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THE SITUATION ROOM

North Korea: Nuclear Capable Missiles?; Liberals Criticize Obama's Budget; Interview with Dan Pfeiffer; Dinner with a Dozen Senators

Aired April 11, 2013 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Jake, thanks very much. Happening now, as North Korea warns the war can break out at any moment, a stunning and scary claim about the North's ability to deliver nuclear weapons.

A break in the case of a secret recording in which Senator Mitch McConnell (INAUDIBLE) apparently discusses ways to undermine a potential rival, the actress, Ashley Judd.

And rapper, Jay-Z versus JC, that's White House press secretary, Jay Carney. Why they're arguing over a controversial trip to Cuba.

I'm Wolf Blitzer. You're in the SITUATION ROOM.

ANNOUNCER: This is CNN Breaking News.

BLITZER: But we begin with breaking news. An extraordinary and chilling assessment of North Korea's ability to actually deliver nuclear weapons. A bombshell remark dropped during a Congressional hearing here in Washington today. It comes as North Korea is warning that war can break out, in their words, "at any moment."

Let's go straight to our Pentagon correspondent, Barbara Starr. Barbara, tell our viewers what happened on Capitol Hill today because it's causing quite a stir.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: A military and intelligence revelation, Wolf, pure and simple, has North Korea made more progress than anybody knew about manufacturing and being able to deliver a nuclear weapon today on Capitol Hill. Congressman Doug Lamborn, Republican of Colorado, had this extraordinary acknowledgment.

(BEGIN VIDEO CLIP)

REP. DOUG LAMBORN, (R) COLORADO: Quoting from the unclassified portion, which I believe has not yet been made public, they say, quote, "DIA assesses with moderate confidence the north currently has nuclear weapons capable of delivery by ballistic missiles, however, the reliability will be low." General, would you agree with that assessment by DIA?

UNIDENTIFIED MALE: You know, congressman, with the number of caveats you put on the front end of this, I'm not going to -- I can't touch that one because I'm not sure now. It hasn't been released. Some of it is classified, some of it is unclassified. Let me take that one for the record.

(END VIDEO CLIP)

STARR: A top-secret, classified report from the defense intelligence agency, some of the most closely held secrets about North Korea's nuclear weapons capability. Let's go very quickly to George Little, the official spokesman for the Pentagon and what he had to say to Jake Tapper on "The Lead" just a short time ago.

(BEGIN VIDEO CLIP)

GEORGE LITTLE, DEFENSE DEPT. PRESS SECRETARY: Jake, I think you can understand that I can't get into classified intelligence assessments, but we are very concerned about North Korea's growing missile capabilities.

JAKE TAPPER, CNN ANCHOR: That conclusion the congressman was reading was, that was unclassified. So, surely, you could elaborate on that, that the North Koreans have missiles with nuclear capability even though they might not be all that reliable.

LITTLE: Well, the conclusion in fact may be unclassified, but the underlying content is definitely classified.

(END VIDEO CLIP)

STARR: Wolf, here's what we know. Since North Korea's last nuclear test, they said that they had miniaturized technology for nuclear weapons. That's really key. That means the technology that can put together a nuclear warhead and put it potentially on a ballistic missile. The U.S. had always said it had to believe North Korea's assertion about that.

Even yesterday, General Dempsey publicly said he had to accept the worst case scenario about North Korea's ability to do this. But the capability, if they can do it, the question that we don't know the answer to, does the U.S. believe they've already done it? Do they have it made up and ready to go in their arsenal?

I caught up with Congressman Lamborn just a short time ago to try and get some additional clarification. Have a listen.

(BEGIN VIDEO CLIP)

LAMBORN: We do not know that they have with any high degree of certainty. We know that with moderate certainty, they do have that capability. And the reason I'm concerned about this is because the president has offered a defense budget that cuts missile defense by half a billion dollars. My goal in all this is by calling attention to the potential threats that we restore those dollars.

(END VIDEO CLIP) STARR: So any which way you cut this, Wolf, you know, is clearly there are some growing indications from the intelligence community, the North Koreans are further along than the American public realize. The question is, how far along have they really done it and, again, this notion of moderate confidence.

The U.S. still has very little information about what exactly North Korea is up to and how soon they can do any of this, Wolf.

BLITZER: The actual line that the congressman read from this unclassified defense intelligence agency report, I'll read it to you, "DIA assesses with moderate confidence the North currently has nuclear weapons capable of delivery by ballistic missiles. However, the reliability will be low."

The reliability of the delivery? And that's the only line he released. I understand there's a line before and a line afterwards which is classified, which may give this spectacular assertion some further contacts.

STARR: That is absolutely correct, Wolf, and a very important point you make. The line before, the line after is classified. So, the context to the American public is not clear. This is highly classified information. All we know is what we see here. And i think you just made another very interesting point. Moderate confidence about the ability to deliver.

I think all acknowledgements are the North Koreans still have a lot of problems with their guidance system. So, what they're doing, clearly, is putting the parts and pieces together but how soon they really can make it all work. That is really the key and that is what tonight we do not have the answer to, Wolf.

BLITZER: Interesting development. Very, very critically important, at least, potentially. Barbara, thank you.

Just a few moments ago I spoke with the United Nations secretary general, Ban Ki-moon. He's here in Washington and he just met with President Obama in the oval office of the White House. And I asked the U.N. secretary general about this report on North Korea's nuclear missile capability.

(BEGIN VIDEO CLIP)

BAN KI-MOON, U.N. SECRETARY GENERAL: We do not have any independent information to verify, but it may be true that they will continue to improve their technology. That will be against -- against the Security Council resolution, Security Council resolution most recently -- resolution 2094 urging North Korea to reframe from making any provocative measures.

(END VIDEO CLIP)

BLITZER: More of the interview with the United Nations secretary general, Ban Ki-Moon coming up at the top of the hour here in the SITUATION ROOM on our special report, the crisis with North Korea. The secretary general also has a specific message that he will deliver to the leader of North Korea, Kim Jong-Un. He speaks in Korean directly to Kim Jong-Un. They watch CNN International in Pyongyang. You'll hear what that message to Kim Jong-Un from Ban Ki-moon.

That's coming up at the top of the next hour. Ban Ki-Moon, as I said, met in the oval office with the president who himself had this to say about the latest threats from North Korea.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now is the time for North Korea to end the kind of belligerent approach that they've been taking and to try to lower temperatures. Nobody wants to see a conflict on the Korean Peninsula.

(END VIDEO CLIP)

BLITZER: Once again, we're going to have much more coming up on the crisis with North Korea, our special report here in the SITUATION ROOM. It comes up right at the top of the hour, 6:00 p.m. eastern only here on CNN.

Let's move on to some other important news here in Washington. President Obama's budget blueprint has something for almost everyone to dislike. It would raise taxes on the wealthy but also could reduce some Medicare and Social Security benefits. That has some liberals up in arms.

Let's go to our chief White House correspondent, Jessica Yellin. She's watching this story unfold. What is the very latest, Jessica, the reaction to the president's budget proposals?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, aides here tell me the president, he's offering a compromise budget. But as you point out, Republicans say he does not find enough savings in Social Security and Medicare, and progressive Democrats are howling that he touches those programs at all. They say that's not what they elected a Democrat to do.

(BEGIN VIDEOTAPE)

YELLIN: Progressives are howling the president's budget is a document only Republicans could love.

SEN. BERNIE SANDERS, (I) VERMONT: -- in 2008. he said that he would not cut Social Security. We want the president to remember what he said and not go back on his word.

(CHANTING) Yes!

REP. RICK NOLAN, (D) MINNESOTA: We did not come here to cut benefits that people rightfully earned by paying into the system.

YELLIN: They're outraged the president proposes slashing $400 billion from Medicare over the next ten years and changing the formula for Social Security so checks could fall by $45 the first year and by hundreds of dollars down the line. In 2008, then candidate Obama pledged --

OBAMA: Now is the time to protect Social Security for future generations.

YELLIN: Now, some Democrats feel betrayed.

NOLAN: There are 57 million recipients of Social Security and Medicare out there. All of whom would be adversely impacted by this. And that's why, yes, you're seeing not only Democrats but Republicans rising up in opposition to this proposal.

YELLIN: The administration acknowledges the president borrowed Republican ideas. The change to Social Security is --

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: A proposal that emanated from Republican leaders.

YELLIN (on-camera): You just said it was a Republican proposal. So, why is the Democratic president issuing a Republican budget?

CARNEY: Because he's president of the whole country, and he believes we need to reach a budget compromise that's balanced.

YELLIN (voice-over): But Democrats should not be surprised. This is not a new priority for the president. Right after he took office in 2009, he held a summit about cutting the deficit.

OBAMA: We cannot and will not sustain deficits like these without end.

YELLIN: He didn't prioritize this agenda, thanks to the financial crisis and the political considerations of a re-election until recently. So, now, he's pressing it, but he's hardly gone over to the other side. This budget is filled with big ticket poverty fighting programs, pre-K education for all kids, price tag $75 billion over ten years, job training and on ramps to work for the unemployed, $12.5 billion over ten years.

He even proposes increasing the minimum wage from $7.25 to $9 an hour, all government initiatives that usually would make Democrats cheer.

(END VIDEOTAPE)

YELLIN (on-camera): And many Democrats, Wolf, are cheering about those programs, but many of them tell me they just find the president's budget bewildering. They say on the one hand, he is proposing Republican ideas for reforming Medicare and Social Security, at the same time, he wants to pour billions into government programs fighting poverty.

But the bottom line here, Wolf, they should not be confused. The president has said from the beginning, he would like to be a deficit fighter and still find ways to help the neediest. If progressives did not believe it when he said that, it was a case of selective hearing -- Wolf. BLITZER: Jessica Yellin is over at the White House for us. By the way, later this hour, I'll speak with the White House senior adviser to the president, Dan Pfeiffer. We'll get some more on this. Also, a Democrat and a Republican who don't see eye-to-eye on virtually anything, but they're both against the president's proposed budget and cuts to Social Security for very different reasons.

We're going to have much more on that, much more on this afternoon's very dramatic developments here in Washington on the Korean crisis, our special report on the Korean crisis. Remember, the full hour comes up 6:00 p.m. eastern right at the top of the hour.

(COMMERCIAL BREAK)

BLITZER: Now, one of the least likely alliances you'll ever see, one of the Senate's most liberal members, Bernie Sanders, the independent senator from Vermont and a very fiscally conservative Republican, Grover Norquist, the president of Americans for Tax Reform who's now -- whose no new taxes pledge has been an article of faith for Republican lawmakers for many, many years.

They're on the same sides right now opposing the president's budget proposals for very, very different reasons. Listen to this.

(BEGIN VIDEOTAPE)

BLITZER: Let's ask Senator Sanders, is the president's budget dead-on-arrival?

SANDERS: I think that is highly, highly doubtful that the president's budget as written is going to be incorporated into law. And one of the concerns that some of us have with a somewhat different perspective than Mr. Norquist is that in 2012, and this is an important point to make, revenue is the percentage of GDP was 15.8 percent.

That was the lowest that it has been in 60 years. The last time we had a balanced budget under Clinton in 2000 revenue was a percentage of GDP was over 20 percent. My concern right now is that you have one out of four major corporations who are paying zero in taxes at a time when corporate profits are at an all-time high.

So, if we are serious about deficit reduction, you don't cut Social Security. You don't cut Medicare. You don't cut disabled vets' benefits. What you do is ask the wealthy and large, profitable corporations. Some of them paying zero in taxes after making billions in profits. They've got to start contributing to deficit reduction.

BLITZER: All right. Go ahead, Grover. What's wrong with that?

GROVER NORQUIST, AMERICANS FOR TAX REFORM: Well, everything. The reason why we have very low government revenues is so many people are unemployed and income is growing so poorly for the people who do have jobs. What we did have when the Republicans had the House and Senate for the last six years, the 1990s, was strong economic growth. They cut the capital gains tax and that gave you the strong revenue coming in. And the Republicans didn't let Clinton spend as much money as he wanted. His budgets had $200 billion deficits as far as the eye could see.

SANDERS: I think Mr. Norquist is rewriting history somewhat. He's right in saying -- he is right in saying that revenue declines when you're in the midst of a terrible recession.

NORQUIST: Yes.

SANDERS: And unemployment is high. No question about that. We are in the midst of this recession because we deregulated Wall Street, and as a result of the recklessness and illegal behavior, they plunged us into recession. We have to bail them out to the tune of some $700 billion.

But he is wrong in suggesting that when you give huge tax breaks to the wealthiest people in this country and when one out of four corporations pay nothing in taxes, that that does not have an impact on the deficit. Of course, it does.

NORQUIST: OK. I'm talking to the senator who opposed the efforts to reign in Fannie and Freddie which gave us the recession that we had. We're now three or four years into the recovery. It's such a lousy recovery because of tax increases and spending too much money and too much regulations and the president's war on producing energy across the country. All of these things give you very bad economic growth.

But nobody should allow the Congress, this Congress, to get off the hook for allowing Fannie and Freddie to bankrupt so many Americans and to damage so many homes. That was government policy. It was big government policy. It sure wasn't deregulation.

SANDERS: Oh, it really wasn't. Our good friends on Wall Street just are so honest, so conservative in their fiscal investments, they had nothing to do with the deficit, and it's that big, bad government that forced them into the derivatives, that forced them to merge, that forced them to become too big to fail. It's always the government. Look --

NORQUIST: Are you unable to say Fannie Mae and Freddie Mac? Is that you incapable of saying those two words?

SANDERS: They're running (ph) profits for now. But you could -- the truth of the matter -- are you unable to talk about the illegal behavior on Wall Street?

NORQUIST: I'm certainly opposed to illegal behavior. Fannie and Freddie --

(CROSSTALK)

NORQUIST: Fannie and Freddie used the law to end up making mal- investments (ph) and the rest of us ended up paying for them. That gave you the recession.

SANDERS: No.

NORQUIST: Now, we've had a recovery for three years and it's a lousy recovery because of the policies that you've endorsed. And --

SANDERS: Well, actually, let me tell you something. This senator, when he was in the House, helped lead unsuccessfully, I might say, the effort against deregulation, because I believed then and I believe now that when you have a handful of giant financial institutions, and right now, Wolf, we're looking at six financial institutions in this country that have assets equivalent to two-thirds of the GDP of The United states of America.

And if anyone believes that these financial institutions once again are not too big to fail, they are solely mistaken. The bottom line is, when Mr. Norquist and I disagree, I think you tell the people, Mr. Norquist, do you believe that we should abolish Social Security, Medicare? We should make substantial cuts to those programs in order to protect and prevent taxes going up for the wealthiest people in this country?

NORQUIST: My position and the position of the American people is that taxes shouldn't be raised. We should reform government spending and reign it in. The programs you've mentioned, Social Security and Medicare, are right now heading for bankruptcy because they're not sustainable because of the policies that have been put in place and the lousy Obama recovery in the last four years.

We need reforms like the Ryan plan which actually reform entitlements so they're still there. Under your plans, they're gone in a couple decades.

SANDERS: Well, actually, I tell you what the American people want. Poll after poll with the American people saying is that we should not cut Social Security but what we should do is lift the cap on taxable incomes.

BLITZER: We're going to wrap it up right now, but I'll give you the last word, Grover Norquist, since I gave the first senator first word.

NORQUIST: Sure. Look, the President Obama's budget is not serious. It's like the one a year ago which every single Democrat in the House and Senate voted against. It's a political document, but the Democrats didn't even vote for it last year. If the president actually wanted to pass anything in his budget, he would have lined up the Democrat votes in the Senate first. It's just for show. He didn't actually write a budget he plans to work with.

BLITZER: Grover Norquist --

NORQUIST: Again, again --

BLITZER: We got to leave it there. Grover Norquist from Americans for Tax Reform, Senator Bernie Sanders, a good discussion, a serious discussion, and I hope we'll continue because these are critically important issues for millions and millions of Americans. Thanks to both of you for coming in.

NORQUIST: Thank you.

(END VIDEOTAPE)

BLITZER: One of President Obama's senior advisers is standing by. Dan Pfeiffer is over at the White House. I'll ask him about this opposition to the president's proposed cuts to Social Security, the opposition coming in from Democrats and Republicans. Stand by.

(COMMERCIAL BREAK)

BLITZER: We're following the dramatic breaking news from Washington up on Capitol Hill today. The United States congressman said point blank that North Korea, in his words, may have nuclear weapons that could be delivered by ballistic missiles. Representative Doug Lamborn quoted an assessment by the U.S. defense intelligence agency. That's over at the Pentagon.

At a House Intelligence Committee hearing, he said this, he said, "DIA assesses with moderate confidence the north currently has nuclear weapons capable of delivery by ballistic missiles. However, the reliability will be low." That assertion from a United States congressman.

Let's discuss this and a whole lot more. Dan Pfeiffer is joining us from the White House right now. He's the senior adviser to President Obama. And I know the president met today with Ban Ki-Moon in the oval office, a high on the agenda, of course, North Korea. Our interview with Ban Ki-Moon coming up at the top of the hour.

But give us the latest from the president. What does he think about this crisis right now and specifically about this assertion quoting an unclassified line from a DIA report?

DAN PFEIFFER, SENIOR ADVISER TO THE PRESIDENT: Well, Wolf, I'm not going to comment on that specific assertion. What the president has said about this is that this is part of a pattern of behavior from North Korea we've seen many times, provocative actions, bellicose rhetoric, and it is incumbent upon North Korea to step back, meet their international obligations, and do what they say is their number one goal which is economic development which can only happen if they do essentially the opposite of what they're doing right now.

BLITZER: Because you spent a lot of time with the president. How would you describe his involvement right now with this issue? It clearly is a crisis. Everyone recognizes it is, but is it dominating his thinking, is it on the sidelines, what is your sense?

PFEIFFER: He's obviously following this very closely. He's being kept up to date by his national security team and he's -- like everyone is concerned about this, but he understands that this is an issue of regional -- you know, North Korea is a threat to regional stability, but we've taken the steps that we need to take to protect the homeland, protect our allies, and our brave men and women who are serving in the region.

BLITZER: The president yesterday unveiled his new budget for 2014 and it's got a lot of stuff in there, obviously, but some liberal Democrats, your base whether labor union leaders like Richard Trumka at the AFL-CIO, Bernie Sanders, the independent senator from Vermont, you just heard him here.

They're pretty upset about the way he wants to change the inflation factor for Social Security recipients, for Medicare, and for other areas. They think this is a horrible, horrible idea. What do you say to them?

PFEIFFER: Well, first, it's important to understand the context here. What the president did is he took the last offer that he presented to Speaker Boehner during our fiscal negotiations in December and included it in his budget. So, that includes some provisions like the one you're referring to here that are things Republicans specifically asked for to be included in any fiscal deal, because the president wanted to demonstrate he's serious about trying to resolve our problems.

But also, that we don't have to choose between deficits and job creation. We can do both, and that's what his budget says. But it's a compromise. And so, you're going to have folks on both sides who aren't going to want it.

BLITZER: And so, what is the president going to try to do to reassure some of those liberals out there who are disappointed that he's tinkering with Social Security? They say he promised he wouldn't do that and they think this is a betrayal.

PFEIFFER: Well, I would say that this is part of a compromise and the president doesn't view his budget as some sort of ala carte menu where Republicans can take certain provisions and try to pass those. It's a comprehensive plan. And so, we will only have this sort of changes you're talking about under two conditions.

One, it's part of an overall deal that includes tax reform that raises revenue by closing loopholes that benefit the most wealthy. And two, that we put in specific provisions that protect the most vulnerable in these changes so that they do not get hurt here.

BLITZER: How did the president's dinner with those dozen Republican senators last night, the second sort of outreach he's been doing? They call it the charm offensive. I know that the budget, the economy, jobs, that was high on the agenda at dinner last night. It lasted almost three hours. Give us the president's reaction. Is he more encouraged that some sort of grand bargain can be achieved?

PFEIFFER: Well, he thought it was a good dinner. It was a wide- ranging discussion. We talked about economic issues including the budget, but also guns and immigration and the other issues before the Senate right now. His view of this is that there are certainly some folks who are saying the right things in the Republican side who seem to be willing to be part of what he calls a caucus of common sense. But the question here is, is the Republican Party as a whole going to be willing to compromise? Are -- is the House of Representatives, which views -- currently views compromise as a dirty word, willing to compromise? If that's the case we have a chance. He knows it's not an easy path, he knows it's a hard path. But there's an opportunity and so that's why he's having the conversations he's having with both sides of the aisle.

BLITZER: Let's see what happens. Dan Pfeiffer is over at the White House, the senior adviser to the president of the United States.

Dan, thanks for coming in.

PFEIFFER: Thank you, Wolf.

BLITZER: And stay right here for our daily special report on the crisis with North Korea. At the top of the hour we'll hear directly from the United Nations Secretary General Ban Ki-Moon. He has a message for Kim Jong-Un in North Korea. He speaks to him from here in THE SITUATION ROOM to Pyongyang directly in Korean with that message. You'll hear it first on CNN.

(COMMERCIAL BREAK)

BLITZER: President Obama certainly has made some big moves this week when it comes to guns, immigration, and his -- revealing his own new budget. Why is he painting with pretty bold strokes right now?

Let's discuss what's going on. Our chief political analyst Gloria Borger is here as she is every day. And Joe Klein is joining us, he's the political columnist for our corporate sibling "TIME" magazine.

Gloria, how much of what the president is doing right now is sort of looking ahead to his legacy --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Everything.

BLITZER: -- now that he is in his second term?

BORGER: Everything. Well, second terms are all about legacy and you just mentioned what's on the president's agenda. Obviously immigration reform is a big legacy item for him. He didn't expect gun control to be one. But it is certainly becoming one particularly after Newtown. And then of course on the budget.

What we saw the president do this week I think is pretty promising. I think Joe thinks so, too, which is that he set out a budget that actually touches the third rail of American politics, Social Security, Medicare, and actually says, you know what? You got to deal with these entitlement programs. Angering his base. But in the second term, presidents have to sometimes choose between their base and the history books. And I think he's going for the history books.

BLITZER: And I remember Bill Clinton did that in his second term as well.

BORGER: Welfare. Welfare.

BLITZER: As a lot of people remember.

Joe, you've written a new column in "TIME" magazine and you actually go out on a limb and think that things are going to work out for the president. He might actually get that so-called grand bargain with the Republican leadership in Congress. A new budget deal, a new economic proposal.

JOE KLEIN, POLITICAL COLUMNIST, TIME: Well, yes. Wolf, it's always good to speak to my siblings by the way.

(LAUGHTER)

No. I think I've been speaking to members of the Senate especially. The big change here is that instead of trying to knock his head against the wall in the House dealing with John Boehner and the Tea Party people again and again, he is going through the Senate this time. And there are a bunch of Republicans in the Senate who would be willing to compromise, you know, on a deal that was reasonable. Some new revenues and some entitlement reform.

I actually thought that what we saw yesterday, which was like, you know, a bologna explosion from both sides attacking the president's -- you know, the president's plan, was a very good sign. I think most of the Democrats eventually will come along. Some may not. But if they don't, that'll make it more, you know, a more credible plan for Republicans. Make it easier for some moderate Republicans to vote for it.

I think we have a possibility. The other major, huge faction is that when you talk to members of congress, Gloria, I think you probably have had the same experience, they're beginning to get a lot of pressure from the business community, which wants to see this thing settled.

BORGER: Yes. They want to see this thing settled and they also, Joe, want to see immigration reform settled.

KLEIN: Absolutely.

BORGER: So I think -- so there is a lot of pressure from all sides here and I think what you're seeing also is the president, having dinner with all these Republicans last night for example, deciding that perhaps if he can deal with the Senate and get enough votes on something in the Senate, then he can put some pressure on the House.

BLITZER: I'll start being encouraged when I see the president having dinner with a whole bunch of Republicans from the House of Representatives as opposed to the Senate.

All right, guys.

BORGER: We're not that far along.

(CROSSTALK)

BLITZER: We're going to continue this conversation.

A quick thought, Joe. Go ahead.

KLEIN: Wolf, you know, he doesn't need to have a discussion with an awful lot of Republicans in the Senate. We have already seen this year that you can pass tax increases with 30 or 40 Republicans breaking away from the Tea Party that's shackling them and joining a majority of Democrats.

BLITZER: Joe Klein from "TIME" magazine and Gloria of course, she's from CNN.

Sibling, cousins.

BORGER: See you, siblings. Yes.

BLITZER: Guys, thanks very much.

KLEIN: See you --

BLITZER: Just ahead, a break in the case of a secret recording with Senator Mitch McConnell and aides discuss ways to undermine a potential rival, the actress Ashley Judd.

But first, here's a preview of this Sunday's "THE NEXT LIST."

(BEGIN VIDEO CLIP)

JUAN SOSTHEIM, RANCHO MARGOT: My father thought I was a nut for taking the job, but I took a job working at Burger King. I became operations manager and director of Burger King in Europe.

UNIDENTIFIED MALE: He is coming from a very strong corporate sector and he says he is now paying for his sins.

SOSTHEIM: But now I want to use the knowledge that I gained and give it to others so I am creating this living university here so that people can come and enjoy themselves and by osmosis if nothing else take over everything that we know.

Hello, everyone. My name is Juan Sostheim. And I'm the owner and founder of Rancho Margot.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: There is a break in the case of a secret recording we told you about this week. The one where Senator Mitch McConnell and campaign aides were caught discussing how to undermine potential rivals including the actress Ashley Judd.

CNN's Jim Acosta has details.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT (voice-over): According to an official with the local Democratic Party in Louisville two members of the liberal group Progress Kentucky were behind the secret recording of a strategy session at Senate minority leader Mitch McConnell's reelection headquarters back in February.

Jacob Conway says the two activists were so excited about what they had they couldn't wait to share the news.

JACOB CONWAY, JEFFERSON CO., KENTUCKY, DEMOCRATIC PARTY: They were there. They overheard this salacious conversation and decided to record it.

ACOSTA: Conway tells CNN he is not sure why members from the group were there in the first place but that they told him they were right outside the room. He adds that their account of what was they heard matches the recording revealed by left-leaning magazine "Mother Jones."

SEN. MITCH MCCONNELL (R), MINORITY LEADER: I assume most of you have played the game Whac-A-Mole? This is the Whac-A-Mole period of the campaign.

ACOSTA: The recording features McConnell and his campaign team going through their opposition research on potential opponents including actress Ashley Judd who has since declined to run.

UNIDENTIFIED MALE: Jesse can go in chapter and verse from her autobiography about, you know, she suffered some suicidal tendencies.

CONWAY: One of them told me about it and then I ran into the other one and asked him about it and they told me about it. The same weekend that it happened. And I didn't really pay any mind to it until the "Mother Jones" story broke. And when I heard the "Mother Jones" tape, it was the exact same things that they told me was discussed, I put two and two together.

ACOSTA: As it turns out the same group named by Conway was singled out by McConnell at a news conference Tuesday.

MCCONNELL: Well, as you know, last month my wife's ethnicity was attacked by a left-wing group in Kentucky and then apparently they also bugged my headquarters.

ACOSTA: In response to the McConnell campaign's allegation that its headquarters was bugged the FBI has launched an investigation. A source close to the campaign says agents pulled the building's surveillance footage.

JESSE BENTON, MCCONNELL CAMPAIGN MANAGER: They were here for about an hour. They checked out the office, they took a lot of pictures, they examined our personal devices. And they -- I believe, they swept the office. ACOSTA: Retired FBI agent Tom Fuentes says the case will likely hinge on whether the conversation could be overheard.

TOM FUENTES, FORMER FBI ASSISTANT DIRECTOR: The investigation is going to have to determine if the individuals are being truthful that they overheard this conversation out in the hallway or near the elevator and the people in the meeting were speaking in such a loud manner that they had no trouble not only hearing it but recording it with enough quality to be able to replay it later.

ACOSTA: Conway says he believes the two activists used something as simple as a smart phone to make the recording. Not a bug.

CONWAY: This is not Watergate as our senior senator has described it.

(END VIDEOTAPE)

ACOSTA: As for Progress Kentucky CNN has tried to contact the group but our calls have not been returned. Meanwhile, the McConnell campaign says it is disturbed by the allegations of the group's involvement and Democratic Party officials in Louisville stress they had nothing to do with the reporting -- Wolf.

BLITZER: I suspect this saga will continue. Jim Acosta, thank you.

Jay-Z raps about going to Cuba forcing a clarification from J.C. That would be the president's spokesman, Jay Carney.

(COMMERCIAL BREAK)

BLITZER: The recording stars Jay-Z and his wife Beyonce were criticized by some Republican lawmakers for visiting Havana in recent days. Jay-Z just released this rap song in response. Listen.

(BEGIN VIDEO CLIP)

JAY-Z, RAPPER: I done turned Havana to Atlanta. Guayabera shirts and bandanas. Politicians never did (EXPLETIVE DELETED) for me. Except to lie to me, distort history. Obama said, chill, you're going to get me impeached. You don't need this (EXPLETIVE DELETED) anyway, chill with me on the beach.

(END VIDEO CLIP)

BLITZER: The White House press secretary, Jay Carney, responded to those lyrics earlier today.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I guess nothing rhymes with Treasury. It's a song, Donovan. The president did not communicate with Jay-Z over this trip.

(END VIDEO CLIP) BLITZER: All right. Flat denial on that part.

Let's discuss what's going on in our "Strategy Session." Joining us, our CNN contributors, the Democratic strategist Paul Begala, the Republican strategist Ana Navarro.

Paul, let me start with you. These celebrities, are they sending the wrong message? What's going on here?

PAUL BEGALA, DEMOCRATIC STRATEGY: Look, first up, as you know, Wolf, in pop culture, nothing crosses my radar, no artist does, until he or she does a duet with the great Willy Nelson, about to turn 80. Snoop Lion, I get him. I'm into the Snoop. But Jay-Z has yet to do that. So I had to go to Twitter. And I asked my Twitter followers, a personal named De-Ann had the best response. She suggested that I say the country has 99 problems, but Jay-Z isn't one.

And I think that's a right thing. This is an artist. We have cultural exchange there. I think it's a good thing for artists to go to Cuba. I think it's a good thing for Cuban artists to come here. And I think that the right-wing attacking Jay-Z for this is silly.

BLITZER: And he did have permission, Beyonce and Jay-Z, Ana, to go to Cuba from the Treasury Department. They've got to sign off on these kinds of visits. And as you know, a lot of Americans go as tourists to Cuba to see what's going on. Do you have a problem with any of this?

ANA NAVARRO, REPUBLICAN STRATEGIST: I frankly have a problem with the way he's reacted to it. Look, Wolf, Havana is not Atlanta. Cuba is not Cancun. It's not Disneyland, it's not St. Bart's. It is an island 90 miles from the coast of Florida and there are 11 million people living under a repressive regime there. It is a dictatorship that has lasted 54 years.

I live here in Miami. I am not a Cuban-American, but I can tell you that I've lived and grown up around Cuban-Americans. And there are so many people in this community who are direct victims, people who have been in jail 20 years, 25, 28 years, as political prisoners in Cuba.

I have friends in this community who are the children of people that were executed in firing squads by the Castro regime. So what you see Mario Diaz-Balart and Ileana Ros-Lehtinen and Marco Rubio doing is representing those people that have felt so much pain. And to trivialize what's going on in Cuba, I think is just not the right thing.

It would have been nice if Jay-Z and Beyonce had maybe spent some time with one of the dissidents, if may they've gone and visited somebody that's been in jail, if maybe they had spent some time with the people that have suffered and that are suffering there and they could have come back and told a little bit about what's going on in the real Cuba, what they saw is not the real Cuba.

BLITZER: All right. NAVARRO: It's the tourist Cuba for people with dollars.

BLITZER: And Marco Rubio --

NAVARRO: So for me it's not a funny song. It's not funny at all.

BLITZER: Marco Rubio himself is a Cuban-American. He called the -- the regime, the Castro regime, over there a cruel repressive and murderous regime.

Go ahead, Paul, what do you think?

BEGALA: Well, Senator Rubio is right about that. The Castro regime has for half a century been cruel and repressive and whatever else he said. They have a terrible, terrible human rights record. It doesn't mean we shouldn't have artists going over there. I mean, my goodness, we -- the People's Republic of China, as he points out, Jay- Z, in the song talks about how the mike he's using was made in China. Another cruel repressive communist, anti-democratic regime.

And yet we have full business exchanges with them. Even when the Soviet Union was at their worst, we had cultural exchanges there. You know, Jay-Z is an artist. As I say, not at the level of Willy Nelson, but he's -- the kid's got some talent. I think it's good for an American artist to go there and show them what freedom and freedom of speech is all about. Maybe it will catch on even in Cuba as well.

BLITZER: Maybe it will, maybe it won't. All right. Guys, thanks very much. Good discussion as usual.

Jeanne Moos is coming up next here in THE SITUATION ROOM, and that will be followed immediately by our special report on the Korean crisis, and the new worries North Korea may be much further along in developing nuclear-tipped missiles.

(COMMERCIAL BREAK)

BLITZER: CNN's Jeanne Moos has found something you don't see every day. We'll let her explain what's going on.

(BEGIN VIDEOTAPE)

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN SPECIAL CORRESPONDENT (voice-over): Why make a sandwich when you can eat peanut butter straight out of the jar?

TREVIN SPENCER, VIDEOTAPED DOG EATING: It's so funny.

MOOS: The dog's name is Odin, the guy laughing is the cameraman and the hands handling the spoon belongs to Odin's owner. And if you think the cameraman's laughter is contagious, just imagine being there.

SPENCER: I was basically crying behind the camera laughing so hard.

MOOS: At least Trevin Spencer could see the action. His roommate and the dog's owner, Ashlin Parker, was underneath the green jacket with her head covered.

SPENCER: She was kind of crouched down hiding behind Odin and her arms are reaching around Odin.

MOOS: The dog himself was wearing a white shirt and vest for the shoot at home in Spokane, Washington.

(On camera): So what inspires someone to make a dog in a suit eating peanut butter video? The answer is two dogs dining with much better manners.

(Voice-over): These two waited patiently for their dinner and actually used silverware to eat, not to mention napkins. They even fed each other. The video that inspired Ashlin and Trevin was uploaded a little over two years ago. When the viewers cried fake, the masterminds put out another video revealing their technique.

Ashlin and Trevin decide to re-make the doggie dining classic using peanut butter, an arrested K-9 cinematic history. As one commenter posted, "I'm watching a dog in a suit eating peanut butter. What am I doing with my life?"

(On camera): And that did you do with the leftover peanut butter?

SPENCER: It's actually back in the fridge.

MOOS (voice-over): Waiting for Odin the German Shepherd when he wants seconds. Careful what you eat out of their fridge.

Who cares about peanut butter and jelly? We prefer peanut butter and German Shepherd.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. This is a SITUATION ROOM's special report. North Korean crisis.

Happening now, we're following breaking news. A chilling new claim about Kim Jong-Un's ability to launch a nuclear attack even as his regime threatens war.