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Michigan Do-Over Comes Undone; Obama Responds to Clinton's Criticisms; Joblessness on the Rise; Faulty Equipment at Iraq Bases Leads to Electrocution

Aired March 20, 2008 - 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: And to our viewers, you're in THE SITUATION ROOM.
Happening now, Michigan's do-over appears to be dead despite an offer by Hillary Clinton backers to bankroll a primary re-vote. Now the Clinton and Obama camps are accusing each other of leaving voters without a voice.

Barack Obama suggests Hillary Clinton will do anything to win. Does he have an answer to the so-called "kitchen sink" strategy? The candidate goes one-on-one with CNN's Larry King. Stand by for that.

And a CNN exclusive -- drug runners have a new weapon in their arsenal -- submarines built in the jungle, then loaded with cocaine for the secret trip north. We're going to show you how the Coast Guard is trying to stop them.

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

The plan for a Michigan do-over comes undone. The state senate adjourned without approving a primary re-vote. In what the Obama camp sees as a cynical move, Hillary Clinton's backers had offered to pick up the tab. Now the Democratic campaigns are picking on each other.

Carol Costello is watching this story for us.

Carol, update our viewers. Where do things stand now?

CAROL COSTELLO, CNN CORRESPONDENT: Well, you know, Wolf, dreams of a Michigan do-over may be dead, but this primary, well, to steal a line from the Grateful Dead, what a long strange trip it's been. All day today, Clinton fought for Michigan votes and her supporters were willing to foot the bill.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): The Clinton campaign fought on to the last minute for the Michigan redo.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I have, as the Democratic National Committee has, come out in favor of an effort to re-vote in Michigan. I do not understand what Senator Obama is afraid of.

COSTELLO: To add fuel to the fire, two of Clinton's most point of law supporters, New Jersey Governor Jon Corzine and Pennsylvania Governor Ed Rendell, sent this letter to Michigan's governor, assuring her Michigan taxpayers would not have to foot the bill. Letter said: "Twelve million will be deposited in Michigan to cover costs of a second primary election."

All of that money to come from 10 private donors -- who are also Clinton supporters, including Bernard Schwartz, a wealthy New York businessman. He told me he's willing to fork over millions to benefit Michigan voters.

BERNARD SCHWARTZ, CEO, BLS INVESTMENTS: And for them to be disenfranchised by virtue of some procedural matter within the DNC would be totally inappropriate and unfair.

COSTELLO: But Obama's camp saw things a little differently. His spokesperson, Bill Burton, said: "This letter eliminates any pretense that Clinton's efforts in Michigan are about anything other than an attempt to bankroll an election and are even more evidence that Clinton is willing to do absolutely everything to get elected."

SCHWARTZ: The people and Obama also want to have a fair representation. They should help pay for it, too. They're more than welcome.

COSTELLO: But in the end, it was all for naught. The Michigan Senate adjourned Thursday without taking up a presidential primary bid. And now, a Michigan do-over is very unlikely.

CAMERON BROWN (R), MICHIGAN STATE SENATE: I think it sets a bad precedent. I think it essentially says to the voters that if you don't like the results of an election, we can redo it. I mean this is America. We don't do that here.

(END VIDEOTAPE)

COSTELLO: And I just heard from Michigan's governor. She says the primary redo may be dead, but -- and I quote -- she says: "We will turn our attention to other options. It is essential, she says, that Michigan voters have a voice in who will be our party's nominee."

So it's not quite over yet.

BLITZER: Never say never.

COSTELLO: At least according to the governor.

BLITZER: It looks pretty over.

All right, we'll see what she can do. Carol, thanks very much.

Clearly, given the mess in Michigan and Florida, the Democrats are in a lot of disarray right now, with growing bitterness, a campaign that threatens to drag on and on. And there are enormous implications for both of these presidential candidates. Let's discuss with our senior political analyst, Gloria Borger.

It really is a mess, Gloria. Where do the Democrats go from here?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: To the Rules Committee, which Donna Brazile is on. And I think the Rules Committee -- and, by the way, Harold Ickes, who is Hillary Clinton's...

BLITZER: Of the Clinton campaign.

BORGER: ...chief delegate counter is also on the Rules Committee. But, look, the Clinton campaign really wanted these re- votes because they're looking for an advantage in the popular vote and also they're behind in the delegates. And so the Obama campaign right now, Wolf, would just like to say, OK, let's split these delegates 50/50. That is a nonstarter with the Clinton people.

I was talking to some other folks today who were saying maybe there could be some kind of a complex formula they come up with at the DNC that takes into account the voting that was already done in Florida and Michigan and then takes into account the delegates as they are proportioned as you head to the convention.

There's also a possibility -- and I hate to say this -- of legal action. Maybe the Clinton campaign would just decide to sue the DNC.

But the Rules Committee has to meet first. And there a lot of Clinton representatives -- perhaps a majority, I'm not sure -- on that committee. We'll have to see what the Rules Committee of the DNC decides to do.

BLITZER: Would the Obama people, do you believe, buy this notion of, all right, 55 percent for Hillary Clinton, 45 percent for Barack Obama, divide up the delegates according to that percentage in Florida and Michigan, because I've heard that thrown out there?

BORGER: I've heard that, too. And there are some people inside the Obama camp who are pushing that and saying look, look magnanimous on Florida and then you can do a 50/50 split on Michigan.

So, you know, I think at this point, Wolf, anything is really, really possible. But now, Howard Dean is really in a tight spot.

BLITZER: The chairman of the DNC.

BORGER: You bet.

BLITZER: How does all of this wind up helping John McCain, if it does?

BORGER: Well, I think any time the Democrats are forming a circular firing squad it's good for John McCain. And he's been traveling this week. As we know, he made some mistakes on his trip to Iraq, confusing Shiites and Sunnis. And that was a problem for him. But he didn't get a lot of play. We did a piece on it.

But he was able to visit Israel with Joe Lieberman, try and court Jewish voters. So, you know, all of this is good for him at this point. BLITZER: We saw him praying at the Western Wall.

BORGER: We did.

BLITZER: Thanks very much, Gloria.

BORGER: Sure.

BLITZER: See you later.

For the latest political news, by the way, any time, you can always check out our Political Ticker at CNNPolitics.com. The Ticker is now the number one political news blog out on the Web. And that's also where you can read my latest blog post.

Jack Cafferty is in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: I never miss those.

BLITZER: Thank you.

CAFFERTY: No. In fact, I have some on like -- stuck on my refrigerator with those little magnets?

BLITZER: Me, too.

CAFFERTY: They're up there.

BLITZER: Thank you.

CAFFERTY: I put them out. I put them on the refrigerator.

(LAUGHTER)

BLITZER: Thank you.

CAFFERTY: Make the kids read it.

BLITZER: I love your Cafferty File, you know that.

CAFFERTY: Ah, you know (INAUDIBLE).

The U.S. needs independent leadership and maybe even a new party. Senator Chuck Hagel, the Nebraska Republican and one of the very few class acts in Washington, D.C. has a new book out. It's called "America: Our Next Chapter".

Hagel writes this: "In the current impasse, an Independent candidate for the presidency or a bipartisan unity ticket could be appealing to Americans." Hagel is a Vietnam veteran. He suggests the war in Iraq might may be remembered as one of the five biggest blunders in all of recorded history. He says the invasion five years ago was "the triumph of the so-called neo-conservative ideology, as well as Bush administration arrogance and incompetence."

And they're members of the same party. Hagel says he held one of the Senate's strongest records in supporting President Bush, but his standing as a Republican was still doubted because of his opposition to the administration's foreign policy -- one that he sees as reckless and divorced from strategic context.

Chuck Hagel announced last year he wouldn't run for a third term in the Senate and he would not seek the Republican nomination for president. That's too bad. He would have been a great president. His name was often mentioned as a potential running mate for New York Mayor Michael Bloomberg on an Independent presidential ticket. But last month, Bloomberg said he wouldn't run. So, there you go.

Here's the question, though: Republican Senator Chuck Hagel says the U.S. may need a new political party. Is he right about that?

Go to cnn.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: A lot of people are always going to wonder, could a Bloomberg/Hagel ticket, given the billions of dollars that Bloomberg has to finance that kind of presidential third party race, could that actually have won? And that's going to be a subject for political dissertations down the road.

CAFFERTY: Some -- here's another thought. Somebody wrote me today, what if Hagel and Obama formed a third party and ran together?

BLITZER: Well, Obama seems to be doing pretty well in the Democratic Party right now.

CAFFERTY: Yes. So far. We'll see.

BLITZER: All right. Jack, thanks very much.

Barack Obama suggests the Clintons will do whatever it takes to win. He talked about the Clintons' -- the Clinton campaign's so-called "kitchen sink" strategies. He's been speaking over the past while with our own Larry King. We're going to share some of that with you. That's coming up. I think you're going to want to hear this.

Also, a free trade free-for-all. Round two -- Democrats engage in name-calling over the NAFTA deal.

Do newly released White House records show where Hillary Clinton actually stood on the issue?

And a bargain they can resist -- given the plunging dollar, why aren't tourists from abroad living it up right here in the United States?

We'll explain. Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: As efforts to find solutions to the Michigan and Florida stand-offs seem to be falling apart, the Democrats seem to be feeling the strain.

CNN's Larry King asked Barack Obama just a little while ago if he's been disappointed or surprised by Hillary Clinton's campaign.

Listen to this exchange.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: She's a tenacious campaigner. I don't think either her or her husband like to lose. And, you know, she herself, and her campaign, talked about a "kitchen sink" strategy -- well, we're just going to throw a bunch of stuff at Senator Obama and see what sticks.

I understand that that's the textbook way of operating in Washington. And that's what you do -- when you're down, if you're down in the polls, if you've been losing a lot of races, then you throw a lot of negative stuff at your opponent.

That's the kind of politics, in part, that I'm looking to change. Now, you know, we don't mind drawing tough comparisons on issues. But part of what I think the country needs right now is a little less rhetoric, a little less P.R. and spin, a little more straight talk, a little more honesty about the difficult issues that we're going to solve.

And, you know, I have respect for Senator Clinton, her intelligence and her diligence. I think she's got some good ideas. I think John McCain is an American hero and, you know, quick to honor his service on behalf of our country.

But we've got some big problems that we're facing right now. You know, I meet families all the time literally are having to make decisions about do they drive to work this morning or do they pay the electricity bill?

I meet families who don't have health care for their kids or themselves despite the fact that they have one, two, three jobs, in some cases.

So those are the kinds of issues that aren't going to lend themselves to sound bites. They're not going to lend themselves to clever ads. What's needed is for us to sit down in a pragmatic, practical way and try to figure out how we're going to solve these problems.

(END VIDEO CLIP)

BLITZER: And you can see Larry's full interview with Senator Barack Obama tonight on "LARRY KING LIVE." He's Larry's guest for the hour -- 9:00 p.m. Eastern.

From Barack Obama, let's go to Hillary Clinton. She's speaking live in Indiana right now. She's at a town meeting there.

Let's listen in briefly and see what she's saying.

(JOINED IN PROGRESS)

CLINTON: And I also -- I also want a chance to hear from you, because I can't possibly know every concern on your minds. I can't know every problem that you or your family face. And I can't even imagine all the good ideas you have. Because, you know what I have found is that most of the good ideas come from people who are, you know, thinking hard about what to do to improve their communities or their jobs or their schools or their country.

So I'd like to take just a few minutes and maybe hear from some of you, if you have questions or comments, because it helps me understand more about what we're going to be working on together.

So, let me ask you, is there anybody who has something they want to say before I wrap up?

Oh, we've got a few. That's good. OK. Well, I'll kind of start and go around.

I see this man right over there. Hey!

(APPLAUSE)

CLINTON: I think that's a very popular comment.

Let's see, here's a lady right there in blue, right there.

QUESTION: Why can't the veterans go to our local hospitals and be taken care of instead of so far away from home?

I had a friend who passed away last week. His died -- his wife died the week before. He was at Fort Wayne Veterans. She was in Indianapolis. They couldn't be together.

CLINTON: Yes, that's really heartbreaking. You know what, we're going to have to look at the entire V.A. system and try to figure out how we're going to help take care of people in a sensible way and actually have them look for ways that we can get more services into the community where, you know, people who are eligible for V.A. care and eligible for Medicare -- we can try to figure out how we can make it, you know, more humane and more practical to take care of people. We're going to look at all of that, because I think there are some good ideas that people have about how to do that.

Yes, sir?

BLITZER: All right, Hillary Clinton out in Indiana.

The man standing right behind over there, Evan Bayh, the U.S. Senator from Indiana, former governor of Indiana, a very popular politician in The Hoosier State, someone whose name has often been floated as a possible -- possible vice presidential running mate for Hillary Clinton. He's a strong supporter of her.

The name-calling gets even more heated between the Clinton and Obama campaigns. This time, it's the controversial NAFTA trade deal that's once again hitting a nerve and has both campaigns suggesting the other simply isn't telling the truth.

And a horrific accident on the sun-drenched waters off the Florida Keys. A woman is enjoying a boat ride with her family when she's suddenly killed. You're going to be shocked at what took her life.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The number of Americans losing their jobs is on the rise. The Labor Department now saying new unemployment claims jumped to 378,000 last week -- the highest level in nearly two months. Nearly three million Americans are looking for work. Even those with jobs are not taking any chances. A brand new CNN/Opinion Research Corporation poll finds 46 percent of people surveyed are cutting back on heat. Thirty percent are reducing spending on food.

The economy also taking a hit from a big drop in foreign tourists visiting the United States, even though the dollar has been at record lows against the euro, the yen and other foreign currencies. What is going on?

Let's turn to our State Department correspondent, Zain Verjee. She's looking at this story.

It's an important story. People don't realize how important foreign tourism is to our economy. What is going on -- Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, it's really significant and really interesting. I mean, you'd think with the weak dollar that overseas tourists would be flocking here because of it. But the U.S. economy is actually taking a real hit because even fewer tourists are coming to the United States.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Enjoy the tour. Welcome to Washington, D.C. .

VERJEE (voice-over): Overseas travel around the world is up. But except for an uptick in 2006, travel to the U.S. is still down big time since 9/11.

ROGER DOW, CEO, TRAVEL INDUSTRY ASSOCIATION: We're down two million travelers from where we were seven years ago.

VERJEE: The Travel Industry Association says the U.S. has lost $130 billion in tourist spending. It blames frustration and confusion over U.S. travel rules. This British paper shows the Statue of Liberty holding a no entry sign and calling travel to the U.S. a nightmare, citing interrogations and long lines. DOW: What's happening is the European press is beating us a like a drum, saying America doesn't want you, it's a hassle to get here. So all those things are adding up to people not coming here.

UNIDENTIFIED MALE: And there's a lot of problems --

VERJEE: Jose from Spain says his friends worry about the problems of entering the U.S.

UNIDENTIFIED FEMALE: It will be some difficultly --

VERJEE: Anlishu Jeh (ph) from China says tourists have a tough time getting visas. On the State Department's own Web site, it takes a person in Shanghai 32 days just to get a visa interview -- even longer in Sao Paulo, Brazil -- 85 days. The U.S. says it's trying to speed up the process and three out of four visas are approved.

TONY EDSON, DEPUTY ASSISTANT SECRETARY OF STATE: We're in a business where we have to turn down a certain number of our applicants because they qualify under our law, so we have some hurt feelings no matter how hard we try.

VERJEE: The weak dollars may boost summer travel here.

UNIDENTIFIED FEMALE: Good, cheap holiday --

VERJEE: European travelers like these at London's Heathrow Airport don't need a visa to the U.S. and say they want to cash in.

UNIDENTIFIED MALE: Get a vacation in. Get some cheap supplies while you're there, clothes for the kids.

VERJEE (on-camera): The majority of people here today on this trolley are from different parts of the United States. We met these gentlemen, though, visiting from Germany and this family from London.

UNIDENTIFIED MALE: It is worth to get all this pain, the immigration, just to come here to show him this beautiful city and this beautiful country.

UNIDENTIFIED FEMALE: I mean the cue was quite long, you know, to get through immigration. But, you know, I think I'd rather feel that there is a lot of security and feel safe.

(END VIDEOTAPE)

VERJEE: Overseas tourists here spend a lot of money and they have a big impact on local economies. It's estimated that they spend about $4,000 just on each visit.

BLITZER: The -- a lot of people don't realize, Zain, that tourism is really an export industry because it brings in a lot of foreign currency, which is good for the U.S. economy.

VERJEE: And also very good for the U.S. image. It's a good public diplomacy strategy for people to people. And it's sort of diplomacy on the cheap, if you will. Travel industry experts say that when Americans mix with tourists from overseas, it's a really good thing. There's some research that shows that people who come here are actually 74 percent more likely to feel good or very good about America just by being here on one visit.

BLITZER: It's not as easy to get in as it used to be.

VERJEE: No.

BLITZER: All right. Zain, thanks very much for that.

Please be sure to check out CNNMoney.com's special report, issue number one, online. From protecting your money top finding a job that's right for you, there's a lot of very useful information that could save you money and misery. Remember, CNNMoney.com.

Hillary Clinton supporters offered to pick up the tab for a re- vote in Michigan. But now Democrats are trying to pick up the pieces as that do-over appears to have come undone.

I'll speak with Clinton supporter James Carville, Obama supporter and the former Senate majority leader, Tom Daschle. They're standing by live.

Also, U.S. troops electrocute in Iraq in their barracks and on their bases. At least a dozen deaths now are being investigated.

And a CNN exclusive -- submarines built in the jungles of South America and used to smuggle tons of cocaine north -- here.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, China's crackdown on anti-government protesters in Tibet won't keep President Bush from attending Beijing Games' Summer Olympics. The U.S. is urging China to use restraint, but the White House adds the Olympics should be about the athletes, not about politics.

The soaked Midwest is watching rain-swollen rivers surge past their banks. The worst flooding in decades there has killed at least 15 people.

And for the second day in a row, a new audio tape that's supposedly from Osama bin Laden. The al Qaeda leader calling Iraq -- and I'm quoting now -- "the perfect base for a holy war to liberate Palestine."

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

The Democrats are getting into another free-for-all over free trade, specifically, the NAFTA deal, which is triggering more name- calling between the Obama and Clinton campaigns. Let's go straight to CNN's Jessica Yellin. She's at that Hillary Clinton event in Indiana.

What's the latest on this exchange that's going on over NAFTA?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, it seems that it's Hillary Clinton's turn to be in hot water over NAFTA -- maybe.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): This was Hillary Clinton lashing out at Barack Obama for suggesting she once championed NAFTA.

CLINTON: Shame on you, Barack Obama!

YELLIN: Now the Obama campaign is calling her a hypocrite, saying new evidence shows she was a vocal backer of the trade deal.

Their smoking gun -- just released White House schedules showing that as first lady, Clinton attended NAFTA strategy meetings before it passed Congress. Top Obama strategist David Axelrod insists she owes an apology to the people of this country and questions how she would treat the truth as president.

Clinton maintains the schedules prove nothing.

CLINTON: I have spoken consistently against NAFTA and the way it's been implemented.

YELLIN: And she's hitting back, resurrecting the controversy that erupted when an Obama adviser discussed NAFTA with a Canadian official.

CLINTON: I have been consistent, unlike Senator Obama, who has not been. He tells the people of Ohio one thing, and his economic advisers tell the government of Canada something else.

YELLIN: It's hardly news that Clinton publicly promoted NAFTA as first lady.

CLINTON: I think everybody in is favor of free and fair trade. I think NAFTA is proving its worth.

YELLIN: A former Clinton White House official who ran one of those NAFTA meetings Clinton attended says privately she objected to the bill.

UNIDENTIFIED MALE: I must tell you, Hillary Clinton was extremely unenthusiastic about NAFTA. That's putting it mildly. I'm not sure how she objected all the provisions of it. She just didn't see why her husband and why that White House had to go and do that fight.

YELLIN: The Obama campaign insists whatever her private opinions, Clinton is not being truthful about the role she played making NAFTA law, a political he said/she said.

(END VIDEOTAPE)

YELLIN: And Wolf, I just got off the phone with one former Clinton White House official who confirms what David Gergen said. They say Senator Clinton did raise concerns when she was first lady about NAFTA primarily because she was worried that a NAFTA bill would take precedence over a healthcare bill, and she wanted to promote health care at that time.

Of course, this issue is resonating now because so many voters, especially in the state of Pennsylvania and here in Indiana are concerned about their economic circumstances. NAFTA really plays into that -- Wolf.

BLITZER: All right. Thanks very much, Jessica Yellin.

As the bickering between the candidates intensifies, let's hear from some of their key supporters. Joining us right now is the Democratic strategist, James Carville. He's strongly in the Clinton camp. And the former Senate Majority Leader, Tom Daschle. He's strongly in the Barack Obama camp.

Guys, thanks very much for coming in.

The argument is that Barack Obama fears a redo primary in Michigan. Does he?

TOM DASCHLE, FORMER SENATOR MAJORITY LEADER: Not at all, Wolf. He has said from the very beginning we want to resolve this thing in the most fair way. Obviously, we have to live with the rules that the DNC has created. We have to live with the confines of the practical applicability of a new primary but if that could be done, he was completely supportive of it.

BLITZER: Do you accept that?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: No. We've already raised the money. I asked David Wilhelm to put up half the money on this show. And Governor Rendell. A rule is a rule. The DNC can amend a rule. There was a rule when the people took out these sub prime mortgages we're not going to say you live by the rule.

You can do something to help these people. This thing has happened. Michigan is completely devastated by this administration's policies. And we ought to have as many people voting.

BLITZER: On what basis do you blame Barack Obama for the failure of the Democrats in Michigan and the state legislature to come up with a strategy?

CARVILLE: Senator Obama's people in Lansing are doing everything they could to not have this vote.

DASCHLE: That's not true. I love James, but, listen. Hillary Clinton has had about five different positions on this whole thing. I'm not sure what her latest one is. But the bottom line is --

BLITZER: Here's the question. Were you secretly trying to derail a redo?

DASCHLE: Absolutely not. No. No evidence of that. We want to have a good vote, if it's possible.

CARVILLE: We put up the money for it.

BLITZER: Is that a problem?

DASCHLE: He wants a Clinton-financed primary. How does that solve the problem?

CARVILLE: You put up half. We put up half. We could have --

DASCHLE: Clearly that would work. But you can't have a primary if you can't resolve the practical issues.

CARVILLE: What are the practical issues? Let people vote.

DASCHLE: You said you weren't going to let the people vote who voted last time?

BLITZER: What about the argument that Senator Daschle makes of that there would be enfranchised voters.

CARVILLE: You have a primary. You let people vote.

BLITZER: Just Democrats and Republicans who voted the last time? Independents, could they vote too?

CARVILLE: Whatever. Different states have different rules. Have a Democratic primary. Let Democrats vote. Anybody that's watching this show can see that I and Senator Clinton want to have a primary and let people in Michigan decide. Anybody can see as good a man as Senator Daschle and as fine a man as Senator Obama is, they don't want to have it because they would lose it. That's the wrong signal.

He doesn't want to have this for the simple fact that he would lose. Just like he would lose in Florida. Now if the Democratic nominee is afraid to face a primary of Democratic voters, can you imagine what the general election would be like? I think Senator Obama ought to show strength and say I want to run this thing, put up half the money.

BLITZER: Those are strong words.

DASCHLE: They are strong words. And they're totally wrong. They're totally wrong. He doesn't know if we would win or lose. We've won more states than Hillary Clinton all over the country. We could probably win that one as well.

BLITZER: In Michigan? DASCHLE: Absolutely. We're not backing away from a contest. We've been involved in contests. The real question is do you allow everybody to vote? The Clinton people say no. Can you put this together in a way to satisfy all the legal requirements? The Clinton people acknowledge that is not possible.

They're willing to accept a flawed election. I would call it a kitchen sink strategy. They're prepared to use the kitchen sink to win this. They'll do it however they think they can do it to their great advantage. This isn't going to work in large measure because it's not administrative.

CARVILLE: Anybody watching the show can see what it is. I came on this very show and offered to put up half the money. The Obama people didn't want to do that. Their lobbyists are working in Lansing with everything they could, working in Florida with everything could to prohibit Floridians and Michiganders from having an opinion in this. It's very clear we cannot go to the general election if our nominee doesn't want to face Democratic voters. That's what's happening here. We're all for it.

BLITZER: Because a lot of people look at this Senator Daschle and they say, this is not a complicated ballot. You have Hillary Clinton. You have Barack Obama. You have a box. You check which one you like. And you put the ballot in a box and count the ballots.

DASCHLE: If you tell everybody Wolf that they can vote. People who aren't in Michigan that they can vote. If you tell people that they can vote after the meaningless vote, but they're off the table. We want to vote, but we want to select the people we can have a vote for. That isn't going to work.

CARVILLE: Again, you can hear the fear.

DASCHLE: It's not fear. It's fairness. Their position is nobody should vote. Michigan and Florida shouldn't have a say in this.

You know Florida has been hit by the subprime thing more than anybody in the state. Everybody says we want to participate in this. This is a thrilling thing. I can race half the money. I can raise all the money. In fact Governor Rendell would -- I've been on the phone with the governors. We're ready to go.

BLITZER: All right. You made a statement a while ago. I want to see if you still believe it. You said if that Hillary Clinton wins the primary in Texas, wins the primary in Ohio, and wins the primary in Pennsylvania, she will be the Democratic nominee. Is that still whole?

CARVILLE: I think so. I was assuming that we would get a vote. The only way she can be stopped if she wins in Pennsylvania if the Obama people --

BLITZER: If she loses.

CARVILLE: If she loses Pennsylvania, she's not going to be the nominee.

BLITZER: Will she still be the nominee if she wins in Pennsylvania?

CARVILLE: I think so.

BLITZER: Even without Michigan and Florida?

CARVILLE: I think so because every superdelegate knows that the Obama people are the people not pushing for this. They know that they don't want to run. I mean these guys have gotten the thing figured out completely.

I think that Senator Obama would be much better off telling his supporters in Lansing, hey, let's go. Let's take this thing. Let's have the vote. If he wins the Michigan primary he's going to be the nominee.

BLITZER: Senator Daschle, we're out of time but go ahead.

DASCHLE: Well, Barack has said from the beginning, he'll have that vote so long as it's fair. But the Clinton people are suggesting let's have an unfair election. And that's not acceptable.

And I think this idea of winning Pennsylvania, Texas, and Ohio provides you with the ability to win the nomination is wrong. That comes as a shock to the 47 other states who have all participated and who expect to have a voice at the convention.

CARVILLE: How many Idaho's equal one California? Maybe in their mind it's one for one. But if you get a calculator out.

DASCHLE: And every other state. We can do that, too. But it ought to be who has the most delegates.

CARVILLE: Let's tee it up.

BLITZER: Let's see if there's still a way out of this mess because it is a mess. A lot of people are frustrated, as both of you know. They're worried the big beneficiary out of this internal decent is going to be John McCain. We'll talk about that on another occasion.

Thanks for coming in.

DASCHLE: You bet, Wolf.

BLITZER: In their barracks and on their bases in Iraq, U.S. troops -- get this, they are being electrocuted. Now a U.S. senator panel wants to know what is going on.

And the family of one Green Beret is suing a major U.S. contractor.

Also a CNN exclusive, drug cartels using a fleet of submarines to try to smuggle cocaine past the U.S. coast guard. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: U.S. troops in Iraq electrocuted in their barracks, a powerful congress is saying there have been at least a dozen such deaths. He wants to know who is to blame.

Let's go to our Pentagon correspondent, Barbara Starr. She's following the story for us.

Barbara, what is going on?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, it seems unbelievable, but, indeed, troops dying in Iraq, being electrocuted.

(BEGIN VIDEOTAPE)

STARR: Staff sergeant Ryan Maseth stepped into the shower on January 2 at his base in Baghdad, turned the water on, and died. The 24-year-old combat veteran was electrocuted by a short in a water pump according to the army. His mother, Cheryl, is heartbroken.

CHERYL HARRIS, MOTHER OF ELECTROCUTED SOLDIER: He was a Green Beret. He was a weapons master. He was trained to survive. And hearing that he was electrocuted was just so senseless to me.

STARR: Maseth is at least one of 12 service members the military says have been electrocuted in Iraq since 2003, most by improper grounding of electrical systems in areas such as swimming pools and showers.

Congressman Henry Waxman, chairman of the House Oversight Committee, is calling for an investigation, and says Kellogg Brown and Root, the largest American contractor in Iraq, had the job of maintaining the shower building and may have known about the electrical problems.

Maseth's parents are suing KBR, claiming in part, in a court filing, "The water pump servicing the facility was manufactured by a Chinese company for sale to countries outside the United States because it's failed to meet applicable U.S. safety standards."

KBR said in a statement it's cooperating with investigators, adding, "At the time of Staff Sergeant Maseth's tragic death, KBR was providing repair services at the facility in response to requests issued by the Army."

But the family attorney, Pat Cavanaugh, says it's all too late.

PAT CAVANAUGH, FAMILY ATTORNEY: In Ryan Maseth's building they, in fact, knew about it, reported it, were funded in excess of $3 million to fix it. And for whatever reason did not fix it.

(END VIDEOTAPE) STARR: Now, Wolf, the entire case is under review, as well, by the Pentagon inspector general. The Pentagon says KBR knew about some of the electrical deficiencies at this facility, but was only ordered to fix them after Ryan Maseth died. It may be very small comfort to his family of course. He's survived by two brothers also serving in the army.

And that Chinese water pump, Wolf, according to U.S. government, it was installed years ago by Iraqis -- Wolf.

BLITZER: What a heartbreaking story. All right, Barbara. Thank you for that.

It's one of the most controversial policies of the Iraq war. One some say is nothing short of a backdoor draft. Now it's front and center in the new movie "Stop Loss" that's opening later this month.

CNN's entertainment correspondent, Kareen Wynter, takes a look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: By the authority of the president you've been stop lossed.

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: The movie "Stop Loss" gets at the core of a controversial military practice, when a soldier's contract is involuntarily extended.

UNIDENTIFIED FEMALE: How can they do this?

UNIDENTIFIED MALE: They're doing whatever they want to do. With a shortage of guys and no draft, they're shipping back soldiers who are supposed to be getting out. It's a backdoor draft is what it is.

WYNTER: Actor Ryan Phillippe leads the film's young case.

RYAN PHILLIPPE, ACTOR: You live every day over there hoping to get home and get home alive. To be forced back against your will is really -- you can't imagine that.

WYNTER: Currently some 7,500 active service soldiers are subject to stop loss. Since 2001 the policy has affected more than 100,000 soldiers.

For Stewart McKenzie, the consequences were devastating.

STEWART MCKENZIE, "STOP-LOSSED" SOLDIER: I think it's dishonest. If somebody wants to be at war and somebody wants to go. But if they've done their four years, be like, OK, I signed a contract for four years. I'm done.

WYNTER: Like the characters in the film, McKenzie was 18 when he enlisted in the army. He was eager to serve his country. But now questions the explanation his recruiter offered about the stop loss policy.

MCKENZIE: He basically made it sound like it's World War III. He said there's no chance. Don't worry about it. Sign right here.

WYNTER: The Army says stop loss is necessary to sustain a cohesive force and is used sparingly.

McKenzie was stop lossed while still stationed in Iraq Seven months after he was scheduled to finish his four year contract, a roadside bomb severed his left hand and blew off part of his leg.

MCKENZIE: You go over there I mean you're always just dodging bullets.

UNIDENTIFIED MALE: Just waiting around to get blown up.

WYNTER: Now discharged on medical retirement, McKenzie's hope for "Stop Loss" the movie is that it helps people understand the stop loss reality.

MCKENZIE: Just open everyone's eyes and let the people judge if they think it's right or wrong.

WYNTER: Kareen Wynter, CNN, Hollywood.

(END VIDEOTAPE)

BLITZER: Drug smugglers go deep to try to evade the coast guards. This is a CNN exclusive. The coast guard in hot pursuit of subs loaded with cocaine. Why the underwater boats may be the cartel's newest weapon against the war on drugs.

And there's the grand old party and the Democrats. But does America need a new political party? You're e-mail to Jack. That's coming up.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In news around the world, a CNN exclusive; drug smugglers may have a new edge as they try to get past the United States Coast Guard. A fleet of submarine like vessels built in the jungles of South America, each capable of carrying tons of cocaine.

Here's our homeland security correspondent Jeanne Meserve -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, they were once regarded as a novelty, an oddity, but now they are a real and growing problem.

(BEGIN VIDEOTAPE)

MESERVE: A high-speed chase on the high seas. In this video obtained exclusively by CNN, coast guards men on a navy boat chase a semi submersible, a vessel that rides almost completely underwater. Its suspected cargo, tons of cocaine.

This incident three weeks ago in the Pacific far off the coast of South America is part of a growing trend. Between 2001 and 2007, they were 23 known smuggling cases involving semi submersibles. The coast guard projects 85 this year, 120 the year after that because they do the job for the traffickers.

ADM. THAD ALLEN, COMMANDANT, U.S. COAST GUARD: They're very low profile, very hard to pick up with radar. They go very slow and don't leave a wake.

MESERVE: They are sometimes camouflaged with blue paint. Built in the jungles of Columbia for about a million dollars a piece, new models can travel hundreds of miles without refueling at speeds as high as 12 knots and can carry as much as 12 metric tons of cocaine.

Once made of fiberglass, many are now made of steel, making them more seaworthy. Some can be navigated by remote control.

FRANKIE SHROYER, DRUG ENFORCEMENT ADMIN.: The traffickers are always trying to out wit us. They have a lot of money. If these become successful or more successful, they'll continue to use it until we get a handle on it.

MESERVE: Authorities say they often get good intelligence about semi submersibles but don't always have the resources to respond. When they are successful, the crew of the semi submersible usually bails out, scuttling the vessel and drugs, making prosecution difficult. But that could change.

UNIDENTIFIED MALE: We're actually working with the congress right now to pass legislation to make the operation of these vessels illegal.

(END VIDEOTAPE)

MERSERVE: The semi submersibles operate mainly in the Pacific, carrying cocaine from Colombia up to Central America or Mexico. But authorities worry that someday they might sail directly to the U.S., carrying cocaine and potentially other dangerous cargo -- Wolf.

BLITZER: All right. Jeanne, thank you.

Let's go to Jack, he's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour: Republican Senator Chuck Hagel of Nebraska says the United States may need a new political party. Is he right?

Drew in Massachusetts: "Absolutely. We have an institutionalized two party system that is sanctioned by the government designed to perpetuate itself instead of responding to the needs of the people, one party largely hijacked by the right, the other beholden to the left, the relatively same block of moderates making up nearly half the electorate in this country are usually stuck choosing between two candidates that don't truly reflect their desires."

Donna in Galveston, Texas: "Jack, are you kidding? Chuck Hagel makes absolutely too much sense. His idea, as well as any other like minded, rational, logical, intelligent individual will be shouted down by political rhetoric and the possibility of another party will be buried under more partisan strong arm maneuvers."

Aammar writes: "Republicans, Democrats alike have failed the American people. Gas prices are high, foreclosures are high, the economy is in shambles. A new party would bring back confidence to the American people."

Anna in Missouri: "If the Democratic Party does not put an end to the Clinton campaign or the superdelegates override the pledged delegates and put her on the ticket in the fall, a third party will definitely be possible even this year. Obama/Hagel would take enough votes from McCain and Clinton to propel them into the White House."

Bill in New Jersey: "At least one. It seems the third party efforts of the past were too closely related to a singular issue, so that when the issue went away, the party did as well."

And Barbara in Florida says: "Yes, Jack. We could have an independent party similar to Canada's system, but they still get stupid politicians, too."

They're everywhere -- Wolf.

BLITZER: Jack, thank you.

Coming up, Congressman John Murtha, an outspoken war critic, he's backing Hillary Clinton. I'm going to ask him why.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Senator Obama attempted to clarify his remarks that he made the other night about his grandmother and race.

Lou Dobbs is trying to digest what's going on.

Lou, what do you think?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Well, it's interesting, Wolf, that Senator Obama made these comments today referring to the typical white person in his interview with a radio station in Philadelphia.

I believe what we're watching here, and we're going to be focusing on this on my broadcast at 7:00 Eastern here today. I think he's demonstrating a lack of maturity and really consideration about the topic he's challenged all of America to take up. And that is race because the senator himself continues to speak maladroitly at best on the issue himself and it's becoming a very real issue for the senator.

BLITZER: Because a lot of people think that speech he gave in Philadelphia the other day was brilliant and it was poignant, passionate, and he courageously addressed the most sensitive issue in the country.

DOBBS: Well you know, race should not be the most sensitive issue in this country. In point of fact, I think a lot is made of the fact.

Secondly, I disagree with it being the greatest speech in the history of the world as some are so anxious to proclaim it. It was a good speech. It was a speech made necessary, again, by his own unwillingness to take responsibility for his actions and made necessary to explain a 20 year association with a minister who was, at best, difficult to understand, and at worst, you know, absolutely spewing bile in the pulpit.

So I think we're going to see this campaign have to do a lot of explaining, this senator have to do a lot of explaining. We're going to be exploring that tonight on "LOU DOBBS TONIGHT."

BLITZER: That's coming up in one hour.

Lou, thanks very much.

DOBBS: Thank you, Wolf.

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