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Tax Trouble Dogs Labor Pick; Senate Debates Economic Plan; President Obama Strikes Back; How to Spend the Money; New Al Qaeda Safe Haven; Mixing Politics & Religion

Aired February 5, 2009 - 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, another bump in the road to President Obama's cabinet. Tax trouble now holding up a vote for the nominee for Labor secretary. It's the third time.

How does the president's team keep missing this?

Maybe even the fourth time.

Also, voters are venting about the stimulus -- calling into lawmakers by the tens of thousands, jamming phone lines up on Capitol Hill -- what the people are saying about the economic recovery plan.

And you've seen the amazing images of miracle on the Hudson. Now we have the audiotape of the final minutes before the plane ditched in the frigid waters of the Hudson River. If you thought the pilot was a hero before, wait until you hear this.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

But first, we're following a developing story right now. Another Obama cabinet pick being dogged by some tax trouble. This time the Labor secretary nominee, Hilda Solis. It's serious enough that a key committee vote on her nomination is now being postponed.

Let's go to senior White House correspondent, Ed Henry.

He's working the story for us -- all right, Ed, what do we know?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, yet another embarrassing revelation, as you noted, for this White House, this time involving the president's pick for Labor secretary. The congresswoman, Hilda Solis of California, dealing with a tax problem about -- it's really focused on her husband.

And the sign outside a Senate committee today says it all -- an executive session meeting that was supposed to happen on this nomination postponed indefinitely as senators on the committee try to figure out what this means for her nomination.

Her husband, just yesterday -- after this revelation by "USA Today" -- paid over $6,000 in tax liens -- some of them dating back as far as 16 years -- against his auto repair business.

I pressed the White House press secretary, Robert Gibbs, about it today and asked him what impact this would have on her nomination.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We reviewed her tax returns and her tax returns are in order. The story denotes that her husband had some issues with paying a business tax. And, obviously, that taxes should be paid. He's -- she's not a partner in that business. So we're not going to penalize her for her husband's business mistakes. Obviously, her husband, I think, has and should pay any taxes that he has.

(END VIDEO CLIP)

HENRY: But this is becoming a story not just about taxes, but about transparency, too. You'll remember the tax problems of Tim Geithner and Tom Daschle. They were not made public and not told to senators and, in some cases, until weeks and weeks after they were first discovered.

In this case, my colleague, Dana Bash, reporting from two sources that senators on the committee only really started hearing about it in the last couple of days, when "USA Today" starting asking questions about the taxes.

So, yet again, the administration facing pressure from the Hill about what they knew and when they knew it. As you heard from Robert Gibbs, they're making a distinction that it's not taxes involving Hilda Solis herself, it's her husband's business.

Nevertheless, still an embarrassing revelation and it's clouding the nomination yet again -- Wolf.

BLITZER: All right, we'll watch this story.

Ed Henry, thanks very much.

Meanwhile, a group of 12 Democratic and five Republican senators are meeting behind closed doors. They're trying to reach a compromise on the president's essentially by trimming tens of billions of dollars in spending. Votes are expected to begin pretty soon and the president is warning there's no time to waste.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The time for talk is over. The time for action is now. Because we know that if we do not act, a bad situation will become dramatically worse. Crisis could turn into catastrophe for families and businesses across the country. And I refuse to let that happen. We can't delay and we can't go back to the same worn out ideas that led us here in the first place.

(END VIDEO CLIP)

BLITZER: Meanwhile, on Capitol Hill, the phones are being jammed right now by those who support and those who oppose this package.

Let's go to Capitol Hill.

Brian Todd is up there.

I guess you're getting an earful. A lot of members are getting an earful, as well, especially on the Senate side -- Brian, right now.

BRIAN TODD, CNN CORRESPONDENT: They certainly are, Wolf. You get a real sense up here that for many members of Congress, especially now, on the Senate side, this stimulus package is the most important piece of legislation they'll work on their entire careers. And their constituents aren't letting them forget it.

(BEGIN VIDEOTAPE)

TODD (voice-over): As they go line by line through the stimulus package, their lines are lighting up.

UNIDENTIFIED MALE: Senator Boxer's office.

TODD: Senator Barbara Boxer's office -- one of many that are overwhelmed with constituents' calls on the recovery plan. We tried and couldn't connect.

SEN. BARBARA BOXER (D), CALIFORNIA: This is senator Barbara Boxer. Thank you for calling my Washington office. Because so many Californians are calling to share their views about many important issues, all lines are currently busy.

TODD: Operators tell us constituents have been jamming lines on Capitol Hill for two weeks. An aide to Senator Dianne Feinstein says her office has gotten nearly 38,000 calls, e-mails and letters about the plan.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: So please either hold, or if you would rather, call back in a few minutes or 15 minutes or so.

TODD: The volume is so great, most calls don't make it through. One woman from Laguna Hills, California couldn't get through to Feinstein's or Boxer's offices. She and others reached one of CNN's Capitol Hill offices by accident.

The woman voiced frustration with the stimulus and with the tax problems of presidential appointees.

UNIDENTIFIED FEMALE: "I just find that, you know, the arrogance that they have, that they're so far superior and that they can make the laws, but they don't have to abide by the laws. It's only we, the taxpayers.

TODD: Other callers backed the stimulus plan.

UNIDENTIFIED FEMALE: Even though it's perfect, I think it's got a lot of potential to help us get -- get out of this downward spiral we're in. TODD: Congressional aides tell us the calls on the stimulus bill are about half supportive, half against -- although many could characterized as being for it with reservations -- concerns the plan won't create enough jobs.

When we caught up with Senator Boxer, she said her office is doing the best it can to clear the lines. She wants people to keep calling, to e-mail and to have patience.

BOXER: It's a compromise. All of life is. So let's get started. Because if we do nothing, that's an action. And that's going to cause suffering.

(END VIDEOTAPE)

TODD: Now, Senator Boxer and others here tell us that they have rarely gotten call volume like this. But they've now been besieged twice in recent weeks with this legislation and with that TARP package to bail out the financial houses -- Wolf, they've seen a lot of action up here.

BLITZER: And it's not just Congressional offices, Brian, that are getting all the attention, is it?

TODD: No. A lot of watchdog groups -- we talked to Citizens for -- Against Government Waste, who tell us that they have been besieged with calls, e-mails, angry postings on their Web site. They say it's kind of the psychological trigger -- the debate over stimulus is a psychological trigger from months of frustration over the bailout package -- perceptions among constituents that the rich are getting richer and the most powerful are only remaining so. So it's a lot of psychological work at play here.

BLITZER: Thanks very much.

Brian Todd up on Capitol Hill.

Let's go back to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: It took no time at all after Brit Prime Minister Gordon Brown suggested the entire world is in a depression for the entire country of Great Britain to get its knickers in a knot.

While facing questions from parliament, Mr. Brown told lawmakers: "We should agree as a world on a monetary and fiscal stimulus that will take the world out of depression."

Well, the opposition party jumped all over him right away and said the prime minister should explain himself, he needs to careful with his language to make sure he doesn't undermine confidence. They asked if Mr. Brown had information that everybody else didn't have.

Mr. Brown's spokesman quickly came out and said the prime minister had made a slip of the tongue when he used the word depression, that it was "not deliberate and not what he thinks." A week earlier, Mr. Brown admitted that Britain is facing "a deep recession" -- his words. And the country's treasury secretary also said that they are "facing some of the harshest economic conditions for decades, perhaps for a century."

Whatever words they're using, things are getting ugly everywhere -- including Britain. Statistics already show that the country is facing its worst recession since 1980 and forecasters suggest that the British economy will likely contract more than any other leading industrialized nation this year.

So here's the question: Is the world economy in a depression, in your opinion?

Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: Jack Cafferty, thank you.

Critics blast his plan for spending for fuel-efficient cars. Now President Obama blasting them right back.

(BEGIN VIDEO CLIP)

OBAMA: But when you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, are these folks serious?

(END VIDEO CLIP)

BLITZER: The president speaking over at the Energy Department, saying he's ready to get serious about energy independence -- and making a challenge to Congress.

Also, does the president's plan put Pentagon money into chapels and day care instead of equipment for the troops in the war zones?

We're crunching the numbers.

Plus, his engines are dead, his plane is going down and every word is being recorded. We have the gripping tape of the final moments before the landing that stunned the world on the Hudson River.

(COMMERCIAL BREAK)

BLITZER: For the first time as president, Barack Obama is getting ready to board Marine One to take that short helicopter flight from the South Lawn of the White House over to Andrews Air Force base in nearby Maryland, one of the Maryland suburbs. And then he'll make a short walk on the tarmac over to Air Force One, and, for the first time as president, board that huge 747 plane. We're going to have coverage of both events coming up -- the first time as commander-in- chief boarding Marine One and Air Force One.

Meanwhile, the president moving to show quick action on the issue of energy -- the conservation front. And he's starting with things you use every single day -- dishwashers, microwaves, even lamps. He's ordering higher efficiency standards for them. And the president is also lashing back at criticism of his economic recovery plan.

(BEGIN VIDEO CLIP)

OBAMA: I read the other day that critics of this plan ridiculed our notion that we should use part of the money to modernize the entire fleet of federal vehicles to take advantage of state-of-the-art fuel-efficiency. This is what they call pork.

You know the truth. It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match.

And so when you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, are these folks serious?

Is it any wonder that we haven't had a real energy policy in this country?

For the last few years, I've talked about these issues with Americans from one end of this country to another. And Washington may not be ready to get serious about energy independence, but I am and so are you and so are the American people.

Inaction is not an option that is acceptable to me and it's certainly not acceptable to the American people -- not on energy, not on the economy, not at this critical moment.

So I'm calling on all the members of Congress -- Democrats and Republicans, House and Senate -- to rise to this moment. No plan is perfect. There have been constructive changes made to this one over the last several weeks. I would love to see additional improvements today.

But the scale and scope of this plan is the right one. Our approach to energy is the right one. It's what America needs right now. And we need to move forward today. We can't keep on having the same old arguments over and over and over again that lead us to the exact same spot, where we are wasting precious energy, not creating jobs, we're failing to compete in the global economy and we end up bickering at a time when the economy urgently needs action.

(END VIDEO CLIP)

BLITZER: And President Obama also said the stimulus plan would create hundreds of thousands of jobs in a clean energy industry.

We want to go over to the Pentagon right now.

Our Pentagon correspondent, Chris Lawrence, is standing by with more on this economic stimulus package and the debate over how this money is being spent, as far as the U.S. military is concerned, because the debate is sort of heating up right now, isn't it -- Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: It sure is, Wolf. And the rules of this stimulus restrict how the Pentagon would spend its money. But some are arguing that with two wars going, defense is the last place that you should be throwing money at projects that don't have a very high priority.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): The U.S. military could be about to get billions of dollars for barracks and buildings. The stimulus package would allocate an estimated $3 billion for housing and facilities, more than $4 billion for hospitals and clinics and $360 million for child care centers.

REP. DOUG LAMBORN (R-CO), HOUSE ARMED SERVICES COMMITTEE: There are defense projects that could be funded right now.

LAWRENCE: House Republican Doug Lamborn argues the money should be going to weapons and equipment for troops on the front line.

LAMBORN: There is nothing for them. I hope the Senate will do a better job of addressing the defense needs of our country.

LAWRENCE: But Gordon Adams, who advised the Obama administration during the transition, says those kinds of contractors are already working at full capacity.

GORDON ADAMS, NATIONAL SECURITY EXPERT: They're already adding third shifts. They've already got full up on the production line. They can't go any faster. They can't go any bigger.

LAWRENCE: The stimulus package stipulates speed over actual need -- projects that quickly create jobs, not necessarily what's at the top of the priority list.

WINSLOW WHEELER, CENTER FOR DEFENSE INFORMATION: Just throwing money at the thing is a bad idea, both for economic stimulus and it's a bad idea for defense.

LAWRENCE: Winslow Wheeler spent 30 years on Capitol Hill working for both parties in the Government Accountability Office.

WHEELER: The high priorities in our budget these days are not things like more chapels and more day care centers. We have a backlog of equipment repair from materiel that's been worn out in Iraq and Afghanistan sitting in depots waiting to be repaired.

(END VIDEOTAPE)

LAWRENCE: Now, there is no doubt that new hospitals and housing would help a lot of military families. But the way it's set up now, these projects -- these don't necessarily have to be even the most needed hospitals and housing, just what can get done the fastest -- Wolf.

BLITZER: All right, Chris.

Thanks very much. The stunning recording prosecutors want to use as evidence against baseball home run king, Barry Bonds. You're going to hear it right now here in THE SITUATION ROOM for the first time.

And recordings of the very different kind -- a pilot about to ditch his plane in what's being called the miracle on the Hudson. His calm under extraordinary pressure simply hard to believe.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: OK, which runway would you at Teterboro?

UNIDENTIFIED MALE: We're going to be in the Hudson.

UNIDENTIFIED MALE: I'm sorry. Say it again, Cactus.

(END AUDIO CLIP)

(COMMERCIAL BREAK)

BLITZER: It was not that long ago that Al Qaeda had a major base of operations in Afghanistan. And we know what happened on 9/11.

Now there's word coming in to CNN that Al Qaeda is developing yet another potential save haven, with enormous consequences for all of us.

Let's go to our Pentagon correspondent, Barbara Starr, who's getting some important information.

What are you learning -- Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, there are serious new worries about an old Al Qaeda hangout and the economic implications for the global economy.

(BEGIN VIDEOTAPE)

STARR (voice-over): U.S. officials tell CNN, over the last several weeks, a number of Al Qaeda operatives have infiltrated Yemen from Saudi Arabia. One U.S. official telling CNN: "There is real concern Al Qaeda is trying to mount attacks."

Yemen has long been an al Qaeda safe haven, from the USS Cole bombing in 2000 to this attack on the U.S. embassy last year. Now the worry is a resurgent Al Qaeda will plan attacks against nearby Saudi oil infrastructure or shipping lanes.

JON ALTERMAN, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: If you want to hurt things in the Middle East, Yemen is a close by base to do it from.

STARR: Attacks against oil or shipping could devastate an already shaking economy.

ALTERMAN: There are lots of things you can do, very low tech, very low cost, not taking a lot of people, and able to wreak horrible destruction.

STARR: The U.S. believes Al Qaeda moved people into Yemen because of a crackdown by the government. As a result, Yemen says it's mobilizing nearly a thousand border guard troops.

Saudi Arabia is cooperating.

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: When we had the attack on our consulate -- the U.S. consulate in Jetta, Saudi Arabia, those individuals crossed the border from Yemen and brought the guns with them to do the attack. And so the Saudis really care.

STARR: Perhaps the most disturbing intelligence -- one U.S. official says there's good reason to believe Al Qaeda leaders located along the Afghan-Pakistan border -- perhaps even Ayman Al-Zawahiri -- are sanctioning the new activity in Yemen.

(END VIDEOTAPE)

STARR: And all of this comes as both Yemen and Saudi Arabia are hunting fighters the U.S. released from Guantanamo Bay, now believed to be back in the region, possibly taking part in plotting potential new attacks -- Wolf.

BLITZER: Barbara Starr working her sources.

Thank you, Barbara, very much.

We're just getting word here in THE SITUATION ROOM that the gold medal swimmer, Michael Phelps, has just spoken out about some of the recent issues involving alleged marijuana use, among other subjects. And we've got the videotape. You're going to want to hear what he's saying. That's coming up right here in THE SITUATION ROOM.

Also, captured on tape -- a crippled passenger plane and the search for somewhere, anywhere safe to land.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: (INAUDIBLE), check.

Does he need assistance?

UNIDENTIFIED MALE: Yes, he -- it was a bird strike.

Can I get him in for Runway 1?

(END AUDIO CLIP)

BLITZER: Newly released audio recordings revealing just how close US Airways Flight 1549 came to disaster before its miracle landing in New York's Hudson River.

President Obama talks faith and family and how his father's turn toward atheism sent the president on a path toward religion. And too much information -- a new Google feature can track your every movement.

But is it a gift to stalkers?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, surgery today for Supreme Court Ruth Justice Ruth Bader Ginsburg. The high court says the 75-year-old underwent surgery for early stage pancreatic cancer. She's expected to remain at New York's Memorial Sloan Kettering Cancer Center for at least a week.

A Wall Street rally -- investors pushed the Dow up 106 points. Analysts credit new optimism over the bailout plan and better than expected sales reports from retailers, including Wal-Mart and Macy's.

And a plane crew's heroism -- newly released audio recordings revealing how close crippled US Airways Flight 1549 came to disaster.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

All that coming up.

But I want to bring in our senior political correspondent, Candy Crowley, right now to talk a little about this faith-based initiative -- revised, to a certain degree, by the new president of the United States.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Right, revised and, they say, expanded by the new president of the United States.

As you know, Wolf, this is a president who, even as a campaigner, understood one way or the other that you cannot take religion out of politics.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Democrats have always been squeamish about embracing politics and religion. But not this one. The president embraces it all -- an inclusion he comes by naturally.

OBAMA: And I had a father who was born a Muslim and became an atheist and grandparents who were non-practicing Methodists and Baptists and a mother who was skeptical of organized religion.

CROWLEY: For better and for worse, the president's religious development was sometimes a central, sometimes a whispered issue in his campaign. The controversy over his former pastor, the Reverend Jeremiah Wright, became so politically toxic, the Obamas had to quit their church.

He had an outreach program and several meetings with Jewish leaders to dispel mistrust in that community. And Internet fueled rumors that he was a Muslim forced him several times to restate his Christian faith -- seated in Chicago, where as a community organizer, Obama worked with people of faith.

OBAMA: Because I spent month after month working with church folks who simply wanted to help neighbors who were down on their luck, no matter what they looked like or where they came from or who they prayed to. It was on those streets and in those neighborhoods that I first heard God's spirit beckon me. It was there that I felt called to a higher purpose.

CROWLEY: Politically, this was a president who understood from his early days as a candidate that you cannot take politics out of religion or religion out of politics. He had a highly organized, effective program, reaching out to religious voters of all stripes -- even into the traditional Republican base of Evangelicals.

Today at the National Prayer Breakfast, he made a place at the table for faith in government.

OBAMA: Whether it's a secular group advising families facing foreclosure or faith-based groups providing job training to those who need work, few are closer to what's happening on our streets and in our neighborhoods than these organizations. People trust them. Communities rely on them. And we will help them.

(END VIDEOTAPE)

CROWLEY: One of the key differences between the Obama faith-based initiative and the Bush faith-based initiative is that President Obama will take this group and put it in the White House. And, Wolf, they've put it under the auspices of domestic policy -- a signal that this will not just be about matching up faith-based or community organizations with federal money, but also with federal policy.

BLITZER: Interesting. All right. Thanks, Candy, very much.

Let's talk a little bit about this and more. Joining us now, our CNN political contributor, Hillary Rosen, a Democratic strategist, and Republican strategist Mary Matalin. Guys, thanks very much.

Hillary first to you. Are you OK? You heard Jessica Yellin reporter earlier that this revised faith-based initiative would really leave it up to Congress as opposed to the president himself and the White House to determine whether gays and lesbians could still be discriminated in terms of hiring by some of these religious groups that would receive federal money to help in their social services. Is that OK with you?

HILLARY ROSEN, DEMOCRATIC STRATEGIST: Well it is. You know I was thinking during Candy's good piece, that the difference in so many respects for wide swap of Americans between Bush instituted a faith- based program and Barack Obama doing it is the comfort level about the expected inclusion of a program this president will create and not just gays and lesbians, but all kinds of American families and folks. So I think there is a lot more trust in the current process.

BLITZER: What do you think Mary, of the way the president announced the new faith-based initiative today because a lot of it sounded very similar to what President Bush was advocating?

MARY MATALIN, REPUBLICAN STRATEGIST: Right and the essence of a faith-based initiative is the recognition that the delivery of social services is sometimes more efficient done outside of government. It's interesting that Barack Obama could recognize that in the establishment of faith-based, but not in his stimulus package, where he wants the government to be the delivery mechanism for jobs, for wealth creation and it's a ying yang thing. He's right on the faith- based thing. He's wrong on the stimulus package.

BLITZER: Lindsey Graham, the Republican senator from South Carolina, he was speaking earlier today. Listen to what he said, Hilary, because he says the president should be doing much more to try to get some kind of compromise on the economic recovery plan through the Senate. Listen to this.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It is a waste of money. It is a broken process and the president, as far as I'm concerned, has been AWOL in providing leadership on something as important as this.

(END VIDEO CLIP)

BLITZER: I guess he wants a much more assertive president, not only speaking publicly, but actually going up to the Senate and twisting some arms.

ROSEN: That's what they say they want, but that's not really what they want. What they really want are more tax cuts, more tax cuts for businesses and more tax cuts for wealthier Americans. That's what they're pushing for and the Republicans were unhappy there aren't more tax cuts in the bill. So they're coming up with proposals to kill pieces of the bill.

It's important to recognize that when you take out things like aid to cities and to states for local child care, community services, that you're putting teachers out of work, that you're affecting local safety patrols, so you know, saving jobs and helping state and local governments not raise property taxes is a very important component of this bill. Spending matters.

BLITZER: Does it make any real difference to most of those Republicans, Mary, what emerges? Because so many of them are digging in their heels saying they're going to oppose this recovery plan or stimulus plan no matter what.

MATALIN: You know, I haven't spoken to a number of Congressmen. They're more afraid of constituents than the Obama machine. It is their constituencies, their home districts that are getting wind of this stimulus package and it is a lot of pork. If there was a distinction between or a connection between spending and jobs, which is not the case, than they could be more for it. We're not talking about the size. We're talking about what is the function of government and Republicans have been able to reassert the role of government in a Free State joined by and will continued to be joined by a lot of blue dog, fiscal conservative Democrats. It's not just tax cuts so there will be tax cuts. It's been proven throughout history that tax cuts, the right kind of tax cuts, incentivize savings and job growth and wealth creation, not just any kind of tax cuts. They're not trying to tax the rich or tax cuts for the rich. That's just old talk. That's not what Barack Obama's talking about either.

As for Lindsey, I think the president has shown that as much leadership as you can. What he's discovering here is that he's a new kind of paradigm politician and he's bumping up against an entrenched culture. He is Washington. When he says Washington's not ready, he's got control of both chambers in the White House so he's Washington, it's a different culture and he has to learn how to deal with it.

BLITZER: Hilary, what Republicans, at least most of them, are saying, they want more tax cuts, not necessarily for the wealthy, but for those middle class who are paying let's say 10 or 15% rate right now for federal income tax. What they hate a lot them say is giving these so called tax credit to individuals who pay no federal income tax.

ROSEN: The cynic in me suggests that they want to vote against whatever comes up because if the economy doesn't get moving again, they want to be able to say they were against the plan, but the optimist in me believes that Barack Obama is trying something different. We had the largest tax cuts in history in the last seven years under George Bush and look where the economy is. It is time to support Barack Obama and the Republicans ought to stop trashing this effort to their constituents who are just now confused more than anything else.

BLITZER: All right. As they say, to be continued. Hilary and Mary, thanks guys very much. Lots to consider, lots to discuss.

We're getting new videotape coming into THE SITUATION ROOM of the swimmer, the gold medal swimmer, Michael Phelps. He's speaking out about the problems he has following that picture of him supposedly using some marijuana. Zain Verjee has got the tape and the details. What do we know, Zain?

ZAIN VERJEE, CNN CORRESPONDENT: Well you know Wolf, that photo really created a fire storm. Olympic champion Michael Phelps saying though that he made a mistake. That it was a bad judgment. Just a few moments ago, he gave this interview to WBAL just outside the pool where he trains. Here's what he had to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How are you doing?

MICHAEL PHELPS, OLYMPIC CHAMPION: I guess as good as I can. Being able to have support through times like this is the most important thing and you know I'm really being able to find out who my true friends and family are.

UNIDENTIFIED FEMALE: What do you want to say to your supporters and detractors and all the kids who jumped in the pool around the world because they want to be like you?

PHELPS: The biggest thing is I clearly bad some bad judgments and mistakes in my life and I think the best thing is you know, learn from your mistakes and it's already what I've done and what I continue to do and you know, I'm going to do everything I can in the pool and I'm already back in the water training, still deciding on the lot of things. I'm happy to be back in the water. It's a place where I feel at home and feel comfortable.

UNIDENTIFIED FEMALE: Has this made you rethink Rome this summer and maybe London in 2012?

PHELPS: Like I said, swimming makes me happy. It's been my life for so many years now and you know, just feels good, good to get back in the water. I'm not going to make decisions yet, but we'll see what happens. Like I said, this is something where I can relax. I can chill, I can be myself, I can joke around with Katie. You know I'm - I feel home in the water.

UNIDENTIFIED FEMALE: This is a question you'll probably only get asked in Baltimore because you have a lot of fans here, but people really think of you as their kid, their brother, their own family member. A lot of people want us to ask you, Michael Phelps, what were you thinking?

PHELPS: Obviously, not much. Like I said, bad judgment. I can learn from it and try to make my life better than it has been in the past. I've made mistakes and I have to live with every mistake that I've learned.

(END VIDEO CLIP)

VERJEE: There's a possibility, Wolf, he could face criminal charges. Many of his sponsors have stood by him and have expressed their support. It's one thing to get all those gold medals, but must have had quite a time explaining that photograph to his mother.

BLITZER: Let's not forget, he's only 23 years old. He obviously made a mistake and he's very regretful of having that made that mistake.

VERJEE: He's a kid.

BLITZER: Well, 23. Thanks.

VERJEE: That's young.

BLITZER: You're about to hear two very different kinds of audiotape. Ones show the amazing calm of a pilot scrambling for options on course to ditch his plane in the Hudson River. The other is a tape prosecutors want to use against baseball great Barry Bonds. CNN has it. You'll hear it right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The audiotapes are now in. The pilot communicating that's disastrous U.S. Airways Flight 1549. Let's go to CNN's Mary Snow. She's in New York working what they call the miracle on the Hudson River but now we hear that miracle unfold. Share it with us Mary.

MARY SNOW, CNN CORRESPONDENT: It's really striking Wolf. As you're about to hear, it's dramatic not because of emotion, but because of the lack of it.

(BEGIN VIDEOTAPE)

SNOW (voice-over ): Facing a potential disaster over the skies of New York, Captain Sully Sullenberger kept calm. Roughly 90 seconds after take off, there's a problem.

CAPT. CHELSEA "SULLEY" SULLENBERGER, PILOT OF FLIGHT 1549: This is Cactus 1539. Hit birds. We lost thrust in both engines. We're turning backwards towards LaGuardia.

SNOW: Cactus is the sign for U.S. Airways. The flight number is actually 1549 and air traffic controller at LaGuardia has an open runway.

AIR TRAFFIC CONTROLLER: If we can get it for you, do you want to try to land runway 1-3?

SULLENBERGER: We're unable. We may end up in the Hudson.

SNOW: About 40 seconds later, Captain Sullenberger looks for another option in New Jersey.

SULLENBERGER: I'm not sure we can make any runway. What's over to our right? anything in New Jersey, maybe Teterboro?

AIR TRAFFIC CONTROLLER: Cactus 1529 turn right 2-8-0, you can land runway 1 at Teterboro.

CACTUS: We can't do it.

AIR TRAFFIC CONTROLLER: OK. Which runway would you like at Teterboro?

SULLENBERGER: We're going to be in the Hudson.

SNOW: Radio contact was lost as the plane made the water landing. The now famous miracle is that all 155 people on board made it safely from the Hudson's frigid waters. Survivors say hearing the tapes made them relive the ordeal.

BRAD WENTZELL, PASSENGER: I think I'm doing the same thing a lot of people are doing is you're trying to listen to how cool and calculating this pilot was. ALBERTO PANERO, PASSENGER: The one point I did get a little bit of chills down my back is he says, unable. That's all he said. That's exactly the tone of voice and demeanor he had when he said brace for impact.

SNOW: One New York air traffic controller says behind the calm are terrifying moments.

DEAN IACOPELLI, PASSENGER, NATCA: You're heart stops. I mean you realize that this is serious. This is when all the planes and voices become people.

(END VIDEOTAPE)

SNOW: Pretty amazing. As for Captain Sullenberger, he called the experience surreal. He told an ESPN reporter, it was very quiet as we worked, my co-pilot and I, we were a team. But to have zero thrusts coming out of the engines was shocking-the silence.

BLITZER: All right, Mary. Thanks very much.

This programming note for our viewers, don't miss the first prime time appearance of that heroic pilot and the crew on "LARRY KING LIVE." It will air next Tuesday, February 10th right here on CNN.

You're about to hear for the first time a stunning audio recording which prosecutors want to use as evidence against the baseball home run king, Barry Bonds. The former San Francisco Giant slugger pleading not guilty ahead of his upcoming trial. Let's go to CNN's Ted Rowlands. He's had access to this audiotape and you're about to share it with our viewers. Ted, explain the significance.

TED ROWLANDS, CNN CORRESPONDENT: Well Wolf, what you're going to hear is allegedly Greg Anderson, this is the trainer of Barry Bonds allegedly talking about Barry Bonds and steroids. It will be up to a federal judge whether or not a jury actually hears the tape.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): Barry Bonds had nothing to say to reporters on his way into or out of the San Francisco federal courthouse today. The former baseball legend is facing multiple counts of perjury and obstruction of justice for allegedly lying under oath in 2003 about steroid use. Potential evidence prosecutors want to use against Bonds who has pleaded not guilty includes an audio recording obtained by CNN. Prosecutors say the recording between Bonds' trainer, Greg Anderson, and Steve Hoskins, a long time friend of Bonds. In this part of the recording, the person prosecutors claim is Anderson talks about how he isn't worried about Barry Bonds testing positive for steroids saying, he'll be tipped before the test is conducted.

"I'll know like probably a week in advance before they're going to do it, but it's going to be in either the end of June ...

It's right before the All Star break technically. So after the All Star break we're like -- clear."

ROWLANDS: Later, the person prosecutors claim is Anderson can be heard boasting about what he's allegedly been giving Barry Bonds.

"Everything I've been doing at this point, it's all undetectable."

Right.

"See, the stuff that I have, we created it. And you can't you can't but it anywhere. You can't get it anywhere else. But, you can take it the day of and pee.

Uh-huh.

And it comes up with nothing.

Isn't that the same [expletive] that Marion Jones and them were using?

Yes, same stuff, the same stuff that worked at the Olympics, and they test them every [expletive] week."

ROWLANDS: Olympic runner Marion Jones served time in federal prison and lost her Olympic medals for lying about steroid use. The audiotape is one of several pieces of evidence the Bonds' defense team argued today should not be allowed at trial.

UNIDENTIFIED MALE: Our defense is that Barry Bonds is innocent. That's our defense and we think that's the central fact of the case and whether the prosecution puts on item of evidence a, b or c, x, y and z, we'll deal with it.

(END VIDEOTAPE)

ROWLANDS: And the reason the tape is so significant is because Greg Anderson will not cooperate with federal prosecutors. In fact Wolf, he served time for contempt after refusing to testify in front of a grand jury. They're hoping to get the tape in and some other evidence. The judge is expected to rule over the next few days. The trial starts next month, March 2nd. Barry Bonds facing multiple counts of a possible jail sentence if found guilty.

BLITZER: A lot of interesting trials. All right. Thanks very much, Ted Rowlands. Good work. Thanks for sharing it with our viewers.

There's sobering news about the U.S. Supreme Court Justice Ruth Bader Ginsburg. She's in a New York hospital. We're going to tell you why.

And the perks of a president, the commander in chief preparing to take his first flight aboard Marine One and Air Force One. We're about to take you aboard.

Stay with us. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Let's check in with Jack for "The Cafferty File."

CAFFERTY: Question this hour: Is the world economy in a depression?

C in Georgia said: "You know what would help is if the media would implement a moratorium on the following terms for one week. Depression, recession, financial crisis, confaction, layoffs. We would see a major improvement in the stock market, people's tempers and the gross national product. We were supposed to see help and change and the media is doing their best to make us all crazy."

Jeff writes: "We are in a depression. Price of oil down and home prices down and the world stock markets down 30% and cars selling for almost nothing. It's a spiral and politicians don't want to admit that except for investment bankers. It's a depression."

Megan writes: "I'm no economist, but there is trouble everywhere in the world. The U.S. and Britain are two examples of countries facing deep recession or depression. It's a matter of terms and we are in deep trouble. With the we, I don't mean fellow Americans. This is a worldwide affair."

Dennis in Pittsburgh said: "Nobody has the guts to say we are in for a long, long recovery. Politics gets in the way of honesty."

J.D. said: "I would rather spend time talking about employment and domestic production instead of making sucker bets on how bad it will be. When unemployment reaches 25%, we have a depression. This fear mongering has got to stop. Ative any in Philadelphia, I bet the 2.6 million people who lost their jobs last year are definitely in one.

If you didn't see your e-mail here, go to my blog at CNN.com/CaffertyFile. You might find it among the hundreds of others posted.

BLITZER: Thanks very much. Jack Cafferty.

Take a look at this. Marine One getting ready on the ground at Andrews Air Force Base outside of Washington, D.C. The president of the United States with his first flight aboard Marine One since taking office. They made the flight to the south lawn of the White House over to Andrew's Air Force Base to board Air Force One, the first time as commander in chief boarding that huge 747 to go to a Democratic retreat in Williamsburg, Virginia. We'll have live coverage in a moment. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Over at Andrew's Air Force Base getting ready to make a short trip. We saw his Marine One land at Andrew's on the short trip over from the south lawn of the White House. He salutes and walking up the steps. Ed Henry is standing by as we watch the pictures. Where is he going?

HENRY: If he is going to Williamsburg, Virginia for a retreat with house Democrats, they voted on the first version of the plan. There could be a vote on a much different bill. You are trying to lay the ground back making their way back to the House to make sure the troops are together. This first flight, there is a fierce competition with White House aides who would get on the first flight for the few president. Some were joking they were mad they didn't get on. Guy is Robert Gibbs. He said that the president recently gave Robert's 5- year-old son Ethan a replica that someone had given him, a toy. Last night Robert Gibbs was putting his son to bed and he said tomorrow your dad will be on Air Force One his son said wow, that's cool. It's part of the job amid the seriousness, this was the cool part.

We have the videotape of the president boarding Marine One on the south lawn of the White House. He is making the short walk getting ready to salute the marine boarding the helicopter for the short flight over to Andrew's Air Force Base. The president of the United States having a few words with that marine as well. I want to give our viewers a look inside air force one right now with a man who flew three presidents before retiring from the U.S. air force at the end of the Bush administration. The colonel invited us on board the world's most famous plane.

With the airliners, it's a 747-200. It has the same configuration of the majority of the airlines with a few extra for the president.

Like an oval office. His flight jacket replaced former President Bush's.

You can get the video down to the ground to get it out to the news network to the American people. He has the ability to contact anyone, any time, anywhere in the world through our communications on board and run the country while on board. There is no golden sinks. We don't have anything amazing on the aircraft. It is a flying White House. The design of the plane is just that. The president has sleeping quarters and the staff have quarters to carry out their work, but it is not a king's plane as such. It's a flying White House.

It is tailored to each administration's specific needs.

We will take a good look at what his likes and dislikes are and make everything available for the first family.

BLITZER: The president on air force one right now making a trip to Williamsburg, Virginia.

To our viewers, you are in THE SITUATION ROOM.

President Obama's is recreating a controversial administration program and he talks about his own religious journey. Plus the president said the time for action on the economy is now. This hour. The Senate is struggling to scale back the rescue plan and trying to reach a compromise. Just as Ruth Bader Ginsburg's cancer surgery is raising the future about the Supreme Court under President Obama. All that and the best political team on television. We want to welcome our viewers in the United States and around the world.