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Another Obama Cabinet Nominee Withdraws; Top Spy on Top Threats

Aired February 12, 2009 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the breaking news we're following: Another Cabinet nomination explodes in the president's face. Senator Judd Gregg reveals why he doesn't want the top job as the Commerce Department after all. Is there more to this stunning turn than he's saying? The best political team on television is standing by.

Plus, President Obama sells his economic rescue plan at a factory that has a huge stake in whether it's passed. This hour, our new breakdown of what you could get out of the bill and when.

And why Colin Powell thinks he deserves at least some of the credit for the Obama victory -- an exclusive and emotional interview with the former secretary of state.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

But, first, the breaking news: Republican Senator Judd Gregg now says he realizes he wouldn't be a good fit as President Obama's commerce secretary.

The breaking news this hour, the New Hampshire senator came forward just a short while ago to talk about his decision to withdraw his name. It's the third Cabinet-level nomination to fall apart for team Obama. We're getting new information about the tensions and the concerns that have been building for days now.

Our White House correspondent, Dan Lothian, is standing by.

But, first, let's go to our national political correspondent, Jessica Yellin. She's working the story. She's got good inside information -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Wolf.

A Democrat aware of discussions tells me that it was two days ago when Senator Gregg told the White House he was bowing out. And at the time, it caught White House officials off-guard. They say he wanted the job. He met with White House officials. He knew their differences. That's according to one Democrat.

And President Obama is himself now telling a local paper that Gregg's decision to withdraw came to him as something of a surprise. (BEGIN VIDEOTAPE)

YELLIN (voice-over): A surprise announcement.

SEN. JUDD GREGG (R), NEW HAMPSHIRE: The president asked me to do it. I said yes. That was my mistake, not his.

YELLIN: New Hampshire Republican Senator Judd Gregg pulling out as commerce secretary nominee just 10 days after accepting the job.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And I look forward to working with Judd in the years ahead.

GREGG: Thank you for taking this rather extraordinary step.

YELLIN: But the deal unraveled even before his confirmation hearing began.

The fiscal conservative says he was troubled by the amount of spending in the president's stimulus plan. He did not cast a vote on it, even though the president desperately needed every senator he could get.

But sources close to Senator Gregg say the bigger issue for him was the White House's effort to take control of the census, usually overseen by the Commerce Department. Results of that census are used to draw congressional districts, which can determine which party controls Congress.

Republicans turned up the pressure on Senator Gregg, who was caught in the middle.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: If this process continues to be controlled by the White House, we're opening the door to politicize the census.

REP. DARRELL ISSA (R), CALIFORNIA: I was shocked when I learned that Rahm Emanuel was going to in fact direct what is otherwise an independent agency underneath a confirmed independent agency -- or semi-independent agency.

(END VIDEOTAPE)

YELLIN: And, Wolf, you see there House Republicans putting enormous political pressure on Judd Gregg at the end to withdraw from this role.

One thing that both Democrats and Gregg himself seem to agree on is that he got cold feet at the last minute. He realized he has too big -- his differences with the White House are just too great at this point -- Wolf.

BLITZER: All right, Jessica, stand by.

I want to get some more on this story now.

Our White House correspondent, Dan Lothian, has been traveling with the president all day. They're in East Peoria, Illinois.

All right, first of all, Dan, give us the reaction from the White House.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, you know, we were here at this Caterpillar plant, where the president had just begun his remarks, when word did break of this announcement. And the White House obviously was stunned by this.

They did release a statement, Robert Gibbs writing in part -- quote -- "Once it became clear after his nomination that Senator Gregg was not going to be supporting some of the president's key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways. We regret that he has had a change of heart."

Now, this obviously was not what the White House wanted to be dealing with today. The president really was trying to focus, again, on his economic stimulus plan. He was here at this plant just weeks after it was announced that more than 22,000 employees would be losing their jobs.

Today, the CEO of Caterpillar said that there could be additional layoffs, but, ultimately, with the stimulus bill, some people could be rehired.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): At this East Peoria Caterpillar plant, the president pitched the stimulus plan as a lifeline for workers here who stand to lose their jobs.

OBAMA: Those 22,000 layoffs aren't just a crisis for those families or for the communities like Peoria and Decatur and Aurora. They are an urgent warning sign for America.

LOTHIAN: The world's largest maker of mining and construction equipment, with more than 112,000 employees, has been hit hard by sinking profits. As management struggles to remain competitive, they're turning to layoffs to make ends meet.

UNIDENTIFIED MALE: We're all kind of worried here. We don't know what's going on.

LOTHIAN: Working with uncertainty, but Caterpillar officials say the stimulus bill could help to turn things around.

JIM DUGAN, SPOKESMAN, CATERPILLAR: If there are investments that are made quickly and thoughtfully to improve the infrastructure system, that's something that, in the long run -- not tomorrow, but years from now -- will make Caterpillar more competitive.

(END VIDEOTAPE)

LOTHIAN: The CEO says that he very much supports the stimulus package, but he's concerned about the buy-American provision, whereby any of these public works projects will have to use materials that are made here in the United States.

Now, this plant, for instance, ships a lot, 50 percent, of what they make here overseas. So, he's very concerned that this provision could lead to some kind of trade war -- Wolf.

BLITZER: All right, Dan, thank you.

Let's check back with Jack Cafferty. He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: With the economy in a tailspin, Americans are saving more, quite a bit more. And while that's a good thing for Americans, believe it or not, that is a bad thing for the economy.

We have gone from a negative savings rate a year ago to saving 3.6 percent of our income in December. That translates to $36 banked for every $1,000 of after-tax income. That's a lot of money that's not in circulation.

Although our current savings rate isn't a record high, and we still trail other industrialized countries, it's a lot higher than it's been. And therein lies the problem. See, our economy relies on consumer spending for its mojo. Consumers drive two-thirds of our economy. If Americans aren't spending, the economy doesn't go anywhere.

But as more people are laid off, family budgets are tightened, a lot of, understandably, people want to save more money. And more Americans are saving more as they're seeing their access to credit cut off. This is all a lot different from what we saw before the bottom fell out of the economy last September.

The savings rate was at historic lows from 2005 through early in 2008, occasionally even falling below zero. Those were the days when a strong stock market and skyrocketing real estate prices led a lot of us to believe we had an endless supply of money, or certainly an endless supply of credit, if we needed money. Those days are over. And we suddenly find ourselves in a rather strange position now.

Although it's better for your bottom line to save as much as you can, doing so might just prolong our economic woes.

Here's the question: If you come into extra money, would you be inclined to spend it or save it?

Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.

BLITZER: Thanks, Jack, very much.

Colin Powell on what the historic election should mean to all Americans.

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER U.S. SECRETARY OF STATE: It hit me. It hit me emotionally. I was expecting him. I supported him. I voted for him. But it was still an electric shock. And I just sat down in my chair. And my kids were crying. And I said to myself, we did it. We actually did it. What a great country.

(END VIDEO CLIP)

BLITZER: All right, you're about to see General Powell on the verge of tears discussing President Obama's election. You're going to hear him also discuss issues in ways you have rarely heard the former secretary of state. Stand by for the exclusive.

Meanwhile, what's in it for you? Wait until you hear Democrats explain how fast you will see new jobs and money in your pocket after the economic plan passes.

And is the world prepared? The president's new top spy lays out huge dangers of possible collapse caused by the economic crisis.

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

(COMMERCIAL BREAK)

BLITZER: Why am I not surprised? Some last-minute wrangling over the new economic stimulus compromise, some House Democrats still demanding right now to still read the fine print, which of course is their right.

Let's go to Mary Snow. She's standing by.

But, first, our senior congressional correspondent, Dana Bash, who's working this story.

They were supposed to pass it today in the House, but not so quickly.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Not so quickly. You say that they want to read the fine print. The big problem right now, Wolf, is there is no fine print to read. They hatched this deal yesterday afternoon. But the legislation, the formal legislation, it is not even written yet. They are still wrangling over some controversial language.

And that is why, in the House, they're not voting today.

(BEGIN VIDEOTAPE)

REP. VIRGINIA FOXX (R), NORTH CAROLINA: Has the bill been made available to the Democrats in the chamber?

BASH (voice-over): Congresswoman Virginia Foxx knew full well the answer to her question was no.

REP. ED PERLMUTTER (D), COLORADO: I have the highlights of compromise. That's what I have.

BASH: For that reason, House Democrats forced their leaders to delay voting on a $789 billion stimulus bill until they can actually read it.

REP. DAN MAFFEI (D), NEW YORK: What I want to know is, is the -- are the resources actually going to be used for what we say we want them used? Are they actually going to create jobs? I think they will. But I want to make sure. And I want to make sure that these jobs are coming to my district.

BASH: House Democrats are most skeptical about money for education. The stimulus package sends some $50 billion to states to help prevent cutbacks in education and other services. But many, like Democrat Dan Maffei, wanted money targeted for school construction. And he's not sure now if his district will get it.

MAFFEI: We're trying to build a new technical high school in my district, precisely to do the kinds of things that would stimulate the economy and help get our economy into the 21st century.

BASH: Still, members of the Congressional Black Caucus, who were very worried stimulus funds would not reach constituents who need it most, say they are satisfied.

REP. MAXINE WATERS (D), CALIFORNIA: We're going to be able to take home some real, real help to all of those constituents who have been waiting for so long to get their government to just give them a hand up.

BASH: Stimulus programs they point to, $4 billion for public housing projects, $4 billion for job training, and $7.2 billion to bring broadband Internet service to the underserved.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: That's very exciting for us and for our communities.

(END VIDEOTAPE)

BASH: Now, assuming that this massive stimulus bill is actually completed and written, so that House members can read it, they do plan to vote on this in the House tomorrow.

And earlier we reported that they were trying to work out a deal to vote in the Senate on Saturday. But the Senate majority leader is actually trying to accelerate that, perhaps, he says, trying to get a vote tonight, but that is going to require Republicans to go along with that. And it doesn't look like, according to our sources, that's going to happen, so maybe a vote in the Senate tomorrow as well at this point -- Wolf.

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

So, how soon before all of us begin to see the effects of this economic stimulus spending?

Let's bring in CNN's Mary Snow. She's been talking to a lot of experts out there.

What's the answer, Mary? MARY SNOW, CNN CORRESPONDENT: Well, Wolf, economists are warning that the bulk of this stimulus plan is going to take time to produce results. And some say, for now, the best to hope for is that it will ease the severity of the recession.

(BEGIN VIDEOTAPE)

SNOW (voice-over): It's a huge investment, $789 billion pumped into the economy. When will it pay off?

The president's chief economic adviser told THE SITUATION ROOM:

LAWRENCE SUMMERS, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: You will see the effects begin almost immediately. Layoffs that otherwise would have happened in cities and towns of cops and teachers won't happen.

SNOW: We asked New Jersey Governor Jon Corzine what it means for his state.

GOV. JON CORZINE (D), NEW JERSEY: Some of the help with regard to relief for unemployment, food stamps, some of the health care aids, unemployment insurance, that's going to hit the streets right as the president signs it.

SNOW: But that is only part of the stimulus story. The overall package, say Democratic sources, is estimated to be 35 percent tax cuts, 65 percent on spending. That includes things like bridges and roads.

CORZINE: There's been a lot of pressure to get state and local governments to prepare so-called shovel-ready projects. Those are things that can go in the next 90 days. You will see a lot of activity in highways and school reconstruction.

SNOW: Economist Anthony Karydakis isn't so sure.

ANTHONY KARYDAKIS, NYU STERN SCHOOL OF BUSINESS: Ninety days would be somewhat on the optimistic side.

SNOW: Karydakis is warning Americans not to expect immediate results from spending on infrastructure and says those shovel-ready projects are limited.

KARYDAKIS: Most states are required by law to bid these things out to contractors. And that means the bidding process itself can take 60 to 90 days alone, before anything gets done.

SNOW: Economists say it takes time to get from Congress authorizing the money to having a plan for it and then actually spending it.

BILL GALE, BROOKINGS INSTITUTION: The spending stimulus generally, the infrastructure in particular, will take, say, six to nine months.

(END VIDEOTAPE)

SNOW: So, the bottom line, some of the economists we spoke to say they expect to see a real impact more likely in 2010, next year, as opposed to 2009. And it will take years to see the full effects of this massive spending -- Wolf.

BLITZER: Mary Snow, thank you.

The Capitol is certainly buzzing over GOP Senator Judd Gregg decision to pull out of the confirmation process for secretary of commerce. We are going to talk about what's behind this stunning development.

Also, the new director of national intelligence speaking out on the huge dangers facing the United States -- we have new information.

And we're going to hear Colin Powell's thoughts on the African- American journey from the age of Lincoln to Obama and why General Powell says there's still a long way to go.

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

(COMMERCIAL BREAK)

BLITZER: We heard a major new threat assessment coming out today from the director of national intelligence.

Let's go to our Pentagon correspondent, Barbara Starr.

Topping the list to at least some of us was a huge surprise. What's going on, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, usually, when the director of national intelligence goes to testify on Capitol Hill, all the talk is about Iran, North Korea, countries like that.

Today, it was different.

(BEGIN VIDEOTAPE)

STARR (voice-over): Just two weeks on the job, President Obama's new top spy made it clear, issue number one for him, the world economic and financial crisis.

DENNIS BLAIR, DIRECTOR OF NATIONAL INTELLIGENCE: It already looms as the most serious one in decades, if not in centuries. An instability can loosen the fragile hold that many developing countries have on law and order.

STARR: Blair noted, instability is already here.

In Europe and the former Soviet Union, there have been anti-state demonstrations. The former Soviet Union, Latin America and sub- Saharan Africa lacked sufficient cash or credit to cope. And Central Asia is ill-equipped to deal with energy, water and food problems. BLAIR: The global financial crisis has exacerbated what was already a growing set of political and economic uncertainties.

STARR: The crisis may only grow worse.

BLAIR: Adding more than a billion people to the world's population by 2025 will put pressure on clean energy sources and food and water supplies.

STARR: Senators wondered if the intelligence community is prepared.

SEN. RUSS FEINGOLD (D), WISCONSIN: Do you think we're well- positioned right now to monitor around the world the effects of this crisis in ways that will damage our national security?

BLAIR: I think we will be able to have some warning.

STARR: There was still talk of traditional threats. Blair called for more intelligence cooperation with Pakistan to capture al Qaeda, and warned again that the latest intelligence shows Iran could get a nuclear weapon soon.

BLAIR: If Iran pursued its centrifuge uranium technology, they could have a weapon as early as 2010.

(END VIDEOTAPE)

STARR: But, Wolf, Blair, who is a retired Navy admiral, made it very clear his top concern right now, today, the world financial and economic crisis. He painted a very sobering picture -- Wolf.

BLITZER: I don't ever remember hearing that from a head of intelligence.

All right, thanks, Barbara, very much.

(NEWS BREAK)

BLITZER: As Colin Powell tells it, Barack Obama's election hit him like a bolt of lightning.

(BEGIN VIDEO CLIP)

POWELL: President Obama's presence as an indication of how far we have come, but also as inspiration to go even further.

(END VIDEO CLIP)

BLITZER: Stand by for the former secretary of state in an exclusive and emotional interview.

Plus, more of our breaking news -- Cabinet nomination trouble for Barack Obama, the president of the United States. We're just getting new comments in from President Obama on this afternoon's bombshell announcement. And a bitter pill for some House Democrats to swallow -- 11th- hour concerns about the economic stimulus package.

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

(COMMERCIAL BREAK)

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

Happening now: Barely weeks into her new job, Secretary of State Hillary Clinton's passport will be getting filled fast. At Egypt's invitation, she will be heading to Cairo next month for international donors conference. It's designed to raise money to rebuild Gaza following Israel's military offensive against Hamas.

There soon may be a cure for the common cold, after all. For the first time, scientists have mapped out the cold virus. And that could lead to dramatically effective new treatments.

And Pope Benedict XVI trying to put out the firestorm over a reinstated bishop who denies the Holocaust. Meeting with American Jewish leaders, the pontiff called the killing of six million Jews a crime against God. He will head to Israel in May -- all of this, plus the best political team on television.

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

But, first, an exclusive interview with the former Secretary of State Colin Powell. Weeks after President Barack Obama was elected, the general is still getting emotional when discussing what happened.

He spoke exclusively and passionately to our own Don Lemon.

(BEGIN VIDEOTAPE)

DON LEMON, CNN ANCHOR: There are those who say, you know, it's over. You know, we don't need certain sorts of programs, affirmative action, what have you, that racism is over in this country because of the election of Barack Obama.

POWELL: It isn't. Racism is not over. We have to be candid.

I was so happy that Americans came to the polls, went to the polls, and a lot of people said, oh, you know, those white folks, they will -- they will say they're going to vote for Obama. They will go in the booth, and they won't.

Well, it turned out most of them did. Ten million more Americans voted for Mr. Obama than did for my dear friend Senator McCain. But there were places in our country where white folks voted for Mr. McCain up to 88 percent of them. So, there is a racial element of that. And black folks voted up to the 98 percent for Mr. Obama.

So, we have not become a raceless, classless society yet, not when you go into our inner cities and see young African-Americans who don't have good schools, don't have job opportunities, are in need of health care, in need of better housing. And so we should use Mr. Obama's presence -- President Obama presence as an indication of how far we have come, but also as inspiration to go even further.

LEMON: That was a very personal moment for you. Did you cry?

POWELL: Yes, we all cried. Did you cry?

LEMON: You cried?

POWELL: Yes. Did you?

LEMON: I was busy working. I was emotional. I can't say that I did cry, but there was a moment where it hit me...

(CROSSTALK)

LEMON: ... when I was -- I was here in Washington -- when he got out of the car and walked with his wife.

(CROSSTALK)

LEMON: But you cried. Tell me about that moment and why.

POWELL: Well, I was in Hong Kong. I was not in the United States. I had voted early and I was in Hong Kong. And it was morning in Hong Kong when it was evening here in Washington.

And so I'm getting up, getting ready for the meeting I'm going to in Hong Kong. And I'm watching the -- the news, all of the broadcasters giving results -- New Hampshire's done this. New York's done this. The exit polls from Maine say this.

And as I'm getting dressed and watching television, I'm talking to my wife, who's in Fairfax County, Virginia, with my son and daughter-in-law. And I'm texting with one of my daughters in New York. So the whole family is watching this, even though we're 8,000 and 9,000 miles apart.

And we saw the results start to come in. And I remembered 2000, where it took five weeks. And I remembered 2004, where it took all night. And as I'm waiting for the results to come in, suddenly one of your colleagues on another channel -- it was the one I happened to surf to -- says, we have one more exit poll to report.

And he simply said, Barack Obama is the next president.

And it hit me. It hit me emotionally. I was expecting him. I supported him. I voted for him. But it was still an electric shock.

And I just sat down in my chair. And my kids were crying. And I said to myself, we did it. We actually did it. What a great country. What a great inspiration to all Americans and what a great inspiration to the world. Because many people in the world thought Americans can't. They're not ready for this. They won't do it.

LEMON: You're emotional about it now. POWELL: Yes. Every day.

LEMON: You're almost crying.

Why?

POWELL: Well, I don't know why.

Maybe it's because I remember the days when a young black kid growing up in the Bronx could only look to a Joe Louis or Ralph Bunche or to a Jackie Robinson for inspiration. Maybe it was because, even though I grew up in an integrated neighborhood in New York City, I knew I was a second-class citizen.

I've been telling a joke recently to try to convince people of the changes we have gone through, that I remembered, as a young kid in the Bronx, hearing one day in the early '50s -- I forget exactly when it was. And I was a teenager. And we all were sitting on the corner stoop.

And we heard, "Hey, did you hear?"

"What, man?"

"Did you hear that" -- it was either Greyhound or Trailways. I can't remember which one.

"Did you hear Greyhound hired its first black bus driver to drive in the South. They're actually going to let a black man drive a bus down the interstate in the South."

And we said, "Whew."

And then we all kind of smiled and kidded, and said, "Lord, I hope he don't have an accident..."

(LAUGHTER)

POWELL: .".. Because you know what the white folks will say."

We felt that insecure about ourselves, because we were taught for 200 years to feel inferior and insecure about ourselves. But things were changing.

And I got an education that allowed me to not be insecure about myself. And I went into an institution -- the United States Army -- that was ahead of everybody else. And they said to me, the only thing we care about is performance. We don't want to hear about your immigrant background. We don't hear about -- hear -- want to hear about you being a poor kid. We don't want to hear about the fact that you're black. The only thing we care about is performance.

You ready?

And I said, yes, I'm ready.

(END VIDEO CLIP)

BLITZER: And you can much more of Don Lemon's exclusive interview with Colin Powell Sunday night, 10:00 p.m. Eastern, on CNN NEWSROOM with Don Lemon. That's coming up Sunday night. It's part, by the way, of a special series he's put together called "African- American Firsts." You'll want to see it Sunday night.

We have brand new tape just coming in -- President Barack Obama's first public reaction to Senator Judd Gregg's stunning decision to withdraw his nomination for Commerce secretary. You're going to hear it here. That's coming up.

Plus, a heartfelt tribute to a predecessor. President Obama honors Abraham Lincoln on this, the 200th anniversary of his birth.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: All right. We're following up on the breaking news. Senator Judd Gregg, Republican of New Hampshire, announcing he's no longer a candidate to become President Obama's Commerce secretary.

Let's assess what's going on with our senior political analyst, Gloria Borger; our CNN political contributor, Steve Hayes, of "The Weekly Standard;" and our CNN political analyst, Roland Martin. They are part of the best political team on television -- Gloria, only a little while ago, a newspaper in Springfield, Illinois "The State Journal-Register," had an interview with President Obama and they posted this clip of what he had to say.

(BEGIN VIDEO CLIP)

OBAMA: It comes as something of a surprise because the truth is, you know, Mr. Gregg approached us with interest and seemed enthusiastic.

(END VIDEO CLIP)

BLITZER: Now, at his news conference up on Capitol Hill, Senator Gregg seemed to take a very different stance on that sensitive issue.

Listen to what he said.

Listen to this.

(BEGIN VIDEO CLIP)

GREGG: The simple fact is there was -- I did not didn't campaign for this job. You know, there -- I didn't ask anybody to call for me to get in this job. I think I might have called him a couple of times over the week-and-a-half period -- the week period when I was being considered and asked what's the status.

But beyond that, I didn't do much else. I don't think they sought me out and I didn't seek them out. I think an intermediary suggested me and they thought it was a good suggestion.

(END VIDEO CLIP)

BLITZER: All right. So, clearly, very different, Gloria, than what the president said, that: "He approached us with interest and seemed enthusiastic."

Someone's maybe not telling the full story.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right. I mean, it sort of seems like Judd Gregg is the runaway bride, Wolf, you know, who kind of chickened out because...

(LAUGHTER)

BORGER: ...because, in the end, he decided that he was uneasy with an administration whose stimulus package he couldn't even vote for. And I think there are hurt feelings or -- on both sides. I think that the White House would have liked him to vote for their stimulus package and he might have liked for the White House not to say, gee, we might take the census out of your jurisdiction, because it's a -- because it's a political issue.

In the end, Judd Gregg is a former governor, a senator. I think he wanted to run his own show. And he became increasingly uneasy with this because he wasn't in line with what Barack Obama thinks a lot of the time. And Barack Obama is the president and he's the boss.

BLITZER: He was going to be a member of the cabinet, Steve, and yet he recused himself. He said he wouldn't even vote on the seminal issue facing the administration and the Congress right now -- the economic stimulus package. When I heard that the other day, I was pretty stunned.

STEPHEN HAYES, SENIOR WRITER AT "THE WEEKLY STANDARD": Yes, I think, in a way, Judd Gregg is sort of like Republicans in general across the country. He's -- he likes the idea of Barack Obama. I think he was enthusiastic and wanted to be helpful, at least initially, in the administration, as we're in these tough economic times.

But when he actually looked in -- looked at the bill -- looked at the stimulus package and said jeez, this is a bit too far. And I think he said this is a bridge too far for me.

I think this is likely to be a very nasty split and we're going to hear a lot more about this in the next 24 hours.

BLITZER: You know, and, also, Roland...

ROLAND S. MARTIN, CNN POLITICAL ANALYST: (INAUDIBLE).

BLITZER: We -- hold on a second, Roland. We heard from the head of the Congressional Black Caucus a little while ago, Congressman Barbara Lee. She issued a statement. And I'll just sort of summarize it in a couple of words -- good riddance. They weren't very happy with him to begin with. MARTIN: No. She was highly critical when he -- when it was announced that he was going to be the nominee. And, look, let's just deal with -- dismiss with the nonsense. The reality is you have Republicans who did not want Gregg to go and the census issue was the major issue. We can stand here and talk all day oh, the stimulus bill and what was in it and he was uncomfortable.

But the reality is the census issue was a major issue that Democrats had, Republicans have. And Gregg knew full well he was caught in the middle of that.

And, look, that's a major issue for the Commerce Department. But also, many of the affirmative action programs -- contracting programs in the federal government, fell on the Commerce, as well.

And so I think the census is the critical issue and not the stimulus bill...

BLITZER: And the issue...

BORGER: Well...

(CROSSTALK)

BLITZER: And the issue, just for those viewers...

(CROSSTALK)

BLITZER: For those viewers unaware, the Commerce Department is in charge of the Census Bureau. But this administration was hoping to move some of those responsibilities, Steve, from Commerce, over to the White House. And a lot of Republicans said that's overly politicizing a bureau that's not supposed to get involved in politics.

HAYES: Yes. Well, and I think they're right about that. I mean, to me, what's been astonishing about this -- and I think it is because we've been in the context of this stimulus fight -- is that that hasn't gotten more attention. I mean this seems, to me, a pretty significant power grab. And I would hasten to say if there were the Bush administration, we would have heard lots of crowing about how this was politicizing a -- you know, the nonpolitical federal government bureaucracy.

BORGER: And I think that -- that Senator Gregg took this as kind of a slap in the face, according to one source of mine. Look, you know, this is a White House that had a short-term tactic -- oh, great idea. Let's put a Republican -- another Republican in the cabinet.

But in the long-term, this was a Republican who didn't really agree with President Obama on a lot of issues. And it became clear...

MARTIN: So what was he...

BORGER: To both sides...

MARTIN: Right. BORGER: And they did it because they thought it would look good and, also, I was told, because it would take a chief economic quarterback for the Republicans off the field in the Senate and put him on the side of the White House.

MARTIN: Hey, Wolf, I think for the Obama administration -- look, cut to the chase. Put Democrats in your administration. Enough with this nonsense of trying to find other Republicans.

(LAUGHTER)

MARTIN: Look, you've made the point. You've got Bob Gates. You've got Ray LaHood. Look, there are Democrats who are sitting here saying we're not going to stand around and have a guy over in the Commerce Department who is at odds with where we stand on other issues.

So make your appointments and move on. But this whole notion of keeping trying to find Republicans to fit, he had a philosophical and ideological difference. Choose somebody who has your back 100 percent and not make -- don't make any more deals.

BLITZER: All right, guys, we're going to leave it on that note.

I know Lou is going to have a lot more coming up at the top of the hour.

He's standing by with a little preview.

What's coming up -- Lou?

LOU DOBBS, CNN ANCHOR: Wolf, as you might suspect, we're going to be talking about some sort of political voodoo curse on the post of Commerce secretary. We'll have the very latest on the unexpected decision by Senator Judd Gregg to withdraw his nomination over disagreements on that massive stimulus bill and the census and who knows what else.

Also tonight, Democrats fighting one another over the stimulus plan. Now Senate Majority Leader Harry Reid is clamoring for some Republican support. We'll have that for you.

And the final version of that stimulus bill is loaded with pork. Top Senate Democrat Chuck Schumer seems to think Americans don't care about what he called tiny, porky amendments. Tonight, we're going to show you a pie chart. This is for Senator Schumer's benefit, so that he can see what's pork, what's spending and what's tax cuts. And he may change his mind about that cute little tiny, porky amendment stuff. That's in Lou's Line Item Veto tonight.

Also, Democrats using the stimulus legislation to kill one of the most effective tools to fight illegal immigration -- the eVerify program. Supporters of eVerify say the fight's far from over. Senator Jeff Sessions, Congressman Lamar Smith, among our guests.

Join us for all of that at the top of the hour, all the day's news and more -- Wolf, back to you.

BLITZER: See you a little while, Lou.

Thank you.

Honoring Abraham Lincoln, on this, his birthday bicentennial.

(BEGIN VIDEO CLIP)

OBAMA: I can say that I feel a special gratitude to the singular figure who, in so many ways, made my own story possible and in so many ways, made America's story possible.

(END VIDEO CLIP)

BLITZER: We're going to hear President Obama's extended remarks.

Plus, we'll get a peek at the new pennies marking the occasion -- all four of them.

Also, the octuplet mom calling to mind a certain celebrity -- at least to some people following her story.

Would that be Angelina Jolie?

Jeanne Moos is standing by to take a "Moost Unusual" look.

(COMMERCIAL BREAK)

BLITZER: President Obama helped mark the 200th anniversary of Abraham Lincoln's birth today.

Here's part of what President Obama had to say on Capitol Hill.

(BEGIN VIDEO CLIP)

OBAMA: It is a great honor to be here -- a place where Lincoln served, was inaugurated and where the nation he saved bid him a last farewell.

As we mark the bicentennial of our 16th president's birth, I cannot claim to know as much about his life and works as many who are also speaking today. But I can say that I feel a special gratitude to this singular figure who, in so many ways, made my own story possible. And in so many ways, made America's story possible.

It is fitting that we are holding the celebration here at the Capitol, for the life of this building is bound ever so closely to the times of this immortal president -- built by artisans and craftsmen, but also immigrants and slaves.

It was here, in the Rotunda, that Union soldiers received help from a make-shift hospital. It was downstairs in the basement that they were baked bread to give them strength. And it was in the Senate and the House chambers where they slept at night and spent some of their days. What those soldiers saw when they looked on this building was a very different sight than the one we see today. For it remained unfinished until the end of the war. The laborers who built the dome came to work wondering each day whether that would be their last, whether the metal they were using for its frame would be requisitioned for the war and melted down into bullets. But each day went by without any orders to halt construction and so they kept on working and kept on building.

And when President Lincoln was finally told of all of the metal being used here, his response was short and clear: "That is as it should be." The American people needed to be reminded, he believed, that even in a time of war, the work would go on, the people's business would continue -- that even when the nation itself was in doubt, its future was being secured and that, on that distant day, when the guns fell silent, the national Capitol would stand, with a statue of freedom at its peak as a symbol of unity in a land still mending its divisions.

It is this sense of unity, this ability to plan for a shared future, even in a moment where our nation was torn apart, that I reflect on today.

(END VIDEO CLIP)

BLITZER: The U.S. Mint, by the way, is rolling out the first of four new pennies celebrating Abraham Lincoln's bicentennial. Each shows a different period in his life, starting with the log cabin in Kentucky where he was born. The second shows him in Indiana, where Lincoln chopped wood and enjoyed reading. We then see Abraham Lincoln standing outside the Illinois statehouse, reminding us of his law career. The final penny shows the Capitol dome under construction during his term in the White House.

Jack Cafferty's joining us once again.

He has "The Cafferty File" -- Jack.

CAFFERTY: You know, not to denigrate the memory of President Lincoln, we're $12 trillion in debt. They're spending taxpayer money making four new pennies.

Why?

The question this hour is: If you come into extra money, will you spend it or save it?

Or perhaps you could use it to make some new pennies.

Tripp in Mechanicsburg, Pennsylvania: "Take a closer look. You'll see that those putting away extra savings are the ones who can afford to. We who can't afford to make ends meet at the end of the month spend every penny so that our gas won't be turned off and our homes foreclosed."

Eric in Colorado writes: "With all the money the government is printing to pay for the stimulus, we'll need any extra money to counterbalance the high inflation that's about to hit us."

What extra money?

Matt in Stafford, Virginia: "I'd love go to out and spend all of my theoretical extra money, thinking the action would spawn magical economy fairies who would then go around making everything better. Nobody knows where this economy is going. The stimulus is a defibrillator -- it could shock the economy back to life or do absolutely nothing. My money is going into the bank."

Daniel in Japan writes: "The first thing I would do with any extra money is change it into something other than U.S. currency. It would be better to save it in the form of Japanese yen or canned Spam than to keep a stack of soon to be worthless U.S. dollars. It's over, Jack. The zombies are coming."

M. writes: "Of course, I would save it. I was brought up by parents who were children of the Great Depression. They believed the quickest way to double your money was to fold it in half and put it in your pocket."

Joan writes: "Spend. There are great deals right now, so anyone who can afford it should take advantage of the bargains and help themselves and the country as a whole."

Jesse in New Jersey: "It would go right into my savings, which is under my mattress, since I can't trust the banks."

And Roland in St. George, Utah: "I'd send you as much as it would take you to get you to read one of my comments on the air. Do you even know where St. George, Utah is?"

Roland, no.

And if you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile and look for yours there, among hundreds of others. Four new pennies. That's just what we need.

BLITZER: Four new pennies. Well, you know, it's something.

All right, Jack.

Thank you.

You may have noticed, by the way, that the mother who gave birth to the octuplets -- at least to some -- bears a resemblance to a certain movie star.

Jeanne Moos with this "Moost Unusual" story. That's next.

(COMMERCIAL BREAK)

BLITZER: The mother of the octuplets and Angelina Jolie?

CNN's Jeanne Moos has a "Moost Unusual" story.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): As the story of the octuplets' mom has snowballed...

(on camera): The one who had the eight babies?

UNIDENTIFIED MALE: Eight?

MOOS: Eight.

UNIDENTIFIED MALE: How?

MOOS (voice-over): How could you not wonder about this?

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

UNIDENTIFIED FEMALE: Is the octo mom obsessed with Angelina Jolie?

(END VIDEO CLIP)

MOOS: We seem obsessed with the question.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

UNIDENTIFIED FEMALE: Look at her lips.

UNIDENTIFIED FEMALE: Angelina Jolie wannabe look alike popping out all those babies.

(END VIDEO CLIP)

MOOS: And guess who popped up when "Saturday Night Live" covered the octuplets.

(BEGIN VIDEO CLIP FROM "SATURDAY NIGHT LIVE," COURTESY SNL/BROADWAY VIDEO)

UNIDENTIFIED MALE: Angelina Jolie.

What are you doing here?

UNIDENTIFIED FEMALE: I heard someone had eight babies.

Does she want all of them?

(END VIDEO CLIP)

MOOS: Move over, Ann Curry, with your exclusive NBC interview.

(BEGIN VIDEO CLIP FROM "TODAY," COURTESY NBC)

ANNE CURRY, NBC CORRESPONDENT: This morning, we'll be speaking with Nadya Suleman, the controversial mother of eight. Nadya, not -- not yet.

(END VIDEO CLIP)

MOOS: While Angelina likes to adopt kids, the octo mom seems to have adopted Angelina's look. "Life and Style" weekly put the two on its cover. When we showed the octo mom's photo to some folks...

(on camera): The question, who is this?

UNIDENTIFIED MALE: Angelina Jolie?

MOOS: No. This is Angelina Jolie.

UNIDENTIFIED FEMALE: It looks like a really, really young Angelina Jolie.

MOOS: But it's not Angelina.

UNIDENTIFIED FEMALE: Ah.

It's just a look-alike?

UNIDENTIFIED FEMALE: The lips. The lips. Yes. They look alike a lot.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: They're related?

MOOS (voice-over): Oh, Angelina will love that.

UNIDENTIFIED FEMALE: I have a Web site.

MOOS: The "Chicago Sun-Times" describes Jolie as creeped out and irritated. The paper quotes a source close to the actress as saying: "Jolie has received admiring letters from the octuplets' mom," though Suleman told NBC a different story.

(BEGIN VIDEO CLIP FROM "DATELINE," COURTESY NBC)

NADYA SULEMAN, OCTUPLETS' MOTHER: I have never even thought of Angelina Jolie, except the last time I saw a movie.

(END VIDEO CLIP)

MOOS (on camera): Do you think they look alike?

UNIDENTIFIED MALE: It looks like they've the same doctor doing their lips.

MOOS: We called a plastic surgeon who compared old and recent photos of the octo mom.

DR. ANTHONY YOUN, PLASTIC SURGEON: Her nose definitely appears to be whittled down and her lips definitely appear to have increased in size, probably by about three or four times. (BEGIN VIDEO CLIP, COURTESY REDSTATEUPDATE.COM)

UNIDENTIFIED MALE: Eight babies on top of the six she done got at home and not counting the two apparently still in her lips incubating.

(END VIDEO CLIP)

MOOS: In her NBC interview, Suleman denied having cosmetic surgery.

(BEGIN VIDEO CLIP FROM "DATELINE," COURTESY NBC)

UNIDENTIFIED MALE: Did you have your lips done?

SULEMAN: No. No.

(END VIDEO CLIP)

YOUN: What I think she has probably had done is fat actually transferred from her thighs or her bottom into her lips. And what can happen to somebody...

MOOS (on camera): From her bottom?

YOUN: Exactly. You take fat from the bottom...

MOOS: That's what people are going to kiss?

(voice-over): Hey, maybe everyone has got this thing backwards.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

UNIDENTIFIED FEMALE: I think Angelina Jolie is trying to look like me.

(END VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: And don't forget to watch THE SITUATION ROOM this Saturday and every Saturday, 6:00 p.m. Eastern. Among my guests this Saturday, the Senate Judiciary Committee Chairman Patrick Leahy.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.