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Madoff's Victims Speak Out; Credit Card Crisis Threat

Aired March 11, 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: And, to our viewers, you're in THE SITUATION ROOM.

Happening now: the president warning of the dangers of global recession, and his treasury secretary talking of an additional billions of dollars in emergency funding to the International Monetary Fund. Can the U.S. afford to bail out the world?

Plus, it could be the next big financial pillar to crumble, new fears that the credit card industry made some of the mistakes as banks.

And they say Bernard Madoff swindled them out of all of their life savings, and, even if he goes to jail, they want their money and their homes and their lives back -- all that and the best political team on television.

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

President Obama is promising a crackdown on lawmakers' pet projects in the future. But, for today, he's signing off on thousands of them. And now critics, like Senator John McCain, are saying the president missed an opportunity to stand firmly for reform.

Let's bring in our White House correspondent, Dan Lothian.

Dan, what happened?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: And, Wolf, you know, the president signed this bill behind closed doors. It's the first time that he has done this. Why did he do it?

Well, White House spokesman Robert Gibbs, all he could say is that some things are signed in public and some things are not.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): President Obama essentially held his nose and signed what he called an imperfect spending bill, $410 billion that keeps the federal government running.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can't have Congress bogged down at this critical juncture in our economic recovery.

LOTHIAN: It was a day of contradictions. The bill is loaded with 9,000 earmarks, what some consider pet projects, or pork. At the same time, the president is calling for earmark reform, strict new guidelines to prevent future abuse.

OBAMA: The future demands that we operate in a different way than we have in the past.

LOTHIAN: One Republican couldn't resist poking the president in the eye.

REP. JEFF FLAKE (R), ARIZONA: This gives voice to St. Augustine's lament: Give me sobriety, but not yet.

LOTHIAN: White House officials say they're moving beyond the past to focus on the economy and recovery efforts, and part of the strategy is a P.R. offensive to showcase a fully engaged economic team.

Treasury Secretary Timothy Geithner was on the "Charlie Rose" show on Tuesday. Then, for the first time, reporters and cameras were given access to the Oval Office after the president's daily economic briefing.

And, on Friday, the president's top economic adviser, Larry Summers, will be making a major speech on the economy.

JOSH GOTTHEIMER, BURSON-MARSTELLER: They need to convince people, like with any marketing campaign, that they should feel -- that they can feel more comfortable, that the future is better, even if there's going to be some bumps ahead.

(END VIDEOTAPE)

LOTHIAN: As part of the administration's earmark reform, they would like lawmakers to post on their individual Web sites any of the earmarks that they have in a bill. This is part of the whole transparency effort.

And, of course, if anything there the administration believes is not legitimate, they will push very hard to have it eliminated -- Wolf.

BLITZER: All right, Dan, thank you.

The treasury secretary, Timothy Geithner, reportedly floated expensive idea today for dealing with the deepening global recession. The Associated Press saying the United States plans to seek approval to increase the size of an international monetary emergency fund by as much as $500 billion.

The U.S. contributes about 20 percent of the fund, which now is $50 billion.

On camera today, President Obama made it clear he wants other countries to back up his plan to jump-start the global economy.

(BEGIN VIDEO CLIP) OBAMA: We can do a really good job here at home with a whole host of policies. But if you continue to see deterioration in the world economy, that's going to set us back.

(END VIDEO CLIP)

BLITZER: Wall Street is shrugging off the second blues for a second day today. The Dow Jones industrials closed up almost four points. That's a very, very tiny increase, but at least it's an increase. Investors managed to hold on to the almost 300-point gain made yesterday. That was the best performance so far this year.

Meantime, the energy secretary, Steven Chu, warned today of a possible threat to economic recovery. He told senators he will warn OPEC nations against cutting OPEC -- against cutting oil production and adding to the volatility of fuel prices. He says those moves could make the global recession worse.

Look at this eye-popping number right now, $764.5 billion. That's how much the deficit has grown to. And it's a record. The Treasury Department says the federal budget deficit grew almost $193 billion last month alone. That was a record as well.

With unprecedented numbers like these, what are lawmakers saying about the notion of yet another economic stimulus plan?

Our congressional correspondent, Brianna Keilar, is standing by with more on this part of the story.

Brianna, what's going on?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, some rank and file Democrats think it's a good idea, but Democratic leadership aides say it's too soon to talk about another stimulus.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): House Democratic leadership aides deny work is already under way on another economic stimulus package less than a month after Congress threw the economy a $787 billion lifeline.

The pushback comes back after Congressman David Obey, the top Democrat in the House Appropriations Committee, told CNN Tuesday night he's already instructed his staff to start drafting a proposal for another stimulus plan.

A Democratic leadership aide tells CNN Obey got ahead of himself. But House Speaker Nancy Pelosi said Tuesday more stimulus money might be needed.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We have to keep the door open to see how this goes.

KEILAR: Republicans jumped on the talk of another expensive bill, accusing Democrats of out-of-control government spending. SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: In just 50 days, Congress has voted to spend about $1.2 trillion between the stimulus and the omnibus. To put that in perspective, that's about $24 billion a day.

KEILAR: While Democratic leaders sought to tamp down suggestions another stimulus is on the horizon, some rank and file House Democrats, like Pennsylvania moderate Joe Sestak, are ready to support one.

REP. JOE SESTAK (D), PENNSYLVANIA: The most bold, aggressive leadership is what's needed. I have seen that effort in the economic stimulus plan. But it was really, I think, the minimum needed, and we will have to come back again for more.

(END VIDEOTAPE)

KEILAR: But Speaker Pelosi's spokesman, Brendan Daly, says -- quote -- "Congress will continue to closely monitor economic conditions to determine if further action is need to stimulate the economy."

So, what is the timeline here? Well, speaking with Democratic leadership aides on background, they will only say that it would be several months, close to the end of the year, before they would consider a second stimulus -- Wolf.

BLITZER: Brianna Keilar, thank you.

It's also worth remembering right now that President Bush, the former president of the United States, also signed a stimulus package on his watch, a $170 billion measure approved last year.

So, since this current recession began, we are now potentially about to get into a third economic stimulus package, not a second one, a second one on President Obama's watch, a third altogether.

President Obama, by the way, says he's not just the leader of the free world; he's also a husband, a father, and a son of a loving mother. Today, highlighting the women in his life, he created the White House Council on Women and Girls. It aims to ensure that the government is considering how policies and programs impact women and families.

Senior presidential adviser Valerie Jarrett is the chairwoman. She says it won't just focus on women here in the United States.

(BEGIN VIDEO CLIP)

VALERIE JARRETT, SENIOR PRESIDENTIAL ADVISER: We certainly are looking beyond our country. We have every department involved, the State Department, the Defense Department, the U.N. ambassador.

And, so, yes, we are looking -- the United States, though, is a role model for women around the world. And, so, if there are atrocities anywhere, that's certainly something that we want to examine and see what we can do at the federal level to address those atrocities.

(END VIDEO CLIP)

BLITZER: Let's hope it helps.

All right, let's go back to Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, more than 50 days now into the Obama administration, and it looks like his honeymoon with the American people is going along just fine, thank you, CNN poll of polls showing 61 percent of those surveyed approve of the job our president's doing.

It's not as high as it was during the transition period or right after his inauguration, but it's still pretty good. The rating is also slightly higher than those of his predecessors, including George W. Bush, Bill Clinton, George Herbert Walker Bush, and Ronald Reagan at about the same time in their administrations.

President Obama's maintaining this approval rating as he gets down to the business of governing, following through on many campaign promises and making some tough decisions on everything from Iraq to Afghanistan to Guantanamo Bay detainees, education, health care, you name it.

Of course, the biggest issue, the economy. Although the stock market doesn't seem to have much confidence in President Obama or his bailout plans, polls suggest that Americans do. A recent poll shows three out of four of us have confidence in the president to make the right economic decisions.

And that's much higher than the percent who have confidence either in Wall Street or in congressional Republicans.

So, here's the question. What will it take to end President Obama's honeymoon? Go to CNN.com/caffertyfile, and post a comment on my blog.

They all end. It's just a question of how and when.

BLITZER: Tough business, very tough, tough crowd out there as well, Jack. Thank you.

CAFFERTY: Yes.

(LAUGHTER)

BLITZER: So, what's the cost of having a credit card in this recession? For many of you, priceless. But hold on to your plastic. Could your credit line soon be cut?

And the former President Bill Clinton essentially telling the current president, Barack Obama, be careful. Why is the former president cautioning the current one? Bill Clinton spoke to our own Dr. Sanjay Gupta. Stand by for that. And it happened to these people. Imagine virtually all of your money possibly gone, the biggest financial scheme in history.

(BEGIN VIDEO CLIP)

DOMINIC AMBROSINO, FORMER MADOFF INVESTOR: Everything that we planned for in our future four years ago, when I retired, revolved around Madoff and the investments.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Hold on to your plastic. The credit you now need or enjoy could soon be drying up because of this recession.

Let's go to Mary Snow in New York to explain what's going on -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, a banking analyst stood out because she predicted trouble at Citigroup. That was back in 2007. Now she's raising another red flag, this one, the next potential jolt to the economy.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Does plastic pose the next threat to the economy?

Prominent banking analyst Meredith Whitney warns in a "Wall Street Journal" opinion piece that credit cards are the next credit crunch. She estimates $2 trillion of credit card lines will be cut this year, $2.7 trillion by the end of next year, and a big pullback on that credit, many economists agree, could further slow already weak consumer spending.

PHILIPP SCHNABL, NYU STERN SCHOOL OF BUSINESS: The question is, is it going to be too fast? And is it going to affect individuals who are actually good borrowers, who are able to repay their loans, their credit cards, but the banks are just being too cautious and going to cut those as well?

SNOW: With people falling behind on mortgage payments and losing their jobs, there's worries about customers not paying their credit card debt. American Express recently offered to pay some customers to close their accounts if they paid off their balances.

Those who followed the credit card industry say companies like American Express are trying to protect themselves against risky customers.

LESLIE MCFADDEN, BANKRATE.COM: Credit card issuers as a whole are trying to cut down their risk. Now, this was just another way for them to do it.

SNOW: The solution? In the article, Whitney calls on lenders, politicians and regulators for thoughtful leadership to prevent what she estimates to be a 57 percent contraction in credit lines.

But another economist says, while at the same time these companies are cutting credit lines to protect against risk, they also make money by loaning it to consumers, most often at double-digit interest rates.

LAKSHMAN ACHUTHAN, AUTHOR, "BEATING THE BUSINESS CYCLE": There's certainly a tug-of-war going on between these -- these kind of competing issues. But I wouldn't have the complete kind of doomsday outlook out there.

(END VIDEOTAPE)

SNOW: Now, banking analyst Meredith Whitney says desperate times require radical measures and calls on credit card lenders to work together to keep credit lines intact for people who do have the ability to pay their bills -- Wolf.

BLITZER: All right, we have got to do a lot of work out there, a lot of important work.

All right, Mary, thank you.

The accused financial scammer Bernard Madoff is set to plead guilty tomorrow. He's accused of running the biggest financial scheme in history.

Meanwhile, the people who have lost virtually all their money, they want Madoff to pay.

Our senior correspondent, Allan Chernoff, has more -- Allan.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, like many Madoff investors, Ronnie Sue Ambrosino her husband, and Dominic, were living the good life, secure that their money was well-invested, until the Madoff scandal broke in December.

(voice-over): Madoff investor Ronnie Sue Ambrosino has little confidence any justice will come from Bernard Madoff pleading guilty, after seeing him remain out on bail since December.

RONNIE SUE AMBROSINO, FORMER MADOFF INVESTOR: He manipulated the system to allow him to stay in his penthouse for three months. Is he going to continue to manipulate the system on Thursday with the hearing?

CHERNOFF: Ambrosino and her husband, Dominic, both retired, say they squirreled away their entire savings with Madoff, believing the nest egg had grown to $1.6 million. They were vacationing in their custom-made R.V. in, surprise, Arizona, of all places, when they got the surprise of their life -- word that Madoff had been charged with running a massive investment fraud.

R. AMBROSINO: It happened on a Thursday. And what I remember for those first few days is needing to hold on to each other.

DOMINIC AMBROSINO, FORMER MADOFF INVESTOR: Everything that we planned for in our future four years ago, when I retired, revolved around Madoff and the investments.

CHERNOFF: The Ambrosinos now say they can't afford to drive the R.V. back to Florida.

D. AMBROSINO: To move this motor home 2,500 miles, it's roughly at a cost of $1 a mile. And to move it anywhere right now at $2,500, we just don't have it. It's just not in our budget. It's not -- we don't have the money. We're just -- we're stranded. We're stranded here in Phoenix.

CHERNOFF: And seeing Madoff plead guilty, Ronnie Sue and Dominic say, will bring them little satisfaction. What they want is to get back their money, their life savings.

R. AMBROSINO: The man has proven that he's obviously got no conscience. He's taken money from his best friends. He's taken money from his sister, his employees. The only thing I would like to know -- and, again, I don't think I would believe it -- is who else is involved and where is my money?

CHERNOFF (on camera): Their best hope for getting some money back is the Securities Investor Protection Corporation, which is supposed to provide investors with up to half-a-million dollars. But, so far, SIPC has sent out checks to only a dozen Madoff investors -- Wolf.

(END VIDEOTAPE)

BLITZER: Allan Chernoff, thank you.

People all over the country say they're victims of Bernard Madoff's investment scheme. This map by "The Wall Street Journal" shows most of them live in New York, New Jersey, Denver, and Palm Beach, down in Florida.

The lure? Prosecutors say Madoff promised some people a 46 percent annual return on investments. The government says it still doesn't know how much money was lost. About $940 million have been recovered so far. That's a fraction of what Madoff claims, about $50 billion, although, yesterday, prosecutors said it could be closer to $65 billion -- billion -- allegedly ripped off.

In another alleged fraud case, the Texas billionaire R. Allen Stanford is putting the courts on notice that he won't testify, citing his fight -- right against self-incrimination. The Securities and Exchange Commission has filed civil court charges of accusing Stanford of running a massive Ponzi scheme and committing fraud on a scale of about $8 billion.

We asked what you thought of the president's first 50 days.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Here's my report card for his first 50 days in office, his handling of the economy, C., Iraq, B., Afghanistan, A., overall leadership, C. Total score? B-minus.

(END VIDEO CLIP)

BLITZER: I-Reporters rose to the challenge, and now the best political team on television is ready to give us their own report cards.

And new details on the deadly rampage which terrorized three Alabama towns -- what authorities are saying about the shooter.

Plus, pushing hard for the best seats on a plane. Are members of Congress putting undue pressure on the U.S. military to get perks while traveling?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Do members of Congress put undue pressure on the Pentagon to get the best seats on military planes.

Let's bring in our Pentagon correspondent, Chris Lawrence. He's doing some investigating.

What are you finding out?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Wolf, it shows -- that these e-mails and documents show that some congressional staffers treat the Pentagon almost like a glorified travel agent.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): When House Speaker Nancy Pelosi and members of Congress need to fly on military planes, the Defense Department books their travel, but e-mails and documents show some military planners intimidated by congressional staffers.

And no wonder they're afraid to say no. Look what one staffer writes when she's told certain planes aren't available.

(on camera): "This is totally unacceptable. The speaker will want to know where the planes are. This is not good news. And we will have very disappointed folks, as well as a very upset speaker."

That sounds threatening.

TOM FITTON, PRESIDENT, JUDICIAL WATCH: When you have a representative of the speaker of the House of Representatives saying the speaker is going to be very upset because there aren't corporate jets available for either her or members of Congress, I think you have an abuse of power.

LAWRENCE: Tom Fitton's conservative watchdog group documented hundreds of e-mails, including one where staffers discourage commercial flights because it would inconvenience the members' husbands and wives.

FITTON: Well, why do we have to take members of Congress' spouses into account?

LAWRENCE: Officially, the Pentagon says it takes requests in good faith.

GEOFF MORRELL, PENTAGON SPOKESPERSON: I assume that everybody is very conscientious about the requests they make to use government aircraft.

LAWRENCE: But e-mails show exasperated military planners griping about the costs of prepping the jets, cooking the meals, crews driving in, and then staffers wait until the last minute to call it off.

"Two days in a row, we cancel the mission after the crew is at the aircraft, when there were clear signs there would be no travel."

In December, military planners argued over Pelosi's request to depart from an airport closer to her home. One wrote, "Whether it is the best use of assets is not the question, but, instead, is it worth upsetting the speaker?"

(END VIDEOTAPE)

LAWRENCE: Now, ultimately, that flight did go out of its original airport. But it shows that desire to please.

Now, we spoke with Speaker Pelosi's office, and they said that she is extremely appreciative of what the military does with these flights. But, obviously, somewhere along the line, that is not getting communicated down the channels before it gets to the military.

BLITZER: Sometimes, these staffers can be pretty aggressive in trying to make the case for their bosses.

LAWRENCE: And it creates a culture almost of fear, a fear of saying no.

BLITZER: I remember, when I covered the Pentagon, I did similar stories. So, it hasn't really changed in all these years.

All right, Chris, thanks very much.

Bill Clinton has some strong words of caution for President Obama., the former president speaking exclusively to our own Dr. Sanjay Gupta about the search for medical miracles and the moral questions that need to be asked. Stand by. You're going to hear it.

And the United Nations' secretary-general has ticked off some members of the U.S. Congress. Wait until the word he used to describe this country's debt to the U.N.

And hear for yourself why President Obama is being accused of putting off until tomorrow what he should have done today.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now: Freddie Mac is asking the federal government for nearly $31 billion of additional aid -- that after the mortgage finance company posted a huge fourth-quarter loss.

The United Nations' secretary-general, Ban Ki-Moon, is getting heat from U.S. lawmakers for calling the U.S. a deadbeat donor. Ban Ki-Moon says he was simply referring to America's late payments to the world body.

And this just in: a photograph of the man who's accused of carrying out the worst mass shooting in Alabama history. Authorities say Michael McLendon shot and killed 10 people, before turning the gun on himself -- all this, plus the best political team on television.

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

President Obama is facing new criticism that he's putting off until tomorrow what he should have done today.

More now on our top story.

The president signed off on billions of dollars of spending and thousands of pet projects. While many people call them wasteful, the president says they can fund some worthy projects.

(BEGIN VIDEO CLIP)

OBAMA: Now, let me be clear. Done right, earmarks have -- have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts. And that's why I have opposed their outright elimination.

And I also find it ironic that some of those who rail most loudly against this bill because of earmarks actually inserted earmarks of their own and will tout them in their own states and their own districts.

But the fact is that on occasion earmarks have been used as a vehicle for waste and fraud and abuse. Projects have been inserted at the eleventh hour without review and sometimes without merit in order to satisfy the political or personal agendas of a given legislator rather than the public interest.

There are times where earmarks may be good on their own, but in the context of a tight budget, might not be our highest priority.

These practices hit their peak in the middle of this decade, when the number of earmarks had ballooned to more than 16,000, and played a part in a series of corruption cases. (END VIDEO CLIP)

BLITZER: The president talked about the principles that prevent the abuse of earmarks and says the spending process must be open to scrutiny.

(BEGIN VIDEO CLIP)

OBAMA: Now these principles begin with a simple concept -- earmarks must have a legitimate and worthy public purpose. Earmarks that members do seek must be aired on those members' Web sites in advance, so the public and the press can examine them and judge their merits for themselves.

Each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.

Next, any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other federal contracts. The awarding of earmarks to private companies is the single most corrupting element of this practice, as witnessed by some of the indictments and convictions that we've already seen.

Private companies differ from the public entities that Americans rely on every day -- schools and police stations and fire departments. When somebody is allocating money to those public entities, there is some confidence that there is going to be a public purpose.

When they are given to private entities, you've got potential problems.

You know, when you give it to public companies -- public entities like fire departments -- and if they are seeking taxpayer dollars, then I think all of us can feel some comfort that the state or municipality that's benefiting is doing so because it's going to trickle down and help the people in that community.

When they're private entities, then I believe they have to be evaluated with a higher level of scrutiny.

(END VIDEO CLIP)

BLITZER: And although the president signed off on this bill, he says it must mark an end to spending business as usual.

(BEGIN VIDEO CLIP)

OBAMA: I recognize that Congress has the power of the purse. As a former senator, I believe that individual members of Congress understand their districts best and they should have the ability to respond to the needs of their communities. I don't quarrel with that.

But leadership requires setting an example and setting priorities. And the magnitude of the economic crisis we face requires responsibility on all our parts. The future demands that we operate in a different way than we have in the past. So, let there be doubt -- this piece of legislation must mark an end to the old way of doing business and the beginning of a new era of responsibility and accountability that the American people have every right to expect and demand.

(END VIDEO CLIP)

BLITZER: The president's first 50 days in office -- iReporters are grading Mr. Obama. Now the best political team on television hands out its report card.

Plus, a warning from a former president to a current president -- what Bill Clinton is telling President Obama to watch out for.

Our own Sanjay Gupta had an exclusive interview with Bill Clinton today. Stand by. Sanjay is here. He's about to tell us what happened.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My report card for his first 50 days in office. His handling of the economy, C; Iraq, B; Afghanistan, A; overall leadership, C; total score, B minus.

However, with ideas like talking with the Taliban or another stimulus package, I could quickly see the score going down to a D, as in disaster.

(END VIDEO CLIP)

BLITZER: That was (INAUDIBLE) of Denver. He says he voted for Barack Obama. A tough grader.

Let's get to the best political team on television.

Joining us, our senior political analyst, Gloria Borger; our CNN contributor, Steve Hayes, of "The Weekly Standard;" and our senior political correspondent, Candy Crowley.

I don't know if I want to put you guys on the spot and ask what kind of grade you would give the president for his first 50 days, but I will.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Oh, all right.

BLITZER: What kind of grade, Gloria, would you give the president, overall, for these first 50 days?

BORGER: Can I punt and say incomplete?

Would you...

BLITZER: You could if you want to. That's a legitimate grade.

(LAUGHTER) BORGER: Well, you know, I mean I would say that on foreign policy, as you heard from our iReporter, I think he gets higher grades. On domestic policy, particularly as it pertains to the economy, I think we can't tell yet. Although I think on communication strategy, I don't think he does so well. I think they get a C on communication strategy, because they need to come up with a unified field theory to tell people why they're doing all of this at one time and how all of it relates to the economy. Yes, we're going to do health care. Yes, we're going to do energy. But that is because you can't improve the economy in the long-term unless you do all of it together. I don't think people are getting the message.

BLITZER: Steve Hayes is a tough grader.

What do you think?

STEPHEN HAYES, SENIOR WRITER "THE WEEKLY STANDARD": Yes, I don't grade on a curve. I'd probably give him a D. And I would...

(CROSSTALK)

BLITZER: On what?

Overall?

HAYES: Overall. But I would flip Gloria's formulation a little bit. I'd give him, you know, a D or poor marks for domestic policy. And I think we can grade him at this point, because we haven't seen much. I'd give him an incomplete on foreign policy. I mean, he -- he announced his Afghanistan plan -- 17,000 more troops -- without actually ever telling us what they're going to do. I think the Afghanistan plan, nobody in the administration knows what they're going to do. I think that's the case with a lot of it.

BLITZER: Well, they're reviewing the strategy for Afghanistan...

HAYES: They're reviewing it now...

BLITZER: ...even though he said they couldn't wait to get more troops in because of the urgency. But now he's got an overall administration review on Afghanistan. So that's...

HAYES: Three reviews, actually.

BLITZER: He's got a lot of reviews -- all right, what do you think, Candy, because we know you're tough.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Yes. Well, lot of reviews, lots of czars, lots of commissions. You know, the blueprint is there, whether or not you believe in the blueprint. But, you know, at the moment, no -- no -- nothing's broken ground yet -- I mean I don't think on the foreign policy side or on the economic side.

I mean I agree with Stephen in the fact that -- that he sent troops before defining the mission. I think this is something that, you know, in a previous administration, would not have gone by so easily. But he continues to -- I mean look, he still gets an A from most of the American public.

BLITZER: Yes.

CROWLEY: So that's what matters.

BLITZER: The public opinion...

(CROSSTALK)

BLITZER: His job approval numbers are pretty good.

BORGER: Well, but his problem is that his job approval numbers are much, much higher than the approval numbers for his plans. And so...

CROWLEY: But they're still over 50. I mean it's still...

BORGER: It's still, no, no...

CROWLEY: ...pretty darned good.

BORGER: His approval is over 60 percent.

CROWLEY: Right.

BORGER: But some of his plans are 50 and under, like the stimulus package, for example. So I think at some point, he's really just depending on his personal popularity.

BLITZER: Is he really going to have a fight with Democrats and Republicans in Congress when it comes to these pet projects, these earmarks, or is that going to go away?

HAYES: I think it goes away in the short-term. I think he'd be smart to have a fight. I can't imagine why he's not picking a fight.

BORGER: (INAUDIBLE).

HAYES: If I'm Barack Obama, this makes me look like a centrist. After all of this spending, after all of the massive amounts of intervention that we've seen -- federal government intervention in the daily lives of the American public -- this makes him look like a centrist.

BLITZER: But he...

HAYES: And he could...

BLITZER: I'll tell you why he's not picking a fight...

HAYES: ...he could (INAUDIBLE) on it.

BLITZER: ...right now, because he needs a lot of those Democratic chairmen...

BORGER: Yes. BLITZER: ...like David Obey of the Appropriations Committee and Nancy Pelosi, for that matter. He needs that Democratic leadership and he doesn't want to pick a fight with them.

CROWLEY: Absolutely. This is the wrong place, wrong time, as far as this administration is concerned. They already have said for weeks, well, this wasn't really ours. You know, this is from, you know, last year. So this is kind of a vestige of the Bush administration. And so far they've gotten away with it.

But I agree, it would be a great place to step up the fight. And today he said well, the government would be running. Well, the government's been running without this bill now since October.

Our foreign affairs correspondent, Jill Dougherty, reported earlier here in THE SITUATION ROOM that the president and his advisers are thinking -- considering whether he should actually write a letter to the supreme leader of Iran, the ayatollah, in order to maybe warm up the situation -- create that dialog that he talked about during the campaign.

BORGER: Maybe on a BlackBerry.

What do you think?

(LAUGHTER)

BORGER: You know, I think the real question here is do you do something like that before the June elections?

BLITZER: In Iran?

BORGER: In Iran. And does that influence the elections one way or the other?

BLITZER: Does it help Ahmadinejad, the president, get reelected?

BORGER: Right. Exactly.

Why would you want to do that, help him?

BLITZER: Steve?

HAYES: Well, I mean I don't know what the political implications would be internally in Iran. But if you write a letter like that, it has to start by saying please, Dear Ayatollah Khameini, stop killing our soldiers in Iran and in Afghanistan and stop funding terrorists. I mean I think that has to be the sort of starting point.

BLITZER: And stop trying to build a nuclear bomb, assuming they are trying to build a nuclear bomb.

CROWLEY: You know, it's pretty high up to have the president write a letter. And, you know, obviously it was a huge campaign issue, who contacts whom and what are the requirements. And he said well, we'll reach out our hand, but they have to open their fist. It just seems to me, at this point, that there has to be some kind of give and take, like what -- you know, what would be willing to give up. There has to be a point to this letter.

BLITZER: Right.

CROWLEY: If there's no point to this letter, why do it?

BLITZER: Well, there are some U.S. wrestlers in Tehran right now and they're doing a little wrestling. We'll see what happens on that front.

Guys, thanks very much.

BORGER: Sure.

BLITZER: A former president has something to say about a current president. We're talking about Bill Clinton's advice to Barack Obama on a controversial decision.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: If it's obvious that we're not talking about some science fiction cloning of human beings, then I think the American people will support this.

(END VIDEO CLIP)

BLITZER: It's a CNN exclusive -- Bill Clinton speaking about the search for medical miracles with our own chief medical correspondent, Dr. Sanjay Gupta.

But does Bill Clinton have a warning?

We're going to be speaking to Sanjay. He's got some of that interview for us. Stand by.

And a "Moost Unusual" look at the man tasked to delivering the country's bad news.

(COMMERCIAL BREAK)

LOU DOBBS, CNN ANCHOR: We'll be addressing the nation on "LOU DOBBS TONIGHT" at the top of the hour. President Obama signing a massive spending bill containing thousands of earmarks in a clear break from his promise to deliver change you can believe in.

How about that?

We'll have complete coverage.

Also, House Speaker Nancy Pelosi striking back in the escalating controversy over reports she uses our Air Force as her private airline. We'll have a live report for you.

And new charges that the liberal political orthodoxy is threatening First Amendment rights on college campuses. And we'll have a documented demonstration.

A filmmaker who's made a provocative documentary joins us here tonight.

Also, I'll be talking about the threat to our Second Amendment rights with Senator John Ensign, who's fighting for gun rights in the District of Columbia -- a fight that's being watched all across the nation.

Join us for all of that and a lot more at the top of the hour on "LOU DOBBS TONIGHT."

THE SITUATION ROOM with Wolf Blitzer returns right after this.

(COMMERCIAL BREAK)

BLITZER: Former President Bill Clinton is weighing in on a life and death policy reversal. He spoke exclusively with our chief medical correspondent, Dr. Sanjay Gupta, about President Obama's executive order lifting limits on embryonic stem cell research.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Is this going to as divisive an issue as it is now?

Is this going to be the abortion of the next generation?

Or are people going to come around?

B. CLINTON: I think -- the answer is I think that we'll work it through. When it's -- particularly if it's done right. If it's obvious that we're not taking embryos that can -- that under any conceivable scenario will be used for a process that would allow them to be fertilized and become little babies and I think if it's obvious that we're not talking about some science fiction cloning of human beings, then I think the American people will support this.

I appreciate the fact that the president wants to send a strong signal that scientific research on everything from climate change to the genome to the embryonic stem cells was too politicized in the previous eight years. And he wants to put it back to science. I agree with that.

But there are values involved that we all ought to feel free to discuss in all scientific research. And that is the one thing -- I think these committees need to make it clear that they're not going to fool with any embryos where there is any possibility, even if it's somewhat remote, that they could be fertilized and become human beings.

(END VIDEO CLIP)

BLITZER: Let's bring in Dr. Sanjay Gupta.

He's here -- Sanjay, he had some strong words of advice for this new president.

GUPTA: You know, he's been there before, Wolf.

It's deja vu, as they say, all over again. Back in '93, 90 percent of the country wanted health reform -- 85 percent of Republicans, incidentally, as well. It didn't happen.

And the question is, what is different now?

Health reform has been something that people have been trying to get done since Teddy Roosevelt.

So, yes, he was a bit wistful in how he looked back at health reform. A lot has changed and there's probably more political will, according to the former president.

There's also strange bedfellows -- the insurance industry -- the health insurance industry now supporting universal health care. A lot of physicians groups also supporting universal health care.

How is this all going to play out?

He was trying to both look at the past and sort of imagine what the future might hold, as well -- Wolf.

BLITZER: Did you get a sense they have a good working relationship, the current president and the former president?

GUPTA: You know, it's interesting, I asked specifically about health care. And he's saying, you know, the current president can call on him any time and, also, call on the current secretary of State, who was obviously very pivotal, Secretary Clinton, in health care. And he said, you know, she's pretty busy right now. The president has talked to her a little bit about health care.

But for the most part, it's being done at that health summit and now in these groups around the country. So he had a lot of advice and maybe the president will be watching tonight some of the things the former president had to say about it.

BLITZER: Good idea.

All right, I know a lot of people will want to watch tonight.

Sanjay, thanks very much.

GUPTA: Thank you.

BLITZER: And this important note to our viewers. The former president of the United States, Bill Clinton, speaks with Sanjay Gupta. Sanjay is sitting in for Larry King tonight on LARRY KING LIVE. It airs at 900 p.m. Eastern only here on CNN.

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

CAFFERTY: The question this hour: Is what will it take to end President Obama's honeymoon, which is moving right along and continuing to garner pretty big approval numbers?

Mike in Sacramento writes: "Only one thing would end it for me and that's if he stops telling the truth. He will continue to get a lot of slack from good Americans of every political persuasion as long as he's honest."

Lee in Minnesota says: "The honeymoon's barely started. Don't be so quick to forget the hell of the last eight years. I have full confidence in our current intelligent, intelligent, intelligent president.

Did I emphasize intelligent? What a change from the past eight years."

Jack writes: "A constant barrage of negative press. The honeymoon will be over when the media says it's over."

Michele in New York writes: "The honeymoon won't be over until this country and the media realize Mr. Obama is not God. He can't fix everything nor does he have the experience, which people have not figured out yet. Those of us who did not vote for him are just sitting here waiting and watching as more and more mistakes are being made. Open your eyes."

Shaun writes: "I think an incident on the Korean Peninsula could put Russia and China on the defensive. How Obama deals with emerging global issues will test his presidency and ultimately the American people's faith in change."

Alyssa in Chicago: "Jack, the honeymoon will be over if the economy is still underwater in two years and if Americans begin throwing shoes at him."

Marie in California: "What will end the honeymoon? Your questions will end it."

And Kathy in Georgia: "If you don't get over your crush on Michelle, Jack. The president has enough to worry about without having to worry about a hunk like you gushing over his wife. Does that merit me a copy of your new book?"

No.

(LAUGHTER)

CAFFERTY: 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 -- Wolf.

BLITZER: I read it over the weekend.

CAFFERTY: Did you?

BLITZER: We're going to discuss tomorrow some very moving passages.

Jack, good work. But we'll talk tomorrow. No time right now.

CAFFERTY: I'll look forward to it.

Thanks, Wolf.

BLITZER: Thank you.

CAFFERTY: All right.

BLITZER: Is it the economy that's making him seem so gloomy?

Jeanne Moos gives us her take on the Treasury secretary, Timothy Geithner.

And guess what?

Her report is Moost Unusual.

And a woman place a violin as Pope Benedict speaks -- just one of our Hot Shots -- pictures worth a thousand words.

(COMMERCIAL BREAK)

BLITZER: Here's a look at the Hot Shots coming in from our friends over at the Associated Press -- pictures likely to be in your newspapers tomorrow.

In Bangladesh, a daughter cries and a soldier salutes at a military funeral.

In Vatican City, a woman plays the violin as Pope Benedict speaks.

In England, crowds greet soldiers returning from Afghanistan with open arms.

And in France, a competitive cycler signs autographs for the young fans.

Some of this hour's Hot Shots -- pictures worth a thousand words.

Finding humor in a man whose job requires him to deliver the country's bad news. You may not think it's possible, but CNN's Jeanne Moos found something to smile about.

She has a Moost Unusual look at Timothy Geithner.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): He's the Treasury secretary whose name we had to learn to pronounce -- or rather not pronounce the silent H.

OBAMA: Secretary Geithner.

(BEGIN VIDEO CLIP FROM "CHARLIE ROSE," COURTESY PBS) CHARLIE ROSE, HOST: With Tim Geithner.

(END VIDEO CLIP)

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

UNIDENTIFIED MALE: I'm Timothy Geithner.

(END VIDEO CLIP)

MOOS: No you're not.

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

UNIDENTIFIED MALE: Live from New York, it's Saturday night.

(END VIDEO CLIP)

MOOS: Workaholic Geithner probably spends his Saturday nights crunching numbers.

UNIDENTIFIED MALE: Do you solemnly swear?

MOOS: I swear he's always solemn. Geithner the glum -- we had to look long and hard to finally find him smiling.

(BEGIN VIDEO CLIP FROM "CHARLIE ROSE," COURTESY PBS)

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: You know, it's a modest increase in those rates.

(END VIDEO CLIP)

MOOS: But then, how funny are taxes, especially when they're your own and senators are asking how you managed not to pay some?

UNIDENTIFIED MALE: Which brand did you use?

GEITHNER: I used TurboTax to prepare my returns.

MOOS: Barely a month-and-a-half into the job, he's already "SNL" fodder.

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

UNIDENTIFIED MALE: This $420 billion will be placed in a special fund and will go to the first individual who comes up with a workable plan to solve the banking crisis.

(END VIDEO CLIP)

MOOS: When his appointment was announced, the markets zoomed up almost 500 points. When he outlined... GEITHNER: Our plan...

MOOS: ...the market plunged almost 400 and critics charted the drop.

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

UNIDENTIFIED MALE: You can call the number on the screen below (INAUDIBLE).

(END VIDEO CLIP)

MOOS: That solemn face seems to invite scrutiny. A face reader analyzed the long furrows in his forehead that come and go, noting exceptional forehead mobility that suggests exceptional mental powers.

Others suggested the resemblance to Clingons.

(VIDEO CLIP)

MOOS: It's rare that left-wing Bill Maher and right-wing Ann Coulter agree on something, but the other night they both regretted the selection of Geithner because, in Maher's words, he tends to sound like -- and here, Maher used an earthy expression for scare.

(on camera): Now, if you can't follow all the financial mumbo jumbo, maybe you want to try following Secretary Geithner's hands.

GEITHNER: Conditions...

Expanding...

To the Congress with two letters last week...

To begin to act...

But we're going to put those resources back into the hands of working Americans.

MOOS: The only time his hands aren't working is when they're swearing on the bible.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Tomorrow, President Obama meets with representatives from each state to get an economic update.

What would you tell President Obama if you were meeting with him?

Submit your video to iReport.com/situationroom. See tomorrow's show to see if you made the cut.

I'm Wolf Blitzer reporting. Let's go to Lou in New York -- Lou.