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Obama Administration Seeks Broad New Financial Powers; Party of Sour Grapes?

Aired March 26, 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: We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

The Obama economic team wants to go to dramatic new lengths to protect the financial system, the treasury secretary today laying out proposals before Congress that would give the administration controversial power over private businesses.

Our senior correspondent, Allan Chernoff, is here with more on this story.

Allan, what's the goal here?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, what the secretary is trying to do is prevent a collapse of the financial system. Our markets that raise and lend money to keep the economy going came very close to a complete shutdown last year. Some, in fact -- some of those markets actually did fail. The Treasury wants to make sure this does not happen again.

(BEGIN VIDEOTAPE)

CHERNOFF (voice-over): The failure of investment firms Bear Stearns and Lehman Brothers and the near collapse of insurance giant AIG threatened the financial system. Government regulators concede they were poorly equipped to head off the trouble and to deal with it once it erupted.

Treasury Secretary Geithner says it can't happen again, that new regulation is needed.

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: To address this will require comprehensive reform, not modest repairs at the margin, but new rules of the game.

CHERNOFF: The new rules Geithner has in mind would have a government regulator watching out for the system as a whole, making sure that no one company can knock down the nation's financial dominoes. That means tougher regulations requiring the biggest banks, insurance companies and investment firms to be more conservative by keeping more cash on hand and limiting their risk-taking.

If a major firm were in danger of going bust, the new regulator would have the power to either bail the firm out or shut it down. GEITHNER: We're still in the midst of a very challenging period. And so I think it would be in the interest of the country for Congress to do everything they can to make sure we've got broader tools so that we can manage this effectively.

CHERNOFF: Some congressmen fear the treasury secretary wants to become big brother.

UNIDENTIFIED MALE: Do you realize how radical your proposal is?

GEITHNER: It's not a radical proposal.

UNIDENTIFIED MALE: Oh, it's absolutely -- you're talking about seizing private businesses, and you don't consider that to be radical?

GEITHNER: No. This is a prudent, carefully designed proposal to protect -- protect our financial system from the...

UNIDENTIFIED MALE: If it's prudent and carefully designed, Mr. Secretary, then you would have the answers to some of my questions.

CHERNOFF: Hedge funds, the private investment pools that are not regulated now, would have to register with the Securities and Exchange Commission. And they are concerned.

DAVID FRIEDLAND, PRESIDENT, HEDGE FUND ASSOCIATION: The last thing we want now is overly burdensome regulation that pushes these managers over the edge and decide that it is no longer worth their efforts to remain in business.

(END VIDEOTAPE)

CHERNOFF: Geithner also wants more oversight of money market mutual funds to make sure that they are being as conservative as they are supposed to be and to ensure there's no danger of a run on those funds, as regulators feared last year -- Wolf.

BLITZER: Lots of changes happening.

All right, thanks, Allan.

On Wall Street, the March rally in stock prices gained more momentum today, the Dow Jones industrials rising 174 points to close at its highest level in almost six weeks. Investors were encouraged by surprisingly good earning reports by some major consumer brands.

Also, some far less heartening news, the government reports the U.S. economy suffered its biggest drop in 26 years. The gross domestic products fell at an annual rate of 6.3 percent during the last three months, the last quarter of 2008.

And the number of people filing jobless claims topped 5.5 million for the week ending March 11. That's the ninth straight week that unemployment claims have hit an all-time high.

President Obama is set to give the order for one of his top military priority, beefing up U.S. troop strength in Afghanistan. He's been briefing lawmakers about the strategy all day today. He is set to officially unveil it tomorrow.

Defense sources revealing to CNN the plan does include several thousand troops devoted to training and advising the Afghan armed forces.

Our Pentagon correspondent Barbara Starr is joining us now with more details on what we can expect to hear tomorrow -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, when the plan is unveiled tomorrow, one of the things you might expect, a wall of criticism about whether the White House is devoting enough attention to Afghanistan.

(BEGIN VIDEOTAPE)

STARR (voice-over): Lieutenant General Karl Eikenberry, who once walked unarmed on the streets of Afghanistan as the top U.S. military commander, now likely to be confirmed as the new ambassador there, the top diplomat in a war zone where the U.S. is not winning.

LT. GEN. KARL EIKENBERRY, AMBASSADOR TO AFGHANISTAN NOMINEE: It is going to require additional commitment of U.S. and, importantly, NATO forces into eastern and southern Afghanistan.

STARR: He signs on as President Obama's war strategy is emerging as a plan of lowered expectations.

ROBERT GATES, DEFENSE SECRETARY: It's a difficult problem, and trying to come up with new approaches and new initiatives.

STARR: There is little talk of outright victory. The plan includes well-known proposals, more reconstruction, training tens of thousands of additional Afghan security forces, and more aid to Pakistan. But the centerpiece still is eliminating insurgent safe havens.

Retired Brigadier General Mark Kimmitt points out the biggest problem has been not enough boots on the ground in the south.

(on camera): Why is security problematic here?

BRIG. GEN. MARK KIMMITT, U.S. ARMY (RET.): Well, it's problematic because that's where the Taliban have chosen to fight, it's where the Taliban have chosen to try to extend their influence. While there are problems up in the north and in the west -- and, of course, we continue to have the fighting in the east -- the latest effort seems to be try to try to gain a toehold in the south over the past year or so. They see weakness down there.

There are already 17 additional U.S. troops on their way to Afghanistan. But now thousands more may be going, in part to help train Afghan security forces.

Barbara Starr, CNN, the Pentagon. (END VIDEOTAPE)

BLITZER: Thank you, Barbara.

Let's go to Jack Cafferty. He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, Secretary of State Hillary Clinton says there will be consequences if North Korea goes through with a planned missile launch.

This comes after North Korea placed a long-range missile on a launch pad and said they will use it to send an experimental communications satellite into orbit.

But the U.S., Japan and South Korea say it is all just cover for testing a Taepodong-2 ballistic missile. The launch could come within the next few days. The U.S. says such a test would violate U.N. Security Council resolutions. And that's why the U.S. is saying it will seek punishment through the U.N., probably more sanctions against North Korea, and Japan as well has said it will press for new sanctions.

But North Korea says that any more sanctions will make it quit with the six-party talks and potentially restart a nuclear plant that makes weapons-grade plutonium. If they successfully launch this rocket, it could show that they have the technology to send the missile as far as Alaska or Hawaii.

American officials have said the U.S. is capable of shooting down a North Korean missile heading for our soil, but Secretary of State Clinton says the U.S. has no plans to shoot down this particular rocket.

This is President Obama's first big test when it comes to dealing with the regime of Kim Jong Il. And we could learn a lot about the new president by watching how he responds.

Here's the question: What should the U.S. do about North Korea's planned missile launch? Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: You remember what the vice president, Joe Biden, said during the campaign. The new president would be tested within the first six months of a new administration.

CAFFERTY: Well, and it looks like this might be the first test.

But Kim Jong Il is -- he's about a lot of noise and not as much substance. What's he going to do if the world places additional sanctions on him? The country is starving to death as it is. If he gets frisky with one of these missiles, that country will cease to exist in a matter of hours. So, I think he is just banging the drum, wanting somebody to notice that he is still around.

BLITZER: He is doing a pretty good job at that.

CAFFERTY: Yes, he is.

BLITZER: All right, Jack, thank you.

CAFFERTY: Yes.

BLITZER: One is leader of the free world. The other is the world's richest man. So, wait until you hear what Bill Gates thinks of President Obama.

Today, the president took your questions in a first-of-its-kind White House forum, but one question seemed more popular than others. The topic? Marijuana.

And, yes, we can, vs., no, we shouldn't. Do Republicans who oppose the president's plans risk sounding like the party of sour grapes?

(COMMERCIAL BREAK)

BLITZER: The world's richest man wants you to know what he thinks about President Obama, Bill Gates speaking exclusively to CNN and revealing his thoughts on how the White House is handling the economy.

Let's go straight to our White House correspondent, Dan Lothian, for details -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, when billionaires speak, people tend to listen. And Bill Gates says that the economic crisis is a novel situation, so new tactics need to be used in order to fix the problem. And he believes that the president's team is on the right track.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): It's a strong endorsement of President Obama's economic team from the richest man in the world, Bill Gates.

BILL GATES, MICROSOFT FOUNDER: President Obama has built a great team. It's a very smart team. They know fixing the economy is their top priority. It looks like some of these remedies are getting the loans coming back in.

LOTHIAN: His remarks to CNN's Spanish language network come amid criticism of the president's treasury secretary, Timothy Geithner. Some on Capitol Hill have even called for his resignation.

Gates didn't weigh in on that, but he did suggest that the economic team's efforts will take time to produce results.

GATES: It will be a while, though, before they get the consumer confidence back so that people are spending. And they're trying to make that as short as possible. We can't say when it will happen, but I feel very good about the people who are doing this work and how they're tuning, and they have got exactly the right goal in mind.

LOTHIAN: It seems the president stays in close contact with Gates. He dropped his name during the online town hall meeting.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I was just talking to Bill Gates yesterday, and he was talking about the use of technology, where you can use videos to look at really successful teachers and how they interact with their students.

LOTHIAN: Another billionaire, the second richest man in the world, has long supported the Obama administration, but earlier this month, Warren Buffett appeared to criticize the way the government has been handling the economic crisis.

WARREN BUFFETT, BERKSHIRE HATHAWAY: We've had muddled messages, and the American public does not know it.

LOTHIAN: But Buffett remains a strong supporter of the president and an informal adviser as the administration works to fix the economy.

(END VIDEOTAPE)

BLITZER: And Bill Gates, as you know, he also spoke about some other remedies that seems to be working. What is the administration saying about the economic turnaround?

LOTHIAN: Well, Wolf, that's a subject that they want to be very careful with. While they will point out that there are some small signs of progress, you have seen housing starts up by about 22 percent, more lending taking place, a senior administration official telling me that it is really too soon to tell if the economy has bottomed out and if that turnaround has already started.

BLITZER: Thanks very much, Dan Lothian, at the White House.

President Obama's $3.6 trillion budget scores a big win -- Democrats pushing it through a key Senate committee. The Senate and the House will both vote on different budgets next week. Republicans in the House say they have come up with a plan B to the president's budget.

Are Republicans saying no to spite the support or do they really have better plans?

Our senior congressional correspondent, Dana Bash, is up on Capitol Hill with more on this story.

Good questions. Do we have answers, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, for the most part, the Republicans aren't saying no to the president to spite him. They do philosophically disagree with most of his prescriptions, but I can tell you Republicans are getting a rap as the party of no and they are trying to shake it.

(BEGIN VIDEOTAPE)

BASH (voice-over): From the president's stimulus plan...

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: This is a joke, and we ought to treat it as such. Vote no.

BASH: ... to the spending bill...

BOEHNER: We should vote no.

BASH: ... Republicans know they're getting a reputation for saying...

BOEHNER: Put me in the "no" column.

BASH: President Obama has been working hard to make the party of no label stick...

OBAMA: "Just say no" is the right advice to give your teenagers about drugs. It is not an acceptable response.

BASH: ... taunting GOP critics of his budget in prime time.

OBAMA: We haven't seen an alternative budget out of them.

BASH: So, today, House Republicans released one...

BOEHNER: Here it is, Mr. President.

BASH: ... a glossy blue pamphlet, but it was light on specifics and had few answers to basic budget questions like, what's the Republican goal on the deficit?

BOEHNER: To do better.

BASH: He promised more details next week. But the rush to respond now is part of a new effort by Republicans to not just oppose Democratic plans, but publicize their own.

(on camera): What's the danger of being labeled and perceived as the party of "no"?

REP. ERIC CANTOR (R-VA), HOUSE MINORITY WHIP: Well, you know, if you're just the party of "no," I don't know how anyone could say that you are ready to lead again.

BASH (voice-over): The number two House Republican, Eric Cantor, leads an economic team in charge of devising GOP alternatives.

REP. JUDY BIGGERT (R), ILLINOIS: It's the bad actors that really, we have to address.

BASH: He invited CNN in as they completed a GOP housing plan. And at a press conference announcing the proposal...

CANTOR: We're here today to say yes, we do.

UNIDENTIFIED MALE: Yes to better solutions. Yes to alternatives.

BASH: They were candid about their goal -- go from...

UNIDENTIFIED MALE: The party of no...

BASH: ... to...

UNIDENTIFIED MALE: Yes, yes, yes, yes, yes.

(END VIDEOTAPE)

BASH: Now, Republicans will tell you that the supporters want them to do exactly what they are doing, Wolf, which is say no to the president's policies.

But they also know inside the GOP that they also have to get out of the Republican -- or actually the political wilderness by saying what they are for. But I can tell you just from watching this press conference today and the fact that we didn't get very many details on plan we thought we were going to get, it shows it may be a tough road for them.

BLITZER: They have got their own challenges. Certainly, they do.

Thanks, Dana.

Big Blue is outsourcing. One of America's best-known companies announces plans to send 5,000 jobs overseas. We're going to tell you about that.

Also, why the coin you are looking at is like no other coin ever minted.

And controversy in Dallas, after an NFL player rushing to say goodbye to his dying mother-in-law is confronted by police.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: A new setback today to the president's efforts to try to reboot the economy. It may leave him feeling a bit disappointed with the CEO of IBM.

The tech giant reportedly is cutting 5,000 jobs right here in the United States and outsourcing them overseas.

Mary Snow has been looking into this story for us -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we contacted IBM. A spokesman declined comment, saying the company wouldn't comment on rumor or speculation.

But, certainly, the headline is being met with both worry and anger. (BEGIN VIDEOTAPE)

SNOW (voice-over): Word came out in a "Wall Street Journal" report that IBM is cutting 5,000 jobs and that many of those jobs are going to India. But a group that's been fighting IBM's outsourcing for years is blasting the company, saying this time, IBM workers are being dealt a double blow.

LEE CONRAD, ALLIANCE-IBM: We're outraged that job cuts are happening in the U. S. , and the work is being ship offshore. This, at the same time that IBM has their hands out for stimulus money to us, is totally unacceptable.

SNOW: IBM is hoping to benefit from stimulus money. Its CEO, Sam Palmisano, met with President Obama in late January, along with the heads of other technology companies to support the president's economic stimulus plan.

SAMUEL PALMISANO, CEO, IBM: Because in the research we've done working with the transition team, we know that $30 billion could create a million jobs in the next 12 months.

SNOW: Also in January, in a "Wall Street Journal" editorial, IBM's chief made the case to invest in innovation as a way to help boost the economy. He calls for transforming power grids, creating electronic health card records, and spending on broadband. IBM is hoping to gain a slice of the pie from government stimulus money spent on these projects, but the author of a book on outsourcing says strings need to be attached.

RON HIRA, AUTHOR, "OUTSOURCING AMERICA": So this is really a question of policy. IBM is doing what's in its best interest, and in this case it's not in the best interest of America. And that's why you need policy-makers to step up and do something to ensure that this money gets spent to create American jobs.

(END VIDEOTAPE)

SNOW: And, Wolf, Ron Hira says this is not just about IBM. He says he would not be surprised to see stimulus dollars going overseas to several tech companies who may be getting federal money, because a lot of these companies have sizable offshore operations -- Wolf.

BLITZER: Mary Snow, thanks for that report.

Some are calling it the flood of the century. We are on the front lines in the battle to keep one city from being swallowed by water. And we are standing by to hear live from North Dakota's governor.

And just-released video of an NFL player trying to persuade a police officer to let him see his dying mother-in-law.

And why the president suspects some of the participants in his online town meeting today may have been smoking something -- Mr. Obama forced to address unusual questions because he reached out online. (COMMERCIAL BREAK)

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

Happening now: Police prevent a pro football star from seeing his dying mother-in-law, a controversial confrontation all caught on tape. We have the police dash-cam video for you.

California Governor Arnold Schwarzenegger announces plans to shut down a tent city for homeless people in the state capital. The new plan involves moving residents of the camp to a new, more sanitary location.

And mortgage rates hit their lowest level in 52 years. Bankrate.com now puts the average 30-year fixed rate at 5.19 percent.

I'm Wolf Blitzer in CNN's command center for breaking news, politics and extraordinary reports from around the world. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get to the breaking news.

The mayor of Fargo, North Dakota, says his city right now is in unchartered territory, facing potentially record-breaking flooding this weekend, maybe as early as tonight or tomorrow. And right now residents are doing everything they possibly can to hold back the Red River.

Let's bring in CNN severe weather expert, our meteorologist Chad Myers.

We are talking about an area -- Fargo alone has nearly 100,000 people. And they are getting ready for the worst.

CHAD MYERS, CNN METEOROLOGIST: They are, Wolf.

And if you are from the East Coast and you don't think of Fargo as more than a farming town, let me tell you, it is a city out here. It is the biggest city.

We will spin you around. There are big buildings here. There are tall buildings here. There are some high-ground areas here that will not flood. But the problem is now the Weather Service has raised the estimate from where they think the river will crest. They brought it up another foot, and they said maybe even another foot on top of that, which brings it right to where all of the Army Corps of Engineers are trying to build these sandbags levees to, at possibly 43 feet.

Look at all these buildings down here, the river running right through downtown Moorhead on the other side of the river.

This is the latest. This only came in about 10 minutes ago. The line has changed. That number is 42 feet. That means 42 feet from the bottom of the river, not from where flooding starts. Flooding starts at 18. So, that's 24 feet of potential water right over this area.

So if your levee is here and you have to build your levee four feet higher than it is right now, you just can't stack sandbags up. They're been trying. You must make a big pyramid.

Here's how you must make -- you must make the bottom of your sandbag hill or pile much wider than it is high. So you just can't make a four foot pile of sandbags with 15 or 20 sandbags. It takes almost 75 sandbags to make a four foot high hill, just to try to protect you from that next four feet that that water could get over -- and now is forecast to get over -- Wolf.

BLITZER: They're very worried about what's happening over there.

Chad, stand by.

Our iReporters in North Dakota -- they're fighting to hold back the water.

And our Internet reporter, Abbi Tatton, is following this part of the story.

It's so dramatic, these iReports we're getting.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, we've seen thousands and thousands of people helping with the sandbagging efforts. Some of them have been working since Sunday night. You can see what they've been doing at ireport.com.

This is what they're watching right now -- the Red River rising. This is an area of 15th Avenue in Fargo. This shot by Tyler Specht. That was it on Tuesday. You can still see an area of road, even though there's floodwaters.

Now, take a look at it, this picture from this morning. After a day of blizzards, you can barely see the other side at this point.

Because of these rising waters, you have scenes like this one going on across Fargo.

This is from Kevin Johnston. He's from Minneapolis, went to Fargo's Rose Creek, where his parents live, to help out with sandbagging efforts. He's been working 13 hour days since Tuesday. You can see this wall of sandbags is right there against the homes. People watching, very concerned about these rising waters. They've been rising at a rate of about three feet a day -- Wolf.

BLITZER: The pictures -- they're simply coming in.

We're getting a lot of these iReports, Abbi, aren't we?

TATTON: Yes. Go to ireport.com. We've been getting them in at 3:00 a.m. 9:00 a.m. -- pictures of the Fargo Dome. Hundreds of people working on sandbagging efforts. And you look at them and you think this must be midday, there's so many people there. But some of them are from 3:00 a.m. In the morning. People are working around the clock. It really is all hands on deck.

BLITZER: Let's continue watching the breaking news right now.

Abbi, thanks very much.

CNN's Susan Roesgen is on the front line of the battle in Fargo.

She has more -- Susan?

SUSAN ROESGEN, CNN CORRESPONDENT: Wolf, there are more than 3,000 volunteers here in the Fargo Dome trying to fill more than half a million more sandbags than they have already between now and Saturday. And no one is giving up.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): Fargo is trying to defend itself against an approaching enemy -- and the enemy is growing. On Saturday, the Red River is expected to crest here at a record high 41 feet.

MAYOR MARK VOXLAND, MOORHEAD, MINNESOTA: If you know you have to get out, don't wait until tonight. Get out now and let us be able to work, keep our people safe by being able to operate in the daylight. Don't ask us to come back in an hour, because we don't know what's going to happen in an hour. This thing has been happening fast.

UNIDENTIFIED MALE: Actually, it is approaching the rail.

ROESGEN: The Coast Guard has rescued more than a dozen people. Others are getting out on their own.

DIANE BARIL, HOMEOWNER: Higher ground, that's where we're going. We'll just take some -- a couple of suitcases and away we go.

ROESGEN: City leaders didn't want to do it, but they've got an evacuation plan for Fargo now, even as they build a second circle of dikes -- worried that the first one won't be enough. This could be the difference between relief and ruins.

(END VIDEOTAPE)

ROESGEN: Wolf, you can imagine doing this for hour after hour after hour. Each of these sandbags weighs about 35 pounds and you won't hear anybody here complaining -- Wolf.

BLITZER: Susan Roesgen -- she's literally on the front lines in this battle against these floods.

Let's go back to Chad Myers -- Chad, you know, I hear these warnings -- 42 feet, cresting within, potentially, the next few hours that could go up there Saturday, but before then, there could be a whole lot of problems, as well.

And I want -- I want you to give us a comparison -- the floods we saw in CNN Katrina and the potential floods in North Dakota -- in Fargo.

MYERS: Weather-wise, I'm just going to let that go. But -- but the problem, I think, in the comparison to Katrina is that everybody in Katrina thought those levees would hold.

If the people in Fargo think these -- all these levees are all going to hold, they may run the same fate as those people in New Orleans. If you are under an area that you are being held back by a levee -- and, you know, forbid a sandbag levee -- you need to be out of there and not wait for that possible sandbag to break.

People didn't expect those levees to break in Katrina. And I'll tell you what, I hope they make it in Fargo, because I -- I can't see every levee holding -- Wolf.

BLITZER: All right, Chad.

Thanks very much.

Let's go right to North Dakota.

The governor, John Hoeven, is joining us on the phone.

Governor, you just heard Chad.

Are concerned about those levees holding?

GOV. JOHN HOEVEN (R), NORTH DAKOTA: Hello, Wolf.

We're working very hard to build the levees, the dikes, doing the sandbagging, using heskel bearers (ph), doing everything we can to get that flood protection level up to the projected crest.

Now, the National Weather Service has raised that crest a number of times. And they're now saying 42 plus. The community of Fargo is in the 43 foot range -- 43 feet above flood stage. And we are continuing those efforts to make sure we do the very best job we can to protect the city and the citizens.

We have an incredible number of volunteers out there -- 900 Guardsmen. I'm bringing in another 500 Guardsmen. A tremendous amount of equipment. And everybody is working very hard to put the best protection in place that we can in a situation, you know, that -- that continues to change.

BLITZER: I'm really worried about what's going on. Based on the reporting we've seen, Governor, are you getting the assistance from the federal government -- FEMA, for example -- that you need?

HOEVEN: We are. The Corps of Engineers has been in here from the start, helping with the diking and the levee work. And, again, this is -- is a large scale integrated effort that's been going on for a long time, requiring a lot of effort on the part of our citizens. But it includes not only building the protection and putting that in place, but also contingency planning for not only getting people to move things out of their basements and those kind of things, but evacuations in some areas and in contingency plans -- contingency diking and those kind of things, as well.

BLITZER: Chad Myers, our meteorologist, has a question for you, Governor -- go ahead, Chad.

MYERS: Governor, this is going to be a seven day record-breaking flood, not a one hour flood. The water just doesn't come down.

What if one of those levees failed?

Do you have a contingency plan?

Will you blow the tornado sirens?

What will you do to get those people out of there in a hurry?

HOEVEN: Yes. We have code red plans which alert people, as well as evacuation plans that include local, state, federal authorities in areas that may have trouble because of waters possibly reaching flood protection. And that is part of the overall plan.

So the first -- obviously, the first step is the protection, but obviously moving people out in areas, as necessary, is also part of the planning effort.

BLITZER: We're going to stay in close touch with you, Governor, every step of the way.

Good luck to everyone in North Dakota.

We'll be watching and doing whatever we can to help.

Governor John Hoeven is the governor of North Dakota.

It was one of the most popular questions at President Obama's virtual town hall meeting today -- would legalizing marijuana help the economy and create jobs?

The president's reply -- that's coming up.

Plus, the GOP comes up with its own budget proposal. And one of our iReporters doesn't like what he sees.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get right back to Fredricka Whitfield.

She's monitoring a developing story out of Mexico.

What just happened -- Fred?

WHITFIELD: Well, that's right, Wolf.

You know, we've been reporting on the Mexican drug cartel violence right along the U.S. border. Well, now reports that the body of a U.S. marshal has been found in Juarez, Mexico, which is just across the way from El Paso, Texas.

We understand the body of Marshal Vincent Bustamante was found with multiple wounds to the head, Mexican police say consistent with an execution-style shooting.

You know that just within the past year or so, 7,000 deaths have been related to the drug cartel violence and many of whom are killed execution-style -- Wolf.

BLITZER: All right. We'll stay on top of this with you, Fred.

Thanks very much.

Let's get to our senior Congressional correspondent, Dana Bash; our CNN political contributor Steve Hayes of "The Weekly Standard;" and our CNN political analyst, Roland Martin. They're all part of the best political team on television.

He had this town hall meeting online today. And he was asked repeatedly -- the thousands of questions he got -- about one specific subject that he pre-empted his -- the question and answer.

Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: I have to say that there was one question that was voted on that ranked fairly high and that was whether legalizing marijuana would improve the economy and job creation. And I don't know what this says about the online audience.

(LAUGHTER)

OBAMA: But I just want -- I don't want people to think that -- this was a fairly popular question. We wanted to make sure that it was answered. The answer is no, I don't think that is a good strategy.

(END VIDEO CLIP)

BLITZER: All right, he joked about it, Dana. But, you know, there's a lot of people out there who believe this is a very, very serious issue -- whether or not marijuana use should be legalized, like alcohol use was legalized after Prohibition.

BASH: You're exactly right. It certainly is a serious issue. And -- and the president used humor, which everybody should be in favor of, especially in the tough times.

But I'll tell you what struck me is, you know, him joking about that when we have going on what Fredericks Whitfield just reported on a few minutes ago, the -- this violent drug war going on in -- at the southern border that the president sent National Guard troops to -- to address just this week.

So, certainly, again, humor is interesting, but I think that there are a lot of people raising their eyebrows saying now, with this going on, is that the right joke you want to make?

BLITZER: What did you think, Steve?

STEPHEN HAYES, SENIOR WRITER "THE WEEKLY STANDARD": Well, I -- I was struck by another joke that people didn't seem to get, when he said that the issue ranked fairly high. I thought, oh, that...

(LAUGHTER)

HAYES: ...that's the joke, too.

Look, I think it is a serious issue. There's actually -- you know, as a candidate, Barack Obama made several pledges that he wasn't going to do things like raid medical marijuana facilities in California. And then just yesterday, there was a raid in San Francisco.

So you have people who are in favor of legalization actually taking him to task for going back on a campaign promise. And whether this grows into something, you know, much -- a bigger issue, we're yet to -- we'll see.

BLITZER: I'm curious, Roland, where you stand on this.

ROLAND S. MARTIN, CNN POLITICAL ANALYST: Well, first of all, considering the fact that I don't even drink or smoke, look, it's irrelevant to me. Look, the bottom line is this here. What's happening in Mexico, frankly, is boiling down to heroin and cocaine -- much more potent forms of drugs. And the people who are arguing about legalization of marijuana, they're saying, look, at the most the folks are going to do see if they can do is probably get sleepy and have the munchies when it comes to marijuana.

But, look, it seems to be picking up a little bit of steam there. But the bottom line is, it has not reached a level thus far to have a serious conversation as to whether or not we are going to legalize marijuana in this country. It is simply a simple part of this whole war on drugs. And I don't think it has a shot of actually happening.

BLITZER: Dana, you were at the news conference when they unveiled their budget alternative to the president. One of our iReporters, Jim Morrison of Brooklyn, New York, a strong Obama supporter, sent us this.

(BEGIN VIDEO CLIP)

JIM MORRISON, IREPORTER: Well, the Republicans in Congress did, indeed, release their budget proposal today, in the form of a 19-page pamphlet filled with pretty pictures and platitudes. What it's not filled with is concrete proposals and numbers and solutions. Instead, it offers critiques and criticisms of the president's proposal and what it does wrong or does, frankly, too much of.

In these difficult and challenging times, the Republicans need to offer more than simple obstructions and nos.

(END VIDEO CLIP)

BLITZER: I think we heard a lot of that from the Democrats and other supporters.

How did it go today, Dana?

BASH: Well, certainly not the way they planned it, I've got to tell you. I mean we have been getting an earful from Republicans, really saying that they understand that this label "party of no" is -- is a bad thing for them and they've been trying to overcome it.

And I think that their race to do that with this press conference today by saying that they -- you know, they heard the president a couple of nights ago saying that they have no budget alternative. And they tried to say well, we do have one. But then they did this press conference without really having the details. That might have backfired against them.

And, certainly, by coming out and, you know, saying that they have these ideas and not really being able to answer specific questions, maybe even just general questions like how are you going to lower the deficit, might not have helped them as much as they had hoped.

They do say that they are going to have details next week. But, again, today was the day that they had billed as this big press conference.

BLITZER: All right. Unfortunately, we've got to leave it right there, guys.

We'll continue this conversation tomorrow.

And tomorrow, as well, the president will be announcing his new strategy for Afghanistan. It's expected to include thousands of additional troops.

Do you support sending more troops to Afghanistan?

Submit your video comments to ireport.com/situationroom.

We're going to show some of the iReports on this question tomorrow here in THE SITUATION ROOM.

What should the U.S. do about North Korea's planned missile launch?

That's our question to you at this hour.

Jack Cafferty is standing by with your e-mail.

Plus, an NFL player rushing to the hospital to see a dying relative when he's pulled over by police. The entire incident captured by police dash came. You're going to see why it's now exploded into a huge controversy.

(BEGIN VIDEO CLIP)

ROBERT POWELL, DALLAS POLICE OFFICER: I can screw you over. I'd right here not do that. Your attitude will dictate everything that happens.

RYAN MOATS, NFL PLAYER: Sir...

POWELL: And right now, your attitude sucks.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Shocking videotape of an incident involving an NFL player and police officer in Texas has landed the police officer in some hot water.

CNN's Ed Lavandera has details -- Ed?

ED LAVANDERA, CNN CORRESPONDENT: Wolf, what appeared to be a routine traffic stop turned into what the Dallas police chief says is an embarrassing and disappointing situation.

(BEGIN VIDEOTAPE)

(VIDEO CLIP)

LAVANDERA (voice-over): This is Police Officer Robert Powell's view chasing down an SUV that he just saw slowly pass through a red light. The car has flashing hazard lights turned on and inside is NFL running back, Ryan Moats. He's racing to the hospital to see his dying mother-in-law.

When Moats pulls into a parking space, police say Powell draws his gun and the confrontation quickly gets heated.

POWELL: Get in there. Get in there.

Let me see your hands. Get in there.

Get your hands on the car, you understand?

TAMISHIA MOATS, WIFE OF RYAN MOATS: Excuse me?

My mom is dying.

POWELL: Do you understand?

R. MOATS: My mother-in-law is dying right now.

LAVANDERA: From the officer's dashboard video camera, you can hear Moats try to explain the urgency of the moment. His wife and another relative ignore the officer and go inside. The officer asks for Moats' insurance and says he's being ticketed for running a red light.

POWELL: I need your insurance.

R. MOATS: I don't know where it's at. I don't have insurance.

POWELL: Yes.

You don't have insurance?

(CROSSTALK)

POWELL: Well, if I can't...

(CROSSTALK)

POWELL: Listen, if I can't verify you have insurance...

R. MOATS: My mother-in-law is dying! Right now!

POWELL: Listen to me. Listen.

R. MOATS: You're wasting my time!

POWELL: If I can't verify you have insurance, then I'm going to tow the car. So you need to find it or I'm going to tow the car.

(CROSSTALK)

POWELL: Stop talking. Stop talking.

R. MOATS: Take me to jail.

POWELL: You can either (INAUDIBLE) and cooperate or I can take you to jail.

R. MOATS: I'm cooperating. You asked -- what did you ask for?

POWELL: Your insurance.

R. MOATS: You asked for my insurance...

POWELL: (INAUDIBLE).

R. MOATS: ...my license and registration.

POWELL: Shut your mouth.

R. MOATS: There you go.

POWELL: Shut your mouth.

R. MOATS: Yes.

POWELL: You can cooperate and settle down or I can just take you to jail for running a red light.

R. MOATS: Go ahead.

POWELL: Is that -- is that what you want to do?

R. MOATS: Whatever. Go ahead.

POWELL: OK. I can screw you over. I'd right here not do that. Your attitude will dictate everything that happens and right now, you're attitude sucks.

R. MOATS: Yes, sir.

POWELL: OK?

I turned my red and blues on as you were going over the bridge. This is when you stopped.

R. MOATS: You think I'm going to stop when my wife's mother is dying?

POWELL: You were required to stop. Yes, what you are doing does not matter.

R. MOATS: OK. Yes, sir.

LAVANDERA: Dallas Police Chief David Kunkle ripped his officer's handling of the situation. Powell has been put on paid leave until an internal investigation is complete. He could be fired.

CHIEF DAVID KUNKLE, DALLAS POLICE: I want to issue a personal apology and also an apology on behalf of the Dallas Police Department to the family of Jonetta Collingsworth. I am embarrassed and disappointed by the behavior of one of our police officers, Officer Robert Powell.

LAVANDERA: And listen as another police officer and even a hospital nurse try to help get Moats inside.

UNIDENTIFIED MALE: Hey, that's the nurse.

POWELL: Yes?

UNIDENTIFIED MALE: And she says that the mom is dying right now. And she's wondering if they can get him up there before she dies.

POWELL: All right. I'm almost done.

UNIDENTIFIED MALE: OK.

LAVANDERA: After almost 15 minutes, Ryan Moats finally is allowed to walk away -- but not in time to say good-bye to his mother- in-law. She died as Officer Powell finished writing the ticket.

(END VIDEOTAPE)

LAVANDERA: And after all that, the ticket has been dismissed. Dallas police leaders say that in their initial interviews with Officer Powell, that the officer insists that he handled himself properly and did everything the way he was supposed to -- Wolf. Ed Lavandera. What a story.

Thanks very much for that.

Boats race past Sugarloaf Mountain in Rio de Janeiro -- one of our many Hot Shots.

That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack Cafferty for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour: Is what should the U.S. do about North Korea's planned missile launch?

It could be launched within the next few days. They've moved the thing onto the launch pad, apparently.

John writes from New Jersey: "Nothing. That idiot in North Korea is just looking for attention. He knows he's toast if he ever shoots a missile at us."

Ralph in Washington: "Don't knock it down, but draw a line in the sand. Cross the line, next time it goes down."

Eleanor in Mt. Laurel, New Jersey: "Let the diplomats take care of this. We don't know enough. The most important thing we can do is trust Hillary Clinton. She's quite savvy, has much experience in the field. That's why President Obama chose her to be secretary of State."

Donna writes: "Once again, the U.S. is taking a wait and see attitude and we could get a huge reality check down the road. Haven't we had enough of those? I say shoot the damn thing out of the air and let the Korean freaky man know that we're serious now, not later. The U.S. has gone soft and that's our biggest problem as a people. We've turned into a bunch of soft-bellies that our great grandfathers would be ashamed of."

Fred writes: "Let them launch it and promptly shoot it down before it gets through the atmosphere. If we shoot them down a few times, they may be forced to abandon the program due to a lack of funds."

John in Texas: "I think we have enough problems to worry about here in the U.S. We definitely cannot afford to expend extra money with another war. Our enemies have learned the best way to defeat us is by bankrupting us. What timing they have, don't you think? Our time being the world's cops is over."

Cody in New Jersey writes: "I honestly don't think it's our problem. Either it fails and we laugh, or it succeeds and we throw more sanctions at them at the U.N."

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: We're going to look for you tonight on "LARRY KING LIVE".

CAFFERTY: There you go.

BLITZER: Two hours from now Jack will be on "LARRY KING LIVE".

Have a good time, Jack.

CAFFERTY: Thanks.

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

On Capitol Hill, Republican staffers lay out copies of the House Republicans' budget plan before a news conference.

In Canada, volunteers take sandbags to try to save homes from rising waters caused by an ice jam.

In Mississippi, a tornado left homes shattered and injured at least 24 people.

And in Brazil, a boat passes by the famous Sugarloaf Mountain in Rio de Janeiro during a Volvo ocean race.

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

We want you to check out our political podcast. To get the best political team to go, subscribe at CNN.com/situationroom.

I'm Wolf Blitzer in THE SITUATION ROOM.

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