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Chrysler's New Lease on Life?; Mixed Message on Flu Safety

Aired April 30, 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: The president says Chrysler is getting a new lease on life. Will bankruptcy and a deal with Fiat really keep the carmaker afloat?

And Hillary Clinton and Robert Gates deliver a one-two punch of diplomacy and defense -- their targets, the terror threat in Pakistan and the nuclear threat in Iran.

We want to welcome our viewers in the United States and around the world.

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

The flu outbreak that's been raging across the globe may be easing in the country where it began. Mexico's top health official reports the number of new cases is stabilizing. The World Health Organization says it's dropping the term swine flu to refer to the virus officially now known as the H1N1 influenza.

Drugmakers are warning it could take at least six months to develop a vaccine to protect against this flu strain.

Our homeland security correspondent, Jeanne Meserve, is watching what's going on. She's getting the latest from officials in the Obama administration -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, government officials have two conference calls daily to coordinate information and public messaging, but, today, a wrench was thrown in the system, as the country continued to ramp up for a possible pandemic.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): At the Washington Hospital Center, preparations for a possible onslaught of H1N1 cases.

DR. BILL FROHNA, WASHINGTON HOSPITAL CENTER: We have ventilators, cots and wheelchairs.

MESERVE: The number of confirmed cases is edging higher. The official tally from the Centers for Disease Control now 109 confirmed cases in 11 states. The death toll remains at one.

UNIDENTIFIED FEMALE: We're starting to get lots of questions, as you might imagine. MESERVE: A Webcast supplemented the heavy diet of daily briefings, hearings and media appearances by federal, state and local officials.

UNIDENTIFIED MALE: Thanks. I was just wondering about the safety of air travel.

JOHN COLMERS, MARYLAND HEALTH SECRETARY: Well, I can tell you that from the standpoint of the CDC, there are no travel advisories that I knew of this morning recommending against air travel domestically.

MESERVE: But government officials' carefully coordinated effort to project a calm, calibrated message, pushing information without promoting panic, got upset by Vice President Joe Biden, who said he would tell his family to avoid airplanes, subways, even cars and schools.

(BEGIN VIDEO CLIP, "THE TODAY SHOW")

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: I wouldn't go anywhere in confined places now.

(END VIDEO CLIP)

MESERVE: Biden's office issued a clarification, but officials spent much of the day clearing up the misunderstanding.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: ... said what he said. I'm telling you what he meant to say, which was that...

MESERVE: What he meant to say was this:

REAR ADMIRAL DR. ANNE SCHUCHAT, CENTERS FOR DISEASE CONTROL AND PREVENTION: We are recommending that people defer nonessential travel to Mexico. We're recommending that people who are sick not get on airplanes or public transportation. And I think there may have been a misstatement.

(END VIDEOTAPE)

MESERVE: One member of Congress wondered aloud today if the country was working itself into too much of a frenzy over what is still a relatively small outbreak. But government officials are operating on the theory that giving Americans a lot of information and specific tips on how to protect themselves and their loved ones will prevent a frenzy -- Wolf.

BLITZER: Jeanne Meserve, thank you.

The flu outbreak hits the Obama administration close to home. The White House says an Energy Department staffer who traveled to Mexico in advance of the president's recent trip there developed flu- like symptoms. Three of his family members then came down with the flu and are being tested to see if they have the same virus spreading across much of the world right now. (BEGIN VIDEO CLIP)

GIBBS: This individual never flew on Air Force One. The individual would have been at the working dinner on the night of -- I said Thursday, Friday, so Thursday night, the 16th. He was asked specifically if he ever came within six feet of the president. And the answer to that was no.

(END VIDEO CLIP)

BLITZER: Another story the Obama administration is dealing with right now, Chrysler. It files for bankruptcy protection today and reaches a deal to combine the company with the Italian carmaker Fiat. Chrysler is set to temporarily stop most production, starting -- most production until the restructuring is complete.

The company says some plants already have closed because they can't get parts. President Obama says this isn't a failure for Chrysler; it's a step toward its revival.

Let's get some more from our senior White House correspondent, Ed Henry -- Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, the president was certainly trying to avoid all of this, the first U.S. automaker since Studebaker in 1933 to file for bankruptcy, but many officials determined this was the last, best hope of saving the company.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The president vowed the bankruptcy will not disrupt the lives of the car company's employees and will not affect consumers' ability to buy a Chrysler or get one repaired.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: ... the process that has the a full support of Chrysler's key stakeholders and the full backing of the United States government. And I have every confidence that Chrysler will emerge from this process stronger and more competitive.

HENRY: But industry analysts are not quite as optimistic, noting the bankruptcy process can be messy in the short term, and it's tough to change American buying habits over the long haul.

UNIDENTIFIED MALE: And if the American public suddenly decides that these same Chrysler products that they haven't been buying, that they want to buy them, and Chrysler starts to pick up market share, they may pull through, but those are a lot of ifs, and there's a heck of a lot of risk.

HENRY: The deal brings Italian automaker Fiat in for an alliance, while CEO Robert Nardelli will be out when the revamped company emerges from bankruptcy, with up to $8 billion in help from taxpayers.

OBAMA: Every dime of new taxpayer money will be repaid before Fiat can take a majority ownership stake in Chrysler.

HENRY: The president's auto task force tried to avoid bankruptcy by getting several financial firms led by J.P. Morgan to agree to vastly reduce Chrysler's debt. But the president's team was outraged when a group of investment firms and hedge funds held out for better terms.

OBAMA: Some demanded twice the return that other lenders were getting. I don't stand with them. I stand with Chrysler's employees and their families and communities.

(END VIDEOTAPE)

HENRY: Now, White House officials say they do not expect job cuts in the short term, but the company could ask the bankruptcy judge in this case to get some pay cuts, to also announce job cuts down the road, shut down plants, et cetera. So, that's why a lot of employees are on edge right now, waiting for the next shoe to drop -- Wolf.

BLITZER: All right, thanks, Ed Henry, with that story.

Let's bring back Jack. He's got "The Cafferty File."

JACK CAFFERTY, CNN ANCHOR: Troubling story.

Despite tens of billions of dollars we spend every year on education in this country, high school students have not made significant gains in reading or math for 40 years. A new government report, the nation's report card, shows results for 9-, 13-, and 17- year-olds going all the way back to the 1970s.

And while the two younger groups have improved in those two subjects over the years, the scores for 17-year-olds have barely budged. On reading, the high schoolers' scores have improved by a total of one point out of 500 since 1971. They have intermediate skills and can make generalizations about what they have read.

As for math, the scores have gone up by two points out of 500, since 1973. Students can perform moderately complex procedures like using decimals or fractions. Colleges and businesses, not surprisingly, say that a lot of high school students are just not up to snuff, that they earn diplomas without learning any necessary skills for life.

As one education advocate puts it, if high schools were cell phones, they would be considered in a dead zone. Secretary of Education Arne Duncan calls the results for high school students especially troubling.

Very perceptive.

President Obama speaks about education being one of his administration's top priorities. This national report card suggests that he doesn't have a lot of time to waste. The administers wants to make boosting high school graduation rates a key focus. And they also want states to start using tougher common standards for both teaching and testing, instead of benchmarks that vary from state to state.

So, the question is this: What does it say about the state of education in this country if high schoolers have made little progress in reading and math since the 1970s?

It's disgraceful.

BLITZER: Whenever I hear this, it makes you crazy, because you think you learn, all the money that is being pumped in, and it's not helping.

CAFFERTY: And the budgets go up every year.

BLITZER: Yes.

CAFFERTY: And they talk about, well, we don't pay the teachers enough. But teachers are protected, and the bad ones can't be taken, weeded out of the school systems. A lot of money goes to administrators. Questionable, what kind of bargain that is. And in the meantime, the kids -- we're not getting it done.

BLITZER: Yes. All right, Jack, thank you.

CAFFERTY: Sure.

BLITZER: So, how fast might this flu virus spread? And how much danger might you be in? I will ask a top infectious disease specialist.

Also, is there any reason to fear riding on planes or subways? The vice president, Joe Biden, said something that is pretty alarming to a lot of travelers today. But now he's clarifying.

And in New York, a building collapses like an avalanche of bricks. Crews desperately search through the rubble to see if anyone was trapped.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to our top story, the swine flu, what's going on right now?

Joining us is Michael Osterholm. He's the director of the Center For Infectious Disease over at the University of Minnesota.

Thanks very much for coming in, professor.

DR. MICHAEL OSTERHOLM, DIRECTOR, UNIVERSITY OF MINNESOTA CENTER FOR INFECTIOUS DISEASE RESEARCH: Thank you, Wolf.

BLITZER: Is it stabilizing right now, as one health official in Mexico seems to suggest, or should we be bracing for a worst-case scenario? OSTERHOLM: Well, you know, we're really into a very long marathon. And we have just started. And we don't know what's going to happen.

You know, every day brings new findings. And I think that what we have to say right now is that the number of cases in Mexico clearly appears to be leveling off, but around the world we're seeing an increasing number of new infections.

BLITZER: Are the authorities, the health authorities, in the United States, from your perspective, doing everything they should be doing, or should more be done?

OSTERHOLM: I have to tell you, I think the Centers for Disease Control and Prevention have just done an outstanding job. I think they have really put science first and foremost. Their messaging has been clear.

They have collaborated closely with state and local health departments, which also have performed way above and beyond the call of duty. And so actually, believe it or not -- as you know, we have been critical in the past about some of the federal health activities -- I think this one has been simply outstanding.

BLITZER: There's a wide discrepancy with a lot of local health authorities in public health in various parts of the country. How big of a problem is that?

OSTERHOLM: Well, you know, anytime you have a new infectious agent like this coming into a community and you're now talking about community-wide interventions, mitigation strategies, as we call them, people are going to be feeling their way around the big -- you know, the national recommendations. What do I do about a school?

Well, if you have got 80 schools in a school district, that's different than a rural community with one school in a school district. And I think what you're seeing right now are people in this first week just trying to figure out the best way to respond. I think the actual -- that will get much better with time. And I think you're going to see much more standardization of how people respond.

BLITZER: Eighty thousand students from kindergarten through 12th grade in Fort Worth have been told, stay home, at least for a week. About 200,000 students altogether around the country have been told to stay home.

Is that overreacting, or is it prudent?

OSTERHOLM: Well, first of all, as we look at a response to this agent, you have to look at, is it just in the community for the first time and it's very limited and we may be actually able to just stop it in its tracks?

In that case, you are really talking about those schools where you have a student or students who were exposed to a case or who they themselves went to a place like Mexico and became infected. I think it's very prudent to consider taking those schoolchildren and keeping them out for a week and telling them not to have lots of contact with other kids.

I don't understand where you're taking 80,000 students out in many school districts. I think that probably was a far reach, and hopefully it's an opportunity to learn about what we do and what we don't want to do in terms of intervening.

BLITZER: And I'm curious to hear what you think about what the vice president, Joe Biden, said earlier today. He's backed away from it, but earlier, he said, you know, if it was a member of his family, he wouldn't get on a -- he wouldn't advise them to get on a plane or a subway.

OSTERHOLM: Well, you know, I think this is a real teachable moment here, because, in fact, the vice president was right. And I think he might have wanted to change what he had to say.

And what I mean by that is, right now, there is no scientific reason to believe that the risk is such that you would want to stay off planes or not ride subways. On the other hand, if this actually should become a full-blown pandemic over the upcoming months, then we will have a very different set of recommendations, and that very well might be an appropriate response.

And, so, I think what public health is trying to do right now is really tailor the interventions, the messages, what we do about it, even the level of concern to what we know and where we're at, and we're not there right now, staying off of planes and out of subways.

BLITZER: We know this is the end of the traditional flu season right now, and there's some suggestion, yes, it's going to stabilize, the swine flu, and maybe even seem like it's going away, but it could come back with a vengeance, a so-called second wave, later in the year, when the flu season, the traditional flu season, comes back. Are you worried about that?

OSTERHOLM: I am.

And I just have to tell you, Wolf, that anyone who comes on this show or any other show and tells they know what is going to happen, don't have them back again, because they are not telling you the truth.

We don't know. This could go on for four or five, six more weeks and then fizzle out. It could do that, but then come back with the second wave, like we saw in 1918, or this could be the opening punch in a pandemic match, in which the disease will spread around the world, and it could be mild, moderate. There could be mutations or reassortments occur with the virus, meaning it changes, so that even the clinical picture would change over time.

None of us have a clue about what's going to happen with this. And we just have to be honest with the public and say we're telling them what we know, when we know it and then based on that what do we think they ought to do. BLITZER: Good advice.

Michael Osterholm of the University of Minnesota, thanks very much.

OSTERHOLM: Thanks, Wolf.

BLITZER: We will stay in touch.

A two-pronged approach to the two of the world's hot spots -- the defense secretary, Robert Gates, and the secretary of state, Hillary Clinton, they joined forces to confront Iran and Pakistan.

A new report confirms what was feared about Afghanistan and Pakistan, terrorism on the rise in both countries.

And a U.S. ship captain rescued from pirates on the high seas now telling Congress about his ordeal.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: In Washington, assessing threats from radical extremists on the one hand and a nation determined to have nuclear capabilities on the other.

Secretary of State Hillary Clinton and Defense Secretary Robert Gates, they talked about those issues in front of senators today.

Let's go straight to our Pentagon correspondent, Chris Lawrence.

What happened, Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, Wolf, Clinton and Gates side by side, and they're saying they have to work together to solve those problems in Iran and Pakistan.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Defense and diplomacy, together on Capitol Hill and talking about the Taliban. Defense Secretary Robert Gates says Pakistan didn't take the threat seriously, comparing it to the World Trade Center attacks in 1993 and 2001.

ROBERT GATES, U.S. SECRETARY OF DEFENSE: Al Qaeda was at war with the United States for eight years before we decided we were at war with al Qaeda. And I think the same kind of thing has kind of happened in Pakistan.

LAWRENCE: But Pakistan's military is continuing a show of force against the Taliban in Buner. When the Taliban pushed within 60 miles of the capital, Secretary of State Hillary Clinton said it was a wakeup call for Islamabad.

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: We do think that the government of Pakistan, both civilian and military leadership, is demonstrating much greater concern about the encroachment by Taliban elements.

LAWRENCE: And some Pakistanis themselves are speaking out, like this small protest in Lahore.

UNIDENTIFIED FEMALE: I will fight them to my last breath and to the last drop of blood in my body.

LAWRENCE: Pakistan already has nuclear weapons. The U.S. is trying to stop Iran from developing them, but may have no military means to do so.

GATES: Even a military attack will only buy us time and send the program deeper and more covert.

(END VIDEOTAPE)

LAWRENCE: Yes, Secretary Gates says that Iran hates being isolated. He says those U.N. resolutions that we hear about, they're not perfect, but Gates says Iran hates when they pass, because it's a reminder of how isolated they can be -- Wolf.

BLITZER: So, Chris, are sanctions the only option?

LAWRENCE: Well, Gates says that and Iran's neighbors collaborating on some sort of missile defense aimed specifically at Iran, making them understand that they could start the escalation of a nuclear arms race in the Middle East and end up even less secure than they are right now.

BLITZER: Chris Lawrence is over at the Pentagon.

Thank you.

Our Dr. Sanjay Gupta has been covering the global flu outbreak from ground zero. He's now back from Mexico and he's about to give us his unique perspective on what he saw, what's going on. We will discuss whether a full-blown pandemic can be prevented.

Republicans are taking a new shot at portraying Democrats as weak on national security. It's a familiar strategy, but will it work this time? The best political team on television is standing by.

And could the world have gotten an early warning about this flu outbreak by Googling?

(COMMERCIAL BREAK)

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

Happening now: It's looking more like the reclusive North Korea will not resume talks on ending its nuclear program. Secretary of State Hillary Clinton told the Senate today, it's implausible, if not impossible. Congress is a step closer to forcing credit card companies to back off. The House has passed a bill restricting sudden jumps in interest rates and late fees.

Chrysler's bankruptcy filing only made a small dent on Wall Street today. The Dow finished down 17 points. Analysts say April's overall gains show investors are feeling a bit more confident about the economy.

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

To our top story -- the swine flu outbreak is having a significant impact on life in Mexico.

CNN's Ted Rowlands is in Mexico City. He has details -- Ted.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT: Wolf, whether you have this virus or not, if you live in Mexico City, you're affected by it. You just see people walking down the streets wearing masks. Most people are wearing masks and seem to be taking the advice of the government seriously.

And look at this. This is happening now, too, around the city, where the government has sent out health workers in mobile clinics, if you will. Basically, a few workers in a van come out, set up a few tables, and then people who have concerns about their health can be literally checked out on the streets.

Now, coming up over the next few days, the government is hoping to exploit a holiday, a national holiday, Felipe Calderon urging people, instead of going out to celebrate Cinco de Mayo and other festivities scheduled for this weekend, he's urging everybody to stay home, so that the virus can stop spreading.

FELIPE CALDERON, MEXICAN PRESIDENT (through translator): I want to ask all of you, without exception, that, on these upcoming days off, from the 1st to the 5th of May, that you stay home with your family, because there is no safer place than your own home to avoid being infected with the swine virus.

ROWLANDS: Health officials say they are optimistic in the fact that the number of deaths has steadily dropped over the last few days. They say that is a trend that is very encouraging. And, again, what they're trying to do now is to urge people to stay home over the next few days to stop the growing number of infections around the country -- Wolf.

(END VIDEOTAPE)

BLITZER: All right, Ted, thanks very much.

Let's bring in our chief medical correspondent, Dr. Sanjay Gupta, right now. You have been investigating what's going on in Mexico, Sanjay. Help us appreciate if you think the scene that Ted Rowlands was just describing in Mexico would have to be replayed here in the United States.

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Well, you know, there's a lot of encouraging signs from Mexico that that might happen in the United States as well.

Obviously, Ted just mentioned these -- these fatalities rates have gone steadily down. I saw that myself, you know, day after day. The number of cases of people being sick, admitting themselves to the hospital, as well as the number of people who died from this disease were going down.

I also think that this idea of social isolation that the president of Mexico talked about, taking advantage of the holiday to encourage people to stay indoors, is the same message that we're seeing reiterated by the administration in the United States -- this idea that if you socially isolate, you can take something that could spread pretty easily, seems to be fairly transmissible and really start to contain that -- Wolf.

BLITZER: Are we over the hump or are you afraid we're still -- we still have a huge potential hurdle ahead of us?

GUPTA: Well, you know, I've asked that same question to the infectious disease community. The right answer is nobody knows for sure. But we can look at past history to say that, you know, as the weather starts to get warmer, as we get closer to summer, we are probably going to continue to see decreases in transmission.

We're going to see decreases in people getting sick and certainly decreases in deaths. That is what happens typically with this sort of flu bug -- this H1N1 swine virus.

So I don't know if we're over the hump yet. Things -- you know, in the United States we may sort of be tracing Mexico by a -- by a couple of weeks behind. So you may have more cases for a week or so. And then it may be over the hump and you may see that same pattern in countries around the world.

BLITZER: Sanjay Gupta, thanks very much.

Now that the number of flu cases has been growing over the past few days, many plane passengers flying to and from Mexico are covering up out of fear.

But should they have reason to fear flying right now.

Let's go to CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're here at the international arrivals terminal at Dulles International Airport. As you can see, a fairly steady stream of arrivals from anywhere from Amsterdam to Mexico City to Munich. Now, passengers are telling us today that their flights were fairly full.

But the question is, after some remarks by the vice president, will international travel continue to be busy?

(voice-over): A mobile flu virus known to have traveled from Mexico to the U.S. and beyond by plane.

The vice president tells NBC's "Today Show" what he's told his own family.

(BEGIN VIDEO CLIP, "THE TODAY SHOW")

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: I wouldn't go anywhere in confined places now. It's not that it's going to Mexico. It's you are in a confined aircraft. When one person sneezes, it goes all the way through the aircraft.

(END VIDEO CLIP)

TODD: Joe Biden's office later clarifies that, saying what he really meant was that people should avoid unnecessary travel to and from Mexico and avoid confined spaces if they're sick.

It still brought a mixed reaction from arriving international passengers at Dulles Airport outside Washington.

UNIDENTIFIED FEMALE: You're in a confined space, so you know how germs travel quickly anyway. So, yes, I -- I would think twice, perhaps, about traveling in an economy cabin.

UNIDENTIFIED MALE: For me, I don't think it's as bad as (INAUDIBLE) makes -- makes it look.

TODD: Officials at the Air Transport Association, which represents airlines and is working closely with the CDC in this crisis, counter Biden's claim, saying a sneeze does not go all the way through an aircraft. The air, they say, does not circulate the length of the plane, but rather sideways on each row and is exchanged with outside air through state-of-the-art filters.

JAMES MAY, PRESIDENT AND CEO, AIR TRANSPORTATION ASSOCIATION: The ventilation system in modern aircraft today is actually equivalent to or better than in most modern office buildings. We use HEPA filters, which are the kinds used in hospitals. And so it is, truly, very safe to fly.

TODD: The ATA says it's impossible for crews to disinfect every plane more than they already do. But on aircraft which fly in and out of flu zones or those which have carried flu victims, they are applying extra cleaning on hard surfaces, like armrests and tray tables, where viruses could linger.

(END VIDEOTAPE)

TODD: Now, there's an important bottom line that the Airport Transport Association wants to get out there. And that is that so far, they have not identified any cases where patients with the H1N1 virus transferred the illness to anyone else on the same plane -- Wolf.

BLITZER: All right, Brian.

Thank you.

Google is helping track the spread of this new flu in Mexico, by tracking Web searches for flu symptoms as an indicator where the people are getting sick.

Abbi Tatton is joining us now -- all right, Abbi, what's Google picking up?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, it was right here in Mexico City about April 19th that there was a spike in Google searches of things like flu symptoms, body aches, thermometers. Now, this is four or five days before the announcement about swine flu, so it wasn't in the news yet -- an early indicator that cases of flu were on the rise even before public health officials had made any announcements.

And now Google, at Google.org, is posting maps based on these Web searches to help people track where the flu is spreading throughout Mexico.

Google has been monitoring flu searches in this country -- in the United States -- since November, after establishing a match between people Googling things like: "Where do I buy a thermometer?" and actual data from the CDC on cases of the flu.

Unfortunately, Google had not been tracking Mexico when the outbreak happened, so they weren't able to provide any early warnings to anyone.

What they're doing right now with these maps is filtering out all those hundreds of thousands of general Web searches that people are doing about swine flu and focusing just on the searches that are likely from people who are trying to find out about their symptoms -- Wolf.

BLITZER: Abbi, thanks very much for that.

Abbi Tatton reporting.

Republicans are trying to rebrand their party. We have details of how some top leaders are trying to change the GOP image.

And President Obama bans the harsh interrogations allowed by the Bush administration.

Is the president making America safer?

The best political team on television will weigh in.

(COMMERCIAL BREAK) BLITZER: Top Republicans are launching a new campaign to try to change their party's image. It comes two days after Senator Arlen Specter's defection and 101 days after Democrats took over the White House.

Let's bring in our national political correspondent, Jessica Yellin -- Jessica, what's going on?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Wolf, you know, there's just about no problem in Washington that can't be solved by throwing a town hall meeting. So you won't be surprised that a group of Republicans is trying to revive the party by sending some familiar faces on the road.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): These are dark days for the Republican Party. As the ever candid RNC chair, Michael Steele, put it in a television interview...

(BEGIN VIDEO CLIP, COURTESY CBS)

MICHAEL STEELE, RNC CHAIRMAN: I'm not going to sit here with, you know, pie in the sky, talking about, you know, how wonderful things are. They're not.

YELLIN: The problem -- the new Democratic president is really popular. Fifty-one percent of Americans say they now have a favorable opinion of the Democrats. That's 12 points higher than for the Republicans.

As the party searches for someone to lead it out of the wilderness, the press is focused on polarizing figures, like this guy.

(BEGIN VIDEO CLIP FROM RUSHLIMBAUGH.COM)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I hope Obama fails. It's not a question of hope he will. This just can't work.

(END VIDEO CLIP)

YELLIN: And promising new faces keep fumbling their national debuts, including Louisiana governor, Bobby Jindal.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: Good evening and Happy Mardi Gras.

(END VIDEO CLIP)

YELLIN: To expand the party's appeal, Congressional Republicans in Washington have decided to launch a road show. They're sending Senator John McCain and former Governors Mitt Romney and Jeb Bush out with this goal. REP. ERIC CANTOR (R-VA), MINORITY WHIP: To engage in a wide open policy debate with Republicans, with like-minded Democrats, Independents, liberals, conservatives, in a discussion premised on the principles of freedom and opportunity.

YELLIN: Longtime Republican pollster Whit Ayres says the party needs to woo Independents back into the fold.

WHIT AYRES, GOP POLLSTER: The Republican Party needs to think in terms of addition rather than subtraction. Independents hold the balance of power in our political system.

YELLIN: While Senator Arlen Specter's defection from the party has some saying good riddance, others say it's a wake-up call for the Republicans.

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Anyone who is whistling past the graveyard saying oh, we need to do exactly what we're doing, we're right, by God, is wrong.

(END VIDEOTAPE)

YELLIN: And the senator's comments point to a brewing fight inside the party, with some arguing that Republicans will win control in Congress again only if they return to pure conservative roots and focus on social issues, others saying the party has to expand its reach and focus instead on economic issues and welcome candidates like Arlen Specter, who has centrist views.

BLITZER: Jessica Yellin, a good report.

Thank you.

Let's talk about this and more with our senior political analyst, Gloria Borger; our CNN contributor, Steve Hayes, of "The Weekly Standard;" and our CNN political analyst, Roland Martin.

What do you make of it, Gloria?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Look, I think Jessica is right. The Republican Party has a big problem. And one of the problem is generational. I mean there's been a whole shift in the voting population. So those tried and true issues -- calling the Democrats soft on defense, for example -- don't work with younger voters. You know, the demographics of the country have changed. There's more minority voters, more Hispanic voters. Barack Obama turned a lot of red states blue.

So the same old, same old isn't going to get them anywhere.

BLITZER: Where do you -- what do you think -- who's right, those Republicans who say Arlen Specter, good riddance, he was never a real Republican anyways, or other Republicans, including some of the moderate senators, who say this should be a real wake-up call for the party, Steve? STEPHEN HAYES, SENIOR WRITER, "THE WEEKLY STANDARD": Well, I think the Republican Party is in trouble, but I don't think that Arlen Specter's departure or defection is the reason or is even a symptom of the problem.

Arlen Specter is a unique guy. I mean he left because of reasons that are specific to Arlen Specter. I don't think that anybody believed that Arlen Specter was the face of the Republican Party going forward.

That said, I think parties exist for a reason. Parties exist because they bring together people who share basic political principles. And I think to compromise on those basic principles -- three or four or five sets of ideas -- would be a mistake.

BLITZER: Roland, how much trouble is the Republican Party in right now?

ROLAND S. MARTIN, CNN POLITICAL ANALYST: First of all, huge trouble. This, frankly, this initiative here, Wolf, I call it old wine in old wine skins. And that's exactly what it is.

(LAUGHTER)

MARTIN: And so you can sit here and, you know, trot these folks out, but the fundamental issue that they have is not just the fact that you want to have a town hall meeting, you want to have the conversations, it's also who you're putting out.

It's very interesting, people forget that when Ronald Reagan was in power in '80 and '84 when he won, it was amazing how many college Republicans were fired up about the Republican Party.

The same people, the Cantors of the world, they were 18, 19, 20 years old then. So it's amazing how the young lions then can't figure out today what got them excited.

Reagan was able to do that. So people often forget that. And so you would think that they would try to go back to the grassroots level, trying to be able to get those voices, re-establish the College Republicans and try to build from there. But this is not going to do it.

BORGER: You know, Wolf, only one out of every five voters in this country now identifies themself as a Republican. That's the lowest it's been for the party in 25 years. And what they're doing is going back to old leadership -- Newt Gingrich, for example, being one of them; Dick Cheney being another, which is why this...

MARTIN: It's like back to the future.

BORGER: Right. Which is why this group...

BLITZER: All right.

BORGER: ...is trying to get a new conversation started. So I applaud them for trying to do it.

HAYES: Yes, Wolf, can I just jump in real quickly?

I mean I think -- this -- I don't think that's entirely fair to this group. I mean, you've got Bobby Jindal, you've got Sarah Palin, you've got Mitt Romney, who ran before, but, you know, has a very credible issue on the economy -- or speaker on the economy. You've got Jeb Bush, who was a successful governor of Florida.

I mean these aren't all the old people. I think it's a combination of old and new.

BORGER: No, Bush is new.

MARTIN: And, Wolf, also...

BLITZER: All right...

BORGER: But he is a Bush.

MARTIN: Governor Sarah Palin has been extended the invitation. She has not accepted. So -- they think she will. But she hasn't confirmed yet.

BLITZER: All right. Now, this is what the president of the United States, at his news conference, said last night on the issue of waterboarding.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Waterboarding violates our ideals and our values. I do believe that it is torture. I don't think that's just my opinion. That's the opinion of many who have examined the topic. And that's why I put an end to these practices.

(END VIDEO CLIP)

BLITZER: All right. Now listen to what Condoleezza Rice recently told a student at Stanford University on this subject.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: If you were there in a position of authority and watched Americans drop out of 80-story buildings because these murderous tyrants went after innocent people, then you were determined to do anything that you could that was legal to prevent that from happening again. Three thousand Americans died in the Twin Towers and in the Pentagon.

UNIDENTIFIED MALE: Five hundred thousand died in World War II...

RICE: Yes, I know (INAUDIBLE)...

UNIDENTIFIED MALE: ...and yet we did not torture...

RICE: Fighting a war...

UNIDENTIFIED MALE: We did not torture the prisoners of war.

RICE: And we didn't -- and we didn't torture anybody here either, all right?

UNIDENTIFIED MALE: You tortured men at Guantanamo Bay.

RICE: No. No, dear. You're wrong, all right?

You're wrong. We did not torture anyone. And Guantanamo Bay, by the way, was considered a model, "medium security prison" by representatives of the Organization of Security and Cooperation in Europe, who went there to see it.

Did you know that?

(END VIDEO CLIP)

BLITZER: All right. The president of the United States says waterboarding is torture, Gloria. And Condoleezza Rice says the Bush administration did not torture. There's obviously a major difference here.

BORGER: Yes, there is a major difference. And at the president's press conference last night, he also made it clear that he believes that we could have gotten the same information that we got using waterboarding, for example, through other techniques.

You know, you're never going to get Condoleezza Rice and Barack Obama to agree on that. But what Barack Obama was saying, having read the memos, he said that we haven't seen yet -- and I believe we should see them -- is that the information would have been gleaned anyway.

BLITZER: Steve?

HAYES: Yes. But he had what supporting evidence did he provide to -- to back him up on that assertion?

BORGER: Well, I'd like to see it.

HAYES: It's simply an assertion. And I'm -- I was a little surprised last night, frankly, that our colleagues in the news media didn't follow up and say, are you kidding me?

Can you give us some evidence and, by the way, declassify these memos...

BORGER: Right. I'm with you.

HAYES: ...that other people are calling to have declassified. He says he can't talk about them...

BLITZER: All right, very quickly, Roland.

HAYES: It's totally hypocritical. MARTIN: Yes, because I would ask former Secretary of State Condoleezza Rice this question -- if waterboarding was used against American troops by another country, would she call that torture?

BLITZER: All right. We'll leave it on that note, guys.

Thanks very much.

A good discussion.

It's a serious situation, but the latest flu outbreak has been a boon to the mask industry.

And dozens of schools close their doors because of confirmed or suspected cases of swine flu. Thousands of families are affected.

(COMMERCIAL BREAK)

LOU DOBBS, CNN ANCHOR: Coming up at the top of the hour, we'll have the very latest for you on the swine flu outbreak. Among the latest suspected cases, an official in the Obama administration.

We'll tell you about another gaffe by Vice President Joe Biden, this time on the issue of the swine flu outbreak.

Also, this country's third biggest carmaker, Chrysler, going bankrupt -- a restructuring plan that will give the United Auto Workers union control of the company, all of their benefits and retirement -- all of that with the help of billions of dollars of your money.

And Americans more hopeful about the direction of this economy -- a new indication that our recession could end later this year. We'll have that special report.

Join us for all of that, all the day's news and much more at the top of the hour.

THE SITUATION ROOM continues in just a moment.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty once again.

He's got "The Cafferty File."

CAFFERTY: A troubling story: What does it mean about the state of education in this country that high schoolers, 17-year-olds, have made little or no progress in reading and math since the 1970s?

James in Tennessee: "It points to an education system dominated by local school boards that are more for athletics than for literacy, more for religion than science and demonstrates all too painfully, despite our universities pumping out millions of would-be educators, we're not creating actual teachers. It's time to return to the awareness that all children are not intellectually equal and it's time to start teaching to the top of the class, instead of the bottom."

Matt in Virginia writes: "While budget cuts don't help, the main problem is a lack of effort and discipline. I'm a senior in high school. The sheer lack of effort is seen in every class I attend. Students sleep through class, text on their cell phones and chatter away. And instead of studying to learn the material, they do what they need to do to pass the test and then move on." Felicia writes: "I teach post-high school students. The vast majority of them can't perform basic math functions. Fractions are impossible for some. I recently discovered that Roman numerals had never been taught at all. I've also had several kids who didn't know how to read a ruler. Quite a shame, indeed."

Charles in Illinois says: "Until we see, as a country, invest in education, our results will not get any better. We don't want to pay our teachers. Our schools look like prisons. And parent apathy is at an all time high. Plus, standardized tests measure inert facts that have little to do with any of the skills that are associated with contributing to society."

Chuck writes: "The problem is the teachers' unions and tenure. Bad teachers must be fired. Good teachers must be paid more -- period."

And Pete in Atlantic Highlands, New Jersey: "Ever since the '70s, we've had the new math, fuzzy arithmetic -- everything but real math. Many students working in stores can't even count out change when the cash register tells them how much to pay you. As for reading, most of the text they read on the Internet is not written to the grade level of the books they used to read in school. Instead, it rarely gets past see Dick and Jane post dirty pictures on their Web pages."

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: See you tomorrow, Jack.

CAFFERTY: Are you going back to Washington, tonight?

BLITZER: I certainly am.

CAFFERTY: Well, we've enjoyed your time here in the big city.

BLITZER: We'll do it again.

CAFFERTY: OK.

BLITZER: Thank you, Jack.

CAFFERTY: Take care.

BLITZER: It's becoming the face of the swine flu virus -- the mask.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Introducing the reusable Enviroair Designer Mask with internationally patented filtered breathing technology.

(END VIDEO CLIP)

BLITZER: A "Moost Unusual" look at how marketers are trying to cash in on the fear.

(COMMERCIAL BREAK)

BLITZER: With fear spreading just as fast as the swine flu virus, some savvy marketers are taking advantage.

CNN's Jeanne Moos has a "Moost Unusual" look at the outbreak of a certain accessory.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): So eye catching, it's become the face of the swine flu -- the mask -- a serious accessory in Mexico, still a novelty in the U.S.

(VIDEO CLIP)

(BEGIN VIDEO CLIP FROM "THE TONIGHT SHOW WITH JAY LENO," COURTESY NBC)

JAY LENO, HOST: So Michael Jackson not so crazy, huh?

(LAUGHTER)

LENO: Yes.

(END VIDEO CLIP)

MOOS: Though Michael Jackson's masks tends to be fashionable. You know the mask has permeated pop culture when Web sites like Defamer feature reality show celebrities kissing in masks in Mexico.

As one person posted on PopSugar: "They're going to get tan lines."

(BEGIN VIDEO CLIP, COURTESY ENVIROAIRMASK.COM)

UNIDENTIFIED MALE: You can protect yourself and your family with the Enviroair Designer Mask.

(END VIDEO CLIP)

MOOS: Another company is featuring a swine flu mask sale -- a box of 50 for $14.99. And though New York's mayor says...

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: We do not recommend that you use a mask.

MOOS: ...many New York City drug stores have sold out. On the Web, there are instructional videos.

(BEGIN VIDEO CLIP, COURTESY WORLD FOOD PROGRAM)

UNIDENTIFIED MALE: There are two types of masks that can be used during an influenza pandemic.

(END VIDEO CLIP)

MOOS: Serious videos and silly ones -- how to make a swine flu mask.

UNIDENTIFIED MALE: Do it yourself.

UNIDENTIFIED MALE: Right.

UNIDENTIFIED MALE: DIY.

MOOS: Using coffee filters or a Styrofoam bowl that you can decorate. Definitely not doctor approved.

People are posting photos of decorated masks on Flickr. They're shoving them on their pets.

A few years back, during the SARS outbreak, this Louis Vutton spoof made the rounds. A real photo was doctored to include a mask with designer insignia.

The swine flu outbreak inspired a breakout marketing idea. The Web site Gawker reported: "Go gorilla media, pitch the you're at here concept," proposing clients plaster their brand on masks.

The hottest new viral marketing idea -- go swine.

(on camera): Within hours of the pitch being e-mailed out, the head of Go Gorilla was having second thoughts.

(voice-over): Out went the apology e-mail: "In hindsight, the concept was not as clever as I had originally thought."

(BEGIN VIDEO CLIP FROM "THE COLBERT REPORT," COURTESY COMEDY CENTRAL)

STEPHEN COLBERT, HOST: You're going to want to ask anyone you see if they have swine flu.

(END VIDEO CLIP)

MOOS: What the masks definitely won't protect you from is the mask joke.

(BEGIN VIDEO CLIP FROM "THE COLBERT REPORT," COURTESY COMEDY CENTRAL)

COLBERT: You'll want to cut a mouth hole, OK?

(LAUGHTER) COLBERT: Do you have swine flu?

(END VIDEO CLIP)

MOOS: Not that folks are laughing behind these masks.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Thanks, Jeanne.

I'm Wolf Blitzer in THE SITUATION ROOM.

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