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THE SITUATION ROOM

President Obama on Health Care; Suicide Bombers Bring Terror Back to Indonesia; President Obama Clings to Your Approval

Aired July 17, 2009 - 15:59   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Rick.

Happening now, American luxury hotels attacked. Suicide bombers bring terror back to Indonesia.

This hour, who's behind the deadly blast and will they strike again?

Plus, a "Hail Mary" pass on health care. We're standing by to hear live this hour from President Obama. He's scrambling to keep his hopes for an overhaul alive as concerns about costs rise.

And a murdered couple buried in Florida. Their big family of adopted children struggling now with shock and grief. And their lawyers try desperately to put rumors about the killings to rest.

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

You're in THE SITUATION ROOM.

But we begin with the breaking news. You're looking at live pictures from the White House right now.

Any moment now, the president of the United States will walk through that door and speak about health care reform. It's priority number one, domestically, for the president.

He was supposed to start speaking about 45 minutes or so ago, but there has been a mysterious delay. We don't know why.

The president has been waiting about 45 minutes. What's going on? But we're going to listen to the president as soon as he walks through that door.

Dan Lothian is our White House correspondent. He's watching all of this as well.

Any explanation for the delay?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Not at all, Wolf. I wish I had an answer to the mysterious delay.

What I can tell you is the last indication we got in terms of timeline was that the president would be coming out in about 10 minutes. Now, that was more than 15 minutes ago. But again, just to give you a little sense of what's been going on behind the scenes here, initially the president was not scheduled to make any remarks, public remarks today. He was just doing a lot of sort of lobbying and behind-the-scenes negotiations on health care here at the White House, but there was nothing on his schedule at all until late this afternoon, when we got word after many rumors that were circulating around, we got word that indeed the president would be coming out at 3:15 and making some remarks on health care.

Perhaps in a reaction -- in response to some of the growing concerns that this health care reformship (ph) up on Capitol Hill is sinking. So the president, on the record, at least, was coming out at 3:15, and we continue to wait, not knowing what the mystery is behind the delay.

BLITZER: Dan, stand by for a moment.

Dana Bash is up on Capitol Hill, our senior congressional correspondent.

Dana, the president's problems right now not so much with Republicans, but with some fellow Democrats.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: That's right. And this is mostly, at least, this problem right now, is in the wake of some testimony from the head of the Congressional Budget Office yesterday, saying that the plans currently moving through Congress, Democratic plans, don't achieve the president's central goal, which is to bring medical costs down.

So, what I'm told by congressional sources here, Democratic sources, is that the reason the president is coming out is to try to give a pep talk. And he's probably going to say in some variation, maybe multiple times, there is momentum, there is progress.

You know, as you well know, with a lot of these things, a lot of these issues, it's about perception. And right now, in the last 24 hours, the perception is that health care is in trouble. So the president is going to try to turn that perception around. And that is with the prodding, and, frankly, some pleading by Democratic leaders here in Congress.

BLITZER: All right, Dana. I want you and Dan to stand by.

Dr. Sanjay Gupta, our chief medical correspondent, is also watching this.

The big problem right now is paying for this health care reform legislation, Sanjay. And the study that we've been talking about, this Congressional Budget Office study, it's not helping the president at all, because it's showing that his plans are simply going to cost a lot more money than so many people thought it would.

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes. And that's been a big blow, I think, really, everyone's agreed on that.

Now, if you read the Congressional Budget Office report and look into some of the language specifically, it is hard to sort of project or predict what the long-term savings of the proposed plan would be. I mean, for example, Wolf, you and I have talked about this. You focus a lot of money, a lot of focus on prevention and wellness.

Does that save money in the long term? Does that help offset some of these costs by having a healthier population overall that doesn't get as sick, doesn't require as many procedures, doesn't exercise the resources of the health care system as much?

That's what a lot of people are banking on. You heard Senator Schumer talk about that. You heard Nancy Pelosi talk about that.

But admittedly, this is some sort of funny math. It's hard to sort of predict, and I don't know if we can say for sure.

BLITZER: All right, Sanjay. Hold on.

Here's the president.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: All right. Good afternoon.

I realize that Washington is often focused on the 24-hour news cycle instead of the long view, and I know that there's a good deal of that going on right now when it comes to health care. So I want everybody to just step back for a moment and look at the unprecedented progress that we've already made on reform that will finally lower costs, guarantee coverage, and provide more choice.

Over the last several weeks, we have forged a level of consensus around health insurance reform that we've never seen before in this country. In May, we were able to bring together health care providers around an agreement to do their part to decrease the annual rate of health care growth by 1.5 percentage points annually, which will save us $2 trillion or more over the next decade and lower costs for all of us.

A few weeks later, we got the pharmaceutical industry to agree to $80 billion in spending reductions over the next decade, reductions that will make prescription drugs more affordable for seniors. And that's partly why the AARP has endorsed our efforts.

Last week, we reached an agreement with hospitals to bring down costs by another $155 billion. And just this past week, both the American Nurses Association and the American Medical Association, representing millions of nurses and doctors across the nation who know our health care system best, announced their support for what we're trying to do.

In these past weeks, we've also built consensus around specific reforms on which there hasn't been consensus before. Let me list some of those. And I want to particularly applaud the efforts of the committees in the House and in the Senate who have worked long and hard to make this progress.

We're now at a point where most everyone agrees that we need to invest in preventive and wellness programs that can save us money and help lead healthier lives.

We have an agreement on the need to simplify the insurance forms and paperwork that patients have to fill out every time they go to a hospital or see a doctor.

We have an agreement on the need to reform our health insurance system so that if you lose your job, change your job, or start a small business, you can still get affordable health insurance.

We have an agreement on the need to prevent insurance companies from denying coverage to Americans with preexisting medical conditions.

And we have an agreement on the need for a health insurance exchange, a marketplace where people can compare prices and quality and choose the health care plan that best suits their needs.

So, this is what health insurance reform will mean for the average American. It will mean lower costs, more choices, and coverage you can count on. It will save you and your family money.

You won't have to worry about being priced out of the market. You won't have to worry about one illness leading to your family going into financial ruin. Americans will have coverage that finally has stability and security, and Americans who don't have health insurance will finally have affordable quality options.

These are the areas where we agree right now. And this consensus has brought us closer to the goal of health insurance reform than ever before.

Now we've got to get over the finish line. And part of this process is figuring out how to pay for it.

I've said that health insurance reform cannot add to our deficit over the next decade, and I mean it. Let me repeat, health insurance reform cannot add to our deficit over the next decade, and I mean it.

Already, Congress has embraced our proposal to cut hundreds of billions of dollars in unnecessary spending and unwarranted giveaways to insurance companies in Medicare and Medicaid. So, we actually believe that about two-thirds of the costs of reforming health care could be achieved through these savings alone, without any new revenue.

Of course, that still leaves one-third of the costs in order for us to cover all Americans that we're still going to have to find a way to pay for. And the key committees in Congress are working diligently with the White House to see if we can come up with an agreement on that remaining one third.

The bill I signed will also include my commitment and the commitment of Congress to slow the growth of health care costs over the long run. This is a separate issue, and I just want to be clear.

There's an issue of, how do we pay for health care reform immediately, in a way that's deficit-neutral, but how do we also bend the cost curve so that we're not seeing huge health care inflation over the long term that would not only make any health care reform package more expensive 15, 20 years out, but would also make sure that people who have nothing to do with the government programs like Medicare and Medicaid, how do we make sure that their costs are under control as well?

Now, I realize there's going to be a lot of debate and disagreement on how best to achieve these long-term savings. Our proposal would change incentives so that providers will give patients the best care, not just the most expensive care, which will mean big savings over time. This is what we mean when we say that we need delivery system reform. I have proposed to Congress, and I am actually confident that they may adopt these proposals, that independent -- an independent group of doctors and medical experts will oversee long-term cost savings measures.

Every year, there's a new report that details how much waste and inefficiency there is in Medicare, how best practices are not always used, and how many billions of dollars could be saved. Unfortunately, this report ends up sitting on a shelf. And what we want to do is force Congress to make sure that they are acting on these recommendations to bend the cost curve, each and every year, so that we're constantly adjusting and making changes that will reduce costs for families and for taxpayers.

We need an independent group that is empowered to make these changes, and that's something that we've proposed. I'm confident that if we work with the foremost experts in the field, we can find a way to eliminate waste, slow the growth of health care costs, and provide families more security in the long term.

Now, I realize that the last few miles of any race are the hardest to run. But I have to say, now is not the time to slow down. And now is certainly not the time to lose heart.

Make no mistake, if we step back from this challenge at this moment, we are consigning our children to a future of skyrocketing premiums and crushing deficits. There's no argument about that.

If we don't achieve health care reform, we cannot control the costs of Medicare and Medicaid and we cannot control our long-term debt and our long-term deficits. That's not in dispute, so we're going to have to get this done.

If we don't get health care reform done now, then no one's health insurance is going to be secure, because you're going to continue to see premiums going up at astronomical rates, out-of-pocket costs going up at astronomical rates, and people who lose their jobs or have a preexisting medical condition or changing their jobs finding themselves in a situation where they cannot get health care.

And that's not a future that I accept for the United States of America. And that's why those who are betting against this happening this year are badly mistaken.

We are going to get this done. We will reform health care. It will happen this year.

I'm absolutely convinced of that. I believe that members of Congress are prepared to work as hard as it is going to take to make this happen. And I am grateful for the work that they have already done. I'm confident that we're going to be putting in a lot more hours, there are going to be a lot more sleepless nights, but eventually this is going to happen.

Thank you very much.

QUESTION: Mr. President, why not push back the deadline?

BLITZER: There he is, the president of the United States, delivering what Dana Bash told us he would be doing, delivering a pep talk, if you will, to make sure that all of his supporters, Democrats, and perhaps some Republicans out there, are on board.

He's committing himself, and he's pledging that there will be health care reform, it will be completed this year. Earlier in Europe, he said he was hoping to get it completed by the August recess. That's unlikely right now, but he's saying this year it will be completed.

He says so much progress has been done, unprecedented progress, in his words. The big issue, who's going to pay for all of this? He says there will be some savings, but there's still going to have to be some more money that is going to be available to help these uninsured get insurance.

We've got a team of our reporters standing by to assess what we just heard.

Dan Lothian is at the White House. Dana Bash is up on Capitol Hill. Dr. Sanjay gupta is joining us from New York.

Dan, he tried to get his troops all excited and get them reassured that things are moving in the right direction, but he acknowledged there's some huge problems there.

LOTHIAN: Oh, that's right. I mean, he pointed out that the last few miles of any race are the most difficult ones. And so, this is something the White House has been saying all along, that this will not be easy, that there will be hurdles along the way, but that they will get this done.

I thought what was interesting, though, the president coming out and essentially saying that why he came out was in response to the 24-hour news cycle, perhaps the negative news that this ship is sinking. The president very much admitting that that is not the case. That, in fact, progress is being made.

And also, you know, reacting to the criticism that this health care reform currently in the House will only drive up health care costs. The president believing that through savings and through spending reductions, that they can bring down those costs. The president really getting actively involved here, getting out in front, trying to knock down criticism that health care reform right now is in trouble -- Wolf.

BLITZER: Let's bring in Dana. Dana is watching the debate unfold on the Hill.

We didn't hear where the president say that one-third of the money needed to insure everyone in the United States is going to come from. There are lots of proposals up on Capitol Hill. And one, a surtax on the wealthiest Americans to pay for it, but there's a lot of opposition to that.

BASH: Certainly, there's a lot of opposition to that, even among members of his own party, who are worried, as Republicans are, they say, about the affect that that will have on small businesses. But he is getting, little by little, more involved in the details.

And, you know, it might have seemed like it was in the weeds a little bit, but when he talked about the fact that he wants there to be an independent board that dictates the race for Medicare, that is actually a step forward in terms of wading into the details for the president. That is something that many Democrats up here have been pushing for, because they say that is one way to save, a cost-saving measure. And now the White House is backing that.

And that is exactly the kind of thing, Wolf, the Democrats have been really pleading the White House to do more of, to, please, you know, use that bully pulpit, as he did just today, to tell us exactly what you need, because that can help us in trying to figure out the best way to do that. And that's why I think a lot of Democratic leaders here are going to be very happy with what the president did just now.

BLITZER: And Sanjay, you also heard the president say he's got the support of the nurses out there, the AARP, he's got some key groups that are on board, at least right now. But it's not going to be easy once the dust settles to keep everyone on board.

GUPTA: Yes. I mean, he started off by talking about this unprecedented level of consensus, including the American Medical Association, just over the last 24 hours, also lending their approval of at least this bill that came out of the House.

He did talk about a lot of things with regards to the specific of consensus as well. You know, the idea of prevention and wellness, simplifying insurance forms, things like that. And he really focused on the idea that there are a lot of people -- a lot of momentum building behind some of these measures.

And it was interesting. Dana just sort of mentioned this, but I thought this was interesting, this idea of an independent board.

Senator Tom Daschle had written about this in his book "Critical," this idea that you would have an independent health board much in the way that have a Federal Reserve Board. It's a private group of health care professionals who would help determine best practices for the medical profession as a whole.

And, you know, the supporters of this say we spend too much money and get too little. The critics charge, how do you have a board that interferes, potentially, with a doctor's practice of medicine? So, that's going to be a little bit of a controversial point, but a lot of overall points made here -- Wolf.

BLITZER: Important stuff going on right now. It's the top, top priority, domestically, for the president. We'll see if he can achieve it.

Guys, stand by. We're going to have more of this later in THE SITUATION ROOM. The president of the United States saying they're going to get over the finish line, the last few miles, though, are the hardest to run. "We are going to get this done," he says, "this year."

We shall see.

Also coming up, investigators are trying to figure out how suicide bombers got around tight security at two luxury American hotels in Indonesia. The clues, the killings, and the hunt for who's to blame.

And a powerful cleric's new demand brings thousands of people into the streets of Iran. What could it mean for anti-government protesters?

And as Sarah Palin prepares to step down as Alaska's governor, she's making her supporters a promise.

(COMMERCIAL BREAK)

BLITZER: Suicide bombers posed as hotel guests, using their room as a command post for the deadly blast they carried out today, explosions, only a few minutes apart, at the Marriott and the neighboring Ritz- Carlton hotels in the capital of Indonesia. At least six people are dead, more than 50 others wounded. And a four-year-old break from terror is now over in the nation with the largest Muslim population in the world.

CNN's Dan Rivers reports from Jakarta -- Dan.

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT: Wolf, the area around both hotels remains sealed off tonight as police begin to investigate who carried out this double bomb attack on the Marriott and Ritz- Carlton hotels. Indications are at the moment that this does have a link with Islamic terrorism.

(BEGIN VIDEOTAPE)

RIVERS (voice-over): This footage may hold vital clues as to who carried out the double bombing in Jakarta. A man wheels a suitcase through the lobby. Seconds later, a massive blast tears through the hotel. It's not clear if the suicide bomber was the man caught on camera, but police are urgently checking.

Moments after the two explosions, a security guard films as smoke pours from the Marriott hotel. The building barely visible as a crowd of confused onlookers realize this is a terrorist attack. Then, sirens of the first emergency vehicles arriving at the scene. The Ritz-Carlton was also hit, windows gaping open, shredded curtains fluttering in the tropical heat.

GREG WOOLSTENCROFT, WITNESS: I heard a huge explosion, and I looked out my window towards the Marriott, and there was a big plume of black and brown smoke going up.

RIVERS: And then the shock as news of the dead filtered through to the crowds outside.

But then the police move our camera back as they find a third bomb, undetonated, but live in a room on the 18th floor. The bomb disposal van moves in and it's made safe. The police think the terrorists were checked in as guests, using room 1808 as a command and control center.

The police chief leading the investigation says the explosives recovered were similar to those found in west Java in a house with links to Indonesia's most wanted man, Nordon Top (ph). He's alleged to have links to the shadowy terrorist network Jemaah Islamiyah, or JI.

The Marriott has been attacked before by JI. A bomb in 2003 left 12 dead and 150 injured. JI were also behind the bombings on the holiday island of Bali seven years ago which killed more than 200 people, many of them foreign tourists.

The reason these two hotels were targeted this time is unclear. The Manchester United football team were due to stay at the Ritz-Carlton on Sunday, but it's not thought that the attack was aimed at disrupting their tour. More likely, the hotels were hit simply because they were popular with westerners.

(END VIDEOTAPE)

RIVERS: There's been a lull in attacks in a few years here in Jakarta, but now everyone is wondering whether Jemaah Islamiyah is back -- Wolf.

BLITZER: Dan Rivers in Jakarta for us.

These hotels that were targeted literally stand side by side in an upscale business district in the Indonesian capital.

CNN's Tom Foreman is here to map it all out for us.

Tom, these hotels, they're owned by the same company. Ritz-Carlton is owned by Marriott, and they're literally very close to each other.

TOM FOREMAN, CNN CORRESPONDENT: Very close. Across the street, literally. And they are not only popular with westerners there, but many western businesses are around them, that sort of thing.

Let's take a look at Indonesia first to make sure we orient ourselves.

Australia down here, India, China. You get a sense of where it is. It's a large, spread out company, 240 million people. It's the largest -- third largest democracy in the world and the largest Muslim democracy in the world. About 30 -- about 86 percent of the population is Muslim there.

BLITZER: The largest Muslim country in the world. Absolutely.

So, this is Jakarta, which is a big city, about 23 million people as you go out to the far extremes of the greater Jakarta area. And the Ritz-Carlton is down here in the southern part of downtown.

You can see how it's right across the street from the Marriott over here. And as we understand it, as Dan just mentioned a minute ago, the actually bomb making was taking place somewhere over here in the Marriott on about the 18th floor. It would put it somewhere in here. That's where they believe it was happening in a room.

That was the third bomb they were talking about, the bomb explosives up in here. The first explosion went off down here in the Marriott. The second one went off over here, just about two minutes later.

Now, if this is, in fact, the work of Jemaah Islamiyah, which is this JI group he was talking about, then that is an important thing here, because most of the people of this country have not been particularly supportive of that group. They're a very small group. Most people oppose them quite dramatically.

And one of the other possible links that has been raised in all of this is that maybe the reelection of the president there, who's generally pro-western, and certainly pro-western business, which happened on the 8th, if I remember correctly, may have helped spur this, plus the release of some of the members of this group. The group has largely been splintered, because throughout Indonesia, the president who was just reelected has put pressure on them, has broken them up and broken up their central organization. So, the notion is that splinter groups that say this may be the way to react are striking in this way, even though others -- there was a bombing in Bali, at the other end of the island here. When there was that bombing four years ago, other parts of JI, in fact, said that's a mistake, we're going to turn people against us.

So, the question is, is it that group, and have they come together again to strike? Their goal being a holy Muslim nation that goes here, here, here, here, that's not going to happen, but that's what they're after.

BLITZER: Clear to me, at least, they struck two American-owned hotels in the Indonesian capital. Indonesia is, as you point out, a real democracy right now.

Tom, thank you.

Crowds gathering in Iran to hear a top cleric speaking out about the recently disputed presidential election.

And the mother of two of Michael Jackson's children is suing. Wait until you hear whom Debbie Rowe is suing and why.

(BEGIN VIDEO CLIP)

DEBBIE ROWE, MOTHER OF TWO OF MICHAEL JACKSON'S CHILDREN: Do not touch me!

UNIDENTIFIED MALE: Nobody touched you here.

ROWE: You just did!

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

Happening now, new revelations in that shocking murder of the Florida couple known for adopting children with special needs. Investigators are about to address the news media. We're standing by to bring you that live.

Citigroup is the latest in the financial services firms to report billion-dollar profits, all after taking billions in bailout money from the federal government. But is the company now biting the hand that feeds it?

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

Health care, the economy, the wars -- how do you think President Obama is handling all of that right now? There are new numbers coming in.

Let's go to our senior political analyst, Bill Schneider.

Bill, how's the president's honeymoon going?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, the passion has cooled a bit.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Last month, President Obama's job approval held fairly steady at just over 60 percent, according to CNN's Poll of Polls. This month, an average of 57.

The American public is beginning to ask some tough questions about their new president, like is he a good provider? The nation's unemployment rate jumped to 9.5 percent last month, the highest in 26 years.

REP. ERIC CANTOR (R-VA), HOUSE MINORITY WHIP: The problem with the stimulus plan that passed back in January, it just wasn't targeted to -- to get people hired again. And we have got now a situation where unemployment is nearing 10 percent.

SCHNEIDER: In 16 states, including seven of the nation's 10 largest states, unemployment is over 10 percent, over 15 in Michigan.

In May, according to the CBS News poll, 25 percent of Americans were worried that someone in their household might lose a job. In June, that figure climbed to 36 percent. Now it's up to 40 percent. And they're losing confidence in the president's handling of the economy. Last month, people worried about losing a job still gave President Obama a 58 percent approval rating on the economy. This month, their confidence has dropped sharply, to 42 percent.

Patience, says the White House economic director.

LAWRENCE SUMMERS, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: We were at the brink of catastrophe at the beginning of the year. We have walked some substantial distance back from the abyss.

SCHNEIDER: Do Americans believe this president has a clear plan for solving the nation's economic problems?

They did when he first took office, 64 percent. And now? Most still do, but the number is down more than 10 points.

(END VIDEOTAPE)

SCHNEIDER: Nearly 3.4 million jobs have been lost during the first half of 2009. That is more than the 3.1 million lost during the whole year of 2008 -- Wolf.

BLITZER: Very disturbing numbers, indeed. All right, thanks very much, Bill, for that.

Fredricka Whitfield is monitoring some other important stories incoming to THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Thanks, Wolf.

Well, in Tehran, tens of thousands of people gathered for a highly anticipated speech by a top cleric and former president who now supports the opposition. Witnesses say police used tear gas to disperse some of the crowds. In the speech, Ali Akbar Hashemi Rafsanjani called for the release of protesters arrested after last month's disputed elections.

And Michael Jackson's ex-wife is suing a woman who claims to have recently received e-mails from Debbie Rowe, saying that she doesn't want custody of the dead singer's children, but was interested in money. Rowe says she sent no such e-mails and is asking for unspecified damages from the woman for an interview which aired on the TV show "Extra" this week. A custody hearing is scheduled for Monday.

And when the space shuttle Endeavour docked at the International Space Station a short time ago, it brought together 13 astronauts. That's the biggest crowd ever in space. Before docking, space shuttle astronauts photographed the shuttle to look for any evidence of damage from Wednesday's launch.

And we will mark the 40th anniversary of the Apollo moon landing with an hour-long special Monday at 4:00 p.m. Eastern.

And scuba divers are reporting that schools of rare and menacing giant squid are turning up just off the coast of Southern California. The squid are native to deeper water to the south, and they can grow up to 5 feet long and up to 100 pounds and have razor-sharp breaks and toothy tentacles.

And they're also very aggressive, which is prompting many longtime divers to actually stay out of the water.

As long as you keep a good distance, I know a lot of divers would like to see it, just not touch it -- Wolf.

BLITZER: Amazing pictures, though...

WHITFIELD: Yes.

BLITZER: ... you have got to admit.

WHITFIELD: Pretty phenomenal.

BLITZER: Fabulous.

All right. Thank you.

Police in Philadelphia accused of making a racist rants online -- it's pitting officers against some fellow officers. We are going to tell you what it's all about.

And the president marks a 100-year milestone in the civil rights movement. Did he tell his audience what it wanted to hear?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let it be said that this generation did its part, that we, too, ran the race, that full of faith that our dark past has taught us, full of the hope that the present has brought us, we faced, in our lives and all across this nation, the rising sun of a new day begun.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: There are some disturbing claims being made against the fourth largest police department in the United States. It involves white and African-American police officers, a Web site, and claims of racist rants.

Let's go straight to CNN's Mary Snow. She's working the story for us.

Mary, what's going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the Web site you just mentioned is run by individuals, not the police department. But a lawsuit filed in federal court is holding Philadelphia's police department responsible for it.

(BEGIN VIDEOTAPE) SNOW (voice-over): It is this Web site called Domelights, billing itself as the voice of the good guys, that is at the center of a civil rights lawsuit, citing postings like this one saying, "Guns don't kill people; dangerous minorities do."

Philadelphia Officer Rochelle Bilal is president of an African- American police organization leading the legal fight trying to shut down the Web site. She says some of her fellow officers are behind the messages, and she says her breaking point came after seeing a posting about black children denied access to a private public pool, referring to them as "ghetto monkey faces."

ROCHELLE BILAL, PRESIDENT, THE GUARDIAN CIVIC LEAGUE: These bigots get on this Domelights site and just say very nasty, hurtful, racist type of things, even against their own colleagues. So, enough is enough with this.

SNOW: The suit was filed against the Philadelphia Police Department, alleging it allowed its officers to encourage racism, and claims officers are on the site while at work.

The department declined comment, but the city solicitor said in a statement, this is a private Web site, adding, "The allegations against the city and the police department are misplaced."

A screen username, "McQ," is also named in the suit, which alleges he's an unidentified police sergeant who founded the site. McQ posted a message citing the lawsuit, saying, it may cause the Web site to be suspended, but added, it was not an admission of wrongdoing, writing: "I categorically deny any wrongdoing on my part. I did not make racist posts. I did not maintain the Web site on city time or equipment."

Some posts question First Amendment rights, but the attorney who filed the suit says, it's not that simple.

BRIAN MILDENBERG, ATTORNEY: You don't have, as a police officer, your -- the same type of First Amendment right that you may have as a police officer when you're sitting in your living room.

SNOW: But can a city's police department be held responsible for individual employees? That, says one constitutional law professor, poses the biggest challenge.

WILLIAM CARTER, TEMPLE UNIVERSITY SCHOOL OF LAW: The question under the law, then, is, what did the city know, at what point did it know it, and were the actions, if any, that it took in response adequate?

(END VIDEOTAPE)

SNOW: Now, Wolf, the groups who filed the lawsuit want the Web site shut down. The suit is also seeking unspecified damages -- Wolf.

BLITZER: Mary, thank you.

Race and racial struggles were certainly a big part of President Obama's speech before the NAACP last night. The first African- American president spoke in incredibly stark terms to the nation's oldest civil rights group. And he conjured up ghosts of America's past to talk about the promise in America's future.

(BEGIN VIDEO CLIP)

OBAMA: And I want all the other Barack Obamas out there, all the other Michelle Obamas out there...

(CHEERING AND APPLAUSE)

OBAMA: ... to have the same chance -- the chance that my mother gave me, that my education gave me, that the United States of America has given me.

(APPLAUSE)

OBAMA: That's how our union will be perfected and our economy rebuilt. That is how America will move forward in the next 100 years.

And we will move forward. This, I know -- for I know how far we have come. Some, you saw, last week in Ghana, Michelle and I took Malia and Sasha and my mother-in-law to Cape Coast Castle, in Ghana. Some of you may have been there. This is where captives were once imprisoned before being auctioned; where, across an ocean, so much of the African American experience began.

We went down into the dungeons where the captives were held. There was a church above one of the dungeons -- which tells you something about saying one thing and doing another.

(CHEERING AND APPLAUSE)

OBAMA: I was -- we walked through the "Door Of No Return." I was reminded of all the pain and all the hardships, all the injustices and all the indignities on the voyage from slavery to freedom.

But I was reminded of something else. I was reminded that no matter how bitter the rod, how stony the road, we have always persevered.

(CHEERING AND APPLAUSE)

OBAMA: We have not faltered, nor have we grown weary. As Americans, we have demanded, and strived for, and shaped a better destiny. And that is what we are called on to do once more. NAACP, it will not be easy. It will take time. Doubts may rise and hopes may recede.

But if John Lewis could brave billy Clubs to cross a bridge...

(CHEERING AND APPLAUSE)...

OBAMA: ... then I know young people today can do their part and lift up our community.

(CHEERING AND APPLAUSE) OBAMA: If Emmett Till's uncle, Mose Wright, could summon the courage to testify against the men who killed his nephew, I know we can be better fathers and better brothers and better mothers and sisters in our own families.

(CHEERING AND APPLAUSE)

OBAMA: If three civil rights workers in Mississippi -- black, white, Christian and Jew, city-born and country-bred -- could lay down their lives in freedom's cause, I know we can come together to face down the challenges of our own time.

(CHEERING AND APPLAUSE)

OBAMA: We can fix our schools.

(CHEERING AND APPLAUSE)

OBAMA: We can heal our sick. We can rescue our youth from violence and despair.

(CHEERING AND APPLAUSE)

OBAMA: And, 100 years from now, on the 200th anniversary of the NAACP...

(CHEERING AND APPLAUSE)

OBAMA: ... let it be said that this generation did its part, that we, too, ran the race, that full of faith that our dark past has taught us, full of the hope that the present has brought us, we faced, in our lives and all across this nation, the rising sun of a new day begun.

(CHEERING AND APPLAUSE)

OBAMA: Thank you! God bless you!

(CHEERING AND APPLAUSE)

OBAMA: God bless the United States of America!

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: They liked him at that speech, no doubt about that.

Let's talk a little bit about this and a lot more in our "Strategy Session."

Joining us, the Democratic strategist Hilary Rosen and the Republican strategist Mary Matalin. They're both CNN contributors.

Mary, this is the president of the United States. He can deliver a speech like this. He can go to Cairo, address the Arab and Muslim world, go to Wall Street, talk about arcane tax issues, and hang out with a bunch of guys in the locker room before an all star -- a baseball all-star game as well.

It's pretty impressive, you have got to admit.

MARY MATALIN, FORMER ASSISTANT TO PRESIDENT BUSH: Very impressive. He's an unusually skilled politician and orator.

And that -- that particular message was not only moving and well- delivered; it's very important. And it's -- it's akin to the one he gave on Father's Day, that fatherhood doesn't stop at conception. So, these are important messages delivered to answer audience from a very important messenger.

So, that was very beautiful and moving, not as well-crafted as the Cairo -- it's better crafted, rather, than the Cairo speech, which really was substantively erroneous.

But, as elegant as he is, polls are showing, and the -- and the own -- behavior of his Democrats in both chambers is showing that his eloquence is not going to be any substitute for the decreasing popularity of his policies.

(CROSSTALK)

MATALIN: So, he can sing the song, but I don't know if he's going to be able to sell the -- sell the goods.

BLITZER: He's going to have to do everything in his -- in his -- in his pocket, in his arsenal, Hilary, to get through, to get this health care reform initiative, for example, passed right now.

This is a critical moment, as he himself acknowledged within this hour.

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Well, first, I just have to say, that -- that speech last night, when I was watching it, it made me cry.

I thought the -- the -- not just the substance of it, but the passion of it, and -- and -- and the commitment to not just making this country better, but making everybody in this country feel better about their -- their own potential. It's such an important message, like Mary said.

You know, and I think that what happens with something, an issue like health care, is, every time he goes out there and talks about the realities we're facing as a country, prospects for legislation get a little better.

(CROSSTALK)

BLITZER: Hold...

(CROSSTALK)

ROSEN: He -- he has to cajole this through in many ways.

BLITZER: And he's going to.

I want to go -- hole on a second, because our senior White House correspondent, Ed Henry, is joining us right now.

Ed, what are you learning?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, we have just learned -- learned from the White House that the president is going to be having a prime-time news conference next Wednesday night, July 22, 9:00 p.m. Eastern time.

Interesting, his fourth prime-time news conference in just the first few months. It shows, as you're talking about right now, that this president is going to try to grab the megaphone, not just starting today, but all into next week and beyond, to try to push back on some of the critics out there, some of the naysayers, saying that he can't get health reform done.

We're told by White House aides that the focus will be on health care, at least in his opening remarks. Of course, reporters can ask about any number of subjects, but he clearly wants to try to get, not just the media's attention, but, more importantly, beyond us, he wants to get the public's attention and try to push for reform.

BLITZER: And -- and, just to be precise, health care reform, it's at a critical moment right now, Ed. And this is his top domestic priority, by far.

HENRY: Absolutely, no doubt about it.

I mean, of course, the financial crisis is still paramount as well, trying to bring jobs back. He -- he's pushing back on critics saying the stimulus has not worked.

But his biggest initiative right now, no doubt, is health care reform. And he realizes it's -- you know, that -- that, while it's in peril right now, a lot of people were saying the same thing back in January and February about the stimulus bill, and he pushed back on critics. He was the chief cheerleader. The White House used him very effectively, and he got that through.

So, they're going to try to replicate that with health care.

BLITZER: All right, Ed is going to stand by.

I'm going to ask Mary Matalin and Hilary Rosen to stand by as well.

Don't laugh. He may have been a funny man in the past, but the new Senator Al Franken wants to be taken very seriously. Can he become one of the Senate's respected power-brokers? We're going to ask that question.

And you can't be a politician without making promises, but Sarah Palin is making a special promise to you. It will be especially helpful to her fans and her political foes.

Stick around.

(COMMERCIAL BREAK)

BLITZER: We're just learning that the sheriff in Pensacola, Florida, is about to have a news conference -- new information coming in on the murder of that couple with 16 kids, many of them adopted with special- needs. We will have live coverage at the top of the hour. Stand by for that.

Let's get back to our "Strategy Session" right now. Once again joining us, our Democratic strategist, Hilary Rosen, Republican strategist Mary Matalin.

Mary, Al Franken, the newest United States senator, what do you think? How did he do this week?

MATALIN: Well, he's been going out of his way to not be the Al Franken that I used to love, actually, as an...

(LAUGHTER)

MATALIN: ... an original "SNL" viewer. I was -- Hilary, I'm not going to date you, but I was -- I saw the original...

(CROSSTALK)

MATALIN: ... "Saturday Night Live." So, that was -- he was great fun. I wish he had stayed in the comedic business. But, you know, he's made a big deal not to be that Al Franken.

And it's hard to tell, after five days, or his first week, how he's going to be. But he comported himself with dignity on that committee.

BLITZER: Hilary, you know him quite well. He's an intelligent guy.

ROSEN: He -- he's very intelligent. And, you know, he asked very serious questions about complicated telecom policy and Voting Rights Act. And, you know, he got in a few jokes at the end about "Perry Mason."

And I -- I think he's going to be a great senator. I was -- worked for Bill Bradley when he was first elected to the Senate from New Jersey. He was, you know, a famous basketball player. He was not known as a politician. He -- he went there and got very serious very early on. And he bored the tears out of the media. And everybody was expecting him to be something different.

And my guess is, Al Franken's going to do the same after -- over the next year.

BLITZER: Let's hope not. Let's hope he has a few jokes up his sleeve as well.

(LAUGHTER)

BLITZER: All right, let's talk a little bit, Mary, about Republicans. Mitch McConnell, the Republican leader in the Senate, said he's going to vote against Sonia Sotomayor's confirmation. But there are a few other Republicans already making it clear they're going to vote to confirm her. There's no doubt she will be confirmed. The question is, how many Republicans, Mary, do you believe will vote -- will join with the Democrats to vote yea?

MATALIN: Oh, she's going to pass, but the number is -- she will be confirmed, but the number is going to be -- who knows. But that the Republicans laid out, conservatives laid out what their ideal judicial nominee might be was fine, and that was their objective this week.

But, really, as we're moving on, what Republicans are more concerned about right now and more energized about are -- are joining with Democrats to stop the health care initiative that Ed Henry just talked about, and why the president's doing his prime-time conference, and stop the energy, the cap and tax, as they call it.

So, this was something that we like to cover on TV, and it was interesting, but it's not where the energy on the Hill is on -- in either chamber in either party.

BLITZER: Do you agree, Hilary, that the Republicans in Congress, at least they seem to be finding their mojo, getting back their mojo a little bit?

ROSEN: Not particularly.

I -- I actually think that there are going to be a couple of Republicans who are going to help Democrats pass health reform in the Senate, and they just want to make sure that they're on the train...

(CROSSTALK)

BLITZER: But not if there's a tax increase there. You -- you believe Republicans, some Republicans, Hilary, will vote to increase taxes?

ROSEN: Well, I think it's going to depend on where those taxes come from, but I think the answer is probably yes, if they're taxes on the wealthiest. I do.

BLITZER: You agree, Mary?

MATALIN: Absolutely not.

(CROSSTALK)

MATALIN: And Democrats today, 20 Democrats in the House today said they will not vote for anything that is a tax, even on the evil rich, because the rich are small job-creators -- or small-business owners. They're job-creators, and they will be taxed at a rate unheard of, unprecedented, never-before-reached in the history of this country.

So, when Democrats are saying they're not going to vote on this on tax increases, I'm hard-pressed to think of any Republicans who would sign up against that. BLITZER: There were higher tax rates back, way back, before Kennedy in the '60s. But that's another story.

(LAUGHTER)

BLITZER: We will get back to that. That seems like a long time ago.

Guys, thanks very much for coming in.

Hillary Clinton is back on the international stage, and she's showing her frustration with some red tape created by the Obama administration.

Plus, a Florida couple laid to rest, but questions persist about their murder -- new information about the investigation and what was found in a safe, a safe that was found in the crime -- at the crime scene.

And a smoking gun in the killing of former NFL quarterback Steve McNair -- how it led police to a convicted murderer.

(COMMERCIAL BREAK)

BLITZER: The sheriff in Pensacola, Florida, is about to speak to reporters. There are apparently some new developments in that horrible case, the murder of that couple in Pensacola with some 16 kids, many of them adopted with special-needs. The sheriff is going to be walking to the microphone in a -- in a moment or so, we're told.

Ed Lavandera is there in Pensacola on the scene.

Set the scene for us, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, you know, the sheriff didn't really have any intentions of calling a press conference today, because today was the day that Byrd and Melanie Billings have been laid to rest. There were funeral services and graveside ceremony just a -- a short while ago.

But, before those ceremonies started, the family's attorney held a quick statement with reporters, and essentially revealed the secret of the contents -- the secret contents of what was inside that safe, which included family jewelry and heirlooms, documents, and children's medication, not clearly the kind of things that you would think that five armed men would want to burst into a home and steal.

But it's also something that investigators and prosecutors had tried very hard to keep close to the vest. So, they're going to talk about that now.

BLITZER: The sheriff.

(JOINED IN PROGRESS)

DAVID MORGAN, ESCAMBIA COUNTY, FLORIDA, SHERIFF: ... sincerely your participation in this case. After consultation with the state attorney's office this morning and -- and this afternoon, we determined that it would be appropriate for to us release the following information to the press, as a confirmation.

As you may have heard this morning from one of the civil attorneys involved with the Billings family, it was released that -- the contents of the safe that has been taken into evidence by the Escambia County Sheriff's Office in preparation of our case.

The contents of the safe which we will verify are personal items, items such as passports, birth certificates, adoption papers, some heirloom jewelry, and some -- some prescription medication assigned to this family.

I will also share with you at this time that we have known -- we have known -- of the contents of this safe since the inception, since the inception of this investigation.