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Iran on the Clock; U.S., China in the Same Big Boat; 911 Call That Led to Gates' Arrest

Aired July 27, 2009 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: He's pulling no punches -- from Sarah Palin to President Obama to health care reform, the comedian and HBO host Bill Maher -- he's here in THE SITUATION ROOM this hour to tell us what's on his mind.

And members of Congress are passing out money to their favorite parks, but why are they keeping Washington's National Mall in such an appalling condition?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Israel warned once again today that all options are open when it comes to stopping Iran from getting a nuclear weapon -- another strong hint that military action is still possible.

And U.S. Defense Secretary Robert Gates, in a swing through the Middle East, is warning Iran that the time for talking is quickly running out.

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

He's working the story for us.

Lots of words today on Iran -- Chris.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: That's right, Wolf.

Some senior U.S. officials are making it crystal clear they cannot and will not let this stalemate with Iran go on much longer.

(BEGIN VIDEOTAPE)

LAWRENCE: (voice-over): President Obama offered to have unconditional talks with Iran to scale back its nuclear program. But that offer is about to expire.

ROBERT GATES, SECRETARY OF DEFENSE: The president's offer is not open-ended.

LAWRENCE: And Iran is on the clock. In Jordan, Defense Secretary Robert Gates said the president anticipates a response within two months.

GATES: If the engagement process is not successful, the United States is prepared to press for significant additional sanctions.

LAWRENCE: Gates says these would not be small, incremental restrictions. The U.S. would be asking other nations to back major sanctions on Iran.

(BEGIN VIDEO CLIP FROM "MEET THE PRESS," COURTESY NBC)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: First, we're going to do everything we can to ever prevent you from ever getting a nuclear weapon.

(END VIDEO CLIP)

LAWRENCE: But Sunday, Secretary of State Hilary Clinton sent her own message to Iran's decision makers.

(BEGIN VIDEO CLIP FROM "MEET THE PRESS," COURTESY NBC)

CLINTON: But your pursuit is futile because we will never let Iran -- nuclear-armed, not nuclear-armed -- it is something that we view with great concern.

(END VIDEO CLIP)

LAWRENCE: Iranian officials say their nuclear technology is only for energy, not weapons. Israel doesn't believe them and is keeping open the option of a military strike on Iran's nuclear plants.

Israel is concerned that Obama's diplomacy gives Iran too much time to enrich uranium.

GATES: But I have every sense that -- that the Israeli government is prepared to let our strategy play out.

(END VIDEO TAPE)

LAWRENCE: And part of that strategy is trying to convince Iran that nuclear weapons make it less secure, because having nukes could scare Israel into action or make its Arab neighbors feel like they have to develop weapons just to keep up -- Wolf.

BLITZER: Chris Lawrence.

The stakes are, no doubt, enormous.

Superpower rivals, the U.S. and China, tend to look at each other very cautiously. Now President Obama has kicked off a high level huddle here in Washington, calling on both sides to seek, in his words, "cooperation, not confrontation."

Let's go to our foreign affairs correspondent, Jill Dougherty.

The stakes on this story, Jill very high, as well.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: They are, Wolf. Look at all the problems around the world, from climate change to the economic crisis. The two countries that could have the biggest impact on them are the United States and China. And that's why this summit is taking place here in Washington, just a few blocks from here.

(BEGIN VIDEOTAPE)

DAI BINGGUO, CHINESE STATE COUNCILOR (through translator): Yes, we can.

Thank you.

DOUGHERTY: (voice-over): Top Chinese and U.S. officials are speaking each other's language.

TIMOTHY GEITHNER, TREASURY SECRETARY: We acted together. To use the Chinese phrase fungu tungjohu (ph).

DOUGHERTY: The first U.S.-China strategic and economic dialogue has an ambitious agenda and some challenges.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let us be honest, we know that some are wary of the future. Some in China think that America will try to contain China's ambitions. Some in America think that there is something to fear in a rising China.

DOUGHERTY: But Mr. Obama says how the two countries work together will shape the 21st century.

OBAMA: Which makes it as important as any bilateral relationship in the world.

DOUGHERTY: The U.S. And China want a new partnership aimed at solving the world financial crisis, climate change and clean energy, regional security, like North Korea and Iran.

CLINTON: We will not always see eye to eye. And where we cannot, we will be honest with each other.

DOUGHERTY: Human rights still a flashpoint, but one not likely to sink this ship. "We're all in the same big boat that's been hit by a fierce wind and huge waves," says state counselor Dai Bingguo, "and we must cross that stormy water together."

(END VIDEO TAPE)

DOUGHERTY: Behind the scenes at this two day meeting, hashing out thorny issues like protectionism -- the US, with its "buy America" provisions and Beijing with its own "buy Chinese approach."

No solutions are expected immediately, of course. This dialogue is just beginning -- Wolf.

BLITZER: And it's enormously important one, as well.

Thanks, Jill, very much. Let's go back to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Health care reform, Wolf, took a pretty serious hit last week. And the White House is going to have to find a way to try to get things back on track.

Despite President Obama's lofty rhetoric and flowery speeches, divisions within his own Democratic Party are threatening to derail the centerpiece of his presidency. The Senate will not vote on health care until the fall, if then. And it's not clear whether the House will act before it breaks for its August recess, either.

The president made matters quite a bit worse by wading into the arrest of Harvard Professor Henry Gates during his prime time news conference. That put much of the focus during the last half of the week on racial issues instead of on health care.

More bad news for the president has come from the nonpartisan Congressional Budget Office. The CBO estimates the health care plan supported by the White House would save almost no money over 10 years. They're talking about an outside panel that would decide what treatments would be covered by Medicare. But the CBO did say the government's insurance plan could co-exist with private insurance companies without driving them out of business.

And finally, most Americans aren't in that big a rush to get health care passed. Check out these Gallup poll numbers. Less than half of those surveyed -- 41 percent is all -- say that health care reform has to be passed this year. Thirty percent say it should not be done -- it should be done, rather -- but not necessarily this year. And 24 percent say there shouldn't be any health care reform at all.

So here's the question: What can President Obama do to regain momentum on health care reform?

Go to CNN.com/caffertyfile and post a comment on my blog.

You know, I bet if you went back to that news conference Wednesday night he might not have take than last question.

BLITZER: Or he might have just ended it without saying the police acted stupidly. He would have said, you know, I don't know all the facts; Professor Gates is a friend of mine; yes, there's a problem, still, of racial profiling and just ended it right there.

CAFFERTY: Many better options than the one he took.

BLITZER: But you know what, all of us are smarter with hindsight. You know that.

CAFFERTY: Oh, I understand that. But you and I aren't president of the United States.

BLITZER: That's also true. That's right.

CAFFERTY: Which is probably a very good thing... BLITZER: Which is very...

CAFFERTY: ...for the country.

BLITZER: Excellent point.

(LAUGHTER)

BLITZER: And good for us, as well.

All right, Jack.

Thank you.

A concerned neighbor calls police.

(BEGIN AUDIO CLIP, COURTESY CAMBRIDGE, MASS. POLICE)

UNIDENTIFIED MALE: Are they still in the house?

UNIDENTIFIED FEMALE: They're still in the house, I believe. Yes.

UNIDENTIFIED MALE: Are they white, black or Hispanic?

UNIDENTIFIED FEMALE: Well, there were two larger men. One looked kind of Hispanic, but I'm not really sure. And the other one...

(END AUDIO CLIP)

BLITZER: All right. You're going to hear the 911 tape of the call that led to the arrest of an African-American professor.

And who is Bill Maher calling -- and I'm quoting him now -- "soulless vampires?"

The comedian and HBO host speaks his mind live here in THE SITUATION ROOM.

That's coming up.

Plus, the weapon that's taken such a heavy toll in Iraq is proving just as deadly in Afghanistan -- what U.S. Troops there are doing right now to try to protect themselves.

(COMMERCIAL BREAK)

BLITZER: A suspected break-in, a bust and a national uproar -- now police in Cambridge, Massachusetts have released the 911 tape of a concerned neighbor's phone call, which led to the arrest of the African-American professor -- Harvard professor, Henry Louis Gates -- and touched off a raging controversy.

All right. Listen to this.

(BEGIN AUDIO CLIP, COURTESY CAMBRIDGE, MASS. POLICE)

UNIDENTIFIED FEMALE: I'm calling you from my cell phone number.

UNIDENTIFIED MALE: All right.

What's the problem?

Tell me exactly what happened.

UNIDENTIFIED FEMALE: I don't know what's happening. I just had a -- an elderly woman standing here. And she had noticed two gentlemen trying to get in a house at that number. And they kind of had to barge in and they broke the screen door and they finally got in.

And when I had looked -- I went further, closer to the house a little bit after the gentlemen were already in the house. I noticed two suitcases. So I'm not sure if these are two individuals who actually work there -- I mean who live there (INAUDIBLE)...

UNIDENTIFIED MALE: Do you think they might have been breaking in?

UNIDENTIFIED FEMALE: I don't know, because I have no idea. I just noticed...

UNIDENTIFIED MALE: Well, I'm saying do you think the possibility might have been there that's that -- what do you mean they barged in?

Did they kick the door in?

UNIDENTIFIED FEMALE: No. They were pushing the door in. Like the screen part of the front door was kind of like cut.

UNIDENTIFIED MALE: How did they open the door itself -- the lock?

UNIDENTIFIED FEMALE: They -- I didn't see or hear anything, because I was a little bit away from the door. But I did notice that they pushed their...

UNIDENTIFIED MALE: And what do their suitcases have to do with anything?

UNIDENTIFIED FEMALE: I don't know.

I'm just saying that's what I saw. I just (INAUDIBLE)...

UNIDENTIFIED MALE: Do you know what apartment they broke into?

UNIDENTIFIED FEMALE: No. They're just the first floor. I don't even think that it's an apartment. It's a house. It's a yellow house. I don't know if they live there and they just had a hard time with their key, but I did notice that they kind of used their shoulders to try to barge in. And they got in. I don't know if they had a key or not, because I couldn't see from my angle. But, you know, when I looked a little closely, that's what I saw.

UNIDENTIFIED MALE: And were they white, black or Hispanic?

UNIDENTIFIED FEMALE: Ummmm... UNIDENTIFIED MALE: Are they still in the house?

UNIDENTIFIED FEMALE: They're still in the house, I believe. Yes.

UNIDENTIFIED MALE: Are they white, black or Hispanic?

UNIDENTIFIED FEMALE: Well, there were two larger men. One looked kind of Hispanic, but I'm not really sure. And the other one entered and I didn't see what he looked like at all.

I just saw it from a distance. And this older woman was worried, thinking someone's breaking in someone's house. They've been barging in. And I -- she interrupted me and that's when I had noticed. Otherwise, I probably wouldn't have noticed it at all, to be honest with you.

So I was just calling because she was a concerned neighbor, I guess.

UNIDENTIFIED MALE: OK.

Are you standing outside?

UNIDENTIFIED FEMALE: I'm standing outside. Yes.

UNIDENTIFIED MALE: All right. Well, the police are on their way. You can meet them when they get there.

What's your name?

UNIDENTIFIED FEMALE: Yes my name is (NAME OMITTED).

UNIDENTIFIED MALE: All right. We're on the way.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: All right. I guess I'll wait. Thanks.

UNIDENTIFIED MALE: Yes.

(END VIDEO CLIP)

BLITZER: And then the uproar developed in the hours that followed.

Let's talk a little more about the arrest and the controversy with our CNN political contributor, the Democratic strategist, Donna Brazile; along with the Republican strategist, Ed Gillespie, former White House White House counselor to President Bush, former chairman of the RNC.

Guys, thanks very much for coming in.

Is this smart, Ed, for the president to be mediator-in-chief, getting ready for a big meeting at the White House and a beer with the police sergeant and the professor?

ED GILLESPIE, REPUBLICAN STRATEGIST: Well, I think it's smart relative to where he was a few days ago on this issue.

As I watched the president's press conference and saw him take -- you know, get the question at the end, I saw him make the comment relative to the fact that we do still in society today live in a time when African-Americans, Hispanics are often treated differently than white suspects. And that's something we all have to strive to improve upon.

To make a macro statement like that, I thought, would have been fine. I was surprised when he took the extra step and said, I don't know the details of this case, but clearly, the -- you know, policemen acted stupidly, I think is how he -- or the police force did.

I was surprised by that. I wasn't surprised that that led to some -- you know, to negative reaction and then he had to correct course on that (INAUDIBLE)...

BLITZER: And part...

GILLESPIE: (INAUDIBLE).

BLITZER: And part of the correction is to invite both of them to the White House.

GILLESPIE: Yes.

BLITZER: It's going to keep the story, though, alive, as you know, Donna. So the question to you, is it smart to bring them both to the White House and have all this publicity once again focused in on a story he would like to see go away so that the country can talk about, let's say, health care?

DONNA BRAZILE, CNN CONTRIBUTOR: I think the president recognized that once he became a focus of this controversy, it was important that he begin to de-escalate the conversation and to really bring these two gentlemen together, to have a beer, to talk about the much larger issue of how do we improve relations between the police and, say, the minority communities.

This could be a real teaching moment for the country. And I think the president, as leader-in-chief, should lead this discussion, because he understands these issues.

BLITZER: If it's a teachable moment and we all learn something, that would be good, right?

GILLESPIE: Well, yes. But let me -- let's just be clear, though. I think that it is -- it's -- this is a diminishing of the presidency to be in with, you know, in a setting like this, in my estimation. Like I say, wouldn't -- he wouldn't have found himself in this situation had he touched on the broader topic and issue, which I think is totally legit.

But to insert himself into -- into this level of detail, I think he'd probably like to have a do-over. I think he's right to try to do something to turn the page. And, hopefully, I'm sure he thinks this will do it. BRAZILE: It may be a distraction, but race has always been a third rail in American politics. And every time you step on it, no matter who steps on it, Republican or Democrat, you get burned by it.

I think what the president is going is to try to do is bring this conversation to a new level. And that could be a very important moment for the country.

BLITZER: All right. Let's talk about health care for a moment. Nancy Pelosi is leading the House, the speaker of the House.

Here's what she just said in Washington.

Listen to this.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I'm very pleased about the progress that is being made. And all of our leadership has been a part of a team to advance this -- this important issue down the field. We're working with President Obama. This is his top priority. And we will -- when we bring this bill to the floor, it will win.

(END VIDEO CLIP)

BLITZER: Well, she's not going to bring it to the floor until -- unless she's sure it will win. So we'll see when she brings it to the floor.

This poll -- that Public Strategies Inc. and Politico put out, the opinion of Nancy Pelosi -- do you trust her?

Twenty-four percent say they trust her, 58 percent don't trust Nancy Pelosi.

Is she part of the problem, from the Democrats' perspective, right now?

BRAZILE: Absolutely not. Look, she has taken on some of the toughest issues that we've seen in our lifetime, Wolf -- health care, climate change, the recovery efforts. There's no question that Speaker Pelosi's personal popularity may not be as high as, say, some other leaders. But that's because she's doing the job for the American people.

So I applaud her for the job that she's doing. This is -- this is tough. And to manage a caucus like the Democratic Caucus, we should pay her extra for what she's trying to do.

BLITZER: Can she get those 52 so-called Blue Dog Democrats, the conservative or moderate Democrats whom she needs if she's going to get this passed without any Republican support, can she get them on board?

GILLESPIE: Well, this diminishes her ability to do that, I think. I think and there is a gap between a lot of those, you know, Blue Dog Democrats -- conservative Democrats who are in districts that John McCain carried in a very difficult election year.

The fact is that her being from San Francisco, her representing, you know, the very liberal wing of the Democratic Party, doesn't make it any easier for her. And then when you throw numbers like these on top of it, you know, them being tied to Nancy Pelosi back in their districts is not a helpful thing for them politically.

So I think she is -- you know, she's got a road to hoe here.

BRAZILE: You know...

BLITZER: All of these conservative Democrats and moderate Democrats, they're up for re-election next year. So you really can't blame them, especially if they're living in North Carolina or Virginia or some very conservative parts of the country.

BRAZILE: You know what ties Democrats together, Wolf?

It's not just our party label. It's the fact that we believe in helping the ordinary person out there.

The Republicans tried to use (ph) Speaker Pelosi on three special elections after 2006, one in my home state of Louisiana, the other in Mississippi.

And you know what?

People say we don't care where she's from, she's not running here. They support the person, not these labels that people try to attach.

BLITZER: That's a fair point.

GILLESPIE: It's -- I agree that it's not always easy. You know, we tried to attach Tip O'Neill back in the '80s and Nancy Pelosi. I think you have to make the case on the policy.

The problem with Nancy Pelosi is the policies that she supports are more reflective of her San Francisco district than they are in districts in places like Oklahoma, Tennessee and others.

BRAZILE: (INAUDIBLE) the people...

GILLESPIE: So I think...

BRAZILE: The people in San Francisco want jobs. The people in San Francisco want health care. And to make the people in San Francisco somehow or another seem un-American is just...

GILLESPIE: I'm not saying...

BRAZILE: Downright wrong.

GILLESPIE: ...they're un-American at all.

BRAZILE: They want the same things that we all want. GILLESPIE: I'm saying they are -- they tend to have a more liberal perspective and they favor more government intrusion in the economy than do people from other pars of the country. That's not un- American.

BLITZER: All right...

GILLESPIE: That's a different point of view.

BRAZILE: I've got a lot of conservative friends from California, too...

GILLESPIE: It doesn't...

BLITZER: We'll...

BRAZILE: ...I have to tell you. You know that.

(LAUGHTER)

BLITZER: We'll leave that thought right there.

Guys, thanks very much.

Sarah Palin -- she's now gone from the Alaska governor's office, but she's keeping us guessing about her political future.

And a national disgrace -- what's behind the decay of America's front yard?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Alina Cho is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Alina, what's going on?

ALINA CHO, CNN CORRESPONDENT: Hey, Wolf.

Police in Dayton, Ohio say a missing 2-year-old girl and a baby boy have been found crying but safe inside a large trash bin outside a repair shop. About 13 hours earlier, their mother had told police that her boyfriend had fled with the kids after a fight.

French President Nicolas Sarkozy is out of the hospital. His doctors say a combination of heat and, well, too much work caused him to faint while jogging over the weekend. Blood tests along with a brain scan detected nothing abnormal.

And the owner of a Texas kennel where first dog Beau was bred has died. Seventy-two-year-old Martha Watson Stern died at a hospital in Charlottesville, Virginia. Her husband Art has said the couple became interested in Portuguese Water Dogs back in the 1980s after watching them on the famous Westminster Kennel Club Dog Show. And guess what, Penn State leads the pack as the number one party school in the nation -- a dubious distinction, to say the least. The school placed first in the Princeton Review's annual survey of U.S. college students. Now, after Penn State, the number two spot was awarded to last year's winner, the University of Florida. And rounding out the top five, the University of Mississippi, the University of Georgia and Ohio University -- Wolf, the University of Buffalo, do you know where that ranked?

BLITZER: The top 10?

CHO: Not on the list.

BLITZER: Not on -- where did you go to college?

CHO: Not on the list.

BLITZER: Where did you go to college?

CHO: Boston College. Boston College.

BLITZER: Is that on the list?

CHO: Also not on the list -- surprisingly, shockingly, not on the list.

BLITZER: What about B.U.?

CHO: B.U. Not on the list.

BLITZER: OK. All right. Good.

CHO: Yes, yes.

BLITZER: Thanks.

CHO: All good news for us.

BLITZER: Yes.

Bye.

CHO: All good news for us.

BLITZER: So who is Bill Maher calling "soulless vampires?"

The comedian and HBO host takes sides in the health care fight. I'll ask him about that and a lot more. He's standing by live.

Plus, Sarah Palin's parting shots -- the ex-governor of Alaska takes a slap at Hollywood.

Will that help her on the national stage?

And Jack Cafferty is asking how the president can regain momentum on health care reform? Jack will read your e-mails.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now only on CNN, he thought it was over when a jury acquitted him, but the government had him rearrested and still labels him a terrorist.

Is he a victim of profiling or a serious threat to Americans?

A research center for deadly diseases is being built smack in the middle of Tornado Alley, in America's heartland. The decision by the Department of Homeland Security is being heavily criticized.

And the government's Cash for Clunkers program moving into high gear.

Does your old car qualify for a $3,500 to $4,500 rebate?

Stick around and you'll see what's going on in today's Chalk Talk segment.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Critics have been slamming the health care reform effort as socialized medicine. Now the comedian and HBO talk show host, Bill Maher, is bashing the health care business, calling for-profit hospital chains -- and I'm quoting him now -- "jiffy lubes with bedpans."

The host of HBO's "Real Time with Bill Maher" is joining us now.

Bill, thanks very much for coming in.

BILL MAHER, HOST, HBO'S "REAL TIME": Hey, Wolf, you see if I wrote for you, you see how funny you'd be?

BLITZER: You'd be very -- you would be funny, too. I'm not a very funny guy like you.

Let -- let's get to health care in a moment, because you had a strong commentary on it the other night.

But let's talk about Sarah Palin first, now the former governor of Alaska. And among other things, in her departing comments, she said this.

(BEGIN VIDEO CLIP FROM SUNDAY, JULY 26, 2009)

GOV. SARAH PALIN (R), ALASKA: You're going to see anti-hunting, anti- Second Amendment circuses from Hollywood. And here's how they do it. They use these delicate, tiny, very talented celebrity starlets. They -- they use Alaska as a fundraising tool for their anti-Second Amendment causes.

(END VIDEO CLIP)

BLITZER: All right. She made some references to Hollywood. And since you're out there in L.A. You know something about Hollywood. I want to give you a chance to respond.

Did you have a chance to watch her comments in announcing that -- you know, in her formal final remarks as governor?

MAHER: Of course, Wolf. I would never miss a Sarah Palin speech, even though there seems to be a new one every week.

I mean how many times does this woman get to quit?

But, I -- first of all, I want to know who is this tiny starlet she's talking about?

Miley Cyrus...

BLITZER: Well, somebody...

MAHER: ...or Ash...

BLITZER: Somebody who went up to...

MAHER: Ash...

BLITZER: Somebody who did some sort of PSA in Alaska, I guess.

MAHER: But, you know, I mean when you think of tiny starlets, I think of Ashleigh Olsen. I just want to know who she's talking about.

Second of all, I think it's a little ungrateful.

Who has been better to guns than Hollywood?

Hollywood does nothing but make movies with a million guns killing people and blowing everything up. So she should reconsider her remarks.

BLITZER: Do you think she has a future nationally as a presidential candidate?

MAHER: I don't know about a presidential candidate, but I would never put anything past this stupid country. Possibly. I think she certainly could get the nomination, considering what the Republican Party has become and where they are right now. I think she still has a high favorability rating, but it's always going down. The more people see her, the less they usually like her. I think she's probably too much of a loose cannon, which is something she also shoots wolves with, by the way, to run for president. You have to be pretty disciplined to run a national campaign over months and months and months. And she just didn't seem to have that in her DNA, as she would say.

You know, this speech she just gave was another rambling sort of nonaddress. You'd think after the last one and all the criticism it got she would have said to whatever handlers or people she has around her, OK, let's do this speech now like a laser. Let's just get it right down and focus, this is my last shot. But no, it's another rambling attack on tiny starlets. I mean, she's the gift that keeps on giving to comedians. I'll tell you that.

BLITZER: All right, I know you've got some good material that you've used from her over this past year.

MAHER: Yes.

BLITZER: Let's talk about something you said the other night on "Real Time with Bill Maher." And I want to play this clip, this is you.

(BEGIN VIDEO CLIP)

MAHER: As conservatives get to call universal healthcare, socialized medicine, I get to call private for-profit healthcare, soulless vampire bastards making money off human pain.

The more people who get sick and stay sick, the higher their profit margins, which is why they're always pushing the Jell-o.

(END VIDEO CLIP)

BLITZER: All right. It was very funny stuff, your commentary. I know you had a very serious element in there, as well. But what's the point? What would you want to see emerge from this whole health care debate in Washington?

MAHER: Well, something. First of all, obviously, I think everybody in Washington and most people in the country agree that at least a starting point. Maybe this won't be the most perfect bill, but obviously, this is something that presidents going back to FDR have been trying to accomplish in America. And as the president says every time he broaches the subject, to do nothing is a disaster. We can't do nothing. Doing nothing is actually worse.

So, you know, hopefully he'll get the Blue Dog Democrats on board and they'll have something.

But if I just may address the bigger topic, you played the clips about health care. What that editorial was really about was the idea that there used to be some things in America that were not for profit, health care was one of them. Not that doctors didn't make money, but certainly insurance companies weren't in the mix like they used to be.

I also mentioned prisons. Prisons were not something that we ever farmed out to private corporations, but now the correction -- I forget the name of the company, but is a correctional institution, company, rather, that's on the New York Stock Exchange. There's a reason why the number of prisons and prisoners in this country has skyrocketed and that we have more prisoners per capita than anywhere else in the world -- because it helps the bottom line of corporations.

Also, I mentioned war contractors. We have more private contractors in Iraq than we do soldiers. They're paid a lot more than the soldiers -- they do things soldiers used to do for themselves like laundry and cooking meals.

And the fourth one I mentioned was television news, something you're very familiar with. That used to be a loss leader, that used to be nonprofit. You know, a generation or two ago, not everything in this country had to be for profit. Some areas were roped off and we said that's just too important to put the profit motive in because the profit motive always poisons everything to a degree, but we've changed, we've become a different society. Everything has to be for profit now and some things shouldn't be.

BLITZER: And I know you feel strongly about that, as well, although you're not saying that there should be no room for capitalism in our country. Capitalism has been good.

MAHER: No. Of course, capitalism is good. I am not a communist. No. I am a capitalist, absolutely. But as a society, we used to understand that it didn't have to go everywhere. You know, when capitalism becomes this religion -- and it's ironic, because usually it's the people who are most religious in this country who believe or at least treat capitalism like it is truly their God, unfettered. I would say capitalism is the correct economic system. Communism was trying to make the river flow the wrong way.

No. You have to use human selfishness, that is what capitalism is. But there have to be some dams and locks on the river.

BLITZER: That's a point you made in your commentary, your editorial, the other night. I'm going to have you standby for a moment. I want to take a quick break, but we want to continue this conversation with bill Maher. We're going to get his take on how the president is handling the controversy over Professor Henry Louis Gates and that arrest.

And later, the weapon that's taken such a heavy toll in Iraq is proving just as deadly in Afghanistan. What U.S. troops there are doing, right now, to protect themselves.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The open desert's the best way to go...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Want to get back to Bill Maher, the host of "Real Time with Bill Maher" on HBO, our sister network.

Bill, a couple little clarifications, because we're getting flooded with e-mail ,already. Earlier, Sarah Palin, I asked does she have a future ahead and you said something to the effect, I don't put anything past this stupid country. So, people are already complaining that you're calling the United States a stupid country. I'm giving you a chance to clarify.

MAHER: I don't need to clarify. It is.

BLITZER: Well, tell me why you think the United States is a stupid country.

MAHER: Because Sarah Palin could be president. Please, do I need to expand on that anymore? Yeah, I do, in general, I mean, it's a big country, that's the great thing about it, there's 300 million people here. So, within this large country, there are tens of millions of very bright, intelligent people, you know, the ones who are watching us, not the ones who are writing the e-mails. But, you know, in general, gosh, you know, this country just gets dumber and dumber by the day and I don't think I have time on your show to list all the reasons.

BLITZER: But, you -- this country did elect Barack Obama president of the United States.

MAHER: Look who he was running against. Yes. I mean, look at the situation. I mean, this was after eight years of Bush, which was, you know, a -- pretty much a disastrous presidency. John McCain was not a very attractive candidate, and of course he picked Sarah Palin to run beside him. And, you know, given that choice, I think Americans, you know, came to the fore on that one, but just because they elected a bright guy doesn't mean they're bright.

BLITZER: Let's talk about Professor Gates, this controversy. How do you think the president's handling this uproar?

MAHER: Well, I'm sure he wished he picked his words differently, but I don't think he was wrong. You know? There's a guy who used the word "stupid." and look what happened to him.

BLITZER: You don't think it was wrong for him to say the police acted stupidly?

MAHER: Absolutely not, I think they did. You know, I'm not even sure if this is really a racial situation, because -- you know, I don't know if this cop is racist, but I have to say, you know, it seems to me more like a police situation. I mean, I think Henry Louis Gates was arrested for the crime of not kissing the behind of the police officer. And I think that's too often the problem we have in this country with the police.

You know, Michael Moore, when he made his brilliant movie about health care, he said something interesting, he said what he found out is in America the people are afraid of the government and in France the government is afraid of the people.

Well, in a similar way in this country, I think the people are afraid of the police and it shouldn't be that way. I asked this question on the show Friday night, I still don't have an answer -- why was this man arrested? I can see why the police came. I can see why they went into his home. I can see why they asked him to step out. But, at that point they knew everything they needed to know about the situation. He wasn't a burglar, it was his home. Who was being threatened?

If you arrest somebody, I assume it means because they are in some way a threat. What was the threat? Why couldn't that policeman just walk away at that point?

BLITZER: Well, I one there, you weren't there, we don't know the extent of the disorderly conduct, if there was, in fact, disorderly conduct.

MAHER: Disorder -- come on, Wolf. Wait a second, disorderly conduct?

BLITZER: I don't know if there was.

MAHER: He's a 58-year-old -- he's a 58-year-old crippled professor. Are you telling me he was a threat to the people in his neighborhood? He was going to go on a rampage with his cane?

BLITZER: Well, no.

MAHER: I mean, come on.

BLITZER: Some of his colleagues, Sergeant Crowley's colleagues, including African-American cops who were there, they backed him up. They back up Sergeant Crowley in saying he did absolutely the right thing.

MAHER: Yes, because they're policemen and they stick together. But, I'm telling you that's the wrong attitude. I'm not saying there aren't good cops, of course there are, probably most of them. But, I just think there is a bad attitude also that you find too often in the ranks of the police. You know? And that attitude is if you don't kiss my behind I'm going to arrest you.

BLITZER: All right, I want you to give me a grade for the following individuals, a quick grade in the six-month mark of the Obama presidency and tell me how they're doing, "A" being the best, "F" being failure. Barack Obama.

MAHER: I would give him, at this point, an A-minus, B-plus. I mean, it's only been six months. Obviously, he inherited a huge mess, but it looks like the economy is, you know, fingers crossed, turning around to a degree. It certainly could have been a lot worse. We were facing a sort of a meltdown. It could have gone the other way. I don't think we're out of the woods.

There's a lot of areas I've been critical of. I've had a lot of criticism of my show recently from the left who say you're being too hard on Barack Obama, to which I say, that's my job, to be hard on the president, to hold his feet to the fire.

But given what he has inherited and where we are now and what's possible, you know, working with a Congress that he gets no help from the Republicans and his own party are very often not a lot of help, you know, I think he's doing pretty good.

BLITZER: What about Joe Biden?

(LAUGHTER)

MAHER: Well, you know, I love Joe, but even my patience is wearing a little thin with Joe.

BLITZER: What grade...

MAHER: This whole idea of -- I guess I'd give Joe a C-plus. You know, I'm not sure all the things he's doing, because some of the things you don't hear about that the vice president is doing. You just mostly hear about the comments that he makes.

And, you know, this idea that I'm not going to change, I'm just going to be Joe, I'm always going to be -- change a little, Joe. You don't always have to say everything that comes into your head, you know? Have that mechanism that edits. Don't always be voicing your entire interior monologue.

BLITZER: All right, Bill Maher, I can honestly say, as always, you are still very politically incorrect, but that's bill Maher. His show airs Friday nights on our sister network HBO, "Real Time with Bill Maher." Thanks for joining us.

MAHER: OK, Wolf.

BLITZER: Private citizen, Sarah Palin, she walks away from the governor's mansion with quite a bit of support. But see why a political future isn't necessarily a sure thing.

Plus, an infectious disease lab in the heart of tornado country? Who thought that was a good idea? A potential biohazard and your safety.

(COMMERCIAL BREAK)

BLITZER: Will a final blast at Hollywood help keep her on the national stage? Sarah Palin stepped down as the Alaska governor this weekend leaving a lot of questions about her political future. Let's bring in our senior political correspondent, Candy Crowley for some answers -- Candy.

CANDY CROWLEY, CNN SR POLITICAL CORRESPONDENT: Well, I'm afraid we don't have any answers, but it sure is a lot of fun watching her. She was stepping down, but if you didn't know better you'd think it was August of 2008 when Sarah Palin exploded onto the national scene. She left her job as governor with a fierce defense of her record and a fiery assault on her critics.

(BEGIN VIDEOTAPE)

(voice-over): She is a one-woman sound bite machine.

SARAH PALIN (R), FMR ALASKA GOVERNOR: By the way, Hollywood needs to know we eat, therefore, we hunt. CROWLEY: A warning from the moose-hunting, fish-catching Sarah Palin that Hollywood wants to take away the right to bear arms, an unexpected topic for a farewell speech.

But, as Palin handed over the Alaska governorship, the wear, tear, and resentments of a year on the big stage were evident in her parting words, including her parting shots at the media.

PALIN: So, how about in honor of the American soldier, you quit making things up.

CROWLEY: Though her support in the party has dropped a bit, Palin leaves the governor's seat with a solid conservative base.

UNIDENTIFIED MALE: I'll tell you one thing, if we get a woman president, let it be her. She's a real woman, she knows about what a woman is supposed to be.

CROWLEY: But overall, numbers indicate a national run would be rocky. The latest ABC/"Washington Post" poll found that 53 percent of Americans view Palin negatively, 40 percent see her positively. Worse, four in 10 Republicans don't think Palin understands complex issues.

Still, she wouldn't be the first politician to rehabilitate herself and it's clear, while she's handing over the governor's chair, she's not relinquishing the microphone.

PALIN: Know, with this decision now, I will be able to fight even harder for you, for what is right and for truth.

CROWLEY: Palin's writing a book, she says she will help other candidates, she'll give speeches and one of her first post-governor events is at the Ronald Reagan Library in California. She's a hot commodity and she will be making good money, but book tours, speeches, helping like-minded politicians are also must-dos for politicians eyeing the White House. This is called keeping your options open.

UNIDENTIFIED FEMALE: Because I just asked her that about five minutes ago, and you want to know what she said? She said I don't know with her little smirk.

CROWLEY: As for the former vice presidential candidate, now former governor of Alaska, exit stage right. But definitely don't fade to black.

(END VIDEOTAPE)

There's a spate of rumors now that Palin will host a talk show. Certainly she's a proven draw, but she's also a good fund-raiser. Her spokeswoman says Palin has raised more than a million dollars for her political action committee, which is why, I think, people are still looking at her saying she could go either way.

BLITZER: She will be a force out there, no matter what. There's no doubt about that. CROWLEY: It will be fun to watch her.

BLITZER: Absolutely. Thanks Candy.

The National Mall, here in Washington, is often called America's front yard, but in reality, those reflecting pools and monuments are not necessarily picture-perfect. Let's bring in CNN's Brian Todd.

Brian, what's behind the decay on this national treasure?

BRIAN TODD, CNN NEWS CORRESPONDENT: Well, Wolf, I'm going to give you a perfect example here, Wolf, of just what we're talking about. You've got contradicting images that are juxtaposed. You've got the Washington Monument over here and the Jefferson Memorial in all their glory but our photographer Floyd Jarmoth (ph) is going to zoom in on the sea wall, here. This is the sea wall, to the tidal basin. In that area back there, that brown and muckish area, it is in severe decay. That area is breached at least once a day. You have whole stones falling into the tidal basin and, as usual, in this town, this is a matter of money and influence.

(BEGIN VIDEOTAPE)

(voice-over): It's enticing enough to draw 25 million tourists a year, more than Yellowstone, the Grand Canyon and Yosemite National Park, combined. This is often what they stumble on. The sea wall by the Jefferson Memorial, breached every day. It's sunk at least six inches in three years and this kind of disrepair is all over the national mall.

(on camera): This is one of the best-known landmarks in Washington, the reflecting pool. It looks terrific in postcards and in movies, but if you come down here and see it up close, this is what you're treated to. Take a look. Goose droppings on this side stone stretching as far as the eye can see toward the Lincoln Memorial. The water is polluted with it. This is supposed to be a pool with a filtration system. It's never had one, it's standing water, essentially, it's only cleaned out a couple times a year. The National Park Service doesn't have the staff or the resources to come down here and clean it up enough.

(voice-over): Caroline Cunningham calls the mall a disgrace and it's sometimes a deadly one.

(on camera): This is the capitol reflecting pool. What happened with the ducks here last year?

CAROLINE CUNNINGHAM, PRES TRUST FOR THE NATIONAL MALL: Last year, 17 ducks died because of avian botulism, the water is so fouled.

TODD (voice-over): Cunningham is president of the Trust for the National Mall, a nonprofit trying to raise private funds to match money from Congress. That's part of the problem. Cunningham estimates some $400 million needed for the mall's upkeep hasn't been spent. She says some in Congress simply haven't realized the scope of decay at their doorstep. Steve Ellis from the watchdog group Taxpayers for Common Sense says many lawmakers who control purse strings, like Senator Robert Byrd, have no problem sending money home for, shall we say, less trafficked monuments.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: Including more than $100,000 for the Mother's Day Shrine which is in a town, a small town in West Virginia.

(END VIDEOTAPE)

TODD: Now, contacted by CNN, a spokesman for Senator Byrd e-mailed us saying that that shrine was built in 1873, is a historic landmark in and of itself and he issued this statement saying that the senator, "responding to his constituents and the need to help restore that structure, obtained the money for the repairs." This spokesman said the senator also would have supported about $200 million that was allocated for the mall, but he said some members of Congress pulled that money earlier this year because they deemed it not stimulus worthy -- Wolf.

BLITZER: Brian Todd at the National Mall, thank you.

Michelle Obama, sounding perhaps like Hillary Clinton, is the current first lady starting to play a bigger role in pushing her husband's health care reform package.

And the government's Cash for Clunkers program is up and running. See if your old car qualifies for a trade-in rebate in today's "Chalk Talk," that's coming up.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty. He's got the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN NEWS CORRESPONDENT: The question this hour is what can President Obama do to regain his momentum on health care reform?

Simon in Orlando writes, "I think the question of 'should he' be answered first. That's what the general public seems to be wrestling with. There are too many question regarding cost, implementation and effect that have not been addressed to the satisfaction of most citizens. Obama's not going to regain momentum until a clearer picture what have national health care really means emerges."

J.C. In Georgia writes, "He has to attack the tort and insurance abuse issues. As my doctor tells me (sic), 'there's no amount of your money I won't spend to keep me out of court.'"

Eric writes, "The president could regain momentum by explaining what is going to be in the reform program. Give people a detail or two to rally behind. President Obama is finding out a vague idea of reform isn't nearly as easy to gain support for as a vague slogan of change."

Jerry in Iowa, "Nothing. Leave it alone. It is not a priority. How about finishing up one or both of our never-ending wars."

"N" writes, "Simple: put 'single-payer' on the table and 1. Tell the insurance lobby to get lost. 2. Start publicly embarrassing the senators and representatives that have been taking hand-outs to derail reform."

Lou writes, "He needs to get his message across better. I am for health care reform, but I have no idea what plans are on the table."

And Richard in Colorado writes, "Speak softly, carry a big stick and use it to beat the Blue Dog Democrats and the Republicans severely about the head and shoulders."

If you didn't see your e-mail here, you can go to my blog at CNN.com/CaffertyFile, look for yours there -- Wolf.

BLITZER: All right, thanks very much, Jack.

And to our viewers, you're in THE SITUATION ROOM. Happening now, broken government, an infectious disease lab in tornado country. Whose bright idea was that? And what if the germs get out? This hour, critics take direct aim at a potential safety hazard for the continental United States.

And only on CNN, we're calling it the terror do-over. They just sent this Florida college student free, but the feds locked him up again. CNN's John Zarrella reveals a key figure that casts doubt on the government's action.

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

You're about to hear the emergency call that inflamed a racially charged national controversy. We have the 911 recording that led to Henry Louis Gates' arrest. Do you remember, this started when the Harvard University professor arrived home from a trip and the door to his home was jammed. Professor Gates was trying to force it open with help from another man. A neighbor noticed and called the police. Pay close attention to what was said and what was not said.