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Angry Crowds Confront Lawmakers Over Health Care; President Obama Beats Back 'Scare Tactics'; Interview With GM CEO Fritz Henderson

Aired August 11, 2009 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, questions and chaos, answers and anger. President Obama confronts fear about health care reform, while voters confront lawmakers with angry concerns.

GM is determined not to run out of gas. It says its New car will drive you more miles a gallon than any car ever. And GM has a New strategy as well. Will this drive GM back to the top?

I'll ask the CEO, Fritz Henderson. He's standing by live.

And plot to kill. Al Qaeda-linked terrorists reportedly plan to take out U.S. troops at a huge American base in Kuwait during one of the holiest months for Muslims.

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.

It's one of the roughest days in this month that either will make or break efforts for health care reform. Today, a town hall forum featuring President Obama could have turned ugly, but he didn't back down and it didn't turn ugly. He forcefully defended his ideas, thumbing his nose at critics and pushing back at what he called rumors.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: For all the scare tactics out there, what is truly scary, what is truly risky is if we do nothing. If we let this moment pass, if we keep the system the way it is right now, we will continue to see 14,000 Americans lose their health insurance every day.

Your premiums will continue to skyrocket. They have gone up three times faster than your wages, and they will keep on going up. Our deficit will continue to grow because Medicare and Medicaid are on an unsustainable path.

(END VIDEO CLIP)

BLITZER: While the president faced a largely friendly crowd in New Hampshire, some lawmakers braved unfriendly crowds. Missouri Senator Claire McCaskill and Pennsylvania Senator Arlen Specter, both Democrats, attended town halls and heard an angry earful over everything from health care to God.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One day, God's going to stand before you and he's going to judge you and the rest of damn your cronies up on the Hill. And then you'll get your just desserts.

I'm leaving.

SEN. ARLEN SPECTER (D), PENNSYLVANIA: OK. OK. OK. We've just -- we've just had a demonstration of democracy.

UNIDENTIFIED MALE: I reviewed 3,200 the best I could. To me, it is obviously written with the assumption that government has the right to control our lives from pre-birth to death. For that reason, it's not worth considering, it's not worth modifying, it's not worth amending. It needs to be dumped overboard.

I don't understand this rudeness. What is this?

SEN. CLAIRE MCCASKILL (D), MISSOURI: I don't get it. I honestly don't get it. Do you all think that you're persuading people when you shout out like that?

UNIDENTIFIED MALE: (INAUDIBLE)

MCCASKILL: Beg your pardon? You don't trust me?

OK. I -- you know, I don't know what else I can do. I don't know what else I can do. If you -- if you want me to go home...

(END VIDEO CLIP)

BLITZER: Our White House correspondent, Dan Lothian, is standing by. He's covering President Obama in New Hampshire. But Senator Specter is hearing more from his constituents in Lewisburg, Pennsylvania. That's where our national political correspondent, Jessica Yellin, is standing by.

Quite a day for Senator Specter today, Jessica.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: It has been a very tense day for the senator, who is now at the second town hall. This one, already, Wolf, far more civil than the one we attended earlier today.

This is an overflow audience. One of the advantages here is they've put the people who couldn't get into the auditorium into an air-conditioned space elsewhere on the campus. That seems to keep tempers cool.

But compare to that to what we saw just a few hours ago in Lynchburg (sic), Pennsylvania, where people were on the streets, many of hundreds of people in front of the town hall, yelling at each other, insisting that their right to speak is being denied, very angry they couldn't get into the town hall and, Wolf, what we really sensed was a lot of fear, a lot of anxiety and confusion. For example, when I tried to interview one small businessman about why he came out, he said he just wanted to learn about the bill. He wanted to find out how it would affect small businesses, and in the middle of my interview, he was interrupted by hecklers, and watch what followed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'd just like to know...

UNIDENTIFIED FEMALE: Read the legislation.

UNIDENTIFIED MALE: ... because, you know, we can't understand it. There's thousands pages of things...

UNIDENTIFIED FEMALE: Learn how to read.

UNIDENTIFIED MALE: Oh, I did go to school, ma'am. Why don't you read what the thing says?

UNIDENTIFIED MALE: You don't know what it says.

UNIDENTIFIED MALE: Why don't they take the health care being forced down our throat? Yes, why don't you go home. Why don't I have freedom? Because we elected somebody that wants to take our freedoms?

(END VIDEO CLIP)

YELLIN: Wolf, you see there was a lot of tension and moments like that on both sides of this issue. That was, again, in Lebanon, Pennsylvania. We've been all over the state today.

And, Senator Specter, again, in his second town hall of the day, fielding questions, again, from an audience that was both in favor and opposed to the various reform proposals -- Wolf.

BLITZER: Yes, he was in Lebanon. Now he's in Lewisburg, Pennsylvania.

How much of this anger that is being manifested against him is the result of his decision to switch from a Republican to a Democrat?

YELLIN: A fair amount of it is fueled by frustration that a lot of folks here do feel that he switched on them unexpectedly. So, that has just intensified some of the anger that's already here -- Wolf.

BLITZER: All right, Jessica Yellin. We'll get back to you.

At President Obama's town hall meeting today in New Hampshire the crowds were friendlier, but the mission was still very critical -- convince skeptical Americans that without health care reform, all Americans will suffer.

Let's go to our White House correspondent, Dan Lothian. He's in Portsmouth, New Hampshire, with more.

How did it go for the president, Dan? DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, we didn't see any fireworks here today like we've seen at those congressional town halls across the country, but the president did try to stir things up a bit by looking for people in the audience who don't necessarily agree with him.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Responding to criticism that he's not answering tough questions in his town halls, President Obama called for dissent.

OBAMA: I don't want people thinking I just have a bunch of plants in here.

LOTHIAN: Even then, the questions were mostly friendly, although this Republican in the audience was concerned that a public option would hurt private insurers.

UNIDENTIFIED MALE: Because who can compete with the government? The answer is nobody.

LOTHIAN: As demonstrators for and against health reform shouted and banged drums outside, President Obama made his case inside and tried to knock down myths.

OBAMA: This idea that somehow the House of Representatives voted for death panels that will basically pull the plug on grandma, I am not in favor of that.

LOTHIAN: Since June, the president has held more than a half- dozen town hall meetings across the country. Health care reform 101.

OBAMA: If you like what you've got, we're not going to make you change.

First of all, nobody is talking about some government takeover of health care.

You won't have to worry about pre-existing conditions.

LOTHIAN: And in this health care marketing push, there's a constant theme.

OBAMA: If we do nothing, I can almost guarantee you your premiums will double over the next 10 years.

LOTHIAN: President Obama promises audiences that cost cuts and wealthy Americans will help pay for reform, without adding to the deficit.

OBAMA: We've already identified hundreds of billions of dollars worth of savings in our budget.

LOTHIAN: But after all these town halls, Americans still have doubts. The White House blames a campaign of misinformation. LINDA DOUGLASS, WHITE HOUSE OFFICE OF HEALTH REFORM: And every time you try to do something with health care, those special interests try to scare people into thinking that it's going to be worse for them. These are the people who want to preserve the status quo.

(END VIDEOTAPE)

LOTHIAN: Now, the White House is trying to make the case that health care reform is about more than just helping the 46 million people who are uninsured, but also about providing better care and making it more affordable for all Americans -- Wolf.

BLITZER: Dan Lothian's in New Hampshire.

Thank you, Dan.

Let's check in with Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: You know what we need? We need a health care czar. And I've got the person right here.

BLITZER: Who is that?

CAFFERTY: Well, first she called President Obama's health care plan evil and she said it would create death panels. Now, Sarah Palin is urging restraint at the town hall meetings.

In comments on her Facebook page, the former governor of Alaska, who quit in the middle of her first term, says there are many disturbing details in the health care bill, but that, "We must stick to a discussion of the issues and not get sidetracked by tactics that can be accused of leading to intimidation or harassment."

Big words.

Palin suggests the disruptive protests "diminish or nation's civil discourse" -- big words -- and says opponents shouldn't give supporters of health care reform any reason to criticize them.

This is the same woman who a few days ago, was spreading a false claim that President Obama would force the elderly and disabled to appear before a death panel. She said a group of government bureaucrats would get to decide whether people like her parents and her son, who has Down Syndrome, could get health care.

There is no such provision in the bill. Gee, you don't suppose she didn't read it, do you?

Rather, a House committee did pass a provision that would let Medicare reimburse seniors who want counseling on end-of-life issues.

Once again, Sarah Palin's version of reality is at odds with reality.

Whatever the reason, Palin backed down. See, she wasn't getting any support. Several Republican governors distanced themselves from her. They either refused to comment or they said that Palin could speak for herself.

That's not exactly the way to build that right of center coalition she keeps talking about.

Anyway, here's the question: Are you interested in Sarah Palin's views on health care reform? Go to CNN.com/caffertyfile and post a comment on my blog.

Health care czar. What do you think?

BLITZER: Well, not bad...

CAFFERTY: She's not doing anything.

BLITZER: ... but, you know, the president, in his town hall in New Hampshire today, he indirectly, without mentioning her, he responded to Sarah Palin and her death panels suggestion. You know what he pointed out?

CAFFERTY: No.

BLITZER: You know who introduced the legislation calling for these Medicare end-of-life provisions counseling for elderly?

CAFFERTY: Probably a Republican.

BLITZER: Republican Senator Johnny Isakson of Georgia. So, we double-checked. There's an interview with him today in "The Washington Post."

CAFFERTY: Oh, ,OK.

BLITZER: And he cosponsored the 2007 Medicare End of Life Planning Act, and he said this when he was asked about Sarah Palin -- he said, "Someone could take an end of life directive or a living will as that is nuts. You're putting the authority in the individual rather than the government. I don't know how that got so mixed up."

Interesting.

CAFFERTY: Well, it got mixed up because Sarah Palin was the one who was annunciating it. She has problems with that.

BLITZER: Interesting stuff. We're going to invite him to come on the show and talk to him about all of this.

CAFFERTY: That's a good idea.

BLITZER: Yes. Thanks, Jack. We'll get back to you shortly.

Where does free speech cross the line? Amid a heated health care debate, vandals paint a swastika at one congressman's office, and another congressman says he's received death threats. GM has a deal for you. Its new car will get you the most miles per gallon of any car ever. But will it drive GM back to financial prosperity?

I'll ask the CEO, Fritz Henderson. He's standing by live.

And President Obama's children used in an ad against him. Why? And why is the group behind it refusing to take it down?

(COMMERCIAL BREAK)

BLITZER: GM is looking for something to jolt its economic fortunes. Might it find it in a new partnership with a popular Web site and with a new car that may get unprecedented mileage?

Let's go to CNN's Dan Simon. He's joining us from San Francisco with more -- Dan.

DAN SIMON, CNN CORRESPONDENT: Well, hi, Wolf.

We are at the Stewart Chevrolet dealership, and this is just one dealership in California that has put its entire GM lineup on eBay. One example here is the Chevy 2009 Malibu. Computer users can go to eBay, click the "Buy it Now" button, or offer a lower price.

(BEGIN VIDEOTAPE)

SIMON (voice-over): You could call it electronic haggling. Two hundred twenty-five dealers, just in California for now, are putting their new inventories on eBay.

You won't find Cadillacs there. The company apparently doesn't want to cheapen the brand. You will find the company's other cars and SUVs like the popular Chevy Equinox.

(on camera): Is there much room for negotiation, or did you try to price them at the "Buy it Now" category?

UNIDENTIFIED MALE: Some cars are priced at the "Buy it Now," some cars are priced to be able to negotiate on.

SIMON: And you don't want to tip your hat necessarily right here on CNN and tell me?

UNIDENTIFIED MALE: Not necessarily.

SIMON (voice-over): But consumers might feel more empowered making their purchase through eBay. The site shows potential buyers what different dealers are asking for the exact same car.

ROB CHESNEY, EBAY: We have great expectations for the program. The fact that we'll be offering consumers some of the most competitive prices that they've ever seen on GM inventory, and the fact that we're doing it in this kind of new and very compelling way for consumers we think will be a great combination. SIMON: GM's use of eBay is temporary. The program lasts for about a month. But if successful, it plans to expand the partnership and launch it nationwide.

The company, meanwhile, is seeing some positive signs elsewhere. It's had more sales than any other automaker under the Cash for Clunkers program. An 18 percent share, according to the Transportation Department.

And the company is getting a lot of buzz over its highly anticipated electric car, the Volt, which launches late next year. GM says it will get up to an unprecedented 230 miles per gallon.

(END VIDEOTAPE)

SIMON: As for the GM/eBay partnership, buying cars online, of course, is nothing new, but this is the first time a carmaker has done it in this type of aggressive fashion. And in terms of why they chose California as their test case, well, this is a market where GM has struggled in recent years, and they are hoping this will help turn things around -- Wolf.

BLITZER: Dan Simon on the lot in San Francisco.

Thank you.

Let's talk a little bit more about GM's drive back to financial prosperity. Joining us is the CEO, Fritz Henderson. He's coming to us via GM's help from one of its facilities in Milford, Michigan.

Mr. Henderson, thanks for coming in.

FRITZ HENDERSON, CEO, GENERAL MOTORS: Hi, Wolf. Good afternoon.

BLITZER: Are you worried that selling cars via eBay will further hurt a lot of those dealerships not only in California, but if it goes national, across the country? So many of those dealerships are already in trouble. If you can eliminate them, they're going to be in further trouble.

HENDERSON: First, Wolf, when we did the partnership with eBay, we committed to ourselves and to our dealers that we would do it with dealers. Two hundred and twenty-five dealers are participating with us in California, that did it voluntarily, because they thought it was a very interesting thing for us to experiment with.

It basically takes the showroom into the living room and allows the consumers a series of choices in a more comfortable environment. We had very good support from our dealers. And we wouldn't do it without having our dealers along with us.

BLITZER: Well, won't they be making a lot less per car sale via eBay than they would make if they sold the car directly to someone walking in and going into that showroom?

HENDERSON: I think that remains to be seen. Like any experiment, this is a test program because we don't really know what to expect.

We just thought it was an outstanding way to test this, to do it with a fantastic company and a fantastic buying experience with eBay, and to do it with our dealers. And so, we combined those things, we launched the program, and we'll see how it works. I mean, we're excited about the potential that comes with the program, but we want to see its results.

BLITZER: So you'll test market first and see how it works in California, decide if it's worthy of going national.

Let's talk about the Volt, your new electric battery car. And we're showing our viewers a picture of it right now.

Realistically, when will it be ready to start being sold?

HENDERSON: End of next year we'll be in the market. We're at our Milford proving ground today, and actually, we had customers with us yesterday and media today. We showed our pre-production operations. The Volts are being produced for validation testing as we speak and will be in the market at the end of next year.

BLITZER: How much will it cost?

HENDERSON: The vehicle itself has a relatively high cost. It's a first generation technology. Both the batteries, as well as the motors and the technology itself, are higher cost, like any first generation technology.

We haven't priced the vehicle. We wouldn't do typically until we come closer to when we launch it. The vehicle itself, though, by the way, Wolf, already has been proved for a $7,500 federal tax credit. So, in terms of to the consumer, we know that there will be a $7,500 tax credit attached to the car.

BLITZER: But can you give us a ballpark, $30,000, $40,000, $50,000?

HENDERSON: First of all, we haven't priced the car. The cost of the car, we talked about publicly, that the cost of the car, including everything, is closer to $40,000, which is, you know, given first generation technology, is not surprising to us. Again, we have this tax credit, and we are working to try to improve the cost of both this car, and then we have a second generation team working on the next generation to bring it further down the cost curve.

BLITZER: How many Volts are you going to assemble?

HENDERSON: We have capacity for 60,000 vehicles. It will be a mass production vehicle. It's actual demand, we'll have to see when we launch it. But we have capacity to sell 60,000, and that means it will be a high production car.

BLITZER: I know you guys have restructured, you're trying to basically start from the beginning. You've got $50 billion in loans from the federal government. Realistically, best case scenario, when do you think you're going to be able to start returning some of that money to American taxpayers?

HENDERSON: First, when we went through the bankruptcy, we received $59 billion in total between the U.S. and the Canadian governments. A relatively large portion that was converted into equity, which is why the U.S. and Canadian taxpayers are shareholders. We have 330 million shareholders, if you will.

I think our first job is to repay the loans, and there are some loans that are on our balance sheet. And it's our objective to get those loans repaid as soon as possible. Their maturity is 2014. We're going to work like crazy to pay that back far sooner, and then get a return for the shareholders, which is how the taxpayer will really get paid back. Not only paying back the loan, but getting a return on the investment and the equity in the company.

BLITZER: Good luck, Mr. Henderson. Thanks for coming in.

HENDERSON: Wolf, thank you very much for having me.

BLITZER: The heated health care debate takes an ugly turn. Get this -- a swastika is found outside the office of a lawmaker who supports the president's reform plans. And another congressman says he's getting death threats.

We'll have a live report on these very disturbing developments.

And remember those new planes Congress agreed to fund for senior government officials? Well, there's been a significant change of heart. Lawmakers now say they don't want the new jets.

We're going to tell you why.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: One chamber of Congress may want it, but will the other chamber go for it? The public option regarding health care reform, could it pit the House against the Senate?

And it appears to be a first. President Obama's daughters, Sasha and Malia, used in an ad against their dad. Why is the group behind the ad refusing to take it down?

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, a group linked to al Qaeda accused of planning an attack on a huge U.S. military base in Kuwait. We have new information coming into THE SITUATION ROOM on that alleged plot and how it was uncovered. Pakistan delivers a warning to the former president, Pervez Musharraf -- try to return to Pakistan and risk arrest. We're going to tell you why the government in Islamabad is now getting tough on Musharraf and how he's firing right back.

And Mexican cartels now trafficking in drugs and humans. They're smuggling people across the border and killing anyone who gets in their way.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

The heated health care debate leading to shouts, shoves and now a swastika. Representative David Scott from Georgia discovered the Nazi symbol spray-painted on a sign outside his office today. The Democratic lawmaker recently held a community meeting which included a very contentious exchange about the president's health reform plans.

CNN's T.J. Holmes is joining us now with more.

T.J., is there definitely a link between the swastika, the vandalism, and the position that the congressman is taking?

T.J. HOLMES, CNN CORRESPONDENT: Well, he would tell you yes, he definitely believes so. And that meeting you mentioned there, remember, it wasn't even about health care.

This wasn't one of those health care town halls. It was about another community issue, a very localized issue, and a man was there, waited this four hours, and then asked a question about health care. One question he got in that one meeting now has resulted in him being a target.

(BEGIN VIDEOTAPE)

HOLMES (voice-over): Has a national debate about health care really come to this?

REP. DAVID SCOTT (D), GEORGIA: This is not good for America. It's not good for this debate. It's a distraction.

HOLMES: Georgia Congressman David Scott says his staff found the swastika painted on the sign outside his office Tuesday morning. He says his office has also received offensive faxes. Police are now looking into it.

SCOTT: You want a meeting with me on health care, I will give it to you.

(APPLAUSE)

HOLMES: Scott says he believes it's a result of the heated health care debate. An argument he had with a doctor at a public meeting has been featured on both local television and CNN.

UNIDENTIFIED PROTESTERS: Just say no! Just say no!

HOLMES: He also thinks that some of the protests at town hall meetings have been far from spontaneous.

SCOTT: I think, to a degree, they're organized and orchestrated. There's no question about that. But they have a right to do it. That's very, very important. This is America. It's rough-and-tumble. That's what we're here for. So, there's no problem with that. But this is something else.

HOLMES: Another congressman, Brian Baird in Washington State, has canceled public meetings after he says he received death threats. Scott says he believes the president needs to be the one to step up and keep this heated debate from crossing the line.

SCOTT: I think he has to really speak strongly to tamper this down, before somebody really gets hurt at one of these things.

(END VIDEOTAPE)

HOLMES: And, again, the congressman said he certainly believes that people have a right to stand up and protest, but felt, in that one particular meeting, since it wasn't about health care, he should stand up and tell him, this wasn't the right time.

Now, also, Wolf, FBI has gotten involved in this investigation of that swastika, along with the local police here and also the U.S. Capitol Police -- Wolf.

BLITZER: Yes, that's a pretty, pretty ugly swastika right there. All right, thanks very much, T.J. Holmes, reporting from Atlanta.

President Obama's children are mentioned in an ad campaign for health school -- healthy school lunches, but without their knowledge or consent. And that's not sitting well with the White House.

Let's get the details from CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, here are the ads in question. They're plastered all over this hallway at Union Station, this cute little girl named Jasmine (ph) saying: "President Obama's daughters get healthy school lunches. Why don't I?"

Now, the White House has complained about these ads, but the group that put them up says, it's not taking it down.

(BEGIN VIDEOTAPE)

TODD (voice-over): A health food campaign with a VIP critic.

Dr. Neal Barnard of the Physicians Committee For Responsible Medicine says, it wasn't long after his group put up these ads in Washington's Union Station advocating a vegetarian lunch option in public schools that they got a call from White House attorneys.

DR. NEAL BARNARD, FOUNDER AND PRESIDENT, PHYSICIANS COMMITTEE FOR RESPONSIBLE MEDICINE: They contacted us the day after the ads went up, and they said, you can't talk about the president's children.

And we pointed out that the comparison really is about the schools.

TODD: Barnard's group says, on several days earlier this year, when Sasha and Malia's private school offered a vegetarian choice for lunch, the D.C. public schools offered no such choice.

The group wants Congress to institute a mandatory alternative.

(on camera): There's one Republican pollster quoted as saying, if the White House hates you, it's not going to help your agenda.

Are you worried about that kind of backlash?

BARNARD: Not in the least. The president, I believe, would support a healthy meal for Jasmine (ph) and every child like Jasmine (ph).

TODD (voice-over): Doctor Barnard says his group's Web site has seen a lot more traffic since the ads went up, but that White House attorneys hinted they might take legal action.

Barnard says a First Amendment attorney has told him he's on solid legal ground. We called one White House lawyer Barnard mentioned. She didn't return our calls. First lady Michelle Obama's office referred us to a comment by Press Secretary Robert Gibbs, who said they are trying to protect the girl's privacy, and "We hope that others will be respectful, as many in the media have been, about not using the girls as a publicity stunt."

One journalist who covers presidential politics says that position will likely garner support.

SUSAN PAGE, WASHINGTON BUREAU CHIEF, "USA TODAY": It's hard to grow up in the public eye. There are times when the president's children are unavoidably in the limelight. But, other than that, even for an advocacy group, I think there's a sense in town that you probably should leave them alone.

(END VIDEOTAPE)

TODD: The Physicians Committee For Responsible Medicine is determined to keep the ads running through the end of this month. They are targeting hundreds of Capitol Hill staffers who pass through these escalators in this hallway every day on the way to work. The thing they're pushing for, new legislation to require more fruits and vegetables in public school lunches, comes up in the fall -- Wolf.

BLITZER: Brian Todd, thanks very much for that.

The plane truth -- some members of the House of Representatives wanted some new luxury planes, but wait until you see what heavy criticism did to their plans. Should people be investigated for tactics critics call torture? The attorney general is under pressure over past water-boarding. And CNN could be coming to your hometown. Our Ali Velshi is on the CNN Express, speaking to Americans about health care and the economy. You're going to find out where he is and where he's heading next.

(COMMERCIAL BREAK)

BLITZER: Health care reform and a hotly contested public option plan, does it have a realistic chance of becoming the law of the land? And should supporters stick their neck out in the House of Representatives if its future is sort of dismal in the U.S. Senate?

Let's talk about that and more in our "Strategy Session."

Joining us, our CNN political contributor the Democratic strategist James Carville, and Republican strategist Ed Gillespie.

Guys, thank very much for coming in.

There's a dilemma, probably -- correct me if I'm wrong -- if the public option isn't in the House version. It might not pass, but the liberals love that public option. On the other hand, the -- the Democrats in the Senate, a lot of them, together with the Republicans, hate that public option.

Do you force Democrats, moderate Democrats, in the House to walk down that plank, even if it's not going to wind up the law of the land once these conferees get together?

JAMES CARVILLE, CNN POLITICAL ANALYST: They probably have enough votes to pass it. And -- and...

(CROSSTALK)

BLITZER: Who has enough votes to pass it?

CARVILLE: The Democrats.

BLITZER: In the House with the public option?

CARVILLE: With the public option.

BLITZER: Yes.

CARVILLE: And there will be a lot of moderate Democrats...

(CROSSTALK)

BLITZER: Yes. All right, but in the Senate -- it's not going to get through the Senate.

CARVILLE: If the number-two person in the Senate...

(CROSSTALK)

BLITZER: Dick Durbin. CARVILLE: ... is willing to negotiate it, and it hasn't even gotten there, you know...

(CROSSTALK)

BLITZER: So, the question is, do you force some of these moderate or conservative Democrats...

(CROSSTALK)

CARVILLE: I don't think they need to force very many of them. They probably have enough votes, that some of them won't. And I don't know if some of them can be forced. But my guess is, is that they will pass it like that in the House.

BLITZER: And your guess, when all the dust settles, if there's legislation that the president signs, it will not have the public option?

CARVILLE: That's my guess, based on what -- what I -- what -- what I hear from...

(CROSSTALK)

BLITZER: If it doesn't have the public option, will Republicans jump on board and say, you know what, we want to be part of this reform process as well?

ED GILLESPIE, FORMER REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: Well, the Republicans do want to be part of the reform process. Wolf, their focus is on cost, as well as trying to get the involuntarily uninsured covered. The public option goes a long way, but it's not -- you know, if you are going to raise taxes, if you are going slash Medicare, if you are going a number of things that -- that also don't need Republican concerns, I -- look, I think, at the end of the day, they don't have a public option, they don't have a big tax on -- on people, then you end up with a bill that gets some -- some Republican support.

But I would be surprised if the public option is in there.

BLITZER: So, in the end, though, you think the president will sign something into law this year?

GILLESPIE: I think, if it has health care reform in the title, he will sign it, yes.

(LAUGHTER)

BLITZER: Yes. You think -- you're pretty convinced about that as well?

CARVILLE: I think this is -- it just reminds me of -- I grew up on the Mississippi river. And it -- it meanders. It winds.

Actually, in Carville, Louisiana, believe it or not, it actually goes slightly north. But, in the end, it gets to the Gulf of Mexico. I think that's what's going on here.

BLITZER: As you know, Eric Holder, the attorney general, is under pressure to -- to create or -- or to appoint a special independent counsel to investigate the CIA and private contractors, their involvement in what -- what's called torture, the water- boarding. I'm hearing he's probably not going to ask for a special counsel, but he will have some sort of an investigation.

Is that going to put this issue to rest?

GILLESPIE: Well, I hope so, Wolf.

The fact is, there's been an investigation on this. If the -- people forget, but, in 2004, an inspector general report was forwarded to the Department of Justice, was given to the leaders in Congress and the leaders of the Intelligence Committees. The full committees were briefed out in 2006. No one saw anything that warranted a further -- any criminal investigation by the Department of Justice.

I think it would be a huge mistake...

BLITZER: Because the charge has been, from some on the left, that those who actually did the implementation of the interrogations, they went even beyond what the Bush Justice Department authorized in their memorandum.

CARVILLE: Well, you know, I just -- the -- politically, I think the thing is pretty much of a nonstarter.

Having said that, the -- the attorney general is charged with discharging the laws of the United States. And if he has on -- on -- some reason to believe that people exceeded their authority or broke the law, who is to tell the attorney general that he can't do that?

BLITZER: Do you think -- do you think -- do you think he will name a special prosecutor?

CARVILLE: I don't know. I have -- and I don't know -- I don't know what it is. It may be a preliminary thing.

But if -- if -- if you're the attorney general, and you have reason to believe, that doesn't mean that laws were broken, but who is to say -- politically, I can say it's not a very popular thing. But I can't -- I'm not in a position that -- we're not -- we don't have Alfredo -- Fredo Gonzales in there, OK?

GILLESPIE: But people -- people should know, though, James, that...

CARVILLE: Right.

GILLESPIE: ... career prosecutors recommended rejecting a -- a criminal prosecutor on this as far since thing was sent over in 2004.

In fact, the U.S. attorney in the Eastern District of Virginia said that there's not anything... CARVILLE: I don't...

GILLESPIE: ... that warrants going forward with a criminal investigation.

So, it's been sitting there for five years. All of a sudden, five years later, they say, oh, we're going to launch this investigation.

I think it would be a mistake.

(CROSSTALK)

CARVILLE: I guess the real possibility is, is new information has come forth. I don't know that. But it could be that...

(CROSSTALK)

GILLESPIE: A possibility.

(CROSSTALK)

CARVILLE: It could be...

(CROSSTALK)

GILLESPIE: I'm just saying, from what is known right now, it would come as a shock.

BLITZER: It sounds to me like it's -- it's an issue that the Obama administration would just as soon have go away. They got so much else going on right now.

CARVILLE: Right.

And I think president has said -- you know, but, having said that, if the -- but I have no idea what the facts are, if it's 2004, other people have come forward, or anything like that.

But maybe it will -- they will investigate it and determine nothing is there.

(CROSSTALK)

BLITZER: At his town hall today, Arlen Specter, the Democratic senator in Pennsylvania, got a question, nothing to do with health care, but this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What about this Guantanamo closure? I don't want these criminals to come over into here into our area and then escape, and we find that a bunch of innocent people have been murdered.

(END VIDEO CLIP) BLITZER: You think the president is going to be able to live up to his pledge that, by January 21 of next year, Gitmo, Guantanamo Bay, the prison there, will be shut down?

CARVILLE: I think he's going to shut it down. I don't know if it will be January 21 of next year, or April the 21st of next year. I think it's clear that they're going to do that.

BLITZER: You think...

GILLESPIE: Well, President Bush's goal was to close Guantanamo as well. The key is, you can't put an artificial time frame. I think that's where President Obama made a mistake.

The fact is, you have got to find places to relocate these -- these people. You have got to determine which ones warrant relocation, which ones need to be prosecuted. And -- and I think that year deadline, I -- I hope he doesn't stick to it, because I worry about the outcome if he does.

(CROSSTALK)

CARVILLE: If he misses it by 60 days, I guess, in one sense...

(CROSSTALK)

BLITZER: Because there aren't a whole lot of senator and representatives who say, you know what, bring it into my district or state.

CARVILLE: Well, I'll tell you what.

(CROSSTALK)

CARVILLE: If you -- if you come and you say, we will bill the president some jobs, there will probably be people bidding on it.

Look, we -- let me tell you something. We hold -- the federal penal system holds some pretty bad people. There are some bad actors. And there -- there's a -- there's a place in...

(CROSSTALK)

CARVILLE: They build them in mountains and stuff.

(CROSSTALK)

CARVILLE: The idea that one of these guys is going to escape is remote, at best.

BLITZER: It is pretty remote that somebody could escape...

CARVILLE: Right.

BLITZER: ... from a maximum-security prison in Colorado -- Florence, Colorado, for example. GILLESPIE: I assume that's the case, if it's a maximum-security prison.

(LAUGHTER)

(CROSSTALK)

BLITZER: Yes.

CARVILLE: Right.

GILLESPIE: But, you know, it's more than just the threat to the local community of having these vicious people there.

There's also the question of, once you bring them onto American soil, the rights that are bestowed to them, the discovery that their lawyers can seek. The judicial changes that are brought about by that, I think, warrant further consideration by this administration.

CARVILLE: Well, again, I think they're going to consider it and I think they're going to close it. Whether they do it by January the 21st or not, I don't know.

BLITZER: It would be embarrassing for the president, if he made such a public...

(CROSSTALK)

BLITZER: It was one of the first things he did after he was sworn in.

CARVILLE: They're going to...

(CROSSTALK)

BLITZER: If he doesn't live up to that, that could be pretty embarrassing.

CARVILLE: Right.

(CROSSTALK)

CARVILLE: But who is -- if he says, all right, the 21st, and they close it on March 21, I don't think it's going to matter that much. I mean, it's a deadline, and you give yourself an extension.

The IRS gives you an extension.

(LAUGHTER)

BLITZER: Well, they're -- they are asking the allies to take some of these guys.

CARVILLE: Right.

BLITZER: And there aren't a whole lot of allies willing to take a lot of them.

CARVILLE: Right.

(CROSSTALK)

GILLESPIE: But -- and that's something, again, President...

(CROSSTALK)

CARVILLE: ... the Bush administration did as well. And they're -- you're right. There's not a lot of folks out there saying, yes, send them our way, whether it's here in the United States or abroad.

BLITZER: We will leave it on that note.

Guys, thanks very much for coming in.

CARVILLE: All right. All right.

BLITZER: Embattled South Carolina Governor Mark Sanford says his critics smell blood in the water. Hear him in his own words.

And the life of Eunice Kennedy and her dedication to public service -- Eunice Shriver, who will carry her cause, now that she's gone?

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": The governor of New Jersey is fighting for his political life. A new poll shows Democrat Jon Corzine trailing Republican challenger Chris Christie by nine points. That's in a new Quinnipiac University poll. And Corzine holds very high unfavorable ratings. Fifty-eight percent of people in New Jersey disapprove of his job performance. New Jersey's governor election -- gubernatorial election is three months away.

We're watching it closely.

Apparently, a Democratic senator is not going to take it anymore. Ben Nelson of Nebraska is responding to a barrage of pressure. He has a new ad running in his state explaining his position on health care reform. Nelson says he wants reform that won't explode spending and will improve care and control costs.

Liberal groups are pressuring Nelson to support President Obama on health care reform. They are even responding to Nelson's new ad, appealing for financial help to keep their own ads critical of Senator Nelson on the air in Nebraska.

The House of Representatives thinks twice. Amid heavy criticism, it's now dropping a request for the Pentagon to buy more expensive civilian-style jets. This involves the addition of four planes to a House military bill. The planes would cost more than $270 million. The Pentagon's original request was for four planes to upgrade its aging fleet of aircraft used to transport Washington officials. And the governor of South Carolina isn't apologizing to anyone. The issue, his use of state planes for personal trips. Criticized for doing it, Governor Sanford says, past South Carolina governors did the same thing. The governor is also being criticized for taking pricey business and first-class flights paid for by taxpayers.

Listen to the governor explain it all.

(BEGIN VIDEO CLIP)

GOV. MARK SANFORD (R), SOUTH CAROLINA: I think it's a couple different things.

Let's go back to the obvious. You know, I did wrong. I messed up, and there are consequences for that. But, at some point, it gets to the point of the absurd, wherein, you know, in political terms, people smell blood in the water, and they keep coming and coming and coming.

And, so, I think that there's something wrong. You know, there have been more than 20 years of, you know, economic development trips through a whole host of governors, Republican and Democrat. And it's been a longstanding practice of the Department of Commerce to get, you know, governors a business-class ticket, because you fly across the Atlantic, you land, and you go straight into meetings for the day.

I mean, I literally remember going over for one meeting where I left in Charlotte -- I don't know where I left from -- but left to fly over there, change in Frankfurt, fly to Austria, go straight to a business lunch, get on a plane, and come back.

And, you know, if you want to -- I'm not trying to defend the practice, but I'm just saying, that has been the practice, and there's some level of common sense to it. If you're going to step straight into business meetings that have significant economic consequence for the people of our state, you need to have gotten some level of sleep the night before.

And whether myself or Hodges or Beasley or Campbell, you know, we don't go out and purchase the tickets. It's done through the Department of Commerce.

And, so, I would simply say, there's something of a double standard, when you have had a practice that's been in place for 20 years. And it's not just for governorships. It's been for secretaries, for senior-level folks at Commerce and others.

And, now, all of a sudden, folks are saying, well, wait a minute. He took a business-class ticket, though that's been going on for 20 years in South Carolina. So, I would say, at some level, there is a double standard.

And if -- if -- with all due respect to Senator Thomas or others, if they were serious about the inquiry in terms of understanding where the administration comes from, and -- rather than just sending out a press release, at some point, they would pick up the phone and call the office, and say, give us a little background on this.

And, so, I would say that.

(END VIDEO CLIP)

BLITZER: State law says officials should use state planes for official business, and they should opt for low-cost travel. Sanford has come under intense scrutiny and criticism since admitting he cheated on his wife and lied about it.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

Secretary of State Hillary Clinton calls on Congo to crack down on sex offenders. She makes that urgent appeal after touring an area where gang rape is rampant.

And air travelers stuck on the tarmac -- tarmac for hours on end -- now top officials here in Washington are demanding answers.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour, Wolf, is, are you interested in Sarah Palin's views on health care reform?

Bryan in Georgia writes: "No, so please stop covering this woman. She has obviously not even read the proposals, seeing her past statements. We have death panels right now. They are called insurance companies. They are the ones that are making hourly decisions whether people live and die by deciding if they will cover them or not."

Lee in North Carolina says: "I was interested in her views until I heard her death panel remark. It's now clear that she's not much interested in the facts. Therefore, I'm no longer interested in her views -- about anything."

Kodiak in Alaska: "Not in the least. I live in Alaska, think she's out of her mind, or what limited mind she may have. By the way, the Alaska legislature just overrode her veto of federal energy stimulus funds -- the only state to do so."

Pat in Pittsburgh says: "Sarah Palin could not be more of a loon if she sprouted wings, began flying around, and eating raw fish. Why..."

(LAUGHTER)

CAFFERTY: "Why are we still paying attention to her?"

That's an interesting mental image.

Lee in Arlington, Texas: "I am always interested in hearing what Palin has to say. Her world view is like getting to go to an improv comedy show for free. And everyone needs a good laugh."

Craig says: "I couldn't care less what Mrs. Palin's views are on whether you should drink right or -- white or red wine with chicken, let alone her views about health care. The woman is a clown, a non- thinking entity who is destroying the image of women in politics every time she opens her mouth. Right-wingers like her because she's cute and she's religious."

Tom writes: "There's little about Sarah Palin and her views that interests me. She continues to prove that she is nothing but irrelevant when it comes to matters of substance. She's all Eskimo and no igloo."

And one other guy wrote, "I would rather listen to what the Rice Krispies are saying."

If you didn't...

(LAUGHTER)

CAFFERTY: If you didn't see your e-mail here, go to my blog at CNN.com/caffertyfile. Look for yours there, among hundreds of others.

If these sounded one-sided, it's because they were. We got over 4,000 e-mails on this question in the last hour-and-a-half, Wolf. And I can't read them all, but I bet I spun through a couple of hundred of them. Didn't see any, any that supported Ms. Palin.

BLITZER: Interesting. The Rice Krispies are saying snap, crackle and pop, if you recall.

CAFFERTY: See, you're showing your age now when you do that.

BLITZER: I know. All right, Jack.

CAFFERTY: Remember those commercials?

BLITZER: Of course I do.

CAFFERTY: Yes.

BLITZER: Jack, thank you.

(LAUGHTER)

CAFFERTY: OK.

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