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A.P. Reports Feds Didn't Carry Out Prescribed Burn; Dragged Across the Border; Staying Safe in World's Hot Spots; New Air Safety Rules; Human Body Parts for Sale; President Obama to Address Congress

Aired September 2, 2009 - 17:00   ET

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


MALVEAUX: You're in THE SITUATION ROOM.

Happening now, 220 square miles of California consumed by flames -- we are with a strike teams who are battling this massive blaze trying to save the thousands of homes that are still at risk.

Well, were they lured into a trap?

US journalists captured, then freed by North Korea, tell how they were dragged across the border into a living nightmare.

And they made millions while their failing banks were bailed out by taxpayers. Now, a new study shows that those bailout barons got a lot richer while many of their workers were getting laid off.

Wolf Blitzer is off.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Firefighters say that they haven't turned the corner yet, but they are holding their own against a massive blaze that has scorched 140,000 acres of California forests and foothills; also reduced to ashes dozens of homes. Thousands more are still at risk. The Station Fire north of Los Angeles is only 22 percent contained.

Our CNN's Brian Todd -- he has been to the front lines of this massive fire, with the strike teams that are fighting to contain it -- Brian, what have you seen?

BRIAN TODD, CNN CORRESPONDENT: Suzanne, we just came down from the mountains. I can tell you, the conditions have gotten no better for these firefighters, even though they've made considerable progress, as you mentioned, containing over 20 percent of this fire. That's a lot of progress from yesterday. Still, more than 140,000 acres charred. And the reason that the conditions are so bad, very steep terrain up there that they're dealing with, bone dry conditions. And I can tell right just from the temperature out here, it is a lot hotter here than it was yesterday.

I'm going to show you the areas that they're concentrating on right now. Our photojournalist, Tim Hart, is going to come over here with me. There's another gentleman here navigating the map, as well. But here are the areas that they're looking at. The western fringes of the fire right here -- those are the hot spots, Tujunga Canyon, up near the western fringe of where the Station Fire is.

Also, over to the eastern fringes, the area around Chileo, even though it's not in the red area, they -- they -- it did creep over there. There's an area called Devil's Canyon, where there is a lot of fire going on. This is the area where they're concentrating on now and battling. Not so many homes threatened in this area, but there are homes down here in the area of, let's see, Spruce Grove, Cascade, Mount Wilson, around this area that they are concerned about. They're not saying they're overtly worried. They are concerned. They are watching to see if the fires progress down there.

Now, the incident commander, Mike Dietrich, who has given this fire human characteristics by the day, talked to us about what he would give it this day. That was a little bit earlier.

(BEGIN VIDEO CLIP)

MIKE DETRICK: I'm still characterizing the fire, if it has a human characteristic, today it will be cranky, one more day.

And in terms of are we out of the woods on this yet?

The answer is no. There's a lot of open fire line out there. There's a lot of hard work to be.

And the question was have we turned the corner yet?

The answer is no, but I think we can see that there might be a warning sign that there's a curve or a corner up ahead. That will be in the next several days.

(END VIDEO CLIP)

TODD: Yes, they say it will be at least several days -- possibly up to a week -- before this fire is completely contained. But the conditions, Suzanne, not getting any better for these firefighters. It's getting hotter. They don't anticipate a break in the weather really any time soon.

MALVEAUX: Brian, thank you.

Two journalists detained for almost five months in North Korea are speaking out for the first time in a "Los Angeles Times" op-ed. Lara Logan and Euna Lee described clinging to bushes to try to stop guards from dragging them across the border.

Let's go to our own Abbi Tatton -- and, Abbi, did they say that they set foot in North Korea?

ABBI TATTON, CNN INTERNET REPORTER: Yes, Suzanne. They say they did, though they wonder if they were tricked into doing so. In this firsthand account from Laura Ling and Euna Lee, they say it was Friday on March 17th when they arrived at this frozen river that divides China and North Korea. There were four people standing there on the China side -- Laura Ling, Euna Lee, a producer and a local guide that was there to show them these local smuggling routes. And apart from that, they say, there wasn't much else. There was no barbed wire. There was no fence to mark the international border.

And Ling and Lee say they had no intention of going into North Korea that day. But when the guide stepped out onto the ice -- stepped onto the frozen river to cross, they said they did follow him.

They said at that point they ventured to the North Korean river bank and they were there for no more than one minute. Nervous, that's when they headed back.

They got to about the middle of the river. And at that point, they say, they looked back and they saw two North Korean guards who were behind them running and yelling. They ran, as well. They ran toward the China side. And they say at that point, on the China side, that's when they were captured. That's when they were violently dragged back to the North Korea side.

And at this point, there were just two of them, just Laura Ling and Euna Lee. The producer had outrun them and the guide had also disappeared and run off. And they wonder whether they had been lured into a trap, Suzanne, saying that the guide that morning certainly behaved oddly.

MALVEAUX: And Abbi, they had notes. They had tapes with them.

What happened to all of that?

TATTON: They say they swallowed them. They say they swallowed the notes. And in any case, they'd been working on a story about human trafficking, interviewing North Korean defectors who had gone into China. And they had tapes of them. They had notes. They say that after they were captured, to protect those subjects, they swallowed the notes and they damaged their own tapes so that the guards wouldn't find them.

MALVEAUX: Amazing. OK.

Thank you, Abbi.

Well, how do reporters stay safe in hostile parts of the world?

Our CNN international correspondent, Cal Perry, he has spent a lot of time in war zones. And he is joining us now live from Baghdad -- and, Cal, I want to start off, first, what do you make of how these journalists behaved when they crossed over into -- into the North Korean side?

CAL PERRY, CNN INTERNATIONAL CORRESPONDENT: Well, it was really fascinating to hear what Abbi had to say. And I -- I think as journalists we -- we have to talk to these governments. We have to talk to certain people that other governments will not do so. But at the same time, that being our job, we don't want to be caught up in international incidents. We don't want to be caught up in international diplomacy. It sounds to me like what happened in this case was, of course, the North Koreans were using these two journalists to get at the Americans.

It's certainly not a position you want to be in. When you're dealing with your sources, you want to protect these sources, as these two journalists did, because your sources, in the end, can be your protection. So you really have to walk a fine line in talking to people that your government cannot talk to, because that, at the end of the day, of course, is our job.

MALVEAUX: And, Cal, have you covered some six wars in five years. You've had to rely on people -- translators, guides -- in hostile situations.

How do you develop their trust?

How do you know if the people that you're with are going to undermine you or work with you?

PERRY: It's all relationships.. And these are really the unsung heroes. These are the people we can't name on TV, the local producers and security guards. These are the people that become your family. And these are the people you rely on to tell you how they're feeling and what they're feeling and to give you an idea of where you are. Because, of course, oftentimes we will come into these war zones and we'll be fresh in these war zones. We will have not -- have never been there. And you rely on your local staff to tell you what's going on, to tell you what the street is safe, which street is unsafe, to tell you when they have a bad feeling, to tell you when to turn back. And our security guards are really advisers. It's a conversation that we have with them. The answer is never no. The answer is can we do it a different way?

Is there another way that we can approach this?

Let's not set a pattern, those types of things -- Suzanne.

MALVEAUX: And, Cal, have you ever been misled by a guide or somebody who you trusted in a story?

PERRY: Well, certainly, we found ourselves in difficult situations. But have you to follow your gut. We were just, two months ago, headed for Latfiyah, which is just south of Baghdad. We came to a checkpoint and the Iraqi Army started asking a lot of questions. Somebody who we didn't know, who was out of uniform, reached in the car and started feeling whether or not we were wearing flak jackets.

Our local cameraman, Samat Kasiyra (ph), who has been here with me for more than five years said, that's it. I have a bad feeling. This doesn't make sense. Let's get out of here.

And we immediately turned around and we came back to Baghdad. The next day, three suicide bombers were found in the town that we were headed to. So you have to rely on the unsung heroes that are surrounded with you -- these local producers, these security advisers. These are the people that allow us to do our jobs, which is to tell the world what's going on out here.

MALVEAUX: And, finally, Cal, how do you prevent your own family from going crazy with worry and distress?

They don't know where you are. The two journalists were saying that this is a top secret mission for them.

How do you handle that?

PERRY: You -- you lie. You lie to your family. I mean, it's a horrible thing to say, but you don't want to give -- you don't want your family to be worried about you unnecessarily. It's easy when it's to tape. You can you go here in Baghdad on an embed, come back and warn them, what you're about to see on TV, it looks a lot worse than it really is.

When you run into problems is when you're live.

In Southern Lebanon, in 2006, I remember speaking to my parents. And I told them everything is fine. It's nowhere near as bad as people are saying. And then I got a phone call 10 minutes later from my mother and she said I can see you and I can see the mushroom clouds of the explosions going on behind you. And there's nothing you can say. She's sitting there watching you.

MALVEAUX: Well, we're glad you're safe, Cal, and we're glad your mom's -- she's OK, too.

All right. Thank you, Cal.

Well, Jack Cafferty is in New York with The Cafferty File -- hey, Jack.

CAFFERTY: Suzanne, apparently it's time for Plan B. President Obama getting ready to shift his strategy when it comes to health care reform after a brutal month of August that wounded both his party and his presidency.

Politico reports top White House officials say the president is going to be more active now in the debate, which is something he probably should have done weeks ago. We learned this afternoon Mr. Obama will give a speech about health care reform to a joint session of Congress next Wednesday, right after the lawmakers return from their recess. And despite pressure from his base, the president reportedly has said he has no plans to insist on a public insurance option.

That is likely to anger many of the liberals in the Democratic Party, but could show the president is willing to take on members of his own party to try to get this thing done. Nancy Pelosi is on the record saying that no bill will pass the House of Representatives without that public option. One top Republican senator, Lamar Alexander, is warning that there will be a minor revolution if Democrats reform health care without Republican backing. He says the town hall meetings show that Americans are scared to death of reform and going it alone would "wreck our health care system and wreck the Democratic Party."

A new CNN/Opinion Research Corporation poll shows a majority of Americans want Congress to keep working on the health care bills that are already in progress. Twenty-five percent say they should pass with few changes. Twenty-eight percent say they should pass with major changes. Twenty-five percent say lawmakers ought to start over and 20 percent say they ought to drop the whole thing altogether.

So here's the question. With the August recess ending, what are the chances that Congress will pass health care reform?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf. The debate is set to get white hot once again, I have a feeling, Suzanne.

MALVEAUX: Absolutely. I think you're right, Jack.

Well, human body parts for sale.

(BEGIN VIDEO CLIP)

NANCY SCHEPER-HUGHES, FOUNDER, ORGANS WATCH: A kid who does not speak much English, who is terrified and shaking, and thought maybe I've made a mistake to do this. But $25,000, you have to admit, is a -- is a good amount of cash.

(END VIDEO CLIP)

MALVEAUX: Organ trafficking is a growing industry around the world and it's becoming routine, even in the United States -- a CNN special investigation.

Plus, amid reports of more children coming down with possible swine flu, our Dr. Sanjay Gupta tells us when you should and should not take your child to the emergency room.

And the father of Sarah Palin's grandchild unleashes a whole new set of allegations against the former Alaska governor. Paul Begala and Alex Castellanos are standing by.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

MALVEAUX: We want to go directly to Allan Chernoff, who has some breaking news regarding an announcement coming from the FAA -- Allan?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: That's right. The Federal Aviation Administration is trying to make sure that we do not have another tragic accident over the Hudson River here in Manhattan. You'll recall, last month we had a helicopter crash with a small airplane. Nine people killed. Well, now the FAA is saying it is going to call for new rules above the Hudson River. It's a corridor that has been very crowded. And what they're going to do is they're going to split it up by altitude. They're also going to require that planes, helicopters, flying in that region keep their lights on, that they announce when they enter the airspace over there and, also, that they remain at a speed of 140 knots or less. That's about 120 miles per hour, relatively slow.

So all these changes being brought to the fore right here -- and the FAA is saying they want to make them permanent -- by mid-November. These are rules that had been proposed three days after the accident. Now, the FAA is saying let's make these permanent.

MALVEAUX: All right.

Allan Chernoff on the breaking news.

Thank you so much.

When the FBI arrested a Brooklyn businessman on charges of organ trafficking trying to broker the purchase of a kidney for $160,000, the news seemed both shocking and unique. But a CNN global investigation has found that the illicit buying and selling of kidneys, even in the United States, is not only relatively routine, but a robust, growing industry.

Drew Griffin of CNN's Special Investigations Unit reports.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): When the FBI arrested Brooklyn businessman Izhak Rosenbaum, they had no idea what they say they uncovered would be so big.

(on camera): Law enforcement sources who are still investigating tell CNN Rosenbaum was running an operation called United Lifeline. He was using hospitals in New York, Boston and Philadelphia.

What he was doing was selling kidneys.

UNIDENTIFIED MALE: His business was to entice vulnerable people to give up a kidney for $10,000.

GRIFFIN: (voice-over): Investigators say that donors and patients in this network had one thing in common -- they were all Jewish. Donors usually came from Eastern Europe, mostly poor, selling their kidneys for $5,000 to $6,000 to U.S. and Israeli patients willing to pay up to $160,000 for the kidney itself and the transplant.

Rosenbaum's attorney claims he hasn't had enough time to assess the FBI's case and offered no comment, but the lawyer did say law enforcement's account of Rosenbaum's network was inaccurate.

To those who study the illegal trade of organs, allegations of widespread trafficking in kidneys on the East Coast should surprise no one. In the recent past, according to researcher Dr. Nancy Scheper- Hughes, that has included organized crime.

SCHEPER-HUGHES: Mainly that business has been run by a kind of a Russian organs Mafia. And often they have been using Bulgarian guest workers or they have been using, you know, new Russian immigrants to kind of fuel it.

NICK ROSEN, KIDNEY SELLER: So I saw an ad in the paper and the ad said "kidney donor wanted."

GRIFFIN: Nick Rosen says selling a kidney in the United States was as easy as answering that ad. Nick Rosen is an Israeli citizen. He bears the scars of an operation where he says neither doctors nor the hospital asked too many questions.

(on camera): Do you think they knew?

Do you think the surgeon who did the surgery knew?

ROSEN: I think they -- they -- they may -- they may have had a feeling or a hint. But I can't say I know for sure.

GRIFFIN: (voice-over): A few weeks after answering the ad, with a promised payoff of $20,000, Rosen said he was flown from Tel Aviv to New York, hustled into New York's Mount Sinai Hospital, where he and the patient he'd never met before told hospital staff they were cousins.

(on camera): They didn't ask for family records or anything like that?

ROSEN: No. No.

GRIFFIN: So, basically, you were just two guys who came in, declared yourselves cousins...

ROSEN: Yes.

GRIFFIN: (voice-over): Dr. Barbara Murphy is in charge of the hospital's kidney unit. She says screening is rigorous, but...

DR. BARBARA MURPHY, MOUNT SINAI HOSPITAL: We're not detectives. We're not the FBI. And -- and we don't have methods that they have at our disposal and people can, on occasions, deceive us.

GRIFFIN: Nancy Scheper-Hughes is a University of California anthropologist who has been tracking illegal organ sales for 15 years. She says for the hospitals, it pays to look the other way.

SCHEPER-HUGHES: I ask not only what about the surgeon, what about the transplant coordinators, the nurse coordinators, the hospital chaplain, the bioethicists who are supposed to screen people and say, well, how long have you known each other?

GRIFFIN: On the day we talked to her, she said she was learning of a young Korean man recovering in Los Angeles' Cedars-Sinai Hospital, having just sold his kidney for $25,000 in cash.

(on camera): And this took place.

SCHEPER-HUGHES: Last night.

GRIFFIN: Last night.

SCHEPER-HUGHES: In Los Angeles.

GRIFFIN: In Los Angeles.

SCHEPER-HUGHES: That's right. A kid...

GRIFFIN: With $20,000.

SCHEPER-HUGHES: A kid who does not speak much English, who is terrified and shaking and thought maybe I've made a mistake to do this, but $25,000, you have to admit, is a -- is a -- is a good amount of cash.

GRIFFIN: (voice-over): A source with knowledge of the deal confirmed to CNN the surgery did, indeed, take place. The hospital wouldn't comment on specifics due to privacy concerns, but said if, at any time during the evaluation process, the transplant team suspects the donor is being inappropriately paid for a kidney, the transplant is cancelled.

But to Scheper-Hughes, that's not happening enough. The World Health Organization estimates one out of every 10 kidney transplants in the world is illicit.

SCHEPER-HUGHES: Well, I think there is no stopping it. I have to say, I'm pretty depressed about it right now.

GRIFFIN: Depressed because it's a business that's only getting bigger, as more of the world's desperately poor are willing to sell off a piece of themselves.

Drew Griffin, CNN, Berkeley, California.

(END VIDEO TAPE)

MALVEAUX: Well, know someone who needs a new body part?

We have learned where they can buy one -- all cash, no questions asked. "Secret Harvest: The Illegal Trade in Body Parts," a stunning "A.C. 360" worldwide investigation. That is tonight at 10:00 right here on CNN.

Well, the young and the elderly -- they are definitely not seeing eye to eye on health care reform. Find out what is behind this widening generational divide.

And on the eve of Michael Jackson's private funeral, a judge decides who will pay for the service.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Fredricka Whitfield is monitoring the stories that are coming into THE SITUATION ROOM right now -- and, Fred, what are you watching?

WHITFIELD: Hello again, Suzanne.

A blistering resolution today from the Scottish parliament condemning the decision to release Lockerbie bomber Abdelbaset al- Megrahi from prison. The resolution claims Scottish justice secretary, Kenny MacAskill, mishandled the decision to free al- Megrahi, blasting him for meeting personally with al-Megrahi as he gathered evidence. The resolution also says MacAskill didn't have sufficient medical advice to make a judgment about the bomber's prognosis.

And a Los Angeles judge today ruled that the special administrators of Michael Jackson's estate should pay for his funeral this week. The request was made by the late singer's mother, Katherine Jackson. The pop star will be buried more than two months after his death in a private ceremony tomorrow night. No one has been charged in Jackson's death.

And you're looking at aerials -- about now -- of a man being rescued from a lion pit. Just a short while ago at Boston's Franklin Park Zoo, the Boston Fire Department rescued the man from a concrete ravine inside the lion habitat. Officials say he was conscious, but that was during the ambulance ride to a local hospital. At the time of the incident, however, movie crews were at the zoo shooting scenes for an upcoming film. It's still unclear whether that person worked for the zoo or worked for the movie set -- Suzanne.

MALVEAUX: OK. Thank you, Fred.

President Obama makes a dramatic bid to regain the advantage -- will an address to a joint session of Congress give him the upper hand in the debate over health care reform?

Plus, a new barrage of accusations against Sarah Palin from the father of her grandchild.

Does Levi Johnston just have an ax to grind?

And while their failings banks were being bailed out by taxpayers, they were making millions -- how the bailout barons got richer while many of their workers were getting pink slips.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, a massive wildfire threatens thousands of homes in California. We go to the front lines and watch as firefighters teams use everything in their arsenal to put out those flames.

And scandalous photos of private security guards at the U.S. embassy in Afghanistan -- today, more pictures of the contractors. And just wait until you see what they're doing now.

And the George Washington Bridge considered a prime terror target in the New York area, but that didn't stop two security guards from apparently sleeping on the job.

Wolf Blitzer is off.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

Democratic sources say President Obama will tackle the contentious issue of health care reform during a speech to a joint session of Congress next Wednesday. Much of the debate is focused on the so-called public option -- a government-run health insurance program that would compete with private insurers. And members of Congress are finishing up their August recess with town hall meetings across the country today.

House Speaker Nancy Pelosi addressed the controversy at one of those.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I support what the president has said. He's said that he believes that the public option is the best way to keep the insurance companies honest, to increase competition in order to forego lower costs, improve quality, expand coverage and retain choice. He has also said if you have a better way of doing it, put it on the table.

MALVEAUX: The public health insurance option was also a big talking point at a heated town hall hosted by house majority leader Steny Hoyer. Our CNN congressional correspondent Brianna Keilar is here. Where does he stand when it comes to the public option?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well Suzanne, Steny Hoyer supports it. He is house speaker Nancy Pelosi's deputy after all. That said, he won't say it's make or break for him. He is a representative of a district that actually gave more than 60 percent of its votes to John McCain in November.

(BEGIN VIDEOTAPE)

KEILAR: The line for house majority leader Steny Hoyer's health care town hall meeting wrapped around much of the high school where it was held, opinions covering the spectrum

UNIDENTIFIED FEMALE: I think it should pass. Everybody should have affordable health care.

UNIDENTIFIED MALE: And I don't know all the ins and outs and I'm afraid I might lose what I have.

KEILAR: Once inside there were desperate pleas for a government- run insurance plan.

UNIDENTIFIED FEMALE: I can't afford it. The doctor won't even take me now.

UNIDENTIFIED MALE: My son pays $800 a month and has a $5,000 deductible. We need a public option.

REP. STENY HOYER, HOUSE MAJORITY LEADER: I support a public option. It would bring down premiums for all of us.

KEILAR: But in this conservative district, many people were concerned the Democratic plan to overhaul health care will drive the country further into debt.

UNIDENTIFIED MALE: I don't see how the government can provide all these things and still say they are going to save money. It doesn't make ordinary common sense.

KEILAR: Despite assurances from Hoyer --

HOYER: If it's not paid for, I'm not going to vote for it.

KEILAR: Critics remain skeptical convinced the health care system is broken but just as certain a government-run insurance plan is not the fix.

UNIDENTIFIED MALE: I am for health care reform, but I'm not for government-run health care reform.

KEILAR: Speaking to CNN after the meeting, Hoyer reaffirmed his support for the so-called public option but stopped short of saying house Democrats will vote down a bill if it doesn't include one.

HOYER: There are many other aspects of this bill that are very good and will make a real difference in terms of cost to individuals and families, access to affordable quality health care. All of those are very important as well.

(END VIDEOTAPE)

KEILAR: Reality is while a government-run public option is in all three versions of the house health care reform bill and the one bill that's come out of committee in the senate, in the senate centrist Democrats have expressed an opposition to this public plan that its passage there seems extremely unlikely, Suzanne.

MALVEAUX: Thank you, Brianna.

Well, the battle lines are drawn at those health care town halls, and our latest polling shows how deeply divided Americans are over the president's reform proposals. Joining me now two CNN political contributors, Democratic strategist Paul Begala and Republican strategist Alex Castellanos. I want to start off with the fresh new poll news. Obviously people are split over whether or not they approve or disapprove of the president's -- we call it the president's health care plan. We have about 25 percent strongly favor, 23 percent moderately favor. On the other side you've got about 10 percent moderately oppose and then 41 percent strongly oppose. Paul, is it a good idea for the president to go before congress and -- and make this speech?

PAUL BEGALA, DEMOCRATIC STRATEGIST: Absolutely. High risk, high reward, and that's how Barack Obama became president, you know. Obviously he's a really gifted communicator, but he's also not going to not only be responsible for communicating but for leading. He's going to have to tell that congress with more precision than he has in the past what he's for and what he's against and why. My own hope is that he uses that as an opportunity to draw real contrast between his vision of health insurance reform and the Republican vision which I think he can make a good case is the same old policies that got us in this mess, allowing the insurance companies to dump you if you get sick, to dump you if you get old, to dump you if you're a woman. That's the Republican plan. The president needs to outline --

MALVEAUX: Alex is laughing here. Jump in.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I think everyone in the business community including the insurance companies have agreed to change all of those things so that's one thing that the president and insurance companies already agree. It is a good idea. I do agree that the president needs to step forward and lead on this issue because right now congress is kind of gridlocked on this thing, but let's remember he doesn't need Republican votes. He's got Democratic majorities. It's his own party that is in revolt and doesn't know what to do on health care reform.

MALVEAUX: And the RNC seems to be capitalizing off of that. This is a new ad. It's called the seniors bill of rights. I want you to take a listen.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: A few things we should all agree on, the seniors bill of rights. Oh, and President Obama, it's not too late to change your mind. Stand with us and stand with senior citizens. After all, they have earned it.

(END VIDEO CLIP)

MALVEAUX: Now our latest polls actually show that when it comes to opposing the health care reform, 60 percent of the seniors oppose where you've got 60 percent of younger folks are for Obama's plan. Is it too late for him to grab on to those seniors? Has he lost them essentially?

BEGALA: First off, he didn't do great with seniors in the election.

MALVEAUX: Doesn't he need to work even twice as hard? BEGALA: President Obama and Democrats generally have an ongoing problem with seniors, mostly for demographic reason, the Roosevelt seniors are leaving the scene, the greatest generation and Reagan seniors replacing them. It's a more conservative cohort. Michael Steele, I kind of like him as a guy, he's a good guy, given the Democrats a gift. Now they have a debate on Medicare. Let's put on the floor of the senate and the house the Republican proposal on Medicare which is to turn it into a voucher plan. Ron Brownstein of the national journal, independent journalist, looked at the Republican plan and said it would end Medicare as we know it for everybody under the age of 55 and make it a voluntary voucher plan. Let's have a --

MALVEAUX: Alex?

BEGALA: How many Republicans are going to vote to repeal Medicare which is their real position?

CASTELLANOS: I don't think Paul is exactly reading from the Republican playbook. It's the Democrats and the President Obama with the problem with the seniors. President Obama has said that half of health care costs come at the end of life and President Obama said he's going to reduce health care costs and seniors are very concerned when Democrats have said and they said they won't vote on rationing health care for seniors that scares seniors and that's why the Democratic health plan is a big loser for seniors and is costing them support

MALVEAUX: I want to dramatically change the topic here. We're going to Sarah Palin and Levi Johnston, obviously the father of her grandchildren, Trigg, burst on to the national stage when we saw at the Republican convention with the family, with the daughter of Sarah Palin, Bristol. He has -- he's in the October issue of "Vanity Fair," quite extensive, a lot of accusations that he's throwing around about Sarah Palin as well as the rest of the family. Here's how he explains how she took the loss of the presidential election, vice presidential spot. He says, "Sarah was sad for a while. She walked around the house pouting. I had assumed she was going to go back to her job as governor, but a week or two after she got back she started talking about but a week or two after she got back, she started talking about how nice it would be to quit and write a book or do a show and make triple the money. It was to her, not as hard. She would blatantly say I just want to take this money and quit being governor." We know at the time that she had already had a book deal months ago before it had been reported. Does Levi Johnston, does he have credibility here? Does what he say really matter?

BEGALA: He may have -- I have no idea if it's true. I think actually there are questions does he have conscience? I don't like Sarah Palin? I have contempt for Sarah Palin as a politician and yet I feel sorry for her here. You ought to have a right, even Sarah Palin, to walk around your house and be disappointed after a loss and say anything you like without some guy, you know, who used to date your daughter blabbing it to "Vanity Fair." I think that she's been wronged here and I promise never to defend Sarah Palin again.

CASTELLANOS: I'll hold you to that. MALVEAUX: Alex, real quick.

CASTELLANOS: When you abandon public life and you're still a public figure, when you abandon your ability to lead sometimes your private life is all you have in the microscope. This is the price people play. Your life becomes a soap opera. If she does run for president Levi won't be on the ticket.

MALVEAUX: Got to leave it there. Thanks very much, Alex, Paul.

A long criminal history and frightening criminal fantasies. Phillip Garrido had both. The disturbing details of the accused kidnapper revealed in new court documents. Stay with us. You're in THE SITUATION ROOM.

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MALVEAUX: Want to go directly to Fredricka Whitfield who has some breaking news about a shooting that has taken place at a California college. Fred, what are you learning?

WHITFIELD: Suzanne, it's taking place in San Bruno, California at Skyline College. According to sources we're told by one person who says he is an editor of a student newspaper that a young male student burst into a classroom and said that he had been shot. Well, right now we do understand and have gotten confirmation, one person has been shot. Still unclear who that person is and what the condition is, and that police are looking for suspects in this shooting. There is a lockdown imposed on this college campus. Text messages, emergency text messages are going out to students on this campus, letting them know to stay in a safe place, make sure the doors are locked and stay away from the windows. That's taking place. You're looking at these pictures coming into THE SITUATION ROOM right now.

MALVEAUX: Thank you very much. Fred, we'll be following this throughout THE SITUATION ROOM.

Philip Garrido and his wife Nancy have pleaded not guilty to kidnapping and raping Jaycee Dugard. Dugard was 11 years old when she was abducted outside her California home 18 years ago. Now new court documents revealed disturbing details about Phillip Garrido's past, a history of violence and frightening mental obsessions. Here is our CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT Newly released court documents offer a glimpse into Phillip Garrido's mind, details from his 1977 trial where he was convicted of kidnapping and raping Katie Calloway Hall. The night he raped her he said, "I had this fantasy that was driving me to do this, inside of me, something that was making me want to do it without no way to stop." Garrido's first wife Christine Murphy speaking out for the first time describes him as a monster.

CHRISTINE MURPHY, PHILIP GARRIDO'S FIRST WIFE: I just wanted my life to be the way it used to be before Phil Garrido. LAVANDERA: Garrido also testified in that 1977 trial that intense drug use stimulated his sexual addictions. He says he cruised neighborhoods as a peeping tom, driving around town exposing himself in public places, including schools. He also testified that he often fact size fantasized about raping women but after turning to god he started to feel ashamed of his actions. Murphy says sex issues caused her marriage with Garrido to fall apart.

MURPHY: I never got pregnant and I always thought he couldn't have children.

UNIDENTIFIED FEMALE: What happened to your marriage?

MURPHY: Well, it fell apart because of his neediness for sex.

LAVANDERA: Investigators now say they have found no connection between Garrido and a string of murders back in the 1990s that happened near his workplace, but authorities are still looking into whether Garrido is responsible for the disappearance of two young girls near Antioch, California. Several of Garrido's neighbors are raising disturbing questions about what happened in Garrido's backyard. Mike Rogers lives behind Garrido. He says grown men often partied in the backyard prison where Jaycee Dugard and her daughters lived in tents. Knowing what he knows now, it's troubling to think of what was happening.

What exactly did you see these guys doing?

MIKE ROGERS, PHILIP GARRIDO'S NEIGHBOR: They were like drinking and sharing their beers and high-fiving and getting crazy, you know, screaming and hollering. It was, you know, I thought maybe they were partying back there, who knows, you know. I mean, he just, you know, I hollered at him and didn't even look at me.

LAVANDERA: Antioch investigators tell CNN they heard those stories but still don't have any evidence that other men might have abused Jaycee Dugard and her two daughters in that backyard. Despite being a registered sex offender and receiving regular visits from parole officers, Phillip Garrido managed to elude close scrutiny, and now the California department of corrections says it will launch an internal review.

Ed Lavandera, CNN, Antioch, California.

(END VIDEOTAPE)

MALVEAUX: Well, their banks needed a bailout, but the CEOs definitely do not. Despite the furor over lavish executive pay at failed financial institutions, many top executives are still getting the big bucks. You're in THE SITUATION ROOM.

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MALVEAUX: Bank CEOs raking in billions of bonuses while their companies fail and had to be bailed out by the government. That sparked outrage last year leading lawmakers to make major changes in the way bank officers are compensated. Here's CNN's Christine Romans.

CHRISTINE ROMANS, CNN CORRESPONDENT: It's as if nothing changed at all. The do 20 banks that need bailout money from taxpayers paid their CEOs richly in 2008 as the banking sector teetered on the brink and knocked the global economy deeper into recession, the very firms that ultimately need government help paid their CEOs millions. A report called "Executive Excess 2009, America's Bailout Barrons" shows the top 20 banks that received bailout money paid their CEOs $13.8 million. That's 37 percent higher than the typical S&P 500 CEO. Timothy Geithner and Ben Bernanke earn 126,000 and the chiefs of major regulatory agencies earned $126,000. That most likely to pay only through this year because of stock options that became more valuable during the summer stock market rally. The report also notes that the 20 top banks laid off 110 workers at the time that the CEOs were paid a third more than other S&P CEOs. The report concludes that the pay bubble that led to excessive risks is not -- it falls a woefully inadequate federal response by both congress and the white house after some tough talk earlier this year.

MALVEAUX: Time to check with Jack for the Cafferty tile.

JACK CAFFERTY, CNN CORRESPONDENT: Unbelievable. Hi Suzanne. The question this hour is with the August recess ending, what are the chances congress is going to pass health care reform?

Truman in Toronto, "Hi Jack, short answer, no. Long answer, hell now. Too many people make too much money off the current system to ever let it go and they'll do everything short of murder to keep their cash cow in the barn. Half the opposition is simply trying to bring down the democrats and Obama himself. The other half either has special interests in the for profit system or an ignorant fear of change."

Becker in Texas, "If the administration continues to be tone deaf to the American public, health care reform will pass. If it is passed, I agree with Lamar Alexander that there will be a major blood letting at the next election. I have the lowest view ever of our politicians at this point."

Pete in Arkansas, "Private insurers can make campaign donations, a government program can't. enough said about why congress won't support a public option?"

Edward in Dana Point, California, "Winston Churchill once said socialism is a philosophy of failure, the creed of ignorance and the gospel of army, its inherent virtue is the equal of sharing of misery. So too is Obama's plan to change the medical procedures in this nation. It's as close to socialism as we've ever been before and just because we bought a pig and a pope the present democratic majority doesn't mean we have to feed that animal at the trough forever."

Peter says, "The democrats are still drink from success and haven't sobered up enough to realize that the part of no is not going to let anything pass. The Democrats will have to sober up, stick together and pass a health care bill. As for the public option, we already had that. those who can't pay for health care don't and the public has to make it up."

And Craig in Arizona, "According to your poll, only 25 percent of the respondents approve of the bill as it exists. I therefore predict congress will pass it immediately."

If you didn't see your e-mail here, go to my blog, CNN.com/Caffertyfile and look for yours there among hundreds of others. It's clear reading this stuff that the public absolutely gets this stuff and yet it seems to be lost on so many of these folks inside the beltway where you are.

MALVEAUX: 220 square miles of California consumed by flames. We're with the strike teams who are battling this massive blaze trying to save the thousands of homes that are still at risk. And amid reports of more children coming down with possible swine flu. CNN Dr. Sanjay Gupta tells when you should and should not take your child to the emergency room. You're in THE SITUATION ROOM.

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MALVEAUX: There are growing reports of children sickened by possible H1N1 flu. Doctors are seeing more patients in their waiting rooms and emergency rooms are filling up. So when should you take your child to the E.R.? Dr. Sanjay Gupta has been looking into it.

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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: The president's talking about this, the secretary of health is talking about this, lots of concerns about swine flu. The E.R. is about 200 percent busier than it normally is, it probably doesn't need to be. Most kids who come here probably won't even get tested. Let's take a look.

UNIDENTIFIED FEMALE: What do you say in like two-hour wait?

UNIDENTIFIED MALE: I have a sore throat, I had a headache and I had a cough.

DR. ALESIA FLEMING, CHILDREN'S HEALTHCARE ATLANTA: The flu has hit the city. We know that, okay? Big-time. Whether it's regular season flu or the new H1N1 flu that everyone's talking about, we won't be certain today, we're no longer testing, it doesn't make a difference.

GUPTA: As a journalist, it's a little bit difficult to cover because we have heard of children dying of H1N1, in the spring we heard about that more so and we know that this virus seems to affect younger people more than older people. What am I do to about that as a parent?

DR. JIM FORTENBERRY, CHILDREN'S HEALTHCARE ATLANTA: I would recommend families to really look at your child and take away that H1N1 term and look at them if they have the flu. If your child is less than 3 months old and has a fever at any time, I would bring that child in to be seen. If your child is having difficulty breathing, if they are dehydrated, that is they are very dried out, they are vomiting and they are not able to keep fluids down, they need to come in and be seen. If your child isn't perking up in between fevers, then you should speak with your family's pediatrics or family doctor. We can help limit the number of children that come to the emergency department just to the ones that need services that we're going to provide differently, and limit it to just the ones that need to be in the hospital.

GUPTA: This virus doesn't seem that bad.

FORTENBERRY: Yes, right now, we need to think of this as the flu. We need to keep our -- we need to keep our guard up.

GUPTA: What percentage of people who get swine flu are going to need to go to the E.R.

FORTENBERRY: I think a very small percentage of those numbers will have to come into the hospital.

GUPTA: Here's what I learned today, H1N1 is here. But as things stand for now, for most kids, it's just going to mean just a few miserable days and those miserable days are best spent at home.

(END VIDEOTAPE)

MALVEAUX: More shocking behavior by the men guarding the embassy in Afghanistan. It's broken government and we have new pictures.

Plus we're on the front lines of a living hell. Brian Todd is on the move with fire strike teams in California, making progress and putting their lives on the line.

And is President Obama ready to scale back or even scrap a government run health care option?