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President Steps Into High Stakes Crisis; President: U.S. Fighting on Global Warming; Protester: "This Guy Is A Monster;" Floods Unleash Death and Devastation; Changes in Senate Health Care Bill

Aired September 22, 2009 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Jack, thank you.

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

Happening now, President Obama steps into a high stakes crisis. He meets together with Israeli and Palestinian leaders for the first time and uses some blunt language to push for an end to the Middle East conflict. Stand by.

From the leader of the free world to the man known around the world -- President Obama is doing something very special for Bill Clinton this hour. You're about to find out. We're going to show it to you live.

And Will Ferrell says what's wrong with health insurance executives making millions in profits?

The comedian pretends to look out for them in a comical new video with more with your favorite celebrities.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

It's some of the highest stakes diplomacy going on. President Obama certainly engaging in it right now. He puts himself smack at the center of the elusive Arab-Israeli peace process. Today, handshakes between the president; the Israeli prime minister, Benjamin Netanyahu; and the Palestinian leader, Mahmoud Abbas.

But friendly gestures didn't stop some blunt talk from President Obama about ending the decades-old conflict.

Let's bring in our foreign affairs correspondent, Jill Dougherty.

She's covering this story for us -- Jill, how did it go?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Hey, Wolf.

Well, you know, settlements -- it's been the Obama administration's key Mideast issue for months. Now it looks like that strategy is on its way out.

(BEGIN VIDEOTAPE) DOUGHERTY (voice-over) President Barack Obama brokers a symbolic handshake -- the first between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas since Netanyahu was elected seven months ago. But a handshake doesn't mean talks. And for Mr. Obama, a flash of frustration.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Simply put, it is past time to talk about starting negotiations. It is time to move forward. It's time to show the flexibility and common sense and sense of compromise that's necessary to achieve our goals. Permanent status negotiations must begin and begin soon. And more importantly, we must give those negotiations the opportunity to succeed.

DOUGHERTY: With negotiations stalled, an impatient Mr. Obama points to some progress, but says much more work still needs to be done -- Palestinians to stop incitement and improve security and for Israelis, to stop talking freezing settlement construction and start acting.

OBAMA: We cannot continue the same pattern of taking tentative steps forward and then stepping back. Success depends on all sides acting with a sense of urgency.

DOUGHERTY: But President Obama's Mideast envoy hints the president's strategy of insisting that Israel freeze settlements isn't working to bring the parties back to the table.

GEORGE MITCHELL, U.S. SPECIAL ENVOY FOR THE MIDDLE EAST: We are not identifying any issue as being a precondition or an impediment to negotiation.

(END VIDEOTAPE)

DOUGHERTY: So next step, special envoy George Mitchell will meet with Israeli and Palestinian negotiators next week. Secretary of State Hilary Clinton reports back to President Obama on progress in mid-October. As for today, there were no concrete results. In fact, you could say the meeting itself was a message -- Wolf.

BLITZER: He's just trying to get them going -- at least talking. This is the first time the prime minister of Israel, since he was elected, has met with the Palestinian leader.

DOUGHERTY: Right.

BLITZER: So that, in and of itself, was significant.

DOUGHERTY: Yes.

BLITZER: All right. Thanks very much, Jill Dougherty.

Will Israel continue to ignore the Obama administration's demand to stop building settlements in the West Bank?

Could Israel attack Iran in the future? I'm going to put those and other important questions to the Israeli prime minister, Benjamin Netanyahu. He'll be joining us live. That's coming up here in THE SITUATION ROOM.

The Middle East conflict certainly isn't the only crisis the president is tackling during his visit to the United Nations this week. He's also addressing climate change. In a speech to a special summit over at the U.N. The president said the U.S. is a serious partner in the battle against global warming. And he said we all will be held accountable by what we do now.

(BEGIN VIDEO CLIP)

OBAMA: Our generation's response to this challenge will be judged by history. For if we fail to meet it boldly, swiftly and together, we risk consigning future generations to an irreversible catastrophe. Difficulty is no excuse for complacency. Unease is no excuse for inaction and we must not allow the perfect to become the enemy of progress. Each of us must do what we can when we can to grow our economies without endangering our planet and we must all do it together.

(END VIDEO CLIP)

BLITZER: The very fact that he's here in the United States is sparking as much interest as anger -- we're talking about the Libyan leader Moammar Gadhafi. He's among more than 120 leaders attending United Nations activities this week. Colonel Gadhafi's first U.N. appearance that's sparking lots of outrage, especially after Libya gave a hero's welcome to a convicted terrorist.

Let's bring in our Mary Snow.

She's working the story for us -- Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the Libyan leader is being met with protests and he found limited options on where he could stay.

(BEGIN VIDEOTAPE)

SNOW (voice-over) It's been a month since the only man convicted in the bombing of PanAm Flight 103 received a hero's welcome in Libya. Now, Frank Duggan wants to reciprocate. He, for one is working to make sure Libya's leader, Moammar Gadhafi, will not feel welcome in the United States.

FRANK DUGGAN, VICTIMS OF PANAM FLIGHT 103: You can try and make peace with the country, but this guy is still a monster.

SNOW: More than 20 years after the bombing of PanAm Flight 103 over Lockerbie, Scotland that killed 270 people, Duggan is organizing families of those victims to protest outside the United Nations when Colonel Gadhafi addresses the General Assembly. He says the release of Abdul Baset Ali al-Megrahi has reignited anger he hasn't seen in years. (on camera): The reaction to al-Megrahi's release, what has it done to this group?

DUGGAN: It's -- it's given them -- I hate to say a new lease on life, but it has. I mean it's gotten people to the point where they really wanted to do something.

DOUGHERTY: (voice-over): Gadhafi had worked to ease his way back onto the world stage, but he's ignited fury over al-Megrahi's homecoming and now doors are being slammed in his face here in the US.

Protests erupted in the town of Englewood, New Jersey, where Gadhafi wanted to pitch a tent. The plan was nixed. He was snubbed from Central Park and reportedly found no room at the inn at a posh New York hotel.

Realtor Jason Haber says he was approached about this tony New York townhouse that rents a unit for more than $20,000 a month.

JASON HABER, REALTOR: They were looking for representatives of the Dutch government to stay in a townhouse somewhere on the Upper East Side.

SNOW: Former international relations student said he soon noticed e-mails with Libyan government addresses and discovered the inquiries were about Gadhafi.

HABER: At some point, I said, well, there must be something we can do -- you know, something to that effect. And I had said, in exasperation, well, if you send the convicted terrorist back to Scotland, perhaps we could work something out.

SNOW: (on camera): You said that to them?

HABER: And they hung up on me.

And that was the end.

SNOW: And that was the end?

HABER: That was the end of it.

(END VIDEOTAPE)

SNOW: So where will Gadhafi be staying?

There are reports tonight that he's pitched a tent about an hour north of New York City, in the suburban community of Bedford, New York. Now, the countidi -- the county executive says he's heard the uncor -- the unconfirmed reports, that is, and that it is no -- there's no legal way to prevent this, as he's a head of state. But he adds that Gadhafi is not welcome in Westchester County -- Wolf.

BLITZER: We'll see where he winds up staying, pitching his tent, if you will.

Thanks very much for that, Mary.

Jack Cafferty has got The Cafferty File -- Jack.

JACK CAFFERTY, CNN ANCHOR: It's great when the U.N. comes here to the big city, isn't it?

BLITZER: I know you love it. You look forward to this week every year.

CAFFERTY: Well, it's like Barnum & Bailey.

Congressman Joe Wilson -- he's raised more than $2 million since he called President Obama a liar. That's not bad. It hasn't even been two weeks since the Republican from South Carolina carried on like a child on the floor of the House during President Obama's health care speech to a joint session of the Congress.

In fact, Wilson's outburst has been a money maker for both parties. Wilson and his Democratic opponent in next year's election, Rob Miller, each raised more than $1.5 million in one week following Wilson's outburst.

Initially, Wilson was quick to apologize for his behavior. But since then, he has become considerably more defiant. In videos on his campaign Web site, Wilson now says he's under attack by liberals and vows not to be muzzled.

The House voted last week to formally reprimand Wilson, but that hasn't stopped him from raking in the big bucks from all over the country. In fact, he has become somewhat of a celebrity -- or a hero, if you will -- to conservative activists, actually being invited to speak in other states.

There's a darker side to all this, though. Some people, including former President Jimmy Carter, say that Wilson's actions were racially motivated. Wilson insists that's not the case, but his critics point to his past actions, like a 1999 vote against removing the Confederate flag from South Carolina's Capitol Dome.

So here's the question -- what does it say when the congressman who called the president a liar before a joint session of Congress has since raised $2 million?

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

And South Carolina, Wolf, is not the richest state in the country by any means.

BLITZER: No. It's -- they've got a lot of economic problems there.

CAFFERTY: Yes.

BLITZER: There's no doubt about that.

Did you see ABC's "Dancing With The Stars" last night? CAFFERTY: No.

Here it comes, right?

BLITZER: Well, watch this.

CAFFERTY: Is it coming now?

BLITZER: Here he is, Wild Thing. The Hammer.

Remember The Hammer?

CAFFERTY: He's very disturbing.

BLITZER: Watch this a little.

(VIDEO CLIP)

CAFFERTY: Which one -- which one is DeLay?

(VIDEO CLIP)

CAFFERTY: I'm going to be ill.

(LAUGHTER)

(VIDEO CLIP)

BLITZER: There he is, Tom DeLay, the former Republican majority leader in the House of Representatives. He's a wild thing.

CAFFERTY: Yes. And so -- and so are you.

BLITZER: Does he make your heart sing?

CAFFERTY: No, he doesn't.

(LAUGHTER)

BLITZER: He's Tom DeLay.

CAFFERTY: Not even close.

BLITZER: We'll play that again for you later.

CAFFERTY: Oh, great.

BLITZER: If you really want to study it...

CAFFERTY: Yes, I'll look forward to that.

BLITZER: ...a little bit more.

CAFFERTY: I'll be tortured with this until 7:00.

BLITZER: Tom DeLay. All right. Great.

Comedian Will Ferrell has a question for the president.

(BEGIN VIDEO CLIP)

WILL FERRELL, COMEDIAN: Why is Obama trying to reform health care when insurance companies are doing just fine making billions of dollars of profit?

Obama, why?

(END VIDEO CLIP)

BLITZER: Will Farrell and other famous celebrities -- they're using comedy to make some serious points about health care. This video is getting a lot of attention out there.

And parts of the South are awash in death and disaster -- why the flood danger, though, is far from over.

And Bill Clinton gathers the world's most powerful leaders right here in New York City -- a meeting for his Global Initiative is getting ready to kick off. You're going to see it live, including remarks from President Obama. We'll have live coverage. That's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The stories are heartbreaking -- floodwaters rip a 2- year-old boy from his father's arms, killing the toddler. A woman listens on the phone as her niece tragically floats away in rising waters. And right now, at least seven people are dead from widespread flooding in Georgia and one person is missing and presumed dead in Tennessee. There are drier skies and waters are receding, but the danger is not over yet.

Let's bring in our severe weather expert, Chad Myers.

He's joining us from the CNN Center -- Chad, what does it look like?

CHAD MYERS, CNN METEOROLOGIST: Well, it still looks underwater, Wolf. This is from WSV, our affiliate in Atlanta -- a live shot here. This is Clarkdale Elementary in Cobb County. And there's the zoom in of the shot there. There was about eight feet of water in this building. And it's going down a little bit, but not very much.

Here's some video now out of Cobb County, as well. This, in fact, one of the major arteries for Atlanta. It's the perimeter -- or in D.C. It would be the Beltway. The Beltway is essentially closed on the west side of Atlanta right through here. All the trucks -- every single truck that drives through Atlanta has to go on this part of the -- of the perimeter. Well, now they're all being pushed off the perimeter onto the side streets and onto the side roads to try to get them here. Here are some shots now -- very expensive homes. It's very nice to live along the river in Atlanta. The Chattahoochee River -- there are a lot of songs about the Chattahoochee River. But, unfortunately when the river comes up, the river comes up to 25 to 28 feet, flood level being about 20 feet -- water goes everywhere into these very nice communities, into these very nice houses.

This was actually just an iReporter floating along, literally in a boat, taking these pictures for us earlier today.

It has been a very ugly couple of days here -- excuse me -- in Atlanta and not getting a whole lot better. Wolf, 20 inches of rain in 72 hours in Kennesaw. Lilburn just about the same; Lawrenceville, Douglasville and Woodstock, all very big towns around the outskirts of Atlanta.

The rain has stopped for now. The rain is still to the south and into New Orleans. And I believe that this is going to be the problem area for the next couple of days, to the west and southwest of Atlanta, not Atlanta proper.

But I'll tell you what, it doesn't matter whether it's a six hour flood or a six day flood, Wolf, when water gets in your house, it sure makes an incredible mess.

BLITZER: It sure does, indeed.

All right. We're going to check back with -- back with you, Chad.

Thank you.

MYERS: You're welcome.

BLITZER: It's been a very rough few days for Atlanta families trying to deal with all these rising floodwaters.

What's it like to watch your house get flooded?

One family documented their experience on YouTube.

Let's bring in our Internet correspondent, Abbi Tatton -- Abbi, what did this family go through?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, these videos will show you. This is what the last 36 hours in Atlanta -- in downtown Atlanta, where Ben Friedman lives with his family. You've got torrential rain coming down yesterday morning at about 5:00 a.m.. This is looking out from his front steps. He's basically in the middle of a lake by mid-morning. So the only way to get around, at this point -- take a look at this video here -- is to very carefully wade.

(BEGIN VIDEO CLIP, COURTESY BEN FRIEDMAN, YOUTUBE.COM)

BEN FRIEDMAN, ATLANTA RESIDENT: There's some bricks here so watch your feet.

UNIDENTIFIED FEMALE: OK.

FRIEDMAN: Don't trip.

UNIDENTIFIED FEMALE: Oh, my gosh.

FRIEDMAN: I'm in a bush, so come to the left.

UNIDENTIFIED FEMALE: OK.

FRIEDMAN: Just kind of shuffle your feet. Like don't take them far off the ground, that way you're...

UNIDENTIFIED FEMALE: I'm not.

(END VIDEO CLIP)

TATTON: That's Ben and his wife and his father, who were checking on neighbors around lunchtime. They could wade still at that point, even though the heavens had opened. But then more rain came. And at that point, that wasn't even an option.

Take a look at what happens next. At about 4:00 p.m., that's when rescue crews arrived with a boat to pick up Ben and his family, to take them to higher ground. At this point, we're talking about seven feet of water around the house here. They were rescued and taken away. That was a rescue crew coming from Augusta, Georgia, over two hours away to help with this community.

Now this is a community, it's along Peachtree Creek. It's an area that was recognized by the Army Corps of Engineers to be at risk from flooding. So about 30 years ago, they came along since then and they raised all these houses. They -- they brought up the first floor so there's a lot of them have -- their garages along the first floor. So they were protected a little bit. But still, Wolf, a huge amount of damage along this road.

BLITZER: Abbi, where is the floodwater now?

TATTON: Well, the water has receded. Let me show you that it looks like on day two, this morning. This was called "the morning carnage assessment" here by Ben as he walked around. You can hear the squelching as he goes through into his garage here -- a whole lot of damage to bikes, to barbecues. That's the high water mark there -- seven feet up the wall.

And if I -- John, if I can ask you to go across to this other video here, let's listen to him as he walks into the backyard.

(BEGIN VIDEO CLIP, COURTESY BEN FRIEDMAN, YOUTUBE.COM)

FRIEDMAN: ...the smell or the look.

(END VIDEO CLIP) TATTON: The smell, he said -- he told me -- was absolutely terrible this morning, a mixture of mud and sewage. Now the cleanup really begins. Ben Friedman saying that he's now taking photos to document what happened to his backyard, to his basement for the insurance companies. Wolf, he reckons about $50,000 in damage.

BLITZER: My heart goes out to not only the Friedmans, but all those families down there.

Abbi, thank you very much for sharing that with us.

If you'd like to help those hit hard by these continuing floods across the Southeast, you can visit our Impact Your World page. There you'll find links to several organizations now on the scene and doing important work. That's at CNN.com/impact.

A comedic spin on a serious issue -- one of the most famous comedians joins some of your favorite actors to promote health care reform.

So why are they defending health care executives making billions of dollars at your expense?

And these may look like typical teenagers playing a popular video game, but these are police officers.

Why were they playing video games during a big drug bust?

(COMMERCIAL BREAK)

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

SNOW: Hi, Wolf.

Tense times in Honduras. The U.S. Embassy in Tegucigalpa has closed because of what officials called "a fluid situation" after a violent day in the capital. As first reported on CNN Espanol, Honduran police used tear gas at the Brazilian embassy to crack down on supporters of ousted President Manuel Zelaya. Zelaya secretly returned to Honduras Monday and was housed at the Brazilian embassy. Zelaya told CNN several were injured during the police attack.

Former eBay CEO Meg Whitman today officially declared her candidacy for the governor of California, running on her successful business experience. California has just slashed expenditures because of the recession and she proposes to continue cutting another $15 billion from the state budget and eliminating 17 percent of state employees.

And finally, a story of what you might call a real police strike force. Take a look at this. During a drug bust near Lakeland, Florida last spring, county cops were unaware of the suspected dealers' surveillance camera. As you can see, it showed the deputies taking breaks -- a lot of breaks -- to play a video bowling game. It's unclear whether this will affect the admissibility of all the drugs, weapons and other evidence the officers seized between frames.

BLITZER: They did have a few laughs, though, in the process.

Mary, thank you.

Thanks very much.

A few well-known comedians put their talents together to sarcastically portray one of the challenges facing our nation right now. Will Farrell is among the stars taking a shot at how industry executives handle health care.

Check it out.

(BEGIN VIDEO CLIP)

FARRELL: And insurance companies are detail oriented enough to deny claims for things like typos.

If you spell something wrong, do you really deserve surgery?

I don't think so.

(END VIDEO CLIP)

BLITZER: The group hopes the video makes the case for a public health care option.

And the commander in Afghanistan says success requires more troops. President Obama isn't so sure -- at least not yet. Some officials say times have changed in Afghanistan and the U.S. needs to consider options other than counter-insurgency.

And we're standing by to hear from President Obama. He's about to join former President Bill Clinton at his foundation's global event here in New York.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, federal agents look for a dozen people connected to a suspected terror plot. Potential targets could be transportation or entertainment venues.

Also, some say much can be inferred in a handshake. It's the first time that the Israeli prime minister, Benjamin Netanyahu, and the Palestinian president, Mahmoud Abbas, have met since Netanyahu was elected seven months ago. We're standing by to speak with Prime Minister Netanyahu live.

And stocks bounced to a high for the year -- the Dow closing up 51 points to its highest since October 2008. The Nasdaq and the S&P 500 also soared to a new one year level.

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

The Senate's plan to overhaul health care is undergoing major changes on Capitol Hill in its first hearing. Aides say the Finance Committee chairman, Max Baucus, has approved another $50 billion over the next decade to lower costs for more Americans.

Our senior Congressional correspondent, Dana Bash, has been following this all day long -- Dana, what's the latest?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, the latest is -- I think that what's important to tell our viewers is why it is so important, Wolf, what's going on in this room behind me. And that is because the White House believes what this Senate Finance Committee actually passes will form the outlines of what Congress could pass with regard to a health reform proposal, but first it obviously has to pass this committee, and to do that, as you mentioned, the Democratic chairman is bending to criticism within his own ranks.

(BEGIN VIDEOTAPE)

BASH: He began by marking the moment with a little prodding.

SEN. MAX BAUCUS (D-MT), FINANCE CHAIRMAN: My colleagues, this is our opportunity to make history.

BASH: But the Democratic finance chairman knew the only way to find enough votes from fellow Democrats to pass a health care overhaul was to change his own proposal.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: We have to make the insurance exchange more affordable for average working families.

SEN. JOHN KERRY (D), MASSACHUSETTS: It is key when we finish this, that we're lowering those costs in a way that makes it more affordable for them.

BASH: Even before a long week of committee voting began, Senator Max Baucus made a slew of concessions aimed at making insurance more affordable for the middle class, increasing subsidies for families making up to $88,000 a year and reducing the maximum penalty for families who don't get health insurance under a new mandate for coverage, bringing it from $3,800 down to $1900. Also to answer concerns among several Democrats who say a tax on high-cost insurance plans would hit working class Americans; Baucus is now exempting high- risk professions like fire fighters and coal miners as well as retirees.

The changes were not just about calming worried Democrats but also luring one moderate Republican, Olympia Snowe.

(END VIDEOTAPE)

BASH: Senator Snowe was rather non-committal, though she did have some nice things to say about the proposal there at the beginning of the debate. As far as other Republicans go, Wolf, they were pretty strong in their criticism. Senator John Kyle called this bill a stunning assault on our liberty but the reality is the name of the game for the Democratic chairman is to make sure he doesn't lose Democratic votes, and that is what you are going to be seeing as they slog through this. There will be long days and long nights through the entire week as he tries to get enough changes to this very important piece of legislation going on behind me in order to be able to pass it through this committee with the hope, say Democratic leaders, of potentially putting it on the Senate floor as early as next week.

BLITZER: We'll stay on top of this story, Dana, thanks very much.

Let's go to the Clinton Global Initiative. The president, President Obama, is speaking.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So I'm happy to be here and honored by the invitation, and I've always appreciated President Clinton's valuable advice and the ideas that he's offered my administration. I do understand that the president has been having trouble getting a hold of my secretary of state lately, but I hope he doesn't mind, because Hillary Clinton is doing an outstanding job for this nation, and we are so proud of her.

I also want to just very briefly take this opportunity to thank President Clinton for his service. In his eight years in office he helped swing open the doors of opportunity and prosperity to millions of Americans, and as the first U.S. president to face the full force of globalization he worked to share that prosperity with people around the world, from promoting trade to expanding education, to forging an historic global compact on debt relief.

After a lifetime service, he would have been forgiven had he settled for a life of quiet, a life of ease, a life of improved golf scores. My understanding is they have not improved that much since he was in office, but he chose a different path. He asked what can I do to keep making a difference? And what an extraordinary difference he, working with all of you, have made. For the victims of disaster, from the Asian tsunami to hurricane Katrina, he's made a difference. For those in need, from parents and children battling HIV/AIDS to the efforts today on behalf of the people of Haiti he's made a difference. It's no exaggeration. Around the world Bill Clinton has helped improve and save the lives of millions. That is no exaggeration.

And this week, even as we gather at the United Nations to discuss what governments can do to confront the challenges of our time, even as we've -- were joined tonight by so many extraordinary leaders, presidents and prime ministers, this global initiative reminds us of what we can each do as individuals. You don't have to hold a public office to be a public servant. That's the beauty of service. Anybody can do it, and everyone should try.

To all the CGI members here tonight, I want you to know how grateful I am for your efforts, and I know that those efforts require greater commitment at such difficult economic times. Indeed, your work and the spirit of service behind it is deeply personal to me. I've seen it. I've been shaped by it my entire life.

I first saw it in my mother. She was an anthropologist who dedicated her life to understanding and improving the lives of the rural poor from Indonesia to Pakistan, whether working with USAID or the Asian Development Bank, the Ford Foundation, the Bank in Jakarta or Women's World Banking here in New York, she championed the cause of women's welfare and helped pioneer the microloans that have helped lift millions from poverty. My mother understood that whether you live in the foothills of java or the skyscrapers of Manhattan we all share common principles, justice and progress, tolerance and the dignity of all human beings, and we all share common aspirations for ourselves and for our children to get an education and to live in dignity and in peace and in security.

That's where I first saw that spirit. That's who planted it in me, and I saw this spirit again when I moved to Chicago working as a community organizer on some of the poorest streets and some of the poorest neighborhoods in the United States, in neighborhoods devastated by steel plant closings. I've worked with local churches to help people in need, and change didn't come easy, but with a lot of time and effort it did come, block by block, neighborhood by neighborhood.

That's when I learned that real progress does not just come from the top down, not just from government, it comes from the bottom up, from people. If you want to bring about change in the world, you can't just be an advocate of somebody else doing it. You can't just preach lofty goals and wait for somebody else to act. You have to step up. You have to serve.

I've seen this spirit of service in my wife Michelle, one of the millions of people whose lives have been touched by Americorps created by President Clinton. She left her job at a law firm to be the founding director of an Americorps in Chicago that trains young people for careers in public service. I've seen the transformation that occurs in think lives, in hers, when people are empowered to live their dreams, and that's the spirit that's represented here tonight.

The difference that CGI members have made around the world. The greenhouse gases that you've cut, the entrepreneurs that you've empowered with microloans, all the people, many of them children, you've helped to lead healthier, more productive lives. More than 200 million in more than 150 countries. That's the meaning of service. That's the difference we can make when we remember our common humanity or when we embrace our common responsibilities, when we recognize our common destiny.

Your ability to serve people in the disconnected corners of the world reminds us of another truth. We stand at a transformational moment in world history, when our interconnected world presents us at ones with great promise and also with great peril. The very technologies that empower us to create and build also empower those who would destroy and disrupt. The extremists in the mountains of Afghanistan and Pakistan who fuel attacks from New York to London to Bali, from Mombassa to Madrid to Mumbai. Reckless speculation in any financial sector of the world, where someone's failure to pay a mortgage in Florida can couldn't bought to a global recession that undermines all of us. Poverty in Somalia or the poppy fields in Afghanistan, the northbound flow of drugs from Colombia and the southbound flow of American guns and cash into Mexico. All of this fueling violence that endangers each and every one of us, and a flu that starts in one country can become a pandemic that sickens millions. Carbon emissions from cars in Boston and factories in Beijing are melting the ice caps and imperiling the planet. And by the way, we're joined here by the leader who made that particular truth impossible to ignore, former Vice President Al Gore, and we owe a great debt of thanks to him.

These are the threats of the 21st century. These are the challenges we face, and just as no nation can wall itself off from the world, no one nation no matter how large, no matter how powerful can meet these challenges alone, nor can governments alone. Today's threats demand new partnerships across sectors and across societies, creative collaborations to achieve what no one can accomplish alone.

In short, we need a new spirit of global partnership, and that is exactly the spirit that guides this organization. I hope that it is the spirit that guides my administration. Here at home we've summoned the American people to a new era of service, launching a new expansion of community service, more than tripling the side of Americorps, creating a new model, an innovation fund to bring together non- profits, foundations, the private sector and government to find the community solutions that work, to fund them and replicate them across America. Around the world, even as we pursue a new era of engagement with other nations, we're embracing a broader engagement, new partnerships between societies and citizens, community organizations, businesses, faith-based groups. That's why we've been speaking directly to people around the world, including our friends across the Muslim world with whom we've launched new beginnings based on mutual interests and mutual respect. That's why you've seen Secretary Clinton in so many countries at town halts, on local television programs reaching out to citizens and civil society. That's why she's created a new initiative to promote global partnerships between business, non-profits and faith groups to promote development. In fact, this spirit of partnership is a defining feature of our foreign policy, because government and the military can work to disrupt, dismantle and defeat terrorist networks, but while the violent extremists only destroy, we have to make it clear the kind of future that we want to build.

That's why we're investing in people, education, and health and welfare as we're doing in Afghanistan and Pakistan. We need to build new partnerships across regions and religions and that requires citizens and NGOs and others to help with the basic services upon which true security depends. We're making historic investments in clean energy and working towards deep cuts in emissions, but we still need business to unleash new innovations and non-profits to keep up the pressure to end the threat of climate change. We're making substantial increases in foreign assistance, but we still need civil society to help host nations deliver aid without corruption, because foreign assistance is not an end in itself. The purpose of aid must be to create the conditions where it's no longer need, where we help build the capacity for transformational change in a society. We're pursuing a comprehensive global health strategy, building on successes in the fight against HIV/AIDS and working to end deaths from malaria and TB and to end polio. These efforts will only be sustained if we improve the capacity of public health systems to deliver care, especially for mothers and children. We're making major new investments in food security, but this can't simply be handouts of American food. We need to share new methods and technologies so that countries and communities can become more self-sufficient.

In short, we're renewing development as a key element of American foreign policy, not by lecturing or imposing our ideas, but by listening and working together, by seeking more exchanges between students and experts, new collaborations among scientists to promote technological development, partnerships between businesses, entrepreneurs to advance prosperity and opportunity for people everywhere.

That's how we'll confront the challenges of our time. This is how we will seize the promise of this moment in history, standing together, working together and building together. The spirit I've seen in my travels around the world and in elected leaders and in entrepreneurs, the heroic civil society groups and the students from Ankara to Cairo from South Bend to Strasbourg, the optimism and the faith and the confidence that we each can make a difference, and that's the spirit that I see here tonight. The spirit that says we can rise above the barriers that too often divide us, country and culture, color and creed, race and religion and region, that we can come together and that we can leave this world even better, even more hopeful than we found it.

So, to all of you thank you for your vision, for your engagement, for your stick to it ness. As hard it is a may be your commitments have never been more need. They have never been more inspired, and I am grateful to President Clinton for having the vision and leadership to help c ca catalyze this extraordinary group of individuals and the commitments that are making such a difference around the world. Thank you so much, everybody.

BLITZER: There they are, the former president and the current president at the Clinton Global Initiative, the forum getting under way right now here in New York. World leaders are attending this forum as well as the United Nations general assembly also taking place this week.

Let's talk about this, what we just heard and more with two CNN political contributors, the Democratic strategist Paul Begala who used to work for Bill Clinton and the Republican strategist Alex Castellanos.

Alex, give me your immediate reaction to what we heard from the current president.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: A generous speech from the current president to the former. Certainly the work I think that Bill Clinton is doing with the Clinton global initiative is commendable. Many people think I think the Clinton legacy will be shaped predominantly by a lot of the work that he's doing here after he's -- as ex-president in a way. I think a lot of Republicans wish he had gotten to this important role sooner, but he's doing terrific work here and the president was generous in his comments today?

BLITZER: He's really raised billions of dollars, Paul, as you know, the former president of the United States, for all sorts of causes around the world, especially in Africa helping those with HIV/AIDS.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, he has, and as President Obama pointed out and I think Alex quite nicely and kindly says it was generous speech, and it was. There are literally millions of people who are alive today because of the work that President Clinton is doing. You know, and it's been a new model of entrepreneurial philanthropy, if you will, where he has gone in with a very sort of business-oriented approach and helped ratchet down the cost of these anti-retro viral drugs, and then he has helped to build regional health clinics in some of the most remote parts of Africa so that we can deliver this less expensive medicine. He's worked with the pharmaceutical industry, not against them. It's been a very impressive thing. Of course, as you pointed out, I used to work for him and I'll be there in a couple of days so I'm a little biased but the speech was unusually personal for Barack Obama.

BLITZER: What a difference. I remember during the campaign when his wife was running for the Democratic presidential nomination and now how times have changed.

BEGALA: Yes. It was really striking. Look, I went and saw Hillary a day or two after she got out of the race and she was very comfortable in supporting Barack Obama because she had fought against him so much that she developed a high degree of respect for his toughness and his talent. Her husband took a lot longer frankly. He really -- he's not a guy who nurses grudges, but I think when it was his wife it was a lot harder for him. I was so struck. President Obama is a very guy, very analytical guy. He was more personal in this speech than I almost have ever seen him. He talked about his mother. Lost his mother at a young age. It was really tough and she would have been very home at the Clinton global initiative, someone who traveled the world to try to help poor people. He talked about his wife and how she ran an Americorps program. This is a guy who very often talks in programmatic or policy terms, but this time he talked very personally about his family.

BLITZER: Yes.

BEGALA: That's a rare thing and it was quite an insight into his heart.

BLITZER: And that's when he scores a lot of points when he does that. Alex, let's move on and talk about health care in the little time that we have left. I'll play for you a new PSA, a new public service announcement from Will Ferrell and other comedians reeling in their own way going after the health insurance companies. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Something terrible is happening.

UNIDENTIFIED FEMALE: Something terrible is happening.

UNIDENTIFIED MALE: Health insurance executives are getting a bad rap.

UNIDENTIFIED FEMALE: As the health care debate heats up --

UNIDENTIFIED MALE: We need to remember who the real victims are.

UNIDENTIFIED MALE: Health insurance executives.

UNIDENTIFIED MALE: People are saying a lot of mean things about health insurance companies and their executives and it's got to stop.

UNIDENTIFIED FEMALE: These great businessmen are American heroes.

UNIDENTIFIED MALE: So why is Obama trying to reform health care when insurance companies are doing just fine making billions of dollars of profit?

UNIDENTIFIED MALE: Obama, why?

UNIDENTIFIED FEMALE: Insurance companies need our support, because they keep our selfish priorities in check when we cannot we.

UNIDENTIFIED MALE: Please, doctor, my daughter's dying! She needs medication!

UNIDENTIFIED FEMALE: Think about somebody else for once.

UNIDENTIFIED MALE: If my kid falls off his bike and breaks his leg he should have to pay that money out of his pocket, out of his allowance.

UNIDENTIFIED FEMALE: How else is he going to learn not to fall off that bike?

(END VIDEO CLIP)

BLITZER: A pretty powerful ad in its own right, Alex?

CASTELLANOS: Funny stuff and effective stuff, and you know, in the middle of this contentious debate a little humor maybe is something we can all agree on is a good thing. I hope Will Ferrell's next ad is government-health run care, why are Republicans opposing that? After all the government is so good with money and it cares about people so I hope Will Ferrell has the courage to do that one.

BLITZER: That ad will get a lot of publicity, Paul, as you know.

BEGALA: It will and Alex, he makes a good point. It's who's on trial here. The truth is, most Americans, maybe not me and Alex, we're partisans, most Americans will nod their head in agreement to either indictment, and the Republicans have done a good job of scaring people about what the government might or might not do in charge of health care and funny or die, will Ferrell's website that produced this remarkable and hilarious bit, they shifted the attention back to insurance executives, and most good Americans would say eh, I'm scared of them, too. It's a clever and politically very smart. They're good political strategists as well as comedians

CASTELLANOS: And tells you something about how the debate changed. Obama started shooting for health care reform to transform the entire health care system and still trying to get the government- run health care. That's a long stretch. The American people don't want it. He's backed off to something smaller, health insurance company reform, and that shows you he's lost a lot of political capital. He's pulling back a little bit, and using the insurance company execs as the evil boogeyman here. Actually, insurance companies make about 2 percent profit so it doesn't generate all that much but a good political whipping poll.

BEGALA: Fact check they also have about 15 percent overhead so it's not just a profit, it's all of the money they spend on their salaries and their overhead and the bureaucracy that they have, which makes even --

CASTELLANOS: Unlike the government which is so efficient it's now, what, $10 trillion in debt in the next few years?

BEGALA: Medicare system has four percent overhead, private systems have about 15 percent. You tell me which is more efficient.

CASTELLANOS: Forty trillion dollar debt.

BEGALA: From your guys, Alex. We balanced the budget! The Clinton people we balanced the budget. It was the Republicans that blew the bank.

BLITZER: We'll leave it on that note, guys, Paul and Alex, thank you very much.

We're standing by to speak live with the prime minister of Israel, Benjamin Netanyahu. We have an important three-way meeting with President Obama today and the Palestinian leader Mahmoud Abbas. We're going to question Prime Minister Netanyahu live, that's coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: For a lot of you out there watching, it certainly feels like no end to the economic gloom and doom but the treasury secretary says things are not as bad as they seem.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: If you look at the consensus of private forecasters now, if you listen to what people say who built things, make things, sell things, I think you would say that there's a general consensus now that the economy, the U.S. economy is growing again for the first time really in almost 18 months, and I think if you look at the expectation for growth not just through the end of this year but into 2010, 2011 you're seeing people start to build in projections of progressively higher growth rates. I think it's encouraging.

(END VIDEO CLIP)

BLITZER: Timothy Geithner's comments come on the heels of the prediction of the Federal Reserve chairman Ben Bernanke, that the recession, he says s likely over.

Let's go to Jack Cafferty with "The Cafferty File" -- Jack?

CAFFERTY: The question this hour is: What does it say when the Congressman Joe Wilson of South Carolina, the guy who called the president a liar in front of a joint session of Congress has since raised more than $2 million for his re-election campaign next year?

Ted in Aloha, Oregon: "Representatives who act like children are supported by men and women who also act line children. It most clearly shows the U.S. needs more grownups."

Richard writes: "It's not surprising, the GOP is very good at using fear, smear and denigration in order to rule the day. Wilson's cash influx is nothing more than a financial attaboy from the right."

Steven writes: "It says a lot of people agreed the president was lying at that moment. The outburst was terribly impolite and inappropriate but that doesn't make the statement untrue."

Jack writes from California: "It means that ignorance, greed and racism is worth about $71,000 a day in South Carolina."

Scott in San Diego: "The country's becoming more divided, those of us who disagree with the direction in which the country's being taken are very upset over the less than honest information coming from the White House. Joe Wilson stood up for us when we felt like the Democrats didn't care."

Mike in Atlanta writes: "It says that fools and their money are soon parted."

Mark in Seattle: "It means a whole lot of Americans from across the country agree with Wilson. Wake up, Cafferty."

F. in Manchester, New Hampshire: "Means there are a lot more creepy people in the U.S. than I wanted to know about and I don't know what to do about them."

Mike in Armstrong, Texas writes: "If this guy can get 2 billion bucks for calling Obama a liar, think how much he could have gotten if he threw his shoes." That's just dumb.

If you didn't see your email here, you can go to my blog at CNN.com/Caffertyfile and look for yours there. BLITZER: We always do.

CAFFERTY: There you go.

BLITZER: Thank you very much.

To our viewers you're in THE SITUATION ROOM.

Happening now, President Obama is caught up in a diplomatic whirlwind, tackling everything from global warming to Middle East peace. He's here in New York at the United Nations. Will all the talking produce results? We're watching.

The president's major diplomatic challenge at least on this day, trying to bring the Israeli and Palestinian leaders closer together. I'll speak live with Israeli Prime Minister Benjamin Netanyahu and asked him if he was convinced to make any new concessions.

And Bill Clinton's new campaign to address the world's problems. He's all over the media, got his own conference under way here in New York right now. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Obama dived head-on today into one of the longest and most frustrating diplomatic challenges in the world, the elusive summit for Arab-Israeli peace.