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THE SITUATION ROOM

Interview With Senator John Kerry; U.S. Welcomes China #2 Military Chief; Anniversary of Dark Financial Days

Aired October 26, 2009 - 16:00   ET

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


WOLF BLITZER, HOST, "THE SITUATION ROOM": Because some people think it is too little too late right now, that the damage is already done and the U.S. should cut its losses.

SEN. JOHN KERRY, CHAIRMAN, FOREIGN RELATIONS COMMITTEE (D-MA): I don't think that would be cutting our losses, frankly, if we just sort of said hey, we're finished, say good-bye. I think it will increase our losses because Pakistan will then clearly -- there are factions in Pakistan that would feel motivated to then link up with the Taliban, as they did previously...

BLITZER: If the U.S. were to pull out from Afghanistan you're saying...

KERRY: Sure.

BLITZER: What if the U.S. were simply to...

KERRY: But not just that.

BLITZER: ... maintain the current level of about 68,000 U.S. troops without bringing in another 40,000, which is what General McChrystal would like?

KERRY: I think that there is a general assessment, Wolf, that it's very difficult to rapidly train the Afghan Army, get them partnered with us sufficiently, and be able to actually get the Afghans to be more out front and leading in this effort to decide the future of their own country.

BLITZER: But to get the Afghan army ready, that could take years and years...

KERRY: No. It's -- we -- well, I think not. I think we're at about 90,000, some say, today. I think it's more like 50 trained or -- and even less than that capable of going out and operating...

BLITZER: Fifty thousand.

KERRY: Yes. But as you bring them in now and train them more effectively -- and I think that's doable -- and partner them with American forces up front and early on, I think it is possible to get about 3,500 or so a month, which is what General McChrystal says he thinks they can do. BLITZER: So, let's just be precise. Are you with General McChrystal in wanting to advocate another 40,000 U.S. troops go in, or are you with Vice President Biden, who basically says the number right now is good, you don't need to go higher than that?

KERRY: Well, I'm not sure that that's precisely what Vice President Biden is saying, frankly. I think President -- you know, Vice President Biden has very appropriate questions that he's been asking and that he asks. He and I traveled there a year ago together. We shared many of the same thoughts and beliefs about some of the difficulties there.

BLITZER: He wants a counter-terrorism strategy...

KERRY: No, he did not.

BLITZER: ... as opposed to a. counterinsurgency strategy?

KERRY: No. Let me absolutely correct the record on that.

BLITZER: All right. Go ahead, please.

KERRY: Vice President Biden is not advocating a -- simply a counter-terrorism terror -- effort. I think he believes, as others do, that that won't work all by itself.

But he is asking appropriate questions about the scope. And that's what I raised today. I believe that the numbers of troops and the rapidity with which and the scope of what General McChrystal has sought to do is a little bit too much, too fast.

BLITZER: So what's a good number from your point of view?

KERRY: The numbers is not the debate. The numbers will flow out of what the strategy is. What I want to make certain is that we have the right several pieces in place that are critical to succeed.

One, that we are training the Afghan Army effectively and rapidly enough. Two, that we have a sufficient civilian activity on the ground that we come in underneath the troops. And three, that the governance -- that the local government, either in a district or a community or nationally, where it impacts it, is doing the things necessary to deliver.

BLITZER: A lot of us remember your service during the Vietnam War. And you gave a speech at the Council on Foreign Relations today. And you said when you were driving around in an armored vehicle in Afghanistan in recent days, you looked out, you saw the faces there looking at you, it brought back memories of the faces you saw as a young troop -- as a young -- you were in the Navy at that time...

KERRY: Right.

BLITZER: A sailor, 40 years ago.

KERRY: It did. I mean... BLITZER: Is this Vietnam that we're facing right now?

KERRY: No. No. It's very, very -- it's truly very different.

BLITZER: Because a lot of them see the U.S. as foreign occupiers.

KERRY: There are similarities, but there are also big differences. There are always similarities in a war, but there are -- you can't always see the entire new theater within the context of the old one. Some things lend themselves, some things do not.

This is not a situation where we have a national insurgency, with national aspirations, a country divided, a civil war. These -- you know, the Taliban are a very different entity. They are vastly disliked across Afghanistan. The problem is that the government of Afghanistan has not provided for people sufficiently that they believe that's the better alternative.

BLITZER: Can the U.S. trust President Karzai?

KERRY: I think the U.S. can work a relationship -- can we trust him to do the things that he says he's going to do in the next months? Those are the things we have to put to the test.

I believe he wants to move forward. I believe he is prepared to make changes in the process. I think he's prepared to make changes in personnel. We have to work with him very, very closely in that effort, and we have to make sure that our allies are working with us in concert.

We're not working effectively even as the allies in Afghanistan today. We don't have a unified command. We don't have a unity of the kinds of civilian efforts we're making. We don't have a unity of military operations even...

BLITZER: So the bottom line, from what I hear you saying, is the U.S. has to stay and make a long-term commitment to Afghanistan right now, to the tune of tens of thousands of troops, to the tunes of hundreds of billions of dollars?

KERRY: I am not talking about -- I mean, the numbers of troops are going to be determined by what we do with our strategy. If we effectively empower Afghans to be able to make these choices and decisions, and have an Afghan military capable of assuming responsibilities, I believe you can draw down American troops, and I can see the period of time where you do that, nearer term.

BLITZER: How long?

KERRY: I don't -- you know, Wolf, if you get into sort of pinning yourself down (INAUDIBLE). But not as long as Iraq.

You know, we're only just beginning a legitimate strategy in Afghanistan now. For eight years, we've been adrift. For eight years, Afghanistan has been sucked of its resources necessary for this, of American troops, other efforts. It's gone to Iraq.

And the truth is that -- one soldier said, you know, we haven't fought an eight-year war in Afghanistan. We've fought a war eight times over each year, the same war.

What we need to do is transition it now to a stage where we have a comprehensive strategy that is focused on Afghans making the choices, taking over the front lines of this war. The more rapidly we do that, the better chances of success.

But I think what happens in Afghanistan does have an impact on Pakistan. What happens in Pakistan, it could become the epicenter of extremism in the world. And that's where al Qaeda is.

We have to keep our focus on the real target here, which is al Qaeda. Taliban, because they have harbored al Qaeda, they still have a relationship with al Qaeda, it's important, therefore, to marginalize the Taliban. But we don't have to beat the Taliban in every single part of Afghanistan. We simply have to empower the Afghans...

BLITZER: Because, as you know...

KERRY: ... to have a stable government.

BLITZER: ... there's al Qaeda in Somalia and in Yemen.

KERRY: Absolutely.

BLITZER: The U.S. isn't going in there.

KERRY: And I said that my speech today. I said, you know, why should we stay in Afghanistan -- I asked the question -- when we have the ability to have al Qaeda make a plot against us in London or Frankfurt or in Yemen or somewhere? The reason is that the Taliban are linked to them, and they could provide them assistance and they could provide a sanctuary.

I don't think the likelihood of the Taliban taking over Afghanistan is very high at all. I don't think they can do it, particularly if we're there.

So, I think we can get a game on one side of the border that helps to stabilize the other side, helps us deal with Pakistan's challenge, where there are, after all, nuclear weapons, major strategic interests. And if we do both cleverly, I don't believe it has to be at the expense of American troops for a long, long period of time.

(END VIDEOTAPE)

BLITZER: More of my interview with Senator Kerry coming up in the next hour. We'll specifically focus in on the situation in Iraq. I'll ask him if the situation there is falling apart. That interview in the next hour. The U.S. and China have a history of tensions, sometimes worse. So, why is the Pentagon welcoming one of Beijing's top generals to some of America's most important military sites? What's going on?

And in our "Strategy Session," the president portrayed as a man who takes small and careful steps. Is that praise or criticism?

And a Saudi woman sentenced to 60 lashes for listening to the issue of sex on television. Now the king of Saudi Arabia is getting involved in her case.

(COMMERCIAL BREAK)

BLITZER: America's seat of military power will be hosting the second most powerful man leading another military power. The warm welcome comes despite some recent tensions between the United States and China.

Let's bring in our Elaine Quijano. She's over at the Pentagon working the story for us.

Elaine, what's going on?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, this visit tomorrow by a high-level Chinese general comes as the U.S. and other countries have watched with some concern as China builds up its military capability.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): It's been a bumpy road for U.S.-China military relations after a series of confrontations earlier this year between U.S. and Chinese ships in the South China Sea. So the Pentagon and Defense Secretary Robert Gates are pulling out all the stops, welcoming Chinese's number two military officer, General Xu Caihou.

GEOFF MORRELL, PENTAGON SPOKESMAN: The more transparency there is, the more dialogue that goes on, the less chance there is for a misunderstanding between two very formidable powers on the world stage.

QUIJANO: The general's weeklong visit includes stops at the U.S. Naval Academy in Annapolis, Maryland, Ft. Benning in Georgia, and U.S. Pacific Command in Honolulu.

Peter Brookes is a senior fellow at the Heritage Foundation.

PETER BROOKES, SR. FELLOW, HERITAGE FOUNDATION: The Pentagon, in hopes that this will allows the Chinese to feel that they can open doors as well to the American military so that there can be better communications, so there can some be confidence and security-building measures...

QUIJANO: Better communication especially about China's unprecedented military buildup. DAVE FINKELSTEIN, DIRECTOR, CAN: You now have a China that has the capability, if not the intention, to employ military force in new ways that it hasn't been able to before.

QUIJANO: A buildup some call alarming.

BROOKES: We've seen significant changes in their capabilities over the last years, but we really don't know their intent. China is not threatened by any of its neighbors or the United States, so many people are concerned or trying to define exactly what the intent is of China's military buildup.

QUIJANO: Analysts say it's in the U.S.' own interest to keep the lines of communication open with China amid ongoing tensions over issues like Taiwan and the need for greater Chinese cooperation on Iran and North Korea.

(END VIDEOTAPE)

QUIJANO: Now the bottom line, Wolf, this visit is about showing China's military not only some openness, but, of course, also respect. Tomorrow there's going to be a full honors parade when the general arrives here at the Pentagon, and later on a dinner hosted by Defense Secretary Robert Gates -- Wolf.

BLITZER: Rolling out the red carpet indeed for China.

Thanks very much, Elaine.

You just heard about china's military buildup and capabilities, and when you compare defense budgets, here's something else. According to the International Institute for Strategic Studies, the U.S. budget for last year was $693 billion, the defense budget. China's a mere fraction of that, at about $61 billion.

Take a look at this. China has more active troops, almost 2.2 million, compared to almost 1.6 million active troops for the U.S.

Let's turn to the financial news situation right now.

Stocks tumbling today after the Dow crossed 10,000 again. The Dow lost 104 points, closing below 10,000, at 9,867.

What's currently happening in the market seems like nothing compared to what happened in some of the darkest days of the market's history. An important yet disturbing milestone is approaching.

Here's CNN's Richard Roth.

(BEGIN VIDEOTAPE)

RICHARD WARSHAUER, WALL STREET AFICIONADO: This is where everything started. And for centuries, this is where everything happened.

RICHARD ROTH, CNN CORRESPONDENT (voice-over): The crash. No, not last year's stock market plunge, but the great crash. It all went down 80 years ago this week.

WARSHAUER: 1929 was the greatest fall in the Dow Jones over a two-day period. In today's terms, it would be like a 2,200-point drop.

ROTH: Richard Warshauer and lifelong friend Jim Kaplan give tours every anniversary of the great crash.

JIM KAPLAN, WALL STREET AFICIONADO: This whole area was filled with people who had come down to see what was going on.

UNIDENTIFIED MALE: The tremendous crowds which you see gathered outside the stock exchange are due to the greatest crash in the history of the New York Stock Exchange in market prices.

ROTH: Quite a shock, especially because the Friday before, following a large drop, newspapers proclaimed the stock market crisis was over.

UNIDENTIFIED MALE: But in October 1929, the Wall Street bubble burst.

ROTH: The historic collapse was just starting, eventually leading, many believe, to the Great Depression.

UNIDENTIFIED MALE: And then it actually loses 89 percent of that value in the stock market crash in 1929.

ROTH: At the Museum of Finance on Wall Street, a ticker-tape machine from the crash days. The end of a mania for stocks based on easy credit.

RICHARD SYLLA, ECONOMICS PROFESSOR AND HISTORIAN: It's leverage. I mean, we learned in the latest financial crisis that firms and individuals can take on too much leverage. That's exactly what they did in the 1920s.

ROTH: A familiar replay to someone born during the crash years.

HILDA HEIN, MUSEUM VISITOR: It did have the smell of the same thing happening again.

ROTH (on camera): What are some of the more popular questions that the tours ask you about the crash?

WARSHAUER: They always ask the same question. Where did the people jump out of the windows?

ROTH: Where did they?

WARSHAUER: Vastly exaggerated.

ROTH: Never happened? No suicides?

WARSHAUER: I'm sure there were one or two, but it became part of the popular lore. ROTH (voice-over): The crash experts say another famous story is true. At the market's peak, tycoon Joseph Kennedy, patriarch of the Kennedy clan, hearing stock tips from a shoeshine man and selling stocks short, making a fortune.

(on camera): Do you give out stock tips to anyone, like the famous shoe shine man of 1929?

UNIDENTIFIED MALE: No, I don't. No, I don't.

ROTH (voice-over): But he did shine the shoes of Kennedy's grandson, John Kennedy Jr. Lynnwood (ph) says he is the last shoeshine man left on Wall Street.

(on camera): I really had a bad year in the market, so I can't pay you right now, but I'm -- no, I'm going to pay you.

(voice-over): Richard Roth, CNN, New York.

(END VIDEOTAPE)

BLITZER: As you probably remember, a year ago President Obama carried the state of Virginia for the first time in decades for Democrats. Can he help elect another Democratic governor there?

The president heads to Virginia to campaign tomorrow. With all his personal involvement, might it hurt him politically if Virginia goes Republican? We'll discuss.

And CNN looked into it, saw the president played only with men on his sports outings. Did President Obama see our story a couple weeks ago? Because now, guess what? That has changed.

(COMMERCIAL BREAK)

BLITZER: Let's get to our "Strategy Session" and talk about President Obama a little bit.

Joining us, the Democratic strategist Maria Cardona and Republican strategist John Feehery.

The new "Newsweek" magazine has a cover story. Anna Quindlen wrote it, which I'm sure both of you have read by now. Let me read a couple sentences referring to the president.

"He is methodical, thoughtful, cerebral, a believer in consensus and process. In an incremental system, Barack Obama is an incremental man. This makes attacks on him as a radical or a socialist preposterous, not to mention ridiculously retro."

Having said all of that, there is some concern from his left base that he's simply way too cautious.

MARIA CARDONA, DEMOCRATIC STRATEGIST: I think that what's clear -- and this was also clear from his campaign -- is that he was going to be very methodical. Inspirational? Absolutely. Getting people riled up and inspired to come out and to try to change the nation? Yes.

And I think that he still is doing that. You see that in his speeches.

When you talk about incrementalism, it doesn't mean that you're not getting anything done. Look at what he's done -- the Lilly Ledbetter equal pay for equal work, the Children's Health Insurance Program, which he signed, and even the American Recovery Act.

BLITZER: But there is a frustration level out there on the left that he's not being, I guess, assertive enough, especially when it comes to health care reform. They would like him to get tougher.

JOHN FEEHERY, REPUBLICAN STRATEGIST: Well, I think he's been mugged by reality. I mean, the fact of the matter is, he thought he was going to close Guantanamo and he couldn't. He's still trying to do that. He said we were going to get out of Iraq, ,and we really can't.

And with the public option, he said we were going to get national health care, and you know what? It's really hard, because people in the Senate don't want the public option.

So, I think that he's actually being mugged by reality. Now, I don't think that means he's not radical. I think he's trying to govern as a radical. And the premise of the article was that he governed as a radical and was...

(CROSSTALK)

BLITZER: He campaigned...

FEEHERY: And now he's governing as a moderate, which I think he campaigned...

BLITZER: Well, that always happens in any campaign. You know, when you have the full responsibility being president of the United States, you can't necessarily do everything you said you would do as a candidate.

CARDONA: Absolutely. And it is reality, and there's no question that governing is very different from campaigning. It is more methodical. It is much more deliberate and incremental.

But again, I don't think it lacks inspiration or that it has to lack inspiration. I think the problem is, is that he has tried to really change the tone in Washington, and what he's been met with is complete disdain and disrespect. It's really tough to continue to work on "Yes, we can" when all your detractors are saying is, oh, no, you won't.

BLITZER: Are you surprised that in Virginia, for example -- the president will be going tomorrow to Virginia to campaign for the Democratic gubernatorial candidate Creigh Deeds -- that it looks like the Republican candidate is doing so much better, at least right now, with eight days to go? FEEHERY: Well, the White House certainly thought so. They threw him under the bus this week, and now the president is going to go campaign for Creigh Deeds this week.

BLITZER: You're referring to a story in "The Washington Post" where they basically said he has himself to blame for his problems.

FEEHERY: Right. And I think that McDonnell has won a magnificent campaign.

BLITZER: He's the Republican candidate.

FEEHERY: And I think he's going to win fairly significant. And I think the president and especially his chief of staff, Rahm Emanuel, are trying to cover their tracks with Creigh Deeds and say, yes, we didn't mean to throw you under the bus.

BLITZER: You don't know if Rahm Emanuel was the source of that story, do you?

FEEHERY: I don't know for certain, but I'm pretty certain.

BLITZER: You just suspect it.

(LAUGHTER)

FEEHERY: Exactly right.

CARDONA: It's clear that the White House and the DNC, who has spent more than $6 million on this race, and Governor Paine are completely committed to doing what they can to help Creigh Deeds. Should he have embraced President Obama earlier? Maybe. And who knows where that would be now.

BLITZER: Because the Democrats have won several statewide races over the past few campaigns, over the past few elections, and they were poised to win again this time, although it looks, at least if you believe the polls right now, that it might not happen.

CARDONA: It's very difficult when you are a sitting governor or from the incumbent party to run in this recession. But for the Republicans to really try to claim some momentum, they're going to have to win in New Jersey and in New York.

BLITZER: We're going to speak to Jon Corzine, the Democratic governor of New Jersey, in our 6:00 p.m. Eastern hour.

Let's say -- and we don't know what's going to happen a week from tomorrow. Let's say Corzine, the Democrat, wins in New Jersey, McDonnell, the Republican, wins in Virginia. What does that say about the president of the United States right now?

FEEHERY: Well, I think what it says is that Republicans are going to say this is a referendum on Obama losing because of Virginia, and the Democrats are going to say, oh, no, it's not. That's going to be kind of a jumped ball. I do think though that if you look at what's happening in Virginia, all the way belt-wide, that was a purple state and now it's certainly big-time red.

BLITZER: All right. We'll leave it on that note, guys.

Thanks very much for coming in.

CARDONA: Thank you.

BLITZER: The White House is in the pink. We're talking about to promoting an important cause right now.

Just ahead, what's going on?

And also, were pilots too distracted to land as scheduled in Minneapolis? Were they asleep? We're going to tell you what authorities have learned from five hours of interviews.

And the Saudi king steps into a rather controversial case -- a woman sentenced to 60 lashes because sex was spoken on television while she appeared. She was just listening.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker" right now, the Obama administration is making a big statement in support of Breast Cancer Awareness Month. Check out the huge pink ribbon hanging from the White House. We're told it's 30 feet tall, six feet wide, weighs about 125 pounds. It will stay up through the end of the month.

A new poll suggests New York Mayor Michael Bloomberg is on track to win a third term in office. The Quinnipiac University survey out today shows the Republican-turned-Independent has an 18-point lead over his Democratic challenger eight days before the vote. "The New York Times" reports the billionaire mayor is on pace to spend $250 million in all on his three mayoral campaigns. That's more than any other self-funded candidate has spent in the history of the United States.

Remember, for the latest political news any time, you can always check out CNNPolitics.com and all the new features on CNN.com. Go there. I think you will like it.

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

Happening now, two airline pilots come clean, solving the mystery of why they ignored radio calls and missed their destination. Now we know what they were doing in the cockpit that left them completely distracted.