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THE SITUATION ROOM

President Obama Explains Security Failures; Will Health Care Reform Help or Hurt Democrats?

Aired January 7, 2010 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Also, how will all these changes affect you, the flying public, the next time you want to board a plane?

And the president's renewed declaration of war against al Qaeda and its growing threat in Yemen. We are going there.

And with terror weighing in on the Obama White House, will the president's domestic agenda suffer? We are looking at the other urgent problems demanding his attention right now.

We want to welcome our viewers in the United States and around the world.

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

President Obama says no one person or department is to blame for America's closest brush with airline terror in years. He says, when the system fails, it is his responsibility, and he is suggesting no one will be fired, at least for now.

You heard the breaking news from the president live here on CNN in THE SITUATION ROOM, and we just wrapped up a briefing with members of his national security team.

There's a lot to digest, to assess about what went wrong, what can be learned from all of this, how the administration is trying to fix the problem. Our analysts and correspondents are standing by here in our studio, as well as out in the field, to help us better understand what is going on, and how it will affect the lives of Americans and others around the world.

We have lots to digest, so let's begin the coverage with CNN's Jeanne Meserve, our homeland security correspondent.

Actually, Jeanne, stand by for a moment, because, before we get to you, I want to replay a little bit of what the president had to say earlier, just a little while ago.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A failure to connect the dots of intelligence that existed across our intelligence community and which together could have revealed that Abdulmutallab was planning an attack. Third, this in turn fed into shortcomings in the watch-listing system which resulted in this person not being placed on the no-fly list, thereby allowing him to board that plane in Amsterdam for Detroit.

In sum, the U.S. government had the information scattered throughout the system to potentially uncover this plot and disrupt the attack. Rather than a failure to collect or share intelligence, this was a failure to connect and understand the intelligence that we already had.

(END VIDEO CLIP)

BLITZER: The president also went out to lay out intelligence and security reforms. We're going to go over those at length. We're going to assess what he exactly said.

He was most passionate, though, in talking about the al Qaeda threat and how he didn't want to be distracted by partisan finger- pointing.

(BEGIN VIDEO CLIP)

OBAMA: We will measure progress, and John Brennan will report back to me within 30 days and on a regular basis after that.

All of these agencies and their leaders are responsible for implementing these reforms, and all will be held accountable if they don't.

Moreover, I am less interested in passing out blame than I am in learning from and correcting these mistakes to make us safer, for ultimately the buck stops with me. As president, I have a solemn responsibility to protect our nation and our people, and when the system fails, it is my responsibility.

Over the past two weeks, we've been reminded again of the challenge we face in protecting our country against a foe that is bent on our destruction. And while passions and politics can often obscure the hard work before us, let's be clear about what this moment demands.

We are at war. We are at war against al Qaeda, a far-reaching network of violence and hatred that attacked us on 9/11, that killed nearly 3,000 innocent people, and that is plotting to strike us again. And we will do whatever it takes to defeat them.

And we've made progress. al Qaeda's leadership is hunkered down. We have worked closely with partners, including Yemen, to inflict major blows against al Qaeda leaders. And we have disrupted plots at home and abroad and saved American lives.

And we know that the vast majority of Muslims reject al Qaeda. But it is clear that al Qaeda increasingly seeks to recruit individuals without known terrorist affiliations, not just in the Middle East but in Africa and other places, to do their bidding. That's why I have directed my national security team to develop a strategy that addresses the unique challenges posed by lone recruits. And that's why we must communicate clearly to Muslims around the world that al Qaeda offers nothing except a bankrupt vision of misery and death, including the murder of fellow Muslims, while the United States stands with those who seek justice and progress.

To advance that progress we've sought new beginnings with Muslim communities around the world, one in which we engage on the basis of mutual interest and mutual respect and work together to fulfill the aspirations that all people share -- to get an education, to work with dignity, to live in peace and security.

That's what America believes in. That's the vision that is far more powerful than the hatred of these violent extremists.

Here at home, we will strengthen our defenses, but we will not succumb to a siege mentality that sacrifices the open society and liberties and values that we cherish as Americans, because great and proud nations don't hunker down and hide behind walls of suspicion and mistrust. That is exactly what our adversaries want. And so long as I am president, we will never hand them that victory.

We will define the character of our country, not some band of small men intent on killing innocent men, women and children.

And in this cause, every one of us -- every American, every elected official -- can do our part. Instead of giving in to cynicism and division, let's move forward with the confidence and optimism and unity that defines us as a people, for now is not a time for partisanship, it's a time for citizenship, a time to come together and work together with the seriousness of purpose that our national security demands.

That's what it means to be strong in the face of violent extremism. That's how we will prevail in this fight. And that's how we will protect our country and pass it, safer and stronger, to the next generation.

(END VIDEO CLIP)

BLITZER: All right, so, the president of the United States making his point.

Let's go to our homeland security correspondent, Jeanne Meserve.

Jeanne, some specifics announced, not only by the president, but more announced by his homeland security adviser and his homeland security secretary.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Right, about steps they're taking to improve the visa process, the watch list process, screening technology analysis

But, Wolf, we have learned a lot since Christmas about how the system failed to detect Umar Farouk Abdulmutallab. And, today, we learned some new details, specifically that U.S. officials knew the concerns of the suspect's father, that his son had become radicalized, but they did not know he had a valid visa, because an initial search by the State Department had misspelled his name.

Second, it was revealed that the National Counterterrorism Center and CIA personnel responsible for watch-listing did not search all available databases to uncover additional derogatory information that could have correlated with Abdulmutallab and then perhaps put him on a selectee or no-fly list.

Third, a series of human errors occurred. There was delayed dissemination of a finished intelligence report. And there appears to have been faulty database searches, as we mentioned, which misspelled his name.

Information technology, we're told, within the counterterrorism community did sufficiently enable the correlation of data that would have enabled analysts to highlight the relevant threat information.

And John Brennan, the president's top intelligence adviser, said the intelligence community did not understand before Christmas Day that al Qaeda in the Arabian Peninsula had shifted its focus and increased its abilities. Here is a bit of what he had to say.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, U.S. DEPUTY NATIONAL SECURITY ADVISER: In the intelligence that we have acquired, over the past several years, it's been rather aspirational. It has said things. It has promoted a certain view, as far as bringing the fight to us.

But all of their activities, at least that we were focused on, were happening in Yemen. They carried out attacks against Prince Mohammed bin Nayef in Saudi Arabia, against Saudi targets, inside of Yemen against Yemeni, as well as against U.S. targets. So it was aspirational.

We saw that there was this mounting sort of drumbeat of interest in trying to get individuals to carry out attacks. That was the fragmentary information.

And so, in hindsight now -- and 20/20 hindsight always give you -- gives you much better opportunity to see it, we saw the plot was developing. But at the time, we did not know, in fact, that they were talking about sending Mr. Abdulmutallab to the United States.

(END VIDEO CLIP)

MESERVE: Brennan said corrective actions have been made. He believes if someone like Abdulmutallab was in the system now, he would be highlighted, he would be found, he would be brought to the attention of intelligence officials -- Wolf, back to you.

MESERVE: Jeanne Meserve is our homeland security correspondent.

Jeanne, thank you. We have a lot more to digest. Also, we want you to take a closer look at this video. Watch it very closely. What you are looking at is a very disturbing security breach at one of the nation's busiest airports. We have the videotape right now. It is showing how a man simply walked past airport security. Officials don't know who he is, at least not yet.

Here's the question: Do you?

Our coverage continues right after this.

(COMMERCIAL BREAK)

BLITZER: All right, let's get right to Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Democrats plowing ahead, Wolf, with health care reform, trying to iron out the differences between the Senate and the House versions before the president's State of the Union address in a few weeks.

One of the biggest differences is how we are going to pay for all of this massive overhaul. President Obama is now telling the House Democrats to drop their opposition to taxing so-called Cadillac insurance plans. The House had wanted to increase income taxes on individuals making more than $500,000, couples making more than $1 million. The Senate backs taxing insurance companies on the higher- end insurance plans.

Gee, do you suppose the insurance companies would then turn around and raise their rates to compensate? Yes. Then there are other disagreements about all of this, too, a lot of them, like the fact that House Democrats likely will have to drop the public option. A lot of liberals think it is not even worth passing health care reform unless there is a public option.

There are questions about funding for abortion, still don't know how that is going to be addressed, and whether illegal aliens should be allowed to buy insurance coverage with their own money, and, if they're allowed, will they? Or will the taxpayers continue to pick up that tab?

Meanwhile, the Democrats are short-circuiting the legislative process by not having a formal conference committee to meld these two bills together. Nay, nay. Instead, the whole thing is happening behind closed doors, out of sight of the American public, something President Obama promised several times would never happen, remember?

Here's the question: Will health care reform help or hurt the Democrats in the upcoming midterm elections this fall? Go to CNN.com/caffertyfile. Post a comment on my blog.

It is that old thing, be careful what you wish for; you might get it.

BLITZER: Yes. It looks like they probably will get it, and you are right. It's a good question, Jack. Thanks very much.

We heard President Obama say just a little while ago that this is not the time for partisanship. He says this is the time for citizenship. We are taking a hard in-depth look right now at the security reforms he laid out when you heard him live here just a little while ago.

Lives certainly are on the line. There are also some political stakes on the line as well.

Let's bring in our White House correspondent, Dan Lothian.

And it is a hard line to walk, the politics of all of this, but the national security at the same time.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That is right. And the president is being very careful in walking that line, and laying out today really what we have heard over the last couple of days, Wolf, and that is that there were gaps in the system, that there were bits and pieces of information out there, but that the intelligence community did not do a good job of putting it all together.

Now, going forward, as the president is talking about reforms, a lot of it, one might argue, should be sort of standard operating procedure for the intelligence community, that they should more aggressively analyze the information that they have, get it turned around to the various different agencies in a more speedy time, but the president nonetheless saying that these reforms will help prevent what happened on Christmas Day.

Now, what was the most stunning thing that came out of these reviews? Well, I posed that question to Secretary Napolitano and Mr. Brennan. Take a listen.

(BEGIN VIDEO CLIP)

BRENNAN: In my view, it is one of the most lethal, one of the most concerning of it. The fact that they had moved forward to try to execute this attack against the homeland I think demonstrated to us -- and this is what the review sort of uncovered -- that we had a strategic sense of sort of where they were going, but we didn't know they had progressed to the point of actually launching individuals here. And we have taken that lesson, and so now we're all on top of it.

(END VIDEO CLIP)

LOTHIAN: Now, John Brennan says that intelligence just simply fell through the cracks. He said that he told to president -- quote -- "I let you down, and I will do better" -- Wolf.

BLITZER: He did say that, indeed. All right, thanks, Dan Lothian at the White House.

Brian Todd is our correspondent over at Reagan National Airport here in Washington. He is taking a closer look at the security. And I take it that everything we heard from the secretary of homeland security and from John Brennan suggests security is going to be beefed up at airports, not only around the U.S., but around the world, when they engage in flights heading towards the U.S.

BRIAN TODD, CNN CORRESPONDENT: That is right, Wolf.

The stepping-up of aviation security is a huge component of what the administration laid out today. It is a very ambitious plan. Boiled down, here is what you are going to see, at least domestically in the United States, an acceleration of the deployment of law enforcement personnel, many more of them. Air marshals are going to be deployed at airports across the country on aircraft flying to and from the United States.

You are going to see a lot more air marshals, law enforcement personnel from across the Department of Homeland Security deployed at airports, also, enhancing the criteria for placing people on watch lists, those no-fly lists and broader lists of people who are of concern to security officials. They are going to strengthen the criteria for placing people on those lists.

A very, very important component of this plan is getting the enhancement of screening machines, improving the technology in screening machines and also deploying more of them. Secretary Napolitano said right now they have 40 of these very high-tech body scanning machines deployed across the United States. They want to put 300 more in place just this year. That is a very ambitious goal.

But a key component of all of this, Wolf, is to try to get other countries to adopt similar standards. Now, I asked a former TSA administrator, Chad Wolf, how tough it's going to be to get other countries to adopt similar standards just regarding those screening machines. Here is what he had to say.

(BEGIN VIDEO CLIP)

CHAD WOLF, FORMER TSA OFFICIAL: It is not a short-term fix. It's a long-term, so we're talking months, maybe even years, when we talk about harmonizing technology and harmonizing screening procedures.

Screening procedures can come a little bit shortly, but the technology is going to be a much more difficult process, whether you are talking about technology at the passenger checkpoint or technology screening bags.

(END VIDEO CLIP)

TODD: Now, as an example of that, Chad Wolf said that the machines used to screen bags overseas are of a different format. They're kind of a different technology than the machines used to screen bags here in the United States.

He says a huge challenge is going to be to figure out whether you want to try to adopt similar machines here and overseas or use the different machines and adopt kind of a common criteria, a common standard, Wolf. That is some of the challenge they face.

BLITZER: Bottom line, get ready to come to the airport a little bit earlier next time you fly, not only here in the United States, but if you were planning on flying to the United States from overseas as well.

TODD: Absolutely.

BLITZER: Brian is over at Reagan National Airport here in Washington.

It is the hug and kiss that triggered a major security scare. It happened at Newark Airport Sunday night. The chaos that followed lasted for hours. Now the video that security breach has been released.

Our national correspondent, Susan Candiotti, is joining us now with some of those details.

It is pretty frightening, how easily someone could get through that security perimeter.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: That is for sure, Wolf. And, clearly, this video shows what led to all of the chaos.

And, first of all, thanks to New Jersey Senator Frank Lautenberg, that is why everybody got to see this video, because he asked that it be released.

Let's get right to it. We are going to show you a man standing at the security checkpoint, and he is wearing a light-colored jacket. He is then approached by a TSA officer -- you see it there -- who tells him to get back on the other side of the rope line.

And then, about four minutes later, a TSA officer, the same one, in a blue shirt, he walks away from his post. A Homeland Security official says he was distracted by someone who asked a question. There, he is out of the screen.

Then, about 30 seconds after that, with the desk unattended, you see a woman wearing a white coat, and she approaches the desk from the gate area, the secure area. The man in question ducks under the security rope line, and then he greets the woman with a kiss and a hug. And then the two turn and walk back into the secure gate area.

Now, authorities only found out about this from a passenger. And then there was a mad scramble to find the man. They never did. Two official sources tell CNN that TSA later learned that he left after only about 18 minutes. He left using a normal airport exit. And, by that time, the TSA was still running around trying to find its own security videos. And you remember they found out that their cameras were not recording, so they had to run over to Continental Airlines. And that took about an hour-and-a-half.

And, as we all know, it took several hours to get things back to normal. Thousands of passengers had to be rescreened. They had to ground flights from leaving for a time. And it was a huge mess, Wolf.

BLITZER: And this individual and the girlfriend, no one knows at least right now who they are, is that right?

CANDIOTTI: They have no idea who they are and they thought is by releasing this, making it public, that someone might recognize them and bring them to authorities' attention.

BLITZER: All right, we are going to continue to watch this story, pretty scary stuff, when you think about it. Susan Candiotti working it for us.

The president may be trying to show he is actively -- and he's acting aggressively against terror, but there are a lot of other major problems on his plate. Jessica Yellin will be taking a closer look at that dilemma.

Also, al Qaeda seemingly is having no problems recruiting in places like Yemen. Does the White House need to rethink its strategy? Our own John King and David Gergen, they are standing by.

(COMMERCIAL BREAK)

BLITZER: The suspect in the Christmas Day airliner bomb plot has been tied to extremists in Yemen.

Our CNN international security correspondent, Paula Newton, has been digging into the background of Umar Farouk Abdulmutallab. She's joining us now live from Yemen's capital of Sanaa.

What are you finding out, Paula?

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Well, Yemeni officials confirmed to us what we have been hearing from the sources on the ground. And that is that Anwar al-Awlaki, the American, in fact, Wolf, who is called the Internet sheik, did in fact meet with Abdulmutallab.

That is new information, but American officials tell me that they are still not clear exactly how they met, where they met, and what they discussed. But, Wolf, we heard John Brennan earlier saying that they did miscalculate about what was going on in this country with operatives Awlaki.

He, Abdulmutallab, may represent the first breakout recruit here for al Qaeda, al Qaeda in the Arabian Peninsula being able to reach out and actually terrorize the United States with some of their new recruits -- Wolf.

BLITZER: What are you learning, Paula, also about the explosives that the Nigerian took aboard that plane?

NEWTON: Well, that is an important trail in this investigation. And Yemeni officials saying, look, we believe that the explosives came from Nigeria, but American officials are saying it is way too early for that determination. They say the Yemeni officials are most likely jumping the gun.

They still believe the most likely place that those explosives were found were here in Yemen given out to Abdulmutallab by al Qaeda.

BLITZER: Paula Newton with that disturbing report, she is on the scene for us, one of the few Western journalists in Yemen right now.

(NEWS BREAK)

BLITZER: President Obama is showing renewed determination today to deal head on with lapses in homeland security, but he has a whole range of other pressing items on his agenda. We are taking a closer look at his very difficult juggling act and whether he can pull it off.

(COMMERCIAL BREAK)

BLITZER: Happening now, President Obama issuing a tall order to the intelligence community: Analyze and integrate before anyone else falls through the cracks. And the president is urging, now is not the time for partisanship, but for citizenship -- his words -- ultimately shouldering the blame for security shortcomings.

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

More on the breaking news this hour: President Obama ordering a series of reforms in response to the failed airline bombing on Christmas. They include tougher rules for putting people on the no- fly list and more widespread distribution of intelligence reports.

While the president tries to show he's acting aggressively against terror, he certainly has a lot of other pressing problems that need attention and need that attention right now.

Our national political correspondent, Jessica Yellin, is joining us with more on this part of the story -- Jessica.

JESSICA YELLIN, CNN CORRESPONDENT: Well, Wolf, President Obama has a chock full agenda. And now the Christmas terror scare is forcing him to refocus. That does not mean his domestic agenda is in critical condition, but it does create a serious complication.

So here's a diagnosis of where the president's agenda stands. On health care reform, well, you could say it's in stable condition. The House and Senate versions will be merged. Democrats want a vote by early February.

OK, the debt limit -- that means raising the amount of money the U.S. can borrow. We're saying it's in serious condition. The House has voted to increase it. The Senate comes next. We say serious condition because it's a politically uncomfortable issue for the White House and now it's going to come up right before the State of the Union, stepping on the president's message of fiscal responsibility.

A jobs bill, stable condition. The House passed its version. Now it's over in the Senate. They'd like to vote on this by the end of February. Financial reform. OK, the House passed its version. But the Senate, Wolf, has a very different version and the Senate is trying to add in compromises that will win Republican support. So we say the bill has a case of extreme swelling -- serious condition. Democrats hope they can pass it by spring.

On climate change, it passed the House, but good luck getting it past the Senate. Good luck getting the Senate to even vote on it. Release date -- maybe never.

Immigration reform. OK, the House wants the Senate to suggest their prescription first. Smart observers think immigration reform could be a casualty of an over full agenda. They don't want to say it now, but Democrats might be forced to leave this one for the next session.

And then there's education reform. Well, the House passed a version, but the Senate is up next.

How, though, can they possibly do all of this in one year?

We'll call this one TBD.

So look at all this. Here are those agenda items together. It is a lot for Congress to tackle all at once.

The big question is will something have to move to the back burner -- Wolf.

BLITZER: They'd like to pass as much of it as they can this year, because they are deeply concerned they won't have the majority -- if they'll even have the majority in the House and the Senate next year. So they want to get things done this year.

Jessica, thanks very much.

With Al Qaeda seemingly having no problems recruiting in places like Yemen, does the president need to rethink his outreach to Muslim nations right now?

Let's talk about that and more with our chief national correspondent, John King, and our senior political analyst, David Gergen -- David, you heard the president reaching out dramatically to the Muslim world at the end of the remarks today.

Is that going to have an impact?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: I doubt very much, Wolf. I think his Cairo speech had an impact. The inability to move forward on the Middle East has, I think, slowed some of the momentum of trying to reach out to the Muslim community.

But it's very clear today from these -- the briefings and the president's appearance that we've got a serious problem in Yemen. And one of the big surprises out of all this is -- today is that we've been speculating that the real intelligence failure was -- surrounded this young Nigerian, when, in fact, we learned today that the -- the bigger failure was to under -- was to misunderestimate -- or underestimate the -- the power of Al Qaeda in Yemen recruiting and radicalizing this young Nigerian and others. And that, by failure to follow up on those clues, we missed the -- the picture about the Nigerian.

And the other thing that came out today, Wolf, there is a real concern in the administration that Arab Muslims now in Yemen are reaching out to Africans -- to black Africans to recruit them through the Internet. And this young Nigerian is a prime example, but they're reaching out to other blacks. And there is a concern about the racial aspect of this and where it's going. But you heard that with Mr. Brennan today, talking about this outreach to Africa.

So this -- it's bringing in the broader Muslim world.

BLITZER: It's a good point.

John King is here, as well.

And Peter Bergen had made that point that that African-American convert to Islam who went on the shooting rampage in Little Rock, Arkansas had been in Yemen earlier. And let's not forget Major Nidal Hasan, who had contacts with that American-born cleric in Yemen.

So the alarm bells, presumably, should have been heard long -- long before Christmas Day.

JOHN KING, CHIEF NATIONAL CORRESPONDENT: And, Wolf, to follow on that and to echo David's point, I had breakfast this morning with a European diplomat here in Washington. This is a very close ally of the United States, someone closely involved in intelligence sharing. And I have to tell you, it was, frankly, a chilling message. I received what he has said, is that his government has now decided to go back across the intelligence spectrum and across the political spectrum and said stop operating under the assumption that Al Qaeda is scattered. Stop operating under the assumption that they can't mount serious attacks nike -- like 9/11.

The point being that he believes, yes, can they have a wave of attackers like 9/11?

Probably not.

But he said look at what happened -- a double agent apparently killing CIA operatives overseas, then this attempted bombing of a plane here in United States. He said it has proven to their intelligence services that Al Qaeda has found a new way to be active and to plan attacks. And he says if you operate under the assumption that they can't pull off a big one, you might not see the clues. So they have said they are going back to square one in their assessments.

BLITZER: I think, David, a lot of intelligence services of -- of the allies, they have to back and take a closer look right now at what's going on. GERGEN: And they have to share information, because this is a -- a -- it's become planetary wide concern, certainly among Western nations, because Al Qaeda is in so many countries now and has this whackamole (ph) quality about them.

BLITZER: Are you going to have the -- discuss this on "STATE OF THE UNION" on Sunday, I assume, as well?

KING: Absolutely, we will. And among our guests will be Senator John McCain and Senator Joseph Lieberman, who are, at this moment, making the rounds of some pretty important countries in this war on terror, as they would call it, including Afghanistan and Iraq, as part of their trip.

BLITZER: 9:00 a.m. Sunday morning.

All right, John, thanks.

David, thank you to you, as well.

The president isn't passing out blame for the failure to intercept the airline bomber, but he is accepting responsibility.

Could that move backfire?

The best political team on television is standing by.

(COMMERCIAL BREAK)

BLITZER: Fredricka Whitfield is monitoring some of the other top stories in THE SITUATION ROOM right now -- Fred, what's going on?

WHITFIELD: Hello, Wolf.

Hello, everyone.

Well, FBI agents have arrested two men who worked in Afghanistan for the company formerly known as Blackwater. The indictment, handed out by a federal grand jury, charges each man with two counts of second degree murder and includes several weapons charges. The arrests stem from the shooting deaths of three Afghan men in Kabul last May.

And the men charged in the deadly Fort Hood shootings almost had a hospital visitor yesterday. A man falsely claiming to Major Nidal Hasan's lawyer tried to pay him a visit. But guards familiar with Hassan's actual attorney turned him away. The man, who's name has not been released then, said he was a doctor and was removed from the premises. No charges have been filed.

On Capitol Hill, some call it the cornhusker kickback -- Democratic Senator Ben Nelson says he'll support health care reform as long as all states get extra Medicaid funding. Nelson's home state has already been promised similar funding, but Nelson insists Nebraska won't get special treatment. If the deal falls through, he wants to relieve states from paying the cost of Medicaid expansion in 2017 and beyond -- Wolf.

BLITZER: There's lots to negotiate still in this health care reform package.

All right, thanks very much, Fred.

The buck stops in the Oval Office -- the president says he'll accept responsibility for failures to keep an alleged bomber off of a U.S. airliner.

But is that the right stance for him to take?

The best political team on television about to weigh in.

(COMMERCIAL BREAK)

BLITZER: An investigation into the Christmas airliner attack shows a chain of failures. President Obama today taking responsibility, ordering a series of reforms.

What are Republican lawmakers on Capitol Hill saying?

Our Congressional correspondent, Brianna Keilar, is standing by -- Brianna, what are you hearing?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, Pete Hoekstra, for instance, the top Republican on House Intelligence Committee, hit the Obama administration for what he says is a "go it alone approach" for dealing with terrorist threats -- not just this attempted bombing, but also the Fort Hood attack. And John Boehner, the Republican leader in the House, says: "I am concerned that the president has yet to lay out a real comprehensive strategy to fight and win the war on terror. He should start by reconsidering a series of troubling decisions that have made our nation less safe."

He singles out the president's plan to close the prison at Guantanamo and also to try 9/11 mastermind, Khalid Sheikh Mohammed, and others, in the U.S.

So what you have here, Wolf, is Republicans accusing the Obama administration of many missteps, painting a picture of a systemic weakness -- not just this individual incident. It is, after all, Wolf, an election year and national security is typically considered a bigger strength for Republicans than Democrats. Very evident in what we're hearing from Republicans coming off Capitol Hill.

BLITZER: All right, thanks, Brianna.

Brianna Keilar is our Congressional correspondent.

Responsibility and accountability and the president saying the buck stops with him in that failed Christmas Day terror attack.

Let's bring in the best political team on television, including our CNN senior political analyst, Gloria Borger; "Washington Times" columnist, Amanda Carpenter; and our CNN political analyst, Roland Martin.

Did -- was the president wise to say I'm responsible, the buck stops with me?

ROLAND S. MARTIN, CNN POLITICAL ANALYST: Absolutely. You spend all the time sitting here talking about this department or that department and you lose sight of exactly what the -- what the whole point is. And so the president stepping up with the buck stops with me, now here's what we're going to do to fix the problem.

That's what the American people want to hear. We don't want to hear the same old, you know, political nonsense of well, you did this and you did that.

And, also, keep in mind, we have heard -- we have the same problems under Democratic presidents, under Republican presidents. This is a bureaucratic problem that we often see in Washington, where people don't want to share data, don't want to also work with others. And so we need, as the American people -- because our safety is what's most important, not turf battles.

BLITZER: Amanda, how is that going to play?

AMANDA CARPENTER, "THE WASHINGTON TIMES": Well, I think he's right on one level. I did see that Senator Orrin Hatch put out a statement reacting to the president's briefing, blasting the -- it's ethiocracy (ph), the changing culture in the Intelligence Committee over the past few years that's probably to blame for this.

But where Republicans are going to hit them with this is the Obama administration's willingness to classify these people as criminals rather than enemy combatants and keeping them through the military tribunals. This is the approach that the Republicans are very adamantly opposed to. They say they should be treated as enemy combatants even if they commit these crimes on U.S. soil.

BLITZER: Because you heard Newt Gingrich, the former speak; Liz Cheney, the daughter of the former vice president. They're saying the president is systematically making the country less secure.

BORGER: You know, we've heard that argument. Clearly, the president said today the buck stops here. He was as angry about this as anyone.

But I think what we've learned in going through this whole process today and through the weekend is that the problem has changed. It is no longer turf battles. It is no longer information sharing. They're actually sharing the information.

The problem is that they've got so many dots because they're also gathering so much more information, that they have a very difficult time distinguishing what's an important dot and what's an unimportant dot.

MARTIN: And we also have, I think, a -- a critical issue in understanding that, look, we have spent billions of dollars and -- you look at body scanners. Eight years after 9/11 and all of a sudden, hey, we're going to send 150 out to the airports. So all those Republicans who are complaining and the Democrats who are complaining, they were sitting on their butts for eight years with the 9/11 Commission, who laid out recommendations, and they did not follow through.

BORGER: Jim DeMint voted against the...

MARTIN: Absolutely. So at some point...

BORGER: ...body scanners, right?

MARTIN: At some point, members of Congress, regardless of party, are going to have to say, wait a minute. Forget my own little personal issues, I have to keep the American people safe. And here's a important point, Wolf. The American people are going to stop whining. We're going to stop trying to be, we're so inconvenienced with body checks and security checks. No. You want to be safe, you can go through the rigors of security to keep us safe.

CARPENTER: But I will say, it seems that most Americans, they look at this problem and they say, listen, there's a guy who tried to blow up a flight on Christmas Day whose father approached the authorities with a warning. And then when he is arrested, he is given a lawyer rather than being put through a military tribunal. And this is where the frustration -- and I know Richard Reid was also put through federal court, but with the -- it's a different world now.

(CROSSTALK)

CARPENTER: We've been at war for a long time.

BORGER: Here's the intelligence problem. He approached the embassy saying that his son was missing, he wanted their help and that he would -- had been cavorting with extremists to whatever, that he felt that his son was keeping bad company, if you will.

They didn't interpret that the way they should have, because they didn't really understand the threat of Al Qaeda in Yemen, right, which has grown. And so those are two dots that they should have connected that they didn't connect, because the father said my son is in Yemen with these bad guys in Yemen.

BLITZER: Isn't it a mistake that the president didn't fire anyone?

MARTIN: No, because that's -- because that is typical Washington -- hey, let me quickly fire somebody and make everybody happy then we're all good. No. What he is saying is we have a -- a more serious issue here and that is the inability to connect the dots.

But if you also look at that -- that intelligence report that came out of Afghanistan, the inability of Americans there to understand what is happening locally on the ground.

We have a much broader issue that we have been dealing with since 9/11. That is, the inability to know what's happening on the ground, but, also, of the weakness in our hiring of people who could actually study the data and they understand exactly what it all means.

BLITZER: I mean I -- I was surprised at how -- how candid they were in this summary in this report and when they said, Amanda, that they didn't know that Al Qaeda in the Arabian Peninsula, in Yemen specifically, had this operational capability. They thought they were aspirational...

MARTIN: Candor is nice.

(CROSSTALK)

CARPENTER: But I think those were some of the shocks we were warned about in the run-up to the release of this report. I mean it's out there. Everyone should read it.

BLITZER: Yes. All right. Well, I've read it and it's pretty -- pretty blunt, a lot of it is. I'm sure the declassified -- the classified version -- is even blunter.

All right, guys, thanks very much.

Jack Cafferty is asking, will health care reform help or hurt the Democrats in the midterm elections in November?

Jack with your answers, that's coming up.

And the information superhighway on the highway -- you may soon be able to get on the Internet and keep up with Twitter while driving?

(COMMERCIAL BREAK)

BLITZER: Let's get right to Jack for The Cafferty File -- Jack.

CAFFERTY: The question this hour, Wolf, is will health care reform help or hurt the Democrats in the midterm elections later this year?

Cheryl writes from South Carolina: "It will help. As imperfect as the legislation is and as ugly as the process has been, health care reform will save American lives and help us catch up with the rest of the civilized world."

Maggie says: "Most likely it will hurt -- badly. Most Americans are so focused on instant gratification that if the effects of the health bill are not immediate, the bill will be dubbed a failure before it can even take effect."

Gini in Maine says: "The health care reform bill will hurt the Democrats slightly in 2010, but will help them substantially in 2012. By 2012, the good parts of it will have kicked in. It's not a great bill, but it's the best we can get right now."

M. writes: "It will help. This is one of the primary reasons they were elected. It took them a while, but they finally figured out Republicans don't want to compromise or negotiate. They'd better do everything they can while they have the majority."

Melissa says: "Who cares if health care reform helps or hurts the Democrats? We want to know if it's going to help or hurt the American people."

Loren in Chicago: "Hurt. The Republicans will play on the lack of debate and the decision being made behind closed doors to work on the swing voters while the Democrats will have a compromise bill that loads the cost onto our children. And while they'll try to call it a success, the fact that several Democrats have already announced that they won't run for reelection suggests even some of the Democrats don't think the value of the bill is very high."

Grady writes from San Marcos, Texas: "It hurts my heart to contemplate the possibility that the Democrats might retain control of both houses of Congress. It also hurts my heart to contemplate the possibility that the Republicans might capture one or both houses. Either way, we're screwed."

If you want to read more on the subject -- some of it a little more highbrow than that last e-mail -- you can find it on my blog at CNN.com/caffertyfile -- Wolf.

BLITZER: There are a lot of people who agree with Grady out there in Texas, there's no doubt about that, Jack.

CAFFERTY: There's a certain body of evidence to support his point of view.

BLITZER: Yes.

All right, Jack.

See you tomorrow.

Thank you.

Kyra Phillips and John Roberts -- they're standing by to tell us what's coming up right at the top of the hour.

What are you guys working on?

KYRA PHILLIPS, CNN ANCHOR: Thanks, Wolf. A lot. And, by the way, Wolf, I always agree with you.

Coming up at the top of the hour, pros pack in heat -- a professional athlete goes down for some serious gun play. NBA star Gilbert Arenas pulled his gun on a teammate in the locker room. Well, that stunt could ruin his career and will cost him millions of dollars.

ROBERTS: It's just the latest in a long line of young, rich athletes drawing afoul of the law.

With all the fame and fortune, how could so many of these guys do throw it all away so easily? Please join us for all that and a whole lot more coming your way, Wolf, at the top of the hour.

We'll see you then.

BLITZER: I will be watching -- watching you in the morning, watching you later in the day. We'll watch you got coming up at the top of the hour.

ROBERTS: Yes.

BLITZER: Guys, thanks very much.

ROBERTS: Now you know what it's like -- now you know what it's like watching you, Wolf. You're everywhere.

BLITZER: I am.

PHILLIPS: That's right.

BLITZER: You guys are working hard. All right -- but you're young. When you're young, you work. When you're old, you don't work so hard.

All right, guys.

Thanks very much.

Jeanne Moos is comparing it to the movie "Revenge of the Nerds." The Obama budget director, who some White House officials are calling nerdy, is also being called sexy, especially after an eye-opening revelation in his love life.

Stand by.

(COMMERCIAL BREAK)

BLITZER: He's been called everything from a skillful economist to a sexy nerd and now the newly engaged White House budget director has another title -- father of three.

CNN's Jeanne Moos find all of this Moost Unusual.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: (voice-over): Who ever thought...

PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR: Look at you.

MOOS: ...that the company's budget director...

ORSZAG: Write that down.

MOOS: ...would become the poster boy for sexy nerds?

ORSZAG: So there.

UNIDENTIFIED FEMALE: Well, I'm a bit of a nerd myself, so I find that sexy.

UNIDENTIFIED FEMALE: Not to me.

MOOS: Budget Director Peter Orszag never budgeted for this brouhaha -- front page by "The New York Post." His former girlfriend, a shipping heiress, just had his baby a few weeks before his new fiance, an ABC correspondent, went on "Good Morning America".

(BEGIN VIDEO CLIP FROM "GOOD MORNING AMERICA," COURTESY ABC)

UNIDENTIFIED MALE: Let's see the rock on that finger.

UNIDENTIFIED FEMALE: (INAUDIBLE) Bianna got engaged.

UNIDENTIFIED MALE: Bianna got engaged yesterday.

UNIDENTIFIED FEMALE: Everybody.

(END VIDEO CLIP)

MOOS: Did we mention Orszag is divorced with two children from his first marriage?

In the words of one blogger, frankly, I don't see how Orszag can balance three families and the national budget.

Until now, he's been one of the most eligible bachelors in Washington. On blogs like The Huffington Post, he's not just "Mr. Hot," he's hooooooooot with nine Os. He's making nerdy sexy. Posted one admirer, "I'll take me some Orszag, thank you very much. Delicious."

UNIDENTIFIED FEMALE: I like the intelligent nerd. My husband's bald.

MOOS (on camera): He's considered one of the most eligible -- you're shaking your head at me.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED FEMALE: He doesn't look overly masculine to me. He doesn't look like a man. He looks like, you know, a boy that was on the chess club.

MOOS (voice-over): Oh, yes?

Well, just like in the movie "Revenge of the Nerds"...

(BEGIN VIDEO CLIP FROM "REVENGE OF THE NERDS," COURTESY TWENTIETH CENTURY FOX)

UNIDENTIFIED FEMALE: You're that nerd.

(END VIDEO CLIP)

MOOS: ...this nerd gets the hot girl. Orszag is considered a brilliant economist. He discussed the budget on "The Daily Show".

(BEGIN VIDEO CLIP FROM "THE DAILY SHOW WITH JON STEWART," COURTESY COMEDY CENTRAL)

JON STEWART, HOST: Department of Commerce.

ORSZAG: There you go.

STEWART: Do we need that?

(END VIDEO CLIP)

MOOS: One person posted, "He looks like Stephen Colbert's cousin.

UNIDENTIFIED MALE: I think he's sexy nerdy. He looks like Anderson Cooper with dyed hair.

MOOS: Even the president has joked about him.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: TLC has got something called Jon and Kate plus Peter Orszag.

MOOS (on camera): The budget director is also a country music fan. Occasionally at Congressional hearings, you hear him quoting lyrics...

(voice-over): ...referring to the budget.

ORSZAG: But as the country music singer Toby Keith once put it, "There ain't no right way to do the wrong thing."

MOOS: Does quoting a country Western singer like Toby Keith...

(MUSIC)

MOOS: ...make Peter Orszag a nerdy cowboy or a nerdy playboy?

(MUSIC)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: And remember, I'm on Twitter. Go the Twitter.com, wolfblitzercnn and you can get my Tweets whenever you want.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "CNN TONIGHT."