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THE SITUATION ROOM

Health Care Reform; Charlie Rangel Investigation; IRS Informant Program; Chile's Aftershock; Wall Street Regulation

Aired March 3, 2010 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the president's end game for health care reform, after a year-long debate, what is different right now?

Also some hospitals are making tough choices about the way babies are born and that could save all of us a pile of money.

And panic in Chile, an aftershock triggers a tsunami scare and a race for higher ground.

I'm Wolf Blitzer in CNN's Command Center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

A full year after President Obama started providing health care reform he says everything that can be said has now been said. So you may be wondering what, if anything is different today. We now know the president's strategy to try to cross the finish line. After recent efforts to reach out to Republicans, he made it clear today he's ready and willing to push forward without the Republicans. Listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: No matter which approach you favor, I believe the United States Congress owes the American people a final vote on health care reform.

(APPLAUSE)

OBAMA: We have debated this issue thoroughly. Not just for the past year but for decades. Reform has already passed the House with a majority. It has already passed the Senate with a supermajority of 60 votes. And now it deserves the same kind of up or down vote that was cast on welfare reform that was cast on the children's health insurance program, that was -- that was used for COBRA health coverage for the unemployed, and by the way for both Bush tax cuts.

All of which had to pass Congress with nothing more than a simple majority. I, therefore, asked leaders in both Houses of Congress to finish their work and schedule a vote in the next few weeks. From now until then I will do everything in my power to make the case for reform.

(END VIDEO CLIP) BLITZER: Let's bring in the White House correspondent Dan Lothian. Dan, what, if anything, did you hear from the president that was really different today?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well Wolf, I think it really was the president's tone. He was forceful and at times defiant. You are hearing him at the end of his remarks saying let's get it done. And the president spelling out that this was not -- there was not an option here to really start over because he doesn't believe that another year of negotiations will help.

But ultimately what today was about and also that letter yesterday that he sent up to the bipartisan leadership in Congress and also the summit last week, what it was about really was showing the administration's effort to reach out to Republicans. Showing the American people, showing those moderate Democrats that they have listened to some of the complaints from Republicans, have made changes and one official here at the White House told me that listen, they always hoped that by making these concessions that more Republicans or some Republican would come onboard, that they never really expected it, ultimately it is time to move forward, Wolf.

BLITZER: The top Republican in the Senate, Mitch McConnell was not very happy with the staging of this event at the White House today. Listen to this.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We are all lab coats. I don't -- you guys don't wear lab coats. Every press conference on this subject is surrounded with lab coats. Nobody supplied you with a lab coat?

(END VIDEO CLIP)

BLITZER: He was referring to all the doctors and nurses who were there today. What about that?

LOTHIAN: That's right. Well that's right. You know that's not the first time the White House has done this. It happened last year at an event, health care event in the Rose Garden. The White House obviously wanting to have a TV moment here, have that backdrop, a powerful moment they believe -- I was talking to an aide here at the White House and he told me essentially what they wanted to do is showcase the fact that these medical experts are out there on the frontlines are supporting the president's effort to get health care reform. But clearly staged for the cameras, they believe, to drive their message home, Wolf.

BLITZER: Thanks very much -- Dan Lothian at the White House.

Top Republicans say Democrats probably will be able to pass health care reform without any GOP votes. But they are promising to get political revenge by making this an issue in the November elections. I asked Republican Senator Lamar Alexander of Tennessee for his reaction to the president's remarks. (BEGIN VIDEO CLIP)

SEN. LAMAR ALEXANDER (R), TENNESSEE: Just spent seven and a half hours talking about ways that we could set cutting costs as our goal. That's the real way to get your health insurance premiums down and to keep the government from going broke. And the president is basically saying even though the American people have tried to say in every way they know how they don't want this bill, a CNN poll showed only a quarter of the American people support this bill. The president says we don't care. We're going straight ahead. We're going to pass it anyway. We're going to jam it through with a partisan vote.

(END VIDEO CLIP)

BLITZER: I also asked Senator Alexander about the president's assertion that the Democrats' program would insure another 31 million middle class Americans about 10 times more than the Republican alternative.

(BEGIN VIDEO CLIP)

ALEXANDER: That is true and we can't afford it. And that's the reason that we have a half trillion in new taxes. That's the reason we are taking a half trillion out of Medicare which is going broke by 2015. That's the reason all of the governors are up in arms because of the unfunded mandates and half of the people who the president plans to insure under his plan will be dumped into Medicaid, a government program, and half the doctors won't see Medicaid patients so it is like giving people a ticket to a bus line without a bus. It is not real health care reform.

(END VIDEO CLIP)

BLITZER: Senator Alexander, a former president of the University of Tennessee, was the front man for the Republicans' views during the president's recent health care summit at Blair House across the street from the White House.

One of the most powerful men in Congress is giving up one of the most powerful posts. Today New York Congressman Charlie Rangel stepped down from his chairmanship of the House Ways and Means Committee temporarily. Rangel is dogged by ethical questions.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGEL (D), NEW YORK: In order to avoid my colleagues having to defend me during their elections, I have, this morning, sent a letter to Speaker Pelosi asking her to grant me a leave of absence until such time as the Ethics Committee completes its work.

(END VIDEO CLIP)

BLITZER: Rangel's work on House Ways and Means affects every American because it is deeply involved in health care and taxes. We want to remind you just what Congressman Rangel has been slapped with and what could still be coming down the road. Our congressional correspondent Brianna Keilar is here in THE SITUATION ROOM. Remind us of the charge -- I guess the admonition that he received this week.

BRIANNA KEILAR, CNN CORRESPONDENT: Yes and let's start here with just the issue that he has been formerly slapped on the wrist for. The House Ethics Committee said that he broke House gift rules by accepting travel, two trips to the Caribbean that were paid for in part by corporate sponsors. He went to Antigua in 2007. He went to St. Maarten in 2008. And what the Ethics Committee found was that of two his staffers, including his then chief of staff, knew that there were corporate sponsors involved. He was held responsible for their behavior -- Wolf.

BLITZER: But there are more allegations down the road. He has got a lot of hurdles.

KEILAR: He has got a lot hanging over his head, some of the issues that the Ethics Committee is investigating but they haven't really decided on whether they are going to punish him or not yet. The big one is that he failed to pay taxes on money that he earned from a rental villa that he owns in the Dominican Republic. This is a really big deal for the person who is in charge of the Congressional Tax Writing Committee, as you can imagine.

And actually, I think we have a photo of him that was taken there in Quantico (ph), Dominican Republic where he did have this villa. But also he failed to disclose on his congressional financial disclosure statement, which is something that all members of Congress need to do. He failed to disclose in 2007 hundreds of thousands of dollars of assets and that's something else that they are looking at.

BLITZER: Did he have any choice today but to step down at least temporarily?

KEILAR: He was painted into a corner and it seemed maybe so where Democratic leaders because what you had was Republicans who were forcing a vote as they've done before on Rangel's position. And the difference today was that he has been facing a lot of pushback from Democrats. He has been getting so much criticism from Republicans, but it was apparent that he could have faced a very embarrassing vote. That enough Democrats could have voted with Republicans and it could have been quite the review.

BLITZER: Given health care, given jobs, given so many other issues. This is a very sensitive moment for him to take a leave of absence from the chairmanship.

KEILAR: Hugely sensitive. This is a critical time for health care, a critical time for the economy for Americans, and this is a critical post to both of those issues. Rangel's chairmanship leaving it at least temporarily leaves quite a void in leadership on this committee. And there is an acting chairman, Pete Stark, but there are a lot of concerns from Democratic aides. They will tell you Democratic members worry that he is not up to it. He's prone to gaffes and he's also had some pretty serious health problems. BLITZER: Brianna thanks very much. Congressman Rangel is adored by many of his constituents in Harlem. He's disliked by many of his critics here in Washington. He has had a long time in power to earn fans and some enemies. Rangel has been in Congress representing New York's 15th District since 1970. He has been the powerful chairman of the House Ways and Means Committee since 2007, the first African- American, by the way, to sit on a committee going back to 1975. He also served in the U.S. Army receiving a Purple Heart and a Bronze Star for valor while serving in Korea.

Look closely and you will see a nightmare through the evergreen trees. A Coast Guard helicopter traveling back from the Olympics crashes. You're going find out what happened.

And there's no end to the danger. Aftershocks rock Chile and our own CNN crew is swept up in the panic and the alarm. Wait until you see it.

And ask this question and you may hear a pregnant pause. How can hospitals possibly -- responsibly, I should say, deliver babies and provide other health care more cheaply? You will see how some medical experts say better care is cheaper care.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: If you know someone cheating on their taxes and chances are you do, well there might be a buck or two in it for you. Under the Internal Revenue Services Informant Program you can receive up to 15 percent of the amount that's been underpaid up to a maximum award of $10 million. Informants have to complete a claim, send it to the IRS. Informants' names aren't made public but they do have to reveal their identity to in Internal Revenue.

They also have to give a lot of detailed information about the person they are turning in, the tax cheat, including the person's Social Security number, address and date of birth. In the last few years, the IRS has also begun cracking down on big-time cheaters with the new whistleblower program that has turned up lots of tips. It is believed the most common informants are dissatisfied middle-ranking employees in big companies.

They may feel frustrated about not getting a promotion or their bosses cheating on their taxes. Although one tax expert points out that there is a very mix of informants, including those who are simply looking for revenge. They turn in a former spouse or a boss. People snitch for various reasons including the big financial payoff, up to 10 million. Some also feel angry about others being above the law, getting away with something or they feel morally obligated to turn in somebody who cheats.

Some factors that prevent people from reporting tax cheats, the exhausted amount of information required along with a fear of retaliation, but with tax season right around the corner 10 million. Here is the question. Would you rat out a tax cheat in order to make money? Go to CNN.com/CaffertyFile and post a comment on my blog. You probably would.

BLITZER: Lot of people probably do and will, Jack, thank you.

Days after Chile's catastrophic earthquake, the country is still being rocked by aftershocks quickly sending people into a panic. CNN's Karl Penhaul was doing a report on aid arriving in a coastal area of Chile when people started running for higher ground shouting -- tsunami, tsunami! Watch this extraordinary video.

(BEGIN VIDEO CLIP)

KARL PENHAUL, CNN CORRESPONDENT: In addition to the aid that the government has already sent in concerned citizens are banding together as well and sending in supplies --

(SHOUTING)

UNIDENTIFIED MALE: Tsunami, tsunami, tsunami!

(SHOUTING)

UNIDENTIFIED MALE: (INAUDIBLE)

UNIDENTIFIED MALE: Still roll (INAUDIBLE).

UNIDENTIFIED MALE: (INAUDIBLE)

PENHAUL: OK, there's been a tsunami alert now and that was after an aftershock earlier on. And the military have been handing out aid. (INAUDIBLE) We have been separated from our producer. He was in the vehicle but we hope that he (INAUDIBLE) too.

(SOUNDS)

PENHAUL: (INAUDIBLE) let's shoot over here. As you can see, the military are beginning to gather their gear together. We have to help (INAUDIBLE) the people up here.

(SHOUTING)

PENHAUL: You can hear the whistles going on. Want to shoot over there and see how --

UNIDENTIFIED MALE: (INAUDIBLE)

UNIDENTIFIED MALE: (INAUDIBLE)

UNIDENTIFIED FEMALE: (INAUDIBLE)

UNIDENTIFIED MALE: (INAUDIBLE)

(SOUNDS)

(END VIDEO CLIP)

BLITZER: Turns out the aftershock was only a small fraction as powerful as Saturday's quake which triggered a killer wave. And this time it turns out there was no tsunami but people are on edge as you clearly saw. They're taking no chances.

Rescuers reached the scene where a Coast Guard chopper crashed after providing security for the Olympic Games. We have the latest word on the survivors.

And she has been showing us some pretty outrageous hospital expenses. Now our medical correspondent, Elizabeth Cohen, shows us how one hospital is keeping costs down.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now. What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf. Well rescue crews have reached a Coast Guard helicopter that crashed this morning in the remote Utah Mountains. It was flying home after providing security for the Olympic Games in Vancouver. Authorities say a second Coast Guard chopper has now airlifted two of the injured crew members to the hospital. The others onboard are said to be OK.

Two people onboard a Mediterranean cruise have been killed after freak waves hit the ship seen here on the Louis Cruise Lines (ph) Web site. Officials say waves as high as 26 feet slammed into the Louis Majesty smashing windows. A German and an Italian were killed and more than a dozen others were injured. It is believed recent high winds caused the waves. The ship is now in Barcelona.

An Independent senator, Joe Lieberman, and a dozen Democratic senators today introduced legislation that would repeal the "don't ask, don't tell" law on gays in the military. The legislation would prohibit discrimination against service members on the basis of sexual orientation. The chairman of the Senate Armed Services Committee, Carl Levin is one of the bill's sponsors.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE: When people are not allowed to serve simply because of their sexual orientation, it diminishes our readiness. It diminishes our strength. It denies us; it robs us of men and women who can contribute to the defense of their country and our country.

(END VIDEO CLIP)

SYLVESTER: And while they say politics can be a game of cat and mouse, now London's Houses of Parliament they can certainly vouch for that. Mice have infested the famous building. U.K. lawmakers have been debating whether to bring in cats to deal with the problem, but there's some concern that the cats might ingest poison or disrupt Parliament. So the plan for now is to stick with poison and traps -- what a situation there -- Wolf.

BLITZER: They've got to figure out how to deal with that and I'm sure they will. Thanks, Lisa.

If you have seen and felt a train wreck before, what's the best way to avoid it? Again, that's the question Washington is grappling with right now regarding some new regulations for Wall Street. How do you ensure the country never again sees another financial collapse? Stand by.

And at one of the busiest airports, why did an air traffic controller allow children to give important instructions to pilots?

(COMMERCIAL BREAK)

BLITZER: Never again. That's what the Obama administration says about any future collapse of the nation's financial system. Right now talks are under way in the U.S. Senate about new regulations for Wall Street, among the considerations, creating the Consumer Protection Entity. The Obama administration wants limits on the size of financial institution and says consumer protections are key to any new regulations.

Let's talk about this with Arianna Huffington at Huffingtonpost.com and our senior political analyst David Gergen. Guys thanks very much for coming in. Arianna, you wrote a really tough piece on Huffingtonpost.com in which you said among other things this.

You said "leaving too-big-to-fail banks to continue doing business as they have been is like operating on a cancer patient and taking out only half the tumor. The disease is guaranteed to come back and eventually prove fatal." And you really went after Senator Chris Dodd for backing down on having some teeth. Tell our viewers why you are so concerned.

ARIANNA HUFFINGTON, CO-FOUNDER & EDITOR-IN-CHIEF, THE HUFFINGTON POST: Well, I'm very concerned because every columnist across the political spectrum knows that unless this consumer protection agency is independent with broad authority, it is not really worth even bothering to pass a bill that includes the creation of such an agency (INAUDIBLE). That's what at the moment Senator Dodd is proposing.

(INAUDIBLE) housed in the fed. When today at a conference by the Roosevelt Institute, Joe Stiglitz, who used to be a chief economist at the World Bank, said that (INAUDIBLE) they were going to consider investing in the United States they wouldn't because of how corrupt the fed has become and how susceptible to the pressure from Wall Street. So putting the agency within the fed would really make it completely ruthless (ph) and meaningless.

BLITZER: I guess the problem that Senator Dodd has is getting it passed and I guess the tough kind of agency that Arianna and many others would like, David, maybe was not politically doable.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, first you've got to fight for it before you find out whether it is politically doable. Let me just say -- I want to say a word on behalf of the fed. I think the danger to the fed is not as about as close as to Wall Street. The danger to the fed is if it loses its independence and Congress starts to regulate the fed and step in too much, then you are going to find investors very nervous.

You'd politicize the fed. (INAUDIBLE) to this question of protection of consumers, look I think the banks have been vilified too much, but there has been no question that consumers need stronger protection. That the system failed and it failed consumers. There was a lot of predatory lending. People were misled about some of the mortgages they took.

There has been a lot of misleading stuff that's gone in the credit card industry. And the -- when the Obama's administration set out to create an independent consumer agency, I think they were on the right track. What surprised me and I think has shocked Arianna is that they haven't fought for it.

BLITZER: And the Securities and Exchange Commission was simply asleep during the whole Bernie Madoff Ponzi scheme. It's shocking to see how little they did even though they were given warnings down the road. Arianna, listen, you've probably seen this video that a lot of these "Saturday Night Live" comedians have done promoting financial reform. Let me play this little clip.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What you've got to understand is that we got a regulatory issue here. We got a radio like that, we're going to get more bubbles, going to get bigger, larger, and pop, money goes to the weasels. Sometimes you got to do the right thing. You got to take those approval ratings there and screw them, ratings, screw them.

(END VIDEO CLIP)

BLITZER: Dana Carvey as Bush 41. That's a pretty popular video, Arianna.

HUFFINGTON: Yes, absolutely. We've had it up all day on "The Huffington Post". And Wolf, that video indicates something that's going on around the country, which is more and more people, including the people who created the video recognize that there needs to be a lot more pressure, a lot more pressure coming from the grassroots, coming from people outside Washington because otherwise, Washington will do what David said, a kind of preemptive surrender, even before they fight for something that's worth fighting for because of the tremendous influence of lobbies. You know the amount of money that has been spent fighting financial reform, the amount of lobbies were going up and down Capitol Hill trying to basically kill financial reform. (INAUDIBLE) that we need this cultivating (ph) pressure that in a way it represents.

BLITZER: You know, David, you have been in Washington for a long time. Limited attention span, health care reform, jobs, this -- this issue of financial regulation creating new safeguards, it is not necessarily a top the agenda of the Obama administration.

GERGEN: No. That's definitely right. It is a dry subject. Complex subject. Hard for people to understand it. Hard for all of us to understand it. And -- but -- it just isn't health care where the administration lost control of the narrative and then saw -- you know, probably reversing on it. It is never -- I think, argued this case clearly and -- then the consistent way and kept it -- fire on and gradually now losing ground. Mine, they passed the independent consumer agency in the house. And now they are over in the Senate. Looks like they are going to throw in the towel in the Senate. Barney Frank, you know, got -- said what they are proposing in the Senate is a joke. I mean, that's pretty strong language coming from a fellow democrat.

BLITZER: Are you disappointed? Assuming the Democrats get this health care legislation passed in the coming few weeks, are you disappointed that it is not more robust?

HUFFINGTON: Well, I'm disappointed, first of all, it has taken so long and the administration wasted so much time trying to appeal to Republicans who it was clear months ago were not going to actually come together. No matter how many concessions the administration makes, it has been so obvious just by being a casual observer of the scene that they were not going to come along because for them politically it has paid off to be the party of no when it comes to health care as well as many other issues. So wasting all that time, losing the narrative, and now questioning whether they are going to include the side car which is a way to toughen up the Senate bill or not, it is still unclear and the public needs to have some clarity about what is at stake here.

BLITZER: He didn't give thank you clarity today, Arianna?

HUFFINGTON: Well, he did mention the word reconciliation, Wolf. At least he did say a lot of things have been passed with a simple majority including the two bush tax cuts. Reconciliation would be the way to go. Again, he shied away from mentioning that.

BLITZER: He didn't mention the word but clearly made it clear that 50 votes, 50 senators plus Joe Biden is enough to get I didn't.

GERGEN: He made it very clear that he's now going to embrace 50- plus one strategy and will push forward with Democrats only. What I think he left very unclear is the substance of the proposal and I think there is legitimate public concern. Yes the system is broken. But there's concern that we are -- we may be passing a very expensive bill with no serious cost containment. And the president has -- the -- Democrats have allowed this thing to be watered down so it is very unclear whether the cost contain many will work and we will wind up with a bill we are not paying for and it is going to cost us one heck of a lot of money when we are deeply in debt.

BLITZER: David Gergen and Arianna Huffington, thanks very much for coming in.

GERGEN: Thank you.

HUFFINGTON: Thank you. BLITZER: Some critics of Senator Jim Bunning say he should be mugged by an unemployed person. We are talking to his constituents in Kentucky after the Republican single-handedly held up jobless benefits among other things. Plus, New York's Governor David Paterson makes a new vow as the scandal surrounding him keeps growing.

The revelation that a young kid radioed a pilot from a busy control tower even worse than first thought.

(COMMERCIAL BREAK)

BLITZER: Republican Senator Jim Bunning has given up his one man crusade to block a package of unemployment benefits he says runs up the deficit. The backlash in Kentucky may not necessarily ease up any time soon. Our Ed Lavandera has been talking to folks in Louisville. Ed, what are they saying?

ED LAVANDERA, CNN CORRESPONDENT: Wolf, we decided to stand here in front of the Louisville Slugger Baseball Bat Museum. We thought it would be a good backdrop. Take a closer look at that relationship Senator Bunning has with his constituents here in Kentucky. Of course, Bunning was a hall of fame baseball player. A pitcher often criticized forgiving up too many home runs and critics, even his Republican critic critics, are saying he lobbed up a softball the Democrats knocked out of the park.

(BEGIN VIDEOTAPE)

ROBERT ZOELLER: We are ready go?

UNIDENTIFIED FEMALE: Ready to go. Another workday.

ZOELLER: Yeah. Another workday.

LAVANDERA: We are on the morning commute in Louisville, Kentucky with Robert Zoeller and his wife. It is a rare day. He works when his boss is at a sheet metal plant have the work to call him in. It is only his second week on the job this year.

ZOELLER: January, February, March last year, I don't think I worked at all.

LAVANDERA: Zoeller is one of the millions of underemployed workers in the United States. You would think he would be angry at Senator Jim Bunning for temporarily blocking unemployment benefits. He let the senator know what he thought.

SEN. JIM BUNNING (R), KENTUCKY: Dear Senator Bunning, I fully support your decision to stand up to those in Congress who want to do nothing more than to spend the taxpayers' money, even the money they do not have. It says, sincerely, Robert, from Louisville.

LAVANDERA: Interesting voice of support for Bunning because -- he has been taking it pretty hard.

ZOELLER: The thing about Bunning, not only does he stand up there and tell people what he thinks but stands behind what he thinks. He doesn't change his opinion. He doesn't change his vote.

LAVANDERA: Zoeller says he was surprised to hear Bunning read his let other the Senate floor. Jim Bunning was a hall of fame baseball player, an aggressive pitcher not afraid of hitting batters with fastballs. Some say he brought that aggressiveness to politics and first elected to Congress in 1986 and then moved over to the Senate in 1998. But he's not seeking re-election now. I'm here with Rick, runs the news side of Louisville Mojo. You are showing me the comments that people have been making about Senator Bunning over the last few days.

RICK READING, LOUISVILLEMOJO.COM: Right. There's actually some support.

LAVANDERA: Most say things like this, Senator Bunning should be mugged by an unemployed person. Rick Reading says Bunning often baffles voters when he predicted last year Supreme Court justice Ruth Bader Ginsburg would die in nine months from cancer.

READING: This episode in Washington this week is not that big of a surprise, that -- of all the U.S. senators, Bunning would be the one who would stop something that would be important for the nation.

LAVANDERA: Spend time in a Kentucky unemployment line and Bunning's constituents will tell you it tarnished his political legacy. If I say Senator Bunning -- what is the mood out there towards him?

UNIDENTIFIED MALE: Senator Bunning doesn't have a heart.

LAVANDERA: Do you think this will hurt the way he's remembered politically in this state?

UNIDENTIFIED FEMALE: Yeah, I'm sure it will. Look at him. He has his own throat.

UNIDENTIFIED MALE: I don't think we will hear much more out of him.

(END VIDEOTAPE)

LAVANDERA: A lot of people in Kentucky saying that Senator Bunning doing a lot of this because he's no up for re-election and won't be running come this fall. That's giving him the bravery to do all of this and the senator's office disagrees with that but some of the critics say with eight, nine months left in office it will be interesting to see what else he does. Not many people here think they heard the last of Senator Bunning.

BLITZER: Yeah. Suspect that they are right. Still will be a senator for several more months. All right. Ed, thanks very much.

He vowed the world with the -- emergency landing skills on the Hudson River. One year later the hero pilot Sully Sullenberger makes his final flight. Stay with us. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We are getting word of yet another earthquake. Lisa Sylvester is getting information. What do we know?

LISA SYLVESTER, CNN CORRESPONDENT: At this point we know it is a 6.4 magnitude earthquake that struck about 155 miles southwest of Taipei in Taiwan. It happened around 8:18 in the morning local time, during rush hour, approximately 7:18 eastern time. There were no immediate reports of injuries or damage. We will don't monitor the story and bring you the latest developments as they come in.

Hero pilot Sullenberger is hanging up his pilot's cap. He made the so-called miracle on the Hudson landing last year after losing engine power from a bird strike. The 59 year old flew his final flight for U.S. Airways this afternoon. Some of the passengers whose lives he saved flew with him. Sullenberger says he plans to spend more time with his family and working on pilot issues.

And a poll of New York state voters indicates they don't want Governor David Paterson to resign. According to a Quinnipiac University poll, 61% say Patterson should finish his term. State Attorney General Andrew Cuomo is investigating whether Paterson or his staff member tried to persuade a woman to drop domestic violence complaint against an aide. CNN's Mary Snow was in Albany today and got to talk to Paterson.

MARY SNOW, CNN CORRESPONDENT: Good morning, governor. Are you planning to tell your story?

GOV. DAVID PATERSON (D), NEW YORK: I would really love to tell my story. I have worked on domestic violence issues for over 20 years. And I think I'm sensitive to victims and also prospective victims. I think that you I would relish the opportunity to talk to you about this right now. But when I read these accounts that are unsourced and inaccurate, it is obviously frustrating. But the hope for me is that the attorney general's investigation is a place where witnesses have to take an oath and hopefully with the truth comes out. And when the truth come out, I'm confident that I will be vindicated.

SYLVESTER: The FAA says air traffic controller is now on paid leave after allowing his son to radio instructions to pilots at New York's JFK airport. CNN told he brought another child into the tower the next day. A supervisor has also been placed on leave in what an FAA official calls a totally unacceptable lapse in judgment. Audio clips of the transmissions are all over the internet. Wolf?

BLITZER: Yes. Pretty shocking stuff. Thanks very much for that.

Taking a bite out of skyrocketing health care costs by reducing the number of expensive medical procedures. The hospital in Utah is making that a priority. It is starting in the maternity ward. Let's go to CNN's senior medical correspondent Elizabeth Cohen.

(BEGIN VIDEOTAPE) ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: We are in Murray, Utah, where Hailey Nelson is about to have a baby. How's the labor going?

HAILEY NELSON: Going well.

COHEN: Any pains yet?

NELSON: No.

COHEN: Epidural kicked in?

NELSON: Yes.

COHEN: We will catch up with you in a bit. I will say something that sounds crass. How Haley has this baby affects my pocketbook and yours, too. Let me explain. I'm here in Intermountain with Dr. Brent James, chief quality officer. Looks like Hailey doing well in there.

DR. BRENT JAMES, INTERMOUNTAIN HOSPITAL: Very well. I think in about an hour we will have another citizen of the state of Utah.

COHEN: Now here in intermountain you are very focused on not wasting money. So can you take me on a tour of the hospital, show me how you do it?

JAMES: I would be delighted.

COHEN: Found you had a lot of CT scans that were unnecessary, wasting money. How much money did you save when you stopped doing repetitive scans?

JAMES: We dropped the total number by about 20%. It would have been measured in the tens of millions of dollars. It is not CT scans. It is other imaging exams.

COHEN: Here is another way intermountain saves money. I will tell you, it is so much cuter than an MRI. Here at this hospital, two out of every ten babies are born via caesarian section. The national average at hospitals around the country is that three out of every ten babies are born by c section. Now you may think, okay, one extra baby by c-section, what's the different? C-section costs about $2,000 more than a vaginal birth. If you do the math if every hospital in the country had statistics like this hospital, the nation would save about $1 billion. By instituting all of these changes to get rid of waste, how much money are you saving?

JAMES: We estimate that we are saving a minimum of $150 million per year.

COHEN: That's a lot about $150 million a year.

Why can't all hospitals do this?

JAMES: Frankly, they can. COHEN: It makes me nervous when I hear that hospitals are trying to save money, because I want you to spend money on me when I'm sick. So you're saving all this money, but are you delivering good care?

JAMES: It turns out in almost all circumstances better care is cheaper care.

COHEN: How could better care be cheaper?

JAMES: You avoid the complication. We have a great way of saying it -- the best patient outcome at the lowest necessary cost.

COHEN: So I'm going to go check on Hailey now.

NELSON: Wonderful.

COHEN: Congratulations. She's beautiful.

NELSON: Thank you. We think so, too.

COHEN: She was not born by c-section.

NELSON: No.

COHEN: So she saved everyone a little money.

NELSON: That's a good way to look at it.

(END VIDEOTAPE)

COHEN: You may be wondering why can't every hospital do what intermountain has done? Part of the answer is that hospitals make money when they do more procedures or more CT scans, they make more money off a c-section than a vaginal delivery, for example, so it can be hard to tell a hospital stop doing things that are making you money. Wolf?

BLITZER: Elizabeth Cohen, thanks very much. Hospitals also do that kind of stuff to avoid malpractice lawsuits down the road. They want to make sure they get a lot of tests in. Very complicated subs. Elizabeth will have more in the coming days.

Would you rat out a tax cheat to make money? Jack Cafferty has your e-mail.

An effort is under way to get former President Ronald Reagan on the $50. Huh? You have high arches.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack for "the Cafferty file". Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question is would you rat out a tax cheat in order to make money for yourself. Rob writes, "This country is sounding more and more like pre-war Germany. Let's have brother turn on brother. Yes, America, you too can be a nice political policeman. Save the country and turn in that rotten next-door neighbor who makes $200,000 when you make only $50,000. Correct me if I'm wrong, but isn't this how class wars get started?"

Shondra writes, "No. given the current administration's track record for hiring responsible tax paying citizens, I refuse to waste my time helping them find anybody else who isn't paying their taxes."

Nick in San Diego writes, "Not a small-timer in the middle class, but a heavy hitter? You bet, in a New York minute."

James in North Carolina, "Rat out a tack cheat to make money, no, I wouldn't, Jack. I love my mother."

Linda writes, "Geithner, Rangel, et cetera, where do I collect my payment?"

Greg writes, "Thanks for the tip, Jack, I didn't know such a program existed but I'll look it up as I expect to report an ex-spouse that I wrote to you about a couple of days ago."

Bob writes, "Why bother? The money is probably taxable."

Arthur writes, "Not a chance."

Agnes in California, "Absolutely not. I grew up behind the iron curtain where snitching on your neighbors to the state was a daily routine. This is as immoral as one can get. You know what? In a corrupt system like that, you never know when it's you who the government will go after."

Dennis writes, "You're safe, Jack. I won't say a work."

If you want to read more, go to my blog, CNN.com/Caffertyfile.

BLITZER: See you tomorrow. Thanks very much, Jack, Jack Cafferty with the Cafferty file.

Let's check in with Campbell to see what's coming up right at the top of the hour. What are you working on, Campbell?

CAMPBELL BROWN, CNN ANCHOR: Hey there Wolf. Coming up at the top of the hour, John Thune, who is of course one of the Republican leaders in the U.S. Senate on the Republican outrage right now over the white house push to get health care reform done and get it done very quickly.

Also, Wolf, our special series "Medical Breakthroughs." We're looking at a brain cancer treatment being described as some as a smart bomb kind of. It attacks tumors without making patients as sick as many of the previous treatments did.

Also, a rock veteran, some crying foul over the way that soldiers are portrayed as renegades and cowboys in "The Hurt Locker." Wolf, see you in a few.

BLITZER: That brain tumor story, Sanjay Gupta, himself a neurosurgeon, he's doing that report, right?

BROWN: He is. He's been doing this special series for us all week. Very interesting.

BLITZER: Thanks, Campbell.

A member of Congress wants a new face on the $50 bill. You'll find out who could potentially take over Grant's prized position.

(COMMERCIAL BREAK)

BLITZER: Let's look at some of the hot shots this hour.

In India, a farmer carries a bundle of sugar cane along the border with Pakistan.

In Indonesia, a protester leaps over a burning pile of banners during an anti-government rally.

In the Philippines, a parks and wildlife worker stares at a room filled with confiscated elephant tusks.

And in London, an actress performs a scene from "Love Never Dies" a sequel to "Phantom of the Opera."

Hot shots, pictures worth 1,000 words.

On our political ticker, a North Carolina lawmaker wasn't to put former President Ronald Reagan on the $50 bill. Republican Patrick McHenry is proposing legislation that would bump President and legendary union general Ulysses W. Grant from the bill and replace him with Ronald Reagan. Congressman McHenry says several historians have ranked Reagan a greater president than Grant and it's time to honor, in his words, the last great president of the 20th century.

Mark your calendars. The Republican National Committee has set its date for its 2012 convention, the week of august 27th. By tradition, the Democrats will hold they're convention after that, because they control the white house. Three cities have been named finalists to host the convention. That would be Phoenix, Tampa, and Salt Lake City.

Remember, for the latest political news anytime, check out CNNpolitics.com. And you can follow me on twitter.

Up next, Campbell Brown.