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THE SITUATION ROOM

New York City's Big Push to get Counted

Aired April 1, 2010 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Rick, thanks very much.

Happening now, President Obama is getting more blame than ever for Americans' economic mess. And the Wall Street bailout isn't helping his credibility with the American public. Wait until you hear some new numbers on how much the bailout cost and how financial big shots are profiting right now.

Also, he's the highest ranking North Korean defector ever and he's sharing what he knows about the reclusive and eccentric leader, Kim Jong-Il. This hour, his unique insight into the North Korean nuclear threat and what the U.S. should do about it.

And Uncle Sam wants you to send in your 2010 Census form. This is a critical day for Americans to be counted and if you're not, it could cost you, your state and in your -- and your community big time.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

President Obama is wrapping up another victory lap over health care reform. But many Americans want to know what he's done for them lately over jobs and the economy.

Just hours before a highly watched report on unemployment is released, we have new evidence that the public's financial pain and anger are taking a toll on the president's party.

Look at this. Our just released CNN/Opinion Research Corporation poll asked, "Which party would do a better job on the economy? Forty- five percent say Democrats. That's down 7 points from August. Forty- eight percent say Republicans would do a better job on the economy. And that's up 9 points from August.

The Treasury secretary, Timothy Geithner, acknowledged today that the federal bailout of Wall Street has left many Americans bitter.

(BEGIN VIDEO CLIP FROM "THE TODAY SHOW," COURTESY NBC)

MATT LAUER, HOST: When someone's out there and they haven't gotten a job that they lost two years ago and -- and they get the feeling that business on Wall Street has returned to normal...

TIMOTHY GEITHNER, TREASURY SECRETARY: Right. Yes.

LAUER: -- and the executives are getting big bonuses again and they still can't pay for their mortgage or they're underwater...

GEITHNER: Yes.

LAUER: -- they say where's the fairness in this?

GEITHNER: Exactly. And it's not a -- it's not fair. It's deeply unfair and they should be angry about it.

But, again, what was the choice the president had to make?

He had to decide whether he was going to act to fix it or stand back because it would -- it be might be more popular not to have to do that kind of stuff. And that would have been calamitous for the American economy -- much, much worse than what we went through already.

(END VIDEO CLIP)

BLITZER: We're getting a new and some would say disturbing look at how much the bailout has actually cost the country.

Let's bring in our national political correspondent, Jessica Yellin, who's doing some addition right now.

What's this recovery costing us?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: You know what, most people, when you ask them about what Wall Street bailout, think that the cost was the so-called TARP program -- $700 billion that Congress approved. We've heard so much about it.

But guess what?

According to a new analysis by a private group out today, a research group, we have spent a whopping $4.6 trillion -- yes, trillion dollars -- propping up banks and financial institutions. Most of that money came from the Federal Reserve. Now that's cheap loans that banks can get, but small businesses can't. And, as you know, the details -- most of those details are kept secret -- Wolf.

BLITZER: At the same time, some fat cats on Wall Street have become much fatter -- much fatter over the past year.

YELLIN: They really have. And it's remarkable numbers. This is from "The New York Times" today. Now, we should note, none of these guys works directly for a firm that got government bailout money. They work at hedge funds, which gamble on the stock market.

Now citing research from "Absolute Return" magazine, which monitors these hedge funds, last year these guys made more money than ever before.

And who came out on top?

First of all, David Tepper -- worth last year, $4 billion; George Soros, $3.3 billion; and James Simmons, just $2.5 billion -- Wolf. BLITZER: That's not what they're worth, that's how much they made last year.

YELLIN: That's how much they made last year plus their investment in their own company. That was in the middle of the recovery, when most of us were really struggling. Not these guys.

BLITZER: Yes, these are not millions, these are billions we're talking about.

YELLIN: It's hard to process.

BLITZER: Yes. It's amazing.

All right. Thanks very much for that, Jessica.

With President Obama -- when he took office, he talked of inheriting the recession from President Bush. But more Americans now are starting to see Mr. Obama as part of the problem.

A brand new "USA Today"/Gallup Poll shows 26 percent of the people questioned say President Obama deserves a great deal of blame for these tough economic times. That's almost double the number from last July. Most Americans, 42 percent, still blame George W. Bush for the recession.

Let's bring in our senior political analyst, David Gergen. They still blame Bush. But more and more increasingly, they're starting to blame President Obama -- David.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: Absolutely, Wolf. That goes with the territory, as you know. In Vietnam, it was Lyndon Johnson's war. And shortly after he took office, it became Richard Nixon's war. And the same thing is happening with the economy.

By this November, I think it's going to be almost solidly a view -- at least half the country will believe, going to the polls, that it's President Obama's economy. And all this spending by the Federal Reserve and on TARP Jessica Yellin just talked about, as well as additional spending by Congress, is only going to deepen that view on the public, Wolf, that we spent all this money, where are the results?

So that's one reason why this jobs report tomorrow is going to be so important.

BLITZER: Because the jobs report, a lot of economists are predicting it will show significant job growth in the month of March, maybe 150,000 jobs; maybe as many as 200,000 jobs. But at the same time, they're cautioning, a lot of those jobs are government jobs. For example, the Census hired a bunch of people.

GERGEN: Well, that's right, Wolf. And it's also worth remembering that -- that as -- as we go forward here, the labor force keeps growing. So it takes 150,000 jobs in any single month just to -- to meet the needs of the new people entering the labor force. You've got to get above 150,000 before you really start making progress on -- on -- on basic unemployment in the country. I think someone from CNN...

BLITZER: But having said that, David -- let me interrupt you.

GERGEN: Yes.

BLITZER: Just a little bit more than a year ago, we were losing 700,000 jobs a month; 600,000 jobs a month. So if you create 150,000 or 200,000 jobs, that's a significant improvement.

GERGEN: It's a significant improvement. And that's what we're waiting for. There are conflicting signals in other reports this week about which way it may go tomorrow. And that's why it's going to -- we're all waiting with great anticipation, is this going to be the turn on unemployment or not?

But someone at CNN has calculated, Wolf, that we lost so many jobs during the downturn, that even if you create 300,000 a month, it will take five years, at 300,000 a month steadily, over five years, to get back to where we were before the -- the economy started reeling downward.

So we've got a long way to go. And Tim Geithner has been emphasizing not only the unfairness of what we're seeing in some of these CEO paid payouts, but that this is -- we -- it's going to take a long time to dig out from this. And President Obama will increasingly be looked to as either -- either he speeds it up or he gets blamed for it.

BLITZER: David Gergen, thanks very much.

We'll wait for those numbers tomorrow morning. 8:30 a.m. Eastern -- that's when the numbers are released. You can watch CNN's "AMERICAN MORNING" and you'll get the numbers right away.

The Obama administration says its new fuel economy standards will save drivers money over the long haul. The final rules were issued today. The goal is to increase fuel by 5 percent a year.

By 2016, for example, all passenger cars sold in the United States would have to average -- average 39 miles per gallon. Light trucks would average 30 miles a gallon. The administration estimates that the new rule will raise the price of each vehicle by about $1,300, but within three years, the higher cost will be offset by fuel savings estimated at about $3,000 over the lifetime of a car.

The Transportation Department says the new fuel standards also will reduce greenhouse gas emissions at a substantial rate, equivalent to removing 42 million cars off the road. Those announcements coming today from the administration.

A high level defector from North Korea is now sharing some of Kim Jong-Il's secrets. And in a rare appearance, he's warning U.S. officials that nuclear talks won't get them anywhere. Stand by for his fascinating insight. And Afghan President Hamid Karzai has some angry words for the West and some strong accusations. Stand by to hear why he's blaming foreigners for some of his problems.

And President Obama takes on Republican critics who warned that health care reform could be the end of the world. The president responding today in Maine.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN ANCHOR: How sad it is that during the holiest period of the Catholic Church, the faithful are distracted by the sins of the church. Today, is Holy Thursday. Tomorrow is Good Friday, the day Jesus died on the cross for the sins of mankind.

But this year, three days before Easter, the sins of the leaders of his church cast a dark shadow, indeed, over the most joyous celebration in Catholicism -- the Resurrection.

Instead, the church is lashing out at those who dare to expose the sexual abuse of children by priests. The Vatican plays victim, claiming it was attacked by "The New York Times" during Holy Week. It's the children who were attacked, the ones that go to the Catholic Church -- thousands of them, tens of thousands of them. We don't know how many.

In one case alone, a single priest abused 200 deaf children and nothing happened to him -- nothing. He wasn't punished by the church. He was protected by the church. He wasn't punished by the criminal justice system, either. There has been no justice for 200 deaf kids who were taught to trust and respect a priest who turned around and destroyed their innocence.

One spokesman for the church tries to write the sexual abuse of children off as what he called "a homosexual crisis." Like that makes it OK. Grown men abusing children is OK because it's a homosexual crisis. Any excuse to avoid the truth, it seems.

Now a lawyer in Kentucky, bless his heart, William McMurray, wants to try to get some justice for the tens of thousands of children around the world who could never speak for themselves. No one would listen.

Here's the question: Should Pope Benedict be required to answer questions under oath about the sexual abuse of children by the Catholic Church?

Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

In Afghanistan today, President Hamid Karzai is lashing out at the United Nations and the international community. He's accusing them of interfering with last year's fraud-tainted presidential election in his country.

Mr. Karzai didn't specifically mention the United States, just days after President Obama's visit to Kabul, Afghanistan. But his increasingly strained relations with the West were reflected in his very harsh words.

Listen to this.

(BEGIN VIDEO CLIP)

PRES. HAMID KARZAI, AFGHANISTAN (through translator): This is the reality, brothers. For this reason today, I come here to talk to the members of the Independent Election Commission about fraud in the presidential election and provincial election. No doubt there was huge fraud. There was vast fraud. The fraud is not by the Afghans. This fraud has been done by the foreigners.

(END VIDEO CLIP)

BLITZER: By the foreigners.

A U.N. watchdog committee, by the way, threw out nearly a third of Karzai's votes in the presidential election last summer, denying him a first round victory. A planned run-off was canceled after his remaining challengers simply dropped out of the contest.

On the front lines of the war in Afghanistan, they're modern-day G.I. Janes. And now these female Marines are covering territory that their male counterparts can't.

Our Pentagon correspondent, Chris Lawrence, has their story from Helmand Province.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Just about everyone told these two Marines, sure you deployed to Afghanistan, but you'll never leave the base.

LANCE CORPORAL GIADA WITT, UNITED STATES MARINE CORPS: They were like, yes, there's 0 percent chance that you'll be leaving the wire ever.

LAWRENCE: But here they are, in a remote, heavily IEDed part of Helmand Province on foot in Afghan villages.

WITT: (INAUDIBLE).

LAWRENCE: Lance Corporal Giana Witt and Corporal Christina Arana (ph) are part of FET or Female Engagement Team. The Marines realized they were only reaching half the Afghan people. But Witt and Arana can go where male Marines can't -- into the homes of Afghan women.

WITT: Since this culture believes the women can't meet with the men, they have to keep themselves covered.

LAWRENCE: Even our crew has to stop at the gate to avoid offending the man who owns this home.

(on camera): I know they seem to be marginalized, but do you think that Afghan women have a good deal of influence within their family?

WITT: Absolutely. And they're definitely a key player in getting information.

LAWRENCE: In a counter-insurgency fight, if a woman tells the team they need a new wall and the Marines get it built, it improves their acceptance in the village. And the women may know from their husbands who the bad guys are.

Women only make up 6 percent of the U.S. Marine Corps and they're not allowed to join infantry or recon.

WITT: We can only do one (INAUDIBLE). You have to meet with the people and you have to understand them.

(END VIDEOTAPE)

LAWRENCE: (on camera): Right now, the FET teams are thrown together with female Marines who have other jobs, meaning they work for a couple months and then have to go back to their units. Some critics say if the program is paying that many dividends, the military should invest in staffing and training for it full-time -- Wolf.

BLITZER: Chris Lawrence on the scene for us in Afghanistan.

Thank you.

President Obama has a message for Republicans who call his health care bill Armageddon. And get this -- it involves talk of asteroids. You're going to want to hear what the president is saying today.

And the man convicted of gunning down one of the country's few late-term abortion doctors interrupts his sentencing to say why he did it. That and more coming up.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now -- Lisa, what do you have?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf.

Well, despite major recalls in recent months, Toyota appears to be bouncing back. The embattled automaker says U.S. sales surged 41 percent last month. The gain follows a 9 percent dip in February due to the safety recalls. General Motors and Ford are also reporting increased sales for the month.

A judge in Kansas is weighing the punishment for the man convicted of gunning down an abortion doctor last May. Scott Roeder admitted to the crime and even blasted his victim from the stand during his sentencing hearing today. He faces life behind bars, but the judge can make him eligible for parole after 25 years.

Roeder's lawyers argued the circumstances of the case did not warrant the harsher sentence, but the judge has pointed to evidence Roeder stalked his victim before shooting him at church.

Police in Southwestern Illinois say they have two suspects in the fatal shooting of the mayor of a small bankrupt town. Investigators say the mayor of Washington Park was found in his car today shot twice in the chest at close range. They believe he'd just finished an overnight shift at his other job. The blighted community near St. Louis is known for its strip clubs, as well as the convictions of members of local government for embezzlement.

New safety measures are in place at the Pentagon following a gunman's attack early last month. The head of the Pentagon's Protection Agency says officers are performing extra screenings to visitors and more random inspections of employees who enter the building. He also says communications improvements have been made at the Pentagon's command center. Meantime, a multimillion dollar five year security overhaul is also underway -- Wolf.

BLITZER: Thanks, Lisa.

We're going to check back with you for more later.

A new warning to the United States that negotiating with North Korea is simply a waste of time. It comes from a man who was part of Kim Jong-Il's inner circle until he fled the country. You're going to want to hear his take on what North Korea is up to, including its nuclear threat.

And what New York City stands to lose if residents don't fill out their Census forms -- the big push is on right now and the stakes are enormous.

And it's a story that's creating a lot of outrage -- the father of a Marine who sued protesters who disrupted his son's funeral now is being forced to pay a price.

(COMMERCIAL BREAK)

BLITZER: And you're in THE SITUATION ROOM.

Happening now, pirates attack a U.S. Navy ship in the Indian Ocean, but wind up losing their fight. You're going to want to hear what happened. We have a full report. That will come up.

And they're being deployed around the country to keep you safe, but full body imaging machines are turning up a lot more than explosives. And critics say that's causing legal problems for the wrong people.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

But first, this just coming into THE SITUATION ROOM.

We've just received word that President Obama has made an unannounced stop to get a briefing on the flooding in Massachusetts and elsewhere in New England. He's meeting with the governor of Massachusetts, Deval Patrick, among others. We're going to get you the pictures and get a report from the scene as soon as that comes in. Stand by. The president right now outside of Boston getting a briefing on the serious flooding in New England.

Earlier, the president stopped in Maine to talk about health care and the president urging Americans not to judge the new health care reform law until some of the benefits take hold -- and he says that will be soon.

He wrapped up an appearance just a little while ago and he took on his Republican critics, who have portrayed the overhaul as the end of the world.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now over the last year, there's been a lot of misinformation spread about health reform. There's been a lot of fearmongering, a lot of overheated rhetoric. You turned on the news, you'd see that those same folks who were hollering about it before it passed, they're still hollering about how the world will end because we passed this bill. This is not an exaggeration.

John Boehner called the passage of this bill...

(BOOS)

OBAMA: No need to...

(BOOS)

OBAMA: We don't -- we don't need to boo. I -- I just want to give the facts. He called this -- the passage of this bill Armageddon. You had others who said this is the end of freedom as we know it.

So after I signed the bill, I looked around.

(LAUGHTER)

OBAMA: And...

(APPLAUSE)

OBAMA: -- I looked up at the sky to see if the asteroids were coming.

(LAUGHTER)

OBAMA: I looked at the ground to see if cracks had opened up in the Earth. And you know what?

It turned out it was a pretty nice day.

(APPLAUSE)

OBAMA: Birds.

(APPLAUSE)

OBAMA: Birds were still chirping. Folks were -- folks were strolling down the street. Nobody had lost their doctor. Nobody had pulled the plug on granny. Nobody was being dragged away to be forced into some government-run health care plan.

(END VIDEO CLIP)

BLITZER: We're going to talk more about this with CNN's John King and Candy Crowley. That's coming up later here in THE SITUATION ROOM.

But right now, let's turn to one of the most serious international challenges for President Obama -- the nuclear threat from North Korea and its reclusive leader, Kim Jong-Il. We're getting new inside information from someone who knows Kim Jong-Il well.

Our foreign affairs correspondent, Jill Dougherty, is joining us from the State Department.

She's been working on this story for a while -- Jill, a very high level North Korean defector and you had a chance to catch up with him.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right, Wolf. Well, he first saw Kim Jong-Il when the North Korean leader was just a teenager -- 17 years old. Later, he became part of the inner circle of Kim. And then he fled from North Korea.

And now he tells me there's another, more effective way of dealing with Kim Jong-Il.

(BEGIN VIDEOTAPE)

HWANG JANG-YOP, NORTH KOREAN DEFECTOR (through translator): Kim Jong-Il, he is the absolute ruler. He has all the power.

DOUGHERTY: (voice-over): The highest ranking North Korean defector ever says negotiating with Kim Jong-Il is useless.

JANG-YOP (through translator): Perhaps what you really want to ask is whether Kim Jong-Il would ever give up his nuclear program. And to that I would say that, well, only in certain people's dreams.

DOUGHERTY: Hwang Jang-Yop, former mentor to the North Korean leader and author of the regime's ideology, defected to South Korea in 1997, blaming Kim for the starvation deaths of more than one million of his countrymen. In 2003, during his first visit to Washington, Hwang testified before Congress about the deplorable human rights situation in his country.

Now, based in South Korea, he's back for talks with officials here and a rare public appearance. Hwang says military force is not the way to make Kim Jong-Il's regime give up its nuclear weapons. But neither is engagement.

JANG-YOP (through translator): We should kind of show them some respect, on the one hand, but practically, we should not be too lenient in giving them promises, because there is not much to expect in return from them.

DOUGHERTY: Instead, he says take a page from the cold war.

JANG-YOP (through translator): I don't think military is the solution. I think the solution is more -- more multifaceted. You would have to wage a war of ideology. You would have to look to the economy, and also diplomacy.

DOUGHERTY: Another strategy Hwang says could work, separate North Korea from China, which he calls North Korea's only lifeline.

JANG-YOP (through translator): China decides to stop its alliance with North Korea, it means collapse of the North Korean regime right away. And it will serve as a catalyst for the north to be catapulted into reform and opening.

(END VIDEOTAPE)

DOUGHERTY (on camera): And right now, South Korean officials say that if Kim Jong-il is likely to visit China very soon. That trip would come as the North Korean economy is in dire straits and as the international community is ratcheting up pressure on Kim to stop his nuclear program -- Wolf.

BLITZER: Good report, Jill. Thank you. Jill Dougherty in the State Department.

Today is National Census Day. And there's a huge push under way to get you to fill out your form if you haven't already. New York City is pulling out all the stops, fearing it could lose a lot if residents aren't counted.

And a U.S. Navy ship attacked by five suspected pirates. We're going to tell you what happened and where the pirates are now.

And yet another new embarrassment for the Republican National Committee involving a sex hotline.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN: Make it happen today! Census day, April 1st! And it ain't no joke!

(END VIDEO CLIP)

BLITZER: Big push here in Washington and across the nation today to get Americans to fill out and send back their 2010 census forms. The U.S. Census Bureau says, it mailed or hand delivered about 134 million questionnaires and it's already gotten back just over half of them. The White House released the photo of the president filling out his family's form. Federal officials want to remind us all that the census is important for a number of reasons. It affects how many states, how many seats, that is, your state gets to the U.S. House of Representatives, and it helps determine how more than $400 billion in federal funding is spent every single year.

Our Mary Snow is taking a closer look at New York City's efforts to make sure its residents are fully counted. What are they doing in New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, as the nation's largest city, New York poses a unique challenge to census taker. For starters, it's estimated there are over 200 languages spoken here. But it's not just people who pose a challenge. It's buildings, too.

(BEGIN VIDEOTAPE)

SNOW (voice-over): In a city of eight million people with little room to budge, City Planner Joe Salvo has found people can hide. And he's made it his mission to find them. Salvo realized after the 2000 census that because new construction meant buildings weren't on maps or one home might have several apartments, the Census Bureau missed almost 300,000 New Yorkers.

JOE SALVO, DEPARTMENT OF CITY PLANNING: What happens is this. Someone goes out and looks at the building and they don't know what's there. Our job is to get them to look behind the door by providing them the additional information.

SNOW: And to get information, Salvo has had his team scour the streets, counting things like satellite dishes and water usage to see how many people are in one home. It's part of an unprecedented push by New York City and the Census Bureau to get people to fill out forms.

(BEGIN VIDEO CLIP)

UNIDENTIFIED WOMAN: What is this?

(END VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: New York is the poster child for a difficult to count population.

SNOW (on camera): Why?

BLOOMBERG: We have a very mobile society here. More so than people come here, young people come here, stay for a short period of time. People move around a lot in New York City.

SNOW (voice-over): And then there are hundreds of thousands of immigrants, both legal and illegal. There's fear and suspicion of government. Both community leaders and census workers have spent the last months spanning the streets. Reaching out to areas like this Muslim neighborhood.

I came to this country almost 30 years ago. And I know the fear, I know how people think. And I'm one of them.

SNOW: Despite the efforts, New York City is lagging the nation in getting people to return their forms. And it's frustrating to the City's Census Coordinator Stacey Cumberbatch who says, for every New Yorker who fills goes out a form, it means $3,000 per year of federal money.

STACEY CUMBERBATCH, NYC CENSUS COORDINATOR: That money is for transportation, for education, for health care, for schools.

SNOW: And that's the main push behind the mayor of New York's message.

BLOOMBERG: Let's assume you don't want to be counted. OK. We're not going to get the monies to help you. Except let's get real. You're still going to be in line to get those services. Which means I who did fill out the form have to reach into my pocket and come up with some tax dollars because we still have to help you.

(END VIDEOTAPE)

SNOW (on camera): Wolf, meantime, it's also costing money to get people to fill out the forms. If you don't mail back forms by April 22nd, the Census Bureau will then start knocking on your door. And it can make six attempts to reach you. Now, here in New York City, each time a census worker knocks on a door, it's estimated to cost about $60 -- Wolf.

BLITZER: Mary Snow, thanks very much. A little perspective right now. The first U.S. Census was taken back in 1790. The government has gone to great lengths over the last century to make sure Americans know what the census is all about. Check out some of these promotional images going back decades. Listen to this one. Advertising the 1940 census.

(BEGIN VIDEO CLIP)

ANNOUNCER: The 1940 census is going to have the value it should, enumerators will have to get the full record of each person in this nation. If each enumerator misses only eight names in his district, the total effect would be the underestimate the population of the nation by a million persons.

(END VIDEO CLIP)

BLITZER: Remember, the census is mandatory. If you don't send it back within the next couple of weeks, as Mary just said, you would get a knock on the door from a census taker. And ultimately, ultimately you could even face a fine. Go ahead, fill it out, get it over with, and move on.

Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM. Lisa, what else is going on?

SYLVESTER: Hi, Wolf. Restricted air space over the former western White House will shrink. The FAA is relaxing the rules on flying over the private ranch of Former President George W. Bush in Crawford, Texas. It follows a security review and will reduce the radius of restricted air space from three nautical miles to two beginning in for early June.

Well, donations are pouring in for the father of a fallen marine ordered to pay more than $16,000 in court costs. Albert Snyder has successfully sued protesters for disrupting his son's funeral in 2006. But the higher court reverse the ruling based on free speech. Snyder was cost with the demonstrators court cost. U.S. Supreme Court has agreed to hear this case. The protesters say, the military deaths are God's punishment for tolerance of homosexuality.

And then this is a strange and really sad case of alleged internet addiction in South Korea. A couple is charged with neglecting their own baby who eventually died while caring for a virtual child on the internet. The trial gets under way in just a few hours. And the suspects, one of whom is seen right there under the jacket, they are unemployed. Authorities say that they were long gone for marathon sessions of nurturing a fantasy baby while their real 3- month-old baby died from malnutrition. That is such a horrible, horrible case -- Wolf.

BLITZER: Indeed. All right. Thank you, Lisa. Sad story.

The Republican National Committee now is coming under more fire from inside its own party. Could it be in danger of losing some of that conservative base?

And they're in airports around the country to try to keep you safe. So, why are some arguing that those full body scanners are causing legal problems for people who pose no security threat at all? That's coming up.

(COMMERCIAL BREAK)

BLITZER: Right to our "Strategy Session." Joining us, our CNN Political Contributor Hilary Rosen of the Brunswick Group and Republican Strategist Mary Matalin. Guys, thanks very much for coming in.

Mary, the Republican Party, Republican National Committee is coming under a lot of criticism. And now Tony Perkins of the family research council, which is a conservative organization says, his members stop giving money to the RNC not simply because of the incident with that Racy Nightclub in Los Angeles, but because it's part of a bigger problem, he says. Listen to what he said on CNN's "American Morning." (BEGIN VIDEO CLIP)

TONY PERKINS, FAMILY RESEARCH COUNCIL: Just a few weeks ago, they announced that they were hiring Constitutional Attorney Ted Olson to represent the RNC. It just so happens Ted Olson is also working to overturn prop eight out in California, a marriage amendment that was passed by seven million voters. That obviously doesn't set well with many Republican-minded voters who have worked hard in 31 states to pass marriage amendments or statutes.

(END VIDEO CLIP)

BLITZER: He's referring to the proposition eight which would have allowed same-sex marriage in California, which was voted down. The RNC has a problem now, doesn't it?

MARY MATALIN, FORMER ADVISER TO PRESIDENT GEORGE W. BUSH: Well, it certainly has a problem with Tony and possibly by extension social conservatives. I think the overwhelming majority of Republicans would not find Ted Olson wanting for conservative bona fides having turn as many presidents and being a truly a conservative person.

(CROSSTALK)

BLITZER: I will just point out Mary, he's joined with David Boies to argue the case. It maybe will go all the way to the Supreme Court. In favor of same-sex marriage which you heard Tony Perkins strongly oppose. Let Mary respond, Hilary.

MATALIN: I'm -- but that Ted Olson could not keep that case separate from his extraordinary legal abilities, which he's rendering for the Republican National Committee, is an issue. But Michael Steele has a larger issue. This was not -- it didn't start with Ted Olson. And it didn't end with the club in California for which responsibility was taken. There is a problem. But it's resolvable.

BLITZER: How big of a problem does the RNC have right now, Hilary, from your Democratic perspective?

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Despite my enthusiasm for Ted Olson and the tough case he's taken on in California, and, you know, God forbid it took Tony Perkins to make me sympathize with Michael Steele, the fact is that the Republicans kind of have a war within themselves. And it's an ongoing and years decades-long war, which is how do the social conservatives fit into the party and how do they say that they have a big tent when they're constantly yanked to and fro by threats from all sides of the party.

Right now, they've got the Tea Party. They've got the conservatives. They've got social conservatives. They've got the fiscal conservatives. And they're all kind of fighting for the soul of it. And then having said that, Michael Steele is just a terrible leader. He has no -- shown no ability to bring these factions together and have any party unity at all?

BLITZER: Is that true, Mary, that Michael Steele is a, quote, "terrible leader"?

MATALIN: You know, this is a lot of wishful thinking on Hilary's part. We just got polls out, CNN this week and a Gallup today showing that the momentum in the Republican direction is the highest it's been and Democrats are at the lowest they've been since the beginning of the history of Gallup polling. So, we've always been fractious. We know how to debate. And we know how to come together and unite when we have to. Looks like we'll be able to in the mid-terms.

There are 99.9 percent of the people at the Republican National Committee are super stars, and they're being tarred by the acts of some lunatics out there. But Michael Steele has to -- he has to go talk to some of these people and explain to them what he's doing and the good work -- they spend tens of millions of dollars and thousands of man hours in New Jersey, Virginia and Massachusetts to obvious good effect. He needs to point out more of their good work and come bring them together. Hilary's right about that.

BLITZER: Well, there's no doubt, and I assume you'll agree, Hilary, the Republicans are in better shape now than they were a year ago.

ROSEN: I think they are in better shape now than they were a year ago. But let's not forget that the country essentially fired the Republicans just over a year ago because of what happened to the economy. And we still haven't seen any solutions from the Republicans about how they would fix the economy. So, I think going forward, you know, this war among themselves is going to hamper them. Their only solution has ever been to cut taxes, which has only made rich people richer, which got us into this problem in the first place. I just don't think when push comes to shove, the Republicans are going to be able to succeed just by attacking Democrats.

BLITZER: The National Republican Senatorial Committee had a little April Fools Day fun with this little web video they put out. Let me play a little piece of it.

(BEGIN VIDEO CLIP)

ANNOUNCER: He kept all his promises.

OBAMA: Change has come to America.

ANNOUNCER: Unemployment is at negative 39 percent.

OBAMA: The most sweeping economic recovery package.

ANNOUNCER: Our deficit is no more.

OBAMA: Put an end to the runaway spending and the record deficits.

ANNOUNCER: And global warming has been solved by replacing cars with low emission unicorns powered by the renewable energy of rainbows.

(END VIDEO CLIP)

BLITZER: Very cute little ad. They got a sense of humor over there, Hilary, don't you think?

ROSEN: It's pretty funny. The only thing that would be funnier is if it was actually talking about the truth, which is, you know, unfortunately every initiative that the president has put forward to actually solve the real problems in this country, the Republicans have opposed.

BLITZER: Is that a truth, Mary?

MATALIN: Well, the proof is in the pudding. We have record unemployment. We have record deficits. We have crushing debt. But to honor holy week, I'm going to suspend hostilities and wish the Obama family a happy, happy Easter and the rest of the country a joyous season.

ROSEN: And that's no April Fools' joke.

BLITZER: We wish it to all our viewers out there as well, guys. Thanks very much. Hilary Rosen and Mary Matalin.

Jack Cafferty is asking, should Pope Benedict be required to answer questions under oath about the sexual abuse of children by the Catholic Church? He'll be back in a moment with your e-mail.

And we'll take you inside the collapse of Wall Street with the author of the -- the best selling author of the book turned movie, "The Blind Side." Michael Lewis is standing by to share his take on the stupidity and corruption in the financial world.

And we have an update on the shocking story we've been covering. A man condemned to die for committing sorcery. There's been a major twist in the case. Standby, we'll update you.

(COMMERCIAL BREAK)

BLITZER: Jack's back with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Should Pope Benedict be required to answer questions under oath about the sexual abuse of children in the Catholic Church?

Kelli in New York writes: "Yes, specifically I'd like a factual answer as to why the church put the protection of its priests before the safety of innocent children. The church's behavior suggests an ingrained culture of pedophilia has long existed worldwide. Why it is not called upon to account for this and correct it."

Maria in Tucson, Arizona writes: "No, now leave my father alone. Isn't anything sacred anymore? Why must we feel like we have to continue destroying everything as if a sense of vengeance will correct the past?"

Patty in Pennsylvania writes: "As a lapsed Catholic, I think he should resign. The fact is he was personally involved. The way the church has handled these cases is nothing short of appalling. Instead of fixing the problem, the church covered it up, that's astonishing considering the Catholic Church is the most intolerant when it comes to abortion, contraception and gays."

Karen writes: "The prince of the church is still a human being, and ultimately the CEO of the Catholic Church. His secular job is under fire here, not religion. This is a corporate culture and management issue. Ultimately those children need justice, and the grown men who preyed on them don't deserve protection."

Scott writes: "It's a travesty and disaster how far the church will go to protect what shred of credibility it has left these days. These kids and their families deserve justice, not criticism. In this time, it seems the little people are consistently battered around by large organizations. The church was supposed to symbolize an escape from that. If Jesus were to rise today, I wonder what he'd have to say to the church in light of these charges."

And Kathy in Massachusetts writes: "This latest train wreck from the Catholic Church reminds me of a Boston Globe cartoon from a decade ago. A priest and parishioner on opposite sides of the confessional and the parishioner says to the priest 'You go first.'"

You want to read more on the subject, we've got a lot of mail on this, go to my blog at cnn.com/caffertyfile.

BLITZER: Jack, thank you. I'm sure you did. Thank you.

Pirates versus the United States Navy. A U.S. ship in the Indian Ocean nabs, a group of pirates they say tried to them. We'll going to tell you what they found on board.

And the new iPod is here, right here in THE SITUATION ROOM. We're going to road test one of them for you.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker," the Republican National Committee already was under fire for funding an outing at a Racy Nightclub in California. And now it's facing questions about why one of its fund-raising mailers led people to a telephone sex hotline. Now, the RNC said it was obviously a mistake. The vender that produced the mailer got the number wrong, but the Democratic Congressional Campaign Committee got hold of the mailer and was eager to tip off reporters and try to add to the RNC's embarrassment.

A surprising winner from the final approval of the new health care reform law. That would be the search engine Google. Google says, it saw a more search interest on the subject of health care reform from Sunday, March 21st, to Wednesday, March 24th, than at any point since the debate began. Google says, search traffic was ten times higher the day after the bill passed the House than at any other point in the year.

Remember, for all the latest political news at any time, you can always check out cnnpolitics.com.

And to our viewers, you're in THE SITUATION ROOM.