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Coast Guard Briefing; Interview With Congressman Markey

Aired July 14, 2010 - 17:00   ET


WOLF BLITZER, HOST: Happening now, gushing oil and growing suspense. When will the critical testing finally begin on the new well cap in the gulf? We're about to find out. The incident commander Thad Allen within a moment or two getting ready to brief the American public. Stand by.

We expect some tough questions about the delay and why officials were slow to reveal it to the public. Is there a snag? We'll shortly learn.

Also, some crime and accident victims that may pay for a city's budget nightmare. Oakland, California police say they'll stop responding to certain emergency calls. Is it a scare tactic or a frightening sign of the times?

And a debate over whether there's racism in the Tea Party Movement. After the NAACP's bombshell allegation, a top Tea Party spokesman joins us to face off with CNN contributor Roland Martin.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

We're standing by right now for a very important briefing on the Gulf Coast on the situation there, with the retired Coast Guard Admiral Thad Allen. He's getting ready to speak to reporters. We'll see it live.

We hope to learn within the next few minutes whether officials will in fact move forward with critical testing of a new well cap that could possibly stop the flow of oil.

At - at this time yesterday, many of our viewers will recall, we were told that the so-called integrity test could begin at any moment. It turns out it already had been postponed. News organizations and the American public weren't told about the delay until about five hours after it happened. A lot of questions and a lot of anger about what is going on right now. Enormous frustration.

We'll go to Thad Allen in just a moment. Let's go to CNN's Ed Lavandera in New Orleans for the very latest. What do we know right now, Ed?

ED LAVANDERA, CNN CORRESPONDENT: Well, Wolf, I think what we've seen over the last 24 hours is kind of a good glimpse into what is going on behind the scenes as the scientists on both sides, BP scientists, government scientists continue to debate on the best way of moving forward. And you really start getting this sense of just what a critical juncture we're at in all of this, throughout all of this crisis, almost three months long now.

This is as close as any kind of potential we've seen so far of being able to get this oil well under control, and obviously it's a very delicate, a very tense, a very critical moment, so you can see, imagine behind the scenes of the discussions that - that are going on must be kind of revealing that way, very intense and - and frank as well.

So we know that BP officials have been saying throughout the day that they felt comfortable though moving - about moving forward, that this was ultimately a decision, they say, by federal government officials and Thad Allen in - in particular to move forward. And we've been expecting various technical briefings not only from BP folks but also from Thad Allen that have been slowly delayed and pushed back throughout the day, so we're - you know, we're monitoring Thad Allen's appearance here in the New Orleans area and we anticipate it would be happening very closely.

And of course what we're waiting for is if things will move forward on this integrity test, Wolf, and what they say they've been waiting on is the pretest, if you will, seismic readings down there on the floor of the Gulf of Mexico to determine whether or not this well casing that burrows deep, deep into the earth is strong enough, has the structural integrity to withstand this test. They say that they're worried that this test could put more pressure on that, force oil to leak out of other places that they wouldn't be able to control. So, you can imagine, they say they don't want to do any more damage that would further make this situation worse.

And we can see Thad Allen appearing there now, and we mentioned very close to beginning this briefing here, Wolf.

BLITZER: Stand by, Ed, because there is Thad Allen. He's about to go to the microphone there, the retired U.S. Coast Guard, the National Incident Commander. He's going to update us right now on what is going on, and when you see the live pictures of that cap, you can still see the oil spewing from the - from the top of that well. It's going on full speed ahead.

The goal is to start closing some of those valves at the top of those - that new cap, but to do it in a way that wouldn't cause further problems. Let's listen to Thad Allen.

ADM. THAD ALLEN, NATIONAL INCIDENT COMMANDER: Thanks for coming here to the Lakefront Airport.

I returned a short while ago from a visit out to the well site with Secretary Salazar, Secretary - the Secretary of Interior. We were on the Helix Producer 1, which is a production platform we have brought on to be able to increase our production. This is the first time a floating production unit has been employed in the Gulf Coast. It was a pretty significant event. We had a chance to talk to the crew and get a brief on operations, and that was very, very helpful moving forward. Out on site today in and around the well site we had 44 skimmers, 20 of them were actually within 15 nautical miles of the source where we conduct, find and issue (ph) berns and there continues to be a robust response to the oil being released while we are looking at the - the new stacking cap and the shift and I'd like to brief you on that.

As I briefed my president yesterday in Houston, we had intended to proceed yesterday with the well integrity test related to the new capping stack that was put on the - the well site after we were able to remove the - the piece of riser pipe that had been there for many, many days. We had a meeting yesterday and it went from about 11:00 in the morning to almost 3:00 in Houston. We wanted to make sure that we were getting this right, they're attending to all the details. This is a very significant event and a significant test in the evolution of this response and our ability to increase our containment, our redundancy and our capacity and I'll talk about that in a little bit.

We consulted extensively with outside experts from academia. Our science team, led by Secretary of Energy Chu, consulted also with other members of industry regarding potential issues we should deal with. I will zero right in on what the discussion was mainly about and I'll be happy to answer some questions about it.

We have never been sanguine or sure that we have known the condition of the well bore and the casing pipe since the event occurred. As we've gotten closer to having the potential to close in and do pressure readings on the capping stack, we have had numerous discussions about what the current status is of the well bore and the casings and the implications if they had been damaged or if there was any communication outside the well bore that might bring oil or hydro carbons into what we call the geological formation potentially to the - to the sub-sea floor.

Some - some questions were raised yesterday about the implications of leakage and how that interfaced with the test as we start to shut down the valves and increase pressure in the capping stack and I'll go over that process in a minute.

What we might expect, what we're - even low probability, high consequence outcomes. As a result of that, we asked BP to go back and give us some more information on the structural strength of certain portions of the casing pipes they had run down there, particularly around the 22-inch and 18-inch casing pipes. We asked for some more information about assumptions that could lead to irreversible leakage outside the well from external experts. And we thought about what kind of thresholds we would need to look at as we ran the - the well integrity test.

That took us about 24 hours to work through all of that. We've had a number of conversations and early this afternoon I briefed the president and members of the cabinet on the way forward, and at this time we'll be releasing an order to BP to proceed with the well integrity test, but we gave them some additional direction and we did this to make sure that we were taking due care, and, in some cases, maybe an over abundance of caution to make sure that we didn't do any irreversible harm to the well bore as we proceeded forward.

So what we are going to do when BP is ready, and these procedures will start shortly, we will start to increase the pressure in the capping stack and we will do this in six-hour intervals, and at each six-hour interval we will stop and we will consider a pressure data. We will look at information that we are gaining from sonar, any acoustic data, any remote visual data we have from remotely operated vehicles. I will put this in writing to BP so it will be just an adjustment to the plan I - I previously approved. And this test will run for a maximum of 48 hours, at which time we will stand down, assess where we're at, and assess the next steps.

Two of the very positive aspects that can come out of this, depending on the pressure readings that we find, are an assessment of whether or not we can just cap the well at this point and the pressures can be maintained without damaging the well bore or the casings. We are also in the process of building out an enhanced containment strategy which includes redundancy, so if one part of the system is not working, we could continue to produce.

And capacity. As you know, our current flow rate projections are 35,000 to 60,000 barrels a day. We had intended by about this time to have a 53,000 barrel a day capacity by bringing the helix producer online. What we have is a convergence of two events, trying to bring that system up that produces 53,000 barrels and the opportunity because of weather to advance the capping stack installation and then be able to test for pressure and the integrity of the well bore. So this is kind of an overlap.

I don't want to lose track of the fact that we're following a very robust containment strategy that was actually started in early June where we directed BP to come up with alternatives to increase redundancy and capacity related to the new flow rate numbers.

So, with that said, what's going to happen is we will be initiating the tests later on this evening and I'm going to stun you with my audio-visual aids here, because I'm at Lakefront Airport, I've had now access to Powerpoint. Here we go.

All right. Everybody see this? OK.

I'm going to explain what's going to happen here. You have at the bottom the blowout preventer and the lower marine riser package that are left over from the Deepwater Horizon loss, OK? That's right down here. We are currently producing off the kill-and-choke lines of the lower marine riser package and the blowout preventer through the kill line to the helix producer and the choke line to the Q4000, OK?

Last week, as you remember, we removed the stub of the riser pipe and we put in what we called a flange spool. On top of that, what happened, which was significant, is we've now seeded the capping stack here, and it basically has three rams. That's the mini blowout preventer. It also has a kill line and a choke line, OK? So you basically have a small BOP on top of the larger BOP that is legacy to the Deepwater Horizon. Here's how we intend to do the well integrity test. We will slowly take down production from the Q4000 and the helix producer later on today to the point where they are not producing anymore. That will force the oil up through the blowout preventer into the capping stack. At that point, the kill line, the choke line, and the top of the stack will be open, and there'll be product releasing from there and we know that that's the reason we've got the skimmers and the additional capacity on the surface to deal with that.

We will then in sequence close the middle ram here, which will stop the flow out of the top of the stack and then we will take pressure readings. We will then close the kill line and take pressure readings.

Following that, we will use a remotely operated vehicle that will hook on to the - that - the little bar here that actually turns a valve, and this choke line has been especially constructed - if you looked at the video, you'll see kind of a yellow object up there with a curved up pipe. That is the choke line. That is the last way for oil to leave the capping stack.

We will slowly close that, very, very slowly, in partial turns, and measure pressure at the same time. In that manner, we will slowly close the entire capping stack and start the reading pressure. OK?

Now, as we do that, we're going to be watching very closely the pressure readings. If the pressure readings stay low, that will tell us that the oil is probably going someplace else and we need to consider the fact we may have a breach in the well bore or in one of the - in one of the casings. If that is the case and we have very low pressure readings for about three hours, we will probably stop at that point. That will be the assumption and we will go into production, bring everything back online so we minimize the amount of oil that's going into the environment and we will assess the results of that test.

That will also tell us and give us more information about what we will need to do ultimately with the release wells down below when we try to start to pump -

UNIDENTIFIED MALE: Windstorm. Shakey-shakey -

ALLEN: -- finally kill the well.

If the pressure continues to rise, we will monitor it every six hours. Again, looking at acoustic information, seismic information, visual inspection of the sea floor, and if there are no problems the decision will be made in six-hour increments to proceed.

At the end of 48 hours, we will stop the test, assess all the information we have. We will probably do another seismic run over the area around the well to detect any potential hydrocarbon or methane leaks from the sea floor. And then we will assess whether or not we need to go into another cycle of closing the capping stack down, taking pressure readings, and this will lead us possibly to two very positive directions. Number one, at some point our ability to determine that we can, with confidence, shut the well in and understand we're not harming the well bore and the casings.

This will be particularly useful during hurricane season. We have good weather right now and we'll try to take advantage of that, as you know, but if we have to leave the site, vacate the site, we need to know whether or not we can just cap the well and leave.

If we're not successful in doing that, we can still move to our strategy, which was by the middle to the end of July to go to four production platforms, and that will be producing at that point out of both kill-and-choke lines from both preventers, the legacy ones on the bottom and the new ones on the top to go to four production platforms. And that's what gets us to 60,000 to 80,000 barrels a day, which is in excess of our flow rate projections, which are 35,000 to 60,000 barrels a day, with built-in redundancy in case one of the four went down we could keep operating and handle the flow rate in terms of being able to produce it and the capacity that we need moving forward.

This last-minute evaluation was due to an over abundance of caution led by our technical team, Secretary Chu, his folks, other members of industry and the academic community. We sat long and hard about delaying this test. This was not easy.

There are significant perceptions that have been created around the country. I have my own perceptions of how we'd like to move forward on this. But I think in the interest of the American people, safety of the environment and safety of this project moving forward, it was advisable to take a 24-hour break and make sure we were getting this absolutely right, understood the best way to deal with the unknown quantity which was the condition of the well bore and the casings moving forward, and now we're prepared to do that.

On other operational issues, I'll be glad to answer that, but I'm glad to take your questions.

DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT: Admiral, David Mattingly from CNN. Can you please characterize for us you what think the odds are for success? I mean, you - you're obviously moving forward, but how confident are you that this is going to work?

ALLEN: Well, as far as containment, I'm - I'm very optimistic because we now have a - have a cap in place, and regardless of whether or not we can shut in the well or not, we now have the cap in place that will allow us to go to four production platforms.

Now, one of the problems will be is we may not get 100 percent containment, but it will be much more than we have right now and we have capacity that is in excess of the - of the flow rate. So this is good news.

It will be terrific news if we - if we could shut in the well, but I don't think we can say that. I think there going to be (ph) an over abundance of caution and I don't want to get anybody's hopes up that we can shut this well in until we get the empirical pressure readings that we - we need to have, do a seismic survey of the sea floor and try and understand as well as we can the condition of the well bore and the casings. EVAN BROWN, FOX NEWS RADIO: Admiral, Evan Brown, FOX News Radio. How much was this delay, in fact, a delay and a - a disappointment or - or a setback for everyone involved?

ALLEN: Well, I think everybody wanted to move as fast as we can, but I think I understand and I think everybody understands this has been a substantial impact on our environment. There's been a substantial impact on the Gulf Coast, to the people, to the culture. We all understand the difficult times we're going through. But what we didn't want to do is compound that problem by making an irreversible mistake.

Now, there are some ways where the hydrocarbons can leak out and you say all right, we're going to tolerate that while we do the test because we know, when we're all done, we're going - we're going to be able to produce the oil and there wouldn't be a way for them to get out because there wouldn't be any pressure forcing them out because we'll be producing the oil. But there are some instances where once that happened, based on the type of geological formations and everything else, that might not be reversible, and we wanted to have a very serious discussion about what we felt about that.

And so those are the kind of discussions that were going on. It was an over abundance of caution.

BLITZER: All right. So there he is, Thad Allen, the National Incident Commander, the retired Coast Guard Admiral, making it clear after a 24-hour delay they are going forward. Right now, they've given the green light to BP to start these tests, to stop every six hours, to evaluate the tests will continue, he says, for a maximum of two days, 48 hours. These are critical hours right now.

Ed Lavandera was listening. He's down there in New Orleans, watching what's going on. We can't stress how sensitive this is right now. If it works, it will stop the flow. If it doesn't work, they go back to Plan B and they've got all of those ships atop of the Gulf of Mexico that will contain, at least try to contain, much, if not all, of that oil. But these are critical moments, Ed.

LAVANDERA: Oh, there's no question, Wolf. You know, we've been covering this story for almost three months, so to be able to get to this point I think you can see and - and listening to what Thad Allen is saying there, that this is the best shred of hope that they've seen in quite some time.

And to put it into a better perspective, I think as well, you've got to remember, we are probably about a month away, still, from that first relief well not only getting to where it needs to get underground but also to be able to kill off the line for good. So if this were to start working in the next 24 to 48 hours, essentially, this process could be sparing the Gulf of Mexico from almost another month's worth of millions and millions of gallons of oil spewing into the Gulf of Mexico. That's why the intensity and the critical nature of this, you can really kind of see permeating from Thad Allen's words here.

There are, you know, thousands of people who working on this who clearly are desperately hoping this works.

BLITZER: Stand by, Ed, because we're not going very far away from this story. These are critical hours we're watching right now. You see the breaking news. The go ahead to begin this test, given by the federal government, and we're going to be watching all of this very, very closely.

All right. We're going to stay on top of the breaking news. We're going to get reaction from a leading congressional critic of BP, Democratic Congressman Ed Markey of Massachusetts. He's standing by live. We'll get his reaction to what we've just heard and more.

And a newly revealed video apparently featuring the man who confessed - confessed to the botched Times Square bomb attack.

And President Obama's new warning to the people of Africa about terrorists operating in their midst.

Lots of news happening today right here in THE SITUATION ROOM.


BLITZER: All right. We're all over the breaking news coming in only within the last few minutes.

BP finally gets the green light to perform some critical tests on its new oil well cap just after a 24-hour delay. You just heard it. You saw it live, Thad Allen, the National Incident Commander briefing all of us.

Let's discuss what is going on with Congressman Ed Markey, Democrat of Massachusetts. He's the chair of the Select Committee on Energy Independence and Global Warming. He's been one of the leading critics of BP in all of this.

Congressman, thanks very much for coming in.

REP. ED MARKEY (D), MASSACHUSETTS: I'm glad to be here. Thank you.

BLITZER: Do you have - do you have confidence in what you just heard from Thad Allen?

MARKEY: Well, I'm hopeful. I think every American is hopeful, but obviously there are many questions that still have to be answered about the integrity of the well and the integrity of the sea floor surrounding this well.

BLITZER: What - what does that mean exactly when you say the integrity of the well and the integrity of the sea floor? Explain your concern.

MARKEY: Well, I guess to put it in simpler terms, if you had a hose out in the back yard and you decided to put your hand on top of the hose that's going to put pressure on the rest of the hose. And if it's not strong enough, it will start to spurt out in other parts of the hose.

That's what they have to check here. They have to ensure that this well is strong enough to withstand the kind of pressure that will be applied to it when they complete the containment cap on the top.

BLITZER: In other - in other words when they close off the valves at the top of that new containment cap, they want to make sure it doesn't make matters even worse.

MARKEY: And they also have to make sure that on the sea floor that they're not going to also see a result that they had not -

BLITZER: Explain that to me because I'm not exactly clear on what your - your concern is there. We know there are - are, you know, maybe a billion barrels of oil on the sea floor on the bottom of this well. But what's your concern there?

MARKEY: Well, we don't actually know what the geology is, so we haven't known what the geology is on the - on the bottom of that sea floor. So we have to make sure, and that's why I wrote a letter to BP on June 23rd, asking them about the information they had on well integrity and on sea floor integrity, because there is a possibility that the oil could begin to migrate if there is not enough integrity in the geology surrounding the well as well.

BLITZER: And when you say migrate, you mean it just come out from the bottom?

MARKEY: That is correct.

BLITZER: And make - because I've heard some geologists, some oil experts say if that were to happen, then the Gulf of Mexico would be like the Dead Sea.

MARKEY: Well, again, we have to be very careful here. This is an experiment which has never been conducted before in the history of the planet. This is an underwater science experiment and I think that Admiral Allen and Marcia McNutt, the head of the United States Geological Survey, and the Steven Chu, the Secretary of Energy, are acting with great caution here in ensuring that BP does not move too quickly.

We have a lot to learn so that we don't invoke the law of unintended consequences and make something much worse than it is right now.

BLITZER: Are you getting more or less confidence in BP as this - as this crisis continues?

MARKEY: Well, again, I wrote a letter to them back on June 23rd about the wellbore integrity, about the sea floor integrity, what they knew. I have yet to receive the information.

I think the public has a right to have access to all of this information. This is - these are public waters and there should be transparency. I haven't received the answer yet. You don't know the answer and neither does the general public. And I think that continues to be the failing in the way in which BP deals with this issue.

BLITZER: What about the Obama administration and specifically the point people that has dealing with this, not only Thad Allen, Marcia McNutt, but the others, Ken Salazar, Janet Napolitano, Steven Chu. Do you have confidence in them?

MARKEY: I think that they're making the right decision right now. They're slowing down BP. They're not allowing them to rush here before the science is completely understood. That is the role of the government, not just to limit the liability of BP but to ensure the livability of the Gulf of Mexico for a generation to come.

So this test now is something that is being supervised by Thad Allen, by Steven Chu, by Marcia McNutt and I - that gives me a lot more confidence that we will have the information that we need before BP is allowed to take the next step.

BLITZER: Congressman Markey, we're going to watch this very, very closely together with you. We hope you'll come back. Thanks very much.

MARKEY: Thank you.

BLITZER: We're going continue to follow the breaking news right now.

BP getting the approval of the Obama administration, the scientists, as you just heard, to go ahead and begin the test. The test will stop every six hours. They'll review where they stand. They hope to complete the process, they say, within a maximum of 48 hours if it works.

You see the oil now that's still spewing from the top of that cap right now. They'll close those valves and, if it works, a huge if, the oil will stop spewing from that well. We can only hope and pray.

Other news we're following, the Tea Party Movement now facing accusations of racism from the nation's oldest civil rights organization, the NAACP, despite the controversy how successful has the movement been overall?

And we brought you the story yesterday of a Native American lacrosse team barred from traveling overseas to compete in a world championship. Now there are new developments in the case. Mary Snow has got them.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: We'll get back to breaking news in just a moment. We're watching very closely what's happening in the Gulf of Mexico, a major development right now. You just heard Thad Allen announce they've given BP the go ahead to begin right away the tests, the tests that will determine whether or not that oil you see spewing from atop the well will stop or will continue. The tests could take a maximum of two days but the process now has the go ahead from the federal government. We're getting more on that story.

Also a deadly 48 hours in Afghanistan. A dozen U.S. and allied troops were killed during this time period. 1,174 Americans have died in the war in Afghanistan since it began after 9/11 in 2001. 2009 was the deadliest year with 313 Americans killed in Afghanistan but this year appears to be on track to become even worse. 236 Americans so far have been killed in 2010. We're just beginning a period that historically has seen the most bloodshed the months of July through October. Very worried about what's going on. President Obama's special representative to the region ambassador Richard Holbrooke went before senators today to update them on the war.

Let's talk a little bit more about Afghanistan with our senior political analyst David Gergen. He is here in THE SITUATION ROOM and, you know, David, you keep hearing concerns. Petraeus may be back in Afghanistan. A lot of people have confidence in General Petraeus but now Richard Lugar the ranking Republican on the foreign relations committee, even Newt Gingrich the former speaker. They're wondering, is this going to be successful when all the dust settles?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Their words are very well grounded and General Petraeus knows he only has a very short time to shore this thing up and turn it around. I think what is impressive is he has hit the ground running in Afghanistan. We just learned today that he's gotten an agreement from President Karzai who was opposing this idea, McChrystal proposed it earlier, to establish community policing, in effect local village defense forces on the ground trained and equipped by U.S. special forces, some 10,000. General Petraeus thinks that is very necessary to win over the hearts and minds and to establish and get rid of lawlessness.

BLITZER: The American taxpayers are concerned as they should be the U.S. is spending several billion dollars every month in Afghanistan at a time of economic distress here in the United States when so much money is need for schools and education and states and all sorts of other programs, $4 billion to $5 billion maybe more every few weeks in Afghanistan and they're wondering how much more time will it take to resolve this?

GERGEN: I think General Petraeus needs at least six months to a year to figure out whether he can turn this around the way he did Iraq. Remember, we went through the same sense of defeat in Iraq. He went in there, it took a little time, but he has to get some time here. Again, he is moving so quickly. I'm impressed by that. He has this agreement on the local defense forces. He also is now pushing very hard and Carl Levin is joining him to declare as terrorists the Haqqani network in Pakistan on the border with Afghanistan and really go after them in a serious way. We haven't done that in the past. He's also seeking to clarify now the rules of engagement for these U.S. soldiers.

BLITZER: You and I are old enough to remember Vietnam. Does this have echoes right now of Vietnam? GERGEN: I don't think so. You know, we're not in the jungle kind of situation. I do think we have a limited time to turn it around for public opinion. If we do pull out precipitously, you know, the Taliban will win. It's going to mean that al Qaeda is going to spread triumphantly in other parts of the world. It will mean a huge power vacuum in that part of the world. It could destabilize Pakistan. We have a lot riding on the outcome on this.

BLITZER: David Gergen, thanks very much.

GERGEN: Thank you.

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

LISA SYLVESTER, CNN CORRESPONDENT: Hi there Wolf. The confessed Times Square bomber has apparently surfaced in a new videotape. The Arab language TV network al Arabia is airing what it says is video of Pakistani American Faisal Shahzad. The authenticity of the tape could not immediately be verified and the person in it appears sometime before the May first failed attack occurred. In the tape Shahzad calls the plot a revenge attack.

The latest retail sales numbers are shedding new light on the current health of the economy. Sales in June fell for the second straight month after seven consecutive increases. The government attributes the worse than expected decline to weaknesses in the auto sector. Analysts say this is further evidence suggesting that the economic recovery has now shifted into lower gear.

And despite all of the buzz, it seems that KFC's novel idea for a sandwich just hasn't gone over so well with customers. The company's owner says that sales of the so-called double down have been immaterial. The bunless sandwich which packs bacon and cheese between two chicken fillets instead of bread was launched in April. The fried version of the sandwich is a whopping 540 calories. It contains 32 grams of fat. So that holds a whole lot of fat there, Wolf, in one little sandwich.

BLITZER: Surprised it doesn't have more than only 540 calories. I would have thought it had a lot more than that, Lisa. Thank you.

Let's get back to the breaking news this hour. The federal government giving the go ahead for testing to begin on the new well cap in the Gulf of Mexico. Much more on that coming up.

President Obama sat down with one of the world's most successful businessmen today. At the same time a leading business group is accusing Mr. Obama of destroying jobs. How did that conversation with Warren Buffet go?

Later is there rampant racism in the tea party movement? We'll have a debate with a top tea party spokesman and our CNN contributor Roland Martin.

(COMMERCIAL BREAK) BLITZER: These are live pictures coming in. You see the oil continuing to spew from atop that cap that was installed recently. We did hear the breaking news a little while ago from Thad Allen the national incident commander saying they're going to begin within the next few hours the process of shutting down those valves. They're going to check every six hours to make sure it's working and within a maximum he said of 48 hours they should know whether the process has been a success or failure. We're all over the story. Stand by. Much more coming up.

Other news we're following, check out President Obama right now on this day holding a rather low key meeting with the billionaire businessman Warren Buffet over at the white house. It wasn't on the president's public schedule but the white house later did release this photo when the meeting was over. They spent about an hour together in the white house. A senior official tells CNN they discussed the economic crisis and other issues. This huddle was with an investment tycoon coming as the U.S. chamber of commerce once again has slammed, slammed the president's economic policies. Our Lisa Sylvester is working this story for us. Lisa, some very harsh criticism coming in against the white house supposedly the white house being very anti- business.

SYLVESTER: Yes. This is the position of the U.S. chamber of commerce. They are saying that the Obama administration has created a business environment where small businesses are not likely to take risks, that they're not likely to expand and that they are not likely to hire. And the group says that's going to make it very hard to lower the country's unemployment rate.


SYLVESTER: James Wordsworth is your classic small businessman. He runs a Virginia food services company that employs 250 people. Like others who have gathered here at the U.S. chamber of commerce's job summit he says not enough is being done to create jobs in America.

JAMES WORDSWORTH, OWNER, J.R.'S GOOD TIMES, INC.: While we keep ignoring this jobs thing, it's not an elephant but a herd of elephants in the room. We keep leaving the room for a coffee break.

SYLVESTER: In a blistering open letter to the president the U.S. chamber of commerce criticizes the administration and Congress for neglecting job growth saying after preventing another great depression they took their eyes off the ball. The letter says, "They vilify industries while embarking on an ill advised course of government expansion, major tax increases, massive deficits and job destroying regulations."

THOMAS J. DONOHUE, PRES. & CEO, U.S. CHAMBER OF COMMERCE: All of this has injected tremendous uncertainty into our economy and uncertainty is the enemy of investment, of growth, and of jobs.

SYLVESTER: The white house takes strong exception to that view and has philosophical differences. In an official response to the chamber, senior presidential aides say things are turning around. "Our economy is growing again and the private sector has added 600,000 new jobs." The Center for American Progress, a liberal think tank, says while the U.S. chamber of commerce may be pushing for more deregulation and a cut in business taxes, the Obama administration has been working on policies to help Main Street.

HEATHER BOUSHEY, SENIOR ECONOMIST, CENTER FOR AMERICAN PROGRESS: What they've strove to do is increase demand, make it so that more folks have money in their pocket so that they will be the kind of customers businesses need in order to thrive and grow.

SYLVESTER: The U.S. chamber of commerce and the white house know the areas where they disagree but say they are trying to find common ground.

DONOHUE: A lot of people want to start a fight between the business community and the administration. We're not going there.


SYLVESTER: Behind closed doors there is a real effort to negotiate on issues like extending the Bush tax cuts which are set to expire at the end of this year and moving forward on trade agreements with other countries. Wolf?

BLITZER: A huge debate unfolding right now. Thanks very much, Lisa, for that.

The white house tried to offer up more proof today that its economic policies are in fact working. The Obama administration releasing a new report that the stimulus package saved or created about 3 million jobs. That's their estimate, in line with their earlier predictions from the white house council of economic advisers. Republicans however and other economists say the number is based on mathematical formulas and is not a true head count of people who receive jobs funded by stimulus dollars. This debate is continuing.

The NAACP now saying the tea party movement is racist. We'll have both sides of a very heated debate, coming up.

And much more on the breaking news we're following. The Obama administration now green lighting a key test that could stop the flow of oil gushing from that ruptured well in the Gulf of Mexico. The very latest coming up.


BLITZER: Let's get right to our strategy session. Joining us our CNN political contributors, the Democratic strategist James Carville and Bill Bennett the national radio talk show host. Thanks very much for coming in. James, first to you. The Federal Reserve, they released the minutes from their most recent meeting today. Very dismal economic news. They say the economic recovery if in fact it was a recovery is petering out not going where it should be. Unemployment is going to stay basically where it is right now nearly 10 percent. Pretty dismal political ramifications for the Democrats as a result of this. JAMES CARVILLE, DEMOCRATIC STRATEGIST: Right. Wolf I'm holding a chart that shows job loss and job growth in the red right at the bottom here that's the last year of the Bush administration. This is when President Obama took office. You can see it's almost a perfect v. Is this perfect? No. Is this what we want? No. This is very typical economists will tell you in the aftermath of a financial crisis you're going to have slow growth and I think the administration is trying. Could they do better? Of course. Are they doing a lot better than the previous administration? It's obvious to anybody. There could be more private sector jobs created this year under President Obama than the entire eight years under President Bush. Democrats need to start making that point while acknowledging the fact that more needs to be done and that this thing is not going as well as it could. This is typical of a post financial crisis that you have this kind of growth.

BLITZER: All right. What about that, Bill?

BILL BENNETT, NATIONAL RADIO TALK SHOW HOST: We have a little derby going on when the Democrats ask a question about this, how many seconds does it take before he says "Bush?" that was I think three seconds. It may be better than it seems to people. It may be better than it feels to people. It may be better than what the numbers are. But I don't think so. I wouldn't want to take from James that history he made in '92. It's the economy, stupid? I don't mean James is, that's what James said back then. It is the economy now. They're in trouble and they know they are in trouble. The promises Barack Obama made, not Bush, the promises Barack Obama made, we'll get the stimulus and get this stuff going and things will be a lot better, we'll never see 9.5 percent. We're there.

BLITZER: Despite those numbers and the chart you have, James, when you ask the American people is the country moving in the right track or the wrong track, most people think the country is moving in the wrong track and you're a political analyst. You know that's the key indicator.

CARVILLE: Look, you're right. This is not going well. It's a post financial crisis. We're not -- our wars are not going well. You look at the situation in the gulf. But I mean these are figures. By the way, if you ask as ABC did who do you think is better on the economy the Democrats or the Republicans after all of this, by an eight-point margin people still think the Democrats are better.

BLITZER: That's a fair point.

BENNETT: I suspect they'll increase their majority this November. Don't you think? I don't think so. Again, it's up against reality. Take the census jobs out of there. Take the temporary jobs out of there, James.

CARVILLE: These are private sector jobs. These are not government jobs. These are private sector jobs. If you look at the thing, these are private sector jobs. We're not counting school teachers and policemen and firemen that apparently conservatives don't think actually jobs mean anything. We do but we don't put these in there. This is the private sector chart. A private sector chart.

BENNETT: Well, as you can tell, from the tone, there's a lot of nervousness about what's going on in the country on the part of Democrats and they're right to be. They said things would get better. A lot better. Things are not.

BLITZER: Let me just switch gears briefly. Sharron Angle is challenging Harry Reid, James, in Nevada for the Senate. She gave an interview to David Brody of the Christian the Christian news service, and she made this point, and I want you to tell me as a political analyst if she has a point, if she is right, because she was criticized and she has been criticized for not doing national media news interviews and listen to this.

SHARRON ANGLE (R), NEVADA SENATE CANDIDATE: People say that I went dark. I didn't. I have done over 60 interviews. I quit counting a couple of weeks ago. But the whole point of an interview is to use it use it and not use my words to batter me with it.

BLITZER: Does she have a point James in saying I will do interviews in Nevada with conservative talk shows and others, but I have nothing to gain by going on "MEET THE PRESS" for example?

CARVILLE: Well, she won't talk to Nevada TV stations, and not just --

BLITZER: Well, she did an interview with James Ralston in Nevada, and he is a major TV interviewer there.

CARVILLE: Well, that is it. She says if Harry Reid wins they may have to resort to second amendment remedies and I don't think she wants to answer exactly what she means by second amendment remedies. Again, she criticized Harry Reid for intervening on behalf of senators who saved a $8 billion project, and she said it is not the job of a U.S. senator to create jobs, so if I were her, I would not go on anything either. And the thing did not go well with John Ralston, and those people don't care.

BLITZER: Well, James, we have to leave it there unfortunately, but we will continue this conversation. Guys thanks very much. Bill, I know you want to say something, but save it for next time. If you've got 10 seconds say it right now.

BENNETT: She talked to who she wanted to talk to. She should talk to Wolf Blitzer, and fair-minded people, fine. But people with a hatchet job, no.

BLITZER: We have invited her several times, and I hope she comes by, because I will do a fair interview.

BENNETT: I will urge it.

BLITZER: Thank you, James and Bill.

And the tea party movement is generating some new controversy right now as it claims victories in the election year. We're taking a closer look at the group's track record.

And the breaking news we're following, officials moving forward with the testing of the new oil cap in the Gulf of Mexico. BP's chief operating officer tells us why it is so important to get the test right.


BLITZER: The tea party movement is now embroiled in a brewing controversy after the NAACP the country's oldest civil rights organization accused the movement of racism. We will have a heated debate on the subject in the next hour. Standby for that. But first let's take a closer look at the tea party's track record so far this year. Joining us is our senior political analyst Gloria Borger. Gloria, thanks very much.


BLITZER: How successful has the tea party movement been so far?

BORGER: Very successful, Wolf. More successful than a lot of people thought. Look at some of these folks you know who are backed by the tea party. Nobody had heard of Marco Rubio or Sharron Angle or Rand Paul for example or Mike Lee of Utah who beat an incumbent senator in a primary. These are not established candidates. These were unknown and then Sarah Palin and the tea party came along and endorsed them and they won the Republican primaries.

BLITZER: What about the Republicans at large, has there been a shift toward the tea party movement?

BORGER: Well, it is interesting, because as people learn more about the tea party, they are morphing and changing in the public's mind. First of all, people thought of them as a general protest movement against big government which a lot of people can sign on to, and now they are seeing it as more partisan and more conservative Republican and the numbers are really reflecting that. Back in March, the favorable ratings for the tea party was 41 percent, and unfavorable 39 percent. And now in June look at this, unfavorable 50 percent, and favorable down to 36 percent, so they are losing the independent voters, but when we talk about voter intensity in the upcoming 2010 midterms, the tea party voters are the really intense enthusiastic voters for the Republican party, and they are going to make a big margin of difference for them.

BLITZER: In the midterm election the most motivated the go out to vote.

BORGER: They are, and that is very important.

BLITZER: So, if they become, the tea party-backed candidates part of the GOP majority let's say in the house, what would happen?

BORGER: Well, that is where it gets interesting and quite complex. Talking to a lot of Republicans today, they asked these questions, number one, these are anti-government, anti-spending people. Are they ever going to vote for a spending bill? Number two, will they split with Republicans on votes for the wars in Afghanistan and Iraq and for funding those wars? That could be a big problem. They have to govern if they run a house of Congress.

BLITZER: Thank you, Gloria. Once again, we will have a debate in the next hour over the controversy of the NAACP and the tea party. Stand by for that.

We are following breaking news here in THE SITUATION ROOM. BP gets the go ahead from the federal government to begin a critical test that could, could stop the flow of oil spewing into the gulf.

New concerns about the health of the former vice president Dick Cheney, and what caused him to have major heart surgery in recent days?