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Deadliest Month of Afghan War; Car Accident Unleashes Riot; The Next Immigration Law; Administration Weighs Alternative Immigration Plan; Growth Slows in 2nd Quarter; GM Banking on New Electric Car; Fallen Troops & Fraud Allegations

Aired July 30, 2010 - 17:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Happening now, a traffic accident unleashes a rock throwing riot on a landmark day for death and unrest in Afghanistan.

Also, President Obama in the driver's seat trying to prove that the bailout of the auto industry is paying off.

And L.A. county inferno. Wildfires rage across southern California fueled by strengthening winds and scorching heat.

Wolf Blitzer is off today. I'm Suzanne Malveaux. And you're in THE SITUATION ROOM.

In Afghanistan right now this date, July 30th, 2010, is stained with the blood of Americans. Let me explain. July is officially the deadliest month for U.S. forces in nine long years of the war with 66 Americans killed. The danger and the volatility aren't limited to the battle field. There are scores of people who riot in the Afghan capital today after a vehicle carrying four U.S. contractors was involved in an accident with a car carrying four Afghans. Our CNN's Atia Abawi is in Kabul.

(BEGIN VIDEOTAPE)

ATIA ABAWI, CNN CORRESPONDENT: Around 3:00 p.m. Friday afternoon and here in the capital of Kabul, on Airport Road, this road is called Airport Road, two American vehicles were driving when one hit a civilian vehicle in the end killing two adults, one man, one woman, and injuring four others. This is the remains of the first car. This is apparently the car that actually hit the civilian vehicle. If you notice they were trying to leave after being attacked by other civilians in the area. While they tried to leave their car got stuck here on this side of the curb. And if we walk here we can show you the rocks thrown by the Afghans in the area who saw everything happen. It was an angry mob. Over a thousand we're told by a police official who was at the scene. They burned this vehicle as well as another vehicle that was along with this armored car. We don't know how the U.S. personnel are doing. What we did hear was that the police escorted the Americans out and in the end it was the Afghan police who had to deal with the angry mob of civilians.

UNIDENTIFIED MALE: The Americans got out of their cars and when they started firing, then the people attacked them. They started hitting the Americans.

ABAWI: What you're seeing at work is the Afghan national police and Afghan national army working together in the capital of Kabul during a time that there is all this talk about the Afghan police force and the security force to take over by the year 2014. This alone is proof that they are working, that they are doing a good job and that they were able to disperse the crowd. It took them well over an hour but that was a crowd of over a thousand. So both the international community and the Afghan government hoping that this can be an example of what's ahead in Afghanistan. What you're seeing right now is the Afghan police ordered to pull those rocks that have been thrown at those American vehicles off the road. One of the busiest roads here in the capital of Kabul. The cleanup, proof that the mob and the fighting is over at least for today.

Atia Abawi, CNN, Kabul.

(END VIDEOTAPE)

MALVEAUX: Now to Arizona and the battle over the state's new immigration law. After a judge blocked some of the most controversial provisions Governor Jan Brewer and Senator John McCain stood together today in defense of their state. The Republicans held a news conference on another topic but they took the opportunity to accuse the president of failing to adequately protect America's borders. I want to bring in our national political correspondent Jessica Yellin from Phoenix and there seems to be a big, new development today with a moderate Republican Lindsay Graham. Tell us what has happened.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Hi, Suzanne. That's right. Senator Lindsay Graham, who is long considered a moderate on the issue of immigration reform, was considered a possible partner for Democrats on comprehensive immigration reform not so long ago. He has come out on a television interview saying that he now believes in a very controversial position. He would support amending the U.S. constitution, he says, to deny citizenship to children born to illegal immigrants here in the United States of America. The 14th amendment of the constitution grants citizenship to anyone born here regardless of their parents' status. He says he'd back changing the constitution to end that practice. Now, that is a view that's also shared by the person who wrote Arizona's controversial immigration law. It's an issue being pushed here. There has been legislation to deny citizenship to illegal immigrants' kids in Congress but obviously a movement to change the constitution would be huge. Graham has said he doesn't know if he'll actually press forward with it but it is something he's thinking about. Now, Suzanne, just to give you a sense, that is a flash point issue for Latinos and one of the reasons we have seen massive effort here in Arizona to get Latinos registered to vote at all these protests I've gone to. There have been I'm told 50,000, according to the pew Hispanic research center 50,000 Latinos turn 18 every month in the United States. Those are legal people who could vote. Half of the Latinos in the U.S. who are eligible to vote are not registered to vote and that's why Latino activists are trying to turn those numbers around and they say these kinds of immigration debates are a flash point for registering voters. Listen to this. (BEGIN VIDEO CLIP)

FRANCISCO HEREDIA, MI FAMILIA VOTA: There is huge momentum right now. We need to use this motivation to increase our voting potential and increase our voice and within the state and also within the country to make sure we elect politicians that represent our community here in the state.

(END VIDEO CLIP)

YELLIN: They say there are up to 400,000 Latinos eligible to vote here in Arizona who don't, Suzanne, and they're trying to drive up those numbers to change the state's policies.

MALVEAUX: Jessica, those numbers are quite extraordinary when you talk about the statistics and the potential voting pool. Who do you think this is hurting more, Republicans or Democrats? Who favors to gain and who is losing?

YELLIN: Well, we actually have a new CNN poll that shows overwhelmingly, largely Hispanics tend now to support Democrats. We can look at some of these numbers. Hispanics say that on the topic of who cares more about people like you on that issue, Democrats have a 27-point advantage and on who agrees with you more on the issues a 25- point advantage to Democrats. But you ask what are their top issues? It's not just immigration. The issues they care about most, Latinos say the economy first, then the two wars, then immigration and education. Suzanne, one thing I could add to these new findings from CNN is that Hispanics this year have gravitated from President Obama toward the Republicans slightly. President Obama's approval with Latinos was at 71 percent at the beginning of the year, according to the Pew Research Poll, and now it's down to 58 or 57 percent depending who you ask. So because he has not made traction on comprehensive immigration reform he is losing some support in the Latino community, Suzanne.

MALVEAUX: Okay, Jessica. Thank you so much.

President Obama is urging Congress to pass national immigration reform instead of a patchwork of state and local measures. But with the legislation now stalled the administration may try a back door solution. Our homeland security correspondent Jeanne Meserve is looking into that. What do we know about this new strategy?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Suzanne, Republicans have a memo which they say shows the administration conspiring and scheming, those are their words, to allow millions of illegal immigrants to stay in the U.S. at issue is an 11-page memo prepared for the head of U.S. citizenship and immigration services entitled administrative alternatives to immigration reform. It was obtained by Republican Senator Charles Grassley who gave us his take on what it's all about.

SEN. CHUCK GRASSLEY (R), IOWA: To find very secret, creative ways to unilaterally circumvent the law and have a back door to amnesty. MESERVE: The memo says the following options used alone or in combination have the potential to result in meaningful immigration reform absent legislative action. It lays out how to protect more individuals in the country illegally through administrative and regulatory changes characterizing one as a non-legislative version of amnesty. Well, USCIS says it was merely a brain storming memo. "Internal memos do not and should not be equated with official action or policy of the department. DHS will not grant deferred action or humanitarian parole to the nation's entire illegal immigrant population." But Grassley says it is, quote, ridiculous unquote to think a memo containing this kind of detail was drawn up without specific direction from someone in the administration. He says bureaucrats don't write memos like that for the fun of it. Suzanne?

MALVEAUX: Jeanne, how is the governor who is at the heart of this immigration battle weighing in?

MESERVE: That would be the Arizona governor Jan Brewer. She said she found this very disturbing and said she hoped the administration would be exploring and implementing plans to secure the nation's border and put an end to narco terrorism rather than spending its efforts on something like this.

MALVEAUX: All right. Jeanne, thank you so much for the update.

President Obama is doing something now that he hasn't done before since America plunged into recession. We're going to show you that along with a new snap shot of the economy.

And startling allegations that the families of fallen troops are victims of fraud committed by insurance companies.

(COMMERCIAL BREAK)

MALVEAUX: I want you to check out President Obama behind the wheel. Now, he is driving a car for the first time since, yes, the spring of 2007. He was in Detroit today to get a test run of GM's new electric car and to tout the benefits of the auto industry bailout. Now he had some statistics to back him up. The U.S. economy grew for a fourth straight quarter but growth from April to June was slower than previous quarter and not as brisk as some economists had been hoping for.

PRES. BARACK OBAMA (D), UNITED STATES: Our economy is growing again instead of shrinking. That's a welcome sign compared to where we were, but we've got to keep on increasing that rate of growth and keep adding jobs so we can keep moving forward and that's especially important for places like this.

MALVEAUX: More now on the president's trip to Detroit and efforts to jump-start the economy. Here is our white house correspondent Dan Lothian.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Suzanne, this region was really hit with a double whammy. The bad economy that brought down the already ailing auto industry. One person told us everyone knows someone who is out of work. But the depressing climate is easing. A new electric car is being hailed as a bright spot. And President Obama said the auto bailout is paying off.

(BEGIN VIDEOTAPE)

LOTHIAN: How fast can you go with this car?

UNIDENTIFIED MALE: Up to a hundred miles an hour.

LOTHIAN: Oh, really.

It's the jolt General Motors hopes will drive the industry's recovery.

UNIDENTIFIED MALE: Go ahead and put it right to the floor.

LOTHIAN: And I'm in the driver's seat of the new electric car they call the Volt. Wow. It would have kept going and going.

UNIDENTIFIED MALE: Amazing.

LOTHIAN: The car and its expensive battery technology comes with a $40,000 price tag that critics say will scare off most buyers. But there is a tax credit and lease option that makes it more affordable. Its production has also brought jobs to the GM Hamtramck plant President Obama visited.

OBAMA: Some of you saw me drive the Volt about 12 inches. They don't let me drive much these days.

LOTHIAN: Stephanie Carpenter who is on Volt's launch team says the car offers a reprieve after years of uncertainty and pain in a state dealing with an unemployment rate of more than 13 percent.

STEPHANIE CARPENTER, GM DETROIT-HAMTRAMCK EMPLOYEE: You think about all those jobs lost, you think about all the people you're missing, all the people you worked with and they're no longer there. You think about that. It's heart breaking.

LOTHIAN: But the Obama administration says the $62 billion bailout of Chrysler and GM, which some lawmakers resisted, is working. The Volt and the new Grand Cherokee they suggest are signs of life. Keith Crain covers the auto industry.

KEITH CRAIN, AUTOMOTIVE NEWS: The American auto industry was on death's door and today it's revived and is healthy. It's not robust but it is certainly healthy.

LOTHIAN: But better products, not bailout money, he says, is what will sustain the industry long term. And while GM sees the Volt as that better product, they've been down this road before. Remember the EB-1 electric car of the '90s? Cutting edge that fizzled. But Andrew Farah who worked on that car and is now the Volt's chief engineer said they've learned from EB-1's short comings.

ANDREW FARAH, CHIEF ENGINEER, CHEVROLET VOLT: Being an electric vehicle it had the issue of at some point those batteries are going to run out and if I'm nowhere near a plug I'm stuck. With the Volt we've really I think addressed all of those issues.

LOTHIAN: While each charge will only drive the Volt 40 miles once the battery runs low a gas engine kicks in. But there is another big difference. To get a sense of how far this battery technology has come in 13 years all you have to do is look up. This is the giant battery case for a four door prototype of the EB-1 of the '90s. This is the battery case for a four-door Volt. This one's 1200 pounds. And this one is just 400.

TONY: We have a couple chambers running extreme cold weather and extreme hot weather.

LOTHIAN: Tony runs the lab that's making sure the Volt's battery will go the distance.

TONY: I think we're changing the way that people will think about the automobile and I think we're creating history.

LOTHIAN: And for workers in the auto industry that means speeding away from their past in the rear view mirror.

CARPENTER: Everybody is looking real positive towards the future.

(END VIDEOTAPE)

LOTHIAN: The president plans to visit a Ford plant in Chicago next week and aides say expect more such trips in the fall. With the upcoming mid term elections the white house is jumping on a good news economic story to remind voters that some of their efforts while sometimes unpopular are having positive results. Suzanne?

MALVEAUX: Thank you, Dan. If anyone is banking on the president to improve Michigan's economy it's the state's Democratic Governor Jennifer Granholm. I asked her about it.

(BEGIN VIDEO CLIP)

MALVEAUX: The latest polls are showing an all time low, the approval in terms of how he is handling the economy. It's at 40 percent. How does he change that perception that he's not doing enough?

GOV. JENNIFER GRANHOLM (D), MICHIGAN: Well, you know, part of the challenge is of course that we're in an election year and it's an incentive, there is an incentive for the Republicans to continue to beat the drum that you're not doing enough. Right? Michigan had, up until last month, the highest unemployment rate in the nation and we've had that for a long period of time because of our concentration in autos and the fact that we had not had a partner in Washington before the Obama administration. We're now seeing every single month for the past three months we are seeing growth, net growth in jocks. We hadn't seen that since the year 2000 so all I'm saying is you are not going to see it overnight but coming to places like this and showing people stories of how this is happening across the country is one way to tell people, yes, we haven't arrived yet but we are making progress.

(END VIDEO CLIP)

MALVEAUX: More of my interview with the governor ahead.

Also Republican National Committee Chairman Michael Steele cancels an appearance before a conference of black journalists at the last minute. What happened?

And thousands of acres scorched. A key power source is now in jeopardy. We'll have the latest on wildfires that are burning in southern California.

(COMMERCIAL BREAK)

MALVEAUX: Lisa Sylvester is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now. What are you working on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Suzanne. Hot, dry conditions and increasing winds are working against hundreds of firefighters and 11 aircraft battling a third wildfire in the Los Angeles area. The so-called crown fire has scorched 5,000 acres. A voluntary evacuation order is in effect today. The priority right now is protecting power lines, providing electricity to much of southern California. Two other wildfires have blackened another 17,000 acres in the region.

Democratic representative Charles Rangel says he may have been over zealous in serving the public but he says he is comforted that ethics charges against him involve no corruption or self-dealing. One house ethics committee investigator says members are recommending Rangel be reprimanded a relatively light punishment. A trial-like hearing is also possible. The committee yesterday formally charged Rangel with 13 violations alleging financial wrongdoing and harming Congress's credibility.

Republican National Committee Chairman Michael Steele has canceled his appearance today at the annual meeting of the National Association of Black Journalists in San Diego. A spokesman said in an e-mail to CNN that Steele suffered a bad case of food poisoning while traveling out west. Steele was in New Mexico yesterday for a fundraiser for a GOP candidate. His appearance today was to be a panel discussion including CNN contributor Roland Martin.

Former house speaker Newt Gingrich is weighing a presidential run and sizing up the competition. He says he expects Sarah Palin to be among the contenders seeking the Republican presidential nomination in 2012. Gingrich told News Max Magazine the former Alaskan governor and vice presidential candidate has the potential to be a strong candidate for the white house. Gingrich says he'll decide whether or not he'll run early next year. So a lot to keep track of, Suzanne.

MALVEAUX: We'll be watching. That should be very interesting. Thank you.

Well, some officials in the gulf are worried now because they're not seeing as much oil as they once had. But some officials, locals rather fear that the feds are downplaying the problem and they say they have pictures to prove it.

And a Congressman lets loose on the house floor. Will getting mad get anything done?

UNIDENTIFIED MALE: And then we stand up and say oh, if we had a different process we'd vote yes.

(COMMERCIAL BREAK)

MALVEAUX: There are startling allegations that the families of fallen troops may be targets now of fraud committed by life insurance companies. New York's attorney general has now issued more subpoenas in his investigation. Our CNN senior correspondent Allan Chernoff is in New York with the story. Tell us Allan what this is all about.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well, Suzanne, we have new information. Prudential financial tells CNN it is considering changes to its current plan that pays death benefits to survivors of those that have been killed action. This after a high level meeting between company executives and officials at the VA, the veterans administration. Prudential is the company that has been providing life insurance to military personnel for more than four decades. The standard life insurance coverage that the government does provide is $400,000 per person according to the VA. Now, Prudential vice chairman Mark Grier says the company may begin cutting lump sum checks to beneficiaries.

Doesn't that sound like what it should be doing right now? Well, what it actually does now is more involved and that's at the core of this dispute which is really standard operating procedure in the life insurance industry. New York's Attorney General Cuomo is investigating. He charges, "The insurance industry appears to be hoarding millions that belong to military families whose loved ones have made the ultimate sacrifice for our country." What exactly does he mean by hoarding? When a soldier dies, the family receives a package listing options for the death benefit. One option is a lump sum but Prudential doesn't automatically mail a check. Instead, the company creates what it calls an alliance account, a personal interest-bearing account giving you full access to your money. When the heirs want money they write a check and deposit it.

MALVEAUX: Well, tell us, I guess what's being criticized; the reason is because soldiers' families aren't making much interest on that money? Is that right?

CHERNOFF: That is exactly the case. The money sits with Prudential. It currently pays interest of only 0.5 percent. The insurance company of course is able to invest that money at a much higher return. The insurance industry says, look, that is standard. There is no need for an investigation.

(BEGIN VIDEO CLIP)

RICHARD WEISBART, INSURANCE INFORMATION INSTITUTE: It's completely premature, blown way out of proportion. What the industry does, what insurance companies do in these cases is exactly what beneficiaries need, the opportunity to put off making decisions about the use of large amounts of money without suffering any financial loss. That's exactly what this arrangement does. I don't know why the Cuomo organization would attack it the way they have.

(END VIDE CLIP)

CHERNOFF: Prudential says the same thing that the alliance accounts provide a secure, conservative option for survivors and beneficiaries who find a better interest, if they find a better interest rate they can move the money any time. Suzanne?

MALVEAUX: All right. Thank you Allan.

Now a new setback in the gulf oil disaster. Officials say the static kill procedure to plug the leak with mud and cement has been put off for a day. That is because small cave ins at the relief well have left debris at the bottom of it. In the meantime, some local officials are asking what if there is more oil on the water than meets the eye? Here's CNN's Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT: As for the claims from the federal government that the oil is vanishing fast in the Gulf of Mexico, count Plaquemines county president Billy Nungesser a skeptic.

BILLY NUNGESSER, PLAQUEMINES PARISH PRESIDENT: I still can't tell you who is in charge.

ACOSTA: At a closed door meeting Nungesser and a group of local leaders locked horns with the national incident commander for the oil spill Thad Allen. Some aren't buying his repeated statements the oil is dissipating.

ADM. THAD ALLEN (RET.), NATIONAL INCIDENT COMMANDER: It is more dispersed and harder to find. We'll try and be aggressive as we can with skimmers offshore to try and deal with it offshore but we are finding less and less as we move forward.

ACOSTA: Why would Thad Allen say we just don't see the oil like we used to?

NUNGESSER: Because I said this from day one and I'm sorry, Thad Allen, he doesn't have a clue.

ACOSTA: Nungesser showed us these pictures he says were taken by it after just yesterday, capturing oil in his parish. When he tries to share the photos with Allen he says things got heated.

NUNGESSER: You all said there's no oil. I've got a bunch of pictures here if you'd like to look at them. Oh, we know there are some problems. No, there is some real problems when you are saying there is no oil and everybody stands down and we're out there busting our butts trying to save our marsh land.

ACOSTA: And to Louisiana boater Brian Scorsone the talk of the incredibly shrinking oil spill sounds like a fish tale. Are things getting better out here?

BRAIN SCORSONE, LOUISIANA RECREATIONAL FISHERMAN: The feds are wrong. That's all I got to say.

ACOSTA: He had more to say when we pulled up to these oil covered marshes.

SCORSONE: This is the nursery right here.

ACOSTA: For all of the life out here.

SCORSONE: That's it. This is your nursery. And your filter. You know?

ACOSTA: Doesn't take a scientist to figure that out.

SCORSONE: I'm not a rocket scientist to figure that one out.

ACOSTA: At this marina we found more signs of trouble. These oil-covered marsh animals rescued by wild life officials. As for Allen, he denies his comments while optimistic give the wrong impression.

ALLEN: We've never said all the oil is gone. This is a catastrophic event. There is oil in the marshes. We need to keep working on this.

ACOSTA: But Billy Nungesser fears Allen and the BP are setting the stage to pull out resources.

NUNGESSER: It seems like they want this thing put to rest. And it looks like they are the spokesperson for BP.

ACOSTA: Thad Allen says he made a commitment to local officials that the federal government and BP will maintain a presence on the gulf until all of the oil is gone but Louisiana officials are firing back saying just because the government is confident it will kill this ruptured well doesn't mean the crisis is over.

Jim Acosta, CNN, New Orleans.

(END VIDEOTAPE)

SUZANNE MALVEAUX, CNN ANCHOR: A Democratic lawmaker is screaming mad.

REP. ANTHONY WEINER (D), NEW YORK: If you believe it's the wrong thing you vote no. We are following a procedure. I will not yield to the gentleman and the gentleman will observe regular order!

MALVEAUX: Stand by to find out what set off New York's Anthony Weiner.

And an undercover investigation shows there are still big problems with the way the state department issues passports.

(COMMERCIAL BREAK)

MALVEAUX: Bad blood between Democrats and Republicans in Congress boils over. Last night's debate ended and eventual defeat of a measure to provide health care to 9/11 first responders was the tipping point. It sent one Democratic representative totally into a rage. Take a listen.

UNIDENTIFIED MALE: The gentleman from New York is recognized.

UNIDENTIFIED MALE: Mr. Speaker I yield one minute to the distinguished gentleman from New York Mr. Weiner.

WEINER: Great courage to wait until all members have already spoken and then stand up and wrap your arms around procedure. We see it in the United States Senate every single day where members say we want amendments. We want debate. But we're still a no. And then we stand up and say if only we had a different process we'd vote yes. You vote yes if you believe yes. You vote in favor of something if you believe it's the right thing. If you believe it's the wrong thing you vote no. We are following a procedure. I will not yield to the gentleman and the gentleman will observe regular order. The gentleman will observe regular order.

UNIDENTIFIED MALE: That is correct.

WEINER: The gentleman thinks if he gets up and yells he'll intimidate people into believing he is right. He is wrong. The gentleman is wrong. He is providing cover for his colleagues rather than doing the right thing. It's Republicans wrapping their arms around Republicans, rather than doing the right thing on behalf of the heroes. It is a shame. A shame. If you believe this is a bad idea to provide health care, then vote no. But don't give me the cowardly view that oh, if it was a different procedure. The gentleman will observe regular order and sit down. I will not. The gentleman will sit. The gentleman is correct in sitting. I will not.

UNIDENTIFIED MALE: The gentleman will suspend.

WEINER: I will not stand here and listen to my colleagues say oh, if only I had a different procedure that allows us to stall, stall, stall and then vote no. Instead of standing up and defending your colleagues and voting, no, on this humane bill, you should urge them to vote yes, something the gentleman has not done.

MALVEAUX: Congressman Weiner was railing at New York Republican Peter King.

REP. PETER KING (R), NEW YORK: They say they want Republican support yet they never consulted even one Republican before they made the corporate tax increase. They say they want Republican support before they passed this bill but they never applied that standard when they ran through the stimulus, health care, cap and trade, or financial regulatory reform. No, you only apply it to cops and firefighters and construction workers. What a sad and pathetic double standard. These heroes deserve better than they are receiving here tonight. No matter what happens on this vote I will continue to do all I can to pass this bill as soon as possible in the future.

MALVEAUX: Only 12 house Republicans supported that bill.

House floor tirades and bills stalled by bipartisan rancor and Congress's approval rating is scraping bottom. Well is it all the in fighting? We're going to hash that out in our strategy session.

Later it is considered the ultimate I.D. Now a new investigation discovers how easy it is to get a bogus passport.

(COMMERCIAL BREAK)

MALVEAUX: You saw last night's tirades on the floor of the House of Representatives. Democratic Congressman Anthony Weiner blew a gasket over GOP resistance to a bill to provide health care to 9/11 first responders. An NBC/Wall Street Journal poll shows 73 percent of Americans disapprove of the way that Congress is handling its job. Is this constant rancor from both sides of the aisle the reason why. Joining me for today's strategy session our CNN political contributor and Democratic strategist Paul Begala, CNN senior political analyst Gloria Borger and former Minnesota Republican Senator Norm Coleman who is CEO of the American Action Network and American Action Forum. Gloria, let's start off with you. Do you think that most folks when they take a look at this, are they going to be impressed, are they going to turn away when they see how members of Congress are behaving?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, I think when you look at the Congressman he was clearly passionate about something that a lot of people support which is the health care for the first responders and I think that what they see is you can't get Democrats and Republicans these days to get together and agree on the color of the sky. It's a problem because in Congress you can always find a procedural reason to vote against anything and that is exactly what happened here. Republicans complained about a closed rule so they couldn't amend this. Democrats didn't want amendments that would be uncomfortable to vote on so they go back and forth and back and forth and, p.s., you don't have it done before the anniversary of 9/11. They're going to come back and go at it again in September but not before the 9/11.

MALVEAUX: Paul, is it this kind of passion that people are looking for from their Congressmen when something fails? Does this work in the Democrats' favor? Does it work in Weiner's favor?

PAUL BEGALA, DEMOCRATIC STRATEGIST: I think it does because he's angry about an injustice being done to heroes who risk their lives and many of them are losing their health because of their heroic actions on 9/11. Let me say also in defense of Peter King the Republican Congressman we showed there, this may hurt him because he is a Republican. He is a deeply principled man. He is a very honorable man and I'm kind of weird this way. It makes me think more highly of Congress. Nobody was hitting each other. Nobody used foul language. They were having a passionate fight about an important issue. I happen to think the Democrats are right that we ought to take care of those 9/11 heroes and we ought to pay for it. The Democrats paid for this and this was the problem. I think the Republicans didn't like to pay for it. They didn't like that, what the Democrats were going to do is make foreign corporations who are incorporated in tax haven countries, make them pay taxes on the income they earn in America. So they make money in America, they should pay taxes in America. Democrats want that money to help the 9/11. That's where the friction was between the two parties.

MALVEAUX: Do you believe that actually that message gets lost when we look at what happened on the floor or does Peter King's message get through in some way?

FMR. SEN. NORM COLEMAN: I think there are much more substantive reasons why folks have such a low reflection of Congress today. One you've got a culture of corruption. Our side, you know Republicans, we had Duke Cunningham, Democrats come in, they're going to clean the place up. You got William Jefferson with cold cash in the refrigerator and then indicted for racketeering. Now you got Charlie Rangel. Then you have promises made but not delivered. This was going to be the new bipartisan era. You didn't see it on the floor there. You didn't see it in health care. You didn't see it in financial reform. There was supposed to be transparency. You get a guy appointed head of CMS to control the funding for Medicare and there is no hearing or no discussion. Finally and most importantly Americans are thinking that Nearo is fiddling while Rome is burning. You have 9.5 percent, 10 percent long-term unemployment and Congress is talking about health care, cap and trade, the president is talking about don't ask don't tell. I think people are upset with Congress for a lot more substantive reasons than simply spirited debate on the floor.

BORGER: But they also see a Congress in which each side is so invested in making the other side look bad, period. That's what it's about. And the closer you get to election the more you'll see that. So, you know, I think that people have substantive reasons but there are also reasons which they say this is not what we elected you to do. We didn't elect you to vote no all the time or to propose things we don't like either. So try and get something done.

COLEMAN: The bitter partisanship is very bitter but people are worried about their jobs and unemployment and they don't see Congress doing things dealing with that.

MALVEAUX: Paul, I want to read an op-ed to you because a lot of people are frustrated not only with Congress but with President Obama. They feel that he has compromised on issues when it comes to legislation and the environment, education, the issue of race. The op-ed saying that "Mr. Obama's attempts to avoid confrontation have been counterproductive. His opponents remain filled with a passionate intensity, while his supporters, having received no respect, lack all conviction. And in a mid term election where turnout is crucial, the enthusiasm gap between Republicans and Democrats could spell catastrophe for the Obama agenda. Just to be clear progressives would be foolish to sit out there election. Mr. Obama may not be the politician of their dreams but his enemies are definitely the stuff of their nightmares." Does he have any -- does he make a point here? Obviously there is a lot of frustration that President Obama is pandering, catering to folks who are never going to cooperate with him.

BEGALA: I think Paul Krugman the Nobel Prize winning economist, kind of a nice turn there when an economist can quote William Butler Yates' poetry. That's a pretty good column. So yes I agree with Krugman on this. I think the biggest mistake President Obama has made is something that Senator Coleman referred to a minute ago, was coming in here and presuming that he alone or his party alone could end the bitter divisive politics in Washington. He can't. He can't. And so you know what you need to do? Just win, baby. Okay? Sometimes you just got to hit them upside the head with a 2 x 4 and I think the president is wasting a lot of time in trying to reach out to people who have no desire to get this economy moving, no desire to help the middle class, no desire to try to curb the excesses of British Petroleum or insurance companies or any of the people he has taken on. The interests he has taken on. I think that's his biggest mistake and Krugman, I have to say he warned them on the pages of the "New York Times" when this all began and I think that is the biggest mistake Mr. Obama has made.

MALVEAUX: Gloria?

BORGER: There is a test that is going to come up and Krugman also wrote about it which is just who does the president pick to run his new consumer protection agency? Liberals would like, like Krugman, would like Elizabeth Warren, but she's had some fights with Timothy Geithner, some Democrats believe she is not confirmable because Republicans won't vote for her, and this is one case in which the president can do it by appointment. He doesn't have to cater to Republicans. He can decide just whom he wants to appoint and so people like Krugman are going to look at this appointment and say are you listening to us? So the president has a decision here to make.

MALVEAUX: Senator, you get the last word real quick.

COLEMAN: Timothy Geithner by the way, there are Democrats who have concerns about Warren's appointment. Bottom line, Paul, do you really believe Republicans don't want to improve the economy, don't want to rein in corporate excess?

BEGALA: Yes I do.

COLEMAN: Well, unfortunately --

BEGALA: You asked me the question.

COLEMAN: You think they really don't want to improve the economy? Goodness gracious. Unfortunately it's that kind of attitude. If that plays out then we're in trouble. It's interesting; Krugman is thinking that the president is not liberal enough, not progressive enough. Most Americans are worried he is a socialist. That's not me speaking. That's polling. We're seeing the government taking over financial services, health care. Bottom line is if we could lessen the tenor of the debate here we are amongst ourselves so passionate. I think we would serve ourselves better if we found a way to lessen some of that.

MALVEAUX: Senator, we have to let it go. The debate will continue obviously in the days and weeks to come. Thank you so much.

Well, we told you about a new setback in the gulf. We'll take a closer look at the cave-in problem that is delaying the static kill of BP's damaged well.

And a surge in Mexico drug violence. Much of it is at the border. Is the U.S. more involved in the war with the cartels than we know?

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MALVEAUX: The family farm has been slowly fading into history, but there is still one in New England that's stayed in business for almost 400 years. And that is about to end. Here is CNN's Mary Snow.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT: The water for these crops is what farming has been to the Tuttle family.

WILL TUTTLE, TUTTLE FARM: Four kinds of cabbage here and this is broccoli.

SNOW: 63-year-old Will Tuttle owns what is now known as America's oldest farm. Started by the Tuttle family in the 1630s and it survived longer than some expected. In 1965, the Saturday Evening Post said good-bye to farmer Tuttle, and in 1971, Life magazine questioned whether the tradition would end. But after 11 generations and no descendents willing to step in, Will and his sisters decided to put the farm up for sale.

TUTTLE: We have to live our lives for ourselves and not a legacy that we didn't ask for. Bittersweet feelings, because we all have a particular love for this property, a love for this lifestyle.

LUCY TUTTLE, TUTTLE FARM: Just to be standing there hoeing or weeding and to think about my father doing that and my grandfather doing that.

SNOW: Will Tuttle is not feeling sentimental. He credits his New England values of common sense to guide him and not history.

You don't think about it?

TUTTLE: No, I don't.

SNOW: And the legacy of your family?

TUTTLE: Well, I'm not a museum curator. I'm a farmer, worked hard, worked hard all of my life at it and for a long time. SNOW: Unlike the days when his grandfather delivered vegetables in a truck, this farmer Tuttle has to run year-round to make enough money. But unlike the predecessors, he competes with supermarket chains and Wal-Mart. The recession he says has taken a significant toll, and all of the while living under pressure to develop.

TUTTLE: We will plant an acre of corn that's going to yield 10,000 ears for x-dollars or I can sell that acre for $35,000 to a developer among many other acres or whatever the number is, and sit on the porch and drink an iced tea. It is incredible pressure.

SNOW: But the Tuttle secured a conservation requirement to insure that the 134 acres can't be sold for commercial or residential development. While the land may be protected, Will Tuttle is not so sure that the farming industry will be. He worked 70-hour week, and he says that he could not ask his sons to carry the torch.

TUTTLE: It would be I believe totally unfair of me to say, yeah, this is going to continue. One of my kids is going to run it. I can't decide for them.

(END VIDEOTAPE)

SNOW: And the asking price for the farm is $3.3 million. The family says that the sale isn't imminent. They are hoping that whoever buys it will either continue to farm or maybe turn it into a horse farm or an education center. Suzanne.

MALVEAUX: Little sad. All right. Thank you, thank you, Mary.

Thousands of acres in California now are blackened by dangerous wildfires. Will weather conditions cooperate? Our Ted Rowlands is on the ground to find out.

It is being called the wedding of the year. Will Chelsea Clinton be able to keep her big day just between her and her 500 guests?

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MALVEAUX: Former President Clinton has tough months of campaigning for embattled Democrats ahead. I talked about that with the Democratic governor of Michigan, Jennifer Granholm.

(BEGIN VIDEOTAPE)

MALVEAUX: Governor, what do you make about the fact that the white house has enlisted former President Bill Clinton to go out to the states that are difficult for President Obama, because he does not have a lot of support? Do you think that he makes a better spokesman for the party?

GOV. JENNIFER GRANHOLM (D), MICHIGAN: Well, he is a great spokesman for the party, and you need all hands on deck. It is great that he is enlisting the help and help of others, and I hope that all of us who support this president and what he is trying to do will be a spokesman for him. MALVEAUX: Can I put you on the spot, would you take President Obama or President Clinton to campaign for you?

GRANHOLM: Well, I'm not running again, and both of them are tremendous leaders and we are fortunate to have both of them.

MALVEAUX: And who do you come down on Robert Gibbs who says that he believes that the Republicans could take control in the fall or Speaker Pelosi who says that is bunk?

GRANHOLM: Well, I can completely understand that she is going to fight tooth and nail to hang on to the majority in the house, and I totally respect that. I do think that it is hard for any incumbent, because people are angry at income bents, period. So it becomes more of a challenge, but do I think that I think that we will lose the house, no.

MALVEAUX: Will you bet on it?

GRANHOLM: Okay. Right here.

MALVEAUX: The last time I covered the nominations for the Supreme Court, it was reported that your name was on the short list. I know you love your job as governor, but were you a little bit disappointed?

GRANHOLM: I think that he picked absolutely the best candidates for those, and both Sotomayor and Kagan are phenomenal. I could not hold a candle to them, and I think that he picked well.

MALVEAUX: If you got the offer next go around, would you say --

GRANHOLM: Well, listen, that is total speculation. I'm sure he's got a lot of great candidates. But he picked the perfect people for it.

(END VIDEOTAPE)