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THE SITUATION ROOM

Surge in Jobless Needing Lifeline; Ground Zero Reality Check; Muslims Free to Worship at Pentagon; DeLay Criminal Case Closed; Animals Rescued From Oil Spill

Aired August 21, 2010 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Scientists are raising red flags about the amount of oil still tainting the Gulf of Mexico. Have federal officials gotten their numbers wrong? I'll ask the Incident Commander Thad Allen about the discrepancies.

Also, lessons from trenches in Iraq, the missions, and the violence, now that the last U.S. combat brigade has left the country.

Also, the controversy over an Islamic center and mosque near ground zero. It's heating up. But you might be surprised what else is in the block surrounding the site. We'll take you on a tour.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

New questions are being raised about the lingering effects of the Gulf oil spill and whether federal officials are being a little too quick to declare that the disaster is mostly over. The government reports 75 percent of the oil has been cleaned up, one way or another. But scientists from across the country are offering some different estimates. Researchers a the University of Georgia say up to 79 percent of the oil has not been recovered.

Joining us now is the president's point man in the Gulf of Mexico, the national incident commander, the retired commandant of the U.S. Coast Guard, Thad Allen.

Commandant, thanks very much for coming in.

THAD ALLEN, NAT'L. INCIDENT COMMANDER: Thanks, Wolf.

BLITZER: We're so confused about how much oil is still there. How much oil do you believe is still in the Gulf of Mexico?

ALLEN: Let me talk about the oil budget because there's been a lot of conversation about it. What we were attempting to do is take the flow rate number we finally could close in on, which was 53,000 barrels a day. We added that up for the number of days that it could be have been spilling, and we got 4.9 million barrels.

BLITZER: Well, 4.9 billion barrels of oil came out of that rig?

ALLEN: Correct. We knew some of it was produced, about 827,000 barrels, what we tried to do is figure out what the fate of the oil was and where it went. And when we added everything, we could either- knew to a virtual certainty it happened, like we produced it, or there were estimates about evaporation, and you solve for X, if you will, it was 26 percent left. It was just a starting point to have a discussion. And I think we need get as much information -- anybody that can add to this discussion ought to be adding to it. I think it is all important.

BLITZER: Because 26 percent is one thing. But the study from the University of Georgia says 75 percent is still out there. That's a huge discrepancy.

ALLEN: I think they start from a different set of assumptions, including taking out the amount of oil that was produced. And that is fine, you change the denominator, it gives you a different set of numbers. That doesn't mean they both aren't important and we need to talk about it and move forward in my view.

BLITZER: Here's one quote, "The idea that 75 percent of the oil is gone and of no concern for the environment is just absolutely incorrect," said Charles Hopkinson, director of Georgia Sea Grant and a marine science professor at the University of Georgia, who co- authored this report. You're saying what? What that there is a legitimate debate underway right now. We don't know the real answer?

ALLEN: No, what I am saying is if you make certain assumptions, you will get to certain number, a different set of assumptions, will take you to another number. What I am telling you is the guy that's running the response, while that discussion is going on, we're focused on the response. And that's not impacting any way at all the decisions we are making about going after this oil.

BLITZER: Right now, you're standing by the NOAA estimate that all but 26 percent had really been accounted for?

ALLEN: The NOAA estimate is based on the flow rate that was developed by the Flow Rate Technical Group that I empowered as the national incident commander under Marcia McNutt, from the U.S. Geological Survey. They took that number, created the entire amount. They were trying to figure out what are the component parts of that. It's just a discussion that needs to continue. We need to get as much information as we can about this spill.

BLITZER: Now, there is another issue that's come up. This plume supposedly that's developed under the waters of the Gulf of Mexico. I'll read to you the lead sentence from "The Wall Street Journal."

"Oil from the Deepwater Horizon spill formed an underwater plume of hydrocarbons the size of Manhattan, scientists said Thursday, raising fears of a lingering cloud of trace chemicals in the Gulf with an unknown long-term impact."

Is that right?

ALLEN: That report was made in June. We're aware of it. But actually it was the basis to send NOAA ships out to look for hydrocarbons in the water column. This article came out after the fact, and kind of talked about how they did it, and what the implications were. We're on a search for oil all over the Gulf right now.

And last week I issued an order to aggregate not only NOAA resources but look at the state and local and academic institutions and start a significant search for hydrocarbons. We're not going to know because we have never had a spill of this size in the history of the company before. Let's keep looking for it, and if we find it, and refine all the estimates, our or anybody's.

BLITZER: So you haven't seen a plume the size of Manhattan under the waters of the Gulf of Mexico?

ALLEN: We went out and looked. We have and NOAA vessels out starting at the well head and moving out. We move away from the wellhead appreciably. We just find trace amounts of hydrocarbons. But, since there was a significant amount of oil, you can argue one way or the other, how much it is. It's still substantial. We need to be looking for hydrocarbons out there everywhere we can.

BLITZER: Let's talk about these two relief wells that are supposedly still going to be built that will kill this well once and for all. They were supposed to be done by mid August. But now it's approaching the end of August. What's going on?

ALLEN: Well, we've had a couple of delays related to weather. We had actually had to remove the rigs from the scene for a while. Where we're at right now is the relief well is about three and a half fee way from the Macondo well and about 50 feet above the intercept point. We've held it there. And we're doing a couple of things before we proceed.

We are doing a pressure test, we filled the blowout preventer with the sea wall so the pressure inside is the same as the outside. And 48 hours we are going to look and see if there are any pressure differences. If there aren't, we're actually going to open the BOP, and see if we can remove the drill pipe that's there. If we can do all that safely, that should lead us to a point where we can proceed with the bottom kill sometime the week after Labor Day.

BLITZER: The week after Labor Day, so now we're talking about approaching mid September.

ALLEN: Early September.

BLITZER: Early to mid September. And that's when this well will be dead. We say the BOP, that is the blowout preventer?

ALLEN: Correct. I always give these dates. And I always caution everybody. They're based on conditions moving up to that. Every time you give a hard time line you have to back off of it, it creates a credibility issue. What we are doing is making sure each step along the way, we are taking with an abundance of caution.

BLITZER: But as we speak, no oil, for now more than a month has flown into the Gulf of Mexico. ALLEN: I think it needs to be pointed out, since the 15th of July, there have been no hydrocarbons released into the Gulf. That's correct.

BLITZER: So, everything is safe, everything is in place. The pressure is good. We don't have to worry about another explosion or anything like that until you do -- complete the relief wells.

ALLEN: Through the first 24 hours of this ambient pressure test there have been no fluctuations and the pressure would indicate there is a problem with the cement job. What we want to make sure is when we go into that annulus, the area outside of the well, between the well pipe and the well boar, and we put mud and cement in to that, we don't force pressure up that does something to the current blow out preventer. So, we are going to replace it with a new one that can withstand the pressure.

BLITZER: I guess the question is, there any danger now, between now and the time you finish the relief wells, early to mid September, is there any danger of oil coming out of there?

ALLEN: Very, very low. Never say never. But the problem is, we've got 5,000 feet of the well filled with cement from the top through the well pipe. But on top, we have the blowout preventer from the original event, with the capping stack on top of that. It can be left by itself. But it's subject to weather and hurricane season. While everything is OK right now, we need to get the job done.

BLITZER: What about going back to that same reservoir and drilling once again, down the road. Because there's been all sorts of murmuring, that's a possibility. Is that a possibility?

Well, I'd leave that between BP and the Department of the Interior. I think that is a policy issue for down the line. We're focused on the response right now. I don't think there's anybody at BP thinking about anything other than the response.

BLITZER: Would you feel comfortable about that, personally?

ALLEN: I'd leave that to DOI to make the determination.

BLITZER: The Department of Interior?

ALLEN: Exactly.

BLITZER: And what about resuming deep water drilling in the Gulf of Mexico? When will that happen?

ALLEN: Again that will be a policy decision that is made above my pay grade. What I will say is we've learned a lot about response systems and containment systems and the lessons learn during this spill response should not be lost. As I have said several times, we'd be adding a crime to a crime not to learn from this event.

BLITZER: Good luck, Thad Allen. I know you have been working hard, it has been four months exactly since that disaster. And fortunately there seems to be some serious light at the end of the tunnel. Appreciate it very much.

ALLEN: Thanks, Wolf.

BLITZER: As president Obama vacations in Martha's Vineyard, could an alarming new jobs report put a damper on some of the things that are going on? My interview with a leading economist, that is coming up.

A major milestone in the Iraq war, the last U.S. combat brigade leaves the country. But is it happening too soon? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: This week marks an important milestone in the war in Iraq with the departure of the last U.S. combat brigade. At the end of the month, only 50,000 American forces will remain in Iraq, and Operation Iraqi Freedom will give way to Operation New Dawn.

But there is still no new Iraqi governments five months after the elections and suicide attacks continue to kill civilians by the dozens, including one this week that left more than 40 Iraqi army recruits dead.

(BEGIN VIDEOTAPE)

Let's discuss what's going on in Iraq right now with the Iraqi Ambassador to the United States Samir Sumaida'ie.

Mr. Ambassador, thank you very much for coming in.

SAMIR SUMAIDA'IE, IRAQI AMBASSADOR TO THE U.S.: Thank you.

BLITZER: My deepest condolences to you, to all the people of Iraq, on what's going on.

I'm very worried that the longer it takes to form a new government in Baghdad, right now, there's been no new government for five months, since the elections. The more these kinds of terror incidents will occur because there's an opening. Am I wrong to be worried about that?

SUMAIDA'IE: You're not wrong to be concerned, Wolf. All Iraqi people are concerned about the lack of government at the moment. But it's going to take time. We have to be realistic. In the meantime, while the government is being formed and political deliberations are taking place, the government, the current government is functioning. Security forces are-

BLITZER: But there is a caretaker government?

SUMAIDA'IE: There is a caretaker government. The organs of the state are in place and they're functioning.

BLITZER: But listen to what the chief of the Iraqi military said the other day, lieutenant General Baba Kazavari (ph), he said the Iraqi military won't be, in his words, fully ready to defend the country until the year 2020.

SUMAIDA'IE: We have to distinguish, Wolf, between internal security, that is keeping peace inside Iraq, and policing it, and combating terrorism. That's on the one hand. On the other, defending the borders of Iraq, they are two separate issues.

On the defense of the board in disguise, the chief of -

BLITZER: The military chief?

SUMAIDA'IE: The military chief is absolutely right. Because you need time to build an air force. Even if you order fighter planes, you know that, it will take several years for them to be delivered; same with the navy. But this is different from keeping the country internally secure. And I think on internal security, our security forces had been --

BLITZER: Even though there was lapse today, at this military-

SUMAIDA'IE: Yes, yes. There will be other lapses, I'm afraid. This kind of -- this kind of attack, a cowardly attack.

BLITZER: Is this Al Qaeda in Iraq?

SUMAIDA'IE: It has the foot prints of Al Qaeda.

BLITZER: Claimed the credit for this?

(CROSS TALK)

SUMAIDA'IE: Whether they have or not, I think their fingerprints are all over it. The reality is this: The kind of violence we see today, Wolf, is very different from the violence which we saw in 2006, 2007, which were wholesale violence at targets--

BLITZER: You believe the surge -- the U.S. military surge that General Petraeus implemented worked?

SUMAIDA'IE: It absolutely worked. And we must remember, since June of last year, the American forces have been out of the towns and the cities. Security has been kept by Iraqi forces. And their ability to keep security is increasing over time.

BLITZER: Is Iran playing a positive role in Iraq right now, your neighbor, Iran, or a negative role?

SUMAIDA'IE: Well, Iran is, of course, saying that if they have nothing to do with internal affairs of Iraq. They are not interfering. But let's face it, Wolf, all of our neighbors have an interest of what kind of Iraq emerges out of this. All of them weighed in when elections came, what was conducted in March. All of them supported favorite groups within the Iraq. The Iraqi.

BLITZER: Is it possible --

SUMAIDA'IE: Let me finish this. BLITZER: Yes.

SUMAIDA'IE: Iraqis have demonstrated a strong resistance to outside interference. Iraqis are independent-minded and are making up their minds even with their friends, the United States, they are saying to everybody that we're going to decide on our future.

BLITZER: Let's pick your brain while I have you here, on a totally unrelated matter. You're an ambassador from an Arab country to the United States, a Muslim. How is this debate over this Muslim center and mosque in New York, near ground zero, playing in Arab and Muslim world?

SUMAIDA'IE: Well, I haven't followed how it is playing out, read the Arab newspapers about it. There's an interest in it, but frankly, I don't see any hysteria over it. I don't see any excitement over it. It's viewed as an internal American situation, an interesting debate to watch, but there's no strong feeling about it. And I think it's going to be left to the American Muslim community and the local governments and the American governments to sort it out.

BLITZER: Mr. Ambassador, good luck to you. Good luck to all of the people of Iraq. We hope this project works -- the United States has invested so much --

SUMAIDA'IE: Absolutely.

BLITZER: -- in the security and prosperity and democracy of Iraq. We hope it works.

SUMAIDA'IE: Wolf, I'm confident we'll come through and Iraq will be a good ally of the United States.

BLITZER: As we say, inshallah.

SUMAIDA'IE: Inshallah.

BLITZER: Thank you, very much, Mr. Ambassador.

SUMAIDA'IE: Thank you.

(END VIDEOTAPE)

BLITZER: With the tenuous situation on the ground Iraq's future is uncertain, though. I spoke about that and more with David Ignatius of "The Washington Post."

(BEGIN VIDEOTAPE)

BLITZER: We're not going to know for a year, or five years, if this whole operation in Iraq succeeded or failed, will we?

DAVID IGNATIUS, "THE WASHINGTON POST": We, as my colleague Tom Ricks wrote, we won't know the last chapter for many years.

As our combat troops leave, what we do know, unfortunately, is it's not an Iraqi government. We're leaving a country that had elections, that has had the democratic process that we fought so hard to give them, but is not unable to come up with a prime minister. I know that is a bitter disappointment to a lot of people who worked in Iraq.

BLITZER: In five months, plus now. I've always been saying the longer this goes on, the more likely some of that ethnic tension between Shia, Sunni, and Kurd will come back to haunt everyone.

IGNATIUS: I talked this morning, Wolf, with a friend who's a member of the Iraqi government who said they're at a dead stalemate. Behind the scenes, there's no sign of a breakthrough. As we pull our combat troops out, our ability to bring some leverage to push people toward agreement obviously is diminishing. It's sad that as we end our main phase there, we can't look at a government, look at a prime minister and say that job is completed.

BLITZER: There are some analysts who have been saying for a while now that Iran, Iraq's neighbor, is the big winner in all of this. Are you among them?

IGNATIUS: I think Iran strategically has benefited, the strong Sunni bulwark against Iran that Saddam Hussein represented has been swept away. You know have a Shiite-led government in Iraq. And you have, essentially, a guarantee that Iran will not face a hostile Iraq in the near term. So, in that sense they are a winner. I have seen over the last year Iraqis increasingly resenting efforts by Iran to dictate their future. They don't want us to dictate it, but they also don't want Iran to dictate it.

BLITZER: It seems to me - and this is what Iraqis have said to me. Not only have the Iranians interfered, but the Saudis are, the Syrians are. A lot of Iraq's neighbors have their hands in that mess over there.

IGNATIUS: The fear is Iraq is going to become a bigger, even more dangerous version of Lebanon, which is surrounded by hostile neighbors, all trying to fight their wars within Iraq's borders. That would be a nightmare. I think it is the thing that the U.S. most hopes to avoid by having a strong Iraqi army. We do have 50,000 troops who will stay and their main job will be to train that Iraqi army, to get it ready to protect the country and keep the neighbors out.

BLITZER: This notion that by the end of the next year, those 50,000 troops will be out of Iraq, even though the Iraqi army chief says they need U.S. troops to stay to the year 2020. Is it -- do you see any likelihood that President Obama will change his mind and not necessarily withdraw all remaining U.S. troops by the end of next year?

IGNATIUS: I think if a new Iraqi government said in a powerful, unified way, we need more American help and we, the Iraqi government, ask you, Americans to help us in these ways, I think it is likely we would respond favorably. Right now it is hard to imagine that. Iraqis don't really know how to use their new sovereignty. They can't, for the moment, form a government even. BLITZER: Let's talk a little bit about Iran. Because you were at that now-famous white house briefing where a senior administration official, namely the president of the United States, surprised all of you, came and spoke about what's going on in Iran. How close, based on everything you've been hearing, David, is Iran to that break point when you will have that nuclear capability to deliver a bomb?

IGNATIUS: From what I've been hearing, Wolf, that point is a little further off than we might have thought, six months or a year ago. The reason is the Iranians are having serious technical problems with their enrichment process.

Their cascades are not functioning as they hoped. The output is less than they expected. So we heard at this briefing, not from the president, but from one of his top technical advisers the view that because of these technical problems it will be harder for the Iranians to break out, and openly move toward a nuclear weapon, or to sneak out, and do so surreptitiously.

So, I think for that reason there's a feeling in the White House that there's a little more time to experiment with diplomacy. A little more time to squeeze with the sanctions. They hope the Israelis are reading the same messages and that everybody will make one last effort to see if there is some way, without using military power, to get this done.

BLITZER: More than a year then?

IGNATIUS: Well, what I was hearing at the White House and from others is one year plus. Yes, more than a year.

BLITZER: David Ignatius of "The Washington Post." Thank you very much.

IGNATIUS: Thanks, Wolf.

BLITZER: Mysterious lights between Iran and Venezuela, and growing concern of what two of Washington's staunchest foes may be up to.

And whether or not an Islamic center is built near ground zero, there already are some surprising neighbors in the area.

(COMMERCIAL BREAK)

BLITZER: Around the world there is new cause for U.S. concern about increasingly closer ties between Iran and Venezuela. Their leaders are among Washington's sharpest critics. CNN's Brian Todd is investigating a mysterious airline flight connecting the two countries' capitals-Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, we are told by the airline that this commercial route from Tehran to Caracas will be shut down next month. But there are serious concerns about possible damage already done. Threats to U.S. security that this route may posed.

(BEGIN VIDEOTAPE) TODD (voice over): For the past three years, it's arrived at least twice a month at the Simon Bolivar International Airport in Caracas, Venezuela; a suspicious commercial flight from Tehran. It flies between two capitals with hostile relations with America, but which do legitimate business with each other. U.S. intelligence officials have been keeping a close eye on the flight.

A Venezuelan official tells us it's an above board commercial flight operated by a Conviasa, a Venezuelan state-run airline.

(On camera): But analysts we spoke to aren't so sure. They say one security concern is the route, from Tehran the plane stops in Damascus, Syria. Iran is believed by Western officials to support Hezbollah, which the U.S. considers a terrorist group. From there the flight goes to Caracas, Venezuela, and later it returns to Tehran.

(Voice over): And it's not clear who's onboard.

(On camera): Can regular passengers book a flight on this thing?

PETER BROOKES, HERITAGE FOUNDATION: That's my understanding, that they can't. That this is only for special people.

TODD: Peter Brookes a former assistant U.S. deputy assistant U.S. Defense secretary, now with the conservative Heritage Foundation. He's researched the flight and written about it. Brookes and other analysts tell us regular passengers cannot get on the flight, or the return leg. Brookes talks about who could be on the flight.

BROOKES: Intelligence agents, probably Islamic Revolutionary Guard core individuals, Quds Force, even Hezbollah terrorists. So, form an American interests perspective, this is of great concern.

TODD: Concern that under the cover of legitimate commercial flight, this might be a shadowy pipeline for America's enemies to move people and weapons to Latin America where they could more easily stage attacks against the U.S.

Asked by CNN about this flight, former CIA Director Michael Hayden said, "The concerns are not just in the abstract. We saw people traveling who made us wonder. A current U.S. official says there have been people of concern on the flight.

(On camera): So it leaves Tehran August 26 and arrives in Caracas August 27th.

(Voice over): I tried to get on a flight.

(On camera): No space available on the 26th. What's the next flight?

TODD: A Conviasa agent told me no seats available through late August. Then --

(On camera): So, from now until September 16, all flights every week are booked. (Voice over): Then the agent told me after September 16, the airline is shutting the route down for business reasons. So it's never been clear if regular passengers can get on. I asked Brookes about another concern.

(On camera): What happens when the flight gets from Tehran to Caracas and arrives in Caracas. Is it processed normally? Are people on it processed normally?

BROOKES: My understanding is that it is not. In other words, they don't go through normal customs and immigration at the Caracas Airport. That they go through a separate part of the airport and they're process there, if they're processed at all.

TODD: A passage from the State Department's 2008 terrorism report says passengers on these flights were not subject to immigration and customs controls at Simon Bolivar International Airport.

(On camera): Contacted by CNN, a Venezuelan official brushed back on all of that. He said everyone on board that flight goes through normal customs and immigration checks and there are normal customers and civilians regularly on that flight. There's never been any evidence that the flight carried Hezbollah militants or any weapons. Our call and e-mails to an Iranian official were not returned--Wolf?

BLITZER: Brian Todd, thank you.

Could an alarming new jobs report put a damper on President Obama's vacation in Martha's Vineyard? I'll ask a leading economist, Mark Zandi.

As the bitter controversy grows over a proposed Islamic center and mosque, near ground zero, we visit another site of the 9/11 attacks, where Muslims are free to worship.

(COMMERCIAL BREAK)

BLITZER: The president is vacationing right now in Martha's Vineyard. We knew he couldn't take a break from his job in Washington without acknowledging the thousands of Americans desperate for work right now.

The number of first-time filers for unemployment insurance climbed to half a million people last week. That's the highest level in nine months and that's a concern to many economists, including Mark Zandi of Moody's.

BLITZER: Mark, thanks very much for coming in.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S: Thank you, Wolf.

BLITZER: How surprised were you that the unemployment first-time claims numbers were the highest -- half a million in nine months?

ZANDI: Surprised. You know, the economy is weakening. The rate of growth is slowing, but I am surprised that initial claims of unemployment and insurance are beginning to rise to this degree. It does indicate that unemployment, which is already as you know very high is going to move higher.

BLITZER: Higher than 9.5 percent. Is that - which is the national unemployment number right now? Is that what you're saying?

BLITZER: Yes. We're at 9.5. I suspect that it will be back to double digits by the end of the year early next at the latest.

BLITZER: Well, that's moving in the wrong direction not the right direction. Last year, the president and the Democrats got in a nearly $1 trillion economic stimulus package through Congress. That was supposed to turn things around. What happen?

ZANDI: Well, I think it's fair to say that the economy would be an immeasurably worse place without the stimulus that the stimulus was very helpful in bringing the recession to an end and jumpstarting an economic recovery.

That we would have lost a lot more jobs and unemployment would be measurably higher today without the stimulus. Our problems run deep. It's a very, very severe recession. We're still feeling the ill effects of that. We're not out of the woods yet.

It's not that we're not creating jobs, we are. It's just that we're not creating enough jobs to absorb all of the folks coming in to the workforce and thus the unemployment is moving higher, or will move higher.

BLITZER: Because I read your latest forecast, your latest analysis. You're worried that there could be this double-dip recession, not necessarily predicting it, but you're worried about that?

ZANDI: I am and you know, I don't think we'll experience a double dip, but it's going to be a close call. I will put the odds at about 1 in 3 which is uncomfortably high.

More disconcerting than is that, if we go back to recession, it's just unclear how the policy makers could respond. We have a large budget deficit and really no appetite for any more stimulus.

So it's very important that the economy does not backtrack into a double dip, but obviously the -- the reasons for concern are quite high.

BLITZER: And the Congressional Budget Office today saying that this year's budget deficit will be $1.3 trillion. They've got to make a decision in the next few weeks and months what to do with the Bush tax cuts from 2001 and 2003.

Whether to go back to the Clinton era tax rates or to -- to let these Bush tax cuts -- these rates continue. And you've written about this at a time of economic distress, should they raise taxes on folks making more than $250,000 a year?

ZANDI: No, not in 2011. I do think the economic recovery is too fragile for even these kinds of attacks. In normal times, I don't think raising the taxes for these very high-income households would be a problem for the economy.

And of course, we need the revenue to address our long term fiscal problems to address those large budget deficits that you just mentioned.

But in 2011 with the economy still struggling, I think it would be prudent to forestall the tax hikes, begin to phase them in 2012, 2013 when the economy is presumably in a better spot, but not next year. I think that would be taking an unnecessary gamble with the recovery.

BLITZER: Well, explain what that means. Because the president has made it clear -- he wants those tax cuts that the Bush administration got through Congress for those making more than $250,000 a year to go away.

In other words, raising the top level from 35 percent to 39. 6 percent, which was the level during the Clinton years. What would happen if -- if what the president wants were to happen.

ZANDI: Well, in all likelihood, the economy would still make its way without going back to recession, but, you know, I could be wrong and we could go back in. And if we do go back in, then there is no policy response. There's no good way to respond to that.

So I think we need to guard against the downside scenarios, the scenarios of the double dip and we should look for any kind of economic boost we can get. And raising taxes in the context of where we are today, I think, would be a mistake.

Even on those upper income households, they're -- among all of us the best to tolerate the tax increases. Those folks are under some stress. If they pull back more than anyone is anticipating, we're going to have a big problem.

So I just wouldn't take that chance. Not in 2011. 2012, 2013, yes, I think then we can start focusing on our long-term fiscal problems and those tax rates should rise, but not next year.

BLITZER: We'll see if the White House listens to your advice. Mark, thanks very much.

ZANDI: Thank you.

BLITZER: Amidst to all the controversy about a Muslim community center near Ground Zero in New York. You maybe surprise, but who's worshipping at another 9/11 attack site. Stand by.

And former Republican House Majority Leader Tom DeLay cleared of federal criminal corruption allegations. I'll ask him if the charges were purely political and if he sees any similarities to what's happening to Democrats, Charlie Rangel and Maxine Waters.

(COMMERCIAL BREAK)

BLITZER: There is no letup on the controversy over pass to build an Islamic center and mosque two blocks from the site of the 9/11 terror attacks in New York.

So what if the project goes through. CNN's Mary Snow shows us it would be one more diverse addition to an already diverse neighborhood.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT: We're at the corner of (D.C.) and Church Street. You can see behind these gates where the construction site of ground zero is.

Now, we're two blocks away from where the Islamic Community Center is slated to be built. We're going to take you along our path and show you what's here. Heading north just about a block from Ground Zero, some office buildings to retail and you'll see over here, a Catholic church. This is a remnant from 9/11.

It's getting to be lunchtime and getting pretty busy down here. There's lots of construction going on including that site right across the street.

We're two blocks away from Ground Zero on this street. Something you'd find on any city streets, some retailers, drugstore, a dentist and otb -- off track betting site and just down the block on this end is the site of the proposed Islamic Community Center.

Taking a closer look at the surrounding businesses, restaurants, retailers, a video store, including adult videos, crossing the street, someone handing out pamphlets for a strip club and then directly around the corner from where the proposed site is, New York Dolls.

We just saw the pamphlets being handed out, it calls itself a gentleman's club. We've now circled the block. We're on the corner of Park Place. A lot of construction going on behind us is the site of a building for the University of New York. You can see the Islamic center is down here. No surprise you'd find news crews outside.

As we get closer, we found an artist who set up on the sidewalk expressing his opposition to the Islamic center through painting.

What do you think is an appropriate distance?

UNIDENTIFIED MALE: I -- it's a crazy question. I can't answer that question, but I'm telling you right now, not here.

SNOW: This whole Burlington coat factory is the center of the controversy. The plan is to build a community center that will house a mosque as well as a performing arts center and a gym.

It will be 13 floors and this center will look out on to this office building, that's 21 stories high. Mary Snow, CNN, New York.

(END VIDEOTAPE)

BLITZER: In the midst of the uproar over plans to build an Islamic center near Ground Zero, Muslims are free to worship at another site of the 9/11 attacks. Here's our Pentagon correspondent, Chris Lawrence.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): Once a day, Muslim civilians and soldiers who work at the Pentagon come here to pray, less than 100 feet from the terrible impact nine years ago, where the terrorists crashed a plane into the Pentagon and killed 125 people.

UNIDENTIFIED MALE: We're very tolerant here of one another and our faith.

LAWRENCE: Cameras aren't allowed at any of the actual services, but a chaplain tells me Muslim worshipers come in at 2:00 every afternoon, lay out the prayer mats and pray.

UNIDENTIFIED MALE: We don't keep track of who comes in here. We don't count numbers. We have estimates, of course, 300 to 400 a week. But people are free to worship here as they see fit.

(on camera): Unlike the controversy in New York where they're debating city blocks. Here in the Pentagon, it's literally a matter of inches that's the distance from the September 11 memorial to the front door of the chapel where Muslims' worship.

(voice-over): It's not a mosque. All faiths get a chance to use the chapel. Take Wednesdays, for example, there's a Catholic mass at 11:30, followed by Protestant bible study, an Episcopal service, then the Muslim prayers.

On other days, Hindus and Mormons get their time slot too. On Fridays, there's a Jewish service, followed immediately by a Muslim one where a local imam actually comes in to lead prayers.

Is it the same imam every week or pulled from a rotating group.

UNIDENTIFIED MALE: I think it's pulled from a rotating group.

LAWRENCE: There are nearly 3,700 Muslims in the U.S. military, but that's less than 1 percent of all service members. Some are deployed to war zones.

And Army Corporal Kareem Kan was awarded the Purple Heart posthumously after he was killed by a roadside bomb in Iraq. Now, the center proposed for lower Manhattan is a different structure. But the issue of Muslims worshipping at the site of the attack hasn't come up here.

UNIDENTIFIED MALE: I've never heard any complaints or issues or questions about.

(END VIDEOTAPE)

LAWRENCE: But no one here is minimizing the concerns some people have in New York. And several people told us they think folks in Manhattan have some genuine concerns. Now, for its part, the Pentagon uses an outside Islamic organization to recommend and clear local imams for Friday prayers, same as they would do for priests and rabbis, Chris Lawrence, CNN, the Pentagon.

BLITZER: We last saw him "Dancing with the Stars." Now the former House Majority Leader Tom DeLay is walking away from a criminal investigation free and clear. I'll talk to him about the case.

And it's now safe for sea turtles to return to the Gulf. CNN is there exclusively as animals rescued from the oil and make their way back home.

(COMMERCIAL BREAK)

BLITZER: For the first time in six years, the former House Majority Leader Tom DeLay doesn't have to worry about a federal case hanging over his head.

The Texas republican was under investigation for his ties to the lobbyist, Jack Abramoff who pleaded guilty to fraud and other charges back in 2006. Now, DeLay says he's been told the case is closed and no charges have been filed.

Congressman, thanks very much for coming in.

TOM DELAY, (R) FORMER HOUSE MAJORITY LEADER: Glad to be with you, Wolf. It's a great day.

BLITZER: On a scale of one to ten, ten being thrilled beyond control, how thrilled are you right now?

DELAY: Well, I'm pretty thrilled. I'm happy for my family. They don't have to go through this anymore, at least this phase of it. We still have a trial next -- starting next week on indictments of laws that didn't exist in Texas.

But it makes you feel good, number one that you've been found innocent and my family is relieved. You know, my wife gets up every day and thinks I'm going to prison or have our house raided. Has had a huge impact on her health. So hopefully this will help.

BLITZER: When I heard about the decision. Over six years you've been investigated by two administrations, the Bush administration, Justice Department, the Obama administration Justice Department.

Four attorneys general, and now all of a sudden, they're saying, never mind, no crimes were committed. No charges were will be filed. I was reminded of that quote that Ray Donovan, the labor secretary during the Reagan administration gave after he was exonerated for charges.

Which office do I go to get my reputation back. Is that how you feel right now as far as the federal charges are concerned?

DELAY: Well, Wolf, as you know, politics has changed greatly over the last 10 or 15 years. I've been under these kinds of attacks actually for 15 years. And it's not -- it's -- it's not good enough for your political enemies to ruin your reputation. They now want to bury you, vilify you, bankrupt you, put you in prison, and then dance on your grave.

I'm hoping that people see what's happening to me and stop this criminalization of politics or the destruction. It's not healthy for the country. And it's certainly not healthy for the institution of the House of Representatives.

BLITZER: Do you see what's happening to, for example, Charlie Rangel or Maxine Waters right now? Is that similar to what was happening to you or do you see a difference?

DELAY: I see a big difference. Charlie Rangel's already admitted his guilt on the floor of the House in a speech last week. I don't know about Maxine Waters.

The only similarity is the Ethics Committee has politicized and it's taken over two years to do anything with Charlie Rangel. For that, I regret that, but he's admitted guilt. I was never guilty.

Back in 1996, Patrick Kennedy, chairman of the DCCC announced to the world they were going to get Tom DeLay and it took them about 11 years to do it with a lot of frivolous ethics charges.

I even had Kennedy file a racketeering suit against me. They finished it with the conclusion of indicting me knowing under the Republican rules, the Democrats that I had to step aside as a leader if I was indicted. That's all they wanted.

So I think what's happening to Charlie and to me is completely different because this investigation was criminal, not ethics.

BLITZER: Yes, and Charlie Rangel says he may have made some mistakes in filing taxes late and stuff like that, but he doesn't believe any criminal charges should certainly be filed against him. But we don't get into the whole Charlie Rangel/Maxine Waters issue right now. What's the major lesson you've learned from this whole six-year investigation -- this experience?

DELAY: I think the thing I learned the most, Wolf, is I just -- I'm not mad because they thought I was corrupt. I'm mad because they thought I was stupid.

I knew they were after me. I had lawyers all the day long telling me what I could and could not do to make sure that none of this could happen or that I was living within and working within the rules of the House and within the law and I've been proven right.

WOLF: You still have these state charges that are pending in Texas. That's going to be coming up for adjudication within a few weeks. Is that right?

DELAY: Actually, I go to trial next Tuesday and I'm looking forward to it. I've been waiting five years to go to trial. I could not get to trial. That's a long story. But we're finally going to start the trial with a pretrial hearing on Tuesday. Hopefully I can get before a jury very quickly because I was indicted by a runaway, Rogue district attorney and indicted on laws that didn't even exist in Texas at the time.

BLITZER: After six years, Tom DeLay will not face any federal charges. That investigation is over with. I know you're thrilled about that, Tom DeLay.

Thanks very much for sharing some thoughts with us. We spent a lot of time covering all the accusations. I thought it was the right thing to do to make sure that we reported accurately what the Justice Department has now determined.

DELAY: Thank you, Wolf. I appreciate you so much.

BLITZER: Thank you, Tom DeLay.

Finally, some good news from the Gulf Coast. We're going to show you a homecoming for sea turtles rescued after the BP oil spill.

(COMMERCIAL BREAK)

BLITZER: Sea turtles that were covered in oil through the BP spill are now clean, healthy and back where they belong. They're swimming in the Gulf of Mexico. CNN's John Zarrella got an exclusive look at their happy homecoming.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): You have to wonder, did these sea turtles know where they were?

(on camera): You think when you bring them out here that somehow they know they're home finally.

UNIDENTIFIED FEMALE: I'd like to think that they do, but it just depends on the individual animal. Some are real excited to be out here by flapping their flippers. Others are pretty sedate.

ZARRELLA: He's sedate.

UNIDENTIFIED FEMALE: He's behaving pretty well right about now.

ZARRELLA: Meghan Kaperski (ph), a Florida Wildlife Commission biologist along with National Oceanic and Atmospheric Administration scientists, brought 23 endangered turtles to a release point one mile out in the Gulf of Mexico. During the past three months, these turtles were rescued from the Gulf, covered in oil from the deepwater horizon spill. How bad did they look? They look great now. But how bad did they look when they were first rescued?

MEGHAN KOPERSKI, SEA TURTLE BIOLOGIST: When these animals were first rescued, there was a varying degree of oil. A lot of the animals that were coming in were very heavily oiled initially. A lot of the turtles he saw coming into Gulf World out of Orange Beach and Destin captures were moderately to lightly oiled.

ZARRELLA: Nursed back to health, these are the first of the rehabilitated turtles to go home. They are the lucky ones. More than 1,000 sea turtles were pulled from the Gulf. Less than half of them survived. Retired Admiral Thad Allen who leads the spill response helped with the release. This was a long-awaited moment.

THAD ALLEN (RET.) NATIONAL INCIDENT COMMANDER: I think it's emblematic of us looking forward to recovery. We've got -- still a lot of work to do, but as far as I'm concerned there's no greater place to be than here today.

ZARRELLA: The release site was off Florida's west coast. Of the 23 turtles released, one was found onshore, 11 of them off Destin, Florida, and the other 11 off of Venice, Louisiana.

UNIDENTIFIED FEMALE: Yes.

ZARRELLA: Two at a time, the turtles were carefully lowered to the water, their flippers going a mile a minute. They are young turtles, juveniles. No more than 13 years old. Biologists say they know the oil is still out there. That worries them some.

But they believe here in this part of the gulf, the turtles will be just fine. As they hit the water, the turtles scoot across the surface. It's home and they're back.

(END VIDEOTAPE)

ZARRELLA: Now, you know, Wolf, what they've done also is these turtles are implanted with microchips up into the shoulder area here, just like a veterinarian would put a microchip in a dog or a cat.

So that if for whatever reason in the future these turtles happen to be captured or caught, they'll be able to tell whether or not they were turtles that were ones that survived and were rehabilitated. A great story here today, Wolf, the first of many that will end up back in the gulf waters -- Wolf.

BLITZER: Great to hear all of that. John Zarrella, thanks very much.

That's it for me. I'm Wolf Blitzer. Join us weekdays in THE SITUATION ROOM from 5:00 to 7:00 p.m. Eastern, every Saturday at 6:00 p.m. Eastern right here on CNN. And at this time every weekend on CNN International. The news continues next on CNN.