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Biden Gets An Earful on Tax Cuts; White House Warns of Risk for New Recession; Captive Soldier in Taliban Video; Interview With Cordoba Movement Founder Imam Faisal Rauf; 'Strategy Session'; Obama Primary Challenger?
Aired December 8, 2010 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Brooke, thanks very much.
Happening now, the president sends Joe Biden into a House full of angry Democrats. This hour, frantic lobbying to salvage a White House compromise with Republicans -- tax cuts, jobless benefits and much more -- they are at stake right now.
And a young American man arrested in an alleged terror plot targeting the U.S. military. Authorities say he wanted revenge for the killings of Muslims. His lawyer says he was set up by the Feds.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
Vice President Joe Biden is getting an earful from House Democrats who are livid that the president was willing to compromise on tax cuts for the wealthy. Bidden went to Capitol Hill for a second day to try to sell members of his own party on the White House deal with the Republicans. The White House is raising the stakes with an ominous new warning about what could be go wrong for the entire U.S. economy if the deal falls through.
Our White House correspondent, Ed Henry, is standing by.
But let's get the very latest from Capitol Hill.
Our senior Congressional correspondent, Dana Bash, has been work -- working this story all day -- Dana, what are you hearing about this meeting with the vice president and the Democrats?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, it's going on right down this hallway, Wolf. We haven't heard any yelling through the walls yet. But I can tell you that that doesn't necessarily mean that there isn't a lot of anger going on behind closed doors, because that is certainly, certainly what was predicted from many House Democrats all day long, saying that they really wanted to give Vice President Biden a piece of their mind and make it clear that they do not believe that this is the right way to go, that this tax cut deal is wrong because of the fact that it extends tax cuts for the wealthiest Americans and because it deals with the estate tax in a way that they think really does too much to help, also, wealthy Americans.
Listen to what Raul Grijalva -- Grijalva -- excuse me -- of Arizona, one of the leading -- leading liberals told me earlier about what he thinks about this deal.
BASH: Are you angry at the president?
REP. RAUL GRIJALVA (D), ARIZONA: I think anger is probably a harsh word. I'm disappointed. I think we've been -- we've been left high and dry. And after we went through the -- the tough mid-terms and then to come back and, yes, you know, there's this -- elections have consequences. But, also, consistency and some of our core values we have to stick to as Democrats. And this were -- this represents some of our core values.
(END VIDEO CLIP)
BASH: So says he's not going to vote for it. And what he and others are saying -- were saying going into this is that they are going to tell Vice President Biden that they believe that the only way that they're going to go for this is if somehow these -- all these programs in this package can be changed.
We are told from Republicans and Democrats that is unlikely to happen.
So this is a very, very intense meeting -- there is no question about it -- Vice President Biden is having with his fellow Democrats, who are quite upset with the president.
BLITZER: All right.
Thanks very much.
Don't go too far away. One quick question, though, before I let you go. On the Senate side, the president seems to be having better fortune there, is that right?
BASH: It's very interesting, Wolf. There was a meeting earlier this afternoon in the Senate among Democrats and other members of the president's team -- among other measures of -- members of his economic team. And several Democrats came out and did say, Wolf, that they believe that the reception was more positive.
Why is that?
Apparently, in this meeting, the White House officials presented some economic data that said -- made clear -- from independent economists, apparently -- that made clear that this package -- talking about extending unemployment benefits and, of course, extending these tax cuts and more -- will actually be beneficial to the economy.
So it's looking more like it could possibly pass the Senate. And we're going to probably see that in the next day or two. The Senate majority leader, Wolf, told reporters that he Africa could bring this to the floor in the next day or two. So it will be very interesting to see.
BLITZER: We'll see what happens.
We'll watch it every step of the way.
The Obama White House is warning that failure to pass the tax cut compromise could be hazardous to the entire U.S. economy. The top economic adviser throwing out words that send shivers down a lot of people's spines.
Let's go to the White House.
Our senior White House correspondent, Ed Henry, is working the story for us.
There's no doubt that this administration is engaged in a full court press right now.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Oh, absolutely, Wolf. And this was a dramatic escalation of the rhetoric. The president's senior economic adviser, Larry Summers, today saying that basically if Congress fails to act on the -- act on this tax deal, that it could increase the risk of a double dip recession in 2011. Now, that's significant because for months, White House aides have really downplayed the risk on a double dip recession, which economists as you know, define as a time when you have a recession then all of a sudden you've got a little bit of growth, short-lived, and then bam, another recession hits the economy. That could be a catastrophe.
All of this rhetoric coming after the president, earlier today, really downplayed those tensions that Dana was talking about with fellow Democrats on the Hill and expressed confidence that, in the end, he's going to get this through.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think it is inaccurate to characterize Democrats writ large as feeling, quote/unquote, "betrayed." I think Democrats are looking at this bill and you've already had a whole bunch of them who have said this makes sense. And I think the more they look at it, the more of them are going to say, this makes sense. As I indicated, you've just had economists, over the last 24 or 48 hours, examine this and say this is going to boost the economy. It is going to grow the economy. It is going to increase the likelihood that we can drive down the unemployment rate. And it's going to make sure that two million people who stand to lose unemployment insurance at the end of this month get it.
(END VIDEO CLIP)
HENRY: Nevertheless, there are still some Democrats on the Hill who are not on board. And that's why, for the first time, we're now hearing the president himself may go up and lobby lawmakers on Capitol Hill. As Dana was reporting, Vice President Biden up there for the second straight day. He's got long contacts there from being up in the Senate for over 30 years. But Robert Gibbs today said that the president himself, before this lame duck session of Congress is over, may go up there and lobby lawmakers.
It worked on health care reform. We'll see whether it works here -- Wolf.
BLITZER: I've heard, Ed, that one of the reasons why the president reluctantly went into this compromise agreement is because he's got other issues he's got to deal with during the lame duck session, including the START Treaty with Russia, which he wants the U.S. Senate to ratify.
BLITZER: What are the prospects that that will happen?
HENRY: Absolutely. That is a big reason. They wanted to clear the decks and move on to new START. The president has made that a big priority in this lame duck. And interesting, we got first word of this broken on CNN a short while ago. Former President George H.W. Bush has endorsed this new START treaty. And, interesting, he did it in a one sentence statement. Quote: "I urge the United States Senate to ratify the START Treaty."
Short and sweet. It cheered this White House. They didn't know that it had actually come out until CNN reported it. They have now just blasted it all around. They think this may be the final thing that pushes it over the edge. I've talked to two different senior administration officials who say they believe that they can convince Senator Jon Kyl and other Republicans to at least get it on the floor. They now have the 67 votes to pass that treaty -- Wolf.
BLITZER: No word from the younger President Bush, even though Condoleezza Rice did endorse it.
HENRY: No word yet, but could be something they hold in reserve, if they can get it; if, in fact, it gets to the floor. That's the kind of thing they could roll out in the final hours. This one was a big one, following on former Secretary of State Colin Powell, as well, as you know, just a few days ago, putting his weight behind this -- Wolf.
BLITZER: This is a huge, huge priority for the Obama administration.
BLITZER: All right, Ed.
Thanks very much.
A very busy day for the lame duck Congress. At the same time, we're standing by for the Senate to revisit the ban on gays serving openly in the military. It's a procedural vote on a broader defense bill that would begin the repeal of "Don't Ask, Don't Tell."
The House meanwhile, is moving toward a vote on the so-called DREAM Act. It would allow hundreds of thousands of foreign born young people to become legal immigrants if they enroll in college or enlist in the U.S. military. The Senate has delayed a vote on whether to open debate on the measure until after the House vote.
And we're also expecting a Senate test vote on another high profile bill. It would set aside $7 billion to help 9/11 first responders who got sick at Ground Zero.
Authorities say they've thwarted a new attempt at homegrown terror. New information about the suspect and his alleged plot to target military recruiters.
And we'll tell you what's causing rioting for -- and more misery for the people of Haiti right now.
BLITZER: Is it a move that could come back to haunt the president?
Jack Cafferty is here with "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN CONTRIBUTOR: By making a tax cut deal with the Republicans this week, President Obama could be sealing his own fate come 2012. Some Democrats say agreeing to extend all of the Bush era tax cuts, even for the wealthiest Americans, will cripple President Obama's chances of being reelected.
For starters, the president angered the Democratic base. The left-wing of the party is furious that he refused to fight the Republicans. Some think it would have been better to let all of the tax cuts expire rather than simply roll over for the Republicans.
Many Democratic lawmakers say they're shocked at the price tag on this deal. Some estimates top $900 billion.
So much for deficit reduction.
And by agreeing to a two year extension, it guarantees the debate over the Bush tax cuts will once again be raging just in time for the 2012 presidential campaign.
If the economy improves, the Democrats will be in a better position to argue for ending the tax cuts for wealthy Americans. But that's a big gamble.
And speaking of gambling "The Daily Beast" has a great piece called "Obama's Lousy Bluffing Skills," where they examine the president's poker habits and how they may have predicted his negotiating style. Mr. Obama's former poker buddies describe him as "very cautious and conservative, a player who rarely won or lost big." They say the president wasn't much of a bluffer and didn't call opponents on a bluff unless he had a strong hand. Interesting when you consider that poker is all about reading people and showing strength in order to get a desired outcome.
Here's the question, did President Obama damage his reelection chances by making the tax cut deal with the Republicans?
Go to CNN.com/CaffertyFile.
BLITZER: A good question, Jack.
Thanks very much.
By the way, Rand Paul, the senator-elect from Kentucky, the Tea Party favorite, he's going be joining me later here in THE SITUATION ROOM. He doesn't like this deal either, as opposed to many of the establishment Republican leaders. Stand by for my interview with Rand Paul.
Meanwhile, the family of an American soldier captured in Afghanistan confirms he is the man seen in a new Taliban video. The images are disturbing, but they do contain some clues, at least apparently.
Do they or don't they?
Let's get the answer from our Pentagon correspondent, Barbara Starr.
She's watching the story for us.
So what do we know -- Barbara?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, Specialist Bo Bergdahl, still in captivity some 18 months after he was taken in Eastern Afghanistan. These new pictures show him in apparent good physical health. But it is unclear the circumstances, of course, of his captivity.
The belief by the U.S. military he is being held in Pakistan. Now, in these new pictures, he's outside, outdoors, you can see he's in a very thin shirt, so it may be a clue that these pictures were not recently taken in the cold winter months in those mountains.
The hunt for him still goes on. And when we were recently in Afghanistan, we had a very interesting encounter. We were going through a U.S. military jail in Afghanistan when we came across a picture of Bo Bergdahl taped on the wall.
I want you to watch and listen for one minute.
(BEGIN VIDEO CLIP)
STARR: Why do you have a picture of Private First Class Bo Bergdahl and why do you ask about him?
UNIDENTIFIED MALE: Actually, he's a specialist now.
STARR: I'm so sorry.
UNIDENTIFIED MALE: But he was promoted. He's our first question every time. We're trying to find out where he's at. So every person that comes here is asked, do you know this man?
Do you know where he's at?
(END VIDEO CLIP)
STARR: That was the voice of a military intelligence interrogator. We were not allowed to reveal his identity. But he interrogates detainees. They have a picture of Bergdahl on the wall in the U.S. military jail. Every detainee who is captured and comes in looks at that picture and is asked if they know where Specialist Bo Bergdahl may be -- Wolf.
BLITZER: How long did you say he's been held?
STARR: He was taken last summer so it's been about 18 months now. By all accounts the mystery is how he left his base in Eastern Afghanistan. Did he just walk away? Was he somehow directly captured by insurgents? That is the mystery that no one has been able to answer so far -- Wolf.
BLITZER: Let's hope he OK and let's hope find him soon.
Thanks very much, Barbara, for that.
We're monitoring other top stories here in THE SITUATION ROOM as well, including the arrest of an American-Muslim charged with plotting to bomb a military center in Maryland. Is this part of a dangerous new trend we're seeing right now? The spiritual leader behind that proposed mosque and Islamic cultural center near Ground Zero is weighing in. He's joining us in THE SITUATION ROOM.
Plus, at least 83 people dead in a massive prison fire in Chile. We're going to show you what happened.
BLITZER: Kate Bolduan is monitoring some other top stories in THE SITUATION ROOM right now. Kate, including the Supreme Court case that could affect that controversial immigration law in Arizona.
KATE BOLDUAN, CNN CORRESPONDENT: Different aspect of the immigration law, Wolf, before the Supreme Court. The high court heard oral arguments today on a separate Arizona law which would punish businesses who hire illegal immigrants. Only eight justices actually heard the argument, though; Elena Kagan recused because of her earlier involvement in the appeals process as solicitor general earlier.
This case's outcome could set the stage for the challenge to Arizona's more controversial immigration law which gives local police greater authority to arrest suspected illegal immigrants. And at least 83 people are dead and several more injured following a fire that broke out after a riot in a Chilean prison. Officials there are calling it the worst incident to strike the country's penal system. The prison, which was built to hold just 1,000 inmates housed nearly twice that many at the time of the blaze.
And riots are sweeping through Haiti's capital city of Port-au- Prince as angry protesters voice dismay over disputed presidential election results there. American Airlines is canceling all flights to Haiti as a result.
Meanwhile, a French doctor's report now suggests that the deadly cholera outbreak also ravaging the country may have originated with United Nations peacekeepers from Nepal, but U.N. officials and others caution the findings are inconclusive.
And a snowy, snowy holiday. A major snowstorm is paralyzing Paris this hour. The violent weather has halted air traffic at one major airport, closed several highways and shut down the Eiffel Tower. An estimated four to six inches of snow has already blanketed the area, another few inches could fall before tomorrow.
If you're traveling, that's horrible.
BLITZER: That's why I love Paris in the springtime.
BOLDUAN: There you go. Sounds like the beginning of a movie?
BLITZER: Maybe we could do something about that.
BOLDUAN: Stop inviting me, you're so sweet.
I love the snow, though.
BLITZER: Love Paris.
BOLDUAN: I love Paris in the snow.
BLITZER: Any time.
BOLDUAN: Send me.
BLITZER: OK. Not going.
It's politics with a punch. Stand by to see what happens when lawmakers overseas disagree about spending.
And the leader of the proposed Islamic center in mosque near Ground Zero. I'll ask him what can be done about American-born Muslims who are recruited for terror attacks and jihad?
And new insights into the release of the Lockerbie bomber. Very disturbing documents, those leaked U.S. cables, they tell us stuff the British government presumably didn't want us to know about.
(COMMERCIAL BREAK) BLITZER: You're in THE SITUATION ROOM.
Happening now, payback for some African-American farmers and Native Americans. Just minutes from now, President Obama is expected to sign into law a bill settling their long-standing lawsuits against the federal government. We're going to show you what happens.
And a space-age first. A commercial company takes a monumental step toward creating the next vehicle for space travel.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
An American-Muslim is in police custody charged with plotting to bomb a military recruiting station in Baltimore. The incident is prompting new concerns about what seems to be a growing number of such cases in the United States.
I spoke about that and more with Imam Faisal Rauf, he's the founder of the Cordoba Movement, the spiritual leader of the proposed new cultural center and mosque near Ground Zero in New York. And I asked him specifically whether he thinks there's a bigger problem right now with American-Muslims being recruited for jihad.
IMAM FEISAL RAUF, FOUNDER, THE CORDOBA MOVEMENT: No doubt, there is a problem. And this is why it's important for us to end this spiral, this downward spiral of discourse, of hatred, of animosity between America and Islamic world and Americans.
And this is why I'm launching the Cordoba Movement, which is a multifaith, multinational movement focusing on reversing this cycle of hatred and creating an opposite cycle of tolerance and hopefully, even harmony and love. This is what we need to work on.
BLITZER: It's in contradiction to Anwar al-Awlaki, the American- born cleric in Yemen right now whose got a website together with others that are aggressively seeking to recruit American-Muslims to fight against the United States.
What's the best way to stop these kinds of guys?
RAUF: We have to -- we have to end this downward spiral by creating the opposite. One of the things that happened very positively from our experience this summer was the optics in the Muslim world of the mayor of New York City, the politicians of New York City, the interfaith community supporting our attempts to establish a center.
There was just in the Sunday edition of "New York Style" magazine, it quoted a Bahraini newspaper who said, this support for the American community for our community center was the best propaganda, the best PR that could possibly happen for America.
So what we have learned, Wolf, is that we can actually end this spiral and we have to engage with it and push back against it. We cannot let it dominate the discourse.
Just last night, I met with a number of the 9/11 families and community, survivors, family members and entities whom we have committed ourselves to engaging with in changing this discourse not only about the center but the larger issue of faith and beliefs, what America stands for, what Muslims stand for and how we can reclaim the discourse from these extremists.
We have extremists in the Muslim world, extremists in all faith traditions and when this happens, when you have an Awlaki make something and then you have a pastor threatening to burn the Koran, you create -- and the extremists feed on each other. We need to change it because the battlefront is not between Islam and the West, but when the moderates of all faith traditions, including atheists and agnostics, and the extremists of all faith traditions, including the extremists who are agnostic.
BLITZER: Are American-Muslims doing enough to join you in this fight? Are you satisfied with what your fellow American-Muslims are doing?
RAUF: We need to do more. We are stretched, we are -- we are -- but we need to do more and we cannot do this alone. We need to organize better. We need to partner better and this has to be a joint effort between Muslims and members of other faith traditions. This is the only way can do it.
BLITZER: Let's talk about the cultural center and mosque near Ground Zero. How much money have you actually raised for it so far?
RAUF: We have yet to begin a capital campaign. All that has happened is the developer put together and a group of investors who acquired the property. We have yet to begin a capital campaign to raise the money for that, and that is the work and focus of the developer. On his focus is the real estate and the development and the raising of the money for that development.
But what has happened is that my focus was been, was before and will continue to be on how we can actually win the peace and how do we wage the peace against the extremists who have hijacked the discourse.
And that's what we aim to do and that is why we've founded this movement, cordobamovement.org. I encourage your listeners to visit our website and learn more about our projects, our programs, our approaches on how to win the peace and register the voice.
BLITZER: All right, there was a story on "The Daily Beast" by our CNN contributor John Avlon saying your group has actually applied for some federal funding for the cultural center. Is that true?
RAUF: Well, the developer, I understand, has developed for the Lower Manhattan development funding, which was funding established for the redevelopment of Lower Manhattan. This is what I do understand, yes.
BLITZER: Because there's been criticism Irshad Manji, I know you know who she is, the author of "The Trouble With Islam." She was quoted in that "The Daily Beast" as article saying, "The New Yorkers I speak with have questions about Park 51," which is the name of the cultural center, "Requesting money from public coffers without engaging the public shows a staggering lack of empathy, especially from a man who says he's all about dialogue."
Do you want to respond to Irshad Manji?
I mean, I have focused myself on dialogue. My track record speaks for itself. And as I told you, we were engaged with the 9/11 survivors and families yesterday and they recognize that this is going to be the important.
One of the ladies president yesterday said, look, I don't want my daughter to grow up hating anybody. Another gentleman who was a 9/11 survivor said, you know, I was in a stairwell and I was surrounded by Muslims and we were all looking to survive together.
There are many important stories and they're concerned. And their major concern is how the discourse has been -- has become so vitriolic and one of hatred and accusatory voices. So we are working together with them to create programming in the immediate future on how we can actually reclaim the dialogue.
BLITZER: Are you at all considering moving the proposed cultural center and mosque from that location near Ground Zero to a less controversial location?
RAUF: At the moment, the dream is still alive to establish this center, because the issue is not really about the real estate. This issue is about the broader problems between -- and the perception between Muslims and members of other faith communities.
Let me remind you, the issue that happened and the controversy this last summer is not about just our proposed center. There were many, many -- which was intended to be a community center open to all.
There were three, four, five, six other mosques, proposed mosques around the country, from the Midwest and Tennessee, in San Diego, that also received criticism. So what really appeared was really an anti- Islam sentiment which was whipped up and fanned, and this is very, very dangerous.
BLITZER: So I just want to be precise. As of now, you still want to build it at that location?
RAUF: This is our dream, yes.
BLITZER: Imam Feisal Rauf, thanks very much for coming in.
RAUF: Thank you so much for having me, Wolf.
(END VIDEOTAPE) BLITZER: The backlash against WikiLeaks has unleashed a series of hacker attacks on credit card Web sites and other major online targets.
Stand by. We have the latest.
And a foreign country's newly filed lawsuit against the former vice president of the United States, Dick Cheney.
BLITZER: Kate back, she's monitoring some of the other top stories in THE SITUATION ROOM right now, including some new diplomatic cables released by WikiLeaks that shows perhaps a different role the British government may have been playing in the release of the Lockerbie bomber.
BOLDUAN: Very interesting. More coming out from WikiLeaks, Wolf.
The leaked U.S. cables reveal anxiety within the British government over threats from a, quote, "thuggish Libyan regime" pushing for the release of the convicted Lockerbie bomber. Abdel Basset al-Megrahi, who was freed from prison in August 2009, had been diagnosed with prostate cancer and given months to live. Well, he is still alive.
Commenting on the cables, a senior Libyan source tells CNN that Libyans are shocked by the ignorance of American diplomats.
And Nigerian investigators say they have filed the charges against former Vice President Dick Cheney and others connected to the energy services company Halliburton. They're charged with paying bribes to secure a lucrative natural gas project during the 1990s. Some observers in Nigeria call the long-running case a publicity stunt. A lawyer for Cheney says there is no reason to suspect his client is guilty.
And the suspect charged with operating a so-called bomb factory out of his California home is urging a federal judge to delay the scheduled burning of the house so he can retrieve evidence. Officials plan to burn it down because of fears it's too dangerous for bomb squads to reenter. The suspect faces bomb making and bank robbery charges and is being held on $5 million bail.
And a federal judge has delayed the perjury trial of baseball great Roger Clemens following defense attorney's request for more time to review the prosecution's evidence. Clemens pleaded not guilty in August to charges he lied to Congress about using performance- enhancing drugs. A jury selection is now set to begin it July.
I remember when that was happening on the Hill. Circus, Wolf. It was crazy.
BLITZER: That trial, there'll be a lot of coverage around the trial as well.
BOLDUAN: Oh, yes.
BLITZER: All right, Kate, thank you.
New murmurs right now that President Obama potentially could face a Democratic primary challenger in 2012. Should the White House be nervous? Should they take those rumors seriously?
Plus, the president called it a major priority during his own campaign. So why is it taking so long to repeal the military's controversial "Don't Ask, Don't Tell" policy?
James Carville and Tony Blankley, they're standing by live for our "Strategy Session."
BLITZER: Let's get right to our "Strategy Session."
And joining us, our CNN political contributor, the Democratic strategist James Carville. Also, the Republican strategist Tony Blankley. He's the executive vice president for global public affairs at Edelman Public Relations here in Washington.
That's a big, big PR company. Is that right?
TONY BLANKLEY, VICE PRESIDENT FOR GLOBAL PUBLIC AFFAIRS, EDELMAN PUBLIC RELATIONS: Big and bad.
BLITZER: Good to have Tony here, back after a while.
Let's talk a little bit about what was supposedly such a big priority for the president. When he was running for president of the United States, he said you've got to get rid of the "Don't Ask, Don't Tell" policy that would allow the U.S. -- the gays to serve openly in the U.S. military.
It's now two years later. They're trying to do it, maybe during this lame-duck session. It may or may not happen. A lot of the betting says it's not going to happen.
Why has it taken him so long to live up to that campaign promise? You know that a lot of gay activists and others are very upset.
JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Look, the secretary of Defense wants to get rid of it. The chairman of the Joint Chiefs of Staff wants to get rid of it. The troops who serve in the military want to get rid of it. And I think the president of the United States wants to get rid of it.
But, you know, it's one of these things that it apparently will take some time. For the life of me, I don't know why people who want to serve their country -- they'd (ph) be 100 percent for that. It has been in existence for a long time, and I guess there's just a certain resistance to something that it seems that most of the people that think about this would like to get rid of it a long time ago.
BLITZER: Yes. Even Joe Lieberman wants to get rid of it, even though John McCain doesn't want to get rid of it. At least not now.
Our last CNN/Opinion Research Corporation poll on this question last month asked, "Should we allow openly gay people to serve in the military?" Seventy-two percent said they favor that, 23 percent said they oppose it.
BLANKLEY: Look, I don't think there's any doubt the trend line in American culture and in the military is going to move to a point where there's not going to be any discrimination. But what you saw recently with the testimony of the chiefs of the services, who were less political than the secretary of Defense and the chairman of the Joint Chiefs, who were responding, obviously, in part to the president's policy, was, yes, we're in favor of it, but it makes us a little nervous because there's still a fair amount of resistance, and we're in the field fighting now. So can we do it a little later?
Now, I have a son in the military. He got the survey. I guess the whole service got surveyed. And so I think some of the younger people care less than some of the other ones, and regionally.
But the challenge is, if 30 percent or 40 percent of the fighting men and women are resistant, may not reenlist, then that's a factor. The military has to figure out, what's best for us fighting right now? We've got two wars, one of which we're not doing very well.
CARVILLE: I can't imagine that you are going to have 30 or 40 percent that don't reenlist because of something like this. And like I say, the trend line is inevitable.
BLITZER: And here's what it does raise, this question about the presidency of Barack Obama, that they've waited until the end of his first two years, during this lame-duck session. All of a sudden, the rush, rush, rush, is on, sort of like waiting on another campaign promise to end those Bush tax cuts for the wealthy Americans until the end of his first two years.
CARVILLE: And you know what would have happened if he had said we're going to do it right away? They'd say we're in a recession and you're not focusing in on the economy, you're focusing on that. You're making the same mistake Clinton made. I mean, it's a little bit --
BLITZER: Why did he wait so long on the tax cuts?
CARVILLE: I don't know. I don't have a good answer for that. I think that -- I think that's a legitimate --
BLITZER: How many times did he say he was going to end the Bush tax cuts for those making more than $250,000 a year?
BLANKLEY: Let me defend the president. BLITZER: What?
BLANKLEY: Let me defend the president for a moment.
In fairness to the president, he asked the Democratic Congress during this campaign season to bring up the tax issue. They didn't want to do it because they didn't think they --
BLITZER: Well, why didn't he do it in the first year of his presidency?
BLANKLEY: He was pretty busy.
BLITZER: Well, that's part of the economy, that's part of the stimulus, that's part of the deficit. That's part of all of this.
BLANKLEY: I mean, look, every White House has their priorities. I think the president --
BLITZER: Here's the criticism, and you know this, that he spent so much time on health care, a lot of these other issues were simply pushed aside.
CARVILLE: Well, he spent time on health care, but he also had a collapsing banking system, he also had the auto companies that were going under. He also had a collapse in -- he also had we're losing jobs at 750,000 jobs a month.
I mean, to be fair -- and I have not been afraid to criticize the president at times -- he had a lot on his plate. And, you know, if they made some choices, it's easy to go back and say, well, they could have made a different choice here or there, but --
BLANKLEY: If you work in the White House -- I remember the end of the Reagan administration. Eight years were up, and we were amazed how quickly it went.
We had so many things we wanted to do. I mean, time runs. You get killed by the daily challenges, the incoming fire. And this president had an awful lot of incoming from the world and the country. So I think that's a tough call to say --
BLITZER: You know Matt Bai of "The New York Times?"
CARVILLE: I know him, yes.
BLITZER: He's a good reporter, right?
BLITZER: Do you know Matt Bai of "The New York Times?"
He writes this in "The New York Times" under a headline, "Murmurs of Primary Challenge to Obama": "That a primary is being openly discussed, though, reflects how fully Mr. Obama's relationship with his party's liberal activists has ruptured and the considerable confusion on the left over what to do about it."
Do you believe a Democrat will stand up in the coming months and say, I want to challenge President Obama for the Democratic presidential nomination?
CARVILLE: Well, I guess anything is sort of possible. That would be very, very unwise.
BLITZER: But do you believe someone will stand up and do that from the left, from the center?
CARVILLE: You know, someone, sure. I mean, anything can happen. But, I mean, someone of substance, someone with a real articulate way to go about this? I tend to doubt that right now. But can I say that some --
BLITZER: The way Ted Kennedy challenged Jimmy Carter. Would someone of that substance -- if you remember -- you're old enough to remember when Ted Kennedy challenged a sitting incumbent Democratic president.
BLANKLEY: Yes. Look, any time you have a challenge as a president, it's a symptom. It's not a cause of the problem. And the system is that you have created enough dissatisfaction.
I think this president has enough time to fix his problems. You don't have to, by the way, have a Kennedy challenger, someone who could actually win. Any kind of plausible challenger is a predictor of failure.
So he has a high interest in the next year of managing his relations with the liberals. My suspicion is, when you consider the base that he has with the African-American vote in the primary sequence, there's almost no chance of him being denied the primary.
BLITZER: Well, you know, the Iowa caucuses are just a little bit more than a year from now.
CARVILLE: Look, I agree. Look, this president has done a lot of things that -- he was dealt a pretty tough hand, and he's fought pretty hard, and he's fought some tough issues and everything. You can go back and you can take issue. I really don't like this sort of deal that they just cut.
BLITZER: You don't like it personally?
BLITZER: Why not?
CARVILLE: Because it wasn't a negotiation. It was just a capitulation.
BLITZER: Wait a minute. You're saying the president capitulated?
CARVILLE: The Republicans are saying, everybody is saying, well, that we got everything we wanted, and the White House said, well, we just thought we had to do this. My point is, let the Republicans deliver 75 percent of the votes. They got 75 percent of what they wanted.
BLANKLEY: I'm glad as a conservative in the free market here that the president agreed to the deal, but it's quite a shock. I mean it implies that he's bought into a fair piece of Reaganized view of how the economy functions, and the question is, is he going to follow that up with more pro-business --
BLITZER: He didn't have 60 votes in the Senate, but --
CARVILLE: Well, you know what? Sometimes -- no one ever has the votes when they start. No one ever has votes when they start.
And, you know, sometimes you have a situation, they come in -- and these Republicans are just too rich for words. They come in, the deficit, the deficit, the deficit, the deficit. And the first thing they do, if they don't have a negotiation, they have an auction to add $900 billion to the deficit.
BLANKLEY: Wait a second.
BLANKLEY: Even the balanced budget committee with Alan Simpson recommended that we don't -- we need to stimulate first, and then cut starting two or three years out.
CARVILLE: How does the estate going from $5 million to $10 million stimulate anything? How does giving somebody making $25 million a year stimulate a single thing?
BLITZER: Well, there's a lot of other provisions in there that the White House sees as economic stimulus that will create jobs. All of the Obama tax cuts which the Republicans signed on to.
CARVILLE: According to what people say, look, it's going to do some good. You can't throw $900 billion out there without doing some good. I don't see a strategy behind this.
BLITZER: Some people think this will be a better economic stimulus package than the original Obama economic stimulus package.
BLANKLEY: But Wolf, the point is --
CARVILLE: Wolf, if you tell me what the strategy is here, did somebody say renegotiate --
BLITZER: He told us the strategy.
CARVILLE: What is it?
BLITZER: He did a news conference for an hour, and he did another one yesterday.
CARVILLE: He said that -- I didn't see --
BLITZER: You don't believe him?
CARVILLE: I don't not believe him. I believe that they gave Republicans everything they wanted. They gave Republicans stuff they didn't (ph) want.
BLANKLEY: Look, you can debate how to stimulate the economy, but there is not an economist from the left or right who doesn't think that right now, with the economy the way it is -- Larry Summers just said we could double dip if we don't do something.
BLANKLEY: And so the idea you would actually contract the economy at this moment, even if you want to reduce the deficit over time, is nuts.
CARVILLE: This is like -- this reminds me -- remember that "National Lampoon" cover where they said -- they had the gun to the dog's head, and said, "Buy this magazine or we'll shoot the dog"? So they come in and they say, well, vote for this or you'll cause a recession. I mean, this is the equivalent of Larry Summers, who said we don't --
BLITZER: All right.
CARVILLE: This is the same Larry Summers who said we don't need to regulate derivatives.
BLITZER: I'm going to go tweet during the commercial break that James Carville says Obama capitulates to the Republicans and Tony Blankley defends President Obama.
BLANKLEY: I love his new policy.
BLITZER: All right, guys. Thanks very much.
If you think lawmakers in this country can play rough, wait until you see a real brawl over government spending.
And the future of space flight now. You no longer have to be a NASA astronaut to get a shuttle service.
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UNIDENTIFIED MALE: We have liftoff of the Falcon 9.
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BLITZER: Jack is back with "The Cafferty File" -- Jack.
CAFFERTY: The question this hour: Did President Obama damage his re-election chances by making a tax cut deal with the Republicans?
Carla writes, "It hurts his chances with this Democrat. Has anybody checked to see if the Republican Party contributed heavily to the Obama campaign? I have to ask, because they are sure benefiting from his presidency."
"Obama would make a terrific Republican. He failed at the health care plan he promised, and now he is helping the wealthy Republicans stay wealthy while stomping on the poor and the middle class that he promised to help."
Joe writes, "No, he didn't. You know why? Because for a voter, money talks, especially the money that will not be taken out of their paychecks after December."
"Let's be honest, the rich will always have money, and that will be used to hire tax attorneys to avoid paying taxes at full price anyway. He saved the middle class from having to pay more taxes, and that will be his ace in the hole for the future."
Mar writes from Florida, "He'll never get my vote again. Hillary would have made a better president because she has more stones than Obama will ever have."
Cary says, "It was a sucker bet. Don't do the deal, the average Americans feel the pinch. Do the deal, and the Republicans claim a victory and get to look good for their real base, the rich. Average Americans should be outraged that the Republicans were holding the tax breaks hostage until they extended it to the rich, but they're not."
Dawn writes, "I hope so. Obviously, the president doesn't know anything about negotiation or compromise. Compromise is not backing down until the other side has even more than they originally wanted."
"Notice not one Republican is objecting to this deal? In a true compromise, some on both sides would be unhappy. As a Democrat who voted for this man, I am very disappointed."
Steve writes, "If Palin wins the nomination, then I will vote for Obama. If Romney is the candidate, then I and many other Democrats will stay home."
"Obama has minimal leadership skills. He should have stayed in the Senate, learned how the politicians operate. Right now he looks like a class C rookie trying to hit against Sandy Koufax."
John writes, "I think that two years is a long time. His hands were tied on this one. What will matter for the president is the economy, jobs." "I believe the American people need to believe versus hope. Other words, investments to create new jobs will only come when corporations and businesses believe that the economy is back on solid ground. Not a good idea to bet on hope."
And finally, Eden says, "I've been a big support over Obama, but even now I am feeling exasperated with him. He needs to man up and stop being so willing to compromise. He's like a lawyer who settles every case so he'll never have to go to trial."
If you want to read more on the subject -- got a lot of mail -- go to the blog, CNN.com/CaffertyFile.
BLITZER: Will do for sure, Jack. Thank you.
The White House tax cut deal with the Republicans would add more red ink to the budget. I'll ask Republican Senator-elect Rand Paul how he feels about the compromise.
Stand by. As you know, he's got a lot of allies out there in the Tea Party movement.
And defenders of WikiLeaks are waging a hacker war right now. Major Web sites are being targeted, and there could be financial ripples for many Americans.
BLITZER: At this hour the U.S. government is moving forward to compensate black farmers and American Indian land owners for past discrimination. President Obama signing landmark legislation into law.
Let's go back to our senior White house correspondent, Ed Henry.
Historic legislation I should also point out, Ed.
HENRY: You're right, Wolf. It is historic, and it's something Barack Obama worked on as a senator.
Thousands of black farmers around the country who did not get Department of Agriculture loans simply because of the color of their skin, he had pushed this as a senator to do something. There was $1.2 billion that was tied up in Congress that was going to go to these farmers, but it wasn't going anywhere. And as president, black farmers expected he was going to do more about it.
And I actually, by a chance encounter at a Starbucks here near the White House, ran into John Boyd. You see video of him. He's the chief lobbyist for the black farmers, and he said, "Look, I know you are busy on a lot of other things, but pay attention to this story. It's not on anyone's radar."
We did a story on it. My producer, Shawna Sheppard (ph), went down to John Boyd's farm in rural Virginia. The White House wasn't happy with some of the pressure they were getting from these stories. And finally though, they broke this logjam on the Hill, and just moments ago, the president signed it into law and said this --
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OBAMA: In the end, the work that is represented on this stage and among these members of Congress, this isn't simply a matter of making amends. It's about reaffirming our values on which this nation was founded, principles of fairness and equality and opportunity.
It's about helping families who suffered through no fault of their own get back through their feet. It's about restoring a sense of trust between the American people and the government that plays such an important role in their lives. As long as I have the privilege of serving as your president, I will continue to do everything I can to restore that trust.
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HENRY: So there is about $1.2 billion almost in there for black farmers in this law that has just been signed by the president, over $3 billion for Native Americans, oil and gas royalties and other things related to land rights, as you mentioned. A long time of discrimination and problems that are now being cleared up -- Wolf.
BLITZER: And the president, meanwhile, getting ready for some personal lobbying. Is that right?
HENRY: Oh, no doubt about it. You know, Robert Gibbs is now leaving the door open of the possibility that the president, himself, may go up to Capitol Hill in the next few days, lobby wavering lawmakers, not Republicans, but some of his fellow Democrats who are not on board with this tax cut deal yet. It worked when he did it dramatically earlier this year over health care reform. We'll see if it works again -- Wolf.
BLITZER: Ed Henry at the White House.
Thanks very much.