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Presidential Candidates: Who Will be Left in the End?; Angelina Jolie in Baghdad as Goodwill Ambassador; Claims of China Spying on U.S. Soil

Aired February 7, 2008 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, Mitt Romney faces reality. After less than a Super Tuesday he's moving aside, giving John McCain a much more clear path to the nomination. Can McCain convince conservatives to give him their blessing?

A Chinese spy network on U.S. soil stealing secrets to build up a massive military industrial machine. Those are the chilling findings of a Congressional panel.

And Angelina Jolie in Baghdad -- the actress and U.N. Ambassador for Goodwill making a pitch to help millions of refugees in an exclusive interview with CNN.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Suddenly, the Republican race for the White House looks a lot different. Mitt Romney stepped aside today. In the end, seven was his unlucky number. That's how many states he won on Super Tuesday, but he lost the biggest prizes to John McCain and watched Mike Huckabee sweep much of the South. The former Massachusetts governor today conceded his numbers don't add up.


MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: As of today, more than four million people have given me their vote for president.


ROMNEY: That's good. Yes. That's, of course, less than Senator McCain's 4.7 million, but quite a statement, nonetheless. Eleven states have given me their nod, compared to his 13.


ROMNEY: Thank you to those 11. Of course, because size does matter, he's doing quite a bit better with the number of delegates he's got.

Now to all of you, thank you, here for caring enough about America to show up, to speak up, to stand up for conservative principles. Now I disagree with Senator McCain on a number of issues, as you know. But I agree with him...


ROMNEY: ... but I agree with him on doing whatever it takes to be successful in Iraq and finding and executing Osama bin Laden...


ROMNEY: ... and I agree with him on eliminating al Qaeda and terror worldwide. Now if I fight on in my campaign all the way to the convention, I...


ROMNEY: ... I want you to know, I've given this a lot of thought. I'd forestall the launch of a national campaign. And, frankly, I'd be making it easier for Senator Clinton or Obama to win.


ROMNEY: Frankly, in this time of war, I simply cannot let my campaign be a part of aiding a surrender to terror.


ROMNEY: This isn't an easy decision. I hate to lose. My family, my friends, you, my supporters across the country, you've given a great deal to get me where I have a shot at becoming president. If this were only about me, I'd go on. But it's never been only about me. I entered this race -- I entered this race because I love America. And because I love America, in this time of war, I feel I have to now stand aside for our party and for our country.



ROMNEY: You guys are great.


BLITZER: John McCain asked conservatives for their blessing. He got a somewhat mixed reaction from a very feisty crowd. Listen to this.


JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Surely I have held other positions that have not met with widespread agreement from conservatives. I won't pretend otherwise, nor would you permit me to forget it.


MCCAIN: On the issue of illegal immigration, a position which...



MCCAIN: ... a position which obviously still provokes the outspoken opposition of many conservatives, I stood my ground aware that my position would imperil my campaign. I respect your opposition, for I know that the vast majority of critics to the bill based their opposition in a principled defense of the rule of law. While I and other Republican supporters of the bill were genuine in our intention to restore control of our borders, we failed, for various and understandable reasons, to convince Americans that were. I accept that. And I have pledged that it would be among my highest priorities to secure our borders first. To secure our borders first.


MCCAIN: And only after we have achieved widespread consensus that our borders are secure would we address other aspects of the problem in a way that defends the rule of law and does not encourage another wave of illegal immigration. My friends...


MCCAIN: ... all I ask of any American conservative, moderate independent or enlightened Democrat is to judge my record as a whole and accept that I am not in the habit of making promises to my country that I do not intend to keep.


MCCAIN: I hope I have proven that in my life -- even to my critics -- then vote for or against me based on that record, my qualifications for the office and the direction where I plainly state I intend to lead our country. If I am so fortunate as to be the Republican nominee for president, I will offer Americans, in what will be a very challenging and spirited contest, a clearly conservative approach to governing. I will make my case...


MCCAIN: I will make my case to voters no matter what state they reside in the same way. I will not obscure my positions from voters who I fear might not share them. I will stand on my convictions -- my conservative convictions -- and trust in the good sense of the voters and in my confidence that conservative principles still appeal to a majority of Americans Republicans, independents and Reagan Democrats.


BLITZER: As Mitt Romney suspends his campaign, where does the Republican race go from here? Let's bring in our chief national correspondent, John King. He's watching the story for us.

Let's talk about this contest right now. On the Republican side, there's still three candidates out there. And I'm including Ron Paul, who's still a Republican candidate for the White House, Mike Huckabee, the former Arkansas governor, and John McCain.

So where does this contest, John, go from here?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, by all accounts, even people within the Huckabee campaign, they believe it goes to the inevitability now of John McCain sealing the nomination and becoming the Republican nominee. But Mike Huckabee did issue a statement this afternoon saying he will stay in the race, that he believes he has some principles -- conservative principles he wants to run on.

Some of those he positions he will run on are different from John McCain. But he also said, importantly, in that statement, Wolf, that he will run a positive campaign. And as you know, in recent history and even in recent days and hours, he has said quite positive things about John McCain.

So inside the McCain campaign, of course, they would like Governor Huckabee to step aside. Some believe that he might step aside after another week or two of the contest, that one of his goals is to get more delegates than Mitt Romney heading into the convention. But they believe inside the McCain campaign, and they even believe it inside the Huckabee campaign now -- barring some dramatic turn of events -- John McCain will be the Republican nominee.

BLITZER: So what basically caused Romney at this point -- this last couple of days after Super Tuesday -- you know, there were a lot of meetings going on. You've been doing some digging. What finally tipped him into making this decision?

KING: Two or three key things. The first one is the math, Wolf. They have realized that even if he won all of the contests from here on out, if John McCain would get, say about 30 percent of the vote -- and he has never gone below that number -- if he would get about 30 percent of the vote from the way on out, Mitt Romney would still not be the nominee -- even if he won every contest from here on out, and it's unlikely to think he could win every one based on what we've seen in the past month.

They also have made the calculation that he wants to have a political future. Some are already saying that the speech he gave today could be -- if John McCain does not win the presidential election in November -- the first speech of Mitt Romney's 2012 campaign for the nomination. And, Wolf, inside the Romney campaign, there also was a concern that many people were now associating themselves with the Romney effort, urging him to stay and block John McCain and simply saying things that would not be helpful to the Republican Party in the long run. And they did have a worry that people who were saying they were supporting Romney were saying they would never vote for John McCain -- that conservatives should never vote for John McCain.

They did not view that, inside the Romney campaign, as helpful, both to the Republican Party short-term, this year, and to his long- term prospects for perhaps running for president again or perhaps having some other role in the party in the future. BLITZER: John King doing some excellent reporting for us. Thank you very much.

Let's go to Jack Cafferty File. He's got The Cafferty File in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: Here's a little story about the Arizona senator, John McCain, the presidential frontrunner and now presumed nominee.

McCain was missing in action yesterday when it came time to vote on the economic stimulus package in the Senate. McCain's problem was the that the bill contained provisions that would make 20 million seniors and 250,000 disabled veterans eligible for those rebate checks. It was, granted, a tough decision for McCain. Whichever way he voted he would have risked alienating people.

If he voted no to the rebates, he would have denied benefits to Social Security recipients and disabled veterans -- you know, people he would probably like to have vote for him for president. Plus, there are probably members of each of those groups out there in Arizona -- the state that elected him to the Senate -- who could have used the money.

If he had voted yes, he would have no doubt angered President Bush and the Republican leaders and the conservatives -- some of whom aren't too happy with McCain to begin with. It was one of those moments that says quite a bit about somebody's character.

What did McCain do? Nothing. He ducked. Instead of representing the people in Arizona who elected him, he chose not to vote at all. John McCain -- pilot of the Straight Talk Express -- wimped out.

And it's not the first time -- not by a long shot. In the last year, John McCain has missed more than half of all the votes cast in the U.S. Senate. This makes it look a lot like John McCain wants to be president, but he can't bring himself to do the job of senator that he was elected to do by the people of Arizona. Just another politician choosing to do what's best for him instead of what's best for the people he was elected to represent.

When it came right down to it, John McCain didn't have the stomach for the tough decision it would have required to come down on one side or the other of the stimulus package.

Here's the question -- what message did John McCain send by choosing not to vote on the Senate economic stimulus package?

Go to, where you can post a comment on my blog.

Pretty pathetic -- Wolf.

BLITZER: It's interesting that both Hillary Clinton and Barack Obama, two sitting U.S. senators, they did show up and they did vote on the economic stimulus package. CAFFERTY: Yes. Well, that's what the senators are supposed to do. That's their job.

BLITZER: Jack, standby. You're going to be getting a lot of e- mail on this question. We'll be watching and getting to that later.

Conservative radio talkers are already laying blame for a Republican presidential loss.


RUSH LIMBAUGH, CONSERVATIVE RADIO TALK SHOW HOST: You establishment Republicans are going to be responsible for the election of a Hillary Clinton or a Barack Obama. It will not be us who are responsible. It will not be talk radio. It will be you.


BLITZER: Is the conservative base crumbling or will it rally around John McCain in the end? We're going to talk about that and more with our own contributor, the radio talk show host, Bill Bennett.

Also, the battle for delegates and dollars -- we're crunching the numbers as Hillary Clinton and Barack Obama dig in for the long haul.

Plus, shining star power on a refugee crisis -- Angelina Jolie travels to Baghdad.

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


BLITZER: There are plenty of conservatives out there who still have very strong doubts about John McCain's maverick stance. Some radio talk show hosts have openly scorned him. Listen to this.


LAURA INGRAHAM, RADIO TALK SHOW HOST: I don't care it's enough to say that, you know, you were a foot soldier in the Reagan Revolution. I think the question is what have you been doing for conservatism lately?



BLITZER: Joining us now, our CNN contributor and Claremont Institute fellow, the radio talk show host himself, Bill Bennett.

That was Laura Ingraham speaking at that CPAC crowd, where you are right now, the Conservative Political Action Conference. And she got a pretty good ovation for that line, which was an obvious swipe at John McCain.

WILLIAM BENNETT, CNN CONTRIBUTOR: Well, he got a pretty good reception, though, too. He got very strong ovations.

Laura Ingraham used to work for me. Were foot soldiers in the Reagan administration. I was secretary of education, she was one of my speechwriters. There's a direct answer to that question, Laura, with all due respect. John McCain argued for the surge. If John McCain had not argued so strongly for the surge, we might not have had the surge. We might not have the situation that we have in Iraq today and we wouldn't have the politics that we have regarding Iraq.

It's much quieter. There's much less Democratic heat on the president because of that success. That's what he's done lately. I guess I just don't understand. This is hard for me, Wolf, you know? I mean these are some of my best friends and my colleagues. But some of the talk -- almost admitting defeat, saying, you know, because McCain is the nominee, people who support him will be responsible for this loss in November. I just don't know why people would throw in the towel.

BLITZER: You know, Bill, some of these critics, in addition to Laura Ingraham and Rush Limbaugh, we've got a list -- Ann Coulter, Sean Hannity, Michael Savage, Hugh Hewitt, Mark Levin. These are all well-known radio talk show hosts and conservatives. And some of the arguments you hear is better -- just don't even vote because you shouldn't for McCain. Or, some of them are even saying, like Ann Coulter and Rush Limbaugh, go vote for Hillary Clinton or Barack Obama. It's better in the long run to have them in the White House than what they would regard a liberal like John McCain.

BENNETT: Well, that's the cutting point. I have not heard Rush say that. I corresponded with Rush and he said if I were to decide, you know, that I couldn't support McCain, then I'd -- you know, I'd rather have the karma be held on the account of a Democrat than a Republican. But some have gone that far. You're absolutely right about that, Wolf.

Hugh Hewitt said this morning -- he wrote this morning on his blog, because I'm tracking this pretty closely, look, if it's McCain, we will get behind him and start the process. And I think that's what John McCain did today. I was, frankly, was surprised and very relieved to see, Wolf, how well received he was by this crowd. It was an amazing day. You all covered it very well, by the way, with Dana -- the Romney announcement that he's stepping down.

But the important thing is for John McCain, I think, to realize this is the first step. I think he did a very good job in his speech, but he needs to do more. And what he says and does has to be reciprocated by people in this audience and people -- other conservatives.

Let me say about this group, I'm here. I don't want to say it too loud. This isn't just a conservative group, this is the right-wing of the conservative group. So it's a very conservative bunch. I think they're proud of that.

BLITZER: Well, we did hear sporadic little boos when he raised the issue of illegal immigration... BENNETT: Yes.

BLITZER: ... given his stance with Ted Kennedy...

BENNETT: Sure. Sure.

BLITZER: ... on that matter. And so I guess he did get -- here's the question -- who was more well received today at that CPAC conference? Was it John McCain or Mitt Romney?

BENNETT: Well, I think, when he came in, it was Mitt Romney. When they left, I think it was pretty close. It may still be Mitt Romney, because you probably had more Romney than McCain people. But I've been talking to these young people here and I have to tell you, some of them, it seems to me, Wolf, are showing more maturity than some of their elders. They're saying well, I was for Romney, but, you know, if it's going to be McCain, then we'll get behind him.

By the way, all of us have disagreements in politics. I have serious disagreements with John McCain. But if he's going to be the nominee, you know, doing this what have you done for me lately, John McCain's rating from the American Conservative Union is 82. It isn't 100, but it's 282. Hillary Clinton's nine. I mean there -- there's a difference for conservatives and they need to look at it.

BLITZER: And in the last hour, we heard from Glenn Beck of "CNN HEADLINE NEWS" -- he himself a radio talk show host. He has a very different perspective than Bill Bennett does.

Bill, thanks very much for that.

BENNETT: You bet.

BLITZER: Bill Bennett joining us.

Hillary Clinton and Barack Obama -- they're counting each and every delegate and dollar as they prepare for a protracted battle for the Democratic nomination. We're going to show you where they stand.

Plus, the biggest spy threat to the United States -- that's what one Congressman is suggesting. And he's saying it's coming from China.

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


BLITZER: Carol Costello has got the day off. Fredericka Whitfield monitoring some other stories incoming into THE SITUATION ROOM right now.

Fred, what do you have?


The death toll from Tuesday's devastating tornado cluster in the South is now up to 56. Homeland Security Secretary Michael Chertoff Tennessee today, where more than half the victims died. One mayor estimates the damage in his town alone at more than $70 million. President Bush is scheduled to visit the state tomorrow.

And one billion people could be killed by tobacco use in this century. That's the eye-opening warning coming from the World Health Organization. It says tobacco products led to the deaths of 100 million people during the 20th century. The agency calls tobacco use an epidemic and it's calling on world governments to increase funding for prevention programs.

And troubled British singer Amy Winehouse won't be performing at the Grammy Awards this Sunday, even though she is nominated in six categories. The reason -- the U.S. State Department will not give her a visa. Winehouse has been in rehab for the last two weeks after a highly public battle with addiction. A spokesman says she is progressing well and looks forward to visiting the U.S. one day in the future -- Wolf.

BLITZER: She's a talent, but she's obviously got some major, major problems.

WHITFIELD: Big time.

BLITZER: Big time. All right, thanks very much, Fred, for that.

What are the consequences if a virtual dead heat between Hillary Clinton and Barack Obama lasts all the way to the Democratic convention?


DONNA BRAZILE, CNN CONTRIBUTOR: Well, I think if 795 of my colleagues decide this election, I will quit the Democratic Party. I feel very strongly about this.


BLITZER: Could it come down to the Democrats and their super- delegates and backroom deals?

Also, a Chinese spy network in a massive effort to steal U.S. military and business secrets. That's the allegation. Why government experts are very worried.

And Angelina Jolie in Iraq right now. The actress and U.N. goodwill ambassador talks about her latest mission in an exclusive interview with CNN.

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


BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, Space Shuttle Atlantis is on its way to the International Space Station. The seven man crew will deliver a $2 billion science lab in a mission that was delayed two months by fuel gauge problems. Also, a massive Mafia sweep stretching from New York to Sicily. Sixty-two people are named in a 170-age indictment that includes alleges of murder, drug trafficking, robbery and extortion with arrests still going on.

And the Senate has just approved an economic stimulus plan on an 81-16 vote. Passage came after Democrats drops demands for unemployment benefit extensions and help for the poor with heating bills and Republicans agreed to add rebates for older Americans and disabled veterans.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Democrats are crunching the numbers as the race for the nomination could come down to delegates and dollars. Both Hillary Clinton and Barack Obama maintain they have all the money they needed to go to the distance.

CNN's Jim Acosta is joining us now -- Jim, can you add it all up for us -- the money, that is?

JIM ACOSTA, CNN NATIONAL CORRESPONDENT: Well, Wolf, while the Republican are closing ranks behind their frontrunner, leading Democrats are dreading a drawn out and costly battle.


ACOSTA: With Barack Obama and Hillary Clinton nearly splitting the delegate count in the race for the democratic nomination, party leaders are ringing their hands in fear of something they haven't seen in a generation; essentially, a tie ball game heading into the convention.

HOWARD DEAN, DEM. NATL. CMTE. CHAIRMAN: I think we will have a nominee sometime in the middle of March or April. But if we don't, then we will have to -- we're going to have to make some kind of -- get the candidates to get together and make some kind of an arrangement because I don't think we can afford to have a brokered convention. That would not be good news for either party.

ACOSTA: That's because unlike conventions of recent years, when the party tickets were already established, Obama and Clinton could conceivably end up short of the 2025 delegates needed to secure the nomination. The job of putting somebody over the top would then fall to the so-called super delegates, the nearly 800 party leaders who can technically cast their ballots for the candidate of their choice.

BRAZILE: If 795 of my colleagues decide this election, I will quit the Democratic Party. I feel very strongly about this.

ACOSTA: Obama says it's way too early for that.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I think we're getting ahead of ourselves. You know a month ago I don't think anybody anticipated all the twists and turns that have taken place. So I don't think that we should be speculating now on what this race is going to look like a month from now.

ACOSTA: And it could get more complicated if Clinton seeks those delegates from Florida and Michigan that were disqualified by the Democratic Party after those states moved up their primaries. One thing is clear, the longer they go at it, the more it will cost them. One day after disclosing she had loaned $5 million of her own money to her campaign, Clinton announced today she's raised nearly $6.5 million over the last 30 hours, slightly less than the $7 million Obama raked in about the same time.


ACOSTA: Democrats know full well what happened after the last two deadlock conventions. Adlai Stevenson in 1952 and Thomas Dewey in 1948 both went onto lose the general election -- Wolf.

BLITZER: Jim Acosta, thanks very much.

So what if the democratic nomination does come down to a backroom deal at the convention in Denver at the end of the summer? Let's talk about that and more. Two top democratic strategists joining us; James Carville, who supports Hillary Clinton, and Jamal Simmons, who supports Barack Obama. Guys, what do you think?

James, if it comes down to the convention in Denver, who wins?

JAMES CARVILLE, CLINTON SUPPORTER: Well, I don't know. But right now it's really up to democratic voters. And they're kind of in charge of this election. And sometimes we tend to forget that. And if democratic voters call it a split decision, then there are rules and mature people are going to have to go to Denver and try to work this thing out as best we can.

What fascinates me, we talk about delegates and dollars. Let's have debates. They like the discussion. Democratic voters have time and time again said we want this discussion to continue. Our lives are being squeezed. Our country faces big problems. Let's get out the way. Let these voters decide which way it goes. If they don't make a decision, we'll have to figure something else out.

BLITZER: All right. Jamal?

JAMAL SIMMONS, OBAMA SUPPORTER: Well, what's interesting it's kind of funny that the Clinton campaign which is really the campaign of the incumbent in this race, the person who's been first lady for so long, senator for the last six or seven years. Now they want to have debates every week, which is typically the place where a challenger wants to be.

I think when you're running out of money, and you've got trouble keeping your books straight, you might want to have a debate from time to time, just a little bit of free media coverage. And if that's what they want to do, then that's what they want to do. But it's not up to the Obama campaign to then decide not to campaign to voters, not do the hand to hand combat and instead go out and you know do debates with Senator Clinton. CARVILLE: I think democrats love these debates. Eight million people watched. Senator Obama gave his announcement speech in Springfield. Excuse me for speaking while you're interrupting. Who gave his announcement speech in Springfield; I would think we would be delighted to have debates. I think the party likes this. And democrats are being squeezed out there. And they're the people out in charge this election. Let's give them a discussion. Let's hear from them. Let's hear what they say.

BLITZER: They have agreed at least in two more debates before Ohio, which is March 4th. Obama has agreed to that. Hillary Clinton is recommending one debate each week. I think she's agreed to five debates so far.

CARVILLE: Maybe they can do one every ten days. But again the ...

SIMMONS: Can I speak?

CARVILLE: Sure. Go ahead.

BLITZER: By the way, I should also point out that one of those debates is a debate that we've organized at the end of February in Ohio before the Ohio primary.

SIMMONS: Well, I think Senator Obama he did agree to two debates. No problem with debating Senator Clinton. That's going to be just fine.

The question is though should they just do debates or should they also get out there and talk to voters and everybody knows when you do debates, it takes a day or two out of the schedule to get prepared, do the debate and get out from it. So they're going to debate, but they're also going to get out there and campaign.

And I've got to say, for a campaign that has as much internal and national establishment support as the Clinton campaign, to find out yesterday that they were broke until they had this influx of money today, it's really outstanding. That's the most important development I think of the week, that they haven't been able to raise the money until now.

CARVILLE: Jamal, I'm going to tell you this. There are a lot of Americans that are broke out there. There are a lot of Americans that are suffering in this economy. They want to hear from their president. It's not unusual that people are being squeezed.

BLITZER: What do you think about what Donna Brazile said yesterday here? You know Donna Brazile. She's a wonderful person. She's a great democrat. She says if it comes down to those super delegates making this decision, she's going to quit.

CARVILLE: Well, I would say this, democratic voters are very split on this at every indication that somebody gets momentum then the voters come in and say, wait a minute. I think Senator Obama and Senator Clinton are very capable of conducting themselves, as we saw in Los Angeles, eight million viewers, was to the benefit of the entire Democratic Party. And I mean I love Donna to death.

I'd love to sit down and talk to her but if the voters don't decide, if we keep having elections where it kind of swings back and forth, obviously if we have a definitive decision I would be the first in line for Senator Obama if he's the nominee. That's not going to be the problem but I don't know what to do because the voters don't give us a signal. They keep going back and forth?

BLITZER: Specifically about Donna, what do you think about what she said?

SIMMONS: I think Donna is right on target here. I think that the delegates -- the last thing that we need is to have a bunch of insiders in the Democratic Party throw this election one way or the other. We've got to let the voters decide. Let the voters vote. If we get to the end of this, you know by the time we get to June 7th when we're done with all the primaries and caucuses, then we can make a decision about whether or not other people have to get involved. But for where we are right now, I think we have enough time right now.

BLITZER: Howard Dean, the chairman of the DNC told me the other day he's not worried if it goes on a few more weeks, maybe another month or two months. He is worried of the future of the race for the white house if this goes all the way to the convention at a time when the republicans are focusing in on their one candidate.

CARVILLE: You know we have record turnout, record interest. Eight million people watched the CNN debate. Unprecedented. You're right. Look, I wish this thing would have been settled a month ago for Senator Clinton. He wished it would have been settled a month ago for Senator Obama. We're not in charge of this operation. The democrats around the country are, and we are just going to have to sit back and watch.

SIMMONS: Let me tell you what I like about this. What I like about this is because we have these two unconventional choices, an African-American man, a woman, democrats around the country are having their chance to sign off on which one they want. Nobody will be able to say when this process is over that someone was crammed down their throat. Everybody will have a chance to pick over and decide which one they like and have their voices heard.

CARVILLE: And the republicans, their choice is old white guys and really old white guys. You know? I mean at least we've ...

BLITZER: All right. We've got to go but let me just point out, it was 8.4 million viewers who watched the debate.

CARVILLE: I'm sorry.

BLITZER: When it was live but then we replayed it several times and millions more watched it. It's not just 8.4 million.

SIMMONS: That's what happens when you have the best political team on television.

BLITZER: Here's two of the reasons why. Thanks very much for coming in.

She's one of the world's most famous actresses, but Angelina Jolie is also a United Nations goodwill ambassador. Now she's bringing her star power to Iraq for a very serious cause. She talks to us about the critical problems she's highlighting.

Plus, Chinese spies in the United States allegedly helping Beijing military might at home. Brian Todd working the story. We have details of the new congressional report.

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


BLITZER: They are millions of displaced people in Iraq right now. As overall violence eases there somewhat, some people are starting to return to their homes. The actress and U.N. goodwill ambassador, Angelina Jolie, was in Baghdad today trying to boost their cause. She spoke exclusively with CNN's Arwa Damon.


ARWA DAMON, CNN CORRESPONDENT: What kind of a sense have you been able to get so far in terms of how severe the crisis is and what actually does need to be done to help out?

ANGELINA JOLIE, U.N. GOODWILL AMBASSADOR: Well, in my research before I came here, I looked at, you know, the numbers. There are over four million people displaced. And of the two million internally displaced, it's estimated that 58 percent are under 12-years-old. So, it's a very high number of people, and in a very, very vulnerable situation and a lot of young kids.

So far the different U.S. officials I've met with and different local people I've met with all have shared concerns. Very, very, you know, strongly -- they have spoken out about the humanitarian crisis. But there seems to be a block in -- I'm not good at policy and fixing all this and saying what's wrong. But I do know that, for example, UNHCR needs to be more active inside Iraq. In order for that to happen, they feel strongly about having some better protection, better security. In talking with the U.S. officials, they're willing to give that security, to the extent that they can give it.

And so, you know, I don't have the answers, but I don't know that this is one thing that needs to be addressed and solved because there does need to be a real presence here to help count the people and register the people also. Even just the government here needs to empower the prime minister here needs to empower, the government that deals with migration and displacement to be able to address the concerns for these people. And that hasn't happened in a significant way yet.

DAMON: Do you think that the global community has the responsibility to address that?

JOLIE: Well, I think the global community always has a responsibility to any humanitarian crisis, and I think it's in our best interest to address a humanitarian crisis on this scale, because displacement can lead to a lot of instability and aggression. We certainly we just don't want that. We have a lot of people - it's a little calmer now. This is the time to really discuss and try to get these communities back together.

But if these communities don't start coming back together properly, if we don't start really counting the people, understanding where they are, what they need, making sure the schools are being built, making sure the electricity and water and all these needs are being met, and also understanding that a lot of people that will return are going to come back to houses that are occupied or destroyed and bombed out, and we have to have -- it's going to be a big operation to understand the needs, to address it, to help people put the pieces of their lives back together and return to their communities. So, it's really just putting kind of -- getting the plan together and getting the group together and everybody actively focused on helping the refugees.

DAMON: What is the message that you would want to carry out of here back to the states or even the message that you would want to get our internationally in terms of what's happening here, the refugee crisis, how serious it is and the consequences that could happen in the future if it's not properly addressed?

JOLIE: I always hate speculation on the news, so I don't want to be somebody who speculates. But I think it's clear. I think, you know, a displaced, unstable population is, you know, is a very -- what happens in Iraq and how Iraq settles in the years to come is going to affect the entire Middle East. And a big part of what is going to affect how it settles is how these people are returned and settled into their homes and into their community and brought back together and whether they can live together and what their communities look like. So it does have broad implications.


BLITZER: Angelina Jolie has been logging a lot of miles as a U.N. goodwill ambassador. In Chad, long before the current violence there in Africa, she met with Sudanese women who fled the fighting in Sudan's Darfur region. In Kenya, she visited a camp housing tens of thousands of refugees, mainly from Sudan. In Pakistan, she listened to the concerns of refugees who had fled from Afghanistan. In Cambodia, Angelina Jolie helped to detonate land mines after becoming aware of the problem during the making of the film, "Tomb Raider."

A massive Chinese espionage effort aimed at America. Government experts are calling it a major threat but should U.S. companies share some of the blame?

And she's a power broker in congress, and she may be at the democratic convention as well. I'll speak with the House Speaker, and super-delegate, Nancy Pelosi.

That's coming up in our next hour right here in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: There's shocking new findings about a major Chinese spying effort here in the United States. Let's bring in Brian Todd. He's here in THE SITUATION ROOM.

What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, one congressman told me the U.S. loses $62 billion a year in intellectual property theft at the hands of the Chinese. And we're now told the Chinese have a huge infiltration network tapping American business and military secrets.


TODD: China's massive military and industrial machine, building up at break neck speed. U.S. government experts now say a sophisticated spy network on American soil is helping it along. A commission appointed by congress recently found "Chinese espionage is the single greatest threat to American military and business technology and is straining U.S. counter intelligence." Congressman Randy Forbes, a leader in efforts against Chinese spying, says the Chinese have set up thousands of front companies in America and used businessmen, students, even tourists to gather information.

REP. RANDY FORBES (R), CONGRESSIONAL CHINA CAUCUS: Could be simple as monitoring or watching people going in and out of military bases. It could be going to the libraries. It could be trying to get involved with an industrial contractor so you can get information there.

TODD: We reported last summer than an unclassified e-mail system at the Pentagon was hacked into. U.S. officials believed at the time the Chinese government was behind it. The Chinese foreign ministry denied that. But analysts say Chinese hacking operations are legendary.

MICHAEL GREENE, FORMER NSC OFFICIAL: The Chinese do have hacker units. The PLA and other organs of the Chinese government see cyberspace as a battlefield in the event of conflict with the U.S., Japan or any other country.

TODD: But Michael Greene says it's foolish to look at every Chinese student or businessman in the U.S. and see a spy. Others experts say America has to share the blame. It doesn't produce enough engineers they say, so ambitious American companies recruit from where else, China.

WILLIAM HAWKINS, U.S. BUSINESS & INDUSTRY COUNCIL: There's just too many companies who think they can make a profit helping China become the next great power. That's all they're looking at.


TODD: After trying for several days, we just got a response from the Chinese government to this new report of its espionage threat. In an e-mail, an official at the Chinese embassy said allegations that the China conducts spying operations in the U.S. are "groundless and irresponsible and a reflection of cold war mentality." He says it is hoped that relevant parties here will promote trust between the Chinese and U.S. and not move in the opposite direction, Wolf.

BLITZER: Brian Todd, thanks for that report.

Let's go back to Jack. He's got the Cafferty file.

CAFFERTY: This hour, Wolf, the message is this. What message did John McCain send by choosing not to cast a vote on the senate economic stimulus package?

Paulette writes from Dallas, Pennsylvania, "It means McCain choked! The U.S. cannot afford to have a spineless dummy representing this globalized world. We are just getting rid of one of those!"

Brenda in Arizona, "John McCain has missed most of the votes," This is from a woman in Arizona, "missed most of the votes he was elected to cast on behalf of us in Arizona. He cares only about John McCain. He doesn't care about his constituency at all! He would be a terrible president!"

Kathy in Connecticut writes, "McCain sent a powerful message to disabled veterans. He'll trade on his status on a war hero, but the hell with the other guys. What a total hypocrite he is."

Christine in California, "He's totally out of touch and he's a weenie. He talks the talk but he doesn't walk the walk." I know it's childish but I like that word.

Ryan writes, "This is a cowardly move. He had a job to do and people to represent. Instead, he selfishly did not vote, caring more about his own political future than the people. The democrats have the image of caring more about the people and if the republicans want to counter that image, then their candidate must at least do the job he's elected to do."

Joe writes, "As a 100 percent disabled veteran and a registered, voting independent in Florida, I think Senator McCain told me not to vote for him. As a (former) member of the military, I would think he would know what having one's back means."

Chuck writes, "Jack, he's a conservative now. Caring about the little people would be inconsistent with his newfound position."

And the Grahams write, "Just reminds me of Obama, who either doesn't vote on issues or votes present just for political reasons. Stand up and be men! Or do we need a woman? Yes, we do!" -- Wolf?

BLITZER: The Grahams, that's what they feel. All right. Jack, thanks very much.

Major changes in the race for the white house. Lou Dobbs is standing by. He's watching all of this. He's going to join us in a moment with some thoughts. Also, will democrats have to broker their nomination? I'll ask one of the country's best known super delegates.


NANCY PELOSI, HOUSE SPEAKER: Let's agree that there will be no losers in any of this.

BLITZER: Somebody has got to win.

PELOSI: There will be a loser and somebody who comes in second. I would not like to have to make that decision.


BLITZER: We'll have some of my exclusive interview with House Speaker Nancy Pelosi coming up.

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


BLITZER: Check in with Lou Dobbs. His show comes up in an hour. I want to pick his brain though on some of the dramatic developments that happened in the world of politics today. Lou, what do you think, Romney drops out?

LOU DOBBS, CNN ANCHOR: How are you doing, Wolf? Well, I think Romney has dropped out, and I think that we probably are looking at now a contest on the Republican Party that is effectively over. Senator John McCain is beyond being the presumptive nominee. He's the only likely choice we can imagine.

BLITZER: You don't see any way Huckabee can come out of his wins in the south and do something?

DOBBS: Personally I don't. That may not mean much in the scheme of things, but I personally do not see how he could do so. And I think that the republicans have left themselves with a travesty of choices in public policy. When one looking at what Huckabee is saying, much of which is good, much of which is highly questionable and controversial, when you look at a fourth term U.S. senator and the person of John McCain. Man, this is tough stuff.

BLITZER: You know, when he met with that Conservative Political Action Conference today he raised the controversial issue of his support for comprehensive immigration reform. He wasn't enthusiastically received by them at that point, but at least he had the guts to raise the issue.

DOBBS: John McCain, no one questions his guts. It's his analysis. It's his judgment. And frankly it's his values. When you put the interest of 12 million illegal, 12 to 20 million illegal aliens in this country ahead of somewhere around 300 million American citizens, things are getting pretty tough there, in my reasoning at least. I'm still sort of old fashioned and perhaps a little bit out of date. I tend to think of this as a nation, not an economy. I tend to think of Americans as citizens and not as consumers or units of labor.

BLITZER: He would argue, Ted Kennedy would argue, George W. Bush would argue that this would be in the interest of those 300 million Americans to find a pathway to citizenship for these illegal immigrants.

DOBBS: And I would suggest to the American people that any time George W. Bush, Ted Kennedy and John McCain agree on something you know the decisions are all in. I mean that's not a three of a kind I want to draw to.

BLITZER: Are you among those who really has little, if any, confidence in McCain?

DOBBS: Look, I don't have any confidence whatsoever in the eluviations (ph) of these candidates whether they are Obama, whether they are Clinton, McCain or Huckabee because talk is cheap and frankly everything these four people are talking about is very expensive. It will have a major impact on our economy, the federal budget. They can't pay for any of this nonsense.