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Passports Made Abroad; Obama Criticizes McCain's Lack of Economic Policy; Massive Ice Chunk Collapses in Antarctica

Aired March 26, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now, it's meant to foil terrorists and keep you safe. But your high tech U.S. passport is made by foreign companies. That outsourcing may save money, but will you pay a heavy price when it comes to security?

Hillary Clinton insists it's not over and her husband says his family doesn't quit. But one of the Democratic candidates will come up short and a stunning new poll suggests their supporters will take drastic action.

And candidates as kissing cousins -- Barack Obama and George Bush? John McCain and Laura Bush? Hillary Clinton and Angelina Jolie? But who gets to claim Brad Pitt? We're going to show you the family tree.

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

They're designed to deter terrorists and keep America's borders secure -- U.S. passports embedded with brand new high tech computer chips. But several foreign companies have a -- now have a hand in making them and this outsourcing, meant to actually save money, is raising new concerns about your security.

Let's go to CNN's our State Department correspondent, Zain Verjee. She's been looking into this story.

It's raising a lot of eyebrows, a lot of concerns -- Zain, what are you learning?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, Wolf, there are fears that the high tech push on passports could mean lower security standards.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Your passport used to be made in America, but because of 9/11, all passports now must be fitted with electronic chips -- harder for terrorists to fake. Turns out, though, that in trying to make passports more secure, the U.S. is outsourcing the job to foreign companies.

MICHAEL CUTLER, CENTER FOR IMMIGRATION STUDIES: It's another reason not to sleep tonight. VERJEE: Security experts fear blank chips could be stolen or tampered with.

CUTLER: If bad guys got a hold of those blanks and then properly filled them out and processed them and you had corruption involved, then what you really have are the keys to the kingdom sitting in a foreign country.

VERJEE: The Government Printing Office says U.S. companies don't have the state-of-the-art technology, so it gets European companies to make computer chips, in Singapore and Taipei, that are then sent to Thailand and inserted into passport covers, along with a wireless antenna. Those blank covers and blank chips go back to the U.S., where your data and photo are added.

Congress is sounding alarm bells. In a letter to the GPO inspector general, Congressman John Dingell is demanding to know whether that poses "... a significant national security threat and raises questions about the integrity of the entire e-passport program." SmartTrac, the Dutch-based company producing U.S. passports in Thailand says its facility is secure and built according to U.S. standards and each passport chip is tracked.

In a statement, the GPO says, "The materials are moved via a secure transportation means, including armored vehicles."

The State Department says there's no reason to be concerned.

PATRICK KENNEDY, UNDERSECRETARY OF STATE: When they arrive in the United States, all you have in front of you is a blue piece of plastic that is the standard size of anyone's passport in the entire world and a chip that has nothing on it and it could be the same equivalent as a CD-ROM that you could buy, as I said, anywhere.

(END VIDEOTAPE)

VERJEE: Just a short while ago, CNN obtained a statement from Benny Thompson, the Chairman of the Committee on Homeland Security, who calls outsourcing passports just plain irresponsible, saying that his committee is going to look into whether U.S. technologies are just being overlooked -- Wolf.

BLITZER: One quick question I'm sure a lot of our viewers jump out -- and you referred to it in your piece, Zain. You mean to say there's no company in the United States of America that can manufacture a passport complete with the new high tech chip?

VERJEE: That's what the State Department, as well as the GPO, told us. What we learned also, Wolf, was SmartTrac -- that's that Dutch company in Thailand -- is saying that it's going to build a new production facility here in the U.S., in Minnesota.

They're saying that it should be up and running by the summer. But of course there's a lot of outrage about this, many saying U.S. companies should have this kind of technology and this is something that the Committee on Homeland Security is going to be looking into. BLITZER: Pretty shocking. It's hard to believe that there's no company in the United States who can do this.

All right, Zain, stay on top of this story for us. I'm sure there's going to be high interest out there.

Zain Verjee at the State Department.

John McCain used some very strong language today in laying out his vision of America's role in the world. He seemed, in the process, to set himself apart from President Bush, stressing that the United States can't lead by power alone.

McCain, a war hero, began by saying how much he detests war, calling it "the source of a million tragedies." But the presumptive Republican nominee made it also very clear that he opposes the pullout of U.S. troops from Iraq any time soon.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: It would be unconscionable, it would be an unconscionable act of betrayal, a stain on our character as a great nation, if were to walk away from the Iraqi people and consign them to the horrendous violence, ethnic cleansing and possibly genocide that would follow a reckless, irresponsible and premature withdrawal. I believe a reckless and premature withdrawal would be a terrible defeat for our security interests and our values.

Iran will also view our premature withdrawal as a victory. And the biggest state supporter of terrorists -- a country of nuclear ambitions and a stated desire to destroy the state of Israel -- will see its influence in the Middle East grow significantly.

(END VIDEO CLIP)

BLITZER: The foreign policy speech came a day after John McCain gave his take on the U.S. economy. And that drew a sharply worded response from the Democratic candidate, Barack Obama.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Now, I have to say, John McCain has admitted that he doesn't understand the economy as well as he should. And yesterday he proved it in a speech he gave on the housing crisis.

Understand, our economy is grinding to a halt. Our financial system is locked down. Millions of people are at risk of losing their homes. If people foreclose in your neighborhood, that reduces your home values. People who have taken out home equity loans -- they can't do it anymore. That means some of that debt is going on credit cards. People are stopping -- they're putting off purchases that they were going to make. And that means that businesses then have less -- fewer customers. And this could be a big, big problem. It's already a big problem for those who have "for sale" signs in their front yard. It's already a problem for those who have seen their homes foreclosed on.

But according to John McCain -- he said that the best way for us to address the fact that millions of Americans are losing their homes is to just sit back and watch it happen.

In his entire speech yesterday, he offered not one policy, not one idea, not one bit of relief to the nearly 35,000 North Carolinians who were forced to foreclose on their dream over the last few months. Not one -- not a single idea, not a single policy prescription.

(END VIDEO CLIP)

BLITZER: The McCain campaign wasted no time firing right back, saying -- and I'm quoting now -- "Senator Obama's blatant mischaracterizations aren't the new policies he's promised America, they're the old attack and smear tactics that Americans are tired of."

That from McCain campaign spokesman, Tucker Bounds.

Democrats are taking time out from their own bickering to turn up the heat on John McCain. We just heard it from Senator Obama. As the battle lines are drawn, will that finally convince Republican conservatives to rally around him?

Let's go to CNN's Mary Snow. She's watching this story for us.

Do Democrats think, Mary, they've found McCain's weak spot?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, you know, on foreign policy, which John McCain talked about today, the Democratic presidential candidates are firing back, trying to tie McCain to President Bush's policies. And the Democratic Party is taking aim at some of the things McCain has said about the Iraq War in the past.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Presumptive Republican nominee, Senator John McCain, sees the surge in Iraq as a strong point. He highlighted it following a foreign policy speech in Los Angeles.

MCCAIN: We are succeeding in Iraq. The surge is succeeding. That's just a fact on the ground.

SNOW: McCain is counting on his unpopular stand in supporting the surge to help him win the White House. But Democrats are quick to point out McCain has made previous predictions about Iraq that weren't on the mark.

MCCAIN: I believe that the success will be fairly -- easy.

I don't think it's "easy," but I believe that we can win an overwhelming victory in a very short period of time. SNOW: Political observer, Stu Rothenberg, says national security experience is an asset for McCain, but Democrats may try to put him on the defensive.

STUART ROTHENBERG, "THE ROTHENBERG POLITICAL REPORT": Because he's been around for so long, made so many comments, so many statements, that they'll have some ammunition to use against him.

SNOW: Rothenberg says the big hurdle -- McCain is a Republican following President Bush's low approval rating. Some foreign policy experts say McCain's push to work with allies and his recent trip to the Middle East and Europe are especially noteworthy.

REGINALD DALE, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: In those areas of the world where the Bush foreign policy has been very unpopular, McCain doesn't want to be seen as George Bush Mark II.

SNOW: There is something George W. Bush had that McCain doesn't -- strong conservative support.

ROTHENBERG: His lack of support among conservatives, and particularly evangelicals, is a problem. But the good news for him is that in a general election, those voters are probably going to support him rather than the Democratic nominee.

SNOW: Republicans hope the match-up will help bring in cash. In February, McCain raised $12 million. Compare that to Barack Obama's $55 million raised.

TRACEY SCHMITT, REPUBLICAN STRATEGIST: There's not a better motivator for the Republican base than Hillary Clinton or Barack Obama.

(END VIDEOTAPE)

SNOW: As the Democrats duke it out, McCain has been aggressive about fundraising. But, Wolf, as the numbers show, it's very stiff competition when it comes to the dollars the Democrats are raising -- Wolf.

BLITZER: Thanks very much, Mary.

Mary Snow reporting for us.

Let's check back with Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: When it comes to our ailing economy, you may remember how the Democrats and Republicans in Washington did manage to work together fairly quickly on something. They came up with that $170 billion economic stimulus package. The idea -- to put money in the hands of ordinary Americans in the hopes that they'll spend it to boost the economy. Those checks will be going out in May.

But things may not work out as expected. A CNN/Opinion Research Corporation poll finds only 21 percent of those surveyed plan to spend that rebate check of $600 for individuals who earn less than $75,000 a year, $1,200 for married couples who earn less than a combined $150,000 a year. Thirty-two percent say they're going to save the money and 41 percent say they'll use it to pay bills. Three percent say they'll give it to charity.

In the past, taxpayers have spent a half to two-thirds of rebate checks. But today's unsure economic times may mean that people are less likely to part with that money.

The chief economist at moodys.com say it's important to distinguish between what people say they will do and what they actually do. He thinks taxpayers will end up spending about two-thirds of these rebate checks.

Meanwhile, another tough sign of the deteriorating economy, this in Ohio. One in 10 people now in the state of Ohio receives food stamps. That's the highest number in that state's history, with case loads almost doubling since 2001. The factors to blame are those that are now familiar to Americans in all 50 states -- low wages, unemployment, the rising cost of necessities like groceries and gasoline.

So here's the question: What do you plan to do with your rebate check?

Share with us. Go to CNN.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: Thanks, Jack. Thanks very much.

Bill Clinton says his family is not big on quitting. But if Hillary Clinton isn't on the ballot in November, will her supporters quit and vote Republican? Will some of them do that? There are stunning results coming in from a brand new poll.

Also, you can't pick your relatives. Barack Obama, though, apparently related to both Dick Cheney and George Bush. We're going to tell you which candidates can claim Angelina Jolie and Brad Pitt in their family tree.

And the space shuttle will be retired shortly, after the next administration begins. But the next president -- what will he do? Will he keep Americans in space? Will she keep Americans in space? We'll talk to the astronauts.

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

(COMMERCIAL BREAK)

BLITZER: John McCain tried on the mantle of the foreign policy candidate today. The one-time POW spoke about his hatred of war, but made it also clear he would stay the course in Iraq.

Democrats see an opening there. Let's discuss.

Joining us right now from Fargo, North Dakota, the radio talk show host, Ed Schultz.

It's fair to say, Ed - someone who very much likes Barack Obama, is that right?

ED SCHULTZ, RADIO TALK SHOW HOST: That's fair enough.

BLITZER: All right. I just want to make sure that we're up front with our viewers.

All right. Let's talk about a potential race that John McCain would have in November against either Barack Obama or Hillary Clinton. We don't know who the Democratic nominee is going to be.

How worried are you that he appeals to a lot of Independents, a lot of Democrats out there, because of his reputation as a so-called maverick?

SCHULTZ: You know, Wolf, I think across the spectrum, this is going to alienate a lot of Americans. Today, John McCain took a step forward in his campaign by telling the American people and the world that he's going to listen, but pretty much it's going to be more of the same. I don't know how he's going to restate this case to the American people and maintain this.

Today, the military leaders came out and said we're going to need 140,000 troops in Iraq through '09. How is he going to sell that? I mean I get a sense from my listeners that, you know, he -- Barack Obama and Hillary Clinton could fight all the way up to the day before the election and McCain's not going to be able to sell that.

Plus, how are you going to pay for it? Americans are getting really frustrated with the price tag on all of this. So I think it's a tough sell for McCain to go down the same road.

BLITZER: But he does deviate from the president's strategy -- for example, he wants to shut down the U.S. military facility at Guantanamo Bay. He says he wants a new Kyoto global warming environmental treaty. He says he doesn't want to go it alone, he wants to work with the allies. It's that kind of talk that was also included in his speech today that will be appealing to some Democrats out there.

SCHULTZ: It will be appealing, but the candidates, whether it be Clinton or Obama, have already stated that position. That's an old position. The Democrats have heard that. The Independents have heard that.

How is John McCain going to say, on one hand, that he's going to have this collaborative foreign policy that seeks input? Wait a second. That's what John Kerry tried to sell and the conservatives shot him down on it.

So I just think that it's going to be hard for McCain to restate the case to the American people that he's going to be able to pay for this and stay motivated and continue to tell the American people that this is the best way to fight terrorism. I think it's a tough sell. BLITZER: Are you at all worried that the ardent Hillary Clinton supporters or the ardent Barack Obama supporters, if their respective candidate doesn't get the nomination, might be so angry at the other Democrat they might, in the end, decide to vote for McCain?

SCHULTZ: Well, it's interesting the piece you had earlier on THE SITUATION ROOM, Wolf, that lead Democrats are starting to talk about this. And there may be some remedy out there to deal with this.

I think as much responsibility is going to be on the shoulders of the person that does not get the nomination to do the healing for the party. And it's going to take a little bit of time, but I think that the Democrats see an opening here, that when it comes to the Supreme Court, when it comes to making these tax cuts permanent, when it comes to the same old stuff in Iraq, I think McCain is very beatable. And I'll go so far as to say I think he'll be the easiest candidate that the Democrats have faced in a general election in a long time.

BLITZER: Ed Schultz from Fargo, North Dakota.

Ed, thanks for coming in.

SCHULTZ: Thank you, Wolf.

BLITZER: The Clinton campaign is digging in, with the former president now saying his wife is in the race to stay. You're going to find out why he says she's not a quitter.

Plus, Chelsea Clinton's role in the campaign. We're going to show you why she's walking a very fine line.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, sales of new homes are at their lowest level in 13 years. The Commerce Department says they slumped again in February, for the fourth month in a row, dropping another 1.8 percent. And making matters worse, the median sales price also dropped last month, down 2.7 percent to $244,000.

Hundreds of flights canceled by the world's largest airline. American Airlines cut about 10 percent of its schedule today for safety inspections on its workhorse MD-80 aircraft. The FAA and American's own safety officials are taking a closer look at certain wires and how they're secured to the plane. MD-80s make up almost half of American's fleet.

A federal appeals court is clearing the way for lawsuits by thousands of people who helped clean up Ground Zero in the wake of the 9/11 terror attacks. Many of them say they were not properly protected from contaminated air and other hazards, and now have health problems as a result. Almost 8,000 claims have been filed.

And French President Nicolas Sarkozy is on a visit to Britain, where he is in danger of being upstaged by his new wife. Yes, all eyes are on Carla Bruni Sarkozy as the "Associated Press" reports that Christie's will auction nude art photos of the former model. Sarkozy's office is quoted as saying the sale is a "private matter."

Oh, and, by the way, Mr. Sarkozy did make some substantive news today. And, of course, we'll tell you about that in just a minute. I thought you wanted to know about those nude pictures first.

(LAUGHTER)

BLITZER: Let's see how much do they get for those pictures.

All right, Carol, thank you. I suspect they'll get a lot of money.

A vow from the Clinton campaign -- they're in the race to stay.

(BEGIN VIDEO CLIP)

WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: My family is not big on quitting. You've probably noticed that.

(END VIDEO CLIP)

BLITZER: But it's very unlikely either Democratic candidate will get enough primary and caucus delegates -- the so-called pledged delegates -- to win the nomination. So what then?

And we're standing by to show you why the future of NASA may be riding on the election. Find out which candidate holds the most hope for the space agency.

Plus, Hollywood stars and presidents -- we're going to show you the surprises turning up in all the candidates' family trees.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, President Bush is accepting an invitation to meet next week with the outgoing Russian President Vladimir Putin. The two leaders will hold talks at a Black Sea resort on the controversial missile defense system the U.S. wants to build in Europe.

Also, the French president, Nicolas Sarkozy, is pledging more troops to the NATO mission in Afghanistan. He tells Britain's parliament that when it comes to the Taliban -- I'm quoting now -- "We cannot afford to lose."

And Ford is selling its Jaguar and Land Rover divisions to India's Tata Motors at a sizeable loss. Ford paid more than $5 billion for the prestigious British brand. It will get about $1.7 billion when the deal is done.

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

As their battle for the nomination becomes more bitter by the day, there is an ominous warning sign for the Democrats that could lead to some potentially significant trouble in November.

Let's go back to Carol. She's watching the story for us.

The Democratic voters are being turned off, supposedly, by all this bickering. So what, potentially, Carol, could be the fallout from that?

COSTELLO: Well, listen to this. This race between Clinton and Obama has become personal -- at least in the minds of some voters. They appear to be so loyal -- or so opposed to one candidate or the other -- not only will they not vote for Barack Obama if Hillary Clinton fails to win the nomination, they'll vote for McCain.

Take a look at these numbers. They're from a new Gallup Poll. Twenty-eight percent of Clinton's supporters would vote for John McCain, the Republican, if she fails to get the nod.

So maybe all of you cynics out there, Bill Clinton really is telling the truth when he says voters want his wife to wage a vigorous campaign.

(BEGIN VIDEO CLIP)

W. CLINTON: I've already had four people come up to me and say tell her not to quit. And I want to tell you something, family is not big on quitting. You've probably noticed that.

(END VIDEO CLIP)

COSTELLO: Yes, we did. After talking to a political insider myself today, the Clintons are focused on winning and dealing with the fallout later.

Still, you cannot count out Barack Obama, who is still standing even after a barrage of attacks lately. The Gallup Poll also shows his supporters are just as loyal or anti-Clinton. Nineteen percent of Obama supporters say they will favor McCain if Clinton gets the nod.

I don't know if this sentiment will carry through once someone gets the nod. The people at Gallop say that's not likely but the numbers show how personal the race has become.

BLITZER: It certainly has.

Carol, thanks very much for that.

The Clinton camp has been speaking out a lot lately about not giving up. Should we be reading something into that? What should we be reading into that, if anything? Let's discuss with our Democratic strategist and the Hillary Clinton supporter, Paul Begala and the former Dallas mayor, Ron Kirk. He backs Barack Obama.

Thanks guys for coming in.

All right. Paul, you just heard Carol's report that a significant percentage of people who say Democrats who say they like Hillary Clinton would wind up voting for McCain if she doesn't get the nod and vice versa, as far as Obama's concerned. How seriously -- how serious is that a problem?

PAUL BEGALA, CLINTON SUPPORTER, DEMOCRATIC STRATEGIST: You know, I think not very. I chalk that up to the passions of the moment. I mean I love Hillary Clinton. I have known her 16 years. She has been like family to me for all of that time.

If Barack Obama beats her, I will be the most for Barack Obama of anybody in America. I think most Hillary people, if you scratch them, that's what they'll really tell you. They say something in a poll because they are getting all gassed up right now but this is a high class problem for Democrats.

We are going to have a great Democratic president, either my gal Hillary or Ron's guy Barack. I would be honored if my children grew up in a country led by Barack Obama, just as honored as if they were led by Hillary Clinton.

BLITZER: All right. Mayor, what do you think?

RON KIRK, OBAMA SUPPORTER: You know I guess and it's not just the orange blood that runs through Paul and I, but I agree. I just can't put a lot of stock in those polls right now. As we talked about last time I was with you, there's an extraordinary amount of passion among the supporters for both Senator Obama and Senator Clinton, and to ask them to make that decision right now, it wouldn't surprise me that some appreciable number said I would vote for John McCain.

But I think that the choices and the contrast between Senator Clinton and Obama and McCain will just be too stark, I think, for any reasonably thinking Democrat or Independent.

BLITZER: So basically you're saying the Democrats with the bitterness would go away quickly. Is that what you're saying, Mayor?

KIRK: I don't know this. I'm concerned with the tone of the campaign. I don't know that the bitterness will go away quickly but right now you're asking people to poll on a construct versus the reality of saying Obama versus McCain and I think when they have to make that choice, not only the majority of Democrats but independents and others are going to pick Obama.

BLITZER: One way to do away with the bitterness and some have suggested this for some time now, Paul, would be that so-called dream ticket, put them both on the same ticket and let them work together, irrespective of who comes out on top. BEGALA: I think that would be great. I think both of them ought to be thinking more seriously about it. Hillary's campaign toyed with the idea in public from time to time but then they come back and say Barack is not qualified to be commander in chief. Well, of course he is. If he weren't qualified, they shouldn't talk about him being on the ticket.

Same with Barack. Senator Obama has run a very strategically smart campaign but I think he's made a few mistakes in some of the personal criticisms of Hillary, saying she's disingenuous; she's dishonest; she can't be trusted.

We know all that's not true. They have differences because they're running for the same office. I would like to see them get back together. I think it would be a great ticket.

BLITZER: What do you think, Mayor?

KIRK: I think if there's any chance at all for them to reconcile and get back on the ticket, the Clinton campaign is going to have to take a markedly different tone than the one they have taken the last several days.

With all due respect for Paul, whom I have the greatest admiration for, it's just not believable to argue that Senator Obama and the way he's conducted himself is responsible for the negative tone that this campaign has taken.

BEGALA: This is where we disagree. He has taken very personal shots at my Hillary. I don't like it but you know we have to get beyond it. I mean, he continually says she can't be trusted. That's doing John McCain's work for him. I criticize Hillary, too. She shouldn't be saying he's not qualified to be commander in chief. Of course he is.

KIRK: I've seen -- I remember when Ronald Reagan all but slapped George Bush silly and nobody believed they would work together. There was certainly no love lost between some elements of the Kennedy clan and Senator Johnson at the time.

BLITZER: I was going to say, Mayor, John Kennedy back in 1960 and LBJ, they had a huge, very bitter primary fight. They hated each other. But in the end, JFK said I need LBJ to carry the south, to carry Texas. I have to forget about that and I have to suck it up and take him as my running mate, and that helped him get elected. There is a history, as you well know, being a Texan.

KIRK: There's a long history of that not only in being a Texan but in America. The most important thing, I think the best step we can make toward that possibility, would be that both campaigns are going to have to lower the rhetoric.

But I still think particularly, Senator Clinton, if she really believes that she has the skills and the talents and experience, ought to feel good enough about championing that and back away from some of the attempts she's made literally to kneecap Senator Obama. Because there is, what isn't in question is that there is a huge outcry from the American public to change not just the tone in Washington, but the way we run these campaigns. That's one reason I believe Senator Obama is still the relevant, strong candidate that he is today.

BLITZER: Ron Kirk, Paul Begala, we'll have you both back.

KIRK: Look forward to it.

BEGALA: Good to see you, Mayor. Hook them, horns.

BLITZER: We'll be watching the Sweet 16.

Tricky questions for Chelsea Clinton, the former first daughter is finally finding her voice, speaking her mind out on the campaign trail.

They can trace their family trees to U.S. presidents, past and present, but can the candidates get a bigger boost by boasting about their cousins in Hollywood?

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

(COMMERCIAL BREAK)

BLITZER: She doesn't talk to the news media but that isn't stopping Chelsea Clinton from facing some tough questions as she campaigns for her mom.

Let's go to CNN's Dan Lothian. He's joining us with more on this story.

What exactly, Dan, is Chelsea's role on the campaign trail?

DAN LOTHIAN, CNN CORRESPONDENT: Well Wolf, she really has been reaching out to those younger voters, those college students, spending time on college campuses. Even as she takes on a bigger, more public role.

(BEGIN VIDEOTAPE)

LOTHIAN: Former first daughter, Chelsea Clinton, who used to be seen but rarely heard --

CHELSEA CLINTON, DAUGHTER OF HILLARY CLINTON: My mother has raised me --

LOTHIAN: Is finding her voice on the campaign trail, working to get her mother, Senator Hillary Clinton, elected.

C. CLINTON: I'm really excited to be here in Philadelphia.

LOTHIAN: She routinely sends out fund-raising letters like this one for an upcoming concert in New York with Elton John. Want to join me there, she writes. It's such an important time to support my mom's campaign. But this visible role sometimes forces Clinton to tackle tricky questions. Not from reporters, who are never granted interviews, but from the audience. Like at Butler University in Indiana, where she was asked if the Monica Lewinsky scandal damaged her mother's reputation.

C. CLINTON: Wow. You're the first person actually that's ever asked me that question, in the I don't know, maybe 70 college campuses that I have now been to. I do not think that's any of your business.

LOTHIAN: The audience applauded. The student who asked the question said he supports Clinton and wasn't trying to be controversial.

EVAN STRANGE, BUTLER UNIVERSITY STUDENT: I just want to know her opinion on what she thought about all the criticism that her mom gets.

LOTHIAN: Chelsea Clinton has been asked other tough questions and now perhaps the biggest one looms. Should she open up to reporters now that she's accepted such a public role?

HOWARD KURTZ, HOST, "RELIABLE SOURCES": She has absolutely no obligation to deal with the press. She's not a politician. She's not running for public office. It would be nice if she felt the need to do some interviews but that's her call.

LOTHIAN: A delicate balance for a campaign that's put her in the spotlight to help reel in younger voters.

MICHAEL HAGEN, TEMPLE UNIVERSITY: It's very difficult to walk that fine line between being a public figure and yet not responding to questions from the press.

(END VIDEOTAPE)

LOTHIAN: Chelsea Clinton will be appearing at an event with Senator Clinton in Washington, D.C. tonight. The campaign says that she will continue to play an active role, perhaps spending more time on the college campuses, answering questions about virtually anything unless of course, those questions come from a reporter -- Wolf.

BLITZER: All right. Dan, thanks very much. Dan Lothian in Philadelphia at the CNN Election Express.

NASA at a crossroads. Looking to the next president to chart America's future in space. You're going to find out what each of the candidates has to offer the nation's space agency.

And Barack Obama back from vacation, ready to fight. We will have details of his warning to Hillary Clinton today.

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

(COMMERCIAL BREAK)

BLITZER: The space shuttle "Endeavour" is now in its final stage of its 16-day mission at the International Space Station. Tonight's landing at the Kennedy Space Center has been delayed for a few hours because of bad weather. With the shuttle program itself now in its twilight, NASA workers have a lot at stake in this presidential race.

Let's go to CNN's John Zarrella. He's covering this story for us.

John, what is NASA looking for from the next U.S. president, whoever that might be?

JOHN ZARRELLA, CNN CORRESPONDENT: You know, I think, Wolf, actually it's what the next president is looking for from NASA. You know there are 11 space shuttle flights left before the program is done away with, and the next president is going to have a lot to say about the future of the manned space program.

(BEGIN VIDEOTAPE)

ZARRELLA: As the "Endeavour" astronauts prepare to come home, they took a time-out for a chat from space. With shuttles being retired shortly after a new administration is coming in, I asked if they hoped the next president would continue the plans to go back to the moon and beyond.

ROBERT BEHNKEN, SHUTTLE MISSION SPECIALIST: I find it really exciting and just hope that the next administration can continue on with the same sort of vision that we already have kind of a plan for NASA to continue or put steps out throughout the solar system.

ZARRELLA: Back on earth at the Kennedy Space Center, workers are just hoping vision leads to a light at the end of the tunnel. Under the best of circumstances, thousands here alone will be laid off during a five-year transition from shuttle to the new vehicle called Orion.

Terry White isn't crazy about what he hears so far from the candidates.

TERRY WHITE, SHUTTLE VEHICLE PROCESSOR: I haven't seen anyone really take a hard stand and commit to launching the next vehicle.

ZARRELLA: Since the first shuttle flight, White has worked with his hands on the shuttle's delicate thunderstorm thermal tile system. Now his future is out of his hands. Who will be the most space- friendly president?

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I don't think we can afford to take a time-out, to delay the next generation of space craft.

ZARRELLA: John McCain wants NASA to better prioritize. Not everything will be funded, he says.

MCCAIN: I will make sure we sit down with the smartest people and see what's doable, what's the cost. ZARRELLA: Barack Obama goes further, delaying the moon program and putting that money into education until he's satisfied with NASA's direction.

OBAMA: I want to use some of that money to train engineers and scientists who are going to be able to take us to those next new frontiers.

ZARRELLA: There won't be a new U.S. manned space vehicle until at least 2015, leaving space workers skeptical, at best.

WHITE: We want to see the real hardware and we want to launch the real hardware.

ZARRELLA: No matter who is the next president, that won't be any time soon.

(END VIDEOTAPE)

ZARRELLA: Now, none of the candidates have spent much time talking about the space program. It's certainly not one of the top priorities in this election cycle. But clearly, Wolf, there's not going to be a lot of money, not bucket loads of money, thrown at the space program in the future. No question about that.

Again, space shuttle "Endeavour" expected now to land here at the Kennedy Space Center at about 8:39 p.m. Eastern time. We will be here -- Wolf.

BLITZER: Of course you will be. That's what you always do. John Zarrella, thank you very much. We would expect nothing less.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: What do you plan to do with your rebate check?

Charles in Michigan says: "I will use mine to pay bills. I don't plan to go out, spend it on Chinese products, and apparently 75 percent of the population plans the same. The so-called stimulus is all politics. If the money had been spent on roads and bridges, thousands of jobs would have been created and we would have gotten something for our money."

Brian in Idaho writes: "My wife and I get discounted rent in June and July, only $300 a month. So our rebate check's going to go to pay two months rent."

Marcus writes: "I will cash it before the Democrats try to take it back."

Richard in Washington: "Nothing. I don't get a check. I sold investments I had in order to pay off my mortgage so I get no reward for doing the right thing."

Sue writes: "Double it, use it to pay the tax on my social security payments since I still have to work in order to keep a roof over my head."

Larry in Texas says: "We plan to install new carpet in our bedroom and if there's enough left over, buy a copy of your book, Jack."

Paul in Indiana says: "I will use my rebate check to pay my bankruptcy lawyer."

And Rex in Oregon says: "I will take my friend Arlene out to the Outback, feed her rib eye steak and blooming onions. Then I will go to Radio Shack, buy a new alarm clock made in China. Hope it works better than the last one. From there I will go to my favorite phone store, get that new Korean cell phone I've had my eye on for months. On the way home, I will fill my gas tank with Arabian gasoline, cry a lot and top the day off with a dinner of New Zealand lamb, Chilean vegetables, Peruvian potatoes and a delightful white wine and retire blissfully to my Swedish bed, broke. God bless America" -- Wolf.

BLITZER: And they can always go away in their foreign-made U.S. passport. You see that story at the top of the hour, Jack?

CAFFERTY: I did. Although as I understood it, only the framework, the hardware for the passport, is being made overseas. The actual programming of the chips is done here in the United States. Is that right?

BLITZER: No. I think it's the reverse. The chip, the technology they apparently can only do overseas. They can't do the rest of the stuff over here.

CAFFERTY: So they're putting all our private information on the chips in a foreign country?

BLITZER: That's the concern, yes, that the high tech part of it apparently they can't manufacture here, but the low tech part, they can manufacture here. That was the ridiculous part of this.

CAFFERTY: Are we going to raise the budget for the department of homeland security again real soon, I hope? Because they're doing a hell of a job, don't you think?

BLITZER: I know. All right, Jack, stand by.

Jack will be back shortly.

There are some big surprises hidden in all the candidates' family trees. Genealogists have discovered blood ties to celebrities, presidents and more.

Let's go back to Kate Bolduan. She's picking up this part of the story.

So who's related to whom, Kate?

KATE BOLDUAN, CNN CORRESPONDENT: It's quite a list, Wolf. You would never think Hillary Clinton is related to Camilla Parker-Bowles or that Barack Obama is related to Robert E. Lee. Those are just some of the very unusual connections in the three presidential contenders' pasts.

(BEGIN VIDEOTAPE)

OBAMA: We've got some big problems that are going to be left behind by this Bush administration.

BOLDUAN: Barack Obama is so critical of George Bush, you wouldn't guess they were cousins. But they are. Tenth cousins once removed, a new genealogy study shows with a common ancestor in Massachusetts in 1662.

Some other unexpected connections. John McCain and Laura Bush are sixth cousins. Hillary Clinton and Angelina Jolie are ninth cousins twice removed. And Barack Obama and Brad Pitt are ninth cousins.

OBAMA: When they do these genealogical surveys, you're hoping that you're related to somebody cool.

BOLDUAN: Senator Obama already learned one of the names on his list a few months ago and did not sound too pleased.

OBAMA: You know Paul Revere, somebody. But Dick Cheney, that's a letdown.

BOLDUAN: Turns out, Obama is also distantly related to five former presidents; Bush, Ford, Johnson, Truman and Madison. But that's not unusual, says one of the researchers.

CHRIS CHILD, NEW ENGLAND GENEALOGICAL SOC.: He can trace them back say 400 years. It's not particularly surprising to find these interesting connections. People come into our library all the time. We do find a half dozen presidential connections.

BOLDUAN: Senator Clinton is distantly related to Madonna, Celine Dion and Alanis Morissette. A spokesman for Hillary Clinton tells CNN, "You think with that singing talent in the family, she would be able to carry a tune. Now it makes much more sense how she snagged a Grammy." Will these discoveries have an impact on the campaign?

CHILD: Well, these connections are 400 years ago. I don't think they should necessarily have an impact on votes.

(END VIDEOTAPE)

BOLDUAN: We did ask the researchers to check another very well- known name, Wolf Blitzer. They found your parents' immigration records but after that, they said we had to head to Europe to learn more.

BLITZER: You probably wouldn't learn much. I got a good Uncle Mike in Chicago.

BOLDUAN: I heard about that. BLITZER: Kate, thanks very much for that.

Let's take a look around the world right now.

In Antarctica, a massive chunk of ice suddenly collapsed, putting at risk an even larger portion of ice the size of Connecticut. Scientists say it's the result of global warming. They caught it all on camera, posted the video online.

Let's go to our Internet reporter, Abbi Tatton. She's watching this story for us.

All right. Show us the video, Abbi.

ABBIT TATTON, CNN INTERNET REPORTER: Wolf, they call it chunks of ice the size of small houses. That's what scientists from the British Antarctic Survey are saying about this scene. A section of an Antarctic ice shelf, this is 70 stories high and about seven times the size of Manhattan, disintegrating.

Ted Scambos with the National Snow and Ice Data Center in Colorado spotted the event. He said this area is going through one of the most rapid warming trends on Earth and the ice shelves that were once considered permanent, are no longer stable.

Add another warm summer, and he said the rest of the ice shelf could collapse, a portion of that could be soon. Scientists are using these images to affect how sea levels may be impacted by similar events in the future -- Wolf.

BLITZER: Abbi, thank you.

There's a disturbing story coming into THE SITUATION ROOM right now. Let's check in with Carol once again for details.

What are we picking up, Carol?

COSTELLO: It's strange story, Wolf. Federal prosecutors are now saying Saddam Hussein's intelligence agency arranged for three U.S. lawmakers to travel to Iraq during the buildup to the Iraq war. This happened in October of 2002.

Now, the trip was underwritten by some operative in Detroit, and it was underwritten of course by Saddam Hussein. He paid this operative in Detroit two million barrels of oil to arrange this trip for these three U.S. lawmakers. There's no indication that the lawmakers knew the trip was underwritten by Saddam Hussein, and we don't know exactly what the purpose was, either.

Our Justice Department correspondent, Kelli Arena, is working this story. She'll be passing on more information to you shortly. She's checking with her sources right now. Back to you, Wolf.

BLITZER: Thanks. We will update the viewers as soon as we get more information. Carol, thank you. Should the government use your money to bail out investment banks that put their money in risky ventures? Lou Dobbs standing by. We will talk about it right after this.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs has a show coming up in one hour. I want to pick his brain right now about federal oversight of these investment houses in New York like Bear Stearns.

What do you make of the treasury secretary's inclination to increase some of this oversight?

LOU DOBBS, CNN ANCHOR: Well, I think I am delighted the treasury secretary, Henry Paulson in his own way -- have you ever noticed how little energy the man has when he speaks? It's as if everyone has to work to hear him. But the reality is finally he had something to say worth hearing, that we're going to start regulating these investment houses in New York, that no longer, said Henry Paulson, the former CEO of Goldman Sacchs, an investment banking firm, will we permit them to simply run amuck as they have and I think it's great news for America.

The problem is it's quite a few years too late but at least it's a beginning and it's quite a - this, by the way Wolf, marks the first time that a secretary, a cabinet secretary in this administration has even recognized even dimly let alone overtly as Henry Paulson did, that the government has a responsibility to regulate these markets and these investment firms.

BLITZER: I know you are going to have a lot more coming up this story and a lot of other stories in one hour.

DOBBS: You bet. A lot of stories. That's what we do a lot of stories.

BLITZER: You certainly do. All right, Lou. Thank you.

DOBBS: Thanks, Wolf.

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