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THE SITUATION ROOM

Afghan Power Struggle; U.S. Money to Rebuild Gaza; Iran Detains U.S. Journalist; Interview with Howard Dean

Aired March 2, 2009 - 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: Happening now, breaking news -- a dramatic rescue as a passenger is plucked from an overturned boat, but two NFL players and a third man -- they're still missing as the Coast Guard steps up the desperate search.

Rush Limbaugh rocks a crowd of Republicans, telling them to take back the country. But the new GOP chairman calls him an entertainer and uses -- and I'm quoting now -- "ugly rhetoric."

Who's running the Republican Party?

And frightened investors send the Dow on a stunning plunge, as a giant financial firm reports the biggest loss in U.S. corporate history.

Is the latest bailout throwing good money after bad?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're following the breaking news this hour -- major new developments in the search for those four men, including two NFL stars missing in the Gulf of Mexico. One of the men has been found clinging to an overturned fishing boat some 50 miles off the Florida coast. That rescue providing some new clues for the Coast Guard, looking right now for Oakland Raiders linebacker Marquis Cooper and NFL free agent Corey Smith and a friend.

(BEGIN VIDEO CLIP)

CAPT. TIMOTHY CLOSE, U.S. COAST GUARD: We're looking for persons in the water, not the boat. So they're doing search and rescue planning. And we started hitting that area very hard. As soon as we -- as soon as we saw that -- found the boat with -- with somebody on it, we immediately sent two helicopters to the area to do some pretty detailed searching. One of those, ultimately, was -- was vectored off to take Mr. Schuyler to the hospital.

(END VIDEO CLIP)

BLITZER: We're staying on top of this story.

We'll have more for you on the news as it comes in later this hour. Stand by for that.

Meanwhile, U.S. reinforcements are heading to Afghanistan, where the Taliban is waging a bloody war in a move to take back power.

But is Afghanistan's president, Hamid Karzai, now making a power grab of his own?

Let's go to our Pentagon correspondent, Barbara Starr.

She's working the story for us.

What's going on in Afghanistan -- Barbara, because the stakes for those U.S. troops there already and the thousands more on the way are enormous.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, just as thousands of U.S. troops are risking their lives fighting in Afghanistan, the government of Hamid Karzai again at odds with the U.S.

(BEGIN VIDEOTAPE)

STARR (voice-over): It's still a brutal winter in Afghanistan and it could be a nasty political season this spring. President Obama is rushing 17,000 extra U.S. troops, in part, to help provide security for presidential elections set for August 20th.

But now, undercutting Mr. Obama's plan, Afghan President Hamid Karzai has called for elections within the next two months.

ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: Moving those dates to the left certainly generates a higher level of risk with respect to security for those elections, which we want to be free and fair, as well as secured.

STARR: The State Department wasn't terribly diplomatic, saying in a statement: "Elections in August, as proposed by Independent Elections Commission, is the best means to assure all Afghans can vote."

Karzai says the early date complies with the constitution, which calls for an election by April. But the Election Commission set the later August date so security could improve and to allow more time for Afghans to register.

Analysts say Karzai, who is deeply unpopular in his country, is trying to move up the elections for one reason to stay in power.

JOHN NAGL, CENTER FOR NEW AMERICAN SECURITY: And I think he recognizes that he faces a real challenge in this election, that if he allows the current schedule to go forward, there is a very real chance that he'll be defeated.

(END VIDEOTAPE)

STARR: Now, Karzai's term of office officially ends in May, so even if the Election Commission gets to keep that later August date, it's not even clear who would run the country until a new president is elected -- Wolf. BLITZER: You'll update on this, what's going on.

Thank you, Barbara.

U.S. taxpayers will help to rebuild Gaza, devastated by the recent fighting between Israel and Hamas. The nearly billion dollar pledge was made by the secretary of State, Hillary Clinton, as she makes the rounds in the Middle East.

Our foreign affairs correspondent, Jill Dougherty, is traveling with the secretary in Jerusalem -- Jill?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Wolf, in Egypt, Secretary Clinton said that she wants to turn crisis into opportunity. And here in the Mideast, she's definitely wading into a crisis. We'll just have to see how many opportunities emerge.

In Egypt, Sharm el Sheikh, she announced that the U.S. is pledging $900 million. Now, part of that will go to Gaza for the reconstruction of Gaza. The other part will go to the West Bank, to the Palestinian Authority, for construction there. All of it funneled through the Palestinian Authority of Mahmoud Abbas, not through Hamas, which the United States considers a terrorist organization.

That, as the secretary said, is the short-term. The long-term, she says, is a commitment by the Obama administration to a comprehensive peace between the Israelis and the Palestinians.

(BEGIN VIDEO CLIP)

HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: By providing humanitarian assistance to Gaza, we also aim to foster conditions in which a Palestinian state can be fully realized -- a state that is a responsible partner, is at peace with Israel and its Arab neighbors and is accountable to its people; a state that Palestinians everywhere can be proud of and is respected worldwide. This is the Palestinian state we all envision. This is the Palestinian state we have an obligation to help create.

(END VIDEO CLIP)

DOUGHERTY: The president of the Palestinian Authority, Mahmoud Abbas, says now it is time for the Israeli government to commit to that two state solution. But that could take a long time. After all, this is a government right now that is in political limbo. And Tuesday, when Secretary Clinton has meetings, she will be, meeting with an opposition candidate -- a lame duck government and a prime minister designate who has not committed to that two state solution -- Wolf.

BLITZER: All right. Jill Dougherty in Jerusalem for us.

Meantime, Secretary Clinton says the Obama administration is under no illusions that Iran will answer its diplomatic gestures. A senior State Department official quotes the secretary as saying: "Our eyes are wide open on Iran." The official says Secretary Clinton's comments came after her counterpart from the United Arab Emirates voiced concern that the U.S. might make a deal with Iran on nuclear or other issues.

Without a dialogue, the U.S. and Iran seem to be communicating by actions. The latest -- Iran's apparent detention of an American reporter.

Let's bring in CNN's Zain Verjee.

She's working the story for us.

So what happened here -- Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, Wolf, the U.S. and Iran, as you know, still don't talk directly. Now, one North Dakota family realizes just what a problem that is.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): U.S. citizen and journalist Roxana Saberi is missing.

(BEGIN VIDEO CLIP, COURTESY KVLY)

REZA SABERI, ROXANA'S FATHER: We have been worried for all this time. You know, it's for about a month now our life has been quite miserable.

AKIKO SABERI, ROXANA'S MOTHER: We could wait up to how long, right?

VERJEE: Her parents say Roxana called them on February the 10th, saying she was in jail for buying a bottle of wine -- illegal in the Islamic Republic.

R. SABERI: She was talking so hastily. It seems that they have given her a very limited time that you should say this and they had told her what to say. So this is the most likely scenario.

VERJEE: Iran says Roxana's press card was revoked and she was working there without a permit, adding: "She should not have been engaged in news and information gathering."

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Now, Roxana, you were in Washington, D.C....

(END VIDEO CLIP)

VERJEE: Roxana freelanced for news organizations like National Public Radio. The Iranian government won't confirm if she's been detained.

GORDON DUGUID, STATE DEPARTMENT SPOKESMAN: We asked the Iranian authorities to help by providing information about her status. The State Department has been in touch with her family and we're working with them, offering them what assistance that we can.

VERJEE: Roxana is 31 years old. She's been living in Iran for six years. In addition to reporting, she's writing a book about Iran's culture and people.

A. SABERI: And now all we want the Iranian government to do for our daughter is to set her free so that she can return to the country where she was born and raised, where she was proud to be an American.

(END VIDEOTAPE)

VERJEE: Her parents say Roxana was planning to return to the U.S. this month to publish her book -- Wolf.

BLITZER: And she's a former Miss North Dakota, among other things.

VERJEE: Yes.

BLITZER: Why have her parents decided to speak out now, because they've known about this for a while?

VERJEE: Yes, for a while. But they just weren't getting any information about where she is. They had no contact with her after February the 10th. And they figured by coming forward and making this public, that they could get more information and pressure the Iranian government to say something -- do something.

BLITZER: Let's hope they let her go and let her go quickly.

Thanks very much for that.

Another American has been missing in Iran since March 8th, 2007. A former FBI agent, Robert Levinson, was working as a private investigator in Dubai, across the Gulf -- the Persian Gulf. But he disappeared after checking out of an Iranian hotel.

Iran denies knowing anything about him. Senator Bill Nelson of Florida has suggested that Iran may be holding Levinson to exchange him for some Iranians seized by U.S. troops in Iraq.

He said he wants President Obama to fail and conservative radio talk show host Rush Limbaugh is standing by that controversial remark.

But is he the de facto leader of the GOP?

The party chairman says no -- launching a war of words.

Also, the disgraced former governor of Illinois is back -- Rod Blagojevich landing a huge book deal. There are new details just coming out.

Plus, he wanted the job but got passed over. The former Democratic Party chairman, Howard Dean, is here to weigh in on the new nominee for Health secretary -- can she help usher in universal health care? Howard Dean is here. We'll talk to him about that and a lot more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: People of goodwill collectively recognize that the path we're on is unsustainable. It's going to be Kathleen's job and Nancy's job to work with extraordinary leaders, like the ones on this stage, to make sure that we finally deliver health care reform that will save our federal budget and help American families for generations to come.

(END VIDEO CLIP)

BLITZER: President Obama nominating the Kansas governor, Kathleen Sebelius, for Health and Human Services secretary. He also named former Clinton administration official Nancy-Ann DeParle as his health reform czar, working out of the White House. Together, they'll oversee one of the president's top priorities -- if not his top priority -- universal health care.

But the president bypassed another governor -- a former governor, in this case -- who's a medical doctor who made clear he wanted to be Health secretary, as well. That would be the former Democratic Party chairman, Howard Dean.

He's here in THE SITUATION ROOM with us.

Governor, thanks very much for coming in.

HOWARD DEAN, FORMER DNC CHAIRMAN: Thanks for having me on, Wolf.

BLITZER: This is what I noticed you told -- you recorded in the HuffingtonPost.com

"I was pretty clear that I would have liked to have been secretary of HHS. But it is the president's choice and he decided to go in a different direction."

Because you're a medical doctor. You've been a governor. You've been a political -- a chairman of a political party. You would have liked to have been secretary of Health.

DEAN: Sure. But Kathleen is terrific. I mean she's very bright. She's a very effective governor. This is a good team. Nancy-Ann DeParle is also terrific, worked for Clinton, totally gets this stuff.

So, you know, the president gets his choice about who to have and he chose two really good people.

BLITZER: When Tom Daschle going to be the secretary of HHS, he was also going to be the -- simultaneously, the White House health czar, overseeing universal health care -- health care for all Americans. Is it -- would it have been better that way, to have one person overseeing...

DEAN: No.

BLITZER: ...or two people...

DEAN: No.

BLITZER: ...working it?

DEAN: No, it's a two -- it's a two person job. And this is the pattern the Obama administration has used elsewhere -- on the environment. And so I think that on these really big issues that are very high priority for the president, you're going to see an inside the White House team and then somebody else running the agency who can cooperate and support. And that's what you've got here.

BLITZER: Because HHS is a huge agency.

DEAN: It's a huge agency.

BLITZER: It has a $700 billion budget to begin with.

DEAN: Right. It would have been very, very tough to do HHS and run the health insurance platform together.

BLITZER: Although they wanted Tom Daschle to do it.

DEAN: They did. But Tom Daschle is an exceptional guy.

BLITZER: Why isn't Howard Dean, the former governor, the former presidential candidate, serving inside the Obama administration right now?

DEAN: That I can't answer, but I'm happy with what I'm doing. I'm going to be a consultant. I'm and work for Democracy for America, my old political action committee, on health care issues. I work for a law firm in Washington on health care, alternative energy, stuff -- do some foreign affairs things.

BLITZER: Because by all accounts, in the four years you were chairman of the DNC, you know, you got the Democrats -- I mean you helped get the Democrats the majority in the 2006 elections in the House. And in the Senate, you turned things around there. You turned things -- helped further consolidate that in the 2008 elections.

What happened?

Why -- is there any friction that we want to know about?

DEAN: No, I had a perfectly nice meeting with Rahm Emanuel and David Axelrod a couple weeks ago...

BLITZER: Did you make up with the White House chief of staff?

DEAN: I don't think there was any big (INAUDIBLE)...

BLITZER: Because there was some tension there.

DEAN: Well, that was mostly in the -- in the columns of various gossip (INAUDIBLE)...

BLITZER: No, no, no. Because you wanted to go for all 50 states...

DEAN: Well, there was -- yes, there was some...

BLITZER: You wanted the Democrats to compete...

DEAN: Right.

BLITZER: ...in states like North Carolina and Indiana...

DEAN: Sure.

BLITZER: ...and Virginia. And the...

DEAN: All of which we won.

BLITZER: And the assumption was that he said, well, spend more time in the states that are really competitive, like Pennsylvania, Ohio, Michigan.

DEAN: That's true. But...

BLITZER: So you were right, is that what you...

DEAN: Well, it's...

BLITZER: ...you don't want to say that?

DEAN: ...never a good thing to be right in Washington, Wolf. You know that very well.

BLITZER: Is that why you're not in the Obama administration?

DEAN: I have no idea. That I can't -- that's -- that's not...

BLITZER: Tell us about the meeting you had with Rahm Emanuel.

DEAN: Oh, it was a very good meeting, a very courteous, excellent lunch in the White House. And it -- I was very pleased to have had the opportunity.

BLITZER: And so that was it. No -- no more sounding off...

DEAN: Well, you know -- you know very well I'm not going to tell you what went on in a White House...

BLITZER: You can tell us.

DEAN: Yes. Just between the two of us. BLITZER: No, no. You can tell our viewers.

(LAUGHTER)

BLITZER: Our viewers love this kind of stuff.

DEAN: Right, right, right.

BLITZER: But -- if you want to share it.

All right, let's talk a little bit about universal health care.

DEAN: Yes.

BLITZER: Because when you were running for president, you wanted that, too.

DEAN: Right.

BLITZER: And you know a lot about it because you're an M.D. Hillary Clinton, when she was in charge of this effort back in '93, failed -- and failed pretty miserably. Why do you...

DEAN: Well, let's be clear about it...

BLITZER: Yes. I was going to say, why do you think that the current Obama administration, given all the economic problems facing the country right now, plus two wars, why do you think they can succeed in revolutionizing health care this time?

DEAN: This plan is very easy to understand and you get to do what you want to do. The American people will determine the pace at which this takes place. Here's the Obama plan as it was described during the campaign. One, you have something called guarantee issue and community rating. That means you cannot be turned for health insurance if you have an illness and that they can't charge a 60-year- old more than -- 15 percent more than a 25-year-old. That's very important. That's insurance reform.

The health care reform means that you, as an uninsured person, or as an employee of a small business, or as a retired automobile worker that's not 65, can buy into a private insurance plan or into Medicare. Now you have full choice. -- your choice. The consumer's choice, not the legislature's choice, not the government's choice -- your choice. That is health care reform allowing...

BLITZER: But is this the environment right now, with the economic -- the recession, some are fearing a depression, the hundreds of billions of dollars being spent to bail out banks, financial institutions, insurance giants like AIG, the automobile industry -- is this the environment to tackle health care reform?

DEAN: This is exactly the right environment. Here's what you get if you do the president's campaign plan. One, people get insurance. That is a very critical part of every family's needs. And hundreds of thousands, if not millions of middle class Americans, are terrified they're going to lose their health insurance.

Two, small businesses, which create 80 percent of all new jobs in America, suddenly are free of the burden -- for the most part -- of providing health insurance.

Three, retires of huge corporations say the big three automakers suddenly are relieved of some of the burdens of those retiree health care costs.

This is -- doing health care reform -- real reform now, not just health insurance reform -- doing health care reform, which includes a public entity giving the American people a choice of signing up with Medicare early -- that is an economic prescription to make us competitive again. It's an economic prescription for saving the big three and it's an economic prescription for finally doing something for small business instead of just talking about.

BLITZER: He's got a huge agenda ahead of him. We'll see how he does, the president of the United States.

DEAN: He's done great so far.

BLITZER: Governor, thanks for coming in.

We'll have you back.

DEAN: Thanks for having me on.

BLITZER: Well, we're following the breaking news -- the search for those two NFL stars missing at sea -- their boat and one their friends now found.

Plus, almost 200 whales and dolphins in a mass beaching. Many have already died -- can the rest be saved?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee is monitoring some other important stores incoming into THE SITUATION ROOM right now -- Zain, what's going on?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Hi, Wolf.

Disgraced former Illinois governor, Rod Blagojevich, has apparently landed a lucrative book deal. His publicist says he signed a six figure deal today for a book: "exposing the dark side of politics." The publicist says the book will also detail how Blagojevich chose President Obama's successor for the U.S. Senate. Blagojevich was impeached and removed from office for allegedly trying to sell the Senate seat.

Federal investigators plan to release an engineer's text messages exchanged just before his commuter train crashed last September. Twenty-five people died and at least 130 were injured when the commuter train slammed into a freight train in Los Angeles. It was the nation's deadliest rail crash in 15 years. Investigators say that Metro Link engineer Robert Sanchez sent and received 57 text messages that day. Sanchez was among those killed.

And down under, 54 pilot whales and five dolphins are back at sea after stranding themselves on a beach in Tasmania. Rescuers on King Island helped the whales and the dolphins return to sea at high tide today. The 54 pilot whales were among a group of 192 that beached themselves yesterday. So good news there -- Wolf.

BLITZER: Yes. Good news.

Thank you.

Zain, thank you.

Good news, indeed.

Plucked from an overturned boat, a passenger is flown to safety. But two -- two NFL players and a third man are still missing. Stepping up a desperate search -- we'll tell you what we know.

And huge lines over at the Dodgers Stadium -- not for fun, but for jobs. Thousands and thousands of unemployed folks turning out for a limited number of jobs. It's a scene repeated across America.

And Rush Limbaugh urges cheering Republicans to take back the country.

But why is the new chairman of the Republican Party accusing him of ugly rhetoric?

Who's really in charge of the party?

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, a new push to end the ban on gays serving openly in the United States military. It's an old battle about to reignite. And many believe President Obama could be one of the political casualties. But we're watching this story. Stand by.

Also, the government throws billions at the troubled insurance giant AIG -- billions more dollars, I should say -- after it posts the largest quarterly loss in history.

And when, if ever, can taxpayers expect to get their money back?

Our chief business correspondent, Ali Velshi, asks the company's CEO. Plus, President Obama's pick for Health secretary -- what qualifies the Kansas governor, Kathleen Sebelius, and why is she such a rare breed?

I'm Wolf Blitzer.

And you're in THE SITUATION ROOM.

It seems a little battle underway right now between the new chairman of the Republican Party, Michael Steele, and the radio talk show host, Rush Limbaugh.

Let's go to our senior political analyst, Bill Schneider.

He's got details.

All right, who's arguing with whom -- Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Wolf, it's kind of complicated. Rush Limbaugh is criticizing Democrats, while the Republican national chairman is criticizing Mr. Limbaugh.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): In a speech to a conservative gathering on Saturday, talk show host Rush Limbaugh defended his criticism of President Obama's policies.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: What is so strange about being honest and saying I want Barack Obama to fail if his mission is to restructure and reform this country so that capitalism and individual liberty are not its foundation?

Why would I want that to succeed?

(APPLAUSE)

(END VIDEO CLIP)

SCHNEIDER: On that point, Mr. Limbaugh parts company with Republican leaders in Congress.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: I hope this bill works. I really do, for the good of our country.

REP. ERIC CANTOR (R), VIRGINIA: I don't think anyone wants anything to fail right now.

SCHNEIDER: So who speaks for the Republican Party?

The White House says Limbaugh does.

RAHM EMANUEL, WHITE HOUSE CHIEF OF STAFF: He is the voice and the intellectual force and energy behind the Republican Party. ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: His notion of presidential failure seemed to be quite popular in the room in which he spoke.

SCHNEIDER: Is Limbaugh the de facto leader of the party, party Chairman Michael Steele was asked?

MICHAEL STEELE, CHAIRMAN OF THE RNC: No, he's not. I'm the de facto leader of the Republican Party.

SCHNEIDER: Steele doesn't seem to take Rush Limbaugh too seriously.

STEELE: This whole thing is entertainment. Yes, it's incendiary. Yes, it's ugly.

SCHNEIDER: Mr. Limbaugh responded.

(BEGIN VIDEO CLIP FROM "THE RUSH LIMBAUGH SHOW," COURTESY WMAL)

LIMBAUGH: Why do you claim you lead the Republican Party when you seem obsessed with seeing to it that President Obama succeeds?

SCHNEIDER: Rush Limbaugh doesn't have a particularly favorable public image overall. He's very polarizing. Most Republicans like him, although nearly a quarter do not. Most Democrats don't like him. Limbaugh rallies Democrats as well as Republicans, which is why Republicans are treating him cautiously.

(END VIDEOTAPE)

SCHNEIDER: When asked about Republican Chairman Steele's comments, a spokesman for the Republican National Committee insists the argument between was between Mr. Limbaugh and the White House. Quote, "the feud between radio host Rush and Rahm Emanuel makes great political theater," Alex Cohen said. "But it is a sideshow to the important work going on in Washington," unquote -- Wolf?

BLITZER: Bill Schneider, thanks very much.

Let's bring in our Democratic strategist and political contributor James Carville and Republican strategist Tony Blankley. I'm going to play another clip. James, I'll go to you first, of what Rush Limbaugh had to say on his radio program today about Michael Steele, the chairman of the GOP.

(BEGIN VIDEO CLIP)

LIMBAUGH: It's time, Mr. Steele, for you to go behind the scenes and start doing the work that you were elected to do instead of trying to be some talking head media star, which you're having a tough time pulling off. If it's your position that you want President Obama and Speaker Pelosi and Senate leader Harry Reid to succeed with their massive spending and taxing and nationalization plans, I think you have some explaining to do. Why are you running the Republican Party?

(END VIDEO CLIP)

BLITZER: What do you make of this, of what's going on, James?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think that Michael Steele is done, he's over. I mean, look, I said on February 1st, I wrote a piece and CNN said right on this show that he was the most powerful Republican. And Rush is so much more influential than Michael Steele, but the thing about Republicans is they have some affection for Rush out there. The chairman of the Republican Party taking on the most popular radio guy they have is ridiculous.

I think Steele has sealed his fate. He got a position and he thought he got a job, he's just kind of the head of the RNC. They don't know who he is. That's not very smart of him to take on somebody like Limbaugh, because Limbaugh is never going to get off of this guy, ever.

BLITZER: Tony, is James right, that Michael Steele for all practical purposes, is done?

TONY BLANKLEY, REPUBLICAN STRATEGIST: No, I don't think so. Look, the Republican Party and the conservative movement doesn't have a leader. The Democratic Party didn't have a leader until Obama emerged and got the nomination. We have a few years before a leader emerges. Right now, I'm sort of glad to see the Republican Party is alive and kicking, even if we're kicking each other. At least there's signs of life in the old party.

I don't think -- my guess is that Rush is not going to keep beating on Steele, and Steele will go about the business of largely trying to do the management of the party. So I like to see the fighting, and I've got to tell you, Limbaugh can describe conservatism better than anybody on our side, and he can skewer the Obama and liberalism better than anybody. So I'm glad that voice is out there, but ultimately somebody else is going to be the standard-bearer of the party.

BLITZER: But is he right, James, is Limbaugh right on the basic points he's making going after the Democrats and the Obama administration?

CARVILLE: Well, no, I don't think he's right at all, but I'm not a Republican. But the point is that if I were a Republican, I'm not, I have some -- Rush has done some -- the idea that the chairman of the Republican Party is out attacking him, this guy is not going to have any support out there for this.

And they're just -- you know -- one thing, if I go on CNN and I say something about Rush, it's another thing if Rahm Emanuel, White House chief of staff, as he did this Sunday. I think correctly by the way pointed out he is the most influential person and the leader of the Republican Party. You know, Republicans understand that Rahm is going to do something like that. But to have their own chairman come out is going to be something that they're going to find intolerable. They aren't going to stand for it. BLITZER: Tony, if you listen to the piece that we just saw from Bill Schneider, not just Michael Steele. You heard Eric Cantor, the number two Republican in the House of Representatives, the minority whip. He also said he hopes that President Obama succeeds, not fails.

BLANKLEY: We all understand that different people have different roles. Elected officials have to be more circumspect than people who are rallying the country. You always have that. The Democrats were more polite to Bush earlier than some of the moveon.org crowd was. So there's a certain orchestration to all that. I've got to say one thing, though, that I can't remember a president of the United States going out and demonizing by name frankly almost any American citizen, and I don't think it's in Obama's long-term interest. He's the most powerful man in the world, and anytime he takes anybody on, unless it's an enemy, it looks like he's a bully.

CARVILLE: Who's demonizing who? What I said and what Rahm said, Rahm said he is the most influential single Republican in the country. Rahm said he had bargained for them. We're not demonizing anybody.

BLANKLEY: I wasn't talking about you. I was talking about President Obama, who said people shouldn't listen to -- he's also taken on Sean Hannity by name.

CARVILLE: That's not demonizing somebody. Come on, Tony, this is an adult business. This is politics. That's not demonizing someone.

BLANKLEY: I don't think you would have advised a president to name an opponent by name and say anything negative things about him.

CARVILLE: You're an expert in the English language. Naming someone has a lot different meaning than demonizing someone.

BLANKLEY: When President Obama a few weeks ago said people should stop listening to Rush, I would say that was negative. That wasn't just naming him.

CARVILLE: Again, that's not demonizing someone to say you shouldn't. If I say people shouldn't listen to your point of view, I'm not demonizing you.

BLITZER: But James, I think the point that Tony is trying to make is does that elevate Rush Limbaugh when the president of the United States, as opposed to, with all respect, James Carville or Rahm Emanuel, did you that negatively elevate, overly elevate Rush Limbaugh?

CARVILLE: You know, he was elevated before. He is. If you watched Rush at the CPAC, he is the number one conservative in the United States of America today. I didn't make him that. Look at the convention that you saw this weekend. I wish I knew what they had on, but that's quite another question. They make him that that. The conservatives of America have elevated rush, the Republicans of America. For me to say that or for Rahm to say that, we're just stating the fact. BLANKLEY: Back in the '90s, I don't remember Bill Clinton ever attacking Rush, although Rush was there. We had him under the dome. He was an honorary member. I think it's a mistake on President Obama's part.

BLITZER: All right, we'll leave it at that point. That's a fair disagreement and you guys certainly have every right to disagree. There's no doubt that Rush Limbaugh was loved at that CPAC conference over the weekend and got a rousing reception in his 90 minute address there. All right guys, thanks very much.

Five hundred part-time jobs up for grab over at Dodger Stadium. And almost 7,000 people show up to apply. We're hearing their stories.

Plus, it's a fight that cost President Clinton dearly. Will President Obama suffer the same fate over letting gays serve openly in the United States military? What's different now as opposed to then? Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More investors threw in the towel today, dropping the Dow Jones Industrial average almost 300 points. That put the Dow below 7,000 for the first time in 11 years.

Another sign of the times, these days going to a baseball park may be tied to America's newest pastime, looking for work. CNN's Thelma Gutierrez has our story from Los Angeles. Thelma?

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, nearly 7,000 people tried to wedge their way into a job at Dodger Stadium over the weekend. At stake, 500 part-time jobs in Los Angeles County, where the unemployment rate has soared to 10.5 percent.

(BEGIN VIDEOTAPE)

GUTIERREZ (voice-over): They filed into Dodger Stadium, enthusiastic and hopeful, not to watch a ball game, but to get a job. Bob Reider, 68, he wants a shot at a concession stand job, selling beers.

BOB REIDER, DODGERS JOB APPLICATION: This is supposed to be the golden years, whatever that means, but I don't mind working.

GUTIERREZ: Reider is one of 7,000 people to interview for just 500 part-time jobs. The one he's going for pays about $10 an hour. This is a man who not long ago worked as an I.T. executive for a bank, making $135,000 a year with a company car and a retirement plan. Now he collects Social Security, but is still helping to put two kids through college.

REIDER: It's definitely almost impossible for me to find a reasonable daytime job at my age.

GUTIERREZ: At any age, especially in Los Angeles County, where the unemployment rate is now 10.5 percent, higher than the state average. And the Dodgers are offering a paycheck.

JOE WALSH, VP HUMAN RESOURCES, DODGERS: The Dodgers are very proud to have 500 jobs when not a lot of companies do.

UNIDENTIFIED MALE: I want to deal with traffic control.

UNIDENTIFIED FEMALE: I've been up here quite a few times for games. I never thought I would actually be up here applying for a job.

GUTIERREZ: The competition for the few jobs will be fierce, but after the interview, this former bank executive feels he made the club.

(END VIDEOTAPE)

GUTIERREZ: According to the Dodgers spokesman, 1,000 people attended the job fair last year. This year the organization saw a 600 percent increase. The season begins next month. Wolf?

BLITZER: Sure is a sign of the times. All right, thanks, Thelma.

They may be counting their tickets before they hatch, but states are trying to figure out how they'll be spending the billions in stimulus money. Pennsylvania already eyeing its crumbling infrastructure, big time. CNN's Jeanne Meserve has our story from Harrisburg. Jeanne?

JEANNE MESERVE, CNN CORRESPONDENT: Wolf, for a state like Pennsylvania, trying to figure out what to do with stimulus money is sort of like racing against the clock to solve a Rubik's cube.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): William Penn High School in Harrisburg, Pennsylvania, shows its age.

GERALD KOHN, SUPERINTENDANT, HARRISBURG SCHOOL DISTRICT: As you can see, it really goes down into the foundation.

MESERVE: Projects at the 83-year-old school cry out for stimulus money.

KOHN: The roof just basically gave out above this small classroom.

MESERVE: It isn't just schools like this that need the cash. Much of Pennsylvania's infrastructure, like this water treatment plant, is old. And much of it, including a bridge Vice President Biden recently looked at, is in dire need of repair.

UNIDENTIFIED MALE: Roughly how many bridges in the state do you have like this?

GOV. ED RENDELL (D), PENNSYLVANIA: Six thousand. MESERVE: But the state is facing a $2.3 billion deficit. Officials say the stimulus is a godsend.

UNIDENTIFIED FEMALE: We think about it all the time, wish we could do more.

MESERVE: Donna Cooper, Pennsylvania's secretary of policy and planning, eats on the run as she juggles appearances and meetings, phone calls and briefing books, to winnow down which projects will get about $9.8 billion of money and to strategize on how to compete for an additional $6 billion.

DONNA COOPER, PENNSYLVANIA POLICY AND PLANNING SECRETARY: We're trying to approach this from the premise of synergy. Where do we get more that one beneficial outcome from every dollar invested?

MESERVE: The object, first and foremost, is to create as many jobs as possible.

COOPER: We have projects in the pipeline, but they don't necessarily mean it's the biggest bang for the buck, right?

UNIDENTIFIED MALE: Right.

COOPER: How do you think we should go about that?

MESERVE: With the help of other state officials, Cooper is prioritizing projects which improve academic performance, help drive down health care costs and grow green businesses. With state unemployment at 6.9 percent, they are trying to funnel money to the hardest-hit areas, but there simply aren't enough stimulus dollars to do everything.

COOPER: With this information before us, I'm confident we're making the best decisions. If I had a crystal ball, I would make better decisions, but so would everybody.

MESERVE: To assure skeptical citizens that the money is being spent wisely, a Web site will track precisely where the money is going, and whether it actually delivers jobs and other promised and needed results.

(END VIDEOTAPE)

MESERVE: Pennsylvania hopes to have this puzzle solved and money out the door by April, to create jobs here in Pennsylvania. Wolf, back to you.

BLITZER: All right Jeanne, thank you.

We're following the breaking news, the search for those three missing boaters. One is found clinging to an overturned fishing boat. The search is stepped up for the others, two of them by the way NFL players.

And firefighters are racing, but not to a fire. Our I-Reporters show you the impact of the latest winter storm. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Two NFL players and a friend still missing in the Gulf of Mexico. One man rescued. Let's go to CNN's Brooke Baldwin. She's got the latest for us. What do we know, Brooke?

BROOKE BALDWIN, CNN CORRESPONDENT: Hi, Wolf. An active search is right now under way for three men still missing off the Gulf Coast of Florida. But today a major break in this massive search as the U.S. Coast Guard spotted Nick Schuyler clinging to the boat, alive.

(BEGIN VIDEOTAPE)

BALDWIN (voice-over): Carried to safety, former University of South Florida football player Nick Schuyler, one of four men missing at sea for nearly three days. The focus of a 16,000 square mile search by the U.S. Coast Guard.

CAPT. TIMOTHY CLOSE, U.S. COAST GUARD: The boat was anchored Saturday early evening and at some point it flipped. At some point the other three gentlemen became separated from the boat.

BALDWIN: Schuyler, along with Oakland Raiders linebacker Marquis Cooper, NFL free agent and former Detroit Lions defensive end Corey Smith and former USF player William Bleakley left for a fishing trip early Saturday morning. Early Monday afternoon, a Coast Guard spotted their 21-foot fishing boat which capsized about 50 miles west of Clearwater, with Schuyler clinging to the hold. His parents relieved, but concerned.

MARCIA SCHUYLER, MOTHER: I passed out. I went down. We're ecstatic. I mean, we couldn't have asked for a better ending for us.

STU SCHUYLER, FATHER: I feel the same, of course. But my heart is still out. We still have three men missing and we're not going to talk too much until we find these guys. We're all praying for them.

BALDWIN: Still missing, Cooper, Smith and Bleakley. Schuyler told Coast Guard officials a massive wave hit the boat Saturday night, forcing all four overboard. At one point he said all of them were clinging to the boat for safety, but what happened to the other three is still a mystery.

REBEKAH COOPER, MARQUIS COOPER'S WIFE: It's my worst nightmare to think of anyone I love, especially my husband, in any situation where, you know, he is struggling to get back and can't get in touch with us or get the help that he needs.

(END VIDEOTAPE)

BALDWIN: Right after today's rescue, Schuyler was air lifted to Tampa General Hospital. The Coast Guard did say he is dealing with some hypothermia, Wolf. They also say he was wearing a life jacket.

BLITZER: Let's hope they find those other three guys. Thank you for that.

A massive storm battered the eastern part of the U.S. today. Let's bring in our Internet reporter Abbi Tatton. She has some I- Reports coming up and down the East Coast. What's the latest?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, starting with the Southeast, which is where the storm started yesterday, at points wreaking havoc with the roads and transportation. Interstate 85 in South Carolina, hundreds of motorists were stranded overnight after a series of collisions shut down a stretch of that interstate. This is a view from 4:00 a.m. this morning from one of those vehicles where Bryan Ragon was sitting for five hours without moving an inch on his way home to Charlotte.

And then moving further up the East Coast, take a look at this time lapse video from New York City from an apartment in Manhattan from Chris Bierlein who took a photo every 30 seconds throughout the night on a digital camera outside his apartment, the snow building up there to seven inches by 8:00 a.m., which was a problem for commuters who were heading on their way, as they headed out to work this morning. And then the heaviest snow towards the Northeast, some of the heaviest in Connecticut up towards Massachusetts. One I-Reporter John Stevens in Torrington took out his tape measure and measured nine inches there. And that was this morning and the snow is still falling.

BLITZER: So we'll watch this snowing in March.

A monumental task facing the next health secretary. Can the Kansas governor, Kathleen Sebelius usher in universal health care in her new role? We're going to have details. And a voice known to millions falls silent, closing a long chapter in broadcasting history.

(BEGIN VIDEO CLIP)

PAUL HARVEY, RADIO BROADCASTER: Since I was 14, that voice has been my vocation, my avocation.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: You may not necessarily have recognized his face, but millions of Americans could certainly tell his voice in an instant. The radio broadcaster Paul Harvey has died after a career spanning eight decades. Here's CNN entertainment correspondent Brooke Anderson.

(BEGIN VIDEOTAPE)

PAUL HARVEY, RADIO BROADCASTER: Hello, Americans. This is Paul Harvey. Stand by for news.

BROOKE ANDERSON, CNN CORRESPONDENT, (voice-over): Paul Harvey's distinctive sound and delivery style made him a broadcasting icon. GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Americans like the sound of his voice. His friend Danny Thomas (ph) once said to him, you'd better be right, because you sound like God.

ANDERSON: He had one of the most listened to voices in radio history. His news and views aired on some 1,200 radio stations across America. It was a career that started at an early question age.

HARVEY: Since I was 14, that voice has been my vocation, my avocation.

ANDERSON: Suburban Chicago was Harvey's home base for most of his professional life. The windy city honored him with his own street in 1988. But Paul Harvey Aurandt grew up in Tulsa, Oklahoma. His father, a Tulsa police officer, was killed by gunman firing from a car when Harvey was a toddler.

Harvey entered radio at the suggestion of a teacher in 1933. It was the start of a lifelong love affair with broadcasting. Another life-long love, wife, Angel. He was so smitten with Lynne Angel Cooper on their first date, he proposed.

HARVEY: And now, with your indulgence, the rest of the story.

ANDERSON: Despite vocal cord problems in his early 80s, which temporarily sidelined his talents, the Peabody winner loved working. Loved it so much, that in 2000, he inked an ambitious 10 year deal with ABC Radio Networks for $100 million. ABC had been home for the conservative commentator for more than half a century.

HARVEY: It's not the fame. Not the money. Maybe a comment, kind and sunny, the heart of (ph) warm approval of a friend. That's what gives to life its saver and makes one stronger and braver and gives one heart and spirit to the end.

ANDERSON: Fans say Harvey's golden voice echoed the virtues of small-town America.

HARVEY: Paul Harvey, good-day.

(END VIDEOTAPE)

BLITZER: A great broadcaster, indeed. Our condolences to the family.

Let's check in with Lou, he's standing by. Got a show coming up in an hour. I understand you're working on the British prime minister and his new plan for some sort of global new deal. What's going on?

LOU DOBBS, CNN ANCHOR: Yes, how about that? America is back in the popularity contest in Europe. President Barack Obama's new deal could be going global. The man who wants to make it all happen, British Prime Minister Gordon Brown, he wants America to lead the world out of recession. He tried to get a European new deal. That didn't work out so hot, so now he wants a global new deal. He'll be here to talk about that with President Obama tomorrow. The leader of Britain's socialist labor party is on his way to Washington right now, in fact. He will address a joint session of Congress Wednesday. What happened to Europe's criticism of bad old America? Well, apparently we've gone from being stupid and unilateral to now being saviors or perhaps chumps.

The stock market today expressing a resounding lack of confidence in President Obama's new deal. The market plunging to new lows as billions of dollars more in taxpayer money being spent to prop up failing companies. Is this the kind of change you were expecting? Is the American taxpayer now going to bail out the entire world? Join us for all of that. We'll have the answers at 7 p.m. Eastern on "LOU DOBBS TONIGHT." Wolf, back to you.

BLITZER: We'll see you in an hour, Lou, thank you.

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