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THE SITUATION ROOM

Blunt Warning to GM and Chrysler; GM Workers Fear for Future; Flooding Threat Not Over

Aired March 30, 2009 - 16:00   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, President Obama's blunt warning to GM and Chrysler: Do more to help yourselves or the federal government may pull the plug.

This hour, the president in the driver's seat, forcing GM's CEO out.

Plus, a startling allegation about the Bush administration's war on terror. The journalist Seymour Hersh explains his claim about Dick Cheney and an alleged terror hit list. And Cheney's former national security adviser, he's here to respond.

And now you can see it for yourself, a North Korean rocket on the launch pad. The U.S. bracing for an expected missile test and rising nuclear tensions.

I'm Wolf Blitzer in CNN's command center for breaking news, politics, and extraordinary reports from around the world.

You're in THE SITUATION ROOM.

President Obama's refusing to give GM and Chrysler anymore long- term bailout money unless they make painful concessions. He's giving the carmakers one more chance to show Washington their firms are worth saving.

GM will get enough financial help to keep it going for another 60 days so it can produce an acceptable reorganization plan. Chrysler gets 30 days while it finalizes a partnership with Fiat. The president says bankruptcy remains an option for both carmakers.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: While Chrysler and GM are very different companies, with very different paths forward, both need a fresh start to implement the restructuring plan they developed. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger.

(END VIDEO CLIP)

BLITZER: Let's bring in our White House correspondent, Dan Lothian.

Dan, the president getting tough, forcing, in effect, the CEO of GM to get out. DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. He did do that. And you know, some people may argue that there's a double standard here, that the White House wasn't pushing out any Wall Street bigwigs, but the administration is saying that it was a different circumstances and, in this case, Wagoner had to go.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Rick Wagoner spent decades climbing up the ladder at GM, but he was ousted in a swift and decisive move by the White House. To unions and creditors and suppliers, the alarm clock just went off.

UNIDENTIFIED MALE: Well, I think it focuses everyone's attention. If you can take the longtime CEO of the country's largest car company and basically push him out of there, it shows everybody that the administration and the automotive task force is very, very serious.

LOTHIAN: Serious pressure to make concessions over the next 60 days.

UNIDENTIFIED MALE: It's holding everyone's feet to the fire, and I think that's probably the most important outcome of this move.

LOTHIAN: The White House says Wagoner's ouster is less about sending a message and more about saving a company.

OBAMA: It's a recognition that will take new vision and new direction to create the GM of the future.

LOTHIAN: Tough talk from the president, but the administration was hesitant to say who pulled the trigger and when.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I'm not going to get into a tick-tock.

UNIDENTIFIED MALE: Why not?

GIBBS: Because I'm not.

LOTHIAN: In a move that may just further anger taxpayers, filings with the Securities and Exchange Commission show Wagoner is eligible to receive more than $20 million from GM. In leaving, he thanked all who supported him and added, "Ignore the doubters because I know it is also a company with a great future."

(END VIDEOTAPE)

LOTHIAN: Now, if you're out there looking for a new car and you're nervous about buying a GM or a Chrysler, well, the president was trying to calm your fears. He said that this administration will stand behind all warranties if you buy a new car -- Wolf.

BLITZER: As you know, Dan, Chrysler and the Italian automaker Fiat, they have what's called a framework for a merger deal. What happens though if that collapses?

LOTHIAN: Really the worst case scenario, the administration pointing out they could go bankrupt, or even worse. But they really now want to focus on this deal working out, and the administration also saying if this doesn't work out, they're hopeful that perhaps another company will step up because they don't think that Chrysler can go it alone.

BLITZER: Dan Lothian's over at the White House.

Workers at a GM plant in Warren, Michigan, just got off the clock a few minutes ago, and you can bet they're talking about the company's shaky future and the forced exit of their CEO.

Let's go to our national correspondent, Susan Candiotti. She's there on the front lines for us.

All right. What are you hearing from these men and women, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Well, Wolf, here's what we're hearing. You know, GM shop stewards (ph) are fighting hard to save jobs for their fellow employees, and they are praising what President Obama had to say today in terms of the support and understanding that they say he's giving to them. But, they add, when it comes to a suggestion of more job cuts, more loss of benefits, and more pay cuts, well, that could be an uphill battle.

(BEGIN VIDEOTAPE)

MICHAEL FERGUSON, GM EMPLOYEE: Not a nickel, not one nickel. I've given up enough.

CANDIOTTI: And if it means the end of GM?

FERGUSON: Then me and the general go down together. We will do what it takes to make sure that we can become competitive with Toyota and some of the foreign automakers when it comes to job efficiency and cost, but wages, we're not ready to give any more wages back.

(END VIDEO CLIP)

CANDIOTTI: Now, these workers know full well that there are only 60 days ahead where they have a chance to weigh in on concessions that GM has to come up with, along with its creditors and others. And if they don't, that company might not survive.

They don't know what lies ahead. They hope the president will stand behind GM -- Wolf.

BLITZER: Still a lot of questions out there.

Susan, thank you.

By the way, if one of the big automakers did go bust, hundreds of thousands of jobs could vanish. General Motors currently employees almost 250,000 people worldwide, about 84,000 in the United States. Chrysler has more than 50,000 employees, about 38,000 in the United States, and most of the rest are in Mexico and Canada. And that doesn't include all the suppliers out there to the automakers that could go under and lay off thousands more workers.

In North Dakota and Minnesota right now, residents are being warned that the threat of massive flooding is by no means over yet. The Red River is receding from its highest level in over a century, but an expected snowstorm could set off another round of sandbagging, evacuations, and fear.

Let's go to CNN's Ted Rowlands. He's out on the riverfront for us.

Ted, it looks like it's pretty ugly out there.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Wolf. We're actually on the Red River right now, out in a boat, and you mentioned the snowstorm expected. Well, it is here.

It started snowing within the last hour or so, and it is coming down at a pretty good clip. And it is expected to continue over the next two days, most likely, with some substantial accumulation.

We're out on the river with the USGS, the U.S. Geological Survey. And Chris Laveau is a hydrologist.

Basically, what they're doing is measuring the currents in the river, they're measuring the amount of water that's passing through.

Chris, what have you -- you've been here for seven days. What can you tell us? How are things looking now?

CHRIS LAVEAU, HYDROLOGIST, USGS: Yes. The U.S. Geological Survey has had crews out from North Dakota, Iowa, Kansas and Illinois since last Monday, monitoring how much water is coming into Fargo and how much water is actually here. We've been here to monitor the rise and provide those numbers to the National Weather Service so they can provide timely updates of the crest...

ROWLANDS: It's going down.

LAVEAU: It's going down now.

ROWLANDS: OK. And you were telling us earlier that it's moving at a pretty good clip, 24,000 cubic feet per minute?

LAVEAU: Per second.

ROWLANDS: Per second!

LAVEAU: Yes. You can think of a cubic foot as about the size of a basketball. So 24,000 basketballs per second, and that's down 5,000 basketballs since earlier this week.

ROWLANDS: And the average for this time of year is just in the hundreds. LAVEAU: About 700 basketballs per second.

ROWLANDS: So we're talking about major pressure on the levee system here, which of course is the big concern. So far, everything has held, but talk about the amount of pressure we're talking that this river holds.

LAVEAU: Obviously, the higher the water, the more pressure on the levees. The exact amount of pressure would be best directed to the city engineers, though.

ROWLANDS: OK.

Obviously, the snow is not helping, Wolf. More precipitation is not something that these folks need. What effect it will have remains to be scene. The mayor cautioning residents, be pleased that the river's going down, but don't let your guard down, because the levees still have a long way to go to hold up -- Wolf.

BLITZER: Yes. So it's premature, I assume, to say they've dodged the bullet, because they haven't yet?

ROWLANDS: Not yet. It looks good so far, but they've got a few days left here -- a few days of holding back this Red River, which is still at an unbelievable record level, down about 30 -- just over 39 feet, which is extraordinary.

BLITZER: All right. Let's hope for the best. Thanks, Ted.

If General Motors fails, the state of Michigan could go further into a tailspin. The governor, Jennifer Granholm, she's standing by live. Does she think GM's CEO Rick Wagoner was a sacrificial lamb?

Plus, new satellite images of a North Korean missile on the launch pad. Is the Pentagon prepared to do anything to stop it?

And a startling allegation that the Bush administration had a terror hit list and Vice President Dick Cheney was the man in charge. The Pulitzer Prize-winning journalist Seymour Hersh, he's here in THE SITUATION ROOM to explain his claim. And Dick Cheney's former national security adviser, John Hannah, he's here. He'll respond.

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

(COMMERCIAL BREAK)

BLITZER: Part of the deal announced today with auto giant GM isn't sitting well with Michigan's governor, even though she's fought very hard for federal help. The governor, Jennifer Granholm, calls her state ground zero for the loss of manufacturing jobs in the United States. She's joining us live.

Governor, thanks very much for coming in.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: You bet. Thanks, Wolf. BLITZER: You called the firing, in effect, of Rick Wagoner a sacrificial lamb. That's what you called him. Do you disagree with the president's decision to get rid of him?

GRANHOLM: Well, I understand the desire to have a fresh start, and I think Rick Wagoner would be the first to say that this really isn't about him. This is all about the industry and making sure we have a viable industry. And frankly, it's about those great automotive workers that you heard from in the plant coming out in Warren today, the people who have been building those cars and hopefully will be building the car of the future.

And Wolf, you know, in the president's remarks today I, and I think a lot of people in Michigan, took great comfort in the fact that he said that the government was going to stand behind the future of the auto industry. And that, for us, is good news.

BLITZER: And the government would also guarantee those warranties. I want to get to that in a moment.

Here is the exchange I had with Rick Wagoner when I interviewed him here in THE SITUATION ROOM on December 4th. And I asked him if he was going to stay put or leave.

Listen to this.

(BEGIN VIDEO CLIP)

RICK WAGONER, CEO, GM: The reason I have my job is because our board thinks we've been talking on very tough issues, and really some of the structural issues that have been around the company for years and years and years. And I don't have a golden parachute, I don't have an employment contract. I serve at their pleasure, and I'll continue to serve at their pleasure.

BLITZER: So you're staying put?

WAGONER: Well, yes, sure. That's my plan. I mean, as long as the board wants me to stay put. If they tell me no, then I'll go.

(END VIDEO CLIP)

BLITZER: It wasn't the board that told him to go away, it was the White House.

GRANHOLM: And you know what, Wolf? Here's what he was trying to say, I think, is that General Motors -- I mean, last year, they got the Motor trend Car of the Year, they got the J.D. Powers Car of the Year, they got the Green Car of the Year. They've been in the middle of this massive restructuring effort.

We are ground zero for the restructuring in the auto industry. This year -- as of right now, we will have lost as a state 600,000 jobs, largely related to automotive manufacturing.

So the point is that they have been undertaking all of these steps, and they will continue to do what is necessary to survive. But for us, we want to look forward at a vibrant automotive industry, a vibrant manufacturing sector in this country where we manufacture cars in this country and not necessarily just overseas.

BLITZER: Did the White House simply inform you that Wagoner was going to be gone, or did they consult with you in advance?

GRANHOLM: No, they didn't consult with me about Rick Wagoner. I've been talking with them and beating the halls of the Treasury and burning up the phone lines about making sure that whatever is done, that there is a response for communities and families and people. And that's what I was pleased to hear, that the president looked us in the eye and said, I will fight for you. I understand how important it is to fight for communities where jobs have left and bring in new sectors, and make sure that there's a safety net for those who want to be retrained to move into those new jobs.

When he appointed Dr. Ed Montgomery (ph), which is what he did today, what he is saying is that there is going to be an advocate for all of these communities inside the White House for making sure that they are able to survive and thrive in the future. So that was very good news for us.

BLITZER: The White House, including the president, clearly leaving open the possibility of some sort of structured, orderly bankruptcy for GM and for Chrysler, if necessary, and they're saying -- they're leaving it open by saying, you know what? The federal government could make sure those warranties, the people buying a GM car or a Chrysler car, that they wouldn't have to worry about the warranties being useful. They're leaving that open for some sort of structured reorganization, if you will.

Are you OK with that?

GRANHOLM: Well, I've never -- I think that bankruptcy is a last resort. And what I did hear him say today, though, Wolf, is that whatever happens, they're not interested in a bankruptcy where they liquidate, where the company goes away and the jobs go away.

What they're committed to is a viable auto industry. And they're giving us -- giving the companies between now and 30 or 60 days from now, the ability to complete the reorganization plans. I think that they've had trouble, the companies, getting all of the stakeholders to the table and having them make the concessions that are necessary.

BLITZER: Because it sounds to me like some sort of bankruptcy would be an opportunity for GM and Chrysler to renegotiate their contracts with the United Autoworkers and start paying some of those men and women on the assembly plants and elsewhere a lot less money.

GRANHOLM: I don't think that that's really what it is. I mean, the UAW has provided significant concessions. Their starting wages now are half what they were before.

They've got this whole voluntary employee benefits association where they've offloaded all of their health care costs, they've eliminated the jobs bank. I think, frankly, many of the concessions have to do with the rest of the creditors that they've got to get to the table, including the bondholders.

But the bottom line is, I think that they are saying that bankruptcy is the last resort, and that's why they're giving them this extra amount of time to complete the job of reorganization, because truly, Wolf, how do you support -- how do you buy cars when a company has gone bankrupt? And that's really the -- that's what they need to wrap this around.

You've got to create demand for the American automobile. And when the president said we're going to guarantee the warrantees, we're going to make sure you can deduct the sales tax from when you purchase a vehicle, and we're going to ask Congress to help out with this cash for clunkers idea, where you can turn in an old vehicle and hopefully get a new, efficient one that's made in the United States, all of that is about job creation here and creating demand here.

BLITZER: We've got to leave it there.

Governor, good luck.

GRANHOLM: Thanks, Wolf.

BLITZER: Governor Jennifer Granholm of Michigan.

If money is a motivator, then part of the auto overall plan might just entice you to trade up. The president today pointed to legislation that would provide vouchers to people who trade in their old cars for new ones.

Let's go to our Congressional Correspondent Brianna Keilar. She's looking at this part of the story -- Brianna.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, President Obama was tough on Detroit today, but he's also pushing a plan that would help auto sales, and it's a plan that's already in the works here on Capitol Hill.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Turn in your gas-guzzler, get up to $4,500 to spend on a new car. That's the so-called Clash for Clunkers proposal President Obama is pushing.

OBAMA: Such fleet modernization programs which provide a generous credit to consumers who turn in old, less fuel-efficient cars and purchase cleaner cars have been successful in boosting auto sales in a number of European countries.

KEILAR: True, says Karl Brauer, with the Edmunds Car Buying Guide.

KARL BRAUER, EDMUNDS.COM: Certainly in the short term, the program in Europe seems to be working, because there's been about a 20 percent bump in new car sales in both Germany and Italy. So, again, at this point in time, it seems to be effective.

KEILAR: Backers of the proposal say it could get as many as one million older vehicles off the road each year, but experts say completely scrapping bigger cars that are still in good condition could actually hurt the environment.

BRAUER: One of the biggest concerns of a program like this is that you're getting a net negative versus positive in terms of environmental benefit. When you have a fully functioning vehicle that runs fine, and you crush it to replace it with a new vehicle that runs fine, you've actually wasted a lot of energy because the existing vehicle had already gone through the whole assembly process, and that takes a lot of energy.

(END VIDEOTAPE)

BLITZER: Brianna, explain a little bit more about this plan, what kind of cars would be eligible, not eligible, to sell or to buy.

KEILAR: Well, the older vehicle that we understand, Wolf, would be totally scrapped would need to get 18 miles per gallon or less. And the newer vehicle would have to have an above-average fuel economy. In fact, 25 percent above the average for its class. As well, the new vehicle would need to cost $45,000 or less.

Those are some key points in the plan already introduced in the Senate, Wolf. Details though could change.

BLITZER: Details to come. All right. Thanks very much for that, Brianna.

One of the White House's newest assets, the first lady, Michelle Obama, how her star power could help the president on his first European trip.

Plus, this video captured attention, a police officer refusing to let an NFL player inside a hospital to be at the bedside of a dying relative. What the officer is now saying that adds a new twist to this story.

(COMMERCIAL BREAK)

(NEWSBREAK)

(COMMERCIAL BREAK)

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

Happening now, President Obama prepares for the G-20 economic summit in London. Will the trip put him at odds with European counterparts on the defense over the U.S. standing in the world?

And flooded, snowed under, and not even close to being out of the woods, at least not yet. I'll speak about what's happening in Fargo, North Dakota, with the mayor, Dennis Walaker.

Stand by for that.

And how news of the late actress Natasha Richardson's accident may have saved a little girl's life.

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

President Obama's moving forward with his new strategy for the war in Afghanistan. And one journalist has a provocative idea, that the U.S. could use the help of two adversaries, Syria and Iran.

(BEGIN VIDEOTAPE)

BLITZER: Joining us now, Sy Hersh. He's the writer for "The New Yorker" magazine, has a new article just has come out involving Syria and Iran, a lot of hotspots.

Take a look behind you at that map, Sy. You see Syria, Iraq, Lebanon, Iran, Afghanistan. And here's what you write, you almost conclude, in your article in "The New Yorker": "Syria also can help the U.S. engage with Iran. And the Iranians, in turn, could become an ally in neighboring Afghanistan, as the Obama administration struggles to deal with the Taliban threat and its deepening involvement in that country, and to maintain its longstanding commitment to the well-being of Israel."

Wow. Syria and Iran, all of a sudden, they're going to be allies of the U.S.?

SEYMOUR HERSH, INVESTIGATIVE REPORTER, "THE NEW YORKER": Well, don't forget, after -- after 9/11, the Iranians in particular never liked the Taliban. Iran, Shia, the Taliban are Sunni. And so they supported for years the Karzai government. The Iranians...

(CROSSTALK)

BLITZER: So, what you're saying -- and correct me if I'm wrong -- is that there's a scenario out there in which the U.S. could find itself on the same page as both Syria and Iran.

HERSH: When it comes to stability in Afghanistan, which is very tricky, as you know. We're just beginning to step into it again, this administration, into Afghanistan all over.

But, more importantly, I think, Bashar Assad of Syria's been saying for years, we can help you guys, telling this to the Americans, who were not listening in the Bush administration, we can help you stabilize Iraq, that we have a lot of influence in Iraq, we're fellow members of the Baath Party. We can help calm things down.

BLITZER: And what you're writing about is the secret negotiations that have been going on indirectly between Israel and Syria for more than a year with Turkey's direct involvement.

HERSH: Yes. They're not secret very much anymore.

But what I did learn before the Gaza war, I learned that there was amazing progress had been made internally between the Israelis and the Syrians. A lot had already been made in earlier discussions. But they really resolved a lot of issues. It's just a question of political will. And I was preparing a piece for "The New Yorker" before the Gaza war that was going to say things look good.

Comes Gaza. Afterwards, I sent...

(CROSSTALK)

BLITZER: Because you spent some time with President Bashar Assad in Damascus.

HERSH: And a lot of other people.

(CROSSTALK)

BLITZER: You think he's ready for a deal with Israel?

HERSH: I think he really wants the Obama administration to be on his side.

I think he's -- like a lot of people in the Mideast, they're very relieved to be rid of the Bush administration. They're looking forward to more amicable relations. Don't forget Obama's talking about mutual respect with Iran. He has said that phrase two or three times already.

BLITZER: But do you think he's ready for a deal with Israel, a peace treaty?

HERSH: I think he thinks that the terms since Gaza -- the Syrian view is that the Israelis did not get what they wanted out of the Gaza war. Hamas is still there. Hamas wins by surviving.

They spent 22 days bombing. They lost a lot of favor -- look, they're not nearly as popular. Even in America there is a lot of disquiet among American Jews about what happened.

BLITZER: But am I hearing you say that you think Bashar al- Assad, the president of Syria, is ready to negotiate a peace treaty arrangement with Israel?

HERSH: It's much more than what I think.

He has said so to me. He is ready to sit down seriously and discuss it with Israel. He wants -- he's got conditions. He wants America to play the middle role. He wants us to be in the middle. He also believes, and I think this is part of his longstanding theory about the Middle East, that if he can't get us going, we can get into a regional discussion and he would love to see the United States bring be willing to let Iran get involved in these talks, too.

BLITZER: Here is another quote from the article in "The New Yorker" entitled, "Syria Calling."

"Cheney," the former vice president, "who worked closely with the Israeli leadership in the lead up to the Gaza war, portrayed Obama to the Israelis as pro-Palestinian who would not support their efforts and in private disparaged Obama, referring to him at one point as someone who would, quote, 'Never make it in the major leagues.'"

The question is this, the vice president, former vice president of the United States saying these things about the current president of the United States?

HERSH: Well, are you surprised that a Republican vice president would be unhappy to see a Democratic vice president come in who he doesn't think is terribly experienced in foreign policy? No, I don't think these are this is not surprising to anybody. Cheney was...

BLITZER: The fact that you say that he says to the Israelis that Obama is pro-Palestinian.

HERSH: Here's what happened. Before the inauguration, January 20, is the Obama transition team sent messages to the Israelis saying, "We don't want you bombing Gaza during the inauguration. We want that over before the inauguration."

The Israelis, as I understand it, passed word, they complained to Cheney, Cheney who knows General Jones, who was then the national security adviser in waiting, he wasn't in the job yet.

BLITZER: General James Jones.

HERSH: Yes, the Marine. And he has very good relationships...

BLITZER: He's now the national security adviser at the White House.

HERSH: Yes. Jones -- Jones is a listener. He has got very good relationships with all sides.

So, Cheney talked to Jones and expressed what happened. Jones went to Obama and said you can get what you want, but you have to give the Israelis something. And one of the things that was going on was resupply of smart bombs and other ordnance, bunker busters, to the Israelis.

And that continued for I don't know how many days, but certainly beyond the 20th. Obama, that was sort of a quid pro quo. Obama said to the Israelis, his message to Israel basically, look, I'm totally committed to you. It may not be a blank check as much as you want, but we're committed to Israel.

And so here comes Bashar saying on the other end, hey guys, I am also committed to doing something with Israel on the Golan Heights, we want a regional conference, we want to bring in Iran which he argues this could be very useful for the United States and his problems with Afghanistan and Iran. Why not bring in more people? A very tough diplomatic issue.

BLITZER: Let me speaking about the former vice president, Dick Cheney, you said some controversial remarks a few weeks ago. I want to give our viewers some background and then we'll discuss. Listen to this.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ANNOUNCER:

HERSH: It's an executive assassination wing, essentially. It's the Joint Special Operations Command, JSOC, it's called. They do not report to anybody except in the Clinton in the Bush Cheney days they reported directly to the Cheney office under President Bush, whose authority they've been going into countries, not talking to the ambassador or the CIA station chief and finding people on a list and executing and leaving.

(END AUDIO CLIP)

BLITZER (voice-over): A Special Operations Command spokesman rejects the report. Says their forces operate under established rules of engagement and the law of armed conflict. He adds that the vice president has no command and control authorities over the U.S. military. Two former Cheney aides also reject the claim, as does the former Bush homeland security adviser, now a national security analyst.

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: There is no such squad wandering the Earth. They don't do this. There is no such thing.

BLITZER: Assassinating political leaders has been banned since 1976. But suspected terrorists are a different story. When it comes to top al Qaeda leaders like Osama bin Laden, American policy remains unambiguous.

OBAMA: That we must take out Osama bin Laden and his lieutenants.

BLITZER: Abu Musab al Zarqawi is the highest profile commander killed by American forces so far. Former national security adviser Townsend says the list of authorized terror targets is less than 100, people who can be killed without a trial.

TOWNSEND: These are individuals who either had a lot of Americans on their hands or are plotting the death and destruction of Americans or American interests around the world and those individuals, the U.S. military and the intelligence services, are given authority to capture or kill them wherever they're found.

BLITZER: And who makes the list of targets for the president to sign off on?

TOWNSEND: It's military, it's intelligence, it's law enforcement, the Justice Department, there is a lawyers' committee of lawyers that look at these sort of issues and so it's a very rigorous interagency across the government.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

BLITZER: All right. Those were fascinating comments you made. It caused quite a stir when you said at a lecture out there. I wonder if you want to revise or amend or explain?

HERSH: Yes.

Well, of course, I used the word assassination wing which is loaded and I must drive my editors crazy when I say things that are loaded. But let me say this.

Everything I wrote about, everything I said in that article was written, has been written over the years in "The New Yorker." The basic premise that I was saying is there is a unit known as the Joint Special Operations Command, JSOC, it's a separately independent unit that does not report to Congress, at least in the years I know about and I spent people read a story I wrote last story in the New York that congresspeople are very upset at the senior leadership.

It has been given executive authority by the president in as many as 12 countries to go in and kill we're talking about high value targets. That's absolutely correct.

BLITZER: Is there anything wrong with that?

HERSH: Oh, sure. Because what's the intelligence basis? What's the legal basis for that?

BLITZER: If Osama bin Laden, for example, or Ayman al-Zawahri, the number two al Qaeda leader, the former president and the current president basically have said that if they were available to be taken out they'd be taken out.

HERSH: The idea that you're telling a group of American combat soldiers, who by the way I have no bone to pick with, as I said even at the University of Minnesota, that speech, these guys are doing, they are admirable people doing their job.

The idea that we have a unit set up who goes after high-value targets who up to a certain point I know for sure until very recently were clearing lists. That doesn't mean Cheney has an assassination unit that he says I want to go get somebody. That's how it sort of played out in the press.

The idea that we have a unit that goes around and without reporting to Congress, Congress knows very little about this group, can't get clearings, can't get hearings, can't get even a classified hearings on it. Congresspeople have told me this.

Those are out and has authority for the president to go into a country without telling the CIA station chief or the ambassador and whack somebody and I'm sorry, Wolf, I have a lot of problems with that.

(CROSSTALK)

BLITZER: What about when they send these -- they send these unmanned drones over Pakistan, there is a house, and they say shoot that missile into that house and kill someone, then they cross off the name? Is that an assassination?

(CROSSTALK)

HERSH: If it is done by JSOC and they have reason to think there's a high-value target in there...

BLITZER: What if it's done by the CIA?

HERSH: Well, the CIA -- when -- the CIA has learned a lesson. The reason that I could write a story last summer in "The New Yorker" about it, there was a joint operation inside Iran involving JSOC and the CIA and the CIA wanted to go to Congress and they wanted to get authority. They wanted to get something known as a presidential finding. That is how Congress got a smell of how much is going on.

There is a lot going on that I wrote about and I have written about before. It's not the phrase I said...

BLITZER: When you said executive assassination ring...

HERSH: No, I said "wing", actually.

BLITZER: Well, is it "ring" or "wing"?

HERSH: "Wing." I said "wing."

BLITZER: Wing, all right.

HERSH: But that's all right. It's the same point.

BLITZER: Yes.

HERSH: It was -- I wish I had -- dum-dum. I wish I had said something different, something more careful, because it's a loaded phrase.

It comes down to the same thing, that you can -- you've delegated authority to troops in the field to hit people on the basis of whatever intelligence they think is good and I can tell you it's always not good and sometimes things get very bloody. Yes JSOC is not a new phenomenon. It's been written about. In fact, in his latest book Bob Woodward has a page about it, basically more praiseful than I would be in terms of how effective they were against al Qaeda in Iraq.

The bottom line is, it's -- if it were the way your little presentation set up, that everything was checked and cleared, in fact, it was an awful lot of delegation to this group, which does not brief the Congress. And this does raise profound questions of constitutional authority.

It's the same questions that have come up repeatedly in the Bush administration. That is a unitarian president, the notion that a president can do things without telling Congress and unilaterally. This is an extension of that issue.

BLITZER: Sy Hersh, thanks for coming in.

HERSH: Sure.

(END VIDEOTAPE)

BLITZER: All right, you just heard Sy Hersh's claims about the former vice president, Dick Cheney, and a supposed terror assassination squad. We're going to be hearing from Dick Cheney's former national security adviser, John Hannah. He's here in THE SITUATION ROOM. We will get his response point by point by point.

And, in our "Strategy Session," President Obama as firer in chief. Why didn't he consult Congress before forcing out the CEO of General Motors?

And how Michelle Obama may help her husband on his debut trip as president to Europe. We have new information about the role she is about to play.

(COMMERCIAL BREAK)

BLITZER: Now we continue to look into a startling claim linking the former vice president, Dick Cheney, to an alleged assassination hit list in the war on terror.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now is John Hannah. He's the former national security adviser to the former vice president, Dick Cheney.

You spent quite a lot of time working for Dick Cheney. You're now a senior fellow at the Washington Institute for Near East Policy.

You heard what Sy Hersh had to say about your former boss, Dick Cheney, and what he calls this "assassination wing," an executive assassination wing. Is it true?

JOHN HANNAH, FORMER NATIONAL SECURITY ADVISER TO DICK CHENEY: It's not true.

And I think you heard in that interview that there was a little walking back from the original claim that was made in the speech that Mr. Hersh made in...

(CROSSTALK)

BLITZER: Explain exactly what's going on in terms of a list. Is there a list of terrorists, suspected terrorists, out there who can be assassinated?

HANNAH: There is -- there's clearly a group of people that go through a very extremely well-vetted process -- interagency process, as I think was explained in your piece, that have committed acts of war against the United States, who are at war with the United States, or is suspected of planning operations of war against the United States, who authority is given, to our troops in the field in certain war theaters to capture or kill those individuals.

That is certainly true.

BLITZER: And it starts with Osama bin Laden?

HANNAH: Osama bin Laden and his number two are right at the top of the list.

BLITZER: And there is about 100 of these suspects out there?

HANNAH: I don't want to get into any exact numbers. It is a small group and the point is that it is very, very heavily vetted throughout the interagency process...

(CROSSTALK)

BLITZER: And when he says this JSOC, the Joint Special Operations Command, has this authority, that they don't even tell Congress about that.

HANNAH: It is extremely hard for me to believe. I don't know exactly what the consultations are with the Congress, but it's hard for me to believe that those committee chairman and the leadership on the Hill involved in intelligence and armed services, if they want to know about these operations, cannot get that information through the Defense Department.

BLITZER: And so this would be -- from your perspective, and you worked in the Bush administration for many years, it would be totally constitutional, totally legal to go out and find these guys and to whack them?

HANNAH: There is no question. And in a theater of war, when we are at war, and there's no doubt, we are still at war against al Qaeda in Iraq, al Qaeda in Afghanistan, and on that Pakistani border, that our troops have the authority to go out after and capture and kill the enemy, including the leadership of the enemy.

BLITZER: All right.

Let's talk about the other explosive suggestion that Sy Hersh writes about in "The New Yorker" magazine, that Dick Cheney, when he was vice president, told the Israelis privately that President Obama, then-candidate Obama -- or president-elect Obama -- was pro- Palestinian.

HANNAH: Yes.

With all due respect to Mr. Hersh, it -- and it's a very good article, but that claim, putting words into the vice president's mouth, is just absolutely contrary to any reality that I live with. In fact, the entire lead-up to the transition to Inauguration, the vice president was extremely complimentary about some of the national security picks President Obama had put into place.

BLITZER: "In private," Sy Hersh writes, "Cheney disparaged Obama, referring to him at one point to the Israelis as someone who would never make it in the major leagues. "

HANNAH: Again, completely contrary to my own experience with the vice president, either at that time or in the previous eight years that he would make any such kind of comment.

BLITZER: Because in the interview with John King here on CNN a few weeks ago, he did say he believed that the position was that President Obama has taken since office has made the United States less secure.

HANNAH: There's a difference, Wolf, between disagreements about policy that the vice president may or may not have with the current administration's efforts in the Middle East or elsewhere around the world, and putting into his mouth words that he has never spoken that attempt to personalize this, to an issue between the president and the vice president -- the former vice president.

They are just two completely different things. We can talk about policy differences, but to claim that the vice president is accusing President Obama of being pro-Palestinian or not up to the job of commander-in-chief, I just think is contrary to the facts.

BLITZER: John Hannah, thanks for coming in.

HANNAH: Sure.

(END VIDEOTAPE)

BLITZER: The White House takes a wheel, and the big boss at the auto giant GM is out.

(BEGIN VIDEO CLIP)

OBAMA: Let me be clear. The United States government has no interest in running GM. We have no intention of running GM.

(END VIDEO CLIP)

BLITZER: But the government did step into to the auto business in a very big way today. Does the president have too much say in what is going on? We're going to tackle this in today's "Strategy Session."

And new pictures revealing a North Korean missile launch imminent -- why experts say, even if this is just a satellite, it's still a huge deal.

(COMMERCIAL BREAK) BLITZER: President Obama orders GM, the CEO, to resign. Is it appropriate for a president of the United States effectively to fire the head of the company?

Let's talk about it in our "Strategy Session" with Democratic strategist and CNN political contributor Hilary Rosen and Republican strategist Tony Blankley. He once served as spokesman for the former House Speaker Newt Gingrich.

Is it appropriate, or is it going too far?

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Well, I think he -- look, the American people are counting on him to spend our money wisely.

And they did an evaluation and decided that GM was just not moving quickly enough on a path to recovery. And what the president did today, I think, was save almost a million jobs by saying, we have got to have a viable auto industry, I'm committed to it, but we have got to have changes.

BLITZER: Because some people say, you know, sometimes, you need to fire the head coach in order to get the team going again.

TONY BLANKLEY, REPUBLICAN STRATEGIST: I think the line between the public and the private sector has become very murky. And I think the government needs to move carefully through this zone.

The authority -- I don't -- I'm not sure what legal authority exists, for instance, to guarantee, with the taxpayers' dollars, warranties. Maybe that -- that authority exists. Maybe it needs to be gained through legislation or regulation. But it's all a little vague.

And the danger, of course, among others, is, at some point, this will end up litigated in the Supreme Court, because some shareholder or someone...

(CROSSTALK)

BLITZER: Because when they -- the U.S. government started bailing out, for example, AIG or Fannie Mae and Freddie Mac, they insisted that the CEOs go as well.

(CROSSTALK)

BLANKLEY: But there's a difference, because, of course, in the financial sector, they're -- the financial institutions are already pretty strongly regulated. And the government already has the authority to step in. In the non-financial sector, I think that's a much grayer zone right now.

BLITZER: You -- but, you know, the way they did it, the White House, without consulting with the governor of Michigan, without consulting with Carl Levin, a senior Democratic senator from Michigan, is that the right way to do this, just to go ahead and tell them, we have made this decision; Wagoner, the CEO, is gone?

ROSEN: I think that the elected officials really just wanted a commitment from the president that this sector would -- would remain viable, that the U.S. was committed to these jobs, and that we knew that we had to take a hard look at this, but that, ultimately, we needed to do something to protect...

(CROSSTALK)

BLITZER: Because it's not over yet. They have to come up with a plan in 30 or 60 days...

ROSEN: The -- the fact that he didn't ask politicians for their opinion, I think, probably was the -- you know, serves him well, and over the long term, makes this decision less political and more about doing what is right.

BLITZER: I did hear clearly from the president of the United States saying, you know what, bankruptcy is definitely on the table for GM and Chrysler.

BLANKLEY: Yes.

One of the things that you always look at in government is, operational stuff should usually come out of the agencies. And White House should try to avoid operational -- sort of like Ollie North did back when. Operationing out of the White House wasn't a good idea.

You know, I don't know whether this was actually technically run out of the Treasury agency or whether it was technically run out of the White House, but, as a general proposition, it's more prophylactic for it to happen out of an agency that oversees.

BLITZER: We will leave it there, guys. Thanks very much.

The Obamas are making changes to America's house. There's new information about where the redecorating budget is coming from.

And the president getting ready to head over to Europe, where he's popular, but his economic policies, not so much.

And a deadly siege by gunmen in Pakistan just days after President Obama pledged to help that country fight militants.

(COMMERCIAL BREAK)

BLITZER: Tomorrow, President Obama heads to Europe for his first overseas trip as president of the United States.

What do you think is the most important thing he needs to do while he's there? Send us your comments to Ireport.com/situationroom and watch tomorrow's show to see your video on the air.

On our "Political Ticker": Republican Congressman Peter Hoekstra says he's running for Michigan governor. He told a local radio show today that his business skills would help rebuild and reinvigorate the state. Hoekstra is the latest Republican to jump into the race to replace Democratic Governor Jennifer Granholm. She's barred from running again because of term limits.

President and Mrs. Obama are using their own money to redecorate the Oval Office and the White House residence. The first couple has decided not to accept $100,000 in federal funds traditionally allotted for new presidents to make -- to make their new home their own. The Obamas also are turning down money from the White House Historical Association to finance a new set of china.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: President Obama's ready for his first big appearance out there on the world stage, but his counterparts at this week's economic summit in Europe may be blaming America for the global meltdown, and they may blast the president for his attempts to fix it. We're watching it.

A bloody attack on a police academy -- militants kill trainees with guns and grenades. How much more can Pakistan's fragile government take?

And the waters are no longer rising, but Fargo officials say their battle over the flood is not over yet. Residents are now facing a blizzard.

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

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