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Racial Tinge to Tea Movement; President Pushback Against Socialist Label; Former Jimmy Carter Press Secretary Jody Powell Dies

Aired September 14, 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: Thanks very much for that. We'll stay on top of that story.

And to our viewers here in THE SITUATION ROOM, happening now. Breaking news, a body found inside the wall of a Yale University lab has just been identified as that of a graduate student who disappeared last week. Now, the investigation moves to the next level as police narrow their list of possible suspects.

Extraordinary video highlighting the deadly and increasing danger U.S. forces are facing from roadside bombs in Afghanistan. Only this time, the effort to kill Americans backfires.

Findings that will disturb anyone who uses a BlackBerry or a cell phone. Details of a new study on the cancer risks all of us may -- repeat, may be facing.

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

But first we're following the breaking news this hour, the positive identification of Annie Le's body found stuffed in a wall of a Yale University lab only yesterday, the same day the 24-year-old graduate student was supposed to be married. Now the question, who killed her, and why?

Let's go to the scene. CNN's Mary Snow is in New Haven getting the latest information for us. What do we know about this investigation, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we do know from the medical examiner's office that they're saying in order to facilitate the investigation they are temporarily not releasing the cause of death. And the president of Yale University just addressed students and faculty members a short time ago saying that he has a lot of hope and confidence that a culprit will be caught and arrested, but he can't give the time frame of that arrest.

What Yale's president is saying that there is a limited number of people in that basement of the research building behind me where Annie Le's body was found, and he said the number of people that were there or the names of the people that were there, have been turned over to the police.

The police have been very tight-lipped about this today. They insist that they do not have suspects. They say they are questioning many people, but they do say that this was not a random act -- Wolf. BLITZER: And it comes at a time of the start of a new school year at Yale. What's been the reaction on campus?

SNOW: Very chilling, and students are obviously very frightened by this. And as one professor told us, you really get the sense that there is a murderer among us.

A number of students that we talked to say overall they do not feel all that scared. They point out there are many security cameras around campus, but they also say that they are also aware that not every place has a security camera, and we talked to one medical researcher not far from where the building where Annie Le's body was discovered. She told us this.

(BEGIN VIDEO CLIP)

YAN HUA, YALE RESEARCH SCIENTIST: So think about the security system here because I think most of us work very hard here. We work during the night and also the weekend also, so there are not too many people around, you know, when we are here during the night, during the weekend.

(END VIDEO CLIP)

SNOW: And, Wolf, a Yale official told me that it's not believed there were any security cameras in that basement where Annie Le's body was found, although there were many dozens outside the building that they do not have that camera inside the building. And we also want to mention there is going to be a vigil tonight here on the campus at 8:00 p.m. Eastern -- Wolf.

BLITZER: Mary Snow is on the scene for us. Let's get some more on those surveillance cameras and how they may help investigators solve Annie Le's murder mystery. CNN's Jeanne Meserve is looking at this part of the story for us.

Jeanne, these cameras could be critical to the investigation.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: That's right, Wolf. You know, the case of Annie Le is demonstrating once again that security cameras can be very important and key in any criminal investigation.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): A security camera captured Annie Le walking into the Yale research facility on Amistad Street, but there was no picture of her coming out which helped focus the search for her body. It remains to be seen if the more than 70 surveillance cameras in and around the building will help identify or convict a suspect.

Surveillance cameras have become commonplace on college campuses. At the University of Maryland college park, there are more than 300. They are monitored around the clock, and the images are stored for three weeks. Campus police even capture pictures of every car entering the campus, including snaps of their license plates. Police say it has helped cut the crime rate on campus to a ten-year low.

MAJ. JAY GRUBER, UNIV. OF MARYLAND PUBLIC SAFETY: The success stories are endless. We've solved carjackings. We've solved arsons. We've solved arm robberies, multiple felony thefts. So they've been very, very successful for us.

MESERVE: But no one believes security cameras are a panacea. Though they occasionally catch a crime in progress, they are usually used as a forensic tool to aid investigations like the one being conducted now into the death of Annie Le.

(END VIDEOTAPE)

MESERVE: As far as we can determine, there are no national guidelines on how colleges and universities should deploy surveillance cameras, probably because every campus is unique in terms of size, layout and the threat of crime.

Wolf, back to you.

BLITZER: Jeanne Meserve, thanks very much.

Let's get some more now on Annie Le and this case. We're joined by Thomas Kaplan, who's editor-in-chief of "The Yale Daily News."

Thomas, very much for coming in. How shaken is the Yale campus right now?

THOMAS KAPLAN, "YALE DAILY NEWS": Well, I think this is really a campus in shock. I mean, just the idea that a Yale student was killed in a busy academic building in broad daylight, it's just really horrifying I think to everyone in this community.

BLITZER: So, are students sort of walking in teams, in pairs, they're not going around by themselves? What are they doing during these very, very sensitive hours?

KAPLAN: Well, I think right now, you know, we're assured by the police that this was not, you know, this was not a random act. So I think that has calmed people down a little bit just because, you know, the idea is this was not a robbery gone wrong, something like that. But the idea really is that this is probably a case of a murderer on the loose on campus given the fact you needed a Yale I.D. to get into the basement where Annie's body was found, and that's what's so scary.

BLITZER: Are you familiar with that building, Thomas?

KAPLAN: I am not. The central campus where most undergraduates live is physically separate from the medical school where this building is. But we've learned about it in the past couple of days, and it's the type of thing where you needed to swipe an I.D. card to go pretty much anywhere which hopefully will help investigators.

BLITZER: I was just a few weeks ago in New Haven. A lot of people don't realize that Yale is really built all over the city of New Haven. It's almost like a city campus. KAPLAN: Yes. No, that's the thing. I mean, it's a large campus that runs very far sort of north-south, and this is a campus that's really integrated into the city. It's not kind of a campus with a big wall around it.

BLITZER: How are people remembering Annie Le? I suspect you didn't personally know her, but she probably had a lot of friends, and everything I've read about her and heard about her, she was really an extraordinary young woman.

KAPLAN: She was. I mean, she really had everything going for her. She was a top scholar. She was -- she was very outgoing, a warm person. You know, she was diminutive in stature but certainly not in personality, and that's what I think just makes this so sad for everyone regardless of whether you knew her. It's just a tragedy.

BLITZER: Tell us about you personally, Thomas, how has this affected you?

KAPLAN: Well, I mean, I think it just does give you pause. You know, I think we really trust that when we're in Yale buildings, when we're in, you know, the heart of campus, the safety of campus buildings, you don't really think about anything like this ever happening. But the fact of the matter is, as I said, only -- only Yalies had access to that basement and that seems to point to someone in our community being involved in this, and that's what's so frightening.

BLITZER: And at least as of right now, we don't -- we don't know of any arrests, at least not yet, that would suggest the suspect, the killer is still at large.

KAPLAN: That is true. And I think that's what people are frightened about. But the hope is, given the number of surveillance cameras, given the I.D. cards you had to swipe, that investigators at least have enough evidence to go off of, that they can kind of narrow down a pool of people who were in the vicinity and hopefully bring some closure to this sooner rather than later.

BLITZER: Thomas Kaplan is the editor-in-chief of "The Yale Daily News." Thomas, good luck over there, and to everyone else at Yale. Thanks for helping us better appreciate what's going on.

KAPLAN: Thank you.

BLITZER: Let's go to Jack Cafferty right now. He's got "The Cafferty Files."

It's a nightmare on any college campus, Jack, as you can appreciate it.

JACK CAFFERTY, CNN CORRESPONDENT: It's a horrible story, but the young man's point about needing an I.D. to get into that building where this murder apparently happened should -- should make things a little bit easier for investigators. Let's hope they get this thing solved quickly. If health care reform happens, if it happens, and at this point that's still a big if, it's looking less and less likely now that a so-called public option is going to be a part of it.

Senator Olympia Snowe about the only Republican working with the White House on all of this says there is no way that a plan that includes a public option can pass the Senate. Snowe says President Obama should drop the idea of a government-backed insurance program in order to get more backing from Republicans. Quoting her now, "I've urged the president to take the public option off the table. It's universally opposed by Republicans."

And two other top senators, one Democrat, one Republican, say that the House version of the health care bill, the one that does include the public option is dead, and the only chance for reform lies with a compromise bill that's still being hammered out in the Senate.

Meanwhile, some Democrats and the White House are trying to downplay the importance of a public option saying it's not a deal- breaker and that it's just one way to reach the president's goal of covering an estimated 46 million uninsured Americans. Democrats are saying things like that's a small part of this, or there's more than one way to skin that cat. But the fact of the matter is, a lot of people insist that without a public option to compete with the private insurance companies, health care reform is meaningless.

The president says he still backs a public plan but that he's also open to other ways to create more competition. So here's the question. Is it really health care reform without the public option? Go to CNN.com/caffertyfile to post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

We're getting word of breaking news. A terror-related raid in New York City. Officials concerned enough to brief some top lawmakers here in Washington.

We're getting new details. They're coming in. Stand by.

Also, they are anti-tax, anti-government and a small but disturbing minority within the tea party movement. It's also blatantly anti-black. How does racism figure into the cause?

Plus, a roadside bomb intended for Americans kills the militants planting it instead. We have the extraordinary surveillance video shot from an Apache helicopter.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: And the breaking news involves a terrorism-related raid in New York City, and now authorities are briefing key members of the U.S. Congress which suggests this is a big deal.

Let's go to our Homeland Security correspondent Jeanne Meserve. She's got the details. What are we learning, Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, frankly, Wolf, we don't know very much at this point in time. Federal agencies and departments all across Washington are being incredibly closed-mouth about these terror-related raids in New York City but as you say, it is important enough that apparently some members of Congress are being briefed.

We're told that Congressman Benny Thompson was briefed. His spokeswoman says he does not want to say anything more about it because it was classified.

We know that Congressman Peter King of New York, who's the ranking minority member on the House Homeland Security Committee is going in for a briefing at about this hour. A And we understand from "The Associated Press" that Senator Charles Schumer has been briefed. He told "The Associated Press" there was nothing imminent, and they are very good at tracking potentially dangerous actions, and this was preventive. But the fact that agencies are being so closed-mouth all across the federal government is an indication perhaps that this is some sort of ongoing investigation, but we have absolutely no details at this point in time.

BLITZER: We don't know if arrests of individuals have been picked up yet?

MESERVE: Not at this point in time, no. We'll bring you the latest when we have it.

BLITZER: Thanks very much, Jeanne, for that.

We're following other important news as well including what's going on right now involving U.S. troops in Afghanistan. U.S. military deaths there are now at a record high due to roadside bombs, and now we've obtained some stunning images showing a bomb literally backfiring on the militants planting them themselves.

Our Pentagon correspondent Barbara Starr has pictures and the details -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, the debate about whether to send more troops to Afghanistan is becoming more urgent.

(BEGIN VIDEOTAPE)

STARR (voice-over): In an extraordinary video, U.S. Apache helicopters in southern Afghanistan watch as insurgents appear to be burying more improvised explosive devices in the ground.

UNIDENTIFIED MALE: They're definitely digging another one up.

UNIDENTIFIED MALE: What's this.

STARR: The IED threat is so bad the Pentagon will send up to 3,000 additional forces, including troops to hunt IEDs and medical personnel to treat the growing number of wounded. Commanders say the troops are vital to protect units already there, but what about even more troops to expand combat operations? Some say it's a must.

GEN. MONTGOMERY MEIGS (RET), GEORGETOWN UNIVERSITY: We have harvested a whirlwind in the resurgence of the Taliban because we didn't have enough troops here. We didn't have a big enough effort.

STARR: But skepticism from Democrats and Republicans is growing.

SEN. SUSAN COLLINS (R), MAINE: I will tell you having spent two days there just last month that I just don't know that more troops is the answer.

STARR: Still, the threat skyrockets. The number of IEDs has jumped more than 300 percent since 2007. In this latest incident, the Apaches are ready to strike, but then a child wanders into the kill zone.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is that a kid? Damn it?

UNIDENTIFIED MALE: The kid appears to be carrying something over into the vicinity.

He's handing them something and they're digging in that road.

UNIDENTIFIED MALE: OK. Go away, kid. Go away kid. Go away kid.

(END VIDEO CLIP)

STARR: The child moves away but then --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (EXPLOSION) Whoa. Nevermind.

UNIDENTIFIED MALE: It just detonated by itself.

UNIDENTIFIED MALE: They just blew themselves up.

UNIDENTIFIED MALE: Confirmed. They just blew themselves up.

(END VIDEO CLIP)

(END VIDEOTAPE)

STARR: The raging debate about whether to send more troops to Afghanistan is likely to be front and center tomorrow morning when Admiral Mike Mullen appears before the Senate Armed Services Committee for a hearing to serve a second term as chairman of the Joint Chiefs of Staff. One Mullen aide already says that hearing is likely to be a referendum on the war -- Wolf.

BLITZER: We'll be watching that as well. Barbara, thank you. The Afghan president, by the way, Hamid Karzai, he's now going to be joining us right here in THE SITUATION ROOM on Thursday. We're going to talk about the soaring U.S. casualty rate, the country's contested elections, a lot more. The stakes for U.S. troops in Afghanistan right now are enormous as a result.

Please be sure to join us for this CNN exclusive, my interview with the Afghan president, Hamid Karzai, Thursday right here in THE SITUATION ROOM.

A hero's welcome is waiting for him, so why is the man who threw his shoes at President Bush finding his release from prison delayed?

Plus, a camera rolls as this plane comes in for an emergency landing. What went wrong, and what went right?

(COMMERCIAL BREAK)

BLITZER: Betty Nguyen is monitoring some other important stories incoming to THE SITUATION ROOM right now.

Betty, what's going on?

BETTY NGUYEN, CNN CORRESPONDENT: Hey there, Wolf. I wanted you to take a look at these stunning pictures that we have.

A German passenger jet makes an emergency landing on protective foam at Stuttgart Airport. Listen to that.

The plane have reported problems with its landing gear. It's obvious right there. A German political party official was among the 73 passengers, but they all got off on emergency slides. A spokesman for Lufthansa's contact air says one person was injured and a flight attendant was taken to the hospital for observation. That's a lucky group of people right there.

Children's right groups -- they are speaking out against forced marriage in Yemen after the shocking death of a pregnant girl. The 12-year-old was forced into marriage and then died a painful death during childbirth. Her baby also died. UNICEF and others have been pushing Yemen to ban the common practice of child marriage which it blames for the Arab country's high maternal mortality rate.

A swine flu vaccine. Well, it's going to be ready in early October. That's about two weeks earlier than expected. That is the word from the director of the Centers for Disease Control and Prevention. He spoke to CNN's "AMERICAN MORNING" about who should definitely be vaccinated.

(BEGIN VIDEO CLIP)

DR. THOMAS FRIEDEN, DIRECTOR, CDC: The people who should receive the swine flu vaccine or H1N1 vaccine are anyone with underlying health condition like diabetes, heart disease, lung disease, women who are pregnant, people with asthma. All of these individuals are at higher risk of getting really sick if they have influenza, and so should definitely get vaccinated.

(END VIDEO CLIP)

NGUYEN: All right. So hopefully you were taking notes there. The latest good news, though, about the H1N1 vaccine comes a week after researchers concluded that a single shot was enough to protect people against the virus.

All right. Check out this video.

Customers in a Washington State convenience store -- oh, my goodnesss -- got a shock when a herd of cattle, yes, barged in. Store cameras caught all the action as the cattle browsed the aisles. I guess they were looking for milk.

They were supposed to be going to the nearby fair when they took a sudden wrong turn. Yes. Cowboys on horseback, look at that, actually had to ride into the store, round them up and herd them out. They didn't walk in on foot. They actually had to ride in the store.

Wolf, can you say cleanup on aisle three.

BLITZER: Wow, that's amazing. I've never seen --

NGUYEN: Crazy.

BLITZER: You know, we've seen pictures of the animal that comes in to the 7-eleven.

NGUYEN: Right.

BLITZER: But a cowboy coming in on horseback to round up the cattle...

NGUYEN: One after the other.

BLITZER: ... that's pretty amazing video.

NGUYEN: Pretty cool.

BLITZER: I wonder how much damage they did to the --

NGUYEN: Oh, man. A lot of surprise. They didn't seem like too much. They were going neatly between the aisles.

BLITZER: Yes.

NGUYEN: So, hey, maybe they had some experience at that.

BLITZER: Amazing, look at this cowboy just coming in.

NGUYEN: It's nuts.

BLITZER: All right. Thanks very much, Betty, for that.

NGUYEN: Sure. BLITZER: President Obama says he's a strong believer in the power of the free market, but his critics say he's for big government policies. We're going to talk about the so-called socialism debate. That's coming up.

And contractors behaving badly. Concerns of recent obscene behavior by guards at the U.S. embassy in Kabul could put U.S. personnel in danger.

Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers here in THE SITUATION ROOM, happening now, the top South Carolina Republican Joe Wilson insists he's done apologizing for accusing President Obama of lying, but House Democrats appeared to be finalizing plans to bring to the floor a resolution of disapproval for his behavior.

Senate health care negotiators say they're close to a deal to stop illegal immigrants from getting government-subsidized health care. We're going to have an update on today's talks.

And the ACORN scandal. The liberal activist group helps low- income people get housing, so why did some staff advise on prostitution? And what does ACORN have to say about all of this? We'll interview a spokesman.

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

But first, more on the breaking news we're following this hour. The terrorism-related raid in New York City that's prompted investigators to brief the chairman and the ranking member of the House Homeland Security Committee.

CNN's Deborah Feyerick is joining us on the phone from New York with more.

Deb, what do we know?

Unfortunately, we've lost that connection with Deborah Feyerick. We're going to reconnect with her. We'll get that information to you.

What we know so far is that police, the joint terrorism task force in New York, they've moved in in an area in Queens, and they've decided that this is a threat potentially, potentially that required their activity. Right now, they started to brief members of Congress.

Deborah Feyerick is getting more information. We're going to reconnect with her momentarily and share with you what we know so far.

Meanwhile, they've come together under the tea party banner, but within the movement you're going to find individuals outraged over taxes, health reform, gun control and more. But most disturbing a very small but vocal minority, they are targeting President Obama's race. Let's go to CNN's Elaine Quijano. She's working the story for us.

Deb -- Elaine, excuse me, what are we seeing?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, we have to emphasize by far most tea party protesters are not casting their arguments in what could be seen as a racial light. But a small group of demonstrators is using a controversial image that's been circulating on the web since July.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): Within the larger tea party movement that's gained steam across the country, a small but passionate minority is also voicing what some see as racist rhetoric, including this doctored image circulating on the Internet and even some protesters signs like this one in Brighton, Michigan, portraying President Obama as a witch doctor. We took to the streets of Washington to get reaction.

UNIDENTIFIED FEMALE: I think it's disrespectful to the Office of the President to portray him in this manner. It's race -- it's racist.

UNIDENTIFIED FEMALE: This is appalling.

QUIJANO: Just how prevalent were the protesters carrying racially-charged messages? Difficult to quantify. CNN All Platform journalist Jim Spellman spent weeks covering the tea party demonstrators as a whole.

JIM SPELLMAN, CNN ALL PLATFORM JOURNALIST: Only a handful of people have outwardly have racial issues with the president, but the more you talk to people, you could sense that it was part of a larger distrust.

QUIJANO: For their party tea party leaders disavow any racist views.

MARK WILLIAMS, TEA PARTY ORGANIZER: I saw very little overt racism or anger, and those were on the fringes and were marginalized.

QUIJANO: They want attention focused on the role and reach of government into people's lives but say that controversial protesters have the right to speak their mind.

WILLIAMS: Part of America is that there are people who are bigoted, and, you know, you are never going to convince them not to be. You don't have to embrace them, but in this country you can't shut them up either.

QUIJANO: Chicago Tribune columnist Clarence Page sees the Obama presidency as a chance for some to lash out.

CLARENCE PAGE, CHICAGO TRIBUNE: People are not just mad at Obama. They are mad at Jesse Jackson. They are mad at Reverend Wright. They are made at Al Sharpton. They are mad at people who have nothing to do with Obama except they all happen to be black.

QUIJANO: Page says the vehemently racial resistance that's emerged is another sign any notion of a post-racial society after Barack Obama's election was wishful thinking.

PAGE: It's only the beginning of the process that we are able to live with leadership that may not look like us, may not come from the same background as us but is still part of this very diverse society.

(END VIDEOTAPE)

QUIJANO: Mark Williams, the tea party organizer we note to, says there's been inflammatory rhetoric in statements at events like anti- war demonstrations in the past, burning flags and hanging effigies. His point that like other grass roots movements that tea party protesters are a cross-section of America.

WOLF BLITZER, CNN ANCHOR: Elaine, thanks very much.

Let's talk about this more with Democratic strategist and CNN political contributor James Carville and Republican strategist Terry Holt.

Terry, it's a tiny fringe element but it's there.

TERRY HOLT, REPUBLICAN STRATEGIST: And it's everywhere across America. Racism exists in this country at any event you go to, particularly a political event, you're going to find obnoxious people in some number and you don't have to validate their presence, but let's be real here. Moveon.org was an out-of-control some say liberal, some say progressive organization that had a lot of crazy people attached to it, outlandish thins that they said during the war in Iraq, for example, burning the president in effigy. In America we have speech. We have obnoxious speech, and we can speak out against it, but ultimately this is America and people have a right to say what they want.

BLITZER: Yesterday John King had this exchange with the White House press secretary Robert Gibbs.

(BEGIN VIDEO CLIP)

JOHN KING, CNN CORRESPONDENT: Does the president believe that some of these attacks are based on his race?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think the president believes that people are upset because of the color of his skin.

(END VIDEO CLIP)

BLITZER: Do you believe that?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, sure. Some people are upset with President Obama because of the color of his skin. Who cannot believe that? The hero, Congressman Joe Wilson, he's a neo- confederate. Maybe the confederacy doesn't do anything with race but you'd have a hard time convincing any historian of that or anybody else, but he's now the new exalted one in the Republican Party

HOLT: That's not true, James. In this country people are angry because the government is growing out of control, because the government is spending money that it doesn't have. It is bankrupting our children's future on new big government programs.

CARVILLE: I know your talking points.

HOLT: That's why the people are activated. That's why they are angry and that's why they are organized.

CARVILLE: I understand the talking points.

HOLT: It's not a talking point, it's a plain fact. You've got government taking over health care. Government taking over businesses. Government taking telling people how much they can pay their employees and government taking over the energy policy.

CARVILLE: And I've got you taking over the conversation.

BLITZER: Go ahead, make your point.

CARVILLE: Again, the problem is the hero is a neo-confederate and that appeals to a certain element.

HOLT: That is not true.

CARVILLE: If they were worried about spending, why did they vote for the Iraq war with in funding, why did they vote for tax cuts or have Medicare part "D" with no funding? This is not about spending. Let's be honest. It was all fine when Bush was doing. It just became bad when Obama was doing it and people understand that.

BLITZER: Do you believe that?

HOLT: No, I don't. I think that this president has taken his model of what government should do and expanded it well past people's level of comfort. This government is trying to tell businesses how much they can pay their employees. They are trying to tell people what kind of light bulbs they can use in their house. People are rightfully concerned about the role and size of government.

CARVILLE: See, that's -- the government telling people what they can pay. You know what they call that, the minimum wage. Now that offends people -- that's very offensive. Medicare, the minimum wage, child labor laws, it's very offensive to people on the right, but you know what?

HOLT: I'm not opposed to minimum wage.

CARVILLE: I think that's the government telling people.

BLITZER: All right.

HOLT: That they have to pay a minimum, not that they pay the maximum.

BLITZER: There were signs, if you watch that, the protesters who descended on Washington over the weekend socialist, socialism, major signs like that. The president clearly made this point earlier today when he spoke on Wall Street.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have always been a strong believer in the power of the free market. I believe that jobs are best created not by government but by businesses and entrepreneurs. I did not run for president to bail out banks or intervene in capital markets, but it is important to note that the very absence of common sense regulations able to keep up with a fast paced financial sector is what created the need for that extraordinary intervention.

(END VIDEO CLIP)

BLITZER: Do you believe he's a socialist?

HOLT: Well, I wouldn't -- I wouldn't use the word. I just don't think it's an effective way to get your point across, but ultimately it's a sign of defense that he's on the podium talking about his belief in the free market system. The president of the United States of mark. I think he feels the sting of some of the policies and the reaction that people have had to those policies, and he feels he has to clarify a point that I think all of us just assume.

CARVILLE: Well, of course, he doesn't want to be in the banking business and the truth of the matter is Alan Greenspan said we're all wrong. These people on Wall Street need regulation, like children playing with matches. If it was the represent keen administration that let them go leveraged 20 to 1 or 40 to 1, a book was written saying this is all wrong. These people need supervision. The only people that say that these people don't need supervision and should be able to leverage as 100 to 1 are the tea baggers and the people out there and the extreme right wingers. The truth of the matter is the president is right but these people they need -- they need adult supervision.

BLITZER: There's a role for the FDC.

HOLT: Which adults, government adult or consumers and free people.

CARVILLE: You say let's take leverage to 100 to 1? That's who regulates it. Wo(ph) let them go. They took it to 40 to 1. If we're paying billions -- hundreds of billions of dollars, trillion dollars for AIG. They don't need regulation? They don't need one regulator. There was one regulator for AIG. One regulator for AIG and it's cost this government trillions of dollars.

BLITZER: Terry, you believe the federal government has a role in regulating industry.

HOLT: Certainly, but the government is not going to create enough jobs or create enough taxpayers by its programs to keep this country productive and growing so that people can have a better life. The private sector and business create jobs, and you have to let business do its job and create jobs in order -

CARVILLE: You need regulation. It's about regulation.

HOLT: If you choke the golden goose that lays the golden job egg.

CARVILLE: People ought to be able to put whatever polluters there are, no regulation. You can create all the jobs you want.

HOLT: The way you sound it sounds totally rational, but for some reason when the government gets involved it gets out of control.

CARVILLE: Let's get the government out of regulation.

BLITZER: How worried are you about the tone of the debate that's out there right now?

HOLT: Well, you know, this racism charge, Maureen Dowd's column the other day, it is meant to stoke the fires of fear and partisanship, and what we've seen over the last six or eight weeks in this country is the Democrats getting more intense and partially partisan, going after Joe Wilson, even after he apologized. You see the Republicans, they have seen some light. Now 85 percent of Republicans oppose the health care reform. What we're seeing is less and less room for bipartisan compromise, and that ultimately was what -- got Barack Obama elected so I think both parties should be concerned.

CARVILLE: Again, Wilson is a neo-confederate.

BLITZER: You're talking about Congressman Joe Wilson.

CARVILLE: That is the mainstream of the Republican Party. I'll say that Rick Perry is a little out of the mainstream who wants to secede.

BLITZER: In our brand new CNN Opinion Research Corporation poll in terms of his job approval number, two weeks ago 53 percent thought he was doing a good job and it's now up to 58 percent.

HOLT: He is a master of communication. His speech the other night was very effective. I don't think it did one iota of good in explaining to the American people this very complex reform proposal that he or the Senate Democrats or house Democrats have put forth, but when you see Barack Obama you want to like him, you want to trust him.

BLITZER: What does he need to do, the president, right now to finish this deal and get it passed?

CARVILLE: Get a bill. He obviously -- they got to go day and night. I mean, it's crunch time. They know that. Everybody knows it. The Republicans know it. They are saying it's waterloo, as if we stop this, we can bring his presidency down. That's clearly been the attitude since the get go. 183 Republican amendments out there accepted and, you know, that's just what it is. They are not going to work with him. I think he realizes that now. The main thing they got to do is get a bill.

HOLT: No president is at his strongest position when the public position by the White House is get a bill, any bill. I mean, that doesn't put him in a position of leadership. It doesn't make it so that he's going to have a strong position when he gets to the negotiating table. I'm concerned that if it's get any bill, it will be a bad bill.

CARVILLE: Inherent in this was get a good bill that Democrats can support.

BLITZER: Do you think any Republicans, Olympia Snowe, Susan Collins, are going to support this?

HOLT: If they had been a part of the discussion from the beginning --

BLITZER: Well, Olympia Snowe was a member of the gang of six.

HOLT: But the whole approach to the bipartisan approach that the Democrats in this White House put together was let's find one Republican, let's find two or three Republicans and we'll call whatever the product is bipartisan. A bipartisan process means that Republicans are at the table from the beginning and that just wasn't ever happening.

CARVILLE: For the record, they had three members on the Senate Finance Committee working day and night on this. There have been 83 amendments, but these are people that believes the earth is 5,000- year-old olds. No point in arguing with them.

BLITZER: We'll leave it on that point guys. Thanks very much for coming in.

Drunken, naked parties by private security guards at the U.S. embassy in Kabul. Are they putting the lives of American soldiers at risk? There's new fallout coming out today from pictures that really shocked a lot of us.

And one year after the biggest bankruptcy in American history how well has President Obama done in fixing the broken U.S. economy? We'll have a reality check.

(COMMERCIAL BREAK)

BLITZER: We have very sad news to report right now. Jody Powell, Jody Powell, the former White House press secretary to President Jimmy Carter, has died. We're getting information, died of a heart attack, this according to the Carter Center in Atlanta, Georgia. Let's bring back James Carville. You and I knew Jody Powell very well over many years. I remember covering the Carter administration. He was an excellent White House press secretary.

CARVILLE: He was, and the thing about Jody was everybody in Washington knows who is like a good guy and who is not, and I don't know of anybody that didn't think that Jody was a good guy, and, you know, we lost Mike Defer, you know, who was one of Reagan's top aides, thought to be a universally good guy and sometimes in Washington people see Democrats and Republicans and people in Washington see good guys and not so good guys and Jody was clearly a good guy. Just lovely people in every sense of the word.

BLITZER: I remember covering him when I covered the Jimmy Carter White House, especially during the time of the Camp David accord, the Israeli-Egyptian peace treaty. I traveled with President Carter in Egypt for the final round of negotiations leading up to the Israeli- Egyptian peace treaty back in 1979 and Jody Powell was very helpful to all of us. He was sort of the perfect kind of White House press secretary, the intermediate between the press corps.

CARVILLE: Right.

BLITZER: Which all of us were members of and the government which he also had to obviously represent.

CARVILLE: And he was unique in that he was really part of the inner circle. I mean, when he was a press secretary, he had obviously a very close relationship with president Carter, so if you were a press person, and I want here in Washington at the time, but not always sometimes is the press secretary who is a person, you know, who is on the outside of what's going on. In Jody's case he was probably as inside a press secretary in terms of policy as anybody in a long time.

BLITZER: Deepest condolences. He was born on September 30th, 1943. He was a young man.

CARVILLE: Yes, he was.

BLITZER: Thanks very much.

CARVILLE: Thank you.

BLITZER: Jody Powell, unfortunately, we have to report has died, the former White House press secretary under President Jimmy Carter, an all-around good guy.

Some are warning of a new threat to U.S. forces in Afghanistan, those pictures seen around the world of private American security contractors assigned to the U.S. embassy holding drunken, naked parties. Could those images lead to more American military deaths? Our foreign affairs correspondent Jill Dougherty is joining us now with more. Jill, what exactly are you hearing?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, you know, the State Department says it made a mistake trusting its troubled contractor to supervise guards at the embassy in Kabul, and today it said it's moving closer to pulling the plug on that contract.

(BEGIN VIDEOTAPE)

MICHAEL THIBAULT, COMMISSION ON WARTIME CONTRACTING: We've heard this morning about brothels. We've heard about human trafficking with this company. We've heard about lurid parties.

DOUGHERTY (voice-over): The State Department under fire for renewing contracts with a private security company guarding the U.S. embassy in Kabul, Afghanistan. Critics say the State Department should have known about obscene behavior by the company's guards after years of being told about mismanagement by Armor Group North America.

UNIDENTIFIED MALE: This is repugnant and demands swift and appropriate action.

DOUGHERTY: A member of the commission set up by Congress to oversee contractors in Afghanistan and Iraq charges of misbehavior in Kabul may have deadly results.

DOV ZAKHEIM, COMMISSION ON WARTIME CONTRACTING: Those Afghans who are there are going to tell their relatives, who are going to tell their tribes, who are going to be the latest recruits of the Taliban, who are going to shoot our kids in Afghanistan.

DOUGHERTY: Testifying one of the 20 guard whistleblowers, a company project supervisor who described what he saw at a raucous guard party.

TERRY PEARSON, FORMER CONTRACTOR IN KABUL: Some of them for the best were naked. Some were standing there urinating on the ground and unfortunately and sickly on each other.

DOUGHERTY: Pictures from guard drinking parties, one commission says, are all over the internet. Some internet, some link to sex sites, as damaging to the U.S. image as infamous photo of Abu Ghraib prison.

UNIDENTIFIED MALE: I've seen the pictures, you've seen the pictures. It's a no-brainer. That conduct is appalling and should have been stopped immediately.

DOUGHERTY: But the State Department says, embassy security was never in jeopardy. Even as it repeatedly warned the company to correct problems like shortages of guards and equipment. The watchdog group the whistleblowers turned to says it's not just the party photos that are obscene.

DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: What is truly obscene is that Armor Group knowingly underperformed in its mission in order to maximize profits, endangering the diplomats and its own employees.

DOUGHERTY: The parent company claims it's taking firm and swift actions.

SAMUEL BRINKLEY, WACKENHUT SERVICES, INC: I am not hear to defend the indefensive.

(END VIDEOTAPE)

DOUGHERTY: And a broader question, one that Hillary Clinton is asking, should private companies, instead of the military or government employees, be providing security in war zones? Wolf?

BLITZER: It's a good question. It needs a strong answer. I know they're working on it. Jill, thank you.

Cell phones give off radiation, some more than others. Are there any serious health risks?

Celebrations to welcome the release from prison of the man who famously threw his shoes at President Bush.

Stay with us for the latest right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Right become back to Jack for "The Cafferty File." With a question Jack, when is the good news also the bad news?

JACK CAFFERTY, CNN ANCHOR: We were just talking. We're now, I guess, being seen in high definition around the country, around the world. The good news is that means we're much clearer on people's TV sets at home. In the case of my age, and to a lesser degree your age, that's also the bad news. I think high definition was designed for people who are considerably younger, certainly, than I am. Bear with us here. Just move the chair back from the set a little bit. Your eyes will blur and it will look --

BLITZER: You look fabulous, in standard definition. And great in high definition.

CAFFERTY: You're an attractive man yourself. The question this hour: Is it really health care reform without the public option?

Mark says: "Yes, it is. Health care reform needs to address, preexisting condition, tort reform, transportability, job to job, state to state competition, elimination of all coverage for illegal aliens including ER services. Health care reform doesn't need additional government intervention."

Brian says: "There's no trickle down when it comes to health insurance companies. They hoard profits. A public option is the only way to bring down costs. God bless us all if there isn't reform."

David says: "Certainly we can have health reform without an option. We need to enact legislation that curbs abuses by the insurance companies. We also need to help those that can't afford coverage. That should be done through private insurance. Keep government out of this and it will be more efficient and there will be more support, except from the far left."

Bob in Florida writes: "Stop the dog and pony show, Jack, the entire health care reform issue boils down to one question. Will Congress do what's right for the citizens of this country or what's best for the corporations? The answer has been self-evident from the beginning."

Pat in Kentucky says: "Yes, the provisions for no cap on the amounts spent by insurance companies and inability for those companies to drop you due to a preexisting condition, those provisions are huge. And do constitute reform. Obama said for months the public option is not a deal-breaker and I think they'll come up with something. The health care reform has to happen in pieces and parts."

And finally, Sandra in Arkansas says: "No, no, no. Without a public option, insurance companies will continue to dictate prices, coverage and policies. Preventive care will be hard to come by and eventually have lots more people on what is now the public option, Medicaid. Give us a choice and assure all hospitals and doctors will honor all coverage."

If you didn't see your e-mail here, you can go to my blog at CNN.com/CaffertyFile, look for yours there among hundreds of others and enjoy the rest of our program coming to you in high definition.

BLITZER: Love it, Jack. Thank you.

It was the insult seen around the world. Now the shoe thrower is supposed to get out of the prison. But there's hitch, a new hidden camera involving a controversial grassroots group, an activist posing as a pimp and a prostitute.

(COMMERCIAL BREAK)

BLITZER: Happening now, President Obama uses a dark anniversary to warn Wall Street. What he says to the nation's most powerful business chief also affects your wallet.

A terror raid in New York City is apparently so serious and potentially alarming that lawmakers at the highest levels of Congress are now being informed.

Could your cell phone give you brain cancer? A group puts out a disturbing list of what it considers to be dangerous cell phone. Yours may be on the list. And the Congress is now looking into all of this.

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 has a warning on the anniversary of the biggest bankruptcy in American history.

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