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Watchdog: Bailout Payback Unlikely; Military Frustrations on the Rise; Dick Cheney Accused President Obama Dithering

Aired October 24, 2009 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: The bailout money pit. The president's bailout watchdog tells me the banking industry is in an even bigger mess right now, and he doubts taxpayers will get all their money back.

Dick Cheney accuses President Obama of dithering about Afghanistan. We'll discuss fears that the drawn-out review of u.s. war strategy is demoralizing the troops.

And can you get swine flu from someone sitting ten feet away? We'll discuss some frightening new information and frustrating delays in getting the h1n1 vaccine.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in "THE situation room."


The federal government is cracking down on Wall Street's pay practices, forcing the biggest of the bailout companies to slash salaries of top executives. President Obama is leading the charge.


I've always believed that our system of free enterprise works best when it rewards hard work. This is America. We don't disparage wealth. We don't begrudge anybody for doing well. We believe in success. But it does offend our values when executives of big financial firms, firms that are struggling, pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.


Dozens of executives will see their salaries slashed by an average of 90%. The administration says one goal is to get taxpayers' money back. But what if we never see those bailout tax dollars again?

And joining us now, Neil Barofsky, the Special Inspector General for the troubled asset relief program better known as tarp. Mr. Barofsky, thanks very much for coming in.


WOLF: We're talking nearly $700 billion that you have been investigating. How much of that money is actually going to come back to the American taxpayer? This is money that was given to these financial -- these troubled financial institutions.

BAROFSKY: Yes, you know, it's almost impossible to know exactly how much. But I think what is clear, it's not going to be a dollar-for-dollar return. We're not going to see a profit. It's very unlikely. A lot of this money went out, some of it, for example, in the mortgage modification program. That's $50 billion that's never intended to come back. We'll also see, I think, tens of billions of dollars of potential losses in the auto companies. And we still don't know that aig and citi and some of the other larger institutions.

WOLF: So, is it realistic that aig will actually return some of that money to the federal government?

BAROFSKY: I think they're certainly going to return some of that money. It's unclear whether they'll return all of it.

WOLF: How much should you give them?

BAROFSKY: Through the tarp. They have a line of credit of $70 billion. They've drawn down about 43.

WOLF: How much have they returned?

BAROFSKY: They haven't returned anything to us. They had a total available of $180 billion including what the Federal Reserve gave them. Right now the total balance is about $120 billion.

WOLF: Let's take a look at these Wall Street financial institutions, Goldman Sachs, jp Morgan, two companies, they're making a lot of money. Aren't they?

BAROFSKY: They sure are.

WOLF: And they're giving their employees huge bonuses, right?


WOLF: Anything wrong with that?

BAROFSKY: Well, from a tarp perspective, they paid their money back from the TARP.

WOLF: How much do they paid right?

BAROFSKY: 25 and 10 respectively for JP and then Goldman.

WOLF: JP paid back $25 billion?


WOLF: And Goldman Sachs paid back $10 billion?

BAROFSKY: $10 billion plus repurchased some of their warrants for a little bit more than a billion dollars.

WOLF: Did they pay back with interest or just paid back?

BAROFSKY: They paid back interest as well.

WOLF: And so the taxpayers made some a little bit money on that.

BAROFSKY: No, no, absolutely.

WOLF: So they repaid -- so why, you know the president of the United States and his advisers complaining about the bonuses that these companies are handing out?

BAROFSKY: I think it's a frustration in that in addition to the tarp money, they're the beneficiaries of other federal programs, whether its loans from the Federal Reserve or guarantee debt from the fdic that's enabled these banks to make huge profits because of their reliance on cheap government money whether guaranteed or lent to them, and the source of these profits has been the largest of the American people.

WOLF: Is that why you're investigating the $700 billion through the tarp money, another, what $3 trillion in taxpayer money was sent out to help these companies through all sorts of other ways.

BAROFSKY: Exactly, and look. I mean, the financial system as a whole, what would have happened absent the tarp money without these capital infusions, it may have collapsed. So, they're beneficiaries of all the support. So it's a frustration to see them.

WOLF: What has changed in terms of regulations and oversight over the past year since the disaster of a year ago? You've been in this business now for almost a year. What has significantly changed to make sure it can't happen again?

BAROFSKY: I think it's actually, what's changed is in the other direction. These banks that were too big to fail are now bigger. Government is sponsored and supported several mergers that made them larger. And that guarantee -- that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail that which was implicit a year ago, it's now explicit, we said it. So, if anything -- now there not been any meaning for regulatory reform to make it less likely, in a lot of ways the government has made the problems more likely.

WOLF: So the situation is worse now potentially than it was a year ago.

BAROFSKY: Potentially we could be in more danger now than we were a year ago.

WOLF: What's taking for so long for everyone to react, the congress, the executive branch and get these regulations in place to make sure that people, you know, losing their homes, losing their livelihood a year ago can't happen again? BAROFSKY: I mean, I know that there are proposals right now pending in congress. The white house has put forward some proposals, and we'll just have to wait and see.

WOLF: Do you believe that the top economic advisers to the president, the financial advisers, when the Timothy Geithner, the secretary of the treasury, Lawrence Summers, the top economic adviser, Rahm Emanuel, the white house chief of staff who made a lot of money in the private sector when he was out of government, are they too close to these fat cats on Wall Street?

BAROFSKY: I don't know the answer to that question, but I think that the fact that you're asking this question and so many people are asking this question, there is a cynicism about where they came from makes the need for more transparency so important. And it's one of our big criticisms of treasury is that there's been a failure to be transparent, and they have to be transparent. So people aren't running to that.

WOLF: So when he asked Timothy Geithner that question, the secretary of the treasury, what does he say?

BAROFSKY: Well, so far they've said no. They've refused to adopt some of our most important transparency recommendations, but we'll going to keep pressing because we think it is so important.

WOLF: The best thing that's happened over the past year is what?

BAROFSKY: I think the fact that our financial system did not collapse, and I think the treasury and the tarp deserves some credit for that.

WOLF: The worst thing that is happened over the past year is what?

BAROFSKY: I think this cynicism, this anger, this distrust of government that's born in part from a lack of transparency could have far-reaching ramifications, whether there's a next crisis or when any time the government's going to call on the American people, the taxpayer, to support necessary programs.

WOLF: Anything wrong from your perspective the president of the United States going to a democratic party fund-raiser in New York city, having a lot of these fat cats from Wall Street show up and give the party money? Is there anything wrong with that?

BAROFSKY: That's a little bit outside my expertise.

WOLF: You're not going to get into that?


WOLF: I appreciate it very much. How much longer you got this journal?

BAROFSKY: As long as the United States government owns troubled assets it could be for quite a few years to come.

WOLF: Well, good luck. We're counting on you.

BAROFSKY: Thank you very much.

WOLF: Fresh questions are being raised about the president's handling of the situation in Afghanistan. Is his drawn-out strategy review hurting u.s. troop morale? A Pulitzer prize-winning journalist says the answer is yes.

The secret service does a lot more than simply protect the president of the United States. Some say, though, it's way too much, and there could be serious consequences.

And there are three of the most famous women in American politics right now. What do Michelle Obama, Hillary Clinton and Sarah Palin have in common?


WOLF: The commander in chief is taking his time deciding troop levels for Afghanistan. Are the troops themselves getting antsy waiting for the decision? Let's bring in our political panel joining us, our Senior Political, Analyst Gloria Borger, our cnn Correspondent, Joe Johns, Republican Strategist Kevin Madden. The Pulitzer prize-winning journalist Tom Ricks and our cnn Political Contributor, the Democratic Strategist, James Carville.

Let me start with you Tom, and read to you from a story in "The New York Times" today by Elizabeth Buemiller. She writes this. "After nearly a month of deliberations by Mr. Obama over whether to send more American troops to Afghanistan, frustrations and anxiety are on the rise within the military. A number of active-duty and retired senior officers say there is concern the president is moving too slowly, is revisiting a war strategy announced in March, and is unduly influenced by political advisers in the Situation Room." We're talking about their situation room, not our "situation room." Is that what you're hearing? Because you're well plugged in.

THOMAS RICKS, BLOGGER, THE BEST DEFENSE.COM: Yes. I'm an Obama fan, and I personally find it demoralizing how he's handled this. I don't think you're hearing it so much among the troops who are too busy doing other stuff like cleaning weapons and driving trucks, but among the generals, there's a sense of unease that they thought Obama had made the deal back in March and then wanted to seem to revisit everything. And they kept on getting these announcements from the white house, we're reviewing assumptions that might be missed. This is pretty insulting to people who have been working on this intensely for several years.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, I just think, Wolf, there may be a real change in style here from what you're used to with George W. Bush, for example. And the real problem here is not that the president is deliberating, because I believe that you ought to be flexible and look at changing situations on the ground, but that the deliberations have played out so much in public, and that becomes a problem not only for the president, but for people who are reading about this -- these deliberations and see the president and vice president may actually be disagreeing.

RICKS: Public is definitely a problem. I mean, it makes life much harder. But there's a point it was deliberation becomes dithering, and I think Obama probably passed that point a while ago.

JOE JOHNS, CNN CORRESPONDENT: There's also this perception out there that the president is sort of buying time, that when he decided, oh, we're going to wait until we figure out about the politics on the ground, because one democratic analyst I talked to this day said, if you look at it, essentially what's happening on the ground is going to be there regardless of who's in power. So is he just buying time?

WOLF: Let me bring James in. James, the word "dithering" is a serious word.

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Right. Yes, you know, and then we say that we're going to wait until the election and I don't know if the Karzai before the elections could be much different in the Karzai after the election. Why do we think this runoff is going to be any better conducted than the first round of voting? These things I do not know. I do have the sense that everybody is pretty dug in here, and it seems to me that everything that I've read there are not a lot of good options here. And maybe the president is trying to see if somebody comes up with something better than what is on the table. It all looks pretty tough from this vantage point.

WOLF: Kevin there is settling 40,000 additional U.S. troops beyond the 68,000 who are already there. There's another 40,000 nato troops already there. That's a life-and-death decision for any commander in chief.

KEVIN MADDEN, REPUBLICAN STRATEGIST: True, but I think Tom makes the most important point which is whether or not the deliberation here begins to look like hesitation and whether that sends a very troubling message not only to our allies but to our enemies that this is a president who is being driven by timidity when it comes to making this decision. And I think probably what's most troubling right now is the gap between the information between what secretary Gates is getting and what the political advisers in the white house are talking about on the Sunday shows. It's been reported that what Axelrod and Rahm Emanuel talked about on Sunday was not made -- was not information that was made available to secretary Gates about whether or not there was going to be a cause and effect, A versus B, about the decision that related to the Afghan elections.

WOLF: Tom, let me get right to the core issue. Is it winnable? You told us a couple weeks ago when you were here in "the situation room", that the situation in Iraq, despite what we're seeing today, the president meeting with Nouri al-Maliki and all that talk of meeting the deadlines, getting combat forces out by the end of August, all u.s. troops, all U.S. troops out by the end of 2011, you were very gloomy about the long-term success of u.s. strategy in Iraq. What about Afghanistan?

RICKS: I think the McChrystal plan really does have a chance. It's not a guaranteed success. It's probably better than anything else out there. The important thing about the McChrystal plan is it's not just more troops. It's using additional troops in a very different way, getting them out, actually living with the Afghan units. That changes not just the behavior of the Taliban, it means the Afghan units will be more effective, Afghan police will be less corrupt. That's really the important change in getting the Afghan government.

WOLF: That's a long-term commitment. We're talking years and years of the u.s. involvement in Afghanistan.

RICKS: I think McChrystal has talked publicly about three to five years of an intense plan.

BORGER: How can you make sure that the Karzai government is going to be a credible partner in any way, shape or form?

RICKS: Well, one thing you can do privately ...

MADDEN: It can't.

RICKS: And one thing it could be consider this threatening out to publicly back the opposition, Abdullah Abdullah, funnel a million bucks to his campaign. Though, another thing you can do to improve credibility and legitimacy is to go out with American troops and say get these checkpoints that are just shaking down truck drivers out of here. We're going to have American troops next to Afghan troops at checkpoints. That makes those checkpoints a lot less corrupt.

WOLF: I'm going to take a break but I want James to give me a final thought on this subject.


WOLF: James, go ahead.

CARVILLE: Well, I think Abdullah is a good guy, but the Pakistanis have bizarre understanding quiet problem ability. He was educated in India, and they're very sort of skeptical of that on that and a lot of people would say that actually Pakistan is more of a threat in terms of al Qaeda than Afghanistan. And so it's a pretty complicated deal, but, you know, who knows, who knows? And, you know, this is a pretty sticky stuff we're dealing with here.

WOLF: But in fairness to the Pakistanis right now, the new government, they are cracking down on the Taliban.

CARVILLE: They are.

WOLF: Al Qaeda and Pakistan. Much more so than the previous government of Pervez Musharraf. Stand by. We're going to continue our analysis of what's going on. Tom Ricks, as always, thanks very much for coming into "the situation room" our little "situation room" as opposed to the other one down the road.

RICKS: Thank you.

WOLF: People are ling up for blocks and blocks waiting for the swine flu vaccine. When will there be enough to go around? I'll ask the director of the centers for disease control and prevention.


WOLF: The Former Vice President, Dick Cheney, this week accused President Obama of dithering on Afghanistan, the war strategy, while u.s. troops face danger. I asked the Republican National Committee Chairman, Michael Steele, for his thoughts on the subject.

Let's talk about some big issues out there right now. Afghanistan. What, if anything's, wrong with the president right now taking his time, methodically consulting the military commanders, the intelligence community, before coming up with the decision on whether to deploy thousands of additional troops to Afghanistan?

MICHAEL STEELE, REPUBLICAN National Committee Chairman: I don't think anything's wrong with that at all. In fact, I wish he applied that same principle to the health care debate, quite honestly. I wish he approached health care the same way he's approaching the seriousness of Afghanistan. Both of them will have a devastating impact regardless of the decision one way or the other. Lives are at stake here. It's a big decision. So I think McCain and others -- Senator McCain and others, have been applauding the president for his approach. At the end of the day, though, you've got to listen to what the generals are saying. They're boots on the ground. They're in the hunt, if you will. And know best how to get the ultimate goal of winning this war in Afghanistan. So I appreciate the president taking this approach and really trying to find the smartest way to win this thing. And it starts by listening to those generals and giving them the support that they need.

WOLF: Do you agree with Mitt Romney, the former republican presidential candidate, former governor of Massachusetts who thinks that all this reaching out to Iran right now simply is a sign of weakness and it's time to get tougher with the Iranians?

STEELE: I think -- I think Governor Romney is making a very good point there because I think the one thing you don't want to do is embolden a nation like Iran that looks for those glimpses of opportunity to reposition itself on the chess board. If you have a chance to sort of get them to own up to what they're doing, take responsibility for it, if they want to be a part of the league of leaders in this country -- in this world who are peace-abiding folks, then you need to demonstrate that. And so don't tell me that you want to have, you know, nuclear energy for the purposes of turning light bulbs on, but then we know that there are other purposes that it could be used for as well, and you're not prepared to fully address the u.n., the world community in that regard. So I think Governor Romney is dead on when he says, you know, let's not get too cozy too soon here with Iran. Let's make sure that they're honest brokers and honest players there when it comes to nuclear proliferation in this point.

WOLF: Nothing wrong, though, with trust, but verify which Ronald Reagan used dealing with the old Soviet Union.

STEELE: Yes. But it was the verify part that the soviets would oftentimes trip up on. And so you can trust until the cows come home, but if you're not going back and verifying that what you're trusting to take place has, in fact, taken place, then all you've done is allowed for a lot of chicanery and a lot of bad acts in behalf of people who may have ulterior motives from the ones that they're expressing publicly.

WOLF: The other big issue with domestic issue is health care reform, a subject close to your heart. I know that. "The Washington post" abc news poll that's just come out on the so-called public option, a government-run health insurance company to compete with the private insurance companies. According to this poll, 57% of the American people support the idea of a public option, 40% oppose. I know you are adamantly in that 40%.


WOLF: But it looks like a significant majority feels differently.

STEELE: Well, you know, I appreciate that but I don't necessary trust that number. If you look at the question and what they are asking, it kind of lends itself to a yes for the public option. So I'll take that at face value, Wolf, and give "The Washington Post" its due on that point. What I then look at is the subsequent tabs and the subsequent questions in which a majority of the people, 60 some percent are saying they don't want, you know, a government-controlled system. They're upset about the taxes. They have real concern about the spending.

So when you juxtapose those two together, I think you come to a different place on where the folks are really on the public option. Yes, we like the idea of it, but the reality of it is going to be something very different that's going to lead to more taxes, spending, more debts and deficit, money we don't have right now. And more importantly, the secrecy with which this is taking place is something for me that rather problematic, Wolf. I'm sure you have played the clips on your program of the president during the campaign and recently talking about transparency, and yet that's not what we're seeing. And again, it doesn't lend itself to the kind of trust that what we get is going to be good.

WOLF: Chairman Steele, the poll also, by the way, said if this so-called public option were run by the states, not the federal government, but each state could have their own public option, and it was only good for people who had no other alternative couldn't go to the private sector because the private sector wasn't going to give them the insurance because of preexisting conditions or they didn't have a job or whatever, support for that public option would jump to 76%. Is that something you would be open to, a state-run public option? STEELE: No. Well, as a former state official, I know what the costs -- what the burden is on the state. I mean, you're talking, again, another mandate coming from the federal government that's not going to be backed up by dollars. I mean, it sounds good, and it makes you feel great. And you ask the question just right, you get that 78% response. But the reality of it is, 38%, 40% of state budgets are driven by health care. The rest is education -- another 40% is education.

And those two fronts, you're talking three quarters of a state budget, and now you want to compound that with additional mandates to cover and provide insurance that in many cases states are already covering because the federal government doesn't have the appropriate, you know, protocols or programs in place to offset some of those costs right now. So I think, again, for me, the bottom line is, can we step back a bit, take the same kind of time we're taking in Afghanistan to look at health care, one-seventh of our nation's economy, and get it right?

BLITZER: Michael Steele is the National Chairman of the Republican Party. Thanks very much for coming in.

Is the u.s. secret service stretched too thin? Can it protect you from financial afraid and still manage to protect the President of the United States and his family?


BLITZER: New concerns that the US Secret Service is becoming dangerously overburdened. It has a number of missions from tracking cases of financial fraud to protecting your identity, but there are now suggestions that this could impact its main job, which would be protecting the president of the United States.

CNN's Brian Todd has been looking into this story. Brian, what are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we found a Secret Service that is vigorously defending its track record, its staffing, its budget and its overall ability to handle its dual mission. But when you look at everything the Secret Service now does, it encompasses quite a lot, and serious questions are now being raised over whether any one agency should have to handle all this.


TODD (voice-over): They shadow the president at every turn, protecting him, the vice president, their families, dignitaries. They move ahead of the president to handle security on his trips and investigate threats against him. Could those crucial missions be compromised by so-called mission creep?

The US Secret Service also investigates financial crimes, including fraud, identity theft, and even counterfeiting. That was, in fact, the agency's first mission when it was created in 1865. But now it even helps track missing children, and a recent Congressional report suggests the service may be overstretched. Quote, "If there were an evaluation of the agency's two missions, it might be determined that it is ineffective for the USSS to conduct its protection mission and investigate financial crimes."

The author of a recent book on the Service has already determined that.

RON KESSLER, AUTHOR, IN THE PRESIDENT'S SECRET SERVICE: The fact is that they're - the Secret Service is totally overloaded. They have so many extra duties that they're performing and the number of agents has not really increased.

TODD: Contacted by CNN, a Secret Service spokesman strongly disputed those assessments, saying the agency is not overstretched and that its ranks have increased. The spokesman says last year, while agents protected several candidates during the longest and most expensive campaign in American history, the Secret Service also had its biggest haul ever of financial assets seized from criminals - $141 million.

A former Secret Service officer we spoke to says agents shouldn't be just body guards.

WILLIAM PICKLE, FORMER SECRET SERVICE AGENT IN CHARGE: After a number of years in protection, you need to send those agents back out to do criminal work, to stimulate them, because what we found is good criminal investigators make very good protection agents.

TODD: But is the Secret Service dealing with increased threats to the president? A report last spring by the Department of Homeland Security says, "Right Wing extremists have capitalized on the election of the first African-American president and are focusing their efforts to recruit new members."


TODD (on camera): But at that same time, this report also says those groups "have not yet turned to attack planning." That is quote from that report. And the Secret Service spokesman we dealt with says contrary to recent media reports, President Obama is not receiving more threats than other presidents. The spokesman says Mr. Obama's threats spiked right after his inauguration, but now they're within the same range as his two immediate predecessors, George W. Bush and Bill Clinton - Wolf.

BLITZER: The agency certainly has its hands full no matter which way you slice it, though.

TODD: It does have its hands full. I mean, truth be told, you have to say that. It protects 32 people full time, 4 people part time. This is in addition to visiting dignitaries when they come to the United States. For all of that plus the investigative task, investigating financial crime, they've got a total of just under 3,500 agents.

But again, the agency says it's not overtaxed, and the one official I spoke with says, look, Congress wants to give us $40 million over the next two years just to combat mortgage fraud. That's another task. But he says that shows the Congress at least thinks they're up to the task.

BLITZER: It's interesting, most people think of the Secret Service, they think of the guys protecting the president.

TODD: Just protection (ph). Mortgage fraud? That's quite something different.

BLITZER: Yes. Brian Todd, thanks very much.

And I spoke about a lot of this with Ron Kessler. He's the author of the best-selling new book entitled "In the President's Secret Service: Behind the Scenes with Agents in the Line of Fire and the Presidents they Protect."


BLITZER: Do you believe President Obama is safe and secure?

KESSLER: No. Unfortunately, since Homeland Security took over the Secret Service, it's been cutting corners to a dangerous degree and the most clear-cut example is that in contrast to the past, they now will stop magnetometer screening or metal detection - that's what you go through at the airport. When an event is about to start and the staff starts pressuring them to - to let stragglers in or, in some cases, they don't do it at all.

For example, when Joe Biden threw the first pitch at the Orioles in April, they did not do any magnetometer screening. Both the Baltimore field office and the detail were outraged because this, you know, absolutely takes a chance that a gunman or terrorist can bring in weapons, can bring in grenades and assassinate the president or the vice president.

BLITZER: The other point that they're saying is they're spending more money now protecting this president of the United States than they've ever spent before. They say we currently dedicate more personnel funding and technical assets to our protective mission than at any time in our history, and our protective measures and methods continue to increase in scope and complexity, not diminish.

KESSLER: This is just more smoke and mirrors. The fact is that they're - the Secret Service is totally overloaded. The agents just - in fact, they don't even do physical training anymore, they don't do firearms re-qualification because they're so overloaded. They have so many extra duties that they're performing, and the number of agents has not really increased, and it's just common sense, you know, why let the president speak at an event without having magnetometer screening?

BLITZER: Well, they say the only time that would happen is if the president goes, for example, out to some unannounced lunch, five guys for a burger. They won't do it there, but if he goes to an event like the All-Star Game in St. Louis that he went to, all 50,000 or so fans were screened before they went in. KESSLER: That's just not true. You know, they repeatedly have let people in without magnetometer screening, and they even admitted that in one case that was publicized in Denver when Obama was a candidate and the staff started pressuring, and they let them in. It was unbelievable.

I interviewed former agents up to the level of deputy director on the record who said they can't believe this because until Homeland Security took over, they would never, never allow that to happen on their watch.

BLITZER: Here's some of the statistics they put out, and I'll sort of just paraphrase, that over the past couple years, they say they've safely and successfully protected the president, the vice president, other Secret Service protectees at 10,000 sites, screened 7 million people, all that happening without incident.

KESSLER: Well, you know, I have those same statistics in my book, and that's fine, but if the president is killed, what are they going to say? Well, it - it was OK to - to let - to let these gunmen in without being screened? You know, it's like saying at the airport, well, we don't have time to do the magnetometer screening, metal detection. We'll just let everybody on the plane without any - any screening.

I mean, you don't have to be an expert in security to understand how basic this is, and if the president is assassinated, we'll have another Warren Commission and they'll be pointing fingers right at the Secret Service because it's the Secret Service that's been cutting corners not only when it comes to shutting down magnetometers which, again, they never used to do, but also on the counterassault team. They've cut that to two instead of five. They keep the counterassault team frequently away from the - from the candidates.

The -- they're covering up in a lot of areas. For example, they will have members of Congress go to the training center and they'll impress them with these supposedly unrehearsed scenarios where a threat takes place and the agents thwart it. Well, those scenarios are actually rehearsed beforehand in the case of congressmen. So there's a lot of deceit going on in the Secret Service.

BLITZER: Here - here's a charge you make that the threat level against President Obama has increased, you say by 400 percent as opposed to his predecessors, but a law enforcement source tells me that's false, that the threat level - the number of threats they're getting against President Obama right now, six months into his presidency, is about consistent with the threats that President Bush and President Clinton used to get.

KESSLER: No. That's not true. In fact, you know, I've been telling reporters - about reporters who've talked to Secret Service PR people after the book came out, that the 400 percent figure is accurate. Of course, it fluctuates slightly but it...

BLITZER: Did you get that number from the Secret Service or from another agency? KESSLER: I got it originally from another agency, but I went over it with the Secret Service and I - you know, I believe that it is true. You know, that...

BLITZER: Because what - what this law enforcement - what this law enforcement said was that yes, when he was a candidate, there was a higher degree of threats, but since taking office it's basically stabilized to where it was under President Bush and President Clinton.

KESSLER: No, it's just the opposite. The - the increase has occurred since he became president. There is about 3,000 threats a year under President Bush and now there are about 12,000. Of course, most of them are not credible, but they all have to be checked out.

And - and I might add that the agents themselves are really dedicated, are brave, they're people who pledged to take a bullet for the president, which is what happened with President Reagan when - when he was shot, but it's the management, it's the Secret Service management that has developed this culture of denial where they - they seem to think they're invincible, they can let the president go to an event without doing magnetometer screening, and they are risking an assassination.


BLITZER: That's Ron Kessler. His book is entitled "In the President's Secret Service: Behind the Scenes with agents in the Line of Fire and the Presidents They Protect."

Why is the H1N1 vaccine delivery now delayed, and when will you be able to get it in your area? I'll ask the top man over at the CDC.

And what was misunderstood about Sarah Palin? We'll discuss myths about women in American politics. That's coming up in our "Strategy Session."


BLITZER: Health officials are trying to reassure anxious Americans that they will be able to get the H1N1 vaccine despite all the delays. Joining us now from the Centers for Disease Control and prevention, the director, Dr. Thomas Frieden. Dr. Frieden, thanks very much for coming in.


BLITZER: There was this startling assertion on "60 Minutes" this weekend. I want to play a little clip from the show and - and then - and then we'll talk about whether or not the swine flu or H1N1 can jump from person to person 10 feet away. Listen to this.


UNIDENTIFIED MALE: In animal studies, he's found that the virus can travel at least 10 feet from person to person. So if the virus transmits readily across 10 feet, people in a carpool, people in an elevator, even people on an airplane?

DR. PETER PALESE, MT. SINAI MEDICAL CENTER: Correct. I think all of these scenarios are very much likely to allow transmission of an influenza virus when humans are together.


BLITZER: Wow! I didn't know - know about that. I thought there had to be touching or - that's why everyone was washing their hands. But is that true, Dr. Frieden?

FRIEDEN: The reality is that we don't know as much as we wish we knew about how influenza spreads. We do know it spreads very widely. An average flu season, between 5 percent and 20 percent of an entire community may become infected.

We do believe that the most common way is by droplets, when someone coughs or sneezes and they don't cover their mouth. So that's very important. However flu spreads, there are some plain, simple things that people can do to protect themselves and their families and community.

BLITZER: And the most important thing is to keep washing your hand, is that right?

FRIEDEN: Well, I would say, first, if you're sick, stay home. You'll do yourself a favor, and you wouldn't infect others. Cover your mouth when you cough or sneeze. Wash your hands frequently. And as soon as you can get vaccinated, get vaccinated.

BLITZER: But as far as the vaccinations are concerned, I take it you're not meeting the schedule you had hoped for and there's a shortage right now, and we're already heavy into this flu season, is that right?

FRIEDEN: We wish there were more vaccine out there now. There have been manufacturing delays such that we're not where we thought we'd be even a few weeks ago, and that's frustrating. It's frustrating for us at CDC, it's frustrating for state and local health departments and most - and health providers, and most of all, it's frustrating for people who want to get vaccinated.

There are now millions of doses out in States. What we've done is to get a vaccine out as soon as it becomes available to us. We're shipping overnight. There are about 10 million doses now out in the community or getting to the community, and it is challenging for people to find vaccine. The good news is that if there are no further manufacturing delays, within two or three weeks we should be in a much more comfortable situation where it's - where it is much easier to find the vaccine.

BLITZER: And - and correct me if I'm wrong, the most vulnerable right now as far as, God forbid, death are concerned are young - young people and pregnant women, is that correct? FRIEDEN: The highest risk groups are people who have underlying health problems like diabetes, cancer, lung disease, heart disease, pregnant women and other people who would be more severely affected by flu who may have trouble breathing for other reasons or more limited physical reserve and how well they can breathe and withstand an infection.

BLITZER: All right. Look in the camera and tell our viewers out there - a lot of them are just nervous about this new vaccine and they're afraid either to get it for themselves or their loved ones, saying they don't know what the outcome could be and they think they could even get sicker as a result of the vaccine. I want you to reassure them that this is the right thing to do, go out there and get this vaccine.

FRIEDEN: I understand why people would be worried about getting vaccinated. Nobody likes to get treatments, medications, vaccines. The flu vaccine has been given to hundreds of millions of people. This year's flu vaccine, the H1N1 vaccine, is being made in the same factories, by the same companies, with the same safeguards as the vaccine that we use every year and that has an excellent safety record.

My family's going to get it when there's enough for everyone to receive it. I'm going to receive it as a health care worker, and there's an excellent safety record for the flu vaccine. We wish we had it earlier. It's the best thing you can do to protect yourself against the flu.

BLITZER: Well, we hope that it becomes mild, but it looks very worrisome out there. We'll stay in close touch with you, Dr. Frieden. Thanks very much.

FRIEDEN: Thank you.

BLITZER: Hillary Clinton is more popular right now than the president of the United States. Is she having a greater influence on American women than Sarah Palin?


BLITZER: (INAUDIBLE) to our "Strategy Session", joining us, Leslie Sanchez. There she is - Leslie Sanchez right there. Paul Begala, our Democratic and Republican (ph) Strategist. Leslie has a brand-new book entitled "You've Come a Long Way, Maybe" and look who's on the cover - "Sarah, Michelle and Hillary and the Shaping of the New American Woman by Leslie Sanchez.

Congratulations, Leslie...


BLITZER: ... on the new book. Let's talk about some of the myths that you debunked about these three women in the book. Give us one.

SANCHEZ: Overall, well, they were labeled in the media as the ditz, the witch and the media darling. I think the ditz, with respect to Sarah Palin, look, you have to look at...


SANCHEZ: D-I-T-Z. You know, there are so many people who underestimated her intensity but also her prowess - her political ability to navigate, what she was able to do in her state as a leader. And I think people are going to continue to debate Sarah Palin, but what was misunderstood about her was how much she connected with a certain core of the Republican base - evangelical conservative, a lot of suburban women who felt she was a refreshing voice to the party.

And if you even take that even further, look at the race in Texas, for example. You have Kay Bailey Hutchison against Rick Perry. That's turning into a bit of a gender battle as well, I'm hearing today, with a lot of conservative men, small business owners supported Perry, but women want a fresh face and something new.

BLITZER: You see these three women on the cover of this new book, Paul, and in their own right, they have huge followings, each of them in their own way. And - and I suspect once Sarah Palin's book comes out next month and she goes on the "Oprah" show to launch it, that following could -

PAUL BEGALA, DEMOCRATIC STRATEGIST: I - Well, it probably will grow, I certainly hope for Mrs. Palin's sake. I - I do wonder, though, Leslie -

First off, congratulations on the book. I should hold it up, too. I'm impressed. It looks like a terrific book and - and I - I know it will be.

SANCHEZ: And you're on - and you're on the back, too.

BEGALA: And I did - I endorsed it and Newt Gingrich did, so it's - you can tell...

BLITZER: Full disclosure (ph).

BEGALA: ... it is a - it is - it's got balance from both sides. But I wonder if Governor Palin really wants to ever run for office again. She clearly wants to have a national voice. She's got a platform and - you're correct - she has a base, but leaving that job in Alaska - she said she didn't like the media, she didn't like the investigations and the criticism. Well, that's all that running for president is.

SANCHEZ: Absolutely.

BEGALA: And endless string of those things. So do you think she'll run again?

SANCHEZ: I think it would - you know, you never know with these politicians. I think that she probably thinks she can be a very strong, viable candidate. I think there's a lot of people in the Republican Party that think she is. The question is, will she do the work? Don't - discount the fact she took a $7 to $10 million advance for this book - for this book sale or that... BEGALA: So did you - did you write in that $7 to $10 million..?

SANCHEZ: Yes. Right, right. Right, exactly. You know - but - and I didn't go to "Oprah." I'm here on The Situation Room. We want to say that...

BEGALA: And you actually wrote this yourself, by the way.

SANCHEZ: Yes, I did.

BEGALA: A lot of politicians - Ms. Palin has a ghost (INAUDIBLE).

BLITZER: Look at these - look at these poll numbers because Hillary Clinton...

BEGALA: My gal. My hero.

BLITZER: ... favorable. Right now, in our new CNN/Opinion Research Corporation poll, she's at 65 percent favorable; Michelle Obama, 64 percent; Bill Clinton, 64; Barack Obama, 60; Joe Biden, 45; Hillary, atop the list. How do you explain that?

BEGALA: You know, it warms my heart. I think that hard work, competence, talent and toughness, that all wins out over time. Earlier in this broadcast, Candy Crowley made a very good point, we tend to like our politicians better when they're not running, and she's not now. But the fact that she was willing to go and serve -

First off, you've got to give the president enormous credit to pick his most bitter rival from the primaries and make her Secretary of State. You've got to give Hillary a lot of credit. She's got a heart for service...

BLITZER: Do you believe that Michelle Obama, now that her life (ph) as a First Lady will follow in Hillary Clinton's footsteps and go into politics?

SANCHEZ: I don't think it's been part of her - the fabric of what she's done in her career. I think she's been a tremendously successful and powerful and influential professional businesswoman. She's set some examples for what the First Lady can be in the future. I think she's stretching those boundaries, and she's somebody I think we have to watch. I wouldn't put her in the mold of anybody else. I think she's defining her own.

One thing I will say about Hillary Clinton is look at the fact that she's no longer a lightning rod. She's very pro-American. She's a bit of a hawk.

BLITZER: In the book...

BEGALA: Michelle Obama does have remarkable star quality, which Sarah Palin has and Hillary has, but she is a really charismatic person. (INAUDIBLE)...

BLITZER: They all have star quality, and you know what? Leslie Sanchez - star quality.

BEGALA: Big time! Even a Democrat...

BLITZER: "You've Come a Long Way, Maybe: Sarah, Michelle, Hillary and the Shaping of the New American Woman." Congratulations, Leslie, for writing the book.

SANCHEZ: Thank you.

BLITZER: Home far - for far too many children, a simple hammock cradles a child in a refugee camp. We're going to have that story and more. That's coming up in this week's best "Hot Shots."


BLITZER: Here's a look at some of this week's "Hot Shots," pictures coming in from our friends over at the Associated Press.

In Sri Lanka, a displaced child sleeps in a makeshift crib at a refugee camp. In China, a woman poses for a photo next to a waterfall covered in toilet seats. In Redmond, Washington, Microsoft employees cheer during a celebration of the release of Windows 7. And in Pakistan, children play traditional games at an Afghan colony. Some of this week's "hot shots," pictures worth a thousand words.

I'm Wolf Blitzer. Join us weekdays in THE SITUATION ROOM from 4:00 to 7:00 PM Eastern and every Saturday at 6:00 PM Eastern on CNN and at this time every weekend on CNN International.

The news continues next on CNN.