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The Situation Room

Terror Suspect Pleads Not Guilty; Republicans Criticize RNC Chairman

Aired January 08, 2010 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening right now, lots of news. A notorious suspect in the United States saying he's not guilty -- this hour, the dramatic scene inside the courtroom as he entered his plea and what comes next.

Some Muslim women say they're being stopped, searched and even beaten an airports simply because they're wearing head scarves. Is it part of the federal government's official policy? What's going on?

And the Republican National Committee chairman under fire by members of his own party. They say Michael Steele needs to muzzle himself and stop trampling on the GOP's message.

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

His mug shot has been plastered all over the airwaves and the Internet for weeks. Today, reporters inside a Detroit courtroom got a better look at Umar Farouk Abdulmutallab, the man charged with trying to blow up a U.S. airliner on Christmas.

Our Deborah Feyerick was inside the courtroom when he entered the plea. She's joining us live from Detroit.

Describe, Deb, what happened.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, Abdulmutallab walked in very into that federal courtroom very slowly and with apparent difficulty. Remember, he's suffering second- and third- degree lap burns, having detonated the bomb that was hidden in his underwear.

Now, his feet were shackled. He was wearing a white T-shirt and khaki pants, sneakers. His feet were shackled. The clothing really looked just way too big for his very slight frame. He is not a big man. He's about 5'6'', 5'7'', and very thin. Now, the lawyer for the 23-year-old Nigerian entered a plea of not guilty.

And, after the judge asked him, Abdulmutallab did say, yes, he had taken painkillers over the last 24 hours, apparently to treat the injuries he sustained. Now, the lawyer says, despite that, he definitely understands the charges against him. They include attempting to destroy a U.S. jetliner and kill all 290 people who were on board the plane.

One of the passengers actually was in the courtroom. She said that she came to see him. She wanted to see what he looked like today, as opposed to what he looked like on Christmas Day. She said he just seemed to have actually a little bit more energy today than he did when he detonated that device.

Now, Abdulmutallab's lawyer did not contest the detention. After this all over -- really, it took just about 10 minutes -- he was led from the U.S. courtroom by federal marshals, his long trip from Yemen to Ghana to Nigeria to Amsterdam ending not in glory, but in a very small cell just outside Detroit -- Wolf.

BLITZER: Besides his lawyers, were any family members present during this hearing?

FEYERICK: The only person that appeared to be in court on his behalf -- excuse me -- from the family was somebody who said that she was there for the family, but that she did not want to speak for the family.

There were also about six members from the Nigerian Embassy who were also in that courtroom -- Wolf.

BLITZER: And -- and his lawyers are public defenders, well-known public defenders in Michigan. The -- the -- the taxpayers are really paying for his lawyers, right?

FEYERICK: Well, they are paying. And he's going to get very good counsel.

The woman who's representing him, she is the chief federal defender. She is court-appointed. However, she's represented terror suspects in the past, so she's very well-equipped to handle this. Remember, Abdulmutallab was apparently making some statements to federal authorities, but, as soon as she was appointed to represent him, really, no more information appears to have been forthcoming after that -- Wolf.

BLITZER: Deborah Feyerick, stand by. We are going to have more on this story coming up.

But let's get to the other big threat to the United States right now, the struggling economy. The unemployment rate remained grim last month, holding steady at 10 percent. The first year of the Obama administration has been a rough one for workers -- 4.2 million jobs were lost in 2009, on this president's watch.

Just a short while ago, Mr. Obama refocused on the jobs problem, still issue number one for so many Americans.

Let's bring in our White House correspondent, Dan Lothian. He's working the story for us.

Terror yesterday, jobs today, he's got a lot on his plate, Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: He really does.

And, you know, the White House still believes that focusing on terrorism is very important, but they do want to shift the focus now to jobs and the economy. It's something that top aides said last year that he would focus in on the early part of this year, but it will be a delicate balance. And there are political implications.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Hours after a disappointing jobs report was released, President Obama freed up more stimulus money for clean- energy jobs.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have to continue to explore every avenue to accelerate the return to hiring.

LOTHIAN: The administration, while pointing to positive trends, is under pressure, amid fears of an economic relapse.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president is worried about today and worried about the future.

LOTHIAN: While the White House insists politics is playing no role in its big jobs push, political observers say Americans are speaking loud and clear on the issue, and their votes are crucial to Democrats in this fall's midterm elections.

STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": Well, the economy, and particularly the jobs issue, continues to be the number-one question on the public's mind, so it's crucial for the administration to turn to that issue, particularly given the many months of focus on things like health care.

LOTHIAN: And, more recently, a focus on terrorism. The president tried to turn the corner by taking full responsibility for intelligence failures, but this topic shift to the economy and jobs must be handled delicately.

ROTHENBERG: You know, if the White House doesn't get it right on jobs, the economy, and terrorism, then it almost doesn't matter what it does on health care or climate change or immigration.

(END VIDEOTAPE)

LOTHIAN: The president plans to hit the road again to meet with Americans face-to-face, hear their concerns about unemployment, about hanging onto their homes. In fact, in a couple of weeks, the president plans to go to Ohio. And White House spokesman Robert Gibbs saying that there will were be other events in the next several weeks -- Wolf.

BLITZER: It's a key battleground state, Ohio. They're going to go there a lot, no doubt about that.

Let's talk a little bit about some of the positives the president spoke about today as well, Dan.

LOTHIAN: Well, that's right. He talked about, you know, while we have seen some job losses in December, when you look at the November numbers, there was an uptick. And he pointed out that this is the first time that we have seen something like that in two years.

So, this administration really focusing on that trend, which they say is getting better. The situation is still far from good, and the president pointing out that that road to recovery will be winding, twisting, there will be some setbacks, but they do believe that it's going in the right direction.

BLITZER: All right, thanks very much, Dan Lothian, working the story for us.

CNN is getting a close-up look at how al Qaeda has been able to gain strength inside Yemen. We are going to take you to a tribal area that is a virtual sanctuary for terrorists.

And a lot of questions about something Rudy Giuliani said today. He seemed to suggest there were no terror attacks in the United States when George W. Bush was president. I will ask the mayor, former mayor of New York, to explain himself. What did he mean?

And some Muslim women say they're targets of racial profiling at U.S. airports. We will hear some of their disturbing stories and discuss whether it makes sense to make them remove their head scarves.

(COMMERCIAL BREAK)

BLITZER: All right, listen very closely. You're about to hear about some of the places where al Qaeda plots attacks against Westerners, especially against Americans.

As we -- as we report on the not guilty plea from the man who allegedly wanted to blow up an airplane on Christmas, we're also in Yemen, where terrorists claim responsibility for that bombing attempt.

Our international security correspondent, Paula Newton, is there.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Well, Wolf, talk about barbarians at the gate. I mean, we got a very good look at the kind of challenges the Yemeni government is looking at if they want to go after al Qaeda in their own country.

(voice-over): Just beyond Yemen's international airport in the capital's poor northern suburbs, a road begins leading to thousands of miles of Yemeni tribal lands. Effectively out of government control and the perfect setup for al Qaeda.

(on camera): We're just about a mile from the international airport here. If you want to get an indication about how tribal they are here, we're going to try and go north up this road about a couple miles. It's called Arhab. That is where the al Qaeda strikes have been taking place in the last few days. Up until the last few weeks, the government hasn't even dared enter that tribal area. They have absolutely no control over. (voice-over): But just as we're approaching the check point, we're quickly turned away.

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

UNIDENTIFIED MALE: Right now, he's getting calls saying we need to be out of this area.

NEWTON (on camera): OK, so they're not even letting us approach the check point. We've been on the phone with many people and they're saying not to go to Arhab. Arhab is very telling here. It is just two miles down the road this way, through that check point, and the government is saying, a, it's not safe for us to be there, and, B, it's not safe for them to be there.

(voice-over): It's not just Arhab. There are huge tracks of deserts in mountains across Yemen, al Qaeda sanctuaries where attacks like this are masterminded and executed. Last March four South Korean tourists and their Yemeni guide were killed when a teenage suicide bomber blew himself up. Al Qaeda claimed responsibility saying the South Koreans were U.S. allies in the war on terror.

And just days later when South Korean investigators were in this airport zone, the Yemeni government says it uncovered yet another al Qaeda plot against Korean authorities. All possible because the government simply doesn't control wide areas of the country.

And that's where radical preacher Anwar al Awlaki is counting on. Part of a large and powerful southern Yemeni tribe, he's still out of American and Yemeni reach, almost certainly sheltered by his tribe. Even though Yemeni officials confirm there is evidence he may have given Umar Farouk Abdulmutallab the inspiration to attempt to blow up Flight 253.

(on camera): And, Wolf, the more you unravel these tribal relationships, they're so strong, they're so powerful, the government is going to have to work with these tribes if they want to try and root out al Qaeda -- Wolf.

(END VIDEOTAPE)

BLITZER: Paula, thank you.

On CNN's "FAREED ZAKARIA GPS" this Sunday, an exclusive interview with the chairman of the Joint Chiefs of Staff, Admiral Michael Mullen. He talks about the difference between two worrisome nations.

(BEGIN VIDEO CLIP, "FAREED ZAKARIA GPS")

FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": You know, if I look at the intelligence that one -- one gets and reads, it suggests there are a few hundred al Qaeda members or operatives in Yemen. By your own admission, that's probably more than there are in Afghanistan. Yet, we have about -- we will have 100,000 troops in Afghanistan. Why not take a much more aggressive approach in Yemen? ADMIRAL MICHAEL MULLEN, JOINTS CHIEFS CHAIRMAN: Well, again, it's a sovereign country. We have great respect for the president there in terms of his -- his judgment, in terms of what he needs to do this.

And, right now, as far as any kind of boots on the ground there with respect to the United States, that's just not -- that's not a -- that's not a possibility. I mean, he's just -- we're -- we're not into those kinds of discussions.

And in all of these -- in all of these fights with al Qaeda and with terrorists, it is typically relatively small numbers, nimble, agile, very capable, cunning. And they have studied us. And they adjust.

And, so, typically, there -- it does take larger numbers to get at thought. In the case of Afghanistan, where you talk about we -- we have got, between ourselves and NATO and other countries actually who are contributing, upwards of 100,000 troops, that's really focused on making sure the Taliban doesn't turn Afghanistan upside-down, and then create the kind of permissive environment where al Qaeda could return.

(END VIDEO CLIP)

BLITZER: And you can see the full exclusive interview with the chairman of the Joint Chiefs, Michael Mullen, this Sunday on "FAREED ZAKARIA GPS." That's at 1:00 p.m. Eastern right here on CNN.

The Obama administration is rushing to bring more full body scanners to U.S. airports, but there are other kinds of high-tech screening devices you may not know about. You could wind up being scanned or even sniffed by one of them someday. We have details.

And has the Republican Party chairman, Michael Steele, said too much? Some Republicans are livid about his low expectations for the GOP in November.

(COMMERCIAL BREAK)

BLITZER: Sad news to report from the vice president, Joe Biden. His mother has just passed away. And he issues this statement. There, you see her at the Democratic Convention with Jill Biden this past -- a year ago at the Democratic Party Convention in the summer of 2008.

A lot of us remember her. This is the statement from Vice President Biden: "My mother, Catherine Eugenia 'Jean' Finnegan Biden, passed away peacefully today at our home in Wilmington, Delaware, surrounded by her children, her grandchildren, her great- grandchildren, and many loved ones. At 92, she was the center of our family and taught all of her children that family is to be treasured, loyalty is paramount, and faith will guide you through the tough times. She believed in us, and, because of that, we believed in ourselves. Together, with my father, her husband of 61 years, who passed away in 2002, we learned the dignity of hard work and that you are defined by your sense of honor. Her strength, which was immeasurable, will live on in all of us" -- that statement from Joe Biden.

Our deepest condolences to him and his entire family on the loss of his mother.

Let's check in Fredricka Whitfield. She's monitoring some of the other top stories in THE SITUATION ROOM right now.

Fred, what is going on?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Wolf.

And hello, everyone.

Well, hundreds of UPS workers are about to feel the pinch of the nation's unemployment woes. The shipping giant plans to cut 1,800 management and administrative jobs through a combination of voluntary separation, attrition and layoffs. The company says it's been consolidating its small-package operations as part of a larger effort to streamline the organization and boost profits.

And the Deep South is now caught up in the same deep freeze that has most of country shivering. A fast-moving cold front combined with moisture from the Gulf of Mexico has dumped a dangerous mix of snow and ice across the Southeastern states. And temperatures in Florida are down to the 40s. Winter weather is blamed for at least nine deaths around the country this week.

And U.S. Defense Secretary Robert Gates will stay on the job at least another year, according to a Pentagon official. Gates is the lone holdover from the Bush administration and has described his job as a -- quote -- "painful thing that nobody should enjoy doing." One national security expert says Gates takes his job very seriously and that leaving now would be like -- quote -- "a handoff in midseason."

And, Wolf, it's official. An Arab village in Israel now holds the world's record for the largest plate of hummus, and bragging rights over Lebanon in what is known -- or what has become known as the hummus wars. More than 50 cooks from around Israel's religious divide came together to figure a giant satellite dish with four tons of the chickpea delicacy, doubling the record set by Lebanon just last year.

Nice little surprise this new year -- Wolf.

BLITZER: I love it. Delicious. I had it for lunch today, hummus.

WHITFIELD: I know. I love hummus.

BLITZER: Yes.

(LAUGHTER)

BLITZER: All right.

WHITFIELD: I wish I got that invite to help indulge. BLITZER: Yes. We had -- we had it. We had a nice lunch, a lot of Middle Eastern food today.

All right, thanks very much.

WHITFIELD: OK.

BLITZER: Thank you, Fred.

It's a real-life spy saga of a double-agent-turned-suicide- bomber. We're learning more about how he turned on the CIA, with deadly results. CNN's Nic Robertson has been talking to his relatives.

And we're also investigating a central question in the failed Christmas terror attack: Did the U.S. underestimate al Qaeda's strength in Yemen?

(COMMERCIAL BREAK)

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

Happening now: The man known as America's mayor is earning many Americans' anger right now -- Rudy Giuliani facing some heat for a harsh comparison between President Obama and former President Bush. Some call it unfair and untrue. Giuliani will be here in THE SITUATION ROOM to explain. We will speak with him live.

Metal detectors, body scanners, puffers, we have heard about those airport screening devices, but wait until you see what could be next.

And, in New Jersey, college students who are in the United States illegally could legally see their tuition reduced, and reduced soon.

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

Although the evidence is damning, although officials say he packed explosives in his underwear and tried to blow up that plane on Christmas, the bombing suspect pleads not guilty.

Let's get some more on our top story.

Our homeland security correspondent, Jeanne Meserve, is here.

Jeanne, this has certainly been a wakeup call for a lot of U.S. officials.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: It's true.

You know, administration officials say they were surprised that al Qaeda in the Arabian Peninsula was at the point of launching attacks against the U.S. homeland. The question is, why, and what's next?

(BEGIN VIDEOTAPE) MESERVE (voice-over): Yemen has been a very high priority of the intelligence community, according to a U.S. counterterrorism official. The U.S. was well aware of al Qaeda in the Arabian Peninsula's growing strength, but the intelligence community didn't realize the group had the operational capability to attack the U.S. homeland.

JOHN BRENNAN, U.S. DEPUTY NATIONAL SECURITY ADVISER: We had a strategic sense of sort of where they were going, but we didn't know they had progressed to the point of actually launching individuals here.

MESERVE: U.S. officials knew that the group used a bomb concealed in underwear in the attempted assassination of a Saudi official, but analysts didn't marry that up with al Qaeda's interests in striking the homeland and aviation. One former intelligence officials says, like 9/11, it reflects a failure of imagination.

But a current counterterrorism official rejects that comparison, saying, "We didn't have information about a specific plot. It is wrong for anyone to suggest that U.S. counterterrorism agencies didn't take a real hard look at the possibility that Yemeni extremists might try to do something abroad, to include the homeland."

Thursday, the CIA announced its increasing the number of analysts focused on Yemen and Africa.

CHRISTOPHER BOUCEK, MIDDLE EAST PROGRAM ASSOCIATE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Arabic language skills are difficult to acquire and take a long time and a lot of dedication. And it will take a long time to gear up these -- these capabilities.

MESERVE: Offshoots of al Qaeda are also growing in Algeria, Somalia, and elsewhere, but one expert says one region should get the lion's share of the intelligence community's attention and resources.

BRUCE RIEDEL, BROOKINGS INSTITUTION: Yemen is an important subsidiary of the main al Qaeda core, but the strategic direction, overall planning, and, most importantly, the propaganda instrument remains in Afghanistan and Pakistan. And that's where we need to keep our focus and our activities.

(END VIDEOTAPE)

MESERVE: Does the intelligence community have the capability to cover all these bases at once? A U.S. counterterrorism official says, yes, but no one is saying this will be easy, Wolf.

BLITZER: Yes, it will be very, very hard, I'm sure. All right, thanks, Jeanne Meserve.

As many of us go to airports, keeping bad people out, while letting non-threatening people in, is a huge challenge for airport security. Is that also causing more racial profiling right now? Some Muslims say yes. One woman says even she was searched and humiliated, all because of an item many Muslim women wear.

Here's CNN's Alina Cho.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT (voice-over): Nadia Hassan is a frequent flyer, so imagine her surprise when she arrived at the security check point at Washington's Dulles International Airport Tuesday.

NADIA HASSAN, ALLEGED VICTIM OF RELIGIOUS PROFILING: Racial religious profiling. I am being singled out as a security threat.

CHO: The 40-year-old Michigan born Muslim American headed to Los Angeles said she was singled out for she calls a humiliating full body search. When she asked why this was happening...

HASSAN: The gentleman who was working there specifically told me the reason why I am being put through this type of search is because I am wearing a head scarf. He actually told me that that's the reason why you are being targeted.

CHO: She is not alone. On Monday, a Muslim Canadian woman said she was made to feel like a terrorists because she was wearing a head scarf, berated and banned from boarding a flight to United States all because of her faith. The council on American Islamic relations calls these textbook cases of profiling.

NIHAD AWAD, EXECUTIVE DIRECTOR, COUNCIL ON AMERICAN-ISLAMIC RELATIONS: It's violating the law, it is unconstitutional, and un- American to single out people because of their religion.

CHO: U.S. customs who handled the Canadian case would not comment specifically on it. But in a statement to CNN the TSA says current screening procedures for bulky clothing and head wear have been in place since 2007, that wearing a head scarf doesn't automatically trigger a search, and -- quote -- "In instances where passengers choose not to remove bulky clothing, including headwear, our officers are trained to offer a private screening area, and may conduct a pat-down search to clear the individual."

Hassan says her pat-down search happen in public in front of her 5-year-old daughter and several male TSA agents.

She stresses she favors strict security, but not when the screening is selective.

HASSAN: Do they even know what they are looking for? You are targeting the innocent people, but, yet, the bad guys are getting away. So, it just makes me wonder.

CHO (on camera): The Council on American-Islamic Relations says if the TSA is going to flag women who wear headscarves, what about nuns who wear habits or Sikhs who wear turbans? What about them?

The TSA says it continues to work closely to provide security protocols that are thorough, effective and foster respect.

Alina Cho, CNN, New York.

(END VIDEOTAPE)

BLITZER: All right. Let's talk a little bit more about the potential for racial profiling of Muslims.

Joining us now, Fran Townsend, our CNN national security contributor, a former homeland security adviser for President Bush.

It's a sensitive subject. These women don't want to have to take off their scarves in front of a whole lot of other people, especially men.

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: It's not only the hijab, Wolf, it's also the abaya. In Saudi Arabia, women wear the long black cloak. Also, Iranian woman very religiously observant. And so, it is an issue.

As you know, you take your jacket off, I take my jacket off when I go through screening. And TSA has said they have special security screening privacy rooms, but you have to ask for that.

And so, Wolf, one of the things I think we learned from this is, you need to offer that. Screeners are going to have to say they need to go through a special screening procedure, would they like a private area, and offer that. And it's got to be near the screening area, not far away, not a big delay.

BLITZER: Should every woman who wears a headscarf be told you have to go to this private area for screening?

TOWNSEND: No, and I think that's the objection, Wolf. It can't be based on merely that a woman's an observant Muslim, or because she's wearing a hijab, a headscarf. It really needs to be based on some other criteria, whether or not there's some concern that's there a bulkiness about it, that the screening procedures are inadequate. And one has to wonder, as we've talked over the last two weeks about body imaging and body scanning, what the implications of that will be, vis-a-vis religiously observant women and men, and how TSA will anticipate that.

BLITZER: It's going to require some sensitivity by these TSA agents who work at these airports to deal with this on a more sensitive basis.

TOWNSEND: Exactly right. And immediately after September the 11th, TSA and other law enforcement went through this cultural awareness training, and they're going to have to be sensitive to it as we change our screening procedures.

BLITZER: The American-Arab Anti-Discrimination Committee issued a statement today saying that this new requirement for the extra screening for people coming into the United States from these 14 countries, mostly Arab or Muslim countries, is going to be a major affront to 700 million people who live in those countries. "This directive targets individuals, including U.S. citizens traveling from Muslim-majority or Middle Eastern countries with no regard as to whether the passenger poses an individualized threat. Implementation of this policy will result in racial and ethnic profiling..."

Are they right?

TOWNSEND: Well, I think most people would tell you, Wolf, racial and ethnic profiling is not effective. We profile, but it's specifically targeted to the intelligence that we receive.

And so, what you want to be sure is not -- and I think the president was trying to address this concern in his statement from the East Room -- the dining room yesterday. This is not targeting Muslims. We use the intelligence, and if it takes us in the direction of Arab men, or of a particular age group, we have to be clear, publicly, that it's based on the intelligence and this is not targeting just Muslims.

BLITZER: They look at it, these people in these 14 countries, and they say, why us? Why not England, the United Kingdom? Richard Reid, the shoe bomber, came from England. Or why not Morocco or Jordan, other Arab countries that potentially could send terrorists out as well?

TOWNSEND: Well, that's right, Wolf. And I think what it's going to require is Secretary Napolitano, John Brennan and others in government reaching out to people like the Council on American-Islamic Relations and other leaders in the Muslim community to get their support, their buy-in, in explaining these procedures and targeting to them, and get their support, frankly.

BLITZER: Fran, thanks very much. A sensitive issue all around.

A new arrest in an alleged terror plot reaching from Colorado to New York. The connection to the main suspect in the case goes back years.

And in our "Strategy Session," would it be a good thing for President Obama if Republicans won control of Congress in November? Would that be a good thing?

James Carville and Tony Blankley, they're here live. They'll go head-to-head on this question.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: From day one as Republican Party chairman, Michael Steele has said some provocative things, angering both Democrats and even some of his fellow Republicans. Right now the anger at him is coming from within his own party. It's reached a new level, I must say.

Our senior congressional correspondent, Dana Bash, has been getting an earful on all of that.

What are you hearing? What's going on here, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: I certainly have been getting an earful.

Look, as you said, in the year since Michael Steele has been chairman of the RNC, Republicans have had issues with him on a lot of different things, because of the gaffe that he has made, and because they believe he is weak when it comes to his leadership. But I've been talking all day to senior Republicans aides on Capitol Hill, and Republicans, really, all over, and I have been floored at how upset they are with him about the fact that he is selling a book, perhaps more, they say, than dealing with his own party.

(BEGIN VIDEOTAPE)

BASH (voice-over): Republicans are blasted their own party chairman, saying his new book tour is taking the GOP on an unwanted detour with things like this...

MICHAEL STEELE, DNC CHAIRMAN: We walked away from the Contract with America. We walked away from principal leadership by trying to be Democrat-like, by trying to be something that we're not.

BASH: GOP congressional aides tell CNN that sounded more like an apology tour. And this...

STEELE: I'm not going to sit in January and predict we will take the House.

BASH: Republican congressional sources complain that undermines efforts to raise money and recruit candidates.

Anger at Michael Steele boiled over on an internal GOP conference call this week that sources participating called ugly. Republican congressional aides expressed deep frustration to RNC staff about Steele.

Multiple sources tell CNN congressional aides told Steele's aides he was throwing Republicans off message.

Many in the GOP agree.

JOHN FEEHERY, REPUBLICAN STRATEGIST: It's annoying and it's distracting and it's irrelevant and it's silly. And we don't need it. What we need is everyone working together on a common agenda.

BASH: GOP strategists and aides say one reason they're furious is Steele's book revisits what went wrong for Republicans in the past, which leaders did last year. Many call it the wrong message now, an election year.

Suddenly, the RNC chairman is using his book tour to fire back at critics in his own party. STEELE: That's why we've lost in the past. And I'm telling him, I'm looking him in the eye, and say, I've had enough of it. If you don't want me in the job, fire me. But until then, shut up, get with the program, or get out of the way.

BASH: He even she had this on the Christian Broadcasting Network...

STEELE: God, I really believe, has placed me here for a reason, because who else and why else would you do this unless there's something inside of you that says right now you need to be here to do this?

(END VIDEOTAPE)

BASH: And the RNC won't comment for the record on the explosive conference call aides there had with their counterparts on Capitol Hill, but some are clearly trying to distance themselves.

One RNC aide told me, "He is RNC chairman, but it's his book and his voice." And there are also a number of GOP sources telling me that there's deep concern about the RNC's financial situation under Steele.

The RNC has considerably less money now than it did going in to the last two midterm elections, and several Republican sources, Wolf, are saying that big donors simply are not giving to the RNC because of their concern with Steele. And if they are giving, they're giving elsewhere.

BLITZER: So, amid all of this, is there any serious talk of him either resigning or being forced out?

BASH: I was talking to one senior Republican source who said -- you heard him talking about God in that clip. He said, "If God put him there, its' going to take God to get him out of there," because, actually, the Republican rules inside the Republican National Committee are such that it would be very hard to vote him out.

But he just has one more year left on his term. So, what they're hoping, big picture inside the Republican Party, is that he takes his profile down much lower and he allows Republican leaders who feel that they have much more of a consistent message to stay out there during this election year.

BLITZER: It's sort of all ironic, because in November, last November, Republicans had a pretty good election season in Virginia and New Jersey. They did quite well. To see this little fight going on now, that's sort of unusual.

BASH: Very much unwanted.

BLITZER: Yes. OK. Thanks very much.

BASH: Thank you. BLITZER: He's been busy pushing health care, protecting the nation. Has President Obama taken his eye off the ball on creating jobs? It's a relevant question as we're seeing a fresh new number on jobs lost.

And what's the best way to protect all of us when we fly? We've heard about airport screening devices like metal detectors and body scanners, but wait until you see what could be coming next.

(COMMERCIAL BREAK)

BLITZER: A lot to discuss in our "Strategy Session."

Let's bring in our CNN political contributor, the Democratic strategist, James Carville, and Republican strategist Tony Blankley.

Guys, thanks very much for coming in.

Here's what Michael Steele set today, the chairman of the Republican Party. We were just talking about him. As far as the jobs lost last month, 85,000 jobs lost in December, unemployment remaining at 10 percent.

"The American economy is a powerful and amazingly resilient system that will always naturally return to balance because of the determination and unique ingenuity of the American worker. But President Obama's singular focus on enacting his government-run liberal policies are single-handedly preventing this return."

Let me bring in James Carville.

These numbers were very disappointing in December, because last month, the month before November, now it looks like there was a tiny little job growth, and now it's back to, what, 85,000 jobs lost.

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Well, to be fair, there's fluctuation anytime that you're having a recovery. And I don't doubt we're in the midst of some kind of recover here.

And by the way, these are a lot better numbers than we were looking at a year ago. So, look, I'll tell you, if the next nine months improve as much as the previous nine months, then I'll be fine by the November elections.

So, you know, yes, I wish these numbers would have been a little better, but they're going to bounce up and down in the months to come. But I don't have any doubt that we're looking at jobs going in positive territory by this spring. I hope I'm right.

BLITZER: You're saying -- I just want to be clear, James. Are you saying if the unemployment rate, come November, is at 9 percent or 10 percent, that's going to be positive for Democrats?

CARVILLE: What I'm saying, it's not going to be positive, but it's creating jobs. Unemployment rate is a function of how many people are looking for work, but even at the 85,000 jobs that were lost -- and December was much, much, much better performance than we saw the December before. And I'm saying the jobs numbers, although they're still dismal, are a lot better than they were, and there is improvement in the jobs market in the last year, there's no question about that.

BLITZER: Well, a year ago they were losing about 700,000 jobs a month, 500,000 jobs a month lost.

Now it's 85,000, Tony, so James has a point.

TONY BLANKLEY, REPUBLICAN STRATEGIST: Well, a very small point.

Look, I worked in the Reagan administration, and we were coming out of the recession and inflation of '82 and '83. We started bragging about inflation coming down, and the public handed us our heads because they didn't think things were getting better quick enough.

And I think the Democrats have to be very careful in how they deliver their message. If they sound more confident and pleased with the conditions that the average American is experiencing, they're going to have that same experience that we did. So, I would not, if I were they, be cheering on 8.5 or 9 percent unemployment 10 months from now.

BLITZER: That's a good point, too, James.

CARVILLE: It's a very good point, but if the unemployment -- if we're losing jobs next October, we're going to lose the election bad. But if we're starting to create jobs and things are starting to get good, then we're going to have to make the point that what we have in place, it's starting to improve things.

And Tony is right, one of the hardest things -- we had that problem during the President Clinton administration, when things were getting better, and we tried to make a case and people didn't want to hear it. That's a very tough thing for any administration to do, and Tony is right, it's hard.

BLANKLEY: I think, you know, in the economy, it's one of the issues that's the hardest to spin, if you will. The public knows what it thinks it knows about whether they feel good, and if they don't like it, they don't want to hear any politician's opinion about it.

BLITZER: Here's something else, James. Think about this.

Peggy Noonan writing in "The Wall Street Journal," she says this -- she's worked in a Republican White House as a speechwriter, she's a very smart woman -- "If Mr. Obama is extremely lucky -- and we're not sure he's a lucky man anymore -- he will get a Republican Congress in 2010, and they will do for him what Newt Gingrich did for Bill Clinton: right his ship, give him a foil, guide him while allowing him to look as if he's resisting, bend him while allowing him to look strong."

Does she have a point there? CARVILLE: You know, she's a have good writer and everything. Yes, if they get one and they shut the government down and try to impeach him, it probably will help him.

But, you know, the Democrats, I don't think the president -- you know, the Democrats are going to try to do as well as they can in the next election. We're probably going to lose some seats. You know President Reagan lost seats in 1982, but the projections were a month before that election, as I recall, Tony, that you were going to lose more seats. I think you lost something like 29, but...

BLANKLEY: Yes, 26.

CARVILLE: ... it wasn't a very good year, but it could have been worse.

BLANKLEY: Yes. You know, I have to wonder, James, whether, despite the fact that you got your president reelected in '96, whether you wouldn't have preferred that we had not taken over Congress and you had your own majority for the remaining six years in your administration.

CARVILLE: On election night in November of 1994, I didn't go, wow, just what we needed.

(CROSSTALK)

BLANKLEY: But I'm not sure he (ph0 feels the politics of the moment.

CARVILLE: Yes. No one wants to lose an election, I promise you.

BLITZER: Yes. There's still plenty of time between now and November, although economists still say, Tony, as you well know, that given the population growth in the United States, just to stay even you need to create at least 100,000 or 150,000 jobs a month just to stay even. Forget about losing jobs.

BLANKLEY: Look, I mean, you get past the politics of this, you know, you see what the experts are saying, and they're split.

I mean, there's doubts as to whether we're going to have inflation or deflation, whether we're going to have a double ditch, whether we're going to have a couple of quarters of growth. You know, it's all over the map, because the truth is we don't know whether the real estate market has bottomed out yet, we don't know whether the private sector -- they'll need to start bringing the $11 trillion that's sitting on the sidelines back into the markets and back into productive investment.

So there's an awful lot of unknowns, and politicians are going to be holding their breath.

BLITZER: I love it when all you guys say, "We don't know." Those are key words.

CARVILLE: I agree. I agree completely with Tony. I don't know what to say. I'm flummoxed. I agree with everything he said.

BLITZER: You guys are good. Thanks very much. Have a great weekend.

We're told a Jordanian-doctor-turned-suicide-bomber was gifted, smart and a loner. The people who knew him best offering now some new clues as to why he attacked a CIA base in Afghanistan.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker," New Hampshire lawmakers are hoping their state will retain the tradition of being the first to hold a presidential primary during an election year. The state house will vote Wednesday on whether to give the state's secretary more latitude in setting a primary date. That would solidify New Hampshire's standing of being first. Next, the state senate would vote on the measure, which is expected to become law.

Iowa has the first caucuses, New Hampshire always the first primary.

(MUSIC)

BLITZER: A lot of us remember that. Some seniors could be getting a new twist in their Medicare drug program. And who better to promote it than the man who coined the term we're talking about, Chubby Checker?

Checker, he sang and danced the '60s hit "The Twist" -- a lot of remember this -- unveiling a new ad campaign today promoting what's being called the Extra Health Program. Under the new law, more than one million low-income seniors could be eligible for close to $4,000 in prescription drug assistance.

Chubby Checker.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

If anyone remembers 9/11, it's certainly Rudy Giuliani. But the former New York City mayor seemed to suggest this morning that there weren't any domestic terror attacks during the Bush presidency.

Just ahead, Rudy Giuliani will join us live. I'll ask him to clarify those red-hot remarks.

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BLITZER: We want to take another look right now at this billboard featuring President Obama, because, guess what? It won't be around much longer.

CNN's Ines Ferre is joining us with more on this story.

It's caused quite a lot of buzz out there, Ines.

INES FERRE, CNN CORRESPONDENT: Oh, yes, quite a lot of buzz, Wolf.

You know, there are thousands of billboards in New York City, but one got immediate attention overnight. And I'm not just talking about the people walking by it. I'm talking about the White House.

(BEGIN VIDEOTAPE)

FERRE (voice-over): On this busy Manhattan street corner, a bigger-than-life advertisement that's taken off a life of its own, a photo of President Obama during a visit to the Great Wall of China with the tagline, "A leader in style."

In the photo, the president is wearing a jacket made by the Weatherproof Garment Company. The White House says it never authorized the company to use Obama in its advertisement, citing a longstanding policy "... disapproving of the use of the president's name and likeness for commercial purposes."

But the head of Weatherproof is making no apologies.

FREDDIE STOLLMACK, PRESIDENT, WEATHERPROOF: We're very proud of the fact that of all the coats that President Obama could have chosen to wear in China, he chose our best-selling coat. We like to think of it as a great depiction of President Obama wearing a Weatherproof coat.

FERRE: The company had licensed the photo from The Associated Press. Weatherproof now says it will comply with a White House request to take the billboard down. Legal experts say the company had no leg to stand on.

BARBARA SOLOMON, FROSS ZELNICK LEHRMAN & ZISSU, P.C.: This is a pure commercial appropriation. The First Amendment does not really protect somebody who is making purely commercial use with no expressive element. This is an advertisement and nothing but an ad.

FERRE: Meanwhile, Mrs. Obama is getting her share of advertising attention. Recently, the animal rights group People for the Ethical Treatment of Animals, or PETA, put out this image of the first lady in their fur-free ad. PETA says the White House politely asked them to stop using the ad, but they say they don't plan to stop, telling CNN they're not selling anything, that the picture is a public service announcement, not an advertisement.

(END VIDEOTAPE)

FERRE: And Weatherproof says they'll take down the billboard within the next week or so. They have to find a replacement ad to go up in its place.