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New Developments in the Push to Pass Health Care Reform; Exports Keep Shipbuilder Afloat

Aired March 18, 2010 - 17:00   ET


WOLF BLITZER, HOST: Thank you, Rick.

Happening now, President Obama delays his overseas trip again, as House Democrats push toward weekend votes on health care reform. This hour, the House speaker is gushing over a new set of numbers, but her vote count still isn't where it needs to be, from her perspective.

Also, the man who changed everything in the U.S. Senate -- we're talking about Republican Senator Scott Brown of Massachusetts.

He's here in THE SITUATION ROOM this hour.

How far is he willing to go to stop health care reform?

And how one company is building ships and building up America. The secret -- appealing to markets far off the Horizon.

I'm Wolf Blitzer.


Democrats now with an important piece of the puzzle as they try to put together enough votes to finally pass health care reform. The nonpartisan Congressional Budget Office released its analysis of a compromise version of reform, which is the Senate bill passed in December plus changes or fixes that both chambers would need to approve. The bottom line right now -- an additional 32 million Americans would have health insurance, meaning 95 percent of citizens would have medical coverage. The CBO estimates the compromised bill would cost $940 billion over the next 10 years and reduce the deficit by $138 billion during that time. The Senate bill alone would cost $875 billion and trim the deficit by $118 billion over the next decade.


REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We feel very strong about where we are in terms of how we proceed. The CBO report that we have, again, speaks so eloquently. I love numbers. They're so precise. It speaks so eloquently to the savings that are there for the American people.


BLITZER: All right. Let's bring in our senior Congressional correspondent, Dana Bash.

She's been looking at the -- the numbers and everything else involved in this long, long process -- Dana, what are they saying over there as far as wavering Democrats are concerned and the CBO report today?

Is it going to convince them to vote yea?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That is really obviously what all of this is all about.

So let's take a look at some of the specific changes, because so much of what was done to change the health care legislation was to target some of these undecided Democrats.

Let's take the thing that Democratic leaders have been talking about all day long and that is that deficit number you just mentioned, the fact that it -- according to the CBO, the deficit would be reduced by $138 billion over the first 10 years.

Now this is something that is directly appealing to conservative Democrats who are undecided, in swing districts or Republican leaning districts. Many of them are conservative because they're fiscally conservative. And they're very worried about the cost and the deficit.

So one of those -- of those Democrats -- actually I should tell you, one Democrat who's worried about this, he has already said that he is switching from no to yes, primarily because of this deficit issue. And others say that they are thinking about doing the same, including Baron Hill of Indiana.


BASH: Aside from the Nebraska issue, did you remove the money for Connecticut hospitals?

Did you remove extra money for -- to help Florida for Medicare Advantage, things like that?

Was everything removed, all the special deals?

PELOSI: Well, it's not a question of special deals. Whatever is in there can be subjected to many people competing for it. They're capped. There is a comfort level with why they are in the legislation. We thought that Nebraska was, indeed, a special deal.


BLITZER: What other changes are -- are in this compromise that might appeal to some of those undecided Democrats -- Dana?

BASH: Well, I should just say that I -- I -- we were going to use a sound bite from Baron Hill on the deficit issue. Obviously, that was not that. That was the issue of special deals. And that was something that Nancy Pelosi was talking about. That is another issue, Wolf, the issue of -- of -- the big issue of special deals was, of course, what everybody was talking about. The -- what Nebraska got, specifically the Nebraska fix for Medicaid. They got more money from the federal government than any other state of the union. That is going to be fixed because every other state is going to get that same deal.

But there are some other things in here, like $100 million for a hospital that is likely to go to the State of Connecticut and, of course, the money for Medicaid help to the State of Louisiana. Those still remain in this package -- Wolf.

BLITZER: I take it the House will convene Sunday at 1:00 p.m. Eastern, Dana.

What will they vote on once they get to the House floor?

Will they vote for the Senate bill as is?

Will they do that deem and pass?

What are they going to vote for?

BASH: That's right. They are going to -- our understanding is that on Sunday, they are going to first take up the Senate bill. And that will not be a direct vote on the Senate bill. It will likely be, as we have been talking about, the deem and pass or the self-executing rule, so they won't have to directly vote on it. And then shortly thereafter, the House will vote on this package we've been talking about of fixes. That will -- that will be it. That will be what will go on in the House.

And then this whole issue is going to go over to the Senate. And the Senate is going to deal with that package of fixes.

Meanwhile, the actual Senate bill, that's going to go to the White House. And I was just told by one of the House leaders just moments ago that they do believe that the president will have to sign that before the Senate can take up the changes bill.

BLITZER: All right. We're going to watch it with you.

Don't go too far away.

Dana, thank you.

House Democratic leaders hope that one way or another, members will give final approval to the Senate reform bill and most likely on Sunday, send it to the president to sign. They also hope to separately approve that package of changes to the bill. Those changes would have to be approved by the Senate before heading to Mr. Obama's desk.

And we learned today that the president plans to hang around to try to take care of all of that.

Let's go to our senior White House correspondent, Ed Henry -- Ed, the president basically saying to Indonesia and Australia, it's not going to happen now, we're going to have to wait a few months.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. A lot of people, including myself, had our bags packed ready to go on Sunday. But, obviously, all this high drama here at the White House forcing the president to cancel that trip or at least delay it for a few months. We're told the drama was going on through the night. Basically, the president scheduler (ph) was meeting almost all through the night, trying to figure out all the various permutations based on when the bill arrived, whether they could delay this by a few hours -- the departure; whether they could delay it until Monday.

Finally, we were told, at 9:45 a.m. this morning, the president himself made the call that it was better to just delay it altogether. They now hope to hit both Australia and Indonesia in June.

The bottom line from Robert Gibbs is that they didn't want to sort of have this dragging out throughout the weekend, the president trying to lobby people and make sure this gets through and then maybe call these countries at the last minute on Sunday and say I'm going to have to cancel. They just wanted to get it done now. They hope that now they'll go in June instead -- Wolf.

BLITZER: Is it your understanding the president would then have a formal signing ceremony at the White House -- signing the old Senate version, the version that was passed Christmas Eve, without any other changes, would he sign that into law and that would become the law of the land until the revisions -- the so-called reconciliation bill -- is passed by the Senate and then the House?

HENRY: It's a great question. And the honest answer is we just don't know yet. When you talk to top White House aides here, they say, as Dana just reported, that they believe once the House passes this bill, that's essentially deeming that the Senate bill has passed and then also has the fix-its -- the reconciliation part -- that at least the -- the original Senate bill part could be signed into law by the president.

But Robert Gibbs was sort of hedging on that point today, on whether or not they would wait for a signing ceremony until perhaps next week or next weekend, when the Senate formally passes the fixes. They basically are saying here, they're waiting for the Senate parliamentarian to give them more formal guidance.

It gives you an idea of just how maybe chaotic, maybe a little odd, all this procedure and process has been, that even here at the White House, they don't know yet exactly whether they'll have a signing ceremony (INAUDIBLE)...

BLITZER: But I thought the Senate parliamentarian basically has already suggested that they can't take up the reconciliation bill unless the president signs the Senate bill into law?

HENRY: He did suggest that and we made that very point to Robert Gibbs. But Robert Gibbs suggested that they're still waiting for more guidance about exactly how it's going to be done. And, I think, also, whether he's going to have a formal big public ceremony -- that maybe he would sign it in private just to make sure that one piece is the law of the land but not have a big ceremony yet; maybe wait until the Senate does the fix-its to make sure this thing is -- is completely done. Because they are worried, at least politically, putting away side the procedure, that maybe it will look like the president was celebrating before the Senate finishes this job next weekend.

BLITZER: Ed Henry is watching it at the White House.

We'll be busy all weekend, Ed.

Thank you.

Some Democrats wary about voting for health care reform fear they'll pay a huge price on election day. A former Congresswoman booted for casting a controversial vote has some advice for current members.


BLITZER: In the House of Representatives right now, supporters and opponents of health care reform are working frantically to try to reach the magic number of 216 -- just over half the number of seats currently filled in the House. The yes votes still are very, very fluid.

So CNN is keeping tabs of House members who appear set to vote no. That includes all 178 Republicans in the House and 26 Democrats who are against the bill. That would put opponents 12 votes short of the 216 magic number they need to kill health care reform.

But some Democrats are changing their minds right now and dozens of others still are undecided.

Let's talk about the possible fallout of voting yes or no, for that matter, with our senior political analysts, Gloria Borger and David Gergen -- David, this is about as tough a vote for some of those Democrats -- moderate Democrats -- who are in districts that John McCain carried over Barack Obama in 2008 -- as it comes.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: Well, that's exactly right, Wolf. There are some 49 Democrats who are in districts that John McCain did carry in 2008. A number of them are safe. But there -- by some estimates, there are as many as three dozen Democrats who are still in play who could be vulnerable if they go to yes on this vote. And -- and as you say earlier, it does very much recall Marjorie Margolies-Mezvinsky in 1994, when she went to bat for President Clinton on -- on the budget and then went down in Pennsylvania as a first -- a first term Congresswoman, went down in that election that followed.

BLITZER: She wrote an article on the op-ed page of "The Washington Post," Gloria, today. You know Marjorie Margolies- Mezvinsky.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Um-hmm. BLITZER: "There are times," she writes, "in all our careers when we must ask ourselves why we're here. I urge you simply to cast a vote you can be proud of next week, next year and for years to come. Given the opportunity, I wouldn't change my vote. Then again, what do I know? I was a lousy politician."


BLITZER: She's giving some advice...

BORGER: She is.

BLITZER: -- to those Democrats right now who have to make a decision that potentially could remove them from Congress, like she was removed after she supported President Clinton.

BORGER: You know, Wolf, I actually covered that. And the -- the problem that Marjorie Margolies-Mezvinsky had was that she had gone on television that morning and said she was against this budget. Then President Clinton, who is very persuasive, called her up. She changed her mind. And so she voted with him and she voted for him.

So the problem was that she was telling her constituents one thing all along, had been very vocal against it, and then came out and flip-flopped. So it's really not a question for a lot of these members now whether they can vote their conscience, it's just that you can't do one thing and say another.

BLITZER: And it's interesting that Gloria says that, David, because I was speaking to some -- some Democrats who are on the fence right now. And those who are going to vote no, what they're saying is they're going to go into the House chamber, vote no and then run out of there as quickly as they possibly can so no -- so Nancy Pelosi or Steny Hoyer can't grab them and convince them to do what they did...

BORGER: You can't do that.

BLITZER: -- to Marjorie Margolies-Mezvinsky, get -- get her to change her mind.

GERGEN: Well, well, that's -- that's exactly right if you did. And that's, you know, Nancy Pelosi has to flip some of the nos to yeses. And they will be the ones who will be most vulnerable on this flip-flop charge. And, look, you know, hey, they're -- for -- for Marjorie, there was this ironic twist to the tale, of course, that her son -- her son Marc is now engaged to Chelsea Clinton.

BORGER: Right.

GERGEN: So maybe good things do come...

BORGER: That had nothing to do with it.

GERGEN: -- out for her in the end.

BLITZER: Yes, exactly. GERGEN: It had nothing to do with it, but it's still one of those ironies of history.

BLITZER: She may have lost...

BORGER: But the thing is...

BLITZER: She may have lost her race, but she did get a -- a wonderful daughter-in-law, Gloria.

BORGER: That's right. But the thing is...

GERGEN: Exactly.

BORGER: But the thing is, Wolf, I think the lesson here is that your constituents will say to you, look, if you change your mind, you're allowed to do that, but you have to tell us why.


BORGER: And there'd better be a good reason for it. But if you do it on the floor of the House in the 11th hour and nobody knows why and you've been talking about it for months and then suddenly you change your mind, that's not going to be really well received.


BORGER: Correct?

BLITZER: I think those are good points.

Guys, thanks very much.

We'll be watching all weekend and beyond.

An economy treading water and multimillion dollar ships to sell -- in our Building up America series, an American shipbuilder thinks outside the box of U.S. boundaries to keep its business from sinking.

And Scott Brown -- he's here in THE SITUATION ROOM.


BLITZER: About 206,000 miles on his pickup truck. Senator Scott Brown just drove over here to THE SITUATION ROOM -- a short drive from Capitol Hill. He's going to be my guest in just a few moments. There he is walking out of that pickup truck into the CNN Washington bureau. He's actually putting some quarters in the meter. A good citizen. Good work, Senator. Senator Brown.

Let's check in with Jessica Yellin. She's got some other stories she's working on right now.

Top stories -- Jessica, what else have you got?

YELLIN: Hi, Wolf. Secretary of State Hillary Clinton -- she is in Moscow calling on Russia to delay Iran's first nuclear plant. She says Iran is entitled to nuclear energy for civilian purposes, but she wants Tehran to prove that it's not trying to develop nuclear weapons. Russia insists it will go ahead with plans to launch Iran's nuclear reactor this summer.

Former Presidents Bill Clinton and George W. Bush will make their first joint trip to Haiti on Monday. President Obama had asked the two leaders to spearhead U.S. fundraising efforts in the wake of January's deadly earthquake. Next week's visit is meant to assess the needs of the recovering Caribbean nation. Haiti's government estimates the quake killed more than 230,000 people and left another 1.3 million homeless.

Well, this is the story that keeps giving. Embattled South Carolina governor, Mark Sanford, has agreed to pay $74,000 in ethics fines. An investigation found Sanford violated state laws with his campaign spending and travel, including a taxpayer-funded meeting with his mistress. He could still face criminal charges. Sanford, who, as you recall, was considered a potential 2012 Republican presidential candidate, has been under fire since he went MIA last summer and turned up in Argentina visiting his mistress. Sanford's divorce also became final today. A big day in Governor Sanford's life.

BLITZER: A busy, busy day for the governor.

Thanks, Jessica, very much.

YELLIN: You're welcome.

BLITZER: Shipbuilding is big business in the coastal city of Mobile, Alabama. Shipbuilders there are feeling the pinch from the sagging U.S. economy. Some have already gone under.

In our Building Up America segment, CNN's Tom Foreman found one company that's staying afloat by sending its products overseas.

TOM FOREMAN, CNN CORRESPONDENT: Hey, Wolf, we're on board the CNN Express, rolling down Interstate 65 here, from Montgomery to Mobile. And we're here for a reason -- because one part of Alabama rebuilding its economy is travel -- travel all over the planet, reaching out to find new partners that can make things better.

If you go far enough down this Interstate, you can see how it's working.


FOREMAN: Bayou La Batre is about as far south as you can go in Alabama without getting your feet wet. But here, in the Horizon Shipbuilding yard, they have discovered that the secret to building up is not stopping there, but going offshore to find new markets and new customers.

(voice-over): They build state-of-the-art work boats for pushing barges, servicing oil rigs, that sort of thing. And Horizon is relying much more on sales to places like Nigeria, Mexico, even Iraq.

Travis Short helped start this business almost a dozen years ago.

(on camera): How important has international trade been to this company?

TRAVIS SHORT SR. HORIZON SHIPBUILDING, INC.: It's been very important for us, in particular, because of the downturn in the domestic markets.

RON GUNTHER, VICE PRESIDENT, HORIZON SHIPBUILDING, INC.: Small boat yards are very competitive. A lot of small boat yards have closed down.

FOREMAN: That's Ron Gunther, a vice president. And he says the days are simply gone for counting on the domestic marketplace as much as they used to, especially for $10 million marvels like these.

GUNTHER: This is the best part here. Wait until you see this, Tom.

FOREMAN: Oh, so this is the pilot house.

GUNTHER: Yes. This is where you drive the boat.


(voice-over): And he's not alone. State officials say Alabama firms have increased their exports by 36 percent in a half dozen years.

GUNTHER: You've got to do what you got to do, whether it's here or overseas or where it is, you've got to go out there and find it.

FOREMAN (on camera): They've certainly been affected by the recession here. They've lost more than 100 jobs. But the point is they still have more than 200 jobs and they're still in business. And in this industry, that is saying something.

(voice-over): It is saying the global marketplace is here to stay.

(on camera): Do you think that any business out there can really afford to not be thinking globally at this point?

SHORT: I -- I think not, particularly in our type of business, in the hard manufacturing business.

FOREMAN (voice-over): Because business these days is hard and finding success can mean searching the seven seas.

(on camera): The governor here is really hot on all of this. In the past few years, the state has launched more than 20 industry hunting missions overseas to places like India and China and Russia. And more importantly, they have come back with deals in hand representing millions and millions of dollars and, more importantly, hope for more development in the future -- Wolf.

BLITZER: Tom Foreman in Alabama for us.

Tom, thank you.

He rode his trademark pickup truck to a pivotal win in Massachusetts, snatching up an unstoppable 60 vote majority -- a super majority from the Democrats. Republican Senator Scott Brown pulled up to our D.C. studios here in that same truck just a little while ago. Now he's walking into THE SITUATION ROOM.

Senator, welcome.

We're going to talk in just a moment.


I look forward to it, Wolf.

Thank you.


BLITZER: If you had to name one Republican who makes Democrats downright nervous right now, it just might be Senator Scott Brown of Massachusetts. He single-handedly deprived the president's party of its filibuster-proof super 60 seat majority in the U.S. Senate.

Now, what is he doing for an encore?

One thing he's doing, he's here in THE SITUATION ROOM.

Senator, welcome.

BROWN: It's good to be here.

Thank you.

BLITZER: I hope you'll be a frequent visitor in THE SITUATION ROOM. We're not very far from Capitol Hill.

BROWN: Thank you.

BLITZER: And thanks for driving your pickup truck all the way from Congress here.

BROWN: That's how I get around. It's no secret.

BLITZER: Well, it's a nice little truck.

Let's talk about health care right now, priority number one.

What's wrong with giving 30 million plus more Americans access to health insurance?

BROWN: Well, part of the problem is after a year of doing this, it still raises taxes. It cuts Medicare a half a trillion dollars. It cuts TRICARE for military people. It's going to cost a trillion plus. And while it's certainly important to provide care for those people, I believe that individual states could do it better and that we can do it better. Because the CAR (ph) votes and all the special interest issues that we were talking about that we all shook our heads about, a lot of those are still in that bill.

BLITZER: But I -- but let me -- I guess I should rephrase the question.

What's wrong with spending money -- the cost, if it winds up costing money, if it winds up raising taxes on -- on multimillionaires or millionaires or people even earning more than $250,000 a year if it's going to give access to 30 million Americans so they don't have to worry about getting sick?

What's wrong with that?

BROWN: Well, there's nothing wrong with that. But more importantly, it does raise taxes and it does raise taxes for people who are earning less. It's going to affect businesses. It's also -- once, as I said before, I had felt, as we did in Massachusetts, we provide almost 98 percent of our people with insurance. And individual states would like to have that right to do the same thing and ask the federal government, how can you help us do that?

Can you incentivize us to -- to do it better?

Maybe they'll do it better than Massachusetts and get costs in -- costs under control. But this one size fits all plan really is hurting businesses and hurting individual citizens right now with all the carve outs is not appropriate.

BLITZER: Because you do have nearly universal health insurance in Massachusetts for everyone.

BROWN: Yes, we do. Yes.

BLITZER: Did you have to raise taxes in order to do that?

BROWN: No, we didn't raise taxes and we didn't cut services.

BLITZER: How did you do it?

BROWN: Well, we provided a -- a competitive plan with the so- called Cadillac plans all the way down to Commonwealth Care, which is a fully subsidized plan. We are having trouble right now with costs, because we involve mandates and a whole host of other things that we can do better than what we we're doing...

BLITZER: Will you have to raise taxes to pay for it?

BROWN: No. I believe we can actually do some internal reforms.

BLITZER: You like what -- what has happened in Massachusetts?

BROWN: Well, I voted for it because it's...

BLITZER: But you...

BROWN: -- completely different...

BLITZER: You don't want to change it?

BROWN: It's complete

BLITZER: You want...

BROWN: Listen, it's completely different than what they're trying to do here.

People say well, you voted for Romney-care, what about Obama- care?

Two different things. Our plan didn't raise taxes. The plan that's being pushed right now, the biggest thing that the people have a problem with is the back room deals, the lack of transparency and the fact that they're using political chicanery and parliamentary maneuvers to ram this bill through.

BLITZER: The separate reconciliation bill, it still wouldn't be good enough for you?

BROWN: It's not going to be good for a lot of people, not just me. To put it all on me I think is inappropriate. This bill is resonating throughout the country. Stevie Lynch from my state said he's voting no. I commend him for that. That bill hurts our state. The way they've done it, they can do better. They should do better.

BLITZER: How far are you willing to go? When I say you, I mean the Republicans in the Senate to try to block.

BROWN: I don't speak for all the Republicans. I speak for Scott Brown. I'm a Scott Brown Republican as we've talked about before. I'm going to look at each and every bill and be an independent voter. The way they -- I think the house or maybe some members in the house think it's going to come over and through this magical form of reconciliation, it's going to be fixed. It's not going to be fixed. They're going to go line by line and you're going to get a health care bill that's going to be challenged based potentially by the attorneys general in the state on its constitutionality.

BLITZER: Do you think that's a good idea?

BROWN: I don't have an opinion on that. I'll leave that to the legal people. I do feel we can do better and we should allow the states to participate more instead of this one size fits all approach that is not good for my state and potentially not good for the rest of the country.

BLITZER: I've been told by some of your colleagues, Republicans, that if the house passes it, including the separate reconciliation part, making the fixes, the changes, whatever you want to call it, they're going to introduce amendment after amendment after amendment in the Senate to try to delay it for as long as possible, to change it as much as possible.

BROWN: You know, once again, I said in the beginning it's been a year. We should be talking about jobs right now. We're not talking about jobs. We're doing this. Then we may be doing illegal immigration. We may be doing financial reform. The people in Massachusetts, when we have unemployment almost at 10% and unemployment is rising or at least stable or rising in the country, we need to talk about jobs and we haven't done that now. So I'm not interested in the political maneuvering and the parliamentary maneuvers right now. I'm interested in getting people back to work.

BLITZER: What has surprised you the most since you've come here to Washington?

BROWN: Actually being here with you.

BLITZER: Why is that a surprise?

BROWN: I'm at home. I've been home forever watching THE SITUATION ROOM. I always wanted to see how big it was. And certainly participate in the process. It's been a lot of fun. People -- I guess I'm surprised at the way people have been so receptive and respectful and that means a lot to me and my family.

BLITZER: I know you've met the vice president, Joe Biden, he swore you in as a United States senator. Have you had a --

BROWN: He almost won a razzi last night.

BLITZER: Have you had a chance to meet with the president yet, the first lady?

BROWN: Not yet. I certainly look forward to it.

BLITZER: On some of these issues, you're what they call a moderate Republican from Massachusetts. You're willing to work with them on some of these issues.

BROWN: I've already shown that. I'm a fiscal conservative. For example, in the first jobs bill I worked across party lines to get that passed. The president signed it today. For Massachusetts and for the rest of the country, that creates jobs. I spoke to chambers of commerce today and a lot of businesses from New England. There were very, very thankful for those opportunities, for those small tax breaks that will help stimulate their businesses and hopefully stimulate the economy. So, yes, I look at each and every bill in an independent manner and will continue to do so.

BLITZER: Where else do you think looking at a positive side, where do you want to cooperate with the white house? On jobs you want to cooperate. Where else?

BROWN: Jobs is the most important thing. Chuck Schumer and I have an amendment on the FAA bill. We're working on that now. I think it's a good bill unless something strange happens I'll be supporting that in a bipartisan manner. I think terrorism and taxes. Our deficit, really the three most important issues behind jobs. So I'm looking forward to just solving problems. Right now Wolf as you know, and you've reported it many times, the system is broken. People are angry. They want better. They want us to do better. I feel my being here helps them. It's evidenced by my first vote. It's evidenced by the fact I'm willing to work and listen and be respectful in doing so. I'm trying to get the process moving because people are hurting. They want jobs. They need jobs. And they deserve and want better from us.

BLITZER: The vice president gave you a shout out last night at the Radio TV Correspondents' Association dinner here in Washington. Let me play that little joke.

JOE BIDEN, VICE PRESIDENT: You know, I do have to defend our administration a little bit here. Especially the recovery act which I've been put in charge of. Republicans keep saying it hasn't created a single job. Tell that to Senator Scott Brown.

BLITZER: He got a nice laugh out of that one. You were sitting at my table with your wife, Gayil. You were laughing.

BROWN: Of course. The vice president, I saw him for breakfast. I was at his mansion, the vice presidential residence. He told me I'm going to take a few cracks at you. Hope that's okay. I just remember. What goes around coming around. I have a sense of humor. I know he does. I've enjoyed meeting him. I look forward to spending more time with him.

BLITZER: What about all this talk that Scott Brown has higher political ambitions?

BROWN: Wolf, I just got my business cards last week. We just had our offices painted. I am up to my eyeballs in doing the people's business. I'm going to let the political pundits have fun and do that. Right now I'm going to focus on doing my job.

BLITZER: That's the correct answer.

BROWN: It's how I feel.

BLITZER: We hope you'll be driving your pickup truck here to THE SITUATION ROOM on a frequent basis. Good luck to you.

BROWN: Glad to be here. Thank you.

BLITZER: Scott Brown is the newest member of the United States Senate. Republican of Massachusetts. Hard to believe. Republican of Massachusetts.

BROWN: In the people's seat. Not the Ted Kennedy seat, the people's seat.

BLITZER: Thanks for coming. Some states are just saying no to the federal government's agenda. And they may opt out of health care reform. That's coming up next. We'll take a closer look at the trend of some states going their own way. What is going on?

Are 9/11 workers who got sick at ground zero really ready to settle with New York City? We have new information. We're looking at the deal they've been offered and why it still could fall apart.


BLITZER: Jessica Yellin monitoring some of the other top stories in THE SITUATION ROOM right now. What else is going on Jessica?

JESSICA YELLIN, CNN CORRESPONDENT: Hey, Wolf. More than just aircraft are on the rise for the air force academy. Applications are up, more than 17% for next fall with minority applicants up 36%. The air force attributes the increase to step up recruitment of minorities and in areas underrepresented at the school. This year the academy received 11,500 applications for about 1,300 spots.

Parents of young children will want to listen to this one. The government is recalling 1.2 million highchairs made by the company Graco. The consumer products safety commission says people should stop using the harmony highchair immediately. They say screws on the chair could loosen and fall out and this could make the chairs tip over which has led to 24 reports of injuries.

And the U.N. is rejecting a proposed export ban on the prized sushi delicacy, Atlantic blue fin tuna. Conservationists say it's severely overfished. Officials shot down the plan after Japan, Canada and several poorer countries said it would devastate fishing economies. The U.S., Norway and Kenya supported the proposal. Are you a sushi eater?

BLITZER: Of course. I like sushi.

YELLIN: Love it. Tuna's my favorite.

BLITZER: And you're from California.

YELLIN: Of course.

BLITZER: With health care reform on the line, President Obama postpones his Asia trip once again. He's calling in favors and pushing hard to get the bill passed. Some, perhaps even the president himself, say the vote could make or break his presidency.

And if federal health reform does pass, some states are getting ready for a fight. Their message to Washington, stay out of our business. Brian Todd is standing by with the state's rights fight.


BLITZER: So how much is this health care reform vote really mean? How much is at stake for the president of the United States? Let's discuss that in our strategy session with two CNN political contributors, the Democratic strategist, Donna Brazile and the Republican strategist, Ed Rollins. How much is at stake, Ed, for the president right now? What happens on Sunday afternoon when they're scheduled in the house to vote?

ED ROLLINS, REPUBLICAN STRATEGIST: I think a lot is at stake. I think he's made a tremendous effort to pass this thing. It's now got his imprint on it. And I don't think any Democrats can second guess him. Obviously if there's a failure and they don't get the 216 # or they don't get the votes in the Senate, which is still a question mark, there'll be some in the more liberal part of his party that will basically point fingers at a whole variety of people. But I -- no presidency is broken on one or two events or certainly not one or two legislative things. You know, you get broken on things like Watergate or wars. I think certainly this has been his most important initiative and I don't think anybody can ask for anything more than what he's done.

BLITZER: Donna, this line jumped out on me out of a story on Politico based on the president's meeting with the Hispanic Congressional caucus. One caucus member told Politico that Obama won him over by essentially saying that the fate of his presidency hinged on this week's health reform vote in the house. You think that's true?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I don't know. I wish I could be a fly on the wall for some of those conversations. What I do know is that Congressman Luis Gutierrez announced unanimous support for the Hispanic caucus. It will be back in the bill. It's a very important step. Ed knows this because I think I got it from a Republican. This is good policy. This is good politics. And, Wolf, this is a bill that will lower the federal deficit. It will increase coverage for more Americans. It will lower premiums for Americans today who are struggling with health care costs. And the best part of this is that people with pre-existing conditions will rest comfortably at night knowing that they will not be discriminated against.

BLITZER: I'm getting a lot of e-mails and calls from seniors, though, Donna, who are deeply worried that a half a trillion dollars will be cut from the projected growth in Medicare spending over the next ten years and they're worried that their Medicare benefits are going to go down.

BRAZILE: Not only will this bill strengthen the so-called doughnut hole so that seniors will have more money to cover for their prescription medicine and other needs, but this bill will strengthen Medicare in the long haul. Right now we know --

BLITZER: How does it strengthen Medicare if you're going to cut $500 billion?

BRAZILE: Because we're going to get -- we're going to reduce the waste, the fraud, the duplicative services that will streamline the process to ensure that we can make sure that we're paying for affordable medicine and not just administrative costs. So I think that's one way to go out and explain to seniors. They're being scared like everything else. This is the final hour. We know people are desperate to put more lies out there. The lies are over with.

BLITZER: You think seniors should buy that argument, this $500 billion cut in projected spending is actually going to be good for Medicare?

ROLLINS: No, it's not going to be good for Medicare. Obviously paying doctors less and paying hospitals less is not going to be good for the services. At the end of the day Democrats always amaze me in the sense that you're going to spend $1 trillion more, you're going to raise half a trillion in taxes, you're going to cut half a trillion from Medicare, and you basically talk about how you're saving money. It's sort of like the woman that goes out and buys $15,000 worth of dresses on sale and comes home and says, oh, I could have had $20,000. I actually saved $5,000. This is a big entitlement program. We have no idea how much it's going to cost long term. We do know, though, Medicare recipients today are going to get much less and there's 72 million baby boomers who are going to go into that system in the next ten years and there's no guarantee what they have today is going to be there. What is guaranteed is there's another half trillion dollars in taxes that are coming the way of all Americans.

BRAZILE: You know what's amazing, Wolf, is that after Republicans spent many years raising the national deficit to over $10 trillion, they are now -- the Democrats have a plan that will reduce it. This is a program that not only pays for itself, but it will provide people who need health care more access to coverage. And small businesses who absolutely need some help right now to insure their employees.

BLITZER: Donna and Ed, guys, thanks very much. We'll be working all weekend, all of us, to see what happens.

American citizens are caught in the cross fire of growing violence in Mexico. What is going on? Especially with spring break under way. A lot of college students heading to Mexico. Is it really safe to travel south of the border? I'll ask the Mexican ambassador to the United States.


BLITZER: We'll likely see a health care vote on Sunday, Sunday afternoon. If a federal reform package does pass, opponents to the measure are already gearing up big time to try to get a constitutional fight, including a number of individual state governments. CNN's Brian Todd has the lowdown on what states are trying to do, at least some states are trying to do as far as Washington and business here in Washington. What are you picking up, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the tea party movement has provided us the most visual movement of what we're talking about here. It started out as protesting what its followers perceived as the excesses of federal bail-outs of big banks, but it's also come to promote the ideas of lower government spending, lower taxes, more individual freedoms, and less involvement by the federal government in our lives. Now, on that front, several states have been kind of beating that drum for years now. And the so-called states' rights push has been accelerating recently. Spurring that on, big opposition to the Obama health care plan. Idaho's governor has just signed into law a bill that would allow residents there, if the Obama health care bill passes, would allow Idaho's residents to opt out of the federal government's requirement that almost everyone buy health insurance. Now, that Idaho bill also requires the state attorney general to sue the federal government, if health care reform passes. Virginia's governor also about to sign a similar bill. And in three other states, Oklahoma, Missouri, Tennessee, similar bills have made it through at least one chamber of the state legislature. Look at this. 23 other states are considering doing that. In 6 states those measures have failed. So, you're talking about 34 states where lawmakers have at least proposed bucking the federal government's health care law when it passes, and it looks like two states where they're going to try to carry it even further in Idaho and in Virginia. They're going to try to butt heads with the federal government directly on health care, Wolf.

BLITZER: But as you know, Brian, there are other issues beyond health care where states are getting ready to try to openly defy the federal government.

TODD: That's right. And gun control is another one. We're going to show you this. South Dakota's governor has just signed a bill into law, a bill that says the federal government's gun laws don't apply there if a weapon is made and used in South Dakota. Four other states already have those laws on the books. 20 other states have introduced those measures in their statehouses, seeking to openly defy the federal government's gun laws, Wolf, so, again, a lot of momentum on that front.

BLITZER: So, here's the question, though, Brian, would all of this defiance actually fly in the face, if it was challenged in the courts?

TODD: Most experts believe it would not. That these are mostly symbolic measures. I spoke with Jonathan Siegel, he's a law professor at George Washington University, he talked about those state health care laws and how they might hold up.

PROF. JONATHAN SIEGEL, GEORGETOWN UNIVERSITY LAW SCHOOL: I think most of the states that are passing these laws understand that they can't trump federal law with state law, but what they get out of it is symbolic effects. They're sending a message to the federal politicians that they don't like the health care mandate.

TODD: Still, Siegel says it's not a frivolous exercise for states to pass these laws. He says some states might feel it's worth it to challenge whether the federal health care bill is constitutional and could take that challenge all the way to the Supreme Court. If it's declared unconstitutional, of course, it can't be enforced anywhere, Wolf.

BLITZER: But sometimes, though, as he points out, even if states might lose a legal battle, they win in other ways.

TODD: That's right. And the fight over legalizing medical marijuana is the case in point. Look at this, 14 states legalize marijuana for medical use. The feds have banned all marijuana use, as we know. The feds won in court, but because the states challenged them so much, the justice department said last fall it will not enforce the law in states where it's already legal, so it's really backing off enforcing the marijuana laws in all these states, 14 states, where it's legal.

BLITZER: Good explanation, Brian Todd, thank you.

A shocking claim by a United States general linking gays in the Dutch military to a mass murder. Stand by for more on the comment and the powerful reactions.


BLITZER: New testimony by a retired U.S. general is prompting outrage right now. At issue, gays serving in the military and a massacre. Let's bring in our pentagon correspondent, Barbara Starr, to explain what's going on. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, Retired General John Jeanne testified on Capitol Hill today about allowing gays to openly serve in the military. He suddenly turned to a piece of very sad history for NATO and the military in Europe. He started talking about the 1995 massacre of show thousands of Bosnian men. This was in the middle of the Bosnian ethnic wars between the Muslims and the Bosnian Serb. The Dutch military was there, failed to protect the Bosnian Serbs for a variety of reasons, but General Sheehan suddenly had a very different reason why it went so very wrong.


GEN. JOHN SHEEHAN, U.S. MARINE CORPS (RET.): The case in point that I'm referring to when the Dutch were required to defend the city against the Serbs. The battalion was understrengthed, poorly lead and the Serbs came into town, handcuffed the soldiers to the telephone poles, marched the Muslims off, and executed them. That was the largest massacre in Europe since World War II.

UNIDENTIFIED MALE: Did the Dutch leaders tell you it because there were gay soldiers there>

SHEEHAN: It was a combination --

UNIDENTIFIED MALE: Did they tell you that? That's my question.

SHEEHAN: They included that as part of the problem.


STARR: You know, Wolf, we've -- you and I have both covered the wars, the ethnic wars, in Europe in the 1990s. This was the worst massacre since the holocaust of World War II in Europe. I think that history and the investigations that were conducted have long shown there are a variety of other reasons. Today the Dutch ambassador here in Washington, objected to what General Sheehan said. Said he could not disagree more, and, of course, it should be said that today, the Dutch military serves very honorably alongside the U.S. and NATO in Afghanistan. This is likely not to die down anytime soon, Wolf.

BLITZER: It will be a huge issue. Most of the NATO allies allow gays to serve openly in their respective militaries. Thanks very much, Barbara, for that.

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