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THE SITUATION ROOM

Libyan Rebels Forced to Retreat; Gadhafi Forces Control Zawiyah; Deadly Clashes Escalate in Yemen; Government Shutdown Looming; 2012 Presidential Campaign to Shatter Records; Millions of E- Mail Addresses Stolen

Aired April 5, 2011 - 17:00   ET

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


WOLF BLITZER, HOST: Brooke, thanks very much.

Happening now, lots of news we're watching, including rebel fighters in Libya panicked and forced to retreat, some even blaming NATO for what they now consider to be a losing battle against the strengthening Gadhafi loyalists.

Also, here in Washington, no deal yet. Just days before a potential government shutdown, a defiant President Obama warns Republicans it can't be my way or the highway.

And if you're a customer with any of these companies, you could be victim of, potentially, one of the largest e-mail security breaches in U.S. history.

Should you be worried?

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

So let's go to Libya right now. There's breaking news out of Libya, not good news for the rebels, apparently good news for Gadhafi loyalists. The Gadhafi regime making some significant gains today, making air strikes more difficult by hiding its material in heavily populated civilian areas. Rebel forces once again majorly on the retreat. They're forced out of the outskirts of Al Brega.

Joining us now from Benghazi, our own Ben Wedeman.

Ben, you were out on the front lines with rebel forces outside of Brega earlier today. Give us the latest. What's happening out there?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I can tell you, they're nowhere near Brega anymore. We were with them this morning. And they came under constant and heavy bombardment by Gadhafi forces, driving them way back to basically about 20 to 25 kilometers to the west of this town, Ajdabiya, actually. We're not in Benghazi.

And what we saw was that despite the fact that we were hearing from rebel commanders yesterday, that Gadhafi forces were running out of ammunition, that they were being worn down by the rebels and by the cutting off of their supplies, that was not the case today. The Gadhafi forces were firing in profusion -- mortars, heavy artillery. They're targeting was spot on, hitting right on the road that leads out of Brega to Ajdabiya and really just sending the rebels in a wild stampede toward Ajdabiya.

Apparently, the front lines have now sort of solidified, stabilized, to a certain extent. But it spread panic through the city of Ajdabiya. Most of the residents have left. And now there's a worry that Ajdabiya, which was occupied by Gadhafi forces last month, will be reoccupied, at this rate, if the rebels simply cannot hold the line any longer.

And, of course, everybody is saying where are the NATO air strikes?

There aren't any. We heard the planes overhead during the day in the area of Brega. We heard them over Ajdabiya in the evening, but no sign of air strikes -- Wolf.

BLITZER: Because if Ajdabiya goes, Benghazi is not far away from Ajdabiya and the whole fear is that thousands and thousands of civilians in Benghazi could be in danger by Gadhafi's forces. I assume they're very nervous about that right now.

WEDEMAN: Well, certainly they're much more nervous than they were before. If you recall, last month, Gadhafi's forces made it to the outskirts of Benghazi. And the mood was seriously grim. Then, of course, the NATO air strikes went into effect. Gadhafi's forces were pushed way back to Ras Lanuf. And there was a feeling like the danger had disappeared or at least receded.

Now it's like we're going through a time warp, back where we were before, weeks ago. And, of course, people are increasingly nervous and angry -- angry at NATO. I mean this evening, Abdul Fatah Younis, the senior military officer of the Libyan opposition, came out and harshly criticized NATO. He said that they're giving them precise and almost hourly intelligence on where Gadhafi's forces are but NATO is not -- is just hitting it.

In fact, when I was at the front lines today, I spoke with one rebel commander who said that before we put our faith in God and we were winning. Now we put our faith in NATO and we're losing -- Wolf.

BLITZER: Yes. Lots of questions there -- where is NATO?

We'll check into that as well, Ben.

Thanks very, very much.

And joining us now from Tripoli, our own Nic Robertson -- Nic, I take it, after a few days, they finally let you out of the hotel and went out to see some stuff.

What did you see today?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We went to Zawiyah, which is a town that was rebel controlled when we first got here about four weeks ago now. The government defeated the rebels there.

This is a town that the government has gone to huge lengths to eradicate any trace of the rebels. And they have completely demolished and destroyed the mosque that was at the center of the city there. The rebels had been using it as a medical clinic to treat the wounded and wounded government shoulders.

But what we found in this city, beyond the area where the mosque has been destroyed, is that the government has not just defeated the rebels, but completely stifled what the rebels were fighting for, the -- the chance for people to express themselves openly.

There were so many government officials and minders with us today that no one we talked to dared expressed their real opinion. Everyone told us that the situation is just fine. And the importance of this town, Zawiyah, it is one of the towns here that President Obama and European leaders have said that the Libyan government needs to pull its forces out of.

Well, they absolutely haven't done that. The government has dug in there. There were tanks under trees. They're showing no signs of pulling out and every sign of eradicating any trace of the rebels or dissent there -- Wolf.

BLITZER: Yesterday, when we spoke here in THE SITUATION ROOM, Nic, you broke this one story about this one idea being floated out there, that Gadhafi would step down and let his son, Saif al-Islam Gadhafi, take over. The rebels, the opposition, they've rejected that idea.

So here's the question to you -- where -- where do we go from here?

ROBERTSON: Well, if you look at the military battlefield today, it seems that the government forces still have the upper hand. They're able to bomb and shell -- or shell, rather, the rebels in Misrata, despite some coalition air strikes against -- against government forces. And they've made gains against the rebels in the east. A military battlefield normally translates to diplomacy. That give the Gadhafi regime the upper hand at the -- the diplomacy stakes right now. So they can afford to, perhaps, you know, make it a much tougher offer to the rebels. If the rebels don't take it and the international community doesn't take it, it seems that (AUDIO GAP).

BLITZER: Obviously, we're having technical problems with Nic in -- in Tripoli.

But we will check back with him.

Much more on Libya coming up.

But let's get to the escalating and deadly clashes in the al Qaeda stronghold of Yemen right now.

Despite the political turmoil, the Pentagon is promising to continue aid because of what it calls "the real threat the terror network poses to the United States."

Joining us now, CNN terrorism analyst, Paul Cruickshank.

He's with the Center on Law and Security at New York University's School of Law.

Paul, a lot of analysts have suggested that what's happening throughout North Africa and the Middle East is bad for Al Qaeda. But perhaps it's a different story in Yemen. Explain.

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Well, that's right, Wolf. Broadly speaking, the Arab spring has been bad news for Al Qaeda. It's removed a number of grievances, reduced Al Qaeda to virtual irrelevance in several countries in the region.

But in Yemen, where Al Qaeda does have a safe haven, unlike, say, Libya, there is an opportunity for Al Qaeda over there. If there's a -- a period of extended political strive, of even civil war there, Al Qaeda could take advantage. We've seen that videotape play out several times before with Al Qaeda, in Afghanistan in the '90s; in Algeria, the same decade; and more recently, in Iraq. And al Qaeda has already taken advantage of the situation in Yemen, the vacuum over there, in places like Shabwah Province, the home province of Anwar al- Awlaki. And al-Awlaki predict Al Qaeda in Yemen will take further advantage of the turmoil there -- Wolf.

BLITZER: But on the other hand, if, in the long run, President Saleh and his regime in Yemen fall, let's say, and real democratic reform emerges in Yemen, that would be very good news, presumably, for the U.S. and its -- its friends.

CRUICKSHANK: That's absolutely right. In the long run, you know, democracy would be very good news. But in Yemen, the long run is a very long way away, indeed. It's a -- a very poor country, a deeply tribal country. So democracy is a long way away there.

In the immediate time, for the United States, there are really no good options in Yemen. If Abdullah Saleh doubles down and he cracks down on the protesters, it becomes more bloody over there, it's going to play into al Qaeda's narrative of an American-backed dictator oppressing the local population.

And if he's swept from power, there could be a civil war situation.

So there are no good options there for the United States right now -- Wolf.

BLITZER: What are Anwar al-Awlaki -- he's the head of -- or at least he's one of the leaders of Al Qaeda in the Arabian Peninsula, based in Yemen.

What are his operational capabilities right now to direct attacks against the United States or others?

CRUICKSHANK: Well, United States counter-terrorism officials are worried that he has quite significant capabilities. His affiliate in Yemen is the most active of at least al Qaeda's affiliates right now. There's also been concern in recent time that Al-Awlaki has been able to communicate with operatives in the West in a way in which he's been undetected, using sophisticated encryption that they've been able to download over the Internet. And that's caused a lot of concern, because any time they can plot these attacks -- and there's evidence of more chatter about plots in the works -- and communicate with operatives in the West in a way that's undetected, that's going to cause a lot of concern -- Wolf.

BLITZER: Are you hearing that there's perhaps increased chatter, as they say, in the intelligence community going on right now?

CRUICKSHANK: That appears to be the concern right now, that there may be a plot in the works. This is an organization that in the last 16 months has twice attempted to attack the U.S. homeland. We saw on Christmas Day a flight coming into Detroit, where it was -- was targeted. But that attack failed. And last October, an attempt to bring down cargo planes going to Chicago.

The concern is that Al Qaeda in the Arabian Peninsula may be in the works of plotting a similar attack now -- Wolf.

BLITZER: And, finally, Paul, as many -- as much as Afghanistan has been the focus of the U.S. hunt for Al Qaeda over the past nearly 10 years and the U.S. has 100,000 troops there. There's another 40,000 or 50,000 NATO troops in Afghanistan, spending hundreds of billions of dollars. Correct me if I'm wrong, because some analysts have said to me, there are more Al Qaeda operatives right now in Yemen than there are in Afghanistan.

CRUICKSHANK: Well, certainly, than in Afghanistan, they're more in Yemen right now. But there's still a lot of concern about Pakistan, the tribal areas there, where bin Laden and Ayman Al- Zawahiri are believed to be hiding. Some of their most experienced bomb maker -- bomb making trainers are over there. There are still a lot of Western recruits going to Pakistan.

So there's still a lot of concern about Pakistan, but mounting concern right now over Yemen -- Wolf.

BLITZER: No doubt about that.

All right, Paul.

Thanks very much.

Jack Cafferty is coming up next with The Cafferty File.

Then, President Obama lays down the law with Congressional leaders -- fix this year's budget or come back to the White House every day and work on it.

So who has the upper hand in the fight to avoid a government shutdown Saturday? Plus, millions of Americans, customers of these companies, may have been exposed to e-mail fraud. We're going to tell you how much of your information is now in the hands of hackers.

And right now, the FBI is investigating Libyans in the United States.

Is Gadhafi planning a retaliatory attack on American interests?

(COMMERCIAL BREAK)

BLITZER: Check in with Jack, he's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: There is little chance, Wolf, that the U.S. military involvement in Libya will be considered any kind of a success if Moammar Gadhafi's not removed from power.

President Obama has called on him to step down over and over again, so has the United Nations, so have the opposition forces who are fighting Gadhafi in Libya, but it hasn't happened yet and it doesn't look like it's going to happen any time soon. He's hanging tough.

A government spokesman for Gadhafi's regime said yesterday, Libya is ready to reform the political system and even hold Democratic elections, but that Gadhafi will not step aside. The spokesman said the Libyan people must decide whether their leader for the last 40 years, Moammar Gadhafi, should stay in power.

Gadhafi's second son, Saif al-Islam Gadhafi, echoed all of this in an interview he gave to the BBC today. He says that sweeping changes are possible in Libya, but he scoffed at the idea of his family leaving the country or going into exile. He told the BBC, quote, "It's our country. You want us to leave? To where? The Maldives? To the Caribbean? We are Libyans," unquote.

The Libyan government insists the Gadhafi regime is not attacking civilians; nobody buys that. And I don't think anybody is going to buy the ready to reform idea either, but we'll have to wait and see.

The question is this -- Should Moammar Gadhafi be allowed to remain in Libya?

Go to CNN.com/CaffertyFile, post a comment on my blog.

Sweeping democratic reform, Wolf.

BLITZER: Can't wait.

CAFFERTY: But Gadhafi is going to stay.

BLITZER: Of course.

CAFFERTY: I don't know how those two work together.

BLITZER: It doesn't.

All right, Jack, thank you.

Let's get to the growing threat of a government shutdown. Republican House Speaker John Boehner and the Democratic Senate majority leader, Harry Reid, have just wrapped up a meeting attempting to hammer out a deal. President Obama has instructed them to return to the White House tomorrow if they failed to make progress.

The president spent the afternoon discussing the crisis with key Congressional leaders. No agreement has been reached, at least as of right now.

That was followed, by the way, by some dueling press conferences between the two sides.

Let's bring in Dana Bash.

So they just wrapped up this meeting on the Hill. What's the very latest? What are we hearing? How close or far apart are they Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I'm just getting an e-mail to tell you from a Democratic source that they had a productive meeting and agreed to continue talking.

That doesn't sound like a lot, but it certainly is compared to what you just described has been going on all day, which is some pretty tense, pretty surprisingly public back and forth between House speaker and the president that forced this meeting today.

The fact that they are going to continue to talk is noteworthy and one thing that they are at odds over, the level of spending that they are talking about cutting, which is in the range of $33 billion or maybe more.

But even more importantly is what they are going to cut, what exactly. What programs, what agencies. And that, no surprise, is really based on political preference and political fight over priorities by Democrats and Republicans. And that really is what is keeping them at loggerheads and has us three days away from a potential government shutdown.

BLITZER: We'll see who blinks on this one.

But even as they are fighting over the current budget, they're halfway through the current fiscal year, the Republicans have today have come out with a major proposal for next year's budget and beyond over the next ten years now.

Tell our viewers about this.

BASH: It's really fascinating and we were talking about the potential of a government shutdown because of differences over tens of billions of dollars, Wolf, that is peanuts compared to the trillions of dollars that the House Republicans say that they want to try cut in the future.

(BEGIN VIDEOTAPE)

BASH (voice-over): House Budget Chairman Paul Ryan knows his new 2012 proposal is far-reaching and politically perilous and says that's the point.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), CHAIR, BUDGET COMMITTEE: This is not a budget. This is a cause. We are not just here so we get this lapel pin that says we're a member of Congress. We are here to try and fix this country's problems.

BASH: His plan would cut nearly $6 trillion -- yes, that's trillion with a T -- over 10 years and, in the same period, reduce the deficit by $4.4 trillion.

RYAN: For too long, Washington has not been honest with the American people.

BASH: The House GOP proposal calls for a complete transformation of what have been politically untouchable programs, entitlements.

For Medicare, health care for seniors, no longer would the government pay hospital bills directly. Instead, lump-sum payments would subsidize private coverage. But anyone 55 years and older now would not be affected.

Federal spending for Medicaid, the health program for low-income Americans, would be sent to states to manage.

Those massive changes are largely aimed at tackling the enormous debt and deficit. Even so, the budget would not create a surplus for some 28 years.

(on camera): The budget would not see a surplus until 2040.

RYAN: Till -- late 2030s, that's right.

BASH: Right, for about 28 years. For a generation.

RYAN: Right. So, Dana, this just shows you how deep of a hole our country is in.

BASH (voice-over): Not surprisingly, Democrats rush to attack the plan.

REP. CHRIS VAN HOLLEN (D), BUDGET COMMITTEE: It is simply a recycled, rigid ideology that says we need to provide big tax breaks to the very wealthy and the very powerful at the expense of the rest of the country.

BASH: The GOP proposal does lower taxes for individuals and corporations, making the top rate 25 percent and closes loopholes that allows companies like GE to avoid taxes. (on camera): To play the devil's advocate, if you didn't go as far as you went in cutting taxes, couldn't you balance a budget?

RYAN: We do not propose increasing taxes. Now here's a big difference, if you on paper raise taxes, can you move the numbers farther? Sure. Here's what happens, you lose jobs.

(END VIDEOTAPE)

BASH: Now here's an important reality check. Budget proposals like this one are nonbinding documents, they do not go to the president's desk and this in particular has virtually no chance of going anywhere in the Democratic-led Senate. But, Wolf -- it's an important but -- this is now a dialogue started on very big, very tough issues that until now, because of the political risk, people really haven't wanted to try to tackle -- Wolf.

BLITZER: Yes, it's going to be a major debate over the next few years.

Thanks very much, Dana, for that.

We'll check into the day's other top stories, that's coming up next.

Plus, more on the potential government shutdown. President Obama and the House speaker, John Boehner, both had some tough words today. You can hear the frustration in their voices.

And radioactive water still pouring into the ocean from the crippled nuclear plant in Japan, but there may be a glimmer of hope on the horizon.

(COMMERCIAL BREAK)

BLITZER: There's a glimmer of hope in Japan's nuclear crisis. Lisa has that, some of the other top stories.

What is going on?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, officials say that they have managed to significantly reduce the amount of radioactive water leaking into the Pacific Ocean. They have been pumping a material known as liquid glass into a cracked concrete shaft at the Fukushima Daiichi's damaged number two reactor to try to plug that leak.

The ozone layer may be disappearing even faster than we thought. The World Metrological Organization says the ozone layer in the arctic is depleting at a record rate by 40 percent in just the past few months. That matters because the ozone protects life on Earth from the sun's damaging rays. The U.N. agency blames a very cold winter and harmful chemicals.

Mercedes Benz is recalling nearly 137,000 of its M-Class SUVs because of a cruise control glitch. They cruise control may not disengage automatically like it is supposed to when the driver taps on the brake. The automaker says it's not aware of any accidents from the problem. It began investigating after getting complaints from drivers.

And U.S. Capitol Police are on the hunt for whoever sent a frozen pig's foot to Congressman Peter King along with a ranting anti-Semitic note. The New York Republican had stepped up security ahead of controversial hearings on Muslim radicalization in the U.S. last month -- Wolf.

BLITZER: Thank you very much, Lisa. We'll check back with you.

The Republican House speaker, the Democratic Senate majority leader, they've just wrapped up a meeting behind closed doors to address the looming government shutdown. President Obama trying to hold their feet to the fire.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The speaker apparently didn't want our team involved in that discussion. That's fine. If they can sort it out, then we got more than enough to do. If they can't sort it out, then I want them back here tomorrow.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Pressure mounting right now on President Obama as Democrats and Republicans try to find common ground as the deadline for a government shutdown gets closer and closer, the deadline being Friday night, Saturday. Despite the rhetoric, both sides maintain it can be done.

(BEGIN VIDEO CLIP)

OBAMA: My understanding is that there's going to be a meeting between Speaker Boehner Harry Reid this afternoon at 4:00. The speaker apparently didn't want our team involved in that discussion. That's fine. If they can sort it out, then we've got more than enough to do. If they can't sort it out, then I want them back here tomorrow.

When we are this close, simply because of politics -- and we are prepared to put whatever resources are required in terms of time and energy to get this done, but that's what the American people expect. They don't like these games. And we don't have time for them.

There's some things that we can't control. We can't control earthquakes. We can't control tsunamis. We can't control uprisings on the other side of the world. What we can control is our capacity to have a reasoned, fair conversation between the parties and get the business of the American people done, and that is what I expect.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Listen, our goal is to keep the government open. You have heard me say for the last three months that we have no interest in the government shutting down. But we are interested in cutting spending here in Washington, D.C.

We don't have a revenue problem, we have a spending problem. And we believe that cutting spending will in fact help us create jobs in America.

(END VIDEO CLIP)

BLITZER: All right. Let's dig deeper right now with our senior political analysts, David Gergen and Gloria Borger.

All of a sudden, Gloria, the president shows up in the briefing room and makes that powerful statement, sort of like I'm the adult here and you guys better get your act together.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: You think so? Yes. It's clear.

I talked to a couple of senior White House advisers today, Wolf, and that's exactly what they wanted to project. As one said to me, "Look, we're getting down to the wire. We know the American public doesn't want to shut down."

And obviously, Wolf, it doesn't hurt for the president of the United States to say look, we don't have control over a lot of things in our lives, but this we need to get down. The White House point is that there is a big budget debate coming up, which I might add is not because they are forcing it, but because it's because Republicans are forcing it.

But what we're talking about looking backward is a small percentage of last year's budget, don't shut down the government. They feel that they are on pretty safe political ground there.

BLITZER: Who has the upper hand in this eyeball-to-eyeball confrontation right now, only a few days left before the government either stays open or shuts down, at least a big chunk of it, David?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Wolf, there seems to be a sense in the White House, an underlying assumption, that they have the upper hand because Bill Clinton won a similar fight back in the mid-90s against Newt Gingrich and those Republicans. I don't see that.

The president does bring certain advantages into this. He has the bully pulpit. He used it smartly today.

He cut into the middle of this debate in a very smart way, and he has put up these freezes in domestic spending. But the Republicans come into this with some advantages, too.

I don't think there's any doubt about who's been more aggressive about trying to close the budget deficits over the last few months, the Republicans. And today they came forward with this blockbuster plan by Mr. Ryan, who is the Republican budget chief, for almost $6 trillion in cuts which is not matched by the White House, as Gloria points out. So if you put all of that together, I think the two are on even ground about who's going to get blamed. I think they'll both get blamed.

BLITZER: Go ahead, Gloria.

BORGER: You know, I think the Republican budget is kind of interesting. Paul Ryan's budget is a very risky political proposition. He has to be given an awful lot of credit for introducing it. But that's not the fight that they are fighting right now, and I think those two things in the public's mind sort of gets mixed up.

And that's where the president might have a problem, because people want to cut the budget deficit. And what he's saying is, OK, we met your budget cuts for last year's budget. Let's get that out of the way.

And, you know, it's unclear whether that point is really coming across, which is why the president says, come back here tomorrow, children. And if you don't work it out tonight, you're going to meet with me again tomorrow until you do your homework and you get it done.

GERGEN: But the counter to that is that it's Mr. Ryan who looks like the adult in the room about big budget deficits. He's the one who's had the courage to stand up.

BORGER: Right.

GERGEN: And so far you've had the Budget Deficit Commission who have stood up, we've had the Republicans stand up. We've had people in the Senate working on this. And the White House has been the silent figure in this.

BORGER: Right.

BLITZER: Although they did come out with a statement a little while ago. The White House press secretary saying, yes, maybe he deserves a little credit, Paul Ryan, for introducing this, but take a look at what he's doing. He's doing this on the back of the elderly. He's doing it on the back of poor people. He's letting rich people get more tax breaks just when they don't need it, millionaires.

A pretty strong statement that the White House issued, basically slamming Paul Ryan's entire proposal there.

BORGER: Well, it is a strong statement. But what's so interesting to me, Wolf, if you look back at the midterm elections, it was the Republicans who were griping about the Democrats cutting Medicare in health care reform. Now the Democrats are griping about Paul Ryan's budget because he dares to change Medicare.

So there is no high ground in this debate, honestly. I think Paul Ryan deserves credit for introducing what he introduced, but he didn't tackle the tax side of this. So, you know, this is a long debate to come. Get rid of the shutdown issue.

BLITZER: By the way, one final thought on the shutdown issue, because I want to move on to something else. There's, in my mind, all of those Republicans who lived through the Newt Gingrich/Bill Clinton eyeball-to-eyeball government shutdown in '95, '96. They're the ones who are nervous, those Republicans like Boehner who lived through that, because they are afraid they will be blamed again. Bill Clinton went on to get reelected in '96.

The newcomers, the new team of Republicans, including a lot of Tea Party activists, they didn't live through that experience. They are not as worried about being blamed as some of the old-time Republicans, the mainstream Republicans are.

On an unrelated matter, totally unrelated, we're hearing now there is going to be a new chair of the DNC, Debbie Wasserman Schultz, the Democratic congresswoman from south Florida, Gloria. I'm getting a lot of e-mails from Democratic sources that it looks like she's the one that the president has picked. The president is in the process of still making phone calls to the losers right now, those who didn't get the DNC. There were a lot of people out there who wanted this job.

But what do you think of this decision, Debbie Wasserman Schultz taking over for Tim Kaine? He's going to run from the Senate from his home state of Virginia.

BORGER: Well, correct me if I'm wrong, Wolf, but I believe this would be the first woman to head the Democratic National Committee. She's somebody who is quite close to Nancy Pelosi, has been a vocal person among Democrats in leadership circles. And so I think in a way she's a very natural choice for this.

BLITZER: And she's a good person on TV, too. I think that's an added advantage if you're going to be the DNC chair, David.

GERGEN: Florida, Florida, Florida.

BORGER: Right.

GERGEN: It's all about location. I think she helps with that as well. It's a pivotal state.

And interesting choice. She'll be good on television. The Republicans will put up someone who is lower key as their chairman and is not as -- hasn't yet become an effective spokesperson for them. So it's a very interesting choice. I think the really interesting choice was getting Tim Kaine to run out of Virginia, too.

BLITZER: Yes. He's going to run. We'll see how he does in Virginia.

GERGEN: He's going to be a strong candidate.

BORGER: Absolutely.

BLITZER: All right, David and Gloria, guys, thanks very much.

Now to the race for president in 2012, where fundraising will likely shatter all records. Just yesterday, we told you President Obama, now officially a candidate for reelection, could bring an eye- popping $1 billion to the race. But what about the potential Republican contenders?

All this week CNN is focusing in on the enormous amounts of money all the parties will pour into the campaign. All told, when you add it all up, it could total $3 billion or more.

CNN's Tom Foreman is working some of these details. Let me work over to the Magic Wall.

Tom, $3 billion.

TOM FOREMAN, CNN CORRESPONDENT: Three billion dollars. Wow.

BLITZER: When you talk about Democrats, Republicans, Independents, expenditures, all of that kind of stuff.

FOREMAN: Yes. A tremendous, tremendous amount of money.

And right now, if you look at that giant number for the president, $1 billion, you certainly look at the Republican side, what few numbers we have reported, you think, well, gee, it looks like it's going to be a real mismatch here. Here are some of the numbers we have officially at this point.

For example, we have Ron Paul, $4.7 million raised for his PAC and for his reelection campaign. Ron Paul has been a steady moneymaker among his very devoted following.

Michele Bachmann has raised eyebrows because she's been able to rake in money fast, $2.2 million for her PAC and for reelection down here.

And then, here we have Mitt Romney down here, $1.9 million for his PAC. He obviously has a lot of his own money he can bring to the table.

This is just some of the early reporting. I'm not sure this really means much of anything, Wolf.

But what does matter is all of the money that people can raise between now and the beginning of July, that second quarter to show, are you a real candidate that can rake in real money and get people organized behind you -- because there's a tremendous amount of money out there on the Republican side. It's just not focused yet. So we have to see what's going to happen with people like Haley Barbour.

He had a lot of success with the RNC, a lot of success with the Republican governors. So there's a sense that he might be a real money gatherer.

Newt Gingrich, long-time player, knows how to go about this very well. Tim Pawlenty, another big player.

And then we have all of the -- sort of the wildcards, Sarah Palin, Mike Huckabee, Donald Trump, who says he's going to throw in whatever is in his wallet at the moment, which will be a lot, I'm sure. There are other players as well. The simple truth is, all of these numbers look small when you put them up against this $1 billion from the president. But you have to remember, the president doesn't have a primary. All these people have to face that if they want to run. So you have to take the aggregate of all this money and put it all together and say, once you've picked a candidate and you coalesce that money, then does it challenge that much?

One Republican strategist I spoke to today said that he believes to get the nomination on the Republican side, you're going to have to raise $100 million. That's just to get the nomination. And then, beyond that, to actually get elected or have a credible campaign against that billion-dollar -- you're going to have to have $500 million to $700 million.

You know, I've heard other people who have said that it's going to take a lot more than, and some people say maybe not as much. I will say this, though, Wolf. An important thing to bear in mind, as you look at all this money being raised on the Republican side, and all the outside money, which I'm telling you, you know is going to be a huge factor in this election --

BLITZER: Expenditures, as they're called.

FOREMAN: Oh, yes. We're never seen anything like what we're going to see this year on both sides of the aisle.

The Republicans are better at raising money, and that's going to make a difference in terms of cash flowing into the end. The thing that they must decide how this cash balance thing comes out on the end is, what is in your wallet at home? Everybody knows that is going to make voters decide. The real question is, do you trust these guys or do you just trust the White House more to protect your money in these hard times?

BLITZER: Politics, money talks.

FOREMAN: Money talks. It screams in Washington.

BLITZER: It screams. Thanks very much.

A check of the day's other top stories coming up next.

And are you a customer of one of these companies? We're going to tell you why you need to carefully check your next e-mail that says it's from one of them. It's all part of a massive security breach that could hit you where it hurts.

And remember that terrifying hole in a Southwest jet in midflight? We're looking at whether it could happen again.

(COMMERCIAL BREAK)

BLITZER: An end may be in sight to a bloody conflict in Africa.

Lisa Sylvester is back. She's monitoring that and some of the other top stories in THE SITUATION ROOM.

What's going on?

SYLVESTER: Wolf, President Barack Obama is urging Ivory Coast's self-declared president, Laurent Gbagbo, to resign and end weeks of bloodshed. A government minister says Gbagbo's soldiers have laid down their weapons, and Gbagbo is believed to be negotiating his surrender. Troops loyal to internationally recognized rival President Alassane Ouattara have surrounded Gbagbo's palace. A government minister says U.N. air strikes on military targets to protect civilians prompted that cease-fire.

NASA is giving the all clear to the crew of the International Space Station. It feared a six-inch piece of space junk would crash into the space station, perhaps sending the three-crew members fleeing into a spacecraft for safety. But the debris would not pass close enough to warrant an evacuation.

President Obama met with Israeli's president at the White House today, and says that peace in the Middle East is needed now more than ever.

(BEGIN VIDEO CLIP)

OBAMA: I think he and I both share a belief that this is both a challenge and an opportunity, that with the winds of change blowing through the Arab world, it's more urgent than ever that we try to seize the opportunity to create a peaceful solution between the Palestinians and the Israelis. And he had some very interesting ideas around those issues.

(END VIDEO CLIP)

SYLVESTER: And Wolf, I understand you're going to be talking to him.

BLITZER: I'm going to be interviewing him, Shimon Peres, the president of Israel. And we'll have it here in THE SITUATION ROOM tomorrow. Lots of questions, what's going on, this unrest throughout North Africa and the Middle East, how it impacts Israel. So we'll have an interview with Shimon Peres. It will air tomorrow here in THE SITUATION ROOM.

SYLVESTER: Look forward to that.

BLITZER: Thanks very much.

An e-mail warning may be in your inbox right now. You're going to find out how your private information may have been hacked.

(COMMERCIAL BREAK)

BLITZER: New details now on a massive Internet security breach potentially impacting millions of customers of all these popular stores and companies. Their private e-mail addresses, now in the hands of hackers. CNN's Mary Snow is following this story for us.

A lot of worried people out there. What's going on, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, we're aware of at least 22 companies warning customers of e-mail fraud. There are reports the number could be double that.

This security breach is also opening a window into what companies do with the e-mail addresses that you provide them. And in this case, it points to a company people haven't heard of.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Warnings of e-mails fraud are coming from banks like JPMorgan Chase and Citi, hotel chains Marriott and Hilton, along with retailers Target and Best Buy. But the security breach didn't happen within these companies. Rather, they were all tied to a third party called Epsilon. Epsilon's is a marketing services provider that handles communications between companies and customers. And one analyst says many consumers weren't even aware that their information was being shared.

(on camera): This seems like a fairly secretive business. Is it?

DAVE FRANKLAND, FORRESTER RESEARCH: Sort of (ph), if you like. I'm don't know that I would necessarily say it's secretive. I think to your point, though, many people who received an e-mail from a retailer or a travel company or a financial service institution had no idea who this company Epsilon was.

SNOW (voice-over): We contacted Epsilon, and a spokeswoman said the company is limited in what they can say because of an ongoing investigation. But in a statement, Epsilon says, "The information that was obtained was limited to e-mail addresses and/or customer names only."

It's impossible to say how many people were affected, but Nick Feamster, an assistant professor at Georgia Tech's College of Computing Science, says it's possible the number may be in the millions. And he says if you received an e-mail, you should now be on alert for targeting fishing scammers.

NICK FEAMSTER, GEORGIA TECH: Well, they know, for example, that you've done business with, say, Walgreens or with Chase or Citicorp. And they can now send you a spam e-mail that appears to come from one of those organizations. And you might be more vulnerable now because you recognize that as a trusted brand.

SNOW: Feamster says while this security breach could have been much worse, it should be a wake-up call to people about listing all their personal information.

FEAMSTER: What if someone managed to compromise a large fraction of Google services or of Yahoo! services and gained access to everything from, you know, as I mentioned, your spreadsheets, to your photos, to your e-mail, to your chat logs? All that's actually sitting in one place.

(END VIDEOTAPE)

SNOW: That would be an extreme case, a worst-case scenario that hopefully doesn't happen. But security experts are saying that it's really important for people to be careful of the personal information they are putting online -- Wolf.

BLITZER: So the biggest threat would be from emails and these so-called fishing scams that are out there?

SNOW: Yes. In fact, one of our colleagues got one today, and it's from a major bank. He doesn't have an account there.

It says that he's due for a refund, and that if he clicks a link and updates his financial information, that he'll get that refund. It looks very official. It says safety is important to the company, but obviously it's a scam.

BLITZER: It certainly is.

All right. Thanks very much, Mary. Thanks for that.

Jack Cafferty, he's coming up next with "The Cafferty File."

Plus, unrest has been rocking the streets of Yemen. How dangerous could all of this be? What are the consequences for the United States? And could the turmoil in Libya pose yet another threat to Americans here at home?

And the Southwest plane scare, why the fuselage cracking may be a more widespread problem than thought.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Should Moammar Gadhafi be allowed to remain in Libya?

Bob says, "No, he must be charged at The Hague for his crimes against the Libyan people. Better yet, he ought to be tried by the Libyans and be hanged like Saddam Hussein."

Chris writes, "Having a son take the lead still means dad's in charge. Nothing will change. The right course is for the U.N. to do their job, remove and destroy the killing machines, protect the citizens, and allow them the chance to elect their own leaders."

Don in Westport, Massachusetts, writes, "Yes, in an unmarked grave."

Rick in Detroit, "Gadhafi enjoys a higher popularity rating than many of our elected officials in this country. Maybe we ought to just mind our own business."

Juan writes from Adana, Turkey, "Whatever is done here, here it should be paid. With this said, the dictator's fate should be up to the Libyan people, whether it is prison time or not."

Harold in Alaska, "Sure, a prison in Libya will do as well as a prison anywhere else."

Joe in Florida writes, "He ought to stay in Libya. If not, we'll likely have him south of the border, in Venezuela, which is probably the only country that might take him."

Mark in British Columbia, "Again, American imperialism never ceases to amaze. Who are we to decide who's the leader of their people? You Americans are being misled by your government again. Libya's not a threat, neither is Iraq or Afghanistan, to America."

"You want a war? Look at your southern border."

And Kevin writes from California, "No, he needs a cruise -- missile, that is."

If you want to read more, go to the blog at CNN.com/CaffertyFile.

I think that's the first time we ever got e-mail from Turkey -- Adana, Turkey, wherever that is.

BLITZER: All right. Good for them.

All right. Thanks, Jack. Thanks very much.

The situation in Libya now impacting the FBI here at home. Agents are taking action. What they're now doing to prevent possible retaliation by Moammar Gadhafi.

Plus, protesters killed in Yemen, and why that's not stopping the U.S. from sending aid to its government.

(COMMERCIAL BREAK)

BLITZER: Let's take a look at some "Hot Shots."

In Japan, a fish market opens for trading for the first time since last month's tsunami and earthquake.

In Brazil, farmers play traditional wind instruments during a demonstration.

In China, people take part in an ancestral worship ceremony by releasing tens of red balloons.

And in the U.K., limited edition Prince William Kate Middleton royal wedding teddy bears sit on a window sill at a teddy bear factory.

"Hot Shots," pictures from around the world.