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New Victory for Libyan Rebels; "We Want Everybody to Act Like Adults;" Former U.S. Representative Visits Libya; Brutal Battle Between Rebel Forces and Gadhafi Loyalists; Off-the-Grid Spending for 2012; Interview With Shimon Peres

Aired April 6, 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: Don, thanks very much.

Happening now, the Libyan dictator, Moammar Gadhafi, reaching out to President Obama in a shocking new letter, calling him his son -- his words -- son and urging him to end what he considers an unjust war. This, as a former congressman, armed with his own cease-fire plan, prepares to meet face-to-face with Gadhafi.

Will he tell him it's time to go?

And the growing fear of a government shutdown here in Washington, as talks between the president and the Republican leadership fail, at least so far, to materialize.

Why your tax returns, federal home loans, even family vacations, could now be at risk.

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

Let's get straight to the fierce fighting in Libya, where, despite a barrage of new attacks from Gadhafi loyalists, rebel forces are celebrating a small victory off the battlefield -- the first export of oil since the bloodshed began.

CNN's Reza Sayah is in Eastern Libya for us.

He's joining us.

What's the latest as far as the rebels, they're trying to show that they can effectively run a country by allowing oil exports to resume?

REZA SAYAH, CNN CORRESPONDENT: Yes, Wolf. One of the things the opposition wants to do is present itself to the community as a legitimate government of the Libyan people. And one way to do that is to show the world that it's a viable vital economic alternative to the Gadhafi regime.

Of course, Colonel Gadhafi and his regime made a lot of money here in Libya, selling Libya's oil to African nations, nations in Southern Europe. The opposition wants to show the world that they can do it, too, that the world can do business with it. It took a significant step today. A tanker left the port city of Tubruq, where we are, with about a million barrels of oil. That's about $100 million worth of oil. A Libyan oil company that's loyal to the opposition apparently cut a deal with Qatar. The crude oil is going to go there. Where it goes from Qatar, it's not clear.

But again, a significant (AUDIO GAP).

BLITZER: It looks like we just lost our connection, unfortunately, with Reza Sayah.

We'll connect with him.

There's a lot more happening over there in the eastern part of Libya, where we just heard him report that they're resuming oil exports. There's also some talk of whether or not there could be some sort of two state solution, East and West Libya, partition divided.

We're going to go back to -- to Libya in just a moment.

But there's something developing right now.

All right, let's go to Dana Bash, our senior Congressional correspondent -- and, Dana, we'll get back to Libya in just a moment.

But there's all this concern about a government shutdown. The deadline Friday night at midnight.

What -- what are you hearing right now?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: We're hearing from sources that there actually will be another meeting at the White House tonight with -- a high level meeting with the House speaker and the Senate majority leader and, presumably, the president of the United States to try to come to some agreement to avert a government shutdown.

Sources in both parties have been telling us, Wolf, all day that they had been making progress, but they've had meetings kind of on a staff level. So this is an indication, perhaps, that they're getting to a point where they need the principals to step in and push it over the finish line.

You know, politically, even though everybody says they do not want a government shutdown, Wolf, politically, Republicans are concerned, even though they have been talking about the big picture, that they are going to get blamed if it -- if, in fact they can't come to an agreement.

So that is why, just about an hour ago, House Republicans announced that they are going to put a vote on the House floor tomorrow for a stop-gap measure to keep the government running for one week. This would cut spending by $12 billion but also fund the government -- excuse me -- fund the Pentagon for the rest of the year. And that really is, Wolf, how Republicans are trying to lure their fellow Republicans onto this bill because especially -- nobody wants to do another stop-gap measure. But that is especially true for Republicans. Now, Democrats say that this is unserious. So that is going on. The discussions are going on behind closed doors, even as the war of words continue publicly.

BLITZER: All right. So, Dana --

(BEGIN VIDEOTAPE)

BASH (voice-over): House Speaker John Boehner emerging from a closed door Republican meeting with some tough words for the president.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I've got to tell you, all that -- I like the president personally.

BASH (on camera): Yes.

BOEHNER: We get along well.

BASH: How much time (INAUDIBLE)?

Did I do the right thing there?

BOEHNER: The president is (INAUDIBLE).

BASH: OK, good.

(voice-over): That even as Boehner announced they are making headway with Democrats in high stakes negotiations over billions in spending cuts and a measure to keep the government running for the rest of the year.

BOEHNER: I think we've made some progress, yes. But we are -- we are not finished, not by a long shot.

BASH: As it has been for weeks, a major issue for the House speaker continues to be pressure from fellow conservatives not to compromise on spending cuts.

UNIDENTIFIED MALE: What a lot of us have been encouraging him to do is to people -- the American people want him to be bold. They want us to cut spending in a big, big way.

BASH: Outside the Capitol --

(VIDEO CLIP)

BASH: -- conservative activists and lawmakers rallied for a shutdown rather than giving in.

UNIDENTIFIED MALE: If liberals in the Senate would rather play political games and force a government shutdown instead of accepting a modest down payment on fiscal discipline and reform, I say, shut it down.

BASH: But Republican leaders aren't the only ones being urged to stand their ground, even if it means a government shutdown. Democrats are, too, right from the House floor.

UNIDENTIFIED FEMALE: And I'm going to stand and fight for values. And we're going to pull together. And we'll stand and we'll survive. Let them shut the government down. Shut it down. Shut it down.

BASH: Still, some lawmakers voiced the frustration of many Americans about this impact.

Barbara Mikulski of Maryland has a lot of federal workers in her state who would be furloughed in a shutdown.

SEN. BARBARA MIKULSKI (D), MARYLAND: And I'm telling you, this is a situation of enormous negative consequences. And I think we're going to rue the day the way we're functioning here. We need to come to the table. And we need to sit around and act like rational human beings.

(END VIDEO TAPE)

BASH: Come to the table. Again, just to recap what we reported at the top of this, Wolf, and that is that there is going to be a meeting tonight at the White House, another one, with the president, the House speaker and the Senate majority leader, to try to continue to hash out a deal to keep the government running, to keep the government from shutting down on Friday.

But in the short-term, House Republicans do say that they are going to go ahead with a stop-gap measure, to try to vote on that tomorrow, if there's no deal tonight, to try to vote on that tomorrow. That would keep the government running for one week. I think it's fair to say that Democrats see that as a political move, that they probably say that they won't even take up in the Senate, though -- Wolf.

BLITZER: And it's pretty extraordinary when you think about it, the president is not even getting back to the White House until around 9:00 p.m. Eastern. And then the leadership, the Republican and Democratic leadership, they're going to come to the White House at that -- after that late hour, is that right?

BASH: It sure looks like it. Look, I mean the -- the Republicans were -- were pretty critical of the president. You heard, at the top of my piece, the speaker saying that the -- that the president needs to lead. Another Republican leader, you know, mocked the president for leaving town when the government is on the verge of a potential shutdown.

So it is probably -- it's not a surprise that there's going to be this meeting tonight. But, you know, the president -- I think it's important to underscore the president, until yesterday, had not been involved directly at all. The vice president had one meeting. There were phone calls going back and forth. A lot -- a lot of behind-the- scenes kind of one-on-one talks. But in terms of a formal sit down negotiation, yesterday was the first one. And the fact that they're having another one tonight, it is important and perhaps tells us, as I said before, that progress -- that we were told by sources all day that they are making, are getting to the point where they need a little push from the president of the United States, the speaker of the House, the Senate majority leader, all in the same room, sitting together at a table.

BLITZER: Well, they've got until midnight Friday night to work it out. So they've got all day tomorrow. They've got all day Friday. My experience in these kinds of things, they wait until the last minute, then they have a dramatic announcement and they -- everybody walks away smiling. But, you know, this is -- as you know, Dana, just the first of many budget battles --

BASH: It sure is.

BLITZER: -- over the next few months. So it's -- this is just preliminary and relatively speaking, relatively modest amounts of money compared to what we can expect in the next coming months.

All right, Dana.

Thanks very much.

Stay in touch.

If you hear anything us, let us know.

BASH: Sure.

BLITZER: Let's get back to what's happening in Libya right now. There are dramatic developments happening in Libya.

I want to go to Tripoli right now.

Our senior international correspondent, Nic Robertson, is joining us -- Nic, all of a sudden today, a former United States congressman, Curt Weldon, writes an op-ed article in "The New York Times" saying he's going to Libya to meet with Moammar Gadhafi and tell him to step down.

I know Curt Weldon is now in Tripoli, where you are.

Has he already met with Gadhafi?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, we don't believe that he has. We believe that he's had some meetings today, but not with Gadhafi. Anyone who comes here -- and he's been here before and knows Gadhafi -- recognizes that these happen when the leader wants them, that there's sort of no rhyme nor reason.

And they've certainly been getting some push-back here amongst Libyan officials for why he released that op-ed article before getting that meeting.

So it's not clear how successful he is going to be here, but he does arrive at a time when Libya is absolutely desperate for any international diplomatic contacts, particularly with the United States -- Wolf.

BLITZER: The whole notion of Curt Weldon showing up, it also comes at a time when we're hearing that Moammar Gadhafi sent a letter to the president of the United States, referring to him as "my son."

What do we know about this letter?

ROBERTSON: Wolf, this sounds very similar to a letter that Gadhafi sent President Obama a few weeks ago, just before the NATO air no-fly zone enforcement got in place here. And this is saying, you know, you're my son. It's sort of terms of endearment, yet, at the same time, accusing the United States of being part of this Allied crusade that's bombing Libya.

It's interesting, because this letter sent to President Obama that uses strong language against the United States is at a variance with what the Libyan Press agency reported here earlier on in the day, which was that Moammar Gadhafi recognizes that the United States has pulled back from this crusade (INAUDIBLE) that it is bombing Libya.

So almost two completely different messages, one for the local audience and one for President Obama. And it sort of almost seems that he's doing this specifically because Curt Weldon is here, that he's trying to sort of gain currency at home and abroad and still look tough -- Wolf.

BLITZER: Is -- what are -- what's the reaction in Tripoli to this idea that's now being floated out there, partitioning or dividing Libya into two states, one controlled, effectively, by Kata -- by Gadhafi and the tribes that support him, the other by the opponents, the rebels based in Benghazi?

Has anyone discussed that in Tripoli, where you are?

ROBERTSON: The way that the regime has put it here, it's said from the outset of the NATO campaign that this is a sort of a colonialist revival inspired by the rebels to divide the country. So this is sort of a conspiracy theory, if you will, that the government here, that Gadhafi's regime has put out to win support locally, because for many Libyans, the idea of colonialists, the Italians, as it was, the United States, who had an Air Force base here until Gadhafi came to power, that -- that it is -- they see these countries as coming here to steal the oil.

So this is something that Gadhafi thinks will resonate. Interesting that one of the proposals that Curt Weldon was carrying here to Gadhafi today is that there should be an interim sharing of power. And one of the leaders of the opposition (INAUDIBLE) and the current Libyan government prime minister, that they should share power here to transition until a parliament can get up and running in a year's time.

So his proposals essentially try and bridge that divide that's growing and becoming sort of enshrined, if you will, in this seesawing battle around the oil towns in the east -- Wolf. BLITZER: If you hear anything more about this meeting that's supposed to be taking place between the former Congressman, Curt Weldon, and Moammar Gadhafi or one of his sons, let -- let us know. We'll get right back to you.

Nic Robertson in Tripoli, doing excellent reporting for us

The raging battle between Gadhafi and the opposition just ahead. We'll take you to one city where all of the signs of rebels have been removed and repressed.

Also, the clock is ticking on that deal to try to avoid a government shutdown. Some lawmakers on Capitol Hill actually want to see a shutdown happen.

Why would that be?

Why politics in Washington could derail the negotiations, even at these last moments.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: As I like to say, never too early to start thinking about the next presidential campaign.

Jack Cafferty is here and he's got The Cafferty File -- Jack.

JACK CAFFERTY, THE CAFFERTY FILE: Wolf, he's got big bucks, he's got really weird hair, he's got a big time reality show franchise and a lot of buildings with his name on them. He's outspoken and he's never shied away from a television camera.

But does any of that make billionaire real estate mogul, Donald Trump, a good fit for the Oval Office?

Well, he seems to think so.

Gee, there's a surprise.

While he hasn't officially announced that he's running for president, he's putting more than his toe in the water. For one thing, he's managed to reignite the Obama birther debate. Trump wants to see an official Barack Obama birth certificate. He says by not producing one, he thinks President Obama has something to hide.

Trump is scheduled to speak at several political events in early primary states, a Tea Party rally in South Florida next weekend, a dinner held by the Iowa Republican Party in Des Moines later this spring, and he will be a part of the traditional Politics and Eggs breakfast series in New Hampshire in June.

And speaking of New Hampshire, a poll of primary voters in the Granite State shows Trump running a close second to former Massachusetts governor, Mitt Romney, and well ahead of all of the other well-known Republicans.

"The Donald" says some whacky things that likely make the political strategists in Washington cringe. But a run by the New York billionaire has the potential to shake up the 2012 race. Some are even comparing his possible entry to the run Independent Ross Perot, himself a wealthy businessman, made in 1992. Perot got 19 percent of the popular vote. He ran on the platforms of smaller government and greater fiscal responsibility -- two issues Trump has talked a lot about and two issues that still have not been addressed.

Here's the question, then -- does America need a wild card like Donald Trump in the 2012 presidential race?

Go to CNN.com/CaffertyFile and post a comment on my blog -- Wolf.

BLITZER: It would certainly liven up that presidential race for the Republican nomination, don't you think?

CAFFERTY: I want to see Hillary Clinton run against Obama and I want to see Trump in the race. And the scripts will write themselves for a year-and-a-half.

BLITZER: Did you see that story in "The New York Times" the other day that Trump was doing all this to try to promote his ratings for "Celebrity Apprentice?"

CAFFERTY: Trump is, arguably, the greatest self-promoter since P.T. Barnum. I mean it's amazing how he's been able, over the years, to establish his name and, thereby, his brand, by doing this kind of stuff. Nothing he does, when it comes to self-promotion, is accidental. And I'm sure that all this birther stuff was designed to create interest in him and, by extension, in his reality show.

So, you know, he's -- he's slick.

BLITZER: Yes. Well, yes, I think I heard Suzanne Malveaux earlier in the day -- I could be wrong, I'm going to double check -- say she's going to interview Trump tomorrow on her show that runs between 11:00 a.m. and 1:00 p.m. Eastern. I think she's going to interview him. And if she is, I'll look forward to that.

CAFFERTY: Well, we ought to, if -- if he says anything interesting, we ought to pull a little clip --

BLITZER: Of course.

CAFFERTY: -- and run it here in THE SITUATION ROOM.

BLITZER: We will.

And we love Suzanne Malveaux, too, right?

CAFFERTY: Absolutely.

BLITZER: OK.

CAFFERTY: But now you have to work even harder, because she's not available to fill in for you.

BLITZER: I know. But, you know, I'm going to still get her up here once in a while.

CAFFERTY: OK.

BLITZER: OK.

All right, thanks.

CAFFERTY: See you.

BLITZER: Gas prices are going where they've never gone before. That's terrible news for anyone filling up a gas tank. You won't believe how high they've gone since the first of the year.

And Libyan relatives say they're disappointed by NATO, but maybe this alliance has reason to say the same thing. Just ahead, more on whether the outgunned rebels in Libya are up to the job of toppling Moammar Gadhafi.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now, and including an unexpected arrival in Baghdad.

What's that all about?

LISA SYLVESTER, CNN CORRESPONDENT: Yes, a little bit of a surprise there, Wolf.

Defense Secretary Robert Gates touched down in Baghdad about two hours ago. He's expected to meet with Iraqi officials and: " commanders. Defense officials say Gates will stress the need to fill vacant security positions ahead of the: " drawdown of troops. Gates traveled to Iraq for meetings with Saudi Arabia's King Abdullah.

Sudan is blaming Israel for an air strike that killed two people near the city of Port Sudan. Sudanese authorities are investigating what they call an act of foreign aggression. The foreign minister says Sudan will lodge a complaint with the U.N. Security Council.

It's not clear who was the target of that attack.

Israel believes that weapons are smuggled to Palestinian militants through Sudan, but the Israel Defense Forces had no comment on that report.

And feeling a pinch at the pump?

Well, it is more than your imagination. Gas prices are up 20 percent since January. In fact, they've risen for 15 straight days. They're now closing in on the all-time average high of more than $4.11, last seen back in July, 2008. And it's not even the summer driving season, when prices tend to peak for the year.

And CNN is adding another GOP presidential primary debate to its slate. The latest will feature Republican candidates in Las Vegas on October 18th. That's cosponsored by the Western Republican Leadership Conference. And that must-see debate follows on the heels of the September 12th showdown in Florida co-sponsored by the Tea Party Express. And don't miss the very first debate, taking place on June 7th, with the "New Hampshire Union Leader" and WMUR.

All very exciting, coming up. I can't believe the first one is set for June already -- Wolf.

BLITZER: I assume there will be some Republican candidates by June. But, you know, they're waiting so long, who knows if there's going to be any formal Republican candidates in the race by early June?

SYLVESTER: Yes. You would --

BLITZER: I assume there will be.

SYLVESTER: Yes, you -- I would have to believe --

BLITZER: Yes. I think --

(CROSSTALK)

BLITZER: -- when the president announced earlier this week, Monday morning, that he was formally running for president, I think that's going to encourage some of those Republicans to accelerate their -- their plans.

SYLVESTER: Yes. Our viewers are going to have to stay tuned.

BLITZER: If it can't happen in early June, we'll move it to July or August or whatever.

Thanks very much.

It's been more than 15 years since the last government shutdown.

What would it mean for average American this time around?

And men and women in uniform could be the first to feel the effects. Just ahead, we'll take a closer look at what it means for all of us.

And the Libyan rebels are fighting for more than their freedom.

What would defeat look like?

Nic Robertson toured one town that met that fate.

(COMMERCIAL BREAK) BLITZER: In the past month, rebels in Libya have faced defeat after defeat and now seem perilously close to disaster. In late February, the road to Tripoli was open, the capital was Gadhafi's last stronghold.

But look at where things stand now. The opposition holds two cities and Misrata is circled by government forces.

So what does a town look like after Gadhafi's soldiers have retaken it and crushed any hint of dissent?

CNN's senior international correspondent, Nic Robertson, once again shows us up close what's going on in Zawiya.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Rubble and smashed concrete where once Zawiya's central mosque stood. Four weeks ago, the government brought us here to see their victory over rebels.

(on camera): Over here, the remains of the mosque right on the central square. This mosque was being used by the rebels as a medical clinic. It was one of their medical centers where they were treating their wounded. This is where the mosque stood. It has been so demolished, so destroyed, that all that are left in the ground are a few floor tiles like this.

I mean you look around you here, you can't even see where the walls were, it's been so heavily pulverized into the ground.

(voice-over): In this city, President Obama and European leaders say Gadhafi's forces must withdraw. Instead, they're removing and repressing any hint of the rebels. Around the corner from the former mosque, more sinister signs of cover-up.

(on camera): This is one of the medical centers that was used by the rebels. There's wrecked beds outside here and the doors here firmly shuttered, steel plates on the inside. Up here, the main entrance here to the hospital, as well, shuttered shut. In fact, not only is it shuttered, but it's been welded shut. There's no way for us to get inside this former rebel hospital now. It's actually been welded shut, absolutely closed.

(voice-over): Unless any rebels return, a few yards away, under a tree, a carefully camouflaged government tank. The only voice the government wants now, almost on cue with our arrival, a pro-Gadhafi rally.

(VIDEO CLIP)

ROBERTSON: When officials take us to the city hospital they stifle any hint of anti-regime comment.

(on camera): The mothers here tell us these babies have a fever and that's why they're in the hospital. They also tell us that the situation in Zawiya is just fine, that everything's OK. But, of course, just outside this room, there are government officials, government minders, who are keeping an ear on everything that they say.

(voice-over): The new hospital director, appointed since the rebel defeat, delivers the government message -- they are firmly in control.

UNIDENTIFIED MALE: I didn't have any shortage in any department for the medical supplies.

ROBERTSON: The unspoken message here, the government is not about to give this city up. Rebels, not just defeated, but repression of the very freedoms they fought for.

(on camera): It's not just the mosque that's missing here, it's the voice of dissent that was so strong six weeks ago. No one on the streets here will voice any opinions against the government. That voice has been snuffed out, crushed, removed, in the same way this building has been reduced to rubble.

(voice-over): Nic Robertson, CNN, Zawiya, Libya.

(END VIDEOTAPE)

BLITZER: Let's get some more on the brutal battle under way right now between rebel forces and Gadhafi loyalists.

Joining us, retired U.S. Army Major General James "Spider" Marks.

General, thanks very much for coming in.

MAJ. GEN. JAMES "SPIDER" MARKS (RET.), U.S. ARMY: Sure, Wolf. Thank you.

BLITZER: What happened to NATO? All of a sudden, we're hearing the rebels saying that the NATO is MIA, missing in action.

MARKS: I think both sides are feeling the same way. I think the assessment of the rebels has been all along, they can't do anything unless the air power is there. Rebels are now saying, if we don't have air power all the time, we can't accomplish what we need to accomplish.

Frankly, the rebels really need to trade a little space for time, get back to Benghazi and get their political act together. But without the United States cajoling the alliance, it's very difficult for NATO in its full array to maintain that type of momentum.

The U.S. leads and everyone follows, or the U.S. pushes very aggressively from behind. Both of those are OK, but it must take U.S. pressure to keep NATO rolling like that.

BLITZER: Because the U.S. has walked away from the command and control, the leadership of this NATO operation. It's now NATO that's in charge, and obviously the United States is a player in NATO, but there are others who are players as well.

MARKS: Well, the U.S. -- let's be frank. The U.S. is not only a player. The line in the chain of command goes all the way up to an U.S. admiral four-star, Jim Stavridis.

BLITZER: But he has to listen to what Turkey and Germany -- there has to be consensus among all the NATO allies.

MARKS: Oh, absolutely. My point to your question is, is the U.S. directly involved? Absolutely, in the form of the commander.

What has happened is he has delegated down to that joint task force out of Naples, the command of what's happening in Libya. But he has oversight. He has a finger on that pulse all the time.

BLITZER: But here's the issue that the rebels are complaining about -- no more Tomahawk cruise missiles being launched, no more AC- 130 attacks being launched, no more A-10s going in there and going after Gadhafi forces.

It seems like there is not much happening.

MARKS: What the rebels need to do -- without that assistance --

BLITZER: But the rebels can't do much. You know they're a ragtag bunch of guys who can barely shoot a rifle.

MARKS: This is like a bunch of Barney Fifes. What needs to happen is they need to take a step back because they cannot apply sufficient pressure without losing it all. What they need to be able to do is fight another day. They've got to get their act together.

BLITZER: So they need to withdraw, let's say, from Al Brega or Ajdabiya, and just be based in Benghazi, basically, and give up those towns?

MARKS: I would say yes. And then let NATO do its job, if Gadhafi chooses to close in on them. And there is a series of defenses that they can put in place. It's easier to defend than it is to attack. It takes strength to do both, but you'll have a greater success rate if you're doing it on the defense. And then let NATO do its job against Gadhafi's forces.

BLITZER: In other words, when they were on the outskirts of Benghazi -- it's the second largest city in Libya right now -- and they were on the outskirts of Benghazi, that's when the U.N. Security Council acted, when the Arab League acted, and when the U.S. took charge and started bombing those positions because they were afraid of a bloodbath.

MARKS: What's happening right now is that there is a lot of political knifing that's going on, relative to what the rebels are trying to accomplish. What's worse than that is the rebels are slaughtering themselves against Gadhafi's formations. They should not do that.

BLITZER: Did the U.S. and NATO overestimate the military capability of these rebels?

MARKS: I think they probably did. And I think what really happened was the juxtaposition of what happened in Tunisia and what happened in Egypt, and how quickly those toppled, and that we looked at what was happening in Libya and we went, this is the same, it clearly is not. Gadhafi is not Mubarak.

BLITZER: Yes. Mubarak and Ben Alai in Tunisia, they weren't willing to let their military kill fellow Egyptians and Tunisians. Gadhafi doesn't have that problem, as we know.

MARKS: You've got it.

BLITZER: General Marks, thanks very much.

MARKS: Thank you, Wolf.

BLITZER: The Israeli president sitting down with the president of the United States as political turmoil sweeps the Middle East. Do Israelis trust President Obama/ My interview with Shimon Peres, that's coming up.

And a special investigation you'll only see here in THE SITUATION ROOM. We're digging deeper on companies here in the United States that have made millions of dollars off of Gadhafi.

(COMMERCIAL BREAK)

BLITZER: How will President Obama raise $1 billion for his re- election campaign? Twenty-three thousand donations isn't a bad start. That's how many his campaign received in the first 24 hours after Monday's official launch. A source tells CNN almost all of those contributions were in the amount of $200 or less. The president raised $750 million in his first run for the White House, but his campaign has set its sights higher for 2012.

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

How much money will outside groups spend? The sky literally is the limit.

Our national political correspondent Jessica Yellin is here in THE SITUATION ROOM to explain.

People hear $3 billion and they say, what?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: It's hard to wrap your mind around it, Wolf, but these are big numbers. And already, outside groups on both sides of the aisle are saddling up for the 2012 campaign. This cycle, expect them to spend hundreds of millions of dollars.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Do you remember this ad?

UNIDENTIFIED MALE: I served with John Kerry. John Kerry cannot be trusted.

NARRATOR: Swift Boat Veterans for Truth --

YELLIN: Since that election, the number of independent expenditure, or third-party groups, has exploded. Last year, some new groups brought us ads like these --

UNIDENTIFIED FEMALE: Sharron Angle's ideas are bad ideas.

NARRATOR: Jack Conway has gone the wrong way, too.

NARRATOR: The Sestak-Obama plan costs us too much.

YELLIN: Expect even more this time thanks to a recent Supreme Court ruling that opened the floodgates to limitless contributions to third-party organizations.

STEVEN LAW, AMERICAN CROSSROADS PRESIDENT: We expect to hit $120 million.

YELLIN: Steven Law runs American Crossroads, a Republican group co-founded by Karl Rove. Law says they raised an astounding $70 million for last year's election.

LAW: We created American Crossroads to be a counterpoint to what the unions and other groups like MoveOn.org have done very effectively for the last several elections.

YELLIN: Democrats say they're trying to catch up. Monica Dixon's new group, Majority PAC, will work to keep the Senate in Democratic hands.

MONICA DIXON, MAJORITY PAC EXECUTIVE DIRECTOR: We were just outgunned and out-manned last cycle. We didn't do a good job supporting our candidates against this barrage of money that was spent against them. And so this cycle, we're engaged.

YELLIN: The law limits contributions to candidates, $5,000 max per election, and to party committees, $30,800 per year. But when it comes to third-party groups, the sky is the limit. And often, donors can keep their names secret. Outside groups spent nearly $300 million in the 2010 midterm elections, and that number will no doubt balloon.

LAW: This is one election where, literally, everything is at stake -- the White House, the Senate majority, the House majority, and even the courts.

YELLIN: Which means you, the voter, will get lots of attention.

DIXON: It will be in the form of television advertising and radio. It will be people coming to your door.

YELLIN: And seeing many more of these -- NARRATOR: American Crossroads is responsible for the content of this advertisement.

(END VIDEOTAPE)

YELLIN: And brace yourself. You will see and hear that a whole lot more. With this much money sloshing around, political operatives tell me we are going to see political ads begin all summer long. And sources, Wolf, tell me that the first outside groups' political ads for the 2012 elections will begin in just a few weeks, possibly this month.

BLITZER: I think it's a good time to be a political consultant, an advertising executive --

YELLIN: Making money.

BLITZER: -- own a TV station or a Web site, because that $3 billion, you know it's going to be spent on a lot of political advertising.

YELLIN: That's right. Remarkable money.

BLITZER: Thanks very much for that.

If you're planning a family vacation, you might need to think again. Just ahead, the potential fallout of a government shutdown this weekend.

And could Israel be responsible for a complex computer worm that targeted Iran's nuclear power plants? My interview with the president of Israel. That's coming up.

(COMMERCIAL BREAK)

BLITZER: Lawmakers here in Washington aren't the only ones who should be concerned about the looming threat of a government shutdown. There could be some serious implications for all of us.

Lisa Sylvester takes a closer look.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT: If you're planning a vacation anytime soon, say, to the National Zoo here in Washington, or to one of the country's many national parks, or to a Smithsonian museum, you might want to think again. All nonessential federal government services will be shut down.

(voice-over): The government will keep running federal offices that are essential to protecting life and property -- law enforcement, for example. Also, federal offices with multiyear funding not tied to Congress' annual appropriations. But the bulk of federal workers, about 800,000 of them, will be furloughed and not earning a paycheck, although Congress has the ability to make the pay retroactive. Members of the military will stop getting a paycheck even though they will still officially be earning money. And about one of every three mortgages, those guaranteed by the FHA, may not be processed. And if you haven't gotten your tax refund yet, the IRS will stop processing paper tax refunds.

Other services that could be impacted, passports will not be processed; the National Institutes of Health would stop clinical trials; and the Small Business Administration would stop approving direct loans to small companies.

KEN ROGOFF, PROFESSOR OF PUBLIC POLICY: This is something of a farce, because the government has cash in the bank, so to speak, where it can run for a while. But this is no way to do business, especially when you're the world's biggest debtor.

SYLVESTER: If the shutdown were to drag on, federal courts could be impacted. The federal judiciary branch has contingency funds to pay for court services for two weeks. But longer than that, then grand juries might be dismissed and probation officers might not be able to fully monitor those on parole.

The prospect of the federal government closing up shop isn't sitting well with members of the public.

UNIDENTIFIED MALE: I think it's a terrible idea. It's an abandonment of the reason that the leaders were elected in the first place. They should be able to reach a compromise. There's no reason that both sides have to dig their heels in.

UNIDENTIFIED FEMALE: I have a son that works for the federal government. So, he has four kids to support. So I would like them not to shut down.

(END VIDEOTAPE)

SYLVESTER: Now, a lot of folks out there may be wondering, what about Social Security checks? A senior administration official says current beneficiaries will continue to receive checks as they did during the 1995 government shutdown -- Wolf.

BLITZER: I remember that government shutdown in '95 well.

Thanks very much. Let's hope it doesn't happen again this time. They're better off, just reach a deal, get it over with, and then fight bigger issues down the road. Just my two cents.

Thank you.

There are some Americans who say a government shutdown would actually be good for the country, at least for a few days. But the numbers are sharply divided by political party.

According to our new CNN/Opinion Research Corporation poll, 21 percent of Democrats support the idea. That's compared to 35 percent of Independents, 53 percent of Republicans. Libya's leader appeals to a new pen pal to put the brakes on NATO's mission. That's not all Moammar Gadhafi had to say to President Obama in a letter. He also said he's pulling for him in the 2012 election.

And Japan tries to diffuse a new crisis at its crippled nuclear plant. Engineers, racing to stop a potential explosion at reactor 1.

That and much more coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour, Wolf, is -- Does America need a wildcard like Donald Trump in the 2012 presidential race?

Craig says, "Why would we want to elect someone who is not only a successful businessman, but can campaign on his own dime, thinks OPEC is taking advantage of us, and has already produced his own full birth certificate? He can also take jokes about his hair. He's got my vote."

Dave in Arizona writes, "Yes, just what we need, another clown to cause large distractions amongst the ignorant like Palin did last time. Sorry, but I have seen the decisions he makes on his TV show, and I wouldn't elect him ever. Horrible decisions. Trump represents everything wrong with America -- the rich people trying to take every last nickel from us."

Lou writes, "I think we need fewer wildcards in the race. All these egomaniacs who just like to get themselves on TV distract from the serious questions we need to be asking in a real presidential contest."

Mohammed in Los Angeles writes, "With candidates like Trump, Palin and Bachmann, why in the world does Obama think it will take $1 billion to win the next election?"

Rob writes, "My God. No, Jack. How can you even ask such a question? You're fired."

D.G. in Vero Beach, Florida, "Donald Trump? Oh, sure. We can always use a pompous, egotistical hair ball for president. He fits right in with the congressional failures we already have in power."

And Annie in Georgia writes, "Personally, I would pay money to see him campaign with his supporters at an outdoor venue on a windy day just to see what that thing on his head is capable of doing."

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

There are certain people when we do a question, you get a lot of very entertaining e-mail. Donald Trump is one of those. BLITZER: Sarah Palin's another, right?

CAFFERTY: Yes, she's another one. Hillary Clinton was in the last election race.

BLITZER: Yes. Here's an issue he's going to have to face if he's serious. He doesn't like to shake hands with people. He's a little germaphobe.

CAFFERTY: Germaphobe, yes.

BLITZER: Yes. So he's going to have to learn how to shake hands with a lot of people on those rope lines, and greeting people, and all that kind of stuff.

CAFFERTY: Maybe he can wear those rubber gloves like the doctors wear.

BLITZER: All right, Jack. Stand by.

Do Israelis trust President Obama? Just ahead, my interview with the Israeli president, Shimon Peres.

Plus, can a former U.S. congressman persuade Moammar Gadhafi to simply go?

(COMMERCIAL BREAK)

BLITZER: The Israeli president, Shimon Peres, met with the House Speaker, John Boehner, the Democratic Leader, Nancy Pelosi, other congressional leaders today. This, a day after meeting with President Obama.

I sat down with the Israeli leader at the U.S. Institute of Peace just as political unrest is spreading throughout North Africa and the Middle East. In our interview, Peres gave President Obama a strong vote of confidence.

(BEGIN VIDEOTAPE)

SHIMON PERES, PRESIDENT OF ISRAEL: I trust the president. I think he's serious.

BLITZER (voice-over): The Israeli president says his Oval Office meeting with President Obama went very well.

(on camera): What do you say to those Israelis who don't consider President Obama a friend of Israel?

PERES: I am saying they are mistaken.

BLITZER: Give me an example of why they are mistaken.

PERES: The president said and told me several times that as long as he's president, the security of Israel will be on top of his political consideration. He does (ph) it. BLITZER (voice-over): Still, Peres says Obama did reiterate his call on Israel to freeze all settlement activity on the West Bank and east Jerusalem, something Prime Minister Benjamin Netanyahu and his government reject.

PERES: The president told me this is the policy of the United States.

BLITZER: Despite that, Peres stressed the importance or reviving peace talks with the Palestinians. He said Israel supports a two- stage solution: Israel, living alongside Palestine. And he praised the Palestinian Authority leadership.

(on camera): Is President Abbas, the leader of the Palestinian Authority, committed to the peace process?

PERES: In my judgment, yes.

BLITZER: And Prime Minister Fayyad?

PERES: Yes. I think this is maybe the best hope we could have.

BLITZER: So you should take advantage of that opportunity and negotiate peace with them?

PERES: Right. Yes.

BLITZER (voice-over): But that's easier said than done. The pressure on Israel to resume negotiations with the Palestinians has intensified with the political turmoil sweeping the Middle East. It will further intensify in the coming months since the United Nations General Assembly may go ahead and simply recognize an independent Palestinian state in September.

(on camera): Would it be smart for the president of the United States to do what Jimmy Carter did, invite the Israelis and Palestinians to Camp David and negotiate a peace agreement?

PERES: I think the president is ready to do it, but wants to make sure that in the wake of such a meeting, there will be direct negotiations.

BLITZER (voice-over): Peres is also deeply concerned about Iran and its nuclear ambitions.

(on camera): How close, in your opinion, the government of Israel, is Iran to building a nuclear bomb?

PERES: I really don't know. I mean, there are different ideas. Some say a year, two years, three years. It's very hard to know.

BLITZER (voice-over): But Peres won't say whether Israel is behind a complex computer worm that targeted Iran's nuclear power plants.

(on camera): Is it your opinion that Iran suffered a major setback in its nuclear weapons program by cyber warfare, the Stuxnet worm that has been widely reported?

PERES: I know what I read in the papers.

BLITZER: I think you know more than that.

(LAUGHTER)

PERES: Well, what I know is not far from what's being written. But I don't think I have to take a position on intelligence. And I don't have to go into figures and numbers.

BLITZER: But without getting into who was responsible for that, did that seriously set back Iran's nuclear program?

PERES: I don't have a definite answer to it. I don't know.

BLITZER: Do you want to tell us who was responsible for it?

PERES: Pardon?

BLITZER: Do you want to tell us who was responsible for that?

PERES: Why is it needed?

BLITZER: I'm a journalist. I'm curious.

PERES: You're a journalist, I'm a politician. I don't have to answer the questions.

(APPLAUSE)

BLITZER: I didn't really expect you to tell me.

PERES: OK. So you were right.

BLITZER: I ask the questions.

(END VIDEOTAPE)

BLITZER: The Israeli president, by the way, praised all the young people in the Middle East leading the moves toward democracy. He said he hopes these movements succeed.