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THE SITUATION ROOM

From Google Executive to Revolutionary; Brutal Regimes Collaborating?; "The Most Fortunate Can Pay More"; Pain at the Pump; Cop Maces Squirrel; Obama's Deficit Plan

Aired April 16, 2011 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR, THE SITUATION ROOM: President Obama tears into Republicans, blasting what he calls their deeply pessimistic vision of the future and warning he won't renew tax cuts for the wealthy. But did he go too far?

Plus, he's known in Egypt as a hero widely credited with igniting the social media uprising that topped Hosni Mubarak's 30-year regime. Just ahead, I'll ask the Google executive Weil Ghonim how much has really changed in the weeks since the historic revolution.

Here in the United States, pain at the pump as gas prices near an all- time high. We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Put on the defensive by a Republican plan to tackle America's massive deficits through massive spending cuts, President Obama has come out with his own vision. He too would slash trillions from the deficit but would mix spending cuts with tax hikes on the wealthy. The president has slammed the GOP plan as a betrayal of American ideals, and Republicans have been equally sharp in their response. Here's CNN's Senior White House Correspondent Ed Henry.

(BEGIN VIDEOTAPE)

ANNOUNCER: The president of the United States.

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT (voice over): It was a call to action from a president who, truth be told, has largely been on the sidelines when it came to cutting the deficit the last two years.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Congress has failed to act, then my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code. That should be an inventive for us to act boldly now instead of kicking our problems further down the road.

HENRY: Except those problems could be kicked further down the road since this was a call to action without any actual action; few specific details among the president's four pillars. First, the president vowed he would have the political courage to cut some programs, unnamed, near and dear to the hearts of Democrats. Then in the next breath, he promised to spend new money on all kinds of others. OBAMA: We will invest in medical research. We will invest in clean energy technology. We will invest in new roads and airports and broadband access. We will invest in education. We will invest in job training.

HENRY: As for the second pillar, defense cuts, it sounded like, to quote the president himself, kicking the can.

OBAMA: We're going to have to conduct a fundamental review of America's missions, capabilities and a role in a changing world. I intend to work with Secretary Gates and the joint chiefs on this review and il make specific decisions about spending after it's complete.

HENRY: The sharpest contrast between the approaches of Republican Paul Ryan and the president came on the third pillar, cuts to health care spending like Medicare. The president went out of his way to cast himself as the protector of senior citizens. Raising questions about whether he will step up with substantial cuts. And be able to work out a deal with Ryan since they're now both dug in.

OBAMA: It says instead of guaranteed health care, you get a voucher. If that voucher isn't worth enough to buy the insurance that's available in the open marketplace, well, tough luck. You're on your own. Put simply, it ends Medicare as we know it.

REP. PAUL RYAN, (R) BUDGET CHAIRMAN: I thought the president's invitation to Mr. Camp, Mr. Hensarling and myself, was an olive branch. Instead, what we got was a speech that was excessively partisan, dramatically inaccurate, and hopelessly inadequate to addressing our country's pressing fiscal challenges. What we heard today was not fiscal leadership from our commander in chief.

HENRY: The divide is just as sharp on taxes where the president vowed to raise taxes on the rich even though he avoided that chance back in December when he extended the Bush tax rates.

OBAMA: They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors, each, to pay $6,000 more in health costs. That's not right. It's not going to happen as long as I'm president.

HENRY (On camera): Inside the White House, they defend the president's approach by saying if he had gotten too detailed critics on all sides would have ripped this plan apart. They think it's better to have a broad framework and they are leaving the specifics to Vice President Biden, who has now been deputized to go up to Capitol Hill in early May to try to work out a bipartisan compromise by the end of June, which at this point is very, very ambitious deadline. Ed Henry, CNN, the White House.

(END VIDEOTAPE)

BLITZER: Let's dig deeper on the escalating spending battle here in Washington. Joining us, our Senior Political Analyst Gloria Borger. A lot of bad blood in these initial days of this debate. Here's the question, they've got to raise the debt ceiling, pass a 2012 fiscal year budget. Is it doable anytime soon?

GLORIA BORGER, CNN SR. POLITICAL ANALYST: They have to raise the debt ceiling because everybody-leaders, shall I say, on both sides agree that it would be a huge problem for their country to default. So I think they have to figure out a way to do it.

I think it just got a little bit harder this week, Wolf. You heard what Congressman Ryan said. And also, Republicans can't agree among themselves about the kind of budget cuts you ought to attach to the debt ceiling. Do you want spending caps, do you want some kind of balanced budget amendment. That's all to be worked out.

As for the longer term, I think it's now clearly going to be pushed until after the 2012 election. I cannot see them getting anything significant done particularly on issues like Medicare, big issues like tax reform and until the election. I think that's really bad news for Senate Republicans and Democrats, a gang of six, who have been working to the to really try and do something in a bipartisan way.

BLITZER: It's clear the president effectively launched his re- election campaign.

BORGER: Sure did.

BLITZER: At George Washington University, with that big speech with the Republicans sitting in the front row. Nancy Pelosi, she's the Democratic leader in the House of Representatives. She really didn't participate in the final negotiations to avert a government shutdown.

BORGER: No.

BLITZER: And she voted against the legislation to keep the government.

BORGER: She did.

BLITZER: Open. A lot of people are wondering why.

BORGER: It's kind of interesting. I think there's a moment when a political campaign starts when you have a president up for re- election, and you have his House Democrats, they have different goals. They want to win back control of the House. He wants to win re- election. And sometimes, they have to go their own separate ways and they kind of privately have to agree they're going to do that.

Now, Nancy Pelosi, there were 81 Democrats who voted for the deal. That's about half, about half the Democrats for, half against. She voted against the deal. Her number two, Steny Hoyer voted for it. I think Nancy Pelosi has her eye on how can we defeat these Republicans on the Medicare issue. Don't forget, there are 61 Republicans sitting in the House right now who are in districts that Barack Obama won in 2008. BLITZER: Isn't that a slap, the Democratic leader in the House of Representatives tells the Democratic president of the United States, the Democratic Leader Harry Reid in the Senate, you know what? You guys are wrong and I'm right.

BORGER: Right, it is. But I have my job to do, you have your job to do. As long as you don't need my vote to prevent a government shutdown, if it's not a one-vote margin, let the Republicans give you the votes. I'm not going to do that because I want to win back the House, purely political.

BLITZER: As we say, she wasn't even involved in the final negotiations that resulted in the compromise to keep the government open.

BORGER And I think they may have done that on purpose, Wolf. They want to keep her out of it because they knew exactly where she was on this.

BLITZER: All right. Gloria, thanks very much.

BORGER: Sure.

BLITZER: President Obama along with leaders of France and Britain now issuing a joint call for Moammar Gadhafi to go away. Will it work? I'll speak with someone who knows the Libyan dictator personally.

Plus, is new equipment aiding rebel forces in their battle against Gadhafi loyalists? We are going to the front lines. Stand by.

And just how much has changed in Egypt in the weeks since is the historic revolution. I'll speak with the blogger widely credited with helping to ignite the uprising. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: As Moammar Gadhafi's forces hammer the city of Misrata with mortar and artillery rounds, President Obama and his British and French counterparts are comparing the situation to a medieval siege. Their words, in a joint op-ed article, they say it's impossible to imagine a future for Libya with Gadhafi still in power.

Joining us now is the former Republican congressman from Michigan, Pete Hoekstra, he is former chairman of the House Intelligence Committee.

Congressman, thanks very much for coming in.

PETE HOEKSTRA, FMR. CONGRESSMAN: Good to be with you, Wolf.

BLITZER: We saw Gadhafi this week in a sunroof driving around Tripoli with his hands, he's shaking. Do you think he's panicking for any reason having read this joint article by President Obama, President Sarkozy, Prime Minister Cameron? Does this scare him? HOEKSTRA: I don't think so at this point. He's seen what the NATO forces have done over the last two to three weeks. Sure, they've imposed a no-fly zone. He's come -- he's circumnavigated that by having his troops go around the Jeeps and these types of things and looking like the rebels. He's clearly, from my perspective, you know, he's taking the lead. He's taking it to the rebels. And I think at this point, he doesn't really think that NATO is going to step it up a notch, to ultimately remove him from power.

BLITZER: You've met with Gadhafi a few times when you were in the House of Representatives. You went to Tripoli, you went to his hometown of Sirte. Take us in his mind a little bit right now. Based on what you know and obviously as chairman of the intelligence committee, what you knew then, give us a little favor of what you think is going through his mind.

HOEKSTRA: Well, actually when you're meeting with him, it's a surreal type of environment. You know, it's typically just him. Is he there it carrying on the dialogue with you along with his interpreter. He clearly understands the dynamics of what are going on in the Middle East, the whole threat from radical Islam. I think he understands the West pretty well. What he may and may not be able to get away with. I think he's now -- he's a student. He is watching what's happening to Mubarak, and these types of things.

Gadhafi at this point is digging in. He's not going anywhere else. I think he recognizes that the resolve of NATO to remove him from power senior not there. And as long as it's not there, he's going to push the initiative and try to regain total control of Libya.

BLITZER: So we're talking about prolonged stalemate. Is that what you sense?

HOEKSTRA: It's a prolonged stalemate unless NATO ratchets it up. Remember, President Obama has said that regime change is not the objective of U.S. involvement in Libya. It's a humanitarian mission. If the mission is not to get rid of Gadhafi, he will stay in power.

BLITZER: Interviewed the Senate Majority Leader Harry Reid this week, and he agreed, he liked the idea that the U.S. should keep a running tab of how much it's spending, how much American taxpayers are spending to try to liberate Libya, cruise missiles, military air strikes, at least $600 million so far, $700 million. He says keep a running tab and deduct it from the 33 billion in frozen Libya assets in the United States. Is that realistic?

HOEKSTRA: Well, I mean, there's a lot of legal questions. Exactly whose money is that? That's not the U.S.'s money to determine what to use and how to spend and how to allocate that money, and say we're going to use it for to cover our military expenses. Are we going to cover NATO's expenses? This money belongs to the people of Libya and at this point in time, I don't think we, in a legal court of world opinion, have the right to go and claim those funds to pay for our military expenses.

BLITZER: The argument. HOEKSTRA: It makes perhaps for good --

BLITZER: The argument though, is that this money is being used to liberate Libya and help Libya become a free nation, a democratic nation. Isn't it money well spent for the people of Libya?

HOEKSTRA: Well, it's being spent for U.S. military operations. You know, you could probably make a stronger case, Wolf, that the money that would be being spent for humanitarian purposes, you know, medical supplies, and those types of things that that could be deducted because that's going directly for the people of Libya. To pay for our military expenses, you know, I think that's a questionable thing.

But the bottom line here, this is not about the money. It's not about this. It's about what is our goal and objective in Libya. Let's clarify that and we'll figure out how to pay for it at some other point.

BLITZER: Listen to what Harry Reid also said on U.S. military operation, almost 10 years now in Afghanistan. I pressed him on this issue. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) SENATE MAJORITY LEADER: I'm not confident it's going to work. I'm happy to see that - I've talked to General Petraeus, in the room next door here, a couple weeks ago. He thinks things are going well. I have great respect for him. I hope it's going well. But this is-the American people and rightfully so, have a very short attention span. We cannot continue to keep dumping this money.

(END VIDEO CLIP)

BLITZER: He says dumping money, Congressman, $2 billion a week, more than $10 billion a year. The president says he wants to keep U.S. forces there at least through the end of 2014. With 100,000 U.S. troops there right now. Is this a waste of money?

HOEKSTRA: I think we've got to focus on exactly what's the goal and objective. Our goal and objective should not be nation building in Afghanistan. It is not going to become a democracy that we would recognize. We need a stronger central government in Afghanistan that will keep the Taliban down, make sure it's not a safe haven for Al Qaeda. Those are our goals and objectives. As long as that's what we're funding, it's not money that's being wasted. We go beyond that clear objective, and I think you could probably have a pretty good argument that money's not being spent wisely.

BLITZER: It's $100 billion a year. Just imagine what that money could be spent on here in the United States given the needs here.

HOEKSTRA: That's exactly right.

BLITZER: Congressman, thanks very much for coming in.

HOEKSTRA: Good, thank you.

Pete Hoekstra, the former congressman from Michigan.

Libyan rebels are getting some new equipment including some new weapons. But how do they-do they really know how to use them in? Ben Wedeman will join us from the frontlines.

I'll talk to the former Google executive who helped lead the uprising in Egypt. Wael Ghonim. You'll hear what he has to say on that blogger who was just sentenced to prison for insulting the Egyptian military. Is the new government in Cairo any better than the old one? Lots of questions. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In Libya, we're seeing subtle but significant changes among rebel forces trying to oust Moammar Gadhafi. They're now receiving new equipment but they are still hampered by very old problems. Here is CNN's Senior International Correspondent Bed Wedeman.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SR. INT'L. CORRESPONDENT (voice over): "You are now one group, we now work as one division," a rebel commander explains to his men. This is the last word before they move out. They're preparing to push from Ajdabiya to the outskirts of Brega, hoping to regain the strategic oil town they've lost three times already.

This time things look different. They have new equipment, including brand new military radios they say they don't know the where they come from.

"There's communications between our special forces, our army, and the revolutionaries," says Muhammad. And there's communications with the NATO airplanes.

Some have new boots, courtesy they say of Qatar, the Arab state most firmly behind the revolution against Libyan leader Moammar Gadhafi. Rather than rush ahead willy-nilly, the pickups are lined up, their weaponry ready for when they receive the order to advance.

(On camera): This is something we haven't seen much of recently, a certain level of disciplined organization, and preparation that has been sorely lacking among opposition fighters.

(voice over): Their lack of discipline has left them on the defensive. The frontline now seems to surround Ajdabiya on three sides. Around the town, they scan the horizon for signs of Gadhafi's forces. The worry here is that the enemy will attack from the flanks, not the front. The effort to overthrow Gadhafi is taking far longer than any of these men imagined.

Tamim has been fighting at the front for a month. I ask him how long he expects the fighting to continue.

"God knows," he responds. "But we'll carry on because we are right. We are doing this for the civilians, for the children, to end this 42 years of tyranny."

Fatteh (ph), a 50-year-old businessman turned soldier, is resigned to a long struggle.

"We're prepared to fight for the rest of our lives," he says. "Gadhafi has to go. We don't have a spec of doubt about it. He must go."

And 72-year-old Ahmed has sent his family away from Ajdabiya, but he's stoic about the cost of this war.

"We feel that victory is near," he tells me. "We know that when there is change, we must make sacrifices."

The sacrifice is too high for some. A group of Egyptians is here looking for a lost relative, Nasser Alam Brahn (ph), who joined the anti-Gadhafi forces. He's been missing for more than a month.

"He phoned several times," says his uncle. "The last time he was in Ras Lanuf, then in Brega. Since then we haven't heard from him."

Back the gates of Ajdabiya, the push forward is starting to show signs of falling apart. The discipline displayed earlier starts to collapse. And then without any apparent reason, pandemonium breaks out. Wildfire in all directions. The offensive postponed until further notice. Ben Wedeman, CNN, outside Ajdabiya, Eastern Libya.

(END VIDEOTAPE)

BLITZER: A key player assesses what's happening in Egypt right now. The Google executive turned revolution leader Wael Ghonim is here in THE SITUATION ROOM.

Plus, growing concern two brutal regimes are working together to crush calls for reform. Are Iran and Syria in a secret deadly collaboration?

(COMMERCIAL BREAK)

BLITZER: Egyptian authorities are holding ailing ex-president Hosni Mubarak along with two of his sons. Prosecutors are investigating corruption charges and the killing of protestors during Egypt's dramatic uprising. Officials say Mubarak is being treated for heart problems and will be moved to a prison when his condition improves. Meantime, many Egyptians are celebrating his down fall. Here's CNN's Ivan Watson.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT (voice over): Traffic jams clog the streets of Cairo. But this morning, Muhammad Gofar (ph) is smiling.

"Since I'm a cab driver, I'm always in the street, and I can see that everybody is happy beyond imagination," he says. "The man that used to put people in prison is now behind bars." News of the interrogation and 15 days detention of Hosni Mubarak and his sons spread like wildfire through a city still decorated with the slogans of the revolution that forced his overthrow. Patrons at a venerable Cairo coffee shop quietly savoring their former ruler's fall from grace.

AHMED ABDULSALEM, ACCOUNTANT (through translator): Thank God, I'm very happy. The country has taken a big step forward. During the previous regime, corruption gave way to more corruption. It was survival of the fittest. What we're seeing today is much better than what we had before."

WATSON: The huge challenges plaguing this country are still far from solved. Widespread poverty, unemployment, and a military government accused of torturing of prisoners during the two months since it assumed power.

Just a few days ago, tens of thousands in Tahrir Square were accusing the military of protecting Mubarak. Now their demands have been met. The former president and his family have gone from being untouchables to being ridiculed and called liars on the front pages of daily newspapers.

MAHMOUD AMREYA, COOK: All these people, mafia, just mafia.

WATSON (on camera): Mafia?

AMREYA: Yes, just mafia.

UNIDENTIFIED MALE: You think Mubarak is a criminal?

AMREYA: Mubarak is very, very bad man.

WATSON (voice over): Mubarak's downfall viewed as a victory for the common man. Even for those who earn a living sweating over a hot grill.

AMREYA: I'm very happy.

WATSON (on camera): You are smiling?

AMREYA: Yes, I'm very happy, of course.

(LAUGHTER)

WATSON (voice over): Ivan Watson, CNN, Cairo.

(END VIDEOTAPE)

BLITZER: Wael Ghonim was at the forefront of the revolution that toppled Hosni Mubarak. The former internet executive was detained in the early days of the uprising only to re-emerge and take a leading role.

He's been very active on Twitter. He's a blogger. Wael Ghonim is joining us here in THE SITUATION ROOM right now. Thanks very much for coming in.

WAEL GHONIM, EGYPTIAN UPRISING LEADER: Thanks.

BLITZER: A lot of us were inspired from what we heard from you. You were arrested by the Mubarak regime. You came out. You inspired a lot of people in Egypt. Are you confident that the situation in Egypt today is moving in the right direction?

GHONIM: Yes, I remember telling CNN before that when I was asked about what's going to happen in the next few months and I said personally, I don't care much about the details but I trust the Egyptians.

The dignity is back and we're going through a big wave of self- correction. There are definitely mistakes and issues that we are facing throughout the time, but overall I'm very optimistic. I think we are moving towards the right direction.

BLITZER: I was in Cairo a few weeks ago with the Secretary of State Hillary Clinton. You probably remember she walked through Tahrir Square. I walked around with her at that time. I had huge expectations.

I was very upbeat, but a lot of Egyptians when I was in Cairo, they were nervous. They were telling me that this is going to be a long, long process and there could be a lot of setbacks in the short run.

GHONIM: Well, you know, like what happened in 30 years can be recovered in a couple of weeks, right? It's going to take time. What we need to make sure is it's going in the right path as you've just asked me.

And the second is that the people are still, you know, the people's voices are still heard and there is freedom in expressing the different views and people are able to unite and ask for -- have demands. This is going on.

BLITZER: One point Egyptians were saying to me sort of whispering in my ear. They were nervous that the Muslim Brotherhood may be more organized, may be better prepared politically if there are in fact elections than a lot of the pro democracy movements, the younger people, people like you. Are you worried about the Muslim Brotherhood?

GHONIM: Not at all.

BLITZER: Why?

GHONIM: Number one is the Muslim Brotherhood is one of the, you know, one of the movements in Egypt, but there are other movements and there are independent people who can actually get into the parliament.

BLITZER: Well, organized?

GHONIM: So again, like the whole thing about organization, we have seen have anyone expected what would happen in Tahrir? BLITZER: No.

GHONIM: And it was not organized. It was not planned. So I think we still have time. I'm taking the optimistic view. The second is actually, they are - you know, I have friends from the Muslim Brotherhood movement.

I know what they are calling for and I think they -- at the end of the day, they, you know, they are not as -- Mubarak has demonized them for ages.

BLITZER: He basically suggested that the Muslim Brotherhood would do to Egypt what Hezbollah did to Lebanon or Hamas has done to the Palestinians. Is that an accurate assessment?

GHONIM: I don't think so. I mean, look at what they are saying, like the Muslim Brotherhood have been communicating with public and sort of like a very positive way saying that they're not - you know, they're not going to nominate a president among -- from within themselves.

They are going to support one of the nominees. They're not going to go for complete power. And actually, it is our rule, like as young people, some people mistake because we are not any more on TV that we're not working.

Actually, we're working on setting up, you know, something that protects the revolution. What we want to make sure is there is no one single voice that will control the country again.

BLITZER: Here's what really worries me. Maybe you even know this blogger, Maikel Nabil. He was arrested by the Egyptian military, sentenced to three years because he was blogging criticism of the Egyptian military. That's worrisome to me, I don't know about you. Do you know him by the way?

GHONIM: No, I don't know him, but I've actually read his blog after his arrest. His case basically my position and a lot of activists position is that we, we're not supportive of military courts for civilians.

Probably it was happening as part of when the regime collapsed, there was no, you know, there were no civilian courts or you know, there were no police to take the order, but it's time now to fix that. That's one thing.

BLITZER: Get him out of jail.

GHONIM: The second thing is if Maikel is guilty, he should actually be - you know, he should go through the normal court. It's more than just criticism of the army. He -- he insulted the minister of defense or you know, he was basically, you know, criticizing --

BLITZER: In a democracy, if you insult the minister of defense, that doesn't mean you go to jail. We insult our ministers in the United States all the time. GHONIM: According to the Egyptian law, the civilian Egyptian law, actually you can take someone to court for that. However, my position is that he should not have the gone to jail. It's one of the mistakes that we are experiencing now.

However, the big image, the big image is not as bad and I think like the media wants to pick up on the stories that are very, you know, that are very controversial and are very --

BLITZER: Big picture, you're more upbeat than I am I suspect. I hope you're right.

GHONIM: I'm very optimistic. Actually, three weeks ago, I went while everyone was criticizing the government and the supreme council for not, you know, taking fast steps towards the persecution of all those who are oppressing us for the last few years.

I started meeting with the regulatory bodies to understand to get a sense of what's going on. I was very optimistic and I wrote that things are going to happen. We are not happy with the time pace definitely because at the end of the day, you know, there are people -- there are lots of people who lost their lives and there are lots of families waiting to see justice in action.

And when everyone starts getting persecuted in the past few days, we start to feel the justice in action. So, you know, just to sum it up, there are mistakes. Our role now is to open a dialogue and keep communicating and keep trying to fix all these mistakes as they go.

However, we should not just take like, you know, I think it's not time for conspiracies right now. The overall image is good despite all the bad things that are happening. We should fix those bad things.

BLITZER: One final question because I follow you on Twitter as thousands of people do. Let me read to you a recent tweet that you wrote. What is happening in Syria is a crime, but the world's silence is a bigger crime. Civilians including kids are tortured, killed by regime. Elaborate.

GHONIM: Well, actually, it's not just Syria. I think that this whole thing about interests versus values in the new world where you know, when your interests does not go with the values that you are actually preaching for or the values of the people that you represent and you take the side of the interest, it's -- it really hurts me.

Looking at the people in different countries in the Arab region, dying by their own - you know, being killed by their own people and then you know, looking at the -- they are not getting enough attention. Egypt got a lot of attention at the time of the revolution from the international community.

I think mainly because you know, the role Egypt plays in the world and you know in the region. I think it's time now to -- any dictator who is killing his own people should be accountable. You know, there should be sanctions put on his regime. There should be very strong moves towards preventing them from doing that.

At the end of the day, I'm not saying change the government. It's the Syrian people's problem to solve, but don't kill the people. I don't know if you have seen there are videos today of the army people stepping up on --

BLITZER: We've seen them.

GHONIM: Yes, people stepping on the normal people.

BLITZER: It's a horrible situation and I'm grateful to you for speaking out on it across the board. Thanks for the work that you've done.

GHONIM: Thanks.

BLITZER: Thanks for coming into THE SITUATION ROOM as well.

GHONIM: Thanks.

BLITZER: New information on Iran's role in the Middle East uprisings. What Tehran may be doing to help Syria and it's taking more money to pay for less gas.

(COMMERCIAL BREAK)

BLITZER: The United States and the world indeed are watching carefully the violent unrest in Syria where dozens of anti-government demonstrators have been killed in weeks of protests.

Now we have new information on the Syrian crackdown that has some far reaching and potentially very dangerous implications. CNN's Brian Todd is here in THE SITUATION ROOM working the story for us. Brian, what are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, as you know, few governments in the Middle East have been as efficient at cracking down on dissent as Syria's has. Now we have information that Syria's getting help from another regime that knows how to do this.

(BEGIN VIDEOTAPE)

TODD (voice-over): U.S. officials tell CNN of an ominous new partnership between two of the most heavy-handed regimes in the Middle East. They say Iran is giving material help to Syria to help the Syrian government put down pro democracy protests. A state department spokesman was asked about the potentially lethal collaboration.

MARK TONER, STATE DEPARTMENT SPOKESMAN: Certainly we're troubled by these reports and you know, we'll just say if Syria's turning to Iran for help, it can't be very serious about real reform.

TODD: Two U.S. officials tell CNN Iran is sharing tactics from its 2009 crack down on anti-government protesters. That includes crowd control gear and technical help and equipment to monitor and block e- mails, cell phone calls, text messages and internet postings by Syrian activists trying to organize protests.

Michael Rubin, a former Pentagon analyst who specialized in Iran and who was recently in Syria says Iran is very good at using what he calls repression technologies. Instead of cracking heads in the street, which can inflame protests, Rubin says --

MICHAEL RUBIN, AMERICAN ENTERPRISE INSTITUTE: What Iran does is they take photos and with photo recognition, then they come over the next two or three weeks and they will round up people in the middle of the night where you won't create a spark, where you won't create a backlash and that may be what they're trying to teach Syria right now.

TODD: A Syrian foreign ministry official told state TV Iran is not helping Syria. An official with Iran's mission at the U.N. sent an e- mail to CNN saying his government categorically rejects the reporting as baseless unfounded and part of propaganda in the U.S. aimed at tarnishing Iran and Syria. I asked Rubin a key question about Iran's role in the Arab spring.

(on camera): What is Iran doing more broadly in the Middle East? Are they helping others?

RUBIN: Well, Iran is trying to make these Arab uprisings their own. Certainly what we're seeing is a great game. Iran does see itself involved in a zero sum balance of power competition with the United States.

(END VIDEOTAPE)

TODD: And analysts say watch out for Bahrain. It's literally right next to Iran and used to be part of Iran. The population there like Iran's is mostly Shia and Shia protesters in Bahrain are demanding the overthrow of their Sunni Muslim royal family.

Iran denies any involvement in the protests in Bahrain and U.S. officials say they don't have evidence that Iran is meddling there yet, but they're keeping a watchful eye out, Wolf.

BLITZER: Having said that, it would appear the Iranian regime certainly has an interest in getting rid of the king of Bahrain.

TODD: They absolutely do. You know, the king of Bahrain is an ally of Saudi Arabia, which frankly the Iranians despise. That's their bitter rival in the Middle East. The Iranian foreign minister protested to the U.N. the fact that Saudi Arabia sent troops into Bahrain to quell the protests.

And Iran clearly doesn't like the fact that the U.S. Fifth fleet, the Navy's fifth fleet is based right there in Bahrain right across the Persian Gulf from Iran. They're keeping a close on eye on it. There could be rumblings in Iran may get involved in Bahrain soon.

BLITZER: Yes, all right, we'll watch that very closely because the U.S. has enormous interests in the Persian Gulf. Thank you.

Higher taxes on America's wealthiest individuals. Is it critical to bringing down the country's debt as President Obama says? We have a fact check.

Plus the price of gas in the United States now closing in on an all- time high.

(COMMERCIAL BREAK)

BLITZER: President Obama insists raising taxes on the rich is key to helping reduce the long-term federal debt.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Some will argue we should not even consider ever, ever raising taxes even if only on the wealthiest Americans. It's just an article of faith to them.

I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don't need another tax cut. Warren Buffett doesn't need another tax cut.

Not if we have to pay for it by making seniors pay more for Medicare or by cutting kids from head start or by taking away college scholarships that I wouldn't be here without and that some of you would not be here without.

And here's the thing, I believe that most wealthy Americans would agree with me. They want to give back to their country, a country that's done so much for them.

(END VIDEO CLIP)

BLITZER: Let's dig deeper right now. Mary Snow is standing by with more on this part of the story. What's going on here, Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, this is one slice of the president's plan, but budget experts say taxing the rich won't bring in as much revenue as people might think.

(BEGIN VIDEOTAPE)

SNOW (voice-over): He said it before and President Obama vowed again not to extend Bush era tax cuts for families making more than $250,000 a year.

PRESIDENT OBAMA: We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society.

SNOW: If those tax cuts are not renewed, it would mean that taxes would go up for about 2 percent of the population. The president calls them the richest Americans. But budget experts say it's not enough to help lower the deficit, even with spending cuts.

Here's a hypothetical scenario. The Congressional Budget Office crunched the numbers. If taxes were raised one percentage point for people in the top two tax brackets, it would amount to $115 billion over a decade.

But raise taxes by that same amount, 1 percentage point on all the other brackets, and it comes to just under $500 billion. CNN Money Jeanne Sahadi says there are other reasons why the richest Americans can't generate the kind of revenue that's needed.

JEANNE SAHADI, SENIOR WRITE, CNNMONEY.COM: The income of the very wealthy tends to be more volatile than the income of most people because it's tied up with investments and when the economy goes south, often the income gets hurt.

So you're not going to get as much revenue from them as you might expect, especially when you need it in a downturn. And two, it's not that many rich people. As much as we think, you know, there are a lot of them. There are not enough to carry the country in terms of deficit reduction.

SNOW: But with a 2012 presidential election around the corner, budget experts say no one wants to raise taxes on the middle class. Ron Haskins who served as a senior adviser on Welfare Policy to President George W. Bush says both Democrats and Republicans are wrong.

RON HASKINS, SENIOR ECONOMIC FELLOW, BROOKINGS INSTITUTION: Republicans are betting that if they say no new taxes, the American people like that will try to do it all on the spending side.

The problem is, spending affects the American public too. A lot of people are going to lose their benefits and Democrats say we'll just tax the rich and not the middle class.

But that won't produce enough revenue so that's not going to work either.

(END VIDEOTAPE)

SNOW: And as we noted, the president had vowed many times he wouldn't extend the bush-era tax cuts making $250,000 or more but in December he did. He said he did so in order to prevent a tax hike on middle class Americans and if the last fight over these tax cuts is any indication this is going to be a fierce battle. Wolf --

BLITZER: Fierce battle indeed. Thanks very much.

Remember July of 2008, presidential candidates were competing a gallon of gas at $4.11 then. Brace yourself, because now we're just 35 cents shy of that price one more time. Lisa Sylvester is joining us with this, a lot of heart burn out there, Lisa, over this high price of gas.

LISA SYLVESTER, CNN ANCHOR AND CORRESPONDENT: There certainly is, Wolf. You know, gas prices have been on a steady climb. We are nearing a new record high of $4.11 a gallon for regular gas, but some areas of the country have already topped $4 a gallon.

And if the trend continues, it could slow the country's economic recovery. It could also spell new headaches for politicians.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Coast-to-coast from Atlanta to New York to Los Angeles. Consumers are getting socked by high gas prices.

UNIDENTIFIED MALE: It's $4.19 a gallon, that's ridiculous. It's absolute absurd.

UNIDENTIFIED FEMALE: I have to drive, and they don't pay mileage, so it's really, really sticking me.

UNIDENTIFIED MALE: You know, they're getting the bailouts and the breaks and we're getting squeezed.

UNIDENTIFIED MALE: It's L.A. so it's even worse than most places.

SYLVESTER: The national average price for regular gasoline is $3.79, that's up 93 cents since last year. Why are oil prices shooting upward now?

The fighting in Libya is one contributing factor. Fears of unrest spreading to other countries in the Middle East including Saudi Arabia also has markets on edge and economists say factoring in speculation and an increase in demand from countries like China.

Higher gas prices hit consumers where it hurts most, discretionary spending.

PETER MORICI, ECONOMICS PROFESSOR: Consumers really feel a pinch. They're limited in their discretion because they have to pay their mortgage. They have to pay their utilities so to pay higher gas prices. They go out to dinner less. They go to movies less. They buy fewer clothes. The amount of money that most consumers have to work with is very limited.

SYLVESTER: Gas prices are expected to continue to rise through the spring. The spike in prices is not just a pocketbook issue. It's also a political one.

KEN VOGEL, POLITICO: There's not a lot of evidence that anything the political leaders doing in the short-term has as much impact on gas prices as market trends or long-term energy policy, but that doesn't stop politicians of both parties from pointing the finger at each other.

SYLVESTER: The issue is already playing out like a campaign ad. Republicans are blaming President Obama. Sarah Palin is calling them the $4 per gallon president on a Facebook page. Democrats pushing back, pointing to Republicans' cozy ties with the oil and gas industry.

(END VIDEOTAPE)

SYLVESTER: And in a recent CNN Opinion Research Corporation poll, 64 percent said an increase in gas prices causes them hardship and an amazing 81 percent said they expect to see $5 a gallon gasoline sometime this year, Wolf.

BLITZER: An amazing tax on all Americans who drive this increased price of the gallon.

SYLVESTER: It certainly is hurting a lot of folks out there, Wolf.

BLITZER: Thanks very much for that, Lisa. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Here's CNN's Jeannie Moos.

(BEGIN VIDEOTAPE)

JEANNIE MOOS, CNN CORRESPONDENT (voice-over): What happened to this baby squirrel may drive animal lovers nuts. No, it wasn't an oncoming car, but a back pedalling cop. Don't spray him with your pepper spray, officer.

UNIDENTIFIED FEMALE: Don't spray him!

MOOS: But spray him he did. The screaming girls attend middle school in Mesquite, Texas. The kids and school officials differ on how squirrel was acting.

UNIDENTIFIED FEMALE: It wasn't doing anything to us.

UNIDENTIFIED FEMALE: It was behaving in a kind of a strange manner and kept advancing toward the students.

MOOS: The police department says the officer --

UNIDENTIFIED FEMALE: Officer Davis!

MOOS: -- was worried the squirrel might be diseased, rabid, and was protecting the kids. But for Kelsey Frey who shot the cop squirrel confrontation with her cell phone --

UNIDENTIFIED FEMALE: To me, it was not a very good role model.

MOOS: She thought he should've dropped a box over the squirrel. It's a squirrel, not a tiger, but a squirrel as we've seen in other Youtube videos can get very attached.

The baby squirrel that got pepper sprayed was picked up by animal control and cleaned up and then released back into the woods apparently OK. And in case you ever find yourself under attack by a squirrel, remember the CDC says small mammals such as squirrels are almost never found to be infected with rabies.

It has happened, for example, a woman in Pittsburgh got bit by a rabid squirrel after her dog attacked it first, but it's extremely rare. The case of the pepper-sprayed squirrel is still under review, but the department believes the officer wasn't acting maliciously. As one person posted, at least they didn't shoot it or tase it.

UNIDENTIFIED MALE: Don't tase me, bro.

MOOS: Don't spray me, bro. Jeannie Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. The news continues next on CNN.