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THE SITUATION ROOM

Gingrich Vows 'Whatever It Takes'; The 'Other' Republicans; White House Takes Mortgage Giants to Task; NATO: Not Out to Kill Gadhafi; Troops in Iraq; Dictators Turn to Family Amidst Brutal Unrest; 'Strategy Session'

Aired June 10, 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: T.J., thanks very much.

Happening now, embattled GOP presidential candidate, Newt Gingrich, vowing whatever it takes, reassuring supporters he's staying in the race for the White House despite a major campaign implosion and he's ready to square off with his opponents in CNN's first Republican debate in New Hampshire Monday night.

Also, the CIA chief, Leon Panetta, warning there are 1,000 Al Qaeda terrorists still in Iraq.

Could U.S. troops be withdrawing from the country too soon?

And a star in one of television's most popular comedies igniting a national firestorm after making homophobic remarks.

Could Tracy Morgan's anti-gay rant end up costing him his job?

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

But up first, the growing political controversy swirling around Republican presidential hopeful, Newt Gingrich, just one day after the stunning revelations that most of his senior staff quit. New questions, also, about his potential viability as a candidate. Gingrich now insists he's in it for a long hall and he's explaining the campaign breakup this way.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: There is a fundamental strategic difference between the traditional consulting community and the kind of campaign I want to run. Now, we'll find out over the next year who's right.

(END VIDEO CLIP)

BLITZER: Let's bring in our chief political analyst, Gloria Borger.

She's been working this story for us.

What are these fundamental differences that Newt Gingrich is talking about?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, it's very clear, in trying to piece this together over the last couple of days, that this is a campaign staff that felt that they had completely lost control of their candidate, that there was a candidate who had no discipline, who wouldn't adhere to the schedule they wanted. It was very difficult in terms of getting him to focus on a particular vision or a particular set of ideas he wanted to get across to his voters.

Someone said to me that he just couldn't make the transition from being Newt Gingrich, the great thinker, to negotiating Newt Gingrich, the candidate, who has to learn to speak succinctly and to tell voters the things he is going to do as president.

Then he started making these mistakes, particularly on "Meet the Press," when he came out and called the House Republican budget right- wing social engineering. Things got worse. And they just decided, in frustration, as professionals, that they had to leave this campaign because it was clear to them, after a conference call with the candidate and some real heavy discussions with the candidate, that he wasn't going to change.

BLITZER: A lot of people think this is the end of his campaign for all practical purposes.

BORGER: Well, a lot of people do. And I think it's hard to think otherwise, quite frankly. But Newt Gingrich himself -- you saw that video earlier. And then he pasted something on his Facebook page today. And let me read you from that. He said, quote: "As someone who has been in public life for nearly 40 years, I know full well the rigors of campaigning for public office. I will endure them. I will carry the message of American renewal to every part of this great land, whatever it takes."

So there you have it.

But let me add one thing here. Some people have been saying, you know what, other campaigns have survived large staffs leaving. For example, Ronald Reagan and John McCain. Ronald Reagan fired his campaign. John McCain fired top advisers.

The difference with Newt Gingrich is that his top advisers have quit en masse. So it wasn't the candidate making the decision that the staff needs to go, we need to retool the campaign. It was the staff saying the candidate does not have the discipline or the will to retool this campaign. So that's a little bit different.

BLITZER: And a lot of people are saying this now creates an opening for Texas governor, Rick Perry.

BORGER: Sure. Well, it does for a couple of reasons, the most obvious of which is that Newt Gingrich's two top staffers are very close to Governor Rick Perry. One of them ran his gubernatorial race. We know that Perry has been kind of publicly flirting with the notion. Now he's got, it would seem to me, a readymade staff if he wants it. So we'll have to see what he decides to do. He also has a readymade constituency in the Republican Party, which is that Tea Party constituency that Sarah Palin says has not really been represented well in this Republican field.

So we'll have to see what happens on that.

BLITZER: Maybe another Texas governor in the race for the White House. We'll soon find out.

BORGER: We've seen those.

BLITZER: Yes.

All right, thanks very much.

Newt Gingrich is just one of many Republican presidential candidates you'll see facing off only here on CNN in Monday night's New Hampshire debate. But as they shape the race, whether any of them winds up winning their party's nomination certainly remains to be seen.

As CNN's Jim Acosta reports, some GOP voters may have not found what they're looking for yet.

JIM ACOSTA, CNN CORRESPONDENT: Wolf, according to a new CNN/Opinion Research Corporation poll, GOP voters seem to have an appetite for some alternatives.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): The Ronald Reagan bumper sticker on the Cadillac parked out front is just the first sign Tammy's Diner in Round Hill, Virginia serves conservative politics right along with the country ham. And it's a good thing the current list of likely GOP candidates isn't on the menu. Some of these Republicans just might stick with coffee.

UNIDENTIFIED MALE: I like somebody who's smart and conservative, a staunch Republican. There is no model, no perfect guy sitting right there right now.

UNIDENTIFIED MALE: Obama is going to get elected again. None of these guys can beat him.

ACOSTA (on camera): You don't think so?

UNIDENTIFIED MALE: No, not right now.

ACOSTA: There may be another reason why voters in Round Hill are looking for some other options for 2012. A few big name politicians are acting like presidential teases.

UNIDENTIFIED MALE: What about when this session is over, Governor?

Are you going to think about it?

GOV. RICK PERRY (R), TEXAS: Yes, sir.

UNIDENTIFIED MALE: About running for president?

PERRY: I'm going to think about it. But I think about -- I think about a lot of things.

ACOSTA: Texas Governor Rick Perry is stoking speculation with plans to stage a national prayer event later this summer. Former New York City mayor, Rudy Giuliani, keeps popping up in New Hampshire.

SARAH PALIN (R), FORMER VICE PRESIDENTIAL CANDIDATE: Hi, there.

UNIDENTIFIED FEMALE: Hi.

PALIN: How are you?

ACOSTA: And Sarah Palin not only has a campaign-style bus, there's a pro-Palin movie coming soon.

UNIDENTIFIED MALE: What do you think the odds are that you will run?

PALIN: I don't know. I honestly don't know. It's -- it's still, you know, a matter of looking at the field and considering much.

ACOSTA: New Jersey Governor Chris Christie is headed to Iowa for an education conference next month, but insists he's not running.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I made a commitment to the people of New Jersey when I asked them for four years as governor.

ACOSTA: Think of these Republicans as specials of the day, not quite on the GOP menu, but not quite off.

A new CNN/Opinion Research poll shows Republicans do want alternatives. Two-thirds of GOP voters would like to see Giuliani jump into the race. A slightly smaller, though not too shabby majority, wants Palin to run, as well. Another recent poll found nearly 40 percent of Republicans aren't happy with their choices.

UNIDENTIFIED FEMALE: If the election were tomorrow, it would probably be Mitt Romney. But that's -- that's only because of there's -- of the lack of choice.

ACOSTA: Back at Tammy's Diner, even the prospect of some new choices, like Palin, don't sound too appetizing.

UNIDENTIFIED MALE: Are you going to get elected the president and lead that way, too?

Give me a break. You couldn't do that.

ACOSTA: A sign that when it comes to the GOP field these days, not every Republican is a satisfied customer.

(END VIDEO TAPE)

ACOSTA: While this field has its critics, it may also have a frontrunner. Mitt Romney is the leading Republican, according to a slew of new polls. The only question is whether Romney can fight off any new flavors of the month that are added to the GOP menu -- Wolf.

BLITZER: All right, Jim.

Jim Acosta reporting.

I never stop marveling at the occasional weirdness of presidential politics. I often wondered why some Democrats were running for the nation's highest office. The same can now be said of some Republicans.

Former Pennsylvania Senator Rick Santorum, he's a smart politician, but he lost his bid for reelection in Pennsylvania to Democrat Bob Casey by 18 points. He now thinks he can win the Republican nomination. Herman Cain, a successful business executive, has never held any elected public office. He lost in his bid to win the Republican Senatorial nomination in Georgia back in 2004. But he's now running for president.

Sarah Palin, who's thinking of running, served as governor of Alaska for only two years, quitting midway through her first term. She's made millions of dollars since then.

Jon Huntsman quit as Utah's governor during his second term to become the U.S. ambassador to China. "I believe if people elect someone to a position, that person has a responsibility to finish the job."

There are many Republicans not satisfied, as you just heard, with the current field. They're urging many others, like Chris Christie, Rick Perry, Paul Ryan, Jeb Bush, Rudy Giuliani, to jump in.

Here's a question -- why isn't anyone urging the two most experienced Republican leaders in the country to run, the House speaker, John Boehner, and the Senate Minority Leader Mitch McConnell?

Presidential politics always a bit weird and that's why I love covering politics.

You can read my thought, by the way, on our new blog, CNN.com/situationroom. Go there. I think you will enjoy.

Let's get to the White House right now, where, for the first time, the Obama administration is singling out top mortgage giants for failing to prevent millions of American homeowners from going into foreclosure.

Our White House correspondent, Brianna Keilar, is joining us now with more.

It's a pretty shocking development that we're learning -- Brianna.

Update our viewers.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. The Treasury Department is starting to withhold incentive payments to four mortgage lenders, including some pretty big banks. We're talking about Bank of America, JPMorgan Chase and Wells Fargo. But what they're really using here as a stick, Wolf, is sort of this idea of really humiliating -- publicly humiliating these institutions into kind of doing the right thing.

Here's the big picture, though. This is the first time in the history of this program that we've seen the Obama administration do something like this, in its mortgage relief program that some call a failure.

(BEGIN VIDEOTAPE)

KEILAR: (voice-over):

February 2009 -- with millions on the brink of foreclosure, President Obama rolled out his plan to keep them in their homes.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The plan I am announcing focuses on rescuing families who played by the rules and acted responsible, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it.

KEILAR: Millions of families -- up to four million, in fact, were supposed to avoid foreclosure under the plan. To date, it has kept just about 700,000 in their homes.

Neil Barofsky, the former independent watchdog for the program, has become its chief critic. He resigned from his post in March.

(on camera): So how do you characterize the outcome of this program?

NEIL BAROFSKY, FORMER TARP INSPECTOR GENERAL: It's a failure. I mean I -- I really think it's difficult to define it anything other than as an abject failure.

KEILAR: (voice-over): Lenders whose loans to people who couldn't afford them led to the foreclosure crisis were supposed to modify loans so struggling homeowners could reduce their monthly payments. In exchange, the government would make an incentive payment to the lender. But it didn't really happen.

Barofsky says it's because the payments are not enough and there are no penalties for banks not participating.

(on camera): How many fines has Treasury imposed in this program?

BAROFSKY: Zero. Not one. Notwithstanding the fact that in November of 2009, they issued a press release and said that they're going to start holding servicers accountable with penalties and withholding payments if they -- if they don't comply with the terms of their agreements, nothing followed.

KEILAR: (voice-over): While Barofsky blames the Treasury Department, Secretary Tim Geithner points a finger at the mortgage companies.

TIMOTHY GEITHNER, SECRETARY OF THE TREASURY: They are not putting enough resources in separate. They are not doing a good enough job of helping homeowners navigate through a very complicated, difficult process. They have to do a better job.

(END VIDEO TAPE)

KEILAR: Now, Geithner also highlighted a number of other programs that the Obama administi -- the Obama administration has undertaken to try to help struggling homeowners. One helps those who are unemployed and underwater on their loans. There's another program that targets, Wolf, some of the hardest hit states, giving states the ability to kind of put that money in different places.

The thing is, though, there are no numbers on those programs yet. We'll see them soon, but we don't really know how well they're doing.

BLITZER: It's a story that affects millions, as you point out, millions of our viewers out there.

Thank you.

Brianna Keilar is over at the White House.

Is Moammar Gadhafi on NATO's hit list?

He's virtually a fugitive in his own capital now.

Is the Alliance targeting getting him for assassination?

U.S. troops were expected to pull out of Iraq -- all of them -- by year's end.

So why are top Pentagon brass now hinting that they could stay longer? And a rant by the comedian, Tracy Morgan, hits a nerve, sparking controversy across the country. You're going to find out if he's apologizing for making homophobic slurs.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: NATO insists it's not not out to kill the Libyan leader, Moammar Gadhafi. It says it's out to get his war machine, or "kill chain," as they're calling it.

But a senior NATO official acknowledges Colonel Gadhafi is a legitimate target under the United Nations Security Council resolution authorizing Alliance air strikes in Libya.

Let's discuss with the assistant secretary of State, Jeffrey Feltman.

Mr. Secretary, thanks very much for coming in.

JEFFREY FELTMAN, U.S. ASSISTANT SECRETARY OF STATE, NEAR EAST AFFAIRS: Thank you.

BLITZER: Are you trying -- when I say you, I mean the NATO allies -- trying to kill Gadhafi?

FELTMAN: What we're trying to do is protect the Libyan people. That's what the NATO mission is. It's based on the Security Council resolutions, protect the Libyan people. The political goals are to help the transition there. But the best way to protect the civilians would be for Gadhafi, at this point, to just go away.

BLITZER: Well, if he doesn't go away, are you targeting him for assassination?

FELTMAN: No. We are trying to protect the Libyan people. And that includes going after command and control structures. And command and control structures happen to be in Tripoli, where Gadhafi happens to be. But the goal is to protect civilians. That's what the U.N. mandate is.

BLITZER: Because, as far as you know -- and I know it's sort of changed after 9/11 -- is it still U.S. law that would all -- that would prevent the United States from a political assassina -- a political assassination of a world leader?

FELTMAN: You know, I -- I'm not a lawyer. I'm not going to -- I -- I don't know. I'm not a military guy.

What I can say is that the overall goals that we have in Libya, moving beyond just the NATO mission, the U.S. goals are really to help promote the rights of Libyan people, legitimate rights that they have been demanding since February that they have been denied for 42 years under Gadhafi.

BLITZER: And you've now recognized -- when I say you, I mean the U.S. government, has recognized the opposition as the legitimate government of Libya, is that right?

FELTMAN: The secretary yesterday in Abu Dhabi recognized the Transitional National Council you referred to as, you know, the legitimate interlocutor of the Libyan people for this interim period. The Transitional National Council itself, as its name implies, wants to go out of business. You know, transition -- transitional -- it wants to move to a constitutional assembly, to a road map for elections. So this is an interim period where we are recognizing the TNC as the legitimate interlocutor for the Libyan people.

BLITZER: And just to wrap up the part about Gadhafi, if, in fact, he were killed in one of these air strikes going after command and control facilities in Tripoli or elsewhere, would that help?

Would that -- would that be beneficial to implementing U.N. Security Council Resolution 1973, which authorized the military action?

FELTMAN: Well, it's Gadhafi who is ordering the troops to fire on the people. It's Gadhafi who is not allowing his people to exercise their legitimate rights and their legitimate aspirations. So getting Gadhafi out of the way with help and protection of the civilians, help in the transition to a more open, inclusive, respectful government in Libya.

BLITZER: I don't know if you saw this letter that Gadhafi has written to members of Congress, to officials at the White House. Among other things, he says: "We are ready to sit down at the table with appropriate internal interlocutors lea -- led by the United States. Let's stop the destruction and begin the negotiations to find a peaceful solution for Libya."

You're a diplomat.

Is there a diplomatic solution to what's happening in Libya right now?

FELTMAN: Well, I think there has to be a political and diplomatic track that accompanies the military option, because the military, again, is -- it's limited to the protection of civilians. The political and diplomatic track is larger. It's about a transition in -- in Libya. But what I can say is that, you know, the international community has been pretty clear with Gadhafi. It's what the president has said from the beginning of this operation, of what he needs to do to show he's serious about talking to us, to show he's serious about a transition, which is to basically stop killing his own people, pull back his troops, pull back his mercenaries, allow humanitarian access, allow utilities, you know, electricity to be re--- re-hooked up.

He's done none those things. He's continuing to send his mercenaries and his troops out to attack the Libyans.

So, yes, we see these letters. We recognize the fact that there needs to be a diplomatic and political track in addition to the military. But we don't see him taking the minimum steps to respond to his own people's demands or response to what the international community has asked.

BLITZER: The Syria leader, Bashar al-Assad, is killing his own people, as well.

What's the difference between Gadhafi and Bashar al-Assad?

FELTMAN: Well, first of all, what's happening in Syria is absolutely revolting. You know, every week we hear Bashar say, OK, we're going to start reforms, we're going to start credible dialogue, we're going to start meaningful reform. And what we see instead, we see more killing. I mean today it sounds like that they even used helicopter gunships against their own people up in Eidlid (ph).

I think you see the same international revulsion against what Basar -- Bashar al-Assad is doing that you see in Libya. It's manifesting itself in different ways. Right now, you see action in New York to try to bring Syria before the Security Council, have some accountability in terms of the international organizations.

But you see the same U.S. revulsion. You see the same international reaction in Syria that you do in Libya. Of course, the methods that's used to express that are different in the two countries, depending on the circumstances. No two countries are alike in the region --

BLITZER: But you haven't recalled your -- the U.S. ambassador from Damascus. You haven't severed diplomatic relations with Syria.

Why?

FELTMAN: Well, I'll tell you, when you don't -- when -- when people like you and your -- and your news crews are not allowed into Syria, you have to use all resources to try to get information of what's actually happening on the ground. We have to get all -- use all the tools we can to try to get messages across. Unfortunately, it doesn't seem that Bashar al-Assad is listening to messages about what's happening.

But right now, it's useful for us to keep as many channels of communication open, not only to the government, to the extent that they'll listen, but also to the people on the ground about what's actually happening in Syria.

We want there to be international media. We want -- we want CNN and everybody else to be there to report what's happening. So far, that's not been -- that's not been possible. So the embassy is one source of information.

BLITZER: Well, that's a fair answer. It's a good point.

We'd like to be there ourselves at CNN. The other international news media. We can't. But we're counting on you and the U.S. Embassy to get the word out, what is going on.

Jeffrey Feltman, thanks very much for coming in.

FELTMAN: Thanks for having me.

BLITZER: Jeffrey Feltman is the assistant secretary of State for Near East Affairs.

Appreciate it.

All in the family -- just ahead, why dictators are turning to relatives to do their dirty work in the wake of the violent political upheaval sweeping the Middle East and North Africa. Plus, "Time Magazine" is asking, what recovery?

Is President Obama doing enough to create jobs in this ailing economy?

(COMMERCIAL BREAK)

BLITZER: United Airlines is flying 1,300 jobs into Chicago.

Lisa Sylvester is monitoring that and the other top stories in THE SITUATION ROOM right now.

What's going on -- Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, it is a big coup for new Chicago mayor, Rahm Emanuel. The recent merger between United Airlines and Continental will relocate 1,300 jobs to downtown Chicago. They're mainly in operations and technology. Now, while many of the jobs are already filled, the influx of new workers could help boost Chicago's economy.

And you have seen Sarah Palin, the governor; Palin, the candidate; and Palin, the reality TV star. So get ready now for Sarah Palin, the movie. A documentary film about Palin's stratospheric career is set to hit movie theaters nationwide next month, with early premiers in key voting states. And it is called "The Undefeated" and portrays Palin as an outsider who stood up to the establishment.

And a very happy 90th birthday to Britain's Prince Philip. Queen Elizabeth's consort is marking nine decades with just another working day, according to Buckingham Palace. But there were gun salutes in London and Edinboro, Scotland. And in an interview with the BBC, Prince Philip said he, you know, "wants to enjoy himself more and have less responsibility and less rushing about."

And also, by the way, it was our own David Gracey's birthday here in THE SITUATION ROOM.

BLITZER: He's not 90, though?

SYLVESTER: No, he's not 90. I know He told me his age, but I'm not going to say it on the air so.

BLITZER: (INAUDIBLE).

SYLVESTER: So happy birthday, David.

BLITZER: And David.

Thank you.

"30 Rock" star Tracy Morgan says he's an equal opportunity jokester. But it's what the comedian said onstage that has a lot of people upset right now and has him issuing an apology.

Plus, defending Anthony Weiner -- why Charlie Rangel says his fellow New York Congressman should not resign.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGEL (D), NEW YORK: I know one thing, he wasn't going with prostitutes. He wasn't going out with little boys. He wasn't going into men's rooms with broad stances.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Startling new revelations about the presence of al Qaeda in Iraq from the man who could be the next secretary of defense. What if the United States isn't able to withdraw all remaining U.S. troops from Iraq by the end of this year as they are supposed to?

Let's bring in our Pentagon correspondent, Barbara Starr. She's working this story for us.

What's going on here, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, look, Wolf, it's been the plan for months between the U.S. and Baghdad that U.S. troops would be out of Iraq by the end of this year, but suddenly maybe not.

At his confirmation hearings to become the next secretary of defense, the CIA director, Leon Panetta, started talking about the circumstances under which U.S. troops, if the Iraqis request it, which he thinks they will, the circumstances under which they might stay in Iraq for some period of time. He had quite an interesting exchange about all of this with Senator John McCain, the ranking Republican on the Senate Armed Services Committee.

Have a listen.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY NOMINEE: If Prime Minister Maliki, the Iraqi government requests that we maintain a presence there, that ought to be seriously considered by the president.

SEN. JOHN MCCAIN (R), ARIZONA: Do you think it would be in our interest to do that given the situation?

PANETTA: Senator, I have to tell you, there are a thousand al Qaeda that are still in Iraq. We saw the attack that was made just the other day. It, too, continues to be a fragile situation, and I believe that we should take whatever steps are necessary to make sure that we protect whatever progress we've made there.

(END VIDEO CLIP)

STARR: At least 1,000 al Qaeda operatives still in Iraq.

And behind the scenes, the administration has been urging the Maliki government in Baghdad to make that request sooner rather than later, because until they do, the troop withdrawal plan goes forward, even as the U.S. believes Iraq will ask the U.S. to stay there -- Wolf.

BLITZER: I tweeted earlier today, Barbara, that if the U.S. troops remain on the ground, in the air in Iraq after the end of this year, the oil-rich Iraqi government could start paying for the expenses of maintaining that U.S. troop presence in Iraq. Just a thought.

Let me ask you about something else involving Leon Panetta, the outgoing CIA director. We're now hearing he's in Pakistan, that he flew overnight, and he's now in Islamabad. What's going on.

STARR: Well, our intelligence community producer, Pam Benson (ph), indeed has learned that Leon Panetta is on the ground at this hour inside Pakistan. This is his first face-to-face meeting with his Pakistani intelligence counterpart, of course, since the raid on Osama bin Laden's compound. He's had telephone communications with them, but he is on the ground for a face-to-face meeting to talk about progress and cooperation in the counterterrorism relationship between the U.S. and Pakistan.

It's a bit of interesting timing. He only has about another two or three weeks on the job as CIA director, expected to be confirmed as the Pentagon chief. And once he takes on that job, you'll see him going back to Pakistan again and again, I suspect -- Wolf.

BLITZER: Yes, that story, that issue not going away.

Barbara, thank you.

Turning now to the violent political turmoil exploding across the Middle East and North Africa, where we're learning more about how some key dictators have managed to maintain such a firm grip on power.

Brian Todd is here and he's working the story for us.

For a lot of these dictators, it's all about keeping it in the family.

BRIAN TODD, CNN CORRESPONDENT: They are all keeping it in the family, Wolf. They are relying on brothers, sons, even nephews. These are people who stay in the shadows, but who wield enormous power and have no reservations over using brute force.

(BEGIN VIDEOTAPE)

TODD (voice-over): After a vicious tribal fight, Yemen's president, Ali Abdullah Saleh, badly wounded, flies to Saudi Arabia for medical treatment. He cedes temporary power to his vice president, but it's a formality that means little on the streets.

(on camera): Who's the real power in Yemen at the moment?

EDWARD GNEHM, FMR. DEPUTY, U.S. EMBASSY IN YEMEN: Well, the real power at the moment is with his son and nephews, who control the major military forces, security forces.

TODD (voice-over): Edward Gnehm spent three years as the top deputy at the U.S. Embassy in Yemen. Gnehm and other analysts say President Saleh's 42-year-old son, Ali Ahmed Saleh, has signaled this family is not about to give up power. He's moved into the presidential palace, has sent Yemen's special forces and Republican Guard, which he commands, into the streets. His cousins Tariq, Yahya and Amar are also in key positions.

GNEHM: They're in the national security apparatus, they're in the national intelligence apparatus, and they're also in other military units that go beyond just the one the son commands.

TODD: Saleh's brother, Gnehm says, is a major player in the Yemeni air force. The pattern is clear among at least three intransigent regimes in the Middle East. In Yemen, Libya and Syria, blood runs thicker than reform.

Saleh is following a tactic proven effective by Moammar Gadhafi with his sons -- place them in command of key security forces and unleash them when the pressure builds. Perhaps no one is a more effective wielder of the family stick than Maher al-Assad, the younger, nastier brother of Syria's dictator, Bashar al-Assad.

UNIDENTIFIED MALE: The family has had a traditional division of labor, and Maher al-Assad is the enforcer, he's the knee-capper.

TODD: Oklahoma University professor Joshua Landis has written about the Syrian regime for about 30 years. He says Maher al-Assad, who controls Syria's elite military and intelligence services, is simply carrying on a family tradition. The brother's father, Hafez al-Assad, had his own brother in similar positions.

Why do these dictators turn to their relatives to do their dirty work? Experts say many of them trust no one else. And --

UNIDENTIFIED MALE: This allows for a regime change that is fairly stable and doesn't lead to civil war. There's no mystery why monarchy was the preferred form of government for thousands of years.

(END VIDEOTAPE)

TODD: And some analysts don't expect that philosophy to come to an end anytime soon, even with the unprecedented threats to their power that these regimes are now facing. Edward Gnehm says it's simply too ingrained in their culture to give that kind of thing up -- Wolf.

BLITZER: But even these close family structures, these alliances, they can rupture from time to time.

TODD: They can and they have. There's a fascinating story about the Assad family.

Back when Bashar al-Assad's father, Hafez al-Assad, had heart trouble in the early '80s, he was bedridden. His own brother, Rifaat al-Assad, who we showed it in that piece, he was his enforcer. He tried to stage a coup against his brother.

It was a tense standoff for a while. Hafez al-Assad outmaneuvered his brother, sent him into exile. And we're told by Joshua Landis that Rifaat al-Assad's children are now supporting the Syrian opposition against their own family.

BLITZER: Yes. So that family is -- I remember when Rifaat and Hafez al-Assad, they had that breakup. Surprised he survived it, wasn't killed by Hafez al-Assad.

TODD: Right.

BLITZER: Thanks very much.

New rumors swirling about Hillary Clinton's future. We're going to tell you what she's saying. Stand by.

Plus, the embattled New York congressman Anthony Weiner, he will be heading back to work here in Washington next week amidst mounting calls for him to resign. Just ahead, why he's now apologizing to his own neighbors.

(COMMERCIAL BREAK)

BLITZER: As the 2012 race for the White House gains steam, there's mounting pressure on President Obama to fix the ailing economy and to create a lot more jobs.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now, the managing editor of "TIME" magazine, our sister publication, Rick Stengel.

Rick, you guys have a great cover story on the economy. That's issue number one for American voters. "What recovery?" you entitle it, "The Five Myths About the Economy."

Among other things, you write this -- and let me read it to our viewers -- "Presidents need to appear to be doing everything they can to create jobs, even if that's not a whole lot."

Is there not anything the president of the United States could do to help create some jobs?

RICHARD STENGEL, "TIME": Well, I wrote that, Wolf. I thought you were going to read from the cover. But I think we overestimate how much presidents can do about the economy.

What happens is, presidents inherit the economy from the guy before them, and sometimes that's why they win. But there isn't a whole lot that they can do about it.

Remember, the federal government could do something when they did a stimulus. They could do something when they hired 800,000 workers to do the Census. But it's really around the margins. Really, the private sector is the place where the economy rises or falls. BLITZER: So what a president can do is help the private sector, if you will, go out there, encourage them to create jobs?

STENGEL: Right. I mean, there are tax incentives, there are other kinds of incentives that they can do. But the private sector doesn't react so much to government, except they react to the way the economy is as a whole, the way GDP is growing, the way international development is growing.

But right now, Obama's hand is pretty limited. He can't really do another stimulus. There's no appetite for that. The Fed is basically tapped out with quantitative easing. I mean, it now really is up to the private sector.

BLITZER: Here is another sentence that sort of jumped out at me from the current issue. "The reality is, the economy is changing such fundamental ways that we have to live with high unemployment for, well, what will feel like forever."

Go ahead and explain.

STENGEL: Yes. Well, you know, Wolf, I often talk to economists, and I'll say, well, why is it that any economy or the U.S. economy would have zero unemployment in a perfect world? I mean, there is no actual rhyme or reason why we would ever have full employment or even much higher numbers.

What they say is, in fact, the economy around the world is changing, so that we may have to live with a higher level of unemployment. That involves people not working full time, that involves people working part time.

I mean, there's a statistic in our story that there are 75 million middle class workers being created around the world every year. I mean, that's enormous. There are 350 (ph) middle class workers around the world who are doing the jobs that Americans once did. So I think we have to live with a changed scenario.

The problem is, too, that politicians don't like to say that. They are afraid of saying that. But it's the truth and an uncomfortable truth that we need to hear.

BLITZER: Because the president of the United States, he is running for re-election. If unemployment next year is going to be 9 percent -- it's 9.1 percent right now -- and let's say he's running against Mitt Romney, he's in deep trouble.

STENGEL: He is in deep trouble. I mean, one of the statistics that we've all seen in the last few weeks is that no incumbent president has won reelection if unemployment is above 7.2 percent. It's pretty much sure that it will be above that. But I also think at the same time, Americans are realizing that it isn't that old economy anymore, that even when we get through this, it really won't even be the way that we were before.

So I think people have to be more realistic about it. But at the same token, it could capsize the president.

BLITZER: It's a great cover: "What Recovery? The Five Myths About the Economy."

Rick Stengel, thanks very much.

STENGEL: Thank you, Wolf.

(END VIDEOTAPE)

BLITZER: Europe's E. coli outbreak has killed dozens and sickened thousands. You're going to find out what really happened and how scientists are helping to crack the case.

Also, under fire, not just Newt Gingrich, but also his wife. Is she being blamed unfairly for their campaign staff's mass exodus?

(COMMERCIAL BREAK)

BLITZER: Let's get to today's "Strategy Session."

Joining us, our CNN political contributor, the Democratic strategist, Donna Brazile. Also joining us, Republican strategist, former press secretary for Newt Gingrich, Tony Blankley. He's now with Edelman public relations.

Your former boss, take us into his mind. What was he thinking all these -- out of the box, and then winding up going on this cruise to the Greek islands and the Mediterranean?

TONY BLANKLEY, REPUBLICAN STRATEGIST: Well, my sense is that, ,fundamentally, he and his staff had a different view of how to run the campaign. I think the reporting on that is accurate.

BLITZER: Sixteen members, his top leadership in Iowa, New Hampshire, they all quit.

BLANKLEY: They're very able top operatives, and they want to run the campaigns that in the past have always leaded to victory, which is standard identify your voters, get them out on Election Day. That might well be the right path.

Newt has a different view, and he's going to -- the candidate decides his path, and he's decided to take the path, a very focused issue-oriented campaign, that he thinks you can use social media and digital communication with almost 100 name (ph) ideas he has. And we'll find out whether that's a strategy that can work or not.

But this wasn't a philosophical dispute. And I've just got to say, I worked for Newt for seven years, and the most invigorating seven years of my life.

When people say, well, he went on vacation, if you asked the chief executive, "Do you have time to think?" The challenge (ph) is, invariably, no, I never have time to think, I'm too busy operating. When Newt goes on vacation or travels -- and I used to travel with him -- that's a time for him to actually think more deeply. And I think that, yes, it was a lovely setting to do it. But my sense is that, knowing Newt, that he used that opportunity to rethink how he wanted to run his campaign, and he came back and he and his staff disagreed.

BLITZER: But he's a really smart guy. He's got a lot of ideas, Newt Gingrich. I covered him a lot when he was Speaker.

If he had a different strategy than these professional strategists with whom he was working, who he brought on board, why didn't he come up with that idea before this, knowing that these guys were solid pros, they knew what they were doing in a traditional way? If he had a different way of doing it, he should have come up with that idea earlier.

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Well, it suggests that perhaps the former Speaker is not ready to run for president. Here's why.

First of all, when you're going to run for president, you go out there, you hire the strategists, you hire the staff. And, yes, you come up with a strategy and then you execute.

It's clear to me, based on what has happened over the last month -- because remember, he announced on May 29th -- is that his campaign was not prepared for the kind of spending decisions, the kind of messages, the message discipline that you need in a presidential field, and the ability to raise the kind of serious money. So maybe this is a function of needing a vacation, but you know what? He had January, February, March and April to take a vacation before tossing his hat into the ring.

BLANKLEY: Let me make a point. We're in the middle of a communications revolution. We're seeing Sarah Palin do stuff with social media without even talking to the mainstream media that's getting saturation coverage. We've never seen that before. I've never seen it before. I don't think any of us have.

Now, Newt's betting -- and I think he's adjusting to his understanding of how technology is quickly evolving -- that this is the path he wants to take, and it's an issues-oriented path. And it's -- he's going to be delivering huge analyses on policies.

BLITZER: You know that some of his former aides are blaming his third wife, Callista, for these problems. Do you think that's fair?

(CROSSTALK)

BLANKLEY: I think for any candidate, man or woman, the candidate is responsible for their campaign, not the husband or wife. And that's a side issue, and I don't like seeing that kind of comment about any politician.

BRAZILE: As someone who's been involved in seven presidential campaigns -- and this has nothing to do with Republican or Democrat -- you need a candidate who is disciplined. What I'm learning now is that perhaps he's not as disciplined as we once thought he was.

Because, Tony, the fact is, he has to raise a bucket load of money.

BLANKLEY: You have to raise a bucket load of money, particularly if you're running the conventional campaign, which may still be the right one. I'm not arguing that the conventional method is necessarily wrong. I'm saying that if you go the digital route, then the conventional raising a bucket full of money isn't quite as necessary.

We'll find out.

BRAZILE: You still have to get the delegates in order to win the nomination.

BLANKLEY: Look, I understand.

BLITZER: All right. Let's talk about another politician who's in trouble for very different reasons, Anthony Weiner from New York.

Charlie Rangel, who had his own problems, he's now weighing in. I'll play a clip of what he's telling reporters.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGEL (D), NEW YORK: I know one thing. He wasn't going with prostitutes. He wasn't going out with little boys. He wasn't going into men's rooms with broad stances.

I mean, all of those things I understand. I'm 80 years old. But high-tech stuff like this, I can't respond.

But certainly, I know immoral sex when I hear it from other members, and no one has screamed for their resignation. So I don't know why they're selecting Anthony.

(END VIDEO CLIP)

BLITZER: Do you think he's going to quit?

BRAZILE: I don't know. I wish he would just turn down the volume. Look --

BLITZER: You mean Anthony Weiner?

BRAZILE: What he did was stupid. What he did was lewd.

When I was on this show last before going to three states and another country, we talked about him communicating with a stripper -- or a prostitute. I forgot which one.

The bottom line is he made a stupid mistake. If he wants to be a playgirl, go and model. But give somebody else the opportunity to represent the people of New York.

BLITZER: Very quickly.

BLANKLEY: You know what he did? He was the digital version of a flasher. I think that's -- whatever you think about a flasher, that's what he did. He exposed himself in public in that way, and I think that's a more understandable thing than all the other discussions.

BRAZILE: He embarrassed himself and his family.

BLITZER: Thank you, both of you.

BRAZILE: Thank you.

BLITZER: Thousands and thousands of Sarah Palin e-mails, they are now being released. We're standing by to get a close look.

And Tracy Morgan's on-stage rant.

(COMMERCIAL BREAK)

BLITZER: The comedian Tracy Morgan is in hot water right now after some not-so-funny comments he apparently made during a recent stand-up show.

CNN's Entertainment Correspondent Kareen Wynter is following the story.

(BEGIN VIDEOTAPE)

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT (voice-over): From "Saturday Night Live," to NBC's hit comedy, "30 Rock," actor and comedian Tracy Morgan knows how to deliver a punch line.

(BEGIN VIDEO CLIP, "30 ROCK")

TRACY MORGAN, ACTOR: If you've learned anything from me, it's how to do a bad job.

(END VIDEO CLIP, "30 ROCK")

WYNTER: But a recent stand-up comedy show in Nashville is drawing more jeers than cheers. Morgan's homophobic rant during an onstage performance last week stunned some audience members like Kevin Rogers, who says he cringed at the hateful comments.

KEVIN ROGERS, AUDIENCE MEMBER: I was absolutely shocked and amazed at what I was hearing.

WYNTER: Rogers says Morgan lashed out at lesbians and gays, saying gay was something kids learned from the media, that victims of anti-gay bullying should stop whining. Rogers says the comic even took a shot at Lady Gaga, bashing her chart-smashing, gay-themed song "Born This Way."

ROGERS: I knew that I was going to see a comedian that does push the envelope and was expecting to hear all sorts of different probably inappropriate humor. But I didn't expect to hear an attack on the gay community.

WYNTER: Roger says Morgan also joked about stabbing his own son to death if he were gay.

ROGERS: The entire thing really did hurt me, the violent aspect of that comment. It seemed to go from a joking demeanor to, this is a point in my show to where I'm very serious about what I'm saying.

WYNTER: And while we don't know for sure how serious Morgan's remarks were, he just released a statement to CNN saying, "I want to apologize to my fans and the gay and lesbian community for my choice of words at my recent stand-up act in Nashville. I'm not a hateful person and don't condone any kind of violence against others. While I am an equal opportunity jokester, and my friends know what is in my heart, even in a comedy club this clearly went too far and was not funny in any context."

But GLAAD, the Gay and Lesbian Alliance Against Defamation, says the apology doesn't go far enough and that Morgan should meet with youth and families who have been affected by anti-gay violence, and that, "Jokes that make light of violence directed at gay and lesbian youth aren't only offensive, they put our kids in harm's way. Tracy Morgan must not only apologize, but assure us that this won't happen again and send a clear message to Americans that anti-gay violence is no joke."

(END VIDEOTAPE)