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Awaiting White House Report on Libya Mission; Informants on bin Laden Arrested; U.S. Dollars Wasted in Afghanistan?; Interview With Congressman Barney Frank; Operation Fast & Furious; White House Releases Report on Libya

Aired June 15, 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: Thanks very much, Brooke.

Happening now, President Obama offers a new defense of the Libya military mission, as some members of Congress challenge the commander- of-chief in -- the commander-in-chief in court. This hour, the legal and the political fight over what happens next and the War Powers Act.

Plus, Pakistan arrests some of the people who helped the United States find and kill Osama bin Laden. It's fueling outrage and putting even more strain on U.S. relations with Pakistan.

And Congress investigates why federal agents -- get this -- allowed weapons to fall into the hands of the Mexican drug cartels and the criminals. It's being called a catastrophic failure of leadership. And it had deadly results.

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

Right now, President Obama is trying to put down a mutiny in Congress over U.S. military action in Libya. He's sending a report to lawmakers defending the mission and his authority to order it. Some angry House members from both parties went to new lengths today to push back at the president, announcing a lawsuit challenging America's involvement in the Libyan conflict.

Let's go straight to our White House correspondent, Brianna Keilar.

She's working this story -- first of all, Brianna, we know what the report is going to say.

But what's the status of actually delivering it to Congress?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: It is -- we're expecting it to be delivered to Congress imminently, Wolf. In fact, we're a little surprised that, perhaps, it hasn't been delivered by now. So this could happen any moment. And, of course, we'll be bringing it to you as soon as we get it.

But as we await this report, about 30 pages or so, as we're hearing from the White House, what it's going to include is the justification for U.S. military involvement in Libya, but also -- and very importantly to members of Congress -- a rationale, a legal explanation for why the White House has not sought Congressional authorization for having U.S. troops involved in the operation there.

We do know now from senior administration officials what their argument will be. And it is this, that because, they say, the U.S. is involved in a limited role, that, in their words on a conference call that they had with reporters not too long ago, Wolf, that there are no boots on the ground, there's no exchange of hostile fire and there's no sustained fighting, that they are within the parameters of the War Powers Resolution, which says to the president, you can have troops involved abroad for 60 days, but if you don't have Congressional authorization, after that, you have to pull those troops out within 30 more days.

The deadline on that 90 day period being up here on Sunday. That -- they say, the White House, that they are in line with that, because there is some fine print in the War Powers Resolution. And they are basically saying, Wolf, that that saves them. And that is part of their rationale.

BLITZER: There are a lot of members of Congress, though, Democrats and Republicans, liberals and conservatives, Brianna, who flatly disagree with the White House interpretation of the War Powers Act.

KEILAR: And, Wolf, you don't need to wait for this report to go up to Congress to be able to say that there are many members of Congress, Democrats and Republicans, who are not going to be satisfied with this explanation.

We talked with some experts, one who did tell me -- and there is some disagreement among experts -- but one who said that, in her opinion, the president is in violation of at least the spirit of the War Powers Resolution, if not the letter. But it's also important to note, Wolf, that many presidents in past decades, Democrats and Republicans, have essentially, as she put it, flouted the War Powers Resolution in similar ways.

BLITZER: Barney Frank, the Democratic congressman from Massachusetts, he's here in THE SITUATION ROOM. He vehemently disagrees, Brianna, with the president. My interview with him coming up later this hour.

And Brianna will be back as soon as we get the official report, those 30 pages. Standby, Brianna, for that.

Meanwhile, there's new reason right now to question whether Pakistan was working with or against the United States in the hunt for Osama bin Laden. Sources say Pakistan's intelligence agency has arrested several people who gave the CIA information about bin Laden before he was killed.

CNN's Reza Sayah has more from Islamabad.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Just when you thought the relationship between the U.S. and Pakistan couldn't get more twisted, tangled and complicated, we learn that the ISI, Pakistan's top spy agency, has arrested several suspected informants for the CIA. These are Pakistani men who allegedly fed information to the CIA and helped them before last month's big raid on the Bin Laden compound. This according to two Pakistani security officials.

It's not clear why these men have been arrested, where they are and what, if anything, they're being charged with.

One of the men is reportedly an army major who allegedly wrote down license plates of vehicles going in and out of the compound. But one of our sources, a security official, says that's not true, that none of the men arrested is an army officer. Security officials do tell us that some of the individuals in custody were staying at a safe house rented by the CIA to serve as a lookout onto the bin Laden compound.

These arrests, obviously, raise some questions again about Pakistan's top spy agency.

Why has the ISI been arresting informants for the CIA when they were supposed to be on board with U.S. efforts to go after bin Laden?

You would think they would praise and commend these men instead of arresting them. Fact that they have arrested them suggests that they may not be happy with what they did.

We caution that there is not a lot of detail about these arrests. We still don't know why these men were picked up. But if, indeed, they're in trouble with Pakistani authorities, it's going to fuel suspicion again about Pakistan's commitment to the U.S. fight against extremists. And, once again, it could ignite more questions about Pakistani's intelligence agency, whether it's a U.S. friend or playing a deceptive double game.

Reza Sayah, CNN, Islamabad.

(END VIDEOTAPE)

BLITZER: Let's get some White House reaction right now. More on the concerns about whether Pakistan is reliable ally in the war on terror.

Our White House correspondent, Dan Lothian, is working this story for us.

How are they dealing with this over there -- Dan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, today, during the White House briefing with Spokesman Jay Carney, he was describing this relationship between the U.S. and Pakistan. And he used the word "complicated" at least seven times.

But some people believe that complicated does not adequately describe the situation and that the arrest of those people suspected of helping the CIA is yet another low point.

(BEGIN VIDEOTAPE)

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, I mean, I don't think it's been worse.

LOTHIAN: CNN's national security analyst, Peter Bergen, says this is another blow to the already rocky U.S.-Pakistan relationship.

BERGEN: I think it's at the worst point it's been since, arguably, 1990, when the United States put sanctions on Pakistan because of its nuclear program. And it's bad. It's very bad.

LOTHIAN: The U.S. unilateral mission behind the back of Pakistan's government was a big embarrassment. Drone strikes aimed at eliminating Al Qaeda leaders have also heightened tensions.

MARK TONER, U.S. STATE DEPARTMENT SPOKESMAN: I think we've been upfront about challenges in the relationship. But we've also been consistent in saying that Pakistan and the U.S. need each other.

LOTHIAN: But is Pakistan a U.S. ally?

White House Spokesman Jay Carney had a chance to call them that, but kept using the word partner. He did say the government has been helpful in going after some militant targets and that the U.S. is working to improve the relationship.

(on camera): Does the administration foresee a scene -- a scenario where you have to have tough love, where you really have to start looking at, perhaps, the aid to Pakistan in order to bring that friendship back to the middle?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I think, Dan, that we are very clear-eyed about this. And we pursue this relationship and value it and state its importance precisely because it is in the national security interests of the United States of America to have this relationship.

(END VIDEOTAPE)

LOTHIAN: Now the White House has been very careful to not openly criticize Pakistan, even as questions were being asked about what the government knew about bin Laden's whereabouts.

Going forward, how can this relationship be mended?

Well, experts say, first of all, the U.S. needs to continue to make the case to the Pakistanis that when it comes to going after terrorism, especially inside their own country, that this relationship needs to be healthy. And, also, Bergen points out that fewer drone strikes when inside of Pakistan could go a long way too -- Wolf.

BLITZER: A quick question, Dan.

Are you getting any indication at all from White House officials that they're thinking about cutting U.S. aid to Pakistan?

It's about $2 billion a year.

LOTHIAN: Exactly. You know, we have asked that question for quite some time. And you heard it there. I even posed that question to the White House. And they have not yet publicly said that they are looking at cutting that aid. A lot of things are on the table. They are examining this relationship.

It does appear that, at some point, they have to get much tougher. But so far, no indication that they're ready to pull that aid -- Wolf.

BLITZER: Thanks very much.

Dan Lothian at the White House.

We'll have more on the story later here in THE SITUATION ROOM, as well.

Meanwhile, stand by for a CNN investigation of programs in Afghanistan funded by all of us -- U.S. taxpayer dollars and new evidence that the money simply isn't being spent wisely. A lot of it simply wasted.

And federal agents who are supposed to guard against gun violence purposely let weapons fall into the hands of drug cartels with deadly, deadly consequences. Congress now investigating.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here.

He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, as calls for a quicker U.S. withdrawal from Afghanistan get louder in Washington, a very interesting story appeared in the British newspaper, "The Guardian." That paper reports the U.S. and Afghan officials are in secret talks over a long-term security partnership between the two nations.

If that's the case, this kind of a deal could put U.S. troops, Special Forces and other personnel in Afghanistan for decades. "The Guardian" reports these talks have been going on for more than a month.

A U.S. official denies "The Guardian" report and says there are no plans for a permanent base in Afghanistan.

The federal government wouldn't lie to us about something like that, would they?

The withdrawal of troops from Afghanistan is supposed to get underway in July. And President Obama is getting ready to release his plan on how many of the more than 100,000 U.S. troops in Afghanistan will come home as the withdrawal begins.

More than two dozen senators sent a letter to the president today calling for a, quote, "sizable and sustained reduction," unquote, of military forces in Afghanistan.

The U.S. is involved in four -- count them, four -- wars right now, even though the White House is trying to clear the president of any wrongdoing under the War Powers Resolution, arguing that the military action in Libya does not amount to full blown hostilities.

But we are spending money there and we are dropping bombs and doing other military things. And we're putting military lives at risk. And we're stretched very, very thin.

Here's the question -- How would you feel about the United States maintaining a military presence in Afghanistan for decades?

You know, like Germany, Japan, South Korea, etc.

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

My gut says we're going to be there a long time in some form.

BLITZER: Maybe, but you know what? Barney Frank, who is going to be joining us, Jack, this hour, he makes the case, and it's a strong case, the U.S. right now is spending between Afghanistan and Iraq about $150 billion a year. A hundred and fifty billion dollars a year, think about over 10 years how much that would cost, and think about how much that money could be used either here or paying down the debt. That's a lot of money.

CAFFERTY: And isn't Osama bin Laden dead? Oh, yes, I think that's probably why we went over there, right?

BLITZER: Yes, he is definitely dead.

All right, Jack, stand by, I want to continue this story.

President Obama moving, as Jack said, closer and closer to a decision of the pace of the start of a U.S. troop withdrawal from Afghanistan. He's facing a lot of second guessing about the mission and about America's huge financial aid package to Afghanistan.

CNN has uncovered new evidence that millions and millions of U.S. taxpayer dollars, maybe billions of dollars, have not been spent wisely at all.

Here's CNN's Nick Paton Walsh.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT (voice-over): A generous state-of-the-art gift from the American people to keep their lights on in Kabul, a power plant magnificent in design and in cost, $300 million before anyone had even switched it on.

But American planners forgot one thing, could Afghanistan afford the fuel to keep it going? You can listen to the answer here.

(on camera): Much of the time the plant stays silent, that's because the diesel fuel that it runs on is so expensive that to run it at even half capacity could cost the Afghan government up to $100 million a year.

(voice-over): Its high-tech turbines are on about 7 percent the amount planned. A (INAUDIBLE) some say, but it's sponsors say its occasional backup power is vital.

JOHN HANSEN, USAID: What I think the person on the street would probably tell you is that he or she is pretty satisfied by the fact that power, which was available two to four hours a day in 2009, is now largely available 24 hours a day.

WALSH: But to many, it's a symbol of the billions that America has spent here without asking itself will Afghans be able to pay for this once we're gone.

The same question about this, a huge network of highways built for over $2.5 billion.

(on camera): It's a vast project running around the country through some of the least safe areas meant to breathe the life of trade between cities.

(voice-over): There's a few glitches, though. Much of it's made of asphalt, which some U.S. officials admit is very hard to repair here. And then, there's the burden of maintaining it for heavy use. USAID thinks that will cost $117 million every year.

The roads here are very broken, this trucker says because of the large loads they carry. In real terms for Afghans working here, the $3,600 Haji Bullah (ph) earns in a year is equivalent to the cost of maintaining just 100 meters of road.

It's one thing if power plants and roads run out of money when the Americans leave, it's another when medical care is affected. People in central Kabul's hospital will feel it hard. Care is free here, but these high-tech devices America paid for are not, and without continued huge inputs of cash from donors, they could stay off permanently.

America's gifts so costly, Afghanistan so broke that the bid to give them everything risks coming to nothing.

Nick Paton Walsh, CNN, Kabul.

(END VIDEOTAPE)

BLITZER: This explains why there's so much anger here in Washington right now. Billions of dollars potentially simply wasted. U.S. taxpayer dollars, wasted in Afghanistan on roads, infrastructure, power plants, hospitals. Billions of dollars that could have been spent right here in the United States. Much more on this part of the story coming up. We'll assess what's going on. But so many members of Congress right now and the American public deeply frustrated by this waste of money in Afghanistan.

Greek citizens, meanwhile, frustrated over budget-cutting measures are protesting right now, and they're protesting on math. We're going to tell you what the prime minister of Greece is doing to try to calm their fury.

And inflation in the United States is climbing a bit higher. We're going to tell you why some economists right now -- they say they are concerned.

(COMMERCIAL BREAK)

BLITZER: Mary Snow's monitoring some of the other top stories in THE SITUATION ROOM right now, including some violent protests in Greece happening.

Mary, what's the latest?

MARY SNOW, CNN CORRESPONDENT: Wolf, anger over Greece's austerity program is boiling over into the streets of Athens. At least 25,000 demonstrators tried to form a humid shield around the Greek Parliament to stop lawmakers from debating the budget cuts. Some protesters threw gas bombs at the Finance Ministry; police responded with tear gas. Tonight, the country's prime minister reshuffled his government and says he'll seek a vote of confidence tomorrow.

In the U.S., inflation is on the rise. The Consumer Price Index, which measures inflation, rose 3.6 percent over the past 12 months. The government also reports the pace of inflation continued to climb in May. Some economists worry the higher prices could hurt the economic recovery. Others say the rise in inflation is caused by temporary factors that could change in the next few months.

Angelina Jolie is headed to Turkey to visit with Syrian refugees. Turkish officials say the actress and long-time U.N. Good Will ambassador is expected to arrive in Istanbul on Friday before leaving for a province along the Syrian border. That's where thousands of Syrians are living in refugee camps after fleeing Syria's deadly crackdown on anti-government protesters.

And much of the world is witnessing a major astronomical event right now. It's an unusually long lunar eclipse. A lunar eclipse occurs when the Sun, Earth, and Moon align in a straight line. In this one, the Moon will be completely covered by the Earth's shadow for one hour and 40 minutes, making it the longest this century. Unfortunately, though, the eclipse is not visible in North America -- Wolf.

BLITZER: Unfortunately.

All right, thanks very much, Mary, for that. Members of the president's own party, we're talking about Democrats, they are now hammering him over America's role in the Libya conflict. Stand by, you're going to hear Congressman Barney Frank, Democrat of Massachusetts. He's going to tell me why he thinks the president of the United States is guilty of, quote, "an embarrassing degree of evasion." That's Barney Frank.

And Congress tries to get answers about why federal agents sat back and let Mexican drug cartels get hold of deadly weapons and start killing people.

(COMMERCIAL BREAK)

BLITZER: President Obama's been getting serious flak from both parties over the U.S. military operation in Libya. But in the fight over the so-called War Powers Act, some Democrats have been especially tough on the commander in chief.

BLITZER: And joining us now Congressman Barney Frank, Democrat of Massachusetts.

Congressman, as usual, thanks very much for coming in.

FRANK: Thank you.

BLITZER: All right, the White House now says the War Powers Act does not apply to what's going on in Libya right now. You're familiar with their arguments, what say you?

FRANK: I'm very disappointed. I'm disappointed that the president has been debating it. There's this thing where you become president and they tell you you're the commander in chief of the free world and your judgment erodes.

They ought to understand, committing American military forces is enormously expensive, it has all kinds of implications. I do not understand why presidents continue to think that they should do this without bringing in the broader sector of the electorate through the Congress.

And apparently, from what you read me, they're saying these aren't hostilities because we're only shooting people and they're not shooting back. That's just an embarrassing degree of evasion. We are in there engaging in war-like activities, and, yes, there's a chance that people are getting hurt.

And what I don't understand is why this office accepted this view that a president ought to be able to do whatever he wants with the military without any regard of what the rest of the government wants. And that's a terrible doctrine.

BLITZER: What about the substance -- forget about the War Powers Act for a moment, do you agree that the U.S. should be protecting civilians, Libyan civilians, from Gadhafi's forces?

FRANK: No, I think that England should and France and Italy and Germany and Spain. Gaddafi is a thug, and I hope he is thrown out, but you cannot have the American taxpayers to be the ones to do everything everywhere.

We are bearing the brunt in many parts of the world. And I am for America taking that leadership role, but the notion that -- and Secretary Gates got it right last week when he talked about NATO, in my words, being almost a sham -- the notion that if there was any evil anywhere, it's the American military and the American taxpayer's job to deal with it is -- is terribly mistaken.

We spend more than twice as much as a percentage of our gross domestic product on the military as any of our NATO allies, three times as much as most of them, and there is a time when it's their turn.

And so the question is twofold. Should somebody go after Gadhafi? Yes. Should it always be America? Should we be doing Iraq and Afghanistan, and should we be the ones protecting Western Europe from the no longer existent communist threat?

The single biggest thing driving our budget deficit is not Medicare. We spend about $568 billion a year on Medicare. We're spending $700 billion on the Pentagon, much of it on things that are not directly related to our security and are being done to let our wealthy allies off the hook from doing their own responsibilities.

BLITZER: I know you disagree with the president as far as Afghanistan is concerned, as well. He wants U.S. troops to stay there through the end of 2014 at a minimum. You know it's costing well over $100 billion a year to maintain 100,000 U.S. troops in Afghanistan.

What would you tell him?

FRANK: That he's gravely mistaken, that the good we are doing is not nearly worth it, that you cannot -- look, we are not defeating an enemy over there anymore. We are trying -- we are told we're there to contain terrorism.

Well, if Afghanistan was no longer the refuge for some terrorists, then it would be Yemen, then it would be Sudan, then it would be Somalia. We cannot, with American troops, plug every rat hole in the world.

And I am not going to be told that I can't have police officers on the streets here or that we've got to cut medical care. Or, by the way -- I'm no isolationist -- that we can't stop children from starving in much of the rest of the world, that we can't fight terrible disease in most of the rest of the world, because we're spending such an enormous amount of money in Afghanistan, where we have, I believe, a corrupt regime and a regime that's not prepared to cooperate with us.

So I think he is gravely mistaken in staying in Afghanistan, even more gravely mistaken in not immediately withdrawing from Iraq. The thing about staying in Iraq so that the American military can referee religious and political disputes, it's not a good job for our military.

And again, you cannot tell me seriously that you want to reduce the deficit and spend $150 billion in Iraq and Afghanistan, and another $550 billion elsewhere, when we are doing unnecessary things unwisely throughout the world.

BLITZER: At the Republican presidential debate in New Hampshire the other night, Newt Gingrich, the former Speaker, a man you know, he said this about legislation that you co-sponsored. Let me play the clip.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: The Obama administration is an anti-jobs, anti-business, anti-American energy, destructive force. And we shouldn't talk about what we do in 2013. The Congress, this year, this next week, ought to repeal the Dodd/Frank bill, they ought to repeal the Sarbanes/Oxley bill. They ought to start creating jobs right now, because for those 13 million Americans, this is a depression now.

(END VIDEO CLIP)

BLITZER: All right. Go ahead and respond to the former Speaker.

FRANK: Well, Mr. Gingrich would forget that under his leadership, we totally deregulated all sorts of financial activity. We had the worst economic crisis since the Great Depression, rivaling it if we hadn't taken steps, because we had total deregulation.

And here's what he's talking about. Do not have an independent consumer bureau, let the Federal Reserve be in charge of consumer protection. Do not do anything about speculation. The position Mr. Gingrich is advocating -- we put legislation on the books last year to be used this year to say that speculators cannot go up and buy oil futures, hold it off the market until the price goes up, and then sell it.

We want to put an end to the speculative impact on oil prices, which many believe is at least $20 a barrel. He wants to undo this.

He wants to go back to exactly what happened that caused the terrible crisis. So the notion that by trying to restrain derivatives, trying to restrain mortgages that shouldn't have been granted -- part of this bill says you can't get a mortgage if you are not going conceivably going to be able to pay it back. What Mr. Gingrich apparently says is that those policies that led to this terrible economic crisis were OK and let's go back to it. And he's apparently defending the rights of the large financial institutions, the banks and investment houses, to do whatever they want as long as they make money, regardless of the negative consequences on the economy.

BLITZER: One final political question, Congressman, before I let you go. It involves Mitt Romney, arguably the Republican front-runner right now for the Republican presidential nomination. Back in June, 2007, you told New England cable news this about your former governor: "The real Romney is clearly an extraordinarily ambitious man with no perceivable political principle whatsoever. He is the most intellectually dishonest human being in the history of politics."

Do you remember saying that?

FRANK: I do. And he's confirmed it since.

But I have a little sympathy for him. Apparently, he has spent so much of his money, that he can no longer afford ties. Poor Mitt has not been seen in a tie in several months. So I am going to take up a collection to buy some ties for Mr. Romney.

And he's cut all his ties to his past policies, but I would like to see if we could get him a tie to put around his neck, because he's going around without any tie. He kind of looks a little bit underdressed.

BLITZER: I'll take that as you stand by those earlier comments.

FRANK: Oh, there's no question. No, he has made it worse. He's flip-flopped even more.

This is a man who in 1994, said he would be a better gay rights advocate than Ted Kennedy, a total reversal. He's flipped on abortion. He's been back and forth on the question of a health care mandate.

I cannot think of a public policy -- the only consistent principle of Mitt Romney is he thinks he should run the world.

BLITZER: Congressman Frank, thanks very much for coming in.

FRANK: You're welcome.

BLITZER: It was known as Operation Fast and Furious, but now members of Congress are calling it a colossal failure, guns allowed to fall into the hands of violent drug cartels while U.S. agents sat back and let it all happen.

And a former porn star goes before the cameras to say Congressman Anthony Weiner told her to lie about their online communications.

(COMMERCIAL BREAK)

BLITZER: On Capitol Hill today, growing outrage over an ATF operation, Alcohol, Tobacco and Firearms operation, along the border with Mexico. The program has enabled U.S. assault weapons to get into the hands -- get this -- of Mexican drug cartels in the hopes of eventually bringing down an entire arm smuggling network, where critics say, instead, the strategy led to needless deaths.

Our homeland security correspondent, Jeanne Meserve, is covering this story for us. People died because U.S. officials deliberately allowed weapons to get into the hands of Mexican drug cartel members?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: That's what they're saying, Wolf.

The program was called Fast & Furious, and furious describes the congressional hearing looking into it. Members want to know who gave it the green light and what they were thinking.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): When Border Patrol agent Brian Terry was killed last year near the Mexican border, two guns were recovered nearby and traced. It turned out the Bureau of Alcohol, Tobacco and Firearms allowed the weapons to end up in the hands of criminals.

Brian Terry's mother was shocked when she found out.

JOSEPHINE TERRY, MOTHER OF BORDER PATROL AGENT BRIAN TERRY: I just was flabbergasted. I just didn't believe it at first.

MESERVE: Three whistle-blowing agents from the Phoenix ATF office say supervisors did not allow them to intercept weapons bought by so-called straw buyers for cartels and criminals. The goal was to wait until the weapons surfaced at crime scenes in Mexico and then bring down an entire arms trafficking organization. But the agents say such a tactic often used in drug cases was a colossal mistake, a catastrophic disaster when used with weapons.

PETER FORCELLI, SPECIAL AGENT, ATF: We weren't giving guns to people who were hunting bear, we were giving guns to people who were killing other humans.

JOHN DODSON, SPECIAL AGENT, ATF: Rather than meet the Wolf head on, we sharpened his teeth, added a number to his claw. All the while, we sat idly by watching, tracking, and noting as he became a more efficient and effective predator.

MESERVE: A Republican congressional staff reports that the program was authorized at the highest levels of the Justice Department.

REP. DARRELL ISSA (R), CALIFORNIA: We're investigating you, your organization. We want to know what felony-stupid bad judgment led to allowing this program at the highest levels.

MESERVE: A Justice Department official said he was unable to say who authorized the program, but that the attorney general wants to get to the bottom of it and the department's inspector general is investigating. He backtracked from earlier statements that the ATF made every effort to interdict illegally purchased weapons.

RONALD WEICH, ASSISTANT ATTORNEY GENERAL: So we're not clinging to the statements in those letters.

MESERVE: But Congressman Issa accused DOJ of stonewalling the congressional probe.

ISSA: If you're going to count pages like this as discovery, you should be ashamed of yourself. That's not discovery. That is saying that nothing within the document requested under any circumstances are we going to be shown.

(END VIDEOTAPE)

MESERVE: The fallout from Fast & Furious is far from over. In addition to the multiple investigations currently under way, more than 1,000 of the weapons that walked are still unaccounted for. Still in the hands of criminals and cartels on both sides of the border -- Wolf.

BLITZER: A shocking story, Jeanne. Thanks very much for that report.

All right. Getting good news in from Houston, Texas. Congresswoman Gabrielle Giffords has now been released from the hospital.

A statement coming out of the hospital is saying that, "She has improved to the point where she no longer needs to remain a patient in the hospital. Congresswoman Giffords has shown clear, continuous improvement from the moment she arrived," according to her physician. "We are very excited that she has reached the next phase of her rehabilitation and can begin outpatient treatment. We have no doubt that she will continue to make significant strides in her recovery."

She'll stay, by the way, in Houston.

One of her neurosurgeons said this: "Gabby has recovered well from the surgery. Her wounds have healed. She has resumed full physical therapy without a helmet, and I am comfortable that she can be discharged."

Good news. You saw the picture. There is the picture that was released earlier in the week.

She's out of the hospital. She'll be going through outpatient therapy.

We are wishing her, of course, only the best for a complete recovery.

Good news on the front of Congresswoman Gabrielle Giffords. Remember, she was shot in the head in Tucson back on January 8th.

Here's a question -- could Senator Marco Rubio end up on the Republican ticket as a vice presidential running mate? We're exploring that possibility.

Some in the GOP are saying the Florida Republican would be a very, very smart pick. I'll tell you why they're saying that. That's coming up after the break. And one well-known Democrat is insisting her party "now owns the economy." You're going to find out exactly what Congresswoman Debbie Wasserman Schultz meant by that. That's coming up as well.

(COMMERCIAL BREAK)

BLITZER: The White House has just released its report to Congress on why it believes the War Powers Act does not apply to the military mission in Libya.

Our Brianna Keilar, our White House correspondent, now has the report.

Brianna, what's the headline out of it?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Wolf, a couple of headlines.

One of the big questions that Congress has about Libya, how much has the U.S. involvement there cost? And for the first time, we have a number here.

According to this report from the White House, $715 million, so almost three-quarters of a billion dollars it has cost, and that is a figure that is accurate as of June 3rd. So, a little while ago.

Now, the other issue that really is a headline here has to do with the president's legal justification for not asking for congressional authorization for having U.S. troops involved in the operation in Libya. And here's what this report says.

"The president is of the view that the current U.S. military operations in Libya are consistent with the war powers resolution and do not under that law require further authorization because U.S. military operations are distinct from the kind of hostilities contemplated to the resolution's 60-day termination provision."

You have the White House here, Wolf, kind of looking to the fine print, saying that they don't have boots on the ground, and because of that, they are in -- or being consistent with the war powers resolution that says a president can commit U.S. troops abroad for 60 days. And if he doesn't have authorization after that, he has 30 days to pull them out.

Right now we know that members of Congress are formulating their response to this, Wolf. But no doubt, some of them are not going to think this is sufficient.

BLITZER: All right, Brianna. Stand by, because I want you to go through the report.

We'll get much more coming up later in THE SITUATION ROOM, much more on this breaking news that we're getting out of the White House.

Meanwhile, let's get to our political segment right now. All of us certainly remember election 2000, when we heard the mantra, "Florida, Florida, Florida." In the end, George W. Bush won the state by 537 votes. The count was disputed, but the Supreme Court ratified the election.

In recent days, Republican strategists have been offering me a 2012 version of "Florida, Florida, Florida." They're already thinking about a close election next year for the state's 29 electoral votes.

Some Republicans have said that Florida's young popular new senator, Marco Rubio, would make a terrific running mate. He's smart, handsome, and Hispanic. It could help carry the state.

Following the recent tension between President Obama and the Israeli prime minister, Benjamin Netanyahu, Republican strategist Mike Murphy quickly predicted the Republican candidate had just picked up 75,000 votes in Florida. What jumped out at me wasn't whether Murphy was right or wrong in his prediction, but that he saw the potential impact on the large Jewish vote in Florida.

By the way, Democrat strategists also, understandably, very sensitive to Florida, and that may explain why the president asked Florida Congresswoman Debbie Wasserman Schultz to serve as the Democratic Party chair. She's popular in her south Florida district, and she is Jewish.

Bottom line in all of this, Floridians, get ready. The presidential candidate and their surrogates will be showing a lot of love to you.

Let's bring in our "Strategy Session" right now.

Joining us, our CNN contributor Roland Martin and CNN.com contributor David Frum of FrumForum.com.

Do you agree with Mike Murphy that the tension between the president and Netanyahu may have picked up 75,000 votes for any Republican candidate in Florida?

DAVID FRUM, CNN.COM CONTRIBUTOR: Well, that's possible, but there are hundreds of thousands of votes on the table because Florida was so hard hit by the economic crisis and the housing crisis. That was one of the sand (ph) states that was at the center of the housing disaster, and there has not been a sufficient kind of recovery. And while there are parts of the country where things seem to be significantly better today than they were in 2009, Florida does not feel that way.

And we have seen one more point that is very important to Florida and something we reported on at the Frum Forum site. We have seen a huge migration of professionals from Puerto Rico who are American citizens and are free move to the mainland into Florida. Many, many tens of thousands of people. These are upper-income people, better educated, likely Republican targets.

BLITZER: How smart would it be for any Republican presidential candidate to pick Marco Rubio as his running mate?

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Well, first of all, of course he's on the short list, but he has said many times that he is not going to even go for --

(CROSSTALK)

BLITZER: It's a free country though. You can change your mind.

MARTIN: Of course he can. But also, very interestingly, you look at what he has done, he has not really done anything significant on the national stage, has kept a very low profile.

A benefit though for the Obama campaign, Governor Rick Scott, very unpopular in that state right now. Republicans thought when he won that was going to be a boom. But also, Wolf, I think we are making a mistake trying to, all of a sudden, suggest that it's all about Florida.

If you actually look at the 2008 and look at the 2012 map, the Obama campaign had some serious concerns when you look at Iowa, Virginia, Nevada, Colorado, when you also look at even Michigan, Ohio, Pennsylvania. I don't think they're going to win North Carolina and Indiana again. That amounts to about (INAUDIBLE) votes.

The other issue is this -- of the states he won in '08, they lost about 12 electoral college votes. States he won picked up about five.

And so, the map really shifts. And so it's not just etched in stone he is going to win those states. So I'm not one who says it's all about Florida. I think it's about eight or 10 states that could be a difference maker this year.

FRUM: It's all about the slow pace of recovery that affects just about everybody. And that's the president's real vulnerability. The Americans are fair-minded people, they know he did not create this mess, he inherited it, but he is judged on how well has he pulled --

BLITZER: And Roland, listen to what Debbie Wasserman Schultz, the DNC chair, said about the economy today. Listen to this.

(BEGIN VIDEO CLIP)

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), DNC CHAIR: We own the economy. We own the beginning of the turnaround. And want to make sure that we continue that pace of recovery, not go back to the policies of the past under the Bush administration that put us in the ditch in the first place.

(END VIDEO CLIP)

BLITZER: She's now saying we own the economy. It's the Obama economy.

MARTIN: Yes. And finally, a Democrat has woken up and made some sense in that, what was the key phrase? "We created the turnaround." That's going to be the key there.

The problem for Democrats all this time is they have been whining and complaining, saying, oh, we inherited such a difficult deal. Guess what? Suck it up.

You won the House, you won the Senate, you won the White House. This is what happens when you win. You get the blame, you get the credit.

FRUM: Between October, 2008, and the early spring of 2009, about eight million jobs were lost. Since then, about two million have been created.

I'm not a total math whiz, but I can do that calculation. That tells us an enormous deficit of jobs remain.

We have got these terrible numbers. And the president is going to be judged on the pace and slope of the recovery.

In 1984, the recovery was rapid and strong, and President Reagan was reelected despite still significant remaining unemployment. People saw a better future ahead, and they don't see that now.

MARTIN: And it points to the problem we have in this country, we somehow think it's going to be all of a sudden rapid. What did Ben Bernanke say? Slow turnaround.

FRUM: But rapid in '84.

MARTIN: But this is 2011.

BLITZER: The trend is going to be really important. It's still a long time between now and November of next year.

Guys, thanks very much.

MARTIN: Thanks a lot.

BLITZER: We're digging deeper into why Pakistan has arrested people who gave the United States important information about Osama bin Laden before he was killed.

Stay with us.

(COMMERCIAL BREAK)

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

CAFFERTY: The question this hour is: How would you feel about the U.S. maintaining a military presence in Afghanistan for decades? The British newspaper "The Guardian" claims there are secret talks going on as we speak about that very subject.

Carl in Michigan writes, "My idealistic side doesn't like the idea, but my realistic side says somebody has got to baby-sit those clowns since we depend on oil from that region, and stability has to be maintained in order to support oil company profits. If we ever replace fossil fuels with more sensible alternatives, then we can leave the Middle East to continue their never-ending wars. But until then, we're pretty much stuck."

Chandler writes from Rockaway, New Jersey, "What else is new? We have had a base in Cuba since the Spanish American War, 1898. We have troops in Germany and Japan since the end of World War II. Our ally, South Korea, technically is still at war with North Korea. And yes, we still have troops there as well. We're going to have troops in Afghanistan and Iraq forever."

Gerry writes from Arizona, "Western democracy doesn't have a chance against 1,000 years of warlords. We ought to bail out and cut our losses. The Muslim mentality will never grasp the concept of democracy. The Koran will never permit it. If ever there was a situation of throwing money down a rat hole, this is it, not to mention the loss of American lives."

Jerry writes, "The U.S. military ought to get out of Afghanistan immediately. The only difference between staying there for 20 years or 20 more minutes is the number of dead military and civilians. It's an exercise in futility. Bring the troops home."

"While we're at it, how about a total withdraw from Iraq, Korea, Europe? Bring them all home. Put them on the border with that failed state of Mexico."

James in Georgia writes, "Personally, I'm tired of the U.S. military being used as a police force around the world. While I fully support our military, I think our reach has exceeded our grasp. Afghanistan is one of several countries who seem to be in a perpetual state of war. What makes us think that we can solve their problems?"

And Rick says, "That would be an idiotic idea, actually."

If you want to read more on this, go to my blog, CNN.com/CaffertyFile.

I'm inclined to agree with Rick. Idiotic idea.

BLITZER All right. Jack, thank you.