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THE SITUATION ROOM

Avoiding Debt Disaster; Starving to Death in the Horn of Africa

Aired July 20, 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 HOST: Not exactly. All right, Jack. Thank you. Thanks very much.

And to our viewers, you're in the situation room happening now: urgent efforts to avoid an unprecedented debt disaster.

We're live at the White House where president Obama and the House Republican leadership, they are trying to break the impasse.

Also, a region gripped by famine and a catch 22 for the United States. Saving lives could mean working with terrorists. And when she leaped to her husband's defense, she also leaped into the headline, the surprising story of Rupert Murdoch's young wife. How she went from grueling poverty in China to unimaginable wealth.

We want to welcome our viewers in the United States and in around the world.

Breaking news political headlines: And Jeanne Moos, all straight ahead.

I'm Wolf Blitzer. You are in "The Situation Room."

House Republican leaders are back at the White House this afternoon in search of a debt deal with president Obama. They have been meeting for about 50 minutes and the urgency is growing by the hour.

In just 12 days, the United States will hit its debt limit, leaving the government unable to borrow and possibly unable to pay its bills. There are competing plans to avert financial disaster, but right now none of them has the support to break the impasse.

Let's go to our White House correspondent, our chief White House correspondent Jessie Yellin and she's standing by.

Jessica, what's the very latest? What's going on behind you right now because that clock is ticking?

JESSICA YELLIN, CNN CHIEF CORRESPONDENT, WHITE HOUSE: That's right, Wolf. Right now, the president and some of his top aides are meeting with Speaker John Boehner and Majority Leader Eric Cantor in the later stand with chief of staff Bill Daley and some of its other tough aides like David Plouffe and it is about the nitty-gritty of the way forward as we get down to the wire.

Much to the frustration of some senior lawmakers on Capitol Hill, the president I'm told is still pushing for a big deal and something more than just raising the debt ceiling.

At the same time, senate leaders are also pushing moving forward on their back up plan, the so-called McConnell Reid plan that would raise the debt ceiling with some spending cuts and also a debt commission.

But as we've been discussing, that doesn't have uniform support. It doesn't have support in the House of Representatives. So the big question is what can be done to that? What other options are there to get those crucial votes in the house?

There many people increasingly speaking out on Capitol Hill, saying at least to me on the phone that too many have come and gone to be asking what else can be added to the package at this late hour. They might say it's time to cut date and talk about just raising the debt.

BLITZER: The argument Jessica against continuing to push this so-called "grand deal"

YELLIN: Time in a word, just time. Let me walk you through and give everybody a big reminder where we've been. From May 15th, I think we have graphic on this, from May 15th to June 23rd, Vice President Biden held what we called "The Biden talks". Talking about a medium size deal for deficit reduction and also increasing some revenue.

Those conversations then ended and the president got involved from July 3rd to July 14th. The major players sat down with the president to negotiate what they have been calling the big deal for deficit reduction which involves major entitlement and tax reform.

But those talks after five days of a daily conversation and eight hours of discussions ended without a deal. And now we are facing in two days July 22nd, which was the White House's self imposed deadline for a meaningful deal between the house and the Senate and a final negotiation.

We are on the precipice of that without coming closer to a final deal. And that's why so many people are saying this may be the time to say let's just raise the debt ceiling.

BLITZER: Is White House opening the door of its likely to a temporary hike in the debt ceiling after the president last week said he was not going for any stop gap measure?

YELLIN: They have opened - they allowed for just the littlest tiny bit of wiggle room. Today, Press Secretary Jay Carney did say this in the briefing. Take a listen.

(BEGIN VIDEO CLIP) JAY CARNEY, PRESS SECRETARY, WHITE HOUSE: We will not support a short term extension absent an agreement to a large deal. That's not acceptable. Obviously both sides agree so something significant, we will support the measures needed to support the details of that.

(END VIDEO CLIP)

YELLIN: But immediately after they were very quick to get on the phone with us and they clarify that the meant short-term extension in a matter of days.

In other words, if they come to some kind of deal and if they need a few more days for the house and senate to vote on it, they will allow for that. But this does not mean a 30 or 60 or 120 day debt short-term extension.

So, it's not the kind of short-term extension that some Republicans in the house have talked about.

BLITZER: All right. Jessica Yellin, our chief White House correspondent.

Jessica, thanks very much.

Let's get some more now with our Chief Political Analyst Gloria Borger who is here.

We've heard a lot of praise for this gang of six proposal and Democrats and Republicans in the Senate from the White House but not necessarily a whole lot of praise coming from Republicans in the House of Representatives

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes. The Republicans in the house seem to be the whole today. I went and spoke with the house budget chairman Paul Ryan.

You know Paul Ryan is very important to house Republicans. It's his budget that passed almost unanimously with Republicans earlier this year. And he's become a lightning rod in this budget debate. So I asked him about the gang of six and here's what he said.

(BEGIN VIDEO CLIP)

BORGER: Why not just accept the gang of six which looks like an awful lot like the Paul Ryan budget in certain ways, calling for tax reform.

REP. PAUL RYAN (R-WIS.), BUDGET CHAIRMAN: Well, in some ways it is. The virtue of the proposal is that they say you need to lower tax [inaudible] .

At least somebody else is putting plans out there. But when you get into look in the actual plan, I'd like to see more details because they're not just really coming out.

BORGER: But how would the house Republicans avoid being the ones that look like they are not willing to deal? In other words --

RYAN: Well, first of all they passed the budget and for two years. Second of all, just yesterday we had a gain of 234 member of congress. They put the legislation on the floor and pass it which raises the debt limit.

BORGER: but you know it's not going anywhere.

RYAN: So if we gauge ourselves by will it going, we're not going anywhere or not, we will get nothing done.

(END VIDEO CLIP)

BORGER: Seems to me Wolf that you are not getting anything done anyway. And Republicans are kind a dug in. And that the largest saying we are probably going to get is some kind of a band-aid. Maybe it will be a longer term band-aid but it's going to be a band-aid.

BLITZER: I wouldn't treat it. Eric Cantor issued a statement saying elements of the gang of six were constructed and he certainly didn't rule it out. That he has been a hard liner in the negotiations.

BORGER: Well, right because they like and Paul Ryan and Eric Cantor, they like the idea of tax reform. And that is included in the gang of six. But the problem with the gang of six proposal as far as they are concerned is that it is only an outline of ideas.

And you are not going to close loopholes until you do the tax reform at the same time and that takes an awful lot of time to legislate.

BLITZER: But the said whole notion of compromising right now assuming that there tax increases, the question is are there enough moderate Republicans and moderate Democrats in the House of Representatives because they have an entitlement for some democrats they want to deal with entitlements. Are there enough moderate to get into 218 votes in the house?

BORGER: Well, you know we're going to have to see. I mean I asked Paul Ryan what about the compromise on tax, why don't you just do it?

And his answer was you know what we have a tax increase coming up in 2013. Because that's when the Bush tax cuts expire. He said that's a $1.5 trillion dollar tax increase and he said so "we've already given on taxes now".

Remember that tax increase was due to expire, but he said they are going to increase anyway so we have given it the up.

BLITZER: All right, Gloria. Good work for Paul Ryan today.

BORGER: Thanks.

BLITZER: The powerful rising star. Little technical thing but it will work-out. Thank you.

We will have much more on the debt battle. We will be joined this hour by the Congressman Jason Chaffetz from Utah. Stand by.

What is he willing it do to avoid the debt disaster for the United States? I will ask him.

And she's near the top of the pack for the Republican presidential hopefuls. But should Michele Bachmann's health be an issue in the campaign?

Plus, a newly declared famine and a difficult choice for the United States saving lives versus working with terrorists.

Stay with us.

You are in "the situation room"

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with the Cafferty file.

JACK CAFFERTY, CAFFERTY FILE: Michele Bachmannn is on a roll. A new NBC-"The Wall Street Journal" poll found the Minnesota congresswoman in second place among Republican candidates for president behind only front runner Mitt Romney.

It's the second national poll that got her in second place. She came out on top in three of the four most recent polls among with likely voters in the Iowa caucuses. But her surge in a poll could be coming into a screeching hall.

"The Daily Caller" reported yesterday Bachmann suffers from chronic debilitating migraine headaches. At times the migraine are bad enough she has to be taken to the hospital to be treated for them.

Three anonymous former aides to Bachmann who spoke to 'The Daily Caller" recalled incidents where she couldn't work and even missed house boats because of the migraines.

Another staffer told politico.com it's common for Bachmann to retreat to the private office, close the door and shut off all the lights, sometimes for hours while waiting for a migraine headache to pass.

On the campaign trail in South Carolina, Bachmann admitted that she does suffer from migraines and that she takes medication to treat them, but she downplayed the condition and said it doesn't interfere with her work.

She said that headaches do not interfere with her busy schedules as a candidate either. But then the race is just getting started.

Today the Bachmann campaign released a note from her doctor acknowledging her migraines and saying otherwise her overall general health is good. This news is bad timing for Michele Bachmann. She's been under fire recently from gay rights groups over a husband's Christian counseling business.

Social issues Candidates on both sides of the aisle and in any election campaign and some candidates are able to overcome them. But serious potentially debilitating health issues that's a different story, ask Tom Eagle.

Here's the question. Should Michele Bachmann's health be an issue in the race for president?

Go to CNN.com/cafferty file and post comments on my blog. Wolf.

BLITZER: Thanks very much, Jack.

And escalating crisis has reached the tipping point with the United Nations now declaring a famine in parts of Somalia. Officials say some 3.7 million people are in direct peril and the crisis is certainly not limited by borders.

CNN David McKenzie is in neighboring Kenya where starving refugees are arriving by the hundreds of thousands.

(BEGIN VIDEO TAPE)

DAVID MCKENZIE, CNN CORRESPONDENT: This is the entrance to camp. The people are tired, they are exhausted. Many of them haven't had food or even water for a long time. They've come here since 5am and while the lines don't look that big right now, it's already almost midday and these people just keep on screaming into this camp.

They come in from Somalia and they are walking and taking cars, sometimes spending up to $40. I want to show you something over here.

These people, these families have just come in moments ago. They've come in because they don't have food with them and the conflicts also pushed them oust Somalia and they are in a desperate situation. Going to this edge of the camp, they are trying to get assistance.

When people arrive and they registered, they now have to live here. Because the Dadaab camp was design for tens of thousands now it's pushing to half a million. So effectively people have to live outside the actual camps. They are living in places like this which aren't official areas. It's just community land where people are being forced to live. They say it's difficult to find water it's difficult to find food and really after coming all the way from Somalia and a fling drop being conflict the place that they end up at least for now, it's also really difficult and really terrible conditions.

(END VIDEO TAPE)

BLITZER: David Mckenzie on the scene for us, there is a catch 22 in the crisis for the United States helping famine victims means working with an Al Qaeda affiliate.

Our pentagon correspondent Barbara Starr is working this part of the story for us.

Barbara, how difficult does this make it as far as humanitarian efforts are concerned?

BARBARA STARR, PENTAGON CORRESPONDENT: Well Wolf, at least for U.S. aid agencies and workers it is complicating everything. The Obama administration making it clear it will not tolerate this aide being diverted by this Al Qaeda affiliate group.

(BEGIN VIDEO TAPE)

STARR: Nearly four million Somalis are facing famine and in the middle of it all, the terrorist group known as Al Shabaab, the Al Qaeda affiliate, the U.S>. has been targeting with air strikes and raids.

AL Shabaab which controls much of southern Somalia said it will now allow outside groups back in. It banned them two years ago calling them western spies and crusaders but U.S. officials worry trouble is ahead.

SUSAN RICE, U.S. AMBASSADOR TO UN: Neither the United States nor others in the international community are prepared to pay bribes or taxes to Al Shabaab while it starves its own people.

STARR: Al Shabaab even while fighting in recent years attacked aide convoys, food shipment and charge to a group's fees for its part to the treasury department bands aid that could benefit terrorist groups and All Shabaab is one of them.

As a result, aid from the U.S. to Somalia has plummeted just as drought to cold. Aid organizations said they will help even with the physical risk of attack for the legal risk of inadvertently returning aid to all Al Shabaab supporters.

RAJV SHAH, DIRECTOR, USAID: It's no coincidence that precise geographies that have been labelled a famine and have met the technical determination of famine, are precisely those areas where Al Shabaab has limited access, has harassed aid workers.

STARR: Many think Al Shabaab is now pledging to let aid in for two reasons. To keep U.S. military attacks at bay and build support for itself. But many worry aid workers are at dire risk.

SETH JONES, SENIOR POLITICAL SCIENTIST, RAND: I think aid organizations that trust them or walking right into a civil war.

STARR: Now other countries recently have stepped up to try and dill that U.S. gap. That includes Britain, some of the Scandinavian countries and of course aid organizations from many Islamic countries are front and center in try to help in Somalia.

But for all of them confronting the threat of Al Shabaab and trying to deal in getting aid into this very difficult situation really is reaching crisis proportions.

(END VIDEO TAPE)

BLITZER: Yes. It's a heart breaking situation Barbara. And I want the viewers to know that if you want to help and you can make a difference help some of these victims in the famine in the East Africa, visit our "impact your world" page that is cnn.com/impact. What a story.

A check of the day's top stories that are coming up then: Is a tea party favorite breaking with the other fiscal conservatives on the issue of the debt ceiling?

Here in the United States Republican Congressman Jason Cheffetz will join us live.

Stay with us. You are in "The Situation Room."

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some other top stories here in the situation room including a budget breakthrough in a state that desperately needed one.

What's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Minnesota is up and running again. Governor Mark Dayton signed a two-year budget deal today ending the longest state shut down in recent history. Lawmakers have proved the $35.7 billion compromise spending in the early morning hours since July 1st the capital and state parks have been closed in 2,000 employees have been laid off. Those workers will be back on the job tomorrow.

A grand jury in New York has just indicted Aron for the murder and dismemberment of an 8-year-old boy. Police found the remains of Leibby Kletzky in Aron's freezer and a trash bin after a boy disappeared walking home from camp. And an autopsy revealed Kletzky died after being drugged, smothered. Aron's indictment includes eight criminal counts, including two counts of first degree felony murder.

Hurricane Dora is now a category three storm turning off the Mexican coast with maximum sustained winds nearing 150 miles an hour. Forecasters say Dora could be a category 4. Hurricane tomorrow and will likely produce threatening rip currents on Mexico the southwestern beaches.

And a surprise discovery in space, NASA astronomers have found a fourth moon in Pluto's orbit. The moon temporary named P4. It's extremely small just eight to 21 miles in diameter. All those space telescopes capture the images from a distance of more than three billion miles. NASA plans to examine the moon more closely when the new horizon spacecraft flies by Pluto in 2015.

BLITZER: Very cool. Thanks very much, Lisa, for that.

Capitol Hill is a crowded place these days. We are going to tell you who is out in force making sure their voice is heard in the deficit debate.

And a tea party favorite is breaking with some other fiscal conservatives on the issue of debt ceiling.

Congressman Jason Chaffetz will join me live in right here in "The Situation Room" after this break.

(COMMERCIAL BREAK)

BLITZER: Virtually everyone involved in the debt debate agrees on the need to cut spending as part of the solution and virtually everyone in the country has something at stake when that sparked a huge lobbying frenzy upon Capitol Hill.

Here in Washington, Lisa Sylvester is working this part of the story for us. I think it's safe to say Lisa that the lawmakers in the house and the senator could get an earful, right?

SYLVESTER: You know Wolf, we are on track to see huge spending cuts, but the question is what program subsidies and tax breaks will survive and what will be slashed. And there is a lobbying frenzy underway with special interest groups doing everything they can to be heard.

(BEGIN VIDEO TAPE)

SYLVESTER: Judy Cato and Edith Powell are part of one of the most powerful loving groups out there. Seniors, they are activist and part of a group called the Strengthen Social Security campaign. They are walking the halls on Capitol Hill to deliver a message to lawmakers.

They say the average Social Security retirement benefit of just over $13,000 is the only thing that keeps some senior afloat.

JUDY CATO, SOCIAL SECURITY RECIPIENT: They are coming out and we are going to let the congressman know that this is not going to happen to them.

We're can't let it. I paid too much money in too many years to have it taken away from me. I'm not going to (inaudible). Like I said, I will sit there before I let that happen.

SYLVESTER: As congressional lawmakers and President Obama try to work out a deal to slash the deficit, just about everything is on the table including Social Security cuts and lower costs of living adjustments. The AARPs running this at.

UNIDENTIFIED MALE: With billions and waste in new polls, how could they look as us?

SYLVESTER: The senior's lobby has plenty of company just now. Various interest groups and stakeholders are ramping up their lobby to make sure their voices are heard.

Howard Marlo with the American League of Lobbyists said he has never seen such intense lobbying before.

HOWARD MARLO,THE AMERICAN LEAGUE OF LOBBYISTS: Everybody has something to say. Obviously the folks in wall street are very critical position in terms of the value of their investment. They are very clearly the average citizen that does. We got people who are nonprofits and people in a variety of organizations. There is not a single American who does not have it in this particular issue.

SYLVESTER: Lobbyists for wheelchairs are fighting to protect homeowner deductions for families. Farmers are lobbying to keep top insurance subsidies and tax unions are pushing to keep Medicaid and Medicare untouched. They have higher guns are defending generous tax breaks and defense contractors are working overtime to protect for the defense program.

UNIDENTIFIED MALE: Spending even more.

SYLVESTER: While various special interest groups fight to be spared cuts, these all conservative activists like the club for Growth are working to shave off even more from the deficit. Behind close doors, the president and the lawmakers worked to hash out the deal whether will there be winners and losers. Judy Cato and Edith Powell say they're optimistic Social Security will be left alone. But if it's not, then they say they'll remember come next year in November.

(END VIDEOTAPE)

SYLVESTER: Now, the seniors lobby has a lot of cloud, but so do the unions in Wall Street and big oil. And they have spent millions in just the last three months on lobbying, and we will took -- take a look more at these numbers tomorrow, Wolf.

BLITZER: Interesting stuff. Thanks very much. Crowded up there, as I said, on Capitol Hill.

Let's get some more on that Republican plan to pass the House of Representatives yesterday, calling for a constitutional amendment mandating a balanced budget. CNN's Joe Johns is working that part of the story for us.

Joe, amending the Constitution, as all of our viewers know, that's a big step.

JOE JOHNS, CNN CORRESPONDENT: Wolf, and changing the Constitution to require -- to require a balanced budget has been tried many times. But the idea never seems to get across the finish line. And frankly, this time it's not looking very promising at all.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): Not spending more than you take in is common sense. Go too far past your credit limit, and you can't charge any more. Most states require balanced budgets, and recent polls show roughly 6 in 10 Americans support a balanced budget amendment. So why not put it in the U.S. Constitution? REP. MIKE PENCE (R), INDIANA: The time has come to put into the national charter a requirement that this Congress, this administration, and future national governments live within the means of the American people.

JOHNS: The House Republicans' plan allows the debt limit to go up only if both houses of Congress agree to the amendment.

REP. JASON CHAFFETZ (R), UTAH: Times are dire. The clock is ticking. We've got to come up with a solution. This is a very real plan. We cut spending in the first year, cap our expenses as a percentage of GDP, and then send to the states a balanced budget. It's not theater. It's a real plan. We're the only people that actually have a plan.

JOHNS: A real plan? It's been called make-believe, fantasy, and the critics say they can make it harder to pay for a war, for example, and choke the government in an emergency. It's not likely to pass the Senate.

REP. ALLEN WEST (R), FLORIDA: What do we have to do for the long-term?

JOHNS: Which would leave Tea Party-backed House freshmen like Florida's Allen West, the would-be change agents from the last election, without the biggest single change they demanded.

(on camera) What will you do, presuming the Senate does shoot it down? Will you vote to increase the debt limit exclusive of that?

WEST: No. You cannot just increase the debt level without some type of spending control measures.

JOHNS (on camera): And what about complaints it could choke the government in an emergency?

WEST: It says that there are emergency situations that we have to take care of. So I don't think you're going to see us all of a sudden, if an enemy attacks us, then we can't defend ourselves.

JOHNS (voice-over): Cynthia Lummis is a second-term congresswoman from Wyoming. She says she's not budging either.

REP. CYNTHIA LUMMIS (R), WYOMING: No.

JOHNS (on camera): Why not?

LUMMIS: Because this is the opportunity to do what the American people sent us here to do, which is get our fiscal house in order.

JOHNS (voice-over): Which means any deal on the debt may have to be done without them. Though over at the White House, even the president himself says he sees balancing the budget as a good thing. Just not the amendment part.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We don't need a constitutional amendment to do that. What we need to do is to do our jobs.

(END VIDEOTAPE)

JOHNS: If Congress ever approved a clean balanced budget amendment and sent it to the states, Mr. Obama would not have a veto. And if polls showing support for the balanced budget amendment are right, Democrats could have a fight, because the public basically thinks it makes sense -- Wolf.

BLITZER: Joe Johns, thanks very much.

Let's get some more now with Republican Congressman Jason Chaffetz. You just saw him in Joe's piece. He's joining us live from Capitol Hill.

Some of your conservative colleagues, Congressman, didn't vote for the legislation yesterday, because they don't want to raise the debt limit. But you're willing under certain circumstances to raise the nation's debt limit and go further into debt. Why?

CHAFFETZ: I didn't get elected to just raise the debt ceiling. That is part of the shared sacrifice if we're going to move forward. But what I did come to get elected -- what I did get elected to come do is change the way we do business. And a balanced budget amendment, I think, is a reasonable thing. Just send it to the states and let them have some input. That is -- that is the heart of what we're really asking here.

BLITZER: Ron Paul is running for president. Michele Bachmann, the congresswoman from Minnesota, running for president. They voted against your legislation. And this is what Michele Bachmann said her explanation -- why she didn't like what you proposed.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: And while I embrace the principals of the cut, cap and balance -- this is a pro- growth direction of those principals -- I also believe that we have to repeal Obama care, because this will be devastating to our economy. But we can't continue to do what we're doing, and that's spend money that we don't have, because it's imperative that we not raise the debt ceiling.

(END VIDEO CLIP)

BLITZER: Why is she wrong?

CHAFFETZ: Well, I wish we could go cold turkey. Right now, we -- we borrow 40 cents out of every dollar that we spend in the federal government. But I think a reasonable plan is to put ourselves on a glide past, but a balanced budget amendment, which probably takes seven to ten years for the states to go through the ratification process.

So I understand and respect Michele Bachmann, Ron Paul and others who want to just do it right now. I just -- I worry that, you know, 40 cents out of every dollar, we just cut that off right now. That's a very difficult thing to do.

BLITZER: All right. So I understand your goal in all of this, but it's not going to pass the Senate and even if it did, the president would veto your cut, cap and balance legislation. There's the question. Are you ready to go along with a compromise, namely what the Gang of Six in the Senate has come up.

CHAFFETZ: The Gang of Six. We've got a gang of 234 members. Bipartisan, we have five Democrats who actually supported cut, cap and balance.

BLITZER: It's not going to pass the Senate.

CHAFFETZ: But you know what? We're going down a path. The clock is ticking. I'm not willing to give up on that. I'm not willing to accept the premise that it won't pass. If we don't try, we will never achieve.

And the president says, "Oh, we need a balanced budget amendment. We just need to do our jobs." But the president has never introduced anything that ever balances. His budget never balances. In fact, it doubles and triples the debt. It was presented to the United States Senate and was defeated 97-0. And with such a short time frame, I think this is a reasonable plan.

BLITZER: But if it doesn't pass the Senate, you've got to do something to prevent the country from going into default. Would you be open to the Gang of Six proposal, which is a bipartisan proposal? The White House seems to like it. Looks like a bunch of Republicans -- Tom Coburn, he's an author of it. Would you be willing to go along with that in order to avert economic disaster?

CHAFFETZ: No. I'm not. If the Senate lines up in punt formation, then we need to blitz that punt. And I think we're going to hear people across America saying block that punt.

No, we came to change the way we do business. And I recognize that the clock is ticking, but we have a plan. Nobody else in this town has an actual plan. The president has never presented an actual plan.

BLITZER: I understand that you have a plan, but it's not going to pass. Let you show you what these numbers...

CHAFFETZ: But they should vote on it.

BLITZER: CBS News -- they'll vote on it, and it will be rejected. And then you're going to have to do something to prevent the country from going into default.

Here's the CBS News poll. Debt ceiling agreement should include -- look at this -- 66 percent say you should include spending cuts with what you want but also tax increases; 28 percent, only spending cuts increasing; 3 percent, only tax increases. At least, according to all these polls, you're in the minority on this stance, because you don't want any tax increases, even on the wealthy, even on Exxon-Mobil or G.E. or anything else. Is that right?

CHAFFETZ: No. I think there should be some tax reform. We said in our budget...

BLITZER: But you would go along with tax increases?

CHAFFETZ: No. What I said is we've got to broaden the base, lower the rates. Going through that process of tax reform as was indicated earlier in your program, is a very long and difficult process.

There are two fundamental things that we're asking for. Harry Reid allowed this vote to come up. Take a vote, just a good clean vote. And No. 2, I think the president needs to answer the question, what is he so afraid of on a balanced budget amendment? What is so unpalatable? You know, there's a moment of clarity when he said he was going to veto it. The president says he was not going to support a balanced budget amendment. That should be a wake-up call to America that he has no interest in actually balancing the budget.

BLITZER: All right. So assuming that your bill doesn't pass the Senate, assuming the Gang of Six isn't done in time, would he be willing, as a stop-gap measure, by August 2 to pass this McConnell- Reid legislation that would at least allow the debt ceiling to go up and avert disaster?

CHAFFETZ: No. We had -- remember earlier, weeks ago, the speaker actually brought up a bill to unilaterally raise the debt ceiling with no spending cuts. And it was defeated overwhelmingly.

What I hope everybody realizes is the House Republicans passed the budget with five Democrats. I mean, and we passed the bill, cut, cap and balance. So it does have some broad support out there. It's over in the Senate. The Senate needs to act. They've been dreadfully slow. They're nowhere. They don't have a plan. We hear press conferences and releases, but we actually have something on paper that has passed the House of Representatives.

The president can avert this -- this disaster by just supporting a balanced budget amendment. That's not an unreasonable ask (ph).

BLITZER: One final question. I know you're giving serious thought to challenging Orrin Hatch, the long-time senator from Utah, for the Republican senatorial nomination. What's wrong with Orrin Hatch?

CHAFFETZ: Well, part of the reason we're in this problem is 26 times, Senator Hatch had the opportunity to vote no on debt ceiling increases. Sixteen times he voted in favor of it; 10 times he allowed it to pass on the unanimous consent. So I have the greatest respect for Senator Hatch. I may or may not do this. But I think it's that 36 years that people are worried about. And it's part of the problem that we're dealing with. These guys didn't deal with the problems when they had a chance.

BLITZER: I take it you hated when Ronald Reagan asked those Republicans in the House and Senate to do when he was president and beg them and Democrats to raise the debt ceiling. Ronald Reagan, you believe, was wrong?

CHAFFETZ: I wish that, at some point on both sides of the aisle, a Congress in the past would say no. We're paying more than $600 million a day in interest, and if interest rates go up, that number is going to go up. Unfortunately, on both sides of the aisle, we didn't have the strength and the principle to say enough is enough, and now we're trying to avert this...

BLITZER: Just to be precise, and I'll leave it, Ronald Reagan, both president Bushes, they were wrong in seeking repeated raises in the debt ceiling. You disagree with all three of those Republican presidents?

CHAFFETZ: Republicans and Democrats, there is nobody exempt from this blame. That's why we find ourselves in the precarious position that we're in right now.

BLITZER: Jason Chaffetz, the Republican congressman from Utah. Thanks very much, Congressman, for coming in.

CHAFFETZ: Thanks, Wolf. Appreciate it.

BLITZER: She's captured the world's attention when she defended her husband Rupert Murdoch from a pie-wielding protester. So who is Wendi Deng Murdoch? The colorful and controversial details of her life, that's coming up next.

(COMMERCIAL BREAK)

BLITZER: The British prime minister, David Cameron, went on the offensive today as he addressed the growing hacking scandal surrounding Rupert Murdoch's "News of the World." Cameron told members of Parliament with hindsight he never would have hired his former communications director Andrew Coulson, who's been arrested in the scandal. And Cameron defended himself against suggestions he had inappropriate conversations with Murdoch executives about the mogul's bid for satellite broadcaster BSkyB.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: I never had one inappropriate conversation. And let me be clear. Let me be clear: I completely -- I completely took myself out of any decision making about this bid. I had no role in it. I had no role in when the announcements were going to be made. That is the point.

(END VIDEO CLIP)

BLITZER: I love the British Parliament. That heated session comes a day after Rupert Murdoch's dramatic appearance before a parliamentary committee. His testimony was interrupted by a protester who hit Murdoch in the face with a shaving cream pie. Murdoch's wife jumped to her husband's defense, hitting the assailant. Here to tell us a little bit more about Wendi Murdoch's life before and after she married the media mogul is CNN's Brian Todd. She's a fascinating woman.

BRIAN TODD, CNN CORRESPONDENT: She is, Wolf. And she took us all by surprise when she was so quick to spring into action to defend her husband. But for those who know her story, Wendi Deng Murdoch's toughness and resilience come as no surprise.

(BEGIN VIDEOTAPE)

TODD (voice-over): When she lunged at the man with the shaving cream pie, Wendi Deng Murdoch did more than fiercely protect her husband. She left some witnesses surprised, millions of Chinese cheering, and those who know her story nodding.

MELINDA LIU, BEIJING BUREAU CHIEF, "NEWSWEEK": She is tough. She has taken the cards that life has dealt her, and she's played them to the hilt.

TODD: And Wendi Deng apparently started playing those cards as a teenager.

WENDI DENG MURDOCH, RUPERT MURDOCH'S WIFE: I grew up in China in a small town, very, very poor.

TODD: The daughter of a factory engineer, she was an average student who excelled in volleyball. According to several published reports, Wendi Deng befriended an American couple in China. They taught her English, sponsored her for a student visa. She lived with them in the U.S. in the late 1980s.

Then, according to press reports, had an affair with the husband. The couple divorced. Then, Wendi Deng married the man.

LIU: She did stay married to the first husband long enough so that she could get a green card. Some -- some people see it as ruthless. Others will see it as something that, you know -- that happens. And there -- I've got to say, there are many, many Chinese women who would trade places with Wendi in a heartbeat. A nano heartbeat.

TODD: Melinda Liu says that, while married to the divorced American, Wendi Deng had an affair with another man. She divorced, married the other man, and that marriage later ended in divorce.

In the mid-1990s, she earned an MBA from Yale, then landed an internship with Rupert Murdoch's StarTV. After winning Murdoch's attention, Wendi Deng, 38 years younger, married the tycoon. They have two young daughters together. She's had various positions in his Asian-based companies and produced a recent movie, "Snow Flower and the Secret Fan."

But through it all, observers say, Wendi Deng Murdoch's main ambition has been to protect the interests of her daughters.

(on camera) What was the situation between her and his children?

SARAH SMITH, ITN REPORTER: There was apparently some tension when the question of Rupert Murdoch's will was address. The company was were supposed to be broken up into four quarters and divided between his four adult children. She made absolutely sure that the two children she's had with Rupert Murdoch have been included in that settlement. That was a battle within the family, one that she fought tenaciously, and one that she won.

(END VIDEOTAPE)

TODD: And with that, Wendi Deng Murdoch secured her daughters a sizable chunk of News Corporation stock. We asked to interview Mrs. Murdoch for this story. Her representative declined. We also asked her response to the various accounts of her personal life and the conflicts with the Murdoch children. We have not heard back to those inquiries, Wolf.

BLITZER: You know, she does have this MBA from Yale. Any possibility she could emerge out of this as the leader of this media empire?

TODD: Most observers say that's probably not likely, that she's got little or no ambition to run this company. She does have roles in it. She has interests in it, but it's still seen as James Murdoch's company to run when Rupert Murdoch leaves the scene. And there have also been, as we've reported, tensions between her and Rupert Murdoch's grown children. If she tries to assume some kind of role later on, she's going to have a fight on it.

BLITZER: He's 80, she's 44 right now, right?

TODD: She's about 42.

BLITZER: Forty-two. All right. Thanks very much, Brian, for that.

Should Michele Bachmann's health be an issue in the race for president? Jack Cafferty is next with "The Cafferty File."

And how many ways can you say "hot?" Jeanne Moos takes on the heat.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN ANCHOR: The question this hour, Wolf, is: "Should Michele Bachmann's health be an issue in the race for president?"

Phil -- Paul, rather, writes from Texas, "Although I'm not a huge fan of Bachmann's, I don't see a real issue with her health. All we need to do is look back at JFK and FDR. They both had major health problems, and most of us really didn't know any of the details until after they had both left us. Isn't that what a vice president's for, to replace the president when and while too ill to give 100 percent to the position?"

Lisa in Connecticut writes, "Her history of treatment for migraines is simply a sign of a slow news day. This will be unlikely to affect the campaign. However, her candidacy and blunders give me a headache."

Gary in Minnesota writes, "Bachmann's migraines are not an issue. Her mental stability is the issue. I'm from Minneapolis, Minnesota. Bachmann only sounds cogent in very short doses. Beyond that, as you will all see, she's quite off her rocker. I hope she's wildly successful within her party. It will be great entertainment and an insurance policy for President Obama."

Mike writes, "Of course, and she says that it's from stress. What do you think the commander in chief's job would be? Maybe her husband could pray the headaches away."

David in Florida writes, "These things can be so severe as to be incapacitating for hours at a time. I used to have to take my wife to the hospital for treatment of migraines or leave work once or twice a month to stay with her because of her migraine headaches."

J.K. writes from Minnesota, "All candidates for the presidency need to disclose any health issues they have. It doesn't matter who it is. They're asking the voters to trust them. The voters have the right to know if they're physically fit to perform the job that obviously ages every person who holds it."

Brian in Illinois writes, "No, but it will be an issue. I'm a Democrat, so I can't believe I'm defending Michele Bachmann. Her health will be an issue. The reality is we're a vain country, Jack. We don't like ugly presidents; we don't like fat presidents; we don't like old presidents; and we don't like sick presidents. It's an unfortunate truth."

And finally M.D. writes, "Not tonight, U.S. taxpayers."

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

BLITZER: You'll be interested to know they just wrapped up the meeting at the White House, the president, the Republican leadership. We'll see what emerges. Stay with CNN throughout the night to find out, and I know you and our viewers will, Jack. Thank you.

For our North American viewers, John King is going to have much more at the top of the hour. Also the secretary of state, Hillary Clinton, delivers a message to India that China may not like. That's coming up on "JOHN KING USA" right at the top of the hour.

And just ahead, a sizzling report on a heat wave that's got millions of Americans sweltering.

(COMMERCIAL BREAK) BLITZER: Nearly half the U.S. population is suffering through a stifling heat wave, and if the word "stifling" isn't descriptive enough for you, there are plenty of other words to drive home the point.

Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: You know it's really, really hot when the weather forecast reads like a romance novel.

UNIDENTIFIED FEMALE: What a scorcher.

DIANE SAWYER, ABC NEWS ANCHOR: Sweltering.

UNIDENTIFIED MALE: Flirting with 100.

REGIS PHILBIN, CO-HOST, ABC'S "LIVE WITH REGIS & KELLY": You love the hot weather.

KELLY RIPA, CO-HOST, ABC'S "LIVE WITH REGIS & KELLY": I love it.

PHILBIN: Because you are hot.

MOOS: But sometimes the word "hot" just doesn't generate enough heat.

UNIDENTIFIED FEMALE: Pressure cooker.

MOOS: Especially if you're a weatherman looking for new ways to say the same old thing.

UNIDENTIFIED MALE: We really got some blow torching heat coming for tomorrow, and tomorrow we are back on the burner. Not the back burner. We're back on the burner. Oh, the wheels come off the wagon.

MOOS: While we're all gasping for air like fish out of water, reporters are taking the temperature on the grass...

UNIDENTIFIED MALE: A hundred and 55 degrees.

MOOS: ... in the New York subway...

UNIDENTIFIED MALE: The temperature reads 100 degrees.

MOOS: ... on a swing?

UNIDENTIFIED MALE: A hundred and thirty-one degrees.

MOOS (on camera): We're talking heat so oppressive that sometimes it's hard to spit out the words.

UNIDENTIFIED MALE: The heat indices, the heat and humidity combined... MOOS (voice-over): The current heat wave has been christened with a four-letter word, meaning an area of high pressure that's compressing hot, moist air beneath it.

ANN CURRY, CO-HOST, NBC'S "THE TODAY SHOW": We're going to return now to that heat dome.

UNIDENTIFIED FEMALE: And when we say heat dome.

UNIDENTIFIED MALE: This whole hot dome.

UNIDENTIFIED MALE: This big dome.

MOOS: All this talk of domes -- conjures up visions of heat- radiating UFOs.

UNIDENTIFIED FEMALE: A giant heat dome surrounded by a ring of fire.

JOHNNY CASH, SINGER (singing): I fell into a burning ring of fire.

MOOS: Put some water on it! The heat wave is alive.

UNIDENTIFIED MALE: Shows the heat gobbling up most of the country like a virus.

MOOS (on camera): But if you want to see the newscasters most appropriately dressed for the heat wave...

UNIDENTIFIED FEMALE: Welcome to "Naked News in Brief."

MOOS (voice-over): And in brief even they are covering...

UNIDENTIFIED FEMALE: What officials call a heat dome.

MOOS: But at least the heat dome left Al Roker feeling hot.

UNIDENTIFIED MALE: When will it end? Al has some answers.

MOOS: It's not every day Al gets labeled to hot to handle.

The heat wave brings out a wave of weather chefs.

UNIDENTIFIED MALE: We put this egg in this pan out under the sun for about an hour. This is the result: it's fried right to the pan.

MOOS: But the Julia Child of weather reporting is ABC's Matt Gutman, cooking steaks.

MATT GUTMAN, ABC CORRESPONDENT: We're going to see if we can cook it on the dashboard of this car. Dash board reads 151 degrees.

(voice-over) We came back about two hours later.

(on camera) It's probably about medium well. MOOS: Well done, Matt. Now let's see you eat it.

CASH (singing): And it burns, burns, burns.

MOOS: Jeanne Moos, CNN, New York.

CASH (singing): The ring of fire.

(END VIDEOTAPE)

BLITZER: I love Jeanne Moos.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. For our international viewers, "WORLD REPORT" is next. In North America, "JOHN KING USA" starts right now.