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Hurricane Irene's Aftermath; Gadhafi Relatives Leave Libya

Aired August 29, 2011 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: And you're in THE SITUATION ROOM.

Happening now: deadly flooding, the worst in decades, ravaging large portions of a small state. Vermont is reeling in the aftermath of Hurricane Irene.

Also, relatives of Moammar Gadhafi flee Libya. A wife and some of his children are now said to be in Algeria, while another son is reported killed in battle.

And new signs of a shakeup in the Republican race for the White House, with Texas Governor Rick Perry now soaring to a double-digit lead over his closest rivals.

We want to welcome our viewers in the United States and around the world. Breaking news and political headlines all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

This storm has gone, but the effects of Hurricane Irene are lingering, especially in Vermont. You're looking at video of the worst flooding this small rural state has seen since 1927. The governor, Peter Shumlin says, and I'm quoting him now, "It's just devastating."

Look at the water pouring over one of Vermont's iconic covered bridges. He says whole communities are inundated, along with hundreds of roads and countless acres of crops. Across the state, torrents of water have been surging past homes and businesses and posing a deadly threat.

Three deaths confirmed in Vermont. The governor says he's certain that number will climb. President Obama, meanwhile, is promising help to storm victims there and all along the East Coast.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We're continuing to deal with the impact and the aftermath of Hurricane Irene. As I said yesterday, we're going to make sure folks have all the support they need as they begin to assess and repair the damage left by the storm.

And that's going to continue in the days ahead. It's going to take time to recover from a storm of this magnitude. The effects are still being felt across much of the country, including in New England and states like Vermont, where there's been an enormous amount of flooding.

So our response continues, but I'm going to make sure that FEMA and other agencies are doing everything in their power to help people on the ground.

(END VIDEO CLIP)

BLITZER: CNN's Amber Lyon is in Brattleboro, Vermont. She's joining us now live.

Set the scene once again for us, Amber. I know it's a horrible situation in Vermont. The governor tells me it's probably the worst flooding ever in that state.

AMBER LYON, CNN CORRESPONDENT: Yes, that's right, Wolf.

And the governor is also saying that, although the weather out here right now is beautiful, we're not seeing any rain, they are conducting active search-and-rescues for people they believe to have fallen into rivers that are continuing to crest.

Also, they say there still is active flooding going on in low- lying areas, and here in this town, I think something that upset the residents the most is the loss of historic buildings, bridges, roads, including this one. Take a look at this. This is an artist's studio. This building is about 150 years old. They had yoga studios in there. People would do carpentry and also a medication center.

And look at the yellow tape and the boarded-up windows. This building has been condemned. And I'm going to show you why this is something happening in a lot of areas of this state. Look over here on this edge. You can see where this brook -- this is a brook normally. This is where kids play. It's about four times wider than usual, and yesterday it became a raging river and tore through here and then knocked out the bottom half of this building.

The owner of the building had a woodworking shop under there, but as of now residents are just kind of sitting here watching in amazement waiting for this to possibly collapse. Something else that people are worried about is how people are going to -- if people are going to enter these waters and how they are going to react to the current flooding situation.

It definitely stinks out here, Wolf. There's a sewer line that busted about a mile north of here, and you can smell that, the remnants of that, in this water, as well as about two blocks from here, an area of the town is cordoned off because residents were smelling what they say smelled like gas from propane tanks that were taken away by the waters.

So the governor says he's urging people to stay home, to not go out and sightsee and try to stay in your homes, you know, unless it's an absolute emergency, especially on these roads, because some of the roads may appear to be safe, but the underneath the ground was washed away by the rivers, and they are just not strong enough to hold a car, Wolf. BLITZER: And you have been speaking to average Vermonters. What are they saying to you about how long this might last, this situation, like this?

LYON: They are in shock now, Wolf. They say Vermont is a mountain state. It's north. They don't get hit by tropical storms, and they are really nervous because so many roads are blown out and flooded now that they are not going to have electricity and running water for what could be weeks from now.

We have talked to the residents just right across the street from here. They don't have electric. They don't have running water, and they are worried as to when that's going to be turned back on, Wolf.

BLITZER: Are they saying, Amber, they were adequately prepared and adequately warned by authorities of what was about to happen?

LYON: Well, they were. And we spoke with a man who said -- we haven't heard anyone said they didn't feel like they weren't warned. But we spoke with a member of the search-and-rescue team here.

He said yesterday he had to go out and rescue two dozen people who didn't listen to the warnings, didn't listen to the evacuation orders and chose to stay in their homes. And although these people weren't out driving on the streets or walking, the floodwaters came up to their homes and they had to be rescued, literally plucked out of their living rooms or from the second levels of their homes because the water was pouring in so quickly, Wolf.

BLITZER: Amber Lyon on the scene for us. Amber, thanks very much.

Let's stay in Vermont right now. The unfolding disaster in that state is huge.

We're joined on the phone by the state's independent Senator Bernie Sanders. He's in the capital of Montpelier.

Senator, thanks very much.

First of all, our condolences to you, to all the people in Vermont, for the fatalities.

Have you ever seen anything like this in your state?

SEN. BERNIE SANDERS (I), VERMONT: No, we haven't. I'm not an historian, Wolf, but there are some who believe that this is the worst natural disaster to hit the state since the 1927 floods.

Three people are dead. One person is missing. We're talking about hundreds of road closures. You're talking about the rail lines being shut down, the state office complex being shut down. Many, many, many hundreds of homes, some of which I visited today, have been flooded. The state complex, our office complex, where most state workers are located, is now nonfunctional, so we have got some serious problems. BLITZER: Were the people of Vermont adequately warned about this disaster?

SANDERS: Yes, I think they were.

The problem is what could not have been anticipated is that six to eight inches of rain fell in a very short period of time, and brooks suddenly became, you know, raging rivers. And that caused the damage, but I think the state did an excellent job in telling people to be aware of all possibilities.

BLITZER: What about the federal government? How are they handling Vermont?

SANDERS: Very well so far.

The FEMA people are here. They are coordinating activities with the state emergency people. I have just been on the phone with the secretary of transportation, who promises us help. My understanding is the governor has been in touch with the president. So we expect strong cooperation between the feds and Vermont.

You know, we are a small state. And while nobody at this point can assess the damage, you're talking tens and tens and tens of millions of dollars of damage, if not more than that. So for a small state, this is going to be not only a terrible human burden in the sense of people.

I was just in an area of Waterbury, Vermont, where, you know, all of the basements were flooded, their first floors were flooded. People can't live in them. Electricity is out. Businesses are shut down. It is going to have an economic impact, people without electricity, tens of thousands of homes without electricity. So this is -- you know, for this small state that does not get hit by these type of things very often, this is pretty devastating.

BLITZER: Yes. Who would have thought a tropical storm, as Amber Lyon said, could devastate Vermont, of all places? Normally, you think about North Carolina, Florida, Louisiana...

SANDERS: Right.

BLITZER: ... but Vermont, not necessarily.

One final question, Senator, before I let you go. It's a political question. What do you say to Republican Congressman Ron Paul, who is a Republican presidential candidate, a libertarian, who says, you know what, the federal government should get out of the FEMA business, it has no responsibility in dealing with issues like that?

SANDERS: Well, I have known Ron Paul for many years. I like Ron Paul, but on these issues, he's completely out to lunch.

And I would suggest to Ron to come to Vermont, talk to people who are really hurting who need help. We are a nation. We're not 50 individual states. And when there were terrible disasters that hit Louisiana or earthquakes that hit other parts of our country or tornadoes that hit the Midwest, everybody in this country understands that, as Americans, we stand together.

So that's what America is about, and Vermont stands with other states when they are in trouble, and other states will stand with us. That's what a nation -- that's what being a nation is about, Wolf.

BLITZER: Good luck to all the people in Vermont, Senator Sanders.

SANDERS: Thank you.

BLITZER: We appreciate your joining us.

SANDERS: Thank you very much. Take care.

BLITZER: Thank you.

BLITZER: One of the biggest challenges ahead of Hurricane Irene will be moving critically ill hospital patients out of the potential flood zones, but now some patients and hospital officials are finding out that evacuation may be easier than opening back up.

Let's check in with our senior medical correspondent, Elizabeth Cohen. She's in New York watching this story unfold for us.

What's going on here, especially those folks that have life- threatening conditions and they are dealing with a hurricane disaster on top of all of that?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Wolf, we have been in contact with the five hospitals that had to evacuate patients over the weekend. We're told that they are now doing just fine.

(BEGIN VIDEOTAPE)

COHEN (voice-over): On Friday night, they shipped the patients out. On Monday morning, they brought them back in to five hospitals in New York City.

Eileen Findler's brother was being treated for brain cancer when he got the news he had to leave.

EILEEN FINDLER, SISTER OF PATIENT: It just feels like, what else can you throw into this? It's bad enough having to live with this diagnosis and try to get the medical help. And then, you know, it's just every everything that you try to do, you just keep getting slapped back down.

COHEN: At New York University Langone Medical Center, the hospital was almost completely empty over the weekend.

(on camera): On a busy night, there are usually about 50 people in this emergency room. And I can tell you it's kind of eerie in here. There's no patients. You don't hear doctors, no nurses, no nothing. They are completely shut down. But the hospital did keep six patients who were so critically ill that moving them might have killed them. Elaine Rowinksi and seven other nurses stayed to take care of them.

ELAINE ROWINKSI, NURSE: It went seamlessly. We were able to provide all the services that we would normally provide for our patients on any day.

COHEN: Rowinksi says staff trains for disasters year-round and knows what to do.

ROWINKSI: We had a walkie-talkie system, so if the telephones did go out, that we could get the command center.

COHEN: During the storm, NYU did suffer a bit of water damage and parts of the hospital lost power from Con Edison. That's two reasons why opening back up again is harder than evacuating. It will take days to clean the hospital and bring the patients back in.

(END VIDEOTAPE)

BLITZER: Do the hospitals in New York that evacuated these critically ill patients believe, Elizabeth, they made the right decision?

COHEN: You know what, Wolf? I think they are all over the map on this. One hospital executive said to me Mayor Bloomberg made the right decision, better safe than sorry, good thing we evacuated, even though we probably didn't really need to, but of course who knew at the time?

And a nursing home executive said -- told us that he thought -- basically he was upset that he had to get his patients out of his nursing home. He said the nursing home was perfectly fine. Some of the places where he sent his patients, those places ended up taking flooding, took flooding. So he was very upset that he had to send his patients away.

BLITZER: Yes. Obviously, everybody, with hindsight, we're always a lot smarter than we are before the fact.

All right, thanks very much, Elizabeth Cohen doing good reporting for us.

At the height of the emergency, one police department fell victim to Irene's floodwaters forcing, officers to evacuate themselves.

Also, a dramatic new development in Libya, as relatives of Moammar Gadhafi flee the country, and a dramatic discovery there as well, the convicted Lockerbie bomber lying near death in the war-torn capital. We have a CNN exclusive.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Relatives of Moammar Gadhafi are now fleeing Libya. His wife, a daughter, two sons, some grandchildren are now in neighboring Algeria. That's the word from diplomats in Algeria. Another son reportedly killed in battle, according to a senior rebel commander.

Our senior international correspondent, Nic Robertson, is in Tripoli and he is joining us now live.

Nic, other dramatic developments that you're picking up exclusively?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Indeed, Wolf.

And, first of all, if we look at this killing of Khamis, that the rebels say that they have killed him, I think we need take that with a pinch of salt, be very careful. We know that a week ago the rebels said they had captured two of Gadhafi's sons. It turned out not to be true. The rebels now admit they were lying, part of a psyops campaign to try and sort of put fear into Gadhafi loyalists to get them to put down their weapons.

They have offered no evidence so far of the killing of Khamis. So I think we need to be very careful about that, that particular claim. It could be part of their ongoing sort of psychological warfare operations against Gadhafi loyalists.

Gadhafi's family fleeing, the National Transitional Council has told Algeria -- and Algeria still sees Moammar Gadhafi as the leader here. The National Transitional Council have said that they want Moammar Gadhafi's family back, and if they don't get them back to put them on trial, they will see this by Algeria as an act of aggression, they say, against the will of the people of Libya.

So the National Transitional Council taking this very, very seriously with their neighbor, Algeria, here. They want Gadhafi's family back, Wolf.

BLITZER: And, Nic, you have a worldwide exclusive report that you broke here on CNN involving the convicted Lockerbie bomber who was received as a hero when Scotland and Britain sent him back to Libya. Tell us what you discovered, how you discovered it, because you have done some amazing reporting for us.

ROBERTSON: Yes, Wolf, this is one guy who might have some of the best kept secrets on who was actually responsible in the leadership here for authorizing the downing of Pan Am Flight 103 back in 1988.

We knew that. We knew that he might speak out after Gadhafi had left the city, so we went to try and find him, and we found him in a neighborhood right here in Tripoli, Wolf.

(BEGIN VIDEOTAPE)

ROBERTSON: We found Abdel Basset Ali al-Megrahi's villa in an upmarket part of town, at least six security cameras and floodlights outside.

(on camera): This is Megrahi's house. This is where he's been living for the last couple of years. We're going to knock on the door, see if we can get any answer.

(KNOCKING)

ROBERTSON: Hello?

(voice-over): For 15 minutes or so, nothing.

(on camera): I'm not sure if they have heard me, so let's try the last-ditch means, which is just shout over the wall.

Hello? Hello, hello.

(voice-over): Then, all of a sudden, someone comes. Nothing prepares me for what I see, Megrahi apparently in a coma, his aging mother at his side.

KHALED AL-MEGRAHI, SON: We just give him oxygen. And nobody give us the advice. And some food by injection. If you see, his body is weak.

ROBERTSON: He had been expected to die almost two years ago, but convicted Pan Am 103 bomber, Abdel Basset al-Megrahi, lives, only just.

This wasn't the way he looked when he released from a Scottish jail two years ago. He came home to a hero's welcome, freed on compassionate grounds because doctors said he'd be dead in three months. Almost immediately he began renovating this palatial house, money no object.

(on camera): It doesn't take long walking around this building before you begin to realize, and looking at the marble here on these expensive fittings, to realize that it appears Megrahi was being paid off handsomely for all those years he spent in jail.

(voice-over): In the two decades since the bomb exploded on board Pan Am flight 103 over Lockerbie, killing 270 passengers, crew and townspeople, it seemed the secrets of the attack would die with the bombers.

Megrahi always maintained he was innocent. Just a month ago in a rare public sighting, Moammar Gadhafi had him literally wheeled out for a pro-government rally. I'm seeing him now for the first time in two years. He appears to be just a shell of the man he was, far sicker than he appeared before.

(on camera): Has he been able to see a doctor?

AL-MEGRAHI: No. There is no doctor. And there is nobody to ask, and we don't have any phone line to call anybody.

ROBERTSON: What's his situation right now? AL-MEGRAHI: He stop eating, and he sometimes is come in coma.

ROBERTSON: Coma. He goes unconscious?

AL-MEGRAHI: Yes. We just sit next to him.

ROBERTSON (voice-over): All that's keeping him alive, they say, oxygen and a fluids drip. I ask about demands he return to jail in Scotland.

AL-MEGRAHI: My dad, he's still in the house. And if you send him to Scotland, he will die, by the way, here or there.

ROBERTSON: Do you know how long he has left?

AL-MEGRAHI: Nobody can know how long he will stay alive. Nobody know.

ROBERTSON (voice-over): It seems I have arrived too late. He's apparently in no state to talk. Whatever secrets he has may soon be gone.

(END VIDEOTAPE)

ROBERTSON: Now, some of the former government officials here might also have details and know exactly who planned and who authorized the bombing of Pan Am 103, but if they were to speak out now, they might implicate themselves. Megrahi really seems to have nothing to lose in pointing the finger of blame at others, Wolf.

BLITZER: And when you saw him there, he looks like he's obviously near death. Some have raised questions whether this was staged or anything like that. Did you get the sense that it was possible that they staged this for the TV cameras? What was your impression, Nic?

ROBERTSON: You know, Wolf, when you walk into a situation like that, you have always got to be aware of that, and that was the forefront of my mind.

And although I was sort of filming and talking to the family and I was in the room with him for perhaps six or seven minutes, I -- and I was checking for that, you can't really do what a doctor would do, which is feel a pulse and take a temperature and get a really close look.

But the way the family acted, they were very tense, nervous. There was a real air of sadness. There was a stillness in the room. He didn't move. I have been back and checked the videotape. His eyes didn't flutter. They could have staged this. It could have been very carefully done.

But when I looked at how thin his arms were, how paper-thin his skin seemed to be, he does seem to be a man that's very sick. The sort of caveat there, if you will, is that he hasn't had a treatment from a doctor for perhaps more than a week, about 10 days, that he isn't eating food. So perhaps with proper medical care, he could revive a little bit, but he seems to be a man who is on -- we don't know how quickly, but he does seem to be a man that is going downhill, Wolf.

BLITZER: And the acting Libyan justice minister, I take it, is insisting that even if he were healthy, he would not be extradited to Scotland or England or anyplace else; is that right?

ROBERTSON: That's right.

And the logic behind that, apart from the fact that this is a new government and they're still trying to find their way forward, because afterwards somebody else from the National Transitional Council said, well, maybe a new government would make a different decision, we will see further down the line, but right now the National Transition Council needs to win the support of Megrahi's tribe.

It's a big, influential tribe. That's why Gadhafi went to so much trouble to get Megrahi back to Libya, and right now the National Transitional Council wants his tribe, Megrahi's tribe, on board to form a new government. And if they were to say, hey, we're going to send him back to Scotland to finish his jail sentence, you could forget getting Megrahi's tribe on board. So there's something political about this as well, Wolf.

BLITZER: Nic Robertson doing outstanding reporting for us. Thanks, Nic, very, very much.

Elsewhere in the region, in Israel, seven people have been injured in a stabbing spree. It happened early this morning in Tel Aviv. Israeli police say a Palestinian man stole a taxi, crashed it into a police checkpoint near a popular nightclub.

He then jumped out of the vehicle with a knife in his hand and started stabbing people. Four officers and three passersby were wounded before he was captured.

New poll numbers show a clear shift in the Republican presidential race, as one candidate surges to a double-digit lead.

And President Obama's uncle under arrest in Massachusetts. We're going to tell you what he's accused of doing.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Rick Perry is leading the pack of Republican presidential hopefuls. Our brand-new CNN/ORC poll shows 32 percent of Republicans surveyed want the Texas governor to be their party's nominee next year. That's a double-digit lead over former Massachusetts Governor Mitt Romney, who comes in with 18 percent. Congresswoman Michele Bachmann gets 12 percent.

Perry's style is clearly appealing to many Republicans, but it's not without controversy. CNN's Ed Lavandera has more.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I realize that the United States of America...

ED LAVANDERA, CNN CORRESPONDENT: Rick Perry is described as a brash, calculating politician, but not above ending a satellite interview with a Houston TV station a few years ago with this bomb.

PERRY: Adios, mofo.

LAVANDERA: "Adios, mofo" became an instant snapshot. It inspired T-shirts and coffee mugs.

Ray Sullivan has spent more than 10 years working with the governor. He says Perry is a fun small-town guy. What you see is what you get.

RAY SULLIVAN, PERRY COMMUNICATIONS DIRECTOR: The American people don't want robots. They don't want sound bites. They want folks who speak from the heart. And that's what Rick Perry has always done.

LAVANDERA: But critics say behind closed doors, the governor can be vindictive and divisive.

MIKE VILLARREAL (D), TEXAS STATE REPRESENTATIVE: He's smart. He's aggressive. He's focused on winning elections.

LAVANDERA: Mike Villarreal is a graduate of Texas A&M, just like the governor and was elected as a Democratic state representative at the same time Perry became governor. He says Perry rarely gets involved in the nitty-gritty details of public policy.

VILLARREAL: He delegates out responsibility to governing. Governing decisions are largely driven by political polls, and -- and he keeps his sights set on winning the next election. And -- and so I -- I wouldn't consider him dumb on governance. I just think that's not his priority.

SULLIVAN: Perry is a guy who sets a clear agenda, rolls up his sleeves, and gets to work taking his message to the people.

LAVANDERA (on camera): During Rick Perry's tenure as governor, there'd been a long trail of news stories alleging that major campaign donors have received preferential treatment from straight agencies, that they've been awarded lucrative state contracts or they've been appointed to government positions.

Critics say the governor has created a pay-to-play political culture in Texas.

Is the governor guilty of that?

SULLIVAN: Rick Perry is the most scrutinized, analyzed, probed elected official probably in Texas history. He's been very transparent.

LAVANDERA (voice-over): In last year's Texas governor's race, Perry's opponent called him Part-time Perry. The attack came after the governor's official schedule suggested several dozen days without state business, and a working week averaging just seven hours in the first half of 2010.

Perry says he works around the clock.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I've been the governor for ten years, and if there's -- if they've made anybody that can outwork me yet, please introduce me to him or her.

LAVANDERA: Even his staunchest political adversaries offer this warning: Rick Perry doesn't lose elections and should never be underestimated.

Ed Lavandera, CNN, Dallas.

(END VIDEOTAPE)

BLITZER: Let's dig deep with our chief political analyst, Gloria Borger. What's driving Perry's rise, Gloria?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Wolf, I think this gives you a sense of how unsettled the Republican field really is. He just jumped into the race a couple of weeks ago. Already he's at the top of the polls.

But he has a wide appeal, and that is he speaks to Tea Party voters. He speaks to fiscal conservatives, and he speaks to the all- important evangelical voters.

There was an analysis done by "The National Journal" based on 2008 exit polls. Let's take a look at that. And it shows that evangelical Christians are 44 percent of all Republican primary voters. They don't often get their candidates to the nomination -- look at Huckabee last time around -- but they can be a great impediment if they don't like you. And if you look at Perry's support among evangelical voters, it's twice what Mitt Romney has, so that's a problem.

BLITZER: But that's not -- that's not Perry's only appeal.

BORGER: No, it isn't. He does speak to the fiscal conservatives. He does speak to Tea Partiers. He has a job growth story to tell in the state of Texas.

And also, Wolf -- and this can't be underestimated -- he sounds a little different from the other candidates. He's somebody who says, "I speak the truth." Of course, as we've learned, that can get him in some trouble, as when he called Ben Bernanke, the chairman of the Fed, treasonous. There was some backlash amongst Republicans, so he's got to watch that as he -- as he continues this race, but I do think he's had a way of differentiating himself in this field so far.

BLITZER: And it's fair to say in the early states...

BORGER: Absolutely.

BLITZER: ... Iowa, New Hampshire, South Carolina, evangelical voters are key.

BORGER: Well, Iowa and South Carolina in particular.

Let's take a look at our exit polls from 2008. Evangelicals or born-again Christians were 60 percent of Iowa caucus-goers and South Carolina primary voters.

But -- and this is a big but -- in the state of New Hampshire they were only 23 percent of the New Hampshire voters. And that's, of course, one reason why someone like John McCain, who is not particularly appealing to evangelicals, won in the state of New Hampshire.

BLITZER: What I hear you saying is that maybe Perry could win Iowa, not necessarily win New Hampshire.

BORGER: Right.

BLITZER: But go on and win South Carolina.

BORGER: So you have Mitt Romney doing very well in New Hampshire. You could have Perry doing very well in South Carolina, and Iowa. And by the way, that's Michele Bachmann's big problem right now, because she and Perry are competing for the same voters.

BLITZER: You're filling in for John King at the top of the hour.

BORGER: I am.

BLITZER: For our North American viewers. What can we anticipate?

BORGER: Well, of course, as you've been talking about all day today, Wolf, we've been talk -- we will talk about the developments in Libya.

It's also the sixth anniversary of Hurricane Katrina. We will talk about the lessons learned from Hurricane Katrina as it -- and Hurricane Irene, and we'll see the differences in the way the federal government and the state governments reacted.

BLITZER: Important lessons to be learned, indeed.

BORGER: Yes, absolutely.

BLITZER: Look forward to seeing it, Gloria. Thanks, welcome back.

BORGER: Thank you.

BLITZER: At the White House, the focus is on the economy, as it should be ahead of a major new jobs initiative in the coming week, we're told, maybe next week. Today the president nominated Princeton University economics professor Alan Krueger to head the Council of Economic Advisers.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Alan brings a wealth of experience to the job. He's one of the nation's leading economists. For more than two decades he's studied and developed economic policy both inside and outside of government.

In the first two years of this administration, as we were dealing with the effects of a complex and fast-moving financial crisis, a crisis that threatened a second Great Depression, Alan's counsel as chief economist at the Treasury Department proved invaluable.

(END VIDEO CLIP)

BLITZER: All right. Let's bring in our chief White House correspondent, Jessica Yellin.

Jessica, want to talk about Alan Krueger in a moment. But let me talk about what the president might say in his major speech. I think it's supposed to come next week, though I don't have an exact date. Maybe you do already. Are you getting new substance on what he's going to say?

JESSICA YELLIN, CNN CORRESPONDENT: Wolf, they are very tight -- they're holding the details tight hold, but they are setting expectations very high. They have confirmed it will be next week and suggested that they actually haven't set a date themselves yet, which is why we don't know it.

Today in the briefing, Jay Carney, the press secretary here, Wolf, said that they expect that this jobs program will have substantial measurable impact on both the economy and on the unemployment picture if Congress chooses to pass it in completion. The president is calling for quick action on this plan, once it's introduced. Again, very high expectations, and Carney himself says that this is a plan that Republicans should be able to get behind.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It's not a political package, because it is actually the precisely opposite of it. We're talking about September of 2011, more than a year before the next election. This package will be focused precisely on job creation and economic growth. It will be made up of components that should have, based on historical experience, bipartisan support.

(END VIDEO CLIP)

YELLIN: But, Wolf, so far there is no evidence that the White House has consulted with Republicans on Capitol Hill about what is in the package, even though there are expectations it's targeted tax cuts, investment and infrastructure, et cetera. And the Republicans I've spoken with are already voicing skepticism that this package will be far-reaching enough to have any meaningful impact on the long-term problems that are causing our unemployment, Wolf.

BLITZER: What do we know about this new chairman of the Council of Economic advisers, Professor Alan Krueger, who's replacing Austan Goolsbee.

YELLIN: Well, first of all, he is not going to be involved in this job plan, because while he's going through the nomination process he cannot be.

But he is an expert in labor issues, these very kinds of topics that affect unemployment, and he's a very familiar face around here. He served in the Treasury Department under Tim Geithner and also in the Clinton administration.

So he joins a team of folks, senior advisers on his economic team, who all worked together in the past, in the Clinton administration, and know each other very well and will rejoin one another to serve President Obama here working ahead to solve this jobs problem for President Obama in the coming year.

BLITZER: We'll look forward to the president's speech next week and the substance of it. It's going to be a critically important speech for this president. Jessica thanks very, very much.

Thousands of people flee Hurricane Irene's floodwaters, including police, in one New Jersey town. The chief there recounts how they had to scramble to escape at the height of the emergency.

Plus, President Obama's uncle arrested. We're learning new details.

(COMMERCIAL BREAK)

BLITZER: No one is immune to the flooding that Hurricane Irene has caused, especially in the northeast. Take a look at this military truck that appears to be floating down the street in Manville, New Jersey, but the soldiers are still inside. They had to scramble to safety.

Police faced a similar situation not far away in the town of Cranford. CNN's Jeanne Meserve is there. She's joining us now live.

Jeanne, what happened there?

JEANNE MESERVE, CNN CORRESPONDENT: Well, Wolf, I'm at a residential area of Cranford right now. It probably doesn't look too bad to you now, but we can show you a photograph of what it looked like almost exactly 24 hours ago.

The waters here have receded, as they have many places, but thousands of homes and thousands of businesses have been impacted, and they aren't the only ones. (BEGIN VIDEOTAPE)

MESERVE (voice-over): This soggy mess was the home of the Cranford, New Jersey, Police Department. Not now.

CHIEF ERIC MASON, CRANFORD POLICE DEPARTMENT: There was like a river running through here during the height of the storm.

MESERVE: Early Sunday morning the rain spawned by Irene sent the nearby Rahway River spilling far beyond its banks. When the police department realized it was threatened, officers scrambled to remove records and equipment.

MASON: But we did not have enough time. The water came up so quickly and came into the back of the building so quickly that we had to evacuate ourselves

MESERVE: The town was in mid-emergency with widespread flooding and downed trees. With the police department communications equipment destroyed, 911 calls had to be rerouted to the fire department and a neighboring town.

The police department scrambled to set up shop in a mobile command center provided by the county. In about two hours, it was back in business, though some of the township's 50 or so officers were among those whose homes had been flooded.

MASON: Very resilient. All of our officers have been out here since the -- the hurricane arrived in our community. They're all energized and working very hard for the community.

MESERVE: But the community will pay a price. The chief estimates it will take more than $1 million to clean up the mess Irene left in his department's headquarters.

(END VIDEOTAPE)

MESERVE: And Wolf, this is the scene throughout this part of New Jersey. You see people sifting through their belongings that got wet. Here they're trying to dry out some family photographs. The overall cost in terms of money, in terms of memories, absolutely incalculable.

Wolf, back to you.

BLITZER: A lot of heartbreaking stories all over the northeast, the mid-Atlantic states. Thanks very much, Jeanne Meserve.

President Obama's uncle now being held without bail after being arrested in Massachusetts. We're going to tell you what's going on.

And a new study shows that if you're on a cholesterol-reducing drug, there could -- repeat could -- be unintended effects, and those side effects could help you live longer. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: An Obama administration official is confirming that the president's uncle was arrested last week for allegedly driving under the influence. Onyango Obama is the half brother of the president's father. A police official in Framingham, Massachusetts, says he was arrested Wednesday after allegedly failing several field sobriety tests. He's reportedly being held without bail at the request of the Immigration and Customs Enforcement Agency.

Russia is postponing the launch of a manned spacecraft, and that may have serious implications for the space station. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM.

What's going on here, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, plans to use a Russian spacecraft to carry astronauts to the International Space Station in late September are being pushed back for about a month. The postponement comes after an accident caused an unmanned Russian cargo craft to crash shortly after launch last week.

A NASA official says the delay could mean the space station might have to be temporarily abandoned later this year.

Federal authorities are searching for former NBA player Javaris Crittenton in connection with the murder of a woman in Atlanta earlier this month. Police say Crittenton is the suspect in a drive-by shooting on August 19 that resulted in the woman's death. FBI officials say he may be in Los Angeles.

Crittenton has been out of the NBA since 2010, when he was suspended for a gun-related incident involving Washington Wizards teammate Gilbert Arenas.

And polygamist leader and convicted sex offender Warren Jeffs is in critical condition after falling ill during a fast in a Texas prison. Jeffs was sentenced to life in prison, plus 20 years earlier this month for sexual assault. A prison official says he was sent to a hospital Sunday night.

And a new European study finds that cholesterol-lowering medications can help reduce deaths for more than just cardio vascular disease. The new research indicates that the drugs known as statins may significantly reduce deaths from infection and respiratory illness. The findings come from follow-up research on subjects who took part in a 2003 study, but some experts are questioning the reliability of this type of retrospective research -- Wolf.

BLITZER: So if you're taking Crestor or Lipitor or some of these statins, it may have some other effects besides reducing your cholesterol?

SYLVESTER: Exactly. More positive effects. So I think they're going to have to do a little bit more research of this because it was a study that was looking back previously on prior research. We'll see what happens.

BLITZER: Let them -- let them do some more research. Good idea. Thanks, Lisa.

Unpleasant surprises for some unlucky people in the wake of Hurricane Irene. We're going to answer questions about insurance that countless homeowners are facing right now.

Plus, take a look at this. We're going to give you this storm as seen by one of the youngest and cutest reporters.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Raining. The wind has picked up. This is the biggest ever...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Unlucky homeowners up and down the East Coast of the United State are taking a close look at their insurance policies in the wake of Hurricane Irene. And they'd better read those policies closely.

CNN's Lisa Sylvester is joining us once again. Information, Lisa, you have that that every homeowner should know about?

SYLVESTER: Yes, absolutely, Wolf. You know, you can see these pictures, these images, the water, these raging rivers. A big question are people actually covered,? Will they have money from the insurance company to rebuild and repair their homes?

And what it all hinges on is whether or not they have just the straight homeowner's insurance policy or if they also have flood insurance. If they have flood insurance, they're going to be in pretty good shape.

However, so many people do not have flood insurance, and they just have the straight homeowner's insurance policy. And you can see how the cost can really add up pretty quickly. We're going to close this here. We can show you, the source of this is FloodSource.gov.

This has a scenario of a 2,000 square foot, just a foot of water flooding this house, you can see how the costs really add up very, very quickly: $2,600 for cleaning; $2,000, almost $3,000 for dry wall. You can see how this adds up. We can go to the bottom again. This is just a 2,000-square foot house. We are talking about $52,000, more than $52,000 that somebody might potentially have to go out of pocket.

And what's going to be happening in these days and the weeks ahead is you'll have claims adjusters who will be going over, trying to figure out if damage was caused by the storm, by the wind or whether it was caused by flooding. But there is a general rule of thumb here.

(BEGIN VIDEO CLIP)

BOB HARTWIG, INSURANCE EXPERT: When the water rises from below, such as a river or a lake or stream that's overflowing or storm surge from the ocean, that is all considered flooding.

If you have water that enters from above, through, say, wind that has stripped some of the tiles off of your roof or blown in a window, and then you have wind-driven rain that brings water into your house, that is covered. But if it comes from below, it's a flood, and it is not.

(END VIDEO CLIP)

SYLVESTER: So that's the general rule as it's the below, if it comes up from below it's considered flooding in general. If it comes from inside, then it's considered -- now we've got all these different scenarios, as you can see. If a tree falls is that covered? It's going to depend. If it falls on a structure, then that means that it is likely going to be covered. If your house is uninhabitable, if you have to have temporary expenses covered, it's going to be covered there. Evacuations, that's maybe what you really want to check your policy there. Spoiled food is actually generally covered, but it's limited to about $200 or $500 or so, Wolf.

BLITZER: We'll watch all of this closely together with you. Thanks very much. Lisa Sylvester reporting. Good information. Homeowners need to know about their insurance policies.

Over the weekend you probably saw the TV reporters riding out the storm live on camera, but you may not have caught this 5-year-old CNN iReporter. We're going to show you her reports.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I definitely feel it on my head.

(END VIDEO CLIP)

BLITZER: Here's something that helped a lot of us smile even in the midst of Irene's rampage. This amazing 5-year-old CNN iReporter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Jean Harbrook (ph) reporting from Lewistown, Pennsylvania.

The rain is coming down more than it was before. The wind is probably going faster. I think this is just the starting of it. I definitely feel it on my head. Just a tiny bit of rain.

I'm concerned about the flood just like my puppy. It's definitely raining more because it's 5 p.m. now. Back to you.

This is my last report because it's my bedtime. It is really raining. The wind has picked up. This is the biggest ever has it been. Everybody, take care. And please stay inside. Otherwise, you might blow away.

(END VIDEO CLIP)

BLITZER: She's going to be on CNN's "AMERICAN MORNING" tomorrow morning. Amazing, amazing reporting.

Thank you. 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.