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Interview with Dick Cheney; Red-Hot Urgency on Issue Number One; Jobs Tops Congress' Long To-Do List; State of Illinois May Layoff Thousands; Wildfires Burn Down Hundreds of Homes in Texas; Dick Cheney Interviewed; Bioterror Threat: Is U.S. Ready?

Aired September 6, 2011 - 17:00   ET


WOLF BLITZER, HOST: Brooke, thanks very much.

Happening now, Dick Cheney tells me the Bush administration had no choice when it spent tons of money and sent the federal deficit soaring. Stand by for my in-depth interview with the former vice president on his role in America's economic problems, the war in Iraq and so much more.

Also, Mitt Romney's preemptive strike on jobs -- the Republican unveils his plan, just days before the president's big speech.

This hour, political leaders zeroing in on issue number one.

But do any of them have a plan that will really work?

And Texas wildfires destroying more than 700 homes in 48 hours. A massive blaze raging close to the state capital is growing bigger and more destructive every minute.

I'm Wolf Blitzer.


I've covered Dick Cheney for many years, as a Defense secretary and certainly as vice president of the United States. Today, I found him to be very much the same as I always knew him -- steadfast in his views, unapologetic for doing what he believed and still believes is right.

I interviewed Cheney here in Los Angeles earlier today.


BLITZER: Your biggest regret, as it relates to your time in office.

DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: Geez, you're going to have to go back. That covers 40 years.

BLITZER: The -- the eight years you were vice president.

CHENEY: Well, I -- I think as a general proposition, on the big decisions, I think we got it right. I worked for George Bush. I'm proud to have worked for him. I think that a lot of the most controversial things we did, that people didn't like and -- and criticized us for, things like the terror surveillance program or the enhanced interrogation techniques, were things that allowed us to save lives.

And the net result, the value of our policies is best evaluated in terms of the fact that after 9/11, there were no further mass casualty attacks against the United States, that we stopped every single prospective attack on the U.S. For the last seven-and-a-half years that we were there. I think that speaks for all of our policy.

BLITZER: It certainly does. But, you know, you're a human being. I'm a human being.

CHENEY: Um-hmm.

BLITZER: I make mistakes all the time. You must have made some mistakes as vice president of the United States.

CHENEY: Well, I made mistakes that I talk about in the book.

BLITZER: Give me an example.

CHENEY: Well, I got kicked out of Yale twice when I was a student (INAUDIBLE)...

BLITZER: Well, I'm talking about as vice president.


BLITZER: We all make mistakes when we're in college.

CHENEY: Wolf, Wolf, the -- what I find in this whole operation is people want you to admit, quote, you made a mistake...

BLITZER: What's wrong with that, if you made a mistake, what's wrong with that?

CHENEY: But what they want is they don't want just an admission of a mistake, they want to you say you did something wrong that they disagreed with. It's all about politics and I'm...

BLITZER: But there's nothing wrong with that.

CHENEY: Wolf, I wrote what I believe. I wrote my experiences. I talked, for example, about things that I got wrong in the Bush One administration. I disagreed, for example, with the idea of going to Congress to get authorization to go into Kuwait. The president overrode me. He was right, I was wrong. I mean there -- there are examples like that. I thought...

BLITZER: That was the first President Bush.

CHENEY: I thought wage-price controls was a serious mistake. I was an integral part of wage-price control enforcement.

BLITZER: But during the eight years of the -- the second Bush administration, no mistakes?

CHENEY: I have said all I'm going to say about it, Wolf.

BLITZER: All right.

CHENEY: I'm proud of the policies we put in place. I think they did the job we intended for them to do. And I'm not inclined to make any mea culpas.


BLITZER: All right, that's just a little bit of the interview. Stand by for much more of my conversation with Dick Cheney. We speak about the economy, the wars in Iraq and Afghanistan, his prediction about Syria's future, his new book, his own heart condition. He's going to show us the device that helps keep him alive. We go in-depth on that.

Stand by. Much more of Dick Cheney coming up right here in THE SITUATION ROOM.

Now to the one word, the big issue weighing on all of America right now. We're talking about jobs. There is a new sense of red hot urgency right now as Congress returns from a break and Republican presidential candidate, Mitt Romney, unveils his own jobs plan today.

The markets are ratcheting up the pressure on all political leaders, with stock prices tumbling once again today.

It's all part of the dramatic lead-up to President Obama's critical jobs speech on Thursday.

The White House is offering a glimmer of hope that this time the president and the Congress will find a way to work together.


JAY CARNEY, WHITE HOUSE PRESS SECRETARY: While expectations for what Washington can do are tempered with skepticism, Americans should not have to expect that Washington will, by its actions, actually harm the economy.


BLITZER: Our correspondents, Jim Acosta, Kate Bolduan and Mary Snow, they're all standing by with much more on the jobs crisis and what America's leaders plan to do about it.

But just a little while ago, Mitt Romney finished laying out his vision for growing the economy and creating jobs. The Republican presidential candidate spoke in a key swing state. We're talking about Nevada.

CNN's Jim Acosta has more on Romney's plan and his appearance out here in the West -- Jim.

JIM ACOSTA, CNN CORRESPONDENT: Wolf, Mitt Romney has some urgency behind this effort today to put out this jobs plan. There are two new polls out today that show him behind in the polls by double digits to the new frontrunner in the GOP field, the governor of Texas, Rick Perry. And so Mitt Romney went to Nevada today with a very important mission. And that is to say he is on the case when it comes to creating jobs.. And he not only put out a 59-point plan, he put out a 160 page book a few days, getting the jump on President Obama's jobs speech, sort of a "my jobs plan is bigger than your jobs plan."

And some of the stuff in this plan is obviously tailor-made to appeal to those Tea Party voters out there in the Republican Party. He's talking about ending ObamaCare and -- and the president's health care law and lowering taxes.

But take a look at what Mitt Romney says he would do on day one of his administration, if he's elected president. Five executive orders. The first, to end the national health care law that Republicans call ObamaCare. He is also talking about issuing orders to cut red tape in his administration, lessen regulations in his -- in his administration. He wants to boost domestic energy production across the country. Obviously, that means more oil and gas drilling.

And then perhaps the one component of this that will generate the most heat, he wants to sanction China for unfair trade practices, basically accusing the Chinese of being cheaters when it comes to currency manipulation.

And the fifth item, going after organized labor.

But is in his speech. Earlier today, Mitt Romney went after the Chinese, something that a lot of people did not expect to hear in this speech.

Take a listen.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: So I will dramatically increase the interest and the effort in our nation to establish trade relations with other nations. And that is, I'll clamp down on the cheaters. And China is the worst example of that.


ACOSTA: Now, it's interesting to note that this tough talk on China is not something that we've heard on the campaign trail, Wolf, since Donald Trump left the race. You remember, back in April, Donald Trump delivered what was a profanity-laced speech out in Las Vegas, of all places, in the same general area where Mitt Romney was today, going after the Chinese on that issue. So that's interesting to note.

The other thing that is interesting, also, is that Mitt Romney's fellow Republicans are going after him on the jobs issue. Jon Huntsman, who has struggled to get some traction in the polls, put out an ad today contrasting his performance on jobs with the governor's, of Massachusetts, bringing up the fact that when Mitt Romney was governor of Massachusetts, that state had the 47th worst job creation performance in the country. And that is something that you've heard from Democrats as a talking point. It is now something that Republicans are bringing up. And you're sure to hear it tomorrow night at this debate here in California, when these Republicans go toe to toe out here -- Wolf.

BLITZER: Jim, we know he attacked President Obama on a wide range of economic issues.

Did he criticize any of his Republican challengers today?

ACOSTA: We -- we didn't hear much of that today. You know, this was really a chance for Mitt Romney to change the conversation. He has seen Rick Perry really shoot to the top of now four national polls, if my counting is correct, that show Rick Perry with basically a double digit lead in this race. And I think what we saw today from Mitt Romney was an attempt to change the conversation. To go after China the way that he did -- you know, we've been asking the question, is there anything that the government can do that it hasn't tried to do up in this point, in terms of trying to get the economy going?

One thing that this country has not tried to do during this recession, Wolf, is pick a trade war with China. And Mitt Romney just about did that today with his speech, calling the Chinese cheaters. Those -- those are white hot words to be using in a presidential campaign -- Wolf.

BLITZER: All right.

Thanks very much.

Jim Acosta with that. By the way, the Republican presidential candidates, they will be debating in Tampa, Florida next week. I'll be the moderator for the debate. That's cosponsored by the CNN, Tea Party Express, several Tea Party groups. That's Monday night, 8:00 p.m. Eastern, only here on CNN.

On Capitol Hill, back in Washington right now, lawmakers are getting back to business after their five week summer break. And they're gearing up for President Obama's address before a joint session of Congress Thursday night.

Let's bring in our Congressional correspondent, Kate Bolduan -- Kate, House and Senate leaders have a very long to-do list right now.

Tell our viewers some of the things that are on that list.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: You could almost call it a laundry list of things that they need to address, Wolf. You said it. After a month long recess, Congress heads back to work this week. The Senate back today, the House back tomorrow in what promises to be jam-packed schedule this fall session. But it really can be summed up in one word -- jobs.


UNIDENTIFIED MALE: The Senate will come to order. BOLDUAN (voice-over): After the bruising battle over raising the debt ceiling, Democrats and Republicans returned to Washington saying enough of the gridlock, let's get something done.

SEN. HARRY REID (D-NV), MAJORITY LEADER: The August employment report released last week should be a wake-up call to every member of Congress, Democrats and Republicans. We cannot waste any more time, as has been wasted over the last eight months. Congress must act quickly to jump-start the economy.

And in doing that, it will help the recovery.

BOLDUAN: Topping the list of Congressional to-dos, jobs, with both sides pushing different prescriptions for putting Americans back to work.

The Republican focus is on rolling back labor and environmental regulations; also calling for small business tax cuts.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: And many of us will continue to press for an entirely new approach, one that puts individuals and businesses at the center of our recovery, one that lifts the cloud of uncertainty that's been holding job creators back and enables the American people to move our economy in the direction that they want.

BOLDUAN: Democrats, though, want to spur job creation through infrastructure spending.

REP. CHRIS VAN HOLLEN (D), MARYLAND: And so you -- you've got to get the economy moving again, those infrastructure projects, putting people back to work, you know, repairing bridges and schools and roads and all those kind of things, are a very important part of it.

BOLDUAN: At the same time, the so-called super committee created by the debt ceiling agreement is set to begin its work to find $1.5 trillion in deficit savings in the next three months. And Congress must face outstanding budget battles over everything from funding the FAA to averting another government shutdown at the end of this month.

One potential and rare area of agreement, pending trade bills with South Korea, Panama and Colombia, which both sides have said will boost the economy.

MCCONNELL: The president himself acknowledges that these trade pacts would help create tens of thousands of jobs right here at home, by vastly expanding the market for U.S. goods. He should send them to Congress today so we can finally ratify them.


BOLDUAN: Now, just today, the two top House Republicans sent a letter to President Obama laying out their suggestions for possible areas of cooperation in terms of jobs measures, including in the area of infrastructure initiatives. And at the same time, House Speaker John Boehner and Majority Leader Cantor also asked the president for a meeting of top Congressional leaders ahead of the president's Thursday speech, to discuss the president's jobs proposals. Top Republican leadership aides say they have not yet received a response -- Wolf.

BLITZER: You also, Kate, have some new information about what the Republicans are planning on doing after the president's speech before Congress Thursday night.

BOLDUAN: Yes, Wolf. This is really interesting. It's something we've been tracking for days. There has not been one person, one lawmaker, one high profile Republican that has yet been designated to make the customary formal response to the president on one of these kind of big time, prime time speeches. But according to one senior Republican aide, there likely won't be one formal response to the president's speech. Rather, many or all Republican lawmakers kind of fanning out to respond and rebut the president's speech, as they will.

We did speak to aides to House Speaker John Boehner and they have declined to talk about any of the plans for a response.

But very interesting developments now, just two days out from the speech, that we're now hearing that there may not be one formal response, as usually happens. It may be many Republicans fanning out to make their opinions known -- Wolf.

BLITZER: Kate Bolduan, thanks very much.

By the way, when President Obama lays out his new jobs plan before a joint session of Congress Thursday night, CNN, of course, will carry it live. Don't miss our special coverage. We'll begin right here in THE SITUATION ROOM 6:00 p.m. Eastern Thursday night.

If President Obama needs any reminding about the dire economic situation right now, he need only look to his home state of Illinois.

Our own Mary Snow is looking closely into what's going on for -- there, another state facing a -- a painful budget crisis.

What's going on?

MARY SNOW, CNN CORRESPONDENT: Yes, well, Wolf, this is just the latest chapter in the state's budget problems. And they are big problems.

The governor of Illinois says the money isn't there to pay for the full fiscal year. He's threatening job cuts. One report indicates those cuts could be drastic.



SNOW (voice-over): Like many states, Illinois is starting the school year with fewer services. It's just one area affected by cuts. Now, Illinois Governor Pat Quinn is reportedly considering laying off thousands of state workers. He blames state lawmakers for the budget they sent him. GOV. PAT QUINN (D), ILLINOIS: There's no question that their decisions will result in a situation where our state won't have enough money to get through the fiscal year. So we have to make reductions. And, you know, I'm prepared to do what has to be done.

SNOW: Quinn didn't spell out specifics. But the "Chicago Tribune" reports in addition to lay-offs, the governor may close a state prison, juvenile detention center and homes for the mentally ill and developmentally disabled.

The union for state workers vows to fight, saying in return for concessions, an agreement was reached to hold off on job cuts until June of 2012.

ANDERS LINDALL, AFSCME ILLINOIS CHAPTER: We think that threatening lay-offs and facility closures, huge cuts in needed services and the loss of thousands of jobs, that would plunge the state into chaos.

SNOW: Illinois' budget problems drew attention earlier this year, after lawmakers passed a massive tax hike to create revenue. Those who follow the state's budget policies say the fact the state has been fiscally mismanaged for years is now magnified by the slowing economy and stimulus drying up.

DAVID MERRIMAN, UNIVERSITY OF ILLINOIS: Now, those cuts will leave people screaming and they're going to inflict a lot of pain. But, in fact, some kind of solution is necessary, some kind of -- if we don't borrow, there is going to be -- have to be some kind of very painful cuts.

SNOW: And it's on top of cuts already made. Elizabeth McNichol, with the Center on Budget and Policy Priorities, looked at state education cuts in 24 states and found Illinois topped the list. McNichol expects drastic measures to also be taken in other states, as well.

ELIZABETH MCNICHOL, CENTER ON BUDGET AND POLICY PRIORITIES: We're expecting this -- this year, the 2012 budget year, where we're seeing the impact of the cuts, to be the worst year of the recession. Revenues have not come back up. The federal aid has ended.


SNOW: And Elizabeth McNichol, who you just heard from right there, says looking at dozens of states, the two biggest areas for cuts are education and health care. And she says she does not expect revenues to return to pre-recession levels for several years -- Wolf.

BLITZER: Mary Snow, thank you.

One of the most revealing moments of my interview today with Dick Cheney happened when he showed me the medical equipment that keeps him going after five heart attacks. He'll explain how that battery pack works. Stand by for that.

And we'll also take you inside the fire disaster unfolding right now in Texas. Hundreds and hundreds of homes have gone up in smoke. (COMMERCIAL BREAK)

BLITZER: The Obama campaign just put out this response to the Mitt Romney economic plan that we reported on earlier. "Governor Romney repackaged the same old policies," the Obama campaign says, "that helped create the economic crisis, boosting oil company profits and allowing Wall Street to write its own rules, more tax breaks for large corporations and more tax cuts for the wealthiest while working Americans are forced to carry a greater burden." The Obama campaign responding to the Romney campaign just a few moments ago.

Jack Cafferty is here. He's got the "Cafferty File." Jack?

JACK CAFFERTY, CNN CONTRIBUTOR: Don't think of it as the government. Instead try to think about those weasely politicians in Washington as your federal family. The Obama administration has ramped up the use of this term in describing the federal response to disasters, including the recent hurricane Irene.

For example, they describe the entire federal family, their words, under the direction of President Obama and Homeland Security Secretary Janet Napolitano leaning forward to support state and local governments -- I'm having trouble keeping a straight face. Does this mean the president and Napolitano are our parents? What a thought.

"Government" has become a dirty word in most parts of this country, Congress's approval rating the worst it's ever been. The president is at our near all-time lows. Think debt ceiling, the downgrading of America's credit rating, et cetera. No surprise the federal officials may be trying to rebrand themselves, and family could conjure up images of support and security instead of an unpopular government.

Also, politicians have rebranded unpopular words in the past, "revenue enhancers" instead of taxes, or the estate tax instead of the death tax. Officials are quick to point out the idea of the federal family is nothing new. The term was used under both the Clinton and Bush administrations. Critics doubt the so-called federal family is going to give people warm, fuzzy feelings about the government. Instead it might make people think of big brother or the mafia or if a family, a very highly dysfunctional one.

Here is the question then, do you think of the government as your federal family? Go to or post a comment there or go to our post on THE SITUATION ROOM Facebook page.

BLITZER: Good idea, Jack, a lot of people go to the Facebook page as well. Thank you.

Let's go to Texas right now where wildfires have scorched almost 120,000 acres, destroyed over 700 homes, and already killed two people. The state's governor, Republican presidential candidate, Rick Perry, says the largest of the fires is far from contained. CNN's David Mattingly joins us on the scene for us. David, what is the latest?

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, 700 homes being destroyed by wildfire in the state of Texas just in the last two days, 600 of them in that big fire the governor was talking about near Bastrop, Texas, here where I'm standing. We've seen thousands of people evacuated, most not allowed to go back to their homes yet because it's just too dangerous. Those neighborhoods still in harm's way even if they haven't been hit by fire because of the wind shifts. It's so dry, the embers will blow and start new fires going in a different direction.

Already every bit of equipment and personnel the state of Texas has from surrounding areas, surrounding states have been put to work. It was a little bit cooler today, which meant some of that back-breaking work they've been doing out on the fire lines they've been able to keep at it just a little bit longer.

But at this point, the largest of these fires here in Bastrop still is not under control, but they hope to have a few more cool days where they might be able to make some advances, but no promises yet. We did get to see one neighborhood west of Austin today that was hit by fire over the weekend, two dozen homes burned completely to the ground. We went in with one family as they went back to see their house or rather what was left of it. Listen.


UNIDENTIFIED FEMALE: Katie and Brian's house. And that's my house.

MATTINGLY (on camera): Right here? Oh, I'm sorry.

UNIDENTIFIED FEMALE: The oak trees are still there.

MATTINGLY: Are you all right? You're shaking.

UNIDENTIFIED FEMALE: I'm OK. I am. The luckiest person in the world, my family is safe. Now I need to check on my neighbors. I don't even know where to begin.


MATTINGLY: Hundreds of stories just like that now in the state of Texas, already the worst fire season the state has ever seen. Wolf?

BLITZER: David Mattingly with a heartbreaking story for all of us. We'll stay on top of this and get back to you. Thanks very much.

He started office with a booming U.S. economy, but when he left office the national debt had doubled. More of my interview with the former vice president Dick Cheney coming up. How much responsibility does he take for the collapse of the U.S. economy at the end of the Bush administration? Stand by.

And teamster leader Jim Hoffa refusing to back down from his controversial comments about the Tea Party.


BLITZER: As Washington sharpens its focus on the issue of jobs, I sat down with the former vice president Dick Cheney in Los Angeles earlier today. I sought to get his views on how the Bush-Cheney administration contributed to this huge economic crisis.


BLITZER: When you took office, you and President Bush, the Bush administration, there were budget surpluses as far as the eye could see. When you left office, the national debt had doubled and the economy was teetering potentially on depression. How much responsibility do you personally take for seeing that economic disaster potentially unfold?

DICK CHENEY, (R) FORMER VICE PRESIDENT: Well, like most administrations, Wolf, we had to deal with the circumstances that we inherited, and that included within a matter of months after we were sworn in 9/11. And all of the sudden we're faced with the prospect of 3,000 dead Americans as a result of a terrorist attack that morning. We had to undertake massive programs, create a whole new department, the Department of Homeland Security, and take a lot of steps. It costs a lot of money, frankly, in order to guard against another attack like that.

Plus, we ended up obviously with two major conflicts in Afghanistan and Iraq, so there was no question but what the policies we pursued for, I think, with good reason. I would not have reversed those policies. It necessitated spending money that we would not have otherwise had to spend.

BLITZER: Did you ever think of cutting spending to pay for all those added expenses?

CHENEY: Well, we had -- we tried to separate out what the military costs were as a separate item from the rest of the normal budget, or even the normal defense budget, but the fact of the matter was you couldn't, for example, set up a whole new security system for air travel, build a whole new -- one of the largest departments in the federal government like the Department of Homeland Security, undertake all of the efforts we did overseas without having to spend money. It was just a fact of life.

BLITZER: But you could have cut -- I mean, there were other expenses that you had. Every year your budget went up and up and up. You'll remember John McCain always saying you guys spent money like drunken sailors, with no disrespect to drunken sailors.

CHENEY: John was a sailor, I think. A sensitive subject.

BLITZER: Yes, he was. So it wasn't just the war on terrorism, the new security procedures. Significant tax cuts that were not paid for, a Medicare benefit, prescription drug benefit for seniors, wasn't paid for. All of these new expenses reduced revenue, and the $5 trillion national debt went up to more than $10 trillion when you left office.

CHENEY: I think if you look at it, for example, on tax policy, I would argue that I'm heavily involved on the tax side of things. I had to cast the tie-breaking vote at one point. BLITZER: The 2003 tax cut.

CHENEY: But what we did when we took down the rate, the overall rate, we also cut the rate on capital gains and dividends. It had a significant impact on the economy, and it was a vital part of recovery in the economy.


BLITZER: But it also had a significant impact in increasing the national debt.

CHENEY: Well, I disagree. I mean, you and I probably have a different point of view in terms of the impact of taxes on the economy. But I'm one of those people who believes -- I'm a supply sider, if you will, and I really believe that the tax cuts we put in, in fact, kept the economy from going even deeper into the hole as a result of --


BLITZER: The prescription drug benefit, which costs potentially down the road trillions of dollars, did you ever think that that should be justify set with spending cuts?

CHENEY: Well, the original plan was that you would grant the prescription drug benefit in return for Congress in acting reforms in the Medicare program. We got the prescription drug benefit and we never got the full package of reforms. So there were places where the system didn't produce as much as we had anticipated or hoped from the standpoint of savings, but I think with respect to the wars and the war on terror, and the threat that we inherited, that we had to face, and that we had to deal with, we didn't have any choice but to spend a lot of money.

BLITZER: There was a lot of money on that, but there were other expenses.

Looking back, is there anything you could have done, should have done to avoid that financial collapse near the end of your administration?

CHENEY: Well, I think we did a lot, obviously. I think the program that the president put in place, together working with Treasury and Ben Bernanke over at the Federal Reserve --

BLITZER: The TARP program.

CHENEY: -- the TARP program, was very controversial. It was tough to get it adopted. It was rejected originally, and then we finally got it approved. I think it did a lot of good in terms of putting the financial system in order.

We were in big trouble from a financial standpoint, but only the federal government can deal with the question of maintaining the monetary system. And we had a situation where we had major financial situations who weren't able to borrow money. (CROSSTALK)

BLITZER: But what could you have done to avoid even the need for a TARP program? These financial institutions were collapsing.

CHENEY: Well, one of the things that would have been helpful would have been if the Democratic Congress had adopted our recommendations for fixing Fannie Mae and Freddie Mac. They were huge problems. This whole question of substandard mortgages and financial securities that were based upon that ultimately created a lot of the problem that we had to deal with, and that was a direct result of the failure of Congress to enact the reforms that we recommended for those programs.

BLITZER: All right. So, with hindsight -- and then we'll move on to another subject -- with hindsight, is there anything you should have done differently during those eight years that would have avoided that financial turmoil at the end of your eight years?

CHENEY: Well, I'm not an expert in the financial area, Wolf. Somebody may be able to have a specific answer that they could suggest, but I think generally, given the circumstances we inherited and the problems we had to deal with in terms of the war on terror, Afghanistan, Iraq, et cetera, that we had no choice but to go down the course we did.

Now, eventually, we got a program in place that I think rescued the financial system and the basic financial institutions. The Obama administration came in, obviously, after that, and they had to deal with a difficult set of circumstances.

BLITZER: A lot of your fellow conservatives hated that TARP program.

CHENEY: I know they did, but I think -- and I'm one of those who argues against governmental involvement in the economy. But the one exception I would make is that when you're talking about the financial system of the country, sort of the backbone of the economy, basic fundamental credibility of the Federal Reserve and the Treasury and the value of the currency and so forth, the only institution in our society that has the capacity to deal with the crisis there is the federal government.

You can't palm that off on the states, or even the private sector. So we did what we thought we had to do. We did it reluctantly. And if I had my druthers, nobody would -- I wouldn't have liked to be in that spot, but we really felt it necessary, and I supported it.


BLITZER: All right. We're going to have much more of my interview with Dick Cheney coming up, including our panel that will fact-check his comments about the war in Iraq, Saddam Hussein, the weapons of mass destruction or not.

Much more of the interview with Dick Cheney coming up.

Also, we're asking why the White House, at least so far, hasn't condemned remarks by a top union official who referred to Republican Tea Party supporters as "SOBs" right before the president took the stage.

Stand by. More on that uproar when we come back.


BLITZER: Much more of my interview with Dick Cheney come up. But let's talk about what we've heard so far in our "Strategy Session."

Joining us right now, the Republican strategist and CNN political contributor, Mary Matalin, and the Democratic strategist and a principal of the Raven Group in Washington, Jamal Simmons.

Guys, thanks very much for coming in.

Mary, why didn't the Bush administration -- and you served in the Bush administration the first six years. They had a majority in the House, and the Senate as well. Why wasn't there any really significant effort to cut spending to pay for everything it was trying to do?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: There was a significant focus, as the vice president just said, on responding to 9/11, setting up the Homeland Security Department, which we worked with the Democrats on, but also recalibrating the entire culture of Washington to go from the pre-9/11 mindset, which was terrorism was a law enforcement issue. But there was -- the vice president and you disagreed, and we're going to disagree, Wolf, on this. We don't think of tax cuts as costing anything.

Subsequent to the tax cuts that were put in place, particularly capital gains and dividends, which ex-President Clinton agrees with at this point, grew the economy. We had five percent growth on average for 52 consecutive months. That made more revenues.

So, yes, there were attempts to cut costs and to cut spending, but it was costly to respond to 9/11. Also, there was the Enron debacle, there was --

BLITZER: With all that -- Mary, excuse me for interrupting. Excuse me. Hold on one second, Mary.

But for all of that effort, all the money that you spent on two wars, prescription drug benefits for seniors, and all those major tax cuts, I don't remember any major effort to eliminate what Republicans now routinely call enormous waste and abuse in federal spending during the eight years of the Bush administration. I didn't see any effort, any significant effort to cut federal spending. It went up significantly every single year.

MATALIN: You know what? As a percentage, the deficit, as a percentage of GDP, which is how this is always measured, was an historic average to low, and it was going down as the president was leaving.

What Andy Curtis (ph) said about this was that, rather than go through big spending fights with Democrats, he would send -- they would send up budgets that were more or less in the realm of deficits as a percentage of GDP. Nothing like what we have now, which are quadruple deficits of what the average Bush deficit was.


BLITZER: All right, Jamal. Go ahead and weigh in.

I just want to point out and remind our viewers, during the eight years of the Bush administration, the national debt doubled from $5 trillion to $10 trillion, and not all of that was just as a result of the wars and the war on terror. A lot of it was the result of simply wasteful spending.

But go ahead, Jamal.

SIMMONS: You know, Wolf, the reality is we were attacked on 9/11, the entire country was in a mood to try to join together, to do something to protect ourselves, to go after the people who got us. And the president, instead of asking us to sacrifice anything, instead of asking us to do anything other than to shop or go to Disney World, or whatever it is that he said, instead he went on with another tax cut after the first one he did in 2001.

So, the first time in the history of the United States we've gone to war without raising a tax or a bond to try to pay for that war, and that's what really helped get us in this mess. That's about $1.5 trillion to $2.8 trillion, depending on how you count the Bush tax cuts.

If you make the argument we should have been in Afghanistan, which I would agree we should have, but we never should have gone into Iraq. That's another $1.5 or so trillion that's there -- $272 billion in the Medicare prescription drug benefit.

All these things that we didn't have to do because the Bush administration wanted to, and now here we are in this mess. And instead of trying to find a way to get us out of it, the Republicans in Congress are just standing in the way and arguing for more tax cuts for the wealthy. That's just not going to solve the problem.

BLITZER: All right. Let me just quickly, Jamal, get you to react to Jim Hoffa, the head of the Teamsters, who, yesterday, caused a big uproar introducing the president, spoke of some Tea Party supporters as SOBs, and let's go out there and get them. Today, Jim Hoffa not backing down.

"We didn't start this war. The right wing did. As I said yesterday in Detroit, we all have to vote in order to take these anti-worker politicians out of office. We're fighting back."

"That's what Teamsters do. We stand up for what is right. I will never apologize for standing up for my fellow Teamsters and all American workers."

Nothing wrong with that statement, but was there anything wrong, Jamal, in speaking about taking out all these SOBs? Because the rhetoric, it does cross the line.

SIMMONS: Well, you can take out the word "SOB," and I would leave everything else that it is that he said. What he said was we're going to march -- if you play the entire clip -- we're going to march. And then he said everybody here has a vote, and we're going to take out all those blankety-blanks.

He was talking about his vote. We're the army for the president, and we're going to go out there and take them out. He's talking about marching and voting. If that's violent rhetoric, then we really do have a high standard for what rhetoric is right now.

BLITZER: All right.

Mary, I know you want to weigh in, but we're out of time, so we can't. But we will down the road.

Guys, thanks very much.

Coming up, we're on the trail of Moammar Gadhafi's inner circle. Stand by.



BLITZER: Lisa Sylvester is monitoring some of the top stories right now.

What's going on, Lisa?

SYLVESTER: Hi there, Wolf.

Well, at least six high-ranking officials in the former Gadhafi regime are believed to have fled to neighboring Niger. Reports say Gadhafi's personal security chief and son are among those who were in two convoys that recently arrived in Niger. The State Department says there's no evidence Gadhafi himself was part of either convoy.

In Nevada, three people are dead, six others wounded, after a shooting at an IHOP restaurant in Carson City. Police say the gunman who used an automatic weapon also shot himself and is not expected to survive. Two of the dead were identified as uniformed members of the military. No word yet on what prompted that shooting.

And retired Army General David Petraeus is now the new chief of the CIA. Petraeus was sworn in by Vice President Biden. He served as the top U.S. commander in Iraq and Afghanistan.

Good luck to him on his new post -- Wolf.

BLITZER: Good luck, indeed. He needs it.

All right. Thanks very much, Lisa.

The former vice president Dick Cheney has a machine implanted in his body right now to keep his heart beating. We're going to show you the equipment he needs to stay alive.

Also, experts say a biological terror attack could threaten thousands of lives and cost $1 trillion. We'll explain.

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


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

CAFFERTY: The question this hour, Wolf, is: Do you think of the government as your federal family? Washington trying to run that jive on us. We're your federal family.

Ralph writes, "If I had an Uncle Sam who always wanted more money, who never pitched in to help, who was the town drunk, always at war with his neighbors, who could not be trusted, and Uncle Sam that sent the family business to China, I would punch Uncle Sam in the nose."

Mark in Houston writes, "Am I supposed to have some sort of warm fuzzy feeling here? We have a government that is not working, period. We have a group vying for the Republican nomination that resembles rejects from a "Three Stooges" casting call."

"Neither side has any interest in sitting down, resolving anything for the common good. Instead, they display selfish behavior, blame whoever they can for what's gone wrong, and they go on vacation. They remind me of my ex-in-laws."

Pete in Charlottesville, Virginia, "I think of them as a mooching brother-in-law who's always trying to sell me something or invest in his latest scheme. But he's still family, like it or not."

Paul in Austin, Texas, "More like a big brother. A mean one."

Chris on Facebook, "Lies to me, takes my money. I have no faith in him. Yes, sounds like my family."

Janne in North Carolina, "Have you ever watched 'The Simpsons'? Kind of like that family."

And Don in Ohio writes, "Yes, Jack. They remind me of my drunken uncle. He'd show up every Christmas half dressed as Santa, smelling of booze, with a cigar hanging out of his mouth. His heart was in the right place and he meant well, but like our federal family, he continued to disappoint and embarrass us."

If you want to read more on this, you can go to my blog,, or through our post on THE SITUATION ROOM'S Facebook page -- Wolf.

BLITZER: Which is becoming, as I say, increasingly popular. Jack, thank you.

CAFFERTY: Huge. BLITZER: And thanks for the help.

I heard Dick Cheney say it over and over and over again. He won't apologize for the war in Iraq. Does his defense though stand up to our fact-check?

Stand by. Much more of the interview coming up.

And is America prepared for a bioterror attack?


BLITZER: As Sunday's 10-year anniversary of the September 11th attack nears, the federal government is warning a biological attack is possible. But are we ready?

CNN Homeland Security Correspondent Jeanne Meserve reports.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the White House estimate that is a biological attack or a natural disease outbreak could threaten hundreds of thousands of lives and cost a trillion dollars. But are we ready? Experts say not yet.



UNIDENTIFIED MALE: So we have a virus. No treatment protocol and no vaccine at this time.


MESERVE (voice-over): The new film "Contagion" chronicles the exponential growth of a deadly flu pandemic.


UNIDENTIFIED MALE: On day one, there were two people. And then four, and then 15. In three months, it's a billion. That's where we're headed.


MESERVE: Terrorists could launch something like this and we might not detect it until it was under way. A former top counterterrorism official says it is his greatest fear.

MICHAEL LEITER, FMR. DIRECTION, NATIONAL COUNTERTERRORISM CENTER: Biological weapons. I think they'd have a psychological effect and potentially a huge effect in terms of human life.

MESERVE: Since 9/11, more than $60 billion has been spent shoring up bio-preparedness by, for instance, stockpiling vaccines and medical equipment. Even so, a 2010 report card give the government an "F" for bioterrorism preparedness. RANDALL LARSEN, WMD CENTER: Today, there more than two dozen presidentially-appointed, Senate-confirmed individuals with some responsibility for biodefense, but not one person has it for a full time job and no one is in charge. Does that sound like that's a priority in this town?

MESERVE: Federal funding for public health departments dropped 15 percent just in the last year. And despite improved collaboration, hospitals still have limited capability to dramatically ramp up personnel and beds.

DR. ARTHUR KELLERMAN, RAND CORPORATION: Most major hospitals in this country are operating at 80, 90, 95 percent capacity on any given day, and I think they would be sorely challenged to deal with hundreds, much less thousands or tens of thousands, of casualties. And a circus tent in the parking lot is not going to make up the difference.

MESERVE: In addition, experts say technologies for detecting disease outbreaks and bio-attacks are inadequate, and the pharmaceutical industry is too slow to develop and produce new counter-measures.

LARSEN: If you were the CEO of a big pharmaceutical company, you want to make the next blood pressure medicine, or the things that makes cholesterol go down, or the next Viagra. No question, because that's where the big bucks are.


MESERVE: Experts are increasingly concerned about the proliferation of bioengineering, which can produce and modify diseases in a lab. It means the defenses we have may not be the defenses we eventually need, and experts say we need to build a system that can react quickly and flexibly to any major health crisis, whether it's made by man or nature.

Wolf, back to you.

BLITZER: All right, Jeanne. Thank you.