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THE SITUATION ROOM

Rick Perry's Debate Hits and Misses; President Obama's Hard Sell on Jobs; Taliban Forces Attack U.S. Embassy in Kabul, Afghanistan; Interview With GOP Presidential Candidate Newt Gingrich; Is Texas Governor Rick Perry Still on Top Among GOP Presidential Candidates?

Aired September 13, 2011 - 17:00   ET

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


WOLF BLITZER, HOST: Brooke, thanks very much.

Happening now, many Republicans are looking at the GOP presidential candidates with a fresh eye after our historic CNN/Tea Party debate.

Did Rick Perry do anything to damage his status as the frontrunner?

I'll ask Newt Gingrich about Perry's best and worst moments and his own debate performance, as well. Stand by. He's joining us live.

Plus, a brazen Taliban attack on the United States Embassy in Afghanistan. Some insurgents may still be on the loose right now. We have dramatic new pictures and information coming in from Kabul.

And some top California politicians are trying to figure out what, if anything, is left of their stolen campaign war chest. A well-known Democratic campaign treasurer now stands accused of swindling more than a million dollars in campaign donations.

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

Rick Perry may have walked away from his second presidential debate feeling battered and bruised. The CNN/Tea Party face-off proved to be a very tough test for the Texas governor.

Less than 24 hours after the Republican candidate stood on stage with me in Tampa, reviews still are coming in about Governor Perry's performance.

Our own Joe Johns is here. He's been looking closely at the hits and misses of what happened last night.

What did you find out?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, at this stage in the presidential race, it's really not rocket science. The question is whether a conservative candidate like Rick Perry, running for the nomination, passed the test.

(BEGIN VIDEOTAPE) UNIDENTIFIED MALE: Rick Perry.

JOHNS (voice-over): Did Rick Perry do what he needed to do in a debate with the rest of the field targeting him and angling to bring him down a notch?

On Social Security, Perry is seen as doing a balancing act on the third rail of American politics -- reassuring seniors that Social Security needs to be fixed and not slapped.

GOV. RICK PERRY (R), TEXAS: Slam dunk guaranteed, that program is going to be there in place for those -- those individualizing that are moving toward being on Social Security. That program is going to be there for them when they arrive there.

JOHNS: While at the same time, not backing down on his earlier assertions likening Social Security to a Ponzi scheme.

PERRY: It has been called a Ponzi scheme by many people long before me. But no one has had the courage to stand up and say here is how we're going to reform it.

JOHNS: But for much of the audience Perry is mainly speaking to right now, including social Republicans and many in the Tea Party movement, some say standing his ground in the Ponzi scheme language plays pretty well.

BRENDAN STEINHAUSER, FREEDOMWORKS: I think he's right about Social Security and it being a Ponzi scheme. You know, basically, the retirees that are retiring now don't have the workers to pay for their retirement in the near future.

JOHNS: On immigration, Perry's record is seen as more moderate than some in the Tea Party movement would like. So, once again, he stood his ground rather than backtrack, here defending a program giving in-state college tuition to undocumented immigrants who graduated from Texas high schools.

PERRY: We were clearly sending a message to young people, regardless of what the sound of their last name is, that we believe in you.

JOHNS: Perry took heat from other contenders on this position, but abandoning it would have been seen as a sign of weakness, at least right now.

STEINHAUSER: I think that Tea Party voters, Republican primary voters, are looking for authenticity. They're looking for people that stick to their guns on issues.

JOHNS: However, on the issue of Perry's executive order requiring schoolgirls to be immunized for human papillomavirus, Perry had already said he'd made a mistake before he even got asked about it in the debate.

And then when Michelle Bachmann linked Perry's decision to contributions Perry had gotten from a pharmaceutical company, Perry's denial left him open to questions.

PERRY: The company was Merck and it was a $5,000 contribution that I had received for them. I raised about $30 million. And if you're saying that I can be bought for $5,000, I'm offended.

STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: His response was I'm offended if you think I can be bought for $5,000. But that's not really saying I can't be bought. He needs to come out and say it. He needs to try to explain relationships and talk about government and -- and fundraising and his role as governor.

(END VIDEOTAPE)

JOHNS: Some of the Republicans we talked to today said that while Perry wasn't perfect, the biggest problem he's creating for himself could come in a general election, taking positions that could be hard to defend in front of Independents in the event he gets the Republican nomination -- Wolf.

BLITZER: Executions, that was a -- it's a controversial issue, because he's had a lot of them as governor of Texas.

JOHNS: Right.

BLITZER: It didn't come up last night, but that's potentially an issue out there, as well.

JOHNS: Well, it certainly is a huge issue because he's got a lot more executions coming up. And he's already gone on the record and said, hey, I support the Texas position. I support executions. We get it right in Texas.

A lot of liberals and people opposed to the death penalty are going to take issue with that.

But this is a race for the Republican nomination and they're talking about the primaries.

BLITZER: We're going to have a lot more on Rick Perry and the debate. That's coming up, including our interview with Newt Gingrich.

Thanks very much for that.

More confusion about the Republican primary calendar today. South Carolina now is threatening to jump ahead of any state that tries to preempt its place as the first Southern contest of the 2012 primary season. The warning comes a day after the Arizona governor, Jan Brewer, announced he's moving her state's primary up to February 28th, the same day as South Carolina's. Brews -- Brewer's move is in violation of party rules designed to ensure that Iowa, New Hampshire, Nevada and North Carolina keep their early spots on the primary calendars. Stay tuned.

This just coming into THE SITUATION ROOM.

President Obama's disapproval rating reaching a new high. Check out our new CNN/ORC poll. More than half of those surveyed, 55 percent, don't approve of the way the president is doing his job. Forty-three percent approve.

The public is even more down on the president's handling of unemployment. His disapproval rating on that issue is 59 percent. All the more reason for the president to try to sell the American people on his latest jobs plan.

He made the case to voters in Columbus, Ohio today.

Our White House correspondent, Dan Lothian, is traveling with the president.

He's in Columbus with the latest -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, over the last few days, the president's been talking about all the different aspects of the jobs plan. Today, he was drilling down on education. Some $60 billion in that jobs bill not only to hire teachers, but to rehab schools and junior colleges.

The message from the president is twofold. First of all, explaining the bill that to the American people but also calling on them to put pressure on Congress to pass the bill.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): A good education has always been viewed as a pathway to a good job. But President Obama said investing in school buildings can also yield big rewards.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are millions of unemployed construction workers who are looking for a job.

So my question to Congress is, what on earth are we waiting for?

LOTHIAN: Fort Hayes Arts and Academic High School in Columbus, Ohio is wrapping up a multi-million dollar upgrade. The White House said this is an example of rehab projects that could take place at some 35,000 public schools across the country, putting hundreds of thousands of people back to work -- all paid for by $25 billion in the president's jobs bill.

OBAMA: Every child deserves a great school and we can give it to them.

LOTHIAN: It's an intense sales job by a White House that often deploys a less aggressive rollout and leaves the bill writing up to Congress.

Not this time.

OBAMA: This is the bill that Congress needs to pass.

LOTHIAN: Driven by a sense of urgency, aides said, the president hit the road after delivering his jobs speech last week. OBAMA: Let's pass the jobs bill right away.

LOTHIAN: His early targets, key swing states -- Virginia, Ohio and next, North Carolina.

UNIDENTIFIED MALE: There are no coincidences at this level of politics. There's a lot of strategy and surgical strikes. That's what the president is doing in Columbus today. That's what he did in Richmond last week.

LOTHIAN: But White House Spokesman Jay Carney said this is not about the president's reelection campaign.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The reality is, as go the American people, so goes the -- the members of Congress in this case. So we have to keep focusing everyone's attention on this, because it's vitally important.

LOTHIAN: But Republicans, who have expressed an openness to aspects of the president's proposals, still see a huge roadblock -- how to pay for it all.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The president knows raising taxes is the last thing you want to do to spur job creation. He said so himself. Yet that's basically all he's proposing here.

(END VIDEOTAPE)

LOTHIAN: Now, Senator McConnell says that he believes this bill will have a tough time making it through Congress, that it is just a political exercise.

The White House position is that now is the time to make some really tough choices. And they say the president will continue selling the jobs bail out on the road, even taking another bus tour, although we don't have details on that just yet -- Wolf.

BLITZER: A quick question, Dan.

Are huge crowds showing up for the president at these events like -- like the one in Columbus, Ohio today, which used to be the case four years ago?

A similar situation or are those crowds smaller?

LOTHIAN: No, I think you're seeing a similar situation, not only at some of the other events that the president has held so far. But today, as well, the number that we were told, in terms of attendance, 3,000 people here. It really was sort of like a campaign rally. That's what it felt like, because when the president talked to these folks and told them that they needed to put pressure on Congress to pass the bill, they started responding, "Pass the bill, pass that bill" and chanting.

So, yes, a very enthusiastic crowd here, some 3,000 people. But what's really important is whether or not the president can convince members of Congress to pass the bill -- Wolf.

BLITZER: Dan Lothian traveling with the president in Columbus, Ohio, a key battleground states.

Thanks, Dan, very much.

One correction we just want to point out. The early states, according to Republican Party rules, start in Iowa, then they move on to New Hampshire, Nevada, South Carolina -- South Carolina instead of North Carolina and then, of course, South Carolina. That's why Arizona's decision today is causing some heartburn among the Republicans.

There were a lot of pointed moments and surprises during the CNN/Tea Party debate in Tampa last night. But this exchange and the audience reaction caused some jaws to drop.

(BEGIN VIDEOTAPE)

BLITZER: He needs intensive care for six months.

Who pays?

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: That's what freedom is all about, taking your own risks. This whole idea that you have to --

(APPLAUSE)

PAUL: -- you have to repair and take care of everybody.

(END VIDEO CLIP)

BLITZER: Hours and hours of intense fighting on rooftops and on the ground. Stand by for the very latest on that dramatic Taliban attack on the U.S. Embassy in Afghanistan.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here and he has The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Rick Perry went there. The Texas governor electrifying the third rail of American politics by wading into an ongoing debate about what to do about Social Security.

Unless you've been hiding under a rock, you know that Perry referred to Social Security as a Ponzi scheme, as a monstrous lie and as a failure.

Social Security is perhaps the federal government's most popular program. Millions of Americans rely on it as they reach retirement age.

In calling it a Ponzi scheme, Perry is implying the American people are being duped by a massive fraud. Those are fighting words, which is probably why Perry is walking back his comments a little bit.

In last night's debate, Perry said it's time to have a legitimate conversation about how the fix the federal program so it's not bankrupt. And in an op-ed that he wrote yesterday, there was no mention of the phrase "Ponzi scheme."

Here are a couple of facts. Social Security's badly broken. The program will continue to pay 100 percent of benefits promised until about 2036. But after that it will only be able to pay out three- fourths of the benefits if nothing is done. There were only 1.75 full time private sector workers last year for each person getting Social Security benefits.

Governor Perry suggests one way to fix the program is to raise the retirement age, not an original idea, introduce means testing, which would limit payments to the rich, and in the past he has also advocated for the privatization of Social Security.

Meanwhile, the other Republican candidates, especially Mitt Romney, sense weakness, a little blood in the water, and pounced on it when Perry comes talking about Social Security. Romney referred to Governor Perry's language on the subject as being over the top. And it seems like most Americans agree with that statement. A new CNN-ORC poll shows only 27 percent think Social Security is a lie and a failure. That's more than the fourth of the population though. An overwhelming majority think changes are needed.

The question is this -- is Rick Perry right to refer to Social Security as a Ponzi scheme? Go to CNN.com/CaffertyFile and post a comment on my blog or post on our SITUATION ROOM Facebook page. Wolf?

BLITZER: People do that every day, Jack. Thank you.

Let's move on to another important story we're watching now. We're taking a closer look at NATO forces. They're fighting back against a rather bold daylight attack in Afghanistan. One of the main targets, the United States embassy in Kabul, which is now on lockdown.

Let's turn to our Pentagon Correspondent Barbara Starr. She's watching the story. A brazen daylight attack. What's the latest, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: You know, Wolf, the U.S. and NATO like to say that the Taliban attacks aren't very effective. Today, the Taliban took NATO and the U.S. on, straight on.

(BEGIN VIDEOTAPE)

STARR: Under fire from brazen insurgents in a nearby building, NATO forces shot back from the top of their headquarters inside one of the most secure areas of Kabul. Fighting raged for hours as insurgents launched small arms and rocket propelled grenades to attack not just NATO but also the nearby U.S. embassy, the power centers of the U.S.-led war effort. DAVID PETRAEUS, CIA DIRECTOR: A handful of individuals, five or so, perhaps wearing suicide vests, were able to move into a building under construction several hundred meters from the embassy.

STARR: At least four sites in Kabul were attacked, three Afghan police officers killed, several Afghans injured. There were no U.S. casualties.

HILLARY CLINTON, U.S. SECRETARY OF STATE: We will take all necessary steps not only to ensure the safety of our people, but to secure the area and ensure those who perpetrated this attack are dealt with.

STARR: U.S. officials tell CNN they had intelligence that insurgents were preparing to attack Kabul under the tenth anniversary of 9/11. CNN's Suzanne Malveaux said reporting from Kabul says the insurgents had an impact.

SUZANNA MALVEAUX, CNN CORRESPONDENT: The grenades and weapons did not actually penetrate the embassy and some of these other very important buildings, the presidential palace and so forth, but they are striking at the heart of this powerful community and the security inside of this community, and that has had a devastating psychological effect.

STARR: The Pentagon sought to down play the impact of the attack, but in his first public hearing as CIA director, David Petraeus warned very real threats remain in the region.

PETRAEUS: Even with its core leadership having sustained significant losses, however, Al Qaeda and its affiliates still pose a very real threat that will require our energy, focus, and dedication. Al Qaeda's operatives remain committed to attacks against U.S. citizens at home and overseas.

(END VIDEOTAPE)

STARR: And there are new questions once again about whether the CIA is going too far in protecting Americans. This all came up at the hearing. General Petraeus, now director Petraeus, saying the CIA inspector general is reviewing the role of a CIA officer now working with the New York Police Department to see if that program is appropriate.

BLITZER: We're going to be speaking live to Susan Malveaux. She's in Kabul. That's coming up in our next hour.

Does presidential candidate Rick Perry mirror president Obama when it comes to the war in Afghanistan? A key rival is about ready to weigh in. My interview with the former house speaker Newt Gingrich, the former speaker, presidential candidate, standing by live.

Plus, what's really behind the Iranian president Mahmoud Ahmadinejad's gesture to free those two hikers after more than two years in custody? (COMMERCIAL BREAK)

BLITZER: Here are some stories we're following for our next hour. Powerful California lawmaker allegedly robbed of hundreds of thousands of dollars by a woman some consider the potential Bernie Madoff of campaign treasurers.

Also, another major blow for the lagging economy -- the nation's poverty rate now soaring to its highest level in two decades.

And a vicious war of words between eight Republican candidates vying to be the next president of the United States. We'll have a fact check. Who's right, who's wrong on some of those issues? All that is coming up in our next hour. You're in THE SITUATION ROOM.

Newt Gingrich did something a bit unusual during the CNN Tea Party Republican presidential debate. He chose not to attack Rick Perry's stand on Social Security, going after President Obama instead. Listen to some of his most attention-grabbing lines last night, including the answer to my question about whether opponents are scaring senior citizens.

(BEGIN VIDEO CLIP)

FORMER REP. NEWT GINGRICH (R-GA), PRESIDENTIAL CANDIDATE: I'm not particularly worried about Governor Perry and Governor Romney frightening the American people when President Obama scares them every single day.

(APPLAUSE)

BLITZER: How do you do that? How do you protect seniors, balance the budget so much, so much goes for Social Security, Medicare?

GINGRICH: But that's just a Washington mythology. And anybody who knows anything about the federal government knows that there's such an enormous volume of waste that if you simply had a serious all- out effort to modernize the federal government you would have hundreds of billions of dollars of savings.

BLITZER: If you were president, would you work with the Democrats assume ling they were the majority in the House or Senate? Would you compromise with them on some of these gut issues?

GINGRICH: When I was a young congressman, Ronald Reagan taught me a great lesson if you have Democrats in charge. And that is to go to the American people on principle. Have the American people educate their congressman. He used to say, "I try to turn up the light for the people so they will turn up the heat on Congress." When we passed welfare reform, half the Democrats voted yes because they couldn't go home having voted no. And on a principle basis, I'd be glad to work with Democrats on any office. But I'd do it on principle, not on compromising principles.

(END VIDEO CLIP) BLITZER: All right, let's go to Tampa, Florida. Right now, joining us live, the Republican Presidential Candidate Newt Gingrich.

Mr. Speaker, good to have you back in THE SITUATION ROOM.

GINGRICH: It's always great to be back with you. You did a great job last night.

BLITZER: Oh, thank you very much.

Let's talk a little bit about last night, because I want to go through some of the issues and see where you stand.

I had this exchange with Ron Paul, the congressman from Texas, on a sensitive subject. Let me play the clip and then we'll discuss.

(BEGIN VIDEO CLIP)

BLITZER: Let me ask you this hypothetical question.

A healthy, 30-year-old young man has a good job, makes a good living, but decides, you know what, I'm not going to spend $200 or $300 a month for health insurance because I'm healthy, I don't need it. But, you know, something terrible happens, all of a sudden he needs it.

Who is going to pay if he goes into a coma, for example? Who pays for that?

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: In a society that you accept welfarism and socialism, he expects the government to take care of him.

BLITZER: Well, what do you want?

PAUL: But what he should do is whatever he wants to do and assume responsibility for himself. My advice to him would be have a major medical policy, but not be forced --

BLITZER: But he doesn't have that. He doesn't have it and he needs -- he needs intensive care for six months. Who pays?

PAUL: That's what freedom is all about, taking your own risks. This whole idea that --

(APPLAUSE)

PAUL: -- you have prepare and take care of everybody --

(APPLAUSE)

BLITZER: But, Congressman, are you saying that society should just let him die?

UNIDENTIFIED MALE: Yes! PAUL: No. I practiced medicine before we had Medicaid. In the early 1960s, when I got out of medical school, I practiced at Santa Rosa hospital in San Antonio, and the churches took care of them.

(END VIDEO CLIP)

BLITZER: All right, Mr. Speaker, Rick Perry today said he was taken aback when he heard some in that audience say, yes, society should just let this hypothetical 30-year-old die.

Did -- what went through your mind when you heard that exchange?

GINGRICH: Well, I thought it was a missed opportunity to make a very important case, which is that historically we had charity. We had places that said, if you're down on your luck, if you failed to be responsible, we will take care of you. But that doesn't mean that you're necessarily going to get a private room. It doesn't mean you're necessarily going to get everything somebody would get who's been prudent and who took care of themselves.

So I would start and say that that young person, if they're totally improvident, if they refused to buy insurance, if they've done nothing to be mature adults, yes, we're going to make sure that they're taken care of, but they ought to understand that's charity. They haven't earned it, they're getting it because we care and we're sympathetic and we're compassionate. We're (sic) not getting it because they've earned it.

BLITZER: But that money should come from charitable organizations, not from taxpayers, is that what you're saying?

GINGRICH: Well, I think -- I personally favor the tax deduction for charitable donations. I would prefer to see it come from charitable organizations. Clearly, with Medicaid, we've provided all sorts of money for the poor.

This idea, you know -- what's happened is modern liberalism has said, if you don't have insurance, you can't be covered. That's not true. We could provide health care for the indigent for much less money than we can provide free health insurance.

And I think there are times when we ought to look at whether free clinics are actually less expensive than a universal insurance program, whether or not having a charitable program and charitable hospitals is less expensive and delivers first rate care. None of the doctors who work in free clinics are bad doctors. None of the hospitals that historically are charitable hospitals are bad hospitals.

But it's a recognition that if you refuse to be responsible, you refuse to take care of yourself -- see the case you used, a 30-year- old has a job, perfectly healthy refuses to be an adult, refuses to be a good citizen. I'm not sure we owe them 100 percent of what we owe somebody who has done everything right and worked hard and paid their taxes and bought their insurance. BLITZER: Let's move on to another sensitive subject that came up, Governor Perry's defense, if you will, of that decision he made as governor of Texas to force young girls, 11-year-olds, 12-year-olds, to get this vaccine to avoid a sexually transmitted disease that could lead to cervical cancer.

He defended that decision, although he regretted the fact that he did it through executive order instead of growing through the legislature. Do you have a problem with the point he was trying to make?

GINGRICH: Well, I think Governor Palin later last night had a very powerful point. As governor of Alaska, she looked at the same program as a mother with daughters. She looked at the same program. She rejected it.

I think she thinks that if parents want it, that's one thing, but to impose it, unless parents opt out, she thought was going much too far. And I'm very sympathetic to that.

I think we don't need big government dictating to the rest of us and then saying, well, you always had a chance, sorry you didn't know about it. So I think that Governor Perry has a little more explaining to do on that project, and I'm sympathetic to the point Rick Santorum was making last night that we ought to be very cautious about big government intervening on things like this, particularly when you're talking about a 12-year-old girl. I think that we really have to think about whether or not we want government mandating things like that.

BLITZER: What about his decision to allow in-state tuition for children of illegal immigrants in Texas? That wasn't popular in the audience there, the Tea Party supporters, but what do you think? Does he have the point there?

GINGRICH: You know, I thought there were two parts to that, and I was a little sorry that I didn't have a chance to get involved in that, because in a sense, it also goes back to the earlier conversation about the 30-year-old that you asked about.

First of all, the idea that you either have to have in-state tuition or you can't educated is nonsense. There are private universities. There are for-profit institutions. There's Phoenix University. There are dozens of way to solve this.

Second, you could have said, well, you pay out-of-state tuition. There are a variety of things you could do, so it's not an either/or situation.

I'm very sympathetic to somebody whose parents brought them here at 3 years of age, they've been here 16 years, they're now a 19-year- old, they don't even speak any language except English. Clearly, there has to be some path to get them to be part of America. I think that's got to be part of what we approach with reform, but I'm not sympathetic with the idea that, therefore, we owe them the same tax break that we give somebody who is here legally, who is a resident. I mean, after all, if you're a resident of Oklahoma, and you show up in Texas, you're not going to get the same break even though you're a legal American citizen. Now, we don't say to Texas, you have to take care of Oklahoma, Mississippi, Louisiana, New Mexico. We say it's your decision. But I don't think it's quite as clear as the governor tried to make it last night.

And by the way, it's not about somebody's last name. That's baloney. I mean, that particular line I thought was slightly goofy.

The question is whether you are legal or not legal, your last name can be Smith, or in my case, Gingrich. And if you're not legal you're over here, if you're legal you're over here. It's not about your last time. It's about the status of legality in the United States.

BLITZER: You and I last night did talk about what to do with the 11 million or 12 million illegal immigrants in the United States. Assume, Mr. Speaker, the border is secure, no problem with the border. What do you do with the 11 million or 12 million illegal immigrants in the United States?

GINGRICH: Well, I think if you have a secure border, if you've established that English is the official language of government, if you have a requirement for learning history in order to be an American, and American history to be an American citizen, and if you have an effective guest worker program, which means it's probably been outsourced to American Express, Visa or MasterCard, because they know how to stop fraud, at that point, I think you've got to look at a new and much more creative solution for the people who are here.

I've suggested looking at the World War II Selective Service boards. Some people here ought to go home. Some people here, frankly, are engaged in criminal activity and they ought to go home immediately. Other people, day workers, no ties to the U.S., probably should go home.

But you have somebody who's been here 20, 25 years, they've been obeying the law, they've been paying taxes, they're married, they've got three kids, two grandkids, they're a member of your church, I think the local community's going to say -- not give them citizenship, that would be wrong, but we need to find a path to enable them to be engaged legally in working and living in America within a framework that does not jump over everybody else who has been waiting, but that does recognize that that person has real ties here, and that there be a greater human cost to tearing them out of the fabric of a society in which they've invested 20 or 25 years.

I think we need local boards that apply a human approach to trying to deal with this with some sympathy, but that's also very tough with criminals and very tough with people that have no ties to the U.S. and should go back home immediately.

BLITZER: It sounds to a certain degree that we're talking about -- or at least you're talking about -- a form of amnesty. GINGRICH: No, I'm talking about a form of legality which recognizes the reality that some folks are here. And I don't think when you get down to it, if you go out to talk to people who are very hard-lined, and you say to them, "Now, how many folks in your church are you prepared to go in and tear out of their families and ship out of the United States?" I think you're going to find people suddenly say, OK, let's find a human, commonsense, intermediate step. Not citizenship, but not explosion.

Maybe it gets involved with paying a very substantial penalty because they have broken the law. And maybe that penalty is a function of how long they've been here, and therefore a function of how much they've got to pay over time. But I think you want to find a practical, commonsense solution within a framework of controlling the border, having a guest worker program, and immediately expelling criminals, and requiring people who have no ties to the U.S. to go back home.

BLITZER: Mr. Speaker, I don't know if you have to run, but if you have a second, I want to take a quick commercial break. There's another question I need to ask you about national security. Can you stay with us?

GINGRICH: I'll stay with you.

BLITZER: All right. Stand by.

We're going to get to some national security issues. Want to hear what the Speaker has to say.

Much more of our coverage and the interview when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: It's time to bring our young men and women home as soon and as obviously safely as we can. But it's also really important for us to continue to have a presence there, and I think the entire conversation about, how do we deliver our aid to those countries, and is it best spent with 100,000 military who have the target on their back in Afghanistan? I don't think so at this particular point in time.

(END VIDEO CLIP)

BLITZER: Governor Rick Perry last night at the CNN/Tea Party debate.

It sounds like, correct many if I'm wrong, Mr. Speaker, he wants to get out of Afghanistan a lot more quickly than you would recommend.

GINGRICH: Well, I think we have to ask the military, what's the most rapid rate at which we can withdraw from Afghanistan safely? But I think we are drifting towards the most dangerous period in the Middle East since the Yom Kippur War of 1973. The Turkish-Israeli confrontation could become extraordinarily dangerous. The developments in Egypt in the last week have been very, very dangerous. The Iranians, I think yesterday, announced that their first new nuclear reactor had gone on line.

I think people underestimate how many different problems are building very rapidly. And frankly, I think that the administration's decision to keep 3,000 troops in Iraq is extraordinarily dangerous and indefensible.

So I think there are a lot of things going on simultaneously across the region, and we need to review all our posture in the region, not just Iraq and Afghanistan. I think this is going to become a very serious and very dangerous region.

BLITZER: Do you think Governor Perry has the background, the knowledge to deal with these issues if he were president?

GINGRICH: Look, I think Governor Perry is a very smart man with a very long period of being the head of the Texas National Guard. He had military service. He is somebody who takes very seriously understanding the military. He has many friends. Remember, there are places the size of Fort Hood in Texas.

I think he's a competent guy. He happens to have a strong view about Afghanistan, but he's a very competent person. And if you ask me, if I had to choose between Governor Perry and President Obama, it would be like 99-1 that Governor Perry knows more at a practical level about national security than President Obama does. I am very worried, and I believe that President Obama's decision about Iraq, leaving only 3,000 troops there, is utterly, totally indefensible and extraordinary dangerous.

BLITZER: If you had to choose between Governor Perry and Governor Romney, who would you like?

GINGRICH: Listen, I like all of my Republican friends. I'm happy to choose any one of them versus President Obama, but I'm not choosing any of them against each other. They're all my friends, and I hope to work with all of them in the future.

BLITZER: One final political question before I let you go, Mr. Speaker.

Our latest CNN/ORC poll had Perry at 30 percent; Romney, 18 percent; Palin, who's not even in, 15 percent; Ron Paul, 12; you and Herman Cain at five percent.

Where does your campaign stand right now? Where do you assess your position in this race for the White House?

GINGRICH: Well, right now, we are exactly where George McGovern was at this stage before he got the nomination. It's where Jimmy Carter was at this stage before he became president. It's where Bill Clinton was, at this stage, before he got to be president. And by the way, at this stage in 2007, John McCain wasn't in the top two either. So I'm pretty comfortable. We are talking about substance. We're talking about things that matter to the American people, starting with job creation.

And every week that goes by, I think we gain strength in every debate we've been in. And we have a lot more folks showing up at Newt.org and volunteering to help. So I feel pretty good about where we are and how it's developing.

BLITZER: I never thought I'd here Newt Gingrich making comparisons between himself and Jimmy Carter and George McGovern.

Mr. Speaker, that's not every day you hear that. Right?

GINGRICH: They got the nomination.

(LAUGHTER)

GINGRICH: They got the nomination, as did Bill Clinton and John McCain.

BLITZER: Mr. Speaker, good to have you back here in THE SITUATION ROOM.

GINGRICH: Thanks.

BLITZER: Thanks very much.

GINGRICH: Good to talk to you, Wolf.

BLITZER: Good luck there out on the campaign trail.

The former Speaker of the House, Newt Gingrich.

In California, thousands of prisoners may soon be released. We're going to tell you why.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now.

What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, Homeland Security Secretary Janet Napolitano is among those stressing that more work needs to be done before dismissing the current terror threat even though 9/11 has passed.

(BEGIN VIDEO CLIP)

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: We consider it an ongoing threat, and we continue to lean forward into confirming that threat.

(END VIDEO CLIP)

SYLVESTER: Authorities confirm that a plot tied to Sunday's 9/11 10th anniversary could be in the works, but emphasized the information was uncorroborated.

Almost half of all female inmates in California could soon be released from prison and reunited with their families under a newly implemented alternative custody program. Offenders charged with non- violent, non-serious, and non-sexual crimes are eligible.

And new signs insulin may help treat Alzheimer's Disease. A study published in the "Archives of Neurology" says the drug appears to improve cognition and function in patients suffering mild and more severe dementia. The study could set the stage for broader clinical trials -- Wolf.

BLITZER: Thanks very much, Lisa. We'll have you right back.

All right. Just ahead, why the nation's poverty rate is soaring.

Plus, is Texas Governor Rick Perry still on top in the race for the White House?

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session."

Joining us, CNN politic contributors Roland Martin and Republican strategist Mary Matalin.

Mary, Rick Perry, did he help himself last night in a Republican contest or hurt himself?

MARY MATALIN, CNN POLITICAL CONTRIBUTOR: Well, he continues to be the front-runner. That's a good thing and it's a bad thing. You're a front-runner, you're in the bull's eye. But this is not Rick Perry's first rodeo. He's going to stand up there and be a punching bag, pinata, because that's the nature of being a front-runner. But he certainly didn't hurt himself.

And these things get analyzed instantly, and then they sink in. And what sunk in is that he's still the front-runner by a substantial and solid margin, and there's a reason for that. And it's his record in Texas, and it's he walks, he talks, and he looks and he sounds like what a conservative is, and what should be, and what the Republicans are looking for. But this things far from over. We have many more debates and many more contests in front of us.

BLITZER: You know, Roland, he refused to walk away from some of the controversial positions that he had, positions that some of those Tea Party supporters aren't very happy about. For example, allowing that in-state tuition for children of illegal immigrants in Texas, or for that vaccine for young girls.

He didn't back away from that. He was firm. ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Well, first of all on the vaccines, he did apologize for not going to the legislature to actually get that done versus issuing an executive order, so it was very smart for him to do that. But, Wolf, I'll tell you, it is wise for him to take this position because, once you have a reputation of being a flip-flopper and backtracking, then of course it hurts you. Ask Mitt Romney in 2008. But here's the thing that Governor Rick Perry must be very clear about, and that is, one question can very well open a crack in your armor and let your competition in.

Remember, in the 2008 race, Senator Hillary Clinton was asked a question about drivers' licenses for legal immigrants. She flubbed that question.

That was an opening that Senator Obama needed to come in, and that raised (ph) change after that one question. And so he is going to have to be stronger in some of his answers, but there's no doubt the bull's eye is on his back.

BLITZER: Were you surprised, Mary, that Michele Bachmann was as tough in slamming him last night as she was?

MATALIN: No. I mean, she has been consistently discounted. She's much more formidable a person and a candidacy than sort of the chattering classes have given her credit for. And she got on that like a pit bull, but in the light of day, there are 41 states that have enacted -- or haven't enacted, but had some legislative discussion on the HPV vaccine, and 20 states have enacted something, Minnesota being one of them.

So this is hardly an outlier kind of extreme issue which she got on. She stayed on it. In the end, though, that is not going to matter. It's jobs. It's the economy.

Where she did a really great was her opposition, her intensity of her opposition, and an eloquence and articulation of opposition to Obamacare. That's a very big economic concern for the entire country, not just the electorate. So she did well last night, very well, and she remains formidable.

BLITZER: Go ahead, Roland.

MARTIN: But, Wolf, her responses on the vaccination is important because she was hitting hard on him issuing an executive order and also the mandate. And so I looked at that issue going beyond just the vaccination issue, really going to the whole notion of, how do you use an executive order?

And so, Rick Perry had to deal with that. And so it was smart for her to be this aggressive, because after winning the Ames, Iowa, poll, look, he has taken a lot of attention. She needs to make sure that she is in the top tier. And so it was a smart move on her behalf to be that aggressive in that debate. She can't be less aggressive in any debate in order for her to maintain that top-tier status.

BLITZER: Roland and Mary, we'll continue this conversation. Thank you.

Jack Cafferty's coming up next.

Then, Senator Dianne Feinstein says her campaign war chest has been "wiped out." The alleged crime was an inside job.

Stay with us.

(COMMERCIAL BREAK)

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

CAFFERTY: The question this hour: Is Governor Rick Perry -- is he right to call Social Security a Ponzi scheme?

Mike in Florida writes, "Perry's a jerk. Social Security is a lifeline for the old and not well off. We all know how to fix it forever. Take the earning cap off FICA. But no one has the guts to propose it."

Tom in Atlanta writes, "It's time someone talks about the unspeakable third rail political topic. Perry has shocked us into openly talking about this, and I give him credit for having done so. Is it a Ponzi scheme? Well, it looks like a duck, sounds like a duck, and it walks like a duck."

David in Missouri writes, "Jack, if I may make one small correction, Social Security became a Ponzi scheme. Folks, please remember we had $3 trillion in the trust fund, cash on hand. In 30 years, Congress has spent every single dime of that money that wasn't theirs to spend knowing full well their IOUs were bogus. So, please, let's be very clear and truthful about why Social Security became a Ponzi scheme."

Brandon writes, "Obviously, Rick Perry spent too much time at the firing range. A Ponzi scheme is where somebody takes money from somebody else for their own personal profit. Social Security is taking a small sliver of money from the taxpayers and giving to the seniors, the people who built this country into what it is today."

Bill in New Mexico writes, "Only the future will determine whether Social Security's a Ponzi scheme. When the decision was made to not have each individual Social Security taxes in an individual account accumulating interest, Social Security was well on its way to becoming a Ponzi scheme. Rick Perry's got a 50/50 chance of being right."

And Randy writes on Facebook, "Call it what you want. The bottom line is Social Security is going to run out of money before I retire."

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

BLITZER: All right, Jack. Thank you.