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THE SITUATION ROOM

Looming Government Shutdown One Week Away; Palestinians Launch Historic Statehood Bid; Top Execs from Solyndra Take Fifth Before Congress; President Allowing State to Opt Out of No Child Left Behind; GOP Presidential Candidates Square off in Debate in Florida; Fact- Checking GOP Presidential Front-Runners; Paul Ryan: The Man With the GOP Budget Plan; 'Strategy Session'

Aired September 23, 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, a major potential -- potential setback for Middle East peace process. Palestinian Authority President Mahmoud Abbas making an historic quest for statehood at the United Nations.

Israel denouncing the call. Just ahead, my rare sit-down interview with the Israeli prime minister, Benjamin Netanyahu.

What is next?

Is the peace process dead or can it be revived?

Plus, for the third time this year, the clock is ticking toward an impending government shutdown one week from today. Will Americans around the country suffer the blow of a new political gridlock in Washington?

And NASA's new warning for the United States, as hundreds of pounds of space junk barrel toward Earth.

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

But up first, let's go Up next, Pakistan, where there are now disturbing new U.S. concerns about ties to the alleged terrorists behind a score of recent attacks in Afghanistan.

Top U.S. officials already indicated this week there's evidence Pakistan's intelligence agency is supporting what's called the Haqqani network.

Now they're going one step further, saying they believe that support is coming from the agency's highest ranks.

Our Pentagon correspondent, Barbara Starr, is standing by with the latest -- Barbara, there's a lot at stake right now.

What are the officials saying?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, Pakistan is supposed to be one of the US's closest allies in the war of terror. The United States gives Pakistan billions of dollars every year in aid. But now, for the third day in a row in Washington, tensions ratcheting up.

Today, a top U.S. military official said, indeed, it is the top leadership -- right at the top of the ISI, the Pakistani Intelligence Service, that is supporting the Haqqani network with money, financing, organization, training and advice, supporting their attacks inside Afghanistan and some of those attacks having killed U.S. troops in Afghanistan, as well as, of course, Afghan civilians.

This comes after Admiral Mike Mullen and Leon Panetta, the Defense secretary, all week long have been saying these attacks are no longer tolerable, that Pakistan needs to crack down on them.

Today, the Pakistani Army chief, Mullen's counterpart, fired back, saying that Mullen's comments are not accurate and even saying that they are disturbing.

In the words of General Ashfaq Kayani, the Pakistani Army chief of staff, "disturbing comments by the American admiral," he says, "that are not true, and especially because the two men met and just sat down over the weekend and had a meeting about all of this."

But the Pentagon is sticking by all of this, saying it is the top leadership of Pakistani intelligence that is supporting the Haqqanis -- Wolf.

BLITZER: And I just want to be precise, are U.S. officials also suggesting these elements in the Pakistani Intelligence Service were behind, involved, directly helped plan the attack recently on the U.S. Embassy in Kabul?

STARR: Well, I will tell you, no one is going to that -- into that level of detail that we have spoken to. Where the -- where they are is they say it is the top levels of Pakistani intelligence supporting the ISI, supporting the Haqqani network. And that Haqqani network was responsible for the attacks against the U.S. Embassy, against ISAF headquarters. You've seen the video over the last several days of the U.S. troops trying to defend ISAF, NATO headquarters. Responsible for attacks against the Intercontinental Hotel in Kabul. Responsible for many attacks against military bases across Afghanistan and other against other government facilities in Kabul.

So they believe that the Haqqani network has the financing, the backing of the Pakistani Intelligence Service -- Wolf.

BLITZER: Barbara Starr, thanks very much.

Yesterday here in THE SITUATION ROOM, the Pakistani foreign minister flatly denied these allegations.

Real tension right now between Washington and Islamabad.

But let's go to Capitol Hill right now, where yet again, Democrats and Republicans are on a collision course, with a looming government shutdown just one week from today.

It all comes down to some critical disaster relief funds set to run out next week.

Let's bring in our Congressional correspondent, Kate Bolduan.

She's working the details for us.

What's the latest -- Kate?

KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Wolf.

Well, as the top Democrat in the Senate put it today, Democrats and Republicans up here need to cool off over the weekend, with the Senate returning for a vote Monday evening.

But it seems the fight is far from over, as disaster aid and government funding deadlines quickly approach.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): With lawmakers heading for the exits and after a long week of heated debate --

REP. MIKE SIMPSON (R), IDAHO: That's the danger to this country is a $14 trillion deficit and the $1.6 trillion we add to it every damn year.

REP. ED MARKEY (D), MASSACHUSETTS: Wake up. Wake up. You can't kill these programs. This is the solution you are killing.

BOLDUAN: Congress leaves Washington with no agreement on how to avoid another government shutdown.

Why the holdup as the September 30th deadline looms?

Neither side is backing down. Top Republicans and Democrats continue pointing fingers at each other.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Harry Reid is holding a bill up with full funding of what is needed right now for no reason but for politics. Again, this is why the people just don't have the respect for this institution and this town anymore.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I can't understand their logic.

I mean, do they want the government to shut down?

Do they want FEMA to close?

And FEMA will close.

BOLDUAN: The House, late Thursday night, narrowly passed a short-term spending bill that will keep the government funded through mid-November. The measure also includes what both sides say they care about most -- urgently needed money for federal disaster relief in the wake of the recent floods, storms and wildfires.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It is a reasonable, responsible approach.

BOLDUAN: But that plan was quickly rejected by the Senate. The Democratic majority strongly opposed to House GOP demands the disaster aid be paid for or offset by cutting money for clean energy programs, including the one linked to the now bankrupt solar company, Solyndra.

Yet Democrats contend these programs are creating jobs.

REID: Is it really fair that to fund disaster relief, we take American jobs?

(END VIDEO TAPE)

BOLDUAN: Senator Reid has now countered with what the Senate Democrats call a compromise, saying they will go along with the House measure providing $3.6 billion to federal disaster relief, less than Senate Democrats wanted, but they will not go along with the offsets that are called for in the House measure.

The stalemate now forcing at least the Senate to put off part of its scheduled recess next week -- Wolf, we'll see about the House.

BLITZER: We'll see what happens. One week to go and counting.

These guys have got to get their act together, there's no doubt about that.

Thanks very much for that, Kate.

Over at the United Nations here in New York, an historic moment with serious implications for the future of the Middle East peace process.

The Palestinian Authority president, Mahmoud Abbas, making an unprecedented membership bid for Palestinian statehood amidst cheers of solidarity from crowds of Palestinians in the West Bank. Only moments later, the Israeli prime minister, Benjamin Netanyahu, made his case before the General Assembly. I'll ask him about it in a few minutes. I sat down with Mr. Netanyahu just a little while ago.

But first, let's go to CNN senior United Nations correspondent, Richard Roth.

He's over at the United Nations with the latest -- Richard, how

Did this all play out today?

RICHARD ROTH, CNN CORRESPONDENT: Dramatic history, Wolf, with perhaps an uncertain future. Electric speeches inside the General Assembly Hall between Abbas and Netanyahu. In a way, it almost seemed like one of those Republican campaign debates, with each side making their pitch to the General Assembly Hall, which does favor the Palestinians. Abbas got much more applause and several standing ovations from different groups of countries. "it's time for a Palestinian spring," said Abbas, as he formally held up his application for statehood at the U.N. To applause.

MAHMOUD ABBAS, PALESTINIAN AUTHORITY PRESIDENT (through translator): This is a copy of the application.

(APPLAUSE)

ABBAS: I call upon Mr. Secretary General to expedite the transmittal of all requests to the Security Council. I call upon the distinguished members of the Security Council to vote in favor of our full membership.

(END VIDEO CLIP)

ROTH: The Security Council now has that statement and will hold a meeting on Monday, the first initial meeting behind closed doors -- no votes, no decisions expected.

The Israeli leader says he wants peace with the Palestinians, but he must have security. And he wants to talk face-to-face with Mr. Abbas, Netanyahu saying, the same city, let's do it here.

But the Palestinians want a settlement freeze and there are still many divisions.

Netanyahu said: "We pulled out of Gaza," referring to Israel, "and yet we still get missiles."

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Would any of you, would any of you bring danger so close to your cities, to your families?

Would you act so recklessly with the lives of your citizens?

Israel is prepared to have a Palestinian state in the West Bank, but we are not prepared to have another Gaza there.

(END VIDEO CLIP)

ROTH: Netanyahu saying they should have a peace between the Palestinians with Israel and then Israel would be the first to declare and recognize the Palestinians as a state here at the U.N. -- Wolf.

BLITZER: Richard Roth, you know, as I was watching and listening to Mahmoud Abbas's speech before the General Assembly, you remember when Prime Minister Netanyahu spoke before a joint meeting of the U.S. Congress back in May in Washington. The reception that Netanyahu got in Congress was very similar to the reception that Mahmoud Abbas got today in the General Assembly. I think you'll agree with that.

ROTH: I did. I thought about that during the speech. I also thought about 1974, Abbas appearing empty gun holster, saying don't let the olive branch drop from my hands.

Dramatic moments. But as Netanyahu said, Zionism is racism was declared in 1975 against Israel. He said this is a theater of absurd in the General Assembly for what the -- what has been done to Israel at various international forums.

BLITZER: Yes. You meant Yasser Arafat, not Abbas. You said Abbas, but you meant Yasser Arafat in 1974 --

ROTH: Oh, I'm sorry.

BLITZER: -- when he met with the olive branch --

ROTH: It's been a long day, a long week. Yes, sorry about that.

BLITZER: You've been working --

ROTH: Yes.

BLITZER: -- you've been working hard. I -- I saw you very, very early this morning. So -- but this is a big week for you and for the United Nations.

Richard Roth reporting for us.

ROTH: Well, they still don't have a state.

BLITZER: They still don't have a state. But I remember that 1974 speech that Arafat gave at the General Assembly, just as you do.

Thanks very much, Richard, for that.

Just ahead later here in THE SITUATION ROOM, my interview with the Israeli prime minister, Benjamin Netanyahu. We'll talk about a number of issues, including President Obama's controversial relationship with Israel right now. I'll ask the prime minister, is President Obama a friend of Israel?

If he is, how close of a friend?

We're going to get through all of that.

Plus, why did a solar company touted by President Obama go bankrupt after receiving hundreds of thousands of taxpayer dollars?

Actually, it was closer to $500 million.

Lawmakers want answers and they're not getting any.

(COMMERCIAL BREAK)

BLITZER: The spending battle is not President Obama's only beef with Congress right now. Today he blasted lawmakers over education reform, specifically the controversial No Child Left Behind law, and he's taking new steps to change it. Our White House correspondent Dan Lothian is working the story for us, and he has the latest. Dan? DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, No Child Left Behind was passed with bipartisan support back in 2001, but ever since the beginning it was quite controversial. Today President Obama said while the goals were, quote, "admirable," there were serious flaws that hurt children instead of helping them.

(BEGIN VIDEOTAPE)

LOTHIAN: Declaring that it is time to make America's education system the envy of the world, President Obama took matters into his own hands, allowing the states to opt out of No Child Left Behind's requirements and stiff penalties.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: The change we are making is not lowering the standards, but we are saying that we will give you more flexibility to meet high standards.

LOTHIAN: States have to adopt the plan approved by the administration to put students on academic track for college and careers. They would also have to set guidelines for grading teachers and principals. That could be controversial.

The country's education system is still struggling to make the grade 10 years after President George W. Bush unveiled No Child Left Behind with much promise.

GEORGE W. BUSH, FORMER U.S. PRESIDENT: This act is an important way to make sure that America remains competitive in the 21st century.

LOTHIAN: But critics say it encouraged the schools to lower the standards in order to meet the goal of making all students proficient in reading and math by 2014. The department of education predicted more than 80 percent of the nation's schools could miss the target, running the risk of being shut down or losing staff and critical federal dollars.

OBAMA: Congress has not been able to do it.

LOTHIAN: President Obama criticized Congress for not acting sooner to fix the flaws in No Child Left Behind.

OBAMA: Our kids only get one shot at a decent education, and they cannot afford the wait any longer.

LOTHIAN: There is bipartisan agreement on the problem, but not on President Obama's solution.

LINDSEY BURKE, HERITAGE FOUNDATION: This is a significant executive overreach on the part of the Obama administration, and states that accept the waivers might be accepting some temporary relief from Washington, but, ultimately, they will be taking long-term handcuffs.

LOTHIAN: She is still concerned about the federal footprint in the classroom. BURKE: This is giving the education secretary far more authority to dictate the policies that are implemented at the state and local level and really dictate what is taught in local schools.

(END VIDEOTAPE)

LOTHIAN: Now she argued that instead of trying to fix a broken system, that there needs to be comprehensive reform, one that gives more control to states, local communities, and to parents. Wolf?

BLITZER: Dan Lothian, over at the White House, thanks very, very much.

Lawmakers want the questions answered about why a solar panel manufacturer went bankrupt after receiving half-a-billion dollars in U.S. government loans. Executives from Solyndra were on Capitol Hill today, and Lisa Sylvester is there as well. She's following the story. How did it go, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hello, Wolf. The lawmakers didn't get many answers. Company executives invoked their Fifth Amendment right against self-incrimination today. The FBI and the energy department inspector general and the treasury department are all looking into the Solyndra, a company that has received more than half a billion dollars from taxpayers, money that will likely never be recovered.

(BEGIN VIDEOTAPE)

SYLVESTER: The Solyndra CEO and chief financial officer were sworn in. Republicans peppered with questions. More than 10 times they declined to answer.

BRIAN HARRISON, CEO, SOLYNDRA: I have been advised by my counsel that it is better for me to insert my ability to decline to answer the question under the Fifth Amendment.

BILL STOVER, CFO SOLYNDRA: Under the Fifth Amendment to the U.S. constitution I respectfully decline to answer any questions.

HARRISON: Fifth Amendment.

STOVER: Fifth Amendment.

HARRISON: Fifth Amendment.

SYLVESTER: Lawmakers on the House energy and commerce investigation subcommittee are looking into $535 million department of energy loan guarantee to the now bankrupt solar panel company. Republicans have accused the Obama administration officials of ignoring warning signs that Solyndra was a risky financial bet and proceeding with the loan as part of a broader green jobs agenda, one lawmaker calling it a modern day train robbery.

REP. FRED UPTON, (R) MICHIGAN: Let me just warn you and the other folks involved in this taxpayer rip-off -- we are not done, no, we're not.

SYLVESTER: We asked Solyndra's CEO Brian Harrison and CFO Bill Stover and their lawyers if they had any comment after the hearing.

(on camera) Did you do anything wrong? Did you try to mislead lawmakers or investors in any way? Is there anything that you want to say in your defense?

(voice-over) Right up to the very end the company executives were reassuring the committee members that the finances were strong n. A letter dated July 13th of this year, Solyndra's CEO gave a glowing assessment of the company's finances claiming that the revenues were projected to double in 2011. And 49 days later Solyndra announced it would be filing for bankruptcy.

REP. DIANA DEGETTE, (D) COLORADO: That is one of the burning questions that we have is how could that happen? How could they come to my office and others and paint the rosy picture and go into bankruptcy five weeks later.

SYLVESTER (on camera): They were lying?

DEGETTE: I don't know if they were lying or what, but this is one of the things that we need to ask.

SYLVESTER (voice-over): Ranking Democrat Diana Degette agrees with Republicans that taxpayers have a right to know what happened to half a billion dollars, but she says that the Solyndra case shouldn't be used as a reason to gut future clean energy projects.

(END VIDEOTAPE)

SYLVESTER: Democrats also accused Republicans on the committee of badgering the witnesses. They said that it was apparent early on that the CEO and the CFO were not going to answer questions. Representative Degette said Republicans were, quote, these are her words, "cheap gimmicks to lob political questions." Wolf?

BLITZER: So they didn't say a word to you as they were leaving. They just looked stony faced, and as you asked them the question, they kept on walking, is that right?

SYLVESTER: Yes, we asked questions to both the CFO as he was walking out as well as to the CEO Brian Harrison. We didn't get any kind of comment. We also addressed questions to their attorneys, and their attorneys did not even make a statement at all, nothing of any sort, not even a no comment, Wolf. So we got nothing from them.

BLITZER: It is one thing for the principles not to comment, but another for the attorneys not even the comment. Thank you, Lisa. Good work.

Searching for the cause after a deadly air show crash, what investigators are hoping to learn from memory cards and photographic equipment.

And in the jury's hands, a Florida millionaire accused of killing his wife awaits a decision.

(COMMERCIAL BREAK)

BLITZER: Investigators released the first report on the Reno air race crash. Lisa Sylvester is monitoring that and other top stories in THE SITUATION ROOM right now. Lisa, what is going on, Lisa?

SYLVESTER: Hi, there, wolf. Well, a preliminary report from the national transportation safety board says that a small piece of the tail separated shortly before the crash at the Reno air show, but it does not include a probable cause of the crash. And 11 people were killed when a World War II era plane crashed into the box seats in front of the grandstands of spectators last week. The NTSB is examining memory cards from the plane's onboard camera.

And a jury is deciding whether a Florida millionaire killed his wife in their mansion two years ago. James Bob Ward is accused of shooting his wife between the eyes. Prosecutors say Ward admitted killing her in the 911 call, then told inconsistent stories about what happened. The defense insists Diane Ward died after a struggle over the loaded gun.

Italian prosecutors are presenting the closing statements in the appeal of Amanda Knox case. They urged the jurors to put themselves in the place of the victim's parents. Knox and her ex-boyfriend were convicted of killing her British roommate. Defense attorneys are expected to prevent final arguments early next week.

BLITZER: We will see what they say. Thank you, Lisa.

He may be the frontrunner right now in the Republican race for the White House, but could that change after last night's debate?

Plus, my interview with the Israeli prime minister Benjamin Netanyahu is coming up. He is answering former president Bill Clinton's claim that Netanyahu is slowing down the peace process.

(COMMERCIAL BREAK)

BLITZER: The gloves were of last night in the Republican presidential debate, and now some are suggesting that the frontrunner the race may have serious bruises. Was it an off night for the Texas Governor Rick Perry? Here is CNN's Jim Acosta.

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Well, Rick Perry may be saddle sore after the rough ride he had at the GOP debate. The question is whether the frontrunner the horse race did more than throw a shoe.

(BEGIN VIDEOTAPE)

(APPLAUSE)

ACOSTA: Republicans looking for reviews of Rick Perry's performance at the Google sponsored GOP debate can go right to the search engine. "Close to disqualifying two hours" cried "The Weekly Standard," "A really bad debate" griped Tea Party Nation, "Shovel ready" tweeted one columnist at the Washington Post.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: He's for Obamacare, and now he's against it.

ACOSTA: When Perry mistakenly claimed that Mitt Romney had once supported the president's health care law, the former Massachusetts governor barely bothered to responded.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Yes, nice try.

ACOSTA: Perhaps just as damaging was the Texas governor's defense of his past support for in-state college tuition for the children of illegal immigrants. After Romney and Rick Santorum piled on --

ROMNEY: That kind of magnet draws people into this country.

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: I would say that he is soft on illegal immigration.

ACOSTA: -- Perry seemed to question their compassion. Not the best way to win over the party's anti-illegal immigration activists.

PERRY: I don't think that you have a heart. This was a state issue. Texans voted on it. And I still support it greatly.

(APPLAUSE)

CHRIS WALLACE, MODERATOR: Senator Santorum --

ACOSTA: At a post-debate speech to Florida conservatives, Romney said it's a matter of the head, not the heart.

ROMNEY: I think if you're opposed to illegal immigration, it doesn't mean that you don't have a heart, it means that you have a heart and a brain.

ACOSTA: Perry wasn't about to let that slide.

PERRY: As conservatives, we know that values and vision matter. It's not who is the slickest candidate or the smoothest debater that we need to elect. We need to elect the candidate with the best record and the best vision for this country.

ACOSTA: A little more than a month after tossing his cowboy hat into the ring, Perry has quickly galloped to the head of the GOP pack. Now the Lone Star governor is finding out it could be a bumpy ride to the nomination.

UNIDENTIFIED MALE: It's very difficult to get into a race this late and then have four debates in basically five weeks.

ACOSTA: The Christian conservative organizer Ralph Reed takes the long view on Perry's track record and the fact that he has never lost a race.

UNIDENTIFIED MALE: I would not underestimate Rick Perry.

ACOSTA (on camera): And that's what they say down in Texas.

UNIDENTIFIED MALE: Sure.

(END VIDEOTAPE)

ACOSTA: And Rick Perry can look to another Texas governor, George W. Bush, who had shaky debate performances in 2000 and 2004. While Republicans worried, Bush went on to win two terms as president -- Wolf.

BLITZER: Thanks very much for that.

Let's go straight to CNN's Tom Foreman. He's fact-checking the front-runners in the race.

Tom, the controversy over that HPV vaccine for little girls is still haunting Rick Perry. What are you finding out?

TOM FOREMAN, CNN CORRESPONDENT: Yes, another punch that he took last night, Wolf, one of the questions that was raised again was, why did he issue this executive order as governor to say, let's have these vaccinations for all young women in that state? Those vaccinations never took place. The legislature stopped it before it got that far.

But nonetheless, he was asked about that, and he said this --

(BEGIN VIDEO CLIP)

PERRY: I got lobbied on this issue. I got lobbied by a 31-year- old young lady who had stage four cervical cancer.

I spent a lot of time with her. She came by my office. She talked to me about this program.

I readily admitted that we should have had an opt-in, in this program, but I don't know what part of "opt-out" most parents don't get. And the fact is, I erred on side of life, and I will always err on the side of life as a governor and as the president of the United States.

(END VIDEO CLIP)

FOREMAN: At the end, he's talking there about how parents did have some choice to whether or not they were in the program, they could opt out if they didn't want to. But let's get back to that notion of the woman who lobbied him, because this is a big deal.

He says, "I got lobbied," implying that's the reason I did this. Here is the problem. He did meet a young woman with cervical cancer, they formed a relationship in which he clearly cared a great deal about what had happened to her, it was something that was covered in the press there. But he met her after he signed this order.

It was not the causal effect. It was something that happened afterward.

That's why this statement of his has to absolutely be misleading, because clearly, his implication there is, the reason I did it is I had this great personal experience. It was tragic, and he cared much about this young woman. She's since died, had a terrible story, and something that had a big impact, but that is not the way this played out in the big picture.

One more big thing we want to look at here, Wolf. One of the things that has been in the news of course all this week has been about Israel and the Palestinians and whether or not there will be a deal there, and Mitt Romney jumped all over the president on what he has had to say about Israel.

Listen.

(BEGIN VIDEO CLIP)

ROMNEY: The president went about this all wrong. He went around the world and apologized for America.

He addressed the United Nations in his inaugural address and chastised our friend, Israel, for building settlements, and said nothing about Hamas launching thousands of rockets into Israel. Just before Benjamin Netanyahu came to the United States, he threw Israel under the bus.

(END VIDEO CLIP)

FOREMAN: There you go, "threw Israel under the bus." Is that the case? Well, he can say that if he feels that that's the way it is. But you know what he's leaving out in all of this?

What's happened under the Obama administration in terms of policy toward Israel, in the view of the Palestinians, very similar to what happened under the Bush administration. He didn't mention that.

The president, in his speeches to the U.N., has been critical of the Palestinians, and he's been critical of Israel, and he has talked about a two-state solution. He's talked about the 1967 borders as a beginning of a negotiating area.

None of that is really new. So to suggest that this is somehow some new radical idea from this president, that is simply misleading also, and not something you should take to the bank -- Wolf.

BLITZER: I asked Prime Minister Netanyahu -- I just sat down with him here in New York, Tom -- about the Romney statement alleging that the president threw Israel under the bus. You're going to hear what the prime minister of Israel says, specifically responding to Mitt Romney. That's coming up in our interview here in THE SITUATION ROOM.

I think you'll be interested, our viewers will be interested as well.

Tom Foreman reporting.

Meanwhile, getting the nod from the GOP. Wisconsin Representative Paul Ryan is tapped for a high-profile post. We'll talk about the impact he will have on the presidential campaign. He's a rising star.

And moving beyond traditional targets, where unmanned drones are heading and why.

(COMMERCIAL BREAK)

BLITZER: He's seen as a rising star among the Republicans, and now the Wisconsin Congressman Paul Ryan will chair an important fund- raising group ahead of the 2012 presidential election.

Our chief political analyst, Gloria Borger, has been speaking extensively with Paul Ryan about how his budget ideas have become really central to this year's presidential campaign. Gloria is joining us now live.

I don't think there is any doubt that, certainly for Republicans, he is this huge, huge force right now.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. He certainly is, Wolf.

And, in fact, Paul Ryan's budget has become the Republican Holy Grail. But to Democrats, Wolf, it's just the work of the devil.

(BEGIN VIDEOTAPE)

REP. JOHN YARMUTH (D), KENTUCKY: The Ryan roadmap is the way to the cliff, and then over the cliff.

UNIDENTIFIED MALE: The Ryan proposal obviously would destroy our government.

REP. PAUL RYAN (R), WISCONSIN: I gave fear up for lent this year.

(LAUGHTER)

BORGER: You're not joking.

RYAN: I should know. No, I gave up fear for lent this year.

BORGER: You're not kidding me, right?

RYAN: No.

BORGER: How do you do that?

RYAN: Well, I'm working on it.

BORGER (voice-over): Until recently, Paul Ryan was a relatively unknown budget wonk. Now he's famous as the face of a new brand of Republican economics that includes the most sweeping plan to cut government spending in decades.

RYAN: There's a big test for this country. And whether we apply our country's principles, you know, liberty, freedom, free enterprise, self-determination, government by consent of government, all these really core principles are being tested right now, and you can't have fear if you try to fix these problems. You know, there is a shoot the messenger strategy these days --

BORGER (on camera): You're the messenger.

RYAN: I'm the messenger, and you can't fear that.

BORGER (voice-over): So who is Paul Ryan?

RYAN: I'm fifth generation from --

BORGER: The path from the union-heavy small town in Wisconsin led to a conservative pedigree, first as a Republican congressional staffer --

RYAN: I'm Paul Ryan, candidate for Congress.

BORGER: -- then with a long-shot bid for a House seat 13 years ago.

BILL BENNETT, TALK RADIO HOST: Well, Paul Ryan is maybe a rare thing in Washington. He is what he seems.

BORGER: Bill Bennett is a conservative talk radio host and CNN contributor. He was one of Ryan's mentors, along with supply side guru Jack Kemp in the early 1990s.

BENNETT: He is a guy without guile, without pretense. He likes to hang out with actuaries for relaxation.

BORGER (on camera): Who doesn't?

BENNETT: Yes, which is kind of a funny thing. He also hunts elk with a bow and arrow. So he's an interesting guy.

BORGER (voice-over): He's had the deficit in his sights for years, but even Republicans steered clear of some of his more controversial budget ideas. That is, until the Tea Party became the rage.

RYAN: I think it is because of the circumstances of what happened that the recession, the resulting binge and spending that occurred after it, and then passing entitlements like Obamacare, and then the electoral reaction to that brought these ideas into the mainstream.

BORGER (voice-over): Because it's not like you had an extreme makeover.

RYAN: No, no, I have been doing the same thing for a long time.

(END VIDEOTAPE)

BLITZER: Gloria, why didn't Paul Ryan decide this time around to run for president? A lot of folks were urging him to do so.

BORGER: They were. You know, he was hiking in the Colorado Rockies this summer, Wolf, when a bunch of Republican luminaries started trying to find him desperately, because they wanted him to run for president. They thought he was the man to take on President Obama on the budget deficit, on the economy, on the jobs issue.

And when I asked him about that -- he is 41 years old -- he said, look, you know, "There are other people who can run for president this time, but there is nobody else who can take care of my kids right now." He has a very young family. He is clearly young, with a future ahead of him in Republican Party politics.

And when I asked him about whether he'd be interested in the vice presidency, he was not so unequivocal. So, potentially, you could see Paul Ryan in a number two slot on a Republican ticket, although he is controversial.

BLITZER: I keep hearing his name mentioned, also Marco Rubio, the young Republican senator from Florida's name mentioned.

You know, Gloria, and I know this because we've been speaking to a lot of these Republicans, there's still a large group of Republicans who are looking for yet another candidate to enter this field.

BORGER: Right. Well, that's why they were reaching out to Paul Ryan. They've also reached out to Chris Christie, the governor of New Jersey.

When you see performances that Republicans criticize, as we saw in last night's debate -- all of the candidates got criticized in one way or another -- it still seems that the Republican Party is searching for someone new. But their problem, Wolf, it seem to me, is that there's a real generation gap.

You have got the younger people like Paul Ryan, the Marco Rubios, and then you've got the established people like a Mitt Romney, and people are searching for somewhere in between right now, and they don't quite have it.

BLITZER: Good work, Gloria. Good piece.

BORGER: Thanks.

BLITZER: Thanks very much.

And by the way, I want to give this programming note to our viewers. You can see more of Gloria's interview with Congressman Ryan this Sunday on "Stories: Reporter," hosted by Tom Foreman, Sunday, 7:30 p.m. Eastern, here on CNN.

Republican presidential contender Mitt Romney hitting Rick Perry hard when it comes to illegal immigration. That's coming up in our "Strategy Session."

Plus, NASA warns Americans, beware of space junk barreling toward Earth right now.

(COMMERCIAL BREAK)

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

Joining us, our two CNN political contributors, Democratic strategist Donna Brazile, and Will Cain, the columnist for TheBlaze.com and a contributor to TheNationalReview.com as well.

A lot of us watched that Republican presidential debate last night. A lot of folks think -- I don't know how the two of you think -- that Rick Perry stumbled. Here's how he reacted today to the criticism he's been getting.

(BEGIN VIDEO CLIP)

PERRY: It's not who is the slickest candidate or the smoothest debater that we need to elect. We need to elect the candidate with the best record and the best vision for this country. The current occupant of the White House can sure talk a good game, but he doesn't deliver.

(END VIDEO CLIP)

BLITZER: All right.

What did you think, Will? Because I remember it wasn't that long ago you thought he had the best shot of becoming the Republican nominee. You still think that?

WILL CAIN, CNN POLITICAL CONTRIBUTOR: Yes, thanks for bringing that up, Wolf.

I really thought Rick Perry came in and filled that void of having the style, and to be an alpha leader that was still missing in the Republican field. And substantively, he had the best campaign line with the job growth in Texas.

I did add one caveat, I'd say, Wolf, and that held true unless Rick Perry shot himself in the foot, unless he imploded and self- destructed. Regardless, I was wrong. After last night seeing him stumble and stammer and struggle to find a point, I think it's entirely likely now that Rick Perry could just stumble right out of the poll's lead.

BLITZER: Really? You think he could totally, like, just go away? Is that what you are saying?

CAIN: Well, you know, like you said, he's the clear front- runner. I just don't see how a debate performance like last night -- and by the way, it doesn't exist in a silo. He's put together several average, and that was a below-average performance. I don't see how he maintains a front-runner position in the polls. So I can see him sliding in the polls. He's not going away anytime soon, but I imagine we'll see Romney rise and Perry fall.

BLITZER: You know, it's sort of ironic, Donna, because on the two issues that the right is not happy with Rick Perry on, that HPV vaccine to prevent cervical cancer for little girls, mandating that, and on the issue of letting children of illegal immigrants in Texas get in-state tuition at state universities, both of those potentially could help him in a general election, but in a Republican primary contest, probably not going to help him. Could hurt him badly.

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Well, at this point, he's a real weak front-runner. I think what we saw last night is that, on several issues, and you mentioned two, he appears to be very vulnerable, especially because Tea Party voters are looking, they are looking for someone who agrees with them on all of the positions. But I think, Wolf, that it's still too early to count Rick Perry out, because Mitt Romney has not been able to convince many conservative voters that he has all of the successful ingredients that they're looking for to beat President Obama next year.

Right now, Wolf, I think Republican voters are still on a shopping spree. And we'll see what happens with the Florida straw poll tomorrow, and next month, when we have at least two more debates that the candidates will have to appear together.

BLITZER: Will, listen to Mitt Romney today at that CPAC conference. He hammered Rick Perry last night on the issue of the students, the illegal -- the children of illegal immigrants and the students, but he went a little bit further today.

(BEGIN VIDEO CLIP)

ROMNEY: My friend Governor Perry said that if you don't agree with this position on giving that in-state tuition to illegals, that you don't have a heart. I think if you're opposed to illegal immigration, it doesn't mean that you don't have a heart. It means that you have a heart and a brain.

(END VIDEO CLIP)

BLITZER: Well, a little -- not precise. Rick Perry is opposed to illegal immigration, but he says that children of illegal immigrants have been in the U.S. for a while, they've gone through schools in Texas, they deserve to get that in-state tuition.

How big of an issue among conservatives do you think, Will, this is going to be?

CAIN: Pretty big. And I think, actually, Rick Santorum had the best rebuttal to Rick Perry last night when he said it's not an issue of heart, it's not an issue of blocking access to education for the children of illegal immigrants, it's whether or not you should subsidize it with taxpayer dollars in a tax system which the illegal immigrant has not contributed to. That's what's going to offend conservative values.

So, yes, I think it is going to be a problem for Rick Perry. I would agree with something Donna said just a minute ago. Many of us are still shopping. And your piece a minute ago, Wolf, with Gloria Borger, Paul Ryan looked pretty good, I have to say.

BLITZER: Well, you think there's any hope, from your perspective, someone like Paul Ryan might reconsider at this point?

CAIN: I'm afraid, Wolf, it just might be only that, hope.

BLITZER: Yes, I don't think that's going to happen either.

All right. But he potentially could be a vice presidential running mate. Marco Rubio, as I said earlier, could be one.

Guys, thanks very, very much.

BRAZILE: You're welcome.

BLITZER: Coming up, my interview with the prime minister of Israel, Benjamin Netanyahu, why Israel's prime minister says he thinks the former president Bill Clinton is wrong on one specific charge he leveled against the prime minister earlier in the week.

And it's a bird, it's a plane, it's a falling satellite. NASA says the U.S. is once again a potential strike target. New information coming in. John Zarrella standing by, live.

(COMMERCIAL BREAK)

BLITZER: Here's a "what if" question for you. What if the United States were hit by a falling satellite? NASA says we're once again in the potential strike zone. The space agency expects the satellite to fall back to Earth later today or early tomorrow.

CNN's John Zarrella is joining us now from Miami with the very latest.

These predictions keep going in various directions. What's the latest?

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, they really do, Wolf, and that's exactly right. All of those new predictions came out today, after two days of NASA saying North America was not in the strike zone and that it would fall by sometime this afternoon. Well, this afternoon has already come and gone, and now they're saying it will be either late tonight, early tomorrow morning.

What's happened is that UARS, the Upper Atmosphere Research Satellite has confounded them. It's actually slowed down in its dissent, which has thrown off other probabilities and predictions of where and when it might hit.

I talked to a NASA scientist in the orbital debris program out in Houston, and he says this is what's likely to happen as it descends. (BEGIN VIDEO CLIP)

MARK MATNEY, NASA: It begins to reenter the atmosphere at about 70 or 80 kilometers altitude, so that's about 50 miles, and it begins to disintegrate. And as the pieces that survive the re-entry fall, it will take only a matter of minutes for them to fall the remaining distance to the surface of the Earth.

But keep in mind, they won't be traveling at those high orbital velocities. As they hit the air, they tend to slow down and travel -- they're still traveling fast, a few tens to hundreds miles per hour, but no longer those tremendous orbital velocities.

(END VIDEO CLIP)

ZARRELLA: So, now, most of the satellite, Wolf, is made up of aluminum. That will all burn up, but there are some pieces, 26, that range from tens of pounds to hundreds of pounds -- you know, fuel tanks, fuel -- spent fuel tanks and batteries, that will survive the reentry. And if it hits land, you know, it could certainly impact somewhere now in the continental United States, possibly -- Wolf.

BLITZER: Yes. We hope not, but we should know in the next several hours.

How much debris is out there in general, John?

ZARRELLA: Wolf, there is thousands and thousands of pieces of orbital debris. Once a year, a piece 6.5 to 7 tons, the size of UARS, actually reenters and hits the Earth. Somewhere there's debris falling every day on the Earth. We just don't know about it.

One good thing, all of the newer satellites that are made, they're made with enough fuel left in them that whatever country owns them, can steer them to a position where they can deorbit it so that it will fall harmlessly into the ocean. This one predated that technology, so we have no idea, NASA has no idea right now, where it's coming down -- Wolf.

BLITZER: We'll stay in close touch with you. Hope for the best.

John, thank you.