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THE SITUATION ROOM

Dianne Feinstein Interview; Obama Demands Accountability from Iran; Stunning Theories in Alleged Iran Plot; Warren Buffett Continues to Call for Increased Taxes on the Very Wealthy; House Republicans Accuse President's Jobs Bill of Providing Federal Funding for Abortion; U.S. Officials Accuse Iranian Quds Force of Masterminding Plot to Kill Saudi Ambassador

Aired October 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, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.

Happening now, stunning new theories about why the Iranians allegedly wanted to kill the Saudi ambassador to the United States. I'll ask the Senate Intelligence Committee chair, Dianne Feinstein, what she's learning today.

And Herman Cain strengthening his hand as the leader of the Republican pack. Now that he's actually on top of one presidential poll, we'll take a closer and harder look at whether he can actually go the distance.

And there's a good chance that billionaire Warren Buffett pays a smaller percentage in federal income tax than you do. New information about tax breaks for the super rich may leave you outraged.

We want to welcome our viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos all straight ahead.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

President Obama says one way or another, Iran must be held accountable for an alleged plot to kill the Saudi ambassador to the United States. He says that's true even if Iranian officials at the highest level didn't have detailed knowledge of what was going on.

In his first public comments about the case, the president didn't say exactly who within the Iranian government might have been in on the planning.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have a situation here where the attorney general has laid out a very specific set of facts. What we know is that an individual of Iranian-American descent was involved in a plot to assassinate the ambassador to the United States from Saudi Arabia. And we also know that he had direct links, was paid by and directed by individuals in the Iranian government.

Now those facts are there for all to see. And we would not be bringing forward a case unless we knew exactly how to support all the allegations that are contained in the indictment. So we have contacted all our allies, the international community. We've laid the facts before them. And we believe that after people have analyzed them, there will not be a dispute that this is, in fact, what happened.

This is a not, it's just a dangerous escalation, this is part of a pattern of dangerous and reckless behavior by the Iranian government.

(END VIDEO CLIP)

BLITZER: Let's dig a little bit deeper into the political intrigue inside Iran and the country's relationship with Saudi Arabia. It all could lead to some clues about why the Iranians allegedly wanted to kill the Saudi ambassador to the United States, Adel al-Jubeir.

Our own Brian Todd has been investigating this mystery for us over the past couple of days.

And there are some really provocative theories out there -- Brian.

BRIAN TODD, CNN CORRESPONDENT: A lot of provocative theories, Wolf, because the Iranians have their hands in a lot of intrigue in the Middle East. They deny any involvement in this alleged plot. But there's no doubt that the rivalry between Iran and Saudi Arabia has been boiling for some time.

(BEGIN VIDEOTAPE)

TODD: (voice-over): Senior U.S. officials say they've had much internal discussion over why the Iranian regime might have wanted this man dead. The backdrop for the alleged plot against Adel al-Jubeir, the Saudi ambassador in Washington, is a longstanding bitter power struggle between Iran and Saudi Arabia. Its Persian versus Arab, Shia versus Sunni, one power vying for domination in the Middle East against another.

Tehran vehemently denies involvement in the plot.

But analysts say Iran would have plenty of motive.

ALIREZA NADER, RAND CORPORATION: Especially since the Arab Spring, Iran has been very upset with Saudi Arabia for intervening -- intervening in Bahrain.

TODD: That's when Saudi Arabia, mostly Sunni Muslims, sent troops to Bahrain to help the Sunni king there put down a popular revolt. That movement was led by the majority Shia population of Bahrain, which is supported by Iran.

But there could be other motives for Iran to strike out against Saudi Arabia, the U.S. or its other enemies. In a letter to the United Nations expressing outrage at the allegations, Iran's ambassador calls his country "a victim of terrorism," citing the assassination of a number of Iranian nuclear scientists in the past two years and blaming Israel and the U.S. for those murders.

Another theory, divided factions within Iran. Iran's Quds Force, said to be behind the alleged plot, may have been acting on behalf of Supreme Leader Ayatollah Khamenei, who is in an internal fight with President Mahmoud Ahmadinejad.

Author Roya Hakakian has written about Iranian assassination plots.

(on camera): Is there any way this plot could be tied to that international power struggle between Ahmadinejad and Khamenei?

ROYA HAKAKIAN, AUTHOR, "ASSASSINS OF THE TURQUOISE PALACE": There have been internal power struggles that have played out in -- in similar ways within the domain of internal politics of Iran. But ironically, what has remained a fact is that all the people who seemingly had these internal struggles remain in power today.

TODD: (voice-over): If this conspiracy is proven true, it's not the first time the Iranians have been implicated in a plot targeting single key figures in their struggle against Saudi Arabia.

PROF. VALI NASR, TUFTS UNIVERSITY: Attacking Saudi allies, clients, people assassinating people that are close to Saudi Arabia and Lebanon. They've done this in the Middle East.

(END VIDEO TAPE)

TODD: He's talking about the 2005 assassination of the Lebanese prime minister, Rafiq Hariri. He was backed by Saudi Arabia. A U.N. investigation found the people who killed Hariri were supporters of the terrorist group, Hezbollah, which has often received weapons, training and other logistical help from Iran.

Hezbollah denied any involvement in Rafiq Hariri's killing -- Wolf.

BLITZER: There were also accusations that the Syrians were also involved.

TODD: Yes.

BLITZER: They're close allies of the Iranians, as well.

TODD: That's right.

BLITZER: Proving a motive in this particular case could be crucial as to where the U.S. and other go from here.

TODD: It really could be because if this is true and if a motive is proved, it could really speak to how high up in the Iranian regime this went. Right now, in public at least, U.S. officials are not tying this plot directly to President Ahmadinejad or the supreme leader, Ayatollah Khamenei. They're stopping pretty well short of that right now.

If they can prove a motive, there could be some ties there. But again, that's -- that's probably a long way off.

BLITZER: There could be some serious ties, ramifications, shall we say?

TODD: Right.

BLITZER: Thanks very much, Brian Todd.

TODD: Sure.

BLITZER: The Obama administration is directly venting its anger at Iran, accusing the government of involvement in the alleged assassination plot. All this despite the fact that the two countries don't have diplomatic -- official diplomatic relations.

Listen to the headline out of the State Department briefing here in Washington today.

(BEGIN VIDEO CLIP)

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: We have had direct contact with Iran. I'm not going to give you any further details than that, but just to say that we have had direct contact with Iran on this issue.

(END VIDEO CLIP)

BLITZER: All right, let's get some more now on the possible motives in this alleged plot to kill the Saudi ambassador.

David Ignatius writes about all of this in "The Washington Post." He's got a column out today. He's covered the Middle East and the intelligence community extensively, written some excellent books on the subject.

When you just -- David, when you first heard about these allegations, the attorney general and the FBI director making these allegations that Iran was plotting to kill Adel al-Jubeir, what did you think?

DAVID IGNATIUS, "WASHINGTON POST" COLUMNIST: My first reaction was that it was farfetched. The details that came out, that an Iranian American used car dealer had been recruiting a Mexican drug cartel in which there were informants who turned over information to the Justice Department, it just seemed farfetched.

As I dug deeper and looked at the question of why would Iran engage in such high risk behavior, I do see evidence. This is the evidence the U.S. government and other governments are collecting, that Iran, over the last year, perhaps longer, has engaged an increasingly risky activities, in particular, going after Saudi Arabia and its diplomats. This is -- this instance, the attempted -- the assassination plot against al-Jubeir in Washington is not the only Iranian effort to kill a Saudi diplomat. That's the first thing that my research is turning up.

BLITZER: I'm wondering because I -- I know that there were allegations that Iran, indirectly, was involved in the assassination plot, the car bombing of Rafiq Hariri, the Lebanese prime minister, who was very close, as you well know, to the Saudis.

But what other allegations have there been that Iran is trying to kill Saudis?

IGNATIUS: I'm still working on this, reporting out the details, Wolf. But what I can tell you now is that a Saudi intelligence official told -- told me within the hour that there is evidence of direct Iranian involvement and sponsorship of an assassination effort against a Saudi diplomat in another country.

So there's -- there's reason to think that the Iranians have been taking more risks against their most bitter adversary in the Gulf, Saudi Arabia, for some time now, and that this Washington plot, as unlikely as it seems, comes on top of a number of other instances.

And I think that's part of why U.S. officials, when they look at this, think that there's -- there's more to it, as -- as you just quoted the president saying. There is a pattern of dangerous and reckless behavior inside Iran.

As I push my reporting and talk to more sources and more governments, I'm getting a lot more evidence of that.

BLITZER: So your skepticism is fading rather quickly?

IGNATIUS: The story itself is one that would arouse skepticism in anybody. But as you dig deeper, you see signs that the Iranians have been taking other risks to go after their enemies and that for that reason, this plot, as farfetched as some details are, may be something -- is something that we should take seriously.

BLITZER: And how serious was the allegation -- is the allegation that they were also plotting not only to kill the ambassador, but to blow up the Saudi and Israeli embassies here in Washington?

IGNATIUS: That part I just can't comment on. That sounds to me a little bit like moose talk that would surround this kind of a plot. But I -- I don't have further detail on that.

What I -- what I am confident about is that the person that was recorded on October 4th in a conversation with Manssor Arbabsiar, who is the indicted person, that the person in Tehran he talked to, the recorded conversation, is a significant Quds Force player, whose activities in Bahrain and other countries are well-documented, not just by the U.S. intelligence, but also by Saudi intelligence.

BLITZER: We're going to have more on this story later this hour with Dianne Feinstein, the chair of the Senate Intelligence Committee.

She's been briefed thoroughly on this. And I'm going to press her and ask her, is this an isolated attempt against one individual or were there other targets at the same time?

IGNATIUS: She ought to know, Wolf.

BLITZER: She -- I -- I assume she knows. Let's see if she'll tell us.

David, take -- check out my blog as a -- as a thriller, as a novelist yourself. You'll enjoy it today, because I write whether terrorists read Tom Clancy.

Just check it CNN.com/situationroom.

IGNATIUS: Great.

BLITZER: I'll be anxious to hear what you think.

IGNATIUS: Great.

BLITZER: David Ignatius of "The Washington Post," thank you.

The billionaire, Warren Buffett, is fighting for a new tax on the super rich, the super rich Americans like himself. We're taking a closer look at the politics of his campaign and new ammunition to back him up.

And the House speaker has scheduled a vote soon that could make social conservatives happy, but many jobless Americans maybe not so happy.

Stand by.

(COMMERCIAL BREAK)

BLITZER: A new study from the Congressional Research Service here in Washington is revealing that about 25 percent -- that's a quarter of all millionaires -- pay an effective federal tax rate less than some people in the middle class. And this may add fuel to billionaire Warren Buffett's charges that Congress should raise taxes on the superrich, a concept that is also now a key factor in President Obama's embattled jobs bill. Let's bring in CNNMONEY.com's Poppy Harlow, who has been talking to Warren Buffett frequently over the past few weeks. Give us the main plight of what Warren Buffett is trying to say, Poppy.

POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Wolf, what he's trying to say and what he's really been pushing for since his "New York Times" op-ed in August is that he wants to see the ultra-rich in America just like him taxed more, those who make a million dollars and over taxes higher.

His reasoning behind this, as he said a number of times, is that people that make money off of money through their investments are often taxed at a lower rate, 15 percent capital gains tax. Now he is pushing for word increasing that drumbeat, Wolf.

And I talked to him yesterday, and he talked to me deeply about the super-committee and tasks they're faced with, which he calls an unpleasant choice. But he said there are 12 people who should be motivated to approve something better than our present system. And he went on to say that the richest Americans right now can afford to have their belts tightened if we're going to ask hundreds of millions of Americans to do the same, Wolf.

BLITZER: It seems he's getting more involved politically. We know he's a supporter of President Obama. He seems to be more involved than ever. Is that fair?

HARLOW: It's a great question and that's the question I had for him in California for a one-on-one interview last week. Why is he so outspoken right now? Take a listen to his answer.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, CEO, BERKSHIRE-HATHAWAY: Sure, I'm more out in the open than I was 30 years ago and I've gotten better over time, and there's a chicken and egg aspect of that, I suppose. But so, if I say something now, it's more likely to be on CNN than it would have been 20 years ago.

HARLOW: But is it because you are a very outspoken on public policy now, you're supportive of president Obama. Is it in part because Washington, the one thing most people can agree on, is that there's a lot of dysfunction in Washington and so private business, business leaders need to step in and impact policy?

BUFFETT: I don't think when you become a business leader that you put your views on the world in a blind trust. I was president of the Young Republicans Club at the University of Pennsylvania when I was 17 or 18. I was on a national radio program called youth wants to know on CBS when I was 15.

But I grew up in a family where I was, my family believed in that, that you have -- public policy is belongs to the public and if you're a citizen and you think you have something to say, there's nothing wrong with saying it.

(END VIDEO CLIP)

HARLOW: And he certainly is saying it, Wolf. I went on to ask Buffett to clarify his relationship with the Obama administration because we certainly hear the president reference Warren Buffett quite often these days. What Warren Buffett told me is that he has never once called the president. That was interesting. He said it would be presumptuous of him to do so. He said he's gotten a few call from the president. He takes them every time.

But he has not called the president. He said he would not call it a close relationship. I did ask if he is still 100 percent in support of President Obama. He said, yes. He may not agree with all his policies, but he's still a 100 percent supporter of the president, and he showed that by holding a fund-raiser for President Obama.

BLITZER: And we see on your Web site behind you, he made nearly $63 million and paid $6 million or $7 million in taxes. That's about 10 percent, certainly not the 35 percent, which is the maximum tax rate that people in that bracket should pay, but everything he did was legal. There were no violations of the law. We should point that out as well. Is that right?

HARLOW: Wolf, yes. When you look at his taxable income just to clarify, it's about $39 million in taxable income because he gives so much to charity and state and local taxes, so he paid $6.9 million in taxes. That's 17.4 percent. We have not seen his tax returns. We've got a Republican congressman from Kansas asking to see that tax return. He has laid out what he said he paid in 2010 in taxes and what he made in taxable income. That $63 million number, that's his gross income. But again, we'll see Warren Buffett said if the ultra- rich will release their tax returns, then he said he'll do the same. We'll keep an eye on it.

BLITZER: All right, Poppy, thanks very much.

Another major blow for the now bankrupt solar company loaned more than half a billion in taxpayer money. We'll have the latest on that.

Plus, authorities in New York City are bracing for a potential confrontation. Just ahead, why members of the so-called Occupy Wall Street movement are defying a key order from the mayor, Michael Bloomberg. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go to Capitol Hill right now where Republicans in the House of Representatives are renewing their attack against President Obama's health care law, raising serious concerns about federal abortion funding. Lets' bring in CNN's Athena Jones. Athena?

ATHENA JONES, CNN CORRESPONDENT: Hi, Wolf. That's right. The talk on the House floor earlier today was not about jobs or the economy. It was about one of the most divisive issues in American politics -- abortion. And as is often the case with this issue, the debate got pretty heated.

(BEGIN VIDEOTAPE)

REP. ILEANA ROS-LEHTINEN, (R) FLORIDA: We must protect the sanctity of an innocent human life.

REP. ALCEE HASTINGS, (D) FLORIDA: This is beyond irresponsible. It is, indeed, reprehensible.

JONES: Abortion returned to center stage on Thursday in the House of Representatives as Republicans pushed for a vote on what they're calling the "Protect Life Act."

REP. VIRGINIA FOXX, (R) NORTH CAROLINA: It takes away no rights of women. It is not extreme. And 77 percent of the people in this country are opposed to taxpayer funding for abortion.

REP. BARBARA LEE, (D) CALIFORNIA: Instead of focusing on jobs, Republicans are continuing to wage their war on women. JONES: This bill would amend the president's health care law to ban federal money from being used, even indirectly, to pay for any health plan that includes coverage of abortion services. The bill would allow hospitals that receive government funding to refuse to perform abortions without being penalized.

Democrats say federal law already bans the use of federal money to pay for abortions, and this bill puts women's lives at risk, even in the emergency room.

NANCY PELOSI, (D-CA) HOUSE MINORITY LEADER: When the Republicans vote for this bill today, they will be voting to say that women can die on the floor, and health care providers do not have to intervene if this bill is passed. It's just appalling.

JONES: On the House floor, California Democrat Jackie Speier talked about her own miscarriage.

REP. JACKIE SPEIER, (D) CALIFORNIA: I was bleeding. If I had to go from one hospital to the next trying to find one emergency room that would take me in, who knows if I would even be here today?

JONES: Speaker Boehner said the House was making good on a promise.

REP. JOHN BOEHNER, (R) HOUSE MAJORITY LEADER: This bill was part of our pledge to America. We're keeping our word to the American people, and we're going to do it.

(END VIDEOTAPE)

JONES: Now, Wolf, even if this Bill does pass the House, it's unlikely it will be taking up in the Senate, and the White House has said the president would veto the measure. Still, this is an issue the Republicans had promised their conservative base they would push for. Wolf?

BLITZER: Athena, thank you.

Iran angrily denies involvement in the alleged plot to kill the Saudi ambassador to the United States. So does the Obama administration have proof? I'll ask the Senate Intelligence Committee Chair Dianne Feinstein. She's standing by.

And one candidate's wife shows the stress of the Republican presidential campaign.

(COMMERCIAL BREAK)

BLITZER: President Obama says his administration would not accuse Iran of being behind an alleged assassination plot unless it could prove it.

Let's discuss what's going on with the chair of the Senate Intelligence Committee, Democratic Senator Dianne Feinstein of California.

She's joining us from Capitol Hill.

Senator, thanks very much for coming in.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: You're welcome, Wolf.

BLITZER: I know you've just come from a briefing yourself. But David Ignatius, the columnist for "The Washington Post," he was just here in THE SITUATION ROOM. He said he was originally skeptical of these allegations, but he's now come around increasingly to believe what's going on and he also says he's now getting information that this alleged plot against Adel al-Jubeir, the Saudi ambassador in Washington, was not and is not the only time Iran allegedly has tried to kill Saudis.

Is that true, based on what you know?

(LAUGHTER)

FEINSTEIN: Well, based on what I know, David Ignatius is a very smart man. Based on the briefings, yes, this was a real plot. And, yes, this had to do with Iran.

Specifically, Quds Force, Department 400. Treasury has sanctioned four Quds Force members yesterday. It is real. It happened. It doesn't appear that one would think this was a real plot, it was.

We've been briefed by Treasury, by State, by CIA, and, of course, by FBI, now on two occasions and run through it and run through all of the intelligence and the evidence.

And I am convinced that it was for real.

The question is, why?

Why would Iran escalate by coming into the United States, by finding someone adult -- a dual citizen in this -- in this case, to employ criminal elements to try to assassinate the Saudi ambassador?

And you asked me the question, have they done this before?

I would answer that question, yes, they certainly did it at Camp Victory in Iraq, which killed six Americans. They have done it in places, countries closer to the Near East. I won't be specific because it involves sources and methods. But I believe that's the case.

The other question is, how high up did this go?

And I believe that -- I know it went to the top of the Quds Force. And, therefore, it's likely that the Revolutionary Guard knew about it. Whether the civilian government, in terms of the supreme leader or Ahmadinejad knew about it, there is no evidence that I have seen of that.

BLITZER: But you've seen evidence, Senator, that the Saudi -- that the Iranians tried to kill other Saudi citizens, not necessarily Americans, but Saudis in -- in recent years?

FEINSTEIN: I'm not going to comment on specifics, but I believe that to be correct.

BLITZER: You believe that Saudi Arabia -- that Iran played a role in the assassination of the Lebanese prime minister, Rafiq Hariri, who was very close, as you know, to the Saudis?

FEINSTEIN: I can't say. I don't know.

BLITZER: Was this just a plot to -- an alleged plot to kill the -- the Saudi ambassador?

Or how serious was this other part of the story, that they were also allegedly planning to blow up the Saudi and Israeli embassies here in Washington?

FEINSTEIN: I think it's fair to say that that might well be correct here and possibly in Argentina, as well.

BLITZER: How strong is that evidence?

Is it as strong as the allegation of the assassination plot?

FEINSTEIN: No.

BLITZER: So that's...

FEINSTEIN: It's not -- it's not as strong.

BLITZER: Some have suggested, Senator, that this may have been retaliation for the killing of a few Iranian nuclear scientists in recent years. The allegation was that the Israelis, backed by the United States, may have been involved in these killings.

What can you tell us, if anything, about that?

FEINSTEIN: Well, I can't tell you anything about it.

BLITZER: Do you have any reason to believe it wasn't the Israelis, it may have been the Saudis, involved in these kinds of assassination plots against Iranian scientists?

FEINSTEIN: No.

BLITZER: Do you have a good reason, an explanation why Iran, at the highest levels of the Quds Force, may have wanted to kill the Saudi ambassador in Washington?

FEINSTEIN: Well, now this is speculation. Adel al-Jubeir is not -- is not just the ordinary person. He's really an amazing person. He's very forthright. He's very honest. Reportedly, he's close to the royal family. It may well be -- I can't -- I'm only speculating -- that the Iranians wanted to send a signal to the Saudi government.

But this -- I would hypothesize that Adel al-Jubeir is the number one Saudi ambassador in the world.

BLITZER: And so they -- they were hoping, is that what you're suggesting, the Iranians, to send a signal to Saudi Arabia...

FEINSTEIN: That's, Wolf, that's just my speculation and worth what you're paying for it.

BLITZER: All right. Well, but -- but any of the additional skepticism you, like David Ignatius, may have had, that's gone away?

You believe this to be the real deal?

FEINSTEIN: I believe it to be the real deal. I believe this man will be convicted in a court of law. I believe the evidence will be overwhelming.

BLITZER: A lot will now -- will be watching Saudi Arabia to see if they do anything to retaliate diplomatically, economically, against Iran.

Do you suspect they will sever diplomatic relations, recall their ambassador from Tehran?

FEINSTEIN: Well, I have no idea what the Saudis would do. I think what's important is what we do. This is our country. And that we offer the sanctity of a democratic government in which we house ambassadors, some of whom are friendly and some of whom are not.

But we provide them with an element of security. And I think that's important for everyone to know.

So this is a real affront to the United States, as well as to Saudi Arabia.

The second part of your question I think I lost.

BLITZER: Well, I mean it was just that the Saudis are going to retaliate economically or diplomatically...

FEINSTEIN: Oh, well...

BLITZER: -- by severing their relationship with Iran.

FEINSTEIN: Yes, well, what I wanted to say is that some have been critical of what the United States have done -- has done. I am not one of those. I believe the United States has acted in a very responsible way.

Treasury has sanctioned various parts of the Iranian government and Iranian enterprise and Iranian individuals. State is going out, is delivering evidence yesterday at the Security Council of the United Nations and to our allies all over the world.

So I think the effort to isolate Iran, and, hopefully, to convince Iran that this is not the behavior that's going to endear them to any nation is really important and critical. I think it's going to be very interesting to see how the Iranian government reacts, other than bluster, which is to say all this is made up.

I think it's very secure that it is not made up, that it's real.

BLITZER: Senator Feinstein, we'll stay in close touch with you.

Thanks very much.

FEINSTEIN: Thank you.

Appreciate it.

BLITZER: Herman Cain now has front-runner status in the polls for the Republican presidential nomination. Here's the question, a key conservative though has some serious problems with Herman Cain's so- called 999 plan. We will assess that. That's coming up.

(COMMERCIAL BREAK)

BLITZER: A major milestone for Herman Cain. He now leads a new NBC Wall Street Journal poll. CNN's Jim Acosta is joining us now with more. So, what's going on here, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, he's written off as the un- Romney, as the flavor of the month, but the poll suggests he needs to be taken seriously. It is time to start asking the question, could Herman Cain become the next president of the United States?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This long shot may not be such a long shot.

ACOSTA (voice-over): Herman Cain is no long shot anymore. Latest CNN Poll of Polls shows the upstart GOP contender right on the hills of front-runner Mitt Romney.

For many conservatives, this sudden surge is as simple as 999, Cain's economic plan which would replace the current tax code which taxes individuals and corporations at nine percent and add a new national sales tax, also at nine percent.

GROVER NORQUIST, AMERICANS FOR TAX REFORMS: It's bull. It's traumatic.

ACOSTA: But Grover Norquist, the man behind the anti-tax bill signed by nearly every Republican politician in Washington, cautioned against creating new revenue streams for government.

NORQUIST: You've got one needle in your arm throwing back can hurt. Put in two more and really begin to move to drain the blood out of a person or the income out of people's pockets.

ACOSTA: Cain arguing consumers could take steps to avoid that sales tax. HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Because you don't pay it on used stuff. It gives the decision as to how they stretched their dollar to the consumer.

ACOSTA: Cain is far from a conventional candidate. For economic device, he relies on a little known Cleveland based financial planner named Rich Lowrie. He says in his LinkedIn page he has a degree in accounting. For independent analysis of his 999 plan, Cain turned to husband and wife tax consultants just outside of D.C.

UNIDENTIFIED MALE: You've got to help me cut the budget a little.

ACOSTA: It sounds a little like something out of the early 90's movie, "Dave" which a non-politician president calls on his accountant to fix the budget.

UNIDENTIFIED MALE: Who does these books? I mean if I ran my business this way, I'd be out of business.

CAIN: Our tax code is the 21st century version of slavery.

ACOSTA: Cain is going after the evangelical voters, fiscal and social conservatives who once want to Rick Perry and Michele Bachmann.

CAIN: I felt like Moses. When God says I want you to go into Egypt and lead my people out. Moses resisted it. I resisted it.

ACOSTA: Darling of the right, Cain's challenge could come in a general election campaign. The former godfather pizza CEO and radio talk show host rarely holds back.

UNIDENTIFIED MALE: Would you be comfortable appointing a Muslim either in your cabinet or as a federal judge?

CAIN: No. I will not as this attempt to gradually ease Shariah Law and the Muslim faith into our government.

(END VIDEOTAPE)

ACOSTA: Another challenge Cain's staff is small, just 35 people. But his campaign says it is ramping up. To do that, Cain will need cash to take on the likes of Mitt Romney and Rick Perry. But he is already thinking about, who his running mate might be, Wolf.

He said in an interview just today naming Paul Ryan and Jim DeMint as possibilities.

BLITZER: May be a little premature to start thinking about that but maybe not.

Let's discuss with our chief political analyst with Gloria. Gloria's here, you know, once you beat the end of the top tier, they come up, they start coming after you.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes. We do you, his political opponent. Well, yes, you start getting the scrutiny of a front-runner and today, was very interesting, Wolf. Rick Perry's wife Anita was speaking in South Carolina and let me read you what she said about her husband's journey.

BLITZER: She was really up and now, down.

BORGER: Up and down. Exactly. She said, quote, "It's been a rough month. We have been brutalized and beaten up and chewed up. We are being brutalized by our opponents and our own party."

Now, she's right. But that's what a presidential campaign is, actually. You do get brutalized by the people who oppose you, and that's what Herman Cain is going to get in terms of his 999 plan. A lot of conservatives believe that a national sales tax is not the right way to go, so he's really going to start getting it. We saw that at the last debate. He was the object of the attack.

BLITZER: And Erin Burnett's going to be interviewing Herman Cain later tonight on her show tonight Out Front for our North American viewers. Let me just read to you, because I want to switch gears to Hillary Clinton right now.

Last week, I wrote a blog that got a lot of attention, a lot of hits, on our CNN.com/situationroom Web site. Among other things, I said this. If the economy is still awful next summer and President Obama's poll numbers are really low, he could throw a Hail Mary pass and find a way to lose Vie President Joe Biden and ask Secretary State Hillary Clinton to be his running mate.

Now today, the secretary of state was asked about all of those rumors out there that buzz. Here's what she said on the "Today" show.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Is there any chance you would be vice president in a sec term?

HILLARY CLINTON, STATE SECRETARY: No.

UNIDENTIFIED FEMALE: In the realm of possibility?

CLINTON: I do not think it's in the realm of possibility.

(END VIDEO CLIP)

BLITZER: She's about that.

BORGER: She sounds like Chris Christie.

BLITZER: Even after she says that, there are still people saying if the president is desperate and it looks like she's going to be a one- term president, he may have to throw that Hail Mary pass.

BORGER: Yes, there are lots of people saying it. I got to take her at her word, but Obama and Biden, they're pretty close.

BLITZER: Very. BORGER: And so, I think it would have to be a real, really, really, really tough brace for this president to say to Joe Biden, no, you go become secretary of state.

BLITZER: Hillary Clinton would energize a lot of people out.

BORGER: But she's been a very muscular secretary of state. There are a lot of people in the liberal democratic base who probably think she's too hawkish for them. And after all, she's quite aligned with Barack Obama as part of his cabinet. So yes, it would help, but maybe not as much as you'd think.

And also, I think it would be a real sign of weakness for Barack Obama to say, oh, guess what, I need to do some shuffling. And Wolf, a little fact toy for you. The last time an incumbent president switched running mates was 1976 when Gerald Ford brought on Bob Dole and dumped Nelson Rockefeller.

BLITZER: I remember that very well. Thanks very much.

BORGER: I don't. OK.

BLITZER: I suspect we're going to be discussing this more down the road.

And please join CNN for the western Republican presidential debate out in Las Vegas. It airs live here on CNN next Tuesday, 8:00 p.m. Eastern.

Some Democrats now rallying behind the rising Occupy Wall Street protest movement, but could it end up backfire on President Obama in the 2012 election? We're assessing. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Major new development in the growing scandal surrounding a new bankrupt solar energy firm that received more than half a billion dollars in U.S. taxpayer money. Lisa Sylvester is working the story for us. What's the latest, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Well Wolf, reports out that the CEO of Solyndra, Brian Harrison has now resigned. Harrison last month refused to testify in front of congress when the bankrupt solar panel company. He pleaded the fifth and Congress wants to know why the energy department awarded the company half a billion dollars even when it was clear the firm was in financial trouble. Solyndra has also the subject of an FBI investigation. Harrison came on board at Solyndra, back in July of 2010.

Most of the company's employees were laid off when the company went under in August of this year. But Harrison was one of few kept on as the company navigates through bankruptcy court. Harrison, a little bit background on him, he spend a large part of his career at Intel in various role as vice president and general manager of business units.

And tomorrow there is another energy and commerce subcommittee hearing looking into whether or not the department of energy ignored warnings from the treasury department on the restructuring of that $535 million loan. Representative Cliff Stearns who heads the subcommittee moments ago released a statement saying, quote, "the documents that the White House dumped last Friday, reveal a disturbing prevalence of wealthy donors and bundlers littered throughout the loan guarantee process with direct access to the president's west wing inner circle. And now allegations of political influence and impropriety involving other loan recipients are rampant. It is a topic we do not take lightly and are working to find out if Solyndra is just the tip of the ice berg."

The White House strongly disagreeing political influence played a role in how loans were handed out. And administration officials are insisting that there was a proper vetting of the companies including Solyndra. President Obama had said it's important we invest in the green industries of the future and he has also said you know some are going to succeed and some are going to fail, Wolf.

BLITZER: This issue's is obviously not going to go away. Alright, thanks very, very much Lisa for that.

Member of the economic protest Occupy Wall Street movement are refusing to heed a New York City Mayor Michael Bloomberg's order to temporarily vacate the park tomorrow.

Let's talk about this with the managing editor of our sister publication "Time" magazine, Rick Stengel is joining us.

Now, you got a new cover story, the return of the silent majority. What's the political impact of this Occupy Wall Street movement, Rick, right now?

RICK STENGEL, MANAGING EDITOR, TIME MAGAZINE: I think it's too soon to tell Wolf, but we did a poll in association with our cover week which show that 54 percent of Americans have a favorable view of the occupy wall street movement which is actually twice as many as number of people who have a favorable view of the tea party.

There are a lot of people in the Democratic Party who see it as a foil or counterweight to the tea party but the tea party's an institution compared to Occupy Wall Street. There are Congressmen and women in Washington who follow the tea party line. Right now the Occupy Wall street movement represents a kind of fringe but a fringe that may tap into a, have a larger residence. After all, they say they represent the 99 percent, which is bigger than one percent.

BLITZER: Sure thing, 99 last I heard a lot bigger than one percent. You're absolutely right on that. Karl Rove, the Republican strategist and activist, wrote in the "Wall Street Journal" today this. Among other things he said "rushing to identify with Occupy Wall Street could well threaten Mister Obama's re-election by putting off very swing voters whom the president needs. It could further diminish the president's support from center-left business leaders, already sick of Mister Obama's class warfare and faux populism. Does he have a point there, Karl Rove?

STENGEL: Well, I have two reactions to that. Well which is one, he may be right, and particularly if the occupy wall street movement seems like a bunch of flakes, but my other reaction is if Karl Rove is actually opining against the Democrats associating with occupy wall street, there may be something good in for the Democrats, otherwise he wouldn't bother.

BLITZER: Is Occupy Wall Street sort of the left-wing's version of the tea party movement on the right?

STENGEL: I think a lot of people are looking at it as that way. I mean kind of grassroots movement that a shoes having any leader or spokesperson. As I was saying before the tea party which we have, you know, thought of as not being institution, is a virtual political party compared to Occupy Wall Street, which is still so in coed, still so not formed. It's hard to say what they represent. We certainly know some of the things they're against. We don't really know what they're for.

BLITZER: The return of the silent majority, that's the cover on the new issue of "Time" magazine. Thanks very much for that Rick Stengel.

STENGEL: Thank you Wolf.

BLITZER: An 8-year-old you tube singing sensation gets a surprise of a lifetime. Jeanne Moos will be back with more on this.

(COMMERCIAL BREAK)

BLITZER: Famous pop star's getting a run for her money from a young singing sensation, whose wowing the world. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When 8-year-old Sophia Grace Brownlee hit Youtube -

SOPHIA GRACE BROWNLEE, 8-YEAR-OLD: Let's hit it now.

MOOS: She was a hit doing her version of the Nicki Minaj song "Super Bass".

BROWNLEE: Like a drum did you hear that boom, boom, boom

(MUSIC PLAYING)

MOOS: OK, so maybe Nicki Minaj had a few more pelvic thrusts but Sophia Grace's version got around nine million views on you tube and landed the little girl from England on the "Ellen" show.

ELLEN DEGENERES, HOST, ELLEN DEGENERES SHOW: Is that is your favorite singer, Nicki Minaj?

BROWNLEE: We love Nicki Minaj. We want to meet her so much!

MOOS: That's nice, because Nicki Minaj tweeted the same thing about her. I have to meet her. She's a superstar. A superstar with a sidekick, her cousin Rosy. BROWNLEE: Rosy makes me feel more confident because I got someone with me.

And Nicki Minaj. You got my heart beat running away

MOOS: But Sophia Grace's heartbeat really started running away -

DEGENERES: Come on out, Nicki.

MOOS: When Ellen introduced her idol. Even the parents were overcome, dad asking for a tissue.

NICKI MINAJ, SINGER: She blew me away.

MOOS: Now, there's some bad language in "Super Bass" but when Sophia Grace sings it the f and the n word are gone, though the panties stayed.

BROWNLEE: When the panties are coming off, off, off.

MOOS: As if meeting her idol wasn't enough. Nicki promised Sophia Grace a shopping spree. She also got a wig so she could look like Nicki.

BROWNLEE: I'm the second Nicki Minaj.

MOOS: And then they sang a duet.

MOOS: Her boom booming heart never slowed as she danced relentlessly through the commercial break.

BROWNLEE: Nicki Minaj!

MOOS: Even her sidekick couldn't get her to kick it down a notch. Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: What a story. I love the story. Thanks for watching. I'm Wolf Blitzer in THE SITUATION ROOM. The news continues next on CNN.