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Herman Cain Getting More Scrutiny; President Pushes Executives Action on Economy; New York City Bans Heating Equipment at Occupy Wall Street Site; Interview With Congresswoman Michele Bachmann; The Future King of Saudi Arabia; Syrian Demonstrators Call for No-Fly Zone

Aired October 28, 2011 - 17:00   ET


WOLF BLITZER, HOST: And to our viewers, you're in THE SITUATION ROOM.

Happening now, a winter storm watch is in effect for parts of the northeast United States. An early and heavy snowfall is threatening to create a weather nightmare for Americans just in time for Halloween.

Plus, new tactics in the crackdown on Occupy Wall Street protesters. After arrests and tear gas, some demonstrators may be frozen out of their home base.

And a Tea Party group says it's time for Michele Bachmann to quit the GOP presidential race. I'll ask the congresswoman about the state of her campaign and whether the movement that embraced her is now turning against her.

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.

If you live in the northeast United States, you may want to get out your boots and snow shovels along with some Halloween candy. An early winter storm is threatening to sock parts of the region with as much as a foot of snow or even more. Let's go to our meteorologist and severe weather expert Chad Myers. A new forecast just out. What's the latest, Chad?

CHAD MYERS, AMS METEOROLOGIST: Right from I-95, 20 miles west of that line and up to the west of there, that's where the significant snow is going to be. So Wolf, for New York City, Philadelphia, Baltimore, we're talking two to three, maybe four inches. But west of there where it's colder, that's where the big time snow is going to be, the Poconos and Catskills, all the way up the green and white mountains up to parts of Springfield and Berkshires as well.

This is a new season snow. We didn't expect this even earlier today, but the new models have pointed out a lot of snow. Allentown, Lancaster, 15 inches that ends on Sunday. It starts tomorrow.

I want you to get really close to here. I know people are asking what about New York City. New York City's going to be a sloppy mess. There's going to be three rain drops and two snowflakes coming down at the same time. It's not really going to pile up in the city. But if you get out toward Bergen County, Yonkers, west of the city into the Catskills, that's where that foot of snow is going to come down.

This is not a big deal as much as it could be because it isn't going to be on a weekday. But, Wolf, the threat of this storm is wind for one, but the leaves are still on the trees. You put eight inches, ten inches on the branches of a tree and still have the leaves on, those branches are going to break. Those branches are going to bring down power lines, and I can see hundreds of thousands of people without power by Sunday night.

BLITZER: That would be a nightmare. Chad, we'll stay in close touch with you. Thank you.

As the winter storm threatens the northeast, Occupy Wall Street protesters in New York, they are concerned about more than just being arrested. They now fear they could be frozen out of their demonstration zone. Let's go to New York. CNN's Mary Snow has got more on this part of the story. Mary?

MARY SNOW, CNN CORRESPONDENT: Wolf, this morning the city moved in to cut down on what it called a safety hazard. Many protestors camping out at Zuccotti Park aren't quite buying it.


SNOW: An unexpected wake-up call for Occupy Wall Street protesters.

UNIDENTIFIED MALE: The city law does not allow for the storage and use of generators and fuel in the manner that threatens public safety.

SNOW: New York City firefighters accompanied by police showed up to inspect and remove generators and fuel containers the city says are a fire hazard sitting among the hundreds of protestors camped out in New York's Zuccotti Park. Both the city and protesters say there was no resistance.

But among people like Nicholas Isabella who shot this video, it's raised suspicious.

UNIDENTIFIED MALE: I think that the city, while they publicly say we are allowed to be here, internally they are trying to find ways to wean us out slowly. And this is their way of doing that.

SNOW: New York City Mayor Michael Bloomberg during an interview on WOR radio said the generators and containers are fire hazards that are against the law.

MAYOR MICHAEL BLOOMBERG, (I) NEW YORK: Our first two concerned, first amendment and safety. And this was safety.

SNOW: Protestors say they've taken precautions, including fire extinguishers, and questioned why the city is acting now.

BILL DOBBS, OCCUPY WALL STREET PROTESTOR: The timing is a little odd because it's the first cold day. It comes after a terrible, violent attack by law enforcement on Occupy Oakland. Of course we're concerned, legitimately concerned, because sometimes the explanation we're given in this city is not what's really going on.

SNOW: The mayor of Oakland, California, apologized for recent violence against demonstrators. Tear gas was used and an Iraqi vet was hospitalized. In New York the mayor says there are no plans to move protestors.

BLOOMBERG: The property is not city property, and so far Brookfield hasn't complained and asked us to remove people, so that's not a consideration.

SNOW: And then there's the weather factor. Protesters like Nicholas Isabella are bracing for cold weather and snow, vowing to stick through it.

(on camera) You don't see the cold weather affecting this at all?

UNIDENTIFIED MALE: It will turn some people away. I'm not going to stay everybody will be here. But for the most part, we're not going to stop. It's not going to have a negative effect on us.


SNOW: Wolf, this afternoon hundreds of protesters marched to five major banks here in New York City. Those protestors were delivering letters to CEOs of the banks. The march was peaceful.

Also this week we should point out one union of the NYPD, the Sergeants Benevolent Association, came out to say it will sue protesters if officers get hurt. The union points to recent violence in other parts of the country, most notably in Oakland, California. Wolf?

BLITZER: Mary, thank you. And a leading veterans group is calling for an investigation into the crackdown on Occupy Oakland demonstrators that left one former U.S. marine, Scott Olson, in intensive care. Olson is listed in fair condition with a skull fracture after being struck by a tear gas canister on Tuesday. He fought two tours of duty in Iraq. The mayor of Oakland has now apologized.

President Obama is moving forward with his protest against inaction in Congress, but Republicans are firing right back at this efforts to work around them. Here's our White House correspondent, Dan Lothian. Dan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the president has been saying that his we can't wait approach is no substitute for Congressional action on his overall jobs bill, but what he wants is not what he gets. So with millions of Americans out there looking for work, the president is taking these small steps on his own.


LOTHIAN: The week ended much like it started. After acting without Congress to help homeowners, veterans, and college students --

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And we are not a people who just sit around and wait for things to happen.

LOTHIAN: Two more executive actions from the president aimed to help small and large businesses by creating an online clearinghouse for federal services and moving research to market more quickly. White House spokesman Jay Carney says get used to it.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: You haven't heard the end of it because, again, there is no higher priority for him than doing everything he can to help the American people.

LOTHIAN: But House Speaker John Boehner says he has great concerns about the White House approach delivering a blunt assessment of recent actions on the "Laura Ingraham Show."

REP. JOHN BOEHNER, (R) HOUSE SPEAKER: This idea that you're just going to go around the Congress is just -- it's almost laughable. And so we're keeping a very close on the administration to make sure that they are following the law and following the constitution.

LOTHIAN: But the White House says others have taken similar steps, and Jay Carney insisted it's, quote, "Well within the balance of the president's authority." What all sides can agree on is the urgent need to create more jobs, but then the finger pointing begins. The president blames the Republicans for throwing up roadblocks. Republican blame Democrats for ignoring bills they say will create jobs.

REP. ERIC CANTOR, (R) MAJORITY LEADER: The president has been traveling around the country saying that we can't wait. And we believe that as well, and we're not waiting.

LOTHIAN: Meanwhile, unemployment remains high and businesses sit on the sidelines blaming an atmosphere of uncertainty.

Amid these dark clouds, the stock market is once again showing signs of life, and the European debt crisis has backed away from the edge with a new round of lows for Greece, a move the president welcomed in an op-ed published in the "Financial Times" where he wrote about the importance of, quote, building a credible fire wall that prevents the crisis from spreading.


LOTHIAN: Economists say that a stable stock market and a stable global economy may restore the confidence needed in order to boost job creation, but House Republicans say they have another solution as well, calling for action on more than a dozen bill. Speaker John Boehner's spokesman Brandon Buck said, quote, "If the president wants to do something meaningful to create jobs, he can start by working with Republicans and actually engaging in the legislative process." Wolf.

BLITZER: Thanks very much. Dan Lothian at the White House.

Herman Cain is laughing of a series of campaign distractions. We're taking a closer look at his unconventional style and whether he's serious about winning the White House.

And the new heir to the throne in Saudi Arabia is chosen. Critics are calling his record on human rights, quote, "ugly."

And anti-government demonstrators in Syria are pleading for something Libyans had, a no fly zone.


BLITZER: The two front-runners in the Republican presidential race are on the campaign trail right now. Mitt Romney holds a town hall event in the lead off primary state of New Hampshire later this hour. Herman Cain is looking farther down the road, campaigning in a state that doesn't hold its primary until March. We're talking about Alabama. It's just another example of Herman Cain's unique campaign strategy.

Let's turn to CNN's Jim Acosta. He's looking at this part of the story. Jim?

JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Wolf, Herman Cain says he is in it to win it, but he has a strange way of going about it.



ACOSTA: For a growing number of Republicans, it's all aboard the Cain train, even if the conductor doesn't keep track of all the stops.

CAIN: I don't even know where we left last night. Where were we? Arkansas.

ACOSTA: On this day, Cain campaigned in Alabama, a state that doesn't hold its primary until March 13th. This month Cain also visited Kansas, Ohio, and Texas, leaving less time for early voting states like New Hampshire, Iowa, and South Carolina. Sound crazy?

LARRY SABATO, UNIVERSITY OF VIRGINIA CENTER FOR POLITICS: He's either crazy like a fox or he's crazy but it doesn't matter because it's working.

ACOSTA: Cain has devoted part of his campaign to promoting his new book. He admits he's heard from one supporter who questioned his seriousness.

CAIN: He said there's talk that you're not in this to win it. I said, then they don't know me. He said, well, then I want to send you some money. I said, now you're talking.

(LAUGHTER) ACOSTA: Cain's campaign says it's all about building name recognition. Take those web videos, like this one featuring whisky drinking cowboys punching out liberals, or the infamous spot starring a cigarette puffing campaign manager, all the better when that slow Cain smile shows up on "The Colbert Report." Aides say it's all for a good cause.

SABATO: If you look at if other candidates, I don't think any of them could pull it off.

ACOSTA: Even Newt Gingrich says, you have got to hand it to the guy.

NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: You have to admit, Herman's strategy so far has made him the front-runner. So I'm not going to second guess him.

ACOSTA: Truth be told, Cain is no political novice. He ran briefly for president in 2000 and unsuccessfully for the Senate in Georgia in 2004.

CAIN: Scrap the tax code and shut down the IRS. Replace it with a new tax system that's fair and simple.

ACOSTA: Sound familiar?

CAIN: Nine-nine-nine plan.

ACOSTA: Cain a near front-runner, he is getting more scrutiny. As for that smoking campaign manager, Mark Block, it turns out Block paid a $15,000 settlement with the Wisconsin state elections board in 2001 after he was accused of improper campaign fundraising. For now, it appears Block is staying on the Cain train.

CAIN: We also have a chief of staff by the name of Mark Block, and we say let Block be Block.


ACOSTA: So Block will be Block and Cain will be Cain. And Block told CNN Cain has raised more than $3 million just this month. The Cain train can now use that money to build a more conventional campaign if that's what he wants, Wolf.

BLITZER: What a story this is. All right, thanks very much.

Herman Cain is trying today to move beyond a recent controversy about his views on abortion. He told CNN's Piers Morgan he was personally against it, but suggested the government should not have the final say in cases of rape and incest. Since then Cain has insisted quote he's pro-life without exceptions.

Just a short while ago CNN asked him once again to clarify his position. Listen to this.


UNIDENTIFIED FEMALE: Can you clarify your position on abortion?

CAIN: Thank you all very much.


CAIN: I clarified it a thousand times. Go back and look it up. Thank you, all. I love Alabama!



BLITZER: Let's bring in our chief political correspondent Candy Crowley, the anchor of CNN's "STATE OF THE UNION." what do you make of this? It's a phenomenon, you have to admit.

CANDY CROWLEY, CNN HOST, "STATE OF THE UNION": It's totally a phenomenon, but I think the -- you know how every campaign has an anvil around its neck of some sort. For Romney, it's is he flip- flopping. For Rick Perry, it seems to be is he really up to the job.

And for Herman Cain, it seems to be, is he really in this? Does he actually want to win it? Is this a serious campaign? And when you cannot answer one of the most basic questions certainly in the primary for conservatives, particularly social conservatives, about abortion, if you don't have that ready once you know you're at the top of the heap and people are going to begin to ask, that's a problem.

And it's not a problem in that certainly people have had differing ways of explaining their abortion positions. We've had candidates that have flip-flopped from both sides, so that's not the problem. The problem is to face an electorate in the primaries as Cain is where they so much are interested in two issues -- tax cutting and abortion, the social issues. And not to have that answer ready and thought out sort of underscores those questions, is Herman Cain really serious about doing this.

BLITZER: Have you ever seen in a campaign a front-runner not spending a day in Iowa or New Hampshire or South Carolina or Florida, the contest in January, but going to Alabama, which doesn't have their primary until March?

CROWLEY: Exactly. Except for we're talking about him. He didn't disappear when he went to Alabama. He shows up on practically every cable station and may show up in the broadcast networks. So the question is, for a man who needs to have name recognition, is this helping? I feel the same way about that commercial with the smoking campaign manager. We talked about it for five days.

BLITZER: He may be on to something, because retail politics, going door to door, shaking people's hands, having a town hall meeting where 200 people show up, you're going to get a lot more attention on television than you are those kinds of smaller --

CROWLEY: You are, unless the people -- remember, very few people actually make the decision in Iowa and go out on caucus night. So the question is, do they find this offensive? Has Herman Cain been in Iowa enough to make a difference? Because if he is Howard Dean and runs into Iowa looking like he's going to run into first place and he places third or fourth or fifth, that's not going to be good enough at this point.

Earlier in the week, Ray Sullivan, Rick Perry's communications director, suggested that the Texas governor was not going to participate in the all the upcoming presidential debates. He was asked about Rick Perry today. He gave a more nuanced answer. Listen to this.


GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: I don't know whether not we're going to go on any debates or not. There's going to be a lot of debates. Shoot, I may get to be a good debater before all this.


BLITZER: What do you think about this whole issue of whether he should or shouldn't show up in the debates?

CROWLEY: There are going to be debates he doesn't have to show up. As we know, these debates that are scheduled are kind of scheduled in quotation marks, scheduled in pencil because the candidates have to show up to make it an actually debate. Just because you agree to hold the forum doesn't mean they're coming.

If, for instance, Mitt Romney does too many debates, I'm not coming to this one, Rick Perry can get out of that one pretty easily. He's got cover. And it's OK for Jon Huntsman to say I'm not going to Nevada. I'm going to New Hampshire, because he did fine in debates. It's just couldn't get enough running room, he felt.

So the question is, can a guy who sort of really blown it in the debates so far, and he admits that, and he says the debates were a mistake, he can't then say, well, now I'm not going to do debates because it looks like he's running from them.

BLITZER: If you can't debate the Republicans, how can you debate President Obama if he gets the nomination? Candy, thanks very much.

An important programming note, Candy has Obama campaign senior adviser David Axelrod and presidential candidate Ron Paul among her guests this weekend. Tune in Sunday morning, 9:00 a.m. as well as noon for "STATE OF THE UNION" with Candy Crowley. You'll want to see those interviews.

A new blow to Michele Bachmann's presidential campaign. I'll ask her about a surprising call for her to actually drop out of the race. We'll speak with Michele Bachmann. That's coming up.

And a big bank may be backing off from making debit credit owners pay hefty fees. CNN's Erin Burnett is standing by.


BLITZER: Let's get right to Congresswoman Michele Bachmann, she's one of the Republican presidential candidates, she's joining us from Iowa.

Congresswoman, thanks very much for joining us.

BACHMANN: Thanks, Wolf.

BLITZER: All right. Were you as surprised as I was, and maybe you were or you weren't, when this one Tea Party group, it's called American Majority -- I wasn't exactly familiar with it, maybe you are since you've really been involved in the Tea Party movement -- their executive director, Matt Robbins, issued a statement saying this. He said, "Let's face it," referring to you, "she's a back-bencher and has been a back-bencher congressperson for years. This is not a serious presidential campaign."

I want you to -- when you heard about that, what went through your mind, because these are Tea Party activists?

BACHMANN: Well, of course, we found out that this is really a misstep on the part of the Perry campaign because these are Perry supporters that came out. This was a clumsy move. This was meant to be a stealth move to make it look like this was Tea Party, and apparently, these are Perry supporters that came out and it was just a clumsy move on their part to make this statement.

If Governor Perry has something to say to me, he can come out to the debates and he say it. But this was clearly -- this egg on the face, unfortunately, for the Perry campaign. It certainly isn't a blow to my campaign because I've had non-stop support coming out of the woodwork from Tea Partiers all across the country ever since this came out.

BLITZER: Do you have any evidence that it was directed or that the Perry campaign got this American Majority group involved in this? Any hard evidence, or is that just a surmise?

BACHMANN: No, this is something that people have told us, that these are Perry supporters and they went out with this and this was meant to be a stealth move and it was clumsy.

But again, my involvement in the Tea Party movement has been for years. People know that I brought over 40,000 Americans to Washington, D.C. to fight against the implementation of Obamacare. I have led the movement for the Tea Party in Washington. I started the Tea Party caucus in Washington, D.C. And for years, I have been the leader at the tip of the spear.

I introduced the bill to repeal Obamacare. I'm a chief author of a bill to get rid of the housing and jobs destruction an act, also known as Dodd-Frank. I've been a leading foe of Nancy Pelosi and the overspending, and a leading foe of President Obama. I've been called his chief critic in Washington D.C. That's my badge of honor.

So I think that it's very clear that I have a backing and support of the Tea Party. I'm the one who is the first person who has signed the pledge to build the fence on America's southern border and pull the taxpayer subsidies for illegal aliens. Governor Perry is the one who said he would not build a fence and he's the one who wants Americans to pay for taxpayer subsidized benefits for illegal aliens and their children.

BLITZER: The spokesman, by the way, for American Majority, said they did support -- they did say they liked Rick Perry's economic plan, his tax reform plan, but they insist they haven't endorsed anyone, just for the record. That's what they're saying publicly in reaction to this uproar over whether or not they want you to step down or quit this presidential race.

But let's move, let's move on to some of the other substantive issues right now.

BACHMANN: Well, I'm sure you can -- I am sure you can -- I'm sure you can look into that and find the background.

BLITZER: Well, we will. I promise you that.

Let's talk a little -- I want to get to your economic plan, because you've got a major economic plan you've put out there, but a little politics first.

In out our new poll -- not national polls, but in the states, the first four states -- right now, you're showing you're 4 percent of Florida, 6 percent in Iowa, 2 percent in New Hampshire, 4 percent in South Carolina.

You've got a lot of work ahead of you, Congressman (sic). What's going on, cause you spent a lot of time especially in Iowa?

BACHMANN: Well, we've been in all of these early primary states and we have spent a lot of time. And again, I was discounted from the very beginning on the Iowa Straw Poll.

There's no other straw poll like Iowa's. Anyone who holds a valid driver's license can vote in that poll. I came in with less time than anyone. I was -- everyone said she won't win, and I was the first woman, also, to win the Iowa Straw Poll.

We won that when everyone said it was impossible. Now we're going for the caucuses in Iowa. That's the next time when people will vote.

Sure, I'm being discounted, but I'm doing exactly what I should do. I'm here at Carver Pump in Muscatine, Iowa meeting with the owners and meeting with the people who are working here on the shop floor. And that's what I'm doing voter by voter, and we're identifying people to be supporters.

So don't count us out by a long shot. That's exactly what these other candidates would like to do, they'd like to count us out, but that's not what we're seeing by people on the ground. They recognize that I am the true conservative in this race. And people shouldn't settle, this is the year when they can have it all with the candidate who is a true fiscal conservative, a peace through strength conservative, someone who is a social conservative and a Tea Partier. And I've got that and we're finding a lot of support here in Iowa.

BLITZER: Let's talk about your economic plan, your American Jobs Right Now, your blueprint that you've released this week. I want to go through one area, tax reform. It's in the news right now.

Big oil company like Exxon Mobil, they had a 41 percent profit jump, $10 billion profit in the last quarter alone, but big oil companies like Exxon Mobil, they still get some tax breaks, tax subsidies to the tune of about $4 billion in hard -- in American taxpayer money.

Is that something you would change? Would you eliminate those tax breaks for the big oil companies?

BACHMANN: Well, let's talk about that, Wolf.

If you look at the effective tax rate for Whirlpool, they had a minus 11 percent effective tax rate. GE had a 7 percent tax rate. Google had something like a 21 percent tax rate. McDonald's had something like a 30 percent tax rate. Exxon Mobil had a 45 percent tax rate, and Marathon had something like a 50 percent tax rate.

So if you want to know who is paying the taxes, the oil companies are the ones that are paying an effective tax rate of nearly 50 percent.

BLITZER: But American taxpayers still subsidize those big oil and gas companies to the tune of $4 billion a year. Now, $4 billion a year may not be a lot in the terms of huge trillion-dollar deficits, but a billion here, a billion there, as they used to say, eventually, you're talking real money.

BACHMANN: Well, those are tax credits. That's what you're referring to, is subsidies. Those are tax credits.

Tax credits are available nearly for many industries across the spectrum, but the bottom line is, what is the effective tax rate that these companies are paying? There's no fairness whatsoever when you have GE paying a 7 percent effective tax rate, and you have Marathon Oil paying 50 percent and Exxon Mobil paying a 45 percent tax rate.

That's what really counts, Wolf, is the bottom line. What is the effective tax rate? And some of the highest effective tax rates right now are being paid by the oil companies.

BLITZER: Which of these Republican candidates would you see as your main challenger right now?

BACHMANN: Well, my main challenger right now is Barack Obama. That's who I'm focused on.

His economic policies are a disaster and his foreign policy is even worse. Under Barack Obama's watch, we have expended $805 billion to liberate the people of Iraq and, more importantly, 4,400 American lives.

President Obama just had his hat handed to him by the Iraqis, who have essentially kicked him out and our people out of Iraq while Iran is waiting in the wings. So Iraq is essentially kowtowing to Iran. Iran is seeking to have a nuclear weapon.

They want to wipe Israel off the face of the map, and they want to use a nuclear weapon against the United States. And the president said sure, we'll get out. So, the president has done nothing to secure America's safety and security. He's been a disaster on foreign policy.

BLITZER: But as far as Iraq is concerned, the Iraq War, which started in March, 2003, that was President Bush and the Republicans who launched that war that went on for years. This current president is now withdrawing all of those troops from Iraq.

Don't you give him credit for that?

BACHMANN: Wolf, the current president is being kicked out of Iraq. The president of the United States has gotten nothing.

BLITZER: You want those troops to stay there?

BACHMANN: This is a bipartisan effort --

BLITZER: Do you want those troops to stay in Iraq?

BACHMANN: Wolf, this was a bipartisan effort when the decision was made regarding Iraq. I wasn't in Congress at that time, but this was a bipartisan effort. This was not just a Republican effort.

What President Obama has failed to do is secure the gains that America paid for with an extremely dear cost -- 4,400 American lives, nearly a trillion dollars in expenditures, and we have nothing to show for it. And we may look at a Maliki government which has admitted they cannot secure the peace.

They've said themselves they need eight more years to secure the peace. But, of course, Iran is putting the pressure on. They don't want any American presence, because Iran wants to come in and be the dominant hegemon in that region and exercise influence.

That's the problem. And this is a country who not only wants to dominate Middle East politics, but they also are hell-bent on making sure that they can build and deliver a nuclear weapon sufficient to wipe Israel off the map, and also to use it against the United States.

That's why President Obama has made a tremendous tactical error when he chose to put daylight between the United States and Israel. He sent a signal to Israel's hostile enemies that they can go ahead and be aggressive, and Iran certainly is.

BLITZER: Congresswoman, we'll continue this conversation down the road. Thanks very much for joining us.

BACHMANN: Thank you, Wolf.

BLITZER: A dramatic turnaround. Some big banks are now saying no to those controversial debit card fees. Erin Burnett is standing by to join us with the latest.

And violence in Syria. We're going to tell you what the Arab Spring protesters are demanding now.


BLITZER: I spoke with Jon Huntsman, the Republican presidential candidate, a former U.S. ambassador to China, and I asked him what he would say to the Chinese people if he could in Mandarin. And he said this in the aftermath of China's enormous holding of U.S. debt and what they're doing to try to help the Europeans.

Listen to this.


BLITZER: You're the former U.S. ambassador to China. China's played a very important role in the U.S. economy. They have a lot of U.S. debt. Most recently this week, they played a significant role helping the Europeans bail out Greece and some of that enormous debt crisis there.

Our viewers in China are watching. We have a lot of viewers in China, as you probably know, having lived in Beijing. Say something to the people of China in Mandarin right now, then translate it for us. What would you say to them given this opportunity?


I basically said that despite our challenges, the China and U.S. relationship is the most important in the world today. And it is incumbent upon the leadership in both countries in order to ensure the economic and security of not only our two countries, but the region and the world as well.

Having a president who can actually understand those issues and who knows intimately well our most significant economic challenge and opportunity, as well as our most significant security challenge, would be a great thing to have in the White House, Wolf.


BLITZER: Let's bring in our CNN anchor, Erin Burnett. She's been doing some reporting all over the world, including from China.

You know, he makes a pretty good point. The Chinese influence and what's happening in this country and Europe really is enormous.


I mean, when you look at it, Wolf, and you look at the trading partners, Europe is the most important trading partner for China, and they are considering contributing $100 billion-plus to stabilize the European economy, which matters to the U.S. because Europe is the biggest trading partner for the United States, and of course China is a crucial trading partner for us, as well as the largest foreign holder of our debt.

So it is safe to say that a strong, solid, economically stable China is really crucial to America. Again, the issue comes in to their currency and how we split the spoils, shall I say, of that trade.

BLITZER: You've got something special coming up on "OUTFRONT" later tonight. Tell our viewers what it is.

BURNETT: Well, you know, Wolf, I was listening avidly to your interview with Michele Bachmann, and you really got her to come out and talk about this issue of the Tea Party endorsement. We're going to have Ned Ryan on, the man from the Tea Party group, The American Majority, who said she should step down. So we're going to have him on tonight and try to delve down a little bit on that side of the story, find out these issues about Rick Perry, what really happened.

It's interesting. When you look at the Tea Party, half of the Republican Party, according to Ron Brownstein, the pollster, is defined as Tea Party, but it's very split apart. Right?

Apparently, according to the Tea Party groups we spoke to, there's 5,000 individual groups. But if they could get together, they'd have a lot of power. So we're going to talk about that, and we also have the head of the Republican National Committee to talk about the Tea Party.

BLITZER: Reince Priebus.


BLITZER: All right. Thanks. We'll be watching, as we do every night --

BURNETT: See you, Wolf.

BLITZER: -- "ERIN BURNETT OUTFRONT," 7:00 p.m. Eastern, Monday through Friday.

I think our viewers will want to watch.

Erin, thank you.

A strong earthquake strikes Peru. Stand by for the latest on the damage in a country hard hit by a quake just a few years ago.

And we'll also take a look at the record of the man now in line to be the next king of Saudi Arabia. Will he be a reliable ally of the United States?


BLITZER: A strong earthquake rattles Peru. Mary Snow is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

Mary, what's going on?

SNOW: Well, Wolf, a 6.9 magnitude earthquake struck Peru today. No tsunami threat was issued, and there were no immediate reports of damage. The quake struck about 180 miles south-southeast of the capital city of Lima.

An overnight curfew in one Tunisian city after post-election violence. State media reports security forces used tear gas on the crowds. The protest broke out after an independent committee disqualified some of the winning candidates in this week's elections.

And major changes to the British royal family. Sons and daughters of British monarchs will now have equal rights to the throne. Also, British monarchs will be allowed to marry Catholics. The law will apply to any future children of Prince William and Catherine, the Duchess of Cambridge -- Wolf.

BLITZER: Mary, thank you.

Saudi Arabia's ailing ruler, King Abdullah, has picked a successor, but critics worry about the future king's record on human rights.

CNN's Brian Todd has more.


BRIAN TODD, CNN CORRESPONDENT (voice-over): He could be the next king of Saudi Arabia, a key U.S. ally who America will count on to keep the oil flowing in the Middle East and to counter the growing threat from Iran. He's Nayef bin Abdulaziz, just named crown prince by the aging King Abdullah.

Prince Nayef, as he's know, has been Saudi Arabia's interior minister for 36 years. And for some, to say he's a hard-liner is putting it mildly.

ALI AL-AHMED, INST. FOR GULF AFFAIRS: The main problem with Prince Nayef is his human rights record. It's a very ugly record. He has cracked down on women activists, religious freedom activists, and any democratic activists, reporters, journalists, bloggers, all types of activists.

TODD: Ali Al-Ahmed with the Institute for Gulf Affairs is a longtime vocal critic of the Saudi ruling family. Saudi Arabia has had almost no Arab Spring protests, and Al-Ahmed claims that's thanks to Prince Nayef ordering the arrests of protesters and a clampdown on social media. He's seen as not enthusiastic about allowing Saudi women to drive or vote.

In a cable two years ago published by WikiLeaks, American diplomats call Nayef conservative, authoritarian, pragmatic, and not pro- Western. In the aftermath of the 9/11 attacks, blamed on mostly Saudi hijackers, Nayef caused a stir when he said in an interview, "It is impossible that the al Qaeda organization did that alone. I think they (the Zionists) are behind these events."

Despite our repeated attempts, we couldn't get anyone at the Saudi Embassy to clarify that or to respond to the criticisms from Al-Ahmed and others. But analysts point out it was Nayef's job as interior minister to clamp down on social protests, that he may not behave that way as king. Nayef is also praised by the Obama administration for being relentless against al Qaeda.

Analysts say Nayef's stance as a hard-liner virtually wiped out the terrorist network inside Saudi Arabia.

(on camera): In matters of security, that's something that America has appreciated, right?

THOMAS LIPPMAN, AUTHOR, "SAUDI ARABIA ON THE EDGE": Absolutely. Once they realized that their own support of extremism around the world, that they had created a monster that came back to bite them, they did begin to work quite closely with the American authorities, which was difficult for them.


TODD: So difficult, in fact, that it almost cost Prince Nayef his own life. In 2009, a Saudi militant who was pretending to surrender actually blew up a bomb which may have been actually hidden in a body cavity in the same room as Prince Nayef. He barely escaped with his life. That was a close call for the presumably future king -- Wolf.

BLITZER: He's now the crown prince of Saudi Arabia.

TODD: Right.

BLITZER: Thanks very much, Brian, for that report.

A no-fly zone in Libya helped rebels topple the Gadhafi regime. Now anti-government protesters in Syria want the same kind of help.

For our North American viewers, John King looks at new trouble for the Obama administration, a possible subpoena from Congress about a controversial loan.

And a singing house that may not be music to the neighbor's ears this Halloween.


BLITZER: As NATO prepares to wrap up its mission in Libya on Monday, Syrian protesters want the same support from the international community. In protests that turned violent today, they called for a no-fly zone.

And Arwa Damon is joining us now from Beirut.

Arwa, what did the protesters specifically call for today?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, they dubbed it the "No-Fly Zone Friday," and now we are increasingly hearing voices from within the opposition inside Syria calling for foreign military intervention, the same style of intervention that we saw taking place in Libya.

And Wolf, at the onset of the uprising, and even well into the summer, this notion was a red line for the opposition. They quite firmly were saying that they did not want to see any sort of foreign power militarily involved in their own uprising. But now we are increasingly hearing them calling for that very thing, and it most certainly just goes to show you how desperate they are becoming -- Wolf.

BLITZER: Every time we see these large demonstrations in Syria, Arwa, there's usually a backlash from the government, from the Bashar al- Assad regime. Is that happening now?

DAMON: Well, activists are telling us that dozens of people have been killed and wounded, hundreds of them were detained. Again, the largest, highest number of casualties happening in that flash point city of Homs, where we've really been seeing violence increase increasing in the last few weeks.

What we have on the ground in Syrian right now is a situation where the Syrian security forces are fanned out all over the place. Activists, to try to get out in those numbers, in the videos that we're seeing there, they kind of moves themselves around and try to just pop out for as long as they can in areas where they believe it will take the Syrian security forces a bit longer to get to. But it is becoming increasingly difficult for them to take to the streets, but to continue getting those images out as well.

BLITZER: These crowds look enormous right now. Are they getting more intense? Are they getting bigger? Are they getting more vocal? What's the latest?

DAMON: Well, it's becoming very difficult for the crowds to swell, because if you'll remember, over the summer we are seeing those massive demonstrations in places like Hama and Deir ez-Zor and Homs. All of those major cities have now become military war zones.

And so the activists will either go out in back alleys, or they'll go into small towns, or in the farmlands to be able to gather those high numbers, because they say the Syrian security forces do not hesitate to come in and just open fire on them. And this just goes to show you their resilience. But at the same time, there's also the big question of how long can they actually sustain this?

BLITZER: Arwa Damon on the scene for us in Beirut.

Arwa, thanks very much.

And when we come back, it may be more trick than treat. Up next, we're going to show you a Halloween house unlike any other.


BLITZER: We got a statement from the Rick Perry campaign denying that it was involved at all in this one group called American Majority, a Tea Party group calling on Michele Bachmann to quit. She made that allegation here in THE SITUATION ROOM. "We were not aware or involved in the group's action," a spokesman for the Perry campaign says.

One singing Halloween house is now a nightmare. Here's CNN's Jeanne Moos.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): That's no motion- detecting, anti-burglary device. This is a talking house, practically a dancing house.


MOOS: The Web site Gawker christened it "The Awesome Halloween Light Show You're Glad Isn't on Your Block."

UNIDENTIFIED MALE: In a place that perhaps you've seen in your dreams --

MOOS: Or in your nightmares. The house plays one number taken from the Tim Burton film "The Nightmare Before Christmas."

UNIDENTIFIED GROUP (singing): This is Halloween -- Halloween, Halloween, Halloween, Halloween.

MOOS: Here's the house version --

UNIDENTIFIED GROUP (singing): This is Halloween -- Halloween, Halloween, Halloween, Halloween.

MOOS: This is the family that lives in the Halloween house in Riverside, California.

(on camera): Kevin -- he prefers we not use his last name -- isn't doing any TV interviews at the moment, but we did have a nice, long phone conversation with him.

(voice-over): At his day job, he installs fiber-optics for Verizon, but he takes a week off to put up the 5,000 or so LED lights on his own house


MOOS: And he uses his spare time over a period of months to program them. He started the tradition back in 2008 with "Thriller."


MOOS: He does something different every year. (MUSIC)

MOOS: And this year's graveyard smash is "Party Rock Anthem" from LMFAO.


MOOS: Cars cruise by. Kevin's house attracts a crowds of 300 or so people standing around watching the nightly shows.

(on camera): One night, a teenage girl showed up on his doorstep around midnight and asked if this was the house with all the lights and could he please turn them on? Kevin declined.

(voice-over): To us, it may be funny. Are the neighbors amused? One we talked to said folks seemed to like it, though she was a bit worried it would get too popular.

Online, it's a smash. "Epic!" "Incredible!" "Awesome!" That's Kevin's daughter departing the singing house, mid-performance.

(on camera): Kevin says he doesn't Kevin says he doesn't do Christmas because he's too tired from Halloween.

(voice-over): Take your pick. Is it an eyesore or an eyegasm?


MOOS: Jeanne Moos, CNN, New York.



The news continues next on CNN.