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Florida Race Tightening; Daring Hostage Rescue Raid; Starbucks Joins List Of Companies Supporting Gay Marriage In Washington State; White House Economic Council Director Gene Sperling Is Interviewed; Gingrich: President's Tax Plan "A Job Killer"; Speaker Versus Speaker

Aired January 25, 2012 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now: Our latest poll released this minute, it shows Mitt Romney and Newt Gingrich are neck and neck in Florida, but there's a new trend developing which could make our upcoming CNN debate a crucial factor in the primary in the state.

U.S. special ops forces, including the same unit that killed Osama bin Laden, stage another daring raid, this time on mission to rescue hostages from pirates in Somalia.

And tears on both sides of the aisle. Congress bids an emotional farewell to Gabrielle Giffords and gets an inspirational message.

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

But, first, this just coming in. We're seeing a tight race, a very tight race here in Florida. That makes tomorrow night's CNN Republican presidential debate potentially all the more important, as the candidates try to make an impact. The new CNN/"TIME"/ORC poll shows Mitt Romney at 36 percent, with Newt Gingrich, look at this, at 34 percent. It's a virtual tie. Far behind, Rick Santorum at 11 percent, Ron Paul at 9 percent.

Gingrich has nearly doubled his support here, following his double-digit win in the South Carolina primary, while Romney has slipped. But that big jump by Gingrich may not necessarily tell the whole story. There's another trend developing over these past couple of days.

And there's lots to explore. Let's get right to our chief political analyst, Gloria Borger, and Michael Crowley of "TIME" magazine.

Gloria, on the face of it, it looks like a tie, but there's other trends developing.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right, I think what we're seeing, Wolf, if you look at the polls taken Sunday, the day after the South Carolina primary, and then after the first Florida debate, you see that the trend is actually slowing down substantially for Newt Gingrich.

So take a look at this. The day after the South Carolina primary on Sunday, you see that Gingrich is up six points, Wolf. But after the Florida debate, pre and post, you see that Romney is 38-29. So Romney was up nine points. So what we're seeing here is that Gingrich clearly got a bounce out the South Carolina -- Wolf, you see it there now -- he clearly got a bounce off South Carolina, but it didn't last for him.

And this shift to Romney you see on Monday and Tuesday may well be because the attacks on Gingrich are starting to have some impact. It's always hard to tell.

BLITZER: Michael, if you take a look at those numbers, this poll was done, the CNN/"TIME"/ORC poll was done over three days, and over these three days, there was the big Republican debate Monday night in which Romney really went after Newt Gingrich and Newt Gingrich held back. It looks like that was a mistake if you believe the trend in these three days of this poll.

MICHAEL CROWLEY, DEPUTY BUREAU CHIEF, "TIME": Yes, Wolf, that's right.

It really seems like Newt has been most successful in these debates when he's been on the attack, on the offensive. We have seen what happens when he's under attack. Think back to Iowa and the attacks that were unleashed on him in December. They completely killed him in the polls, drove him out of contention in Iowa.

It's possible we're seeing a repeat of that. You might look to see Gingrich go back on the offensive in the next debate.

BLITZER: And, Gloria, it was obviously a mistake for Newt Gingrich to try to take the high road in Iowa, because you saw his numbers go down. It looks like probably a mistake for him to hold back Monday night in that debate here in Florida.

BORGER: He tried to be the front-runner, right?

BLITZER: Exactly. He was pulling a Mitt Romney, if you will.

BORGER: Exactly. Exactly. Exactly.

BLITZER: And that didn't necessarily work out so well for him, at least so far. We will see what happens tomorrow night in our debate.

It looks like there is though a gender gap in this new CNN/"TIME"/ORC poll.

BORGER: There is a gender gap. In South Carolina, Newt Gingrich won very handily, and that means that he won with both men and women.

But what we're seeing now in Florida is that Newt Gingrich leads men by about four points, that's 35 to Romney's 31, but Romney leads with women 40 percent to 32 percent. Now, Gingrich generally in his political career has always shown a gender gap. It seems like men kind of like the attack more. But if Romney wants to start appealing to men and if he wants to win, he has to start appealing to men, going on the attack might help him.

BLITZER: This is an interesting point, because here in Florida, Michael, there's a lot of people who vote, but elderly are big-time voters throughout this state. And there's no doubt that all of these four remaining candidates are appealing to them.

CROWLEY: Well, absolutely, Wolf.

Florida is such a diverse state that there are so many audiences. It's really challenging politics there. You know, compared to a state like Iowa, which a lovely state, but it's quite homogeneous. Basically you're looking at a religious conservative electorate there that you're playing to. Here they are looking at Latinos, there are elderly voters, and there's racial diversity, and so it's much more of a balancing act.

In fact, one of the big back-and-forths you're seeing right now is Gingrich going after Romney on the idea that's he's anti-immigrant. That's going to be a real important theme in the next few days. I'm sure we will hear about it in the debate.

BLITZER: We will be learning a lot more about all of this in the debate, obviously.

Gloria, Michael, guys, thanks very much.

Big prize in the Republican presidential race involving the Latinos, and they make up, as Michael just said, a huge part of the electorate in the state. Mitt Romney and Newt Gingrich are fighting very hard for that vote. As you might expect, it's getting rather nasty.

CNN's Jim Acosta is taking a closer look.

Jim, first of all, where are you? What's going on?

JIM ACOSTA, CNN CORRESPONDENT: Well, we are watching a Mitt Romney event that just wrapped up a few moments ago, and the former Massachusetts governor, true to form here, in the Cuban American enclave of Miami, Florida, went right after that vote, and he vowed to see Castro leave this earth, as he put it during his remarks a few moments ago, and called for a free Cuba.

That's always good politics down here in South Florida, but I have to say, Wolf, watching Mitt Romney and Newt Gingrich go to war for the Latino vote here in South Florida, all you can say is, ay caramba.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): The race for the Latino vote in Florida has more drama than a Spanish-language soap opera. Newt Gingrich was tearing up in front of a Cuban American crowd in Miami. NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: He's actually teaching our granddaughter. It's really great.

ACOSTA: And showing some machismo over the Castro brothers in Cuba.

GINGRICH: There will not be a succession to Castro, because we are in fact are not going to allow a negative future of a new generation of dictators replacing the Castro brothers.

ACOSTA: Hispanics are the big empanada in Florida, with Latinos making up roughly one in 10 Republican voters in this state. A new Univision/ABC News poll finds Romney with a 15-point lead over Gingrich among Latinos, but 21 percent are still undecided.

That explains why both campaigns are taking to the Spanish airwaves. One Newt Gingrich radio ad calls Romney the most anti- immigration candidate. The spot also resurrects a Romney gaffe in 2007 when he mistakenly used Fidel Castro's catchphrase, fatherland or death, in a call for freedom in Cuba.

Gingrich then dropped the ad after drawing a sharp rebuke from Florida's Cuban American Senator Marco Rubio, who called the ad inaccurate and inflammatory. But Gingrich had no response to Rubio's comments.

(on camera): Speaker, Marco Rubio criticized that Spanish- language ad from you today. Do you have any comment on that?

UNIDENTIFIED MALE: We will see you guys later on.

ACOSTA: Romney is fighting fuego with fuego, running a spot that notes Gingrich once called Spanish the language of the ghetto.

In recent days Romney has softened his tough position on illegal immigration. At Monday's debate, Romney said he could support portions of the DREAM Act the would provide legal status to undocumented minors who go into the military or finish college. Romney had said previously he would veto the bill and he offered up a unique alternative to mass deportations.

QUESTION: So, if you don't deport them, how do you send them home?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Well, the answer is self-deportation.

ACOSTA: Gingrich mocked that comment at a forum with Univision.

UNIDENTIFIED MALE: Self-deportation.

GINGRICH: I just -- can I ask you a question?

UNIDENTIFIED MALE: Sure.

GINGRICH: How close are you to breaking up laughing out loud at this fantasy?

(END VIDEOTAPE)

ACOSTA: And both Newt Gingrich and Mitt Romney would love an endorsement from Marco Rubio, but a spokesman for the senator said even after his comments on that Gingrich ad earlier today, he's not wavering from his position that he's staying neutral here in the Florida primary.

Wolf, we should mention about an hour ago Mitt Romney weighed in on that Spanish-language ad from the Gingrich campaign. He called it inappropriate -- Wolf.

BLITZER: Jim Acosta on the scene for us, thank you very much.

An important note. I will moderate CNN's next Republican presidential debate right here in Jacksonville, Florida, at the University of North Florida, Thursday evening, tomorrow night, 8:00 p.m. Eastern, only days before the pivotal Florida primary. You will see it all unfold live right here on CNN.

There were both tears -- there were a lot of tears on both sides of the aisle today as Gabrielle Giffords formally resigned from the House of Representatives. In her letter to Speaker John Boehner, she said -- and I'm quoting now -- "I will recover and will return."

Giffords has made an extraordinary comeback from a severe head wound suffered last year when a gunman opened fire on a political event in her Arizona district. Six people died. Giffords will now focus on her rehabilitation.

Congresswoman Debbie Wasserman Schultz of Florida read Giffords' letter aloud, then added:

(BEGIN VIDEO CLIP)

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: And let me just say, a point of personal privilege, that, for the last year, it has been one of the honors of my life.

And the most important thing to remember that, no matter what we argue about here on this floor or in this country, there is nothing more important than family and friendship. And that should be held on high above all else.

And I will always carry that in my heart. And even though I know we won't see each other every day, Gabby, we will be friends for life, for life.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Congresswoman Giffords cast her final vote on the big that she co-introduced cracking down on cross-border drug smuggling. It passed unanimously. We will have much more in this story in our next hour. Dana Bash will be up on Capitol Hill.

Here is something I was wondering about last night when I was anchoring our coverage of the State of the Union address, the mysterious words he uttered to the Secretary of Defense Leon Panetta right before he delivered the address.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Leon, good job tonight. Good job tonight.

(END VIDEO CLIP)

BLITZER: "Good job tonight," he said to Leon. "Good job tonight, Leon."

Now we finally know what it was all about -- details of a daring U.S. rescue operation.

Also, Newt Gingrich heckled out there on the campaign trail here in Florida over a controversial part of his past.

And Mitt Romney's scathing reaction to the president's State of the Union address. The director of the White House Economic Council, Gene Sperling, he is standing by live. This hour, he will respond.

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

(COMMERCIAL BREAK)

BLITZER: Let's get to Jack Cafferty. He has got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Indeed. Thanks, Wolf.

As President Obama heads out to campaign for reelection, he has his work cut out for him. A new Gallup poll shows Americans of broadly dissatisfied with the State of the Union on many issues. In some cases, that satisfaction has dropped off a cliff over the last four years. The most toxic issue for Americans: the economy. It also happens to be the top issue on most voters' minds.

Only 13 percent of those surveyed in this Gallup poll say they are satisfied with the state of the economy -- 13 percent. Most ominously for Mr. Obama, that's a 23-point drop since January of 2008, the year before he took office. This is the lowest rate of satisfaction and the biggest decline in the last four years for any of the 24 issues that Gallup measured.

Up next, fewer than three in 10 Americans are satisfied with the moral and ethical climate in this country, and the size and the power of the federal government. There's been a double digit drop in satisfaction for both of these issues since 2008.

There's more. Most Americans are also dissatisfied with the level of immigration into the country and with the nation's efforts to deal with poverty. No surprise there. We have more than 46 million people living below the poverty line, plus a record number of folks on food stamps.

On the plus side, Americans are most satisfied with the overall quality of life in this country, along with the nation's security from terrorism and its military strength. But if you buy that election- year admonition, "It's the economy, stupid," then where President Obama is concerned, there's a problem.

Here's the question: what does it mean for President Obama that Americans' dissatisfaction with the economy has skyrocketed since 2008?

Go to CNN.com/CaffertyFile, post a comment on my blog or to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: And it's a great page, indeed. Jack, thank you.

There was an intriguing moment before the president's State of the Union address before a joint session of Congress last night, just a hint that told me something important was going on. Watch this moment from our special coverage last night.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good job tonight. Good job tonight.

BLITZER: We did hear the president say to Leon Panetta, the secretary of defense, you did a good job. We're going to check out what he's talking about, see what Leon Panetta said, why he justified a shout-out like that from the president. "You did a good job," maybe he'll make some sort of announcement in his speech tonight about what the secretary of defense and presumably the Defense Department did. We'll stand by. We're checking our sources right now.

(END VIDEO CLIP)

BLITZER: And we now know that something very dramatic indeed was happening. In a daring nighttime raid, U.S. Special Operations forces landed in a remote area in Somalia. They rescued two hostage aid workers and killed nine pirates. The American woman, Jessica Buchanan, and her Danish colleague, were kidnapped back in October.

A U.S. official says the same elite Navy SEAL unit that killed Osama bin Laden was among those involved in the raid. A U.S. official says this time, the assault team parachuted in from fixed-wing aircraft and then advanced on foot to the compound. The military says nine heavily armed gunmen were killed in the strike. The commandos got out with the hostages by helicopters.

CNN's Zain Verjee takes a closer look at what this is all about.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Wolf, the U.S. is sending a powerful message to Somali pirates, we are fed up and we are not afraid to come and get you. Now, this kind of operation does not mean it will deter Somali pirates from kidnapping hostages, because it's a new and important revenue stream for them. Somali pirates have been a danger for ships on the high seas for years, hijacking them like it's a slick business. Call it Pirates inc., Wolf.

Now, I just want to give you an idea of that fascinating organizational structure. Think of it kind of like a Wall Street firm.

(voice-over): Few know as much about modern piracy than this man -- John Burnett's education in piracy began the hard way while sailing solo toward Singapore.

JOHN BURNETT, FORMER HOSTAGE: It's as terrifying as waking up in the middle of the night in your bedroom on land and realizing there's an intruder in the house. It scared the hell out of me.

VERJEE: He was held hostage by pirates in the South China Sea. When Burnett was released, he decided to make piracy his life's work. I asked him Somali pirates are able to make millions in hijacks for ransom.

BURNETT: It's nearly a corporate business plan. They have every step run with military precision.

VERJEE: Like any good business, it attracts investors and suppliers. A pirate gang leader oversees the operation, that includes a pirate action group, about eight to 12 men on two skiffs, an on- board commander, a logistics manager, an accountant and an interpreter.

(on camera): Pirates will get close in the dead of night to a merchant ship like this one. They approach it, they look for one that moves slowly and is kind of low. They throw a rope with a hook or a ladder and climb up onto it.

(voice-over): Their skiffs have powerful engines, weapons, GPS navigators, extra fuel.

Burnett says piracy is big bucks and out of control.

BURNETT: There are many, many men and women being held hostage, and no one deals with it. No one cares about it.

(END VIDEOTAPE)

BLITZER: That's Zain Verjee reporting for us from London.

A quick footnote: Zain is reporting that pirates are still holding about 30 people hostage, including several Koreans and Indians.

As for Jessica Buchanan, the American aid workers who was rescued, Brian Todd has spoken to some family members. They are anxiously awaiting her return. We'll have that part of the story as well as new details on the rescue mission. That's coming up here in THE SITUATION ROOM in our next hour.

So, what does Nancy Pelosi really know about the former House speaker? It's a secret she's hinting could derail Newt Gingrich's presidential campaign. It's turning it into a serious war of words between the two former speakers.

Plus, heckled out there on the campaign trail. Details of who was mocking Newt Gingrich and why. We're going to see the exchange.

(COMMERCIAL BREAK)

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

What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, the Seattle-based company Starbucks is joining a growing list of corporations backing the push to legalize same-sex marriage in Washington state. In a letter to employees, Starbucks says the legislation is in line with its business practices and its philosophy. It joins other Washington companies, including Microsoft and Nike in supporting legalizing gay marriage in that state.

And take a look at this rescue off the coast of North Carolina. Coast Guard officials say a 26-foot sailboat ran aground on a shoal over the weekend prompting a call for help. The three men on board are hoisted to safety in windy and rainy weather, as we getting a look at those pictures. Fortunately none were injured. Their first words to the rescuers, quote, "You guys are awesome."

And move over, Exxon -- Apple is now the most valuable publicly traded company in the world. Apple stocks soared more than 6 percent today on news of a record breaking quarterly profit. That pushed the company's market value to $419 billion, surpassing Exxon, which is worth only -- only, by the way -- $413 billion.

Apple briefly surpassed Exxon last August, but the oil giant quickly regained the top stop. Now, Apple is on top, Wolf.

BLITZER: Pretty amazing stuff. Thanks very much, Lisa.

It's former speaker versus former speaker. We're talking about Newt Gingrich versus Nancy Pelosi. The war of words, you're going to hear for yourself. That's coming up in our strategy session.

And Mitt Romney slams the president's ideas on jobs and taxes. I'll get a response from Gene Sperling, the director of the White House Economic Council.

(COMMERCIAL BREAK)

BLITZER: President Obama's on a three-day trip to five political battleground states. His first stop today, Iowa, where he talked jobs, took some jabs at his Republican critics.

Now he's on the way to Arizona. Our White House correspondent, Dan Lothian is joining us. Dan, the White House says this isn't a campaign trip and last night's address wasn't a campaign speech, but certainly to a lot of folks it sounds like the above.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, it does sound like that, Wolf, but the White House saying that the speech last night and certainly this tour is about pushing a vision that will help this country, that will put middle-class Americans back to work and will turn the economy around. As part of the president's big push, there's something old and something new.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): It was a "State of the Union" speech that set the tone for President Obama's re-election campaign, populist themes that appeal to independent voters. Much of it we've heard before.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We should be working on comprehensive immigration reform. Everyone gets a fair shot. What's at stake aren't Democratic values or Republican values, but American values?

LOTHIAN: But behind closed doors, the White House crafted new ideas, and hours before the speech was delivered, released this video on how the proposals ended up in the script. Because of the concerns over content piracy in countries like China, a new trait enforcement unit is being created.

PRESIDENT OBAMA: There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.

PRESIDENT OBAMA: And two more new units to tackle fraud in the financial industry.

PRESIDENT OBAMA: This new unit will hold accountable those who broke the law.

LOTHIAN: And while we've ahead about the so-walled Buffett rule before, the president got more specific.

PRESIDENT OBAMA: If you make more than a million a year, you should not pay less than 30 percent in taxes.

LOTHIAN: White House spokesman, Jay Carney trumpeted the fair share principle.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Americans who are fortunate enough to have benefited from this great economy and country of ours to be millionaires and billionaires should not be pays at a lower rate than working middle-class Americans. LOTHIAN: On the environmental fronts attractive to his base, the president announced a directive to allow development clean energy on enough public land to power three million homes.

As is common in "State of the Union" addresses, the opposing party found few things to applaud, and on the campaign trail, the Republican presidential hopefuls protested not with their hands, but with their words.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: He was speaking in fantasyland again last night.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I find the gap between President Obama's words and his deeds to be sort of astounding.

(END VIDEOTAPE)

LOTHIAN: Now the president also asked Congress to consider tax breaks for companies that bring jobs back from overseas and in addition to that called on Congress to make insider trading by members of Congress illegal.

But Wolf, I should tell you that while the president does have some initiatives that he can push on his own, many of these big proposals will require congressional approval and in this political climate, that will be different if not, as some believe, impossible to do.

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

Let's get more on the speech and the reaction to it. Joining us now Gene Sperling, he is the director of the White House Economic Council. Gene, thanks very much for coming in. Listen to what else Newt Gingrich said today about the president's speech last night.

(BEGIN VIDEO CLIP)

GINGRICH: When he proposed a 30 percent minimum tax, if he actually means it that would double the tax on capital gains. That would drive the stock market down. It would affect every pension and 401(k) in the country.

It would lead people to invest outside the United States, stop capital formation. It would block the development of new companies and about as big a job-killing proposal as any president has ever made. I'm hoping the White House is going to clarify today that actually 30 percent didn't mean 30 percent because if you meant 30 percent, that would be so stupid even they couldn't defend it.

(END VIDEO CLIP)

BLITZER: Now you heard what he just said, the former speaker of the House. Gene, go ahead and clarify.

GENE SPERLING, DIRECTOR, WHITE HOUSE ECONOMIC COUNCIL: I think it's pretty clear and I think it's something the American people support. The president did adopt the rule that Warren Buffett himself called for and the rate he talked about, which is that people making over a million.

When we reform or tax code and reduce expenditures and rates, we should make sure that those few who fortunate enough to make over a million dollars pay a basic rate, an effective rate of 30 percent.

Now, that does not mean in tax reform that you could still not have some preferential rates for capital gains if that is what bipartisan Congress decided to do in tax reform.

What it says, however, is that if you organize all of your money or park your money in places so that you pay a rate that is lower than millions of working families, where you're paying lower than the extra hour of overtime that a police officer or a fireman puts into work, that that's something we don't support.

It's just a basic fairness rule, and, you know, of course I heard those types of things. As you know, we heard those things in the early 90s that the world would come crashing. It didn't work out.

In fact, when we've had fiscal discipline and fairness in our tax code we often had very strong economy, robust job creation, robust that's what the record is. The one time we did decide to bet on lowering tax rates for the most -- we probably had the worst period of job growth and wage growth we have seen in decades and decades.

BLITZER: I want to be precise. For millionaires, people making more than a million dollars a year like Mitt Romney, for example, he obviously makes a lot more than a million dollars a year.

But for folks who make a million dollars or more (ph), capital gains rate for them would increase from 15 percent to 30 percent, interest rates, with taxes on interest investments, interest rates. That would go up to 30 percent too? All of that would go up to 30 percent? Is that how you would do it?

SPERLING: No, that's now how it works, Wolf. First of all, this is a principle for tax reform. In tax reform hopefully we'll have a simpler system. What it says is at the end of the day somebody making $10 million should be paying at least $3 million in their taxes, a 30 percent effective rate.

It does not mean that congress could still gift preferences, lower rates to capital gains even a lot of well-off people that's only a small portion of their income. What it means at the end of the day, after you put all your deductions, preferential rates, you have to pay a basic minimum tax of 30 percent.

Let me remind everybody that in our current tax code right now not one thing the president has called for would in any way hurt capital gains or dividends for 98 percent of Americans. In fact, the president supports continuing our current policy of having zero capital rates for actually the majority of taxpayers.

This is simply saying that when we reform the tax codes those in the small percentage, less than 1 percent who make over a million, whatever capital gains or dividends or deduction they get, at the end of the day, the very, very most fortunate people in our society would pay at least an effective rate of 30 percent. It's like an alternative minimum tax, except a --

BLITZER: I just --

SPERLING: It just hits the well-off.

BLITZER: All right, so in other words just for those making a million or those making more than. Who would pay the higher capital gains tax?

SPERLING: So, Wolf, what I'm trying to explain again is that what the Buffett rule is really an alternative minimum tax. It doesn't necessarily say what the particular rates will be. It says in the end of the day that you cannot use accountants or preferential rates for people who make over a million to pay less than 30 percent of the rate.

Right now, we have an alternative minimum tax that is all distorted, and we have to correct every year so it doesn't hit middle- class families. What people always wanted from a minimum tax for trust in our government is if you are in the tiny percent of Americans who make over a million dollars, you have to have an effective rate at the end of the day.

You can still do your taxes. You may still be able to get preferential rates, for capital gains, you could still have lower rates, but at the end of the day there's a minimum tax. We check and we make sure that the most fortunate Americans make over a million are paying 30 percent.

BLITZER: Let me get your quick reaction to what Timothy Geithner, the secretary of the treasury just told Bloomberg TV. He says he's not going to stay -- he thinks the president will be re-elected, but he's not good to stay for a second term. He says he's not going to ask me to stay on. I'm confident he'll be president, but I'm also confident, he's going to have the privilege of having another secretary of the treasury. I want your reaction.

SPERLING: Well, you know, I think Secretary Geithner is the most outstanding and sound finance minister, and he's very modest. Make the focus will be on the economy this year, not what happens on a year later.

I hope the world works out that Barack Obama is re-elected and Secretary Geithner stays as long as possible. That's a personal decision he'll make. Our focus right now is on strengthening the economy, getting tax cuts and reform that will strengthen manufacturing on our shores.

Discourage people from using the tax code to move jobs overseas and give more incentives for people creating jobs here. That's our focus, that's Secretary Geithner's focus, and most importantly that's President Obama's focus right now.

BLITZER: Gene Sperling joining us from the White House briefing room. Thanks very much for coming in.

SPERLING: Thank you.

BLITZER: Newt Gingrich heckled over his ties to Freddie Mac. Wait until you hear his response to a woman in the crowd here in Florida today.

(COMMERCIAL BREAK)

BLITZER: Two former House speakers going at it with a vengeance. That would be Newt Gingrich and Nancy Pelosi. Last night, CNN's John King asked Nancy Pelosi about Gingrich. Listen to her response and Gingrich's rebuttal.

(BEGIN VIDEO CLIP)

REPRESENTATIVE NANCY PELOSI (D), MINORITY LEADER: Let me just say this. That will never happen.

UNIDENTIFIED MALE: Why?

PELOSI: He will not be president of the United States. That's not going to happen. Let me make my prediction and stand by it. It isn't going to happen.

UNIDENTIFIED MALE: Why are you so sure?

PELOSI: There's something I know. The Republicans, if they choose to nominate him, that's their prerogative. I don't think that's going to happen.

GINGRICH: I have a simple challenge for Speaker Pelosi, put up or shut up. I have no idea what she's talking about. I don't think she has any idea what she's talking about, but bring it on.

(END VIDEO CLIP)

BLITZER: All right. Let's get to our "Strategy Session" and discuss with Democratic strategist, Jamal Simmons, and Republican strategist, Alice Stewart, former spokeswoman for Michele Bachmann.

Jamal, what's going on here? Does Nancy Pelosi know something that could derail the opportunity for Newt Gingrich to become president of the United States? That's what she's now repeatedly hinting.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: It certainly sounds like she knows something, Wolf. I think her spokespeople have said she doesn't know anything that hasn't been made public, but it certainly sounded like she has something in her back pocket.

That if Newt Gingrich got close enough to the White House, she was willing to put it out to stop that from happening. But I do think that we know enough on the record that we don't have to worry about it.

We know about the $300,000 fine he had to pay. We know about the ethics charges. We know about his personal life. All those things are on the record. I think over time that will wear thin with the American voters.

BLITZER: Alice, late today, Nancy Pelosi told our own Dana Bash up on Capitol Hill, any reference I would make to the Ethics Committee is confined to the public record. What do you make of this little exchange between these two former speakers?

ALICE STEWART, REPUBLICAN STRATEGIST: Well, I think it's silly. I think if she's got something, put it out there. Put up or shut up like Speaker Gingrich said.

This is the second time she's done this. She started this talk in December, threatening that she some tough secret information and now they're saying that it's information that's in the public record.

She's starting to sound like the boy who cried wolf. If you have information that's important, put it out there. This is coming from the woman who said we had to pass Obama-care before we found out what's in it.

She's starting to sound like a broken record. If there's something really bad in that information that's part of the public record, I'm sure the Romney campaign would have it and already put it out there.

SIMMONS: Wolf, one thing we do know about Nancy Pelosi though is that she is not one to cry wolf. If you talk to the people on the president's team when she was speaker of the House, everything she committed to get passed, she passed in the House. She's the kind of woman who does complete what she says she'll do.

STEWART: Then put it out there. Stop talking about it, but put it out there. If it's something that so critical that the people of this country need to know, put it out there and let the public decide.

BLITZER: Let me show you, guys, what happened today when Newt Gingrich was out on the campaign trail here in Florida and someone started to heckle him about his ties to Freddie Mac. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You work for the people or Freddie Mac?

GINGRICH: I'm glad you ask that, I work for the people. Of course, I work for the people. Now -- and by the way --

This is a free country and people are allowed to come and be noisy. It's part of the American tradition. I just want to say for the record, I don't know that this lady wants to listen, but I will say if go to the July 2008 "New York Times," you will see the only reference to my talking to Congress about Freddie Mac, I told the House Republicans to vote no on giving them any more money. I was opposed to them getting any more money, and that is a fact.

(END VIDEO CLIP)

BLITZER: Alice, will this have any legs as they say in the Republican primary, this whole Freddie Mac thing?

STEWART: I don't think so. From the way I see it, he's answered the questions. He's talked about the money he's maid, and surprisingly it's really difficult for a lot of folks to understand, particularly liberals, a lot of Gingrich's past transgressions, whether it's Freddie Mac or political or personal past, a lot of the people voting have put that behind him.

I have a problem with some of the his personal issues, but the voters in South Carolina and we've seen in other states, they have put that behind them, and they're looking at him as someone who's got the conviction and strength, at we've seen the debates that he can take on President Obama.

Things like Freddie Mac and other issues, a lot of the voters have put that behind them.

SIMMONS: Wolf, one thing we know about Newt Gingrich --

BLITZER: Ten seconds, Jamal.

SIMMONS: Yes, he's not soft. He knows how to take a punch and he knows how to deliver a punch, but we don't know whether or not that was a Mitt Romney supporter out there. Those aren't Democrats, probably Republicans. So there's a bit of fracturing going on over this.

BLITZER: Guys, thanks very much. Remember tomorrow night's debate here in Florida.

The president wants millionaires to pay more taxes to the federal government. Would that amount to real money for the national coffers? We're taking a closer look.

(COMMERCIA BREAK)

BLITZER: President Obama said in the "State of the Union" address last night, he wants a millionaires to pay a minimum 30 percent tax.

Let's get some more from CNN Erin Burnett, the host of "ERIN BURNETT OUTFRONT," week nights here on CNN, 7 p.m. Eastern. What did you make of that proposal? You heard Gene Sperling say you make $10 million no matter how you make it capital gains, dividends, interest, you're going to pay $3 million in tax. He calls it the Warren Buffet rule.

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUTFRONT": That's right. Obviously, the Warren Buffett rule is a good political term for the White House, because a lot of people like it. As you know, the polls show American public supports taxing millionaires. We did the math though to try to find out exactly how much money this would really raise, asked some tax experts. Assuming you keep the current code for taxes, which I think most would agree it needs more than just changing rates. We need to get rid of loopholes and things like that. The effective tax rates on those highest earners, over a million dollars, would be 44 percent.

That would be back to the mid-Reagan years in terms of that effective tax rate. Wolf, the real question is, would doing that, as Gene Sperling said, as the president is talking about, and clearly going to make a lynchpin of his campaign.

Would it raise enough money to make a difference? That's where you bet some interesting numbers. It would raise about $41 billion a year, experts tell us. Compare that, Wolf, to just how much the government spend last year in fiscal 2011.

That would be 1.1 percent of what the government spent. It's just an interesting way to look at it. You may or may not want to do it, about you when you look at the scale of the problem, the scale of the debt in this country. We need to do a lot more than something like that.

BLITZER: Yes, relatively small amount of money. Erin will have a lot more at 7:00 p.m. Eastern. Thank you.

When we come back, we'll go inside that daring secret mission to free two international aid workers including an American woman held hostage in Somalia.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is back with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is what does it mean for President Obama's re-election campaign that Americans' dissatisfaction has skyrocketed since 2008?

Greg in Miami writes, "I think if the poll taker reached the president himself, he would say he was dissatisfied with the economy. Why is that such a surprise? We're digging out of a huge hole. It's going to take time to recover. The same way it's easier to gain weight than it is to lose weight. What I want to know is who are the 13 percent who were satisfied with the economy?"

B writes it means, "The guy hasn't a clue what he's doing. Can't wait for some more shovel jobs and Solyndra-type investments paid for with our tax dollars.

Bob in Dallas writes, "I think we're trying to put a gauge on an economic downturn that many people alive today have not experienced. I'm not happy with the situation, but I'm dealing with it. I just hope it improves, so my daughter who's 21 can enjoy her youth like I did in the '60s."

Paul in Utah writes "It means people still think Obama is a good speaker, but finally listening to what he's saying and what he's promised and words are not enough anymore."

Pam in New York writes, "It really is not that significant. People know it would be worse if the GOP took the reins. Totally depressing."

Richard says last night's shows were reruns, so was Obama ace "State of the Union" address. And George Carlin had it write -- the American dream, you have to be asleep to believe it.

If you want to read more about this, go to my blog, cnn.com/caffertyfile or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: All right. Jack, thanks very, very much.