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Guard "Sold Out" Hostages to Pirates; Gingrich Tries to Regain Footing; Romney on the Defensive about Finances; Gingrich's Moon Colony Plan

Aired January 27, 2012 - 17:00   ET

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


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

Happening now, a CNN exclusive -- only days after their dramatic rescue, we're getting new word that the kidnapping of a U.S. aid worker and her Danish colleague was an inside job.

As the Republican frontrunners crisscross Florida, Newt Gingrich tries to find his footing after stumbling in last night's rough debate.

Mitt Romney faces new questions about his vast wealth and what he's doing with all that money.

And Newt Gingrich's plan to create a colony on the moon goes over like a lead balloon with his Republican rivals.

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.

All that coming up. But let's begin with a CNN exclusive. There's a stunning new twist to the hostage drama that ended this week when U.S. Special Operations forces rescued an American woman and a Danish man from pirates in Somalia. As the former hostages recuperate at a U.S. base in Italy right now, our own Brian Todd has been learning more about the events that led to their capture -- Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we've been told by the head of the security for that Danish relief group that this kidnapping was an inside job.

(BEGIN VIDEOTAPE)

TODD: (voice-over): Chilling video from the hostage takers -- after their capture, guns pointed toward their heads. American aid worker Jessica Buchanan and her colleague, Poul Thisted, offer proof of life.

JESSICA BUCHANAN: Paul and myself, Jessica, we are safe and we are alive.

TODD: Alive and apparently betrayed.

CNN has new information that at the time they were kidnapped in Somalia in October, Buchanan and Thisted had a security detail of up to eight police officers. They were from what's called the special protection unit, affiliated with local Somali authorities.

CNN is told the lead police officer was compromised, paid by the kidnappers to abduct Buchanan and Thisted.

We learned that from Fredrik Palsson, head of security for Buchanan's aid group, the Danish Refugee Council.

FREDRIK PALSSON, DANISH REFUGEE COUNCIL: One of the guards, he had -- he had was sold out. And -- and he had he had as a mission to -- to capture expatriates. And he had exchanged some of the -- some of the ordinary SBU guards that we normally utilized into -- into guys that were they were just -- they were not -- they were not a part of the -- of the -- of the outfit.

TODD: Palsson says the kidnapping unfolded quickly, as the aid workers were to change vehicles, crossing between territories controlled by different clans. He says Buchanan and Thisted were quickly thrown into a vehicle and driven away.

I pressed Palsson on the compromised officer.

(on camera): Do you think you made mistakes?

And, if so, what mistakes did you make in screening him?

PALSSON: No, I cannot tell you that we did mistakes. I think -- I think that we did -- we -- we hired the right person with the -- with the information we had at the time. I think that -- that his greed for money for -- for money or that -- that had come later.

TODD: Palsson says he's been working security in that region for years, that his group built trust with local Somali officials and there had been no threatening incidents before this. He says that corrupt police commander has disappeared.

Palsson says he doesn't know who paid the officer or how much. He says his group, like other aid organizations, has little choice but to hire locals for security.

Norm Sheehan, who's worked in Somalia with aid groups, says local leaders often require that. As for bringing in Western security teams...

NORM SHEEHAN, AID GROUP SECURITY DIRECTOR: If you bring in a -- a protection force with you, they might as well bring the body bags with them. They will be targeted. TODD: Gary Oliver, head of a security firm that's worked in that region, says outsiders have to get to know local tribal leaders and watch those they hire.

GARY OLIVER, BSG SECURITY: People get to know how people are -- when he came into work that morning, how did he look?

Was he worried?

Was he -- did he seem nervous?

No -- was there strange people in that detail that you'd never seen before?

There's a number of telltale signs that -- that -- that you should be able to recognize.

(END VIDEO TAPE)

TODD: We pressed Frederick Palsson, head of the Danish aid group's security, on whether other guards in that detail were in on the plot, whether they resisted, if they ran away. He says that is not clear.

Contacted by CNN, Somalia's ambassador to the U.N. said the transitional federal government there has no control over the police in that region, but he says his government will press local authorities for answers -- Wolf.

BLITZER: Brian, did this security chief tell you anything more about how his group vetted this particular police commander?

TODD: He did. He said they used the same methods they do when vetting all police hires there. They went to the police station to check on any concerns about that officer. They did background checks, found out which family, which clan he came from, whether he or anyone in his clan had conflicts with other clans in the area. In Palsson's words, this police commander, quote, "fit the profile very well" when they hired him. They don't know what went wrong.

BLITZER: All right, Brian.

Excellent reporting, as usual.

Thanks very much.

Let's get to a major political story unfolding here in the United States -- the race to the finish line now in Florida. With the crucial primary only four days away, Mitt Romney seems to -- seems to have the momentum, while Newt Gingrich tries to regain some traction after tripping in last night's debate right here on CNN.

Let's go live to CNN's Joe Johns.

He's joining us from Delray Beach in South Florida.

What's the latest there -- Joe?

JOE JOHNS, CNN CORRESPONDENT: Well, Newt Gingrich spent much of this day focusing on the Latino vote. But he ended up here in the Delray Beach at a Republican Jewish Coalition event. He's up against a much better organized Romney camp in this state.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The Gingrich road show slogged into Miami after the former speaker's long night in Jacksonville. He's making a big play for the all-important Latino vote in South Florida by highlighting his support of citizenship for immigrants who join the military.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I want to announce that he has a brand new arms bill then, which -- which takes the military service part of the Dream Act, puts it in as a freestanding legislation. It should be easy to pass. It allows young Americans who came here with their parents and who did not yet have citizenship, it gives them an opportunity to serve the -- to serve our country and, as a result, to become citizens.

JOHNS: It's a tough spot for Gingrich here. The debate magic that propelled him in South Carolina has seemingly failed him in Florida. The campaign had no answer to why Gingrich was so flat, except to claim that Romney had been, at times, untruthful and that Gingrich would have looked like he was nitpicking if he had pointed it out.

The campaign later released a new ad to make the point.

(BEGIN VIDEO CLIP FROM NEWT GINGRICH CAMPAIGN AD)

UNIDENTIFIED MALE: Romney said his investments in Fannie and Freddie were in a blind trust.

(END VIDEO CLIP)

JOHNS: Still, on the day after the debate, Gingrich seemed to be rehashing debate moments, though he didn't seem to reflect on his own performance.

GINGRICH: Now, let me turn to several things here at home, the first of which is one that, unfortunately, was not covered very well last night. And I regret that Wolf Blitzer did not turn and ask the rest of us.

I have had a firm position on the right of the Puerto Rican people to have a referendum.

(END VIDEO CLIP)

JOHNS: Gingrich is being badly outspent in the air war, with pro-Romney ads everywhere. He lacks the ground game to compete with Romney, who has been organizing the state for years. What he did do was release a letter from several Hispanic leaders from across the country and invite them to a news conference, where they, frankly, didn't have much to say.

ROSARIO MARIN, FORMER TREASURER OF THE UNITED STATES: Mr. Speaker, you have earned our support. And that is why we are proud to stand here with you and all the way through the White House.

(END VIDEO TAPE)

JOHNS: Not helping the situation for Gingrich, Puerto Rico governor, Luis Fortuno, today endorsed Mitt Romney. The Gingrich campaign is expected to step up its travel schedule over the next several days, trying to pick up some badly need momentum -- Wolf.

BLITZER: Joe Johns on the scene for us in South Florida.

Thank you.

Mitt Romney is also focusing on two crucial segments of the Florida electorate. Right now, he's on the space coast hit hard by the end of the shuttle program.

Earlier, it was the Latino community. Romney gave a keynote address at the Hispanic Leadership Network in Miami. He said he's all in favor of -- he said he's very much in favor of immigration, calling it "an extraordinary source of vitality for America," but legal immigration.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: At the same time, I believe that to protect legal immigration, we have to stop illegal immigration. And for that reason, I would, in fact, build a fence. And I would have enough border security agents to make sure that we are able to protect the border. And I will put in place the system that allows employers to know who's here illegally and not.

(END VIDEO CLIP)

BLITZER: Money is certainly the theme of the latest attacks by the Republican frontrunners. Mitt Romney has capitalized on Newt Gingrich's earnings from a mortgage giant. But Romney certainly is now on the defensive over his finances, as well.

Our own

Lisa Sylvester is taking a closer look -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, Mitt Romney and Newt Gingrich, as you know, they have been sparring over Fannie Mae and Freddie Mac. And the housing giants that had to be -- these are the housing giants that had to be bailed out by taxpayers and were at the heart of the housing crisis.

Well, Romney has said that he has investment bonds in both Fannie and Freddie. And he has said that they were held in a blind trust and that he had no control over it.

Well, we dug up some sound back from 1994, Romney sharing his views back then on blind trusts.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Mitt Romney has taken Newt Gingrich to task, calling him a lobbyist for Freddie Mac, even holding this event at a Florida home foreclosed on by the housing giant.

ROMNEY: What he was doing was clearly promoting Fannie Mae and Freddie Mac, in this case, Freddie Mac, to the tune of $1.6 million. That is one of the reasons we're in the trouble we're in.

SYLVESTER: But Romney has also had to defend his own investments in Fannie Mae and Freddie Mac. At the CNN debate in Florida, the former Massachusetts governor says those were held in a blind trust, which he had no control over.

ROMNEY: My investments are not made by me. My investments for the last 10 years have been in a blind trust managed by a trustee.

SYLVESTER: It's an argument Romney has made repeatedly this week on the campaign trail.

But let's go back in time -- 1994. Romney was then running against the late Ted Kennedy for the Senate. It was Romney who was criticizing Senator Kennedy for not being transparent with the Kennedy Trust Fund. Romney had a completely different take on blind trusts back then.

(BEGIN VIDEO CLIP FROM 1994)

ROMNEY: The blind trust is an -- is an age old ruse, if you will, which is to say, you can always tell the blind trust what it can and cannot do. You give a blind trust rules.

(END VIDEO CLIP)

SYLVESTER: Those words coming back to haunt Romney. American Bridge, a Democratic research group, is already calling him out.

RODELL MOLLINEAU, PRESIDENT, AMERICAN BRIDGE 21ST CENTURY: Mitt Romney called it a ruse and said that every person was responsible for their own finances. And so he went after Ted Kennedy for the whole idea of having this blind trust. And now we find, you know, almost 20 years later, he's using that same -- he's using that same excuse and not taking responsibility for his own finances.

SYLVESTER: Kenneth Gross, an ethics attorney and disclosure expert, says blind trusts can be set up in different ways -- some people wanting to be completely hands off, others giving some direction to their trustees.

KENNETH GROSS, CAMPAIGN FINANCE ATTORNEY: A man of his wealth is really relying on other people to do this. And, you know, except for maybe certain holdings that might create political problems for him, I wouldn't expect him to be in the weeds in terms of his own investments.

(END VIDEO TAPE)

SYLVESTER: Now we reached out to Romney's campaign for response to this new video that CNN has obtained in which Romney calls a blind trust a ruse and they did not comment.

Last night, Romney said that Gingrich, in fact, is also invested in Fannie Mae and Freddie Mac. And we did some fact checking. Wolf, that is also true -- Wolf.

BLITZER: A lot of mutual funds invested, over the years, in Fannie and Freddie. There's no doubt about that.

All right, thanks very much, Lisa.

Good work.

Newt Gingrich's rivals have a blast with his space plan.

(BEGIN VIDEO CLIP)

ROMNEY: If I had a business executive come to me and say they wanted to spend a few hundred billion dollars to put a colony on the moon, I'd say you're fired.

(END VIDEO CLIP)

BLITZER: We're going to get a closer look at how Newt Gingrich's moon shot fizzled with the Republican candidates.

Gloria Borger and Ron Brownstein, they're coming up.

And as Republicans are locked in bitter infighting, Democrats draw up some serious plans to take back what they say is realistic -- full control of Congress.

(COMMERCIAL BREAK)

BLITZER: Newt Gingrich launched a lofty idea this week when he outlined a plan to establish a colony on the moon. He said if he's elected, he'd get it done by the end of the second term. Announced spaces team (ph) is the right stuff in Florida where the end of the shuttle program has added to the economic turmoil, but Newt Gingrich's moon plan went over like a lead balloon among his rivals in CNN's debate last night. Listen to this.

(BEGIN VIDEOTAPE)

BLITZER: Speaker Gingrich, how do you plan to create a base on the moon while keeping taxes down in eight years?

NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: There are many things you can do to leverage accelerating the development of space. Lindbergh flew to Paris for a $25,000 prize. If we had a handful of serious prizes, you'd see an extraordinary number of people out there trying to get to the moon first in order to have build that. And I'd like to have an American on the moon before the Chinese get there.

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: We've got a $1.2 trillion deficit right now. We're borrowing 40 cents of every dollar and to go out there and promise new programs and big ideas, that's a great thing to maybe get votes, but it's not a responsible thing when you have to go out and say that we have to start cutting programs, not talking about how to -- how to grow them.

(APPLAUSE)

BLITZER: Congressman Paul, Texas, the space program very important there, as well. Where do you stand on this?

REP. RON PAUL, (R) PRESIDENTIAL CANDIDATE: Well, I don't think we should go to the moon. I think we maybe should send some politicians up there at times.

(APPLAUSE)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: I spent 25 years in business. If I had a business executive come to me and say they want to spend a few hundred billion dollars to put a colony on the moon, I'd say you're fired.

(END VIDEOTAPE)

BLITZER: All right. Let's bring in our chief political analyst, Gloria Borger, and our senior political analyst, Ron Brownstein. Gloria, first to you, I was waiting sort of as soon as he said you're fired, Newt Gingrich, that Romney saying that you're fired, I thought Newt Gingrich would come back with a line like, yes, we know you like firing people.

(LAUGHTER)

BLITZER: But they sort of missed an opportunity there, which was sort of symbolic, emblematic of what was going on.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes, it really was because Newt Gingrich seemed to have no strategy, seemed to miss a lot of opportunities to get back at Romney. And what was interesting to me about Romney's point that he was making overall is that he essentially said Newt Gingrich is a big spender. He said, you know what? You've been traveling around.

It's nice to go in certain parts of this state and talk about spending on the space program because you'll get some votes, and he said that's what you've been doing throughout the primaries. In portraying him as a big spender, Wolf, it was Mitt Romney really trying to appeal to the Tea Party there. And it may have been quite effective.

BLITZER: It looked to me, Ron, as if Newt Gingrich missed several opportunities to strike, but he held back for whatever reason. What was your sense?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: No, look, I think Newt Gingrich still has not gotten his groove back after two of the best debates we've ever seen in South Carolina. He seemed almost like a baseball hitter whose timing is off. You know, he's kind of launched at the change-ups and let the fastballs go by. He could never quite get to a spot before Mitt Romney did.

When he wanted to confront him, Mitt Romney was there with an answer. When he tried to conciliate him as he did by kind of brushing away your questions about the finances, Mitt Romney still lashed him. You know, I think there's an additional frame (ph) beyond the spending that the lunar colony is supposed to raise.

I think the opponents are painting Gingrich as something like an eccentric college professor more than a pragmatic commander in chief. Someone who's kind of interesting and has kind of ideas, but you don't really want to trust with actual power and decision making. And Gingrich wanted to be seen as visionary as opposed to the managerial Romney. Instead, I think it came off as impractical.

BLITZER: Let's say, Gloria, that Mitt Romney wins Florida, wins it big and that potentially could happen. If you take a look at the calendar after that in February, Nevada, Maine, Colorado, Minnesota, Missouri, the end of the month, Arizona. These are states, potentially that are sort of -- yes, Arizona at the end of the month, states well tailor made, if you will, for Mitt Romney.

BORGER: Sure.

BLITZER: What happens assuming Romney wins big in Florida?

BORGER: Well, you know, it's hard to get the momentum. If Mitt Romney wins in the state of Florida, it's hard for anybody else to get that momentum back because as you point out, some of these states like Michigan is a hometown boy, Arizona, Nevada where he does very well, particularly, in Nevada where there's a sizable Mormon community.

And Ron Paul will compete there because he's interested in those caucus states. And then, you get to Super Tuesday. By the time you get to Super Tuesday, you have to have a lot of money to compete. And, for example, if Newt Gingrich loses, he still has his sugar daddy PAC, but he's going to have a harder time raising money, and to compete in a lot of those big states on Super Tuesday, there are ten states.

And I think that it's hard to see how anybody else at that point can really go toe-to-toe with Mitt Romney who, by the way, already has ads up in some of these states, because he actually is a campaign with an organization, which Newt Gingrich does not have.

BLITZER: Ron, they did have a good exchange -- go ahead, go ahead, respond -- I have something else.

BROWNSTEIN: I have to say real quick. Real quick. I mean, this is a race that has established a clear demographic pattern. One that's actually more familiar from earlier. Democratic contests and Republican contests an upscale, down scale divide. Romney is much stronger among better educated, more affluent, more secular voters. Gingrich is doing best among evangelicals, lower middle income, blue collar, strong Tea Party supporters.

Florida is a tough state for Gingrich. It tilts more toward the groups that favor Romney with this new element of Hispanics. And the February calendar is tough for him, too. He has to find a way to get to Super Tuesday when he has more states where his groups are more prevalent.

BLITZER: They did have Gingrich and Romney a very good back and forth when it came to Fannie Mae and Freddie Mac who made money off their investments. Listen to this.

(BEGIN VIDEO CLIP)

GINGRICH: We discovered to our shock, Governor Romney owns shares of both Fannie Mae and Freddie Mac. Governor Romney made $1 million off of selling some of that.

ROMNEY: Mr. Speaker, I know that sounds like an enormous revelation, but have you checked your own investments? You also have investments through mutual funds that also invested Fannie Mae and Freddie Mac.

(END VIDEO CLIP)

BORGER: Can't beat that. Honestly, Wolf --

BLITZER: Another exchange -- yes, go ahead, Gloria.

BORGER: Yes. You just -- you know, you just can't beat that. And that shows you how much research matters in these kinds of debates. I mean, what Romney's people did is they clearly looked at Newt Gingrich's mutual funds, public record, where they invest, and boom, you get Fannie and Freddie.

And so, Romney was just waiting for that attack on him, and he had an answer and Newt Gingrich couldn't do anything kind of other than shrug, and there again, it shows you the professionalism of the people who are briefing Mitt Romney as he heads into these debates.

BLITZER: Go ahead, Ron.

BROWNSTEIN: Yes, like I say, ditto. I mean, Gloria's exactly right. I think, though, that, you know, it also -- the focus on Romney's wealth is helping, has been helping Gingrich consolidate that more blue collar part of the party which is much larger than it was a generation ago as Republicans have done so well with the white working class.

You know, it's funny we've seen today in Florida the kind of coalition politics that really have not been part of this race, so far. The candidates this morning talking to Hispanic voters, Newt Gingrich here in West Palm Beach County talking to Jewish voters. They're having to build coalitions in a way they haven't.

Some kind of new muscles they're kind of having to stretch. It's been extraordinary to watch them each, try to address these issues. One thing that really stuck out at me, though, both last night watching the event with the Hispanic leadership network, and this morning, at the event where both Gingrich and Romney spoke, Gingrich is hoping that by moving in effect to the left of Romney on immigration, being more lenient, he will kind of court those Hispanic voters.

Two-thirds of the Hispanics, though, voting in the Republican primary are Cubans, and illegal immigration is not an issue for them because of the wet-foot, dry-foot policy. Once you get to the U.S., you are by definition a legal immigrant. So, Gingrich is hoping for to mobilize those voters may not work for him as much as he expects here.

Same with Puerto Ricans, by the way, which is also a big part of that Hispanic constituency in Florida. Not as powerful issue as this might be for him say among Hispanic Republicans in Arizona who you have more Mexican-Americans who might be more directly affected by this.

BORGER: And can I just say one more thing about the wealth issue that the Freddie and Fannie debate has been about? I think for the first time, Wolf, in your debate last night, we really saw Mitt Romney become much more comfortable in his own skin talking about his wealth, not being apologetic for it saying, you know what?

I didn't inherit this. I worked really hard for my money. I had some good investments, and I'm not going to be ashamed of what I've done in my life. And I think that that has some resonance with voters and it's the kind of argument he should have been making from day one, but it took him about a month to feel comfortable saying it.

But I think last night, we saw him finally getting into that groove in talking about how he can care about middle class people but still be somebody who's quite wealthy.

BROWNSTEIN: Especially with those upper middle class managerial Republicans.

BLITZER: Good point. All right, guys, thanks very much, Ron and Gloria.

A bold prediction from the Vice President Joe Biden.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I really do think we're going to win back the House. I mean you're going to win back the house.

(APPLAUSE)

(END VIDEO CLIP) BLITZER: Can Democrats really do it? Nancy Pelosi's recruiting some new faces. You'll meet them in a CNN exclusive.

Plus, a surprising attack between three political rivals in one of the most heated U.S. Senate races of the year.

(COMMERCIAL BREAK)

BLITZER: While the Republican candidates are squabbling, Democrats are focused on trying to regain ground lost in the last Congressional election. And the party retreat in Maryland, lawmakers heard words of encouragement from President Obama.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I believe in you guys. You guys have had my back through some very tough times. I'm going to have your back as well, and together, we're going to move this country forward.

(END VIDEO CLIP)

BLITZER: And Vice President Joe Biden made a bold prediction, stating clearly what the objective is for next November.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I really do think we're going to win back the House, I mean you're going to win back the House.

(END VIDEO CLIP)

BLITZER: Some bold predictions also from President Obama and Vice President Joe Biden. Can Democrats really, though, regain what they lost on Capitol Hill? Our Congressional correspondent Kate Bolduan has been looking into this for us. She's got a CNN exclusive. Kate, what are you learning?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Hey there, Wolf, well, House Democrats, they have a strategy, they have a slogan and they say they even have top-tier recruits as they try to reverse the Republican wave from two years ago. But making that a reality may still be a tough climb.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Are you ready to come to Congress?

BOLDUAN (voice-over): An exclusive look behind the scenes as Democrats draw up their battle plan to take back the House.

UNIDENTIFIED MALE: We're not interested in electing you to the minority. Been there, done that. It sucks.

BOLDUAN (voice-over): A pep talk to some of the new recruits who are key to whether or not Democrats will succeed.

UNIDENTIFIED MALE: You represent our sweet spot --

BOLDUAN (voice-over): The small business owner, the police chief, the former NASA astronaut, all three up against Republican freshmen who rode the Tea Party anti-incumbent wave that helped Republicans win the majority two years ago.

BOLDUAN: What makes you think that you can take back this majority, especially after the beating the Democrats took in 2010?

JOSE HERNANDEZ, NASA ASTRONAUT: : I think voters are getting buyer's remorse with respect to the change of 2010.

BOLDUAN (voice-over): Their message? Surprisingly similar to what their Republican rivals argued in the last election, that they're outsiders and that Washington is broken. They hope to win back the independent voters Democrats lost the last time around.

BOLDUAN (voice-over): Jose Hernandez is running in California's Central Valley.

HERNANDEZ: I'm not a career politician, I'm a citizens' politician. And my upbringing, I'm an engineer, I'm trained to solve problems.

BOLDUAN (voice-over): Jamie Wall, a business consultant, is running in Wisconsin's eighth district, which has switched parties four times since 1998.

JAMIE WALL, BUSINESS CONSULTANT: My background's in business. If there's a good idea in the room, I want to hear it, whether that idea comes from a Republican, from an independent, from a Democrat.

BOLDUAN (voice-over): Val Demings is the first female chief of Orlando's police department.

DEPUTY CHIEF VAL DEMINGS, ORLANDO POLICE DEPARTMENT: When I took over as chief, crime was at an all-time high. But instead of focusing on that crisis, and that's what we're seeing right now in Congress, I chose to focus on the opportunity to make things better.

BOLDUAN (voice-over): House Democrats call it the "Drive to 25" (sic). Here's why, they need a net gain of 25 seats to reach the 218 required to take back the majority. Their campaign operation is focusing on 36 races, pledging money and resources to top-tier candidates. Top Democrats are cautiously optimistic.

REP. NANCY PELOSI (D), MINORITY LEADER: It's razor sharp, it's razor sharp, but is definitely possible for us. We take it one day at a time.

BOLDUAN (voice-over): But Republicans are clearly ready for the fight.

PAUL LINDSAY, NRCC: Ultimately a presidential election is going to revolve around it, be a referendum on the president's economic policies. And that's going to be a bad thing for House Democrats.

BOLDUAN: And House Democrats are pointing to the fact that they've outraised Republicans this year by more than $7 million for these congressional races as helping their chances to take back the majority in the House.

But according to independent analysts like the Cook Political Report, the climb for Democrats, Wolf, is likely steeper than they would like to admit due in part to redistricting and a number of yet- to-be finalized district maps.

BLITZER: Kate Bolduan, thanks very, very much. Good reporting.

A political cease-fire of sorts in Massachusetts right now. The candidates for Senate say they're fighting back against the powerful super PACs. But not everyone is so sure the politicians will keep their word. CNN's Mary Snow is joining us in New York with an in- depth look. Mary?

MARY SNOW, CNN REPORTER: Wolf, candidates made a rare pledge this week in what will be a closely watched Senate race with big money behind it. Since they can't control outside groups, they made a pact to discourage third-party groups from getting involved. I spoke with both candidates about it.

(BEGIN VIDEO CLIP)

SEN. SCOTT BROWN, (R) MASS.: Everybody, all right, thank you very much!

SNOW (voice-over): He became a Republican darling when he won the late Ted Kennedy's Senate seat. Now he's up for reelection.

ELIZABETH WARREN, SENATORIAL CANDIDATE: I'm Elizabeth Warren. I'm running for U.S. Senate.

SNOW (voice-over): She's the Harvard professor and consumer champion, who has become a rock star among Democrats. Republican Scott Brown and Democrat Elizabeth Warren are bracing for a bitter showdown with the balance of power in the U.S. Senate at stake.

But they agree on one thing: they've signed what they're calling a people's pledge to muzzle ads from super PACs and outside groups who can spend unlimited amounts of money after a U.S. Supreme Court ruling two years ago.

UNIDENTIFIED FEMALE: Instead of focusing on jobs, Elizabeth Warren sides with extreme left protests.

SNOW (voice-over): This ad targeting Elizabeth Warren is from Carl Rove's Crossroads GPS, which has spent more than $800,000 since June.

WARREN: Carl Rove and his buddies have the electoral process by the throat. And the United States Supreme Court has said you can squeeze as hard as you want. This is an effort to take that back. SNOW (voice-over): But Warren is far from alone in coming under fire.

UNIDENTIFIED MALE: Scott Brown's gone to Washington. And something's gone horribly wrong

SNOW (voice-over): The League of Conservation Voters has spent more than $1 million on ads since June as well, like these targeting Scott Brown.

BROWN: I'm kind of used to it by now. But I have heard and others have said that this was going to be a place where they're going to potentially spend tens of millions of dollars. For what? We have two intelligent, hard-working people running. We can tell people how we feel about the issues.

SNOW (voice-over): Both Brown and Warren agreed that if an outside group runs an ad, the candidate it's intending to help would face a penalty. They'd have to pay half the ad's cost to their challenger's charity of choice.

SNOW: Can this really work, though?

WARREN: I'm willing to be responsible for what I say, and I think Scott Brown is willing to be responsible for what he says.

BROWN: It certainly sends a very clear message to these outside groups to stay away.

SNOW (voice-over): But "The Boston Globe's" veteran political reporter Frank Phillips isn't holding his breath.

FRANK PHILLIPS, REPORTER, "THE BOSTON GLOBE": There's a lot of skepticism about this agreement. We've been there, done that.

SNOW (voice-over): Phillips covered the 1996 Senate race between John Kerry and William Weld. They made a pact to curb their own spending, but it fell apart in the final weeks before the election. This time around, the interests go far beyond Massachusetts and there's still many months to go.

(END VIDEO CLIP)

SNOW: Wolf, there's still a Democratic primary to go. Now so far there's some lukewarm reaction from third-party groups. Crossroads GPS for one is not committing to the candidate's pledge, citing loopholes on the Democratic side. The League of Conservation Voters says it's inclined to respect the pledge -- Wolf?

BLITZER: An interesting potential cease-fire. Thanks very, very much, Mary.

Now you can certainly catch all of CNN's in-depth coverage of big campaign spending in the featured section of the CNN app for iPad. Visit cnn.com/iPad. It's a national crisis, but here in Florida, foreclosures hit home for almost, almost everybody. How bad is it? We're going to show you.

And NASA rockets helped bring down a Kentucky bridge. Today's other top stories coming up next.

(COMMERCIAL BREAK)

BLITZER: Another deadly day in Iraq, Lisa Sylvester's monitoring that; some of the other top stories in THE SITUATION ROOM right now. What do you have, Lisa?

LISA SYLVESTER, CNN REPORTER: Hi, Wolf. A suicide bomber in Baghdad killed at least 31 people and wounded 60 others. The victims were mourners in a Shiite funeral procession. This is the latest in a series of attacks in Iraq. Many of those killed in recent weeks have been Shiite pilgrims. It's estimated more than 400 Iraqis have been killed this month.

Ford is reporting its best annual earnings since 1998. It makes 2011 the second most profitable year in the company's history. However, much of this profit is due to a non-cash gain in the form of a large tax credit. Without that credit, Ford's quarterly and yearly earnings fell below last year's profits. Ford's CEO insists the results are strong.

And the Coast Guard and Kentucky officials are investigating what caused a cargo ship to crash into a bridge in the western part of the state. The collision caused sections of the bridge to collapse. The vessel was carrying rocket parts for NASA. There were no injuries and no pollution reported. The bridge carries 2,800 vehicles a day.

(BEGIN VIDEO CLIP, "WELCOME BACK, KOTTER")

(MUSIC PLAYING)

(END VIDEO CLIP, "WELCOME BACK, KOTTER")

SYLVESTER: That might bring back a few memories, well, sad to report actor Robert Hegyes from "Welcome Back, Kotter" has died. Hegyes played Juan Epstein on the 1970s sitcom, alongside John Travolta. He also starred in "Cagney and Lacey" in the late '80s. Hegyes suffered a heart attack. The hospital said he was pronounced dead shortly after he arrived. He was 60 years old. Wolf?

BLITZER: Sixty, young guy. I'm so sad to hear that. I loved that "Welcome Back, Kotter," grew up with it, like so many others.

SYLVESTER: Yes, I think a lot of us have memories of that, Wolf.

BLITZER: Condolences to his family. Yes, certainly.

A cancer from within, that's how some see the housing crisis right here in the state of Florida. So what comes next in a state where almost half of the homes are under water? (COMMERCIAL BREAK)

BLITZER: Like so many states, Florida has been devastated by the housing crisis, but here probably even worse. Nearly half of the homes are under water, meaning the home value is less than the mortgages these folks have on these homes. CNN's Christine Romans has been taking a look at this devastation. It's hard really to appreciate what's going on. But give us a sense of how bad it is.

CHRISTINE ROMANS, HOST, "YOUR BOTTOM LINE": Well, you go through these neighborhoods, and, Wolf, there aren't -- there are no neighborhoods, really, that are untouched by this. We went through some of these neighborhoods with a realtor, who is -- basically his job, on behalf of the banks, is to go knock on the doors and see if somebody lives in some of these homes.

People don't know if there's somebody living there who doesn't own the home, if the home's been rented to somebody, if -- all of these homes in the various stages of foreclosure. And we talked to an attorney who represents people fighting foreclosure, and he paints a pretty -- a pretty dire picture of what this means for average Floridians.

(BEGIN VIDEO CLIP)

CHIP PARKER, JACKSONVILLE FLORIDA BANKRUPTCY ATTORNEY: Jacksonville is a beautiful, vibrant city, and it is being attacked by a cancer from within, house by house. And what we see in these neighborhoods, established neighborhoods and new neighborhoods, you start to see vacant houses, decaying lawns. You really lose a sense of community when your neighbors, all of a sudden, have gone.

(END VIDEO CLIP)

ROMANS: You know, so, it's not just, you know, one in every 360 homes in this -- in this state has a foreclosure notice, foreclosure notice last month received, you know and that's about twice the national average.

But it's not just -- it's not just that. It's not just the fact that so many people are going to be going to the voter booths knowing about the housing crisis here. It's real money, because $80,000 on average here in Jacksonville is how much money they've lost in the value of their home -- $80,000. I mean, it's an incredible amount of money that's going to take years to come -- to get back.

BLITZER: How do they turn this around?

ROMANS: They turn it around a couple of -- very low mortgage rates right now, you have affordability for the first time in a long time. And if people can afford to buy a house in some of these neighborhoods when they were priced out before -- but all the buyers right now are cash buyers.

They're buyers from Brazil, from China, they're investors. So the question is, what gives people confidence to start to buy, take advantage of low mortgage rates and the like? And that's going to be jobs. It's the chicken and the egg riddle, right? Which comes first? The jobs or the housing?

BLITZER: You're going to have much more over the weekend on this?

ROMANS: "YOUR BOTTOM LINE," 9:30 am on Saturday, Wolf.

BLITZER: We'll be watching.

ROMANS: Thanks.

BLITZER: Christine, thank you.

"Big Hits, Broken Dreams," CNN's Dr. Sanjay Gupta joins me. We'll discuss his mission to try to save young athletes' lives.

(COMMERCIAL BREAK)

BLITZER: CNN chief medical correspondent Dr. Sanjay Gupta is investigating the horrific collisions impacting young athletes. Thirty-five states now require students and parents to sign a waiver acknowledging risk of head injuries. But is that enough? Here's Dr. Gupta.

(BEGIN VIDEO CLIP)

DR. SANJAY GUPTA, CHIEF MEDICAL CORRESPONDENT: (voice-over): Number 44, senior Nathan Stiles is a Spring Hill Broncos star running back.

RON STILES, NATHAN'S FATHER: If you would watch him run, he had a flow about him that was just beautiful. I mean, it looked so graceful.

GUPTA (voice-over): Nathan is also a starter on the varsity basketball team, a singer.

UNIDENTIFIED FEMALE: The 2010 homecoming king is -- Nathan Stiles.

GUPTA (voice-over): He's the toast of Spring Hill, Kansas.

The Broncos lost that game. And the next day, Nathan had headaches. No big deal until five days later, when his mom, Connie, received a phone call.

CONNIE STILES, NATHAN'S MOTHER: And I got a call from the trainer at school saying, "Nathan's telling me he's still having headaches. You need to go take him to the emergency room.

So I did, had a CAT scan. Nothing."

GUPTA (voice-over): The doctor kept Nathan out of play for three weeks. When he was ready to return, his mom was worried.

C. STILES: I remember him looking at me and he goes, "Mom, are you OK with this?" and I'm, like -- now with him going back to football, I'm like, no, but it's his choice. "Nathan, you want to play?"

"Yes, I'm all right. Yes. I've only got, you know, two games left."

GUPTA (voice-over): But in the last game of the season, right after halftime, Nathan went down.

C. STILES: He had collapsed on the sideline. And the coaches were telling me to try to wake him up. And he didn't. And then I heard him say, "He's seizuring (sic)," and then that was it.

They took him in the ambulance. We waited for Life Flight. And everything went bad from there -- from bad to worse.

GUPTA (voice-over): After hours of surgery, doctors stopped the bleeding in Nathan's brain. But by then, his lungs and heart were too weak to keep him alive. Nathan died. The cause: second-impact syndrome.

(END VIDEO CLIP)

BLITZER: Wow. That's so sad. Sanjay, I understand that Nathan's parents have donated his brain to concussion researchers. He's -- he was only 17 years old. You're a neurosurgeon. What signs of brain trauma did they discover?

GUPTA: Well, yes, and you can imagine, Wolf, just how hard this was on them, and then donating their 17-year-old son's brain. What they found was they found the bleeding that certainly had caused his death.

But they found something else, Wolf, that's pretty important to point out, and that is they found these deposits of proteins and plaques and tangles, the same kind of findings that people often see in much older people, people who have Alzheimer's, even advanced Alzheimer's disease. They found this in the 17-year-old's brain.

And I asked the pathologist who was examining the brain, I said, what caused this? What can you say for sure? And they said they could say for sure this was caused by repeated blows to the head. And they're seeing it in more and more football players. But this was the youngest player they'd ever seen, Wolf, 17 years old.

BLITZER: It's really, really a sad story. But it's an important story, and it's one that all of our viewers know at -- need to know more about. Sanjay's got a fabulous documentary "Big Hits, Broken Dreams." It airs Sunday night, 8:00 pm Eastern. Sanjay, thanks. I always say --

GUPTA: Thanks, Wolf.

BLITZER: -- but thanks for doing this special documentary. "Big Hits, Broken Dreams."

Jeanne Moos is next.

(COMMERCIAL BREAK)

MOOS (voice-over): Beavis and Butthead would probably kick the artist's butt for doing this, making silicone busts showing what the cartoon characters would look like if they were actually human, so lifelike that when we showed them to folks --

UNIDENTIFIED MALE: But are those actual people?

UNIDENTIFIED FEMALE: Are they criminals?

UNIDENTIFIED MALE: Whoa!

MOOS (voice-over): They're criminally ugly.

UNIDENTIFIED MALE: Wow. You can see the acne. Can you see the acne? Look at the acne.

UNIDENTIFIED MALE: Wow.

MOOS (voice-over): The busts have been wowing the Web, provoking headlines like "Ready to Never Sleep Again?" and "Takes Creepy to New Heights."

KEVIN KIRKPATRICK, SPECIAL EFFECTS MAKEUP ARTIST: I wanted to stay true to the cartoon, yet put my own little twist on it.

MOOS (voice-over): Special effects makeup artist Kevin Kirkpatrick made the busts for an art show at the CoproGallery in Santa Monica. Kevin's worked on movies and commercials, creating the zombie, for instance, in this ad for Starburst candy.

UNIDENTIFIED MALE: You are boring me to death and I'm already dead.

UNIDENTIFIED MALE: You're boring me back to death.

MOOS (voice-over): Kevin created Beavis and Butthead in a mere 21/2 weeks, starting in clay, ending in silicone. The hair is human. Brace yourself for Butthead's braces. As Butthead once said to Chelsea Clinton in the White House "I notice you have braces. I have braces, too."

MOOS (voice-over): Does he ever. Kevin says details like Butthead's teeth and acne were the trickiest parts.

UNIDENTIFIED FEMALE: That is award-winning acne.

MOOS (voice-over): The busts are so realistic that almost everyone we showed them to immediately recognized them --

UNIDENTIFIED FEMALE: Oh, Beavis and Butthead, unfortunately.

MOOS (voice-over): -- though some suggest they look like Simon and Garfunkel, or that Beavis looks like Conan, or Butthead looks like Lyle Lovett.

MOOS (voice-over): You don't know Beavis from Butthead, do you?

UNIDENTIFIED MALE: That's Butthead.

MOOS (voice-over): No, that's Butthead.

UNIDENTIFIED MALE: Aah, crap.

MOOS (voice-over): Kevin says he's inspired by his 90-year-old grandmother, who was recently in the in the hospital with heart problems.

KIRKPATRICK: I actually dedicated the piece to her.

MOOS: Are you trying to kill her?

KIRKPATRICK: No. I'm just trying make her proud.

MOOS (voice-over): He made her proud and made himself an eye- popping 14,000 bucks. That's how much a huge fan of the show paid for them. The Tennessee computer programmer plans to computerize and put speakers in them so Beavis and Butthead can talk and butt heads with each other.

Jeanne Moos, CNN--

(on camera): How does he look?

UNIDENTIFIED FEMALE: Not attractive.

MOOS: New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching. I'm Wolf Blitzer in the SITUATION ROOM. The news continues next on CNN.