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THE SITUATION ROOM

President Obama Talks Immigration; Misleading Radar?; Awaiting Health Care Reform Ruling; Grandma Brutally Bullied On Bus; "It's The Middle Class, Stupid!"; Stocks Rebound After Bank Downgrades; Hidden Danger In New Radar?; Lost And Found Ring Comes Home

Aired June 22, 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:

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We should have passed the DREAM Act a long time ago.

The bill hadn't changed. The need had not changed. The only thing that had changed was politics.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: President Obama talking immigration and the economy, making an impassioned case for reelection as he courts Latino voters.

Also, pilots flying through storms with outdated weather information. There are growing fears right now about what's supposed to be the next generation of radar, one expert calling it a matter of life and death.

And a grandmother brutally bullied on a school bus. Right now, though, through the power of social media, an unbelievable outpouring of sympathy and cash. We will update you on what's going on.

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

They were a critical part of his winning coalition in 2008. And this year, President Obama needs Latino voters more than ever as he faces a very tough reelection campaign.

Just a few hours ago, the president addressed one of the country's largest Hispanic conventions, laying out his vision not only for immigration reform, but also for the country's economic future.

Our chief White House correspondent, Jessica Yellin, is traveling with the president in Florida. Jessica is joining us.

Jessica, after a surprise move last week ending deportations for some illegal immigrants brought to the United States as children, did the president use that and more to politically go after Mitt Romney?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: He did, Wolf, but not by name. He sounded almost defiant, Wolf, in insisting that his executive action on immigration last week was the right thing to do. He called out Congress for failing to pass the DREAM Act through legislation.

Here's the president speaking just a short time ago.

(BEGIN VIDEO CLIP)

OBAMA: We should have passed the DREAM Act a long time ago. It was written by members of both parties. When it came up for a vote a year-and-a-half ago, Republicans in Congress blocked it. The bill hadn't changed. The need had not changed. The only thing that had changed was politics.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

YELLIN: Wolf, he went on to say that it's not too late for Congress to pass comprehensive immigration reform. It's not even too late for them to pass the DREAM Act.

He said his door's open, and Congress members know where to find him. But, you know, that really is a rhetorical device in an election year passing such a polarizing piece of legislation like this. There are greater chances that I will beam into your studio right now than that piece of legislation would get passed before the election, Wolf.

BLITZER: Yes, he didn't mention Mitt Romney by name, but he did speak of his opponent who had addressed the same gathering yesterday. And he noted that Romney during the Republican primaries said he would veto -- if elected president, veto the DREAM Act.

And the president specifically said, you know what, he promised he would do so. He got a lot of applause, the president, when he recalled what Romney was saying then, as opposed to the tone of his remarks yesterday.

YELLIN: That's right.

He insisted that because Mitt Romney in the past has said that he would veto the DREAM Act that, in the president's words -- quote -- "We should take him at his word and believe that the will veto the DREAM Act if elected president.

As you say, that was received with applause. He didn't refer to Mitt Romney by name. He said your speaker yesterday, but everybody in the room knew he was referring to Governor Romney.

And he went onto draw stark contrasts between the Republicans' position on immigration and his own. And he used some very -- some rhetoric, some language that was so familiar from the 2008 campaign.

After the president has been criticized for in the last few weeks of having a very muddled message, for sounding sort of in the weeds, he had the sort of lofty rhetoric that we heard from 2008 that was so uplifting to this audience and won him a lot of applause.

Listen and see if this sounds familiar to you from the candidate of 2008, Wolf.

(BEGIN VIDEO CLIP)

OBAMA: Whether our ancestors arrived on the Mayflower or were brought here on slave ships, whether they signed in at Ellis Island or they crossed the Rio Grande, their diversity has not only enriched this country. It helped build the greatest economic engine the world has ever known.

(END VIDEO CLIP)

YELLIN: Now, Wolf, he has clearly honed his message, and he will be delivering a message like this, we're told, from here through Election Day, Wolf.

BLITZER: Four-and-a-half months or so, not that much time left. Thanks very much for that, Jessica.

Mitt Romney's campaign is having to walk a fine line in some critical battleground states where the economy is in fact improving under Republican governors.

So what's his campaign message there?

CNN's Joe Johns is joining us now.

Joe, what else is Romney able to campaign on right now?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, the focus is what it is. And that's jobs and the economy.

But the message has to be tweaked just slightly. And with a new series of tailored ads targeting a few battleground states, it looks like the presumptive Republican nominee is doing the only thing he can, choosing his commercials carefully.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The Romney campaign is trying to thread a needle on its message about economic hardship. It's a little dicey in some of the big battleground states where the economy is showing signs of improvement.

Republican governors in those states want to take credit for good news, like Florida's Governor Rick Scott.

GOV. RICK SCOTT (R), FLORIDA: We have had the biggest drop in unemployment of any state but one in the last 17 months.

JOHNS: In Ohio, unemployment has dropped from a high of 8.9 percent last year to 7.3 percent now, not great, but better.

So, instead of talking about how bad things are, Romney's newest ads about his agenda for the first 100 days talk about getting tough with China on trade.

NARRATOR: President Romney stands up to China, demands a level playing field for our businesses and workers.

JOHNS: The Romney camp's message in Ohio is complicated by Republican Governor John Kasich, who's been selling his job creation record. Polls show 55 percent of Ohio voters still think the country is on the wrong track, almost the same exact percentage as in Iowa, where unemployment is down to 5.1 percent, but pessimism about the economy is high.

The Republican governor's Web site is crowing about all the new jobs and the increase in family incomes here. Romney's ad talks about controlling spending, not doom and gloom.

NARRATOR: President Romney is working towards a balanced budget, making sure the government lives within its means.

JOHNS: A similar situation in Virginia, where unemployment is down from a high of 6.4 percent last year to 5.6 percent now. The Romney ad in Virginia talks about offshore drilling.

NARRATOR: President Romney reverses Obama's offshore drilling ban, creating thousands of new jobs for Virginians.

JOHNS: Some Republican strategists say the Romney message can go hand-in-hand with Republican governors who are promoting lower unemployment.

RON BONJEAN, REPUBLICAN STRATEGIST: It's a one-two punch. The first punch is, you can take those states that are doing well and give credit to the governors because they have taken innovative approaches and raise that up and give them credit. And then the second punch is, Romney can talk about this on a national level.

(END VIDEOTAPE)

JOHNS: The Romney campaign says it differentiates between the national policies of President Obama and governors with innovative policies in the states.

By the way, the Ohio ad that talks about China got a reaction from the Obama campaign today. Senior strategist David Axelrod asked on a conference call how Romney could stand up to China if he was shipping jobs to China, as a new "Washington Post" report suggested.

The Romney campaign has challenged that report, saying there's a difference between outsourcing and offshoring or shipping jobs overseas, Wolf.

BLITZER: Tailoring their messages specifically. They have got audiences obviously on their minds.

Thanks very much, Joe, for that.

Let's bring in our chief political correspondent, the host of "STATE OF THE UNION," Candy Crowley.

Does Romney, Candy, face a sort of dilemma? How does he deal with these swing states, their Republican governors, the economy clearly improving, let's say in Virginia or Ohio? But he can't really talk about that that much because he's going after the president on the economy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: But I think if you listen to Ron Bonjean carefully, that he's onto where the Romney camp is going. And that is saying, look at these policies these Republican governors have instituted.

You have got them in Wisconsin, you have got them in Michigan, you have got them in a lot of different places. And look what's happened under these sorts of circumstances. So I think he can take a governor's record. It does -- the question here is, if you don't give President Obama credit for the good things that have happened, say, in Virginia, how can you give him blame for the bad things that have happened in other states?

So I think that's where they -- this sort of strategy runs afoul. But, nonetheless, I think what he does is, he takes the Republican template and says, look what happened here. What these governors did for their states, I want to do for every state.

BLITZER: Let's talk about campaign fund-raising right now. It looks like the -- Romney and the Republicans are -- they did better last month. They might do better this month.

They might have an advantage on that. They certainly have an advantage with super PAC money and some people -- critics of the president say his blunder back in blunder in 2008 was that he rejected public financing of a presidential campaign, which has given the opening to these hundreds of billions of dollars, if not a billion- dollar race for the White House.

CROWLEY: Sure.

But I also think we have to remember that money becomes a part of a strategy. And so if President Obama looks and says, oh, my goodness, those Republicans, they have raised so much money, but I'm hoping my message that will will out, I mean, there is something to be said against, you know, I'm not the richest candidate, but I'm the right candidate.

So we don't know how much money in the end Mitt Romney is going to be able to raise. I would guess right now they're going to be pretty even. The president is -- certainly knows how to raise money, certainly has raised money over a much longer period of time than Mitt Romney has.

So, I think they will be probably even with money. And just -- I just think that there is always a strategy to those monthly numbers and the way they play them.

BLITZER: Yes. CROWLEY: And I think right now, the Obama campaign's way to play the numbers is to say, wow, look at all that money. We don't even know where some of it's coming from. I wonder what that's all about.

And so they're using it.

BLITZER: I think you're right. I think they will be basically even, the campaigns, the RNC, the DNC. Where the Democrats will suffer is the super PACs.

CROWLEY: Super PACs.

BLITZER: And that's hundreds of millions of dollars...

(CROSSTALK)

CROWLEY: And that's a Supreme Court thing, not a Barack Obama thing. Right.

BLITZER: Yes. Right. You're absolutely right on that as well.

Thank you.

The Supreme Court, by the way, is burning the midnight oil as it puts the finishing touches on epic decisions, the long-awaited ruling on health care among them. We're taking a closer look at what's at stake. We will preview the possible outcomes of the landmark case.

And our CNN political contributor James Carville, he's not a shy guy, as you know. He's shaking things up amongst his fellow Democrats. He's here to talk about some of his controversial memos of recent days.

Plus, a wedding ring is now back home after a 50-year odyssey.

(COMMERCIAL BREAK)

BLITZER: A decision expected within days that will impact every American.

We're back in one minute.

(COMMERCIAL BREAK)

BLITZER: All eyes on the Supreme Court this coming week as the justices are expected to hand down a major ruling that will impact every American and shape the future of the country -- the long-awaited decision on President Obama's health care reform law. And coming just months before the election, the stakes politically could not be higher either.

Let's bring in Kate Bolduan. She's got a little preview of what we can expect.

It will be significant one way or the other. KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: So much anticipation. And you and me and everybody else knows that this is the biggest secret in Washington and only the justices and their law clerks know how this drama will end. But one thing is certain, we'll know by this time next week if the Affordable Care Act stays or goes -- an unprecedented decision effecting as Wolf said nearly every person in this country.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Long days and late nights at the Supreme Court as the justices rush to finish what Justice Ginsburg recently called the flood season.

RUTH BADER GINSBURG, SUPREME COURT JUSTICE: Many of the most controversial cases remain pending, so it is likely that the sharp disagreement rate will go up next week.

BOLDUAN: The biggest case this session and the biggest in at least a decade, the president's health care law. The election year blockbuster argued for more than six hours in March has far reaching implications, from Main Street to the campaign trail.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm actually continue to be confident that the Supreme Court will uphold the law.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: If I'm elected president, I will repeal Obamacare. And I'll stop it in its tracks on day one.

BOLDUAN: The nine justices face four separate issues in this one case. The centerpiece, will the individual mandate requiring nearly all Americans to have health insurance stand, or will it fall? And does the rest or any of the law survive if the mandate is struck down?

Does the law's expanded Medicaid program unfairly step on states' rights? Or will the court call for a legal time-out until the main provisions go into effect? Though this option is unlikely.

THOMAS GOLDSTEIN, SCOTUSBLOG.COM PUBLISHER: There's going to be a bottom line of whether the mandate is constitutional or not. I would be shocked if we didn't know that after the decision.

BOLDUAN: Key to the decision may be these two men, Chief Justice John Roberts and the traditional swing vote, Justice Anthony Kennedy, both seem skeptical of the government's case.

ANTHONY KENNEDY, SUPREME COURT JUSTICE: Can you create commerce in order to regulate it?

BOLDUAN: Yet they asked tough questions of both sides giving hope to the law's supporters it may survive at least in part.

JOHN ROBERTS, SUPREME COURT CHIEF JUSTICE: I don't think you're addressing their main point, which is that they're not creating commerce in health care. It's already there. And we're all going to need some kind of health care, most of us will, at some point. (END VIDEOTAPE)

BOLDUAN: Now, after the decision is handed down, the big question quickly becomes, what now? House Republican leaders have made clear if the law is not completely thrown out, they'll vote to repeal whatever's left. And for weeks, both the White House and congressional Republicans have been quietly strategizing their message so they're ready as soon as the decision comes down.

Wolf, clearly everyone is aware of the political stakes here. You can be sure no matter what the decision is, both sides will be trying to spin it in their favor.

BLITZER: I was curious, interested. John Boehner, the speaker, said the if they rule against the president, he urged Republicans, don't spike the football, don't overly gloat or anything like that, deal with this but don't go crazy.

BOLDUAN: It was in a memo that he sent out to his members. He said exactly that. Don't spike the football here.

And I think, the acknowledgment is while they're happy that it's repealed, they also know millions -- they don't want to be cheering if Americans are negatively impacted by this decision. So, it's a delicate balance for both sides here.

BLITZER: We'll be watching. Thanks very much.

The video went viral. A gang of pre-teens hurling endless insults at their bus monitor. The outrage over the bullying case came back in spades. Funds are pouring in for the humiliated grandmother. We're going to study the power of social media. That's coming up.

And is the man in this video a brazen art thief? A valuable Salvador Dali painting goes missing from a Manhattan gallery.

And later, a rare sight especially in a suburban Florida neighborhood. Look at this. Two bears locked in what looks like mortal combat. We have the video -- you'll see more of it.

(COMMERCIAL BREAK)

BLITZER: A midnight assault terrified civilians in a deadly outcome in Afghanistan. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

Lisa, what happened?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, the Pentagon spokesman says today's deadly attack on a Kabul hotel in Afghanistan has all the hallmarks of the Haqqani Network based in Pakistan and with close ties to the Taliban. Militants attacked the hotel and seized dozens of hostages, triggering a severe battle between Afghan and NATO troops. Officials say 26 people were killed in the 11-hour standoff, including the seven militants. The attack follows recent strikes targeting coalition and Afghan forces.

A Taliban spokesman says the hotel attack targeted Westerners.

And gas prices keep falling. AAA says the price for a gallon of unleaded gasoline dipped for the tenth straight day to a national average of $3.45. Good news. And that's a 6 percent drop just over the past month. One oil expert says production is up and demand is low because we're driving fewer miles and more fuel efficient cars.

And the hunt is on for an art thief who snatched an original painting by surrealist Salvador Dali. The painting is valued at $150,000. Police say the 1949 work entitled "Cartel des Don Juan Tenorio" was taken Tuesday from Venus Over Manhattan gallery in New York this week by a man posing as a potential buyer. Surveillance video shows a thin balding man walking out with a shopping bag.

And good news to report about the air we breathe. The U.S. Energy Information Administration says the country's carbon dioxide emissions are falling. It's happening in spite of the U.S. reputation as an energy hog. The director of Harvard's environmental economics program says the primary reason is plentiful, cheap, cleaner natural gas, allowing some utilities to trade up from coal-fired power plants. The U.S. has cut carbon emissions from its energy sector by 9 percent.

And it's something rarely seen by humans. And catching it on video -- well, that's even rarer. Take a look here. What you're seeing. People in Longwood, Florida, neighborhood today, they witnessed this. Two young male black bears going at it in someone's yard tearing up a flower bed, rolling over an air-conditioning unit. The brawl eventually ended and the pair, they went on their way.

State wildlife officials, you know, they're not exactly sure what was going on here, but they say that it's possible that they were just fighting over territory, Wolf.

You know, when I first saw that video, I thought it looked a little bit like they were dancing.

BLITZER: Yes.

SYLVESTER: But apparently, they're not so happy over there.

BLITZER: They just disappear. They just walked away from there, is that right?

SYLVESTER: Yes, I think if you let this video play out, eventually you'll see they kind of go off frame. One sort of pushed him out of the way. And clearly there was a victor there.

So, that's -- you know what's frightening about that is if you think about it, that was in somebody's yard.

BLITZER: Can you imagine seeing that in your backyard?

SYLVESTER: Not one black bear in your yard, but two black bears in your backyard. BLITZER: I'll call 911 immediately.

SYLVESTER: That's right, Wolf.

BLITZER: Thanks very much.

An outpouring of sympathy along with $500,000 for the grandmother who was brutally bullied on a school bus, all thanks to social media.

Plus, Ann Curry's uncertain future at NBC News. Is she unfairly taking the fall? Stand by.

(COMMERCIAL BREAK)

BLITZER: Will Ann Curry take the fall for "Today" show's recent struggles? Back in a moment.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer. Here are some of the stories we're working on for our next hour.

New Egyptian lawmaker who joined the delegation to Washington may have been allowed in by a mistake, a major mistake. Is he a terrorist sympathizer in sheep's clothing? Brian Todd investigating.

Jurors in Jerry Sandusky's child sex abuse trial pore over the testimony even as new allegations of abuse surfaced from within Sandusky's own family. We'll go to the scene.

And once a hero, twice a hero. The Newark, New Jersey, Mayor Cory Booker dawns his cape once again. We have the details for you. Standby, you're in THE SITUATION ROOM.

Millions of people have now seen it and most of us find it very painful to watch. A grandmother ruthlessly bullied by a group of boys on a school bus.

Let's talk about that and more with Howard Kurtz. He is the host of CNN's "RELIABLE SOURCES," the Washington Bureau chief of "Newsweek" and the "Daily Beast."

Also joining us Lauren Ashburn, she is working with Howie on a new web site called "The Daily Download." Guys, thanks very much for coming in.

Howie, let me start with you. You saw this video. Millions of people have now seen it, an outpouring of financial support for this 68-year- old woman, more than half a million dollars.

She's invited to Disneyworld by the Disney Corporation. Explain this phenomenon because years ago even a few years ago this could have never happened.

HOWARD KURTZ, "NEWSWEEK" WASHINGTON BUREAU CHIEF: No. Because we would never have known about this, Wolf, if not for one of these middle school bullies posting this video on his own Facebook page.

And it gets picked up by everyone. The mainstream media actually a step behind here. Lauren, you saw the way in which this went to use the cliche, viral.

LAUREN ASHBURN, FORMER MANAGING EDITOR, "USA Today": I certainly did. There was a tweet that said, Ellen Dejeneres, please, please comment about this and 5,000 people re-tweeted. Ellen finally came out and said, it breaks my heart bullying doesn't end when you grow up. It ends when you stop bullying.

BLITZER: Let me just play a little clip of that video just to remind our viewers what happened.

(BEGIN VIDEO CLIP)

UNIDENTIFIED KID: My God, you so fat.

UNIDENTIFIED KID: You're so fat.

UNIDENTIFIED KID: You're so fat, you take up the whole seat.

UNIDENTIFIED KID: You don't have a family because they all killed themselves. They don't want to be near you.

(END VIDEO CLIP)

BLITZER: My heart went out to that woman immediately like everyone else. Now, these two boys -- at least two of the four supposedly have now apologized and said they're sorry for this. But the pain is going to be there for a long time.

ASHBURN: It is. And if it hadn't been for that video being posted on social media, we wouldn't know about this. This would be another story of another person who's been bullied.

KURTZ: You said you couldn't even watch the whole thing.

ASHBURN: I couldn't. I had tears in my eyes. I only could watch two minutes of it. It is so gripping and so powerful. It's also motivated people to donate money and to actually do something. These Netizans as they're being called now are really trying to help this woman.

KURTZ: There's a site called "Indigogo.com" that raises money for various causes. I think so many people felt so moved by this, so angry also that they wanted to reach out. People don't know what to do.

How can they participate? What can they do? So they contribute money. The goal was $5,000. Ends up being $500,000 because people somehow wanted to participate in a solution, not just share on social media or sometimes over share, but participate in a solution.

BLITZER: Let me move onto Ann Curry because you wrote on the "Daily Beast" an interesting analysis of what's going on at "Today" show right now. What is going on?

KURTZ: Well, Ann Curry looks like she's moved off of "Today" show as co-host. NBC certainly hasn't denied it, Wolf. She told me a few months ago that she's a hard news reporter at her core. That's true. She's a tremendous journalist.

But that's not the same set of skills as sitting on a couch in the morning being breakfast company and more important, having good chemistry for lack of a better term with your co-host, Matt Lauer who is the superstar of the "Today" show hasn't made anything by saying he likes Ann Curry, but doesn't feel like they have much chemistry.

BLITZER: So is it fair for her -- the ratings for the "Today" show have gone down a little bit. "Good Morning America" has picked up. Some are saying she's being made the scapegoat, is that fair?

ASHBURN: The fall guy. TV news hast a history of doing this. You make the woman the fall guy when the ratings go down. You can look back as far as Debra Norville coming in replacing Jayne Pauly and being considered a home wrecker on the NBC's "Today" show. And it happens more recently, women seemed to take the fall for these kinds of things.

BLITZER: You've been watching the media, Howie, for a long time. Do you think that's fair?

KURTZ: I think Lauren's exactly right. When it's a male and female pairing, it's unusual for the male to be eased out. Ann Curry's only been on the job for a year.

But what's happening here, Wolf, is that though the show is still number one, there's a tremendous amount of money at stake in the morning, hundreds of millions of dollars in advertising revenue.

"Today" show feels like it's slipping, the idea would be to get a better combination on the air. Is that fair to Ann Curry? No, but I bet she'll land on her feet.

BLITZER: In the end it's a business and they want to make money, and that's what they do. Guys, thanks very much for coming in. See you Sunday morning "RELIABLE SOURCES" 11:00 a.m. Eastern. You got some good stuff I'm sure coming up.

KURTZ: We'll see you then.

BLITZER: Thank you.

He steered the Clinton campaign and certainly a popular commentator right here on CNN. James Carville has a new book that will be on the shelves.

He tells in plain English what he thinks should be priority number one. It's called "It's The Middle Class Stupid." James is here live. That's coming up.

And five big banks see their credit ratings slip, triggering a huge reaction in the markets. What's going on? CNN's Erin Burnett is out front standing by to weigh in.

And later, a long-lost wedding ring found. We're going to follow the 50-year-old ring's journey back to its rightful owner.

(COMMERCIAL BREAK)

BLITZER: Bay Buchanan is here, James Carville is here. They're getting ready. Look at this, James Carville "It's The Middle Class Stupid." We're going to discuss what's going on. Standby.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session." Joining us right now, the Democratic strategist and CNN political contributor, James Carville. He's out with a brand new book.

It's not even in bookstores yet. It's called "It's The Middle Class Stupid." And also here Bay Buchannan, the Republican strategist, she is a senior advisor to the Romney presidential campaign. Have you read this?

BAY BUCHANAN, REPUBLICAN STRATEGIST: I just saw it.

BLITZER: A strategist, you've got some -- what does that mean? You said, it's the economy stupid in 1992 and that was the theme, the motto that helped your friend, Bill Clinton, become president of the United States. What does this mean it's the middle class --

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: I think it means the number one crisis in this country is what's happened to the middle class. The number of people fallen out of it, how difficult it is to stay in it.

And I think it's been going on for a long, long time. Right after we wrote this book a study comes out saying middle class people lost 40 percent of their wealth.

I think we have a humanitarian crisis here of any kind of magnitude. I think when we lose the middle class, we actually lose who we are as being Americans. I think that's important.

BLITZER: I think the unwritten headline in this book, James, will correct me if I'm wrong, is that Republicans think it's the rich people stupid. Is that your message?

CARVILLE: It's a little bit different. A lot of books and many of them very good on a very important subject called income equality. What we're talking about is what's happened to the middle class.

It's a little different in, yes, we do think and we obviously talk about it, we favor Democratic policy by and large over Republican policies, but we also don't think the Democrats have aligned themselves sufficiently enough with the middle class. So we're somewhat critical of our own party.

BLITZER: He's a smart guy. What do you think of his advice to his fellow Democrats?

BUCHANAN: He's a very smart guy and I listen to him. And I think he's absolutely correct according to that headline. It is the middle class. I think that's what Mitt Romney's been hammering out there is the middle class has suffered enormously under this president, under his policies. James is correct.

BLITZER: To be fair, right?

BUCHANAN: But in the last three or four years, whether it be assets or jobs, homes, they're losing them. Wolf, they're losing them across the board and Barack Obama has not helped the situation. He has worsened it.

CARVILLE: Actually, though, the loss of wealth in middle class all happened before Barack Obama became president. Let's be fair. This financial crisis did not start under President Obama.

BLITZER: There's plenty of blame to go around, right?

CARVILLE: There is.

BUCHANAN: Yes, but when you're sitting president and more Americans have lost their job in the three and a half years he's been president, more have lost their homes, more have fallen into poverty. He has to take some responsibility, James.

CARVILLE: The book was about something else. But for a man that now we find out was advising people, making tens of millions of dollars advising people how to outsource jobs, how to take jobs away from the United States and put them overseas.

And then who took those profits and then put them in the Cayman Islands and put them in Switzerland, I don't know if that's the guy the middle class is going to trust to do this. I really don't.

BLITZER: You saw that front page story in "The Washington Post" today?

BUCHANAN: I saw the headlines.

CARVILLE: I read the story. It's a very good story.

BUCHANAN: Listen, what this election's going to come down to and I think most everyone would agree there is how has this -- Barack Obama and his record, has it helped Americans? Are we better off?

There's no question we are not. It's getting worse. You saw the unemployment numbers. You saw more and more people signing up for benefits filing for unemployment. Things are not getting better. More and more Americans are concerned --

BLITZER: Because Ronald Reagan asked the American people in 1980, you remember when he was facing incumbent president, Jimmy Carter, are you better off today than you were four years ago?

CARVILLE: I promise that is one question that Mitt Romney will not ask Barack Obama.

BLITZER: Why?

CARVILLE: Because Obama will crush it. He will say, let me tell you. When I took office, you want to know how many jobs we were losing, you want to know what this economy looked like?

I hope that he says we've made no way near the progress that I would have liked, but I would be delighted to answer the question that where the country is today is -- Mitt Romney will never ask Obama that question. I promise you.

BUCHANAN: I don't know if he will or not. But I would have no hesitancy to advise him to do it.

CARVILLE: Please do it.

BUCHANAN: Because there's no question. Look at the promises this president made three and a half years ago to the American people, four years ago.

He said he's going to cut the deficit in half. He told them if indeed unemployment is not lower, more Americans are finding jobs, that he wouldn't get another four years. And that's the situation today. He's been spending outrageously, no concern --

BLITZER: Quickly on both of you. If you had to give one piece of strategic advice, not to Mitt Romney, because I know you're advising him, but to Barack Obama, what would that be?

BUCHANAN: I would give him the advice -- I'd say pack his bags early because things are not looking good.

BLITZER: That's what I'm talking about. How to get himself re- elected? What's the most important thing he could do as a strategic analyst and professional, what should he do to get himself re-elected?

BUCHANAN: Stay away from his record. See if he can't run on something other than his record because that record will send him right on down --

BLITZER: What advice would you give Romney other than don't ask the American people are you better off than four years ago.

CARVILLE: I would say don't ask that question and don't talk about specifics, but talk about how you've been at problem solving. Maybe people didn't like the general way you solved the problem, but gotten things done. I would stay away from specifics.

BLITZER: What's the most important message from this book?

CARVILLE: The most important thing I want to know is I want people to understand that there's a crisis in the American middle class. And where is the presidential commission on the middle class?

Where is the joint committee on the middle class? Where's the Princeton Institute study on middle class? Why aren't we treating what's happening to the American middle class what it is? It's a humanitarian crisis. It's an emotional crisis. It's a financial crisis and we need to deal with it.

BUCHANAN: James, all those things indeed are true. But policy that comes out of Washington impacts that middle class.

CARVILLE: You're right. You know what's like bad policy, like cutting a state tax. That does nothing. You know what's really bad policy for the middle class? Is Mitt Romney saying he wants to give the rich another 20 percent tax cut.

BUCHANAN: That's not a policy.

CARVILLE: You know what's really bad policy of the middle class? The Ryan budget, which is going to have the middle class people pay $6,000 more a year. That's really, really bad policy.

BUCHANAN: This enormous regulation, the outrageous spending, the huge debts, the uncertainty in the market. He won't even tell us about the increase in taxes. This man has failed the middle class.

BLITZER: The book is called "It's The Middle Class Stupid." James Carville, Stan Greenburg, the co-author. The book will be in stores next week?

CARVILLE: Tenth of July.

BLITZER: Thanks, guys.

CARVILLE: Thank you. You bet.

BLITZER: Fallout from a financial jolt. Five major U.S. banks have their ratings downgraded. We're taking a closer look at the markets, how did they react today? CNN's Erin Burnett is out front. She's standing by live.

And pilots forced to rely on possibly outdated weather information. We have details of the growing concern over the next generation radar.

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BLITZER: Pilots are warned about the reliability of a new radar system. One expert says it's potentially a matter of life and death. We'll be right back.

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BLITZER: Stocks bounce back today with all three major stock indices posting gains. The Dow is up more than 67 points. A dramatic turnaround from yesterday when investors panicked ahead of Moody's decision to downgrade five major U.S. banks, Citigroup, Morgan Stanley, Goldman Sachs, Bank of America and JPMorgan Chase.

CNN's Erin Burnett is out front on this story. Wow, what a story it is? Were you surprised that the markets bounced back today? Because a lot of us were expecting doom and gloom.

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUTFRONT": Well, you know, it's pretty interesting, Wolf. I mean, the markets are so volatile as you know, right?

Today, Mario Monti of Italy said, look, I give the euro one more week if we don't get our act together and market still go up, right? So it is volatile. The bank news was concerning to some, but I think the most important take away was it could have been worse.

Some people thought they might downgrade them a little bit further. And also a lot of people say, Wolf, look, these rating agencies didn't get the financial crisis right. Banks had ratings too high before and everybody knew it.

So this was just coming back into line with reality. So you actually saw the bank stocks, a lot of borrowing costs and everything, borrowing costs fell, stocks went up.

So it ended up being a pretty solid day. So I think it's a case of, look, this is acknowledgment of something we already knew by the ratings agencies and it could have been a lot worse.

BLITZER: So what's going to be the big fallout? If there is a big fallout from this Moody's decision?

BURNETT: Well, I think for now, Wolf, the initial fallout is going to be -- it's sort of ironic. Remember last summer when the United States got downgraded, which is, you know, in the big picture of things is not good.

It's not something we wanted. It's something we need to rectify, but around the rest of the world it's so much worse that people would rather put money in the United States even though the United States is in a bad spot.

So what you've seen over the past year is borrowing costs for our country for mortgages continue to fall. It's counterintuitive, but you still saw it happening. I think what you might see happen with these big U.S. banks is the same thing. Moody's downgraded about 15 banks around the world, but the five in the United States, you know what?

They're going to be seen as better and stronger and more well- capitalized than any of their rivals in Europe. So even though it's bad they got downgraded, it may be still safer to put money there than in a lot of those other banks and that's the bottom line.

BLITZER: I'd rather keep my money in those five American banks than any of those European banks on any given day.

BURNETT: Absolutely.

BLITZER: Thanks very much, 7:00 p.m. Eastern "ERIN BURNETT OUTFRONT." Much more coming up. There's growing concern about a new radar system designed to give pilots improved weather information, but could it make flying even more dangerous?

Our aviation correspondent, Lizzie O'Leary, is working this story for us. Lizzie, what's going on here?

LIZZIE O'LEARY, CNN AVIATION AND REGULATION CORRESPONDENT: What we're talking about general aviation private pilots here. For about two years, they have been flying with a next generation radar systems that sends a picture of the weather around them into their cockpit.

But now federal safety investigators are cautioning those weather images could be dangerously delayed.

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UNIDENTIFIED MALE: If you get into the yellow, oranges and red magentas, that's very heavy precipitation.

O'LEARY (voice-over): It's a state of the art weather radar display in a cockpit. Like GPS, it shows where the plane is, where airports are and where bad weather is. But there's a dangerous catch.

The weather picture's called Nexrad, next generation radar, aren't in realtime. Rob Wefelmeyer teaches people how to fly.

(on camera): What do you tell your students about Nexrad?

ROB WEFELMEYER, CERTIFIED FLIGHT INSTRUCTOR: You don't want to use it to actively navigate around weather. So you have to be very aware that that is old information.

O'LEARY (voice-over): We got up in the air with one of Wefelmeyer's pilots to see how it works. And what federal safety investigators worry about.

(on camera): So you can see right here there's a little bit of weather and that's us. And this picture was sent up about one minute ago.

The worry that the NTSB has is that pilots will think that the data is one minute old. It's not.

(voice-over): That picture was sent to the plane one minute ago, but could reflect weather radar that is 10, even 15 minutes old, a potentially dangerous delay.

DEBORAH HERSMAN, NTSB CHAIRMAN: It could mean the difference between life and death. We have seen accidents where we have found that pilots had information that was displayed to them that was 7, 8, 9 minutes old. They thought they were ahead of storm or clear of the storm, but in fact they were right in it.

O'LEARY: Her agency says this confusion may have contributed to two crashes. A helicopter crash in 2010 in Tennessee after the pilot tried to beat thunderstorms. And in December a small plane broke up mid-flight over Texas after flying into a rainstorm.

CHAD MYERS, AMS METEOROLOGIST: Here's the problem. Here's Detroit's radar. It only goes about this far. So if you take all the radars across the country, 159 of them, and you try to make a quilt so that you can make one image or one mosaic, you have to sew together 159 pictures. Takes a long time to do that and send it to an airplane.

O'LEARY: The NTSB is now telling pilots not to rely on these images. It can be a guide, but far from a perfect one.

(END VIDEOTAPE)

O'LEARY: Now, it's important to note this is for private planes, not commercial airliners. Those are equipped with very sophisticated radars, often they're in the nose cone and airlines have their own weather teams to make sure pilots have their most up to date information.

This is really about protecting those smaller planes, smaller pilots heading into stormy thunderstorm season, very important for general aviation pilots to know don't rely on this data because it could be old.

BLITZER: Did you get a little nauseous on that little Cessna?

O'LEARY: I'm not going to tell you that. It was a lovely flight. We had an excellent pilot.

BLITZER: You're braver than I am. Thank you.

A White House visitor shouldn't have been in the United States at all. Our Brian Todd is taking a look at his possible ties to terrorism.

Also, a glittering and bittersweet reunion. You don't want to miss this.

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BLITZER: A long-lost wedding band found in a used car in California finds its way home. Ron Jones of our affiliate KOVR has the story.

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RON JONES, KOVR REPORTER (voice-over): What a journey this 50-year- old wedding ring has been on.

UNIDENTIFIED FEMALE: I'm real excited. I cannot wait.

JONES: Shannon Callahan and her husband can't wait to get it to its rightful owner. Just Tuesday they told CBS 13 how they found it, stuck between the backseat of their car. That was three weeks ago.

SHARON CALLAHAN, RING FINDER: My first thought was, wow, you know. Where'd this ring come from?

JONES: The car and ring are from El Paso, Texas. The Callahans purchased their used vehicle from a local dealer and through the vin learned it came through the lone star state.

Hoping to find the ring's owner, they reached out to the local media. It was discovered the car's previous owner moved from Texas to Auburn and that's where the original bride was too.

They called her and she was able to verify the inscription inside the ring, April 1961.

(on camera): You've been holding onto this for three weeks. How exciting is this the anticipation?

CALLAHAN: This is the most wonderful moment.

JONES (voice-over): The Callahans drove from Alberta to Auburn to deliver the golden ring. What a reunion. Darlene King says she hasn't seen the ring in years when her husband, Tom, lost it in Texas.

UNIDENTIFIED FEMALE: I never thought we'd ever get it back. I thought it went down the drain.

JONES: Tom is not here. He recently passed away.

DARLENE KING, RING OWNER: Nice people found it and I just wish my husband were alive. He died in January of this year.

JONES: Surrounded by local media types, Darlene kept checking just to make sure it was Tom's.

KING: You know what? It is his ring.

JONES: She already has plans for it.

KING: I think I probably wear in on a chain around my neck for a little while.

(END VIDEOTAPE)

BLITZER: That's Ron Jones reporting. King also told him that she plans to eventually give her late husband's ring to her son in Washington state as a keepsake.