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THE SITUATION ROOM

Mitt Romney Speaks Out on Health Care Reform; 9/11 Memorial Disrespected; That Costs How Much?!; Health Care Reform Decider? Health Care Reform Decider?; A Legacy Shaping Vote For Chief Justice; Obama: Romney An "Outstanding Pioneer"; Three Police Killed In Airport Shooting; "Big Ben" Renamed "Elizabeth Tower"; Home Prices Rise For First Time All Year; President Obama Visits Famous Drive In; Harsh, Automatic Budget Cuts Looming; Students Strew Trash At 9/11 Memorial

Aired June 26, 2012 - 16:00   ET

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


JOE JOHNS, CNN ANCHOR: Happening now: Mitt Romney tips his hand on health care reform, as he and President Obama battle over the upcoming Supreme Court ruling.

Also, $800 for a needle, $1,100 for a test tube. CNN chief medical correspondent Dr. Sanjay Gupta takes us inside a hospital. We will go in-depth on outrageous hospital bills.

Plus, the 9/11 Memorial disrespected, littered with trash by junior high school students on a field trip to Ground Zero. Wolf Blitzer is off today. I'm Joe Johns. And you're in THE SITUATION ROOM.

All eyes on the Supreme Court, expected to issue its ruling on Thursday on President Obama's signature first-term achievement, health care reform.

It's a hot topic on the campaign trail today. And for the first time, Mitt Romney is offering a glimpse of how he might respond to the high court's decision.

CNN's national political correspondent Jim Acosta is following all of it for us.

Jim, what is the latest?

JIM ACOSTA, CNN CORRESPONDENT: Joe, it is heating up. That's right.

Whether it was the fight over health care today or baseball, the matchup between President Obama and Mitt Romney had all the subtlety of a bench-clearing brawl.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): After a day of shying away from two landmark cases before the Supreme Court this week, Mitt Romney got aggressive, accusing President Obama of allowing the issues of health care reform and immigration to spiral out of control. MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Instead of focusing on immigration -- and of course the big issue, which was the economy, and getting the economy going -- he instead focused on putting in place his health care reform called Obamacare.

ACOSTA: And if the health care law goes down later this week:

ROMNEY: If Obamacare is not deemed constitutional, than the first three and a half years of this president's term will have been wasted on something that does not help the American people.

ACOSTA: At his own campaign event, the president appeared to concede he's made some mistakes.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm not a perfect man and I will never be a perfect president.

ACOSTA: But he countered the public is in no mood for a health care do-over.

OBAMA: We don't need to refight this battle over health care. It's the right thing to do.

ACOSTA: The president did foul one off at a fund-raiser in Boston, where he was booed for poking fun at the Red Sox for trading the team's beloved third baseman, Kevin Youkilis, to Mr. Obama's White Sox.

OBAMA: I didn't think I would get any boos of here, but I guess I should not have brought up baseball.

ACOSTA: Team Romney balked at that one, accusing the president of letting one between his legs, a la Bill Buckner, saying "Mr. Obama chose to mock the Sox for trading away one of its favorite players. Score that an error."

White House Press Secretary Jay Carney tweeted that while some booed, "Others like me cried Yoook."

NARRATOR: "The Washington Post" has just revealed that Romney's companies were pioneers in shipping U.S. jobs overseas.

ACOSTA: Meanwhile, the Obama campaign is still playing hardball with Romney's business career, accusing the GOP contender of investing in companies that outsource jobs during his time at Bain Capital.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: You have got to give Mitt Romney credit. He's a job creator in Singapore, China, India.

ACOSTA: And with Republicans in the House ready to vote to hold Attorney General Eric Holder in contempt of Congress after the president exerted executive privilege in the Fast and Furious investigation, Democrats are pointing to an interview Romney gave in 2007 supporting President Bush's use of that same authority. UNIDENTIFIED MALE: Do you approve of President Bush's declaration that he will simply refuse these subpoenas that have been sent to Ms. Miers and Karl Rove?

ROMNEY: Yes, he's got a responsibility to protect executive privilege. That's just part of preserving the powers of the presidency.

(END VIDEOTAPE)

ACOSTA: Then there's the game of money ball, as the president is warning Democrats he may be outspent by Romney, Republicans and pro- GOP super PACs. Mr Obama said in an e-mail, if things continue the way they're headed, he will be the first sitting president in modern history to lose the battle of fund-raising to the competition -- Joe.

JOHNS: Really starting to see the tempo pick up here on the campaign trail.

ACOSTA: Absolutely.

JOHNS: Great.

ACOSTA: That's right. And with the Supreme Court case on health care reform expected to come down on Thursday, Joe, I think it's going to get a lot hotter.

JOHNS: Jim Acosta, thanks so much for that. Appreciate it.

ACOSTA: Sure.

JOHNS: Now we're just going to get a little more on this with CNN chief political analyst Gloria Borger.

As the candidates argue over the economy and who has a better plan for the future, when you start looking at the water's edge, it gets more a lot more complicated than that.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It is very complicated.

But it's very difficult when you're president to talk about how the rest of the world affects us, because you don't want to look like you're whining. You don't want to look like you're assigning blame elsewhere.

But, having said that, the truth of the matter is that what's going on in the rest of the world does affect us. And this president's been talking about it. I talked to a senior White House adviser who said to me, on the substantiative issues, we're fine, and then he said, but that's not always what matters in the end.

Take a listen to President Obama at the G-20 summit.

(BEGIN VIDEO CLIP) OBAMA: Today, we recognize there are a wide range of threats ongoing global economic recovery and growth. But the one that's received the most focus, obviously, and that is having a significant impact in the United States as well as globally is the situation in Europe.

As our largest trading partner, slower growth in Europe means slower growth in American jobs.

(END VIDEO CLIP)

BORGER: So there's the European fiscal crisis and its impact on our economy and our banks.

And, of course, that's not even mentioning what's going on in Iran, the instability there, a question of whether Israel would strike Iran and how that would affect world stability and oil prices. And the list goes on and on and on. And those things, let's face it, are not in the president's control.

JOHNS: All right, but domestically jobs, jobs, jobs. The president said it right there. That's certainly going to affect the vote in November.

BORGER: Yes. And if you ask any pollster, what's this election going to come down to, the answer is, of course, the unemployment number.

And that's sort of the indicator of how the country's feeling. Take a look at this. I looked at unemployment back when Ronald Reagan was running for reelection in 1984 vs. President Obama right now. And that red line is Ronald Reagan. You see? It went up to a high in the year three of his presidency. But then it started heading downward.

The blue line is President Obama. And it is -- that unemployment number is plateauing. And that is a real problem for him, because Ronald Reagan seeing that number going down could claim that it was morning in America.

JOHNS: Right. Absolutely.

BORGER: And President Obama cannot say that yet.

JOHNS: But we did get an indicator, what, today...

(CROSSTALK)

BORGER: We did. Consumer confidence again not good, down for the fourth straight month. Unemployment numbers have been higher than 8 percent for 40 straight months.

Now, gas prices have gone down considerably. But that still hasn't been factored in yet by the American people. So I think the big question is when does this sort of pessimism really get cemented? Is it now? Or does the president have a couple more months over the summer to try and get people to believe that we're headed on the right track? Pollsters disagree about that.

JOHNS: And you have some stakes that certainly show some improvement in the job numbers, but nationwide there's an issue.

BORGER: That's right. And luckily for the president, a lot of the states that are doing better are those battleground states that he needs to win. So he may be able to say, things are better in your state and it may be a state that he needs for the Electoral College. So, it's difficult to predict.

JOHNS: Gloria Borger, thanks so much.

BORGER: Sure.

JOHNS: Jack Cafferty's here now with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Joe, President Obama and Congress get a big fat "D" as a grade when it comes to their handling of the economy.

CNN Money asked 20 economists to grade these lawmakers, and both the president and Congress got D's.

It's hard to imagine any other profession where you could keep your job performing at that level.

These experts say Congress is more interested in scoring political points than in helping the economy. Really? They're also worried about the so-called fiscal cliff and the looming disaster if Congress can't get its act together.

But Congress doesn't seem too worried about any of this. Bloomberg News reports congressional leaders are talking about delay the $1.2 trillion in automatic spending cuts until March. These cuts are scheduled to go into effect January 1.

At the same time they might temporarily extend the Bush tax cuts and other tax breaks until March.

In other words, kick the can down the road some more without making any serious choices. The D grade is looking a little generous.

Meanwhile, ordinary Americans continue to suffer under a weak economy.

A new survey shows 28 percent of Americans have no emergency savings. Nothing. Zero.

The general rule of thumb is you ought to have enough to cover at least six months of expenses in the bank. Only one in four people have that.

And just last week, Federal Reserve Chairman Ben Bernanke said he expects unemployment to remain above 8 percent through the end of this year. The real absurdity is Congress and the president will look at you with a straight face and tell you how they think they deserve to be reelected.

Here's the question: Economists give the president and Congress a "D" on the economy. How would you grade them?

Go to CNN.com/caffertyfile. Post a comment on my blog. Or go to our post on THE SITUATION ROOM's Facebook page -- Joe.

JOHNS: Jack, I think people are worried on Capitol Hill that those cuts are going to be so deep they're going to cause real pain.

CAFFERTY: These are cuts they agreed to during that huge fight last summer to raise the debt ceiling. This stuff was passed into law and signed off on by the government. Now they don't want to do it because, hey, it's an election year and it could cost them votes.

JOHNS: Jack Cafferty, thanks again.

When it comes to health care reform, he may be the decider. We take an in-depth look at the Supreme Court's man in the middle, Justice Anthony Kennedy.

Also, lifesaving equipment that comes with a huge price tag. Dr. Sanjay Gupta takes us inside the emergency room and shows us what's behind those outrageous hospital bills.

Plus, heartbreak in Florida as families find their homes flooded by Tropical Storm Debby. We're standing by for an update from the National Hurricane Center this hour.

(COMMERCIAL BREAK)

JOHNS: The future of U.S. health care could be decided this week with the Supreme Court set to hand down its ruling on health care reform on Thursday.

One goal of the Affordable Care Act is to rein in soaring costs.

And if you have ever received a hospital bill, you know some of the charges can be eye-popping.

CNN chief medical correspondent Dr. Sanjay Gupta takes us in- depth.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: One of the questions that comes up all the time is what about these hospital bills, how exactly do you break down, how do you make sense of it. There's no question, it leaves a lot of people scratching their heads.

So I want to give you a little bit of an example here but taking you inside this operating room. This is the hospital where I work where I'm a neurosurgeon. And just having an operation performed in a room like this costs about $3,000 an hour. That's for starters.

Come on in. I will give you a couple of quick examples. If you look at a hospital bill, you might see an IV bag charge, so an IV bag like this, $280 just for the IV bag. That might strike people as very high.

A stapler. This is a stapler that's often used in surgery, something like this costs about $1,200. This is a chest tube. If someone has compression of one of their lungs, they might need a chest tube like this. That costs about $1,100. And you'll find examples all over the room like this. Suture, something that's usually in just about every operating room in the world. This type of suture over here costs about $200.

If you look at even devices like this is a needle used for biopsy, so if there's a concern someone has a tumor, they would use a needle like this. This is going to cost about $800.

Now, it's important to keep in mind if you ask the manufacturers of a device like this, why so much money? They'll say, well, it took years to develop something like this. The research and development costs are significant.

Also, the guarantee certain level of effectiveness of this needle. That costs money as well.

But something maybe you didn't know, when you look at a hospital bill, it's not just the cost of the supplies, there's also administrative costs that are built-in. There's a cost of covering people who simply don't have insurance or can't pay. That's built into these costs as well.

And, finally, keep in mind that what is charged and what is ultimately paid are two very different numbers.

RICHARD CLARK, HEALTHCARE FINANCIAL MANAGEMENT ASSOC.: The typical hospital collects about 4 percent of every dollar that they -- about 4 cents of every dollar that they bill. So it's not coming out in massive profits. It's coming out as results of underpayment from the government.

GUPTA: I'll tell you, you know, the cost breakdowns like I just gave you, on lots of these different supplies, a lot of people simply never see. What we have found is a lot of people don't care as well. If you're insured, some people may not even open the hospital bill. But there are about 50 million people uninsured out there and they care very much about hospital bills like this.

And what you can do is you can call the hospital and get a detailed breakdown. While you're on the phone with the hospital, if the costs still seem too high or just hard to understand, you might be able to negotiate some of these prices down.

(END VIDEOTAPE)

JOE JOHNS, CNN ANCHOR: Sanjay is joining us live now from CNN world headquarters in Atlanta.

Sanjay, $900, $800 for a needle? That's just pretty incredible. A lot of this at the bottom is really about paying for the uninsured, isn't it?

GUPTA: Yes. I mean, people I think sort of generally know this and get this, Joe, but there's a thing known as uncompensated care. When someone is uninsured and they go to a hospital, they have certain costs associated with the health care, that cost is subsequently spread out. It's spread out as the taxpayers, increase taxes, but also spread out in the way that I just showed you.

Hospitals charge more money and therefore insurance companies charge more money to everybody else. Everyone else who has an insurance plan, their premiums are going to go up to pay for that.

So, I just wanted to give you a little bit of an example, a concrete one of how that all comes together, Joe.

JOHNS: I think -- the other thing we have to talk about just a little bit is this individual mandate which supposedly adds more people to the pot, which President Obama says will lower overall costs. But the question here is what happens if that mandate is struck down and whether those prices we're talking about are just going to go up to try to cover the other provisions that end up left in place.

GUPTA: Yes. You know, it's interesting, Joe, I've been thinking about this a long time. As you know, I used to work at the White House and work on issues like this. I think the best way to sort of look at it is, if you don't have a mandate but still have the part of law in place that says you can't charge anymore in terms of premiums to someone who is already sick or has a pre-existing illness, what happens is the people will buy health care insurance when they get sick. They're not going to charge more. So, why not wait until you get sick?

The analogy on a car insurance example would be that you call the car insurance company and ask for car insurance just after you get into a wreck and your car's on the side of the road. Obviously that doesn't work.

And this has been tried before, Joe, in Kentucky, at the state level, they tried doing this exact thing -- no mandate, but insurance regulations demanding people wouldn't charge anymore in terms of premiums for people who are sick. And what they saw is everybody's premiums went up. Everybody's premiums went up by as much as 40 percent, which is why everyone needs to pay attention to this issue, Joe.

JOHNS: Car insurance a very interesting example there because a lot of people say so many states require people to buy car insurance, like this thing we're talking about right now at the court.

Thanks so much for that, Sanjay Gupta.

A stunning revelation about swine flu. A new study says a lot more people died than we first thought. Just how many may shock you.

If you use a Mac instead of a PC, you could wind up paying more for a hotel room? We'll tell you what popular site shows Mac users pricier rooms.

And John Edwards could have gone to jail for the affair he had with Rielle Hunter. Now, she's dropping a bomb shell about their relationship.

Standby.

(COMMERCIAL BREAK)

JOHNS: A staggering new calculation of the number of deaths from swine flu. Mary Snow is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

Mary, what do you have?

MARY SNOW, CNN CORRESPONDENT: Hi there, Joe.

Well, a new study estimates 15 times more people died from the 2009 H1N1 pandemic than previously thought. The World Health Organization originally said under 19,000 people died. But researchers now say it's more like 284,000. One reason: some countries lacked the ability to identify the virus. Now, the study estimates 51 percent of the deaths occurred in Africa and Southeast Asia.

It pays to be a PC if you're using Orbitz.com. "The Wall Street Journal" says Mac users spend as much as 30 percent more a night in hotels, that's' because Orbitz is actually steering Mac users to more expensive rooms. It searchers also tailored to predict costumer shopping habits and Orbitz says Mac users are more likely to book four or five-star hotels compared to Window users.

A Michigan couple is taking the plunge and bringing their whole wedding party with them. Watch as they lineup to take pictures when the dock completely gives out. All 12 people in the lake -- yikes -- including the bride and groom. At least they'll always have a great wedding story to tell and (INAUDIBLE) play some video.

And it's apparently splitsville for Rielle Hunter and former presidential candidate John Edwards.

(BEGIN VIDEO CLIP)

RIELLE HUNTER, JOHN EDWARDS' FORMER MISTRESS: We are a family, but as of last -- the end of last week, John Edwards and I are no longer a couple.

(END VIDEO CLIP)(

SNOW: The break-up which Hunter described as mutual comes just days after the two were photographed together at the beach. And two weeks after the remaining charges were dropped against Edwards for allegedly violating campaign finance laws to cover up their extramarital affair. Hunter has also just launched a tell-all book about the relationship -- Joe.

JOHNS: You know, I covered that trial. And after all the stuff that came out in the trial, it's really hard to see how they stuck together as long as they did.

SNOW: Yes. So much details and drama in that relationship but --

JOHNS: I know. Who knows? All right. Thanks so much for that, Mary.

SNOW: Sure.

JOHNS: It's among the most influential votes they'll ever cast. How will the Supreme Court justices split on health care reform? We'll go in depth with CNN's senior legal analyst, Jeffrey Toobin.

Plus, another top Democrat deciding to skip the party's convention. We'll talk about that more with Hilary Rosen and Alex Castellanos in strategy session.

(COMMERCIAL BREAK)

JOHNS: Going in depth now.

The Supreme Court is set to announce its decision Thursday in the much-awaited health care reform case. As with most controversial issues, the justices are likely to split on the law's constitutionality. So, a court of nine men and women could decide matters of life and death for nearly every citizen.

But the vote of one justice may be most in play.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): He's the man in the middle, the ring- leaning justice often swings left on hot button issues -- the death penalty, abortion, immigration. Now, the Sacramento native might be the one "TIME" magazine calls the decider, whose vote in Thursday's ruling could make all the difference.

THOMAS GOLDSTEIN, SCOTUSBLOG.COM PUBLISHER: In any nine-member court that's closely divided, someone's going to be in the middle. For us, that's Justice Kennedy, who's a solid conservative but does vote with the left in a material number of cases. And when it comes to health care, there's every reason to think he'll be right there in the center as well.

JOHNS: The 75-year-old Kennedy asked tough questions of both sides during the March oral arguments over the constitutionality of the Affordable Care Act, and the key funding provision, the so-called individual mandate, which would require most Americans to purchase health insurance or pay a penalty. The justice wondered whether Congress went too far.

JUSTICE ANTHONY KENNEDY, U.S. SUPREME COURT: The government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases. And that changes the relationship of the federal government to the individual in a very fundamental way.

JOHNS: But some sympathy, too, for the Obama administration and the unique aspects of health care in the national economy, suggesting perhaps the health insurance market was special enough that he could vote to uphold the mandate.

GOLDSTEIN: This is a question about states rights, which he cares a lot about. It's a question about individual liberty and the relationship between the government and the American public, which he cares a lot about.

And so it would be quite surprising if he weren't in the majority in the end. We don't know on which of the questions the court's going to divide five to four, but if it does, then he's likely to be the pivotal vote.

JOHNS (voice-over): Such influence makes Kennedy a target from the left and the right. Critics say he lacks an overarching judicial philosophy and his case-by-case approach has earned him nicknames, Flipper and the Errant Voyager.

Kennedy comes from a family of lawyers, a federal judge for 37 years, the last quarter century on the high court. Friends say he is a curious civic-minded intellectual with a taste for Shakespeare and his beloved San Francisco Giants.

(END VIDEO CLIP)

JOHNS: Let's continue our in-depth look at the health care reform case right now with CNN senior legal analyst Jeffrey Toobin.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Let me ask a question, is it OK that I'm so excited about this? Is it OK that I'm so into this?

JOHNS: I don't know if the rest of the country is.

TOOBIN: Well, I don't know.

JOHNS: All right, so, now, we know that you think the court is going to overturn at least the individual mandate, right?

TOOBIN: I want to make a prediction that is correct no matter how the court -- no, after the oral argument, I thought that there were five votes against some part of the law and perhaps even all of the law.

I thought the argument went poorly for the Obama administration. The conservative justices who spoke indicated more hostility than I had expected.

JOHNS: OK, so we've talked about Justice Kennedy. What we haven't talked about that much is Chief Justice Roberts and whether he might be persuaded to vote for the mandate. Even though, you know, he sort of sides with the conservatives a lot.

TOOBIN: All of us going into the argument thought Justice Kennedy would be the key vote and that may well be the case. What was surprising to me in listening to the questions that the justices asked.

It was that Chief Justice Roberts at times and only at times, indicated more of an open mind about the mandate than I had expected.

And, look, this is a case that it will define Chief Justice Roberts' legacy, at least the first part of his tenure as chief justice. So I anticipate he is going to write the opinion.

JOHNS: Do you think he'll be concerned about blowbacks? Sort of out in the country, people being so dissatisfied with the court and sort of, you know, knocks the court down a notch in the public's view?

TOOBIN: Chief Justice Roberts is very concerned about the public perception of the court, but not enough to vote some different way. He's going to vote his conscience, what he believes, but he is concerned about how the court is perceived.

JOHNS: Does he side often with the liberals, probably almost never?

TOOBIN: Almost never. But interestingly he did side with the liberals on Justice Kagan's opinion yesterday, which said no mandatory life imprison without parole for juveniles.

I don't know what significance that has, but it was in a very unusual split in the court, Roberts and the more liberal members.

JOHNS: Yesterday was the immigration decision.

TOOBIN: Correct.

JOHNS: We touched on this a little bit. Do you think that immigration decision tells us anything about how the court might move on health care?

TOOBIN: You know, a lot of people in minority world are trying to do that today and say, well, Roberts was trying to, you know, show he's not a complete Republican person.

I don't know. I don't think so. One of the things about the justices is they take each case on its merit. They don't trade votes. They don't say, well, I'll vote with you on this one if you vote with me on that one.

I don't think there's anything you can really judge about the health care case that you can learn from the immigration case.

JOHNS: How likely is it a punt? You know, look at this and say, well, it's too hot an issue and we need to re-argue. I think they might have done that with Citizens United.

TOOBIN: Well, there is an option. There is one very obscure part of this case, which essentially says the case is premature. The law hasn't gone into effect yet. It doesn't go into effect until 2014.

Let's just kick the can down the road until then. That's a possibility. Based on oral argument, that doesn't seem like a very likely case. I think they're going to decide the merits thumbs up or thumbs down.

JOHNS: Do you think they'd look bad if they decided --

TOOBIN: Not necessarily. I think -- I mean, there is a doctrine of law that says you don't decide cases until you have to. I think that is a plausible outcome.

At this point, I think the Obama administration would embrace this possibility of just sort of, let the law go into effect, but I don't think that's going to happen. I think we're going to see a decision on the merits.

JOHNS: All right, good enough. Thanks. I did not mention the fact because I'd heard about it, but didn't know for sure. You have a new book coming out in the fall called "The Oath."

TOOBIN: "The Oath," the Obama White House versus the Supreme Court and it's all about these nine justices.

JOHNS: Got it. Thanks so much, Jeffrey Toobin. Good to see you.

News that could spell trouble for the president. One of his biggest supporters four years ago says she will not attend the Democratic convention. How worried should the president be?

And he served 21 terms in the U.S. Congress, but tonight could this be the end of a very long road for Charlie Rangle?

(COMMERCIAL BREAK)

JOHNS: Joining me for today's "Strategy Session" are CNN contributor and Democratic strategist, Hilary Rosen and Republican consultant, Alex Castellanos. He is also a CNN contributor.

President Obama has a new video out. He is attacking Bane Capital again, but this time there's a twist. Let's listen.

(BEGIN VIDEO

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I know how jobs work. I know how jobs come and why they go. I know how jobs are created and how jobs are lost. I understand how jobs come and how jobs go.

(END VIDEO CLIP)

JOHNS: So you get the idea there. We've seen these attacks on bane capital before and a lot of Democrats have reacted negatively including Cory Booker.

There was so much about that, the mayor in New Jersey. This is a little different though. This is an attack on outsourcing itself. How does that play and does it still sort of alienate part of the Democratic base?

HILARY ROSEN, CNN CONTRIBUTOR: Well, you know, the last attacks were about sort of the business of Bane, right? Attacking -- which is just attacking a private company and people objected to that.

This is actually very specific. Mitt Romney's running around the country telling people, you know, I know how to bring jobs back here to America. He's, you know, let China and India take over our economy.

And yet when people went back and did the research, actually when he was running Bane, he was running companies -- consulting with them, sending jobs overseas.

You know, it couldn't be more specifically hypocritical for Mitt Romney. I think this is terrible for him.

JOHNS: Alex, you know, when this thing got started last week, there were conference calls and the Romney people put out a bunch of different information, which is just a real sort of a laundry list that kind of confused the issue. Does this outsourcing attack really sort of get people riled up in either party?

ALEX CASTELLANOS, CNN CONTRIBUTOR: You know, I think it makes the Democratic base happy. But my experience with this kind of thing in campaigns is that there are a couple of problems with this kind of attack.

One of them is motive. If you're a business guy, OK, you're supposed to maximize profits and all that. But when you're running for president, people don't think you're doing it for profit. The agenda now is totally different.

Almost like attacking somebody who's not here anymore. And the second part about it is they're ceding that he's a business guy and a job maker.

He's just not a really wonderful one. He's just kind of a wonderful one. It's like he's a silver medal winner. And this is from the guy who's got the 8 percent unemployment rate. So far in the face of these attacks, these Bane attacks Romney has gone up and Obama has gone down.

ROSEN: But we haven't seen of the impact of the attacks yet.

CASTELLANOS: -- about $5 million in a couple months.

ROSEN: Actually they're running these ads in specific battleground states. In Midwestern states where Mitt Romney is saying I will bring jobs back, I know how to do it. Yes, he's a job creator, but he's created the jobs in Singapore.

JOHNS: So the question is really whether we're going to see a two- pronged attack. There are some writing from a liberal writer in New York just today suggesting, first you see the Obama attack on character almost. And then it moves over to policy as you get closer to the November election. Do you think this is sort of a one-two punch that's supposed to soften Romney up?

CASTELLANOS: I think so. I think right now they're trying to say he's a mean guy and attack him as, you know, the source of all evil. The problem is that Mitt Romney doesn't seem to be that guy.

He's a very pragmatic businessman. One of the problems in the primaries was the Republicans didn't see him as a passionate right wing guy.

Well, that turns out to be a plus in the general where he seems to be a very pragmatic guy. But, yes, here they're going to move onto policy.

JOHNS: Let me ask you quickly. Claire McKaskel, the senator, the Democratic senator who has shown a lot of support for the president now saying she's not going to the Democratic convention. She's in a tight re-election race. What do you think that says and what it means?

ROSEN: Well, I mean, that's hard to interpret. You know, it's a dis to the president and saying me associating with you does not look good for me. You know, It's hard to spin that well. But we've seen that in every re-election for every campaign for years.

CASTELLANOS: Conventions are beasts for the extremes of both parties. And if you're in a swing state in the middle, you don't want to be seen with the extremes of your party. You want to be seen with the middle of it.

JOHNS: Democratic Congressman Charlie Rangel, now this is a guy again and again and again over the years we've said is on his way out and every year somehow rather he fights and lives to see another day. Do you think today is the end of Charlie Rangel given the fact he's sort of been re-districted?

ROSEN: I don't. You know, my colleagues in New York feel that he is just -- you know, he's just a beloved figure in Harlem in particular and even in Spanish Harlem.

This guy has devoted his career to public service. He has brought a lot home. He's decided he's not ready to go and I just don't think the people are going to send him away.

JOHNS: Latino opponent though, right?

CASTELLANOS: That's the big issue, Joe. I think you hit it. The Black Caucus has had a tremendous amount of power in the Democratic Party for a long time.

Now there's a new emerging minority challenging them for power, Hispanics. They need each other to assemble a Democratic governing consensus, but they're also vying for power.

The opponent Rangel has is a Dominican in that district and the district now favors him a little bit. But I think Hilary's right, he'll probably hang on.

JOHNS: Interesting to see what happens because this is a multiple- opponent race and that could water down the opposition to Charlie Rangel.

ROSEN: It's a very odd primary in New York today, a weird hot June day. It's a funny day for voter turnout.

CASTELLANOS: The biggest liability he has is that he's 82 years old. Dick Luger lost because he just lost touch with his district. That's one of the things working against Charlie Rangel today.

JOHNS: All right, thanks so much and we'll see what happens.

ROSEN: OK.

JOHNS: Good to see you both.

ROSEN: Take care.

JOHNS: A fatal shootout at a very busy airport. Police officers open fire on other officers. Standby for details on that.

Plus, say goodbye to Big Ben, at least as you know it now. The famous London landmark gets a name change. We'll tell you what it is.

And the president is no stranger to fast food joints, but wait until you hear the barrage of questions he gets when he visits an Atlanta favorite.

(COMMERCIAL BREAK)

JOHNS: Three police officers dead from a shootout at an airport. Mary Snow's monitoring that and some of the other top stories in THE SITUATION ROOM right now. Mary, what do you have?

MARY SNOW, CNN CORRESPONDENT: Hi there, Joe. Well, it happened in Mexico City at the country's busiest airport. Mexican officials say two police officers who were under investigation for their connection to a drug trafficking ring opened fire on fellow officers to avoid being arrested.

Two of the officers died at the scene. Over 47,000 people have died in drug-related violence throughout Mexico since 2006.

Well, you can say goodbye to London's famous Big Ben, at least to that name. A parliament official says the landmark will be renamed Elizabeth Tower to mark Queen Elizabeth's 60th year on the thrown.

This is just weeks after the queen's diamond jubilee celebration. The Clock Tower was completed in 1859 and got the name Big Ben from the giant bell inside. A new report shows home prices rose in April for the first time in seven months. The bad news, they're still near record lows down 34 percent from their peak in the summer of 2006.

The uptick did help stocks rally early today. But they end I with modest gains as investors remain pessimistic about an upcoming European summit. The Dow rose just 32 points.

And President Obama had lunch at "The Varsity," one of Atlanta's most famous restaurants where the staff bombarded him with the fast food joint's trademark phrase.

In case you're not familiar, they're asking, what'll you have? A question very familiar to those in Atlanta. And if you want to know what he actually had, the president ordered five Chili dogs, four regular dogs and one hamburger for himself and his staff.

Joe, I have never been there. Have you?

JOHNS: No, I haven't actually. It sounds pretty chaotic though. I've been to Ben's Chili Bowl here in D.C. Same kind of thing, I think.

SNOW: I think it's the world's biggest drive in or something.

JOHNS: All right, thanks so much, Mary.

SNOW: OK.

JOHNS: Severe cuts to the federal budget including hundreds of billions of dollars slashed from the Department of Defense will automatically go into effect next year unless Congress acts to stop them or delay them.

CNN anchor, Erin Burnett has been following the story. She's joining me now with the report. Erin, what are you learning?

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUTFRONT": Well, it's interesting, obviously these cuts are severe and they are going to require so many layoffs from the defense area, Joe.

That by federal law the defense contractors will have to notify people 60 days in advance. Of course, that means notifying them right before Election Day.

So there is a lot of incentive on both sides of the aisle to delay some of this sequester. There's been a lot of purporting out there that perhaps there's a deal being talked about.

That maybe in Congress they would go ahead and basically kick the can down the road and have that sequester not take effect until early next year, maybe as late as March.

So we've spent some time today talking to staffers on the Hill. Basically it seems that there are some talks going on right now that would essentially push this out a little bit.

But, Joe, I think the real problem with that is going to be Republicans say, yes, we're talking about this. We're going to extend the Bush tax cuts and get rid of the defense sequester.

Democrats go, wait a minute, what are you talking about? You can't extend all those tax cuts and we're not going to let you get rid of that defense sequester unless you deal with the tough cuts to services that are also part of that $1.2 trillion in expected sequestration cuts taking effect at the end of the year.

But I think what you are going to see is real talk about a delay. Joe, the bottom line here is there only about 31 days between now and the elections in November when members of the House are actually going to be in session because they're out campaigning. It's only about 31 days to do a deal.

JOHNS: A lot of people are saying these are potentially very dangerous situations when these cuts go into effect. That's why they need to postpone them, at least for a while.

BURNETT: Yes. And you know what? They're right about that. Numbers some bipartisan, some more slanted toward the defense industry give you numbers between 1 million and 1.5 million jobs could be effected by the defense sequester alone.

And that's not to say that we want to be a country that's so reliant on defense, it just those are jobs that we need right now. So they will make that argument. But when you look at the numbers, you kick the can down the road three months for the Bush tax cuts and unemployment and payroll and sequestration, you're looking at a few hundred billion dollars.

This money really adds up. We've got to keep raising that debt ceiling. So at some point, we have to make the tough choice, either really commit, spend it and take what comes with that, or make the cuts.

Right now it looks like they're not doing either one. That's going to be the worst possible outcome if it comes to the certainty needed for hiring.

JOHNS: Erin Burnett talking about a very serious situation that we're probably going to be hearing so much more about in just the next few weeks. Thanks for that. We'll be watching for your show tonight.

BURNETT: All right, see you, Joe.

JOHNS: Thousands of people forced to evacuate their homes. Coming up, we'll get the latest official update on the storm that's paralyzing parts of Florida.

Plus, are the U.S. and its allies being tough enough on Syria? New questions after a fighter jet is shot down.

And the 9/11 Memorial disrespected, littered with trash by junior high school students on a field trip to Ground Zero.

(COMMERCIAL BREAK)

JOHNS: Jack joins us again with the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Joe, the question this hour, economists gave the president and Congress a "D" when it comes to the economy, how would you grade them?

Dan in Pennsylvania writes, "To both parties in both Houses for wrapping dog poop in Tootsie Roll wrappers, politicizing it as candy and then claiming the other side won't vote for their wonderful legislation, I give them all "Fs."

I think the president has tried, but he was unable to finish the deal through no fault of his own. I'll give him a "C." A for effort, "F" for results."

David in Florida writes, "I'd give the president a "D" plus on the economy and I'd give Congress an "A" for absent or abysmal or asinine. I think these people should reimburse the government for two years of unearned paychecks."

Richard in Texas says, "I don't think anyone is very proud of our Congress except maybe for the congressmen themselves. When I look at these people as a group, I'm reminded of the Peter Principle, promoting someone to their level of incompetence. These folks in Congress have all been promoted far beyond their level of competence."

H writes, "I'd give them a big fat "F." We've been downgraded simply because Congress and the president can't get anything done. If Obama doesn't start getting assertive with Congress, he can kiss his second term goodbye."

Larry in Houston says, "The president gets a "D" plus, Congress gets an "F." At least we know what Obama's going to do if he's re- elected. As for Romney, if he wins, he'll get an elevator and the middle class will get a shaft."

And Mike in Minneapolis writes, "I'd give Obama a "C" plus. I'd give Congress a good swift kick in the "A."

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

JOHNS: You know, Congress' approval ratings just aren't the best right now.

CAFFERTY: Really? What a surprise. They're doing such an extraordinary job, don't you think? About 17 percent approve. Who are these people?

JOHNS: I think it's up to 17 percent.

CAFFERTY: Well, the people who approve of the Congress should be deported from this nation immediately and not allowed to vote anymore. JOHNS: Thank you very much, Jack. We'll be right back.

It's hallowed ground where almost 3,000 people died on one of America's darkest days. So you can imagine the outrage when a group of young people disrespected the 9/11 Memorial by littering. CNN's Mary Snow has details. Mary, what happened here?

SNOW: Well, Joe, a Brooklyn Junior High School has apologized to the 9/11 Memorial for being disrespectful at the site. But the father of one of the victims on 9/11 says it's not just the kids who are to blame, he faults the memorial itself.

(BEGIN VIDEOTAPE)

SNOW (voice-over): The 9/11 Memorial has drawn 3 million visitors since it opened last year. But it's in the middle of a controversy after a junior high class was kicked out last week accused of throwing trash into one of the reflecting pools honoring those killed on September 11th.

Jim Riches, who lost his son, Jimmy, a firefighter in the attack, calls it deplorable. He's been an outspoken critic of the memorial and blames the people running it.

JIM RICHES, FATHER OF 9/11 VICTIM: You should be talked to. They should tell you, you know, this is hallowed ground. The families feel it's sacred and you know, give a little education.

Instead they send them out there. It's a park-like atmosphere, waterfall, trees. People laying on the grass and there's no real control. I find them at fault also.

SNOW: The principal of the Brooklyn Junior High School apologizes for her students' behavior, but admits in a letter to the Memorial, there was not a lack of preparation, there was a lack of decorum and respect.

The 9/11 Memorial points out that when visitors go online for passes, they are given information and rules on prohibited behavior. Reminding people that the 9/11 Memorial is a place of solemn reflection.

We asked one memorial worker who didn't want to be identified about visitors to the memorial.

(on camera): Do you think they feel like it's a special place?

UNIDENTIFIED MALE: No. Sometimes, yes. Sometimes no. There's a lot of people come over here, you know. Different groups, different countries. They come in like this is a park.

SNOW: Anthoula Katsimatides, a board member who lost her brother on 9/11 sees people on the grass of the memorial a very different way.

ANTHOULA KATSIMATIDES, 9/11 MEMORIAL BOARD MEMBER: Although it is a place of solemn remembrance, it's also a place of hope and reaffirming life. I mean, that was the whole premise behind the type of memorial that we have. All these life affirming elements, the water, sky, grass, was to provide that sense of hope.

(END VIDEOTAPE)

SNOW: Anthoula Katsimatides, the board member you just saw that we spoke with says the board is concerned and dedicated to making sure the atmosphere is one of respect at memorial.

But she says efforts to educate people will go a long way once the museum is open. And, Joe, it's unclear when that will happen. That's been held up.

JOHNS: Mary Snow, thanks so much for that reporting.