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THE SITUATION ROOM

Michigan's Labor Fight; Avoiding the Fiscal Cliff; Interview with Former Clinton Treasury Secretary Robert Rubin; Who Will Replace Tim Geithner?; Deal Done Behind Closed Doors?; The Senate's "Three Amigos"; Who Will Be Next Secretary Of State?; Egyptians to Decide on Constitution; Air Force Launches Secret Space Drone; Comedians Poke Fun at Politics; Who Was Mona Lisa?

Aired December 11, 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: Thousands of angry demonstrators swarm Michigan's state capital for a fight over labor unions.

Here in Washington, Republicans turn the tables on President Obama. We're going to tell you what specific information they are now demanding.

And who was she? You're going to find out why a centuries-old mystery may be closer to a solution.

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

We begin with today's dramatic defeat for union workers in the industrial heartland. This was the scene outside Michigan's Statehouse today, as Republicans pushed through a pair of right-to- work bills saying workers don't have to join unions or pay union dues in order to get a job.

Onlookers chanted shame on you after the vote. This is a watershed moment because Michigan is the same as countless union struggles, including this 1932 march where five people died and dozens were injured when unemployed workers were attacked by police and Ford Motor Company security guards.

It became a turning point in raising nationwide sympathy for the union movement, but after decades of gains, fewer than 12 percent of U.S. workers now belong to unions. In Michigan, it's fewer than 18 percent.

CNN's Poppy Harlow is at the state Capitol in Lansing. She's got more.

Kate (sic), how did it go?

POPPY HARLOW, CNN CORRESPONDENT: Wolf, a historic day here in the state of Michigan, a state that is at the heart of organized labor in this country.

One person said, if it can happen in Michigan, it can happen everywhere and that's why thousands and thousands of protesters descended on the state capitol fighting this legislation, which will make it legal in this state for people to work at an auto company or in public schools without being part of the union.

It will be illegal for unions or employers to mandate that employees join the union or pay any money to the union. This brings into question, what is the future of unions in America? Today, I had a chance to talk to the person at the heart of that debate, Bob King, the president of the United Auto Workers, which was born here in Michigan. Here is his take.

(BEGIN VIDEO CLIP)

HARLOW: Does this mean the beginning of sort of a death of unions in this country? Are you concerned that this is that big symbolically?

BOB KING, PRESIDENT, UNITED AUTO WORKERS: No. I think that unions -- I think that things like this are waking the sleeping giant.

I think that workers and working families are tired of losing. They want a fair share of the prosperity of this state and this country and I think that's going to help build the union movement.

(END VIDEO CLIP)

HARLOW: Also today, Wolf, we talked to thousands and thousands of protesters, many of them union workers. Even those exempt from this legislation came here to be heard, including firefighters and police officers. Here's the take of Ted Copley, a firefighter in Detroit.

(BEGIN VIDEO CLIP)

HARLOW: You're exempt from this right-to-work legislation. Why are you here?

TED COPLEY, DETROIT FIREFIGHTER: Well, yes, that's correct. We are as of right now exempt from this legislation, but it doesn't change the fact that we want to be here to support all our brothers and sisters in the union because we are also union and the fact that our parents, our grandparents and our great-grandparents, they struggled and they fought and some of them even died to have the right to organize for better safety, better wages, better benefits for their children.

(END VIDEO CLIP)

BALDWIN: Poppy is with us.

Poppy, first of all, I meant to call you Poppy, obviously. I called you Kate by mistake. But you're Poppy in all of our eyes.

Let me ask you this about union workers. There are some out there in Michigan who actually support this new legislation.

HARLOW: They do. That's a very good point, Wolf. It's a minority. You have the majority of union workers that are fighting this because they think it's going to mean lower wages, fewer benefits, less bargaining power.

But I want to play you some sound from a Ford union worker, Brian Panabecker (ph). He has been a union worker at Ford for 16 years. I met with him first this summer when we were here in Michigan covering the election and the campaign here. He's been fighting for two years to get this right-to-work legislation passed and here's why.

(BEGIN VIDEO CLIP)

HARLOW: You support the right-to-work legislation but you're going to stay a member of the union and pay those union dues.

UNIDENTIFIED MALE: That's right.

HARLOW: So what changes for you now?

UNIDENTIFIED MALE: It will give me a voice. It will give me leverage inside the union, because now if I threaten to resign from the union, I'm taking my union dues with me. Under current law, I can resign, but I still have to pay the union, so they don't care.

(END VIDEO CLIP)

HARLOW: And that's what is critical in all of this, Wolf.

The unions are going to have to make a very good case to every worker out there that they should join, that they should pay dues in order for people to become part of the union.

I want to pan over and just show you what is happening now, Wolf. This is outside Governor Rick Snyder's office. He's expected to sign this legislation in the next few days. There has been a sit-in in the governor's office. We might have some video of that we can play for you, a sit-in we filmed until the media was removed from the entry of the governor's office.

They moved from the capitol to sit in there. So the debate is not over, but for now this is the law of the land, just a pen stroke away from being the law of the land here in the state of Michigan. Incredibly symbolic for this country and organized labor in America.

BLITZER: All right, Poppy. Poppy is on the scene for us in Lansing, Michigan, a huge story unfolding there.

Here in Washington, everyone's eyes are on the calendar right now. This Friday, the House of Representatives is supposed to break for the holidays. Christmas is exactly two weeks from today. So when are we going to get a deal on taxes and spending cuts?

Our senior congressional correspondent, Dana Bash, is up on Capitol Hill.

What are you hearing, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: The Senate majority leader who, by the way, told me he's one of the world's biggest pessimists, told reports today he thinks it's going to be very difficult to get a deal done by Christmas.

Meanwhile, Republicans who we have been reporting don't have a lot of leverage for their opposition to raising the tax rates tried a different tactic today.

(BEGIN VIDEOTAPE)

BASH (voice-over): A new coordinated message from Republicans searching for more secure political footing. Mr. President, show us your cuts.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Where are the president's spending cuts? The longer the White House slow-walks this process, the closer our economy gets to the fiscal cliff.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Nobody should trust Democrats to put a dime of new revenue toward real deficit reduction or to stop their shakedown of the taxpayers.

BASH: To better understand the GOP positioning, remember what any deficit reduction deficit looks like depends on how much is drawn from either of two different pots of money, first, tax revenue, second, spending cuts likely to center on changes to entitlements like Medicare.

On revenues, Republicans already conceded to tax increases for the wealthy. The big sticking point is what kind and how much. Since that is angering many on the right who oppose any tax increases, Republicans want Democrats to take the heat for entitlement cuts by proposing them first so Republicans don't face the wrath of seniors, too.

Remember this 2011 ad depicting Paul Ryan throwing granny off the cliff? The White House says it's Republicans who haven't offered specifics and the president has.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Very specific spending cuts, including savings in entitlement programs. Again, it's not a mystery. We have seen this before. This is the document.

BASH: That document is last year's White House recommendations to the super committee.

As far as private talks go, a Democratic source simply noted that Boehner met with the president for 40 minutes on Sunday and they "didn't spend that time talking golf and football." To date, much of the focus has been on Republican public discord over tax increases, but Democrats are hardly united.

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: We get nervous in our caucus, don't we, about these secret meetings.

BASH: The president has his work cut out for him getting some in his own party to agree to a deal that includes significant cuts or changes to safety net programs. SEN. TOM HARKIN (D), IOWA: To all of you negotiators who are now negotiating on this so-called fiscal cliff and stuff, keep your hands off Medicare and keep your hands off Medicaid.

ROCKEFELLER: We're not budging on Medicare and we're not budging on Medicaid.

BASH: On taxes, a Democratic source tells CNN they also won't budge on raising tax rates for families making $250,000 or more, but could ultimately accept something short of the 39.6 percent tax rate Democrats campaigned on. Still, the Senate's top Democrat was pessimistic about a deal in the next 14 days.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I think it's going to be extremely difficult to get it done before Christmas.

(END VIDEOTAPE)

BASH: Now, Wolf, part of that pessimism could be coming from the fact that I'm told that these talks are slow-going, that they haven't even started talking about the nitty-gritty, how much to cut in Medicare, how much to raise in taxes, because the first thing they want to do, process-wise, is get top line numbers, top line numbers for spending cuts and also for those tax increases.

And that's no small thing, as you know. Just on the tax side, for example, Republicans have proposed $800 billion in new tax revenue. The president has proposed double that. I'm told over the past few days they have gone back and forth. Republicans had been optimistic that the White House would come down a little bit, maybe to about 1.2 or 1.4. But they say that that is still not where Republicans want it.

BLITZER: They are still negotiating, trying to negotiate a deal. Dana, thank you.

If the president and congressional Republicans don't make a deal, you will start feeling the pain in only about 21 days. Taxes will go up by a total of more than half a trillion dollars. On average, it will mean every U.S. household will start giving the government another $2,000 to $3,500 a year. One way or another, almost 90 percent of us will see our taxes going up.

But up to $110 billion in across the board cuts in government spending will also kick in. Half of the cuts, about $55 billion, come from the defense budget. The other $55 billion come from non-defense programs, like health care, education, housing assistance.

Our chief political analyst Gloria Borger has been looking at all of these numbers.

The dire consequences of going over the cliff, is it enough to force a deal?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: No. And that's what is sort of striking about it. When you talk to some liberal Democrat, they actually say, you know what, maybe it's better to go off the cliff because you get those defense spending cuts that Dana was talking about and the tax cuts for the wealthy expire. You can always restore the tax cuts for the middle class.

You talk to some Republicans, they say a bad deal is not what we want. They don't want any deal. And then, of course, you talk to the American public, as we keep doing here. And the American public, take a look at this, they believe that if there is no deal, that by a 2-1 margin it would have a negative impact on their financial situation.

I think the real problem here, Wolf, is that every politician understands that they are going to get criticized if there is a deal. So what's going on right now is that they are positioning themselves so that their constituencies believe that they worked their very hardest to try and get the deal that's best for them.

Again, we see a lot of this positioning going on and, as Dana points out, much of it behind closed doors.

BLITZER: I have been around Washington for a long time and whenever they get in these situations, there's always a temptation to kick the can down the road, if you will, and punt and leave it for another day.

BORGER: They are really good at punting. Have you noticed that?

BLITZER: Yes. Yes.

BORGER: They may well do that again. They could always sort of pass an extension of the tax cuts for the middle class, but not the wealthy. I mean, I keep having to remind myself that the reason we're in this situation is because they punted once before.

In July 2011, there was the debt ceiling debate and they set up this fiscal cliff for themselves because they knew that they only act in a crisis situation. So they set up this crisis and the question is whether they now have this cliff -- are they going to actually move the cliff because they can't even act in a crisis? That is their own doing.

BLITZER: Not much time left.

BORGER: It's a pretty bad situation.

BLITZER: Gloria, thanks very much.

BORGER: Yes.

BLITZER: One of the biggest guessing games here in Washington involves who will replace the treasury secretary, Timothy Geithner. I'm going to ask Bill Clinton's Treasury secretary, Robert Rubin, who should get the vital job.

Also, we're going live to Egypt. We're going to find out why massive protests have broken out again. You're looking at these pictures coming in from Cairo.

(COMMERCIAL BREAK)

BLITZER: As President Obama begins his second term, we're expecting some major changes in his cabinet. Almost no one is talking about who may get one of the most important jobs, replacing the Treasury Secretary Timothy Geithner.

Just a little while ago, I spoke with the Clinton Treasury Secretary Robert Rubin.

(BEGIN VIDEOTAPE)

BLITZER: Who would you like to see as the next treasury secretary? We know Tim Geithner is moving on.

ROBERT RUBIN, FORMER TREASURY SECRETARY: I would like to see as the next treasury secretary whoever the president picks. But let me just say, if I may, one comment on that -- it is a broad and complex job and I think while it is certainly possible that you may find someone who has never been in Washington to do that job, that's absolute possibility, I think there are many advantages to finding someone who has had Washington experience.

So, I think if the president chooses to go outside of that, that range of people, I think, he could find someone -- could find people who have not that experience. I just think there's an advantage of having had it.

BLITZER: You came from Wall Street. You were head of Goldman Sachs. You came to Washington, spent 6 1/2 years as Bill Clinton's treasury secretary. Correct me if I'm wrong, did you have a whole lot of Washington experience before that?

RUBIN: No, but I spent two years in the White House, Wolf, before I went to treasury, and I've always known that that two years of White House experience played an enormous role to help me prepare to be secretary of the treasury. And I think without it, I probably would have -- I think surely, actually -- would have found it much more difficult to deal with this whole array of policy issues and questions of government process, dealing with the media, dealing with Congress and so forth that I simply haven't had experience with, even though I have found political campaign ads for a long time.

So, I think, for me, those two years in the White House were enormously important in giving me the experience that was helpful then in being secretary.

BLITZER: Well, given the problems the president has had with some of your colleagues and friends on Wall Street, would it be wise to bring in someone with that Wall Street experience?

RUBIN: I think I wouldn't look at it quite that way, Wolf. I think what I would look at -- I know what I would do -- I would look at the requisites of the job and then I would decide who I thought was best equipped to perform the functions of that job and I don't think I would worry about other kinds of what I would call sort of tangential issues that really don't relate to this. And I think there are a good number of people on Wall Street that are very supportive of President Obama, whether he would look to any of those people or not, I have no idea. But I -- given the quality of the people that he appointed to the economic team on the first round -- and it was a terrific group of people -- if you extrapolate from that, it seems to me there's not to extrapolate from it, my guess is he will make an outstanding choice for secretary treasury this time.

BLTIZER: Do you want to throw out a name?

RUBIN: I could throw out names, Wolf, but I think it's probably more constructive not to.

BLITZER: I understand.

Thanks so much for joining us. Robert Rubin, former treasury secretary, appreciate you joining us.

RUBIN: I've been delighted to be with you, Wolf.

(END VIDEOTAPE)

BLITZER: That's just part of the interview, by the way, with Secretary Rubin. Coming up at our 6:00 p.m. Eastern hour, the former Clinton aide talks about the fiscal, including his plans to try to solve the looming economic crisis. The full interview with Bob Rubin airs during our 6:00 p.m. Eastern hour.

Up next, though, a story that you you'll see first right here on CNN. A new name on the sweepstakes to replace the outgoing South Carolina Senator Jim DeMint. And it's a person who may surprise you.

(COMMERCIAL BREAK)

BLITZER: Some interesting names on the short list for the soon to be vacant U.S. Senate seat in South Carolina, something you'll hear first right here on CNN.

Lisa Sylvester is monitoring that and some of the other stories in THE SITUATION ROOM right now.

Lisa, what's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Yes, Wolf, this might surprise a few folks but we have learned that South Carolina's former first lady Jenny Sanford is among the candidates GOP Governor Nikki Haley is considering to fill the seat of retiring U.S. Senator Jim DeMint. Sanford would be bring instant celebrity, having weathered the scandal of her ex-husband, former Governor Mark Sanford who disappeared from the state to see his girlfriend in Argentina. Whoever is appointed will be able to run for the seat in the 2014 special election.

And calls for national unity in Egypt where tensions remain high ahead of Saturday's referendum vote on a divisive new constitution. It was drafted largely by Islamist allies to President Mohamed Morsy. Today, Morsy announced the measure limiting where voters may cast their ballots. An Egyptian army spokesman says the president will attend unity talks on Wednesday aim at ending the political crisis.

And dozens of well-known companies are making a global call for countries to lift their HIV travel restrictions. Forty-five nations seen on this map, in blue, yellow, orange and red have laws or policies that deport, detain, or deny entry to people who are HIV positive. Now companies like Coca-Cola and Gap and from the NBA, they all say those travel bans are discriminatory and bad for business.

Until recently, the U.S., too, had regulations that barred foreign HIV infected foreign nationals from receiving a visa to enter the country. President Obama lifted that ban in January of 2010.

And a chain of Chicago stores is selling what it believes is the last -- yes, the very last shipment of Twinkies in the country. Jewel Osco (ph) says Hostess offered them the entire shipment still left in its Georgia plant, including 20,000 boxes of Twinkies and 5,000 boxes of Ding Dongs, Zingers and orange cupcakes and you can buy them at regular prices while supplies last.

But, Wolf, I don't think there's any surprise here, not for much longer.

BLITZER: Yes.

SYLVESTER: So, if you're thinking of the gift to give someone, who just don't know what to get, get them some Twinkies.

BLITZER: When was the last time you had a Twinkie?

SYLVESTER: It was kind of been about 10, 15 years ago. It's been a very, very, very long time.

BLITZER: Yes, me, too. How about a Ding Dong or a Zinger?

SYLVESTER: I haven't had one.

BLITZER: I haven't had any lately myself.

SYLVESTER: But, now -- I mean, don't they say that those Twinkies like last forever, I almost feel like buying a couple, just storing it on the shelf, just to have --

BLITZER: Safe room downstairs in case of an emergency.

Lisa, thank you.

The fiscal cliff talks have been happening behind closed doors. Now, the president and the House speaker, they are getting grief from some members of their own parties. Does the public have a right to know what's going on behind closed doors?

Our strategy session is next.

(COMMERCIAL BREAK)

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

In Syria, one time chef joins the rebels, starts cooking up something much more lethal.

We're live in the hometown of the U.S. Navy SEAL who gave his life while rescuing an American kidnapped by the Taliban.

Plus, disturbing new revelations about the owner of the plane that crashed, killing a Latina superstar.

Stand by. You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: Let's get right to our Strategy Session. Joining us, two CNN contributors, the Democratic strategist Hilary Rosen, and from our New Orleans, the Republican strategist Mary Matalin.

I want you guys to listen to these two sound bites, two politicians, a Democrat and a Republican, both making the case, get out from behind closed doors, Mr. President, Mr. Speaker. Negotiate the terms of this fiscal cliff deal in public.

Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I get nervous when two people disappear into a White House room and start making a grand alliance and they think, we're going to do this to the rich and we're going to do that to the poor so we'll just make that a trade off.

UNIDENTIFIED MALE: That's what the whole process is designed to do is to get it out of the secret meetings and into the public venues to the American people and the Congress themselves.

We're responsible for making intelligent decisions. That should be done publicly. But at some point, after public debate and so forth, yes, private negotiations can help bridge the gap and bring us to a successful conclusion.

(END VIDEO CLIP)

BLITZER: All right, Mary, what do you think? Should these talks be held totally transparently in public or will that be a kiss of death?

MARY MATALIN, CNN CONTRIBUTOR: I don't think there's time, Wolf, the president has been dragging its feet. We have a few numbers of days left before we go off the fiscal cliff and taxes are raised for everybody.

So Speaker Boehner knows his caucus, he is a serious, mature sober leader. They voted for him. He knows what he can negotiate and he knows what his principles are. He's a principled conservative. He is a mainstream businessman. He knows what the issues are. The House should and it's largely trusting him.

BLITZER: What do you think about that, Hilary? Should the Democrats trust the president right now to close the deal behind closed doors?

HILARY ROSEN, CNN CONTRIBUTOR: I think Democrats mostly trust the president. I don't know what Mary's talking about that the president has dragged his heels. He's been trying to get Congress to deal with this issue for months and months.

But having said that, you know, neither of these guys I think have the full faith and credit of their caucuses to do anything and that's what is taking so long. No Democrats are pressing on the president to be careful on what he cuts on entitlements.

And folks like me would like to make sure that the defense cuts, you know, are substantially a part of this package. Republicans, you know, are making a big deal out of that top 2 percent tax rate and so they both, I think, have a good sense of how far they can go.

That's what is taking so long. It's not the secrecy part that's the problem. It's just that there's such a fundamental difference of ideology here.

BLITZER: Well, very quickly, Hilary, should they do this publicly or privately?

ROSEN: I'm comfortable with them doing it privately because I think that in any event they are going to have to unveil an agreed upon package and Congress is going to -- there are rules in the Congress, which I do not think they are going to end up breaking about having enough days for this to be fully open and transparent for people to see what the deal is. This Congress is too -- you know, is too unary and too self-interested to vote on a blind package.

BLITZER: So Mary, you agree that have confidence that they can do this behind closed doors? Do you agree with Hilary?

MATALIN: In this sense that this is fiscal cliff, this is a political kabuki dance. The bigger issue -- which should this debate should be taken in public is entitlement reform, which is the driver of the debt and regulatory reform and all of the other reforms that are causing government to be in a position to implode on its self.

That's going to hurt the middle class. We borrow 46 cents of every dollar we spent. The president, yes, we have a fundamental difference. The president wants to raise taxes on the job creators when we have such a begrudging recovery, if we can even call it that.

I don't see how raising taxes on people who create jobs is going to create any more jobs. I don't see how without shrinking the government. The president has put nothing on the table that we're not going to have this debt. Today's debt is tomorrow's taxes.

It's immoral. And that should be -- that debate should be with a new Congress and take place in a public way after the new Congress assembles. BLITZER: All right, guys, hold on for a moment because we're going to continue this conversation right after this, including three senators who usually agree on just about everything.

But now a new issue divides the so-called three amigos, Senators John McCain, Lindsey Graham, and Joe Lieberman and it could be President Obama's first big fight of his second term. We're going to tell you what is going on.

(COMMERCIAL BREAK)

BLITZER: Going back to Hilary Rosen and Mary Matalin. Ladies, Piers Morgan had the three amigos for a taping here in Washington. It's going to air later tonight on "PIERS MORGAN TONIGHT," John McCain, Lindsey Graham, and Joe Lieberman.

Listen to this exchange on Susan Rice on whether or not if the president nominates her to be the next secretary of state, she should be confirmed.

(BEGIN VIDEO CLIP)

SENATOR JOE LIEBERMAN (I), CONNECTICUT: On this one, we were going to prove that the three amigos can disagree and still be amigos. Here's I would say about Susan Rice. I've been over all the intelligence that we had before she went on TV that Sunday morning.

I've been over her comments. I don't she's disqualified based on anything she said that morning. But the rest is up to the future and unfortunately I'll be watching it on TV.

SENATOR LINDSEY GRAHAM (R), SOUTH CAROLINA: Personally, I don't believe she would serve the country well in that capacity.

SENATOR JOHN MCCAIN (R), ARIZONA: I'm willing to give her the nomination process, but she's got a lot to prove.

(END VIDEO CLIP)

BLITZER: Hilary Rosen, from a strictly partisan Democratic political point of view, would it be wise for the president to pick this fight with two of those amigos and a whole bunch of other Republicans?

ROSEN: You know, it's a great question, Wolf. Here's -- I've heard some of my Republican friends saying, you know, why would the president nominate Susan Rice if it's just going to make she's guys mad?

But here are the facts. If the president has actually -- didn't nominate Ambassador Rice for that reason, we would essentially be giving in to a narrative for that reason, giving in to a narrative which is just false, which is that somehow the administration withheld the information or did the wrong thing in Libya, which they did not do, which Ambassador Rice did not do.

For John McCain and Lindsey Graham to go out and consistently turn this into an issue about Susan Rice I think says more about them than about her. They had their peak. Lindsey Graham has an election next year. He's worried about acting conservative.

John McCain is just, you know, acting bitter and wants to find issues to attack the president on. These two shall not rule on this issue. If the president needs to make a decision based on who he thinks will be the best secretary of state, but this issue I think about Libya and Susan Rice has gone way far enough. She doesn't have anything to prove.

BLITZER: Go ahead, Mary.

MATALIN: It's not about Libya. It's not about Benghazi, which we now know the facts are that the administration handled very, very badly. What Senator Lieberman said is right. This is not about a Sunday morning talk show.

It's not about whether or not Senators McCain and others are upset at the president. If you look at her U.N. record and, more importantly, her State Department record, then Secretary of State Madeline Albright was furious with her and called her back and put her on probation.

She has a terrible record among professional diplomats in the same -- I don't know if she was a terrible desk officer from Ethiopia to Rwanda, genocide, which is President Clinton says is one of his greatest regrets or mistakes, those were all on her desk and on her watch. If she did such a terrible job there, how can she be a secretary?

ROSEN: The Senate has had the opportunity for the last four years to rehash that old garbage that Mary is talking about. They have not done so now. They are talking about trumped-up charges and old regrets and on issues that, you know, would come out in a nomination hearing if she is nominated.

But I would just say, as an ambassador to the U.N., she's done an excellent job. She's served our country well and President Obama ought to be able to make the choice based on who he wants as secretary of state.

BLITZER: President Clinton has told me on several occasions, Mary and Hilary, his biggest regret as far as being a president on a policy issue is that he failed to do anything as far as Rwanda, the genocide that was going on Rwanda. He blames himself. He had the information in the oval office.

He knew what was going on. He made that decision not to intervene and 800,000 or so people were slaughtered as a result of that. I went with him to those countries in 1998. Susan Rice was on that trip as well. She was the assistant secretary of state for African affairs. He blames himself. We'll discuss this more on another occasion --

ROSEN: To retroactively turn that on Susan Rice is ridiculous.

BLITZER: That's a sensitive issue that obviously the former president of the United States knows very, very well. He knows what was going on.

Piers Morgan, by the way, is going to have the full interview with the three amigos later tonight, "PIERS MORGAN TONIGHT" at 9:00 p.m. Eastern. I think you're going to want to watch this important interview. Piers, by the way, is going to be joining us in our 6:00 p.m. Eastern hour as well.

The timing of today's protest in Cairo, no accident, Egyptians who both support and despise the government are venting their outrage on the streets of the capital ahead of a day that could decide Egypt's future.

(COMMERCIAL BREAK)

BLITZER: Thousands of people hit the streets of Cairo today both for and against the government. It's facing huge tests this week. Voters are deciding whether to approve a new constitution. That happens on Saturday.

Reza Sayah is joining us on the phone now from the Egyptian capitol. Huge crowds out there, what is going on, Reza?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (via telephone): Right now there are still some people outside the presidential palace, but the crowds are starting to thin out, Wolf. I think a lot of people are relieved that there were no clashes, no violence tonight because there was a potential for an ugly night.

That's because both of these sides of this conflict once again calls for mass demonstration. The opposition faction and opponent of President Morsy called for marches that culminated outside the presidential palace.

In about 15 minutes away from that location, there's the Muslim Brotherhood, supporters of the president who gathered in mass. The big question was, would these two sides clash like they did last week? It was an ugly scene last week outside the palace.

These two sides brawled it out, nearly 700 injured and several people killed. Thankfully tonight there was no violence. The opposition came out because they still reject the process by which the constitution was done.

They don't want the vote on Saturday. The president's supporters saying the best way to solve this conflict is to go out for the vote on the constitution on Saturday -- Wolf.

BLITZER: So that referendum will definitely take place on Saturday despite all of the protesters who wanted to be delayed or never wanted it to happen at all.

SAYAH: All indications are that this referendum is going to go on its plan and I think the opposition is looking to tomorrow. That's when the opposition leaders are scheduled to announce their decision whether they are going to take part in the referendum or not. If they come out and say yes, we'll take part, there's certainly the potential to diffuse this conflict. If they say no, if they continue to reject this process, certainly the conflict can go on.

BLITZER: Reza Sayah on the scene for us in Cairo, thanks very much.

Earlier this afternoon here in the United States, the U.S. Air Force launched a secretive new drone into space, we know what the X-37B looks like, but it's a mission that is shrouded in mystery.

CNN's John Zarrella is joining us now from Miami with more. What do we know, John?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, Wolf, it did launch this afternoon about 1:00 p.m. Eastern Time on top of an Atlas 5 rocket inside the faring there, the top third of that rocket is where the X- 37B was encased. It looks very much like a mini-space shuttle, about a quarter of the size of a space shuttle.

In fact, it was originally designed by NASA and was going to be flown inside of a space shuttle's cargo's base until it was taken over by the Defense department and then the Air force. Every time one of these things flies, two m them have flown before, one in 2010 and one in 2011, there is a huge amount of speculation that comes up.

People believe that one of the things they say is this thing could be an anti-satellite weapon, a weapon in space that could shoot down satellites. Others think it could be an on-demand satellite itself. In other words, the military needs to move a satellite into a specific area of the globe to get a quick look somewhere, this could do it.

The Air Force says none of that is true, that this vehicle is just an airborne platform. It flies about 200 miles up, orbits the earth, the same way that space shuttles did, but they are testing new technology, everything from command and control to avionics, the heat shielding, things that the Air Force says will be used in military applications but down the road.

The problem is, Wolf, a lot of those folks out there that are the conspiracy theorists are not buying it. They think that the X-37 is a lot more than that. In fact, the last one that flew, flew for 469 days, 15 months in space before it landed autonomously back at the Air Force base out in California -- Wolf.

BLITZER: We have no idea how long this one is going to stay up there?

ZARRELLA: None at all, Wolf. No idea if it's going to be a longer or shorter mission or what exactly. But you know, Wolf, there are a lot of countries around the world whose intelligence agencies sure would like to know about it as well.

BLITZER: So let the speculation continue, John Zarrella.

ZARRELLA: Exactly.

BLITZER: Thanks very much. At the top of the hour, by the way, we're getting new information on a missing American citizen in North Korea right now. But first, a lighter look at the day's news headlines.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Al Qaeda's number two man has been killed by an American drone in Pakistan, al Qaeda's number three men announced he's stepping down to spend more time with his family.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Politics provided no shortage of material for the late-night comics from the South Carolina Senate seat to the White House Christmas card. Anything was fair game.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: They love me in the Palmetto State because I love it. I love the beaches. I love the mountains. I love the beautiful old estates that have no negative historical connotation whatsoever.

Of course, not everybody is happy about my imminent appointment. They called me vastly overqualified and not as crazy as Senator Jim DeMint. What? I am as at least as crazy as Jim DeMint.

He wanted to ban gay teachers from the classroom. I want to ban teachers from the classroom with their knowledge agenda. I say let the free market decide what the atomic weight of carbon is.

UNIDENTIFIED MALE: Any fight fans? Did you watch the fight this weekend? Good God. Yes. That was crazy. Over the weekend, did you know this? Mitt Romney met Manny Pacquiao just for Pacquiao lost his boxing match to Juan Manuel Marquez. Yes. Afterwards Romney told Pacquiao, you lost for the same reason I did, young Hispanics.

UNIDENTIFIED MALE: The White House released their annual holiday card. It's a very realistic painting. It's Bo, the Obama family dog in front of the White House. The painting was done in black and white. It's based on a colored photo, which we have. That's the original photo. It was a little too colourful, very colorful. I think Bo might be getting into the Obama supply of Centrum.

UNIDENTIFIED MALE: It's hard to believe according to the Mayans in just 11 days we will all be dead. It's hard to believe. The Mayans have predicted that the world will come to an end on December 21st, which is a Friday. How much does that suck?

The world is ending on a Friday? End it on a Monday. At least you get the weekend, right? Got to work all day and then Friday, you're dead on Friday.

(END VIDEOTAPE) BLITZER: In our history, there's no mystery more enduring than the identity of Mona Lisa. Researchers in Florence, Italy are now trying to piece together the puzzle. That's easier said than done as CNN's Ben Wedeman found out.

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BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): The smile has perplexed art historians for centuries, Leonardo Da Vinci's priceless masterpiece, the Mona Lisa.

In the frigid bows of what was once a convent in Florence, television producer turned art researcher, Silvano Vinceti, is leading a project to find and identify the remains of the woman who posed for Da Vinci more than 500 years ago.

(on camera): Historical documents seem to indicate that this is the place where Lisa Gardini, otherwise known as Mona Lisa, was buried. Beyond that, it is all a mystery.

(voice-over): The remains of five females have been found here. The skull may be that of Lisa Gardini, the second wife of a wealthy Florence silk merchant. The remains will be compared with the DNA of two relatives buried elsewhere.

No other likeness of her has ever been found, and given that Da Vinci spent years working on the painting, it is possible the real Lisa Gardini bears no resemblance to the Mona Lisa.

Once we identify the remains, Vinceti tells me, we can reconstruct the face with the margin of error of 2 percent to 8 percent. By doing this, we'll finally be able to answer the question the art historians can't, who was the model for Leonardo?

The smile on the other hand will probably remain a mystery. Vinceti claims scientific analysis suggests the smile came later. When, he says, Leonardo began painting the model in front of him, he didn't draw that metaphysical ironic, poignant elusive smile, but rather he painted a person who was dark and depressed.

The smile, Vinceti and others have suggested, may belong to Da Vinci's long time assistant and some believe lover Giacamo. While other art historians claimed the painting was actually a surreptitious self- portrait.

So we may never know if the smile was, as Nat King Cole sang, to tempt a lover or simply to confound humanity. Ben Wedeman, CNN, Florence, Italy.

(END VIDEOTAPE)

BLITZER: And if you like to see a Da Vinci Mona Lisa painting, you will have to head to Paris where it's hanging at the museum.