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THE SITUATION ROOM

Budget Impasse; New Catholic Church Scandal?; British Cardinal Resigns; Scandals Distract from Pope's Good-bye; Dow Posts Worst Loss of the Year; Seth MacFarlane's Oscar Debut; What NASCAR's Doing To Keep Fans Safe; Pistorius Faces Random Drug Testing; Syrian Regime: We're Ready To Talk; Raul Castro To Retire In 2018; 101-Year-Old Marathoner Retires

Aired February 25, 2013 - 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: We're standing by to hear from the House speaker, John Boehner, and we're waiting for anyone here in Washington to suggest a real actual compromise that will avoid those devastating forced budget cuts.

It's one scandal after another, as Pope Benedict begins his final week as leader of the world's Roman Catholics.

Plus, a CNN exclusive: You will meet the real Americans whose rescue from Iran inspired the Oscar-winning movie "Argo."

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

We're only four days away from billions of dollars in forced budget cuts. This afternoon, members of Congress finally are back on Capitol Hill. President Obama, meanwhile, welcomed the nation's governors to the White House. But is anybody looking for a real compromise that will avoid the chaos scheduled to hit this Friday?

Our search for answers begins with our national political correspondent, Jim Acosta. He's over at the White House.

What's the latest, Jim?

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, if anything, both sides sound like they are digging in. The White House is accusing Republicans of putting schools and the health of young children at risk.

Meanwhile, the Republicans are accusing the Obama administration of trying to scare people.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Welcome, everybody.

ACOSTA (voice-over): Speaking to a meeting of the nation's governors, President Obama said if Congress wants to stop those forced spending cuts that start going into effect at the end of the week, lawmakers better do something about it. OBAMA: These cuts do not have to happen. Congress can turn them off any time with just a little bit of compromise.

ACOSTA: To get Congress in the spirit of compromise, the White House is warning what's about to be cut on a state by state level, 1,200 teacher and aide jobs at risk in California, 7,400 fewer children receiving vaccines in Florid, and 52,000 defense workers furloughed in Texas.

The president asked the press to leave a closed-door meeting with the governors, so he could have a frank question-and-answer session.

OBAMA: What I want to do is clear out the press so we can take some questions.

ACOSTA: And candid is what the president is getting from Louisiana's Governor Bobby Jindal.

GOV. BOBBY JINDAL (R), LOUISIANA: I think that the president needs to stop trying to scare the American people, that absolutely you can cut less than 3 percent without all these awful consequences.

ACOSTA: Just as Jindal wrapped up his remarks, Homeland Security Secretary Janet Napolitano suggested to reporters that the cuts could make the nation's borders vulnerable to terrorists.

JANET NAPOLITANO, U.S. HOMELAND SECURITY SECRETARY: I don't think we can make the same level of security at all places around the country with sequester.

ACOSTA (on camera): Can you just say right here for the record that you are not here just trying to scare people, that what you're saying has to happen is a necessity as a result of these cuts?

NAPOLITANO: Yes, I'm not here to scare people. I'm here to inform.

OBAMA: Line by line, page by page.

ACOSTA (voice-over): House Republicans released a Web video pointing out the president has repeatedly promised to comb through the federal budget to find smarter savings, while a pro-Obama super PAC pointed out in the its own video that Republicans signed off on the forced cuts.

REP. PAUL RYAN (R), WISCONSIN: We got that in law. We got that in law. We got that in law.

ACOSTA: Governor Jindal doesn't sound encouraged.

(on camera): A sense that these cuts are going to happen?

JINDAL: Well, look, as you heard many governors say, we still think there's time for this administration to come up with a sensible alternative. But for that to happen, for these cuts to be averted, the ball's in the president's court. (END VIDEOTAPE)

ACOSTA: But a top Republican Senate aide tells CNN to expect two different bills this week, one from the Democrats, one from the Republicans, and that there will be no filibuster at least on the GOP side, according to this Senate Republican aide and the White House is insisting that any delay to these cuts include new revenues or new tax increases. Wolf, the Republicans at this point just aren't going to go for that.

BLITZER: Hold on a minute, Jim. The House speaker, John Boehner, just started speaking to reporters on the Hill. I want to briefly listen to hear what he has to say.

(JOINED IN PROGRESS)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: ... before the Senate begins to do their work.

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: Good afternoon.

We heard the president say last week that he was going to be forced because of the sequestration to let criminals loose on the street if he didn't get another tax hike. Today, we're hearing discussions from the secretary of homeland security that somehow we're going to have to sacrifice homeland security efforts in keeping our country safe if we don't get another tax hike.

This is a false choice. And the president's been engaging in this rhetoric of a false choice for weeks now. As the speaker just indicated, we in the House have acted. There is a smarter and better way to go about trying to achieve the reductions in spending so we can get a control over the spending. And in the House, we even included measures that the president has proposed in his own budget.

But yet the president won't support even his own measures unless there's a tax increase. So the president really ought to stop campaigning and come back to the table and work with us. We care about what happens to this economy and the people who sent us here. We have proffered alternatives and solutions. We don't adhere or agree with this false choice the president's putting forward.

And as Cathy said, president's off campaigning in my state in Newport News, Virginia. Yes, we're very, very concerned about the impact on the commonwealth, as we are on all states. And there's a way to effect the right changes and reforms so we can avoid that. And we must set aside this false choice the president is proffering.

REP. KEVIN MCCARTHY (R-CA), MAJORITY WHIP: As the other leaders have said, the president's only...

(END LIVE PRESSER COVERAGE)

BLITZER: All right, so that's Kevin McCarthy right now. That was Eric Cantor, before that, the speaker. Doesn't look like they're putting forward a new initiative to try to break the stalemate. He's referring to legislation that members of the House, the majority, passed last -- in the last session of Congress. But that legislation is not -- does not spill over into this new session of Congress. If Congress is going to want to take up new legislation to avert this forced spending, they have to pass a bill this week. We didn't hear the Republican leadership say they were about to do anything along those lines.

They're waiting to hear from the president that they say as a result the stalemate continues right now.

Let's get some reaction from the White House, but no new initiative at least as far as we heard right now from the speaker or from the majority leader in the House of Representatives. We will see if they can come up with something that will be acceptable to the president to avoid these forced spending cuts, what's called sequestration. Much more on this story coming up in a little while.

But let's move on to some other news. We're going to take you out of Washington at least for a little bit. There's a situation that's now threatening millions of people. For the second week in a row, a blizzard is roaring into some of the Plains states and it's already bringing whiteout conditions to the Texas Panhandle and threatening parts of Kansas still digging out from last week's storm.

(WEATHER UPDATE)

CHAD MYERS, AMS METEOROLOGIST: Erin, you're going to get somewhere between 12 and 16 inches of snow before it's done. What are the people there doing to make this better or at least survive it?

ERIN MCPIKE, CNN CORRESPONDENT: Officials throughout the region are already closing schools and government offices. And a number of roads are already closed, Chad.

But the snowstorm is actually a mixed blessing to the region's big business, agriculture.

(BEGIN VIDEOTAPE)

MCPIKE (voice-over): The second major winter storm in under a week slams the Great Plains tonight. But farmers here aren't complaining.

NICK GUETTERMAN, KANSAS FARMER: The drought over the last two years has put our farm in survival mode. You get the feeling that, you know, it can rain or snow again. It does happen. So I get the feeling we are going in the right direction.

MCPIKE: This is the third straight year the nation's breadbasket is suffering from extreme drought. And crop production and the region's economy are down dramatically because of it, with $3 billion of losses here in Kansas in 2012.

Another problem, drinking water. Here at Hillsdale Lake, a major source of drinking water for Kansas City and surrounding areas, the water level is three-and-a-half feet lower than average.

JERRY BENNETT, WATER OFFICIAL: We're hoping that the snowstorm that we had and the upcoming snowstorm can provide us with some much needed water for the lake and help us in the future.

MCPIKE: The drought also hurts cattle ranchers who need feed and water for their herds. But the snow creates problems of a different sort, because it's calving season.

UNIDENTIFIED MALE: We got our first one this morning.

MCPIKE (on camera): This morning?

UNIDENTIFIED MALE: Yes.

MCPIKE: Are you worried about that new calf and the snow tonight and tomorrow?

UNIDENTIFIED MALE: Not that one. It's the ones that will be born during the blizzard. Probably going to lose a few. It's just part of it. We need moisture, but a rain in the spring would be a lot better than a foot of snow, you know. Rather deal with the water bill than a foot of snow and a blizzard.

(END VIDEOTAPE)

MCPIKE: Now, of course, this storm is a big nuisance for him and for cleanup crews, but, Chad, so many people we have talked to over the last week here say they're just thrilled to have any moisture at all -- Chad.

MYERS: No question about it, Erin. Thank you very much. Stay warm out there. It's going to be a cold blizzard as well.

Wolf, severe weather going on in the South as well on the other side of this storm, Louisiana and Texas, tornado watches tonight. That's the other side. Warm and cold. It's the warm side. We will watch those tornadoes for you.

BLITZER: And we will check back with you, Chad. Thanks very much. Thanks to Erin as well.

In Pope Benedict's last few days as head of the Catholic Church, he's dealing with two serious issues, including a cardinal resigning over a sex scandal. Our own Christiane Amanpour is in Rome. She will join us live.

Plus, several NASCAR fans injured in a wild crash. Coming up, we're getting new information now on what's being done to make sure this doesn't happen again.

(COMMERCIAL BREAK)

BLITZER: Pope Benedict XVI gives up the papacy this Thursday, but scandals are threatening to overwhelm his farewell ceremonies. Today, the pope issued an order speeding up the process of picking his successor by doing away with a 15- to 20-day wait before the cardinals meet to elect a new pope. The pontiff also met with three cardinals to discuss their secret report on leaks from his office which led to the arrest of his former butler.

And in another very damaging story, the Vatican accepted the resignation of the Scottish Cardinal Keith O'Brien. Over the weekend, unnamed priests accused him of, quote, "inappropriate acts."

Our senior international correspondent Matthew Chance is joining us now live in Edinburgh, Scotland, with the latest on this part of the story.

Matthew, what do we know?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Wolf, I'm standing outside the official residence of Cardinal Keith O'Brien here in Edinburgh in Scotland, where he's holed up inside, he's not giving any statements beyond the resignation statement he issued earlier today which was accepted by the Vatican. But this has emerged as one of those classic scandals that's been affecting the Vatican, the Roman Catholic Church, over the past several years. You saw it in the United States with the child sex scandal, where senior clerics in the church preach one way of living life but fail to live up to the high standards that they're setting for everybody else.

In this case, it was the cardinal, the archbishop of Scotland, the Cardinal Keith O'Brien, inside this building. But there have been other examples as well. But at the moment, the focus is very much on this cardinal, this archbishop.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): At evening mass, the faithful in Edinburgh have yet another scandal from which to be delivered. The resignation of Cardinal Keith O'Brien, one of Britain's most senior Roman Catholic clerics, has come as a shock.

UNIDENTIFIED FEMALE: It has shocked me greatly. It really has, because he looked like a really good, lovely upright man.

UNIDENTIFIED FEMALE: I'm obviously very sad for the, you know, what's happening in the church and the example it's giving, whether it's true or not, what has been said. It's obviously a very sad day for the church.

CHANCE: The sudden departure follows this newspaper report in which four priests, three current, one former, accused Cardinal O'Brien of having what they called inappropriate relations with them in the 1980s. The implication is of homosexual contact.

The cardinal denies the allegations. But his resignation letter reads, "For any good I have been able to do, I thank God. For any failures, I apologize to all whom I have offended." CHANCE (on camera): Well, here's the thing. Cardinal Keith O'Brien has been a vocal defender of church doctrine on homosexuality and same sex marriage, publicly rejecting them both. Supporters say he has voiced liberal views on the celibacy of priests, suggesting they should be allowed to marry women. But on the issue of gay rights, he's often come across as a hard-liner.

All the more surprising, then, that a scandal of this nature should end his career.

(voice-over): It's damaging for the Vatican, too, already mired in pedophile sex scandal, it's trying to shore up its reputation ahead of the papal election in march. Cardinal O'Brien had been preparing to vote in that conclave, recently speaking of his worries.

CARDINAL KEITH O'BRIEN, ARCHBISHOP OF SCOTLAND: I will respond as well as I possibly can to the will of God for me at this time and to the will of God for the Roman Catholic Church at this time.

CHANCE: But now, he won't be going to the Vatican at all. Preferring, he said, for attention to be focused on Pope Benedict and his successor, not on this scandal surrounding him at home.

(END VIDEOTAPE)

CHANCE: Well, even though the cardinal has resigned, he will maintain his title cardinal. He stays part of the church. He also retains his vote in the conclave if he wants to use it. But for the reasons we just mentioned, he has rejected that, saying he does not want any of that harsh media spotlight to be on him in Rome -- Wolf.

BLITZER: What a story that is. Matthew, thanks very much.

We're also watching reports in the Italian press, hinting at an emerging scandal involving gay priests, male prostitutes and blackmail.

Our chief international correspondent Christiane Amanpour is joining us now from Rome to discuss all of these distractions in the final days of the pope's tenure.

These leaks have been very, very embarrassing, very damaging. What do we know about what's going on, Christiane?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, standing here in front of St. Peter's, you can't help but think that really people are getting whiplash from this one scandal after another that's coming out, these final days of Pope Benedict XVI.

Now, regarding this so-called "Vatileak" scandal, what we do know is three senior cardinals have investigated this particular allegation, and today, they briefed Pope Benedict. Now, he has kept it to himself. He's the only person we're told outside these three cardinals who know what's in this. The press doesn't know, "La Repubblica" doesn't know, the newspaper who first broadcast this over the weekend doesn't know. And the pope said he's leaving it to his successor to deal with.

I spoke to a very senior Italian journalist, very plugged in, perhaps one the best journalists here, and a longtime Vatican watcher, who says he doesn't believe these reports. He does say there are plenty of other things that have gone wrong. Obviously, we know the pedophile priest scandal. We know about the financial improprieties. We know about the lack of governance and lack of accountability on all sorts of issues. But he does not believe these lurid allegations that the newspaper broadcast over the weekend -- Wolf.

BLITZER: We had heard, Christiane, that the pope decided to resign because he was getting old, he's, what, 85, 86 years old, that his health was not as good as it should be, but now all these suggestions that maybe all of these leaks, maybe all of these scandals, were contributing factors in his extraordinary decision to step down.

What do we -- what do we know about that?

AMANPOUR: Well, what we -- what we know, again, from this journalist and from others who I've spoken to is this particular scandal that was in the newspapers here we're told by the Vatican that that's got nothing to do with the pope's resignation. But most certainly these scandals regarding these crimes committed by pedophile priests against children over the decades swept all diocese just about in the United States, exploded throughout the Catholic Church here in Europe, that has taken a big toll on the pope we're told.

But also that his inability to govern in the way that he should have done in this regard according to a very close Vatican watcher is also an issue. He hasn't been able to really make this fully transparent and fully accountable, although he was the first pope to apologize for it, to account for it, to talk about it publicly. But it simply has not been dealt with to the full extend that many demand that it should be.

And we might add, you were talking with Matthew about Cardinal O'Brien -- now, if these allegations are true and he denies it, the cardinal, they involve senior and presumably adult priests we're told. Now, what's happened with Cardinal Mahony, the recently disgraced cardinal of Los Angeles, he was accused of shielding the abuse against children. And, of course, these crimes have been against children in the United States and here in Europe.

Now, he, though, is on his way, if not already here, fully expecting to take part in the election of the next pope, in the conclave, despite mounting petitions for him not to do so, Wolf.

BLITZER: Christiane's going to be there for us all week. We'll check back with you tomorrow. Christiane, thanks very much.

Up next, the very bad day on Wall Street, posting the biggest loss of the year. Our own Ali Velshi standing by live. He'll explain what happened.

(COMMERCIAL BREAK) BLITZER: A brutal day on Wall Street. The Dow posting its worst loss so far this year.

Let's bring in our chief business correspondent Ali Velshi.

Ali, what happened?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, I'm going to give my best try at what happened, something unexpected has happened.

As you can see in the beginning, of the day, the Dow was doing OK. We had a lot of news from around the world. New Bank of Japan governor going to be named. We had some news out of China. We had this news that a particular candidate was winning the elections in Italy.

And everything looked OK. There had been no developments on the -- on the forced budget cuts, as you know. So, no particular reason.

But the market started to drift down through the course of the day. And then suddenly, just in the last little while, look at the acceleration around 3:30 to 4:00. You know from our history together, Wolf, that this always worries me when you see heavy selling right at the end.

Now, here's what we're piecing together. We're making some phone calls trying to figure out from people who buy and sell stocks, what was going on.

And a picture is emerging that in the Italian elections, it does look like, while that candidate was thought to be winning the elections and still is, the Senate in Italy, there are more gains being made by Berlusconi. What that means is that there's a possibility that the two houses of parliament in Italy, may not be of the same party and there may be, you know, a balance of power problem. What that has done, the result of that is Italy, which is a massive bond market, they borrow a lot of money, the price to borrow money has shot up in Italy, and that has sent ripples around the world because we're all connected now, and the idea that Europe, which is starting to heal, may be in for a second leg of a crisis.

Italy is not Greece. Greece is the 32nd largest economy in the world. It is not even significant and look at the problems that it caused with its instability. Italy is a major, major economic force in Europe and around the world. So if Italy is having problems, those interest rates are going up, it's becoming much more expensive to borrow money. It's creating investor fears around the world. That is at the moment, Wolf, and we're still researching this, but at the moment, that is our best guess as to why we saw such a rapid turn.

We'll probably get a result for this election sometime overnight and get a sense of it. Markets around the world will get a chance to adjust.

I want to perspective though, Wolf, the Dow is up more than 5 percent for the year. Most 401ks are in funds that look like the S&P 500. It's up more than 4 percent for the year. So stock markets have been performing very, very strongly recently.

This is an anomaly. This is, by far, the biggest drop of the year so far, Wolf.

BLITZER: So this slide today has nothing really substantively to do with this forced spending cut crisis that's under way here in Washington?

VELSHI: You know, it's harder to tell today than it was 10 years ago exactly what drove markets. Up here when the markets were doing OK, we didn't think there was going to be a deal before Friday. And at this point, we didn't think there was going to be a deal.

So I'm not sure this would have been affected by that. But let me just tell you, we're up near highs for the Dow. Remember in 2007 the Dow was up in the high 14,000s. We're getting up there. As you get up to the top of the market, there are a lot of traders who work on the basis of technicals and when you hit certain levels they sell. A lot of volatility in this market.

So it's probably not one reason. It's a bunch of things that came together. Helped out by Italy causing this drop on the Dow, 216 point, Wolf.

BLITZER: Let's not forget in 2007, when it went up to 14,000- plus, the next year, it went down to 6,500. So it's around 14,000 now. We -- who has any idea where this market is going to wind up.

VELSHI: That's right.

BLITZER: It could be pretty volatile. Just be cautious, be careful with all of your money.

VELSHI: That's right.

BLITZER: Ali, thanks very much.

VELSHI: The first lady of the United States, Michelle Obama, finished the week on a high. She presented the Oscar for best picture in one of many recent TV appearances. Is the White House overexposing her? We're going to discuss that a lot more, coming up. Our Strategy Session is next.

(COMMERCIAL BREAK)

BLITZER: So can the White House and the Republican leadership in Congress see eye to eye before billions of dollars in those forced spending cuts kick in on Friday? Joining us now in our Strategy Session, two guests. Our CNN political contributor, the Democratic strategist Hilary Rosen and the former U.S. senator from Minnesota and former Romney foreign policy adviser Norm Coleman. Guys, thanks very much for coming in.

The speaker just met with reporters on the Hill. I'll play a little clip. This was his message.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Listen, hope springs eternal. The president can sit down with Harry Reid tonight and work with Senate Democrats who have the majority in the Senate to move a bill. It's time for them to act. I've made this clear for months now. And yet we've seen nothing.

(END VIDEO CLIP)

BLITZER: Now, he wants them, Senator, to move legislation that passed in the last Congress. The last Congress is irrelevant right now. You need new legislation in order to pass a bill.

NORM COLEMAN, FORMER MINNESOTA SENATOR: Wolf, what's not irrelevant is that last Congress, we had the tax increase. So now it's spending cut time. The president doesn't want to do the spending cut. We had the tax increase --

BLITZER: But right now, to avert this fiscal crisis we have right now, these forced spending cuts, you need a new bill. You can't use a bill from the old Congress.

COLEMAN: The president -- you know what, and I think Scott Walker, the Wisconsin governor, said it -- let the president come out and say, here's where we're going to cut $85 billion in spending. The bottom line, Wolf, is that president doesn't want to cut spending. It's $16 trillion in debt. He doesn't want to cut spending. If he cuts spending, we could solve this problem.

BLITZER: He does want to cut spending, but he also wants some tax increases. He wants to remove some exemptions, some loopholes to get more tax revenue. And the Republicans say we'll do that only as part of the grand bargain, including entitlement reform and tax reform. We're not doing it now.

HILARY ROSEN, CNN CONTRIBUTOR: Which the president has put on the table, a grand bargain, but the Congress does not want to do it. John Boehner had originally agreed to some $800 billion in loophole closings and other things. But now the House Republicans have refused to do it.

But I guess I have to say this, which is -- this back and forth of he said/he said, is just about the worst thing that they could do. I think the White House is making a mistake by trying to raise the temperature so much and, you know, bringing out the Homeland Security secretary to say, you know, terrorism efforts are going to be reduced. And, you know, John Boehner's out there saying nothing substantive. Just it's all the president's fault and they started the sequester.

I mean, really, there's really no reason why these guys can't try again to get together and --

BLITZER: They have four days. They're not going to reach a deal before Friday.

COLEMAN: They're not going to get it done, Wolf. ROSEN: Of course they will (ph).

COLEMAN: By the end of March, we've got to deal then with the budget again --

BLITZER: They could maybe reach a deal as part of what's called a continuing resolution -

COLEMAN: Yes, I think that's what -

BLITZER: -- to keep the government open. Some people are saying shut it down.

ROSEN: They could reach a deal to delay the sequester, which the president and the Democratic leadership are now calling for, and the Republicans have refused. It makes the most sense to do it. It would be the most sensible thing. I personally would love to see these Defense cuts. But other people, you know, would like to see some more balance there --

BLITZER: Let me move on and get your thoughts. You guys are good political observers right now. The first lady in the United States, Michelle Obama, we've seen a lot her lately. Take a look at this.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: There's so many different activities you can do indoors or outside.

(MUSIC PLAYING AND LAUGHTER)

OBAMA: And I hear that when Jay Leno retires -

(LAUGHTER)

JIMMY FALLON, LATE NIGHT TV HOST: Oh, yes, yes, yes --

OBAMA: -- that the Tonight Show position is going to be open, and I'm thinking about putting my hat in the ring.

And the Oscar goes to -

A little tired. If you noticed, I stayed up a little bit later.

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: She can really do the Dougie too. And she's good.

COLEMAN: At least it wasn't Gangham Style. That would've been -

(CROSSTALK)

BLITZER: Is this a little too much overexposure? What do you think? ROSEN: First lady is, you know, the most popular figure in the country. And I say bring it on. She's constantly promoting Let's Move. Last night even at the Oscars. Which, by the way, was the worst Oscar show ever --

BLITZER: You really liked it that much, huh?

ROSEN: I think she should be -- the worst part about the first lady, was she had to come at the end of this terrible show --

BLITZER: Did you watch the Oscars?

ROSEN: She had soldiers there with her. That was a thoughtful thing. She's constantly promoting her programs. And I think the American people like that.

COLEMAN: The fact is that the president, the first lady, owed Hollywood so much, Wolf. So much. For her to go on, I'm sure everyone was happy. I'm not going to criticize the first lady. She's very, very popular. And we'll leave it at that.

BLITZER: And she can dance. Jimmy Fallon might call it mom dancing --

ROSEN: You might give her some competition, but --

BLITZER: No. She does the Dougie a lot better than I ever did the Dougie. Guys, thanks very much. I loved Shirley Bassey, by the way, doing Goldfinger last night, by the way.

ROSEN: Shirley Bassey and Adele.

BLITZER: Yes. And Adele. Skyfall.

COLEMAN: I completely agree that Adele is superb.

BLITZER: And Barbra Streisand.

ROSEN: And Barbra Streisand.

BLITZER: Looked great, sounded great.

ROSEN: There's something wrong when the music is the best part of a show about film.

BLITZER: No, no, there's nothing wrong with that. I love the music. That was the best part.

ROSEN: That was the best part.

BLITZER: All right, guys, thank you.

ROSEN: By now, we all know the story of Argo but what really happened? In a CNN exclusive, our own Alina Cho sits down with the Americans featured in the film. That's next.

(COMMERCIAL BREAK)

BLITZER: The Oscar-award winning movie Argo tells the real-life story of the rescue operation that saved six Americans during the Iran hostage crisis. In a CNN exclusive, our own Alina Cho sat down with five of the U.S. consular's staff who was caught up in Iran's revolution.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP)

BEN AFFLECK (acting): What happened?

BRYAN CRANSON (acting): Six of the hostages went out a back exit.

AFFLECK: Where are they?

CRANSON: The Canadian ambassador's house.

(END VIDEO CLIP)

ALINA CHO, CNN CORRESPONDENT: In the movie Argo, Ben Affleck plays Tony Mendez, a real-life CIA operative who hatches a plan to rescue six Americans who elude capture during the Iranian revolution.

(BEGIN VIDEO CLIP)

AFFLECK: I got an idea. They're a Canadian film crew for a science fiction movie. I fly to Tehran. We all fly out together as the film crew.

(END VIDEO CLIP)

CHO: That fake science fiction movie is called Argo.

(BEGIN VIDEO CLIP)

ALAN ARKIN, ACTOR (acting): If I'm doing a fake movie, it's going to be a fake hit.

(END VIDEO CLIP)

CHO: These are the real embassy workers on which the film is based.

What did you first thought when you first saw it?

BOB ANDERS, FORMER CONSULAR OFFICER: It was more exciting than the real thing.

CHO: Bob Anders. Lee Schatz, Mark and Cora Lijek, Kathleen Stafford. Five of the six. The first time they've all sat down for a TV interview. The only one who couldn't be with us is Kathleen's husband, Joe, currently working for the State Department in the Sudan.

These were the actors -- ANDERS: yes.

CHO: Who played you. What do you think?

KATHLEEN STAFFORD, FORMER CONSULATE WORKER: Sure looks like Joe. Even got his little sweaters right. He used to wear these little sleeveless sweater vests back then.

CHO: They took me back to the day November 4th, 1979 when Iranian students climbed the wall and stormed the U.S. Embassy.

What went through your mind?

LEE SCHATZ FORMER AGRICULTURAL ATTACHE: This will only last for a little while before the government will come and stop this. And I just tried to keep my staff kind of calm and collected.

STAFFORD: I remember calling my mother after about the first 24, 48 hours and saying don't worry you'll see some things on the news, but I'm safe and I'll call you in a few days. Of course, I didn't call back for three months.

CHO: Seventy-nine days they hid from the Iranians in the homes of Canadian diplomats and came to be known as "the house guests."

STAFFORD: People would come to the house and we would go upstairs and hide. And at one point there were revolutionary guards posted outside the door.

CHO: Then on January 26th, 1980 --

SCHATZ: There's a knock on the door. I open the door, and there's two guys standing there in trench coats. And I said, really? Trench coats.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Have you gotten people out this way before?

AFFLECK: No. This is what I do, and I've never left anyone behind.

(END VIDEO CLIP)

CORA LIJEK, FORMER CONSULATE ASSISTANT: Tony is a very charming guy. Very convincing.

CHO: Did you trust him?

MARK LIJEK, FORMER CONSULAR OFFICER: We didn't have a whole lot of choice.

(LAUGHTER)

MARK LIJEK: I think if we said no thanks, just send in another infiltration tech expert. (LAUGHTER)

(BEGIN VIDEO CLIP)

UNIDENFITIED MALE: Do you think your little will make a difference when there's a gun to our heads?

AFFLECK: I think my little story is the only thing that's between you and a gun to your head.

(END VIDEO CLIP)

CHO: Movie spoiler alert, it worked. And once they cleared Iranian air space --

SCHATZ: We all ordered drinks, and I'm sure people on the plane if they wondered why there were these arms that went up as we made eye contact because we were sitting in different places. But we knew why.

CHO: Alina Cho, CNN, Washington.

(END VIDEOTAPE)

BLITZER: The former Canadian ambassador to Iran, Ken Taylor, he helped hide those Americans. He'll join us live right here in THE SITUATION ROOM during our 6:00 p.m. Eastern hour. Stand by for that.

The "Family Guy" creator Seth McFarlane made his Oscar hosting debut. The day after, the reviews are pouring in. So how did he do? CNN's Kyung Lah is joining us now from Los Angeles. Kyung, was McFarlane too edgy for the academy awards?

KYUNG LAH, CNN CORRESPONDENT: Wolf, it depends who you talk to. Some say this is exactly what they expected, but others say he was definitely too much for prime time.

(BEGIN VIDEOTAPE)

LAH (voice-over): Raunchy and rude.

SETH MACFARLANE, OSCAR HOST: "Django Unchained." This is the story of a man fighting to get back his woman who has been subjected to unthinkable violence or as Chris Brown and Rihanna call it a date movie.

LAH: Too much or just provocative enough for a primetime Oscar host? Take this bit with Ted, the talking teddy bear.

UNIDENTIFIED MLAE: What about you, you got a berg at the end of your name. Are you Jewish?

UNIDENTIFIED MALE: No, actually I'm Catholic.

UNIDENTIFIED MALE: Wrong answer, try again. You want to work in this town? LAH: It doesn't matter a cuddly bear is saying it. The Anti- Defamation League says the words came from humans and the impact is real.

KEN JACOBSON, DEPUTY NATIONAL DIRECTOR, ANTI-DEFAMATION LEAGUE: We live in a time of tremendous resurgence of anti-Semitism around the world. The Oscars is probably the American show that's watch worldwide. So to have billions of people hear this stuff that so many of them believe in the first place, which is the Jews are all powerful and poisonous and control things are coming from our own movie industry was very, very disturbing.

LAH: Outside of the Hollywood bubble, criticism was mixed across the board. On a night that featured so many female performers, the New Yorker called Macfarlane's jokes about actresses and the audience misogynistic awfulness. Calling some skits, hostility to women in the work place, but "The Boston Globe" was a little more forgiving calling him a little Howard Stern and a little Frank Sinatra.

MICHAEL MUSTO, "THE VILLAGE VOICE": Some of the jokes of the evening offended people, but I think that was the point.

LAH: "The Village Voice" says what the audience got was Seth Macfarlane and prime-time critics may not have been ready for it.

MUSTO: The Oscar audience perhaps wasn't ready and the critics weren't ready for going over the line and having someone up there who was willing to puncture pretensions, to push buttons. The ratings went up so obviously the public, as offended as they were, they kept watching till the end.

(END VIDEOTAPE)

LAH: Ratings were up double digits, 19 percent from last year, the highest, Wolf, since 2007.

BLITZER: People watched. Waiting for something to happen I guess. Thanks very much, Kyung, for that. We've just received a scary reminder, one the nation's most popular sports is very dangerous even if you're just watching.

Coming up what NASCAR is doing now to try to protect the spectators as well as the drivers.

(COMMERCIAL BREAK)

BLITZER: We all got a scary reminder over the weekend that sometimes simply watching a car race can be as dangerous as driving in it. Debris from a crash at Daytona injured at least 28 fans.

CNN's John Zarrella is in Daytona Beach right now. He has more on what NASCAR is going to be doing to try to keep the fans safe. What's going on, John?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, you know, Wolf, seven people remain in the hospital here in Daytona following that accident. And now concerns over fan's safety in the wake of the accident have re-emerged.

(BEGIN VIDEOTAPE)

ZARRELLA (voice-over): Simply put, terrifying, a car goes airborne, parts flying, the engine slamming into a retaining fence, a tire catapulted into the stands. A caller to 911 sounds desperate.

UNIDENTIFIED MALE: There's been a crash. These people -- it's serious. Sprint Tower, section zero, row 30.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: We need help, big time, quick.

ZARRELLA: More than two dozen people injured.

UNIDENTIFIED FEMALE: I got hit by an engine or a part of an engine and I got a broken leg.

ZARRELLA: That was on the last lap of Saturday's race at Daytona, but the crash did nothing to keep race fans away from Sunday's big event, the 500. Accidents, they say, go with the territory.

UNIDENTIFIED MALE: That's just the risk. It could happen at a baseball game, you know, hit with a bat, ball, whatever.

ZARELLA: But at nearly 200 miles per hour at times it's like high-speed bumper cars. Drivers assume the risk, but should the spectators?

UNIDENTIFIED MALE: Going to take this incident, try and find out everything we can, and use whatever information that comes from it to hopefully make ourselves better.

ZARRELLA: In the aftermath of the accident, there's a growing chorus within the sport, questioning that assumption. Ask the drivers --

UNIDENTIFIED MALE: We can't catch a break, but that just shows that we have to keep working on the sport and can't be satisfied.

ZARRELLA: The head of the Texas Motor Speedway --

UNIDENTIFIED MALE: Drivers, you know, they bargain for some of the risks that they take. But the fans, that's something you just can't tolerate.

ZARRELLA: By the time the 500 got under way, you couldn't tell there had been a crash. The 22-foot high catch fence at the impact point had been replaced. By all accounts, if not for the fence, the accident might have been catastrophic.

UNIDENTIFIED MALE: It kept the car on the racetrack. The parts and pieces fly into the stands, yes, they did. But the catch fence is to keep the majority of the car on the racetrack and out of the grandstands. So it did a fantastic job.

ZARRELLA: But still, there were injuries, some serious. Some victims still hospitalized. NASCAR will, experts say, go back and look at the crash second by second, piece by piece, a quick fix, perhaps raise the protective fence, move fans further away from the track.

But that would impact one of the attractions of auto racing, how close fans can get to the action. Sometimes, it's just too close.

(END VIDEOTAPE)

ZARRELLA: Now, next week, there's a race in Arizona and NASCAR officials say they have been in touch with track officials in Phoenix and they are sharing what they know at this point about how the accident here happened on Saturday -- Wolf.

BLITZER: John Zarrella from Daytona Beach, thanks very much.

Oscar Pistorius's bail conditions. You're going to find out what he has to do at least for a couple of months straight ahead.

With billions of dollars in federal budget cuts drawing closer and closer, will victims of Hurricane Sandy get hit the hardest? We're going to explore that in our next hour.

(COMMERCIAL BREAK)

BLITZER: South African authorities are keeping close tabs on Oscar Pistorius. Lisa Sylvester is monitoring that and some of the top stories in THE SITUATION ROOM right now. What's the latest, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf. South African officials saying the Olympic track star must undergo at least four random tests for drugs and alcohol in the next few months to make sure that he is complying with his bail terms. Pistorius is charged with fatally shooting his girlfriend, Reeva Steenkamp. He must check in with his probation officer twice a week.

And in other news, the Syrian regime says it is ready to talk with the country's armed rebels, but that's drawing skepticism from the U.S. and from the opposition. Secretary of State John Kerry says it's difficult to take the regime's offer seriously when it's dropping missiles on its own people. Rebel leaders say they will attend an international meeting on Syria scheduled for later this week in Rome.

Cuban leader Raul Castro says he will step down in 2018. He made that announcement after lawmakers re-elected him to a five-year second term. The 81-year-old Castro took over from his ailing older brother, Fidel Castro. Cuba's next leader likely will be this man, Miguel Diaz-Canel Bermudez. Lawmakers have selected the 52-year-old as first vice president. That puts him next in line for the presidency.

OK, how about this, for just inspiring your next workout. A 101-year-old marathon runner has wrapped up his running career the way he started it, with a race. He completed a 10-k in Hongkong over the weekend. He began running when he was 89 years young to overcome depression from the death of his son.

The great, great grandfather has completed nine marathons and has raised thousands of dollars for charity. Isn't that great though? He started running when he was 89 years old. Now 101, just completed a 10-K. So that's inspiration for you, Wolf.

BLITZER: That's amazing. It's a real inspiration. Thanks very much, Lisa.