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Talk But No Action As Cuts Loom; "We Are Abandoning Ship"; Yahoo Goes Low-Tech on Telecommuting; Iranian Fans Go Crazy for American Athlete

Aired February 25, 2013 - 17:00   ET

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


WOLF BLITZER, HOST: And you're in THE SITUATION ROOM.

Happening now, drastic forced budget cuts appearing more likely with each passing hour. Now a plan to try to ease the severity.

Also, Yahoo! !'s trail-blazing CEO dropping a bombshell on her employees, shaking up the tech industry's way of life.

Plus, the picture and the president -- how "Argo," the movie, may be changing Jimmy Carter's image a bit.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

In just for days, a significant budget ax will fall right here in Washington, but the impact will be felt all across the United States. We're talking about those $85 billion in forced spending cuts. Both Democrats and Republicans are talking about it, although neither side is apparently doing anything about it.

Here's President Obama's warning today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can't just cut our way to prosperity. Cutting alone is not an economic policy. We've got to make the tough, smart choices to cut what we don't need so that we can invest in things that we do need.

(END VIDEO CLIP)

OBAMA: House Speaker John Boehner says Democrats need to take action.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president says we have to have another tax increase in order to avoid the sequester. Well, Mr. President, you've got your tax increase. It's time to cut spending here in Washington. Instead of using our military men and women as campaign props, if the president was serious, he'd sit down with Harry Reid.

(END VIDEO CLIP)

BLITZER: Our chief Congressional correspondent, Dana Bash, is up on Capitol Hill -- Dana, you had a chance to meet with some top senators, including John Cornyn today. He tested out, I think, a new message.

What did he say?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's right. It was a small conversation that I and other reporters had with John Cornyn. And what he says, really, at first blush, defies Republican DNA because, Wolf, he says that he is going to press his Republican colleagues to argue that, in his perspective, when these forced cuts go into effect, that when it comes to defense, maybe it's not going to be as bad as the Pentagon and others are warning, because he says that Republicans should argue that overall, defense spending is still on the rise.

Now, Cornyn admits that this is even a change for him. He said that he would listen to Leon Panetta and others say that these across the board spending cuts would be devastating. But he says he looked into it and that he's decided that the best message for himself and for other Republicans -- and, of course, this is the number two Senate Republican -- is to say you know what, maybe it's not going to be that bad.

But, as you well know, Wolf, arguing that any cuts in military spending is anathema to most Republicans. So I would imagine he's going to be -- get some backlash on that messaging when he talks to Republicans about it tomorrow.

BLITZER: I think you're probably right.

When it comes to the GOP legislation to prevent the negative impact from the sequester, what are you hearing?

What's going on?

BASH: What's going on right now is there is sort of the leading idea among Senate Republicans for a proposal that they will probably vote on this week is to give the president flexibility with these forced spending cuts. And why this is important is because the way this law was written is intentionally indiscriminate. And so across the board cuts mean across the board cuts.

So, for example, Wolf, if the Pentagon wanted to save a ship building program by taking money away from maintaining a golf course, they couldn't do that, because that's just not the way it's written. So the idea is to, again, give the president flexibility to save and to alleviate some of the most intense cuts.

The thing that Republicans have not agreed on internally yet is whether that would just be on defense or across the board. And the reason why that is important is because we are told that if they say the president could have flexibility across the board, it could lure some conservative Democrats who are up for re-election. Self- preservation is important and they want to be able to say that they voted on everything possible and it's the president's problem, not mine, even Democrats. This is -- it's come down to a political fight for the -- of the fittest.

BLITZER: Well, four days to go.

Dana, thanks very much.

Let's take a little bit closer look at the money right now. Last year -- last year, not this year -- last year, budget spending came in at around $3.5 trillion. Almost two-thirds of that, though, can't be touched by these forced budget cuts, things like Medicare, Social Security, interest payments. So the looming cut would come from -- at least in the last year's budget -- about $1.3 trillion in what's called discretionary spending, domestic and defense spending.

When you slash $85 billion from that, we wind up with about a 7 percent cut from that so-called discretionary spending, which is obviously a lot more than 2 percent or 2.5 percent. This year's budget, by the way, is $3.8 trillion, almost $4 trillion, which is more than it was last year.

So let's dig a little bit deeper into these numbers, what's going on.

Joining us, our chief national correspondent, John King; our CNN contributor, Ryan Lizza, he's the Washington correspondent for the "New Yorker" magazine; and our chief political analyst, Gloria Borger. She's joining us today from New York -- Gloria, when you hear that it really is much more significant different from the so-called discretionary spending, it could have a real bite.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes, I think it could have a real bite. Of course, as you know, Wolf, it wouldn't take effect immediately. It would take effect gradually. But I think what Dana Bash just pointed out is the key here, which is that this is a meat ax. And that's the real problem, because you don't have any discretion about where to cut and how to cut and who to cut. So, you know, this is no way to run a country. And it's no way to make budget decisions. And that's why these guys ought to get together and fix this before March 1, if that's at all possible.

BLITZER: Do you think it's possible, John, before March 1 --

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: No --

BLITZER: -- to get a deal?

What -- forget about a complete deal --

KING: Yes.

BLITZER: To -- for the legislation to pass the House and Senate, which would give the administration, including the president, obviously, some flexibility in how to come up with this $85 billion --

KING: Is it possible?

Absolutely.

(LAUGHTER)

KING: Are these guys going to do it?

Probably not. The Republicans say they won't come forward with flexibility plans. They believe the Democrats will actually try to block them, because there's a -- unfortunately for the American people watching right now, this is, at the moment, a cat and mouse game over blame, not about avoiding these cuts. Both sides actually have in the back of their mind that these cuts are going forward.

Now, they also have in their mind, Wolf, that they're only going forward for a matter of a couple of weeks because, as you know, forgive me, folks, sequester is a fancy word for forced budget cuts, or children at play, as I like to say. Then they have to pass what's called a continuing resolution. That's because the country doesn't have a budget, so they have to pass a continuing resolution, which is funding authority for the president.

Somewhere in there, Republicans say they will try again and they will pass a continuing resolution a few weeks down the line that gives the president that discretion. So, again, the president can tell agencies, move the money around. The Republicans think that's how it will play out in a couple of weeks.

The question is, if the cuts kick in on Friday, how much is the pain and where's the political blame in that period?

BLITZER: You need that continuing resolution, Ryan, that CR, as it's called, to keep the government in business, otherwise --

RYAN LIZZA, CNN CONTRIBUTOR: Yes.

BLITZER: -- there's a shut down. And some of us remember what happened in the mid-90s.

LIZZA: Yes, we're going to be back here talking about three dates. We've got the sequester cuts coming. We've got the continuing resolution running out.

KING: Right.

LIZZA: And then, again, we have the debt ceiling coming later in the spring. So it's (INAUDIBLE) --

BLITZER: I get a headache just thinking about all of that.

LIZZA: Yes, absolutely. You know, there are two things. There's one -- the one question is, can the government handle the cuts?

Can agencies actually, you know, can the traffic -- air traffic controllers cut 7 percent from their budgets?

And we don't know the answer to that. A lot of doom and gloom out there that says, no, this is going to be catastrophic. Maybe they can handle it.

The other question is, can the economy handle sucking $85 billion out of the economy this year?

The Congressional Budget Office says that's going to cost us 750,000 jobs. So in a soft economy, that's the other big issue. That was the other reason the sequester was supposed to be so odious to the politicians is it didn't just cut it like a scalpel, it did it all at once rather than --

BORGER: You know --

LIZZA: -- over a longer period of time.

BLITZER: Go ahead, Gloria.

BORGER: -- you know, Wolf, it just seems to me that it all depends what the default setting is, what you're going to go back to, OK?

So when the fiscal cliff was hanging over their heads, that meant, uh-oh, Americans were going to get tax increases. That couldn't happen.

When the debt ceiling was hanging over their heads, that meant, uh-oh, the full faith and credit of the United States government was hanging over their heads. We had to be able to pay our bills. That couldn't happen.

What's hanging over their heads now?

First of all, this is not a natural disaster. This is a manmade disaster, which they all made.

And what's hanging over their heads?

Budget cuts, which, by the way, a lot of Democrats like to see those big budget cuts on the Pentagon and a lot of Republicans would like to see those budget cuts on some domestic spending.

So what's hanging over their heads right now is not as awful as the last couple of times we went around this. And so I think that's why John's right.

BLITZER: That's why the --

BORGER: That's why they're going to end up having --

(CROSSTALK)

BORGER: -- this problem.

KING: How about pride?

How about that hanging over their heads, so that they can go home and tell their constituents -- BORGER: At this point?

KING: -- that they work in a government --

BORGER: Yes.

KING: -- that at least can do its most basic function and pass a budget?

BORGER: Right.

KING: That they work in a government and not a circus.

How about pride in that?

BLITZER: That would be pretty good if they could do it.

You know, you saw the article that Bob Woodward, the journalist, had in "The Washington Post" this weekend --

KING: Yes.

BLITZER: -- saying the president, in effect, is moving the goal posts on the $85 billion. He wrote, among other things, "So when the president asks that a substitute for the sequester include not just spending cuts, but also new revenue -- that means taxes -- he is moving the goal posts. His call for a balanced approach is reasonable and he makes a strong case that those in the top income brackets could and should pay more. But that was not the deal he made."

LIZZA: Yes.

BLITZER: Was that the deal he made --

LIZZA: Look --

BLITZER: -- that the $85 billion could not include any additional tax revenue?

LIZZA: Look, the way I look at this is you actually have to step even further back.

How did they get into the sequester negotiations?

How did they get into the position where Republicans were demanding this trigger that, you're right, the White House did eventually come up with?

It was the failure of the grand bargain, right?

And, you know, I have a piece this week out about Eric Cantor. And I asked him, I said is it true that you talked John Boehner out of consummating that deal with the president of the United States? And he said, yes, that was a fair assessment.

And that's where everything flows. All the budget crises that have gripped Washington since 2011, they flow from the failure of that grand bargain, because Boehner couldn't sell the deal to the most conservative members in the House.

KING: Right.

BORGER: Yes, but you know, even, Ryan --

LIZZA: And that's --

BORGER: -- even when they were negotiating --

(CROSSTALK)

BORGER: -- even when they were negotiating that grand bargain, there was a charge that President Obama, at the time, moved the goal posts --

LIZZA: Yes.

BORGER: -- and that the reason that it didn't succeed was because he wanted to add more tax increases to that. So these are charges --

LIZZA: Yes.

BORGER: -- excuse the expression, that these little boys have been throwing back and forth --

LIZZA: You're not talking about me and John?

BORGER: -- and back and forth. I'm not talking about you guys, but that they have been engaging in for years. And at a certain point, we have to say, you know what, I don't care whose idea this was first and I don't care who moved the goal posts or who didn't move the goal posts, what I believe is that this is no way to run our country, period.

BLITZER: All right, we're going to keep your guys.

Don't go away.

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.

Here's a question we've been asking, is the White House overexposing her?

We'll talk about that. That's coming up.

Also, Americans in Iran building bridges through wrestling. It's a CNN exclusive report. Stand by for that. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What you're looking at is Iranian fans right now chasing after Jordan Burroughs like he's a rock star, and the entire USA team, as they get on the bus.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: We're back with John King; also, Ryan Lizza and Gloria Borger from New York.

The first lady of the United States, she had this to say last night.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: And now, for the moment we have all been waiting for. And the Oscar goes to --

(DRUM ROLL)

OBAMA: "Argo."

(CHEERING AND APPLAUSE)

OBAMA: Congratulations.

(END VIDEO CLIP)

BLITZER: Gloria, I think you got to admit, she looked fabulous last night.

BORGER: She did.

BLITZER: The dress, the bangs, the whole nine yards. She did an excellent job. This was like a covert operation. No one knew apparently except for Harvey Weinstein that she was going to be doing this.

BORGER: Yes. Maybe the president of the United States knew. What do you think, Wolf?

BLITZER: Maybe he knew.

BORGER: Yes. I think so. Look, there were lots of movies this year that the White House really wanted to celebrate. "Lincoln" being one of them, "Argo" being, believe it or not, a time when government worked, when, you know, a covert operation worked. And so, I think it was sort of a neat idea for them to do this.

And of course, she looked fabulous and stayed up a little later than she normally stays up, because she gets up at like, what, 5:00 in the morning to exercise, just to make us all feel terrible about how we don't do that. (LAUGHTER)

BORGER: Yes.

BLITZER: Are we seeing too much of her? I think we're seeing a lot more of her now, correct me if I'm wrong, John, than we did, let's say, the first term.

KING: Well, part of it is that she's much more comfortable now. And you'll see in the second term, there's no election ahead. So, she's free to be more herself. She's free to be more out there. There's always a debate, are you over exposing the president? Are you overexposing the first lady?

If she gets deeply into policy, I think then you might see some risk. Let's see what she tries to carve out in the second term. This is her chance, too, to improve a legacy, if you will. But look, she's the most popular person. Nothing against the president. He's around 50 percent, a little higher than thatt.

She's more popular than that. Myself watching, I thought her dress was fabulous. I was just happy to see a fellow member of Red Sox nation get that trophy.

(LAUGHTER)

RYAN LIZZA, CNN CONTRIBUTOR: A lot of -- I was surprised, a lot of conservatives thought this was inappropriate.

BLITZER: Why would it be inappropriate?

LIZZA: Well, a lot of conservatives -- Republicans were arguing it was inappropriate for the White House to -- someone political to be injected into the Oscars. It was one of those classic --

BLITZER: There are so many political movies --

BORGER: Oh, wait, the Oscars --

(CROSSTALK)

LIZZA: -- thought this was no problem. A bunch of -- a lot of Republicans, at least in my Twitter feed thought, you know, they didn't like this. I think maybe I'm reading too much into this, but I think the Obamas in the second term, they're not facing re-election, they're a little bit more uninhibited about doing these kinds of things and not having to worry about the immediate political implications.

You know, the president goes and golfs with Tiger Woods or they go out to a kind of fancy restaurant in Washington. And they just -- I think in the first term, there's much more sensitivity to the political implications of --

BLITZER: And every second term, when we covered, Bill Clinton, the first term was one thing, second term, another thing. George W. Bush, second term, Gloria, pick it up. You're a lot more free to do stuff that you really want to do.

BORGER: You are. But I'm also surprised at people being shocked that politics is being injected into the Oscars.

(LAUGHTER)

BORGER: I think the Oscars are pretty political. And, I think these movies were pretty political. And I think it was a statement coming from the White House. And yes, I think they're going to be more integrated in our culture, and she is more relaxed and why not and, you know, I think the question that lots of conservatives were asking that I saw is, would Hollywood have invited Laura Bush?

Would Hollywood have invited Barbara Bush? Would Hollywood -- I believe that Hollywood probably would have invited Nancy Reagan if they could have thought of it.

LIZZA: And others might make the point that, look, in Washington, gun control's a big issue right now, and there's a lot bashing of Hollywood right now over gun control. What is the White House's position on that right now?

KING: And let the first lady have some fun. She's entitled to have some fun. Now, let's see if Washington can do its business. The one thing she can't get involved in is the sequester negotiations, forgive me if using that term again. You know, she can have more fun with the second term.

LIZZA: Maybe she makes a progress.

(CROSSTALK)

BLITZER: She was great dancing with Jimmy Fallon Friday night, if you saw that. If you didn't see it, you should go and take a look. She can really dance. Mom dancing as Jimmy Fallon --

LIZZA: Mom dance.

KING: I have no dancing ability so I could not judge on that one.

BLITZER: All right, guys, thanks very, very much.

All right. This just coming in to CNN. We've confirmed that the former surgeon general of the United States C. Everett Koop has died. He was well known for his campaign against cigarette smoking and his first official to call for a smoke free nation. He was also known for speaking frankly on the subject of AIDS. Before becoming the nation's top health official, he was a pioneer in the field of pediatric surgery.

According to a statement from Dartmouth College, Koop died peacefully in his home in New Hampshire today. He was 96 years old. C. Everett Koop has passed away.

A frantic search is under way off the coast of California for a couple and two young children missing since their sailboat started taking on water yesterday. We're going to hear their mayday call. That's coming up next.

(COMMERCIAL BREAK)

BLITZER: A chilling final radio call and now a desperate search for a family of four missing in the frigid waters off San Francisco. CNN's Dan Simon is on the scene for us. He's working the story. What's the latest on this missing family, Dan?

DAN SIMON, CNN CORRESPONDENT: Well, hi, Wolf. The search is still ongoing. We're talking about a missing husband, his wife, their four-year-old son and his cousin. At this point, we don't have any more information about their identities because, at this point, no one has filed a missing person's report.

(BEGIN VIDEOTAPE)

SIMON (voice-over): They were sailing in a boat like this one, a 29-footer. At around 4:30 Sunday afternoon, the vessel operator radioed the Coast Guard to say it had taken on water and they were in trouble. An hour later, he radioed this, "We've looped the short audio for clarity."

UNIDENTIFIED MALE: Coast Guard, Coast Guard, we are abandoning ship. This is the Charmblow, we are abandoning ship. Coast Guard, Coast Guard, we are abandoning ship. This is the Charmblow, we are abandoning ship.

PETTY OFFICER PAM BOEHLAND, U.S. COAST GUARD: He sounded relatively calm considering the fact that they were taking on water and they had the children on board. He sounded like -- he wasn't -- panic hadn't set in.

SIMON: Crews from here in San Francisco are searching for the group off the coast of Monterey, about a 100 miles south of here. We're told it's a husband, wife, their four-year-old son and his cousin. Water temperature probably not much above 50 degrees.

BOEHLAND: They had a radio on board which was good for them to be able to contact us so we could start the search. But, they didn't have a life raft. So, they had to improvise.

SIMON: Where the family was heading and why they ignored warnings of rough seas remains a mystery.

BOEHLAND: Their electronics failed. Their GPS failed. And, they decided that it was best to abandon ship.

(END VIDEOTAPE)

SIMON (on-camera): So, we don't know if this was some kind of leisure outing or an extended trip. But despite the fact that these waters are very frigid and it would be difficult for anyone to survive, let alone children, they're still out there searching right now, Wolf. Back to you. BLITZER: All right. Dan, thanks very much. We'll stay on top of this story.

Across the Midwest right now, a blizzard is going from bad to worse. We're now getting a new report that people are trapped in their cars. Let's go quickly to our severe weather expert, Chad Myers, for an update. What's going on, Chad.

CHAD MYERS, AMS METEOROLOGIST: It's happening all across the Texas and Oklahoma panhandle, Wolf. People now stranded in their cars and with the winds blowing at 50 and 60 miles per hour and five-foot drifts, even some of the snowplows that are going out to get those people, the emergency responders are also getting stuck. For a while today, all of the plows were pulled off the roads in the Texas panhandle around Amarillo.

It was just too dangerous. The snowplow operators couldn't even see the roadways. They were actually driving off the road, getting themselves in trouble. Now, that snow has moved into Woodward and is almost to Stillwater, West Oklahoma City. It's going to be a brutal night with winds coming down like this, 30 to 50 miles per hour, blowing that snow in all directions and making huge drifts and putting people in danger if you're out driving.

Amarillo, Texas today, the weather service office said do not travel. That was the forecast. And literally, they were very serious about this. And now, where to Wichita and Hutchinson also down into the I-35 corridor here into parts of Oklahoma. Blizzard warning now for Oklahoma City proper. It's coming to you.

State of emergency for Oklahoma County. You need to be off those roads before it starts. You can't be stuck out there because the emergency responders are not getting to people, Wolf.

BLITZER: Listen to Chad. He's got good advice for all of our viewers. Thank you, Chad.

A story of the Iran hostage crisis takes the big prize at the Oscars, but the story continues for some hostages who didn't escape. Now, they want Iran to pay. We're going to hear from some of them. That's next.

(COMMERCIAL BREAK)

BLITZER: "Argo," which won the Academy Award for best picture last night is the story of a mission to rescue six Americans during the Iran hostage crisis. But 52 other Americans endured more than a year in captivity. And for some of them, the story still, still is not over.

CNN's Brian Todd is joining us now with more on this part of the story. What's going on?

BRIAN TODD, CNN CORRESPONDENT: Wolf, some former American hostages are now trying to compensation from fines to American companies. Fines that were levied to those companies for breaking the trade embargo against Iran. One former hostage told me that he thought "Argo" was a great movie, but he and many others say their story their story, their own story, was much different.

(BEGIN VIDEOTAPE)

TODD: It's now celebrated as the stuff of movie legend. Depicted in the best picture Oscar winning movie "Argo," a risky scheme to get six Americans pretending to be a Canadian film crew out of pos- revolution Iran.

BEN AFFLECK, ACTOR (acting): The only way out of that city is the airport. You build new cover identities for them, you send in a Moses (ph), he takes them out on a commercial flight.

TODD: But that's not how it worked for Steven Lauterbach. This is somewhat that blighted period of American history was like for him.

STEVEN LAUTERBACH, FORMER HOSTAGE IN IRAN: I had a drinking glass which was of glass, it had the embassy seal on it. I broke it, and I slashed both wrists.

TODD: Lauterbach was one of 52 Americans who never got the chance to escape. They were held hostage for 444 days by the Iranian regime, inside the U.S. embassy and at Iran's most notorious prisons. Lauterbach says he slit his wrists to try to get out of solitairy confinement. It worked. But since he and the other hostages were released in January of 1981, Lauterbach's had other problems.

What have you gone through?

LAUTERBACH: It's never really behind you. I've had various nightmares. My most frequent nightmare, somehow the agreement has been aggregated, and we're going back to captivity. I get feelings of sort of panic and claustrophobia sometimes.

TODD: Lauterbach and other former hostages had sought compensation from Iran for their ordeal. A little over $4 million each.

TOM LANKFORD, ATTORNEY FOR FORMER HOSTAGES: They were run into trees. They were beaten. They played Russian roulette with them. They stood them up and mocked firing squads.

TODD: For years, the hostages tried to sue the Iranian government. But under the terms of the Algiers accord, the negotiations between the U.S. and Iran that got them released, they weren't allowed to. Members Congress tried to help. But they could never get U.S. courts or the State Department to agree to move around those accords. Even though the hostages contend that deal was made with a gun to America's head.

(voice-over): Now they're trying to get money from fines collected from companies that violate the trade embargo against Iran. Former hostage Phil Ward, who was a CIA agent in Tehran in 1979, won't see any of it. LANKFORD: He became alcoholic. He became estranged from his community and even his family. And on October 22nd, he took his own life.

(END VIDEOTAPE)

TODD: Attorney Tom Lankford is trying to get compensation for Ward's relatives. He points out that other Americans who were held hostage under different circumstances did win reparations from Iran. Like Terry Anderson who was held for several years by Iran's proxy in Lebanon, Hezbollah.

The State Department says it is grateful to the hostages and expresses sympathy for their suffering, but it says a key condition of their release was they could not sue Iran in U.S. courts. And according to the State Department, quote, "We are bound by this commitment and must continue to honor it." Wolf.

BLITZER: What's been the reaction, Brian, from Iran, to "Argo's" winning the best picture award?

TODD: They're not taking it well right now. Iran's Culture and Islamic Guidance minister -- that's his title, quoted by a government news agency here as saying "'Argo'" quote "lacks any artistic aspects." He says it's an anti-Iranian film. And one government news agency says the fact that Michelle Obama announced the winner speaks to the politicalization of this movie. They're now saying it's a politically motivated film.

BLITZER: That's what they're saying. Thanks very much, Brian, for that.

WOLF BLITZER, HOST: "Argo" is certainly putting a spotlight, and possibly a new bit of light, on the Jimmy Carter presidency.

Doug Brinkley is a presidential historian.

And he's joining us from Austin, Texas right now.

Doug, thanks very much for coming in.

You've written an intriguing piece suggesting that maybe this film, "Argo," is going to be a little revisionist history for the former president of the United States.

Why do you say that?

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Well, first off, as he's getting near 90, he's already a Nobel Peace Prize winner. I think people are starting to just like Jimmy Carter. He was on CNN last week and did a, I thought, a brilliant interview with you guys.

But when you look at the Iran hostage crisis, I mean Carter eventually negotiated the release of all of those hostages. It cost his political reelection. He could have bombed Tehran during it maybe gotten himself reelected, but he -- he didn't. And sometimes we have to learn to judge presidents for what they don't do. He didn't get us into a war in Iran. Look what happened with George W. Bush and Iraq. It didn't turn out so well for the country.

But beyond that in the article, I talk about the Panama Canal doubling its size. That was Carter doing it. He was the one who recognized the People's Republic of China, created a friendship with Deng Xiaoping, who we're all -- we're all beneficiaries of today, and particularly on environment and energy, I think, Carter is looking better and better.

BLITZER: And he also achieved the Camp David Accords peace between Israel and Egypt, a peace which is a cold peace but still in business all these years later.

But at the same time -- and you know this well -- there was, what, 444 days of Americans being held hostage in Iran. There was high inflation, very high interest rates. People were deeply worried about their savings and a lot of folks remembered that, looking at that 1980 election, which he lost to Ron -- to Ronald Reagan.

BRINKLEY: Well, that's right. I mean nobody's pining for the Carter days. And certainly, I mean he didn't control his own party. He had Scoop Jackson, Democrats, hawks abandoning Carter and Teddy Kennedy liberals abandoning him.

But what we can do is start looking at what it was like in his one term, just like we're going to have a revision with President 41 -- see, Carter did some great things.

In Alaska and our National Park Service, you know, Carter doubled the size of the national parks. And he saved all these great wilderness areas. While it may not seem that big to you now, but about 50 years from now, when the rain forests are dead and the -- and so much of the world has been ruined, saving all this park -- bits of wild America will look like a greater achievement.

Only Theodore Roosevelt and FDR was a better conservation president than Jimmy Carter.

BLITZER: How much would pop culture have an impact on some revisionism as far as Jimmy Carter is concerned, for example, the film "Argo?"

BRINKLEY: I think it's helpful because it's put -- it shows that film. I think the Clinton administration was trying desperately to get rid of those hostages and they were always between a rock and a hard place. I mean when you had the famous rescue, we were one helicopter short and it didn't happen well. It became -- "The New Republic" called it the demi -- Jimmy Carter Desert Classic. It was a disaster.

But Carter worked nonstop trying to get those hostages out.

And you know what? They're alive today. They have grandkids and they -- Carter saved all of their lives. And so we can honor, at least, the fact that he was trying to work those for 44. But it was a political disaster for him. It cost him reelection.

BLITZER: So what you're basically saying is as time goes on and years continue to fade away, we're going to have a -- a little bit better recollection of Jimmy Carter, sort of the way Harry Truman, contemporaneously, he was -- he was criticized, but over time, he looked pretty good?

BRINKLEY: Because Carter's integrity is always there. And nobody -- he's an honest man. And that's going to make him look good. His post-presidential work has been amazing.

But I think, you know, when he put solar panels on the White House, that seemed quite flaky. And Ronald Reagan ripped them all down and we all laughed at Jimmy Carter.

But we're now constantly talking about all solar and wind and alternatives. And Carter was talking about that in a very sophisticated way, a long time ago, 40 years ago. He wanted to make alternative energy our new moon shot. We didn't do it.

So when his -- environmental historians and the like will start looking at this and saying, you know what, Carter didn't have political -- no -- didn't have -- know how to lead. He wasn't a great leader, but he had some very important ideas for our country. And I think Carter sometimes overstates things wrongly about the Middle East. I disagree with his views, often. But he's always intriguing, interesting to listen to. And people are starting to appreciate that as heading in -- into age 90.

BLITZER: And that was an excellent interview that Piers Morgan did with Jimmy Carter the other day, as well --

BRINKLEY: Indeed.

BLITZER: -- right here on CNN.

Doug Brinkley, always good to have you in THE SITUATION ROOM.

Thanks.

BRINKLEY: Thanks, Wolf.

BLITZER: By the way, tonight, Piers will take a closer look at the film "Argo," all the winner, the losers, from Hollywood's big night. PIERS MORGAN TONIGHT, 9:00 p.m. Eastern, only here on CNN. Looking forward to that.

Just ahead, billions of dollars in Sandy relief money now being threatened by those looming forced budget cuts. We're going to talk to people who say they're paying the price for all the partisan bickering right here in Washington.

(COMMERCIAL BREAK)

BLITZER: With those broad federal budget cuts looming by Friday, some of those who could be hit are victims of Hurricane Sandy. I'm joined now by CNN's Mary Snow. She's joining us from Seabright, New Jersey. What kind of cuts are we talking about specifically impacting those victims?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, billions of dollars are at stake in that $60 billion aid package that was just passed by Congress last month. And for communities like this one, struggling to rebuild, they're counting on all the money they can get.

(BEGIN VIDEOTAPE)

BRIAN GEORGE, SMALL BUSINESS OWNER: The river's right there. So it blew out here.

SNOW: The business that took Brian George two decades to build was washed away in just minutes by Superstorm Sandy. Still, he remains an optimist. And that optimism extends to those Washington lawmakers who control the fate of forced spending cuts. They don't reach a compromise later this week, up to $3 billion in Sandy relief money would be threatened.

GEORGE: If they have half a brain, they'll understand the need. And they won't get bogged down with politics.

SNOW: And if they do get bogged down with politics?

GEORGE: Well, it's a sin. Bottom line, it's a sin.

SNOW: George has applied for government loans and grants. He's already dipped into his retirement savings. He credits his insurance with putting him into a position to reopen his clothing store in a new location in Seabright, New Jersey, perhaps as early as Friday. But there aren't a lot of customers because many homes here remain empty.

DINA LONG, MAYOR OF SEABRIGHT, NEW JERSEY: Most of them are gutted down to the studs and have been that way since November.

SNOW: Dina Long is the mayor of this devastated coastal community where less than half the population has returned so far. The homeowner in this house, she tells us, could afford to elevate their home. But others wait for government funds to rebuild.

How worried are you about money?

LONG: I don't sleep much any more. When we talk about the municipal budget and how we're going to make it in the next couple of years, I'm very worried. It's caused me some sleepless nights already. I'm confident they'll be more in the future.

SNOW: Long says Seabright's annual budget is $5 million, and it's already had to borrow $4 million. She has no tolerance for delays in Sandy aid because of politics. LONG: And so I feel like on the local level real people pay the price for this kind of political wrangling that's happening in Washington. And that's frustrating and kind of sad.

SNOW: While she is counting on area lawmakers to fight against cuts to Sandy relief, one lawmaker in the fight isn't so optimistic.

REP. PETER KING (R), NEW YORK: To get the money that we're entitled to in New York and New Jersey we had to go around like -- you know, third world beggars to get the money which every other state had always gotten automatically in the past. So, no, I would say some people care but unfortunately too many don't.

(END VIDEOTAPE)

SNOW: And, Wolf, Sea Bright isn't just rebuilding, it's still cleaning up. The sand you see behind me there had to be removed from the streets after it was swept up by Sandy. And Sea Bright, like so many other towns along the Jersey Shore, are racing to get up and running by the summer when they make most of their money -- Wolf.

WOLF BLITZER, CNN ANCHOR: What a story. Mary Snow, thanks very much.

Coming up, one of America's leading high-tech companies now has a new low-tech policy regarding how and where its employees must do their work. We have a surprising decision coming in from Yahoo. That's just ahead.

(COMMERCIAL BREAK)

BLITZER: Tech companies have been trend setters when it comes to allowing workers to telecommute. But now Yahoo! is reversing course, telling its employees no more working from home.

Lisa Sylvester's following this story for us.

A pretty surprising decision. What's behind it?

LISA SYLVESTER, CNN CORRESPONDENT: OK, so, Wolf, you know, Marissa Mayer, the CEO of Yahoo! she has been a trail blazer in every way. The first female engineer at Google. The youngest CEO of a Fortune 500 company at the age of 37. But now she is making headlines in a different way and it all starts with a memo.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Marissa Mayer, named one of "Fortune" magazine's most powerful women, says she has to ruthlessly prioritize.

MARISSA MAYER, CEO, YAHOO: For me, it's God, family and Yahoo! In that order.

SYLVESTER: Mayer, who famously or infamously, depending on who you asked, returned to work two weeks after giving birth, is shaking up the debate over work-life balance issues. In this memo first obtained by the tech blog AllThingsD, Yahoo's the Human Resources director outlines a new policy. No more working from home.

Quote, "To become the absolute best place to work, communication and collaboration will be important. So we need to be working side by side. That is why it is critical that we are all present in our offices."

Workers currently telecommuting have until June to either get comfy working out of the office or leave. Yahoo's new policy was ripped by some commentators. Richard Branson, CEO of Virgin, said the decision seems backwards at a time when remote working is easier and more effective than ever, adding, quote, "Yours truly has never worked out of an office and never will."

Blogger Lisa Belkin, writing for the "Huffington Post," sees it as a direct dig against working parents.

LISA BELKIN, BLOGGER: I think it's backwards. I think it's the opposite what she -- of what she should have done.

SYLVESTER: And CEO Eric Holtzclaw, of marketing company Laddering Works, says not only does he let his employees work from home, he logs time away from the office as well.

ERIC HOLTZCLAW, CEO, LADDERING WORKS: I am always more efficient when I work from home and working from home or working from a third location. So I do a lot of writing and I think that if you work in a coffee shop, and some of those kind of places, you'll get more inspiration.

SYLVESTER: Mayer is bucking the trend. 9.5 percent of workers worked from home at least one day a week in 2010. That's up from 7 percent in 1997. But her decision doesn't come out of the blue. She came from Google, a company that likes the collaborative atmosphere when workers have face-to-face time. And she is in the middle of a turnaround for Yahoo.

We reached out to Yahoo! but the company declined to comment. The Web site "Business Insider" did talk to some Yahoo! employees and not all of them are upset.

ALYSON SHONTELL, BUSINESS INSIDER: It was getting way too lenient and people weren't using their best judgment, necessarily with working for home versus working in the office, to the point that some of them didn't even realize their colleagues still work for Yahoo! They were coming in so infrequently or not at all.

(END VIDEOTAPE)

SYLVESTER: Still, this policy change is a little surprising because it is coming from Yahoo! As we mentioned, tech companies, they have been the trailblazers when it comes to things like telecommuting. Take CISCO for example. Ninety percent of its workers work from home at least one day a week.

And, Wolf, I should tell you that some people believe that this is really as an attrition plan that she knows that there are going to be some workers who say, I don't want this deal, I want to be able to work from home, and that they will leave the company. So it's a way of doing layoffs without actually having to call them layoffs -- Wolf.

BLITZER: Yes. There's people who will quit. That's an easy way to reduce your workforce.

SYLVESTER: Yes, and you know they're trying to cut costs. They are in the middle of a turnaround right now. So they're looking for different ways of cutting costs so perhaps that fits into the strategy as well -- Wolf.

BLITZER: Yes, it is. All right, thanks very much, Lisa Sylvester reporting.

So when we come back --

(BEGIN VIDEO CLIP)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: And this is the power of sports. Look at this. This is --

(LAUGHTER)

UNIDENTIFIED MALE: I love you.

(END VIDEO CLIP)

BLITZER: A CNN exclusive from inside Iran. American wrestlers are in Tehran, they have been and have some unlikely fans.

(COMMERCIAL BREAK)

BLITZER: A threatening nuclear program, a history of arming terrorists in the Middle East and a hostage crisis that gripped the nation. The list of conflicts with Iran is both long and very serious. But sports apparently transcends a lot of that.

CNN's Reza Sayah went to the World Cup of Wrestling in Iran's capital of Tehran and found that the most popular athlete in the building was actually -- get this -- an American.

Here's Reza's exclusive report.

(BEGIN VIDEOTAPE)

SAYAH (voice-over): At Tehran's (INAUDIBLE) Arena, under the gaze of Iran's Supreme Leader, the showdown fans were waiting for. Iran taking on the U.S. Two countries whose governments are bitter rivals, locking horns in the Wrestling World Cup.

(On camera): The atmosphere is electric here. But here's what's remarkable. Despite the fierce competition on the mat, there's no sign of bad blood between Iranians and Americans. And here's how you know. Right after their own wrestlers, these Iranian fans are cheering now for this man. American gold medal winner, Jordan Burroughs. JORDAN BURROUGHS, U.S. WRESTLER: You know, it was pretty cool. Every time I step out there, once they see me, they're excited to see me. You know, cheer my name, scream my name and give me praise. It's pretty cool.

SAYAH (voice-over): True to form, Burroughs dominates his match. But in the end, team Iran is king. Final score, Iran 6, U.S. one. After each match, a show of mutual respect. Something Washington and Tehran have rarely shown since 1980 when they broke off diplomatic ties.

(On camera): What you're looking at is Iranian fans right now, chasing after Jordan Burroughs like he's a rock star and the entire USA team as they get on the bus. All these guys just love Jordan Burroughs. They love the fact that the American team is here.

And this is the power of sports. Look at this.

(LAUGHTER)

UNIDENTIFIED MALE: I love you.

SAYAH (voice-over): There is little love in the U.S. for the Iranian government. In a Gallup poll last year, one in three Americans said Iran is enemy number one.

(On camera): Iran is still viewed by a lot of Americans as a dangerous place.

UNIDENTIFIED MALE: Sure.

SAYAH: Does that message match with what you see here and all the love you guys get?

NOEL THOMPSON, U.S. WRESTLER: No. I'll tell you, athletes, right, you go with the lactic acid, we work, we train together. Enables us to engage with each other.

SAYAH (voice-over): This was Team USA's 10th visit to Iran. Each visit stirs speculation that sport might help build bridges between the two countries.

ZEKE JONES, FREESTYLE HEAD COACH, U.S. WRESTLING: When we got here, they had their arms wide open to our wrestling program and to Americans because they realize that it's a better world with us together.

THOMPSON: Well, if wrestlers can get together anyone could get together.

SAYAH: So far the exception to that wrestler's rule has been Washington and Tehran.

(On camera): During our visit to Tehran, the Iranian government's deep seeded suspicion for the international media was evident. A few hours into our shoot security officials confiscated our videotape and erased interviews with both U.S. and Iranian wrestlers saying we were not allowed to ask questions about politics. We ended up doing the interviews over again. It was a reminder that U.S.-Iran relations remain very complicated.

Reza Sayah, CNN, Tehran.

(END VIDEOTAPE)

BLITZER: And as Reza just mentioned, CNN has contacted Iranian authorities. We are protesting the confiscation and the erasing of CNN's video.