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Budget Battle; Pope Says Goodbye; Proof of Education Secretary's Claim about Layoffs; Woodward vs. Obama on Budget Cuts; Budweiser's Maker Fights Back; Rosa Parks Tribute Unites Political Foe

Aired February 27, 2013 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: And trouble brewing. Budweiser fights allegations that its beers are watered down.

I'm Wolf Blitzer, along with Kate Bolduan. You're in THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Hope lies eternal.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Hope springs eternal.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hope springs eternal.

BOEHNER: Hope springs eternal.

(END VIDEO CLIP)

BLITZER: Maybe not. Don't let all that hopeful talk fool you.

The fight over forced budget cuts is going down to the wire. The president and the congressional leaders, they are finally agreeing to sit down and talk, but not until Friday. That's the day the cuts go into effect. And a lot of people are asking, what is going on? What are we all waiting for?

Let's bring in our chief congressional correspondent, Dana Bash.

I don't know if she has any answers, but what are we waiting for, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: If I had the answers, I wouldn't be here right now. But, look, what was very interesting about what happened today is that the president and leaders in both parties were kind of forced together in the same area, as they waited for an event on Capitol Hill. And they had what the Senate majority leader, Harry Reid, described to me as a brief huddle.

Now, our Jake Tapper was told the president told leaders in both parties to be prepared to come to the White House on Friday, ready to talk solutions. That certainly would be a change. (BEGIN VIDEOTAPE)

BASH (voice-over): The president, Republican and Democratic leaders coming together to unveil a statue of civil rights icon Rosa Parks, all pulling in the same direction, the partisan tug-of-war over.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Mr. President, you honor us with your presence. Thank you for being here.

BASH: But this bipartisan moment was just that, a moment. Here's the Senate leaders going at it just 45 minutes earlier.

MCCONNELL: He wasn't elected to work with the Congress he wants. He was elected to work with a Congress he has.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Republicans are too busy fighting among themselves to unite behind a course of action, so they are instead doing nothing, zero.

BASH: The president did ask congressional leaders to the White House to discuss forced spending cuts for their first face-to-face meeting about averting cuts the Democrats call devastating. But the invitation is for Friday, the same day those cuts kick in. Democrats came to the president's defense.

(on camera): Why wait so long?

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Well, look, it is entirely within the purview of Congress to pass legislation and send it to the president. So actually the real question is, is, why isn't John Boehner reaching out to Harry Reid, sitting down with Nancy Pelosi and Mitch McConnell and hammering out a compromise?

BASH (voice-over): But House GOP leadership aides wasted no time hitting the White House on the timing, one asking why the president scheduled the meeting on Friday -- quote -- "when the sequester hits at midnight on Thursday. Either someone needs to buy the White House a calendar or this is just a belated farce. They ought to at least pretend to try."

That led to some confusion and a bizarre back and forth not about how to stop the cuts, but about when the cuts take effect.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The sequester begins I believe midnight on the 1st of March. So --

QUESTION: Right, but it happens after.

CARNEY: Well, actually it happens before, because it happens midnight --

QUESTION: But the meeting happens after these things begin.

CARNEY: No. It begins midnight, March 1. BASH: That prompted this tweet from the speaker's spokesman: "White House waits until sequester arrives to call a meeting 10 months after House passed a plan, then argues about whether cuts at morning or at night."

Here's the real deal. The president does have until 11:59 p.m. the end of the day Friday to sign an order for the forced cuts. So it turns out everyone agrees on the timing, but the fact that they fought about it speaks volumes.

(END VIDEOTAPE)

BASH: Meanwhile, preparations for the cuts are already under way in Congress. The House speaker announced that they would no longer be allowed in Congress to use military aircrafts for fact-finding trips that lawmakers frequently take. The last thing John Boehner wants is criticism by his members or of his members that they're taking junkets when their constituents are feeling pain.

But there may be something else here that the speaker made this announcement and that is, remember, the president has a military aircraft. It's called Air Force One. He used it yesterday to go down to Virginia and primarily whack the Republicans on the spending cuts.

BLITZER: So what you're saying is, if a member of Congress is going to go on a fact-finding trip to Afghanistan, for example, they have got to fly commercially, then?

BASH: Yes, or not go. That's the answer. They're not outlawing these so-called CODELs, but saying if you're going to go, you can't use military aircraft.

BLITZER: That's going to be a lot less of those CODELs, those congressional delegations, I can assure you, if they can't fly on those private government jets.

(CROSSTALK)

KATE BOLDUAN, CNN ANCHOR: Until they get a deal and then they're all back on.

BASH: Exactly.

BOLDUAN: Dana, thank you.

BASH: Thank you.

BLITZER: Kate, you have got more on what's going on at the Supreme Court.

BOLDUAN: It was a big day at the Supreme Court.

Civil rights leaders are outraged by what they heard in the high court today during arguments on whether to uphold the Voting Rights Act, a key part of the Voting Rights Act of 1965.

Our crime and justice correspondent, Joe Johns, was inside the Supreme Court for the arguments today.

Joe, how did it go? It sounded like some very tough questioning.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: You're right, Kate. The arguments were almost combative at times. A debate over the heart of the Voting Rights Act, which was every bit as much about politics, history, and race as it was about the law.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): While supporters of the Voting Rights Act rallied outside, conservatives on the court were picking the law apart, led by Justice Antonin Scalia. He produced audible gasps when he suggested that the law's repeated renewal since 1965 might be the perpetuation of racial entitlement.

He called it "not the kind of question you can lead to Congress."

Scalia's turn of phrase galled civil rights advocates.

(on camera): But is it a racial entitlement?

UNIDENTIFIED MALE: It is a racial entitlement, it is an American entitlement, it is a birthright to cast your right to vote.

JOHNS: The court is hearing a challenge to the portion of the law that gives the federal governor power to pre-approve any voting changes in nine Southern states and parts of seven others, a power some see as a violation of state's rights.

BERT REIN, ATTORNEY: If it wasn't a direct infringement on the sovereign states, that might be an argument. But here, we're in a very different situation.

JOHNS: Conservatives on the court also asked why the law allows the federal government to treat states in the South differently from the rest of the country. Chief Justice John Roberts asked the Obama administration, "Is the government's submission that the citizens in the South are more racist than the citizens in the North?"

Liberals pushed back. Justice Sonia Sotomayor asking the lawyer for Shelby County, Alabama, which brought the case, why the court might rule "in favor of a county whose record is the epitome of what caused the passage of this law to start with." The county argues, things have changed in the South.

FRANK ELLIS, SHELBY COUNTY, ALABAMA, ATTORNEY: We have made great strides over the years. We have minority participation at record levels. We have minority candidates elected by 90 percent white populations.

JOHNS: Many at the proceeding were already bracing for the very real possibility that part of the law could be ruled unconstitutional.

REVEREND JESSE JACKSON, FOUNDER, RAINBOW/PUSH COALITION: We stand challenging this court to do the right thing. I hope it does the right -- but if it does not, we will not go back. We have come too far, marched too much, bled too profusely. We will not go back.

(END VIDEOTAPE)

JOHNS: Underscoring the stakes among the civil rights leaders out there today, Congressman John Lewis, who was beaten in Selma, Alabama, in 1965, in a march for voting rights -- Kate.

BOLDUAN: And, as usual, Clarence Thomas, Joe, he did not speak in court, right?

JOHNS: No, he did not utter a word. However, he is on record as saying that he believes that Section 5, which we're talking about, of the Voting Rights Act, is unconstitutional. So he's already made his position clear.

BOLDUAN: Yet another big case before the high court. We will be watching it closely.

Joe, thanks so much.

Now to a very emotional Senate hearing on gun violence today, with photos of Newtown massacre victims as a backdrop. There was a good deal of discussion about strengthening background checks for gun buyers now that an assault weapons ban seems unlikely to pass. And it got really heated between the Republican Senator Lindsey Graham and the Milwaukee police chief.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If it is such an important issue, why aren't we prosecuting people who fail a background check? And there are 15 questions there. They're not hard to understand if you're filling out the form. I'm a bit frustrated that we say one thing, how important it is, but in the real world we absolutely do nothing to enforce the laws on the books.

Now, let's talk...

EDWARD FLYNN, MILWAUKEE POLICE CHIEF: Just for the record, from my point of view, Senator...

(CROSSTALK)

GRAHAM: How many cases have you made?

(CROSSTALK)

FLYNN: No, it doesn't matter. It is a paper thing.

(CROSSTALK)

FLYNN: I want to stop 76 -- I want to finish the answer. I want to stop 76,000 people from buying guns illegally. That's what a background check does. If you think we're going to do paperwork prosecutions, you're wrong.

(CROSSTALK)

(END VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Senator, if you would withhold just for a moment.

GRAHAM: Yes, that's fine.

FEINSTEIN: Please, no expressions one way or another. And let's keep this civil.

(END VIDEO CLIP)

BOLDUAN: Ahead, another flash point in the gun debate. A Republican is accusing some Obama supporters of being fakes. A lot more on that ahead.

BLITZER: There aren't many human beings on the planet who can draw a crowd like this. Tens of thousands of people packed St. Peter's Square in Rome today for a final glimpse of Benedict XVI while he's still pope.

He steps down less than 24 hours from now.

CNN's Becky Anderson is on the scene.

(BEGIN VIDEOTAPE)

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: Just making my way up to St. Peter's Square. I can already see, there's enormous crowd up here. I would say at least 100,000, if not more.

This is the pope's last general audience, and just behind me here, they have got a road sort of cordoned off all the way around St. Peter's Square, and these crowds here are waiting to see the pope, Pope Benedict XVI, come past in his popemobile. It really is the most extraordinary atmosphere.

It's an absolutely beautiful day and there are flags from all over the world. You can see a Mexican flag there with the Vatican flag. There's a Chinese flag. I can see a Ukrainian flag just there in the crowd, just a really peaceful atmosphere.

UNIDENTIFIED FEMALE: We came from Mexico for a day here today.

ANDERSON: And how does it feel to be here today?

UNIDENTIFIED FEMALE: Oh, amazing, really, a very gorgeous experience, really.

UNIDENTIFIED MALE: It never is in your lifetime that a pope resigns. I think only once, so...

ANDERSON: And 600 years ago. UNIDENTIFIED MALE: Yes.

(LAUGHTER)

ANDERSON: As the pope makes his way around St. Peter's Square in the popemobile, you can only imagine what's going through his mind. He looks frail. He looks tired. This is an 85-year-old man who has decided to stand down, and this is his last 24 hours as Pope Benedict XVI. He will continued to be called His Holiness.

POPE BENEDICT XVI, LEADER OF CATHOLIC CHURCH: This is a decision I have made, after much prayer, is the fruit of a serene trust in God's will and a deep love of Christ's church. I will continue to accompany the church with my prayers and I ask each of you to pray for me and for the new pope.

UNIDENTIFIED FEMALE: I'm very happy to be here, to express my love for Pope Benedict XVI, but at the same time, I'm very sad that he's leaving.

UNIDENTIFIED FEMALE: This is really un-repeatable location.

ANDERSON: And with the pope back in the popemobile and leaving St. Peter's Square, I think it's fair to say that this has been a day of quiet reflection for so many of the people gathered here in the crowd, a sense of pensiveness this day.

Becky Anderson, CNN, Vatican City.

(END VIDEOTAPE)

BLITZER: The United States Senate has just confirmed that Jack Lew will be the next secretary of the treasury, the vote, 71 in favor of his confirmation, 26 against Jack Lew, the former White House chief of staff, the former budget director in the Obama administration as well as in the Clinton administration, also worked for Secretary of State Hillary Clinton in the State Department.

He will now be the next treasury secretary, succeeding Timothy Geithner. Yesterday, Chuck Hagel was confirmed as the defense secretary. Now they're waiting for John Brennan to be confirmed as the next CIA director. But Jack Lew, he has been confirmed. He is the next treasury secretary.

Coming up, a CNN reality check of a Republican congressman's claim, and he's accusing the Obama camp of shady business on Twitter.

(COMMERCIAL BREAK)

BLITZER: All right. Check out all these tweets urging Congress to vote on gun control. A lot of tweets.

BOLDUAN: There sure are a lot of them. But one Republican congressman claims that some of these tweets, though, are fake, and he's blaming supporters of President Obama.

Our Lisa Sylvester has been looking into this.

So, Lisa, what are you finding out about all of this?

LISA SYLVESTER, CNN CORRESPONDENT: This is really interesting. But first, we want to set this up. The question is, is this something called Astroturf, a fake grassroots movement that's made to look like you have a lot of concerned citizens weighs in when in fact you don't?

And this is a story that's been blowing up online, but we went looking to see what was actually real and what was fake and we found some interesting things along the way. Take a look.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): It's a claim that got picked up quickly by several blogs and news organizations. Representative Steve Stockman's accusations that Obama supporters are sending out fake tweets to pressure lawmakers on the gun control issue.

The congressman from Texas put out this news release claiming his office and others were receiving messages, not from real people, but from accounts manufactured by Obama supporters.

We caught up with him on Capitol Hill.

REP. STEVE STOCKMAN (R), TEXAS: We're calling for more information so we can find out exactly who send the fake tweets out and why they're sending them out, and exactly what their agenda is. And we open to expose on that, and I'm sure we will, get to the bottom of it.

SYLVESTER: We wanted to get to the bottom of it too. Were the tweets real or fake? Stockman senior communications adviser Donny Ferguson walked us through why they asserted that these are fake Twitter accounts and not from real human beings. The first red flag, he said, was the egg avatar, the standard image for brand-new accounts where someone hasn't yet uploaded a picture of themselves.

DONNY FERGUSON, ADVISER TO STOCKMAN: This is one of the supposed people who contacted us. As you see, this is the only thing she's ever said.

SYLVESTER (on camera): That's the only tweet she's ever had, one tweet?

FERGUSON: Yes.

And her one follower is the president's digital strategist, which I find it unusual that he took the time -- he follows 27,000 people, but he somehow took the time out of millions of Twitter followers to find her.

SYLVESTER (voice-over): We went digging, while we tracked down that very person, Vera Awah. Turns out she's not a spambot, but a very real person from Livingston, Texas. We weren't her first phone call on this either. VERA AWAH, RESIDENT OF TEXAS: As you can tell, I'm real. I think it's important. That's why I decided to tweet my congressman. I don't do tweets. That was the first one I did. So, I have never done tweets before.

SYLVESTER: How did we get to this point? Organizing for Action is a newly formed pro-Obama advocacy group. It sent out this letter to Obama supporters asking them to tweet their member of Congress. To make it really easy, there's this big button, tweet now, with the same generic message. New users are directed how to sign up for Twitter, among them, Vera Awah.

BEN LABOLT, FORMER OBAMA CAMPAIGN PRESS SECRETARY: They're absolutely real accounts.

SYLVESTER: Those egg avatars with identical messages are from accounts either newly formed or accounts set up a while ago, but only now active.

LABOLT: There were two million volunteers across the country organizing on behalf of the president's reelection. Many of those same supporters and many new people got involved in order to speak out against gun violence.

SYLVESTER: We reached back out to Representative Stockman's office to get their response. They told us -- quote -- "We are always happy to hear from real constituents."

But they're still requesting documents from the White House and Organizing for Action on the anti-gun campaign. But one digital expert says, it's perfectly clear what's going on here. These are people fairly new to Twitter. And on Stockman's claims?

MICAH SIFRY, TECHPRESIDENT.COM: To call it a tempest in a teapot would be to overdignify it.

(END VIDEOTAPE)

SYLVESTER: And the Obama digital strategist, you know, the one that was one of the red flags for Congressman Stockman's office, well, it turns out he actually follows 27,000 people on both sides of the gun debate.

He's following many, many people who have tweeted using the gun control hashtag wedemandavote, including Vera Awah, who, as I said, is a real person who I personally spoke to, not a spambot.

We also tracked down another person. She's an 81-year-old woman living in Texas, and her daughter helped her set up a Twitter account specifically so she could tweet her congressman on this very issue. So a very real tweet and a very real person. So, by all accounts, these are very real tweets.

BLITZER: I love 81-year-olds who tweet.

(LAUGHTER) BOLDUAN: Some of your favorite followers.

SYLVESTER: And that's one of the things that the Obama camp is saying, is that they are bringing a lot of new people to Twitter who had never been involved in social media. So, of course, this is a brand-new account.

(CROSSTALK)

SYLVESTER: Exactly. It's a new way to reach out. And it happens all the time. You both are very well familiar with this. I mean, it used to be the e-mail campaign, where it's like, e-mail your congressman and there's a form letter of some sort. Well, that's what they say they're doing right now, except they're doing it with Twitter. It's the wave of the future. That's the direction we're moving in.

BOLDUAN: Glad you checked it out. Lisa, thanks so much.

Still ahead, a legendary journalist who took on the Nixon White House gets into a fight now with the Obama administration over the forced spending cuts. We will be talking to Bob Woodward of "The Washington Post" coming up.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Up next: The veteran journalist Bob Woodward, he's standing by to join us live to respond to the Obama administration's charge that he's wrong with his facts about the looming forced budget cuts.

(COMMERCIAL BREAK)

BLITZER: We have been hearing dire warnings from members of the Obama administration for days now about the impact of those forced budget cuts that take effect Friday. Now it seems at least one Cabinet member may have been exaggerating.

CNN's Tom Foreman has this story for us.

What's going on, Tom?

TOM FOREMAN, CNN CORRESPONDENT: Hey, Wolf.

As you said, we have heard these dire warnings over and over again about what's been happening. And what we heard today was about teachers and students across the country, how right now, due to the threat of forced spending cuts, they may be losing their jobs, these teachers. But there's precious little evidence to back those claims.

Secretary Arne Duncan, like other Cabinet officers working in tandem at the White House, has been out dutifully ringing the alarm bell about all the bad things the budget cuts might mean. But he's gone even further, suggesting the cuts are already putting teachers out of work.

Listen to him on CBS' "Face the Nation" talking about these layoffs.

(BEGIN VIDEO CLIP, "FACE THE NATION")

QUESTION: How soon could that happen, the 40,000? Because I have read differing accounts. It could be immediate. It could be until the fall. Is there a sky-is-falling aspect to any of the things you're talking about?

ARNE DUNCAN, EDUCATION SECRETARY: Well, some of this stuff happens earlier; some of this stuff happens this fall. But what it does, it creates tremendous instability. And there are literally teachers now who are getting pink slips, who are getting notices they can't come back this fall.

(END VIDEO CLIP)

FOREMAN: So he's right about the sequester, and he says, literally, right now it's happening. At the White House briefing today, he threw out a whopping number, saying schools could lay off as many as 40,000 people. But when he was pressed to explain where anything like this is actually happening now, he came up with only one place. Listen.

(BEGIN VIDEO CLIP)

DUNCAN: There's a district where it's happened, because they have an earlier union notification than most. So Kanawha -- Kanawha County, West Virginia, but the vast majority of them will be rolling out over the next few months. Whether it's also press-related, I don't know. But these are teachers who can getting pink slips now.

(END VIDEO CLIP)

FOREMAN: Teachers are getting pink slips now in Kanawha County in West Virginia. That's not true, according to "The Washington Post," who spoke to the district earlier. The school district told the "Post," yes, about 100 teachers have been told they may be transferred next fall, but it's not connected to sequestration. Nor does it mean that those teachers are losing their jobs.

And our Jim Acosta just spoke to Diane Young, the coordinator of the Head Start program there, and she also said what the secretary said is not on the point. It's not really clear, nor is it accurate.

What they said is that they're waiting on word from the federal authorities about Head Start money, which may or may not be part of this whole equation, and they haven't heard from the federal government, so they may, in fact, have to get rid of some teachers, simply because they're not hearing from the federal government about a routine matter, routine financing for their district. So they have to plan, and that's the only thing they can do right now.

The simple truth is we'll try to find out more from that district and others about when, and how, and if these forced budget cuts are going to affect them. But the indication right now is from the Department of Education, that they don't really seem to know, or at least they haven't been able to point out a clear, clear example of what the secretary was claiming today -- Wolf.

BLITZER: All right, Tom, thanks very much for that explanation. In these battles that are underway, over the forced budget cuts, some conservatives are cheering on a one-time hero of the left, who's become a thorn in the side of the Obama White House right now.

BOLDUAN: Especially at this moment. We're talking about journalist Bob Woodward, the legendary investigative reporter, who exposed Watergate. "The Washington Post" associate editor wrote a controversial op-ed last week. He essentially blamed the White House for the automatic cuts we've been talking so much about, and criticized the president's handling of negotiations with Republicans.

It's gotten a lot of attention, and it's got a lot of people fired up, especially about this part. Woodward wrote this, in part, "The final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell in 2011 included an agreement that there would be no tax increases in the sequester." These forced budget cuts. Woodward went on to write this, "So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goalposts."

BLITZER: That line about moving the goalposts has been hotly disputed by a number of journalists, also by the Obama White House. Listen to this.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The fact of the matter is, Republicans, as well as Democrats, have talked about, from the beginning, the need to replace the sequester with a package of deficit reduction measures that include increasing revenues. So it's just not the case, that it was anything different at the time.

(END VIDEO CLIP)

BLITZER: We're joined now by "The Washington Post" associate editor, Bob Woodward. Bob, thanks for coming in.

BOB WOODWARD, ASSOCIATE EDITOR, "THE WASHINGTON POST": Thank you.

BLITZER: I want to walk through, explain your side of the story. Jay Carney also tweeted, by the way, he said, "Super committee's mandate was not to replace sequester with spending cuts alone. To suggest otherwise is willfully wrong." So they strongly disputed what you wrote the other day in "The Washington Post".

WOODWARD: But it turns out is other reporters know and officials involved in this, and people in Congress, that the White House was on the sidelines in the negotiations of the super committee itself. And they've mixed this up in some strange way. And I'm not sure why they're confused.

No one was talking about a sequester replacement. As you know, the law specifically said, the super committee will come up with tax cuts, in other words, additional revenue, and spending cuts to get about $1.2 trillion in deficit reduction. If they fail -- and all of the leaders in Congress expected them to succeed -- if they fail, then the sequester of simply spending cuts would go into effect.

But this deal that Biden and McConnell made was very important to President Obama, in 2011, because he was afraid he was going to be handed a two-step debt ceiling increase. Not just one. And he insisted on one, and that's what he got.

BLITZER: I just want to be precise. When you say that if the sequester were to -- were to go into effect, if they could come up with an alternative to sequester, there couldn't be increased tax revenue as part of that alternative?

WOODWARD: No, no. It's written in law, in the sequester, itself. It's only spending cuts.

BLITZER: No, it's not. Let me be precise, because here's what the law says. "Unless a joint committee Bill achieving an amount greater than $1.2 trillion in deficit reduction..."

WOODWARD: That's the committee. That's the super committee. That's my point. That's what they were assigned to do. That's what...

BLITZER: The deficit reduction could either be tax revenue...

WOODWARD: Absolutely.

BLITZER: ... or it could be spending cuts.

WOODWARD: Absolutely. And this is kind of -- I hope it's not a smoke screen. I hope it's just a misunderstanding, where the White House says, "Oh, this was a sequester replacement." It wasn't.

I spent two months, Wolf, interviewing, getting all of the documents, talking to the people who were involved in this, and it was deficit reduction for the super committee; if they failed, then only spending cuts. That was the deal the president makes. When you make a deal and get an immediate benefit...

BLITZER: So you're standing by that; they're moving the goalposts?

WOODWARD: It's obvious. I mean, the editor -- editorial page of "The Washington Post," who I wrote this piece for, said it's just irrefutable. When you make a deal and you say, "I'm going to do and I get my part and the other people don't," you're moving the goalposts.

Now, you're entitled to do that. People move the goalposts all the time. Presidents and people in Congress, fine. BLITZER: Let me ask you about the goalpost -- the goalpost aspect of this. I mean, you wrote the book, really, about the debt- ceiling debacle and kind of the fallout thereafter. But why did you write this piece? I mean, you must have been sure it was going to make waves. I mean, it's really become ammo for Republicans in this sequester battle. Was that your intention?

WOODWARD: Well, the -- no, of course not. I mean, you know, I mean, Wolf's known this for decades. I'm in the middle, and trying to be empirical and find out what the facts are.

But your question, why did I write this piece? Because the president, in the third presidential debate, said, this was Congress' idea. Jack Lew, who's now going to be treasury secretary, backed him up.

And then -- now the White House, because I kept asking about this, I think four or five days ago, said, "Oh, yes, it was our idea." They came up with it.

Now, it is playing with -- it is playing a dangerous game to set up a system like a sequester, where it's automatic. This is what we're debating and seeing right now. It came from the White House. It was an act.

BLITZER: There was a precedent, Gramm-Rudman in the '80s.

WOODWARD: In the '80s...

BOLDUAN: What do you make of the White House's response to your article?

WOODWARD: Well, I think they're confused. I think they've got this idea. I mean, they put out these long talking points and said, "See, even Woodward's book reports that Speaker Boehner said, 'Let's get $600 billion over ten years in revenue in the super committee'." That's exactly right. That's not the sequester.

And they've said, they have, you know -- I said, get somebody from the White House here, and we'll debate.

BLITZER: We invited -- we invited the White House to send someone here, to debate this issue with you, and they declined.

WOODWARD: Why? Why? Because it's irrefutable; that's exactly what happened. I'm not saying this is a moving of the goalposts that was some criminal act or something like that. I'm just saying, that's...

BLITZER: It's getting pretty nasty. Take us behind the scenes a little bit. The allegations being hurled against you right now.

WOODWARD: Well, I mean...

BLITZER: You're used to this kind of stuff, but...

WOODWARD: I am.

BLITZER: ... share with our viewers what's going on between you and the White House.

WOODWARD: Well, they're -- they're not happy at all, and some people kind of, you know, said, "Look, we don't see eye to eye on this."

They never really said, though, afterwards -- they've said that this is factually wrong, and they -- and it was said to me in an e- mail by a top...

BLITZER: What was -- what was said?

WOODWARD: It was -- it was said very clearly, "You will regret doing this."

BLITZER: Who sent that e-mail to you?

WOODWARD: Well, I'm not going to say.

BLITZER: Was it a senior person at the White House?

WOODWARD: A very senior person. And just as a matter -- I mean, it makes me very uncomfortable to have the White House telling reporters, "You're going to regret doing something that you believe in, and even though we don't look at it that way, you do look at it that way."

And it's, I think if Barack Obama knew that was part of the communication's strategy -- let's hope it's not a strategy, that it's a tactic that somebody's employed -- and said, look, we don't go around trying to say to reporters, "If you, in an honest way, present something we don't like, that, you know, you're going to regret this." And just -- it's Mickey Mouse.

BOLDUAN: How do you think -- how do you think this is all going to end up, real quick? I mean, the sequester.

WOODWARD: That's the question. That's exactly the right question. And hopefully they fix it. They should do something. There is an irrationality in this.

And just pull back for a second. You've got Leon Panetta, I guess he's still secretary of defense, isn't he?

BLITZER: No, Chuck Hagel is.

WOODWARD: Oh, Hagel's been sworn in, OK.

You know, Panetta, the essence of the Democratic Party, saying, these cuts are going to be a catastrophe. You've got, on the political right, somebody like Bill Kristol, editor of the "Weekly Standard," saying exactly the same thing, that this is a danger to national security.

So, they ought to fix it. If they don't fix it, I mean, the public is going to go, you know, find -- they're already...

BLITZER: I want -- we're going to talk about...

WOODWARD: ... in Washington.

BLITZER: Those of us who have known you for a long time, we know you're not going to be intimidated or threatened by any senior official at the White House. You've gone through a lot worse than this. But I want...

WOODWARD: Indeed.

BLITZER: I want you to stick around. We've got some more to discuss, much more of our conversation with Bob Woodward right after this.

(COMMERCIAL BREAK)

BLITZER: All right. We're back with Bob Woodward of "the Washington Post."

During the commercial break, by the way, you called the White House once again to see if someone would come on and discuss this with you, let alone debate this with you. They once again have declined. But you've been trying now for days to set up a debate with the White House.

WOODWARD: Well, not a debate, but I just think -- first of all, to their credit, they acknowledged that the idea of the sequester came from the White -- came from them. And senior officials, Jack Lew and Rob Nabors.

This idea about moving the goalpost -- look, everyone knows they want more tax increases and some sort of deal. That's -- that's not a surprise. When you make a deal with somebody -- if I say I'm going to do something, and then you get the benefit. And then you say to me, well, wait a minute, "I'm changing," you're changing the goalposts, you're moving the goalposts, you're tearing down the goalposts. I'm not sure -- but you are changing the terms of the agreement. I mean, why don't they just say...

BOLDUAN: That line clearly has touched a nerve with folks at the White House. There's no question about that.

But when you -- when you take a step back, as you have, kind of in writing your book, as well as kind of looking at this piece, is it less about moving the goalposts for both sides and more about both sides just trying to win this in the political sense?

WOODWARD: I -- I guess so. I mean, there's got to be some explanation. I mean, you've done this for a long time, too. It is baffling that they can't sit down and work out something that really would be sensible. You don't have -- it doesn't have to be cuts or tax increases or entitlement reform now. The things they were talking about in the summer, I have all of the -- or a lot of the documentation, in the summer of 2011, it was stuff to begin in ten years on the entitlement reform. Or five years.

There is a way to work with this out, and the question is, what's the impact in the business world, the average consumer? I mean, the stock market shooting up.

BOLDUAN: In the meantime.

WOODWARD: Clearly, American economy is poised on the edge of, we're going to really fix things. The government's got to do...

BLITZER: We've got to leave it. We'll continue this conversation. Maybe somebody from the White House will come in tomorrow. You'll come back.

And just to be precise. You believe, I just want to be precise, because the White House says the president never would have agreed to deficit reduction that simply included spending cuts. He always wanted tax revenues to come up.

WOODWARD: Well, read the law. He did -- he agreed with the idea.

BLITZER: I just want to make sure, you're holding firm.

WOODWARD: And they can't -- that's irrefutable. It's in the law.

BLITZER: OK.

BOLDUAN: Bob Woodward, thanks. Nice to see you, Bob.

BLITZER: And he's not going to be intimidated by anybody.

BOLDUAN: I don't think so. We know.

BLITZER: He was involved with Watergate.

BOLDUAN: Yes. Thanks, Bob.

BLITZER: Thanks very much.

Coming up, she made history on a bus more than 50 years ago, and now Rosa Parks is making history once again right here in Washington. That extraordinary bipartisan moment, that's next.

(COMMERCIAL BREAK)

BLITZER: One of America's best-known beer makers is fighting a lawsuit from some drinkers.

BOLDUAN: That's true. They charge Anheuser-Busch is watering down its beer. CNN's Brian Todd has been looking into this. What's going on, Brian?

BRIAN TODD, CNN CORRESPONDENT: Kate and Wolf, they say Anheuser- Busch has been doing this for about four years on these labels, and they say they've been told about all this by some people who work at the company.

Anheuser-Busch is pushing back hard, and it's got a lot at stake.

(BEGIN VIDEOTAPE)

TODD (voice-over): The so-called King of Beers and its affiliated brands. They're clearly the king of the American beer market, famous for their entertaining ads.

UNIDENTIFIED MALE: A sure sign of a good time.

TODD: Anheuser-Busch, brewer of Budweiser, Michelob, and so many other beers, sells nearly half the beer purchased in America. And according to a newly-filed series of lawsuits, it's ripping off customers.

ROBERT MILLS, ATTORNEY FOR PLAINTIFFS: The lawsuits allege that Anheuser-Busch adds water to their beers, waters it down, and mislabels the stated alcohol content on the labels of the cans of beer of the beer they sell.

TODD: Robert Mills represents dozen of customers suing Anheuser- Busch for more than $5 million. Their complaint says the real alcohol content in Budweiser, Michelob and other Anheuser-Busch beers is less than the 5 percent marked on the bottles, and that's a big money saver.

Quote, "By doing so, AB is able to produce a significantly higher number of units of beer from the same starting batch of ingredients."

(on camera): Even the plaintiffs' lawyers admit taste isn't the issue, as far as they're concerned. They say many beer consumers place a premium on alcohol content and simply think it's important to get an accurate reading from the label.

(voice-over): The attorneys bringing the lawsuit said their clients weren't available to speak to us on camera. They could not give us physical proof of the alleged watering down, but they say the process is systematic and sophisticated. They say they found out about it from people who worked at Anheuser-Busch.

MILLS: People who calibrate the instruments, the people who were in charge in these breweries, of handling this -- these issues, have told us, this is what's happening.

TODD: Mills says those people will testify and says he'll get documents from the company.

Contacted by CNN, Anheuser-Busch rejected the allegations in a statement, saying, "The claims against Anheuser-Busch are completely false, and these lawsuits are groundless. Our beers are in full compliance with all alcohol labeling laws. We proudly adhere to the highest standards in brewing our beers."

I asked Greg Engert, who procures beers for several restaurants and bars in Washington, about macrobrewers' practices.

GREG ENGERT: Large brew houses, it is somewhat commonplace to, quote/unquote, dilute the beer. However, what they're doing is -- for example, if you had a thousand barrels of beer, you know, like 2,000 kegs' worth of beer, and you brew that to, say, 6 1/2 to 7 percent. And then you cut it with some water before bottling, you could bring it down to somewhere between 4 and 5 percent.

TODD: And that doesn't mean you're mislabeling it?

ENGERT: Not at all. And then you get it down to the level you want, exactly, and then you -- and then you label it that way.

(END VIDEOTAPE)

TODD: Engert says that practice enables the major brewers to make and sell more beer out of their original ingredients. It gives the beer a cleaner taste, which a lot of consumers like. And it's not deceptive, as long as you label it accurately.

I asked an Anheuser-Busch official if the company does engage in that practice. He said he couldn't comment beyond their written statement -- Kate and Wolf.

BOLDUAN: I think this is not over quite yet. Brian Todd.

BLITZER: Go have a beer.

BOLDUAN: Go have a beer. Thank you so much.

We'll be right back.

(COMMERCIAL BREAK)

BOLDUAN: Amid all of this partisan bickering, the president and Republicans were able to come together today for actually the same cause.

(BEGIN VIDEOTAPE)

(MUSIC)

BARRY BLACK, U.S. SENATE CHAPLAIN: Let us pray. Almighty God, thank you for infusing her with the resolve to sit down, so that millions could stand up.

BOLDUAN (voice-over): On one bus, on one day, one woman would make civil rights history.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: Rosa Parks, the first lady of civil rights, the mother of the movement, the saint of an endless struggle. However one wished to refer to her, this statue, forever ordains Rosa Parks' status as an icon. BOLDUAN: Now, more than 50 years after her famous bus ride, her statue unveiled in the U.S. Capitol, putting Rosa Parks in the company of America's greatest heroes.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The child Rosa Parks was shy, reserved, at least on the outside.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: On an otherwise ordinary evening, in Montgomery, she did the extraordinary by simply staying put.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The driver got up from his seat to insist that she give up hers. She would not be pushed.

BOLDUAN: Rosa Parks would have turned 100 years old this month, but her legacy, first made on a bus and now cast in bronze, makes her immortal.

OBAMA: Rosa Parks' singular act of disobedience launched a movement. The tired feet of those who walked the dusty roads of Montgomery helped a nation see that to which it had once been blinded. It is because of these men and women that I stand here today.

BOLDUAN: Her legacy also, perhaps, a lesson to the country's leaders today.

OBAMA: That is why this statue belongs in this hall, to remind us, no matter how humble or lofty our positions, just what it is that leadership requires. You can do no greater honor to her memory than to carry forward the power of her principle and the courage born of conviction.

(MUSIC)

(END VIDEOTAPE)

BLITZER: A wonderful woman, indeed. That's it for us. "ERIN BURNETT OUTFRONT" starts right now.