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The Situation Room

Interview With Arizona Governor Jan Brewer; Budget Fail

Aired February 28, 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: Happening now: Congress helps guarantee that the budget acts will, in fact, fall by getting out of town. New backlash over those spending cuts. Arizona's governor is fuming about the release of hundreds of illegal immigrant detainees. She's joining us live.

Plus, did a White House official try to intimate the journalist Bob Woodward? The administration now responding to a story that broke right here in THE SITUATION ROOM.

And eye-popping new photos of a real odd couple, North Korea's Kim Jong-un and basketball star Dennis Rodman.

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

After weeks of buildup, all the warnings, the drama, and the very little action, we're now just one day away from that witching hour when those forced budget cuts actually take effect. President Obama and congressional leaders still planning to sit down, talk about things tomorrow morning. Will that matter at all? Probably not.

Our chief congressional correspondent, Dana Bash, is standing by to explain what's going on -- Dana.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, Wolf, we can now report that the $85 billion in forced spending cuts will begin to take effect late tomorrow. Why can we say that? Because members of the Congress, they're the only ones who had the power to stop it and they're gone.

(BEGIN VIDEOTAPE)

BASH (voice-over): Lawmakers racing down the Capitol steps, bolting out of town for a long weekend. This was before noon, a full day before the hammer comes down on forced budget cuts they voted for.

(on camera): Is there a concern that you all are going to leave town while these cuts kick in and you won't even be here?

REP. TIM GRIFFIN (R), ARKANSAS: The speaker and the leadership will be here and I'm a quick flight away. I go home every weekend to see my family.

BASH: You're on your way out? Are you on your way home?

REP. RICHARD HANNA (R), NEW YORK: Yes, ma'am.

BASH: So you're not going to be here in town when these cuts kick in?

HANNA: If they call me back, I will be back.

BASH: What do you think about the idea that Congress and you all won't even be here when these cuts kick in?

UNIDENTIFIED FEMALE: We have got to go to the airport.

BASH: Got to go to the airport? OK. Bye.

(voice-over): Some Republicans, whose party runs the House, were unapologetic about leaving Washington until Monday.

REP. RICHARD HUDSON (R), NORTH CAROLINA: Well, I think it's actually better when we're home working because the work we do there in my opinion is more important than the work we do here, especially if we're going to keep spending money.

REP. JIM RENACCI (R), OHIO: This was his idea, the president's idea.

BASH (on camera): But, as you well know, most Republicans voted for it.

RENACCI: Well, I voted for it, too, because I think we have to get our spending in line. So, these are the things that -- at 2 percent, most families, most businesses back home have had to do the same thing.

BASH (voice-over): Yet some lawmakers in both parties sounded as fed up as their constituents.

REP. ADAM SMITH (D), WASHINGTON: Leaving -- we could stay here, and if we were staying here and not passing a bill, that's not any better.

BASH (on camera): You're heading to your car. I assume you're going home to New York?

REP. PETER KING (R), NEW YORK: Got a lot of business -- yes, actually, listen, I think the sequester is crazy. I think the president has to show more leadership. Congress should do more. But just to sit here by myself serves no purpose.

BASH (voice-over): Most House Democrats whacked Republican leaders for going out of session.

REP. ELIOT ENGEL (D), NEW YORK: It's an absolute disgrace that we're going home. We should stay here until the sequester has ended. This is a stupid way to do it.

BASH (voice-over): But Democrats do run the Senate and their last votes this week were only a few hours later. UNIDENTIFIED FEMALE: The motion is not agreed to.

BASH: Two proposals to alleviate the forced cuts, one Democrat and one Republican, partisan show votes. Neither passed and neither was expected to.

(on camera): Will you keep the Senate in session or will the Senate not be here just like the House won't be here the day that these cuts kick in?

SEN. HARRY REID (D-NV), MAJORITY LEADER: We're in session. We're not going anyplace. We're ready to work. But at this stage, we can't -- we don't have a partner.

(END VIDEOTAPE)

BASH: Now, leaders in both parties made a point of saying they will be here tomorrow, of course, for the meeting that they will have with the president.

And, Wolf, the president issued a statement late today saying that he is disappointed, really admonishing Republicans for voting down a Democratic plan that he obviously supported. That was voted on in the Senate today about replacing the forced cuts with about half new spending cuts and half tax increases. He said he looks forward to this meeting tomorrow, but Wolf, I can't find a source in either party who thinks that they really will make progress to stop these cuts from going forward, at least in the near future.

BLITZER: Yes, not any time soon, but let's see what they do by the end of March, when that so-called continuing resolution to keep the government open, when that deadline comes up as well.

(CROSSTALK)

BLITZER: You will be busy in March, as you always are. Thanks very much for that report, Dana Bash.

Kate Bolduan is here.

Kate, we're following up also on that pretty, I guess we will call it a bombshell interview we did with Bob Woodward yesterday here in THE SITUATION ROOM.

KATE BOLDUAN, CNN ANCHOR: Yes, it was a very interesting day, I think we can all agree. I mean, we were really surprised when the veteran journalist told us about an e-mail he'd gotten from an Obama administration official. He made it sound pretty intimidating.

Well, we now have the White House's side of the story and it is raising quite a lot of questions.

Let's bring in our chief White House correspondent, Jessica Yellin, for more on this.

So, Jessica, what's the latest on this back-and-forth and very public spat?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Kate.

The White House is trying to prepare for a meeting and a fight with Republicans over spending cuts, but they are still battling last week's war over how Bob Woodward covered the president's spending cuts storyline, Woodward claiming that he felt threatened when the president's top economist, Gene Sperling, had a phone conversation and then sent him an e-mail, following up on it.

The White House says there is no way, no way Woodward could have felt threatened by what Gene Sperling had to say, both because everybody knows that Gene Sperling is not a threat, that was what Jay Carney said in a briefing, and because the nature of the e-mail itself could not be read that way. Listen to this.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): An intimidating threat or a friendly exchange between a reporter and a White House official?

BOB WOODWARD, "THE WASHINGTON POST": They are not happy at all.

YELLIN: At issue, a spat over Bob Woodward's reporting on the president's plan to avoid the looming forced spending cuts.

WOODWARD: 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.

YELLIN: That official was Gene Sperling, director of the National Economic Council and according to the White House, his e-mail was no threat at all.

In a statement, a press official said, "The note suggested that Mr. Woodward would regret the observation he made regarding the sequester because that observation was inaccurate, nothing more."

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Gene Sperling, in keeping with a demeanor I have been familiar with for more than 20 years was incredibly respectful. You cannot read those e-mails and come away with the impression that Gene was threatening anybody.

YELLIN: The key here, all-important context.

In the e-mail exchange obtained by Politico, Sperling writes: "I apologize for raising my voice in our conversation today. My bad. But I do truly believe you should rethink your comment about saying that the president asking for revenues is moving the goalpost. I know you may not believe this, but as a friend, I think you will regret staking out that claim."

Woodward replies: "You do not ever have to apologize to me. This is all part of a serious discussion. I, for one, welcome a little heat."

Now Woodward says it was too hot.

WOODWARD: It makes me very uncomfortable to have the White House telling reporters, you're going to regret doing something that you believe in.

YELLIN (on camera): The president says he values a free press that is not afraid to ask questions, to examine and to criticize.

Has he ever spoken to his aides about the tone he would like them to take, you all to take when talking to the press?

CARNEY: We are enormously respectful of the work that you do, that I used to do, and we also believe it's important for us to make clear when we think, as we have in the past, somebody is out there getting the facts wrong.

(END VIDEOTAPE)

YELLIN: Now, one of the president's former advisers ratcheted up some of the pressure on this whole drama. David Plouffe sent out a tweet comparing Bob Woodward to an aging sports star.

He said -- quote -- "Watching Woodward the last two days, as he's lodged these accusations, is like imagining my idol Mike Schmidt facing live pitching again. Perfection gained once is rarely repeated."

Ouch. The White House says we shouldn't be focused on the back and forth; we should be focused on the spending cuts fight.

BOLDUAN: We can all agree on that, but the back and forth just doesn't seem to end. I mean, one lob after the other. We will continue to follow it. Jessica, thanks so much.

BLITZER: Pretty bizarre story, I must say.

Let's bring in our chief political analyst, Gloria Borger.

The substance, though, of the dispute involves the charge that Bob Woodward made in that article he wrote in "The Washington Post" last week that the president moved the goalposts in saying that there had to be -- as part of an alternative to the forced budget cuts, there had to be tax revenue as well. It's a pretty specific charge.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes. And the White House came out swinging against Woodward on this claim, because the stakes are really high here for the White House.

There's Bob Woodward, unimpeachable journalist, who wrote this very, very well-reported book called "The Price of Politics," and he just came out and said, you know what, the White House agreed to a deal that said no tax increases, just spending cuts.

So they had to push back on that, because they had this very carefully choreographed P.R. offensive, which said, by the way, we always agreed to balance. They're portraying the Republicans as intransigent, you know, people who don't care about the middle class, who want to protect the wealthy at your expense, and so this is -- this could have been a real, real problem for them.

So they had to push back. Also, on the point that Bob Woodward said, look, this was the White House's idea, right? So they had to push back forcefully.

BLITZER: On that point, he was proven correct.

(CROSSTALK)

BORGER: Right. And I would argue that, in the end, when Woodward got involved and you saw those e-mails, that it kind of backfired on Bob Woodward.

BOLDUAN: When you look at the policy question and the fight that's going on between Congress and the president, I mean, there are real risks, though, for Republicans.

(CROSSTALK)

BOLDUAN: I mean, look at recent history in the previous fights we have seen. The polls don't really seem to be in Republicans' favor in this one.

BORGER: No. And this is the problem for the Republicans, because even before they start this fight, they're already treading on thin ice. If you look at their favorability rating, they're at 29 percent. That's not anything anyone would want. President Obama is at 49 percent.

And while the public says, you know what, we believe that the federal government is bloated, it ought to be cut, they agree with that, they don't like this meat axe approach, which is, you know, no thought given to what programs get cut. And so the White House argument is, OK, at certain point, I think they overdid it, but at a certain point, when people see these cuts starting to take effect, not over the weekend, but eventually they will see the long lines at the airports, they will see people getting pink slips, they will not like it, and then they will blame the Republicans.

My thought, quite honestly is that this they're going to blame all of them, because they're all going to look bad.

(CROSSTALK)

BLITZER: It's going to take a while though for that pain to be felt. It's not going to happen in the next few days.

BORGER: And that's where the White House I think overplayed its hand a little bit, because they made it seem like it was going to happen tomorrow, Chicken Little.

(CROSSTALK)

BLITZER: Gloria, thanks very much.

BOLDUAN: Thanks, Gloria.

BLITZER: The world may not see anything like this again for centuries. We will show you the pageantry of Benedict XVI's last day as pope.

Also, ahead Dennis Rodman the diplomat. We have photos of his rather surprising one-on-one with North Korea's Kim Jong-un.

(COMMERCIAL BREAK)

BLITZER: Historic transition for the Catholic Church today. Benedict XVI is now pope emeritus. This was Benedict in his final hours as pope before he flew to a hilltop retreat and formally resigned.

CNN's Becky Anderson has more on the ceremony of this historic day and what's next for the Catholic Church.

(BEGIN VIDEOTAPE)

BECKY ANDERSON, CNN CORRESPONDENT: It was here at Castel Gandolfo that we witnessed history earlier on Thursday.

From the window up there, Benedict XVI gave his final blessing and thanked the audience here for their fondness, their love and support. His closing remarks, "Thank you and good night."

It was at this moment that Pope Benedict XVI gave up the mantle of the papacy and cloisters himself away for a life of prayer and reflection, an event unprecedented in the last 600 years, a moment of history in the modern age. His Vatican guard symbolically abandoning their posts, leaving behind a man no longer with the authority to pronounce infallibly, no longer leading a church numbering billions of believers.

The legacy of Benedict's papacy has yet to be determined, but there is no doubt that the Roman Catholic Church is feeling bruised, struggling with a series of crises, financial, moral. Benedict's final words to the faithful reassuring them that it will not sink amidst choppy waters.

The successor to Pope Benedict XVI will be determined over the coming weeks, the faithful eagerly waiting that outcome. And on this occasion more than maybe any other the world watches with a similar closeness.

Becky Anderson, Castel Gandolfo in Italy.

(END VIDEOTAPE)

BOLDUAN: Becky, thanks so much.

President Obama is taking sides in a Supreme Court case on same- sex marriage, so how far will he go? New details ahead.

(COMMERCIAL BREAK)

BOLDUAN: Clint Eastwood has joined dozens of prominent Republicans taking a stand against California's ban on same-sex marriage. The actor signed a legal brief opposing Proposition 8, along with a long list of GOP leaders, including former lawmakers and administration officials.

That brief is headed to the Supreme Court, where the justices will hear challenge to Prop 8, as it's known, next month. We now know that President Obama will be filing a brief as well.

And our crime and justice correspondent, Joe Johns, has been digging into that.

So what's the latest, Joe?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, Kate, we know the president supports gay rights, but until today, it was not clear whether the president's lawyer who argues cases at the Supreme Court would actually file a brief supporting marriage equality and making some type of equal protection argument.

But even now, the Supreme Court's filing deadline approaching, there is still a question about whether the administration intends to call for a right to gay marriage in all the states or something less.

(BEGIN VIDEOTAPE)

JOHNS: (voice-over): The administration waited until the last minute to say whether it was taking a stand on California's Proposition 8, which bans same-sex marriage, even while prominent Republicans of all stripes were jumping on the bandwagon, calling on the court to rule the state's law unconstitutional.

Hollywood producer and actor Clint Eastwood, former Republican National Committee Chairman Ken Mehlman, Florida Congresswoman Ileana Ros-Lehtinen, and Beth Myers, who ran Mitt Romney's campaign in 2008, and served as a senior adviser to him in the last campaign.

Former Arizona Congressman Jim Kolbe, who is gay, said his position on gay marriage has changed over time.

JIM KOLBE (R), FORMER U.S. CONGRESSMAN: Like others, I have evolved on it too. There was a time, as I mentioned, there was a time that I didn't believe that gay marriage was a possibility. And so I thought, well, if we could have a civil union or something, that would be great. But I no longer believe that. I no longer am willing to settle for that.

JOHNS: It's an important moment in the law and also in politics, because the administration's position on same-sex marriage could go a long way toward defining the Obama legacy.

He's already made history on the issue, becoming the first American president to mention it in an inaugural address.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For our journey is not complete until our wives, our mothers and daughters can earn a living equal to their efforts.

(CHEERING AND APPLAUSE)

OBAMA: Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law, for if we are truly created equal, then surely the love we commit to one another must be equal, as well.

JOHNS: The president's views have evolved, and he himself has said he struggled with the gay marriage issue. This is what he said in 2004.

OBAMA: I believe that marriage is between a man and a woman. But I also detest the sort of bashing and vilifying of gays and lesbians, because I think it's unduly divisive.

JOHNS: In 2008, running for president, he refined his view.

OBAMA: I do not support gay marriage, but I support a very strong version of civil unions.

JOHNS: May of last year was the first time he took the step of supporting it.

OBAMA: For me personally, it is important for me to go ahead and affirm that I think same-sex couples should be able to get married.

(END VIDEOTAPE)

JOHNS: Quite an evolution. With his background as a former constitutional law professor, a source tells CNN's Supreme Court producer, Bill Mears, that Mr. Obama actually had the final decision on whether to file a brief and what to say.

BLITZER: Yes.

(CROSSTALK)

BOLDUAN: We will learn a bit more about that when we see the full text.

BLITZER: And not only an evolution for the president. For millions of other Americans, their positions have evolved. We will see what happens at the Supreme Court.

JOHNS: Including Jim Kolbe, the congressman.

BLITZER: Yes.

BOLDUAN: Yes, that was interesting.

JOHNS: Thank you.

BOLDUAN: Joe Johns, thanks.

BLITZER: The budget axe is about to fall. Members of Congress, though, they have left town. So where's the urgency to solve this mess? Arianna Huffington and Jim DeMint, they are standing by here in THE SITUATION ROOM.

Also ahead, the secretive North Korean leader and the flamboyant basketball star. Guess what? You can't make this up.

(COMMERCIAL BREAK)

BLITZER: A lot of people aren't sure what to expect when they wake up Saturday and those forced budget cuts become a reality.

BOLDUAN: President Obama may be adding to that confusion. Listen to his dire warnings last week, compared to his much more toned-down version yesterday.

(BEGIN VIDEO CLIP)

OBAMA: So these cuts are not smart, they are not fair, they will hurt our economy, they will add hundreds of thousands of Americans to the unemployment rolls. This is not an abstraction. People will lose their jobs. The unemployment rate might tick up again.

This is not a cliff, but it is a tumble downward. You know, it's conceivable that, in the first week, the first two weeks, the first three weeks, first month, a lot of people may not notice the full impact of the sequester.

(END VIDEO CLIP)

BOLDUAN: So let's talk about these forced budget cuts and the politics behind it with our guests. Arianna Huffington is the editor in chief of "The Huffington Post," and Jim DeMint is the president- elect of the Heritage Foundation and a former Republican senator from South Carolina.

It's great to see you both. Thanks for coming in.

JIM DEMINT, PRESIDENT-ELECT, HERITAGE FOUNDATION: Thank you.

BOLDUAN: Arianna, first to you. You just heard those two clips of the president just pretty much a week apart or even just days apart, so what do you think is the change? What's the change in tone?

ARIANNA HUFFINGTON, EDITOR IN CHIEF, HUFFINGTON POST: Well, there's no question that the U.S. economy is in a fragile state, with 25, 26 million people unemployed or underemployed.

So removing demand from the economy at this time, and doing it in such a completely haphazard way, is not going to help. It's going to make it much harder for growth to happen. It's going to make it much harder for jobs to be added.

So it really is an incredible sign of how dysfunctional our political system has become, and I'm sure Senator DeMint is happy to be out of it at the moment.

BOLDUAN: Senator, I want to get your take on this, as well, because you heard that change in tone from President Obama. At the same time, you have many Republicans saying that it's all scare tactics. These dire warnings are not going to live up to what they -- what they're offering. But at the same time, this will affect people. Jobs are on the line. So where's the urgency amongst Republicans in Congress?

DEMINT: Well, over the next ten years, we plan to increase spending 69 percent without the sequester. With the sequester, we plan to increase spending 67 percent. There are no cuts here.

The president knows that his policies, whether it be Dodd/Frank, Obama care, or the tax increases, will probably result in increased unemployment. He's trying to set the stage to suggest that this small cut in spending will have any kind of effect related or similar to what his tax increases have done.

BOLDUAN: But at the same time, Senator, both John McCain as well as Speaker Boehner have both called these cuts incredibly dangerous, as well.

DEMINT: Well, it's dangerous in the sense that most of the cuts, or at least half of them, are coming directly from the military, which has already experienced some budget cuts. So the defense system in our country is only about 20 percent of total spending, but 50 percent of the cuts come from it. In that sense, it does weaken our security.

But defense spending will still increase 16 percent over the next ten years. So, there are no cuts here. There's a slight reduction in the increases of spending. The real damage to our economy is going to come from the tax increases and other policies, such as the implementation of Obama care.

BLITZER: So, Arianna, what were you hinting at before? You think these cuts will create more employment? Will weaken economic growth? Is that what you're suggesting?

HUFFINGTON: Exactly. And, you know, I think Senator DeMint and many Republicans really believe that the major problem we're facing is the deficit, and I -- and many economists believe that the major problem we're facing is unemployment. And the fact that kids are graduating from college, and they cannot find jobs. And we've seen all around Europe, how austerity measures that are focusing on the deficit have not worked.

BLITZER: Let me interrupt, Arianna. You do want some spending cuts, I assume, don't you?

HUFFINGTON: Absolutely. I mean, there are many areas. I mean, farm subsidies, for example, which were -- which were on the line. A lot of the loopholes that need to be closed. And there has to be entitlement reform, no question about that. But it has to be done in a -- in a thought-out way.

And to actually keep defending the Bush tax cuts for the richest Americans or to keep defending the fact that we still have the current interest rate be -- not provide a level playing field for those in the financial sector, compared to those in the manufacturing sector, all these things don't make sense, and they are only going to weaken the economy.

BOLDUAN: Senator, you know, you were just in this town, you're still in this town, but you know political Washington is all about the blame game. Who's to blame when something bad happens?

And it seems that, if you look at the polls recently, and recent history, that Republicans are facing some tough polling. That voters, Americans, if this sequester goes through, they're going to put the blame on Republicans more than they're going to put the blame on the president.

Shouldn't Republicans be concerned about that? Because I'll tell you, I don't sense urgency amongst anyone in this town to get anything done in the next 48 hours.

DEMINT: Well, I'm not going to speak for Republicans, but I can say this. If government spending improved our economy and created jobs, we would have the best economy and the least unemployment we've ever had, because we've almost double spending the last ten years. The plan is to take it up nearly another 70 percent in the next ten years.

The problem is, is that we're spending too much. We have record revenues this year. Even with the sequester, we'll spend more this year than we ever have in history. So it's really laughable that the president is acting like this is an apocalyptic situation.

It really goes back to where I started. The president's policies are hurting our economy. They have for many months. The last quarter of last year, we actually contracted as an economy. That had nothing to do with the sequestration or anything that's happening now. The policies are hurting us. He needs to blame it on someone -- someone else.

Hopefully, the Republicans will not allow themselves to get blamed, because it's not their policies that are in effect right now.

BLITZER: Go ahead and respond, Arianna.

HUFFINGTON: Well, you know, it's unfortunate that Senator DeMint is not willing to look at the fact that the private sector is not spending, is not investing, that we have companies sitting on hundreds of millions of dollars, and not creating jobs.

And that's precisely the time when the government needs to step in and do things that should be done in any case, even if we're at full employment, like infrastructure spending. I mean, our bridges are crumbling, our roads are crumbling. This is precisely the time for private/public partnerships to create the kind of infrastructure that we need in order to grow our economy.

The same thing with the payroll tax holidays, which was ended. Anything we can do right now, both to encourage the private sector to create jobs and to actually get the government to help create jobs. Who have a lot of the cards, for example, for teachers, police force, and at the state and local level, which are dramatically impacting people's lives in communities.

BLITZER: Arianna Huffington, Jim DeMint, guys, thanks very much. We'll continue this conversation.

Also, I want to leave the conversation with something we can all agree on. Arianna, congratulations. We understand you've raised $1 million for nonprofit groups to help create more jobs in the United States. The challenge ends tomorrow. I want to let our viewers know, anyone who's interested can get information at JobRaising.com.

BOLDUAN: Congratulations, Arianna.

HUFFINGTON: Thank you.

BOLDUAN: Thank you, Senator. Good to see you.

Still ahead, Arizona Governor Jan Brewer is going to be joining us. She'll be speaking to Wolf about why she's angry over the release of hundreds of immigration detainees.

And later, how's this for bizarre? Ex-NBA star Dennis Rodman becomes the first American to meet and hang out with the reclusive North Korean leader, Kim Jong-un.

(COMMERCIAL BREAK)

BLITZER: White House officials say President Obama and other high-ranking administration officials here in Washington were caught by surprise by the release of illegal immigrant detainees over the past week. The Immigration and Customs Enforcement Administration, ICE for short, says several hundred low-risk people were released to less costly forms of supervision as a money-saving move ahead of this week's forced spending cuts.

Arizona's governor, Jan Brewer, she's appalled by this decision. She's joining us now from Mountain View, California.

Governor, thanks very much for coming in.

GOV. JAN BREWER (R), ARIZONA: Thank you, Wolf. It's a pleasure to be with you.

BLITZER: I'll play a clip, I interviewed earlier Sheriff Paul Babeu, a man you know from Canal County in Arizona. He's outraged, as well. Listen to what he told me.

(BEGIN VIDEO CLIP) SHERIFF PAUL BABEU, CANAL COUNTY, ARIZONA: This was done under the cloak of secrecy. ICE never announced this. They never called any police chief in my county or myself as a top law enforcement official. I have a problem with that. These people are now out in the community. there was no preparation or coordination for that. We all know recidivism or the return of committing crimes is very high with any prison population.

(END VIDEO CLIP)

BLITZER: All right, Governor. You're the -- you're the leader in Arizona. Did officials in Washington alert you to what they were doing?

BREWER: No, they did not contact my office; nor did they contact my homeland security division in the state of Arizona.

BLITZER: They say, these officials at ICE, that these are low- level detainees and really don't pose any serious risks to the population. You buy that?

BREWER: No, I certainly don't buy that. We know that the policy has been arrest and release those people that have not been involved in prior arrests or prior criminal activity. So these people have a criminal record, is what I believe. I would like to have that for a fact, and I can't say that. But we know that traditionally, they arrest and they release or they TBA; they turn them back around.

So this is a criminal element that the federal administration has decided to release onto the communities and to the United States and it's wrong, and it's outrageous. And it is appalling. To do something of this magnitude and not contact myself or my homeland security people, it's just unbelievable. Unbelievable!

BLITZER: Have you been -- have you been in touch with officials at the Department of Homeland Security and ICE? Your former governor, Janet Napolitano, she's in charge of the Department of Homeland Security. Have you communicated your concerns to them?

BREWER: I -- I have not. I would assume that my -- well, I know that my Homeland Security Department probably has been in contact with them.

But the amazing thing about it is, the day before they did this, I was in Washington, D.C., with the secretary. And no comment, nothing. It's just a little bit over the top.

And now, they're saying nobody knows this, nobody knows that. And you know, it's duck and cover. And it's unfortunate that we don't even realize or we don't even know who's running our country.

BLITZER: You believe them?

BREWER: It's very disappointing. It's very disappointing.

BLITZER: You believe them when they say the president, nobody official, no senior official in the White House knew, Janet Napolitano, other senior officials in the Department of Homeland Security didn't know this was done at the ICE level by career officials?

BREWER: Well, the bottom line is, is that it's that old saying, the buck stops here. Whether you're governor or president, the buck stops with you.

BLITZER: So what can be done to remedy this?

BREWER: Well, you know, enforcing the law, doing their job, and, you know. And in the mindset of that they're trying to say that this is, you know, cutting the budget, because of what's going on in the Senate, is a little bit outrageous.

We need a federal government with leadership to lead this country back to prosperity. That means he needs to get into the Congress and lead us out of this mess.

BLITZER: Because, as you know, if there are these forced, mandatory, across-the-board, meat-cleaver-type of spending cuts, ICE is going to be dramatically affected by this. And they're going to probably be releasing more of these illegal immigrant detainees.

BREWER: Exactly. And, you know, from day one, this was the president's program.

BLITZER: But the Republicans voted overwhelmingly -- Republicans voted overwhelmingly -- it was the president's and the White House's idea, but Republicans overwhelmingly supported what's called those sequesters or those forced budget cuts language.

BREWER: You know -- you know, Wolf, when I became governor of the state of Arizona, I was facing a $3 billion budget deficit with a $10 billion budget. Three billion dollars, and I as governor, I had to make tough decisions and I had to bring people to the table and I had to get the job done. And we did it by cutting spending. We did it by doing strategic cutting. But we got it done.

And that's what they need to do. And that's what the president ought to do. He ought to be over there, doing the job they ought to be doing to get this country turned around and get it back to prosperity. He is the leader of our country, just as I am the leader of Arizona.

BLITZER: Well, we'll see what happens. I suspect the forced cuts will go into effect at midnight tomorrow night. Governor Brewer, we'll stay in close touch. Thank you.

BREWER: Thank you, Wolf.

BLITZER: Up next, is this strange enough for you? Take a look at this. Dennis Rodman turns diplomat. The controversial ex-NBA star. He's palling around with North Korea's secretive leader, Kim Jong-un. They're courtside at a basketball game in Pyongyang.

(COMMERCIAL BREAK)

BLITZER: Take a look -- good look at this picture. I don't know about you, but I love seeing it. Can't believe what I'm seeing, in fact. It's hard to overstate how weird it is. The secretive leader of North Korea, Kim Jong-un, now BFFs with a basketball star, Dennis Rodman. They're both in Pyongyang, watching a little basketball.

Mary Snow is in New York. She's got the pictures. She's got the story behind the story.

Explain, Mary, what happened. He is the first American to meet with the new leader of North Korea.

MARY SNOW, CNN CORRESPONDENT: Who would have thought Dennis Rodman? And it's hard to imagine getting more bizarre than this.

Dennis Rodman arrived in North Korea with the Harlem Globetrotters earlier this week to film a documentary for HBO, which like CNN, is owned by Time Warner. And today, a surprising bond with Kim Jong-un.

(BEGIN VIDEOTAPE)

SNOW (voice-over): These two give new meaning to the odd couple. Basketball Hall of Famer Dennis Rodman and North Korean dictator, Kim Jong-un, chumming it up courtside in Pyongyang. Rodman is said to have told his new buddy that he now has a friend for life. They watched the Harlem Globetrotters play basketball as part of a new HBO show being filmed.

SHANE SMITH, FOUNDER, VICE (ph): Our sort of tagline for the show is "it's the absurdity of the modern condition." Well, if anything shows the absurdity of the modern condition, it's this.

SNOW: Shane Smith is the show's producer. He sent Rodman and the Globetrotters to North Korea earlier this week for a little basketball diplomacy. State media showed them touring Pyongyang.

It was not assured they'd have an audience with the feared leader, but in the end, they not only met with him, but dined with him at his palace after the game.

Once at the palace, the theme from the show "Dallas" was said to be constantly playing in the background.

The bizarre meeting comes just weeks after North Korea had announced it had conducted a nuclear test and tensions with the U.S. Are particularly high. Former White House adviser and negotiator, Victor Cha, says while this meeting is surprising, Kim Jong-un has done a lot of unpredictable things since taking over.

PROFESSOR VICTOR CHA, FORMER WHITE HOUSE ADVISER: Well, I think the North Koreans try to use opportunities like this to congratulate themselves on their accomplishments, as they see them, as well as congratulate this new leadership and try to give him legitimacy on a world stage. So, yes, it is a poke in the eye of the administration, because outside the world of basketball diplomacy, things are moving in a completely different direction.

SNOW: While North Korea has no love for the U.S., it does have a soft spot for basketball and the Chicago Bulls. Former secretary of state, Madeleine Albright, even gave former leader Kim Jong-Il a basketball signed by Michael Jordan as part of her negotiations. Since Rodman played for the Bulls and seems up for anything, the show's producer saw an opening.

SMITH: So if we can open line of communication, if we can have dialogue, it's always better to talk than to fight. So that's what we hope comes out of this.

(END VIDEOTAPE)

SNOW: Now, the film crew is said to have invited Kim Jong-un to America, which was apparently met with laughter.

And in case you were wondering, in that exhibition game that was played today, it had mixed teams of both American and North Korean players. The final score was tied at 110.

BLITZER: A diplomatic score, indeed, a tie. Thanks very much. I love this story. Mary Snow, reporting for us.

BOLDUAN: It's pretty hard to top that, I'll tell you that much. But we're going to do it. CNN's Erin Burnett is going "OUTFRONT" tonight on the future of the Catholic Church after Pope Benedict's historic resignation.

Erin, I'll tell you: it was great watching you this morning, covering it live as the helicopter was leaving and heading over to the retreat.

ERIN BURNETT, CNN ANCHOR: yes. It was amazing watching that helicopter. As we said, I mean, you couldn't get a better advertisement for the glory of Rome than that ride that the pope took today.

History was made today, and we're going to tackle the taboo issue in the church, and we're talking about sex and celibacy. Tonight we've got a nun who left the church because she fell in love, a priest who left the church because he fell in love, and a priest who is staying in the church and who believes in celibacy. We're going to tackle that issue and an "OUTFRONT" investigation into the mysterious death of an American working for a prestigious and secretive government firm.

Back to you.

BOLDUAN: All right. We'll be there, top of the hour. Thanks, Erin.

And when we come back, we're just now getting results of our very own test of Anheuser-Busch's beer. Is it watered down? It's a question we were asked this week. We're going to find out the results, next.

(COMMERCIAL BREAK)

BOLDUAN: Yesterday we reported on a lawsuit alleging that Anheuser-Busch's breweries were watering down Budweiser beer and several other brands. The Budweiser label says 5 percent by volume, but the lawsuit alleges it's a lot less. So we decided to test it for ourselves using an independent lab to find it all out.

Well, here are the results. They're just in. Budweiser showed 4.94 percent instead of 5 percent. Bud Light showed 4.13 percent instead of 4.2. Not exactly evidence of watered-down beer, I guess, and well within -- and well within the government's standards for accuracy.

The samples were bought in the San Diego area, and different bottles from different batches might produce different results.

The lawsuit said it relied not on lab tests, but on accounts from the former brewery employees. There you go.

BLITZER: Looks like it's pretty close.

BOLDUAN: Pretty close.

Blitzer: Other news. It seemed like an amazing rescue. Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): This is a tale of two rescues. This one's fake, and this one's real. A deer, unable to get up on a slippery ice-covered Canadian bay, was rescued by a helicopter's spinning blades.

IAN WAUGH, PILOT: The wash was so powerful that it actually started to push the deer.

MOOS: Pushed her all the way to shore.

But, oh, dear! The pig pushing a baby goat is a hoax. It was put on YouTube five months ago, picked up by tons of Web sites, tweeted out by everyone from "TIME" magazine to Ellen, and played by networks like FOX, NBC, and ABC.

UNIDENTIFIED FEMALE: A little goat is literally drowning in the pond.

UNIDENTIFIED MALE: Send in the rescue pig!

MOOS: But now, just in time for the premiere of a new Comedy Central show, the prank's been exposed in a "New York Times" article. Mission...

UNIDENTIFIED MALE: To create a hero pig by staging a viral video in which he rescues a baby goat.

MOOS: Some were already suspicious. "You can see an arm," noted one Internet sleuth! And sure enough, the host of the Comedy Central show that pulled the hoax reveals divers were involved, as well as a trained, professional pig.

UNIDENTIFIED MALE: So we decided to build an underwater trap out of PVC to guide the big, like a bowling ball going down a bumper lane.

MOOS: At least Brian Williams acknowledged "Nightly News" had run the video.

BRIAN WILLIAMS, NBC NEWS ANCHOR: We'll just call it Pig-gate.

MOOS: Though at the time, they said they had no way of knowing if it was real.

(on camera): Now with the kind of pieces that I do, barely a day goes by that I don't worry about being hoaxed.

(voice-over): Though it didn't take lots of smarts to avoid the "eagle snatching a baby" hoax created by four film students...

UNIDENTIFIED MALE: Oh, (EXPLETIVE DELETED)!

MOOS: And then there was the overexcited train guy.

UNIDENTIFIED MALE: Oh, my God! Woo! Listen to that!

UNIDENTIFIED FEMALE: Now there's excited train guy.

UNIDENTIFIED FEMALE: Crazy.

UNIDENTIFIED MALE: Made a bit of a caboose out of himself.

MOOS: Who's the caboose now? Turns out this was a promotion for a tourist railway.

UNIDENTIFIED MALE: That horn gives me the chills.

MOOS: So does this. It's supposedly security cam video of a naked guy locked out of his hotel room, causing a mom to hide her son's eyes and being asked for I.D. in the lobby.

UNIDENTIFIED MALE: How can I have a driver's license? I'm naked, ma'am.

MOOS (on camera): We call fake! Come on. Who's going to fall for that?

(voice-over): You know what they say about pigs.

UNIDENTIFIED FEMALE: This little piggy went to market.

MOOS: Make that viral marketing.

Jeanne Moos, CNN...

UNIDENTIFIED MALE: Oh, my gosh! She's beautiful!

MOOS: ... New York.

(END VIDEOTAPE)

BLITZER: That's it for us. "Erin Burnett OUTFRONT" starts right now.