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$19 Billion Mistake; Ex-FBI Chief To Lead Penn State Inquiry; Countdown to Failure; Bloody Protests Return to Egypt; Pepper Spray at Point Blank Range; New Yorker Held on Bomb Charges; Primary Money Laundering Concern; Congressional Super Committee is Super Flop; Gingrich Tops GOP Presidential Poll; Protests, Clashes in Egypt Over Failure to Return to Civilian Rule; Egyptian Government Has Resigned

Aired November 21, 2011 - 13:00   ET

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

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Jim, nice seeing you in Atlanta. Have a nice day.

JIM ACOSTA, CNN ANCHOR: I will.

TUCHMAN: And hi, I'm Gary Tuchman sitting in for Randi Kaye today.

And here's the news. It is a tough job but somebody has got to do it, just not apparently these people. Any time now members of the so- called Super Committee who have been trying to come up with a plan to cut future deficits by $1.2 trillion are expected to give up. That's supposed to mean automatic cuts in almost every federal department in 2013. Same bottom line -- $1.2 trillion half from defense, half non- defense, but Congress made these rules and Congress can and likely will change them. In the meantime, stock markets are tanking again. The Dow Jones down 305 points, more than 2.5 percent today. And again, the U.S. credit rating may be in for a down downgrade. We'll have much more on fallout from Super Committee failure and our "Face Time" segment just minutes from now.

Today, three of clashes between Egyptian security forces and protesters in Cairo. Seventeen hundred people have been wounded during the worse violence to hit Egypt's capital since the revolution, at least 22 people have been killed. There are now reports a government official has resigned over the violence. Coming up we head to Cairo for a live report.

A former leader of the FBI will lead Penn State's investigation to the school's handling of the child sex abuse allegations against former football coach Jerry Sandusky. Former FBI director Louis Freeh will head up an independent panel.

(BEGIN VIDEO CLIP)

LOUIS FREEH, FORMER DIRECTOR, FBI: I am committed to ensuring that our independent investigation be conducted in a thorough, fair, comprehensive manner, leaving no stone unturned and without any fear or favor.

(END VIDEO CLIP) TUCHMAN: Well, the panel will have neither legal status nor subpoena power, however the NCAA and federal education departments are said to be closely watching how the school handles the allegations and the outcome of the investigation could affect the future of Penn State's fund-raising. The head of campus police at the University of California Davis is on administrative leave today over this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You're getting pepper in the face. Move! Move! Move!

(END VIDEO CLIP)

TUCHMAN: Sure enough, those non-violent student protesters did get it in the face or in the scalp with pepper spray. And with the chief and two officers on leave, the school's forming a task force to investigate. For her part, the U.C. Davis chancellor is refusing to resign and agreeing to take part in the student rally two hours from now.

The terror suspect being held today in a New York City jail allegedly claims he was one hour away from finishing his first bomb when he was busted. The 27-year-old Jose Pimentel had been on authority's radar since 2009 but not arrested until yesterday. He is accused of targeting police officers, patrol cars and U.S. troops coming home from Iraq and Afghanistan. Authorities say he bought his components off the shelf but found inspiration online, in part from an Al Qaeda posting called "How to Build a Bomb in the Kitchen of Your Mom."

New tough words from the administration about Iran and its budding nuclear program. Today, the U.S. will name Iran and its central bank as a primary money laundering source. So far no sanctions against the bank though, but a senior treasury department official tells CNN the United States will place sanctions on Iranian companies that allegedly support Iran's nuclear program. Some in Congress say current sanctions are not working and they hope sanctioning Iran's central bank would slow that nation's nuclear ambitions.

Actor Hugh Grant testified in great Britain's official phone hacking trial today. Grant's testimony expands the investigation beyond Rupert Murdoch's tabloid empire. For the first time, Grant accused the "Mail on Sunday" tabloid of hacking his phone. If you remember, Murdoch's "News of the World" hacked into thousands of voicemail messages. It went on for eight years and included famous names, among them Hugh Grant.

(BEGIN VIDEO CLIP)

HUGH GRANT, ACTOR: And you feel them glamorizing themselves as though, well, we're just -- we might be a bit naughty but, you know, we get the story. But when the story's been obtained by hacking the phone of a murdered schoolgirl or the family of some -- of a soldier killed in Afghanistan, I don't find that lovable and naughty. I find that cowardly and bullying and shocking.

(END VIDEO CLIP)

TUCHMAN: Grant is the first celebrity to testify.

A major league baseball player is dead and his brother is under arrest and being questioned as a suspect. Police in the Netherlands say Greg Halman was stabbed to death today in Rotterdam. Halman played for the Seattle Mariners but was born in Holland. He also played for a Dutch team helping it win the European baseball championship in 2007. Halman was 24, his brother is 22. That's all Dutch police will say for now.

Well, it wasn't the warm welcome the first lady and Dr. Jill Biden were expecting. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And now, please welcome our grand marshals, sergeant Andrew Barry and family, first lady of the United States Michelle Obama and Dr. Jill Biden as they deliver the most famous words in motorsports.

GRAND MARSHALS: Gentlemen, start your engines!

(END VIDEO CLIP)

TUCHMAN: Sounded like there was some booing. With us right now is Chad Myers. Not only is he an esteemed meteorologist, but I bet you that you do not know, and most people do not know, that Chad used to be a Nascar reporter.

CHAD MYERS, AMS METEORLOGIST: Back before Nascar was cool. That's how old I am.

TUCHMAN: Right.

MYERS: At least 60 or 70 years old. I found that disrespectful. I found those comments, those boos disrespectful. Although for the past 20 minutes before that, driver introduction, drivers are introduced, they're booed, they're cheered, they're -- you know, this was nothing like Kyle and Kurt Busch boos back, you know, a couple years ago. But this happens. Mrs. Obama -- you know, the first lady's approval rating is over 60 percent. That doesn't mean 100 percent, right? The 60 percent is not 100 percent. So there were people out there, and this is that Nascar fever -- it's that fever when you're really -- you're cheering or you're hating someone. You love someone, you hate a driver. If someone -- there's no gray area and there was some, you know, early morning, day drinking, it didn't start until 3:00.

TUCHMAN: Well, you see that at baseball games when politicians throw first pitches, they get booed sometimes. Should that apply to the spouses of politicians?

MYERS: No, absolutely not. Mrs. Obama and Dr. Biden were there for Joining Forces, an event there -- and trying to raise money for vets. The exact opposite reply should have been because they were doing something for the people that the Nascar nation loves, the veterans. I mean, there's nobody that supports the veterans more than the Nascar nation would be. And they just -- it just got lost in translation somewhere.

TUCHMAN: I would not mind watching Nascar this weekend and seeing you do the play by play.

MYERS: I have some old footage. I'll bring it over.

TUCHMAN: Chad Myers, thank you very much.

MYERS: And it probably is footage on film.

TUCHMAN: From the good old days. Chad, thank you very much.

MYERS: You're welcome.

TUCHMAN: Well, the Super Committee may not be so super. Some even calling it an epic failure. Why our next guest says the decision could lead the U.S. into a shaky financial future.

But first, we have to give a shout out to a 98-year-old man who just wrote a book only two years after learning to write his name. Jim Henry of Connecticut didn't learn to read and write until his mid 90s secured (ph) young. Now, he's the author of a 29-chapter book called "In a Fisherman's Language."

(BEGIN VIDEO CLIP)

JIM HENRY, AUTHOR, "IN A FISHERMAN'S LANGUAGE": I can't believe -- it's almost impossible to believe the way I feel. I'm the happiest man in the world.

(END VIDEO CLIP)

TUCHMAN: Jim Henry, you are today's "Rock Star."

(COMMERCIAL BREAK)

TUCHMAN: Today in "Face Time," facing up to failure of mammoth proportions. As we've been reporting, the so-called Super Committee that spent weeks in search of $1.2 trillion in net government savings, is about to admit defeat. The official deadline is Wednesday but a plan is supposed to be posted for 48 hours before the Committee votes and has to be scored by the Congressional budget office besides. So today, 48 hours before, is the day the six committee Democrats and six Republicans have nothing to show for their efforts except of course disdain for the other side.

(BEGIN VIDEO CLIP)

SEN. JON KYL (R), DEBT-REDUCTION SUPER COMMITTEE: Our Democratic friends said we won't cut one dollar more without raising taxes. And I think that tells you a lot about the (INAUDIBLE) here in Washington. We went into the exercise in order to try to reduce federal government spending. And what you get from the other side is, no, we're not going to make any more cuts unless you raise taxes. SEN. JOHN KERRY (D), DEBT-REDUCTION SUPER COMMITTEE: They want the Bush tax cuts for the wealthiest Americans extended. So, the whole deal is really being held hostage to this idea that the wealthiest people in America ought to get a bigger tax cut while everybody else chips in. I don't think anybody in America thinks that's fair.

(END VIDEO CLIP)

TUCHMAN: Well, to be fair to the committee, we understand meetings are taking place and barring some break-through, no one else thinks (ph) their plans until after the markets close. The markets, of course, having another dismal day. Right now, the Dow Jones industrial is down 281 points at 11,514, 2.39 percent for the day. And I want to talk more about the high cost of dodging America's debt issues with Chrystia Freeland, she's a long-time financial journalist and now editor of "Thompson Reuters Digital." Chrystia, thanks for joining us, and the fall-back to the Super Committee supposed to be drastic spending cuts in 2013 but what happens in the meantime?

CHRYSTIA FREELAND, EDITOR, "THOMPSON REUTERS DIGITAL": Well, I think the first thing that we need to watch is what is the impact on market confidence? A lot of people were saying ahead of today that the markets had been skeptical from the beginning. Walk through it right now, like the rest of the country, doesn't have a lot of confidence in Washington's ability to get things done. So, people were saying, look, the markets have priced in failure of the Super Committee, it's not going to be a big shock. That could be, but I think that it could -- a more unpleasant scenario is also a possibility.

And if you think back to the summer and the debt ceiling negotiations, those had really a profound and very negative impact on the markets. What I'm also concerned about right now is what the international impact of this is. You know, in the aftermath of the debt ceiling discussion, something that I heard a lot from outside the country -- and you have to remember that international investors now have a big voice in the American economy, particularly in U.S. debt. So, I heard from a lot of people outside the United States saying, you know, we just really didn't think American politics was so juvenile and so dysfunctional.

TUCHMAN: Yes, we hear a lot of people saying that.

FREELAND: We thought the U.S. could get things done.

TUCHMAN: We hear a lot of people saying that, Chrystia, and it leads to this question. The Bush era tax cuts, they appear to be a major sticking point. But they were due to expire at the end of 2012 anyway, right?

FREELAND: Right, but the question is do they get extended or not? And I think, you know, you're absolutely right zeroing in on the tax cuts. It's something that I think is really, you know, the conclusion you have to come to, following the debt ceiling debate, following this, you know, apparent failure of the Super Committee is, at the end of the day, there is a profound ideological divide in America. You have Republicans on one side saying, you know what? We just think that taxes are a bad thing and there is no way we are going to agree to an additional penny of tax revenue, the tax pledge and so on.

And then you have the Democrats saying, actually, we are for balancing the budget, but we think you have to do that through a mix of tax increases and spending cuts. And I think we might have to wait for the election next year to have a resolution of that really profound issue. It is not a technical issue, it's an issue of belief.

TUCHMAN: Chrystia, if you had (ph) a one-word answer to this. Should these politicians on the Super Committee be embarrassed?

FREELAND: Yes.

TUCHMAN: That's the one-word answer. Chrystia Freeland, thank you very much for joining us, we appreciate it.

Well, billions of dollars in unemployment benefits paid to the wrong people? How people who did not qualify got paid.

(COMMERCIAL BREAK)

TUCHMAN: Now to Arizona for a story we think has been "Under Covered" thanks to affiliate KNXD in Phoenix for the investigation into this. In Phoenix, the Labor Department says more than $434 million in unemployment benefits were paid out in error. And that's just the tip of the iceberg. Nationwide, the government says nearly $19 billion in state unemployment benefits were paid to the wrong people. The amount is more than 10 percent of the $180 billion in jobless benefits paid nationwide during the three years that ended in June. Talk about a waste of money!

Take a look at this map. States that are the worst offenders are the ones in red. And you see Arizona in the southwest there. The Labor Department is cracking down on the Grand Canyon state in a bid to end the improper payments.

And with us now is Mark Darmer. He's with the employment services division of the Arizona Department of Economic Security. He's on the phone from Phoenix.

Mark, thanks for joining us. And, first off, how does something like this happen?

MARK DARMER, ARIZONA DEPARTMENT OF ECONOMIC SECURITY (via telephone): Well, Gary, I think it's important to fully understand the issue. As you have displayed the chart from the Department of Labor, Arizona's three highest improper payment rate categories have to do, the largest of which is the work search related issue. And what Arizona has that some other states don't have is, our state statutes actually require that people who are receiving unemployment actually go out and do a work search weekly in order to continue to qualify for benefits. Arizona's improper payment rate associated with that category was just over 44 percent.

TUCHMAN: So, Mark, if people -- so people that find work --

DARMER: And what's a key in that piece is that in these economic times, as you can well imagine, any time an employer posts a job announcement, they may get hundreds of resumes and applications for that position. Now when a claimant provides their work search to DES, they indicate which employers they went out and applied with. DES then goes through and checks with those employers to ensure that what is reported from that claimant is true and accurate.

As you can imagine, employers don't keep records, especially when they keep getting hundreds of resumes and applications. So when we've been calling employers, if the employer cannot unequivocally state, yes, this person did apply with me, we've been counting that as an error rate case.

Now, on several other states, what they have done is they've changed the process given the economic times. That if the employer cannot positively state that that person did not apply with them, they have been accepting the claimant's work search log as being true and accurate.

TUCHMAN: Mark, let me ask you this, though. This is the big question.

DARMER: Sure.

TUCHMAN: What is the state of Arizona doing about this?

DARMER: Well, we've made several improvements. What we have done is that we are now working with our claimants to keep them better informed of the requirements of the program. We are working with employers to keep information more relevant to the claimants that we are serving. And, we have improved our processes and we are modeling our processes to some of those other states whereby, you know, a state may provide a warning to a client (ph) the first time they encounter a work search related issue, instead of counting it as an error rate case.

So we are looking top to bottom in the program to identify areas where we can make improvements and we have really stepped up to the plate. And I think what you will see is that Arizona's data for the first quarter, by the time we get to the first quarter of calendar year 2012, you're going to see a marked improvement in Arizona statistics.

TUCHMAN: Mark Darmer, thanks for joining us. And try to get that money back to your taxpayers. But we --

DARMER: We absolutely are and we actively seek it. Thanks, Gary.

TUCHMAN: Thank you, Mark. Good talking to you.

Well, Penn State bringing in a big gun to run its internal investigation. But it all flash and no substance? A live report from Penn State, next.

(COMMERCIAL BREAK)

TUCHMAN: Penn State trustees speak out about the school's rape allegations.

(BEGIN VIDEO CLIP)

KENNETH FRAZIER, PENN STATE SELECT COMMITTEE CHAIRMAN: On behalf of the board of trustees, and the entire Penn State community, we are deeply, deeply sorry.

(END VIDEO CLIP)

TUCHMAN: Today, the trustees announced former FBI director Louis Freeh will lead a panel to investigate the school's handling of allegations against former football coach Jerry Sandusky. Sandusky has denied charges that he molested at least eight boys. Freeh says he'll appoint a team of former FBI agents and former federal prosecutors from his law firm to assist the probe.

Sara Ganim is a reporter for "The Patriot-News."

Sara, Freeh says he has pledges of support and non-interference from university officials. But what he doesn't have is subpoena power or CNN -- we can't get any answers from anyone who doesn't want to give them freely. So the first question I want to ask you is, what's the reaction on campus to today's announcement?

SARA GANIM, REPORTER, "THE PATRIOT-NEWS": Well, actually, you know, this is a break week for student here. Thanksgiving break for students at Penn State is a whole week long. So there's not a whole lot of people here. And we're not hearing much reaction at all.

And I think that that's -- the other thing, a lot of people, when they left on Friday, were really relieved to go home and have a break, some were telling us. That they expected a lot of questions from people in their hometown communities when they got home. Just to be honest with you, I think that they were mostly relieved to have this break from the chaos.

TUCHMAN: Sara, Louis Freeh's a very smart guy, but aren't his hands tied? Does he have any real power to do anything?

GANIM: I'm sorry, can you repeat that, please?

TUCHMAN: Yes, Louis Freeh's a smart man. We all know that. But it doesn't seem like he has the power. He doesn't have subpoena powers. So aren't his hands tied? Will it be hard for him to really appreciate anything in this role?

GANIM: Well, you know, I don't know. I think that when you're a non- governmental agency, you might have some issues. But that was one of the questions from this morning. A non-governmental agency can't subpoena people. Can't ask questions and force people to answer them.

But he has done this before and he has been successful at it. So I guess we're going to have to wait and see. You know, there's a lot of agencies taking a look at Penn State right now. I think that this is probably the fifth or sixth investigation that's going on. And so we're going to get a lot of answers from a lot of different directions and I think we just have to wait and see what they come up with. TUCHMAN: Well, and that leads to the next question, Sara, the NCAA, the U.S. Department of Education. They're also investigation the school's actions. So ultimately is what this panel doing, the new panel, is it window dressing or will there be three different investigations or -- it sounds like it could get pretty complicated.

GANIM: Yes, I think it could get very complicated. There are -- like I said, there are a lot of investigations going on. They all have slightly different agendas, I'm sure. But they're all going towards the same goal, the same end result, and they all are investigating, you know, who knew what and when. I think that's the bottom line here.

The Second Mile, the charity that Jerry Sandusky starred, they're asking who was in the charity knew what and when. Could they have stopped it. That's the same questions Penn State's asking. The NCAA wants to know if their rules were followed. And the state attorney general wants to know if any criminal laws were broken.

Then you have all these potential lawsuits that could come from this. I mean there's just a giant scope of questions and everybody's taking a slightly different approach, but they're all going to the same end result, who knew what and when did they know it.

TUCHMAN: Sara Ganim, you've done a wonderful job covering this very tough story. And thank you very much for talking with us.

Well, the super committee is heading for a less than super ending. How its expected failure played politically. That's "Fair Game" next.

But first, a political junkie question of the day. Nineteen former presidents -- this is a hard one, by the way -- nineteen former president also served in the House of Representatives, but how many of those were ever speaker of the House? It's not Lyndon Johnson. That's a hint. The answer, though, is next.

(COMMERCIAL BREAK)

TUCHMAN: Before the break, I asked you how many presidents also served as speaker of the House of Representatives. 19 presidents were in the House, but only James Polk was the man in charge. He was speaker from 1835 to 1839. We're listening to Guns 'n' Roses, by the way. I'm not sure why. But I love it. Great. Six years later. Polk won the presidency.

(LAUGHTER)

That was a hard one. We know that. Now you know, James Polk is the man. Time now to go beyond partisan talking points to the heart of the political debate where all sides are "Fair Game." We've got a lot of really good topics today so let's get right to it.

Joining me now is CNN contributor, Will Cain, and Democratic political consultant, Ed Espinoza.

Guys, thanks for joining us. Let's start with the deficit not-so- super committee.

Ed, I'll let you go first.

How does the committee's failure play politically?

ED ESPINOZA, DEMOCRATIC POLITICAL CONSULTANT: Well, first of all, welcome to the jungle.

(LAUGHTER)

And no better music to introduce us to something like this super committee, which ended up kind of being a super flop. But there are some things we know from it. We agreed on $4 trillion of deficit reduction. We agree that there needs to be cuts in entitlements. What we can't agree on are tax increases for the 1 percent. And this is the hardest part in getting past all of this. A negotiation means both sides have to come to the middle on some things but if Republicans in Congress are going to dig their heels in on this, then we can't make any progress. Thankfully, the debt deal that we signed last summer -- by "we," I mean Congress. Obviously I'm not a member. But the debt deal does call for some automatic triggers. That will help. So the markets probably wouldn't be affected. but that doesn't mean that our confidence in Congress is not. I think it is clearly affected. We are at 9 percent in the polls right now.

TUCHMAN: You're right, Ed. I should have known that. Welcome to the political jungle, of course.

(LAUGHTER)

Will, I want to ask you this. Do both sides deserve equal blame in this?

WILL CAIN, CNN CONTRIBUTOR: There's enough blame to go around. I'm going to have to push back on my friend, Ed, for just a moment. He started with the narrative that the dividing line has been tax cuts, tax revenues, and he is right to some degree. But that means also -- if he invokes that, we have to point out the other side. Let's narrow our focus for one moment on the super committee. Why did it fail? There are many reasons. One of them I have to respond with now is that Democrats came into this process with limited engagement. Here's why. Because the automatic cuts that Ed talked about came in the form of defense cuts and some discretionary spending. Everyone knows in order to put a deficit package together, you ultimately have to focus on Medicare, Medicaid and taxes. The Democrats can look at this and go, why would I focus on Medicare and Medicaid when I can get these cuts that focus so heavily on defense? There's no motivation to put a package together here.

But I just want to say this. This doesn't need to be a left-right deal between Ed and Will or Republicans and Democrats. The truth is the blame lies with the American people. We take polls that say we don't want deficit reduction, yet we don't want our Medicare touched or Social Security touched, and we will ask for taxes on the rich people but not ourselves. That ain't going to work. That is not a formula that will work. TUCHMAN: Will and Ed, a new topic. I want to show you a new poll. This poll, "USA Today"/Gallup poll on the GOP race, let's take a look at it. It shows Mitt Romney, 20 percent; Gingrich, 19 percent; Cain, 16 percent. The sampling error is plus or minus 4 percent. That's a statistical dead heat at the top. Paul and Perry 8 percent and 10 percent respectively.

What does it tell you, Ed?

ESPINOZA: Well, it tells me that there are two things going on, and that Romney's never really been able to coalesce in Iowa. Keep in mind, Iowa's one of President Obama's strongest states. But we've always seen somebody else beat Romney in the Republican primary in that state. Gingrich in front now. Cain in front a couple weeks ago. By the way, Cain's slippage tells me that Herman Cain's less ready to be president. I'd rather see Will Cain on that ticket.

(LAUGHTER)

TUCHMAN: Will Cain, what do you think of that?

(CROSSTALK)

(LAUGHTER)

TUCHMAN: What do you think of the poll? What does it tell you?

CAIN: It tells me that Newt Gingrich is the Mitt Romney alternative for this month, and what goes up must come down.

(LAUGHTER)

We've seen this over and over and over. So, about a month ago, I feel like, Gary, we were being asked, hey, why hasn't Rick Santorum or Jon Huntsman dropped out? I don't understand why they're sticking around. Well, here's your answer. Because we've got six weeks to go and everybody gets a turn at the top. Why would you drop out?

TUCHMAN: You guys, I've been covering --

(CROSSTALK)

ESPINOZA: Tim Pawlenty's not feeling real good about dropping out right now, is he?

(LAUGHTER)

(CROSSTALK)

TUCHMAN: I've been covering these races now since 1980, and I've never really seen anything like this, with a new leader every couple of weeks. It's fascinating. We'll follow it.

Will Cain, Ed Espinoza, that is "Fair Game." Thank you for joining us. Remember, Tuesday night, CNN hosts the next Republican presidential debate, co-sponsored by the Heritage Foundation and the American Enterprise Institute. It beings at 8:00 p.m. eastern time, November 22nd, tomorrow, right here on CNN, hosted by Wolf Blitzer.

Coming up, we are about to take you to a country where gatherings at the capital square are very different than just a few months ago. This is the scene in February, a celebration. And today, anger, violence. So where is this city? The answer is just ahead in "Globe Trekking."

(COMMERCIAL BREAK)

TUCHMAN: New clashes today as government forces try to tamp down renewed protests in Egypt. After three days of rioting in the capital and other Egyptian cities, 1,700 are wounded, at least 22 people dead. Demonstrators say Egypt's transition from military to civilian rule is not happening fast enough.

Our Ivan Watson is in Cairo.

Ivan, earlier this year, we saw celebrations in Tahrir Square after President Hosni Mubarak was toppled from power. The echoes of those celebrations are being totally drowned out by this renewed Egyptian anger. What's at the heart of these new protests?

IVAN WATSON, CNN CORRESPONDENT: I think a lot of people here, Gary, in this bloody drama that's playing out over my shoulder, a lot of people feel that they left too early from Tahrir Square in February last winter when Mubarak stepped down, and that they were tricked, that the military council that then took over has not been true to what they were protesting for, which they say is freedom and democracy. So they are back out. And instead of chanting against Hosni Mubarak, the deposed dictator, they are calling for the ruling military council to step down. And they're fighting. These are running street battles taking place on rooftops in the streets beyond Tahrir Square there, and very bloody as well. There is a constant stream of wounded people being rushed into the square, overwhelmed by tear gas, shot, some of them, birdshot it appears, then a constant stream of ambulances then rushing these people out to hospital. At least 22 people were killed in the last two to three days -- Gary?

TUCHMAN: Ivan, it is pitiful, depressing. Next week, in Egypt, there will be parliamentary elections. Are protesters worried that those elections are not the transition they are seeking. I imagine they are worried about it. How big of an issue is that?

WATSON: Everything is in flux right now. The stock market here dropped more than four points. Flights are being canceled in, and this is a country that relies on foreign tourism for much of its economy. It was supposed to have an historic parliamentary election next week, the first of three phases, and now that is all up in the air. Will those go ahead? Can you still have an election when you have basically a war downtown in the Egyptian capital?

Some of the political groups are calling for those elections to be postponed. Some of them are calling for the military council to step down immediately. Some groups, like the Muslim Brotherhood, say we've got to stay on that course. Otherwise, we'll get very angry. What's very clear is that the tens of thousands of people back here, Gary, they're not going anywhere. We're seeing blankets being brought in, medical supplies, food as well. They are going to hold on to this area with great tenacity unless some kind of political settlement is reached or unless really deadly force is used to clear them out of here. And we certainly don't want to see that.

TUCHMAN: We've been looking at live pictures while we've been talking to you and we see shots of ambulances going through the crowds. It is incredible seeing these pictures after such triumph back in February and March.

One final question to you. Because of what happened to reporters months ago, do you feel safe right now?

WATSON: Well, you know, Egypt has gotten a lot harder to work in as a reporter. Just a couple months ago, I saw an Egyptian TV producer already torn apart by a mob in front of the Israeli embassy here and I really feared that she was going to get raped right in front of me, and couldn't do much to control it.

Here the crowd is encouraging journalists to come in. We feel safe here. But it is a very fluid situation and if I have learned anything in Egypt over the course of the last 10 months, it is to very much respect the mobs when they are out in the streets. They are very excitable and all it can take is one person to direct the mob against you. They can be very dangerous.

TUCHMAN: Ivan Watson, thanks for talking with us and please stay safe. Thank you, Ivan.

He's calling himself the new Newt. We look at the old Newt Gingrich and his rise to fame.

But first, it is a turkey. It is a sinking ship. No, it is the not- so-super committee.

(MUSIC)

TUCHMAN: At any moment, the 12-member bipartisan debt committee is expected to announce its failure to reach a deal on budget cuts, the one job the panel was tasked with. Aren't super heroes supposed to fly in at the last minute to save the day? Super committee, it is time to create a secret identity. Your 15 minutes are up.

(SINGING)

(COMMERCIAL BREAK)

TUCHMAN: Newt Gingrich is everywhere these days -- on TV, running for president, on the web looking for donations, on the bookshelf offering several titles, and in the latest polls. Let's go "In Depth. A "USA Today"/Gallup poll out today -- we showed this earlier, we'll show it again -- has virtually tied with Mitt Romney tied among Republicans and Independents. One percentage point separates the two men. A few hours ago, Gingrich met with business leaders in New Hampshire. Many consider Newt Gingrich the smartest, the most in-depth politician among the Republican field, but one with plenty of baggage, including a reputation that belies his ever-present grin. Many consider him aggressive and combative personally and politically. And there's this assessment from conservative columnist, George Will, quote, "Gingrich is an amazingly efficient candidacy in that it embodies everything that is disagreeable about modern Washington. He's the classic rental politician."

He's certainly hoping to rent the White House at least for the next four years. Who is Newt Gingrich really? There he is with Nancy Reagan in the mid '90s, a younger, slimmer Newt. Never far from the Reagan name or image. Voters sent him to Washington for the first time back in 1978, 33 years ago. Gingrich won a House seat after two straight defeats. In 1989, Gingrich helped oust then-speaker, Jim Wright, who wound up as minority whip. Then in 1994, he helped crafted the Republican revolution during the Clinton administration, wrote the Contract for America and was elected speaker of the House. But the revolution and his popularity faded. And faced with an ethics investigation about his use of donations, Gingrich left Congress in 1999, 12 years ago.

Here's another more personal side of Newt Gingrich from an appearance Friday at the Kennedy School of Government at Harvard. He grew up the adopted son of an Army officer, never wealthy until now. But he remembers back then.

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NEWT GINGRICH, (R), FORMER SPEAKER OF THE HOUSE & PRESIDENTIAL CANDIDATE: I take seriously that every American of every ethnic background in every neighborhood has the right to pursue happiness and that it was endowed by their creator. That means you'll see from me extraordinarily radical proposals to fundamentally change the culture of poverty in America and to give people a chance to rise very rapidly.

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TUCHMAN: That is Newt Gingrich, presidential candidate for the Republican Party.

But we have breaking news right now. Breaking news in Egypt, Tahrir Square.

Back to Ivan Watson for the latest -- Ivan?

WATSON: Gary, we just got off the phone with the spokesman for the Egyptian prime minister's office, a gentleman by the name of Mohammad Higazi (ph), and he has told us that the Egyptian cabinet, the government, has resigned. That would plunge this country even deeper into an already-growing snowballing political crisis, as you can see, with the tens of thousands of people in Tahrir Square behind me. Many of them demanding the resignation of the ruling military council. Here we have the civilian government, which many would say is subservient to the ruling military council.

Now according to a spokesman for that government, it has resigned. Again, plunging this country further into a deep political crisis less than a week before what's supposed to be the first round of parliamentary leaks.

TUCHMAN: Ivan, really quick. You know the country well. What does this mean? Could this lead to panic?

WATSON: I think we're in new territory right now. We don't know where this is going to go or where it will take the country. If you travel around Cairo right now, there are an awful lot of billboards up, campaign advertisements. Outside of this media area, it looks like a lot of people are getting ready for an election. But there's bloodshed going on. The square is in the dark here, over my shoulder. We're watching a constant stream of wounded people. At least 22 people killed here in the last three days. More than 100 police officers wounded in the clashes between these police and protestors who are cursing the ruling supreme council of the armed forces. Lots of concerns that this could be a death blow to the Egyptian economy that has not recovered from last winter. Going to be a lot of concern now. But a lot of the people who are in the square, Gary, in the square, they're saying they're proud because they've retaken the revolutionary momentum here. Perhaps it was naive of us to think that everything would end here, that the politics would move forward smoothly and democratically after those unprecedented days last winter here in Tahrir Square -- Gary?

TUCHMAN: Drama in Egypt's capital.

Ivan Watson, thanks for joining us again.

Well, you want to be the face of the United States of America? An interesting opportunity for 40 people. Philippe Cousteau explains when he joins us live.

Plus, things are heating up on E Street. Why? The Boss is back.

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TUCHMAN: Let's check stories making headlines across the country from "Street Level."

In college sports, news out of College Park, Maryland, the University of Maryland will be cutting eight sports teams beginning next June to balance its athletic department's budget deficit. The cuts include men's track teams, men's and women's swimming, men's tennis and women's water polo and acrobatics and tumbling. The university's president says the school simply cannot afford it and says all scholarships commitments and coaches' contracts will be honored.

New Jersey native, Bruce Springsteen, says things are heating up on E Street. That comes straight from the boss's official web site. Springsteen and the E Street band are going on tour next year. Yes, we know you Springsteen diehards, including me, have been waiting for this for three years since their last tour. This is their first outing without their saxophonist Clarence "Big Man" Clemons, who died this past June. The tour kicks off in Europe, jamming in England from May until July. Springsteen plans to announce a U.S. show date soon. Great news.

In Miami, a family is suing a hospital, alleging a nurse injected this man, 79-year-old Richard Smith, with a drug used to execute inmates instead of giving him an antacid. According to affiliate, WSVN, Smith's son says the doctor told him he went into respiratory arrest after a nurse grabbed the wrong package and gave his dad the wrong medication. Smith was revived but died a month later. The hospital issuing a statement saying it conducted an internal review and now has several new processes in place to prevent a similar mix up. It doesn't help the family. The family's attorney says the nurse is still working with patients despite the investigation.

Congress is once again proving it can't agree on much. It did pass the free trade pace with South Korea recently. That move alone shows just how important South Korea is to the United States. So it's no wonder why next year's world expo in South Korea is proving to be a big deal. And who will represent the United States will be just as critical.

That's where explorer and environmental advocate, Philippe Cousteau, comes in.

Philippe, thanks for joining us.

The U.S. State Department chose you and your team to design and operate the USA pavilion. A big part of that operation includes college students as ambassadors.

Tell us about that.

PHILIPPE COUSTEAU, EXPLORER & ENVIRONMENTAL ADVOCATE: It's an exciting opportunity, Gary. What we wanted to share with the world today is that we are inviting 40 college-level students to apply for student ambassadorship status. What we're doing basically is, on top of providing actual a wonderful, exciting attraction at the USA pavilion for the millions of people participating this summer, we also want to have 40 college-age students here in the United States participate as well and really help tell that story of the U.S. So on our web site at pavilion2012.org, we just opened the application process for 40 -- well, anybody, but we'll choose 40 college-age students. They have to be American citizens and be proficient in Korean, to come over in the summer of the pavilion this summer in 2012 to be the face of the U.S. and really tell the story of the United States to millions and millions of folks going through the expo.

TUCHMAN: Philippe, what a cool opportunity. So you need to speak Korean. What are the other qualifications? You need to be a current graduate or undergraduate anywhere in the United States?

COUSTEAU: Correct, and a citizen of United States. We're partnering with the University of Virginia but it's open to any university-age student across the country. With all the bad news about jobs and the various different scandals that are so much in the news today, this is really just a positive and empowering story. All the expenses are paid for the students. They apply online and the lucky few chosen will have an amazing adventure and experience for four months in South Korea over the summer. We're just thrilled to be able to offer this opportunity to American citizens.

TUCHMAN: I know a lot of people are watching, saying, wow, that sounds great thing to be able to do. Maybe you can narrow it down a little bit.

COUSTEAU: It's going to be a lot of fun.

TUCHMAN: It sounds great. What kind of student are you looking for? Are you looking for someone that's talkative, rambunctious, smart, fun, all of those things?

COUSTEAU: All of those things. We are looking for people who are good at working with people. We want kids willing to explore the culture of South Korea and be proud they have the opportunity to, again, be the face of the United States, to represent this great country at this pavilion and at this world expo where we estimate eight million to 10 million people will be participating and going through. There's well over 100 different countries so there will be other cultural opportunities, lots of events, both from the South Korean government and culture but also from all the other countries participating. So it's going to be really a spectacular once-in-a- lifetime opportunity for those lucky 40 students who are chose be.

TUCHMAN: Philippe Cousteau, thanks for joining us, and congratulations on your role in this. It sounds like a great opportunity --

COUSTEAU: Thank you.

TUCHMAN: -- for you and for these college students who get picked.

We appreciate it.

You can find out more information or apply for the student ambassadors program at the USA pavilion web site, pavilion2012.org/student- ambassadors.

Well, that will do it for me. I'm Gary Tuchman, in for Randi Kaye.

Tonight on "Anderson Cooper, 360," I have a special report on the gulf oil spill and what's happened to the food supply in the Gulf of Mexico. There are some scientists who say, for some people, that food might be very dangerous to eat. There are some who disagree but some who think it's dangerous. We'll have that story tonight, 10:00 eastern time on "Anderson Cooper, 360."

Now we go to more of CNN NEWSROOM with my old friend -- well, she's not -- she's not old, but she's my good friend, Brooke Baldwin.

(LAUGHTER) BROOKE BALDWIN, CNN ANCHOR: I will take it. My dear friend Gary Tuchman, thank you so much.