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The Situation Room

Writing to the Ayatollah; From Gitmo to Killing U.S. Troops; "He Cleaned His Family Out; President Obama's Contradictions

Aired March 11, 2009 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.

Happening now, President Obama considering an approach to Iran. But he may sidestep his hard-line counterpart in favor of the man who holds power behind the scenes. Stand by for news.

While the White House wrestles with the idea of reaching out to Iran, U.S. athletes are doing their wrestling right now in Tehran. We're going to go there.

And while a gunman terrorized Alabama, killing 10 people, a woman risked her life to save a wounded baby. She tells us her story.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

President Obama may be preparing a stunning diplomatic overture, something he vowed to do as a candidate -- opening up a dialogue with Iran.

But could he bypass his hard-line counterpart in Tehran in favor, perhaps, of a more powerful figure?

Let's bring back our foreign affairs correspondent, Jill Dougherty.

She's working the story for us -- Jill, what is going on here?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, it's very interesting, Wolf. But, you know, when Americans think of Iran, they usually think of Mahmoud Ahmadinejad. But if the Obama administration reaches out to engage with Iran, it may not be with him.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Is this man ready to talk to this man?

Not face-to-face. But behind the scenes, talk of a possible letter from President Barack Obama to Iran's supreme leader, Ayatollah Ali Khamenei. Publicly, the administration won't bite.

ROBERT WOOD, STATE DEPARTMENT SPOKESMAN: I just don't want to get into a discussion of those ways that we may or may not be planning to engage Iran.

DOUGHERTY: But privately, senior administration officials and European diplomats say it's one of the options the U.S. is considering to engage Iran. It would make history -- the first time since the 1997 Iranian Revolution that an American leader has officially communicated with Iran's leaders. The letters, still under discussion, would urge negotiations on Iran's nuclear program and seek cooperation on areas like Afghanistan.

Already, Secretary of State Clinton invited Iran to a conference on Afghanistan later this month.

HILLARY RODHAM CLINTON, SECRETARY OF STATE: Iran has an opportunity to step up and become a productive member of the international community. As President Obama said, we are reaching out a hand, but the fist has to unclench.

(END VIDEOTAPE)

DOUGHERTY: And one big question -- should the U.S. reach out before the Iranian presidential elections in June?

European diplomats are warning that it could boomerang. It would let, potentially, hard-line President Mahmoud Ahmadinejad, take credit for improved relations as he runs for election -- Wolf.

BLITZER: What's the difference?

We see so much of Ahmadinejad, the president, between him and the ayatollah?

DOUGHERTY: Right. Well, the supreme leader has much more power than the president. He's in charge of the military, in charge of the clerics. He vets presidential candidates, appoints the head of the judiciary. And, Wolf, this is one reason the experts are saying it's so hard to get one position out of the Iranian government. The supreme leader has to bring all of those different factions together.

BLITZER: That's why he's the supreme leader, I guess, right?

DOUGHERTY: Right.

BLITZER: Jill, thanks very much.

An important story.

We'll watch it.

They called him Prisoner #8 -- one of the first Afghan detainees transferred to Guantanamo Bay. He was later freed and actually returned to his homeland. And now officials say he's a top Taliban commander plotting attacks right now on U.S. forces.

Let's go to CNN's Elaine Quijano.

She's got the details for us -- Elaine, what's going on? ELAINE QUIJANO, CNN CORRESPONDENT: Well, Wolf, he was caught riding in a car with a Taliban leader just after 9/11. He was then locked up at Guantanamo Bay. And now he is back and controlling this massive area in Southern Afghanistan with one goal, officials say -- to kill American and coalition troops.

(BEGIN VIDEOTAPE)

QUIJANO (voice-over): Guantanamo Bay, 2005 -- Prisoner #8, Abdullah Ghulam Rasoul, pledges to U.S. military officials if he's released, he plans to go back home, join his family and work on his land.

The kicker?

He says he's very happy with what the U.S. is doing in Afghanistan: "They are rebuilding my country," he says.

So in 2007, Prisoner #8 is put on a plane back home to Afghanistan. But now, he's resurfaced with a nom de guerre -- Mullah Abdullah Zakir. According to a U.S. counterterrorism official, his mission now -- to attack coalition forces, as the Taliban's operations chief for Southern Afghanistan. The Pentagon had no comment. But officials say 62 suspected or confirmed former detainees have been involved in terrorist attacks.

STEVE COLL, NEW AMERICA FOUNDATION: Well, this case highlights the problem that the Obama administration faces in trying to close Guantanamo, because there are still dozens of individuals whose file suggests that if released, they would seek to go back to war against the United States.

QUIJANO: And some say these cases underscore the need for overseas military prisons like Guantanamo.

DAVID RIVKIN, FORMER JUSTICE DEPARTMENT OFFICIAL: How would you like to be a person to tell the family of a fallen soldier that he was not killed by a foe we encountered the first time, he was killed by somebody we had in custody?

(END VIDEOTAPE)

QUIJANO: Now, President Obama plans to appoint an envoy to oversee the closing of the Guantanamo prison.

His main task?

To try to convince other countries to take some of these 200 plus remaining detainees -- Wolf.

BLITZER: Easier said than done, I'm sure. No doubt about that.

All right, Elaine, thank you.

Let's go back to Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Yes. Who would want those cretins in their country?

I mean that's a -- that's a hard sell, isn't it?

BLITZER: Yes, it certainly is.

CAFFERTY: And the one they were just talking about we had at GITMO. And now he's -- I mean...

BLITZER: Right.

CAFFERTY: America's recession could mean the end of our role as a superpower, according to a piece in the "Atlantic' magazine. Robert Kaplan writes how politicians have pretty much taken for granted that ever since Pearl Harbor, Americans would go along with military missions and costs. For almost seven decades, the home front has been willing to write blank checks for our efforts abroad, building ships, planes, tanks and whatever, so the United States could assert itself overseas.

Kaplan suggests this tradition might come to an end, transforming the U.S. eventually into a shrinking superpower. He writes how the public turned against the Iraq War in 2006. He says the Obama administration probably has about a year to improve things in Afghanistan before the public turns on that effort, too.

There's more.

How about all those expensive weapons programs, air and sea platforms all around the world?

These are what make the United States a global dominant power and critical diplomatic voice. But these things cost a fortune, which we no longer have.

Kaplan doesn't see a sudden slashing of defense budgets by the Obama administration, but rather gradual siphoning of money away from the Defense Department and the military over the next decade or so.

Meanwhile, China, India and other emerging nations are growing their military forces. Kaplan writes he doesn't think this will ultimately mean a security threat to the U.S. but rather will result in a multi-polar world.

In the end, the worst economic crisis to hit the U.S. since the Great Depression could mean that Americans finally turn more inward and focus here, on our homeland.

Here's the question: What will it mean if America loses its superpower status?

Go to CNN.com/caffertyfile, where you can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

Behind the scenes of a slaughter -- a woman tells how she braved the bullets to rescue a wounded baby from that deadly rampage in Alabama.

Plus, a dangerous stare-down out on the high seas brought the U.S. and China to the edge of violence.

Could another type of face-to-face encounter cool tensions?

And the president quietly -- very quietly -- signing the $410 billion spending bill. But a top Republican leader says it's weighed down with lots of waste. I'll speak about it with Congressman Eric Cantor.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Obama today quietly signed into law the $410 billion spending bill, despite complaints that it is packed with Congressional pet projects. The bill certainly does not sit well with many of its critics.

And joining us now from Capitol Hill is Congressman Eric Cantor.

He's the number two Republican in the House of Representatives.

Congressman, thanks for coming in.

REP. ERIC CANTOR (R), VIRGINIA: Wolf, good to be with you.

BLITZER: Listen to what the president said on his decision to go forward with at least some earmarks.

Listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Done right, earmarks have -- have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts and that's why I have opposed their outright elimination.

(END VIDEO CLIP)

BLITZER: Is he right?

CANTOR: Well, listen, Wolf, basically, we start with the premise that if someone makes a promise, the American people expect delivery on that promise. And this president campaigned on the notion that he would come to Washington and change the way this town does business.

So I believe that this president, in his sincerity that he wants to clean up the process. It is something we should do.

Now, whether we can accomplish that, whether he can impose that will on this Congress, is yet to be seen. Because, clearly, there is entirely too much spending and entirely too much waste that's going on. And as you know, Wolf...

BLITZER: Are all earmarks, Congressman, a waste of money?

CANTOR: No. I mean I think that with the Constitutional obligation of a Congress to oversee the spending and expenditure of taxpayer dollars, there is a role for Congress to play. The problem is the system is broken. There is no vetting process that we can point to that is transparent that can demonstrate to the taxpayers...

BLITZER: Because he says he...

CANTOR: ...that we're spending their money prudently.

BLITZER: He says he's trying to clean up that process and that's why he's looking for his middle ground. Some earmarks are good, transparent, honorable projects. The ones that aren't, that he wants to eliminate.

CANTOR: Well, we in the House, I think, ought to be adopting a moratorium right now to clean up the process. Then we can go about spending the taxpayer dollars in a much more meritorious and much more efficient way.

But the system is so broken at this point, we need to take a step back, take a deep breath, do what families and small businesses are doing across this country, tighten the belt and understand that any expenditure has to be done right.

BLITZER: Because listen to Congressman Peter King, Republican of New York. I spoke to him the other day. He strongly defends earmarks.

Listen to this.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: I believe that responsible earmarks are an absolutely essential part of my job as a member of Congress, because if I don't earmark for my district, some faceless bureaucrat in the administration -- in a Democratic administration -- is going to be deciding how money is spent in the 3rd Congressional District.

(END VIDEO CLIP)

BLITZER: What do you say to that?

CANTOR: Well, listen, we are in extraordinary times right now. You know, the amount of spending in Washington is overwhelming. Between the stimulus bill and the spending bill that just passed the Senate yesterday, it's 1.2 trillion. Wolf, that amounts to $24 billion a day -- a billion dollars an hour. That is coupled with the -- the severity of the economic situation.

We've got to take extraordinary measures right now. The system is broken. Let's say... BLITZER: Because -- because Congressman King and others, Democrats and Republicans, say the legislative branch is equal to the executive branch and if the legislative branch doesn't direct money to certain projects, some faceless bureaucrat at the Department of Transportation or elsewhere in the executive branch, is going to do that.

The other problem -- do you think your constituents in your district would have a problem...

CANTOR: That...

BLITZER: ...if they made those decisions as opposed to you?

CANTOR: Wolf, the constituents, I think, that I represent would say we've got to stop wasting money, start balancing the budget and get this economy back on track. That needs to be our focus, not bringing home the bacon. And that's been the culture here in Washington. We need to make sure that what is brought home is consistent with our mission of creating jobs and stimulating this economy.

BLITZER: Would you like to see another Obama economic stimulus package go forward?

Because there's now talk that it may be necessary.

CANTOR: Well, Wolf, I've also heard the discussion that Speaker Pelosi and the chairman of the Appropriations Committee are preparing another stimulus bill.

What I would say to that, Wolf, is that is an admission that what the stimulus bill that went through here in a very rushed fashion did not accomplish. And, in fact, it was an 1,100-page bill that no one read in the House or the Senate. The public didn't have its right no know realized. And the goal was to create 3.5 million additional jobs.

I think by saying that we need another stimulus bill, there's an admission there that that was a failure. And, Wolf, you know, we've been criticized a lot for not having a plan. We did have a plan and we do have a plan. I personally handed that plan to President Obama, as to how to stimulate the economy, create twice as many jobs at half the cost.

Perhaps now, if they're going back and putting another stimulus bill out there, that they'll take some of our suggestions and focus the efforts on small businesspeople around this country. That's how we're going to create the jobs.

BLITZER: And so what I hear you saying is you're willing to work with them now on a second stimulus package, is that right?

CANTOR: We were willing to work before, Wolf. And we said all along the $740 billion stimulus bill that passed was entirely too wasteful, it wasn't targeted to stimulate the economy. If we're going to be about preserving and creating jobs, we need to focus where the jobs are. That's in small businesses.

Let's help the entrepreneurs, the self-employed, the small businesses get back into the game so that they can create jobs for our communities.

BLITZER: Congressman Cantor, thanks for coming in.

CANTOR: Wolf, thank you.

BLITZER: A drop of 180 feet -- a man goes over Niagara Falls and survives. The story still ahead.

Plus, the couple who went from being millionaires to pedaling around in an R.V. Park. Ahead, the woman who says Bernard Madoff's investment scheme literally stranded her here.

And the comments that James Carville made on 9/11, reportedly, they could come back to haunt him.

What's going on?

James is here in THE SITUATION ROOM. We'll ask him.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Zain, what's going on?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, a person has reportedly gone over Niagara Falls and has survived. So far there's no information on just who the person is or what his condition is. But one thing is for sure -- the sight of someone just plunging down the falls really shocked everyone who witnessed it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I thought I imagined it. I actually looked around and there were a bunch of people. And nobody seemed to notice or anything. So I was thinking, did they see it or was it for real. So I -- it took me 10 seconds. I called 911. And then other people ran from the top and they saw the guy floating toward us. So other people did see it.

UNIDENTIFIED MALE: We were able to, with the assistance of the Niagara Falls Fire Department, deploy firemen into the water with water rescue suits. And again, with the assistance of Niagara Helicopter, we were able to guide the male toward the shoreline and able to rescue him.

(END VIDEO CLIP)

VERJEE: He was in the almost freezing water for about 40 minutes. The last time someone went over Niagara Falls and survived was in 2003. A horrifying shooting spree in Germany. This one began today at a school near Stuttgart. Police say a former student shot and killed at least a dozen people, both teachers and students, then left and killed three more people and injured two police officers before apparently killing himself. Police say the 17-year-old gunman seemed to just open fire at random.

Senator David Vitter is explaining a reported run-in with an employee at Dulles Airport just outside Washington. "Roll Call" newspaper says the Louisiana Republican was running late for his flight and tried to open a jet way door after the doors had been closed. Vitter then got into a confrontation with an airport employee, who then just called security. The senator says he accidentally went through the wrong door and calls the report "overblown."

The economic crisis from Main Street to "Sesame Street." Sesame Workshop, the non-profit group behind the popular children's TV show, is announcing lay-offs. It says it's cutting about 20 percent of its workforce, 67 employees in all. The organization says the lay-offs are unfortunate, but needed in these tough economic times.

And, Wolf, Chris Brown will not appear on Nickelodeon's Kids Choice Awards Show later this month. The singer is withdrawing his two nominations after being charged with beating his girlfriend, Rihanna. Brown's spokesman says the controversy surrounding that incident has shifted the focus from Brown's music to whether or not he should be allowed to compete. Brown is scheduled to be formally arraigned on assault charges next month -- Wolf.

BLITZER: I hope "Sesame Street" doesn't fire Big Bird. I love Big Bird.

VERJEE: I love Big Bird, too.

BLITZER: What about Cookie Monster?

Do you like Cookie Monster?

VERJEE: I like Cookie Monster, too, Wolf.

BLITZER: I love Cookie Monster.

VERJEE: Love, love, love.

BLITZER: OK. Thanks very much.

VERJEE: Thanks, Wolf.

BLITZER: Zain, stand by.

Coming up, 10 people dead across two towns -- the worst mass shooting in Alabama history. Police say a man went on a killing spree yesterday targeting his family, random people, even children.

CNN's Sean Callebs picks up the story -- Sean. SEAN CALLEBS, CNN CORRESPONDENT: Wolf, of course, the big question everybody wants to know right now -- what could the possible motive be?

The district attorney is involved, as well as a number of investigator for county and state government. And at this point, no one has any concrete idea.

Now where we are, in the town of Samson, nine lost their lives yesterday, including seven right here on this small block. Among those killed, four members of the suspected gunman's family, who were shot and killed on the porch behind me. Also, tragically, the wife and young daughter of a deputy who was answering the emergency call. And the sheer violence simply stuns the deputy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was on duty. I was in a different area of the county. I was heading this way. We got notified on the radio that a trooper was chasing a suspect that had fired shots. I went to Geneva to Reliable to assist. While on scene at Reliable, I told a friend and he come and checked on my family. And he told me to get home. And I came home and found my wife and daughter had been killed.

(END VIDEO CLIP)

CALLEBS: The deputy's 3-month-old daughter was also on the porch. She was wounded in the shootings. It could have been much worse.

However, a neighbor who lives just next door heard the automatic gunfire. She went out of her house, darted across the yard, scooped up a child and carried the infant to safety.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I ran over there to see if there was any survivors, heard the baby, picked her up. I came between the two vehicles over there and saw him coming up the road. I ducked so he wouldn't see me. As he was coming up this way, I was still ducking and moving around their van, taking -- trying to keep him from seeing me with that baby.

(END VIDEO CLIP)

CALLEBS: Now, as for the suspected gunman, we know he was armed to the teeth. He had an AK-47, an M16, two pistols and a shotgun in his car -- Wolf.

BLITZER: Sean, thanks very much.

All right, this just in. The governor of Alabama now reacting to this horrible mass shooting.

Listen to this.

GOV. BOB RILEY (R), ALABAMA:

UNIDENTIFIED FEMALE: Well, but I think it's a combination of just shock and disbelief. I live in a little, small town about like this. And I know what it would be like in my -- in my community. It's -- it really is devastating to a community this size. You know, this is -- this doesn't happen in small towns. And all of a sudden you begin to understand that you really do have the same problems in some of these small towns you have in the other parts of the country or other parts of Alabama.

(END VIDEO CLIP)

BLITZER: And Governor Riley says state officials need to start thinking very hard further to prepare these small communities for incidents like this one -- make sure police are properly armed.

The White House grapples with the idea of reaching out to Iran. Some Americans have no hesitation.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm very excited. Iran is the place to go. I'd say they really respect (INAUDIBLE) like it should be.

(END VIDEO CLIP)

BLITZER: U.S. athletes are in Iran right now -- the country through their own eyes. We're going to go there.

Plus, the first lady with a special message -- what she says is the backbone of American communities.

And some comments made on September 11 now making some headlines -- what James Carville said then getting some attention out there. And James is standing by live here in THE SITUATION ROOM. We'll ask him for his comments today.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, Wall Street advances for a second straight day. Today, the Dow climbed about 4 points -- not much, but at least it climbed a little bit, to close at 6030. Yesterday, stocks surged 379 points.

Nancy Pelosi on the defensive about her use of military aircraft. We're going to tell you why some people are questioning the speaker of the House and her flying habits.

And confrontation on the high seas -- the U.S. and China pointing fingers after a serious naval run-in. I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

In front of the cameras today, we saw this -- applause as President Obama signed an executive order. But it's what he signed off-camera, behind closed doors, that's drawing a lot of attention.

Let's bring in our senior political correspondent, Candy Crowley, to picture, up the story -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You're absolutely right, Wolf. This is an administration that sold itself as transparent. But today, a very, very big bill signed behind closed doors -- which doesn't mean it isn't getting a lot of attention.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): It was a campaign staple -- getting control of the federal dollars lawmakers use for pet projects back home.

OBAMA: I pledge to slash earmarks by more than half when I'm president of the United States of America.

CROWLEY: Today, in a thread the needle approach, President Obama both broke and honored that pledge. At issue, old business -- a $410 billion spending bill Congress did not pass last year. It is loaded with earmarks, from Democrats and Republicans. Taxpayers for Common Sense is a centrist organization working to cut wasteful government spending.

UNIDENTIFIED FEMALE: You know, the $7.7 billion of earmarks in this bill, some of them may not be wasted. Some of those may be for worthy projects but we don't know that.

CROWLEY: The president signed the bill, behind closed doors.

UNIDENTIFIED MALE: No reason other than the fact that some are signed in public, some aren't.

CROWLEY: Though he made law in private, the president criticized in public.

OBAMA: I am signing an imperfect omnibus bill because it's necessary for the ongoing functions of government and we have a lot more work to do.

CROWLEY: Technically, not true. Congress could have passed temporary bills to keep the government running as it did last year with President Bush, but Democratic sources say as the president looked down the road at what's ahead, this was not a fight he wanted.

OBAMA: We can't have Congress bogged down at this critical juncture in our economic recovery.

CROWLEY: Before signing the pork laden bill, the president outlined measures to reign in earmarks. Republicans went at him.

UNIDENTIFIED MALE: This gives voice to St. Augustine's lament, give me sobriety but not yet.

CROWLEY: The president's anti-earmark plan expands the White House role in the earmark process. Federal agencies would be given 20 days to say whether a project is worthwhile. Any earmark to a for profit company would have to be open to competitive bidding. A couple of weeks ago as the White House signaled its intention to put together earmark reforms, house Democratic leader Steny Hoyer told reporters, "I don't think the White House has the ability to tell us what to do." Nonetheless, House Speaker Nancy Pelosi and Senate Leader Harry Reid put out statements today, incorporating the president's plan with their own earmark reforms.

(END VIDEOTAPE)

CROWLEY: There is some uneasiness about White House involvement in the process, but the president will get a pass on this one. No grumbling here said one Democrat. It was one of his campaign promises -- Wolf?

BLITZER: Candy, thanks very much.

Let's talk about this and more now. Joining us, our CNN political contributor, the Democratic strategist, James Carville and Republican strategist Nicolle Wallace. She's a former communications director in the Bush White House.

Guys, thanks very much.

It was a tough decision, James, the president had to make, but did he blink?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I don't know if he blinked. They said they wanted to get these reforms to him. My understanding is that we said he wanted to reform the process. And my other understanding I think on our network reported that 40 percent of these so called earmarks stem from Republicans. I think he'll be held to a higher standard next year. He makes a valid point.

BLITZER: Nicolle correct me if I'm wrong. Did President Bush, and you worked for him, ever veto spending bill that had earmarks?

NICOLLE WALLACE, REPUBLICAN STRATEGIST: Well look, I think all of the country has turned to this president and they're paying attention to what he does. What he did today is the equivalent of sitting there with a half gallon of mint chip ice cream, finishing off the whole thing and saying, tomorrow, I'm going to Weight Watchers. I mean this is a powerful president.

BLITZER: But President Bush did sign all that legislation as well, didn't he?

WALLACE: The entire public was watching this president. They were inspired by him and they were inspired by him because he promised to change.

BLITZER: I'll take that as a yes. Why are you laughing?

CARVILLE: Sometimes, you've just got to say, actually, he did but people weren't inspired by him. I think what she was saying is it didn't matter that President Bush did it because people weren't inspired by him.

WALLACE: My point is people were talking about what the president did and the president did not campaign the first or second time the way Barack Obama did. People don't know what earmarks are, they really don't understand the process and how junked up it gets. But they do understand that Barack Obama said he was going to end earmarks and his first massive spending bill contains a whole bunch of them.

CARVILLE: I think he was for transparency and I think they added some of that stuff. We can argue this, but we know that President Bush signed them all.

BLITZER: We asked our viewers to send in I-report comments grading the president of the United States. We've got one from Houston, Texas -- saying he contributed money to the Obama campaign considers himself a liberal. Nicolle listen to what he says.

UNIDENTIFIED MALE: How would I rate President Obama's first 50 days? He deserves an a. Why? Well, he has the ability to lead by letting everyone effectively come to his conclusions. This works because he's a pragmatist and mostly driven by data as opposed to ideology.

BLITZER: On the last point Nicolle, do you agree?

WALLACE: I live in New York and I think everybody here gives this president an a. He is very popular right now and I think that you know, they are riding this wave where I think a simple, just to get back to the last discussion, a simple thing like an earmark reform promise on the campaign trail, they think not a big deal to modify. But what they have to watch, as popular as they are, are these little chips away at his credibility. Sure, this is an earnest guy, who sent u an I-report and obviously believes what he says. He looks pretty earnest and I think a lot of people share that view. But from a political perspective, the White House really has to guard and protect their credibility.

BLITZER: James, there's a report and I'm sure you've seen it, Lincoln Drudge (ph) today saying you were in a meeting with reporters, a breakfast meeting with reporters, on the morning of 9/11 and when before any of us knew what was happening in New York or at the pentagon and you were suggesting that you were hoping that President Bush at that point, would not succeed. That report saying that the reporters never reported that because you asked them after we knew what was happening on 9/11 to not report it.

CARVILLE: First of all, the guy that wrote that is Bill Salmon and he works at Fox and I've always find him to be a straight guy. To be fair to me, I said, look, everything I said, I just said everything I said, I you know, given the circumstances, everything was changed. Thank god I had the good sense to realize the United States was at war, unlike Rush Limbaugh, who four times after he said it when the United States is at war fighting three different wars, kept insisting that he wanted the president to fail in a time of war. Again, I was pretty clear when I read that report, that Bill did report that I said that after I found out.

BLITZER: But let me just be precise James. Did you say that morning, did you say that you hoped President Bush would fail?

CARVILLE: I don't know what I said that morning. I know him to be a reporter. Once I found out that the country was at war, I said I don't mean whatever I said, disregard it. I had the good sense, I presumably to the extent I can remember seven and a half years ago, to say that. And I was grateful he put that in.

BLITZER: We'll leave it there. Guys, thanks very much.

Tomorrow, by the way, President Obama meets with representatives from each state to get an economic update. Have you seen any changes in your state since the stimulus package was passed? What would you tell President Obama if you were meeting with him? Here's what you can do. Submit your video to ireport.com/situationroom and watch tomorrow's show to see if your video made the cut. We're doing this everyday.

On the edge of violence. American and Chinese sailors in a dangerous face to face confrontation. Now, top diplomats fight to put a lid on the tension.

And young immigrants recruited in the U.S. heartland to fight in their homeland but will they come back to America to launch terror attacks?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We told you about a confrontation between U.S. and Chinese sailors on the edge of violence. Can top diplomats now put a lid on the tensions which are very real? Let's bring back Zain. She's got some details -- Zain?

VERJEE: Wolf, the U.S. and China have been playing what's been called a dangerous cat and mouse game with submarines and their hunters.

(BEGIN VIDEOTAPE)

VERJEE: The United States says its high seas spat with China is serious.

GEOFF MORRELL, PENTAGON PRESS SECRETARY: We believe it requires face to face talks to find out what was going on here and to ensure that there are no further incidents of this nature in the future. VERJEE: China blames the U.S. for a confrontation near a key naval base just south of China's Hainan Island. China says the U.S. ship, Impeccable, was acting illegally in China's special economic zone. Not true, say U.S. officials.

MORRELL: We believe firmly that what that naval ship was doing in those international waters is not only fully consistent with international law, it is common practice and we hope that the Chinese would behave in a similar way. That is according to international law.

VERJEE: U.S. officials say Chinese vessels tried to harass the crew by moving dangerously close to the ship. The Impeccable responded with warnings and finally turned water hoses on one of the Chinese vessels prompting sailors to strip down to their underwear. The Impeccable is a non-combat surveillance ship that uses sonar to gather underwater data. U.S. military officials say China operates submarines in the area Impeccable was surveying. The Obama administration does not want a military crisis with China.

CLINTON: We must work hard to avoid such instances and to avoid this particular instance, having consequences that are unforeseen.

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VERJEE: China also has a major impact on the U.S. economy and is a key player in North Korean diplomacy and some experts say this could really give the hard-liners to make the case for not going easy with China and really put pressure on President Obama.

BLITZER: Thank you for clarifying that. Zain, thank you.

They left America's heart land for a war in their native country, but could some young immigrants come back to America looking for terror targets? That has some lawmakers raising warning flags. Let's go to our homeland security correspondent, Jeanne Meserve.

Jeanne, there was an important hearing on the hill today.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: There was. Here's the concern. Young Somali American men recruited in the U.S. to fight in their home land, then return to the U.S. to conduct terror attacks. It has not happened yet but it has some people worried.

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MESERVE: A video on YouTube which a Senate committee says was used to get young men to pick up arms in Somalia's civil war. Some have left the Somali community in Minneapolis to fight in the streets. One is the first U.S. citizen known to have become a suicide bomber. He conducted his attack in Somalia last October, but there is concern that others like him could use their American passports to come home and strike here.

PHILIP MUDO, FBI NATIONAL SECURITY BRANCH: I would talk in terms of tens of people, which sounds small, but is significant. Every terrorist is somebody who can potentially throw a grenade into a shopping mall.

MESERVE: The young men are recruited by a U.S. designated terrorist group called Al Shabab (ph), an Islamic group fighting for control of Somalia and have links to al-Qaeda.

ANDREW LIEPMAN, NATIONAL COUNTERTERRORISM CENTER: These individuals could be indoctrinated by al Qaeda while they're in Somalia and then return to the United States with the intention to conduct attacks.

MESERVE: Officials emphasize there is no credible instance that attacks are planned here, but one source says the FBI is investigating recruitment is Columbus, Ohio, San Diego, California, and in Minnesota where Burhan Hassan (ph) lived. He vanished last November resurfacing in Somalia. His uncle believes he knows where the recruitment took place.

OSMAN AHMED, COMMUNITY ACTIVIST: He used to go to school, home, the mosque.

MESERVE: Somalis say some young men in their communities are acceptable to recruitment because of difficulty integrating into American society and are not aware of what they are signing up for.

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MESERVE: Law enforcement is trying to build bridges to the Somali community to find and/or dissuade the recruits, but officials say the real solution is to bring peace to Somalia, something that has been elusive since 1991. Wolf?

BLITZER: Jeanne Meserve, thank you.

While the White House grapples with the idea of reaching out to Iran, U.S. athletes are grappling and reaching in Tehran. We're about to go there.

And the first lady Michelle Obama visits the state department and says change is coming to women all over the world. Michelle Obama in her own words. You're about to hear from her, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: While the Obama administration wrestles with the idea of reaching out to Iran, American athletes are doing their wrestling inside Iran. CNN's Reza Sayah has the story of the throw down in Tehran.

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REZA SAYAH, CNN CORRESPONDENT: At a wrestling arena in Tehran, Iran, a rare scene. Under the gaze of the late Ayatollah Khomeini. Next to Iran's best wrestlers, American wrestling champion Tervel Dlagnev and Team USA.

TERVEL DLAGNEV, USA WRESTLING: I'm sure they have ten guys here to win this tournament. I'm really excited.

SAYAH: Dlagnev and his teammates in Tehran practicing for the most prestigious tournament in a country where wrestling is king.

DLAGNEV: It's huge.

HENRY CEJUDO, USA WRESTLING: I'm very excited. Iran's a place to go. That's where they really respect wrestlers like they should be.

SAYAH: For some, it's their first trip to Iran.

DLAGNEV: I asked, is that safe?

SAYAH: What they've seen in Iran, they say, is not what they've seen on the news.

CEJUDO: I know they portray on TV. The Iranian people are very, very nice. Very respectable. They're the nicest people I've ever met.

SAYAH: This is team USA's eighth visit to Iran. For Iranian wrestlers, the respect is mutual.

FARDIN MASSOUMI, IRANIAN WRESTLER (through translator): We have everything here.

ZEKE JONES, COACH, TEAM USA: The people of Iran are so friendly.

SAYAH: Zeke Jones was part of the first team to visit Iran in 1998. Each trip comes with the anticipation of improved relations between Washington and Tehran. That hasn't happened, at least not on a large scale. But Jones says the talk out of the Obama administration sounds promising.

JONES: There's openness from the Iranian people, and openness from the American people, that I think it can be different this time.

SAYAH: This is a perfect example of what sports can do, but governments can often not. You have Team Cuba practicing right here next to the Team USA. All the way in the end is Team Iran. Three countries sharing the same practice facility, getting along. Something their governments haven't been able to do.

MIKE NOVOGRATZ, USA TEAM LEADER: It would be nice if we solved some of the world's issues on the mat, you know?

SAYAH: If it happens, it wouldn't be the first time. Back in 1971, remember, it was a visit by U.S. ping-pong team that provided the first crack in icy relations between the U.S. and China.

Reza Sayah, CNN, Tehran.

(END VIDEOTAPE)

BLITZER: Wrestling diplomacy as opposed to ping-pong diplomacy. Let's go to Jack Cafferty right now for "The Cafferty File" -- Jack?

CAFFERTY: All right. The question this hour is what will it mean if America loses its super power status? There was article in the "Atlantic Monthly" that suggests that we're sort of on that road.

Theresa writes, "If and when the U.S. loses superpower status, we'll hopefully follow all the other has-been European superpowers and at long last provide health care for our citizens, and put emphasis on arming our children with knowledge and not weapons."

Randy in Salt Lake City: "What do you mean if, Jack? Very soon the U.S. will lose its AAA credit rating because it's insolvent. We can't repay our debt because we're broke. We'll have to bring our military personnel home from the 730 foreign bases. The empire will be no more. Once this country falls to Banana Republic level, the world might be able to breathe a sigh of relief because the UCA, United Corporations of America, won't be destabilizing or destroying other nations for corporate profit."

Anna writes: "Jack, we're no longer superpower. Now China controls everything. We only lead in greed and corruption."

Roy in Chicago: "The economic crisis has affected all countries globally, so we're not the only ones who are shrinking. Over the last 50 years we have turned more into a contract superpower that protects most of the free world, where those countries have ceased military development. Perhaps remaining a superpower in the 21st century means redefining our role and sharing those costs."

Andrew in California: "I think we've already lost our superpower status, our companies moved away, our cars can't compete and people here are more interested in an octo mom than the idiocy in Washington. We will be broke for generations."

And Dean in Pennsylvania writes: "All superpowers lose their status sometime. All empires get broken up, i.e., Roman, Ottoman, USSR, Nazi Germany, et cetera. We'll survive just as all the others who have fallen. It may seem like the end of the world, but the sun will come out again tomorrow."

If you didn't see your e-mail here, you can go to my blog at CNN.com/Caffertyfile. Look for yours there among hundreds and hundreds of others -- Wolf?

BLITZER: Jack thanks very much.

Coming up next, the first lady of the United States, Michelle Obama in her own words.

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BLITZER: The first lady has a message she wants everyone to hear. She says the backbone of any community is its women. Michelle Obama spoke over at the State Department today where the Secretary of State Hillary Clinton honored courageous women.

MICHELLE OBAMA, FIRST LADY: Thank you.

Communities are only as strong as the health of their women. Every day we see what happens to families, communities and countries when women don't have access to health and medical care, when they don't have the resources to properly care for their children, when they're oppressed and struggling with emotional, physical, sexual and psychological abuse, when they have no access to education or fair treatment in the justice system. The difference between a struggling family and a healthy one is often the presence of a strong woman or women at the center of that family. The difference between a broken community and a thriving one is the presence of women who are valued, where relationships among women and between women and men are based on mutual respect.

The women we honor today are not just changing their own circumstances. They're changing the world. When a 12-year-old girl fights for her freedom and win, they change the future for millions of girls just like them. When advocates are beaten and jailed and still raise their voice, they inspire and nourish hope. When one woman with a phone in her apartment starts a movement that motivates thousands, her cause can no longer be ignored. When brave women challenge thousands of years of tradition and history and become leaders in their religious communities, they change minds. And when women fight to be educated, and then reach out to bring their sisters along, they change the future for generations to come.

This is how real change occurs. One determined woman at a time. And change is coming.

BLITZER: To our viewers, you're in THE SITUATION ROOM.