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One Hundred Fifty Plus Dead in Italy Quake; Pentagon Programs Face Ax; New Bonus Controversy; Luck is Going to Run Out; "U.S. is Not At War with Islam"

Aired April 06, 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 THE SITUATION ROOM.

Happening now, breaking news -- a desperate search for survivors as a powerful earthquake slams Central Italy -- toppling entire blocks of buildings, killing at least 100 people. We're on the scene.

The Defense secretary takes an ax to some key Pentagon programs -- recommending a halt to the F-22 fighter jet and putting a new presidential chopper on the chopping block.

Will lawmakers defend their pet projects?

And visiting Muslim Turkey, President Obama reaches out to the entire Muslim world, saying the entire United States is not at war with Islam.

Will his efforts pay off?

I'm Wolf Blitzer.

You're THE SITUATION ROOM.

Let's begin with the breaking news in Central Italy, where there's a sense of extreme urgency right now, almost a full day after a powerful earthquake shook the region. There is fear that trapped survivors may not be able to hold out much longer. The death toll now at least 150 people -- the number continuing to go up. Ten times that number are injured. Tens of thousands of people are now homeless.

CNN's Diana Magnay is there.

She's on the scene for us -- Diana, what's going on right now?

DIANA MAGNAY, CNN CORRESPONDENT: Well, Wolf, there is a huge rescue operation going on here -- 4,000 rescuers centered around the town of L'Aquila here in this central region. This is an area that spreads across a huge part of Central Italy. Twenty-six towns affected. Behind me, just one of many sites where they're trying to pull people from the rubble.

As you said, the death toll now standing at 150 and probably set to rise further.

Let's just have a look at how the events of the day unfolded. (BEGIN VIDEOTAPE)

MAGNAY (voice-over): It was a ferocious rumble in the dead of night. Thousands awoke to the violent rattle of windows -- the ground shaking beneath their feet. As dawn broke, the frantic search for loved one begins. This elderly, the infirm, children and those whose homes simply buckled -- collapsing all around them. This man one of dozens pulled from the rubble hours after the quake struck and amazed to be alive.

This medieval town has old building codes to match. Centuries-old adobe buildings ripped and crumbled as the Earth shook. But so did modern buildings. Even roads sank -- cars tossed like toys. A layer of dust covered many parts of the town, as if snow has fallen. The government has declared a state of emergency here -- the Italian prime minister, Silvio Berlusconi, making a special visit to the area.

SILVIO BERLUSCONI, ITALIAN PRIME MINISTER (THROUGH TRANSLATOR): At the present moment, we are committed to rescue the people who are under the rubble. We have some mechanical equipment to dig them out and it is very important for us to use all kinds of equipment.

DOMENICO, DI BARTOLOMEO, FIREFIGHTER (THROUGH TRANSLATOR): We managed slowly and with an effort that required great patience -- to dig with our own hands to finally reached this girl who was calling us. She said that her name was Francesca, that she was 21 years old, that, luckily, she could move her hands. So we spoke to her and that gave us the enthusiasm we needed to bring about her successful rescue.

MAGNAY: This is Italy's first major earthquake in almost seven years and the deadliest in three decades. But Italy's seismic challenge is unavoidable. It is sandwiched between the European and African tectonic plates and fault lines crisscross it's mountainous spine.

Along those fault lines, centuries-old architecture. And the Italian people remain at the mercy of the Earth's violent jolts.

(END VIDEOTAPE)

MAGNAY: And, Wolf, there are 50,000 people homeless tonight. They're staying in tents, field hospitals. Emergency food is being brought to them -- wondering when they'll be able to return home. The only glimmer of good news so far is that today they have managed -- rescue operators have managed to save 70 people so far from the rubble -- Wolf.

BLITZER: Diana Magnay on the scene for us in Italy right now.

Stand by, Diana.

Italian authorities are just coming to grips with how much damage has been done to this historic area in Italy.

Abbi Tatton is here.

She's taking a closer look.

It's really so sad to see what's going on, especially to these historic sites and all the folks who have been so impacted.

ABBI TATTON, CNN INTERNET REPORTER: All the apartment buildings, the historic cathedrals, castles out there. And we're looking specifically at the City of L'Aquila, which is a city that was built in the Middle Ages that now, in many parts, has been reduced to rubble.

Take a look at that the historic city center. This is from Google Street View. This is what this street looked like if you happened to visit it yesterday. This is a historic state government building.

The picture on the right is the scene after the earthquake. But it's hard to recognize that this is the same street. And the aerial photographs, as well, just released by Italy's Forestry Police Force show the 10,000 to 15,000 buildings that have been destroyed.

Take a look at this. This is Google Earth. On the left, what it used to look like. This is the picture of it today. It looks like every other house has been destroyed from this picture.

The Culture Ministry in Italy says the damage to buildings is huge and they're just taking stock at this point. Take a look at what they mean. This is one of several churches -- historic sites that's been destroyed. The roof is gone. The dome is not there. You can see right into the building.

Ten thousand to 15,000 buildings, homes, apartment buildings, cathedrals, castles -- the list just goes on and on.

BLITZER: We're going to have a lot more on this story coming up.

Our heart goes out to all those people in Italy who are suffering right now.

Thank you, Abbi, for that.

Let's move on to some other important news we're following right now. The Defense secretary, Robert Gates, swinging the budget ax. He's taking aim at some high tech fighter jets and a new White House helicopter fleet.

Our Pentagon correspondent, Chris Lawrence, is standing by with details -- Chris, what did we learn today?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, you mentioned it. But that's not all.

Defense Secretary Gates is cutting more than a billion dollars from the missile defense system. And he told me even if North Korea had successfully launched its missile, he still stands behind this budget.

(BEGIN VIDEOTAPE) LAWRENCE (voice-over): Spending as we know it would radically change if Defense Secretary Robert Gates gets his way.

ROBERT GATES, SECRETARY OF DEFENSE: An opportunity to truly reform the way we do business.

LAWRENCE: Here's how. He'd terminate the $13 billion new presidential helicopters. He'd end production on the F-22 -- a jet that's never been used in Iraq or Afghanistan. And he'd cancel the $87 billion vehicle part of the Army's future combat system.

Gates says the budget has to cover conflicts that blur the lines between conventional and irregular warfare.

GATES: You may face, at the same time, an insurgent with an AK- 47 and his supporting element with a highly sophisticated ballistic missile.

LAWRENCE: He won't get these changes without a fight. Joe Lieberman and five other senators wrote a letter to President Obama, saying: "The cuts could undermine our emerging missile defense capabilities."

And Republican Senator James Inhofe went on YouTube to protest the cuts.

(BEGIN VIDEO CLIP FROM YOUTUBE.COM)

SEN. JAMES INHOFE (R), OKLAHOMA: And I would say gutting our military. I -- you know, I've never seen a budget like this.

(END VIDEO CLIP)

LAWRENCE: Some analysts applauded Gates when he stopped by the DDG-1000, a new Navy destroyer that costs $3 billion to $5 billion each.

WILLIAM HARTUNG, NEW AMERICAN FOUNDATION: Basically, other than having a few guns that can reach the shore, there's no way we need to spend that -- that kind of money just for a kind of modest increment of support for our ground troops.

(END VIDEOTAPE)

LAWRENCE: And not every senator is opposing Secretary Gates. John McCain supports the budget and says it balances the needs of today with the threats of tomorrow -- Wolf.

BLITZER: All right. We hear about the money that's being cut.

Where is the money going, because he has a different set of priorities?

LAWRENCE: Totally different, Wolf. He wants to add nearly 3,000 special ops fighters. He wants to triple the number of cyber experts that we're training for computer warfare every year. And we talked about cutting that F-22 -- he wants to increase production on the F-35 and ultimately build more than 2,000 of them.

You know, there's so much to this budget, it's too much to tell you here. But if you go to CNN.com, you can get a much bigger picture of exactly all these changes that are going on.

BLITZER: What is the F-35?

Tell our viewers.

LAWRENCE: Its a joint strike fighter. And that's the key to all of this, Wolf. He wants platforms that can be used by multiple branches of the service in multiple areas of combat.

BLITZER: Chris Lawrence is our man at the Pentagon.

Chris, thank you very much.

Let's check in with Jack Cafferty.

He has "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: When it comes to North Korea's missile launch over the weekend, Newt Gingrich says he would have disabled that long-range missile before it ever left the launch pad. The former House speaker says too many people: "Don't appreciate the scale of the threat that is evolving on the planet."

And he adds that he hasn't seen the United Nations do anything effective with either Iran or North Korea.

And he's right.

But the U.N. Is the route that President Obama is taking. The State Department called the launch a provocative act in violation of a 2006 Security Council resolution and said North Korea's action: "Merits a clear, strong response," in the form of another Council resolution.

An emergency meeting, however, of the U.N. Security Council adjourned yesterday, with no official reaction whatsoever to North Korea.

Many U.N. Security Council resolutions in the past have proved not to be worth the paper they are written on. Gingrich isn't the only one questioning the Democratic administration and whether it's tough enough on national security. While the White House insists North Korea's missile launch shows the importance of President Obama's call for a world without nuclear weapons, his critics say that's an unrealistic and dangerous position.

Meanwhile, the White House is pushing back against accusations of appearing to be weak -- suggesting the Bush administration's tough talk toward both Iran and North Korea proved to be ineffective.

Here's the question -- Newt Gingrich says he would have disabled North Korea's missile. Is that what the United States should have done?

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

BLITZER: Jack Cafferty, thank you.

President Obama reaching out to roughly one quarter of the world's population. That would be Muslims.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Many other Americans have Muslims in their families or have lived in a Muslim majority country. I know because I am one of them.

(END VIDEO CLIP)

BLITZER: We have details of the president's Muslim outreach and how Americans are reacting.

Also, a new push to solve some cold serial killings -- the FBI looks to the nation's highways and truckers.

And the father of Sarah Palin's grandchild goes on television and takes the family feud public. Now Sarah Palin is firing back.

(COMMERCIAL BREAK)

BLITZER: They guarantee more than half the mortgages on U.S. homes. But the companies known as Fannie Mae and Freddie Mac weren't able to guarantee their own solvency and are now being run by the government at a huge cost to taxpayers. And now some taxpayers are being asked to pay even more. Some bonuses could be at stake.

Let's go to Mary Snow.

She's looking at a story that's already generating a lot of outrage out there involving these proposed bonuses to Fannie Mae and Freddie Mac executives.

MARY SNOW, CNN CORRESPONDENT: It certainly is, Wolf.

The regulator for Fannie Mae and Freddie Mac, though, is not backing down. And he's detailed his case for retention bonuses.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Mortgage giants Fannie Mae and Freddie Mac has received billions of dollars in Treasury money since the government took them over in September. But its regulator is making the case that employees should get retention bonuses.

We asked compensation consultant David Schmidt to review the details. The plan calls to pay out about $210 million to over 7,000 employees over 18 months and they are broad. DAVID SCHMIDT, JAMES F. REDA & ASSOCIATES: When you look at the size of these two organizations, in the case of Freddie Mac, it represents nearly everybody, and for Fannie Mae, about 60 percent of -- of employees.

SNOW: Republican Senator Charles Grassley, a ranking member of the Senate Finance Committee, requested the bonus information and his office provided us a copy. He spoke to us by phone while traveling in his home state of Iowa, slamming the idea of retention bonuses.

SEN. CHARLES GRASSLEY (R), IOWA: They wouldn't even have a job if it weren't for the taxpayers. And so consequently if you're on the -- the government dole, it seems to me that there's a whole different ethic. And that ethic is that you build yourself back into profitability and earn the bonus.

SNOW: But James Lockhart, the regulator for Fannie Mae and Freddie Mac, sees it differently. He was unavailable for an interview, but in letters to Grassley and others he says: "Senior managers who made decisions that led to the current situation are gone and employee stockholdings and options are worthless," adding: "It is not realistic to expect that experienced and highly skilled employees will indefinitely continue to work as hard as they have if we don't provide reasonable incentives to perform."

But one political scientist says it's a tough sell.

SARAH BINDER, BROOKINGS INSTITUTION: The public doesn't really see a difference between AIG and Fannie and Freddie. It looks to them that bonuses -- that we are rewarding companies for poor performance.

(END VIDEOTAPE)

SNOW: Democratic Congressman Barney Frank has also been calling on regulator James Lockhart to rescind the bonuses. And the House passed a bill last week to limit executive compensation to companies receiving bailout money -- Wolf.

BLITZER: I suspect this story is only getting started right now.

Thanks, Mary, for that.

New York's attorney general today filed civil fraud charges against a hedge fund manager who allegedly investigated billions of dollars with Bernard Madoff without telling his clients. The complaint accuses J. Ezra Merkin of lying to investors about what he was doing with their money. It says Merkin collected $470 million in fees and bonuses from those clients, including some charities and colleges. Many customers had no idea where their money went until Madoff was arrested.

Merkin has previously said he himself was victimized by Madoff.

In Pennsylvania, the only thing preventing disaster may be luck. Officials worried about a crumbling bridge and a heavily traveled interstate highway. But it's not part of the president's plan to rebuild the economy by rebuilding America. Abbi Boudreau, of CNN's Special Investigations Unit, has been investigating this project -- and I guess the question, Abbi, is why isn't this project, which seems to be in such great need, being funded?

ABBI BOUDREAU, CNN INVESTIGATIVE CORRESPONDENT: Well, the answer is actually pretty complicated, to tell you the truth. It's just not that easy to understand.

When we went to Philadelphia in December to look at part of I-95, a major interstate, transportation officials told us that section of the road was in desperate need of repair.

But, surprisingly, that bridge will not be getting stimulus money.

(BEGIN VIDEOTAPE)

BOUDREAU (voice-over): Last December, I went along with Bridge Inspire James White as he examined an elevated section of I-95 built in the 1960s -- crumbling concrete, rust. State officials told us this overpass needed a major overhaul.

CHUCK DAVIES, PENNSYLVANIA TRANSPORTATION DEPARTMENT: This is one of the largest structurally deficient bridges that we have in our inventory.

BOUDREAU: Chuck Davies of the Pennsylvania Department of Transportation invited us to see this crumbling bridge months before President Obama signed his stimulus package. It was his way of showing how badly they needed the federal money.

(on camera): Do you fear that something bad could happen?

DAVIES: You sort of become fatalistic. You know, I sort of -- I sort of think, well, my luck's going to run out at some point. It just is.

BOUDREAU (voice-over): But this part of I-95 is not getting any stimulus money.

The reason?

It's not quite shovel ready.

BOUDREAU (on camera): And we've learned some America's largest projects, like the I-95 bridge, will see a dime of federal stimulus money.

(voice-over): A spokesman for the American Association of State Highway and Transportation Officials tells us this bridge in Pennsylvania is just one example of the needed. But once the rules were set, projects like this one are still on hold.

The Association hoped to get $64 billion to fund projects throughout the country, but ended up with less than half that. So states like Pennsylvania took their share of the money for road and bridge repairs that are needed and ready to go. But since the I-95 overall is still being designed, it's not eligible for funding.

(END VIDEOTAPE)

BOUDREAU: Repair crews will continue to work on I-95 to keep the highway maintained and make sure there aren't any serious cracks in the bridge. Now, Pennsylvania is getting one billion for transportation infrastructure and another section of I-95 is getting some of that money for repainting and resurfacing -- Wolf.

BLITZER: Complicated, but you did a good job explaining it, Abbi.

Thanks.

BOUDREAU: Wolf, thank you.

BLITZER: Thank you very much.

Far from the border, a major American city emerges as a new hub for Mexico's violent drug trade -- it's suburban secrets now revealed.

Plus, a library's very rare find -- "Schindler's List."

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, the U.S. military says Al Qaeda in Iraq is behind a wave of deadly car bombings meant to incite sectarian violence. Six attacks along with a roadside bombing killed at least 32 Iraqis and injured more than 100 -- almost all of them civilians, many of them Shiites.

A warning from scientists -- the planet may be on thin ice because of the thin ice on the planet. New research shows more than 90 percent of Arctic sea ice is less than two years old the kind that melts much faster than older ice. Sea ice reflects sunlight, so the less there is, the more heat the ocean absorbs -- warming the planet even more.

The Empire State Building is going green. It's 6,500 windows are being replaced with insulated glass and ventilation, water and the lighting systems are being upgraded to be more efficient. The $20 million project is expected to lower the building's energy costs by more than $4 million a year and cut carbon dioxide emissions by some 1,000 tons over the next 15 years. And an Australian library is celebrating a rare find -- "Schindler's List," the one made famous in the movie. The document contains the names of 801 men Oscar Schindler saved from the Holocaust by putting them to work in his factories. It's a copy that was given to author Thomas Keneally, whose book was the basis for the movie. He got it from a survivor who was on the list and wanted Schindler's story told -- Wolf.

BLITZER: All right. Thanks very much.

Deborah Feyerick.

Stand by. We're going to get back to you.

Reaching out to Islam...

(BEGIN VIDEO CLIP)

OBAMA: We do not consider ourselves a Christian nation or a Jewish nation or a Muslim nation.

(END VIDEO CLIP)

BLITZER: But can the United States benefit from the president's efforts to win over the world's Muslims?

Also, is there a link between long haul truckers and serial killers?

The FBI tries to solve hundreds of killings along the nation's highways.

And from touching the queen to the fashion face-off with an ex- super model, Michelle Obama took Europe by storm.

Is that the start of a new role for the first lady?

(COMMERCIAL BREAK)

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

Happening now, President Obama sets a goal for nuclear disarmament -- it's ambitious, but is it realistic?

Thousands more U.S. Marines are about to deploy to Afghanistan. Now, new intelligence says the mission may be even more dangerous than anyone imagined.

Our Barbara Starr is travelingly -- traveling exclusively with the U.S. Marine Corps commandant.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM. President Obama today stood before lawmakers in Muslim Turkey and reached out to the entire Islamic world. But can he reach those whose hearts have been hardened against the United States?

Our senior political correspondent, Candy Crowley, is looking into this part of the story for us -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, the answer to that question is yes, but it probably will take some time. You know, Wolf, we find from the latest CNN/Opinion Research poll that about this whole trip, more Americans think the president's trip overseas has won goodwill than think the trip has actually brought about specific policy changes.

The poll was taken before this latest stop in Turkey. Certainly the visit there fits the pattern.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Before the Turkish parliament, the president of the United States looked to begin a new era with the Muslim world. To Turkey, he stressed the ties that bind -- the battle against Al Qaeda in Afghanistan, NATO membership and the personal touch.

OBAMA: The United States has been enriched by Muslim-Americans. Many other Americans have Muslims in their families or have lived in a Muslim majority country. I know, because I am one of them.

CROWLEY: U.S. ties with Turkey, always complicated, got more so in the Bush era, when Turkey refused to allow U.S. troops to use Turkish soil to enter Iraq.

OBAMA: I know that the trust that binds the United States and Turkey has been strained. And I know that strain is shared in many places where the Muslim faith is practiced.

So let me say this as clearly as I can. The United States is not and will never be at war with Islam.

CROWLEY: Former President George Bush made the same point many times, but both Europe and the Muslim world had stopped listening.

It is the advantage of a new face dealing with old problems -- showing up can help. Showing up can be a beginning.

OBAMA: We're going to be able to, I think, shape a set of strategies that can bridge the divide between the Muslim world and the West, that can make us more prosperous and more secure.

CROWLEY: It will take more than the Obama era to fully bridge the kind of gap that exists between the U.S. and much of the Muslim world. On one side, there is resentment that the U.S. is too close to Israel at political and human cost to Palestinians.

On the other, there is mistrust. A new CNN Opinion Research Corporation poll asked Americans if they think the U.S. should trust Muslim allies as much as other allies. The country's split, 51 percent said yes, 48 percent said no. Making amends with the Muslim world is not just about a single war, it's about attitudes, here and overseas.

(END VIDEOTAPE)

CROWLEY: In the end, this maiden voyage of the president is overwhelmingly seen by Americans as success, whether in substance or style, and judging from the headlines that have followed him on the trip, Europe feels the same way -- Wolf?

BLITZER: Good point, Candy, thanks very much.

Let's talk about this and a lot more. Joining us now the Democratic strategist, the CNN political contributor James Carville and Frank Donatelli's chairman of Go Pack, the high ranking official in the RNC. Thanks, guys for coming in. I'm going to play this little clip, this is what the president said earlier today in Turkey, a Muslim country and NATO ally.

(BEGIN VIDEO CLIP)

OBAMA: One of the great strengths of the United States is, as I have mentioned, we have a very large Christian population; we do not consider yourselves a Christian nation or a Jewish nation or a Muslim nation. We consider ourselves a nation of citizens. Who are bound by ideals and a set of values?

(END VIDEO CLIP)

BLITZER: In your native south, how is that going to play, James, when he says we do not consider ourselves a Christian nation?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: There are some people who say we should have Christianity in the constitution, as I understand it, the founding fathers thought about that and they rejected that idea. And we are a nation of values and not one religion. I think most people understand that, I am a Christian and some people are not Burks that's not what defines us as a nation and we're defined by laws, and whether we go to church on Sunday, or Friday or Saturday is their own business. I think some people may take offense to that but I think the vast majority of Americans agree with that statement.

BLITZER: In the past, as you know Frank, many presidents have referred to the United States having Judea Christian values, if you will, but what do you think of the way the president phrased that today?

FRANK DONATELLI, FORMER DEPUTY CHAIRMAN OF THE RNC: If we're a nation of shared values, Wolf, the question then becomes where do these values come from? The Democratic platform of 2008 in surely it's something deeper than that and the answer is that it's the Judea Christian tradition that informs America as a country, it's where we get our respect for the individual, it's where we get our respect for freedom of religion and everyone is free to practice their own religion. But for the president to deny that our country is formed by Judea Christian values --

BLITZER: He didn't deny that. He said precisely, let me read it to you, he said "We do not consider ourselves a Christian nation, a Jewish nation or a Muslim nation, we consider ourselves a nation of citizens who are bound by ideals and a set of values."

DONATELLI: Well the better answer would have been to say we are a nation that considers ourselves as a product of the Judea Christian tradition because that happens to be accurate.

CARVILLE: There are some people who say we are a product of the Abrahamic tradition which goes back even further. But are people going to say that he denied we have Christians in the country? Of course they're going to say that. Actually what he said is very accurate and of course we're shaped by many things and certainly the founding fathers will help shape the Abrahamic tradition or the Judea Christian tradition, but what he said was an absolute fact. And I think that he just repeated something, but sometimes there's value in stating the object and I think there was some value to it.

BLITZER: I think he was trying to underscore countries like Turkey, where it's a mostly Muslim nation; there should be a separation of church and state.

DONATELLI: That's not a problem for our country, we believe in the separation of church and state. That the president has to appear and apologize for that seems to be ridiculous. Turkey has been a pretty good al vie in the past, even though there have been some problems. I just don't think we advice our ability to work with Muslim nations.

BLITZER: James, I didn't hear the president apologizing.

CARVILLE: I don't know what Frank is exactly talking about. And by the way, no country in the world has struggled more with the distinction between religion and politics as Turkey has, and they very distinctly have decided to separate the two. But I think it was very important what the president did and I think this right wing claptrap will say he was apologizing for the United States, or denying our heritage or something. It's just not based in fact. What he said was an absolute fact, it was something that was necessary to say, and he said it in a country that has a unique history in dealing with religion and politics.

BLITZER: Frank, let me move on to the dramatic announcement today by the Defense Secretary Robert Gates, to cut back on the F-22, the presidential helicopters, to devote billions more for insurgencies as opposed to some of the old cold war missions. What do you think about what he's trying to do?

DONATELLI: Well, there's a lot to recommend what Secretary Gates has talked about, and I think that the secretary of defense is very, very good at I think getting the best out of all the resources we possibly have there, Wolf. Obviously procurement reform is a good thing, more devotion to Special Forces. I would say, though, they do think the budget in the beginning is woefully inadequate to deal with the crises that we are going to face as a country at a time when North Korea just shot off a missile, not to have more money in the budget for missile defense for example strikes me as very shortsighted.

BLITZER: It's one thing to make these proposals, James as you know, it is another thing to get Congress to go along with it. There's a lot of vested interest, a lot of jobs at stake, a lot of districts and states that want to continue to build some of these projects.

CARVILLE: Right and the F-22 people are not just going to go away and evaporate. This is the opening round in a many-round struggle here. And yes, we got a lot of responsibilities, our defense department does and Secretary Gates does, and we also got many other things that we're trying to deal with at the same time. So this will go through the political process, it will be an interesting process and we'll see where it comes out in the end, but the first shots have been fired in a pretty long war here.

BLITZER: As you know Frank, I don't know how defense secretaries wanted to eliminate the V-52, that Osprey, that tilt rotor helicopter, they said that the Marines really didn't need it. But members of Congress disagreed and guess what they're still building.

DONATELLI: I think that they are still building that. It just goes to show that member also fight to the death about cuts of any programs that the secretary wants to cut back. But I think he has some good ideas here.

BLITZER: On that note, we'll leave it. James and Frank, thank you.

Tomorrow by the way, the Vice President Joe Biden will be our guest here THE SITUATION ROOM. We want you to be part of the interview as well. What question do you have for the vice president of the United States? Send your video questions to ireport.com/situationroom. Watch tomorrow to see if your questions are answered.

Are truck drivers responsible for some unsolved serial killings along the nation's highways? The FBI has a new tool that may solve the mystery.

And far from the border, how has Atlanta become a hub for Mexican drug cartels? A frightening scenario playing out right now in the city's suburbs.

(COMMERCIAL BREAK)

BLITZER: Far from the border, a major American city in the suburbs, now a major center of business for Mexico's drug lords. Let's go to CNN's Brooke Baldwin. She's in Atlanta working this story for us.

Pretty shocking stuff, Brooke.

BROOKE BALDWIN, CNN CORRESPONDENT: It's amazing, especially considering the fact they grew up here. I had no idea. We're talking about Atlanta, we know it's home to multimillion dollar businesses like Home Depot and Coca-Cola. But now there's a new power player in town, the Mexican drug cartels.

(BEGIN VIDEOTAPE)

BALDWIN (voice-over): Drugs, weapons and cold hard cash, it's a lethal combination fueling the Mexican drug cartels. And according to the Drug Enforcement Administration, now a new city has emerged as a staging ground to this deadly train.

RONNIE VINCENT, DEA: Metro Atlanta is a hub for businesses in the southeast; it's also a hub of operations for Mexican organized crime.

BALDWIN: Atlanta, prime real estate for drug distribution, according to the DEA's top Atlanta agent, Ronnie Vincent. He agreed to take CNN on a special aerial tour to show us how this deals go down, starting with the southern city's web of freeways.

VINCENT: You can go east, west, north, south, from metro Atlanta, moving shipments of drugs from the Mexico border all the way up the eastern seaboard.

BALDWIN: Before that can happen, the driver must wait here at truck stops just like this one, often in broad daylight.

VINCENT: A truck driver arriving to a place like this will then wait, it could be as soon as an hour, it could be two or three days. Then they'll receive instructions.

BALDWIN: Next the driver heads to a warehouse. Vincent says there's plenty pick from in Atlanta. There the drugs are parceled out and sent to dealers throughout the U.S. but the drivers aren't done. They use this same truck to smuggle money and guns back into Mexico.

In 2008, Atlanta led the nation with $70 million in confiscated cash according to the DEA and last September, federal agents along with local law enforcement rounded up 34 members of Mexico's gulf cartel and the Atlanta area alone, part of a nationwide effort called project reckoning.

If you think drug cartels are keeping their high dollar drug operations in the gritty inner city, think again. The DEA says they prefer the suburbs. They move into quiet, middle class neighborhoods just like this one where they set up shop, stockpiling drugs and cash before distributing them.

Last July, a group of men with cartel connections lured a Rhode Island drug dealer to this home. They chained him, beat him, held him hostage demanding he pay $300,000 they say he owed. The DEA raided the home before it was too late.

VINCENT: There's no doubt in my mind that if we didn't act when we did, he would have been dead.

BALDWIN: Three men got caught and pleaded guilty, but the rest escaped. Vincent says the explosive growth of Hispanic immigrants in metro Atlanta yet is another reason why Mexican cartels come here, allowing them to blend in and disappear, enabling this deadly drug trade to rage on, spreading groups in this southern city.

(END VIDEOTAPE)

BALDWIN: Atlanta Mayor Shirley Franklin is aware of the drug trafficking taking place as is local law enforcement. And the DEA says Atlanta has emerged as the drug distribution hub of the entire east coast.

BLITZER: Who would have thought, Atlanta of all places. All right, Brooke. Thanks very much.

The FBI is eyeing truck drivers right now as they're trying to solve a series of serial killings. Let's go to CNN's Ted Rowlands, he's been working this story for some time now. What are you finding out?

TED ROWLANDS, CNN CORRESPONDENT: Basically, Wolf, a few years ago the FBI was looking into a bunch of unsolved murders in different states and they started to basically connect the dots and what they have come up with is a database that lists unsolved murders and they say they're targeting a number of truck drivers that are possibly serial killers.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): Five years ago after investigating a string of murders along Interstate 40 in Oklahoma and Texas, the FBI established a connection between long haul truck drivers and serial killers.

UNIDENTIFIED MALE: They may be 1,000 miles a way in a day, so you never get to the point where we can, you know, put that together. There's nobody, there's no witnesses, and there's no -- there's no evidence to go by.

ROWLANDS: In an effort to help local law enforcement with unsolved cases, the FBI has established the highway serial killings initiative which includes a database of murder victims and suspected killers. Many of the victims, which total more than 500, are like Casey Joe, a prostitute who was last seen at this Oklahoma City truck stop in 2004. Her body was found in Texas, thrown over a bridge and into a creek. One of the most notorious cases of a truck driving serial killer was in California. Wayne Adam Ford walked into a sheriff's office in Humble County in 1998 with a human breast in his pocket. Ford, who hauled lumber up and down the state, admitted to four murders. He's now on death row.

The FBI highway serial killings database opened up to local law enforcement last year, the agency believes that as more information is added, more killers will be brought to justice.

(END VIDEOTAPE)

ROWLANDS: And, Wolf, the FBI is going public with this to encourage local law enforcement to enter their information into this database. Of course we're talking about a minuscule amount of truck drivers that they think are suspects but they are getting information that dates back up to 30 years. They say they have about 200 potential truck driver suspects in the system right now.

BLITZER: Let's hope they figure this one out and do it quickly. Thanks very much, Ted, for that.

Eliminating the world's nuclear weapons, that's the president's dream, what would it take to turn that dream into reality?

Plus, he split with her daughter, now the father of Sarah Palin's grandson tells all on television, you'll hear what he has to say right here on THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty for "The Cafferty File" -- Jack?

CAFFERTY: The question is: Newt Gingrich says he would have disabled North Korea's missile. Is that what the U.S. should have done?

Eric writes: "North Korea is a rogue nation under the control by an insane dictator. The missile launch was nothing less than Kim Jong Il flipping the bird to the world. Anyone with any sense knows this. I am not a Newt fan but he's probably correct."

Bruce writes: "Gingrich's comments are not at all surprising and are as dangerous as they are fool hearted. Obama's attempt to work through the U.N. is not the end of the process. It is an attempt to restart a process that has been off track for eight years."

Steve writes: "It's funny. Now that they are not in power, the GOP seems to have all the answers to what ails the world. Now that Forrest Gump and Darth Vader are no longer relevant, it seems that all the right wing pundits have the answers."

Paul in South Carolina: "In the past, America has been called a paper tiger. We just proved it by condemning and then doing nothing. Shameful. The cowards are in charge now."

Wendell writes: "Yes, we should have stopped it. It's too late now. We drew a line in the sand and we allowed them to cross it. It's like a child you keep threatening to spank and never do. Some day soon the world will have wished it had used a firm hand."

Rocky writes: "If old Newt would have gotten his way, all it would have done is stir up a hornet's nest that South Korea would have to deal with. And that would have put us into another war."

J.T. finally writes from New York, "We should buy Newt a plane ticket to Pyongyang and let him do his thing. If he succeeds, we'll buy him a plane ticket back."

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

BLITZER: Jack, thank you.

The death toll climbing as the search for survivors of that earthquake in Italy approaches a critical phase. We're following the breaking news. We'll go to Italy for that.

She fled the violence of Iraq for a better and safer life here in the United States. Instead, this wife and mother of three falls victim to a massacre.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends at the Associated Press, pictures likely to be in your papers tomorrow.

In Egypt, an activist goes head-to-head with an anti-riot soldier.

In Italy, a dog wanders among the earthquake rubble. Her owners are missing.

In Turkey, the honor guard takes their position after President Obama takes part in a wreath-laying ceremony.

In Washington, the secretary of education. Pictures worth a thousand words.

Governor Sarah Palin and her family are continuing to have a feud of sorts with Levi Johnston. Let's go to Dan Simon, our correspondent who's working this story for us.

This is the young man who is supposed to marry the daughter of Governor Palin. That didn't exactly happen. What's going on right now?

DAN SIMON, CNN CORRESPONDENT: Well, the engagement was broken off and Levi Johnston was on the Tyra Banks show today. He displayed for the world that he actually has Bristol Palin's name tattooed on his ring finger. He says that was a mistake. Clearly the relationship is strained. It all happened after the birth of their baby. Take a look.

(BEGIN VIDEOTAPE)

SIMON (voice-over): The images during the Republican National Convention of a teenaged seemingly in love couple are now a distant memory for Levi Johnston and Bristol Palin. Appearing on the nationally syndicated Tyra Banks show, Johnston says the relationship has become poisonous.

LEVI JOHNSTON, BRISTOL PALIN'S EX-FIANCE: She says that I can come see the baby and that kind of thing, but won't let me take him anywhere.

TYRA BANKS, TALK SHOW HOST: So you can't take the baby out of the Palin house?

JOHNSTON: Not very often. No.

SIMON: Johnston appeared with his sister and mother, all of them frustrated over the situation.

SHERRY JOHNSTON, LEVI JOHNSTON'S MOTHER: That's my baby, too. I am part grandma and I don't get no pictures. It's like I'm not wanting pictures to go sell.

SIMON: Levi Johnston says it didn't start off bad. In fact, he claims he lived with the Palins shortly before the baby was born in December.

BANKS: You guys were sharing a room?

JOHNSTON: Yes. I just wanted to be around him. She had to go to the hospital.

SIMON: A Palin family spokeswoman disputes that saying, "Levi has never lived under the same roof as Bristol or any of the other Palins. Do you really think the governor and Todd would have allowed that?" The statement also says, "Bristol did not even know Levi was going on the show. We're disappointed that Levi and his family in a quest for fame, attention and fortune are engaging in flat out lies, gross exaggeration and even distortion of their relationship." Towards the end of the show, a personal but rather light-hearted moment.

BANKS: Were you practicing safe sex?

JOHNSTON: Yes.

BANKS: Even when the baby was conceived?

JOHNSTON: We were.

BANKS: And so there was just wardrobe malfunction?

JOHNSTON: I guess.

BANKS: Every time, you practiced safe sex?

JOHNSTON: Yes.

BANKS: Every time?

JOHNSTON: Every time.

BANKS: Levi.

JOHNSTON: Every time.

(END VIDEOTAPE)

SIMON: We should tell you the Palin family did not specifically address the allegation that Levi Johnston can't really take his baby anywhere. We asked the family spokesperson about that. All they gave us was that one statement, and despite all the bad blood here, Tyra Banks asked Levi Johnston if he would vote for Governor Palin if she would get the nomination for president in 2012, and his answer was yes. Back to you.

BLITZER: Did he say that Governor Palin knew about the nature of their relationship?

SIMON: Well, that was a question posed by the host, Tyra Banks, and specifically I think you're asking about whether or not they were having sex, and he says Governor Palin probably knew that, but wasn't exactly sure but he said that moms are very smart. That's all he said.

BLITZER: Yes, they are. Moms are always very smart. Thanks very much for that.

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

Happening now, breaking news. More than 150 people are dead after the deadliest earthquake in Italy in almost 30 years. Now, officials fear even more deaths if they can't quickly rescue survivors trapped under all the rubble. We're going there.

President Obama tries to woo Muslims from a Muslim nation. Its support could sway what happens in Iraq, Afghanistan and way beyond.

And meet some of America's Most Wanted. They're on the run accused of endangering the environment. We want to welcome our viewers in the United States and around the world.

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

Let's get to the breaking news we're following. Many people could be buried alive under the twisted metal, jagged concrete, sharp glass, so there are desperate efforts under way right now to find them. About 75 miles away from Rome, there is an immediate search under way. Rescue efforts and relief efforts, and lots and lots of mourning after the deadliest earthquake Italy has seen in almost 30 years.