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The Situation Room

President Obama Expresses Words of Regret in Role Over National Controversy; Palin's Last Days as Alaska Governor

Aired July 24, 2009 - 15:59   ET

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

(1600 BELOW)

WOLF BLITZER, CNN ANCHOR: Happening now, presidential surprise. President Obama talks to the police officer who arrested Professor Henry Louis Gates and expresses words of regret for his role in this divisive national controversy.

White House huddle. President Obama talks to the police officer who arrested Professor Henry Louis Gates and expresses words of regret for his role in this divisive national controversy.

And a magazine cover's headlines "Sex & The Silvio." Shocking claims against the Italian prime minister, Silvio Berlusconi. It involves a paid escort and the most intimate private acts between a man and a woman.

I'm Wolf Blitzer in CNN's command center for breaking news, politics, and extraordinary reports from around the world.

You're in THE SITUATION ROOM.

We have just witnessed a political twist that's rarely seen. Just a short while ago, the president of the United States made a surprise appearance before reporters and dialed back his words regarding the arrest of an African-American scholar, Professor Henry Louis Gates of Harvard University.

Let's go straight to our White House correspondent, Dan Lothian. He's got the details -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, this was a story that was just not dying down. The president was trying to focus on health care reform, deal with division within his own party on that issue. At the same time, White House officials were really trying to do some damage control on this controversy in Cambridge, Massachusetts, so the president decided to come out and address the matter himself.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): It wasn't quite an apology, but President Obama tried to put out a wildfire that was burning out of control, placing a five-minute phone call to Sergeant James Crowley.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: I obviously helped to contribute ratcheting it up. I want to make clear that in my choice of words, I think I unfortunately gave an impression that I was maligning the Cambridge Police Department or Sergeant Crowley specifically. And I could have calibrated those words differently.

LOTHIAN: Words the president uttered at his Wednesday primetime press conference.

OBAMA: The Cambridge Police acted stupidly in arresting somebody when there was already proof that they were in their own home.

LOTHIAN: In his first sit-down television interview, Crowley said he never wanted to take such drastic action.

SGT. JAMES CROWLEY, CAMBRIDGE POLICE DEPARTMENT: I was continuously telling him to calm down during this whole exchange because I really didn't want this either. Nonetheless, that's how far Professor Gates pushed it and provoked and just wouldn't stop.

LOTHIAN: The president now concedes that his good friend, Louis Gates Jr., also played a role in how all this turned out.

OBAMA: There was an overreaction in pulling Professor Gates out of his home and to the station. I also continue to believe, based on what I heard, that Professor Gates probably overreacted, as well.

LOTHIAN: This came just hours after a group of police officers in Massachusetts made it clear what they wanted to hear from President Obama.

STEVE KILLIAN, CAMBRIDGE POLICE PATROL OFFICERS ASSOCIATION: I think when the time is right, they should make an apology to us. I think the president should make an apology to all law enforcement personnel throughout the entire country who took offense to this.

LOTHIAN: The president admitted that this controversy was taking attention away from his top domestic priority, health care reform.

Beyond smoothing this over with the arresting officer, Mr. Obama said he hopes this becomes a teachable moment.

OBAMA: ... where all of us, instead of pumping up the volume, spend a little more time listening to each other and try to focus on how we can generally improve relations between police officers and minority communities.

(END VIDEOTAPE)

LOTHIAN: Now, the president probably (ph) did have some lighthearted moments during that short phone conversation. They talked about getting together here at the White House, along with Mr. Gates, and having a beer. Spokesman Robert Gibbs says that it is a real invitation, but as far as he knows, nothing yet has been scheduled. And I should point out, Wolf, we're also learning that the president has now spoken directly with Mr. Gates.

BLITZER: As soon as you get more details, let us know how that conversation went. Apparently, the conversation with the police sergeant went well.

You just heard a little bit of what the president said explaining his regrets for his role in this controversy.

Let's listen to the president explain all of this in fuller detail.

(BEGIN VIDEO CLIP)

OBAMA: Because this has been ratcheting up, and I obviously helped to contribute ratcheting it up, I want to make clear that in my choice of words, I think I unfortunately gave an impression that I was maligning the Cambridge Police Department or Sergeant Crowley specifically. And I could have calibrated those words differently. And I told this to Sergeant Crowley.

I continue to believe, based on what I have heard, that there was an overreaction in pulling Professor Gates out of his home and to the station. I also continue to believe, based on what I heard, that Professor Gates probably overreacted, as well.

My sense is you've got two good people in a circumstance in which neither of them were able to resolve the incident in the way that it should have been resolved and the way they would have liked it to be resolved. The fact that it has garnered so much attention I think is a testimony to the fact that these are issues that are still very sensitive here in America. And, you know, so to the extent that my choice of words didn't illuminate but rather contributed to more media frenzy, I think that was unfortunate.

What I'd like to do, then, is make sure that everybody steps back for a moment, recognizes that these are two decent people, not extrapolate too much from the facts, but as I said at the press conference, be mindful of the fact that because of our history, because of the difficulties of the past, you know, African-American are sensitive to these issues. And even when you've got a police officer who has a fine track record on racial sensitivity, interactions between police officers and the African-American community can sometimes be fraught with misunderstanding.

My hope is, is that as a consequence of this event, this ends up being what's called a teachable moment, where all of us, instead of pumping up the volume, spend a little more time listening to each other and try to focus on how we can generally improve relations between police officers and minority communities, and that instead of flinging accusations, we can all be a little more reflective in terms of what we can do to contribute to more unity. Lord knows we need it right now, because over last two days, as we've discussed this issue, I don't know if you've noticed, but nobody's been paying much attention to health care.

I will not use this time to spend more words on health care, although I can't guarantee that that will be true next week. But I just wanted to emphasize that -- well, one last point I guess I'd make.

There are some who say that, as president, I shouldn't have stepped into this at all because it's a local issue. I have to tell you that that part of it I disagree with.

The fact that this has become such a big issue I think is indicative of the fact that, you know, race is still a troubling aspect of our society. Whether I were black or white, I think that me commenting on this and hopefully contributing to constructive, as opposed to negative, understandings about the issue is part of my portfolio.

So, at the end of the conversation, there was a discussion about -- my conversation with Sergeant Crowley -- there was discussion about he and I and Professor Gates having a beer here in the White House. We don't know if that's scheduled yet, but we may put that together.

He also did say he wanted to find out if there was a way of getting the press off his lawn. I informed him that I can't get the press off my lawn.

(LAUGHTER)

He pointed out that my lawn is bigger than his lawn. But if anybody has any connections to the Boston press, as well as national press, Sergeant Crowley would be happy for you to stop trampling his grass.

(END VIDEO CLIP)

BLITZER: And just within the past few minutes the White House released a statement confirming what we heard from Dan Lothian just a few moments ago, that the professor did speak with Professor Gates at 3:15 this afternoon. According to the White House statement, they had a positive discussion during which the president told Gates about his call with Sergeant Crowley and statement to the news media. The president also invited Professor Gates to join him and Sergeant Crowley over at the White House in the near future, presumably for that beer.

We'll look forward to covering that story.

Let's go to Jack Cafferty right now for "The Cafferty File."

They didn't invite you or me, Jack, but it looks like those three guys are going to have a beer.

JACK CAFFERTY, CNN ANCHOR: I'll bet he wishes he hadn't said it.

BLITZER: I think you're right. I'm sure he did.

CAFFERTY: Isn't it ironic he went through the whole presidential campaign with nary a nod toward any sort of racial problems in this country, and at the tail end of the news conference the other night he stepped right in it up to his eyebrows. Stuff happens.

More words from President Obama -- "Keep on your members of Congress. Keep up the heat. We have got to get this done." That's a quote from the president.

While the president calls on Americans to pressure their lawmakers on health care reform, it seems like many members of Congress in no rush. They're going on vacation for four weeks, and then they may or may not get around to finishing this later. Sometime.

Now that Senate Majority Leader Harry Reid said that the Senate will not vote on this until after the August recess, look for the legislation that President Obama wanted fast-tracked to immediately get relegated to the slow lane.

Reid says slowing things down might be the right way to go here instead of trying to jam something through. The main reason for the delay in the Senate is the Finance Committee, which is trying to come up with a bipartisan bill.

House Speaker Nancy Pelosi now says they will take the bill to the floor of the House "when it is ready," and at that point she assures us they'll have the votes to pass it. But moderate and conservative Democrats there continue to voice complaints about cost, among other things, and I bet at this moment they don't have the votes to pass it.

Meanwhile, one of the president's top Republican critics, Senator Jim DeMint, is echoing Mr. Obama. DeMint, who said stopping the president on health care would be his Waterloo, is calling on voters to connect with their representatives and "let them know that Washington should not make their family's health care decisions for them."

So, that's our question. Do you plan to contact your congressional representatives about health care during the August recess?

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

BLITZER: I think a lot of our viewers probably do. All right. Thanks, Jack. Stand by.

A harrowing scene of death and survival. An airplane breaks apart, causing some deaths, but there are survivors.

Sarah Palin might say you won't have her to kick around anymore. She's set to leave her job.

What do many of you think of her? There are fresh poll numbers.

And the House Speaker speaking exclusively to CNN's John King. Wait until you hear what Nancy Pelosi is now saying on health care reform and on the arrest of the Harvard professor, Henry Louis Gates.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our top story.

Joining us right now, the "STATE OF THE UNION" anchor, John King, who just came from Capitol Hill.

Where you had an interview with the House Speaker, Nancy Pelosi. And she's now addressing this controversy involving Professor Henry Louis Gates at Cambridge, Harvard.

JOHN KING, CNN SR. NATIONAL CORRESPONDENT: She addressed it because I asked about it, Wolf, because as we've talked to many Democrats, they're a bit upset about what the president said. They think it puts them in an awkward position, that on the one hand, he said, "I don't know the facts," and then went on to say, but the police "acted stupidly."

This is the 11th anniversary of that tragic shooting on Capitol Hill. Two officers died. And Speaker Pelosi was among those paying tribute to those slain officers today and those who carry on the work. And I asked her, what message did the president's remarks send to the men and women who every day risk their lives to keep all of us safe?

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I think that the president of the United States has great respect for those who -- public safety is our first responsibility as elected officials, public safety and the national security of our country. Nobody carries that burden greater -- in a greater way than the president of the United States. This was an unfortunate incident, I think, by anyone's description.

KING: Do you think he had an unfortunate choice of words there?

PELOSI: Well, that would be up to him to decide, but the fact is, is that it was an unfortunate incident and that racial profiling still seems to be an issue in our country that has to be addressed. But with all due respect to the police officer involved, and the professor, who was affected by it, it didn't turn out the way it should have, and I think that is unfortunate.

(END VIDEO CLIP)

KING: Interesting there, her point about racial profiling still being a problem in the country. But I can tell you, most of all, Wolf, after the interview, checking in with Democrats, after the president came into the briefing room at the White House, they are very relieved the president tried to quiet this controversy, if not put an end to it.

BLITZER: I'm sure that was his intent, and he probably succeeded, at least for the time being.

You also got into the big issue up on Capitol Hill right now, health care reform, which seems to be at a critical point.

KING: It is a fascinating point, and the Speaker met us between big meetings on health care. She left our interview and went to see her own leadership. And what happened today was the Blue Dog Democrats, the conservative Democrats, essentially said they have been told the House is going to go forward with its bill and ignore some of their concerns. The conservatives think it costs too much. They don't like the public option.

And I asked the Speaker this question because those Blue Dog Democrats say she does not have the votes now. If they're not on board, she doesn't have the votes. So, I asked the Speaker to explain to me how she would go forward with this big disagreement within the Democratic family.

(BEGIN VIDEO CLIP)

PELOSI: We believe that we have a good bill. This isn't about rushing. We've been talking about if this for a very long time, and the American people have been waiting a long time.

And we have three committees. Two of them have reported out a bill. The Energy and Commerce Committee is the last one to report out a bill. And they have some differences of opinion. Differences of opinion about the public option, which has the overwhelming support of the House Democratic Caucus, a robust, level playing field public option, and that's one of the sticking points.

KING: It is the Speaker's job sometimes, and you're doing a lot better than I to referee disputes within the family.

Are you worried your family is coming apart on this and that you might not have the votes on the floor?

PELOSI: Absolutely , positively not.

KING: You have the votes?

PELOSI: When I take this bill to the floor, it will win.

(END VIDEO CLIP)

KING: And there's the big right there -- "When I take this to the floor, it will win." This, despite warnings from many of her own conservatives that she does not have votes.

It was interesting, Wolf. She did not want to get into the specifics of the dispute. Essentially, her point was, yes, we have disagreements in the family, but it's time to move on. We've been trying to negotiate, trying to negotiate. It's time to bring this to a vote in the House.

That is her position. It is the leadership position. Many in her own party think she should try to work with the conservatives more, and they're also worried, Wolf, as you know, of having this House vote, putting the House Democrats on the record while the Senate waits at least until the fall before it votes.

BLITZER: Especially something they vote on which is controversial. It turns out to be a waste since the Senate is going to reject it anyhow. It would be embarrassing for a lot of those conservative or moderate House Democrats.

KING: And potentially used against them in the midterm elections next year. There's a lot of jitters.

BLITZER: You got an exclusive interview with the Speaker.

Also, the Republican leader in the Senate, Mitch McConnell, coming up 9:00 a.m. Sunday morning on "STATE OF THE UNION." John, thanks very much.

One of the Republican Party's most talked about political figures, Sarah Palin, is getting ready to step down as Alaska's governor on Sunday.

Here's what the late-night comedian David Letterman had to say about that.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": So, she's stepping down as governor. She's leaving the governor's mansion. Next stop: LensCrafters commercial.

Don't kid yourself. Sunday is going to be an emotional day. It's her last day and she's going to go out onto the porch and wave good-bye to Russia.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: All right. Let's bring in our senior political analyst, Bill Schneider, who's been looking at some new poll numbers on this subject for us.

Bill, what's happening to Governor Palin's national image?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Wolf, it's deteriorating, according to a new poll by "The Washington Post" and ABC News.

Right after she was nominated for vice president at the Republican Convention last September, her national image was more than 2-1 favorable. Now most Americans have a negative opinion about her. This is the second poll this month that shows most Americans with a negative opinion of Governor Palin.

Democrats never much liked her. Among Independents, her favorability has gone from 60 percent to 40 percent.

Now, what about her Republican base as she sets out to campaign for Republicans across the country? Some damage there, too.

Among Republicans, her favorability has gone from a solid 88 percent to 70 percent, and among white Evangelical Protestants it's down 15 points to 62. But, you know, last year, solid majorities of Republicans and white Evangelicals held strongly favorable opinions of the governor. No more.

Her strong support from base has fallen sharply. Just 41 percent of Republicans and 35 percent of white Evangelicals now say they strongly favor her.

BLITZER: Have the ethics controversies in Alaska really damaged her? SCHNEIDER: Not so much. Most Americans continue to see Governor Palin as honest and trustworthy, but most Americans do not see her as a strong leader.

Her sudden resignation does not seem to have gone over well. Strong leaders don't quit.

The public was never certain about Governor Palin's intellectual abilities. Even last fall, the public was split over where whether she understands complex issues.

Now most Americans say she doesn't. She is, in fact, a very divisive figure.

When asked whether Governor Palin shares your values, Americans are split almost evenly. Eighty-three percent of Republicans say she shares their values. Her views may rally the conservative base, but they turn off other voters. She comes across as a walking culture war -- Wolf.

BLITZER: Interesting numbers. Sunday, she steps down as governor of Alaska.

Bill Schneider, thank you.

An aviation nightmare. An airplane breaks apart, leaving some people dead, but there are survivors.

And two African-American men with very different thoughts about black men in America, they'll debate the arrest of the Harvard scholar, Henry Louis Gates. Joining me, the syndicated columnist Larry Elder and Democratic strategist Jamal Simmons.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Cambridge police officials asked President Obama to apologize. We're going to talk about the huge race debate ignited by the arrest of an African-American professor in his own home.

Plus, was this Michael Jackson's dream house, and was he planning to create a new Neverland there?

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: All right. There is breaking news involving the ousted Honduran president, Jose Manuel Zelaya. He's apparently crossed into Honduras for the first time.

Karl Penhaul is on the scene right there.

Karl, tell our viewers what's going on right now. We're looking at these live pictures. KARL PENHAUL, CNN CORRESPONDENT: Wolf, Mr. Zelaya, the ousted Honduran president, is literally one step inside Honduras.

He took a step across a rusty chain that divides Nicaragua from Honduras. And he's taken that step. Twenty-five yards away from him is the Honduran military and police. They are under orders to arrest him. But, so far, they have not moved in to arrest him.

In fact, a few minutes earlier, a Honduran army colonel offered to meet Mr. Zelaya face to face, each of them on the other side of the border (INAUDIBLE) dialogue to see how they could work a way out of this.

But, just as that colonel was doing this, he had received a call on his cell phone which we understand was from the head of Honduran armed forces, the man who carried out that military coup.

And, after that, the colonel withdrew and stopped any conversations with Mr. Zelaya. Following that, Mr. Zelaya took this dramatic one step inside of Honduras. Difficult to tell whether this right now is for media consumption, or whether he really intends to press on ahead and try and get deeper into his country and try and get back into the presidency, as he's promised -- Wolf.

BLITZER: Karl, stand by. And if you get more information on what happens next -- I know this is a dramatic moment -- we're going to check back with you.

Karl Penhaul is on the border of Nicaragua and Honduras. And we will see what happens to the ousted Honduran president.

All right, thanks, Karl Penhaul, for that.

Right now, let's back to our stop story. What's going on? The president of the United States only a little while ago made a dramatic appearance in the White House press room to tell reporters, you know what, he could have used better words in discussing the arrest of the Harvard university professor Henry Louis Gates.

Let's talk about this with two guests.

Joining us now, Jamal Simmons -- he's a Democratic strategist -- and syndicated columnist Larry Elder.

Let me start with you, Larry.

What do you think? The president's remarks, you have heard them. Do you think this now puts this whole controversy to rest?

LARRY ELDER, RADIO TALK SHOW HOST: I -- I suspect it's probably got another day or two shelf life. I -- I could be wrong, because there may be a -- a civil lawsuit down the road which would kick this back up again.

But, at end of the president's press conference, he made a comment that was over the line. He first said that Gates is a friend of mine, I don't have all the facts. So far so good. And then he proceeded to say that the police acted stupidly, and that you can't arrest somebody in their own home, without at all talking about the horrific things that Gates said to this officer that precipitated the arrest.

That said, today, he used the same verb, Wolf, that I used in a column I recently wrote. Don't worry. I'm not going to go after anybody for plagiarism. And that is overreaction.

Cops are trained at the academy to take abuse, F-words, S-words, comments about your mother, which is what Gates allegedly made towards this officer, and you're trained to walk away from that. So, I don't believe that he should have been arrested. At most, maybe a report could have been filed to a prosecutor, and the prosecutor might have investigated it and maybe might have filed charges.

But you walk away from that. You're trained to deal with that kind of abuse.

BLITZER: All right, let me let Jamal -- you were shaking your head when he was -- when Larry was speaking.

But go ahead and weigh in on that specific point that the president originally said, you know what, I don't have all the facts, but then he went on to say, the police acted stupidly.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: I think the president probably -- stepped up and said something that a lot of African-Americans were thinking, which is that, for an African-American middle-aged man who walks with a cane to be in his home and to be arrested, regardless of what he said -- I have talked to lawyers about this. It doesn't matter if you're belligerent in your home. As long as you're not threatening, that you can say whatever you want.

That's not an arrestable offense. So, I -- I can't help but think what would have happened if someone like our friend David Gergen, who is also a professor at Harvard, if that this had happened to him, whether or not there would not be some outrage that he was arrested out of his home because he spoke illy to a police officer when he thought that he was breaking into his home, and he was not, whether it was that or another situation.

And I have been on the wrong end of that situation in my own life, and I think that this is something that a lot of African-Americans would prefer that we -- we have a more serious conversation about, maybe get out of the context of this particular incident, but we have got to figure out how to get police officers in the black community on a better page.

BLITZER: Larry, have you ever been racially profiled?

ELDER: Have I ever been stopped? Have I ever been stopped possibly because I am black in a neighborhood where it is unlikely that there is a black person? Yes.

But, whenever I have been stopped by the police -- and, by the way, I was stopped only a few days ago not far from my house. I live in a nice neighborhood. I drive a nice car. I rolled through a stop sign. It was a non -- it was a police officer, I believe, of Hispanic descent.

I was polite. He was polite. He found out I lived near the neighborhood. He told me he was looking for people who have been breaking in homes in the neighborhood, not for people who are residents. And he let me go.

Politeness begets politeness. What bothers me more about what the president said, not only basically siding with professor Gates, Wolf, is that he implied that there was a racial motive behind this, without any evidence whatsoever.

One of the reasons, I believe, one of the reasons that Barack Obama was elected president is that many of us wanted to get beyond racism. He had an opportunity. He called it a teachable moment later. But then he had an opportunity to say, look, everything ought to be judged on a case-by-case basis. Just because it's a white officer and a black civilian doesn't necessarily mean there's racial animus or there's a racial motive behind this. Don't stereotype blacks, police officers, but, blacks, don't stereotype officers.

Obama could have said that, and didn't.

(CROSSTALK)

BLITZER: And the president now, Jamal, does say that he knows the officer, Sergeant Crowley, is an outstanding officer, has actually invited him and professor Gates to come to the White House for a beer and to talk about all of this.

He -- he seems, the president of the United States, regretful that he sort of inflamed this whole uproar.

SIMMONS: Well, the political strategist in me says that he probably did the right thing for the -- for the -- for the body politic or for his particular political situation. And probably he -- personally, I'm sure he did what he thought was right.

The black man in me who got pulled over when I was 19 or 20 years old in Michigan with three friends because a woman inside of a convenience store thought we had bulges in our jackets, and the cop came up and stopped us when we got back on the highway -- even though she didn't claim that we stole anything, but just that we had bulges in our jackets, and we had to answer questions on the side of a highway in the middle of the night -- that person in me wishes that he wouldn't have had to say what he said today.

And, so, I think I would prefer that, you know, when we talk about this situation, you think about what it would be like if we had had the situation reversed, and it was a white professor, a black police officer who arrested in his home because he thought that he was breaking in.

I think right-wing radio would be going off -- off the charts, saying that here was a man's home that was violated. And most lawyers will tell you, in your home, you have a lot of rights to protect your home. Here's a -- here's a man who was taken out of his home by jackbooted thugs.

BLITZER: All right.

SIMMONS: I think the right-wing -- I'm not saying this cop was -- but the right-wing radio hosts would be going nuts about this kind of thing.

BLITZER: All right.

SIMMONS: But, here today, we're not.

BLITZER: Very quickly, because we have got to go.

Larry, is this a good debate that the country is having right now?

ELDER: Well, again, had Obama handled it the way I suggested it, which is, let's deal with this now on a case-by-case basis, this is not your grandfather's country.

Gates lives in a city with a black female mayor, in a state with a black governor, and in a country with a black president. It is not the same as it used to be. The police department is not the same as they were 50 or 100 years ago. And we ought to deal with these things on a case-by-case basis, not jump to conclusions.

He failed to do that.

SIMMONS: Well, Larry, I'm not -- Larry -- Larry, I'm not 50 -- Larry, I'm not 50 or 100 years old. But I also will say this, that it's possible for things to be better socially and politically, and to still be bad legally.

ELDER: Well, I don't know what to tell you, other than the fact is that we need the police.

SIMMONS: We do.

ELDER: The police are the line between us and the bad guys.

And I don't know what kind of neighborhood Gates lives in, but I grew up in South Central. And a disproportionate percentage of the crime is done by black people against other black people.

So, to have this hostile attitude towards the police from the black community that is generated quite often by irresponsible so-called civil rights leaders, I think, does not serve the country well.

BLITZER: All right, guys, we're not going to end this debate, but the debate certainly will continue.

(LAUGHTER)

BLITZER: Jamal Simmons, thanks very much for coming in.

SIMMONS: Thank you.

BLITZER: Larry Elder, thanks to you as well.

ELDER: Jamal, thank you.

And, thank you, Wolf.

From Neverland to Wonderland -- you're going to see the -- the house, we're told, that Michael Jackson wanted, but couldn't afford.

And the first lady, Michelle Obama, you're about to hear her talk as well, what she loves about the art, the designs, American-style.

(COMMERCIAL BREAK)

BLITZER: Let's bring in senior political analyst, Gloria Borger. She's been reporting on this health care debate.

You have just come from the White House, where you and some other journalists have had a briefing.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes. We met with Rahm Emanuel, probably just at the same time the president was giving his -- his statement on the Gates situation.

BLITZER: The White House chief of staff.

BORGER: That's right.

And, you know, he really wanted to put to rest some of the criticism that this president hasn't been involved enough and hasn't put out a bill. And let me just read to you what he said.

He said: "We made a choice to offer broad outlines and let the legislative process work. We are not sitting back like the Maytag man."

And he makes point that the president has been on the Hill, he's been on the Hill. They have been meeting with negotiators. But he made the point -- and don't forget, he worked for Hillary Clinton -- that, if you put a bill out there, every change in the bill, he said, becomes a defeat.

He also told us that the secretary of state, Hillary Clinton, spoke with the president today. And she said to Barack Obama -- quote -- "I wish I was this close in 1994."

BLITZER: When she was the first lady...

BORGER: Exactly. Exactly.

BLITZER: ... when she was running this health care debate at the time. At the time, Rahm Emanuel was working in the White House for the president.

BORGER: Mm-hmm. BLITZER: What about the critics who say that the money simply isn't there to simply pay for this huge new expense?

BORGER: Well, he -- he made it very clear, first of all, that the president is absolutely committed to reducing the deficit and paying for everything in this bill. And then he took on the Republicans, and he said, "The party that is sitting there complaining about the deficit has nothing but a pool of blood around them."

And, by that, he meant red ink, because, of course, he pointed out that the Republicans passed a $900 billion prescription drug benefit, and did not pay for a penny of it. So, he's very clear that they're going to -- they're going to pay for this.

BLITZER: All right. We're going to continue this. He's not backing down at all, Rahm Emanuel, over at the White House.

If you thought Neverland was spectacular, wait until you see what might -- repeat, might -- have been Michael Jackson's next house. Drew Griffin of CNN's Special Investigations Unit gives us an exclusive tour.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): It's the home Michael Jackson wanted, but, at the time, even he couldn't afford. According to his Las Vegas realtor, Zar Zanganeh, this 10- acre walled estate was to be Michael Jackson's Vegas Wonderland.

ZAR ZANGANEH, FORMER REALTOR FOR MICHAEL JACKSON: This is the only house I showed Michael out of probably 10 or a dozen where he came outside. And he came outside with no umbrella, no mask on, just came out here with the kids to see the grounds of the property.

Through this gate here, we have an apartment. It's about 1,000 square feet. And the kids wanted to make this into the playroom. And Michael loved that.

GRIFFIN: Instead, Zanganeh placed Jackson and his family in this lease home. It was not up to par, says Zanganeh, but Jackson was building a life in Las Vegas and also trying to build back his wealth, entertaining casino owners, who were offering Jackson deal after deal to make him stay.

ZANGANEH: I know that Michael really liked the idea of being able to perform in one location night after night. He loved the fact that the kids could actually have a place to call home, and not move around with him, since they are always going everywhere with him. That was an idea that very much appealed to him.

There's a couple secret tunnels through here.

GRIFFIN: The estate is filled with quirky appeals, secret tunnels leading to a gun range Jackson wanted to turn into a music studio, a barber chair in the master bath, a full gym, theater room, and a 20- car garage where he and his family could load into and out of cars out of view.

(on camera): What was he most interested in when he would came into a house like this?

ZANGANEH: Michael's biggest concern, in my opinion, was always the safety of his children.

GRIFFIN (voice-over): At the time, just back from his self-exile in Bahrain and Ireland, Jackson simply couldn't afford the $22 million to $25 million price tag.

Zanganeh says, he believes the concert tour would have been Michael Jackson's pathway back to this house, a permanent show in Las Vegas, and a new retreat he would have called "Wonderland."

Drew Griffin, CNN, Las Vegas.

(END VIDEOTAPE)

BLITZER: We're closely watching developments in the Honduran political crisis right now, clashes erupting, as the ousted Honduran president, Jose Manuel Zelaya, crosses the border into his country on foot. We have the latest for you. That's coming up.

Plus, Sarah Palin preparing to leave office -- what are her plans? And will she be missed in politics?

(COMMERCIAL BREAK)

BLITZER: Let's get to our "Strategy Session."

Joining us, the Democratic strategist and CNN political contributor Hilary Rosen, and the Republican strategist John Feehery.

The president had a major speech today, sort of lost amidst all the other news...

HILARY ROSEN, CNN POLITICAL CONTRIBUTOR: Right.

BLITZER: ... between health care and his friend the Harvard university professor, the uproar over that. It involves education, and he's offering billions of dollars to schools out there and states, local districts, if they do the right thing, step up, and get really good, solid educational systems in place.

It sounds a little bit like No Child Left Behind, which was the Bush administration's education initiative, but you're shaking your head.

ROSEN: Well, No Child Left Behind was a set of standards that schools had to meet...

(CROSSTALK)

BLITZER: He's got standards now. He's...

(CROSSTALK) ROSEN: But without support.

And what Arne Duncan, the secretary of education, and the president did was, they took advantage of the stimulus package and they put in a lot of money for education, and they have got a plan. They have got to provide support for teachers, so that they can hold more teachers and principals accountable.

BLITZER: So, what...

ROSEN: They're going to -- test scores are going to matter, but also a school's entire environment is going to matter.

BLITZER: So, what she's saying is that it's -- it's like No Child Left Behind, except it's got money to back it up.

JOHN FEEHERY, REPUBLICAN STRATEGIST: It's so odd to do it on a Friday afternoon.

I mean, if there's real competition, if it's a real program, he should really make it a centerpiece of his presidency. Education is one of the most important things we can do for our competitiveness. I like the fact that there's competition in this. We need more competition. We need more standards. We need more accountability. We need more better teachers. We need more of an inspiration, so people can actually get educated in their schools.

So -- but why do it on a Friday afternoon, when you have got all this other stuff going on? It should be the centerpiece of his agenda.

ROSEN: Well, you know, the president started out with three major agenda items. We're going to energy independence. We're going to health care reform. And we're going to investment in education.

It's a big agenda to get started all at once. And it's a -- it's a -- it's a tough year. And I think education, they're really struggling with how to get support in there. But Secretary Duncan, I think, is -- is working hard in -- in supporting schools. They're working with unions. They're working with school districts. And they're trying to be innovative.

I -- I think that they're making progress.

(CROSSTALK)

FEEHERY: My guess is, the reason that they're doing this now is because a lot of their allies don't like it. And I think that's the big problem with getting reform with the Democrats. They don't really like too much...

(CROSSTALK)

BLITZER: The teachers unions...

(CROSSTALK)

FEEHERY: Teachers unions hate it. So, we need more competition. And we need more accountability.

BLITZER: All right, let me talk about Sarah Palin with you guys for a moment. She's leaving the Alaska governorship on Sunday. I'm sure we're going to be hearing a lot from her over the -- the coming weeks and months. But what do you think at this moment, just before she leaves?

FEEHERY: Well, the world is her oyster. I mean, she can do whatever she wants to do. She can go into a TV show, like Mike Huckabee has done. She can -- actually, she has a passionate base that really likes her.

She obviously has some liabilities, though, because the national press thinks she's kind of a joke. And there's that liability that she has got to overcome that. But she does have a fund-raising base. She has a group of people who really love her. And she can do whatever she wants right now.

BLITZER: She can do TV, if she wants. She can give speeches, make a ton of money. She's going to write a book, make a lot of money on that.

ROSEN: Right.

BLITZER: She will become a very wealthy woman quickly.

ROSEN: And she's got the best of both worlds now. All of the media elites make fun of her all the time, which keeps her on television, which keeps people talking about her.

And the more people like us and me make fun of her, the more that her base likes her.

(CROSSTALK)

ROSEN: So, you know, if you're Sarah Palin, you're excited about the future.

BLITZER: And how does this impact the Democrats?

ROSEN: I think Democrats are -- are -- are you know, do -- would do well to keep their powder dry as she goes on this next leg. You know, beating her up too much only helps her, makes her more serious a candidate for the right wing. She's got a lot to prove and a lot to make up for from the last campaign.

BLITZER: That's a good point, isn't it?

FEEHERY: I think Democrats want her in the -- in the -- in the headlines. They seem to always say that she's going to be a nominee, and that they want to keep her there.

You know, I think that, for -- from her perspective, she's got to get credibility. And the way she goes to get credibility, go around the country, say some things that are smart, focus on things that matter to the American people, and actually make a difference in the public policy arena.

BLITZER: Well, we will see what she does. Guys, thank you very much.

FEEHERY: Thank you.

BLITZER: Proposed reforms for the nation's health care system are front and center here in Washington. Jack Cafferty wants to know, do you plan to contact your congressional representatives about health care during the August recess?

And the policeman and the professor -- a home invasion call balloons to a national incident. We're going to hear both sides of the story in their own words.

And a sex scandal -- a real one -- in Italy, alleged video of an encounter between the prime minister and a call girl, it all goes public. (COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": Who will vote yes to put Sonia Sotomayor on the Supreme Court? Count two more nos. That would be Republican Senator John Cornyn of Texas. He says he will vote against Judge Sotomayor. Many of his constituents, by the way, in Texas are Latino, so voting against the Hispanic judge could hurt Cornyn, at least potentially.

Meanwhile, Republican Senator Orrin Hatch of Utah also says he be voting against her.

Remember, for the latest political news any time, you can always check out CNNPolitics.com.

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

JACK CAFFERTY, CNN ANCHOR: Yes. Do you know offhand -- we were just talking -- are they going to schedule a vote on Sotomayor before they adjourn for the recess?

BLITZER: I think the Judiciary Committee will. I wouldn't be surprised if the full Senate does as well.

CAFFERTY: OK. Good. Thank you.

The question this hour: Do you plan to contact your congressional representatives about health care reform during the August recess?

Debra in Arizona: "I received an e-mail from the president this morning and immediately called my two senators in Arizona, requesting government health care options, even though I have health private insurance. I support President Obama 100 percent. I was not surprised to have to leave a voicemail message for Senator John McCain. I was really surprised to get an aide on the telephone for Senator Jon Kyl."

Dennis in Tennessee writes: "I already have, Jack, several times. I tell my wife, letting politicians know how we stand on this subject is my own form of health care reform. It might not do any good, but I feel better."

Elaine in Washington: "Yes. I will contact my representative, although she has no vote on the matter that I know of. I would like her to ask the Blue Dog Democrats who are saying we can't pay for reform one question: How will you pay for health care five or 10 years from now if there is no reform?"

Neil in California: "I would love to urge my congressman to work with the White House on an equitable health care bill, but my representative is Tom McClintock. He's made his position of opposition clear from the get-go, and talking to him is like talking to a brick wall that quotes Abraham Lincoln."

John in Alabama writes: "I have contacted my senator, Jeff Sessions, so many times, that he sent me a letter telling me not to do so again. I will not give up voicing my opinion on this or any other subject."

And Ross in Oklahoma writes: "I won't be contacting my representative or senators. They are Republicans, of course. I live in Oklahoma, the only state where McCain carried every county. I might as well live in Canada, for all the impact I will have on this discussion. Come to think of it, if I lived in Canada, I would have health insurance."

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 of others.

And, Wolf, we posted the question on CNN.com about whether or not President Obama should apologize to the Cambridge police officer in this Gates affair. Thousands of e-mails are pouring in...

BLITZER: Wow.

CAFFERTY: ... over the transom.

BLITZER: Wow.

All right, Jack.

CAFFERTY: Yes, getting a big response.

BLITZER: I'm not surprised.

All right, Jack, thank you.

(CROSSTALK)

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

Happening now: Democrats in disarray. Party conservatives in Congress are furious over threats by liberal party leaders to push through a vote on health care reform. Stand by for the latest.

A black market in human organs, an alleged kidney salesman among dozens arrested in a wide-ranging corruption investigation that's also -- that also nabbed public officials and religious leaders on other charges.

And tempers rising and nerves fraying over the arrest of an African- American scholar by a Massachusetts police officer. President Obama takes heat for fanning the flames and makes the stunning move just a couple hours ago to try to ease this situation.

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