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Hasan's Colleagues Saw His Stranger Side In Psychiatric Reports That Included Tangents About Islam, The Quran

Aired November 14, 2009 - 18:00   ET

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

WOLF BLITZER, CNN HOST: The alleged Fort Hood gunman now charged with murder. We're learning that his former colleagues had serious concerns about his state of mind, his competence, and his allegiance to Islam.

Plus, he says he quit his State Department job in protest to the war in Afghanistan. Now Matthew Hoh has a message for the president about the danger of sending in more troops.

And is the president too calm for his own good? I'll ask his former campaign manager, David Plouffe, if Mr. Obama needs to create more fear.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It appears he won't be able to walk in the future, that's an exact quote from the attorney representing the suspect in the Fort Hood massacre. He's delivering this news of his client's condition.

(BEGIN VIDEO CLIP)

COL. JOHN GALLIGAN (RET.) FORT HOOD SUSPECT'S ATTORNEY He's not ambulatory. He's paralyzed, at least from the waist down. And my understanding is that there's no immediate likelihood that that's going to change.

(END VIDEO CLIP)

BLITZER: The man who allegedly slaughtered 13 people in cold blood paralyzed from the waist down. The lawyer also says Major Nidal Malik Hasan has severe pain in his hands. This just one of several new developments.

For those 13 deaths Hasan is charged with 13 counts of premeditated murder. He could face more and if convicted could be put to death. Amid this investigation, we're uncovering new information about the suspect's professional past. Let's bring in our Brian Todd. He's investigating for us.

Brian, what are you picking up?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're getting more detail on the problems Nidal Hasan had during his medical training, problems that were brought to the attention of his superiors.

(BEGIN VIDEOTAPE)

TODD (voice over): A former colleague of Nidal Hasan's during his medical training tells CNN Hasan's contemporaries had widespread concerns about his competence as a psychiatrist. Former colleagues, who did not want to be identified because of the ongoing investigation, say they thought Hasan's presentations were not academically rigorous. And one said, quote, "No one in class would have ever referred a patient to him."

Earlier this week, Hasan's supervisor at Fort Hood was asked about reports of problems.

COL. KIMBERLY KESLING, DARNELL AMRY MEDICAL CENTER: His evaluation reports said that he had some difficulties in his residency, fitting into his residency, and so we worked very hard to integrate him into our practice, and integrate him into our organization. He adapted very well and was doing a really good job for us.

TODD: But former colleagues tell CNN of substandard performance by Hasan during previous training. One of them said his PowerPoint presentations, like this one shown in "The Washington Post," were inappropriate and unscientific.

Hasan's former colleagues tell of Hasan talking about the persecution of Muslims and justifying suicide bombings in those talks, instead of the required discussions on health. Two colleagues remember Hasan saying his allegiance was to the Quran over the U.S. Constitution.

One colleague says he confronted Hasan about the presentations and says Hasan dodged his questions and talked about Islam. He says people complained to Hasan's superiors about his slide shows and that the superior seemed attentive to their concerns. NPR reports Hasan's superiors had a series of meetings in 2008 and 2009 discussing whether Hasan was psychotic. Hasan's attorney didn't comment on issues of Hasan's professional competence, but was asked about mental responsibility in this case.

GALLIGAN: At any time you have conduct alleged, or attributed, to an individual that's completely inconsistent with what appears to be earlier conduct, that issues are raised that call into question one's mental responsibility.

TODD: One of Hasan's former colleagues tells CNN he saw no signs of mental instability in him, but believes Hasan did try to provoke people with his religious views. Given these patterns, should someone have intervened with Hasan? General Russel Honore, who was not involved in Hasan's career, makes this point.

LT. GEN. RUSSEL HONORE, U.S. ARMY (RET.) CNN CONTRIBUTOR: Something was missed in this major's tone, his demeanor, and the things that had been reported that he has said. That we could have possibly done more to help him before he got that far.

(END VIDEOTAPE)

TODD: One of the former colleagues, who I spoke with, says he's beating himself up these days over that very same question, asking himself repeatedly if he could have done something to stop this. He says he doesn't think he could have, Wolf.

BLITZER: What do his former colleagues say about his communication with this suspected Islamic radical cleric, who's now believed to be in Yemen?

TODD: We asked that of one of his former colleagues, and specifically the information from investigators that those communications were consistent with the psychiatric research at these training institutions. And one former colleague says that's ridiculous. And he calls that finding very disturbing. Here's a quote from him. He said, "The thought that any of this is research is a joke." He's really not making that connection.

BLITZER: Brian Todd on top of the story. Brian, thanks very much.

I want to bring in our senior legal analyst, Jeffrey Toobin. He's joining us now.

The fact that he's now been formally charged, Jeffrey, with 13 counts of premeditated murder, tell us precisely what this means. Because it seems - the formal charges seem to have come forward rather quickly.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: They are fast charges. And what's significant here is that prosecutors had a choice. They could have brought this case in federal district court, in the civilian courts, or they could have done a court-martial. They have chosen a court-martial. And what that suggests, doesn't prove, but it suggests, that the authorities here do not believe there was a conspiracy. Because it is a lot easier to bring a conspiracy case in a civilian court than in a court-martial. So it really suggests that the prosecutors here believe that Hasan acted alone.

BLITZER: He will face the death penalty, is that right? Capital punishment in the U.S. military for this?

TOOBIN: Absolutely, under the written law. But the fact is there has not been an execution because of a court-martial since 1961. So it will be complicated to try to try to resurrect that machinery, but frankly, if there's ever a case that is likely to lead to the death penalty, this one certainly seems like it.

BLITZER: Why has it been so long in the U.S. military that there's actually been capital punishment, a death sentence carried out? We know that there have been many times, many cases of soldiers, other military personnel, committing murder, for example.

TOOBIN: Well, they just have not chosen to bring those cases. There are some people actually on death row now, as a result of court- martial. So it hasn't -- so there may be executions in the pipeline, as it were. But the authorities have not done that. Remember, any sort of murder on an Army base, on a military base within the United States can be brought in a civilian court. So, some of those cases may have gone there.

BLITZER: Prosecutors are saying -- military prosecutors, they could file additional charges. And some have suggested the fact that one of the victims, Francesca Velez, she was pregnant. Could they bring a 14th murder in this case, the pregnancy?

TOOBIN: It does seem possible. You know, you wouldn't think abortion politics plays a role in this case, but in 2004, the Congress and President Bush amended the criminal laws in federal cases, both court-martials and civilian cases, so that the murder of a pregnant woman can result in a separate charge for killing the fetus. That has not been tested through the courts all the way yet. So we don't know if that would stand up in the Supreme Court as a separate murder charge. But it is certainly possible that Hasan could be charged with that murder as well.

BLITZER: Now, there are a lot of eyewitnesses. There's a lot of forensic evidence, the two guns, for example. It seems like a pretty strong case that the prosecution has. The defense attorneys, what arguments do you foresee them making?

TOOBIN: Well, it certainly seems like the only option available to them is some sort of state of mind defense. Based on what we know, a defense that says, you got the wrong guy just seems like it's never going to fly. The defense is potentially insanity. Now, we talk a lot about insanity defenses, but they rarely succeed. And certainly someone with his training, with his background, with his ability to function in the world is going to have a very tough time raising an insanity defense. But defense attorneys work with what they have. And that may be all that's available to them.

BLITZER: What about copping a plea to avoid the death sentence, maybe pleading guilty and then serving life without the possibility of parole? I assume that's a possibility.

TOOBIN: Well, that's a possibility, but the prosecutors have to offer that deal. And given the magnitude of this crime, given the horror this crime, it's going to be hard for prosecutors, I think, to do anything less than the maximum.

I don't see, at least at this early stage, what Hasan's leverage is to prosecutors to say, well, cut me this deal, and I'll do "X" for you. Well, what's he going to do for them? I don't really see what bargaining power he has, at least at this point.

BLITZER: Unless there's some totally embarrassing information that the federal -- that the U.S. military wouldn't want to be released in an open courtroom. Sometimes they do that if it's classified information, or whatever.

TOOBIN: Sure. And that's why it's important, you know, to take a deep breath and recognize that this investigation is just getting started. There's a lot to learn here. And the defense may learn things. The prosecution is certainly going to learn things. And then both sides will make a judgment about what the best way is, what their best option is.

BLITZER: Jeffrey Toobin, thanks very much.

This week there was a growing sense here in Washington that diplomatic efforts to contain Iran's nuclear ambitions are failing. Will Israel launch a unilateral first strike? I'll ask the Israeli Defense Minister Ehud Barak. He's here in THE SITUATION ROOM.

And David Plouffe, the campaign manager, said to have been essential to helping make Barack Obama president of the United States. We'll talk about what he thinks. Is the president doing a good job or not?

And a seasoned journalist, and author, sets out to investigate a mystery. The mystery of her own family's history behind the Iron Curtain. Contneed Martine (ph) will tell us the surprising results. Stay with us you're in THE SITUATION ROOM

(COMMERCIAL BREAK)

BLITZER: Efforts to reach a deal on Iran's nuclear program are in limbo. And outside of Washington no one is more concerned than Israel which fears it could be the target of an Iranian nuclear weapon. Would the Israelis act alone to take out Iran's nuclear program? I spoke about that and more with the Israeli defense minister and former Prime Minister Ehud Barak.

(BEGIN VIDEOTAPE)

BLITZER (On camera): Is it still possible that the Iranian nuclear program, the tensions with the U.S., the Europeans, with Israel, that can be resolved, diplomatically?

EHUD BARAK, DEFENSE MINISTER, ISRAEL: First of all, I hope --

BLITZER: I know you'll hope so, but do you believe it will?

BARAK: I'm not sure. I don't try to make predictions in the Middle East. We all prefer that it will be solved by certain kind of influence or even sanctions. But no one can tell you whether it will happen.

BLITZER: How much time is there? Because that's -- everybody realizes that the clock is ticking. And at some point your government probably will take action.

BARAK: I don't want to comment on this directly. But I say that basically there is not a lot of time. They have already accumulated enough material to be able to produce a single nuclear bomb if they go into high enrichment. They now consider removing three-quarters of it. If it will happen, it will take them backward, one year, but it doesn't mean that it will stop them from keep enriching.

BLITZER: I guess the question is how much time will you give the Obama administration, and the Europeans, to try to resolve this nuclear issue? BARAK: Wolf, we're not in a position to dictate to the rest of the world. We are a small partner in these --.

BLITZER: But you are in a position to take unilateral action, which you've done against Iraqi nuclear facility, a Syrian nuclear facility. And there's a lot of people wondering, when is Israel going to take action against Iran?

BARAK: We still clearly prefer the issue to be solved by determined sanctions. But it should be done within a reasonable time limit, which will be months, probably long months, but not years. And then the time will come to consider what should be done if that doesn't work.

Our position is clear and consistent. We keep telling, we do not remove any option from the table. We will recommend to others not to remove any option from the table. And we mean what we say.

BLITZER: Because the Iranians have made it clear that if Israel were to take military action, a military strike, they would retaliate, and they've got missiles that can reach Tel Aviv. They can reach your major populated areas.

BARAK: We don't have any illusion that dealing with Iran is not going to be a picnic, not for us, not for the rest of the world. But we believe strongly it's a major challenge for the whole world. I can hardly think of a nonproliferation regime if Iran turns into a nuclear military power.

And not to mention any conceivable, stable world order, especially in the Middle East. And I think that they have in the back of their minds the example of North Korea. If North Korea can keep getting away with whatever they have done, it signals to Iran that the whole world is not determined enough to stop.

BLITZER: Because if the Iranians retaliated, let's say, it wouldn't take long for Hezbollah in Lebanon and Hamas in Gaza, they would certainly start firing rockets at your populated centers as well.

BARAK: You know, Wolf, you leave no doubt that you are interested in talking about the consequences of populated --

BLITZER: People have to think about that.

BARAK: Yeah. I don't want to talk about it. I keep telling you, it's still time for action, determined sanctions regime. But if these fail, I think that no serious player should remove any option from the table. And we are not removing.

(END VIDEOTAPE)

BLITZER: Ehud Barak, the former prime minister of Israel, now the defense minister of Israel.

President Obama, calm and cool under pressure, but could that be working against him? Is the president showing that he is tough enough? I put that question and more to David Plouffe. He was the campaign manager.

And the former State Department worker who says he resigned his job in Afghanistan to protest U.S. policy toward Afghanistan. Matthew Hoh; he's answering my questions here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The chief architect who helped then-Senator Obama become President Obama is now telling how he did it. One year since the election, he's not only looking back, but he's also looking at the president right now. How's he doing?

And joining us now, David Plouffe. He was Barack Obama's campaign manager during the campaign. His new book is entitled "The Audacity to Win: The Inside Story & Lessons of Barack Obama's Historic Victory."

David, thanks so much for coming in.

DAVID PLOUFFE, OBAMA 2008 CAMPAIGN MANAGER: Good to be with you, Wolf.

BLITZER: Is the president showing that he is tough enough, right now, to get the job done? Because a lot of people out there apparently aren't very scared of him.

PLOUFFE: Oh, I think he's showing toughness every day. Listen, on health care reform, which we took another big step towards finally achieving. This weekend, taking on entrenched interests, we tried for 100 years to do this.

BLITZER: But three dozen Democrats said to the president, thanks, but no, thanks. We're talking about Democrats, not Republicans.

PLOUFFE: Well, listen. This is going to be hard. And we've obviously got a process still to go in the Senate, then a conference committee. But the point is we've tried to do this for 100 years. It's failed for a number of reasons. You've got big special interests entrenched, who are fighting this with everything they've got. And I think the president ran, in large measure, because he thought on health care, on energy, on education, Washington was letting the country down.

If we do not make the proper progress in these areas, our country will not thrive. And so he's bound and determined to do the longer-term things. And as you know in the town where you're interviewing me, it's short term and very political. But he's trying to do the tough, long-term thing.

BLITZER: But you know what the argument is. He really hasn't been mean enough. He's so even-tempered, he's so nice that people don't necessarily take him as they would, let's say, an LBJ, who used to scare people, especially members of his own party, on Capitol Hill. Does he need, if he wants to get health care done, does he need to start cracking that whip?

PLOUFFE: Listen, I think he has been. And I think his steeliness and his strength is one of the reasons that we are as close as we are right now to passing health insurance reform. I saw this during the campaign. People criticized him for his even-keeled -but don't mistake that even-keeled-ness for a real strong sense of where he thinks the country needs to go, and a real ability, I think, to take on these tough fights. And that's what's happening now.

BLITZER: Let me just interrupt, David, because some moderate Democrats, those Blue Dogs, they're saying you know what? They're not going to pay any price. There's not going to be any negative fallout from the president if they reject what he wants.

PLOUFFE: Well, listen, members are going to make their own determination. I would be much more concerned if I were them about what the voters have to say about this than what the White House has to say about it. They'll make their own judgment.

But I happen to believe that the best thing for the country is to do the smart things on health care, on energy, on education, coupled with the right things right now to stabilize the economy. I also happen to believe that this is the best long-term politics for our party. Because if you solve problems, eventually you're going to, I think, experience some political reward for that.

BLITZER: A year after the election, and you helped him orchestrate that election, he's still popular, about a 54 percent job approval number, right now, in our latest CNN/Opinion Research Corporation poll.

But on some of the most sensitive issues, his policies are not popular. For example, how is the president handling economy? 46 percent approve, but 54 percent disapprove of the job he's doing. How is the president handling health care? 42 percent approve, 57 percent disapprove, and similar numbers on Afghanistan. What happened over the past year that he's allowed this to go forward?

PLOUFFE: Well, listen. One of the big elements of my book is we did not campaign based on, you know, what the polls had to say day-to- day, or the commentary on shows like this. And I don't think the president is today.

Listen, we've got a tough economy. It's actually fairly remarkable to me that with the economy and unemployment where it is, basically everybody who voted for him thinks he's doing a good job. I would also, on those numbers, suggest to you that, you know, politics is a comparative exercise. And the Republicans have not trust right now nationally on these issues. So he's trying to do some hard things in a tough environment. He's not focused on the polls or the political chatter at the moment. He ran for president not to occupy that office, but to do the right things with it. Even things that are tough and long term, and that's what he's focused on.

BLITZER: A fascinating part of your book is now the first lady, Michelle Obama. Who was tougher on you during the low periods? The president or the first lady?

PLOUFFE: Well, I don't think either was tougher on us. I think that they're both very candid people. And so I think that, you know, we had -- both of them were obviously terrific assets out on the campaign trail. But I think that we had a healthy culture. And we definitely had some rough moments. You know, in the book, this wasn't just a smooth sail into the White House, as you know. So I wanted to capture some of the tough moments, some of the mistakes people like I, and others, made.

I think that's one of the more interesting parts of the book. That it sort of the mythology when you win, never is - you know, kind of matches up with the reality. Which is, we were big underdogs and we had to fight through a lot of tough stuff. But both he and the first lady are terrific during those moments. Because when we were at our lowest, they were at their best.

BLITZER: The book is entitled, "The Audacity to Win", the author is David Plouffe.

David, thanks for coming in.

PLOUFFE: Thanks, Wolf.

BLITZER: There are very serious questions about the president's signature issue, health care reform, and when - even if - it will pass Congress. So what if efforts to pass health care reform fail?

(BEGIN VIDEOTAPE)

REP. NANCY PELOSI, (D-CA), SPEAKER OF THE HOUSE: The yeas are 220; the nays are 215. The bill is passed.

BLITZER (voice over): An historic moment as the House of Representatives passed a health care reform bill by the slimmest of margins. But the battle is far from over.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now it falls on the United States Senate to take the baton and bring this effort to the finish line on behalf of the American people. And I'm absolutely confident that they will.

BLITZER: Not so fast.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The House bill is dead on arrival in the Senate.

BLITZER: So what if health care reform fails? It did in 1994 under President Clinton. There are real-world consequences. The nonpartisan Congressional Budget Office projects the number of uninsured people in America will jump from the current 45 million to 54 million in the year 2019. And the Health and Human Services Department forecasts that national spending on health care would rise from 16 percent of the gross domestic product to more than 20 percent.

Then there's the political cost. Democrats will pay the price. GLORIA BORGER, CNN SR. POLITICAL ANALYST: They control the House. They control the Senate. They control the White House. They've been pushing health care reform. It's been a top priority of the president's. And if it fails, the country would have a good question, which is, can the Democrats govern?

(END VIDEOTAPE)

BLITZER: That question could help shape the next Congress with health care reform failure spelling opportunities for Republicans heading into next year's midterm election. We'll watch all of this very, very closely.

He's a former Marine who fought in Iraq. Now he says it's time for U.S. forces to leave Afghanistan. That's where he was working when he quit his State Department job to make his point. My interview with Matthew Hoh. That's coming up.

Plus, the U.S. budget deficit hits a new all-time high. What does it mean for all of us? I'll ask the White House Budget Director Peter Orzad.

(COMMERCIAL BREAK)

BLITZER: There's no shortage of opinion as President Obama weighs whether to send thousands more US forces to Afghanistan, but one in particular is getting a lot of attention, Matthew Hoe is a former marine who fought in Iraq. He was a civilian officer working for the state department in Afghanistan before resigning last month to protest US policy there. I asked him if the president should deploy more troops to Afghanistan.

MATTHEW HOE, FORMER U.S. MARINE: It would be a mistake because first off, Afghanistan is in a civil war that's been going on since the '70s. All we're doing by our presence there is reinforcing one side of that civil war. So the other side sees our occupation as simply that, an occupation, and continues to fight us. Sending more troops is only going to exacerbate that or only going to fuel that insurgency. Additionally, the way Al Qaeda exist as this ideological cloud like organization that works worldwide and recruits worldwide, 60,000, 100,000 troops in Afghanistan has no bearing on the operations of Afghanistan.

BLITZER: But if the US were to pull out of Afghanistan, what's to say that Al Qaeda couldn't re-establish itself as it established itself there together with the Taliban before 9/11.

HOE: Sure, first of all, I think a lot of people agree with me that the link -- the links between Al Qaeda and the Taliban really didn't exist in 2001. They've been pushed together somewhat now.

BLITZER: Didn't the Taliban give Al Qaeda free reign to do what they wanted in Afghanistan before 9/11?

HOE: Al Qaeda operated out of there. However, I don't believe there was any connection between Mullah Omar's government, which was really (INAUDIBLE) in Kandahar as well as Al Qaeda organization, which spend a lot of time --.

BLITZER: That's a minority view you have, you know that. The widely held assumption in the US intelligence community was that there was a direct link between the Taliban -- they basically let the Al Qaeda operatives train in Afghanistan. They closed their eyes, and they let them do whatever they wanted.

HOE: Sure. I don't believe that the Taliban were involved in any of the planning of Al Qaeda's operations. I don't believe that.

BLITZER: But you're making that distinction.

HOE: Yes.

BLITZER: That 9/11 was specifically the work of Al Qaeda. The Taliban didn't know about it.

HOE: Correct.

BLITZER: That's probably true.

HOE: Yes.

BLITZER: But the fact that Al Qaeda had the free reign in Afghanistan to plan for 9/11 without the Taliban interfering or doing anything to stop, you don't dispute that.

HOE: Well, that was nine years ago, too, and I think Al Qaeda has evolved. After 9/11, after we chased the Al Qaeda and the Taliban out of Afghanistan, I think Al Qaeda evolved and they went onto the internet and now really recruit worldwide. But even then they were recruiting worldwide. Most of their operations --

BLITZER: Because they are in Pakistan now much more than they are in Afghanistan or Somalia or Yemen, for that matter. I guess the question is this. Chris Lawrence mentioned this in his report. Should the US or the west be reaching out to some Taliban elements right now to try to see if there's a deal there?

HOE: Absolutely, absolutely. If you agree that Afghanistan is a civil war, that this has been a continuation of the war that started in the '70s, you have to have political reconciliation.

BLITZER: So you don't see the Taliban simply as terrorist and the US should never negotiate with terrorists?

HOE: No, but don't get me wrong. There's many members of the Taliban are horrible, brutal people. However, I don't believe they have any interest in worldwide Jihad. I think most of the Taliban, the rank-and-file Taliban, most of them are on interested in their local communities.

BLITZER: They would just treat the people -- if they came back to power, the Taliban, they would treat women and girls, for example, as they did when they were in control, which was pitiful.

HOE: Which is horrible.

BLITZER: Are you willing to allow that to come back?

HOE: I don't think it's in the interests of the United States to try and change cultural or societal structures in other country.

BLITZER: So we should basically walk away, you think?

HOE: Not walk away in the sense of throw everything to the side and not be involved in that region. I think our priority should be destruction of Al Qaeda. I think the fact that we have not killed Bin Laden or Zawahiri over the last eight years is a real shame and I believe that leads credence to that organization and credibility. I think (inaudible) leadership.

BLITZER: You served in Iraq. You served for the state department as a civilian employee in Afghanistan. If you had a chance to speak directly to the president on the eve right now of his making this very important decision, what would you say? Look into that cam are and tell us what you would say to the president of the United States.

HOE: I would say, Mr. President, I understand the domestic political concerns that you have, however, but this is the opportunity to be a great leader, to recognize the challenges that we are facing, and the fact that it's a civil war.

American combat troops are not defeating Al Qaeda by their presence in Afghanistan. All they are doing is just fighting people who are fighting us because we're occupying them. We need to reevaluate our strategy there and attack Al Qaeda as the organization that it is, not as what we want it to be. And we have to realize that this is a civil war, and more combat troops will only fuel the insurgency.

BLITZER: Matthew Hoe speaking with me, the former state department employee.

Right now, the United States is breaking records. We have the highest unemployment rate in decades and the biggest deficit ever. We'll talk about this flood of red ink with the director of the office of management and budget. Peter ORSZAG is at the White House. Plus --

It's been 20 years since the Berlin wall crumbled and the iron curtain fell. Author, Kathy Martin will talk about discovering her family's dramatic history in cold war Hungary.

And for the first time a woman flies with Britain's red arrows, the top guns of the Royal Air Force. Stand by, your in the "Situation."

(COMMERCIAL BREAK)

The federal government is seeing lots of red ink. The deficit in October hit a record $176.4 billion and experts say they're worried that ongoing deficits could stunt the nation's fragile economic recovery. Let's discuss this and more with Peter Orszag, the Director of the Office of Management and Budget. Thanks very much for coming in, Peter.

PETER ORSZAG, DIRECTOR, MANAGEMENT AND BUDGET: Good to be here.

BLITZER: Trillion dollar-plus deficits as far as the eye can see? That's going to cause enormous long-term damage to average folks. Explain why you're so concerned about these enormous deficits.

ORSZAG: Well, we first have to explain that right now the deficit is actually ironically helping the economy. The tax relief and additional spending helps to bolster demand when the economy is very weak.

The problem is at some point, whether it's in 2011 or 2012 or 2013, the situation starts to reverse and at that point deficits crowd out private investment and become a harm. We need to get ahead of that problem and that's the line we're trying to walk in the budget that we're putting together for next February.

BLITZER: Because so much of US taxpayer dollars already is being spent simply to finance, to pay the interest on those loans we're getting, on the t-bills we're selling to China or Saudi Arabia or other countries that are helping to finance this budget deficit.

ORSZAG: That's correct although we need to remember, we're in an exceptional time right now. Total borrowing has imploded. Private borrowing has collapsed. In fact, the treasury department is the last borrower left standing. For right now, long-term interest rates are very low. We need to get ahead of the problem because as private borrowing starts to pick up, that situation's going to change.

BLITZER: How worried are you that some of these foreign creditors of ours are going to lose confidence in the dollar and they're going to, for example, start buying gold as a hedge, India, for example, has recently done that, and that the value of the dollar will go down as a result?

ORSZAG: Well, I'm going to leave comments about the dollar to our treasury secretary. But again, if you look at the interest rate on our long-term government bonds, right now the ten-year bond is -- has a yield, an interest rate, of under 4 percent. It's very low and that's because we're in such an exceptional period. That is going to change at some point, and we need to act before that happens.

BLITZER: One way of dealing with these budget deficits is to raise taxes. Is that right?

ORSZAG: Well, a deficit reflects an imbalance between spending and revenue. So narrowing it requires acting on one, the other or both.

BLITZER: So when does that go into effect? The president said repeatedly during the campaign he wants to increase taxes for those making more than $250,000 a year. When will that go into effect? ORSZAG: Well, under the budget that we put out this year, that would go into effect at the beginning of 2011. Again, above $250,000. So for a very small share of American taxpayers.

BLITZER: We got a question on Twitter. From someone who asked us this question. Mac1014. He says, when in our history has raising taxes produced private sector jobs?

ORSZAG: Well, I think what we need to remember is that budget deficits can impede economic activity. If you look back during the 1990s, for example, in 1993, there was a very significant effort to reduce the budget deficit including through some revenue increases. The result was a very robust period of economic growth throughout the 1990s. And as we look past this immediate crisis and look to the future, we need to put the nation back on a sounder fiscal course, again, to build a stable economic foundation.

BLITZER: And when you say revenue, what was the phrase you used? Revenue enhancers?

ORSZAG: Revenue increases.

BLITZER: You mean tax increases, right?

ORSZAG: That would be another way of putting it.

BLITZER: I just want to make a fine point on that. Here are some numbers from our recent CNN/opinion research corporation poll.

Do you approve of how President Obama is handling unemployment? He's proposed a jobs summit next month or jobs forum he's calling it. 47 percent say they now approve of how he's handling it, but in March it was 64 . Jobs, jobs, jobs. Here's the question. You got this forum coming up next month in December. What's taking so long? It's because the jobs have been a critical issue all these 10 months that he's been in office.

ORSZAG: Well, I think what we're seeing is the jobs market is still unacceptably weak. It's still too high, but what's happened is at least we've gotten some economic growth going again. In fact, if you went back a year, November 2008, and anyone told you that real GDP growth in the third quarter of this year was going to be 3.5 percent, I think they would have been quite surprised. So we're getting some economic growth, but that needs to now translate into job growth. And we're focused on that process.

BLITZER: How worried are you that the trillion-dollar-plus price tag for health care reform will convince some moderate democrats, for example, in the senate not to support it?

ORSZAG: Well, I think what we're seeing, again, in the Senate legislation, you have a deficit-reducing package that not only reduces the deficit over the first decade of its existence --

BLITZER: I'm talking about the house package. ORSZAG: Well, again, in the house bill, there's also -- it also does reduce the deficit over the first decade. It reduces the deficit thereafter, too, and includes some important reforms to how health care is practiced in the United States. As the debate shifts to the Senate, I think you're going to see, again, attention focused on those cost containment provisions which are solid.

BLITZER: Peter Orszag is the White House budget director. Good luck.

ORSZAG: Thank you very much.

BLITZER: You're dealing with all of our money. We hope you do well. Thank you.

ORSZAG: Thanks.

BLITZER: Twenty years ago this week, thousands celebrated in Berlin as the most brutal symbol of the cold war crumbled into dust. As a child, the journalist and author Kathy Martin lived behind the iron curtain. She's now written a very personal view of one of the pivotal events of the 20th century.

(COMMERCIAL BREAK)

Twenty years ago this week, Germans tore down the Berlin wall delivering a fatal blow to the communist system. The anniversary unleashing emotional memories of the cold war era and family stories of survival.

And joining us now, Kathy Martin. She is the author of a new book entitled, "Enemies of the People -- My Family's Journey to America," which is a very personal and powerful account of what your parents and you and your older sister went through. Really amazing stuff. You learned so much.

Going back, especially this week when the Berlin wall went down, this was the height of the cold war. Your father and mother were in Hungary after World War II. They were accused of being spies for America and arrested.

KATHY MARTIN, AUTHOR, "ENEMIES OF THE PEOPLE": They weren't spies. They were convicted as CIA agents simply because they were the last independent press behind the iron curtain, the only source of actual news coming to the west from the east. And, of course, they had to be eliminated and this was my childhood. I actually opened the door when they came to take my mother away, the secret police.

BLITZER: After your father had already been taken away. They were gone for a year.

MARTIN: My father, two years and my mother for a year. They were convicted for much longer, but then came the revolution which, by the way --

BLITZER: In '56. MARTIN: Yes, yes. And we hadn't -- I was 6 years old, my older sister, 8, and we had nowhere to go.

BLITZER: Who took care of you?

MARTIN: Strangers because so powerful was the hold of terror on the state that my parents' closest friends didn't want to have anything to do with us because we were children of enemies of the people, which is the title of my book, but it's in the files which I translated, the secret police file on the family. Turns out that the Marton family file was one of the biggest ones.

Twenty years of total surveillance because they were waiting to catch my parents in some great act of treachery. And guess what? The files revealed that it was an American who ultimately provided the most damaging evidence against my father, a guy who was in the American embassy, who was being blackmailed by the secret police. He was caught -- and you've seen the spy movies. He was caught in the sack with a double agent, photographed, and blackmailed, and he gave evidence against my father.

BLITZER: And your parents eventually got out of Hungary.

MARTIN: Yes.

BLITZER: They came to the United States here, and your dad, Andre Marton, whom I knew, he was the chief diplomatic correspondent for the associated press over at the state department. A great journalist, indeed. But in the course of this research, you went back, and you checked and discovered all sorts of things about your mom and dad including a lot of painful information.

MARTIN: Yes. Indeed. Well, first of all, it turned out that almost everybody in our inner family circle was informing on them, including, and worst of all, our baby-sitter who was a full-time agent who was kind of late in life vindication for me because I never liked her and I didn't think she was fit for her job. She was always in a hurry.

BLITZER: Because Hungary in those days was a real police state. People forget.

MARTIN: Yes. The power of fear, Wolf, the first time I actually saw the naked face of that fear was when the secret police took my sister and me to my mother's best friend after my mother's arrest. My mother said, "Take the girls. This lady will look after them." and she opened the door about this much. She sees the two of us little kids. Behind us the agents, and her voice about to break, she says, "where shall I send packages for the girls?" in other words, she -- that was the full extent of her support.

BLITZER: Your parents were Jewish. Holocaust survivors, but they never told you --

MARTIN: No.

BLITZER: -- or your sister.

MARTIN: No.

BLITZER: That they were Jewish or that your grandparents died at Auschwitz.

MARTIN: Right.

BLITZER: Why didn't they share that information with you?

MARTIN: You know, having lived through the two greatest nightmares of the 20th century, first the fascist Nazis in Hungary including, as you said, the deportation of my grandparents to Auschwitz, then the communists, my parents were so relieved to have survived and reached safe haven here in the United States that they never wanted to look back. And I don't think they ever imagined that I, their reporter daughter, would eventually go back and access these files. They never imagined the files would be open. And now, of course, the family has no secrets left.

BLITZER: So you had no idea that your parents were Jewish and that you were Jewish?

MARTIN: As a result, yes.

BLITZER: Because you were a grown woman when you found out about this.

MARTIN: Yes. I was 30 when, in the course of an interview I made that discovery.

BLITZER: What was surprising to me, after World War II, so many of the survivors, the Jewish survivors of the holocaust, like your parents, they didn't want to stay in Europe, whether Germany or Poland or Hungary. They wanted to get out, come to the United States, go to Israel, go to Australia.

MARTIN: Yes. Not my parents.

BLITZER: Your parents wanted to stay. Why?

MARTIN: They had an opportunity to report what was going on, the whole Stalinization process of that part of Europe and they were the last to do that. And I think sometimes their professional lives trumped their family lives, their children certainly. They were great reporters in, you know, the finest tradition of intrepid journalists. They were willing to go to prison for their belief, but I think that they also were extraordinarily reckless in their conduct.

BLITZER: Right in the early '50s especially.

MARTIN: Yes.

BLITZER: Before their arrest. They sort of flaunted it.

MARTIN: Yes, and they actually were giving the Americans -- they thought that in the cold war, it wasn't an equal fight. America was on the right side. And so they were actually giving advice to the American ambassador in Budapest which is what ultimately they were accused of doing.

They weren't spies but a very fine line between the two, but I think enemies of the people what you get, which you don't get in the historians' account, is the human cost of 50 years of communism. I mean, the fact that parents, my parents, were -- didn't know what had happened to their children.

My parents had no idea who was looking after us and we as children didn't know where they were or how long they'd be away. I mean, that was the way it was, and may it never come again.

BLITZER: And we learn a great deal of this period of time, the cold war, and what happened to one family. It's a powerful, powerful story, Kathy. Thanks very much for writing it.

MARTIN: And a happy ending, too, because here I am.

BLITZER: And you've done quite as well for yourself.

MARTIN: Thank you.

BLITZER: And we're very delighted that you've reached this level.

MARTIN: Thank you.

BLITZER: And written this book. Thank you, Kathy.

MARTIN: Thanks, Wolf, for having me.

BLITZER: And it's that time of year again. A big spruce shows up in New York City. One of our "hot shots." Stay with us.

(COMMERCIAL BREAK)

Here's a look at some of this week's "Hot Shot." in Hungary, doctors and medical students gathered for a march in the streets of Budapest.

In New York, a spruce Christmas tree was raised by workers in Rockefeller Center.

In China, a woman walked along a footpath covered in snow.

And above northern England, check it out. The red arrows including the first woman pilot to join them. They practice formations. "Hot Shots," pictures worth 1,000 words. I'm Wolf Blitzer.

Join us weekdays in the SITUATION ROOM from 4:00 to 7:00 Eastern and every Saturday at 6:00 p.m. eastern on CNN and at this time every weekend on CNN International.

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