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The Situation Room
American on Trial For Murder in Italy; Modest Drop in Jobless Rate; House Arrest in Luxury Swiss Cottage; Scandal Over Global Warming Heats Up; 'Modest' Dip in Jobless Rate
Aired December 04, 2009 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now: something President Obama hasn't gotten to do very often, applaud a jobs report he calls modestly encouraging. But, this hour, he may find our new poll numbers on his approval rating discouraging.
American troops aren't waiting for the surge to launch a new offensive in Afghanistan -- just ahead, a confused enemy and a new promise of reinforcements from U.S. allies.
And Italian jurors and judges now are deciding the fate of an American student charged with murdering her roommate. The 22-year-old says she is innocent and vulnerable after two years in jail. A verdict is now, we're told, expected within the next two hours.
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.
It's a modest ebb in a tidal wave of unemployment, but President Obama and many out-of-work Americans are willing to take what they can get, the October jobless rate of 10.2 percent dropping 0.2 percent last month to 10 percent. It's the most upbeat report since the start of the recession two years ago, and it allowed the president to bring just a bit of holiday cheer to people who are struggling in Pennsylvania.
Our White House correspondent, Dan Lothian, is traveling with the president -- Dan.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Wolf, President Obama's visit to Allentown, Pennsylvania, put the spotlight on a community dealing with high unemployment. He offered no prescription for their pain, but this was part of a listening tour as president and his economic team look for ways to create more jobs.
(voice-over): At a local community college, President Obama struck a cautiously optimistic tone, as he talked about the latest unemployment numbers, a tick down, instead of a tick up.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is good news, just in time for the season of hope. But I do want to keep this in perspective. We have still got a long way to go. I consider one job lost one job too many. LOTHIAN: So, days after committing 30,000 more troops to the war in Afghanistan, President Obama is on a road show to fix unemployment. It's carefully choreographed, a tour of this Allentown metal plant.
OBAMA: What have we got right here?
LOTHIAN: Lunch at a local restaurant and a visit to a career center.
Top aides say the president wants to meet Americans struggling in this bad economy and get ideas on how to boost private-sector jobs. While he encourages out-of-the-box thinking, he wasn't expecting this pitch from a college student.
UNIDENTIFIED MALE: I was wondering if -- maybe if you checked out some of the statistics about legalizing prostitution, gambling, drugs, and non-violent crime, in order to stimulate some of the economy?
(LAUGHTER)
OBAMA: You know, I -- I have to say this. Well, I -- I appreciate the boldness of your question.
(LAUGHTER)
(APPLAUSE)
OBAMA: That will not be my jobs strategy.
(LAUGHTER)
LOTHIAN: Mr. Obama pivoted to more realistic options, like building roads, bridges and ports, but a turnaround in the job market will remain a huge challenge.
CHRIS ISIDORE, CNNMONEY.COM SENIOR WRITER: Stopping the layoffs is a necessary first step, but -- but getting employers to be confident enough and to have enough access to money, credit, to have strong enough sales to actually start hiring people again, that's -- that's a huge gap to -- to cover.
LOTHIAN (on camera): On Tuesday, President Obama will deliver a speech on the economy. Aides say he will roll out new initiatives to create jobs and boost economic growth. But White House spokesman Robert Gibbs says there will not be another $787 billion stimulus plan -- Wolf.
BLITZER: Dan, thank you.
(END VIDEOTAPE)
BLITZER: Secretary of State Hillary Clinton is welcoming new pledges by U.S. allies to send 7,000 more troops to Afghanistan, the reinforcements from at least 25 countries, including Britain and Poland, coming as the U.S. prepares to send in another 30,000 troops. Secretary Clinton is in Belgium for talks with NATO leaders, and she spoke with CNN's John Roberts.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN HOST, "AMERICAN MORNING": You wanted to get 7,000 troops. Do you think that you'll get to that number? Might you get beyond?
HILLARY RODHAM CLINTON, U.S. SECRETARY OF STATE: Well, what we've always said is between 5,000 and 7,000, because that's what we assessed. But we're obviously looking for more commitments, we think more we'll be coming in, in the weeks ahead.
(END VIDEO CLIP)
BLITZER: Just ahead, we are going to have more on the troop surge in Afghanistan and the situation on the ground right now.
Our brand-new poll shows that the American people are for the most part rallying behind the president's new war strategy in Afghanistan, but, if you think that's helping his approval rating, guess again. It's dropped below 50 percent for the first time in our survey.
Our senior political correspondent, Candy Crowley, has been crunching the numbers.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Trouble on the home front is eating into his political capital, but the president's hard sell on Afghanistan did the job.
OBAMA: I am convinced that our security is at stake in Afghanistan and Pakistan. This is the epicenter of violent extremism practiced by al Qaeda.
CROWLEY: The latest CNN poll found that a majority of Americans still oppose the war in Afghanistan, but 62 percent favor the president's plan to send 30,000 more troops there. Thirty-six percent are opposed. In the good news/bad news category for the president...
OBAMA: These additional American and international troops will allow us to accelerate handing over responsibility to Afghan forces and allow us to begin the transfer of our forces out of Afghanistan in July of 2011.
CROWLEY: ... two-thirds of Americans favor the president's exit plan from Afghanistan, but 59 percent think it was a bad idea to announce it.
Despite his success in gathering public reinforcement for more troops in Afghanistan, the president's overall approval rating has fallen below 50 percent for the first time in a CNN poll. The latest CNN/Opinion Research Corporation poll numbers show 48 percent of Americans approve of the way he's handling his job. That is a seven- point drop in less than three weeks.
Partially fueling this dissent is this. Just 36 percent of whites who never attended college approve of the way the president is handling his job, an 18-point drop from Americans most likely to work in mining, construction and manufacturing, the three hardest-hit areas of the recession.
With his numbers so far into the positives on Afghanistan policy, it is abundantly clear what's dragging down the president: jobs, jobs, jobs. It is not a wonder he was in Allentown, Pennsylvania, today.
OBAMA: Americans who have been desperately looking for work for months, some of them maybe for a year or longer, they can't wait, and we won't wait. We need to do everything we can right now to get our businesses hiring again.
CROWLEY: The president is promising to send new jobs initiatives to Congress next week.
(END VIDEOTAPE)
CROWLEY: While the pressure is on the president to do something about the job market, there are signs that he has some leeway when it comes to Afghanistan. Americans in this poll asked who they blame for the current situation in Afghanistan, Wolf. Sixty-four percent say George Bush.
BLITZER: Because of the -- the previous administration.
It's interesting. This poll was completely taken after the president's speech Tuesday night on Afghanistan. It was taken by all the networks. Everybody was carrying this speech live. Normally, after a major speech like that, the poll numbers, the job approval numbers usually go up. They don't necessarily go down. He gets a little bounce in the immediate aftermath, but it didn't happen this time.
CROWLEY: It was a very specific bounce that he got. It was on Afghanistan, what he -- the -- the subject that he spoke to, because where -- you see, what was amazing to me is, the majority of Americans don't like this war in Afghanistan. They want out of this war in Afghanistan. And, yet, almost two-thirds of them said, yes, send 30,000 more troops.
So, he did get a boost on that narrow issue, but on -- overall, I think, when you look at this, what you can tell, is yes, Afghanistan is going on, Iraq is going on, health care is going on up on the Hill, but issue number one remains the economy, specifically jobs.
BLITZER: Yes, that's what touches home to so many folks.
All right, Candy, thanks very much. Don't go away.
Let's check in with Jack right now for "The Cafferty File" -- Jack. JACK CAFFERTY, CNN ANCHOR: Wolf, the Senate has voted to cut almost $500 billion from Medicare as a way to help pay for health care reform. Is that an oxymoron? Republicans tried to stop it. They failed. The esteemed senators apparently think they can cut that much from Medicare without hurting seniors.
They better hope the seniors agree with that premise. They insist that Medicare is already in trouble and needs to be fixed -- quote -- "not raided to create another new government program" -- unquote.
Senator John McCain's recording a phone message meant for voters arguing against the proposed Medicare cuts, but Democrats say the Republicans are making false claims about the $460 billion-plus in cuts, and they insist there is a lot of waste, fraud and abuse that can be cut from Medicare. Why haven't they done that before now?
Keep in mind, they also need to find a way to pay for nearly $1 trillion worth of health care reform. The Democrats say the bill won't reduce guaranteed Medicare benefits for seniors and that it would extend Medicare solvency for another five years.
The AARP supports the proposed Medicare cuts over 10 years, thus giving the Democrats some political cover in their push to cut back subsidies to private Medicare plans, along with payments to hospitals, hospices, home health care agencies and other providers.
Medicare is an extremely popular program among seniors. For a lot of them, it's the only health care they have. Is it really a good idea to start cutting a program, a government-run health care program, that works?
Here's the question. Should Medicare cuts be part of health care reform? Go to CNN.com/caffertyfile and post a comment on my blog.
I think this is one of those things that looks good on paper, Wolf. They say we can cut $500 billion in waste and fraud. Why haven't they done that before now?
BLITZER: I always ask that question whenever they say that, and they say, well, we're finally going to do it right now, finally. Just get -- get -- get ready, because it's about to happen.
CAFFERTY: Check's in the mail.
BLITZER: Yes, I have heard that.
CAFFERTY: Yes. Yes.
BLITZER: Jack, thank you.
The U.S. is expanding its push-button war against Taliban insurgents in Pakistan. Our Pentagon correspondent Barbara Starr is in the war zone right now.
A government official says he's being fired for speaking out against those proposed civilian trials for the 9/11 suspects. And the media circus at the ski chalet where the film director Roman Polanski is under house arrest. The sex crime case leads Polanski and a horde of reporters to the Swiss Alps.
(COMMERCIAL BREAK)
BLITZER: The U.S. is stepping up its efforts to kill enemy fighters along Pakistan's border with Pakistan. It involves using those pilotless planes called drones that shoot missiles at terror suspects.
Today, we learned the White House has authorized an expansion to the CIA's drone program in Pakistan.
But, as this program expands, the controversy over it likely will grow as well.
Here's our Pentagon correspondent, Barbara Starr.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Pakistan, August 2009: An unmanned aircraft takes off from a secret base inside Pakistan. The Central Intelligence Agency has a tip where the Taliban leader, Baitullah Mehsud, is hiding. The CIA drone flies in, piloted by personnel miles away in front of a computer screen. Its missiles fire. Mehsud is killed.
It's called push-button war, targeted killing by remotely controlled planes. The growing reliance by the Obama administration on these drones to kill inside Pakistan, a U.S. ally, is increasingly controversial.
Philip Alston, the United Nations special investigator, questions if this is legal warfare or targeted assassination.
PHILIP ALSTON, U.N. SPECIAL INVESTIGATOR: Under what program, under what authorization, under what set of laws is the CIA actually operating? This is the CIA. This is not the Department of Defense. Normally wars are fought by a defense department, not by an intelligence agency.
STARR: In 1976, President Gerald Ford banned political assassination. Since 9/11, the Bush White House, and now President Obama, have insisted the drone campaign in Pakistan is part of the war against the Taliban and al Qaeda, not the Pakistani people.
CIA Director Leon Panetta tersely defended the once-secret program earlier this year.
(BEGIN VIDEO CLIP, MAY 18, 2009)
LEON PANETTA, CIA DIRECTOR: Very frankly, it's the only game in town in terms of confronting and trying to disrupt the al Qaeda leadership.
(END VIDEO CLIP)
STARR: But Alston says, if the U.S. wants to claim the attacks are vital, there must be changes.
ALSTON: The fears of the international community that the U.S. is operating perhaps a targeted assassination program that's not contained by the appropriate rules will simply be increased.
(END VIDEOTAPE)
BLITZER: Once again, that was CNN Pentagon correspondent Barbara Starr. By the way, she has just arrived in Afghanistan. We will be filing reports about the war, the plans for a troop buildup there. You're going to see those reports here throughout next week.
"You're fired," that's essentially what was told to a top foreign policy researcher for Congress. Could it be he was fired for openly speaking his mind?
Let's bring in Brian Todd. He's been looking into this story for us.
What are you finding out?
BRIAN TODD, CNN CORRESPONDENT: Wolf, this official claims he was fired for just that reason. He is Morris Davis, a retired Air Force colonel, former lead prosecutor for the military commissions of Guantanamo detainees.
Since his retirement, he's been openly critical of the commissions, but he now works for the Congressional Research Service, an arm of the Library of Congress charged with providing objective, nonpartisan information to congressmen on virtually any topic.
Now, taxpayers shell out about $100 million a year to fund CRS. Last month, Davis wrote articles critical of the commissions and critical of the Obama administration's decision to try some detainees in civilian courts.
Here's a quote from an op-ed in "The Wall Street Journal" -- quote -- "A decision to use both legal settings is a mistake. It will establish a dangerous legal double standard."
Now, Davis now says he's being fired for writing that op-ed, says his bosses at CRS have told him he will be out of a job before Christmas. With the help of the ACLU, he is trying to save his job. The ACLU sent a letter today to the Congressional Research Service, saying Davis' firing is a violation of his First Amendment right to free speech, and the ACLU threatens to sue if they go ahead with this firing.
Now, remember, the CRS is supposed to be a nonpartisan, objective research arm for Congress. So, someone espousing such a strong opinion could conceivably cause a problem. But Davis says this has nothing to do with his job as a foreign policy researcher, that there is another division at CRS that handles legal matters. So, I came back at him with another key question.
(BEGIN VIDEO CLIP)
TODD: It does come under the purview of the Congressional Research Service.
COL. MORRIS DAVIS (RET.), CONGRESSIONAL RESEARCH SERVICE: Correct.
TODD: So, couldn't that service kind of be thought as painting some kind of a partisan or opinionated version of an issue overall, and wouldn't that be a problem?
DAVIS: Well, again, I think it depends on, is it reasonable for Congress to expect that they have 698 cloistered people who give up the First Amendment right to express an opinion on anything? Because, literally, any topic is of interest to Congress, so we would be precluded from ever speaking on any issue.
(END VIDEO CLIP)
TODD: Davis also says he's gotten permission in the past from CRS to speak or write on issues, as long as it's done on his own time as a private citizen.
He's also given us documentation here, rules from the Library of Congress, saying employees are -- quote -- "encouraged to write and speak out on issues, as long as they disassociate themselves from the library," which Davis says he was doing.
Now, we have been in touch all day with the Congressional Research Service. They will not comment on any permission given to Davis or -- or on the regulations. They won't go on camera with us. They did give us this statement -- quote -- "As a matter of professional courtesy, and out of respect for the confidentiality of individuals, CRS will not comment on personnel-related matters."
Wolf, that is -- that is what we have at this point.
BLITZER: Yes. Is there any indication that the White House was at all involved in -- in the firing?
TODD: There is no indication at the moment that they were. The White House has denied this. And we talked to an official today at White House. They say they have no involvement in this matter at all.
Maybe more importantly, both Davis and the ACLU say they have no evidence that they were involved in this decision.
BLITZER: All right, Brian, thanks very much -- Brian Todd working the story.
There's a fresh twist in a scandal concerning global warming. It involves the leak of those e-mails that show, at least some say, a pattern of manipulation of climate change facts -- now a major international panel wants an investigation.
And a 1,000-foot-long tunnel in Mexico, police say smugglers intended to sneak drugs and humans into the United States. And that was only a few feet away from U.S. soil.
(COMMERCIAL BREAK)
BLITZER: Brooke Baldwin is monitoring some other important stories incoming to THE SITUATION ROOM right now.
Brooke, what's going on?
BROOKE BALDWIN, CNN CORRESPONDENT: Wolf, we're keeping a close eye on this story here.
Two attorneys in the Italian murder trial of American student Amanda Knox say they expect the verdict in less than two hours, the story happening in Perugia, Italy. In fact, you're looking at live pictures outside the courtroom.
Take a look at scene and all those people. The jury began deliberated today. Knox and her former boyfriend are accused of stabbing Knox's British roommate to death back in 2007. Knox did take to the stand yesterday. She actually spoke in some Italian. She maintained her innocence. When that verdict is handed down CNN, of course, will take you back there live.
And a heads-up here if you're drinking Slim-Fast. If you open one of the cans of Slim-Fast, toss it in the trash, call the company for a refund. Unilever -- that's the company that produces the diet drink -- they have declared a voluntary nationwide recall of any Slim- Fast ready-to-drink products in a can.
They did so after discovering the possibility that its canned drinks could be contaminated with some kind of microorganism that can make you sick. Slim-Fast powdered shakes, the meal bars, the snack bars, they say those are not affected by this.
And you like some snow? How about this story: an early school day of flights canceled because of this wintry weather, not exactly, though, what you would expect though in Houston, Texas, but, yes, today, this rare winter storm warning is in effect there through much of this evening. A freeze warning is in place through tomorrow morning. Snow started falling on Southeast Texas early this morning, pretty pictures, maybe if you're not driving, I guess. Up to five inches is predicted in some areas before it ends tonight.
And it was billed as the world's highest cabinet meeting. Wearing yellow oxygen masks, Nepal's top politicians held this cabinet meeting at a base camp near Mount Everest today at a breathless height of 17,192 feet. Wow.
This was a stunt really, they say, to highlight the toll they say global warming is taking on glaciers. And they had their photo-op, signed a commitment to tighten environmental restrictions, and flew then back to lower ground. Wolf, I don't know if you're afraid of heights, but that's some serious elevation we're talking about there, huh?
BLITZER: Yes, 17,000 feet, that's high.
BALDWIN: Whew.
BLITZER: Yes.
BALDWIN: It's high.
(LAUGHTER)
BLITZER: Very high.
Brooke, thank you.
BALDWIN: Thanks, Wolf.
From jury accommodations of a jail cell to some posh digs in a luxury Swiss cottage -- that's the transition that filmmaker Roman Polanski has made. You are going to see where he is staying now as he waits to see if he will be sent back to the United States to face justice for a sex scandal.
And are facts about global warming being manipulated? Critics say yes, after the leak of revealing e-mails. Now a U.N. climate panel wants answers.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now: A new report is released about the 2007 Virginia Tech massacre, and it reveals some troubling details about the worst shooting rampage in U.S. history. We're taking a closer look.
She's accused of killing her British roommate. Now the American student Amanda Knox's fate lies in the hand of an Italian jury. Attorneys believe the verdict is imminent. We are told it could come within the next 90 minutes or so, any moment.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
He's been released from his jail cell and is now confined to a home, a luxury Swiss cottage, in an exclusive winter resort frequented by celebrities. We're talking about the filmmaker Roman Polanski. He's now in far more posh digs as he awaits word if -- if he will be sent back to the United States to face justice for something that happened more than 30 years ago.
CNN's Morgan Neill is in Switzerland.
(BEGIN VIDEOTAPE)
MORGAN NEILL, CNN CORRESPONDENT: We're here at Roman Polanski's chalet. Just behind me, you can see (INAUDIBLE) Look up there. This is really the center of attention in this small tourist town in the Swiss Alps.
Now, that's not the only sign of the massive attention we have got here. Just take a look over this way. You can see
*** NEILL: Look up there. This is the center of attention, the small tourist town in the Swiss Alps.
Now, that's not the only sign of the massive attention we've got here. Just take a look over this way. You can see media outlets from all over the world, really, all hoping to catch some kind of glimpse of the famous director.
He's just arrived here to his chalet a short time ago, but no one has caught a glimpse of him yet. You can see, the doors are shut up, the windows are shut, the blinds are drawn. So far, no word nor sight of the famous director.
ROGER SEIFRIZ, TOUR DIRECTOR: It's a very new experience for us, and also for the people living in Gstaad, because, as you heard today, we were a holiday resort somewhere in the Swiss Alps, and now we are an arrest cell.
MAYOR ALDO KROPF, GSTAAD, SWITZERLAND: A very different thing is that we have a lot of media here. Normally it's very quiet here. We don't have media. They are not interested in what people are doing. Also, the very famous people, they used to stay here to walk around, to go shopping by themselves without any paparazzi or media following them.
NEILL: As you walk through the streets here, you really get a sense for what a sleepy community this is. It's a population of about 2,000 to 3,000 people, and very exclusive, as can you take by looking at some of the shops around.
Now, as we went to several of the shops today, you get a sense for the very slow pace as well here. Many of them simply closed in the middle of the day.
Overall, certainly not a place used to the kind of worldwide attention it's now getting.
Morgan Neill, CNN, Gstaad, Switzerland.
(END VIDEOTAPE)
BLITZER: In another story capturing worldwide attention, the scandal over global warming heating up. There's a fresh twist involving the leak of those e-mails that some say poke serious holes in long-held climate crisis theories.
Let's go straight to CNN's Mary Snow. She's got the latest for us -- Mary. MARY SNOW, CNN CORRESPONDENT: Well, Wolf, a senior U.N. climate official is speaking out on a leak of e-mails between climate scientists, and the U.N. panel he heads is now getting involved.
(BEGIN VIDEOTAPE)
SNOW (voice-over): Two weeks after computers were hacked at the U.K.'s University of East Anglia, and e-mails between climate scientists were posted on the Internet, the head of the U.N.'s climate science body told BBC Radio he wants an investigation.
RAJENDRA PACHAURI, CHAIRMAN, IPCC: We certainly are going through the whole lot, and then, as I said, we take a position on it. So we certainly don't want to brush anything under the carpet. We don't want to sweep it under the carpet. This is a serious issue, and we certainly will look into it in detail.
SNOW: This U.N. probe is in addition to an investigation under way at the University of East Anglia, which says it's looking to see if there's any evidence that scientific data was manipulated or suppressed. Phil Jones, the head of the university's climate research unit, has stepped down temporarily.
Those who question the effects of human activity on climate change have seized on the e-mails, accusing scientists of conspiring to hide evidence and trying to destroy data. Among them, Republican Senator James Inhofe, who has called global warming a hoax. This week, he called for hearings. No decisions yet.
And the e-mails were raised at a House hearing this week.
REP. JOHN SHADEGG (R), ARIZONA: Anyone who thinks that those e- mails are insignificant, that they don't damage the credibility of the entire movement, is naive.
SNOW: But at that hearing, a top government scientist says the e-mails do nothing to change the science.
JANE LUBCHENCO, NATIONAL OCEANIC AND ATMOSPHERIC ADMIN.: E-mails really do nothing to undermine the very strong scientific consensus and the independent scientific analyses of thousands of scientists around the world that tell us that the Earth is warming and that the warming is largely a result of human activity.
GAVIN SCHMIDT, GODDARD INSTITUTE FOR SPACE STUDIES: These are the temperature records from the U.S.
SNOW: Gavin Schmidt is a leading climate scientist with NASA's Goddard Institute for Space Studies. In the weeks since the e-mails were hacked and questions arose, he's been putting large volumes of data links on the Web site RealClimate.org that demonstrates a consisting trajectory of a potentially dangerous warming climate.
SCHMIDT: So, what we've done is we've just said, you know, look, you're not aware of that data, but here is all the data that's already existing. SNOW: His name appeared on those e-mails and he says he has nothing to hide.
SCHMIDT: There's nothing in these e-mails that's problematic. You know, most of the stuff that's been talked about has been taken completely out of context, and there's a lot of nonsense that's being spoken.
(END VIDEOTAPE)
SNOW: Now, debate about these e-mails come as world leaders head to Copenhagen next week for the U.N. Climate Change Conference. As to what impact it will have, the U.K.'s energy and climate change secretary is quoted by the BBC saying that the idea it could derail the summit is, in his words, "nonsense" -- Wolf.
BLITZER: There are others though that disagree. We'll have extensive coverage next week of that summit in Copenhagen.
Thanks, Mary, very much.
Relief, meanwhile, over at the White House as the unemployment rate dips. But when will the country actually start creating more jobs than it loses?
We're waiting for the verdict from Italy in the case of an American exchange student charged with murdering her roommate. We expect to bring it to you live from Italy within the next 90 minutes or so.
And two years after the massacre, new information about the shooting spree at Virginia Tech and what went so horribly wrong.
(COMMERCIAL BREAK)
BLITZER: Let's get back to our lead story, the most upbeat unemployment report in two years. The jobless rate falling last month by .2 of a percent to 10 percent.
Let's talk about it with Mark Zandi. He's the chief economist and founder of MoodysEconomy.com.
Mark, thanks very much for coming in.
It wasn't that long ago the U.S. economy was losing 700,000 jobs a month. Only 11,000 jobs lost last month.
So are we on the verge of seeing more jobs created than lost?
MARK ZANDI, CHIEF ECONOMIST & FOUNDER, MOODYSECONOMY.COM: Yes, I think we're headed in that direction. I think by next spring, we should see some consistent job growth. We've got a few more months of job losses, but we're clearly headed in the right direction.
BLITZER: So, by, let's say, March or April you think that there's going to be a positive net growth of jobs? ZANDI: Yes, I do. And partly, it's because the Census has to go out and hire a few hundred thousand people to conduct the 2010 census. But even abstracting from that, I think we'll get some positive job growth.
BLITZER: And it was interesting. They released the numbers today. They said for October and September, they revised the unemployment numbers, showing fewer people actually lost their jobs than we originally thought.
ZANDI: Right, and that just reinforces the trend lines that we started the year losing 700,000 on average per month, now we're losing at most 50,000, 100,000 per month. And by early next year, I think, we will be firmly in positive territory.
BLITZER: So are we over the hump? Is the recession over?
ZANDI: Well, you know, economists had thought the recession was over this past summer. By their definition. Of course, for most Americans, it's not -- the recession won't end until unemployment begins to decline. And that probably won't happen for another year. We won't see substantive declines in unemployment until this time next year.
BLITZER: So, throughout 2010, let's say, are we going to see 9 percent unemployment, 8 percent unemployment? How low is that number going to go, you think?
ZANDI: Well, we're at 10 right now and it's going to go higher. So, I think by next summer, fall, we'll probably see a month where we're pretty close to 11 percent.
BLITZER: Oh, really?
ZANDI: Oh, yes.
BLITZER: Even if there's going to be positive job growth in March or April? You still think it's going to go higher for the rest of the year?
ZANDI: Yes, because you need to create -- we need to create 100,000 to 150,000 jobs every single month to absorb all the people that are coming into the workforce every month. And so we have to have very strong, solid, positive job growth to even stabilize unemployment, let alone start seeing it come back down.
BLITZER: Is the improved jobs situation the result of the economic stimulus package, the billions that were sent into the economy?
ZANDI: Yes, in part. Of course, what the Federal Reserve has done in lowering interest rates and providing credit to the economy has been very important. But I don't think it's any accident this recession has come to end and the job market is moving in the right direction at this point in time. It's because of that $787 billion package. It is providing a good punch to the economy. BLITZER: And it looks like a lot of Democrats in Congress and maybe the president himself, they are ready to use some of that TARP money that has been returned to the federal government from Goldman Sachs and some of the other big banks to start -- instead of just using that money to pay down the national debt, keep it in the U.S. Treasury, start using that money right now to create some more jobs.
Is that a good idea?
ZANDI: Yes. You know, I think it is.
You know, I think there is still a -- the coast isn't clear. As long as we're lose jobs and unemployment is rising, there's still a reasonable probability that we backtrack and go back into something -- back into recession, deep recession. So we need to ensure that that does not happen. So I think it is important for policymakers to remain aggressive and provide a little bit more help to the economy to make sure that this recovery evolves into an expansion.
BLITZER: How worried though should we be about the deficit, the national debt, the trillion-dollar-plus annual deficit that we're seeing right now?
ZANDI: Yes. We need to be worried, but we need to be worried after the job market finds its footing. We need to get this economy growing, and as soon as it's growing and we think that the coast is clear, we have to focus like a laser beam on that long-term fiscal situation and get those deficits down.
BLITZER: What about the value of the dollar? A lot of folks, a lot of Americans are worried that the dollar's value keeps going down and down and that their life savings could be lost, especially if we see some significant inflation down the road.
ZANDI: Well, you know, Wolf, there's a lot of things to worry about, but the dollar isn't one of them. I mean, it's falling in an orderly way. The decline has been very appropriate. And it's a net positive for our economy, at least so far. Yes, it has contributed to higher oil and other commodity prices, but it's lifting our exports, it's helping corporate profits, and on net it's been a plus.
BLITZER: Mark Zandi, thanks very much for coming in.
ZANDI: Thank you.
BLITZER: When it comes to jobs and the economy, members of the president's own party are increasingly disgruntled and pressing him to do more.
Let's bring in our senior political analyst, Gloria Borger.
He's facing somewhat of a revolt from some members of his own party.
GLORIA BORGER, CNN SR. POLITICAL ANALYST: Yes, there are lots of Democrats who believe, look, you know, you've paid attention to Afghanistan. We're going to have to go out on a limb there. We're not happy about it.
You paid attention to health care. We're going to have to go out on a limb on that. We may not be happen with the final bill.
And what they are worried about is what you and Mark Zandi were just talking about, which is jobs. And they feel that the president, as someone said, could use a little bit more Bill Clinton in him and feel their pain, and needs to go out and talk to the American public about jobs and start doing something about jobs, which is why we're going to hear from the president next week on that.
BLITZER: Next Tuesday he's going to be delivering another speech on this.
BORGER: He is, and he's going to be talking an awful lot, I believe, about small businesses and how we can help small businesses create jobs either by getting credit flowing to them or by giving them tax incentives to employ more folks.
BLITZER: But what about the deficit?
BORGER: Oh, it's huge.
BLITZER: Because that's hovering over how much he wants to shell out and try to create some jobs.
BORGER: It's a huge problem. Only 39 percent of the American public believe that this president is doing a good job with the deficit.
And then we have something looming, Wolf, within the next few weeks. And that is the Senate is going to have to vote to raise the debt ceiling.
Take a look at this. You'll see how the national debt ceiling has gone up since the year 2002, and it is now at almost $13 trillion.
Within the next month they may have to raise it to as much as $15 trillion, and that's essentially setting our credit limit. And I've learned that there are moderate Democrats who have gone to the Senate majority leader and said we are not going to vote to be with you to raise this debt ceiling unless you tell us that the president is going to have a deficit commission so that we can get solid plans in place to start bringing our deficit down and taking care of these kinds of fiscal problems that we have.
BLITZER: It's a huge, huge problem for the president.
BORGER: It is. He's kind of stuck, because he's got to spend to get the economy out of this rut, but he's got to let people know, he's got to pivot, and say, I also care about this deficit for the future.
BLITZER: Gloria, thank you.
Gloria Borger reporting. Destination: the United States. Police say this 1,000-foot tunnel in Mexico was just a few feet from reaching the U.S., and that smugglers hoped to secretly sneak people and drugs into the United States.
Stand by for a report.
And walk the streets of the ruined city of Pompeii without leaving your home. Our Internet reporter, Abbi Tatton, will show you how.
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BLITZER: U.S. authorities are taking action against members of a notorious Mexican drug cartel.
Let's bring in CNN's Rafael Romo. He's joining us from the CNN Center.
What do we know, Rafael?
RAFAEL ROMO, CNN SR. LATIN AMERICAN AFFAIRS EDITOR: Well, Wolf, we're talking about a very powerful drug lord by the name of Marcus Arturo Beltran Leyva. He's 47 years old, and the U.S. Treasury Department says that he is responsible for multi-ton shipments of cocaine from Central and South America, and also considerable quantities of heroin from Mexico.
Now, what are they doing to try to disrupt his operation? They are freezing his assets in the United States. He owns a private plane company and also a transportation company and warehouses, and the U.S. government is seizing all that have and freezing his assets.
It's very important in the war on drugs because, so far this year, there have been 6,900 people who have died in Mexico alone. So the U.S. government is trying to hit this drug lord where it hurts the most, which is his pocket -- Wolf.
BLITZER: We were learning about this large tunnel that was just discovered from Mexico trying to get into the United States. What do we know about this?
ROMO: Wolf, this is an amazing story.
Wednesday morning, Mexican police, acting on tips by U.S. authorities, discovered this tunnel in the border city of Tijuana, in Mexico. The tunnel was almost 1,000 feet long and reached depths of 90 to 100 feet in places.
Mexican police arrested 13 people who were working inside the tunnel when it was raided. Authorities say the tunnel was very sophisticated.
Listen to this, Wolf. It had lighting, electrical and ventilation systems, and also an elevator -- can you imagine that -- an elevator. Now, Mexican police say that they had been working here at the tunnel for about two years. They were getting close to the U.S. border and actually making it across the border. The main purpose of this tunnel, they think, it was going to be used to smuggle drugs and also people across the border -- Wolf.
BLITZER: Very creative ideas from Mexico.
All right. Thanks very much for that, Rafael.
You don't have to leave your home to tour some of the world's most fascinating historical landmarks. Google has teamed up with the United Nations Educational, Scientific and Cultural Organization to put several World Heritage sites into Google's secret view program.
Let's bring in our Internet reporter, Abbi Tatton, who is very excited about this story.
Tell our viewers what we know.
ABBI TATTON, CNN INTERNET REPORTER: Well, Wolf, the city of Pompeii, which for centuries was buried under a 20-foot layer of volcanic ash, has now been -- being restored, as we speak, in Italy. This has now been minutely photographed by Google in collaboration with UNESCO's World Heritage Sites here.
So you can take this virtual stroll around the city we are in right now. This is the area around the Basilica, one of the most important areas of this city, the open-air market where people would gather.
This is one of more than a dozen sites mainly in Europe at this point that have been photographed in this way, in this collaboration between the two organizations. One of them in England, my favorite here.
This is Stonehenge in Wiltshire, which you can see there, where every British school child is dragged at some point in the pouring rain to walk around this beautiful site, 4,000 years old or more, some of those stones there. As you can see, Wolf, looking very, very 21st century in this rendering.
BLITZER: When you were a little girl and as a schoolchild, were you taken to that?
TATTON: Yes. I mean, it was all raining, Stonehenge. Always raining, but not in these pictures. The sun was out.
BLITZER: So it looks like that actually.
TATTON: Yes. It's very pretty, yes.
BLITZER: Thank you very much, Abbi, for that.
A U.S. exchange student in Italy says she is not a killer. We're standing by for the verdict in the murder trial of Amanda Knox. We expect to go there live within an hour or so. We're told we will get the verdict, and you will see it and hear it right here in THE SITUATION ROOM.
Stand by for that. You're looking at those live pictures.
And promoting peace in Afghanistan not with bombs but with books. An author shares his insights on the future of the country and its children.
Plus, suicide bombers storm a crowded mosque, kill several dozen people. About half of them teenagers.
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BLITZER: Significant travel changes over at the White House.
Ed Henry is our senior White House correspondent.
What's going on?
ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Robert Gibbs, the White House press secretary, has just confirmed the president is going to delay his trip to Copenhagen for that big Climate Change Summit. He's going to delay that actually until December 18th.
He was supposed to go on December 9th, next week. He's going to delay it a week.
The significance is the president has been on the phones. He's also been meeting face to face with some key leaders like the Australian prime minister, Kevin Rudd, and is getting some indications that it would be better for him to go at end of the two-week Climate Summit Conference instead of at the beginning.
What this suggests behind the scenes is that this White House has calculated that there may be a real deal in Copenhagen. A lot of people had been expecting that there may not really be any progress in terms of mitigation, in terms of countries agreeing to caps on emissions and pollution. And this suggests that while the White House originally had sort of low expectations, wanted the president to go at the beginning of the conference and then move away, now him going at the end, they think he could maybe help close a deal. That perhaps by him going at the end, there could be some sort of dramatic progress there and it would be better for him to go at the end rather than the beginning.
So this is a pretty big development.
BLITZER: Does it affect the time schedule for his going to get the Nobel Peace Prize in Oslo?
HENRY: We're still trying to figure that out. That's interesting, because he was supposed to leave this coming Tuesday night, go to Copenhagen first very quickly, just for a few hours, and then go on to Oslo, Norway, to pick up the Nobel Peace Prize. Our expectation at this time is that the president is still going to go to Oslo, because he's got those ceremonies to attend, and then likely to go to Copenhagen the following week. So the logistics are still being worked out, but I think it's very significant that all of a sudden, this Climate Change Summit, which a lot of people thought, you know, perhaps this is just going to be more talk, the White House at least is now calculating that they think there may be some real progress there, and it's better for the president to go at the tail end of it and try to help close a deal.
BLITZER: Two transatlantic trips instead of just one.
HENRY: That's pretty big right before Christmas, yes.
BLITZER: Thanks very much, Ed, for that.
The Houston mayor, Bill White, tops our "Political Ticker" right now. He's jumping into the Texas governor's race and abandoning his U.S. Senate campaign.
The Democrat is allowed to transfer the $4 million in his Senate war chest to his bid for governor. He's now seen as the party's strongest contender for the governor's job while Republicans hold a contentious primary. The incumbent Republican, Rick Perry, is being challenged by Senator Kay Bailey Hutchison in the Texas GOP primary.
Remember, for all the latest political news at any time, you can always check out CNNPolitics.com.
Let's go to jack for "The Cafferty File" -- Jack.
CAFFERTY: Have they ever figured out if they were cooking the books on that global warming stuff yet?
BLITZER: They haven't figured it out yet, but there are some who suspect that those books were cooked.
CAFFERTY: A little hanky-panky maybe going on there. All right.
The question this hour: Should Medicare cuts be part of health care reform? The Senate voted to cut almost $500 billion out of Medicare.
Joe writes, "You have to separate waste, which should be cut, from services, which had better not be cut. I think this looks like just another scheme of the Republicans to scare and fool us old folks."
Brad says, "The cuts will come in situations like this one just experienced by my 86-year-old aunt. She was taken to the emergency room. She gave a urine sample and was sent home. The hospital billed $1,800 to Medicare."
"The problem is not health care costs. It's the charges."
Johnny in L.A. writes, "The reductions need to be extracted, and quickly. This is the biggest eye-opener in the whole legislation. If there is waste in the system, you don't need a law to change it, so take it out. This foolish game by the Democrats to keep costs down at the expense of the senior community, which needs the services more than the non-insured, is ludicrous."
Akra writes, "Absolutely. The Republicans are surging ahead in the race to irrelevancy. The Democrats need a big move to catch up. Throwing themselves on the third rail of Medicare is a sure-fire way to get her done."
N. writes, "Since when has the Medicare system actually worked? Coming from someone in health care, it doesn't, and it never has."
Lia in Florida writes, "Every year since we've had Medicare, it's always been the Republicans who have railed at how inefficient and wasteful the program is. Now that a Democratic president is finally going to do something about it, they decide to scare granny and gramps with the chicken little routine. Unbelievable."
"As with just about everything else, this federal program's overhaul is long overdue. And nobody is going to die because of it."
Linda in Arizona writes, "Just do it. I'm tired of dithering."
If you didn't see your e-mail here, go to my blog at CNN.com/caffertyfile -- Wolf.
BLITZER: Thank you, Jack.
To our viewers, you're in THE SITUATION ROOM.
