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Democrats to Move on Health Care Without Republicans, If Necessary; Paterson Will Not Seek Reelestion; Clinton on Greenspan Outrageous Words; Salty Language Stalled Senate

Aired February 26, 2010 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Have a great weekend, Rick. Thanks very much.

Happening now. Democrats vow to move forward on health care reform with or without Republicans. Did the president's summit create any new hope for bipartisanship? I'll ask the two party chairmen Michael Steele and Tim Kaine. They're standing by live.

Also this hour, New York Governor David Paterson says he won't run for a full term in office after all. Will that satisfy his critics and cool down a red-hot scandal?

And Sea World says on with the show, keeping the giant whale that killed a trainer. Is the park doing enough to make sure that no one else dies? I'm Wolf Blitzer, you're in "The Situation Room."

President Obama's only days away from revealing what's called a way forward for health care reform. The White House says he'll consult with Democratic leaders in Congress and then make an announcement next week. Today the House Speaker Nancy Pelosi all but confirmed an open secret here in Washington, Democrats are making tentative plans to use a controversial legislative shortcut known as reconciliation. It could allow them to pass health care reform without any Republican votes. All this playing out a day after the president's healthcare summit at Blair House across the street from the White House.

By CNN's count, President Obama, by the way, and the Democrats together, they got a total of 257 minutes of talking time. GOP lawmakers got to speak for 111 minutes.

Joining us now is the chairman of the Democratic Party, Tim Kaine, the former governor of Virginia. We're going to be joined fairly soon, we hope, by the chairman of the Republican Party Michael Steele as well.

But let me start with you, Governor Kaine, is it a forgone conclusion now that the Democrats one way or another are going to try to pass this including the 51-vote majority procedure known as reconciliation?

TIM KAINE, DEMOCRATIC NATIONAL COMMITTEE CHAIRMAN: Wolf, it is definitely the case that we're going to move forward. The bodies are going to move forward to get healthcare pass. The president in earnest yesterday sought Republican ideas and heard a couple of good ones that he acknowledge, ideas about sale of insurance across state lines. There's a piece of that already in the bill, but perhaps it can be augmented. Ideas about trying to limit frivolous lawsuits.

So the president acknowledged that the Republicans had some good points, but there's a process now for going to an up or down vote which is what Americans want to try to find a path forward on healthcare and you will see the two Houses and the president roll out a strategy for doing that very soon.

BLITZER: How worried are you that Republicans say you try to ram this through, with that up and down vote in the Senate. You're going to pay a huge price in November in the midterm elections?

KAINE: Well, Wolf, let me do two things. First, the bill has passed the Senate already with 60 votes. So it wasn't rammed through. In fact, it's been played out in slow motion for months, as you know. Senator Bachus kept his committee open and extended for some period of time so that the bill that the Senate has passed with 60 votes already has a number of Republican amendments to it.

But you're right, it looks like there's some possibility that what the Senate might do is pass a second bill on financing adjustments through a reconciliation process. The reconciliation process is every bit as much a part of the Senate rules, as the filibuster is, for example. And it has been used repeatedly in the last 30 years, mostly by Republicans, but often on health care matters.

So the Cobra protection that workers have when they lose their jobs to continue health insurance, the "R" in Cobra stands for reconciliation. It was done by reconciliation.

(CROSSTALK)

BLITZER: But you heard John McCain yesterday say this is, what, a sixth of the whole GDP of the entire U.S. economy and it was never meant that this kind of process was never meant to enact this dramatic change in American economic policy.

KAINE: Wolf, it's hard to take the Republican claims of good faith seriously when they so misstate the rules of the Senate like that. The balanced budget act, one of the most important pieces of legislation that was passed, passed under the reconciliation project. The S-CHIP program that insures millions of low-income American kids passed with reconciliation. This is a rule every bit as much as the filibusters.

I know the Republicans like the 60-vote requirement and trying to use it as much as they can, but this 50-vote requirement is part of the Senate procedure that the Republicans have used often when it was in their interests to do so. I think what the American public wants is not debates over process, they want to get to an end result, an end result that will -

BLITZER: It's not just Senator McCain, it's Robert Byrd, the longest living senator. He wrote an op-ed piece saying this reconciliation procedure was never meant to deal with something like health care reform.

KAINE: Well, but it has been used, Wolf. As you know, the Cobra bill, the (INAUDIBLE) bill.

BLITZER: He knows a lot about the rules of the Senate, Robert Byrd.

KAINE: Yes. And I'm going to defer to him on that. I'm not a Senate rule expert, but I do know the history. Reconciliation has been used for balanced budget act, for S-CHIP, for Cobra, for key procedures. And again, what the American public wants is why shouldn't we be able to have an up or down vote.

Now, the bill has already passed, as you know, with 60 votes. It met that super majority requirement. Reconciliation is not something you would traditionally use for insurance reforms, or things like that, but on straight budgetary matters. Revenue adjustments or the financing of the bill, that's exactly what reconciliation was intended for.

The American public's entitled to an up or down vote on whether the system is going to be reformed, on whether people with insurance will be protected from the horrible rate increases that you've been seeing all across the country in recent weeks, so it is important that we get to a final vote on this matter.

BLITZER: Are you happy, on a totally different matter, that David Paterson is not going to lead the Democratic ticket, he's not going to seek election in November as governor of New York?

KAINE: Well, I respect his decision, Wolf. I heard it this morning. I was actually on another television show, and somebody just kind of handed it to me, and I respect the decision. It's a tough time being a governor right now. He's had a lot of issues that I think have been distracting, and he's made a respectable decision to take himself out of the fray for the election cycle this year.

You know, we're going to take that race very seriously. We want to make sure that the governor's mansion in Albany stays in Democratic hands and we'll work very hard to do that.

BLITZER: Governor Kaine, thanks very much for coming in.

KAINE: Always good to be with you, Wolf.

BLITZER: Governor Tim Kaine, the chairman of the Democratic Party. We hope to speak with the chairman of the Republican party Michael Steele. That's coming up later.

We're following a surprise from inside the White House today. The woman at the center of that security breach at the White House a few months ago will soon be out. Let's go straight to our White House correspondent, Dan Lothian. We're talking about Desiree Rodgers, Dan. Tell us what happened today.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. She is the social secretary, now the White House is confirming that she will be stepping down in the next month or two. As you know, she did come under fire when the Salahis managed to get into the state dinner for the Indian Prime Minister and his wife. After that she came under fire, there were calls for her to resign. She declined to go up on Capitol Hill when there was a hearing looking into the security breach.

Now, the president and the first lady released a statement this afternoon saying, "we are enormously grateful to Desiree Rodgers for the terrific job she's done as the White House social secretary. When she took this position, we asked Desiree to help make sure that the White House truly is the people's house, and she that by welcoming scores of people, everyday Americans through its doors, from wounded warriors to local school children to NASCAR drivers. She organized hundreds of fun and creative events during her time here. And we will miss her. We thank her again for her service and wish her all the best in her future endeavors."

So why is she leaving now? I asked White House spokesman Robert Gibbs.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Many of you I think saw the interview that she did where she was asked to come here by the president and first lady to do many of the things I talked to Jake about. And she told them around the beginning of the year that she thought it was time for her to go back to the private sector. She's not been asked to leave. She's decided it's time to go back to doing other things that she loves.

UNIDENTIFIED MALE: Did the state dinner incident did not play into this at all?

GIBBS: I don't think it did.

(END VIDEO CLIP)

LOTHIAN: She is now on her way back to Chicago. She was aboard an aircraft, and did communicate via e-mail with my colleague, Suzanne Malveaux. She told her "it has been incredible, setting the foundation for the White House for this historical presidency." And she said she's headed back to the private sector. Wolf.

BLITZER: Suzanne has an exclusive interview with another former White House official Van Jones, that -- we're going to have that interview later here in "The Situation Room." Dan, thanks very much.

Jack Cafferty is next. Also coming up, what's next for one of the most powerful members of Congress? Now that he's been slapped with an ethics violation.

And does George W. Bush support Dick Cheney's very vocal criticism of President Obama. Bush 43 answering that question today.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty for the "Cafferty Files." Jack. JACK CAFFERTY, "CAFFERTY FILES": As predicted, that day-long health care summit that was televised yesterday amounted to a little more than a lot of political theater. The Democrats are now taking a hard look at using a 51-vote shortcut in the Senate to ram a health care bill through.

It's a procedure known as reconciliation. It's supposed to be used only for legislation that affects taxes and the deficit. Democrats are trying to figure out how this complicated process might work, and whether they even have enough votes in both Houses to make it happen. The plan would be for the House to pass the bill that's already gone through the Senate, and then for both Houses to pass a package of changes that mirror the president's plan.

Under those rules, the Democrats could only need 51 votes in the Senate, but there are a lot of problems. For starters, Senate Democrats aren't even sure they would have the 51-vote simple majority they need. They could also face a big-time backlash from the public trying to jam this thing through. Over in the house, Democrats may not have enough votes, either.

The one Republican that voted for the healthcare bill last time already says he's going to vote no, not to mention Democrats facing tough re=election battles who may change their votes to no. And abortion might be the biggest obstacle of all. There could be as many as a dozen how Democrats with who vote against the bill because they say it's not strict enough in making sure the tax money does not pay for abortions.

So here's the question - should the Democrats try to ram healthcare reform through with 51 votes using that process called reconciliation? Go to cnn.com/caffertyfile, and post a comment on my blog.

BLITZER: I just want to remind our viewers, Jack, right after "The Situation Room," 7:00 p.m. Eastern, you have a "Broken Government Cafferty Files" special report. Give our viewers a little preview.

CAFFERTY: Well, it's an hour long program that looks at the various problems that we're encountering, the deficits, a national debt that's out of control, unfunded liabilities for social programs, lack of health care reform, two wars, unemployment at 10 percent. Pick something you like. The government is broken. If we don't get something done pretty soon, it probably will be too late. The show starts at 7:00.

BLITZER: We'll be watching, Jack. Thanks very much, Jack Cafferty with the "Cafferty File."

You just heard Jack talk about reconciliation. How do you feel about the prospect of that being used to pass health care reform? A company called Crimson Hexagon tracks online comments about topics. Check this out.

Of more than 14,000 conversation on twitter, Facebook, blogs, forums, it finds 39 percent support reconciliation. 30 percent are against it. 17 percent think the Republicans are hypocritical, 14 percent say that Democrats are hypocritical.

Some people are wondering how much scandal can one state take. The last New York Governor resigned in disgrace amid a sex scandal almost exactly two years ago and now Eliot Spitzer's successor is tarnished by a different type of scandal. We're talking about David Paterson's problems that have caused a political feeding frenzy in New York, especially in the New York City tabloids.

As we've mentioned just a short while ago, he announced he won't run for a second term. Let's go straight to CNN's Mary Snow. She's working the story for us. Very, very different today, that only a few days ago he was here in THE SITUATION ROOM earlier in the week saying he's running. He's determined to run and there's no way he can change his mind, but all of a sudden he did.

MARY SNOW, CNN CORRESPONDENT: Yes, very different. Some Democrats who have been in contact with him over the last 48 hours also described a very different governor, very somber. And we learned that Governor Paterson made this decision by late yesterday afternoon. This of course as concerns grew among state Democrats.

A state democratic leader says the decision was made before even Paterson spoke to reporters last night. You may remember he said he was listening to concerns and keeping an open eye. At that point he was opening the door for him to quit the race. This was just six days, Wolf, after he launched his campaign. With this investigation now under way into whether he and security detail tried to exert influence in a domestic abuse case, Paterson said today he had to be realistic about politics and said it was what he called an accumulation of obstacles that led him to the decision.

Take a listen.

(BEGIN VIDEO CLIP)

GOV. DAVID PATERSON (D), NEW YORK: It has become increasingly clear to me in the last few days that I cannot run for office and try to manage the state's business at the same time. And right now New York state needs a leader who can devote full time to this service.

In addition, I am looking forward to a full investigation of actions taken by myself and my administration, but I give you this personal oath. I have never abused my office, not now, not ever.

(END VIDEO CLIP)

SNOW: And that investigation is being conducted by state attorney general Andrew Cuomo who hasn't announced his bid yet for governor. This, of course, now clears the path for Cuomo. He said in a statement late today, that he will announce his plan at what he calls an appropriate time. Wolf?

BLITZER: How much of this do we know was Paterson's choice or was he effectively given an ultimatum?

SNOW: We asked that to the state Democratic party chairman, he insists that this was Paterson's choice and his alone. But as you mentioned, Democrats in the state were very outspoken about urging him not to run. Al Sharpton for one applauded his decision today. He was planning on a meeting tomorrow with New York democrats and met with some leaders last night to discuss Paterson's future.

Democrats were saying behind the scenes that they have been very worried that this was a serious issue, this investigation, and you know, today both "The Daily News" and the "New York Post" we have one cover here, "New York Post" saying time to go. So there's certainly a lot of pressure on him.

BLITZER: All right.

SNOW: But they thought that he should step down altogether.

BLITZER: Yes. For a while that's been going on. Thanks very much, Mary.

A death at Sea World. When should the show go on? Sea World announces when whale performances will resume after a whale kills its trainer.

Plus a political wife begins a new chapter in a sordid affair. We're talking about Jenny Sanford, the wife of disgraced South Carolina governor Mark Sanford. Wait until you hear what the judge gave the wife today.

And the senator who put a stranglehold on virtually all of President Obama's nominations for federal posts, talks to CNN in his first TV interview about it.

And Alabama's Richard Shelby is not sorry.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other top stories in the "Situation Room" right now. Lisa, what's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf. Well, Sea World will resume its whale show tomorrow following the death of a trainer in Orlando. The park's president is promising to keep trainers out of the water at least until the investigation into the Dawn Brancheau's death is complete. Meanwhile, Sea World says the whale that killed her will remain an active contributing member of the team.

And hurricane force winds fan a fire at the historic hotel in Hampton, New Hampshire sending an entire beachfront block up in flames. No one was in the hotel or the other businesses at the time, because it's the off-season. Winds from the same coastal storm also ripped a roof off another hotel. Everyone inside though got out safely.

Family court judge in Charleston has granted a divorce to Jenny Sanford, wife of scandalized South Carolina Governor Mark Sanford. Mrs. Sanford attended a brief hearing this morning without her husband. She discovered that he was having an affair with an Argentinian woman he described as his soul mate. The decree ending the 20-year marriage will be final in mid March.

And this is probably not the preferred way to send airmail. The cargo door on a plane carrying about 3,000 pounds of mail accidentally opened over Montana. Postal workers say a couple bags may have been fallen out. Crews are now searching the wilderness complex for any missing pieces. So I guess the check is not in the mail, unfortunately might have flown out the back door. Wolf.

BLITZER: It will be irritating for a lot of folks. Yes. All right. I hope they find the mail. Very important. Thanks very much, Lisa.

He has power over the federal government's purse strings, a lot of power. Now his hands though have been slapped by the House ethics committee. What does that mean for Congressman Charlie Rangel's political future. Stand by.

And why Hillary Clinton is now slamming the former Federal Reserve chairman Alan Greenspan.

(COMMERCIAL BREAK)

BLITZER: To our viewers here in the "Situation Room," happening now, a top Hamas commander is assassinated. 26 suspects have been identified, all have vanished. We watched their intricate operation unfold. Stand by for that.

He was supposed to lead the country to green jobs. Instead he's President Obama's first top-level adviser to hit the bricks. Suzanne Malveaux has an exclusive interview with Van Jones, his first since leaving the White House. You'll want to see it.

And an $800 needle, a $1,200 stapler. Every wonder why hospital costs are so high. CNN's Dr. Sanjay Gupta breaks down a hospital bill for all of us. I'm Wolf Blitzer, and you're in the "Situation Room."

It's not necessarily a good day for two national figures who are coincidentally from New York, specifically Harlem. We just heard Governor David Paterson reveal he won't run for a second term, but we're also watching what will happen to Congressman Charlie Rangel. Now that he's been slapped with an embarrassing ethics violation.

Rangel holds the powerful top spot on a committee that will play a key role in health care and tax cuts for all Americans. Let's go to our congressional correspondent Brianna Keilar. She's working the story for us. So what's the fallout from this slap that he got from the Ethics Committee?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, the ethics committee, Wolf, says that Rangel broke the house gift rule. He accepted trips to the Caribbean for an annual business conference. He went to Antigua in 2007. He went to St. Martin in 2008 and these trips were paid for in part by corporate sponsors.

Now under House rules, that's not acceptable. Members aren't allowed to do that. And so the committee says he must repay the costs of these trips. But even though Rangel told the committee, Wolf, that he wasn't aware that these corporate sponsors were in play, they're holding him responsible, because some of his staff members, including his then chief of staff, were aware. They're holding Rangel responsible for those staff members, basically submitting false information to the ethics committee when they wanted approval for these trips.

BLITZER: But this was just one of the issues that was hanging over his head, right, Brianna?

KEILAR: It is. And perhaps the biggest problem for him is one, especially considering that he's the head of the House tax committee is one where he failed to pay taxes for a rental property for earnings that he got from a rental property that he owns in the Dominican Republic. We're still waiting for the ethics committee to put out its ruling on that instance as well as some others, but all of these create really a political problem for Democrats, because, remember, when House Speaker Nancy Pelosi swept into power, the Democrats reclaimed the House, she promised to run the most ethical Congress in history, to drain the swamp, as she put it. And I pressed her on that today.

(BEGIN VIDEO CLIP)

KEILAR: The appearance of impropriety in all these matters that the ethics committee is looking into, isn't that kind of damage your promise to drain the swamp?

REP. NANCY PELOSI, HOUSE SPEAKER: No, I think every member is entitled to have his day before the ethics committee. They have said he did not knowingly violate the rules. And again, if this were the end of it, that would be one thing, but there's obviously more to come. We'll see what happens with that.

(END VIDEO CLIP)

KEILAR: In the meantime, Republicans seized on this latest news, again saying that Rangel needs to step aside from his chairmanship, and could it be, Wolf, that Rangel's sensing some pressure from Democrats as well. We heard today from Gene Taylor, a moderate democrat who said that Rangel need to step aside while all of these issues are sorted out.

BLITZER: We'll follow it with you. Thanks very much, Brianna Keilar, up on Capitol Hill.

Let's get to Michael Steele right now. He's the chairman of the Republican Party. Michael Steele, thanks very much for coming in.

MICHAEL STEELE, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: Hey, Wolf. Great to be with you, man.

BLITZER: Do you just assume that when all the dust settles in the coming weeks, the Democrats are going to have the up or down vote in the House and the Senate that they need to get healthcare reform passed? STEELE: I really don't know, right off the top but I would suspect that wherever they are, it's not going to be in a good place. I mean, you had a lot of folks going into yesterday's event, if you will, calling it a dog and pony show for the president and his democrats. Well, I took a slightly different tack on that, a different point of view on it.

For me, just the whole approach of this thing represented more of a death panel for Obama-care. You know, if that wasn't enough, when you come out of this thing and you're looking at the reconciliation fight that may loom ahead of us, it certainly will have represented a death panel for the Democrats this fall.

BLITZER: I'm not exactly following. A death panel. Those were pretty sharp words. What does Michael Steele mean by those words as far as the Democrats and the health care legislation that they wanted enacted?

MICHAEL STEELE, REPUBLICAN NATIONAL COMMITTEE CHMN.: Well, basically what they have done is they've sat in committee now before the nation and effectively by not listens to the American people, by trying to enforce on them a top-down health care system killed any meaningful efforts in my view to get health care done. You saw a president yesterday who interrupted more than he listened. I think that's an important aspect of this to take away from what we saw yesterday. This was a chance for him to sit back as the commander in chief, if you will, of his agenda and listen to both sides and try to find between the talking heads there in the room the common ground, the consensus among the members. Instead, he engaged as if he was a subcommittee chairman trying to beat back efforts by the opposition to get just one more piece of legislation on the table.

BLITZER: He convened the meeting, he was the chairman in effect of that session, right?

STEELE: Yeah, but you can be the chairman of a meeting and still be the one sitting back above the meeting, listening, taking in the points. Gives this is the first time he's engaged the Republicans in any meaningful way. From my perspective, Obama-care hit a wall yesterday and it will be an even bigger wall in my estimation if they go down the road of reconciliation. That's what I mean by a death panel.

BLITZER: It looks like they're going to go down that road one way or another, and Obama-care, as you call it, could be the law of the land pretty soon.

STEELE: I doubt it. The people don't want it. If they go down this road with reconciliation, then come November, there will be a whole new set of lawmakers in the land come to go Washington, because the people will speaking very loud and clear, and then we will begin to undo the damage that has been put in place through Obama-care. It's that simple. This is what the people are wanting out there, and this is what we've been talking about and fighting for. Listen to the people. They're telling you Wolf what they want, man, it's not complicated. BLITZER: The president made the same point in his summation at the end of that session when he said, you know what? I hope in the next four to six weeks we could get some bipartisan agreement, but he also made it clear he wants 30 million more Americans to have insurance. He says the Republicans are ready to provide 3 million Americans additional insurance -- health insurance over the next ten years. He says on that issue, there doesn't seem to be any way to bridge that gap.

STEELE: But what is in that gap? What is in between 3 million and 30 million? It's money. It's who pays, it's how much. This administration has not adequately addressed that issue. The CBO numbers are all over the place. The impact on small businesses is all over the place. The level of unclarity to what this Obama plan on health care means to me, the small business owner, to me the individual just learned he has cancer, to the individual who's struggling to pay health care costs right now is unclear. So what we've been asking for the president to do, and I applaud leader Boehner and leader McConnell in their efforts to scrap the bill, scrap the bill --

BLITZER: No, the president said he's not going to do that.

STEELE: Let's start with something fresh.

BLITZER: He says he's going forward, and the Democrats are going forward. If they get their 51 votes in the Senate, they just need 50 plus Joe Biden, and Obama-care could be the law of the land pretty soon.

STEELE: It could be, but in the six hours this event went on, we had over a,000 citizens go to our website, gop.com, and sign a petition, scrap the bill petition, 50,000 Americans in just that six-hour period, saying this is not what we want, you cannot turn a deaf ear to that, you cannot turn a blind out to what people said was a bottom-up solution, and not the bureaucracy and the programs that will come from the various institutions that will be created from it.

BLITZER: The folks will have a chance to decide in November in those midterm elections, dig on what happens in the next several weeks. Michael Steele, always good to have you here in THE SITUATION ROOM.

STEELE: Good to be with you, Wolf.

BLITZER: Michael Steele is the chairman of the Republican Party.

We're getting worse by the way of a new loss for Tiger Woods. What the scandal is now costing him.

Also some veterans of the Persian Gulf War are getting a second chance to try to prove they have a mysterious illness and discern compensation.

And former President George W. Bush has refused to criticize President Obama. Does she wish that Dick Cheney would follow his lead? Stand by. Our strategy session, that's coming up. (COMMERCIAL BREAK)

BLITZER: Secretary of State Hillary Clinton is raising some eyebrows with something she has said here in Washington. Let's bring in our senior political analyst David Gergen.

David, thanks very much for coming in. She was very critical of the economic situation, and in testimony yesterday she made it clear she's upset with the former Federal Reserve chairman Alan Greenspan for the economic policies that he saw through, saying in effect this undermined U.S. national security around the world, because it weakened the U.S. economy. Listen to what she said.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: I do not like to be in a position where the United States is a debtor nation, to the extent we are with the projections going far into the future, the kind of disadvantages that implies for our ability to protect our security, to manage difficult problems, and to show the leadership that we deserve.

(END VIDEO CLIP)

BLITZER: She named names, David. She wasn't shy. She said -- she went on to say, "I remember as vividly as if it were yesterday when we had a hearing in which Alan Greenspan came and justified increasing spending and cutting taxes, saying we didn't really need to pay down the debt. Outrageous, in my view." She was recalling her days as a U.S. senator. Those are pretty strong words from her.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: They were indeed. She's recalling -- as best we can tell there were twice when Alan Greenspan testified in front of her, when she was on the Senate budget committee a new member of that committee back ten years ago, January 2001, just after George W. Bush had been inaugurated. At that time her husband, Bill Clinton, along with the Republican Congress had left behind the country with substantial surpluses. It's hard to remember that then, but Alan Greenspan came up and testified and said basically we have surpluses as far as the eye can see, and think of this, he said in 2011, that's the year we're in now, fiscal year, we're going to have a surplus of $800 billion. So the real question at that time oddly was, well, what to do with all the surpluses? He testified and he endorsed the idea of tax cuts. It was seen -- the Democrats took umbrage because here was the Federal Reserve chairman endorsing tax cuts just after George W. Bush was proposing a trillion almost $2 trillion worth of tax cuts over 10 years. She was fundamentally right about one point. He did endorse tax cuts, and those tax cuts have been a part of the deficit problem, and indeed we have become a large debtor nations. We've gone from being the biggest creditor nation in the word.

BLITZER: And she says that undermines the U.S. national security with enormous debt, whether it's to Japan, China, Saudi Arabia or whatever.

GERGEN: I think the foreign policy community increasingly agrees with that view. Larry summers raised this question, how long can the world's biggest borrower remain the world 'biggest power? That's a very and profound question.

But I do want to say this. I shy she got one thing wrong. She accused Alan Greenspan of saying, we can raise spending and cut taxes. That's not what he said, that we can cut taxes, he is a spending hawk, has been all his life, did not want to raise spending. The deficits we now have are a product, yes, in part of the tax cuts, but they're also part of a whole lot more spending since then, so it's a combination. I don't think you can -- I don't think it's fair to hold Alan Greenspan accountable for the fact that we're the world's largest debtor.

BLITZER: We've been spending a lot of time this week on broken government. Is this an example of broken government?

GERGEN: I'm glad you raised that. This goes an opportunity to say there are also things in government that do work. This is an opportunity to say there are also things in government that do work and one of them is the Federal Reserve board. Sometimes it makes mistakes. You can argue about Alan Greenspan on this but if you look over a long period of time, the Federal Reserve board has been an enormous asset for this country, the most respected central bank in the world. There are other parts of government that work that we should bare in mind. The U.S. army, the military is a part of government. It words extraordinarily well, the best fighting force in the world and best in our history. If you look back at other programs civil rights, Medicare, Medicaid, fundamentally those have been successes. So I think as we talk about what's broken, it's important to remember there are institutions of our government that do work well.

BLITZER: Good point. David Gergen, thanks very much.

GERGEN: Thank you.

BLITZER: Let's go right to Lisa Sylvester. There's a story developing here in THE SITUATION ROOM.

Lisa, what's going on?

LISA SYLVESTER, CNN CORRESPONDENT: This is a story that's just coming in. Another lucrative business relationship bites the dust. Gatorade tells CNN it's dropping Tiger Woods. The company says, "We no longer see a role for Tiger in our marketing efforts and have ended our relationship." The company adds it will continue to partner with the Tiger Woods Foundation and Gatorade is sold by Pepsi Company. The company had already stopped selling its Tiger Woods drink brands in November. Wolf?

BLITZER: Thanks very much, Lisa for that.

Sometimes Senate action comes down to just one person. How one senator brought things to a screeching halt and uttered words that some say brought the chamber to yet another new low.

And CNN's own Dr. Sanjay Gupta takes us behind the scenes in the operating room. You're going to see what you're paying for. (COMMERCIAL BREAK)

BLITZER: Let's get to our "strategy session." Right now joining us now, two CNN political contributors, Democratic strategist Paul Begala and Republican strategist Alex Castellanos. Thanks very much for coming in. Did you see that story in Politico that had a headline, Buenning holds floor, and there's a tough, and then there's a bad word that starts with an s--t, tough something? He used that word, did you read that story?

PAUL BEGALA, DEMOCRATIC STRATEGIST: I did read it. He said I guess tough doo doo if we were being careful about our language. I'm pro- cursing. OK? I'm a Dick Cheney Democrat that way. I like swearing, but I think it's good. Young people should swear. It's better than smoking or drinking, so I'm pro-swearing, but what he said it about is what's appalling. Senator Buenning alone under the Senate rules is stopping unemployment benefits from continuing. The entire house, Republican and Democrat, 100% of the house voted for it, and I'll bet you 99% of the Senate --

BLITZER: Because it's about to lapse.

BEGALA: On Monday. So 1.2 million Americans will lose their unemployment benefits because of his stunt and his answer was tough doo doo. That's reprehensible. The Republicans ought to call him down.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: No one ever thought Buenning full of civility. That's just not the guy. He's an old baseball player and he's a pretty tough guy, but what he's doing has a good side to the story. That is this. It's $10 billion, which used to be real money, that's more than you're going to make all year. It's tendered up. We can't pay for. You know why Republicans are trying to hold Democrats for this, because there's a senator, Barack Obama, who when he was in the Senate, voted for a $2.9 trillion budget, 3.1 in '09, the $700 billion TARP package, and he says he inherited this from George Bush. President Obama inherited these deficits and these steps of spending from Senator Obama.

BLITZER: It's not just unemployment benefits that will run out for all these people on Monday, but also the cobra program, the benefits they get for insurance will run out as well unless they enact this legislation.

CASTELLANOS: And the money has run out. Pay for it. If it's worth while, if it's worth doing, let's find the money.

BEGALA: How would you pay for it?

CASTELLANOS: Let's cut spending.

BEGALA: Name one.

CASTELLANOS: All right Paul. Let's see.

BEGALA: Medicare? Social security? That's what the Republicans always want to cut.

CASTELLANOS: I would cut the department of education in Washington, because no kid is ever taught there. I would cut the department of commerce, because commerce ought to occur where people are, not where politicians are. You can take a bunch of education money and get rid of that.

BEGALA: Yes, we had this fight in the '90s, and we balanced the budget, the Republicans destroyed that surplus, and it has weakened our country, as secretary of state Hillary Clinton is saying is right. What Buenning is doing is appalling. 1.2 million people will lose their benefits. They lost their job because the economic policies Buenning voted for, which ran up the deficit. Buenning is not a deficit hawk. He help create these deficits. He voted for the Bush tax cuts then the other Bush tax cuts then the Bush war. I mean they have created these deficits and they have caused this pain.

CASTELLANOS: David Gergen -- I love it when Paul gets excited. Don't curse. I think David Gergen made a good point. That's tax cuts don't necessarily cause deficits.

BEGALA: Yes, they do.

CASTELLANOS: When you spend money you don't have, that's what causes deficits. That's what President Obama did when he was Senator Obama. He inherited these deficits.

BEGALA: Look, the notion that a guy like mine in a party like the Republicans has squandered the greatest surplus in American history, a surplus that Democrats built, now all of the sudden when it's going to help middle class people but when it's going to help big fat cats on Washington, Republicans are happy to do it. It's appalling what's occurring to those poor people.

BLITZER: Let me change the subject quickly to one of your idols, Dick Cheney the former vice president. Today the former President George W. Bush had a little reunion of his staff here in Washington, and he said you know what? He approves of the way Dick Cheney is going after the Obama administration, even though President Bush has remained silent in criticizing the current president.

CASTELLANOS: I think the president is very clear he does not want to get into the politics of this stuff, but the policy of keeping the country safe in foreign affairs is very important to him. When Joe Biden says that being president is not very hard, because you don't have to work at it, the vice president, well, apparently Dick Cheney is apparently willing to work at it, still. What he is doing is important still. He is calling out the Obama administration and raising the red if flags and making it more difficult for them to be weaker and move to the left. That is why they have had to say, look, we will fight a war on terror and not a criminal action.

BEGALA: Dick Cheney has a perfect right to speak out and President Bush can speak out and finally he has a first amendment spokesperson he can endorse. Dick Cheney did not hold a task force on terrorism that he was required to chair until after 9/11. We were attacked on 9/11 in part on 9/11 because Bush and Cheney were asleep at the switch. Now they want to criticize Barack Obama about this? Good luck. I think that Dick Cheney is so completely discredited that he's a perfect spokesman for the Republicans so I want Dick Cheney. Honestly I want him to be healthy. Thank god he's got good health care, and but also I want him to keep speaking because he is the embodiment of Republican weakness, failure and malfeasance.

BLITZER: In fairness to the current vice president, Joe Biden, I think that he was trying to be cute and funny when he said that the vice president is not that tough.

CASTELLANOS: And second career as a comedian could work out.

BLITZER: Sometimes the cute and funny does not work out.

CASTELLANOS: Well, you are a better moderator though than the president, Wolf.

BLITZER: Thank you, guys, very much.

It is called reconciliation, should the Democrats try to ram health care through with 51 votes? Jack Cafferty ready to read your e-mails.

And he was to be Obama's green jobs czar and instead he left after controversy after a few months. In an exclusive interview, Van Jones says he is about building bridges and speaks to Suzanne Malveaux and the first interview since leaving the white house. Stand by for that.

And a stunning cost of surgical procedures. Take an itemized tour of the OR with CNN's Dr. Sanjay Gupta.

(COMMERCIAL BREAK)

BLITZER: Right over to Jack with the Cafferty file. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: Question this hour, should to Democrats try to ram health care reform through the Senate with 51 votes using that reconciliation process?

Tom writes, "Ram health care reform through, yes, at turbo speed. We took the banking industry off of the leash and they ran away with trillions of our dollars and the insurance agency is doing the same thing. I am all for capitalism, but not immoral greed, greed and more greed."

Donna in Canada, "It is a stupid idea and it will split the country even more. Being from Canada, I would love for America to adopt universal health care system and that should be the eventual goal, but America is seriously facing bankruptcy right now. You can't go out to buy an expensive car when you can't afford mortgage payment and the grocery bill."

Joanne in Minneapolis, "That would not be wise. The maximum cap on the deficit is $5 billion over ten years using the reconciliation rules. If they do that, they will more than likely be removed from office for illegal activity. Robert Byrd has written a letter that this law is not for this policy, because it is for deficit reduction and adjustment of taxes only."

Greg in Georgia, "We live under a Democratic Republican whether the majority rules. If the Republicans want to whine about losing a vote to a majority, I would remind them that they lost the election by a majority. Deal with it."

Justin in Sacramento, "They most definitely should and must. The 22 times that the reconciliation budget procedure has been used in the inception 1974, 14 have come from a Republican-controlled Congress, including ramming through the patriot act, middle-class Americans need reform now and we cannot afford to wait."

Darrell in Lake Forest, California, "Yes. What we have here is a failure to communicate. We need health care reform with or without the Republicans."

Andrea in Illinois writes, "I don't think that a majority vote is ramming anything anywhere, Jack."

You want to read more about this, you will find it on my blog, CNN.com/Caffertyfile. Don't forget my special hour-long program about this and related topics beginning to night at 7:00.

BLITZER: Right after THE SITUATION ROOM. We will be watching, Jack. Tim Kaine, former governor of Virginia, the Democratic Party chairman, made a point and he said they got 60 points at one point in passing the Senate health care reform and if they have to do 51 votes the next time, they had 60 the first time so it is not ramming it through. That is the point.

CAFFERTY: But the idea is that when one version of a bill passes the Senate and one passes the house, then it is supposed to go to a conference committee where the differences are reconciled and then be resubmitted for a vote of both chambers. This has no similarity to that process anymore at all.

BLITZER: That is also a good point. Thank you very much. We will be watching "BROKEN GOVERNMENT" 7:00 p.m. eastern tonight.

Investigators on the trail of a cold, precise and elusive assassins. We will get an update on a Middle East murder mystery that is proving hard to follow.

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