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Reversing 20-Year Drilling Ban; "Climate-Gate" Scientist Cleared; More Sanctions Against Iran in the Works

Aired March 31, 2010 - 17:00   ET

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

WOLF BLITZER, HOST: Thank you, Rick.

Happening now, President Obama's new plan to explore for oil and mine the political center. This hour, the benefits and the drawbacks of easing a 20-year ban on most offshore oil drilling.

Also, the big winner in Iraq's recent election, the former and likely future prime minister -- I'll talk to Ayad Allawi about the enormous political and security challenges he's facing right now. And he's sharing a very moving personal story about the night Saddam Hussein's hit men tried to kill him.

And new questions about those multivitamins that are supposed to make all of us healthy.

Could they actually be linked to cancer?

Dr. Sanjay Gupta, he's here, he's examining the findings of a brand new study that has a lot of people, especially vitamin takers, worried right now.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

It's a striking reversal of U.S. energy policy for the past two decades -- President Obama wants to open up large areas off the coast of the United States to new oil and gas drilling. Right now, new drilling is mostly confined to the yellow area on the map here in the Gulf of Mexico. But take a look at what's highlighted in red right now. You can see the president's new plan allows new drilling off Virginia, considers it for much of the Atlantic Coast. It would expand drilling in the Gulf of Mexico and exploration of Alaska's Cook Inlet. But it puts new protections on Alaska's Bristol Bay. That's seen here in green. And it leaves in place a ban on drilling off the West Coast. The president says he tried to balance competing economic and political demands.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The answer is not drilling everywhere all the time, but the answer is not also for us to ignore the fact that we are going to need vital energy sources to maintain our economic growth and our security. Ultimately, we need to move beyond the tired debates of the left and the right, between business leaders and environmentalists, between those who would claim drilling as a cure-all and those who would claim it has no place, because this issue is just too important to allow our progress to languish while we fight the same old battles over and over again.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior White House correspondent, Ed Henry. A lot of Democrats were stunned, I -- I should say, to hear about this today.

Why the, shall we call it, evolution in administration policy?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, it's interesting. I mean what they say here is that it may be dramatic in the sense that the president is taking on some in his own party. We saw the tepid response from Speaker Nancy Pelosi, various environmental groups, who say they're disappointed. But when you talk to top aides here, they point out the fact that this is not the president saying "drill, baby, drill," the way the Republican ticket -- the McCain/Palin ticket did in 2008. They say that he's laying out a plan that will drill responsibly. And as you noted, it's not going to do it everywhere. It's only going to do it in selected places. And they also point out that they don't really believe it's much of an evolution, because if you listen closely to what the president said, including in that presidential debate at Hofstra University in New York, he signaled he was going to do this.

(BEGIN VIDEO CLIP)

(BEGIN VIDEO CLIP FROM OCTOBER 15, 2008)

OBAMA: I think that we should look at offshore drilling and implement it in a way that allows us to get some additional oil. But understand, we only have 3 to 4 percent of the world's oil reserves and we use 25 percent of the world's oil, which means that we can't drill our way out of the problem.

(END VIDEO CLIP)

HENRY: So you can hear the balance he was talking about as a candidate, that he was open to more offshore drilling, but that we couldn't drill our way out of the problem. He said virtually the same thing today.

However, as a candidate, he did say that he would prevent oil companies from drilling off the coast of Florida, which he's now opening the door to. Administration officials say they're -- insist they're going to do it responsibly, there's going to be safeguards. But when you listen to Democratic senators, like Bill Nelson of Florida, they say they're going to be watching very closely to make sure those safeguards really are there -- Wolf.

BLITZER: Because earlier, in June of 2008, right in the middle of a campaign, he said, when I'm president, I intend to keep in place the moratorium here in Florida and around the country that prevents oil companies from drilling off Florida's coasts. That's how we can protect our coastline and still make the investments that will reduce our dependence on foreign oil and bring down gas prices for good.

It seems to be a dramatic change from that statement to today.

HENRY: For Florida, it certainly does. And, look, that's a big electoral prize. He -- he was appealing to environmentalists there when he -- when he said that statement. Now, as president, he has to govern and as he was talking today, he believes it's -- it's a delicate balancing act. But the door is going to be open to some of that drilling now and he may take some heat for it -- Wolf.

BLITZER: Ed, stand by.

The early reaction to the president's drilling plan is mixed and cuts across party lines. Republican Senator John McCain is actually cheering the move, invoking the 2008 campaign slogan, "drill, baby, drill." But the top Republican in the House, John Boehner, says the president is not going far enough.

As for Democrats, Virginia Senator Mark Warner says the president is taking a positive step. But New Jersey Senator Frank Lautenberg, a leading opponent of offshore drilling, is vowing to fight the president on this issue he calls "the new Obama plan" -- and I'm quoting him now -- "kill, baby, kill policy."

Let's bring in our senior political analyst, David Gergen -- David, explain this, I said earlier, evolution. Others say flip-flop.

What do you see it as?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: I think evolution is a better word, Wolf. In the public mind, the Democratic reaction to the Republican Convention, when we heard "drill, baby, drill," the public certainly thought the Democratic Party and the Obama campaign stood for not drilling. But I think there were times in the campaign, in September and October of 2008, when he signaled that drilling would be part of what he thought would be a comprehensive strategy. And he also said very plainly in the State of the Union -- we commented on it that night, as you'll recall, just this January -- that he intended to pursue not only nuclear power, but -- but offshore drilling.

I think the surprise to me, Wolf, is they didn't signal much of this in advance. But more importantly, I thought that he would make this part of a trading agree -- you know, he would trade with the Republicans -- you support me on renewables, on wind and solar, you support me on the beginnings of a Cap-and-Trade plan, say, for the utility industry, and in -- and in exchange for that, I will do nuclear and I will do offshore drilling, the things that you really want. And then he would get a grand bargain on an overall energy strategy.

He's, in effect, made a peremptory concession to the Republicans on this, just as he did with nuclear. He's lost some of his bargaining leverage. Maybe this is a different form of leadership than what we're accustomed to. I'm surprised. But I'm not at all surprised he's embraced it, ultimately. I thought that's always where he was going to wind up and I thought he's been telling us that in various ways.

BLITZER: The -- I guess some are already suggesting he wants to reposition himself, perhaps, more toward the center on this debate and move away from his more liberal Democratic base.

GERGEN: That's possible, Wolf. And that that's a calculation in the White House. But you've also got, you know, Jim Jones sitting there, as his national security adviser, who is deeply committed on this question of energy development and having a broader, more comprehensive energy development as part of national security.

I mean the energy independence is -- is really important -- or greater energy independence, of course, is important for us in the Middle East. And so I don't think it's all driven by politics. I think it -- I think there's a -- there are deep underlying reasons. And, by the way, there are people like Bill Gates now, who are talking -- and Bill Gates got very seriously interested in these -- the -- that maybe nuclear power has -- there are some ways you may be able to reduce nuclear waste and eliminate some of that risk. And you -- you know, there are a lot of serious people looking at, are there ways that we can do drilling and we can do nuclear that are -- that are nowhere near as risky as what they were 10 or 15 or 20 years ago?

Offshore drilling today is a lot more safer, in many ways, environmentally, today than it was 20 years ago.

BLITZER: David Gergen, thanks very much.

GERGEN: Thank you.

BLITZER: Let's turn to politics -- from politics to Iraq right now and anew era in democracy, in stark contrast to the brutal regime of Saddam Hussein.

I spoke earlier with the former Iraqi interim prime minister, Ayad Allawi. He may be poised to become prime minister again, after his political bloc won the most number of seats in the recent parliamentary elections. Allawi shared a very personal, very compelling story of what happened to him back in 1978. He was in London at the time, working to organize a secret opposition group back in Iraq, when he says Saddam Hussein sent his henchmen to try to kill him.

Listen to this clip.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, FORMER IRAQI PRIME MINISTER: It was a very cold night in -- in February 1978. I woke up suddenly, accidentally, to see a shadow by the bed. And then I saw a flickering -- a flicker around the shadow. I thought it was real, not a dream. So I kicked the shadow with -- with my right leg. And the next thing I felt that I was struggling to stand on my feet. I couldn't. There were blood shooting out of my body. I had fractures of the skull. My wife -- late wife -- then just woke up and turned the lights on. And I saw a huge guy wielding an ax to try and cut me into pieces.

(END VIDEO CLIP)

BLITZER: Wow!

The interview, by the way, with Ayad Allawi -- my interview with him that I taped earlier in the day -- he was in Baghdad -- it will air in the next hour here in THE SITUATION ROOM. He goes on to explain why he's very fearful of his own security right now, even after his party won the most recent Iraqi parliamentary elections. You're going to want to see this interview. That's coming up in the next hour.

It's been called Climate-gate -- the controversy over leaked e- mails raising fresh questions about global warming. Now British lawmakers have wrapped up their investigation of the scientist at the center of it all. Stand by to hear the results.

And the suspects in an alleged militia plot to kill police appear in court.

We're going to tell you what these self-proclaimed "Christian Warriors" had to say.

And will President Obama convince the nation to slap Iran -- the United Nations, I should say -- slapping Iran with tougher sanctions?

I'll speak live this hour with the U.S. ambassador to the UN, Susan Rice.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here.

with The Cafferty File -- Jack.

CAFFERTY: Wolf, the White House is backing a race-based admissions policy at one public university. "The Wall Street Journal" reports the Obama administration has asked a federal appeals court to uphold the system at the University of Texas at Austin. The case was brought by two white students who were rejected for admission at the Austin campus.

Seventy-five percent of students are admitted to that school on academic grounds if they rank in the top 10 percent of their high school class. But the remainder are admitted through a so-called holistic evaluation that takes factors like race or ethnicity into account.

These white students say the admission policy violated the federal civil rights law. So far, a district judge has rejected their claim. But it's possible that this thing could wind up before the U.S. Supreme Court. You see, the case actually tests a 2003 high court ruling that upheld a similar policy at the University of Michigan Law School. At the time, the court said the school had a quote, "compelling interest in attaining a diverse student body," unquote. It prohibited outright racial balancing, but said that race could be a plus factor in order to build a critical mass of minority students.

Since then, though, the Supreme Court has become more conservative and critics of race-based admissions are hoping that this case in Texas might be the way to change the policy.

For its part, the university insists its policy is critical in achieving what it calls "the diverse institution" that it's looking for.

So here's the question -- are race-based admissions a good idea at public colleges and universities?

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

KATIE COURIC: Get ready for a lot of reaction, Jack.

Thank you.

CAFFERTY: I think so.

BLITZER: I think you're right.

Let's get to a follow-up now to a huge controversy in the debate over climate change. It centered on a British scientist and his leaked e-mails. And it fed doubts about whether global warming is real.

Now, a panel in the U.K. has completed its investigation into what a lot of people have come to call Climate-gate.

Mary Snow is working the story for us.

She has the findings.

What did they discover -- Mary?

MARY SNOW, CNN CORRESPONDENT: Well, you know, Wolf, just to back up. This investigation focused on Phil Jones. He's a scientist at the University of East Anglia in the U.K.

And if you remember, in November, he was thrust into the middle of that big controversy when his e-mails to other scientists about climate change were hacked and posted on the Internet.

Now, critics seized on them, claiming the e-mails showed scientists were trying to exaggerate the threat of global warming.

Not true, according to a parliamentary committee in the U.K. It's been investigating this and has cleared Jones of hiding or manipulating data.

The panel concluded, in its words: "We have found no reason in this unfortunate episode to challenge the scientific consensus that global warming is happening and that it is induced by human activity."

However, the report did criticize Jones for not complying with requests from climate change skeptics for data. The panel had said while it could sympathize with his frustration for complying with requests that he viewed as a way to undermine his work, it emphasized that climate scientists must be more transparent and publish all their raw data.

It also says that the University of East Anglia should make sure this happens.

We reached out to the university, which provided a statement on the report, saying: "We are pleased that it has dispelled and rejected many of the myths that have arisen over the matter while accepting that we have been taken to task on a number of issues which we are determined to address" -- Wolf.

BLITZER: Did it -- did they address those e-mails that appeared that the research was being hidden?

Did they address that whole question?

SNOW: Yes. And if you remember, Wolf, there was that one e-mail in particular. It was sent by Phil Jones and it generated so much of the attention and controversy. It referred to what it called "a nature trick" and mentioned "hide the decline."

Now, this panel concludes that they were colloquial terms, specifically the word "trick." It says it found that to be a way of meaning a neat way of handling data. And as for that phrase, "hide the decline," it says that was shorthand for meaning discarding data known to be erroneous.

The panel says that Jones' published papers now refutes allegations that he was part of a conspiracy to hide any evidence -- Wolf.

BLITZER: You know, the skeptics are going to say this was just a cover-up by this -- this panel that came up with this report. So I suspect, Mary, this debate will continue.

SNOW: Yes. Absolutely. Far from over.

BLITZER: Yes.

All right, Mary Snow.

Thank you.

Prosecutors say nine militia suspects have been preparing to do battle against the antichrist. Now they're facing charges that they plotted to kill police. Stand by for the latest on this case.

And we know she was attacked by a killer whale. Now we have the official cause of death of that SeaWorld trainer.

(COMMERCIAL BREAK)

BLITZER: There could be a very significant development involving Iran and sanctions. We're going to be speaking live in the next few minutes with the United States ambassador to the United Nations, Susan Rice. Stand by. I think we're working on an important story right now.

But let's check in with Lisa Sylvester.

She's monitoring some of the other top stories in THE SITUATION ROOM right now -- Lisa, what else is going on?

SYLVESTER: Hi, Wolf.

Well, eight members of a Christian militia accused of plotting against the government have pled not guilty. A ninth member appeared in an Indiana court today, but didn't enter a plea. Prosecutors say the group planned to make a fake 911 call, kill responding police officers, then set off a bomb at the officers' funeral. Authorities claim the suspects' ultimate goal was to start a violent revolt against the government.

US military search crews are scouring an area in the Arabian Sea, looking for a missing crewman after a Navy aircraft crashed today. Three other crew members were rescued in good condition. Officials say the plane went down after experiencing mechanical problems. The plane operated from the USS Dwight D. Eisenhower aircraft carrier. The Eisenhower and its aircraft are helping in that search.

We now know the official cause of death for a SeaWorld trainer attacked by a killer whale last month. An autopsy report says 40- year-old Dawn Brancheau died of drowning and blunt force trauma to her head, neck and torso. Her death was ruled an accident. The killer whale snatched Brancheau from a poolside platform, thrashing her around underwater in front of a horrified audience. The animal still lives at SeaWorld but no longer is in the shows.

And a piece of irreplaceable history is about to hit the auction block. The first edition of the first U.S. Census signed by Thomas Jefferson back in 1791 will be auctioned off in New York in two weeks. The 56-page document lists the population for the nation's 13 states and Southwest Territory. And that document is expected to get, according to reports, about $50,000 to $70,000 -- Wolf.

BLITZER: I suspect it could wind up getting more than that.

SYLVESTER: I think quite possibly.

BLITZER: I think that some collector will want that.

SYLVESTER: Yes. And it's a good reminder, also, to get those Census forms in, too, Wolf.

BLITZER: Yes. I guess I've got to do mine, too.

SYLVESTER: Yes. BLITZER: All right. Thank you.

Over two months since the catastrophic earthquake in Haiti and now the world is meeting to try to do something about it.

Is the United States doing enough to help Haiti's long-term recovery?

We'll speak about that and much more with the U.S. ambassador to the United Nations, Ambassador Susan Rice. She's standing by live.

(COMMERCIAL BREAK)

President Obama is trying to get tough with Iran. He's pushing the U.N. Security Council for strong new sanctions a part of what he's calling a determination to prevent Iran from acquiring nuclear weapons.

For more on this, I'm joined by the United States ambassador to the United Nations, Susan Rice.

Ambassador, thanks very much for joining us.

SUSAN RICE, U.S. AMBASSADOR TO U.N.: Good to be with you, Wolf.

BLITZER: There is a story moving on the Associated Press right now and the lead is this. I'll read it to you: "Six major world powers have agreed to begin putting together proposed new sanctions on Iran over its suspect nuclear program after China dropped its opposition, U.S. Officials said, Wednesday."

Has China dropped its opposition to imposing a new round of sanctions on Iran?

RICE: Well, China has agreed to sit down and begin serious negotiations here in New York, Wolf, with the others in the P5-plus-1 -- that's Britain, France, Germany, the United States, Russia and China -- as a first step toward getting the entire U.N. Security Council on board with a tough sanctions regime against Iran.

So this is progress, but the negotiations have yet to begin in earnest. We have shared our thoughts on what elements ought to be of a tough U.N. Security Council resolution. We're gratified that -- that now we're going to get down to the nuts and bolts of negotiations. That's what's necessary. The president has committed us to building adequate and sufficient and strong pressure on Iran to make clear to Iran that it faces a choice. It can either give up its nuclear weapons program and -- and rejoin the community of -- of nations or it can face increased isolation and intensified pressure.

BLITZER: All right. Because you know that, obviously, you have France, you have Britain, you have Germany, you probably have Russia. But if China is on board to vote yes for a new round of United Nations Security Council sanctions, that would be a huge development.

RICE: Well, obviously, Wolf, we want very much to have the strongest possible support from all members of the Security Council. China is a critical part of that equation, as is Russia, as are our European colleagues and the many other members of the Council.

We will be working intensively in the coming weeks to build the strongest possible agreement to a set of sanctions that will put real pressure on Iran and clarify the -- the stark choice that it faces.

The president has been very clear, we are not prepared to acquiesce in a nuclear-armed Iran. That would be a grave threat to our security and the security of the entire region and we will take steps, as have throughout, to make that Climate-gate.

BLITZER: All right...

RICE: We've been engaging. We've been now stepping up the pressure. And we expect that that will begin to clarify the choice that Iran faces.

BLITZER: Do you have any doubt that Iran is trying to build a nuclear bomb?

RICE: Wolf, I think all of the evidence indicates that their program is not as they state, for peaceful purposes only, that there is a military motive to it. And that is our assessment. And we have given Iran ample opportunity, in the context of the proposals that we and other members of the P5-plus-1 have put forward, to demonstrate that it is a peaceful program with peaceful intent and they have not been willing or able to do so. So our conclusion is that this is a serious potential threat to us and important partners in the region, and we are treating it as such.

BLITZER: Here's what one of your predecessor, John Bolton, who served in the Bush administration, said today on Fox News. I'll play this clip.

(BEGIN VIDEO CLIP)

JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: There is absolutely nothing being discussed in the context of U.N. Security Council sanctions that will have any material impact on Iran's nuclear weapons program, whether they're imposed in weeks or months or whatever. It gives people the wrong impression. And I think it simply provides more cover, more time for Iran.

(END VIDEO CLIP)

BLITZER: He says it's basically, you know, it's bad because these sanctions will be weak and it only gives the Iranians more time to develop a bomb.

RICE: I don't think John Bolton has seen the draft of our potential elements for inclusion in the resolution, so I don't know how he can make that judgment. But suffice it to say that we will work with our partners in the Security Council to mount serious and intensified pressure on Iran. We think that the package of elements that we have proposed and that will be discussed in further depth will put meaningful pressure on Iran. And that's our intention. It is to make it clear that Iran has a choice. And should it continue on the path of refusing to engage seriously with the United States and other members of the international community to give up its nuclear weapons program, then that pressure will intensify.

BLITZER: Yesterday President Obama standing alongside President Sarkozy of France said it would be weeks, this spring, when those sanctions would go into effect. Walk me through and our viewers as well, the timeline that you have. When will the U.N. Security Council convene to consider a new round of sanctions against Iran?

RICE: Well, Wolf, this is a process. There's not one meeting where it's done, poof. It's a process of consultation and negotiation among p-5 plus 1 in the first instance and in very close consultation as well with the other elected ten members of the Security Council. This is a complex issue with countries having very diverse perspectives and divergent interests and it will take tough negotiation to get the strongest possible text. The president has been clear. He's not interested in this dragging on months. He's looking for action within weeks, and that's ha we intend to deliver.

BLITZER: Let's talk about what the U.N. security council, the united nations was doing today, namely Haiti, trying to raise some funds, badly needed funds to deal with the aftermath of the earthquake in Haiti. The U.S. pledged today -- correct me if I'm wrong -- $1.15 billion over the next two years. Here's the question. Is that going to be enough?

RICE: Well, Wolf, this is a very significant contribution by the United States. You're right, $1.15 billion. That is from the U.S. government with the support of Congress, but that is only a part of what the American people have donated. More than half of every household in this country has given in a private contribution to the relief and recovery effort in Haiti. The Haitian government and the United Nations came in with a proposal that $3.9 billion be provided for this first window of 18 to 24 months. The U.S. pledge was $1.5 billion. And that has leveraged the support and contributions of over 5 other states. And as of the time I walked out of the united nations a little while ago, more than $5 billion had been pledged in excess of that $3.9 billion target. So we are very encouraged by the broad base of support, the generosity of donors. They have confidence that the government of Haiti has put forward a plan for its long-term reconstruction and development that will, as many people have said, build back Haiti better. The president's commitment to Haiti has been unwavering and incredibly strong from the very first days. And our pledge today and that of many others is indicative of our long-term commitment to Haiti's recovery and development.

BLITZER: That's very impressive $5 billion in pledges. I believe that's new information, but you know what? These are pledges -- let's make sure these countries actually deliver. Because in the past there have been pledges for other good deeds that they haven't really come through. So now you have to hold them tight and make sure they actually come up with the cash.

RICE: Absolutely. And one of the important and impressive things about today's conference was that the United Nations put in place an unprecedented mechanism for tracking these contributions for ensuring that they're transparent, to be sure that people aren't double pledging things that they had already committed. The United Nations and the government of Haiti will have for first time a real tool to hold donors accountable. The United States is good for its part and we'll make sure others are as well.

BLITZER: Thank you for joining us. Susan Rice is the U.S. ambassador to the United Nations.

A new ruling against the federal government and its policy on wire tapping alleged terror suspects. Stand by for details and what this could mean for the future.

Texting while driving is certainly dangerous enough, but what if you're doing it behind the wheel of a truck or a bus? There's now new action to try to prevent that from happening.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is back. She is monitoring some of the other top stories in THE SITUATION ROOM. What do you have Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Hi again Wolf. Much of New England is under water and forecasters are warning more flooding is ahead. Rhode Island appears to have gotten the worst of this week's storm. Some parts of the state got hit with close to a foot of rain. And many of its rivers and streams have yet to crest. States of emergency are in effect there as well as in Massachusetts. Hundreds of people have been forced from their homes.

The transportation department is cracking down on texting while driving in an effort to reduce number of crashes caused by distractions. The department is proposing a text messaging ban on interstate truck and bus drivers. It would make permanent an interim ban announced back in January. 20 states plus the District of Columbia already prohibit all drivers from texting behind the wheel.

Republican Senator Kay Bailey Hutchison of Texas will be staying in Washington for the remainder of her term after all. Hutchison had avowed during a heated gubernatorial primary that she'd leave the Senate before her term expires in 2012. She was defeated by Texas Governor Rick Perry this month. The senator now says there are plenty of reasons for her to remain in her seat. She'll be staying put, Wolf.

BLITZER: All right. We'll see what happens on that front. Thanks very much.

It was a big bleeping day, as Joe Biden famously described it. Now you can wear his words on your chest. James Carville and Terry Jeffrey, they're here on the health care fight, a lot more including a new t-shirt.

(COMMERCIAL BREAK) BLITZER: Right to our strategy session. Joining us, the Democratic strategist and CNN political contributor James Carville and the conservative commentator Terry Jeffrey, editor in chief of cnsnews.com. Guys, thanks very much for coming in. Howard Fineman from "Newsweek," I know that the president and his adviser want to pivot to other topics, economic development jobs energy foreign policy. I'm sure that Obama firs that the country including independents who won it for him in 2008 will eventually come back at least by 2012. But he's dug himself a partisan hole with this big bill and it will be interesting to see him try to dig his way out. Does Howard Fineman have a point?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, he's got a point. The question is, is it a very good point? I don't know. It remains to be seen. He's already moving pretty quickly. He moved on the energy policy today. He passed a student loan bill. Got an agreement with Russia. He's had a pretty good two weeks. I think people are feeling better, but you know, let's way and see what the jobs number is Friday.

BLITZER: He is pivoting to major issues, domestic and foreign policy.

TERRY JEFFREY, CONSERVATIVE COMMENTATOR: Well, the best thing, Wolf, for the Democrats and for President Obama in the short term is for people to forget about the health care bill. Most of the provisions people don't like don't kick in immediately. They're thinking that people won't be thinking about it as much in November as they are now. Long-term historically this is the most significant thing that President Obama will ever probably do. It plays into -- the big question of whether the United States can survive financially given the deficits we're looking at. According to CBO, Wolf, $9.8 trillion in new debt would be caused by the fiscal 2011 budget that President Obama has put out. That didn't count this health care plan.

BLITZER: You disagree. I know you do.

CARVILLE: Obviously I disagree. 85% of the debt -- our figures are policies that were instituted during the Bush administration, between tax cuts, wars, however I do believe -- I do agree with Terry that we have to do something about this monumental debt. And it is something that is going to have to be addressed and the president will be forced to address it. We have a lot to do as far as fiscal responsibility.

JEFFREY: What James said isn't correct. The stat is coming from the big entitlement programs, social security and Medicare. Everyone knows that these are not funded with the tax system we have now. The biggest deficit between World War II and 2009 when Obama came into power was $258 billion. In 2008, we had a Democrat in Congress. The smallest deficit --

BLITZER: Hold on. Hold on. Throwing out too many numbers.

JEFFREY: These are important numbers. CARVILLE: Tell me where I'm wrong. Medicare part d passed under Bush. Tell me I'm wrong. Tell me I'm wrong.

JEFFREY: Let me agree with you. Wait a minute. Let me agree with you. Medicare part d now faces a larger unfunded liability than social security. It has spent $8 trillion. President Bush never should have done that. The Democrats wanted a bigger program. The fact of the matter is we face an unsustainable fiscal situation that can literally bankrupt our country on top of this President Obama has put a nationalized health care system. This is going to be his legacy. His legacy will be that he bankrupted America.

BLITZER: I want to move on. But you agree during the eight years of the Bush administration, the national debt -- not the budget deficits, the national debt went from around $5 trillion to doubled to more than $10 trillion. That was during the Bush administration.

JEFFREY: Look, I was a severe critic of President Bush's domestic policies. When we had a Republican Congress in the 1990s with Bill Clinton president, we balanced the budget. President Bush started moving it in the other direction. We elected a Democratic Congress in 2006, it was all straight uphill. It's a fact. People can look up the CBO budget numbers. We're headed towards unbelievable debt under President Obama.

BLITZER: Let's talk about t-shirts. The Democrats are looking to make a little bit of money. Look at that. You can turn around that way and you can see "health reform it's a BFD." A lot of our viewers will remember what the BFD, referring to the vice president, Joe Biden. What do you think about that?

CARVILLE: It's fine. That's not the kind of thing I would buy, but it generates news and gives us something to talk about. It might make a buck.

JEFFREY: Joe Biden is often good for comic relief in heavy debates in Washington. This is another instance of it.

CARVILLE: Didn't strike me as -- you know.

BLITZER: The t-shirt is no big deal.

CARVILLE: No big deal.

BLITZER: Let's talk about Sarah Palin on Iran. Because she just sent out a very sharp critique. We just heard Susan Rice, the U.S. ambassador to the United Nations make the case for tough sanctions against Iran. This is what Sarah Palin just put out on Facebook. While President Obama once said a nuclear-armed Iran would be unacceptable, after more than a year in office it's sobering to have to acknowledge that his administration has made no progress in implementing crippling sanctions on Iran.

CARVILLE: That's five different attacks in that Facebook thing or whatever she put up. Secondly, as that was running on there under the crawl says China agreed to sit down and discuss sanctions with Iran. You know, being attacked by Sarah Palin on foreign policy is like being attacked by James Carville for the way that you part your hair. Good god, who cares what she says anyway?

JEFFREY: Look, Secretary of State Clinton recently said over and over again that it's unacceptable for the Iranians to have a nuclear weapon. Why is it unacceptable? It will cause every Sunni regime to want nuclear weapons. It is a direct threat to the existence of the state of Israel. We can't be sure that the Islamic regime in Iran would be deterred the same way that the Soviet Union was in the cold war. We can't be sure that if they develop a nuclear weapon they won't use it. If it's unacceptable, are we going to sit around and negotiate with people at the unions to decide whether we can get together with China --

BLITZER: China and Russia come around and say, you know what, tough new sanctions, that's significant.

JEFFREY: Do you believe that sanctions are going to stop these people?

CARVILLE: It stopped Saddam Hussein. We found that out because the Republicans wanted to start a fourth war.

JEFFREY: But there's --

CARVILLE: We know they worked in Iran.

JEFFREY: There's one difference between Saddam Hussein and the people who run Iran. We have reactionary Shiite ayatollahs running around. Saddam Hussein was not --

BLITZER: I love the lapel pin you have on. Tell our viewers what you've got on because it looks like my favorite team.

CARVILLE: That's a local baseball team. They're going to win 79 games this year. I predict it right now.

BLITZER: The Washington Nationals opening day on Monday. You know who is throwing out the first pitch?

CARVILLE: President Obama.

BLITZER: That's very cool. Let's hope he reaches home plate. That's very important. Guys, thanks very much.

Jack Cafferty is asking are race-based admissions a good idea in public colleges and universities? Stand by for your e-mail. Five Americans on trial in Pakistan accused of plotting attacks against that country. They're laying out their defense.

There's a new development in the story of a popular Lebanese television host who is now facing execution - execution maybe this Friday in Saudi Arabia for witchcraft.

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BLITZER: Jack's back with "the Cafferty file." Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is, are raced-based admissions a good idea at public colleges and universities?

Jack writes from Florida, "Questions regarding an African's race or ethnic identity should be removed from all college application forms. If you want to give the disadvantaged a leg up, then base it on income, not race. Believe it or not, there are poor white people and rich black people in this country."

Conner in Chicago says, "I guess the real question is, would this college still have a decent amount of racial diversity if we only looked at the 75% that were admitted based on merit alone? If it had none or almost none, then I'd argue that this raced-based system would be need to combat racial discrimination, but if it was diverse, then I'd argue that the plaintiffs in this case have a valid point."

Lenny writes, "Absolutely not. If a kid works hard in school to be in the top 10%, then they should be rewarded not punished because they were born with white skin. Skin color and ethnicity should not be a factor. These colleges ought to be more concerned with getting the best and the brightest and uphold their requirements regardless of race."

Steve in Virginia, "To build a critical mass of minority students, what? White and Asian students don't need to have a critical mass built for them. They build it for themselves, by accepting the education that's offered to them and working hard to learn. There's a 50% k-12 dropout rate among black and Hispanic students. Minorities should be expected to build their own critical mass, by addressing the dropout crisis."

And John in Oregon writes, "I'm not a lawyer, but I'll play one here. The Gutter case in Michigan dealt with law school and not undergraduate admissions. I don't think the Supreme Court has ever ruled in favor of race being used at the undergraduate level. I would venture that President Obama will lose this one, as he should."

If you want to read more on the subject, go to my blog, CNN.com/Caffertyfile.

BLITZER: Will do, Jack. See you in a few moments.

The man who could be Iraq's next prime minister talks about his party's election victory, and it reveals how he survived a terrifying attack by one of Saddam Hussein's henchman.

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BLITZER: Five Americans went on trial in Pakistan today. They're accused of plotting terror attacks against the country, but the defense is launching an aggressive campaign to prove the so-called D.C. five are not holy warriors, but rather, just young men learning more about their religion and their culture. CNN international security correspondent, Paula Newton, reports. (BEGIN VIDEOTAPE)

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: This was the first day of trial, the first day of testimony, lasting for a couple of hours. But what was significant here is that the defense is looking much more confident than they were before about their five defendants being acquitted. The defense continuing to claim here that the charges against the D.C. five really quite serious, in terms of trying to carry out terror attacks both here in Pakistan and elsewhere, actually they want to try and prove that attacks were going to happen against U.S. targets in both Afghanistan and Pakistan. The defense saying that that evidence has been concocted, and they say that they will back that up with evidence in court. Now, when this whole proceeding was finished, we spoke with Khalid Farooq, he's the father of Umar Farooq, and here's what he had to say after visiting with his son.

KHALID FAROOQ, FATHER OF DEFENDANT: It went very well. They are innocent. They will be proved innocent they are involved. I'm positive.

NEWTON: How? Why are you so positive?

FAROOQ: Because they are innocent. I'm positive. The truth comes out anyway. [ inaudible question ] yes, but my lawyers, we are confident of it.

NEWTON: How are you able to deal with your family?

FAROOQ: Very difficult. Very difficult.

NEWTON: Imagine how that father feels, he and other parents have called authorities in the United States because they were worried. They'd gone missing and they turned up in Pakistan, and after a lengthy investigation, Pakistani and U.S. authorities say that they are suspected terrorists. They now face up to life in prison.

Paula Newton, CNN, Zargota, Pakistan.

(END VIDEOTAPE)

BLITZER: And you're in THE SITUATION ROOM.

Happening now, President Obama's drilling