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The Situation Room

Keeping Nukes Out of Terrorists' Hands; Source: New York City Subway Targeted; Senate Tackles Unemployment Benefits; Supreme Court Justice Hillary Clinton?

Aired April 12, 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: Rick, thank you.

Happening now, President Obama welcoming world leaders and delegates from 47 countries, as he convenes an unprecedented summit with an eye toward terrorism.

Also, two of New York City's busiest transit hubs, Times Square and Grand Central Station, allegedly the target of a suicide bomb plot. We're learning new details right now.

And he's the world's most wanted terrorist -- is the U.S. any closer to finding and capturing Osama bin Laden?

I'll ask Pakistan's prime minister in an exclusive interview.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

It's a gathering of presidents, prime ministers and other leaders, the likes of which the United States hasn't seen in more than 60 years. They've come to Washington at President Obama's invitation, to talk about what he calls is the single biggest threat to American security -- keeping nuclear weapons out of the hands of terrorists.

CNN White House correspondent, Dan Lothian, is joining us with more -- Dan, what's happening right now?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, in just a few minutes, the president, Wolf, will be welcoming these world leaders and then later this evening, will be having a working dinner with these leaders.

But, you know, the big question, I think, that's being asked is what will really come out of these two days?

Is this more a show rather than substance?

The White House says that what they're trying to do is get these world leaders to commit to really securing all vulnerable nuclear materials out there -- keeping it out of the hands of terrorists. That's something, as you pointed out, that the president believes poses the biggest threat to the United States. The president, according to one expert, told us that what he is trying to do is to really get the world to focus on this issue and that's the most important thing that can come out of this -- to get them to focus on the threat that's not only posed to the United States, but also to the global community.

And what the White House is touting today is this promise by the Ukrainians saying that they will dispose of all of their highly enriched uranium. This is something that the U.S. had been seeking now for some 10 years. And now this promise coming today -- Wolf.

BLITZER: And we're showing live pictures of the president welcoming some of those 47 leaders who have come to Washington for this historic summit.

Another key issue on the agenda -- Iran and its nuclear ambitions -- Dan, is the U.S. any closer in getting China on board to support a tough new run of sanctions against Iran?

LOTHIAN: Well, Wolf, you know, that is the big question. And the president has been talking about Iran with various world leaders and, of course, with President Hu of China. And all indications that we're getting from the meeting that the president had with President Hu is that China seems to be showing some positive signs. We haven't gotten the full readout yet what exactly that means. But certainly what the U.S. is looking for China to agree, along with these other P5-plus-1 nations, for tougher sanctions on Iran.

We saw that Russia had been hesitant to do that in the past. They've warmed up to this idea. Now the United States is hoping that China will do that, as well, to put some pressure on Iran. China has always hoped that this could all be solved through diplomacy. But the U.S. is trying to show here that they need China on their -- on their side in order to push for these tougher sanctions to get Iran to abandon its nuclear ambitions.

BLITZER: All right. Dan Lothian reporting for us.

As you see, the president is continuing to receive world leaders right now. We'll go there shortly.

But among those attending this summit, the Pakistani prime minister, Yousef Raza Gilani. I met one-on-one with -- he met one-on- one with President Obama yesterday. And today he sat down with me for an exclusive and wide-ranging interview.

I asked him about the hunt for the world's most wanted terrorist, the leader of Al Qaeda.

(BEGIN VIDEO CLIP)

YOUSAF RAZA GILANI, PAKISTANI PRIME MINISTER: In fact, Osama bin Laden is not in Pakistan. And whosoever are the militaries, we hardly discriminate between the good Talibans and the bad Talibans.

Whoever are the militants, be -- it is our commitment, it is our resolve and we have to take on those evil forces from our country. Therefore, talking about Al Qaeda, we don't see any sort of those concern in Pakistan.

(END VIDEO CLIP)

BLITZER: But how does he know for certain that Osama bin Laden is not hiding in Pakistan?

I'll ask him about that, Pakistan's nuclear program, much more. My exclusive interview with the Pakistani prime minister is coming up in the next hour right here in THE SITUATION ROOM.

We're also learning chilling new details of an alleged suicide terror plot targeting New York City subway trains.

Our homeland security correspondent, Jeanne Meserve, has the latest -- Jeanne, what are you picking up?

JEANNE MESERVE, HOMELAND SECURITY CORRESPONDENT: Wolf, you've been talking about nuclear materials, but in the case of Najibullah Zazi, the airport shuttle driver from Denver, the alleged mode of attack was homemade explosives. The target -- the New York City subway.

Some additional detail on how he intended to carry it out.

(BEGIN VIDEOTAPE)

MESERVE: (voice-over): Five million people a day travel the New York City subway. Najibullah Zazi and his co-conspirators allegedly wanted to kill as many of them as possible, according to a federal law enforcement official. According to the sources, Zazi had told investigators he and his co-conspirators were starting two of Manhattan's busiest stations -- Grand Central and Times Square. And they came close to going operational.

After allegedly purchasing bomb-making chemicals in Denver, Zazi traveled to New York in early September, planning to strike on September 14th or perhaps the 15th or 16th. According to the federal law enforcement source, they intended to split up and board the one, two, three or six train, position themselves in the middle of crowded cars and detonate the bombs they were wearing.

UNIDENTIFIED MALE: Conducting those bombings in closed trains, if you had three individuals, that would have caused quite a few -- quite a few casualties and instill a great -- a great impact -- a great fear in the traveling public. This is what they want to do.

MESERVE: Just last month, Chechen terrorists blew up trains in Russia. Transit systems in London and Madrid have also suffered devastating hits. A number of plots against New York's subway have been uncovered, but no attacks have been carried out. The New York Police Department has increased its presence on the system, doing random bag checks and periodic demonstrations of force. But officials acknowledge the system that's designed to move a large volume of people quickly is still vulnerable. Some passengers take it in stride.

UNIDENTIFIED MALE: I ride the subway very often and thank God they were caught.

UNIDENTIFIED MALE: Yes, I heard about it, but (INAUDIBLE).

UNIDENTIFIED MALE: You know, this could happen (INAUDIBLE).

(END VIDEO TAPE)

MESERVE: A federal law enforcement source says a fourth man is in custody in Pakistan in connection with the Zazi plot. He is not an American. And whether or when he will be extradited to the U.S. is uncertain -- Wolf.

BLITZER: Jeanne Meserve reporting for us.

Thanks very much.

Afghan outrage boiling over -- civilians take to the streets, chanting "Death To America!" Troubling signs ahead of a major U.S. offensive.

Also, deep cuts proposed for the Postal Service. Now there's concern they may not be deep enough. Wait until you hear what it all means for your mail delivery.

And Conan O'Brien finds a new TV home -- details of his new big gig, that's coming up.

(COMMERCIAL BREAK)

BLITZER: Let's get right to Jack for The Cafferty File -- Jack.

CAFFERTY: In case you've forgotten, Tax Day is Thursday. But it turns out that millions of Americans really don't dread the April 15th filing deadline much at all. And the reason is 47 percent of U.S. hold households pay no federal income taxes. That's right. Almost half of Americans will pay nothing.

So what we have, in effect, is roughly half the households paying the tax load for the whole country.

One Washington research group says it's either because people's incomes are too low or they qualify for enough credits and deductions and exemptions.

In the past few years, credit for lower income families have grown so much, that a family of four with two children younger than 17 making $50,000 a year pays no federal income tax. Nothing.

We now live in a country where half the people aren't paying for the government's services and programs that benefit everyone, including national defense, public safety, infrastructure and education. It's estimated the wealthiest 10 percent of Americans pay about 75 percent of the federal income taxes -- the taxes collected by the federal government.

Under President Bush, the nation's wealthiest taxpayers got some big tax breaks. But President Obama has been pushing tax cuts for poorer Americans and tax increases on the wealthiest. Everyone gets hit paying a lot of the other taxes -- federal payroll tax, excise tax, gasoline, alcohol, cigarettes, as well as state and local taxes. But when it comes to the federal government's biggest source of revenue, the federal income tax, almost half of all American households pay not one thin dime.

So here's the question -- is it right that almost half of American households pay no federal income taxes?

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

BLITZER: I didn't know it got that high, Jack. I really -- that's news.

CAFFERTY: Forty-seven percent.

BLITZER: Yes, that's...

CAFFERTY: Did you file your taxes yet?

BLITZER: I did.

CAFFERTY: Did you get a refund?

BLITZER: A little bit. Not much.

CAFFERTY: How much?

(LAUGHTER)

BLITZER: Let's not discuss. I pay so much in taxes.

(LAUGHTER)

BLITZER: You wanted to make me nauseous a little bit.

CAFFERTY: Sorry.

BLITZER: So far, I didn't get any refund yet.

CAFFERTY: All right.

BLITZER: Hopefully they'll send it to me.

CAFFERTY: OK. Some time.

BLITZER: Thank you.

Let's go back to our top story right now. President Obama's Nuclear Security Summit -- it's happening right now. The president says the single biggest threat to U.S. security is the possibility of a nuclear weapon falling into the hands of terrorists. Our senior political analyst, David Gergen, is here to talk about that.

He makes the case that it's the greatest threat to the United States right now -- terrorists getting their hands on a dirty nuclear bomb or some sort of nuclear device.

How realistic is that?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST, FORMER PRESIDENTIAL ADVISER: As a threat?

BLITZER: Yes.

GERGEN: It's a very real threat. Think of the -- whether those 19 terrorists on September 11th had had dirty bombs instead of airplanes. They would have killed a lot more people than they did.

So this is a very legitimate threat.

People sort of say, well, can you make progress against it?

Well, the truth is, Wolf, that since the cold war ended, we have made a lot of progress. You'll remember when Senators Nunn and Lugar began pushing for this. Well, Ukraine today becomes the 20th country to give up nuclear materials on its own soil. With the United States help and leadership, there are about 250 facilities in the Soviet Union and Eurasia. Over 200 now are better secured than they were.

But there's a new report out today from a group commissioned by Sam Nunn, as co-chairman by a group of Harvard -- of colleagues. It said we've got a long, long way to go.

There have been 18 cases of theft in recent years, too.

BLITZER: Yes, because in my mind -- and I've spoken to a lot of intelligence sources, not only in the United States, but around the world -- they -- they truly believe that Al Qaeda still has this dream of doing something more spectacular than 9/11.

And what would be more spectacular than 9/11?

GERGEN: Well, exactly...

BLITZER: Some sort of nuclear attack.

GERGEN: You bring a -- you bring a dirty bomb -- a nuclear bomb into the Port -- Port of New York, you could easily kill one or two or three million people pretty quickly. So it's -- it's a serious issue.

The president, he's -- he's not the first person to focus on this, but he's the first person to really bring the people together and say let's come up with work plans, let's try to get this done over the next four years.

It's important. This is something that transcends politics. It's really about the safety of all nations.

BLITZER: So this conference, 47 countries participating in the summit today and tomorrow in Washington, is it just for show or is there something substantive going to emerge there?

GERGEN: I think this is, in some ways, a much more substantive conference than Copenhagen was on climate change, because they're actually asking for work plans to come up with, not just to communicate, but what are your work plans?

The United States is trying to get more money to put into this, helping countries that can't pay for it to get -- to -- to lock up their facilities.

But the theory is, if you can lock up the plutonium and the highly enriched uranium, which, after all, are materials for bombs, if you can really lock it up around the world, it will be much, much harder. You won't eliminate the threat from terrorism -- from terrorists getting bombs, but you will significantly reduce that.

BLITZER: But there's so much of it around the world right now. It's in all sorts of former republics of the Soviet Union; whether -- India and Pakistan, they have access. There's concern, at least some -- some folks have concern about the security of the Pakistan nuclear arsenal.

GERGEN: Both Pakistan and Russia remain highly vulnerable places. And as you point out, there -- I think there are literally hundreds of storage facilities now, some in bunkers, and dozens of countries that have this material.

So it's a big problem. But that's the reason the president is trying to put some urgency into it, because there's been a lot of complacency in some of these countries. And also to broaden -- we've been focusing a lot on the Russian soil. We need to broaden that out and get a lot of other countries involved. It was good -- this goes all the way back to Al Gore, what Ukraine did today.

BLITZER: Yes.

GERGEN: He put a lot of time in on this.

BLITZER: Because I remember speaking to officials in the -- in the Bush administration and the Clinton administration...

GERGEN: Right.

BLITZER: -- before that. This is what kept the president of the United States awake at night -- this -- this scenario right there.

GERGEN: That's exactly right.

BLITZER: And I'm sure it keeps President Obama awake at night sometimes, as well.

GERGEN: When he's -- when he's not watching the Duke game, right?

You called that.

BLITZER: Thanks, David Gergen.

GERGEN: OK.

BLITZER: A single plane crash wipes out the top leadership of an important U.S. ally. Now, serious questions about whether human error may be to blame.

And millions of Americans relying on unemployment to get by. Now they're counting on the U.S. Senate to take action. We're going live to Capitol Hill for the latest.

(COMMERCIAL BREAK)

BLITZER: T.J. Holmes is monitoring some of the other top stories in THE SITUATION ROOM right now -- T.J. What's going on?

HOLMES: Protesters expressing anger against America -- this after U.S. troops fired on a civilian bus near Kandahar, killing four people, wounding more than a dozen. Coalition troops had hoped to rally public support in Kandahar. That's known as the birthplace of the Taliban. NATO expressing regret for the loss; also saying they will investigate.

Also, one week now since that country's -- since the country's deadliest coal mine explosion in some 40 years. President Obama has now ordered all U.S. flags in West Virginia be flown at half staff. Crews there are searching for the nine remaining victims inside the Upper Big Branch Mine. Work has been hampered, though, by high levels of hazardous gases. They keep having those rescuers to have to turn back. Flags are to stay at half staff until sunset on Sunday.

To Sudan now, where voters still have two more days to cast their ballots. U.N. officials announced an extension after complaints of voter confusion in many polling sites in Southern Sudan. At several places, voters said they couldn't find their own names in the registry. These are the country's first multiparty elections in almost a quarter century.

And you iPad users, maybe you should have waited. It's only been on the market for about a week, Apple's new iPad, and already it has what some are calling a -- an iPad killer. This one comes from Germany and has a nearly matching moniker. Check it out. It's called the WiPad. Its maker says this tablet, though, outperforms the iPad. It has a bigger screen, a Web cam, a USB port to connect other devices. WiPad prices will start around $600 for the six gigabyte version. The WiPad is going to hit stores in late July. So iPad, WiPad you pad, we all pad -- Wolf.

BLITZER: It's going to be a new -- a new rage out there.

HOLMES: Something else, yes.

BLITZER: Yes.

All right, thanks, T.J.

HOLMES: All right.

BLITZER: Hillary Clinton -- is she a potential Supreme Court nominee?

There's lots of buzz about her and other names that may be on President Obama's short list.

And if you think lines at the U.S. Post Office are long enough now, wait until you hear about some new recommendations for cost- cutting.

Plus, Poland's leadership decimated -- details of the investigation into the plane crash that killed the country's president, the army chief, the navy chief, the banking chief and dozens more leaders.

(COMMERCIAL BREAK)

BLITZER: And you're in THE SITUATION ROOM.

Happening now, what would happen if terrorists got a hold of nuclear weapons?

It's a nightmarish scenario and now our Brian Todd is getting answers.

And it's the chilling story of an American family who adopted a 7-year-old from Russia, then decided to give him back. Now the country is threatening to stop any additional adoptions. We'll have the latest on the investigation.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Members of Congress are back on Capitol Hill today, tackling an issue now facing thousands of unemployed Americans. Senators are expected to vote this week on whether to extend unemployment assistance to the long-term unemployed or those who've already exhausted their unemployment benefits.

The bill was first held up last month by Republican senator, Tom Coburn, over government spending concerns.

Our senior Congressional correspondent, Dana Bash, is up on Capitol Hill -- Dana, this is a really philosophical point -- fight that's going on right now.

Tell us about it.

And I understand you have a special guest with you, as well. DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right, it is a philosophical fight. And the vote is going to start any minute now. And the fight really is, Wolf, about Republicans, who believe that -- most of them, at least, believe that these unemployment benefits should be extended, but say they should be paid for, they shouldn't add to the deficit or the debt. Versus Democrat who, of course, also believe that these unemployment benefits should be extended, but they say they don't have to be paid for, joblessness is an emergency.

Now, Wolf, this is a problem and a fight that also went on last month. And these same unemployment benefits were held up. There were a few Republicans who helped Democrats pass this last month. And one of them was Scott Brown, the newest senator from Massachusetts.

And we actually have Scott Brown here, who is going to talk to us as he heads into this vote.

Senator, thank you very much for joining us.

SEN. SCOTT BROWN (R), MASSACHUSETTS: Thank you.

BASH: The first question as we walk into the Capitol with you is, how are you going to vote?

Will you vote with Democrats to extend these unemployment benefits?

Well, people are hurting. And I think it's important to move the process along, because when I came here, it's my opinion that -- that things are broken and there's a logjam here in -- in Capitol Hill. And it's my hope that I can help move things forward. So I'll -- I'm going to do just that and vote for cloture, which allows the process to move forward.

But make no mistake, while people are hurting, the people who are paying the bills are also hurting. And we need to make sure we find a way to pay for this.

So I'm looking forward to moving it forward and -- but I'm going to reserve my rights on the final bill, to make sure that we can at least find a realistic way to pay for it, by using unallocated stimulus monies, you know, and taking a little bit from here and there and finding the funds to ultimately pay for it, because one of the biggest complaints that I hear is that we want to help people that don't have jobs.

But we also want to make sure that we don't have more unemployed by people who are paying the taxes.

And how are our -- our kids, our grandkids and great grandkids are going to pay for?

BASH: So I'm hearing you say that you are going to join Democrats right now in this vote that you're walking toward, to at least begin debate. But are you drawing a line, saying when, before this bill is actually voted on finally -- I think -- I think by the end the week...

BROWN: It will, yes, be by the end of the week, I would think. Yes.

BASH: Do you -- are you saying it must be paid for or Democrats don't have your vote?

BROWN: Well, I'm going to see what -- ultimately, how -- how they come up with -- with the money. But the bottom line is, when we left for recess, we had it resolved. It was paid for there. And then it got lost over in the House somehow. And now they're playing, you know, games with it.

This isn't an issue with games. This is about people and people's lives. And I'm going to do whatever I can to -- to help them.

But, once again, we have to start living within our means. We have to find a way to start paying for these things. There's a lot of wonderful ideas out there, but where's the money?

You know, we're hurting. We're almost at a $13 trillion debt.

BASH: Now, you came in, you're the most recent senator elected, obviously, changed the dynamic up here big time.

BROWN: Just a little bit.

BASH: You -- you came in on an anti-Washington wave.

BROWN: Right.

BASH: When people out there here, Republicans and Democrats, they all agree that people without jobs should get unemployment benefits, but they can't agree that these benefits -- on how to do it and that -- whether these benefits should be paid for or not. Meanwhile, people are losing their benefits as we speak.

What do people make of that and what do you make of it?

BROWN: Well, I think we need to work together to find common sense solutions. And that's why I'm here. That's why I was sent here, because people are tired of business as usual on Capitol Hill. They're tired of the logjam. They're tired of the lack of civility. And, you know, my role, I feel, as a -- just as a citizen of the country and someone who believes in good government, is we need to get back to doing the people's business. And -- and that's what I'm going to do.

And when I see good vote -- a bill, whether it's a good Republican or Democrat bill, I'm going to vote for it.

But I would encourage my Democrat colleagues to do the same, because I haven't seen the reciprocity. And if I'm going to be the -- the 60th vote, there's going to be times when I'm going to be the 41st vote, too, because we can't all be one-sided. You know, we can't vote for these things and then have the amendment tree filled up and have no opportunity to go forth and pay for this.

BASH: But -- but walking in now, you're going to be the 60th vote?

BROWN: I'm going to be the 60th vote.

BASH: OK.

Thank you, Senator.

BROWN: Thank you.

BASH: Thanks for your time.

And, Wolf, there you see Senator Brown walking in to begin what will be a vote, momentarily, here in the Senate, at least to begin debate. And Senator Brown, that Republican will give Democrats the votes that they need to start debate to extend these unemployment benefits.

And, Wolf, these unemployment benefits, many of them started to run our last week because Congress went home before actually dealing with this.

But you also heard Senator Brown say it's not clear whether or not he will give a final vote.

This is going to be a week long debate over this really, really fundamental philosophical issue and huge political issue this year, which not only deals with joblessness, which is the number one political issue, but also getting this country's fiscal house in order. And that is what we are going to see debated.

Right now, Senator Brown says he'll start the debate. And whether or not he will vote with Democrats ultimately remains to be seen. It is going to be a drama that lasts all week -- Wolf.

BLITZER: But you need 60 votes to start the debate and he'll be the 60th vote. So that's a great win for Democrats, Dana.

But on the final vote to pass the extension of the unemployment benefits, do you need 51 votes or do you need 60 votes?

BASH: You're going to need 60 votes again to end debate and to have a final vote. So that will be, really, the ultimate question for Senator Brown and several other Republicans who we believe will end up voting yes today to at least start debate. That will be the question.

And one of the questions will be, by the end of the week, whether or not there will be a deal or an agreement on possibly a way to pay for this.

Again, this is about $9.2 billion. It is a short-term extension of unemployment benefits. It hasn't been paid for in the past couple of months. And Republicans are laying down the law, saying we want to pay for this. Democrats are saying no. And it's still an open question whether they can get that 60 votes to at least finalize this. And you heard Scott Brown. He's not sure whether he will vote yes or not. I'm sure other Republicans will, too.

BLITZER: Well, I'm sure Democrats are happy, at least today. He's going to vote with them on this first step.

BASH: Exactly.

BLITZER: Thanks, Dana.

Thanks very much.

With the retirement of U.S. Supreme Court Justice John Paul Stevens just around the corner, rumors are swirling about who his replacement will be. Some new names on the so-called short list. Federal Judge Sidney Thomas of Montana, Harvard Law School Dean Martha Minow and Elizabeth Warren who heads the government's asset relief program but the one name sparking lots of attention, the name of the secretary of state.

SEN. ORRIN HATCH (R), UTAH: I even heard the name Hillary Clinton today. You know, and that would be an interesting person in the mix. I happen to like Hillary Clinton. I think she's done a good job for the Democrat secretary of state's position and I have a high respect for her and think a great deal of her.

BLITZER: Let's bring in our senior political analyst Gloria Borger. What are you hearing Gloria? First of all, how realistic is this notion that Senator Hatch is advancing that Hillary Clinton would be the next justice on the Supreme Court?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I'm told not at all realistic. In fact someone a senior Democratic strategist said to me today, maybe Hatch misheard, maybe it was William Clinton, Bill Clinton they were talking? There is precedent. William Howard Taft, former president, was appointed chief justice of the Supreme Court in 1921. He said to me, well, maybe they've got the wrong Clinton, but as far as this white house is concerned, Hillary Clinton's doing a great job as secretary of state. That's exactly where they want to keep her.

BLITZER: Gloria, the tea party express is making its way towards Washington, D.C. this week arriving on April 15th. That's tax day. That's not a coincidence. You think that these groups will influence the debate this summer? If so, how much?

BORGER: I do. I do think so. In talking with people who are getting ready for these hearings on the hill, you know, one thing they said to me was, we've never had a debate sort of post tea party about a Supreme Court justice. So the issue clearly that will be front and center will be the constitutionality of health care reform, the question of so-called eminent domain, states' rights, all kinds of issues regarding the size and scope and legitimacy of the federal government. And it will be interesting for us to watch how Senate Republicans play those arguments and how much they play them up, Wolf. You know? Because these are new things. We're used to debating the social issues, the cultural issues, when it comes to Supreme Court nominees. We're not used to talking about the extent of government in this debate, and I think we're going to be hearing a lot of that this time.

BLITZER: We're all going to be watching very closely Gloria. Thank you.

It's a heated debate over the history of the confederacy. Now one Republican governor is downplaying the controversy. You'll want to hear what he's saying.

And the comedian Conan O'Brien is returning to late night. We'll tell you when and where, you can tune in.

(COMMERCIAL BREAK)

BLITZER: Let's go back to T.J. He is monitoring some of the other top stories in THE SITUATION ROOM. T.J., what do you have?

T.J. HOLMES, CNN CORRESPONDENT: Well I got more bad news for the postal service. They already said they were making some cuts, already said they were going to cut some more. Now a new government report says the U.S. postal service needs to go even deeper with the cuts. Over the last few years the postal service has lost almost $12 billion with mail volume plunging some 17%. The new report recommends more aggressive measures, such as cutting more salaries and closing facilities. Otherwise, it says postal rates will increase and it may need taxpayer subsidies.

Democratic Senator Chuck Schumer coming to the rescue possibly. He is vowing to block airlines from charging passengers for their carry-on bags. Schumer's comments follow an announcement last week the low-cost carrier Spirit Airlines will begin charging as much as $45 a bag. Again, carry-on bag and that would make them the first U.S. airline to implement such a feat. Schumer says carry-ons should be considered a fee-free reasonable necessity.

Finally here, Wolf, it looks like we have us a new co-worker, kind of, sort of. The ousted late-night comic Conan O'Brien now has a new TV home on the cable network TBS. They just inked a deal with O'Brien for a one-hour show at 11 p.m. eastern starting in November. This announcement comes as O'Brien kicks off a nationwide comedy tour. In a tongue in cheek statement he said, "In three months I've gone from network television to Twitter, to performing live in theaters and now I'm headed to basic cable. My plan is working perfectly." Like I said, Wolf a new co-worker. He's at TBS. We're at CNN. We're both owned by Time Warner. I don't believe he will be filling in for you in THE SITUATION ROOM anytime soon.

BLITZER: Yeah, but we all will be part of basic cable, T.J. you, me. We're all basic cable.

HOLMES: You know, it was part of my plan all along, Wolf. BLITZER: Nothing wrong with basic cable at all. We like basic cable. Just basic cable kind of guys.

HOLMES: Of course. Nothing complicated.

BLITZER: Welcome Conan O'Brien to the Turner, TBS, our sister network. We'll be watching. Thanks very much.

What would lead one American family to return some adopted children from Russia back to Russia? We'll get some answers on what's going on.

And it's a heated controversy over the history of the confederacy. Now a key Republican governor is weighing in. You might be surprised by what he's saying.

What would happen if terrorists were to get a hold of nuclear weapons? We're examining that scary scenario.

(COMMERCIAL BREAK)

BLITZER: One key Republican is now weighing in on Virginia Governor Bob McDonald's decision to honor the confederacy this month. In an interview on CNN's "STATE OF THE UNION" our Candy Crowley asked the Mississippi Governor Haley Barbour whether it was a mistake for this counterpart not to have mentioned slavery in that proclamation.

CANDY CROWLEY, CNN CORRESPONDENT: There's a sort of feeling that it's insensitive but you clearly don't agree.

GOV. HALEY BARBOUR (R), MISSISSIPPI: To me it's a sort of feeling that it's a myth, that it is not significant. It's not a -- trying to make a big deal out of something that doesn't amount to diddly.

BLITZER: Doesn't amount to diddly. Let's talk about diddly in our strategy session with two CNN political contributors, Democratic strategist James Carville and Republican strategist Ed Rollins. Ed, what do you think are the way Haley Barbour responded to that?

ED ROLLINS, REPUBLICAN STRATEGIST: I have to preface it by saying Haley was on my staff in the white house. He's one of the most astute able men I've ever known. Whatever he said was with a good heart. So you know he knows the south very well and he knows the country very well, and I think to a certain extent this is an issue, I do think there needs to be -- I was born in Boston, raised in California. The civil war was not a part of my life but I think it's a very important thing that we study and review, because it's so much a part of our history. You can't study it without studying slavery, which is a very important part. Just like you can't study California history without studying the internment of the Japanese, which is also a great disturbance to Americans.

BLITZER: So, James, I take it, you're a southerner. I take it you disagree strongly with Haley Barbour. JAMES CARVILLE, DEMOCRATIC STRATEGIST: I do disagree strongly with Haley Barbour. I think he has the largest percentage of African Americans in his state. To them and their ancestors it meant slightly more than diddly, I'd say. I like Haley personally. Unfortunate term and unfortunate recollection of history. I don't think there's a serious scholar of the civil war that entertains any other idea that slavery was the primary focus behind the insurrection in the south and that that's just what history is, and I think Governor McDonald on the third time around actually got it right.

BLITZER: When he apologized and said he should have included a reference to slavery in the initial proclamation.

CARVILLE: Right.

BLITZER: All right. Move on to Sarah Palin. She's back in the headlines when "Saturday Night Live" and Tina Fey are doing another skit about the former Alaska governor. Watch this.

TINA FEY, ACTRESS: If you like fun you're going to love our afternoon block of game shows. At 2:00 p.m., tea party wheel of fortune. And at 2:30, catch me in are you smarter than a half-term governor. I think you'll be surprised by the answer. I know I was.

BLITZER: She's amazing, Tina Fey, the way she does Governor Palin, but I'll start with you this time, James. She's out there. She's all over the place.

CARVILLE: Boy, is she, and she was the star, star of this thing down in New Orleans, these southern Republicans. She just burns brighter than the rest of them and she's the one that certainly that these activists look to, and she's laying out the case for the party. That's just a fact, and, look. I guarantee you one thing. She gets Tina Fey to stand in for her, I don't think anybody would know the difference. That woman's remarkably talented. Her performance down here and the reaction of these Republican activists to her, and also that, I was actually out of the country watching on CNN, her and Michele Bachmann, Minnesota, the same thing. She is just out and out adored by a certain segment of the Republican Party and there's no denying that. She has a certain magnetism that's unbelievable.

BLITZER: Were you surprised, Ed, she came in third in that straw poll in New Orleans behind Mitt Romney and Congressman Ron Paul?

ROLLINS: I'm surprised she didn't come in first. She had such a big audience there who loved her. And I think to a certain extent Romney is running hard as he did two years ago and Paul's always had a good grass roots. I don't put much into straw polls, but I do put something into someone who can energize the support that she has. If she wants to be a long-term player in this party she will be. If she wants to be a presidential candidate, she'll about strong one. I'm not sure she'll be the nominee of our party or if she was she would be elected but I think anybody who underestimates her reminds me of Richard Nixon being underestimated or the man I worked for, Ronald Reagan, being underestimated. She's a real tent and she can articulate a lot of emotions in a lot of people across this country. BLITZER: There's no doubt James, you make good point. Remember, right after the election in 2008 I went to the Republican Governor Association Conference down in Miami. There were a lot of governors out there, but the media, they were all chasing the governor Sarah Palin. She sort of sucked the oxygen out of all the other political activists down there. I assume it was very similar in New Orleans.

CARVILLE: It is. The reason that the media chases her is because she has a, there's a certain group of people, always watching the faces on particularly the women at that Minnesota event. And you couldn't help but be impressed by the way that they were looking at her, and their level of enthusiasm. I have no idea if she could win a nomination, but I don't think she could win a general election. That's my opinion. But she has something. She can change the temperature in a room like no non-president. Maybe Hillary Clinton's the only other person and boy, she's been in politics for a long time. Other than the secretary of state, I don't know of another person that has it that has is not, only a person that has been president that has that kind of ability to just, just change the whole way a room feels. It's unbelievable.

BLITZER: All right. James and Ed, thanks.

ROLLINS: We're a party without front-runners and -- sorry.

BLITZER: Go ahead.

ROLLINS: We're a party without front-runners and without a star. She really is the star. I would bet she could raise more money than anybody else in this business and I think any candidate would want to have her out there supporting them.

BLITZER: She certainly raised a lot of money for herself since leaving the governorship of Alaska. Guys, thanks very much.

Jack Cafferty is standing by with your e-mail, and just how close is the U.S. to capturing Osama Bin Laden? My exclusive interview with Pakistan's prime minister, that's coming up.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack for the Cafferty file. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour, is it right that almost half, 47 percent, to be exact, of American households pay no federal income tax?

Mark writes, "I believe everybody should pay something. As it stands today, half the people in the country have no reason to vote against tax increases. The tax-paying half of the population will have difficulty in stopping a proposed tax increase that has no effect on half of the nation."

Monica in North Carolina, "I take all the deductions and credits I'm entitled to without apology, but I sure am carrying more than my fair share of the federal tax load if these numbers are accurate. And I don't make enough money yet for me not to feel the pain when I have to pay my taxes."

Allen in New Mexico, "I feel like most of the people who aren't paying taxes can barely afford to get by. I know that my tax refund went straight to rent and bills this year."

Jim writes, "This is a perfect of example of why the fair tax is the answer to our unenforceable and complex tax code. The fair tax is collected at the cash register. If someone makes a purchase, they pay a tax. The other benefit is that under the fair tax proposal all payroll tax deductions would disappear. If you make 12 bucks an hour, you get that money in your paycheck, no deductions."

Cathy in Alabama writes, "It's disgusting that half the people are paying for the other half. Benjamin Franklin said when the people find they can vote themselves money, that will end the herald of the republic. It's generally the Democrats that keep promising people more and more services for free, hence buying the votes of huge groups of people with the money that belongs to others."

Kevin in California writes, "The question should be, is it right that almost half of American households now make so little that they're not subject to taxes."

And Gary in Arizona says, "It depends on your perspective. If you're part of the 50 percent who pay no taxes, it's not only right, it's an evolving privilege provided by a great nation to its wretched, downtrodden masses. However, if you're on the other side of the coin, the side that's paying the bill, you're simply being screwed and you're not even getting a kiss while it's happening and that's just not right."

If you want to read more, you can find on my blog at CNN.com/Caffertyfile.

BLITZER: Lots of people weighing in.

CAFFERTY: Heated emotions.

BLITZER: This is a sensitive subject, especially this time of the year.

CAFFERTY: Thursday is the deadline.

BLITZER: April 15th.

CAFFERTY: Three days left now.

BLITZER: Getting an extension?

CAFFERTY: I'm done. I'm all through. It's like giving blood. I just take it out of my arm, put it on the shelf, and I'll see you next year.

BLITZER: Like me. Thank you. New developments of the case of the boy returned to Russia by the American family that adopted him. There is a news conference by the local sheriff coming up. We're standing by for new details.

(COMMERCIAL BREAK)

BLITZER: Russian investigators are look at human error as the possible cause of a plane crash that has Poland in mourning. The country's president was killed, along with dozens of top government and military leaders. CNN's Fred Plankan is in Warsaw with the latest.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN CORRESPONDENT: As investigators piece together just what happened to Poland's presidential plane, Pols are trying to come to terms with how a single disaster could wipe out such a large number of the country's elite.

UNIDENTIFIED MALE: We can see that certain procedures were not adhered to. Political and military leaders should not all have been on the same plane in such numbers.

UNIDENTIFIED FEMALE: It is unimaginable for me, because so many generals and politicians died, and I can't imagine how so many of them could have gone on the same plane.

PLEITGEN: The toll was staggering. President Kaczynski and his wife, the army chief of staff, the president of Poland's central bank and several VIPs, including relatives of those massacred where Soviet troops killed thousands of Polish soldiers in World War II. There are rules for Polish government air travel, meant to prevent such disasters. The four highest representatives of the country are never allowed to be on the same aircraft. They weren't in this case. But the sheer number of VIPs on board highlights shortcomings in the guidelines, says Tomasz Pietrzak, a pilot who used to fly the presidential plane.

TOMASZ PIETRZAK, FORMER PRESIDENTIAL PILOT (through translator): For lower-ranking officials, the procedure is not formalized. From a practical point of view, I know this is something that would never happen in most other countries.

PLEITGEN: The debate is not new. 20 high-ranking officers were killed in a military plane crash in 2008. Ironically, while returning from a flight safety conference. TV journalist Magda Sakowska says she hopes the government will learn from this tragedy.

MAGDA SAKOWSKA, JOURNALIST (through translator): The interim president doesn't want to discuss the matter white yet, but he has said it is something he wants to address, and changes must be made when it comes to the transportation of VIP passengers.

PLEITGEN: Only a few days after the crash, Poland is still engulfed in deep sorrow. However, questions are arising. Did so many of the country's cultural, political, and military leaders really have to die in a single incident?

(voice-over): Polish officials aren't discussing that publicly, as they work to restore a government shaken to its core. But the question is certain to get more scrutiny in the weeks and months to come.

Fred Pleitgen, CNN, Warsaw, Poland.

(END VIDEOTAPE)