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Incumbent Senator Lincoln at Risk in Arkansas; GOP Conservatives at Odds in Kentucky Primary; McCain Campaign Trouble; Newspaper Holds Key to Rebuilding

Aired May 17, 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: Happening now, new fears that gushing oil could spread far beyond the Gulf of Mexico and up the east coast. This hour. Is an Obama administration official becoming a fall guy for this disaster? Stand by. New information coming in.

The biggest test yet of voter anger at incumbents this year. Our top correspondents are in place on the eve of three Senate primaries that could shake up election 2010.

And they're finally set to visit their children. Held captive for months in Iran, but first, the moms of those jailed American hikers are talking to me about their trip and what they hope to accomplish.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Up first this hour, President Obama has a new nominee to head the Transportation Security Administration. His third choice for a critical job that's gone unfilled for well over a year.

The stakes for all of us, even higher right now after the failed Times Square bomb attack as well.

Let's go first to our homeland security correspondent Jeanne Meserve for the latest -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the name is John Pistole. Pistole has been deputy director of the FBI since 2004. Before that, he was in the FBI's counterterrorism division.

Early reaction to his pending nomination has been positive. Republican senator Susan Collins of the Senate Homeland Security Committee says she is pleased with his strong law enforcement experience as does the Federal Law Enforcement Officers Association which represents federal air marshals.

The TSA is huge with 60,000 employees, including the Transportation Security officers that screen people and bags at airports, but the agency, as you said, has not had a permanent director since President Obama took office. Not for lack of trying.

Erroll Southers withdrew his nomination after making inconsistent statements to Congress about background checks of his ex-wife's boyfriend. And former Army General Robert Harding withdrew after questions arose about his company's government contracts. The administration is hopeful, Wolf, the third nomination will be the charm. Back to you.

BLITZER: Well, does he have significant aviation-related experience, Jeanne?

MESERVE: Well, his resume says that in 1999 he led investigative and recovery efforts for the crash of Egypt Air Flight 990 off the coast of Rhode Island. That's all. But his strong background in intelligence and law enforcement will certainly be seen as a big plus for the TSA position, particularly in the aftermath of that attempted Christmas Day bringing down of an aircraft -- Wolf.

BLITZER: Jeanne, thank you.

We're also learning right now more about the long-term danger of the gulf oil spill almost a full month after the rig explosion that caused this disaster. Right now scientists are studying potentially hazardous oil hidden beneath the surface in the form of large plumes.

Meteorologists are warning that oil from the spill may be pulled into the Gulf of Mexico. That loop current as it's called and could allow the slick to travel to the Florida Keys with 20 days and then potentially even up the East Coast of the United States.

BP says its latest attempt to cap the leak has been working for more than 24 hours, but an insertion tube isn't siphoning all of the gushing oil. Crews are trying to trap more of the crude with this method. The next step would involve pumping a special kind of mud into the well.

Let's bring in our congressional correspondent Brianna Keilar. She's working the story.

Brianna, Allan Chernoff, our senior correspondent here in New York, has just confirmed that the Obama administration official oversees offshore drilling at what's called the Minerals Management Service, will in fact retire at the end of the month.

In all the hearings we've had on the spill on Capitol Hill, we haven't heard from anyone yet from what's called MMS. Have we?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: We've heard from a former official last week from MMS, but, no, we haven't heard from a current official and today there was yet another hearing where we heard from the secretary of the Department of Homeland Security.

We heard from the Coast Guard. We heard again from BP America. But the chairman of the Senate Homeland Security Committee, Joe Lieberman, along with the ranking Republican, Senator Susan Collins, were asking why isn't MMS here? And they made it clear that MMS was invited.

Here's what Lieberman said.

(BEGIN VIDEO CLIP) SEN. JOE LIEBERMAN (I), CONNECTICUT: There's one set of witnesses that are not here, and I must say that's from MMS. I regret that the MMS leadership has chosen not to appear before our committee today because, really, they need to be asked the same questions I'm going to ask Homeland Security, Coast Guard and BP, because MMS, as I mentioned, must approve or reject the oil spill response plans for wells which is where this accident occurred before those wells can be drilled.

(END OF VIDEO CLIP)

BLITZER: Brianna, the secretary of the interior, and MMS is part of the Interior Department, Ken Salazar -- he will be testifying tomorrow. Presumably he'll be able to answer some of these questions, although it would have been probably much better to get the actual head of MMS even though he's not quitting at the end of this month.

KEILAR: No. And I asked -- Secretary Salazar is going to be before two Senate committees tomorrow, and he is really the official that's going to be on the hot seat and, yes, MMS does fall under him. But I asked one committee aide, why isn't MMS testifying?

And that aide told me that Salazar is the highest official responsible for MMS as well as other parts of the Department of Interior, and he's going to be fielding a lot of questions. He's going to be the person that has to answer for MMS.

I do know, Wolf, that right now the head of the Minerals Management Service, Elizabeth Birnbaum, is going to be accompanying Salazar. She is not expected to testify. That said, I've been told by another aide to one of these committees that there's nothing to stop one of the lawmakers, one of the senators, from asking questions.

So it will be certainly interesting to see if any of them really want to demand some question specifically from MMS.

BLITZER: And let's not forget what the president of the United States said only last Friday, that this whole relationship between MMS and the oil companies has been way too cozy. He wants that changed.

Secretary of the Interior Salazar said earlier in the week he was breaking this agency up. But there's a lot more to come. And no doubt about that.

Brianna, thanks very much.

We should point out that officials from MMS have spoken to over at news briefings on the oil spill over the past few weeks but they have not -- repeat -- not been willing to testify before Congress. We'll see if that changes.

The Obama White House says it won't stop pushing for tougher sanctions against Iran, even after what's being described as a nuclear agreement that was announced earlier in the day.

The Obama administration is calling Iran's pledge to send low-enriched uranium to Turkey a, quote, "positive step." But U.S. officials are skeptical given Iran's history of nuclear defiance.

More details on the agreement from our senior international correspondent Matthew Chance.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): They're calling it a victory for diplomacy. The leaders of Iran, Brazil and Turkey celebrating a deal they say should finally end the standoff over Tehran's nuclear program.

Certainly the agreement has raised hopes in some quarters. The tough new sanctions at the U.N. Security Council can now be avoided.

MANOUCHEHR MOTTAKI, IRANIAN FOREIGN MINISTER: We express our strong conviction that we have the opportunity now to begin a forward-looking process that will create a positive, constructive, non-confrontational leading to an era of interaction and cooperation.

CHANCE: The deal's terms appear straightforward. Iran will send the bulk of its controversial enriched uranium to Turkey in exchange for nuclear fuel rods to paramedical reactor in Tehran. It's essentially a rehash of the fuel swap offer the U.N. made to Iran six months ago which got snagged on details and was eventually rejected by Tehran.

Diplomats experienced in the Iranian negotiations are concerned similar problems may emerge this time.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: If they were to make good on this, and ship out 1200 kilograms of low-enriched uranium, yes, that would represent progress. But again, it's important understand that this is less than -- this agreement is less -- or proposal is less than what they agreed to last October.

CHANCE (on camera): On the face of it, the new deal revives what was herald in as face-saving plan to break the diplomatic impasse. Its attraction for the west is that it removes the majority of Iran's enriched uranium stock piles, which many fear could be diverted to build a nuclear bomb.

The concern, though, is whether this time the Iranian is sincere or merely trying to sow division ahead of the U.N. Security Council debate on new tougher sanctions.

(Voice-over): One potential problem with the deal, say analysts, is that it ignores the key Security Council's demand that Iran holds all of its uranium enrichment activities at these nuclear sites across the country.

Another is that while Turkey has agreed to store Iran's enriched uranium it has not produced the fuel rods Tehran wants. Those would have to come from other countries.

Western capitals are now left waiting to scrutinize the fine print of the agreement. The devil, as is often the case with Iran's nuclear brinkmanship, may be in the detail. Matthew Chance, CNN, Moscow.

(END VIDEOTAPE)

BLITZER: Some major rulings out of the U.S. Supreme Court today. One gives the federal government the power to keep some sex offenders behind bars past the end of their official sentence provided they pose a danger to the community.

The (INAUDIBLE) decision marks a key victory for the woman who argued the case on behalf of the government. That would be the solicitor general over at the Justice Department now the Supreme Court nominee Elena Kagan.

Another ruling holds that sentencing juvenile criminals to life in prison without the possibility of parole is, quote, "cruel and unusual punishment especially when the crime is not murder". The court concluded in a 6-3 vote that juveniles lack full culpability for their actions due to age.

And the court also ruled that a British father can, in fact, regain custody of his son. The child had been taken from his home in Chile by his mother and moved to the United States. The 6-3 ruling allows federal courts to intervene in custody battles across borders.

Three important rulings from the Supreme Court today.

We have an exclusive look into the mindset of the failed Times Square bombing suspect. E-mails obtained by CNN piece together a portrait of his frustrations and his apparent desire to fight back.

And if your child has ADHD you'll want to hear about some new research into a possible -- repeat -- possible cause.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here and he's got "The Cafferty File."

JACK CAFFERTY, CNN ANCHOR: You're eventually going to move to New York, aren't you?

(LAUGHTER)

CAFFERTY: Yes, you are.

BLITZER: You know I love Washington, D.C.

CAFFERTY: I know, but you're here more and more --

BLITZER: The politicians --

CAFFERTY: You'll be here tomorrow?

(CROSSTALK)

CAFFERTY: Two days this week. BLITZER: Elections. Primaries.

CAFFERTY: I understand. Best political team on television.

BLITZER: We'll all be here. We'll all be here.

CAFFERTY: Scariest part of the financial crisis is plaguing Greece and other parts of Europe is whether or not we're next. Much like Greece the United States is drowning in exploding deficits. Treasury Department says that the U.S. has now posted budget deficits for 19 months in a row.

And even more ominous is the fact that in April the U.S. deficit was nearly $83 billion, almost four times as high as the deficit was a year ago in April of 2009, and April is the tax filing month. The month historically that shows a surplus because of all that tax revenue coming in, not a deficit.

Overall the deficit for this year is supposed to hit $1.5 trillion. And the national debt stands at more than $12 trillion. So it's not surprising that people who know about this stuff are starting to draw a line between what's happening in Greece and our own future here.

The head of the Bank of England has warned the United States faces the same problems as Greece with our, quote, "very large fiscal deficit." He says it's important for government to have a clear plan on how could reduce these deficits.

And of course, that's the problem here, isn't it? None of our leaders wants to make the tough decisions to either raise taxes or cut spending or both because they're afraid it will cost them votes.

The White House's top budget official says although the U.S. is not in eminent danger of a crisis like Greece, U.S. lawmakers need to act quickly.

Good luck with that.

We have an election in November. So our answer will be to sit around, wait for that toothless bipartisan debt commission to come forward with its recommendations -- none of which the Congress is obligated to act on at all. There are no teeth in this thing. And that -- those recommendations are expected by December.

Just one of the many reasons to throw the incumbents out of office. All of them. Throw them all out.

Here's the question. What is Washington doing about our exploding federal deficits? Here's a hint. Nada.

Go to CNN.com/caffertyfile, post a comment on my blog. They'll be some more incumbents going down tomorrow.

BLITZER: You know what happens the day after the November elections? The presidential campaign starts.

CAFFERTY: That's true.

BLITZER: Because it will be -- just a little bit more than a year before Iowa, New Hampshire --

CAFFERTY: That's true -- we'll have Thanksgiving, Christmas, and then by January there'll be --

BLITZER: It will be -- people will be announcing.

CAFFERTY: You can't wait either, can you?

(LAUGHTER)

CAFFERTY: You get so excited.

BLITZER: Well, you think nothing is going to be done now, just wait until after -- the midst of a presidential campaign.

CAFFERTY: Absolutely. We're headed for the precipice.

BLITZER: Serious problems.

CAFFERTY: Yes.

BLITZER: I agree. Thank you.

Let's get an exclusive peek right now inside the mind of the failed Times Square bombing suspect. CNN has obtained some e-mails helping shed some light on Faisal Shahzad.

Let's go to our international correspondent, Susan Candiotti.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Wolf, the two e-mails are an intriguing snapshot into Faisal Shahzad's mind. A path that took him from the American dream to an alleged terrorist.

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): Four years before a car bomb was found in Times Square, Faisal Shahzad wrote an e-mail brewing with frustration. He'd been living in Connecticut for about six years, married, bought a home, earned an MBA and worked as a financial analyst.

But Faisal Shahzad's eye was on the past and the present. Wars in Afghanistan and Iraq. He blamed the west. Quote, "Everyone knows how the Muslim country bows down to pressure from west. Everyone knows the kind of humiliation we are faced with around the globe. Can you tell me a way to save the oppressed and a way to fight back when rockets are fired at us and Muslim blood flows?"

Paul Cruickshank is a CNN terrorism consultant.

PAUL CRUICKSHANK, TERROR ANALYST: He's somebody who's bored into al Qaeda's world view which is the United States is at war with Islam as a global conspiracy led by the United States to keep the Muslim nation down. CANDIOTTI: That same year there were widespread riots and demonstrations, including one in New York sparked by a Danish newspaper that published a cartoon of the Prophet Muhammad.

Shahzad writes, "The crusade has already started against Islam and cartoons about our beloved Prophet."

The second e-mail is written in April 2009. The same month Shahzad's sworn in as a United States citizen.

Some analysts say Shahzad appears more agitated writing, quote, "It is said if you don't have a proper Sheikh to understand the Quran, then Satan becomes your Sheikh."

Dr. Saud Anwar heads the Pakistani-American Public Affairs Committee. A political action group that says it advocates for a de- radicalization.

SAUD ANWAR, PAKISTANI AMERICAN PUBLIC AFFAIRS CMTE.: He is talking about that anybody who does dialogue with anyone is not right, and he's also saying that anybody who's following the mainstream scholars within the Muslim faith is on the wrong track.

CANDIOTTI: Shahzad goes on to say, "My sheikhs are in the field fighting."

CRUICKSHANK: He clearly is somebody that wants action, that believes in action, and that may be significant. The fact that he is accused of wanting to blow up a car in Times Square means that he was obviously angry. These e-mails allow us to understand more of what was fueling that anger.

(END VIDEOTAPE)

CANDIOTTI: CNN obtained the e-mails from Dr. Anwar who turned them over to the FBI and steered agents to the man who received those mails from Faisal Shahzad. That man also has been interviewed by the FBI -- Wolf.

BLITZER: Susan, thank you.

A new recall impacts thousands of U.S. troops including those in Afghanistan. We're going to tell you what could be wrong with so many of their helmets.

And could there be a link between a common learning disorder in children and their food?

(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, the Thai government is failing to deter the deadly violence raging in Bangkok. Thousands of protesters erupted in battle as government -- a government deadline for evacuating the area came and went. So far 37 people have been killed in the clashes.

A Justice Department investigation is behind the Army's decision to recall 44,000 military helmets. The Army decided to retest the Armor Source helmets after the Justice Department started looking into whether there were shortcuts in production.

The helmets have been distributed to U.S. service personnel worldwide. There have been no reports if they caused injuries and Armor Source says it will cooperate.

New evidence pesticides may be linked to attention deficit disorder in children. A study in the "Journal of Pediatrics" tested the level of common pesticides in kid's urine. Children with the highest levels had an increased chance of ADHD.

All the children's studied had some exposure to common pesticides, rather, used on fruits and vegetables. The study didn't determine, though, whether children were exposed to pesticides in food, water or air -- Wolf.

BLITZER: Lisa, thanks.

Will 2010 be the year incumbents take a beating? The biggest test yet of voter anger happening in hours.

And is President Obama defending freedom of the press or is he chipping away at it?

(COMMERCIAL BREAK)

BLITZER: We're just hours away from what could be the most riveting and revealing day yet of the 2010 midterm elections. There are senate primaries in three states. Two Democratic incumbents and a Republican establishment candidate are in serious danger of losing right now.

Will they fall victim to the anti-Washington anger that is clearly out there?

Our chief political correspondent Candy Crowley is in Pennsylvania. Our senior congressional correspondent Dana Bash in Arkansas and our national political correspondent Jessica Yellin is in Kentucky.

First, Candy, to you. There's new polling that shows it's too close to call in the Democratic race in Pennsylvania right now between the incumbent, former Republican Arlen Specter, and his challenger, Democratic congressman Joe Sestak.

Who has the momentum right now? You're on the scene, Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: I can -- I can probably argue that -- for both at this point. If you -- you know it's a different game right now because they are about to go into Election Day.

What counts? It counts that your voters show up at the polls. Arlen Specter has the support and the endorsement of a number of big unions here. They are pretty good and they've had a long experience in getting out the votes.

Having said that, if you look closely at those polls, there's a huge number of undecideds. At least the last time we looked. And the fact of the matter is, while some of those undecideds really are not going to vote, the undecideds, as you know, tend to go to the person who is not the most well known.

So those you would think would be Sestaks votes. So I could argue both ways, but this has been an unpredictable race and I think remains so.

BLITZER: Candy, Arlen Specter says he will definitely endorse Sestak if he wins the Democratic nomination. Won't run at as an independent candidate. Throw his support to the Democrats.

Sestak sort of hedging on that. What's he saying?

CROWLEY: Well, he doesn't like mentioning the name Arlen Specter. I'll say that. I interviewed both of them yesterday, and Sestak really refused to say, yes, I'll support Arlen Specter, which gave Specter an opening saying, I'm going to answer your questions. And of course I will. I'll do anything to defeat Toomey.

At this point, Sestak, who did take a lot of flak for his non-answer, saying, of course, I'm going to, you know -- I don't want Pat Toomey elected. So slightly different answers but Sestak seemed to understand that it was the wrong answer yesterday and sort of tried to make up for that.

BLITZER: All right. We'll watch together with you, Candy, in Pennsylvania.

Let's go to Arkansas right now where polling shows Democratic Senator Blanche Lincoln with a 12-point lead over Bill Halter, lieutenant governor of Arkansas but that may not be enough to avoid a runoff. Let's bring in our senior congressional correspondent Dana Bash. She's on the scene for us. Is Blanche Lincoln - I assume she's very worried, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: She is worried. She told me she doesn't make any assumptions about breaking that 50 percent threshold she needs tomorrow to avoid the runoff, but she is campaigning in this anti-incumbent atmosphere, somebody with experience and seniority in Washington. The fact she's the chairwoman of the Senate agriculture committee. She says that Arkansans can't get her out of that job that they need her in that job and she delivers that message in her delta draw.

(BEGIN VIDEOTAPE)

SEN. BLANCHE LINCOLN (D), ARKANSAS: Other people can tell you about what they're going to promise. I can tell what you I've done. And I've worked hard and I've produced.

One of the things I've been working on --

BASH: Why do you think this is such a tough primary for you?

LINCOLN: Well I think it's multiple reasons. I've run midterm of the administrations before back 1994 when it was our own President Clinton and it was a tough and challenging year. People's expectations elevated. You're the first thing that comes between them and the expectations that haven't quite been met.

BASH: Those unmet expectations are feeding into the anti-incumbent mood Senator Lincoln is battling. Whether it's the Wall Street bailout or deficit spending, voters are fed up.

UNIDENTIFIED MALE: No disrespect at Miss Blanche Lincoln at this point in time, I think sometimes it's out with the old, in with the new.

BASH: You think it's time for new?

UNIDENTIFIED MALE: Yes, I believe so.

BASH: Do you think that what's happening on the Democratic side in some ways mirrors the tea party on the right and what's happening to you mirrors that? That it's just a wave of anger at Washington, and you're bearing the brunt of it?

LINCOLN: Well, I think people are concerned. I think you know, people are disappointed in Washington, and I join them in that. I'm disappointed, too. I mean, you know, I do believe in fiscal responsibility and I am a true moderate.

BASH: Lincoln is a moderate Democrat. Her positions against public option for health care and against key union priorities have angered liberal and labor groups who have come here from out of state to try to defeat her, but talk to her Democratic opponent, the lieutenant governor Bill Halter and his message, pure populism.

When you think of this challenging a primary you think somebody from the left. You're running from the outside?

LT. GOV. BILL HALTER (D), ARKANSAS SENATE CANDIDATE: I'm running from the outside. That's precisely right. Look, this is a time when people want you to stand up for them. Looks what's happened just in the last two years. $700 billion in taxpayer money going in to bail out Wall Street banks. People want change and they know if you send the same people back to Washington, you're guaranteed to get the same results.

(END VIDEOTAPE)

BASH: Now, the lieutenant governor, her challenger, you just heard, has had big help from outside groups, between $4 million and $5 million spent largely from big labor and she has had the help of the business community as well. If Lincoln does pull off a win either in tomorrow's primary outright or in a runoff in early June, that's just the beginning of her challenge. She still is going to have to have a big fight against her Republican opponent to keep that seat in her hands and away from Republicans in November.

BLITZER: All right. Dana will stay in Arkansas for us but let's move to Kentucky right now and the race to replace retiring Republican Senator Jim Bunning. Rand Paul who has support from the tea party is the son of Congressman Ron Paul, has a 12-point lead over the GOP establishment candidate Trey Grayson. Our national political correspondent Jessica Yellin is watching this race for us. It's a battle I guess among conservatives because both were of these men are very conservative, Jessica?

JESSICA YELLIN, NATIONAL POLITICAL CORRESPONDENT: It's true, Wolf. And this is really a fight over the direction of the Republican Party. You know, as you say, Rand Paul is a true tea party candidate. He wants to abolish the federal department of education and end the Federal Reserve. Says he'll never vote for any piece of legislation that spends money beyond a balanced budget, and he is so far ahead of his Republican opponent that he didn't mention the man he faces in the polls tomorrow. When he spoke here just a short time ago he talked about the Democrat he plans to face in November, and Wolf I'll tell you he said he is a product of a tidal wave by the tea party that is sweeping the nation.

(BEGIN VIDEO CLIP)

RAND PAUL (R), KENTUCKY SENATE CANDIDATE: Tomorrow's election will be big. It's going to be big for us in Kentucky. It's going to be big nationally. It will be the first victory for a tea party candidate in a state-wide election, and this will have huge ramifications. We -- the tea party -- we the people of Kentucky, will help to decide what that message is, where the Republican Party goes, what the Republican Party becomes.

(END VIDEO CLIP)

YELLIN: Now, his opponent, Trey Grayson, was hand-picked by Senate minority leader Mitch McConnell of Kentucky. He has been endorsed by the establishment, including former vice president Dick Cheney, former mayor of New York Rudolph Giuliani. As you say, he is badly trailing in the polls and fighting back these last days stopping short of calling Rand Paul basically a kook. Listen.

(BEGIN VIDEO CLIP)

TREY GRAYSON, KENTUCKY SENATE CANDIDATE: People are -- I think, realizing, wait, this is a guy going to press conferences throw spitballs, vote no, make a lot of noise an it's only getting worse, not better.

(END VIDEO CLIP)

YELLIN: Now, he goes on to accuse him of being out of the mainstream, saying he can't win in November, but, Wolf, Rand Paul makes the case that his message of fiscal discipline is just what all voters in this country want right now and the message we've heard here today from supporters is loud and clear, it's all about spending here in Kentucky. Wolf?

BLITZER: Jessica Yellin is in Bowling Green, Kentucky for us. Thanks, Jessica. She'll be there tomorrow as well.

The first polls by the way close tomorrow at 7:00 p.m. eastern. Join me along with the best political team on television for up to the minute results on these key races. Coverage tomorrow night on these three primaries.

An immigration judge issuing a ruling that hits President Obama close to home. Just ahead, the fate of his aunt from Kenya. Can she stay in the United States?

And a new blow to the oil industry, a massive fire right now in Texas.

(COMMERCIAL BREAK)

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

LISA SYLVESTER, CNN CORRESPONDENT: Hi Wolf. Well a U.S. immigration judge says President Obama's Kenyan aunt is allowed to stay in the United States. The ruling ends a six-year battle over her status. Zeituni Onyango is the half sister of the president's late father. She applied for political asylum in 2002 because violence in her homeland.

Major airports in Europe are open again after being shut down because of ash from Iceland's erupting volcano. Closures in Britain, Ireland and the Netherlands are causing travel delays. 1,000 flights were expected to be cancelled today and it could take until tomorrow to smooth out all of the disruptions.

And take a look at this big smoky fire in Houston. It broke out at a 700 acre oil refinery plant. Residents nearby are being asked to stay indoors until officials can figure out if any toxic fumes are being released. No injuries are reported and no word yet on a possible cause of that fire. Wolf?

BLITZER: All right. Lisa, thank you.

John McCain loses two key staffers. Is his re-election campaign in any serious trouble? Our strategy session coming up next.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our strategy session. Joining us now our two CNN political contributors, Republican strategist Ed Rollins and Democratic strategist James Carville. Ed, John McCain loses two top staffers trying to help get himself re-elected, win that Republican primary in Arizona. Arlen Specter is in trouble. Blanch Lincoln is in trouble. We heard about that. How much trouble is John McCain in? ED ROLLINS, REPUBLICAN STRATEGIST: You know I think he's in a real race. John has always had trouble with campaign managers. He's a tough guy to manage. I think we need to bring Mary Matalin to run his campaign. But you know at the end of the day, he should win the race. You know he's not an easy guy to manage.

BLITZER: He's facing a tough challenge, James, from J.D. Hayworth, the former Congressman from Arizona.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: He is, and Ed make as very good point. I think Senator McCain can be kind of prickly. He doesn't have a great history with campaign managers. I don't think he takes orders very well. He's probably more used to giving them and you know these things are not going to be the be all end all of the campaign but there are signs of some trouble somewhere in that campaign. We'll see if they can get it fixed. I suspect he'll win but I don't know that. Obviously there's some trouble out there in the desert.

BLITZER: We'll see how much trouble incumbents in general have. Let's move on to Charlie Crist. Ed, he's the independent candidate running for the Senate right now and he is now signaling he will veto legislation that would force a woman to have an ultrasound before having an abortion. He calls that mean-spirited. Is this going to help or hurt his efforts come November?

ROLLINS: Well it's certainly going to finish him off with the right to life group and he's waffled on these issues in the past. He's declared he's not - he's very much a pro-choice candidate today. I'm sure when he was governor initially that he was proposing to support this. When you start flip-flopping on issues people don't think you stand for much. He's going to run as an independent. He's no longer a Republican. It may help in the long term, not short term.

BLITZER: Certainly if he doesn't have to worry about a Republican primary, James, if he's running at an independent in a general election in November I guess this might help him. What do you think?

CARVILLE: Well, look, he wasn't going to get the right to life people anyway. And I don't think that Charlie Crist is the kind of man that would do something like this unless he thought there was a political advantage to it. We'll wait and see. Its a --

ROLLINS: I agree on that.

CARVILLE: The way it strikes me -- right. In the interests of disclosure, I have contributed to the Kendrick Meek campaign. I think it's important our viewers know that. It probably is the sort of right move for him. I think he's going to lead the far right to Rubio and he's going to try to challenge in the middle of another side. We'll see how it works out.

BLITZER: Kendrick Meek is the likely Democratic candidate for the Senate in Florida. The president of the United States, Ed, today signed what's called the freedom of the press act, but some reporters and reporters can be whining at times, as you know, are complaining he's not giving them the access that they would necessarily like. We checked in Martha Joint Kumar said Obama's had 47 basically short exchanges with reporters compared to 147 at this point for George W. Bush and 252 with Bill Clinton. On the other hand, Obama's given a lot more one on one interviews, 161 compared to 50 for Bush, 53 for Clinton. Are reporters basically whining or is there a problem in terms of access to the president?

ROLLINS: There's a problem to them, but to the public, he's on television every single day doing an interview of some sort. I think every president does what he thinks he can do best and this white house clearly wants to control it. They don't want the group thing, they don't want a bunch of reporters. They would rather sit down with you and have an intelligent conversation as opposed to that 50 guys question time.

BLITZER: Also very effectively using the internet, James. It's a whole new world out there, posting pictures. They don't have to let pesky white house photographers into events. They can even do their own interviews as they did with Elena Kagan, the Supreme Court nominee and not allow journalists to interview her.

CARVILLE: If you listen to the president of Hampton University, you think he'd never heard of the internet. They figured this is more in keeping with what he likes for what they want and he's very good at that kind of thing. Yeah, I don't think there's a -- there might be some, but few Americans that say we don't hear from the president enough. I think he's to most people he's visible and out there. I don't think people view lack of access as a real problem with this president.

BLITZER: I think a lot of people have seen a lot of this president. There's no doubt about that.

CARVILLE: Right.

BLITZER: Thanks very much. Jack Cafferty is standing by. He'll be right back with your e-mail.

And a startling study about children's attitudes towards race and skin color. Anderson Cooper will be here with me in THE SITUATION ROOM. Stand by for that.

(COMMERCIAL BREAK)

BLITZER: All right. Let's check in with Jack once again for the Cafferty file.

JACK CAFFERTY, CNN CORRESPONDENT: Question this hour is, what is Washington doing about our exploding federal deficits? You know the answer, but let me read a few of these.

Al in Delaware, "How come the deficit didn't matter back when they spent the surplus, started two wars, cut taxes and passed Medicare part D, all unfunded? When asked, then Vice President Cheney said deficits don't matter. I'm not going to hold my breath until some politicians hold their breath to simultaneously raise taxes and make the draconian budget cuts that will finally balance our budget again."

Tom writes, "Congress will do what they have been doing for a long time, blame the lack of progress on the other side. We, the people, need to take back America from the career politicians. To do this, we must send a strong message. The message this year is just say no. Say no to any incumbent, regardless of their party. Vote for anyone but the incumbent." You think this is easy, what I do.

Dave writes, "Since a huge part of the federal budget goes to defense, the answer is obvious, bringing our troops home would save about $120 billion a year."

Fran in New Mexico, "Nothing. Unless you know something I don't know, the government appears to be ignoring the deficits. We're not headed for another depression. Excuse me, the official description is still recession. We're headed for an economic disaster that we won't be able to pull out of."

Dominic says, "The federal government will do what they always have, put small bandages on cuts that require stitches. And sooner or later, America will bleed out."

And finally, Ken says, "They're doing what Washington always does, looking out for number one. Not us, themselves. Bite the pack that feeds you? Not in this lifetime. Party labels don't matter, either. It's self preservation, brother. Tea, anyone?"

You want to read anymore, go to my blog, CNN.com/Caffertyfile. Going to be blood in the streets tomorrow. Figuratively speaking.

BLITZER: Figuratively. Thank you.

New trouble in the latest attempt to try to cap the gushing oil well in the Gulf of Mexico. That's coming up.

And I'll also speak with the mothers of three American hikers jailed in Iran only hours before they're set to leave to see their kids.

(COMMERCIAL BREAK)

BLITZER: Its economy is struggling and unemployment is high. Despite that, one of New Mexico's newer residents is building up America, and he has found an unlikely source for doing it. Our Tom Foreman is there with his story.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, you know there is almost no business right now that's worse than the newspaper business. But if you think that means it can't work, come down here to old Route 66, and you may think otherwise.

(BEGIN VIDEOTAPE)

FOREMAN: A bit more than a year ago, M.E. Sprengelmeyer had every reason to give up on the economy, the west and especially newspapers. M.E. SPRENGELMEYER, GUADALUPE COUNTY COMMUNICATOR: We just walked around the whole day with tears in our eyes.

FOREMAN: After ten years of reporting for Denver's "Rocky Mountain News," he and his colleagues were shocked to find it shutting down.

SPRENGELMEYER: That was a special place, and it was a damn good newspaper.

FOREMAN: But rather than retreat, he charged, straight down to his home state of New Mexico. An unusual choice, perhaps, as a place to rebuild a career, the economy here has been struggling with steep job losses in mining, manufacturing, construction --

UNIDENTIFIED MALE: It was dead. Nothing really going on.

UNIDENTIFIED FEMALE: I would say it's very hard.

UNIDENTIFIED MALE: You can find one, but it's going to be tough.

FOREMAN: But in the little town of Santa Rosa, Sprengelmeyer found a newspaper for sale. And with every last dollar he had, he bought it. Was this a wise decision?

SPRENGELMEYER: It's the best thing I ever did. Best thing I ever did. [ church bells ]

FOREMAN: He says that, because no matter what he is covering each day, he and his small staff are making a go of it. While other papers are dramatically cutting their costs, Springelmeyer increased his staff payroll by 40 percent, adding more pages, more photos, more stories. He killed the paper's website, arguing that it hurt street sales. And through all of that, he rebuilt the paper's relationship with its readers.

SPRENGELMEYER: The community hangs on every story. The community hangs on every cartoon.

FOREMAN: So now when he lampoons a local tourist attraction, a famous diving hole, even business folks who rely on it for a living seem to enjoy the joke.

SPRENGELMEYER: You like the cartoon?

UNIDENTIFIED FEMALE: I like it. I'm going to keep all of these.

FOREMAN: It's tough work. One night a week, he drives 100 miles each way to pick up his papers from a printer, and many more nights, he and his staff work far into the darkness, all to keep expenses down, and quality up.

SPRENGELMEYER: Those things the readers don't notice, but what they sure as heck notice is that a lot of these big city newspapers are getting thinner, and thinner, and thinner.

FOREMAN: While his paper is getting thicker. And the result? Subscriptions, street sales and advertising are all up, up, up.

SPRENGELMEYER: This is the big lesson that you can apply to any paper in the country. It's working here because I'm spending more, not less.

FOREMAN: And because while other papers are folding all over, here everyone knows every morning, M.E. Sprengelmeyer and his team will be back on the beat.

(END VIDEOTAPE)

FOREMAN: M.E. says he will bring back his web page one day, but only when he's sure it won't hurt the core business and in fact will help it grow even more. Wolf?

BLITZER: Tom, thank you.

And to our viewers, you're in THE SITUATION ROOM.

Happening now, their children have been imprisoned in Iran for ten months. Now they're about to travel to Iran themselves. I'll speak with the mothers of those three jailed American hikers.

Two weeks after his arrest, the suspect in the botched Times Square bombing still hasn't seen a judge. Where are authorities keeping him? Is he still talking? Stand by.

And CNN has an exclusive. You may think your young children are beyond racial bias. But Anderson Cooper joins me this hour for a disturbing new study that shows just how much skin color still matters. I'm Wolf Blitzer.