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The Situation Room
President Obama to Address the Nation; Oil Executives Under Fire on Capitol Hill
Aired June 15, 2010 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Also, President Obama is only hours away, two hours away from delivering an Oval Office speech to the nation about the Gulf disaster. What will he say to reassure anxious Americans?
And one U.S. man sets out to avenge 9/11 single-handedly, trying to hunt down Osama bin Laden himself, before being detained by Pakistan. We have details of the weapons he was carrying. Plus, we will hear from his family this hour.
We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.
It's one of the most closely watched and potentially influential speeches an American president can give, addressing the nation from the Oval Office at the White House. In just two hours, President Obama will do it for the first time, speaking to Americans about the Gulf oil disaster.
White House Press Secretary Robert Gibbs tells CNN the president will lay out a game plan for recovery and also touch on the U.S. dependence on fossil fuels. The speech follows Mr. Obama's two-day tour of the disaster zone and comes amid some criticism of his response to the disaster so far. The best political team on television is standing by for analysis.
There is also breaking news we are following right now adding extra urgency to the president's speech tonight. Government officials just announced even more oil is flowing into the Gulf than previously estimated, perhaps as much as 60,000 barrels a day.
Our homeland security correspondent, Jeanne Meserve, is working this story.
Jeanne, this story just keeps on climbing and climbing and climbing.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: You are right, Wolf. It goes up, and up and then up some more.
The federal government is now estimating that the flow rate is between 35,000 and 60,000 barrels of oil each and every day. Consider this. In the first days, BP estimated the flow rate at 1,000 barrels a day. The government upped that number to 5,000, but a special flow rate technical group of government and independent scientists later put it even higher at 12,000 to 19,000 barrels a day. Last week, they revised their estimate upwards to 20,000 to 40,000 barrels, and now we have this new number, 35,000 to 60,000 barrels a day, the top number, a 50 percent increase from the previous high-end estimate.
And Energy Secretary Steven Church says the upper number is less certain, and the government will continue to revise its estimate. That means the number could go down or it could go higher still. About 15,000 barrels of oil a day are now being collected at the wellhead, but using these new numbers, that means at best less than half the oil coming out of the well is being recovered, and it could be as little as one-quarter of the oil, Wolf.
BLITZER: Why do these numbers keep changing, Jeanne?
MESERVE: Well, the government says more and different kinds of data have become available. They specifically mentioned detailed pressure measurements from within the top hat taken over the past 24 hours.
In addition, the scientists used more than a week of data about the oil being collected, acoustic technologies and high-resolution videos. Because of the different methodologies, one member of the flow rate team says it took a lot of work for scientists to reach consensus on the new numbers.
There was a 10-hour meeting in Seattle Sunday and a three-hour conference call yesterday to hammer out these final figures -- Wolf.
BLITZER: And, as they say, they could change next week up or down. Let's see what happens.
Jeanne, thank you.
Containment efforts at the site of that spewing oil well were temporarily shut down today after a ship connecting the crude caught fire. BP says it was put out quickly, no one was hurt, the apparent cause, lightning.
Just over an hour ago, the company said operations had resumed. The fire happened on the Discoverer Enterprise, which is collecting about 15,000 barrels of crude each day.
Here in Washington, on Capitol Hill, top politicians from major oil companies faced sharp questioning from a House committee, whose grilling put a very unflattering spotlight on the entire oil industry and yielded one startling admission.
Our senior congressional correspondent, Dana Bash, is joining us now with details.
Dana, tell us what happened.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, we learned that nearly all of the oil companies have the same or nearly identical deepwater disaster plans as BP, and, in fact, two of those plans have the phone number for an expert who has been dead for five years.
(BEGIN VIDEOTAPE)
BASH (voice-over): Five big oil executives sworn in for the cameras.
UNIDENTIFIED MALE: The whole truth and nothing but the truth?
BASH: And skewered by lawmakers, who called all five oil spill plans reviewed by the committee cookie-cutter and inadequate.
REP. HENRY WAXMAN (D-CA), GOVERNMENT REFORM COMMITTEE CHAIRMAN: ExxonMobil, Chevron, ConocoPhillips and Shell are as unprepared as BP was -- and that's a serious problem.
BASH: To show them as out of touch, the chairman berated the CEOs for including the protection of walruses in their oil spill plans.
REP. EDWARD MARKEY (D), MASSACHUSETTS: There aren't any walruses in the Gulf of Mexico and there have not been for three million years.
REX TILLERSON, CHAIRMAN & CEO, EXXONMOBIL: It's unfortunate that walruses were included. And it's an embarrassment that they were included, but that's part of a larger marine mammal study that is used in preparing regional response plans.
BASH: To paint a picture of an industry more worried about image than safety, a PowerPoint they reveal ExxonMobil's media strategy in cases of disaster, included 13 pre-written press releases.
REP. BART STUPAK (D), MICHIGAN: While ExxonMobil has 40 pages on its media response strategy, its plan for resource protection is only five pages long, and its plan for oil removal is just nine pages long.
BASH: Then a stunning moment of candor from the ExxonMobil's CEO about its readiness for a massive oil bill.
TILLERSON: When these things happen, we are not well-equipped to deal with them.
BASH: But BP competitors were quick to separate themselves from the Deepwater Horizon disaster.
WAXMAN: You think that they made mistakes? The answer you would give would be yes?
TILLERSON: We would not have drilled the well the way they did.
WAXMAN: And how about you, Mr. Watson?
WATSON: We've just had a chance to take a look at your letter. It's quite lengthy, of course, with a number of detailed comments. Our experts are taking a look at it. I have read it myself. And from what I have seen, it's consistent with what the joint industry task force found, that there -- we have an opportunity to raise the bar, if you will, on standards in the industry, and it certainly appears from your letter that -- that not all standards that we would recommend or that we would employ were in place.
MARVIN ODUM, PRESIDENT, SHELL OIL COMPANY: It's not a well that we would have drilled with that mechanical setup.
JOHN WATSON, CHAIRMAN AND CEO, CHEVRON CORPORATION: That practices that we would not put in place were -- were employed here.
BASH: But the Democrats unloaded most of their anger on BP, accusing them of lowballing the amount of oil gushing into the Gulf.
MARKEY: Are you ready to apologize for getting that number so grossly wrong?
LAMAR MCKAY, President and Chairman, BP America, Inc.: I will just reiterate what Commandant Allen said, is that those were not BP estimates.
MARKEY: One final chance: Apologize for getting that number wrong.
MCKAY: We -- we are sorry for everything the Gulf Coast is going through.
BASH: And while some Republicans complained about the tone...
REP. PARKER GRIFFITH (R), ALABAMA: Child-like, accusatory, mean- spirited, petulant questioning.
BASH: ... others took it up a notch.
REP. CLIFF STEARNS (R), FLORIDA: I would call for your resignation. I'm calling for it today. I'm not asking for you to apologize. I'm asking you to resign.
REP. JOSEPH CAO (R), LOUISIANA: In the Asian culture we do things differently. During the samurai days, we would just give you a knife and ask to you commit hari-kari.
(END VIDEOTAPE)
BASH: Now, not surprisingly, other Republicans turned their anger not on BP, but on President Obama. One Republican congressman called him incompetent and a spectator in the stands. Another called administration' response disjointed, confusing and frustrating.
And, Wolf, all of these lawmakers in both parties will have another chance at venting their anger. They are going to have the controversial -- controversial BP CEO, Tony Hayward, before them on Thursday -- Wolf.
BLITZER: Yes. On Wednesday, tomorrow, the president will meet with the leadership of BP over at the White House.
Dana, thank you. When President Obama addresses the nation on the Gulf disaster later tonight, within the next two hours, he will be following a long tradition of U.S. presidents trying to reassure an anxious country.
Franklin Roosevelt set the tone with a series of fireside radio chats during the Depression and World War II. A generation later, John Kennedy was in the Oval Office speaking bluntly to Americans about the Cuban Missile Crisis.
(BEGIN VIDEO CLIP)
JOHN F. KENNEDY, PRESIDENT OF THE UNITED STATES: My fellow citizens, let no one doubt that this is a difficult and dangerous effort on which we have set out.
No one can foresee precisely what course it will take or what course or casualties will be incurred. Many months of sacrifice and self-discipline lie ahead, months in which both our patience and our will be tested, months in which many threats and enunciations will keep us aware of our dangers, but the greatest danger of all would be to do nothing.
(END VIDEO CLIP)
BLITZER: Presidents have also used the Oval Office to comfort Americans in times of tragedy, as Ronald Reagan did after the space shuttle Challenger disaster in 1986.
(BEGIN VIDEO CLIP)
RONALD REAGAN, PRESIDENT OF THE UNITED STATES: The crew of the space shuttle Challenger honored us by the manner in which they lived their lives. We will never forget them, nor the last time we saw them this morning, as they prepared for their journey and waved goodbye, and slipped the surly bonds of Earth to touch the face of God.
(END VIDEO CLIP)
BLITZER: More recently, George W. Bush offered encouragement to a stunned nation from the Oval Office the night of September 11, 2001.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America has stood down many enemies before, and we will do so this time. None of us will ever forget this day, yet we go forward to defend freedom, and all that is good and just in our world.
Thank you. Good night. And God bless America.
(END VIDEO CLIP)
BLITZER: Jack Cafferty is coming up next with "The Cafferty File."
Then, BP's credit rating takes a major hit, fueling new concerns about possible bankruptcy -- what it could mean to American taxpayers.
Also, shocking finds in some internal oil documents. I will talk about that and today's grilling of some top oil executives with Congressman Henry Waxman.
Plus, what we are learning about the American man and -- who tried single-handedly the hunt down Osama bin Laden. His family is now speaking out about his mission.
(COMMERCIAL BREAK)
BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Remember back how they were telling us health care reform was supposed to make health care affordable for all Americans? Well, that's not what's happening.
A new report says employer health care costs will go up another 9 percent in 2011, and you can bet that the companies will pass along those higher costs to their workers.
PricewaterhouseCoopers' survey of 700 employers shows they plan to offset costs by raising deductibles. By 2011, more than 50 percent of employees will have a deductible of $400 or more. That's compared to only 25 percent who paid that much in 2008.
Also, 13 percent of companies say their primary plans in 2010 had deductibles of more than $1,100. That's more than double the level in 2008.
If these troubling trends continue, health care will become less affordable for people who actually have health insurance, and, in the end, the health care law will be little more than another gift to the insurance and pharmaceutical companies and yet another burden on the taxpayers.
Republicans are trying to capitalize on this. More than 70 incumbent lawmakers and more than 330 GOP candidates have signed a pledge to support legislation that would repeal the health care law and replace it with something less costly if they win in November.
Meanwhile, Democrats are hoping, as more parts of the law take effect and the public feels the benefits, they will get behind it.
But, for now, the polls still show that majorities of Americans oppose health care reform months after it was literally shoved down our throats.
Here's the question: If the Republicans win control of Congress in November, should they repeal health care reform?
Go to CNN.com/caffertyfile. Post a comment on my blog.
BLITZER: Jack Cafferty, thank you.
We are counting down to the president's Oval Office address to the nation on the oil disaster, less than two hours away. Our special coverage begins right at the top of the hour on "JOHN KING, USA."
Let's get some insight into what he is expected to say. John is here, along with Gloria Borger, our senior political analyst.
Gloria, I know you have been working your sources.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Sure.
BLITZER: What are you hearing, some of the main points the president wants to make tonight?
BORGER: Well, first of all, Wolf, this is really not a speech about soaring rhetoric. It is about accountability. It is about credibility, and it's about showing that the president is in control.
First, what he is going to do is going to walk through what happened since April, what the response has built -- been. Then he is going to talk about the plan moving forward. He is going to talk about the cleanup, and how that is going, a plan to help the Gulf, and how we make sure this never, ever happens again.
Then he is going to take a turn and going to talk about a larger call for energy independence, which, as you know, has always been a big theme...
(CROSSTALK)
BLITZER: And this is what the Republicans are really upset about right now, John. They don't think it is appropriate at a time of crisis like this for the president to use this moment to go for his controversial cap-and-trade energy legislation.
JOHN KING, HOST, "JOHN KING, USA": They don't think it is appropriate because they oppose to policy. Most Republicans do.
BORGER: Right.
KING: And so that will be one of the subsets of this debate.
The president's challenge is, one, to try to advance part of his agenda -- and that is one piece of it, climate and energy -- because his agenda has just been overshadowed by this. This is a fundamental pivot point of his presidency. Can he get back to other issues, as he deals with the Gulf spill?
But, Wolf, it is a huge challenge, because the president is using -- you know it from covering the White House so long -- the most hallowed ground on the campus, the Oval Office, to speak to the American people. He wants to, as Gloria said, say: I'm in charge. I get it. I understand this is a huge challenge.
Yet, he can't answer so many questions. We just got that new estimate. This is now 13 times the size of the Exxon Valdez. They don't know when they will be able to shut it off. They hope the middle of August. They don't know how much oil is under the water causing horrendous damage to the environment there. When can the fishermen go back to work? Will he say anything about his deepwater drilling moratorium and when those guys can go back to work? So, it is a huge challenge for a leader when you don't have some of the answers to the critical questions to try to convince the American people, who clearly are skeptical right now, that: I am in charge of this. I get it. And if we might have been slow at the beginning, we will be better now.
BORGER: Well, it is a big credibility issue for him now, don't you think, because we, the government at least, agreed with BP's estimates at the beginning, that this was 5,000 barrels. Well, and now, we are up to an estimate that is so large that the president has to kind of gain that credibility back, and also tell the American public, we are going to hold BP accountable, and that, by the way, between BP and the federal government, we can actually do this, at a time when people don't trust the government to do much of anything.
BLITZER: And in this new AP poll has approval or disapproval of the way the president is handling this oil disaster -- 45 percent approve of his job so far -- 52 percent disapprove. He has got a lot of work ahead of him.
We're going to be covering this throughout the night. John is going to have special coverage coming up right at the top of the hour. At 8:00 p.m. Eastern, the president addresses the nation from the Oval Office. Stay with CNN throughout the evening.
Rhetoric heating up on the Korean Peninsula, with the North making a new threat of war. We are following the rising tension.
Plus, Congressman Henry Waxman on today's grilling of top oil executives by his committee. Where were the tough questions before the Gulf disaster?
(COMMERCIAL BREAK)
(NEWS BREAK)
BLITZER: Massive plans for public relations, but relatively small plans for an actual oil disaster. What other embarrassments were revealed in today's grilling of oil executives on Capitol Hill? I will ask Congressman Henry Waxman. He's standing by live.
Plus, the American man who tried to avenge 9/11 by himself, his family is now speaking out.
(COMMERCIAL BREAK)
BLITZER: "Cookie cutter plans" -- that is how one lawmaker describes oil company disaster plans. Joining us now, the man who used those words in today's hearings up on Capitol Hill with oil executives, Congressman Henry Waxman is the chairman of the House Energy and Commerce Committee.
I know that your subcommittee held the hearings today, Congressman Waxman. Thanks very much for coming in. WAXMAN: My pleasure to be with you.
BLITZER: What is the most shocking thing you learned today?
WAXMAN: The most shocking thing we learned today is that all of the other major oil companies have a very good plan to deal with an oil spill. They have all been prepared by the same consultant, and they're exactly the same plan as BP, which is not doing very well in dealing with its oil spill.
In fact, each of the companies said they could deal with a oil spill far greater than the oil spill that we already have from BP. So it makes me wonder, if it looks good on paper, it doesn't necessarily mean they are going to be able to handle it in real life, because BP certainly is not handling it well.
BLITZER: So what I hear you saying is that none of these major oil companies are really ready for a disaster, a spill like this one?
WAXMAN: Well, it certainly makes me wonder if they are ready for it when all they have is a plan that come consultant prepared for them and BP, and it is the same plan. So it -- I would not feel comforted that any of those oil companies could manage this situation any better than BP.
BLITZER: You released documents this week suggesting that BP executives were more concerned about saving a few dollars than they were about safety and security. And as a result of that, not only this disaster, but 11 men are dead.
Here is the question, as far as a criminal investigation is concerned, the Justice Department has an investigation under way, but what else do you want to happen?
WAXMAN: On Thursday, we are going to have the chief executive officer of BP appear before one of the subcommittees...
BLITZER: You are talking about Tony Hayward.
WAXMAN: Tony Hayward. And I wrote this letter to him based on his documents, e-mails from people within his company, statements that were made by some of his own contractors recommending things that they needed to do. And in five instances that we pointed out, he took a shortcut -- not he himself, but BP took a shortcut. And that each shortcut increased the risks of exactly what had happened.
BLITZER: Is that criminal?
WAXMAN: Well, I don't know. It will be up to the Justice Department. But one of the people in the industry when we consulted with them said, this is gross negligence. They didn't do things that people in the industry were doing.
In fact, the CEOs of the other oil companies today said that they would not have handled their drilling the way BP did. They would have made sure the oil well had integrity. That they had tests done to be sure that the cementing was adequate. That they centered the well. That they had done all of these different tests that are standard practice.
But BP decided it would take too long to do these thing, it would cost extra money. They were frustrated, it was taking them a long time to get this well going. And so they decided to go full speed ahead without doing all of the things that it seems pretty clear they should have done.
BLITZER: Here is the dilemma you face. If you go too hard on BP, that company could go bankrupt, and U.S. taxpayers in the end could spend billions of dollars dealing with the aftermath of this. You are walking a delicate tight rope right now, aren't you?
WAXMAN: Well, I don't know about BP's financial situation, but they have to be held accountable, and what we are looking at is the information as to what they should have and should not have done leading up to the oil spill.
We need to do it for two reasons. One, we have to hold them accountable, whatever their financial situation may be, it is their problem. But secondly, to be sure we never have something like this happen again. Even the oil -- other oil executives said they wouldn't do these kinds of practices.
Well, if we're going to have any kind of drilling, wherever it is, we ought to have clear guidelines that will be required of all of the oil companies involved to protect the public interests, to protect safety, to protect their own workers.
BLITZER: As you know, Congressman, there are plenty of critics of BP, plenty of critics of the executive branch, the Department of Interior, for failing to regulate, failing to do its oversight. But there are plenty of critics of Congress, as well.
Where was Congressional oversight of the Department of Interior, the MMS, for example, before this incident?
Do you wish you had done more that potentially could have prevented this?
WAXMAN: Well, everybody wishes they could have done more, I'm sure. People in the Department of Interior and the administration. You would hope people in the press -- past administration, because they were the ones primarily in charge during the time MMS ran into real scandals of -- of collusion and corruption with the oil industry.
And Congress could have done more.
But we are a faced with what they have. And it doesn't absolve BP, if they were cutting the corners and the rest of us didn't know about it, because somebody else didn't know about what they were doing.
BLITZER: The criticism will go on, I suspect, for years and years. Congressman, thanks very much and good luck with your hearing on Thursday.
WAXMAN: OK. Good.
Thank you very much, Wolf.
BLITZER: All right. Congressman Henry Waxman of California.
Was BP opposed to government regulation of the oil industry long before this massive spill ever occurred?
CNN has just obtained a letter that the oil giant sent to a White House task force last year. The details coming up.
And what would possess an American now detained in Pakistan to personally pursue Osama bin Laden?
Stay with us.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Police in Pakistan are now holding a California man who was apparently on a personal mission to hunt down Osama bin Laden.
CNN's Brian Todd has been working this story for us -- Brian, I understand you're also getting some information from family members?
BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf. What we know now is this man's name is Gary Faulkner. And this is one of the last known pictures of him. His brother gave an interview to CNN saying Faulkner was angered by what he called "Osama bin Laden's taunting of America after September 11." And he says Faulkner made it his personal mission to bring down the Al Qaeda leader.
(BEGIN VIDEOTAPE)
TODD: (voice-over): His brother says Gary Faulkner took the September 11th attacks very personally -- so personally, says the brother, that he's been to Pakistan six times trying to find Osama bin Laden. This time, Gary Faulkner is in Pakistani custody. Pakistani officials tell CNN he was picked up in the area around Chitral, walking toward the border with Afghanistan, carrying a sword, pistol, night vision equipment and Christian religious books.
In Denver, Dr. Scott Faulkner told CNN's Jim Spellman his brother was like a bulldog in his quest to find bin Laden.
But...
DR. SCOTT FAULKNER, BROTHER DETAINED IN PAKISTAN: He is not psychotic. He is schizophrenic. He doesn't hear voices. He's a very passionate person. And most people go through their lives without passion. They don't have something that they truly believe in and would give up everything in their life for.
Is this my passion?
Absolutely not.
But is it my brother's?
It is.
TODD: Scott Faulkner says his brother, the oldest of four children, is a divorced construction worker with a grown son. Dr. Faulkner says when he drove Gary to the Denver airport two weeks ago...
FAULKNER: I assumed that it might be the last time I saw my brother. And we talked about his trip. I asked him specifically what he wanted me to do if he came back in a body bag. And he gave me those instructions.
But he went with a confidence. And on every one of his trips, he's been very confident. And having seen my brother now, five or six times, leave the country, I knew that he would be OK.
TODD: But Scott Faulkner says his brother has kidney problems and is in desperate need of dialysis.
It's not clear whether Gary Faulkner was after the $25 million reward for information leading to bin Laden's capture.
I asked CNN terrorism analyst, Peter Bergen, about that.
(on camera): Is that area kind of rife with bounty hunters, American and otherwise?
PETER BERGEN, CNN NATIONAL SECURITY ANALYST: No. I mean the area is not ripe with bounty hunters, partly because, you know, trying to find bin Laden is not easy. Secondly, it's -- the whole region is quite dangerous. Thirdly, you know, as an outsider, and particularly a Western and American, you're going to stick out like a sore thumb.
TODD: Scott Faulkner was asked if he tried to talk his brother out of going.
FAULKNER: Well, I know my brother. And he had a focus in mind. He had a purpose in mind. And if he met his maker, then I know where I'd see him again, in heaven.
Do I want my brother to die this way?
No.
Would I like to see him get Osama?
Absolutely.
So would I -- no amount of my talking to my brother Gary was going to stop him from going. So I saved my breath.
(END VIDEOTAPE)
TODD: Scott Faulkner told us his brother was working with other people -- people, he said, who gave him information on bin Laden's whereabouts. He would not give any names, but he said they were locals.
CNN has gotten no indication from Pakistani police that there were other people involved. His brother said there was a local policeman assigned to watch Gary, a fairly common occurrence in that region, but that Gary had ditched that policeman in recent days -- Wolf.
BLITZER: Was this guy, as far as we know, on the radar of U.S. intelligence or law enforcement?
TODD: the U.S. counter-terrorism and intelligence officials tell us he was not on their radar. Two State Department officials tell us they are "baffled" by this case, that they've never heard of this guy.
I spoke to a U.S. official at the embassy in Islamabad, who says they hope to interview him soon. They're trying to get consular access right now. They should be able to meet with him soon. He's being held in Peshawar.
BLITZER: We'll see what happens to him.
Thanks very much for that, Brian.
We're counting down right now to the president's speech to the nation tonight on the Gulf oil disaster. Our special coverage begins right at the top of the hour on "JOHN KING USA." Stand by.
And what happens if BP goes bankrupt?
Details of what happened today that's causing new concern. Plus, details of a letter BP sent to a White House task force last summer fighting increased oversight.
(COMMERCIAL BREAK)
BLITZER: In September, President Obama created a task force to examine environmental issues related to the oil industry. He gave it 180 days to recommend ways to protect our nation's waterways.
CNN obtained a letter from BP to the task force outlining concerns over the new national policies.
Let's bring in CNN's Abbi Boudreau.
She's working the story for us.
What did you learn -- Abbi?
ABBI BOUDREAU, CNN CORRESPONDENT: Well, Wolf, the BP letter was in response to the report issued by the government task force. It is a broad overview and insight into how BP viewed government controls and regulations of the oil industry.
This four page letter was written in September of 2009. The company made it clear that existing regulations were working just fine and they didn't need additional oversight. In fact, it says the Minerals Management Services, which has been criticized, even by the president, was an effective management system.
Now, the letter goes on to say, quote: "We agree that it may be more time and cost-effective to improve the current ocean governance system than to create a new structure. While we support the initiative to begin establishing a national ocean policy, we would be concerned about policy that significantly increases bureaucracy."
In other words, it appears BP didn't seem to want additional government involvement. Obviously, after the spill in the Gulf, the oil industry is facing -- faces more safety regulations, as well as more oversight.
And, Wolf, it will be interesting to see if the president will address this exact issue tonight -- Wolf.
BLITZER: I suspect he'll say something about it. But we'll find out sooner rather than later.
Abbi, thanks very much.
BP's credit rating took a stunning 6 point drop with one major agency, plunging to near junk status. That's fueling concern the company could go bankrupt as a result of this disaster.
Lisa Sylvester is looking into this for us -- Lisa, what are the analysts saying?
LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, you know, at this point, no one has a crystal ball to know exactly how this is all going to play out. But outside analysts say BP's mounting costs have made bankruptcy one possibility, that it could actually be used as a financial maneuver to manage the growing costs.
But right now, BP executives are insisting that the company is financially healthy, even with all of its liabilities.
(BEGIN VIDEOTAPE)
SYLVESTER (voice-over): BP officials say the company will pay all legitimate claims for those that have suffered economic losses from the oil spill -- a cost that's almost certain to exceed the $75 million liability cap under current law.
UNIDENTIFIED MALE: We've said that that, that we will ignore that cap and that cap is irrelevant for this particular matter.
UNIDENTIFIED MALE: And do the cash reserves of the company suggest that you'd be able to do that? UNIDENTIFIED MALE: We believe so.
SYLVESTER: BP has already spent $1.6 billion on cleanup claims and attempts to plug the leak. And the tab continues to climb. The mounting potential costs prompted Fitch ratings agency to downgrade BP to just above junk status. This is the second Fitch downgrade in less than a month.
Democratic lawmakers want BP to set up an escrow fund of $20 billion to make sure the company can cover its future liabilities.
SEN. RON WYDEN (D), OREGON: What's going to matter most is protecting those who have been injured. Helping them is going to have to come before profit. And our -- our view is that the best way to make this company as profitable as possible is to show people, and show them with some measure of confidence, that they're getting on top of this cleanup issue.
SYLVESTER: To be sure, BP has a lot of resources. The company's profits last year -- $17 billion. But the stock price has been hammered. The company has lost $90 billion in value since the spill. One oil and gas financial analyst says even if the company doesn't declare bankruptcy, it could become a takeover target.
FADEL GHEIT, OPPENHEIMER & COMPANY: We don't want to kill the goose that laid the golden egg. We don't want to put BP out of business. We have to remember that BP contributes to our economy. BP is our largest oil and gas producer.
(END VIDEOTAPE)
SYLVESTER: And BP employs 23,000 American workers. The company says there are three times more BP workers in the United States than any other country. So even though this company isn't going to be winning any corporate citizen awards in the near future, a lot of people don't want to see BP go under -- Wolf.
BLITZER: Lisa, thanks very much for that explanation.
For more on the president's Oval Office address, coming up in a little more than an hour from now, we're joined on the -- on the phone by CNN's Anderson Cooper.
He's in New Orleans. He has been there for some time -- Anderson, based on the conversation you're having with a lot of people there, what do they want to hear from the president?
ANDERSON COOPER, CNN ANCHOR: You know, I think they want to hear how the president believes things are going. I mean there has been a lot of talk. I'm not sure people here really kind of believe a lot of the stuff they have heard. You know, they want reassurance that -- that Louisiana is not going to be forgotten, that the Gulf States are not going to be forgotten and that BP is going to be held accountable in terms of -- of paying, you know, all -- all of the legitimate claims. BP may -- has, you know, has said that that's what they're going to do. The idea of some sort of set aside money is -- is very popular here.
And, of course, you know, we just got these new estimates of the flow rate. Yet again, the estimate is now -- you know, 60,000 barrels a day is now the upper range, which is what independent scientists have said all along. And that sort of just adds to the sense of -- of disbelief that a lot of people have here -- just not believing what the government is saying and certainly not believing what BP is saying.
BLITZER: Yes. I mean I -- I wouldn't be shocked if next week they said 80,000 or 100,000, the way it's been escalating.
COOPER: Yes. I mean it was just last week that they -- they upped the estimate to the upper limit of about 40,000. Now the upper limit is -- is 60,000.
So it's -- you know, I mean they -- it -- you know, it kind of restates the obvious, which is that all along, BP -- and early on, the government, as well -- were -- were kind of saying, well, you know, the actual amount doesn't really matter, that we're dealing with the worst case scenario.
We certainly now know they were not up for -- for worst case scenario. They didn't have a sense of how big this was or if they did have a sense, they -- they weren't publicly admitting it.
But the fact that they're just now, still, trying to get equipment in to be able to -- to deal with the oil that's flowing that the president is now saying that by mid-July, they'll have equipment that can deal with up to 50,000 barrels of -- of oil a day. Still, you know, if -- if they were able to deal with the worst case scenario early on, they wouldn't be bringing that equipment in now.
BLITZER: Anderson is going to be with us throughout the evening for our coverage and a special "A.C. 360" at 10:00 p.m. Eastern later tonight, with complete analysis and coverage of what is going on.
Anderson, thanks.
Jack Cafferty is coming up next.
And at the top of the hour, our special coverage of the President Obama's address to the nation will begin on "JOHN
KING USA."
And it could -- it could even happen to one of America's top soldiers -- passing out in public. CNN's Jeanne Moos will take a Moost Unusual look.
(COMMERCIAL BREAK)
BLITZER: It's time to check back with Jack for "The Cafferty File" -- Jack.
CAFFERTY: Wolf, if the Republicans were in control of Congress in November, should they repeal health care reform?
Julie writes from Louisiana: "Don't be shocked, but my husband, who is self-employed, pays $1,100 a month in premiums for both of us. And we have a $3,300 deductible for each of us. We would welcome a $400 or even an $1,100 deductible. This health care reform bill will not help us at all. And if it goes up any more, which it does every year, we will not be able to afford it."
Terry in North Carolina says: "No. This is the only real legislation to help people that has passed in decades." Shirley says: "Our health insurance premiums went up 30 percent long before the health care plan passed. The insurance companies would have raised premiums no matter what happened and the health care bill is just an excuse to sock to it the consumers. It's a good thing to insure more of the uninsured, because we all pay for them when they get sick."
Bob says: "Most of the health care reform measures don't take effect for a couple of years. It's much too soon to say the reforms should be repealed."
Ames writes: "It ought to be repealed no matter who wins. This misguided law must go and be replaced with one that minimizes government involvement and cost."
Marilyn in Arizona: "Not unless the Republicans have a better idea. And I doubt they do, because they've had plenty of time to tell us about it if, in fact, they have a better idea."
Mike writes: "Yes, it needs to be repealed. It should never have been passed to begin with. It was forced on us by a bunch of sleazy backroom bribes and deception -- not exactly the change I was looking for."
And Michael says: "I sure hope not. Jack, does the health care plan cover suicide? Because you're killing me. Fox News called and they want you back."
If you want to read more about this, you can go to my blog at CNN.com/caffertyfile -- Wolf.
BLITZER: Thank you very much, Jack.
Don't leave.
Don't go to Fox News. We don't want you -- we want you here.
Do you understand what I'm saying, Jack?
CAFFERTY: Yes, sir. I got it.
BLITZER: OK. Thank you.
CAFFERTY: OK.
BLITZER: President Obama is getting ready to deliver his very first Oval Office address. CNN will have special coverage of the speech beginning at the top of the hour with "JOHN
KING USA."
And General David Petraeus suffers a most unusual and unfortunate moment.
Our Jeanne Moos will have a closer look.
Stay with us.
You're in the situation.
(COMMERCIAL BREAK)
BLITZER: All right, here's a look at some Hot Shots.
In Botswana, Prince Henry and Prince William arrived for a visit at an education center.
In Indonesia, an elephant takes a rest at a conservation area. The elephants are becoming endangered by illegal logging that destroys their habitat.
On the border between Kyrgyzstan and Uzbekistan, a doctor throws medicine to a refugee.
And in Kyrgyzstan, a woman cries for help after days of deadly conflict in the ex-Soviet republic.
Hot Shots -- pictures worth a thousand words.
It's a Moost Unusual and, at times, humiliating sight.
Our Jeanne Moos takes a closer look at what happens when public figures pass out.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The same with the funding...
JEANNE MOOS, CNN CORRESPONDENT: (voice-over): At least General Petraeus was sitting down when he collapsed.
John McCain was in mid-sentence.
SEN. JOHN MCCAIN (R), ARIZONA: The best way to...
MOOS: Looking straight at the general, with surprise written all over his face. You could even hear him mutter.
MCCAIN: Oh, my God.
MOOS: As aides rushed to the general's side and photographers rushed to get the shot, General Petraeus was led away under his own power. Five minutes later, he returned to a round of applause, saying it was just a case of dehydration.
GEN. DAVID PETRAEUS, U.S. ARMY: It wasn't Senator McCain's questions, I assure you.
MOOS: Remember when the first President Bush ended up sick under the table at a Japanese state dinner?
He was still joking about it years later.
BUSH: The ugliest part was my dear friend from Las Vegas, Sig Rogich, was giving me mouth to mouth resuscitation.
MOOS: When Marie Osmond was on "Dancing With The Stars"...
(VIDEO CLIP)
MOOS: -- she fainted.
(BEGIN VIDEO CLIP FROM "DANCING WITH THE STARS," COURTESY ABC)
UNIDENTIFIED MALE: Of the samba -- oh.
(END VIDEO CLIP)
MOOS: And after they went to commercial...
(BEGIN VIDEO CLIP FROM "DANCING WITH THE STARS," COURTESY ABC)
UNIDENTIFIED MALE: And the first words out of her mouth when she saw us all leaning over her were, "Oh crap."
(END VIDEO CLIP)
MOOS: When Bill Daly was nominated for Commerce secretary by Bill Clinton, his faint...
BILL DALY: Accompanied me on these...
MOOS: -- was captured from two different camera angles.
DALY: Accompany me on these...
MOOS: And look who helped catch him -- CNN's Wolf Blitzer.
At least when regular folks collapse...
UNIDENTIFIED MALE: As a result, as a result...
MOOS: -- there aren't cameras on you, as there were on then Attorney General Michael Mukasey. And if you're the prime minister of Italy, it's prime time all the time, especially when you're not in your prime. Sometimes the cameras aimed at the bigwigs catch a fainter in the background.
(BEGIN VIDEO CLIP, COURTESY WBAK)
UNIDENTIFIED CHILD: I fainted in front of the governor. Oh, no.
(END VIDEO CLIP)
MOOS: There she goes.
WILLIAM CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And the health system that everybody agrees were there...
MOOS: And being a guest on Glenn Beck's show can leave you light-headed.
(BEGIN VIDEO CLIP, COURTESY FOX NEWS)
GLENN BECK, HOST: Are you all right?
UNIDENTIFIED MALE: I'm passing out.
BECK: OK.
Are you OK?
Do you want to hang on?
UNIDENTIFIED MALE: I'm passing out.
BECK: OK.
Why don't you -- do you want to sit down?
UNIDENTIFIED MALE: Go on.
BECK: OK.
UNIDENTIFIED MALE: All right.
Whoa, whoa, whoa you, OK?
BECK: OK.
Can somebody help him, please?
(END VIDEO CLIP)
MOOS (on camera): But imagine having a fainting spell while you're trying to spell this. It means fox-like.
(VIDEO CLIP)
MOOS: Seconds later, this 13-year-old finalist was up and spelling.
(BEGIN VIDEO CLIP, COURTESY ESPN)
UNIDENTIFIED MALE: A-L-O-P.
(END VIDEO CLIP) MOOS: A word not for the feint of heart.
(BEGIN VIDEO CLIP, COURTESY ESPN)
UNIDENTIFIED MALE: I-D -- A-L-O-P-I-D.
(END VIDEO CLIP)
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
BLITZER: That's all the time we have right now. I'll be back in one hour around the president's Oval Office address.
I'm Wolf Blitzer in THE SITUATION ROOM.
"JOHN KING USA" starts right now.
