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The Situation Room

United States vs. Arizona; Interview With Israeli Ambassador to the United States Michael Oren

Aired July 06, 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: And racy photos and revealing details of an accused Russian spy. Her ex-husband is speaking out and her lawyer is fighting back.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

We are following the breaking news this hour: a major new battle in the political war over immigration pitting the United States government against the state of Arizona. The Justice Department is challenging a state law requiring immigrants to carry their registration papers at all times, and allowing police to question residency status.

The Justice Department says immigration is a federal matter and it's suing to stop the law from taking effect at the end of this month. We have comprehensive coverage this hour. We will hear from some key players.

But let's begin with CNN's Lisa Sylvester. She has the latest -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, the Justice Department is basing its argument on what is known as preemption, that is that the states can't pass law that preempt federal law or policy when it comes to certain issues and in this case immigration.

The Justice Department is asking the district court in Arizona, as you mentioned, for an injunction to keep the law from taking effect at the end of this month, and to go a step further to declare the law null and void.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Arizona's new law makes illegal immigration a state crime, and it would give police officers the authority to question a person's immigration status if they're detained for another crime and there is reasonable suspicion.

The Justice Department in its legal brief said the Arizona law violates the Constitution's supremacy clause -- quote -- "The United States Constitution forbids Arizona from supplanting the federal government's immigration regime with its own state-specific immigration policy, a policy that in purpose and effect interferes with the numerous interests the federal government must balance when enforcing and administering the immigration laws and disrupts the balance actually established by the federal government."

Those other interests, national security, humanitarian relief, and U.S. relations with other countries. The Justice Department argues the state statute will detract resources away from tracking illegal aliens and possible terrorists, a point Phoenix Mayor Phil Gordon agrees with.

PHIL GORDON (D), MAYOR OF PHOENIX, ARIZONA: We don't need 50 immigration policies. It won't secure the country. In fact, it will make it less secure.

SYLVESTER: But public opinion has been strongly in favor of Arizona's policy. According to a CNN/Opinion Research Corporation poll in May, 57 percent of those surveyed favored the law -- 37 percent opposed it.

Supporters say that the federal government has failed to enforce immigration laws, leaving it up to states to pick up the cost of illegal immigration, and rather than supplanting federal immigration policy, Arizona's law is meant to supplement it.

STEIN, PRESIDENT, FEDERATION FOR AMERICAN IMMIGRATION REFORM: The administration is making both a political, a tactical and a legal mistake. The Arizona law has been carefully crafted to work within the context of U.S. immigration law. It is not preempted by federal immigration law. It works in harmony with it.

SYLVESTER: The Justice Department's lawsuit seeks to have the law thrown out even before it has had a chance to take effect. It is a high bar, says constitutional law professor Stephen Vladeck, but he believes the federal government has a strong case.

STEPHEN VLADECK, AMERICAN UNIVERSITY: Preemption cases are a little different than say First Amendment cases. As long as the federal government can show that the state law is inconsistent with and is indeed in conflict with federal policy, the state law must fail. That is exactly what follows from the supremacy clause, and the Supreme Court has recognized that really since the earliest years of the republic.

(END VIDEOTAPE)

SYLVESTER: Now, there is a legal fight. There is also a political one.

Republican congressional lawmakers have already come out criticizing the Justice Department's lawsuit. Ranking member on the House Judiciary Committee Lamar Smith in a letter to the attorney general said Arizona's law simply applies state penalties to acts already illegal under federal law. Senators John McCain and Jon Kyl saying that the federal government has not done everything it can to enforce federal immigration law, and until it does, it should not argue that it is solely a federal responsibility -- Wolf.

BLITZER: All right, Lisa, thank you. Let's dig deeper on the breaking news right now with our national security contributor Fran Townsend. She was the homeland security adviser to President Bush, worked in the Justice Department during the Clinton administration. Also joining us, our national political correspondent, Jessica Yellin.

First of all, we are just getting a statement in from the governor of Arizona governor, Jan Brewer. Among other things, she says this: "It is wrong that our own federal government is suing the people of Arizona for helping to enforce federal immigration law. As a direct result of failed and inconsistent federal enforcement, Arizona is under attack from violent Mexican drug and immigrant smuggling cartels. Now Arizona is under attack in federal court from President Obama and his Department of Justice. Today's filing is nothing more than a massive waste of taxpayer funds."

Legally, does she have a point in challenging this, given the arguments that the Justice Department is making?

FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, she does, Wolf, because let's remember, you know, the federal government often works cooperatively with states in the implementation and execution of federal immigration laws.

And here it is where the state is taking on itself the burden of implementing and enforcing immigration laws, and the federal government is now suing it because it kind of does not like the way it is going about it.

The federal government -- her argument really is the federal government can't have it both ways. They either ought to do it themselves or, if they are going to work with us cooperatively, they should not be in a position to complain.

BLITZER: Because the major argument that the federal -- the lawsuit today made was that immigration policy should be left up to the federal government and not become a patchwork for local and state governments.

TOWNSEND: And, Wolf, I think that is a righteous argument. From a legal perspective, that is right. There is the supremacy clause which governs the right of the federal government, just like we do in a state of war, not to have multiple immigration policies or multiple defense policies.

But immigration is fundamentally different. And we do work cooperatively, the federal government, with state governments, and so there's going to be -- the interesting thing here is the federal government didn't wait long. They don't have a body of facts that they can point to that this law, this Arizona law, is implied in -- is applied in a way that violates the Constitution.

BLITZER: But they are arguing as a matter of principle -- forgot about it whether or not it is implemented rightly or wrongly -- as a matter of principle, this is the jurisdiction of the federal government as opposed to the state government. On this issue, politically, Jessica, there are recent polls -- you just heard Lisa in her report say 57 percent of Americans favor the Arizona law. Another question in that same poll, would you participate in a boycott of Arizona because of the immigration law, only 17 percent of the American public in this poll said yes -- 82 percent said no.

This is not politically popular for the Obama administration to be challenging the Arizona law right now.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: That is right, Wolf. It is never easy politics to go against the will of the majority of the people.

I will say that the Department of Justice Department insists they brought this case on the merits and this is not about the politics. But you can't ignore the politics. I want to point out another poll from the same one that you cited.

We also asked them if we should allow illegal immigrants to stay in the United States if they have a job and pay taxes and 80 percent of Americans said, yes, they should.

What this tells us is that Americans are conflicted about the immigration policy they want and also acknowledge the system is not working, so there is a little bit of give there. And the truth is, the calculation the administration is making is that whatever they will lose politically from those who support the Arizona law, they will gain with a key group of constituents, Latino voters, who have been so disappointed with President Obama so far and he really needs to shore up support.

They expected an immigration bill from him. They have not gotten it yet, so he is really helping them out.

BLITZER: He wants to energize them looking ahead to the midterm elections and then two years later.

(CROSSTALK)

YELLIN: A key voting bloc that the Democrats want to hold on to.

BLITZER: Even though it is unlikely comprehensive immigration reform is going to be enacted any time soon.

YELLIN: That's right. And the community knows that, but the president needs to show he is doing something. The politics of this do help show that.

BLITZER: All right. Guys, thanks very much for that. We are going to have more on this story coming up later. And Jessica is going to have a lot more coming up at the top of the hour. She is filling in for John King.

And you have got a special guest, Sheriff Arpaio, coming in as well. YELLIN: Yes.

BLITZER: All right, we will be watching "JOHN KING, USA" with Jessica Yellin. That's coming up at 7:00 p.m. Eastern.

Jack Cafferty is coming up next with "The Cafferty File," then much more on the breaking news we are following. We will talk about the federal lawsuit challenging Arizona's immigration law with someone on the front lines of what is going, one of the sheriffs who supports the new law, Sheriff Paul Babeu of Pinal County in Arizona.

Also, she's the accused spy some compare to a character out of a "James Bond" movie. Now her ex-husband is speaking out, revealing some very personal details and showing us some very personal pictures as well.

And a royal return after more than half-a-century. We are going to hear Queen Elizabeth's message to the United Nations.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, in 2008, President Obama said no family making less than $250,000 a year will see any form of tax increase.

Well, unless something is done in the next six months, that simply will not be the case.

What Americans for Tax Reform is calling "the largest tax hikes in the history of America" will go into effect in January of next year, when the Bush tax cuts are set to start expiring.

Here's a sample of what's in store for all of us.

Personal income tax rates are set to rise across the board. The highest rate going from 35 percent to 39.5 percent. The lowest rate goes from 10 percent to 15 percent.

And all of the rates in between will rise as well. Itemized deductions and personal exemptions will again phase out. The marriage penalty returns on the first dollar of income. The child tax credit will be cut in half from $1,000 to $500 per child. The death tax returns with a top rate of 55 percent on estates over a million dollars. Capital gains taxes will rise from 15 percent to 20 percent and taxes on dividends will go from 15 percent to a maximum of 39.6 percent.

There are over 20 new or higher taxes in the new Obama health care law and several of those go into effect on January the 1st of next year. The alternative minimum tax will ensnare 28 million families, up from four million families this year, and taxes are set to go up on all types of businesses.

Congress of course knows all about this, but they're on vacation and haven't said what they plan to do, if anything.

Here's the question: A huge tax increase is coming next January. What should Congress do?

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

Somebody already wrote in and said they should all hang themselves and let somebody else worry about the problem.

(LAUGHTER)

CAFFERTY: That is not the kind of answer we are looking for.

BLITZER: No, we want serious answers. All right, Jack, thank you.

A young Army private is now being formally charged in connection with leaked video of what has become a notorious helicopter attack in Iraq that resulted in civilian deaths.

Our Pentagon correspondent Barbara Starr is working this story for us.

All right, Barbara, explain what is going on here.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, Private 1st Class Bradley Manning was serving in Iraq, arrested in May, now formally charged, being held in Kuwait with multiple counts of mishandling and disclosing classified information.

The Army saying today that they have charged him with these multiple counts that fall into two basic categories, transferring classified data on to his personal computer, and then delivering critical national defense information to unauthorized sources.

You are going to recall, Wolf, this all came to light earlier this year over that 2007 video that you were showing a minute ago, video, helicopter video taken in Iraq, classified video showing a helicopter attack over Baghdad in which it is alleged that civilians, journalists working for Reuters, were in fact killed.

The video had never come to light. Now it is alleged that Bradley Manning disclosed that classified video to a Web site called WikiLeaks, which specializes in getting classified information and distributing it on the Internet.

It is also alleged in the charges that this very low-ranking private 1st class got his hands on 50 classified State Department cables and over 150 diplomatic cables in all, and no one -- nobody noticed -- Wolf.

BLITZER: All right. So, this is a major development on that story. Thanks very much, Barbara.

She will be continuing to update on what is going on. President Obama meeting with the Israeli prime minister, Benjamin Netanyahu, over at the White House. You are going to hear what the two men had to say about reports that the so-called special relationship between the U.S. and Israel was fraying. Stand by. We will speak with the Israeli ambassador to the U.S.

And we are going to tell you how much you soon may have to pay to send a letter. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: A show of unity and a call for direct talks with the Palestinians, but the question of settlements looming large, as President Obama welcomes the Israeli prime minister, Benjamin Netanyahu, to the White House.

We are going to talk about what happened with the Israeli ambassador to the United States, Michael Oren.

Plus, a rare visit to New York by Britain's Queen Elizabeth -- details of her whirlwind trip and her message to the world.

(COMMERCIAL BREAK)

BLITZER: Potential progress in the Middle East peace efforts under way right now, as President Obama and the Israeli prime minister, Benjamin Netanyahu, met over at the White House. It was their fifth face-to-face meeting since Netanyahu reclaimed the premiership last spring.

Let's get some analysis of what happened from someone who was inside the White House. Michael Oren is the Israeli ambassador to the United States.

Mr. Ambassador, thanks very much for joining us.

MICHAEL OREN, ISRAELI AMBASSADOR TO THE UNITED STATES: Wolf, pleasure.

BLITZER: I know you are very pleased. What a difference today's session was with what happened back in March, when the prime minister was at the White House, didn't even get a photo with the president. What has happened since then that we have seen this dramatic change in the U.S./Israeli relationship?

OREN: Well, I don't think the change has really been that dramatic, Wolf.

I think what happened in March was greatly overblown.

(CROSSTALK)

BLITZER: It was pretty dramatic in March, when the president of the United States would not even have a joint appearance, a public appearance, with the prime minister of Israel.

OREN: That was a work meeting thrown together at the last minute, because the president was supposed to have been in Indonesia that night, and he canceled because of the health care debate.

But leave that aside. Israel-American relations have been rock- solid, are rock-solid. They will continue to be rock-solid. At today's meeting, the president praised the unshakable friendship between the United States and Israel. He praised the prime minister's commitment to peace, his willingness to take risk for peace.

And Prime Minister Netanyahu, in turn, praised President Obama's commitment to Israel's security and its determination to prevent Iran from acquiring nuclear weapons.

BLITZER: But you personally -- you just came here from the State Department, were you had what you say was a very good meeting with the secretary of state, Hillary Clinton.

Contrast that meeting that you had today than with the meeting you had when you were summoned to the State Department when the U.S. condemned the announcement of new housing units in East Jerusalem when Vice President Biden was in Jerusalem. It was quite a difference between today and then.

OREN: You know, Wolf, the best of friends, as in the closest of families, can have differences sometimes.

And the great litmus test of a friendship, as of any alliance, is the way you can cross those differences and communicate. And we have seen how these relationships have grown stronger over the course of the last year, in the security field, certainly, but also now in the diplomatic field, as the prime minister and the president discuss ways, concrete ways, of moving forward from proximity talks between Israel and the Palestinians to direct talks.

BLITZER: I guess the question is, in this relationship between the U.S. and Israel, which is a very strong relationship, but over these past few months, someone blinked. Was it the Obama administration or the Netanyahu government?

OREN: Neither. I think we communicated with each other very, very closely, intensely, in an atmosphere of friendship and constructive thinking. And we came to understand one another's positions in a much deeper level.

Look at how we handled the Gaza flotilla issue and how Israel has now, in cooperation with the United States, in close consultation, facilitated the flow of goods into Gaza.

BLITZER: Why couldn't you have done that earlier?

OREN: Well, there were people in the Israeli government who would have wanted to do it earlier. It was a difficult process.

But the Obama administration -- again, it is a great litmus of our alliance that together we were able to make this transition. And keep in mind today the president not only appreciated publicly the prime minister's efforts to facilitate the flow of goods into Gaza, but also upheld the notion that Israel has defend itself from Hamas in Gaza.

BLITZER: Did the president ask you, the Israeli government, to extend the settlement freeze in the West Bank? It's supposed to end, Israel's settlement freeze in the West Bank, not Jerusalem, the West Bank, in September. Did he ask you to extend it?

OREN: He -- we discussed concrete measures to build confidence on both sides, to move from proximity talks to direct talks very quickly, hopefully well in advance of the expiration of that moratorium.

And those issues will be discussed in the context of direct negotiations between Israelis and Palestinians.

BLITZER: Because the Palestinians say they don't want to have direct -- they have proximity talks -- they don't want to have direct negotiations until Israel stops building settlements, not only in the West Bank, but in Jerusalem as well.

OREN: Well, the administration itself has expressed optimism, albeit a guarded optimism, about the willingness of Palestinians now to move into direct talks.

And, again, we are discussing these concrete measures which we hope will facilitate that process.

BLITZER: One of the sensitive issues is the reports -- and Israel has never acknowledged this publicly -- that it has a nuclear arsenal. And the United States now voting, deciding to go along with an international conference for a nuclear-free Middle East in which Israel's nuclear program would be front and center.

In the past, the U.S. has avoided these kinds of discussions. Are you worried about the shift that the Obama administration has now put forward on this very sensitive issue?

OREN: Well, the prime minister, again, praised the public and private assurances which he received from the president today addressing all of these concerns.

President Obama talked about the difficult neighborhood that Israel lives in, the serious threats it faced, talks about -- they even talked about Israeli history and how that the United States would never take any measure that would in any way compromise Israel's security and that Israel has a right to defend itself.

BLITZER: But did Prime Minister Netanyahu express his disappointment at this latest stance by the Obama administration?

OREN: No.

BLITZER: It was not important enough to discuss? OREN: It was not an issue in the discussion.

What was a discussion was the reaffirmation of America's unshakable commitment to Israel's security in the unique environment in which it finds itself.

BLITZER: Is there any daylight, as far as you can tell us, between the U.S. position and the Israeli position on Iran's nuclear program?

OREN: None.

BLITZER: As far as a military option is concerned, down the road, if these sanctions, for example, don't work, would there be any daylight then?

OREN: Well, we are very much focused on the sanctions.

And, again, the prime minister called attention, deeply appreciated the work that President Obama has done, both in the Security Council and now in signing legislation on the Iran sanction bill. This is -- these are historic documents. And we are hopeful that, if there is a strong energy component in the sanctions, that they can prove effective in bringing about a change in Iranian behavior.

BLITZER: Has the government of Turkey notified Israel that it can no longer have military overflights or airspace over Turkey?

OREN: Well, it has been reported in the press.

(CROSSTALK)

BLITZER: But what can you tell us publicly on that?

OREN: Nothing.

(CROSSTALK)

BLITZER: How strained is this relationship between two former friends, the Israelis and the Turks? How -- how bad is this relationship right now?

OREN: Well, there are some severe strains. I won't try to -- you know, to sugarcoat the relationship.

The Turks have embarked on a different type of policy. Our policies have remained the same. We value our relationship with Turkey, and we hope to restore much of the friendship we enjoyed in the past and there is some contacts at the highest levels between the Turkish and the Israeli governments.

BLITZER: One last question, I know that the prime minister has invited the president to Israel, and he has not been there yet, and he has been to the Arab world, but not the Israel, and did you get a commitment from the president that he will make a trip to Israel? OREN: Well, only an expression once again that he is interested, and we are looking for the right time and the right opportunity. What happened today is a meeting between Mrs. Netanyahu and the first lady which was a friendly and warm meeting and they discussed their children's passion for the soccer and the world cup.

BLITZER: Are you suggesting that the first lady would come?

OREN: No, when the president would come, she would join him.

BLITZER: And the president has not made a formal commitment?

OREN: Not yet, but in principle, certainly.

BLITZER: OK. Mr. Ambassador thanks very much for coming in. Larry King will interview the prime minister tomorrow night here on CNN, and we all be looking forward to that as well.

OREN: Great.

BLITZER: The ex-husband of an alleged Russian spy revealing some sexy photos of her and equally racy details of her life. Stand by. We have new information.

And the federal government sues the state of Arizona over its controversial immigration law. We will talk about that with one of the top law enforcement official in the state of Arizona. Stay with us. A lot of news happening today right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's get some more now on the breaking news we are following this hour. The U.S. justice department suing to block Arizona's new controversial immigration law. We will talk about it with Paul Babeu. He's sheriff of Pinal County in Arizona. He supports this new law. Sheriff, thanks for coming in.

SHERIFF PAUL BABEU, PINAL COUNTY, ARIZONA: Thank you, Wolf.

BLITZER: I know it is not a huge surprise, because it is building up for the past several weeks, but what was your reaction when you read, I assume you read the justice department's document saying this is unconstitutional what Arizona has done?

BABEU: Well, it is not surprising. And not only the fact that initially even our law before the top prosecutor of America had read even the law decided to challenge us, and to even cast dispersions even on law enforcement that we will racially profile. I was not surprised, but I'd rather than putting the focus to challenge us and take us into court, how about helping to solve the problem and actually secure the border which is truly federal issue, and their responsibility.

BLITZER: Because the constitutional argument they are making is that this is the responsibility of the federal government to have immigration policies to secure the border and the states should not take leadership. There shouldn't be what they called a patchwork of state and local policies. This is the responsibility of the federal government. What do you say to that?

BABEU: Well, Mr. President and company, do your job. I just flew down with John Loflin of Rhode Island and also Sheriff Larry Dever of Cochise County to the border just today and we have a serious problem here. We are talking just the 250,000 illegals that were apprehended just here in this part of Arizona this year. There's another possibly 500,000 to 700,000 additional that came through that we don't know who they are. So, this is a crisis here in Arizona, and not a political issue, and there is where if we can look at it as a national security issue and a public safety issue, then we would do what is best for America rather than to get into this all legal battle. It is shocking that the federal government instead of helping our state when we are in need when law enforcement leaders are calling for 3,000 armed soldiers to secure the border, the president and Eric Holder decide to take us into court and they are joined with the ACLU suing us as well.

BLITZER: But you know what? They are also joined by some other sheriffs in Arizona, including the sheriff in Phoenix, the sheriff in Tucson and let me read to you what Jack Harris, the Phoenix police chief says in a supporting document to this federal lawsuit. This law referring to the Arizona law undermines my ability to set law enforcement priorities for my agency, because I cannot prohibit the use of already scarce resources toward civil immigration enforcement instead of violent crimes and criminal immigration enforcement. There are other sheriffs in Arizona who totally disagree with you.

BABEU: Well, he is a police chief who works for the mayor of Phoenix. The sheriff of Phoenix is Sheriff Joe, who is a tough sheriff, and he is on our side to secure the border. This, the whole idea of let's not enforce the law, because it will suppress calls to the police and everything like that, obviously, that policy has not worked, because we are the kidnap capital of America. You know, we have carjackings, home invasions, officers are killed, and no longer can law enforcement leaders take this whole pass, because here is where we are today. When we have said that this is a federal problem, and look at what has been done, nothing. So we live here. We live in the impact and effect, and no longer are we going to take a back seat so Governor Brewer rightly stands up and defends Arizona and secure not only our border but to protect our families.

BLITZER: How serious are these threats that have been leveled against you, Sheriff? I read about them in the Arizona media, and no matter the position, and you should not be getting death threats? Are they serious or not so serious?

BABEU: Well, obviously, elected officials will get threats by angry citizens who are upset about something and I get that and I have had those type of threats, but when you have credible threats from outside of the state of Arizona that point to Mexico, that are talking now that Mexican Mafia in the cartel members have put a green light on me, I'm less concerned in terms of my safety, but more outraged that these people would think that they can do this against law enforcement leaders of our country. This is a sovereign country, a republic that stands for the rule of law, and this lawlessness that takes place down south of the border where they do kill police chiefs if they are not on the take or do what they say, and turn a blind eye.

BLITZER: I believe you are beefing up security for yourself and your family?

BABEU: Well, I'm always in uniform and I'm always armed. I was a street cop two years ago and by our nature and training, we are protectors. I have refused a security detail, because I don't have enough deputies to respond to emergencies to our families in Pinal County. Our county is larger than the state of Connecticut and I only have 214 sworn deputies to respond to emergencies out there. This is why we need help. We have paramilitary squad-sized elements 80 miles north of the border every night that are operating that are escorting these drugs and they are killing each other. They shot one of my deputies, and what will it take for the president to defend America? Here we are in wars halfway across the globe spending billions of dollars and we can't secure our own border here in America?

BLITZER: Sheriff Babeu, good luck to you and be careful over there, and we will stay in close touch. Appreciate your joining us.

BABEU: Thank you, sir.

BLITZER: He says that she is the spy who loved him and now the ex-husband of this accused Russian agent is revealing personal details of their private life. Pictures as well.

And Britain's Queen Elizabeth in New York City right now and details of her U.N. speech and her visit to ground zero.

(COMMERCIAL BREAK)

BLITZER: Time now to check back with Jack for "The Cafferty File" -- Jack?

CAFFERTY: Question this hour: A huge tax increase is coming next January. What should Congress do?

Doug in Dallas writes: "Let it happen. It is the only way that we will start to reduce the deficit. The party of no will figure out a way to keep it from happening, since it is all of their rich friends that will be howling the loudest."

Gordon in New Jersey says: "Since you have used the phrase death tax, I have to assume that you picked up this tea party hysteria from the Republican talking points. If Bush's tax cuts expire, we go back to the tax policies of the Clinton administration, the most prosperous, and fiscally responsible era of the last quarter century, and that sounds plenty good to me."

Dustin writes: "If Congress does nothing and taxes go up, economic activity will compress toward the end of this year and just fall off of a cliff come 2011. Our politicians are either economically illiterate or they just don't care." M.D. writes: "Maybe it is time to let some of the tax cuts expire in the interest of getting our financial house in order. It would be very tricky since the economy cannot stand anymore reduction in consumer spending and job creation would suffer. Is the political will there to increase taxes in Washington? This ought to be fun to watch."

Dan writes: "This of course is a sunset law which from its inception had an expiration date." Talking about the Bush tax cuts. "The only negative here is the alternative minimum tax which was intended to apply only to millionaires, but now it snares some of the upper middle-class. That can be fixed separately by Congress. As for the rest of the taxes to expire, the free lunches that the Bushes gave us should and will expire and not a bad deal for the balance sheet either."

And Bill writes: "Congress needs to act. This will be a near fatal blow to the economic recovery."

If you want to read more on this, you will find it on my blog, CNN.com/Caffertyfile -- Wolf?

BLITZER: Will do, Jack. Thanks very much. Good question, good email and we will watch.

Jessica Yellin is coming up at the top of hour on "JOHN KING USA." She is filling in for John tonight. She'll have much more on the Arizona immigration issue. Her guests include the Sheriff Joe Arpaio, and Univision's Jorge Ramos. Stand by for that at the top of the hour.

First, we will also have a report from New York City on Queen Elizabeth's historic visit. Richard Roth and Richard Quest are both standing by.

Stick around. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: New details emerging right now about the personal life of the accused Russian spy Anna Chapman courtesy of her former husband. Brian Todd has been following this story for us getting us the new details. It sort of sounds like a James Bond movie what's going on Brian but explain.

BRIAN TODD, CNN CORRESPONDENT: Wolf some of it could be a James Bond movie if you could make some of it up but observers have told us you could not make this stuff up. We've spoken with the attorney for the woman who some call the fem fatale for this alleged operation. She is the accused spy Anna Chapman. Her attorney says she's upset over one of the latest developments in this case, a development that comes courtesy of her former husband.

(BEGIN VIDEOTAPE)

TODD: The attorney for accused Russian spy Anna Chapman tells CNN she is aware that racy photos of her have been published by the British tabloid New of the World. That paper says it got the pictures from her former husband Alex Chapman who according to the tabloid also dished about what he claimed was her adventurous sex life. We reached Anna Chapman's lawyer Robert Baum by phone in New York.

(on camera): What is her reaction to that?

ROBERT BAUM, ANNA CHAPMAN'S ATTORNEY: I discussed it with Ms. Chapman. She was 21 years old when she got married to Alex Chapman. He asked her to pose for some photos. She believed the photos were to be used for private purposes. She is shocked that he has kept the photos for four years after they're divorced and she's disappointed in his betrayal.

TODD: Contacted by CNN, the publicist for Chapman's ex-husband said he couldn't do an interview with us citing his need for rest. Alex Chapman had spoken with British newspapers, including the Daily Telegraph. The publicist Max Clifford did talk to us. Clifford said that he didn't know if Alex Chapman he gave the photos to News of the World or not. Clifford relayed what Alex Chapman had told the papers about the demise of his four year marriage to the accused spy.

MAX CLIFFORD, ALEX CHAPMAN'S PUBLICIST: As the time went by, as the years went by, she became increasingly distant and she seemed to be increasingly enthusiastic to go to these parties, launches, gatherings where the rich and famous were which is something that never appealed to him.

TODD: Anna Chapman's attorney didn't comment on that but he denies other claims by her ex-husband including one that her father worked for the old Soviet spy service the KGB.

BAUM: Her father does not work for the KGB. He's an embassy official who has worked in the past in Zimbabwe and Kenya - not exactly locations for KGB officials to be sent.

TODD: When we asked Robert Baum if she denies the spying charges against her, he said so far nothing has been disclosed to them about the government's evidence so they are not making any comments about the charges.

(END VIDEOTAPE)

TODD: Baum said Chapman is having a difficult time emotionally right now. Says she's being held in solitary confinement, is in her cell about 23 hours a day and is let out for one hour of exercise. He says she's allowed no visitors aside from him, no phone calls, no access to TV or any other media Wolf. She's fairly isolated.

BLITZER: And there's at least one other claim by her ex-husband that's now in dispute.

TODD: That's right. The attorney Robert Baum says a claim that he made that he spoke to her last Friday July 2nd is absolutely untrue for all of the reasons that we just mentioned. She's in solitary confinement, no phone, no access, no nothing. Mr. Baum, the attorney, casting serious doubt on the credibility of the former husband.

BLITZER: All right. We'll continue to report on this story. Thanks, Brian. Thanks very much.

A rare speech and a visit to ground zero. We're going to New York City for details of Queen Elizabeth's whirlwind trip.

(COMMERCIAL BREAK)

BLITZER: When Queen Elizabeth the second speaks, people listen and with good reason. She is not only the British monarch; she's also the queen of more than a dozen countries including Canada, Australia and New Zealand as well as head of the commonwealth. So she was representing one-third of the world's population when she spoke at the United Nations today for the first time since 1957. Listen to this.

(BEGIN VIDEO CLIP)

QUEEN ELIZABETH II, QUEEN OF ENGLAND: I believe I was last here in 1957. Since then, I have traveled widely and met many leaders, ambassadors, and statesmen from around the world. I address you today as queen of 16 United Nations member states and as head of the commonwealth of 54 countries. I have also witnessed great change, much of it for the better particularly in science and technology and in social attitudes. Remarkably, many of these sweeping advances have come about not because of governments, committee resolutions, or central directives, although all of these have played a part but instead because millions of people around the world have wanted them. For the United Nations, these subtle yet significant changes in people's approach to leadership and power, might have foreshadowed failure and demise. Instead, the United Nation has grown and prospered by adapting to those shifts.

(END VIDEO CLIP)

BLITZER: All right. Let's bring in our resident royal watcher, CNN's Richard Quest and our senior U.N. correspondent Richard Roth, both working this story today. Richard Quest, the speech at the U.N. was pretty impressive, I should say, but what did you think?

RICHARD QUEST, CNN CORRESPONDENT: It was extremely impressive because right at the get-go, as you just played Wolf, she reminded everyone why she was there and why we should listen to what she had to say. And then as she went on later, she said, I'm not here to reminisce. The United Nations must become relevant and it needs to have leadership and I'm paraphrasing now but what her core message was, that this place behind us needs to continue to work together on issues like climate change, peace, security, and the dignity of people. That's what she was there to talk about.

BLITZER: And she went from the United Nations, Richard Roth, to ground zero. And this was a symbolically important movement for her in her brief visit to New York.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: After the visit to 9/11 ground zero was a British memorial guard in for the 67 British citizens who died in 9/11, I believe the second nationality amount compared to the Americans' lost in that mass murder. So a very somber conclusion, although very short but memorable visit by her majesty to Manhattan island.

BLITZER: We went back to the archives Richard Quest and got this clip of her last speech at the United Nations back in 1957. Just listen to this.

(BEGIN VIDEO CLIP)

QUEEN ELIZABETH II: I wish first to express to you, to the secretary general and to the general assembly of the United Nations my great pleasure at being here today. This assembly was born of the endeavors of men and women from different nations who, over the centuries, have pursued the aims of the preservation of peace between nations, equality of justice for all before the law and the right of the peoples of the world to live their lives in freedom and security. The future of this organization will be determined not only by the degree to which its members observe strictly the provisions of the charter and cooperate in its practical activities, but also by the strength of its people's devotion to the pursuit of those great ideals to which I have referred. I offer you my best wishes in your task and pray that you may be successful.

(END VIDEO CLIP)

BLITZER: Richard Quest, you look at that clip from the archives, the history is so, so powerful there.

QUEST: And it was unbelievable, sitting in the general assembly, watching her and wondering, looking at her and thinking, did she remember, obviously she does but what was it like and the memories and, Wolf, in that '57 speech, she talked about the difficulties of setting up the United Nations from ideal to reality. And today she talked about the difficulties and challenges of leadership, of going to the next level, which she said and her last words today were that would only happen when they would truly become United Nations. So we have this phenomenal continuity of nearly six decades by the same leader, which is why I think this was given such prominence. Not because it was a silver haired old-age pensioner who happens to live in London but because of that depth of experience that she was able to bring.

BLITZER: Richard Quest and Richard Roth, our two Richards in New York on this historic day, guys thanks very much. That's all the time I have. I'm Wolf Blitzer in THE SITUATION ROOM.