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The Situation Room

Critical Test of Well Cap Soon; President Drafts New Budget Director; Obama White House Leans on Bill Clinton

Aired July 13, 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: Rick thanks very much. Happening now, a make or break test in the oil disaster should begin any minute now. A new well cap could stop the gusher from flowing for the first time in almost three months. Stay right here. We're going to have live coverage. We're not going away.

What's being called a ticking time bomb inside medicine many Americans use every single day, we're talking about painkillers and antibiotics and other medicines all made in China and not subject to tough inspection this country. We're investigating.

And a Native American lacrosse team is stopped from traveling overseas to compete in a world championship. It's a dispute over passports and the right of Indian tribes here in the United States to govern themselves.

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

It's the closest thing yet to putting an off switch on the leaking oil well in the Gulf of Mexico. We're glued those live underwater pictures because testing is expected to begin very soon, perhaps this hour on the new well cap. It involves closing valves that could actually stop, stop the oil from gushing or at least slow it down considerably. CNN's Ed Lavandera is covering this major development in this story for us. Explain the very latest to our viewers, Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, right now we're waiting for BP officials and other scientists to begin what is called the integrity test on that well and also the blowout preventer in that cap that's been put in place and what officials here are looking for is to make sure that everything down there at the bottom of the Gulf of Mexico will work and make this containment cap create one of two possibilities. What they want to see is either that this containment cap will work by itself and not allow any more oil to escape, or perhaps work with the help of riser pipes connected to vessels on the surface of the water and at least allow them to collect the oil that is gushing out from that runaway well down there. So this is a complex test and they've been preparing for it. We had anticipated that they might have started this morning, but they say they've been doing other steps to prepare for this integrity test. It's been pushed back several times today but the latest briefing we got just a short while ago was that this could very well be starting here late this afternoon and that all indications are that's what will take place. Admiral Thad Allen, the retired admiral from the coast guard who's in charge of the federal response here, kind of described for reporters what it is that they're looking for in these complex tests.

(BEGIN VIDEO CLIP)

ADM. THAD ALLEN (RET.), NATIONAL INCIDENT COMMANDER: In this exercise, high pressure is good. We have a considerable amount of pressure on the reservoir, forcing hydrocarbons up through the wellbore. We're looking for somewhere between 8,000 and 9,000 psi inside the capping stack which would indicate to us that the hydrocarbons are being forced up and the wellbore would be able to withstand that pressure and that is good news.

(END VIDEO CLIP)

LAVANDERA: So, Wolf, kind of complex language there but the hydrocarbons are essentially the oil and natural gas that are coming out. They want that high amount of pressure. If that is low pressure, that means the oil and gas is escaping from somewhere else. They have been frank that they wouldn't know where that is. Even though it seems a little bit counterintuitive, if you want this oil to stop, you should be rooting for that high pressure and they say that should help this containment cap work in the right way. Wolf?

BLITZER: Ed, why didn't they try this sooner?

LAVANDERA: You know what? It's interesting. The bottom line here is this particular containment cap that they're working with right now simply wasn't ready. That kind of goes back to the bigger criticism of the oil industry in this particular situation where critics say, look, they weren't ready, weren't prepared, didn't have the technical know-how to deal with this kind of situation and that's what we've been seeing for the last three months where engineers, multiple teams of engineers have been working on different ideas, different plans and they say that each plan has learned from the next. If you look back into May when they had originally used that top hat that big dome that was dropped over this and it failed so quickly because of everything that had frozen about up and that sort of thing, that all of those steps have been processes in the learning process to get to this point. But quite simply what they say is this particular containment cap wasn't ready until now.

BLITZER: Ed Lavandera, don't go away. We're going to say in touch with you. The new capping and testing operation in the gulf is enormous in both size and weight. The sealing cap called the three ram cap stack is 18 feet tall and 75 tons. It's installed on top of a 12-foot six ton piece of equipment known as a flange transition tool. All of that goes on top of the reconfigured blowout preventer on the well, which is 48 feet tall and weighs 450 tons. All together that equipment is about eight stories high shooting up from the sea floor and it weighs about 530 tons.

Clearly there's a lot riding on this new well cap and whether it works. We should know fairly soon. Few are feeling the weight at this moment as much as the president's point man in the gulf, retired Admiral Thad Allen. Our Brian Todd spoke with Thad Allen just a little while ago. Brian is joining us from outside BP's command center in Houston. How did that go, Brian? BRIAN TODD, CNN CORRESPONDENT: It went very well, Wolf. But you can get a sense how anxious a period this is at the BP command center. We do have some late information. The seismic tests that were preparatory for the well pressure test, those have been completed and at this hour, the crucial well pressure test was expected to begin after that replacement cap was put on. BP officials and the incident commander Admiral Allen have gathered here at the war rooms and I spoke with Admiral Allen about the tension.

(BEGIN VIDEOTAPE)

TODD: The incident commander says these are easily some of the most critical days in the entire operation. Admiral Thad Allen says if they measure low pressure in the well for six hours or more, then this well is not strong enough to hold a new seal cap and it's back to full time use of the surface containment ships to capture the oil.

ALLEN: The final effect of this will be an order from me to BP.

TODD: How much pressure are you feeling right now knowing that you have to make that call at some point and it could determine the direction of this operation?

ALLEN: That call will really be a reflection of all the input from the scientific communities, all the best minds in the United States that we can get working on this. Wherever we're at, I'll feel confident that it won't be a Thad Allen decision. It will be the whole of government decision in the best interest of the country.

TODD: Allen describes the atmosphere inside the BP command center where hundreds of people have been working around the clock.

When that cap got put into place and it was successful, what was the atmosphere like? Was it cheers?

ALLEN: Well the video room where all this takes place is very much like a war room except everybody's more informally dressed. It's called the hive. It's actually pretty quiet. A lot people are talking. There's a lot of radio communications dealing with the ROV operators that are out actually on scene.

TODD: Allen said no one stood up and cheered but there was a huge sense of optimism and relief. We got a sense of the tension in that room called the hive where the remotely operated vehicles are controlled during a recent visit to BP's command center.

UNIDENTIFIED MALE: Roger that.

TODD: I had to speak in hushed tones.

Inside the ROV command center these are the lead engineers talking to the engineers on the boat who operate the ROVs, giving them commands, seeing in real-time what they're looking at. We're not really allowed to talk to these gentlemen because they're so involved in what they're doing right now. Allen is careful not to be too optimistic about this new cap, simply too much has gone wrong before. Has it taken a toll on your family? They really haven't seen much of you in the last several weeks.

ALLEN: At this point we had anticipated that I would be retired. My wife and I were planning a trip to Ireland but that will happen when it happens. We owe the country our best effort right now and that's what we're all about.

(END VIDEOTAPE)

TODD: Now as gut wrenching as this operation is, Admiral Allen and BP officials made clear it is the attachment of the relief wells that will be the make-or-break part of this operation. Right now the well that is closest to the leaking well, the relief well that is closest is running parallel to the leaking well. They have a few dozen feet to go before it will actually get to the point where it attaches. It's only about four feet from the leaking well so you get a sense it's getting much closer. We still won't know whether that's going to work until late July or early August.

BLITZER: But we will know whether the cap is going to work in the next few hours or maybe within a day or so. These are critical moments right now. Brian, don't go away. We're going to have more of your interview with Thad Allen later.

There's plenty of finger pointing at BP right now. Did the oil company also play the role in the controversial release of a convicted terrorist? We're taking a new look at Britain's decision to free the Lockerbie bomber.

Also a missing Iranian scientist suddenly turns up in Washington, D.C., but the mystery surrounding his disappearance hasn't been solved.

And President Obama is drafting Bill Clinton to do some heavy lifting out on the campaign trail in the coming months.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Obama jokes he had to do horse trading with Hillary Clinton to find his nominee for the budge director. Jacob Lew is the chief operating officer for the state department under the secretary of state Hillary Clinton. He ran the budget office during the last three years of Bill Clinton's presidency.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When Jack left that post at the end of the Clinton administration he handed the next administration a record $236 billion budget surplus. The day I took office eight years later America faced a record $1.3 trillion deficit. Jack's challenge over the next few years is to use his extraordinary skill and experience to cut down the deficit and put our nation back on a fiscally responsible path and I have the utmost faith in his ability to achieve this goal as a central member of our economic team.

BLITZER: If confirmed by the Senate, Lew would replace Orszag, the first Obama cabinet member to resign.

Two new polls show President Obama's approval rating on the economy has fallen to an all-time low. Let's discuss with our senior political analyst Gloria Borger. She's here in the studio with us in THE SITUATION ROOM. These polls are not very good numbers for the white house.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: There was a new Washington Post/ABC News polls out today Wolf and it really shows you the effects politically of the economic anxiety that people in this country are feeling. And it's really not great news for the Democrats because "The Washington Post" asks people who do you believe should be in charge of the Congress the next time around, and not surprisingly more than half said, you know what? We think the Republicans should be in charge. They do want a change, not the kind of change that Barack Obama envisioned. What's the most interesting to me and has been in the recent polls is that independent voters who had flipped back to the Democratic Party in the last election and who always liked Barack Obama are now saying by a 15-point margin that they prefer to have Republicans in charge rather than Democrats so that is a big warning sign. There it is. That is a big warning sign for the party, for the Democratic Party.

BLITZER: It sort of reminds me, I covered the Clinton white house back in '94, the first mid term election and it was a disaster for the Democrats at that time. These numbers I'm seeing now are sort of deja vu.

BORGER: They are deja vu. It's always dangerous the first midterm election for a new president, always dangerous. President Obama's popularity is about what Bill Clinton's popularity was at the time, but here again when "The Washington Post" asked are you inclined to re-elect your representative in Congress or look somewhere else, six out of ten said they were going to look around now. In June 1994, 53 percent there you are said that they were going to look around. So, you know, it looks on the face of it a little bit worse for the Democrats now, but I was talking to pollsters today. Couple of things to keep in mind. One is it's not that the people don't like Democrats. They don't like anyone right now. The Republicans could be -- their incumbents could be in trouble too. In 1994 the Democrats were completely surprised. They weren't ready for the onslaught. They weren't prepared. Also one more thing, in 1994, it had been 40 years since the Republicans had controlled the House of Representatives and now Democrats can say, OK, wait a minute, remember when Newt Gingrich controlled the house? How did you like it then? There's more recent memory that Democrats can play to. They're hoping that it won't be as bad in '94 when Bill Clinton lost 54 seats.

BLITZER: Yes I remember those days and I guess a lot of people simply like divided government. They like the checks and balances and that could be a factor.

BORGER: In theory they like it. And, you know, who knows. It may work out better than one party government is right now as far as independents are concerned.

BLITZER: We'll see what happens. Gloria, thank you.

Look for Bill Clinton, by the way, to play a significant role for campaigning for Democrats as we head closer and closer to the midterm elections. The Obama white house is planning an aggressive schedule for the former president. Let's bring in our senior white house correspondent Ed Henry. All right Ed. Walk us through what's going on here.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well Wolf, it's very interesting how this came together. Late last month I'm told that after Bill Clinton sort of blindsided this white house by endorsing Andrew Romanoff, a Democrat out in the Colorado Senate race against Michael Bennett who President Obama has endorsed, that caught people off guard. They were concerned. They called the Clinton camp. They said we want a heads up on the political moves. So I'm told a day after all that went down, Doug Bane a top aide to former President Clinton came over here to the white house, met with a political director, not only trying to smooth things over but they sat down and they sort of mapped out an aggressive plan. I'm told they're going to put the former president in a lot of states around country in what Democratic officials are calling what they think will be a strong one- two punch Wolf.

BLITZER: Where do you think they'll be campaigning?

HENRY: There's no doubt we're going to see him in Arkansas. That's his home state. You'll remember that back in May Bill Clinton helped Blanche Lincoln survive that Democratic primary in the runoff. Now she's facing John Buseman, the Republican. You're going to see Bill Clinton I'm told by Democratic officials back in Arkansas but also in Kentucky. You've got a Democrat Jack Conway who's facing Rand Paul, the Republican. He's faced a whole series of controversies as you know. The Democrats believe they've got to pick up opportunity there to flip a Republican seat to Democratic hand. So bottom line is Bill Clinton can go to southern state like that where President Obama is not that popular, Wolf.

BLITZER: A lot of us remember -- of course, everyone remembers Bill Clinton on the campaign trail in 2008 first for his wife when she was running for the Democratic presidential nomination. Are there any concerns at the white house in looking back then and what might happen now?

HENRY: Well they insist in private here at the white house that all this talk about frostiness between the two presidents has really been sort of overdone. Whether that's true or not, the fact of the matter is this is sort of a necessity right now to put any differences aside. When you talk to Democratic officials close to the white house they're very nervous about the growing number of public polls out there especially with independent voters that Gloria was just talking about so it's basically all hands on deck. Maybe they've learned a lesson from Al Gore back in 2000 who perhaps could have used Bill Clinton a little bit more.

BLITZER: Al Gore might have been president if he would have used Bill Clinton back in 2000 in Arkansas for example which he lost but potentially could have won if he would have used Bill Clinton. I think Al Gore thinks about that a lot over these years. All right, Ed, thanks very much. No doubt Bill Clinton could be a huge asset for the Democrats in the coming months.

The safety of a popular diabetes drug under investigation right now, could new concerns about heart problems lead government officials to pull them off some store shelves?

And it's the newest weapon in the fight against that gushing oil in the Gulf of Mexico. We're getting an exclusive look.

They're the sound of South Africa's world cup but today those popular vuvuzella's had a very different purpose and it had nothing to do with soccer.

(COMMERCIAL BREAK)

BLITZER: Look at these live pictures. You can still see the oil that's gushing out of the top of that cap but over the next hour we're told, maybe sooner, they're going to start to shut down some of the valves to see how the pressure is going. If all works as they hope, the oil will stop coming out of the top of that cap over there. This will be a major huge development, could shut down the oil that's gushing out of the well for the first time in three months. We're all over this story. We're not leaving it. Stay with us for the latest.

In the meantime let's check in with Lisa Sylvester. She's monitoring some of the other top stories in THE SITUATION ROOM right now. We're keeping our fingers crossed Lisa. We're hoping when they close those valves we're not going to see oil coming out any more.

LISA SYLVESTER, CNN CORRESPONDENT: That is so true. A lot of people are really hoping this is what does the trick.

In other news Toyota shares are on the rise because of new reports suggesting that some of the company's vehicle troubles could actually have been caused by driver error. The report which appears in the Wall Street Journal implies that some drivers who said their Toyota or Lexus vehicle surged out of control were mistakenly holding down the gas pedal. The findings however don't fully exonerate the company. Toyota recalled millions of vehicles because of this and other problems.

The Food and Drug Administration is investigating the safety of a popular diabetes drug and could vote as early as tomorrow on whether to remove it from store shelves. A Senate committee alleges that Avandia's manufacturer GlaxoSmithKline promoted the drug despite its known safety concerns. One study has concluded that Avandia which controls the blood sugar levels raises the risk of heart problems. GlaxoSmithKline, however, says it is safe.

And a French ban on burkas or any veils that cover the faces of some Muslim women could be around the corner. The country's lower house of parliament voted in favor of the ban today. The government says the veils cannot be tolerated in any public place. The measure will now go on to the Senate where it will be voted on in the fall. Wolf?

BLITZER: All right Lisa. Thank you. Don't go too far away. Other news coming up.

Remember we're standing by for those tests to begin on the new oil well cap. We're getting an exclusive look at some high-tell weapon against the spill as well as the plane that can spot oil below the surface of the Gulf of Mexico. Stand by.

Also: questions about BP and whether it actually played a role, a significant role in Britain's release of the convicted Lockerbie bomber.

And he illegally landed a plane in the Bahamas. You're going to find out how long the so-called "barefoot bandit" will land in jail.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM.

Happening now, Iran says he was kidnapped by the United States. A U.S. official calls that claim preposterous. What's the real story behind an Iranian scientist who's now turned up at the Pakistani embassy right here in Washington?

And he's known as the boss of baseball, we're remembering the colorful career of the legendary owner of the New York Yankees, George Steinbrenner.

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

At some point perhaps in the next hour we could see the beginning of the end of that big dark gusher of oil that's been tainting the Gulf of Mexico for 85 days. We're standing by for testing to begin on the new cap BP placed on its ruptured wellhead. Over the course of those tests we should learn if the leak is sealed and the oil is stopped. Even if that happens, there should still be plenty of oil left in the gulf to clean up. CNN's Ines Ferre has been getting an exclusive look at one of the most high-tech weapons to fight the spill. Ines, tell us what you're discovering.

INES FERRE, CNN CORRESPONDENT: Well Wolf over the past few weeks the EPA has been making daily flights over the gulf to find out where the oil is and they're doing this using a technology that wasn't even intended for this purpose and we've been able to get exclusive access to it.

(BEGIN VIDEOTAPE)

FERRE: It's the newest weapon in the fight against the oil in the gulf. It's known as aspect, an EPA plane equipped with infrared and spectrograph technology. Originally designed to sniff out weapons of mass destruction, it's now tracking the streaks of oil snaking their way to the beaches and marshes of the gulf coast.

UNIDENTIFIED MALE: Long stream about 20. FERRE: The EPA started to use the plane to test air samples after the deepwater horizon explosion in April. But scientists stumbled onto another use. It could see oil in the water much easier than the human eye, distinguishing it from algae or seaweed. But at first the EPA didn't know how to effectively communicate this information with the coast guard and put a temporary halt on its use in some parts of the gulf. Mississippi Congressman Gene Taylor says he fought to keep the aircraft flying.

REP. GENE TAYLOR (D), MISSISSIPPI: In the past few weeks things have gotten substantially better as far as coordination between what's in the air and what's on the ground, getting the skimmers where they need to be, getting every vessel out there engaged in cleaning up and not just pointing out a problem.

FERRE: Using Google Earth everyone can access the location. It at first took hours to gather and analyze. Now the data is transmitted to the coast guard within minutes.

MARK THOMAS, ASPECT COORDINATOR, EPA: You may be over in this area here and you don't know there's oil over here, so you have no way of getting over there to it. Any direction that these guys can get so they can move their boats into the right area is what makes the thing work.

FERRE: A key tool to keep the oil from overwhelming the shore.

(END VIDEOTAPE)

FERRE: Now, right now the EPA has one plane with this kind of technology. They recently represented another one with the same technology, and a long term plan, Wolf, is for them to expand the fleet and expand the use of the technology, Wolf.

BLITZER: All right, Ines, good reporting. Ines Ferre reporting from the scene.

Today the Obama administration sent a bill for $99.7 million to BP and other parties responsible for the oil spill and the clean-up. It's the fourth bill the administration has sent related to the disaster. The three others total $122.3 million. They've been paid in full.

Some top Democrats are reviving questions about BP's possible link to the 2009 release of the Lockerbie bomber. Was Britain's decision to free him influenced by an oil deal and freight concerns with Libya? Our congressional correspondent Brianna Keilar is looking into that. These are serious allegations. Brianna, what are you learning?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, BP has a huge multimillion-dollar deepwater oil drilling project off Libya's coast. It's reportedly set to begin next month and now yet again some Democratic lawmakers are asking if maybe this has something to do why the Lockerbie bomber was released from prison early.

(BEGIN VIDEOTAPE)

KEILAR: Three months to live. That's how long Scottish authorities said convicted Lockerbie bomber Adelbaset al-Megrahi had to live when they released him on compassionate grounds. Megrahi went home to Libya, received a hero's welcome, and almost a year later is still alive. Did the Libyan government pay off the doctors who examined Megrahi?

FRANK LAUTENBERG: And they fabricated. A doctor was paid, it said to change his analysis, his examination of what this man's condition was like. So they said maybe three months to live, and here now he's saying this guy could live ten years. So he was released so he could join his family while he took away other people's family members. It's outrageous.

KEILAR: Citing British reports, New Jersey Senator Frank Lautenberg says the real reason Megrahi was released was to smooth over an offshore oil drilling agreement between Libya and British oil giant BP.

You're convinced there was a deal struck here.

LAUTENBERG: Absolutely. I smelled the rat. We now see that BP had spoken to the UK, talked about the enormous $20 billion deal that might go on with Libya and might be if this man is returned.

KEILAR: Lautenberg and three other Democratic senators are demanding investigations by the British government, the U.S. state department and the Senate foreign relations committee.

And you're not a finance of offshore oil drilling or deep water drilling or BP. These are not --

LAUTENBERG: Right. They're not my choices. But that has nothing to do -- the fact that it's BP, coincidence.

(END VIDEOTAPE)

KEILAR: Now the state department says it will look at these senators' request for an investigation but it's not sure how much it can do about the release of al-Megrahi at this point. Wolf we also checked with BP. They said it is a matter of public record that back in 2007 they spoke with their government and said slow progress on a prisoner release, on a Libyan prisoner release could hurt business relations. BP business relations with Libya. But they insist, Wolf, that there is no specific discussion about al-Megrahi's release.

BLITZER: In general terms. All right. Thanks, Brianna, very much for that.

We're keeping close watch right now on the underwater cameras from BP. Critical tests on the new well cap could begin at any moment now. It could finally -- we can only hope and pray it could finally stop the oil from leaking.

Plus you don't see the words made from China on the bottle, but there's a good chance that's where your ibuprofen came from. Can you be sure it's safe?

And Paul the psychic octopus got a lot of offers but right now after his world cup predictions, eight of them, eight successful ones in a row. We now know what the octopus will be doing next.

(COMMERCIAL BREAK)

BLITZER: The White House today is predicting the Senate will pass the new extension of the unemployment benefits next week. Members have been arguing for weeks about its size and cost. Let's bring in our senior political analyst David Gergen. The debate is under way right now. Who's right? The Democrats are saying the folks need the help, let's do it where a lot of Republicans say, yes, they need the help, but let's find a way to offset the expenditure, cut some money elsewhere in the federal budget to pay for the unemployment extension.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Wolf, I'm a deficit hawk and believe very strongly we need to find ways to start cutting spending. Having said that, I really don't think it makes any difference. The critical thing is to extend the unemployment benefits. It's the morally decent thing to do. We've got some two million people in this country who can't find work. One argument against it is conservative argument against this, well, if you keep sending the benefits, they won't look for work. That's true in regular times. These are hard times. People can't find work. Half the people who are unemployed have been unemployed for more than six months. We've got people who are hurting. We've bailed out banks. We promised to do that. Why can't we make other people who are working hole?

BLITZER: The other side of the argument. Listen to Erskine Bowles, he was the chief of staff in the Clinton White House. He's now on this commission with Allen Simpson to come up with ways to deal with the long-term debt and the budget deficits. Listen to what he said the other day in a meeting with governors.

ERSKIN BOWLES: This debt is like a cancer. It is truly going to destroy the country from within. That is a formula for disaster.

BLITZER: Well, so the argument is why not find this pay-go. Find a way. There's a lot of, fat, let's say, in the budget out there. If you need to come up with a way to extend the unemployment benefits, let's make sure our children and grandchildren don't pay for it.

GERGEN: Well it's clearly preferable to find a pay go, find somebody to pay for unemployment benefits now but if you can't find it don't let that be an excuse for not helping people who are in trouble. I happen to be at that session with the governor. We spent an hour afterwards talking about the problem. They're absolutely right. They're predicting we're going to have the most predictable economic disaster in history. At this point the cost of Medicaid, Medicare and social security alone, just those three, equal the amount of revenue that the government is taking in. Everything else is borrowed. BLITZER: Last week Barney Frank, a liberal Democrat, Ron Paul, a conservative Republican, they said they can save a trillion dollars over the next decade just by eliminating some defense spending.

GERGEN: I'm not at all clear we ought to take it out of the national security bill. You know Secretary Gates is working very, very hard to try to get defense spending under better control but we definitely can't fund it. Erskine Bowles made a very important point with the governors. He said we're not saying you have to start it right now. We are saying within a year or two you've got being on a strong deficit track. I think the unemployment and the poll that Gloria was talking to you about it a little while ago, Americans are divided about whether we ought to stimulate now or cut but an overwhelming majority say we ought to extend unemployment benefits. It's the right thing to do.

BLITZER: We'll see if the White House is right if you can get the votes next week because a lot of people are in trouble right now. I know you have a column on this whole issue at CNN.com, which is very good.

GERGEN: I do. On behalf of cutting steps. We've got to do it over the long haul.

BLITZER: I remember when you were working in the Clinton White House. This was a huge issue.

GERGEN: He had four surpluses in eight years. We can do it. It's not impossible to do. We just got to get at it.

BLITZER: David thank you.

GERGEN: Thank you.

BLITZER: Just days after a highly publicized spy swap between the United States and Russia, could another case be emerging right now?

The popular vuvuzelas from South Africa's world cup tournament now being used to fight the massive oil spill in the gulf. What's going on? We'll tell you.

(COMMERCIAL BREAK)

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

SYLVESTER: Hi, Wolf. A 23-year-old Russian who emerged as part of a pivotal spy investigation is now in federal custody. A government officials says the man who is being deported is not suspected of passing classified intelligence to Russia. He arrived in the United States in October and has been monitored ever since. You will remember a major spy swap between Russia and the United States took place last week.

And it is probably the noisiest souvenir from this year's world cup tournament in South Africa. Now the vuvuzela is being used to help combat the oil disaster in the Gulf of Mexico. Demonstrators blowing on the renowned horns gathered at London's BP headquarters to protest the company's handling of the spill. Proceeds from this event are expected to go toward gulf recovery efforts.

And it is official. Paul the octopus, the one who correctly predicted the outcome of eight consecutive matches? He's retiring from the business. A host of other job offers for Paul is being considered and the German aquarium where he lives might even establish a school to teach the other little octopi to follow in his footsteps. Paul successfully predicted Spain's victory. Pretty impressive, but I'm not sure that that is a skill that can necessary be duplicated.

BLITZER: Good work for Paul. He can retire in peace. Thank you very much.

We're standing by for a make-or-break moment in the gulf of oil disaster right now. Testing on the new well will begin any moment. We'll be watching to see if the oil flow stops. Stand by.

And a new twist in the case of a missing Iranian scientist. Not missing anymore but the story is just as strange as ever.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our strategy session. Joining us, two CNN political contributors, Democratic strategist Donna Brazile and Republican strategist Mary Matalin. Listen to this criticism. Harry Reid the Senate majority leader Donna leveled against President Obama saying he's simply not tough enough with Republicans.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I think that he is on many occasions -- I should say many occasions, a few occasions he should have been more firm with those on the other side of the aisle. He's a person who doesn't like confrontation. He's a peacemaker. And sometimes I think you have to be a little more forceful and sometimes I don't think he is.

BLITZER: All right. That's pretty strong criticism from Harry Reid of the president.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I don't think he was criticizing the president. He was responding to the reporter's question about what do you dislike about the president's approach. Harry Reid is up there every day up against the Republicans who are trying to stall the legislative agenda. Senator Reid's approach is clearly much different from the president's who's trying to find people Republicans like Scott Brown, Olympia Snowe and others who will come onboard to support many of his legislative initiatives. I think the president is a pragmatist. I think he's a realist, but he's -- beyond all that cool, there is one tough dude under all that wonderful cool charm he has.

BLITZER: Do you agree with Harry Reid that President Obama is a man who doesn't like confrontation, he's a peacemaker? MARY MATALIN, REPUBLICAN STRATEGIST: No, I don't. Obviously Harry Reid's not watching the sit room because last time we were on we talked about Obama's new road trip. He's gone from attacking Bush to attacking the other Bs in Congress because he has nothing to defend as evidences by all the polls. They're consistently showing that he's hemorrhaging the voters from the right and the center and even Democrats. Harry Reid was talking about the need for Obama to be more controversial with the health care debate. Obama's problem with the health care debate wasn't with Republicans. It was with the Democrats. He couldn't pull his own caucus together so Harry Reid needs to watch more "sit room" and Obama needs to be tougher.

BLITZER: Go ahead. Donna, I know you want to respond.

BRAZILE: Well, first of all I think what Senator Reid was trying to say was that President Obama is someone who listens and brings in the Republicans and says, hey, if you have good ideas, let's bring them on the table. The last thing we need is a president who basically pushes people around and not listening to the other side. He is comfortable listening to the Republicans and the Democrats alike.

BLITZER: Let's talk about the senator from Louisiana, one of the senators, David Vitter, Mary, and he is causing a buzz out there, this video was posted by the liberal website talking points memo in which he said, you know what, those who raise questions about whether or not President Obama was actually born in the United States may have a point. Let's listen.

SEN. DAVID VITTER (R), LOUISIANA: I personally don't have standing to bring litigation in court, but I support conservative organization who would bring that court.

BLITZER: If you didn't understand that, he said he would support conservative legal organization who would bring that so-called birther issue to court. What do you think about that, Mary?

MATALIN: I think that Senator Vitter who is an otherwise good senator has had a bad couple of weeks. I don't know if that is a response the losing the sea legs here or the fact that he has a legitimate primary challenge here in the former Supreme Court judge opponent. That was not a cool thing to say. I don't think it is going to be impressive here in the state, but at the end of the day, and the end of the election cycle, the Democrat who has done well as have all of the Congressional delegation on the spill, he might be more competitive, but it is going to be a Republican seat.

BLITZER: You know, it is quite a thing though when you think about it, Donna, that a sitting United States senator says, you know, maybe there is something to it, and maybe there should be a legal challenge to the whole birther issue that the president has been daunted with at least by the fringe elements out there.

BRAZILE: Well, I think they it is a frivolous lawsuit. If anyone is still pursuing it, we have seen the documents and the state of Hawaii, and we have seen the birth notices from the local paper, and I don't know what else they would like to see. He is made in the USA like many of the rest of us. But look, that aside, Mary is right, Senator Vitter now has a challenger from the Republican side, the former Supreme Court justice in Louisiana, and he has to fight for the seat. And he has gone across the state talking about the things that the people care about jobs and making sure that the economy can bounce back from the recession and the oil spill. Louisiana does not need another scandalous politician at this point. And if Senator Vitter needs some things to file a lawsuit, look, there are a lot of people down there who cannot get their claims from BP. Go and file a lawsuit on their behalf. That is what we need down in Louisiana.

BLITZER: Quickly, Mary.

MATALIN: Well, his biggest problem is being in the Senate led by Harry Reid to come full circle. So Senator Vitter and any Republican running for the seat, the huge advantage is that Obama is this whole campaign is going to be a competition on a referenda on Barack Obama.

BRAZILE: It will be an independent Democrat like Senator Mary Landrieu who will fight for Louisiana need.

BLITZER: All right Donna and Mary. This conversation is obviously going to continue. Guys thank you.

We're keeping a very close eye right now on those live BP underwater cameras. Standby there could be some breaking news.

Also the next time you have a headache, check out the medicine you are taking, could be made in China and not subject to tough security inspections.

And will a native lacrosse player get to play in the championship. We will have the latest on a very unusual dispute over the passports.

(COMMERCIAL BREAK)

BLITZER: More now on the food and drug administration investigation of a safety of a popular diabetes drug and a vote as early as tomorrow as to whether to remove it from the store shelves. Here is CNN's Dr. Sanjay Gupta.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Turn it on and let it heat up.

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Edward Darden was diagnosed with diabetes ten years ago. In 2006 he started to take Avandia to control the blood sugar and then came a study in the New England journal of medicine which had the headline, a 43% increase in heart attacks for patients on Avandia. Dr. Steven Nissen wrote that article in 2007 as well, and now an update last month. He is giving a presentation to the FDA.

DR. STEVEN NISSEN: We have had evidence for a number of years that Avandia increases the risk of heart attack in diabetic patients. GUPTA: But in 2007 this same panel voted 22-1 that the evidence was too weak to take Avandia off of the market. One reason, a large clinical trial called record that was funded by GlaxoSmithKline, the company that makes Avandia and shows no increased risk. It is taking some heat. On Friday, the FDA posted an analysis by one of its experts that said record is full of holes and that the researchers did not follow up on results of bad outcomes even the patients who died.

UNIDENTIFIED MALE: I have been following the FDA for 20 years, and I have never seen a report as blistering has the record trial.

GUPTA: This is Dr. Murray Stewart, a top Glaxo scientist. We asked him to come on camera, and he did not want to before the hearing. He did tell us by phone that Avandia is safe, and he said that six clinical studies, not just record back him up. It is extremely confusing for diabetes specialists like Dr. Barbara Onumah at Hospital Washington Center.

DR. BARBARA ONUMAH, WASHINGTON HOSPITAL CENTER: There is a lot of information out there, and we don't know which to believe. I think that this is where we rely on the governing agencies to give us direction as to whether the medicine is safe or not.

EDWARD DARDEN, DIABETES PATIENT: If there is a better alternative and something without as much risk, I would rather do that, and that is what I want to do.

GUPTA: Mr. Darden didn't wait. He switched to another medication. He is not alone. Prescriptions of Avandia are down by 2/3 in the last three years.

Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

BLITZER: You are in THE SITUATION ROOM.

Happening now: Final preparations for the test that could be a turning point in the gulf oil disaster. It is expected to begin any moment now and the end result could be complete containment. We are following every critical development. Standby.

A stunning twist in the case of a missing Iranian nuclear scientist seeking refuge at an embassy here in Washington, D.C. was he kidnapped and tortured by the United States as Iran alleges?

And the details of the passport dispute that has a lacrosse team stranded in New York.

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

The next few hours are among the most critical in the gulf oil disaster as the crews begin an integrity test of the new cap now in place on top of the gushing oil well.