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The Situation Room

Storm Threatens Gulf; President Obama Reaches Out to Former USDA Employee

Aired July 22, 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: You are in THE SITUATION ROOM.

Happening now: a new threat moving toward the Gulf of Mexico right now, severe weather, and it is already having an impact on the oil disaster response.

Also, new video emerging of the confessed Times Square bomber meeting with a top Pakistani Taliban leader. We have the video for you.

And President Obama reaching out to Shirley Sherrod -- details of his conversation with the ousted USDA official and questions about how the White House handled the uproar.

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 is a complication everyone involved with the Gulf oil disaster has been fearing, but now it it's one step closer to reality. The National Hurricane Center is tracking a storm that is forecast to move into the Gulf of Mexico and BP is taking this threat very seriously.

(BEGIN VIDEO CLIP)

DOUG SUTTLES, COO, GLOBAL EXPLORATION, BP: The big issue at the moment is the weather. As you know, there is a storm brewing out there. And we are working closely with NOAA and the National Hurricane Center to determine, will it build into a storm and what path will it take?

Because as we've explained numerous times if we have a storm that threatens the -- either the Gulf Coast we are working on or out at the site, we have to take actions because we have to make sure the people are safe. That is the first priority.

Right now, we are having some delays as we prepare for the weather, but our planning and our contingencies are still in place.

And working with the Coast Guard, local and state authorities we have an extensive severe weather plan so I'm confident that will work.

(END VIDEO CLIP)

BLITZER: All right, let's get straight to our CNN meteorologist, severe weather expert Chad Myers. Walk us through the forecast. What are we seeing, Chad?

CHAD MYERS, CNN METEOROLOGIST: The forecast is for it to become Tropical Storm Bonnie. Right now, it is still tropical depression number three. There was tropical depression number one. It became Alex. Tropical depression number two didn't do anything. This is number three. That is why three could be the Bonnie storm, even though it is B and two and all that.

But the thing doesn't look that impressive right now. Hurricane hunter aircraft flying through it, all through it right now, they did find a 45-mile-per-hour wind, so that means it could be upgraded later on tonight or basically at this point at any time.

We will see the storm tracks change as the storm gets closer and closer. Yesterday, Wolf, many of these computer models took it up toward Apalachicola. That would have been so much better, making the wind from the other direction, away from the shore, and pushing whatever oil is left out there away from land. This is not the case today.

The models have all agreed that this thing will go to the left or to the west of New Orleans and that will make the winds do this, pushing all of that oil or whatever it is down there still, the dispersants, back on toward the land and that is what the forecast is right now from the Hurricane Center.

Landfall if you want to call it that -- we will call it, I don't know, bayou fall, because there is not much land there -- will be Sunday afternoon around 2:00. Now, if it does turn to the right and goes much farther to the right like it was forecast to yesterday, landfall would be much earlier, because that is a shorter distance. If it stays to the left, it would be longer and that would be Sunday night, because it is longer to get to Galveston, but right now, just west of New Orleans at only 50 miles per hour.

Now, this is a big question here in the weather office today. Why only 50? This is the warmest water you could possibly find. Well, because there is a little bit of wind out there. There is not that big high pressure sitting above it so that the hurricane has nothing to fight. There is little bit of a battle between the wind speeds here, and that would keep the hurricane or tropical storm from becoming a hurricane at 50 miles per hour.

If that wind goes away, this thing could be much bigger and a much bigger problem than it looks like right now.

BLITZER: Yes, but even a 50-mile-an-hour wind is going to force a lot of the work that is being done right now to come to a halt.

MYERS: Certainly, all the skimmers go home. And at 9:00 tonight, Admiral Allen said that he will make a decision, a key decision, whether some of the vessels out there have to be evacuated or moved off the site altogether. Obviously, the drilling has stopped, the relief wells, because they don't want to drill and then have the ship moved away knocked off the site. And so that has stopped. They have plugged those and waited for those. They will wait until this goes away, until they start to redrill the thing. They are not, though, so far, considering opening up the well and letting the oil go. They think the well still has good -- it's still basically all there. The pressures are still rising slowly. And they think believe the integrity is still fine to let it alone, leave the site and they think it should be just fine down there by itself.

BLITZER: And even in advance of the storm, Bobby Jindal, the governor of Louisiana, has already declared an emergency, so he is obviously very worried about what could happen. We will watch it together with you, Chad. Thanks very much.

(CROSSTALK)

BLITZER: At the same time that all of this is going on, there are now some visible signs of the oil disaster that seem to be vanishing, not necessarily though the environmental threat.

Let's bring back Lisa Sylvester. She is working this part of the story for us.

It is almost a mystery, Lisa, what is going on. Explain.

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, think of it this way. We have all of these skimmers that are going out now. They are available to remove the oil, but guess what is happening? They are not finding a lot of oil. Now, it does not mean it is not there. It is just harder to see.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): The oil surface footprint on the Gulf is shrinking. Aerial flyovers show a dramatic difference in last week since BP was able to preliminarily cap the well.

SUTTLES: To give you some sense of that, the week before we got the capping stack on, we were seeing skimming volumes everyday of approaching 25,000 barrels. Every day since we have had it on, they have dropped and yesterday, we only skimmed 56 barrels. A great deal of the oil that was on the surface has been collected or been naturally dispersed in help from Mother Nature.

SYLVESTER: Some of the oil, that of a lower-density, naturally evaporated as it hit the surface. Other material was hit with dispersants and is now floating in the underwater currents. Still yet the heavier stuff like tar balls may have sunk, according to Louisiana Universities Marine Consortium professor Paul Sammarco.

PAUL SAMMARCO, LOUISIANA UNIVERSITIES MARINE CONSORTIUM: It feels good when you don't see it on the water's surface because it is sort of out of sight, out of mind, but it does not mean it is not there. We are dealing with a tremendous volume of oil and really an astronomical amount of oil in terms of the spill. And it does not just -- you can't snap your finger and think it is going to go away overnight.

SYLVESTER: A lot of the oil has already either made it to the shoreline or is subsurface, broken up. That presents its own challenges.

SAMMARCO: If you drop something on the floor, like ping-pong balls, you know, it is sure is a heck of a lot easier to pick up all the ping-pong balls if they all roll to the corner, you know. When they spread out all over the floor and all over the house, you know, it will take a lot of time to find them all and pick them up.

SYLVESTER: In the first days of the spill you could use boom to contain the oil and send out a skimmer to scoop it up, but now new methods are needed, like the special plane that the Environmental Protection Agency is using. It's equipped with infrared technology that is able to see below the surface.

(END VIDEOTAPE)

SYLVESTER: The Coast Guard says cleanup efforts are now shifting from immediately around the well to the shoreline, now that the oil has stopped flowing -- Wolf.

BLITZER: All right. Lisa, thank you.

BP by the way still hoping to move forward with the so-called static kill procedure that will seal the well once and for all.

(BEGIN VIDEO CLIP)

SUTTLES: we are far from finished. We have clearly made progress offshore, but we've got much more to do offshore. We will be pursuing with approval with Admiral Allen and the government, we hope to pursue the static kill when the weather allows us to do that.

We have to finish the relief well. We have to finish getting the oil on the water. We have a lot of work to restore the Gulf. So the point about all of that is we will be here for a very long time. We are absolutely committed to this cleanup and this response and this restoration activity.

(END VIDEO CLIP)

BLITZER: As we begin the fourth month of this Gulf oil disaster, we are learning more about a climate of fear aboard the Deepwater Horizon rig a month before it exploded. CNN has obtained portions of a confidential report on safety conditions done for Transocean, the rig's operator.

Our senior correspondent, Allan Chernoff, is working this story for us.

Tell us what we're learning about what the employees on that rig feared weeks before this explosion.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: That is right, Wolf. There was a culture of fear, fear of reporting mistakes to superiors. This is a confidential study that was done of Transocean employees actually on that rig. About half of them were surveyed, 40 people or so. And what they revealed in this survey, they said, look, if we make a mistake, we don't want to tell our superiors. If we forget to finish a task, if we drop a heavy object, if we damage equipment, obviously, all of those could create very hazardous situations on board of an oil rig.

Now, we don't know for sure whether any of this actually led to the disaster, but what we do know is the timing of this survey. The survey was done a month before the accident. Remember, that accident, the explosion, was on April 20. This was done, the survey, between March 12 and the 16th.

And, Wolf, get this. Transocean did not receive the final result until May, until May 11, after the disaster -- Wolf.

BLITZER: How did the report rate the safety culture of Transocean?

CHERNOFF: Believe it or not, the report actually gave good marks overall to the Deepwater Horizon rig. On a scale of one to five on many different measurements, such as leadership, communication, training, the marks were basically from 2.9 to 3.5, not bad at all.

BLITZER: What does Transocean say about all this?

CHERNOFF: Transocean is saying, look, this is evidence that we actually do care very much about safety.

And a spokesperson for the company also maintains that the Deepwater Horizon actually operated safely, that they didn't have any problems for seven years and he said -- quote -- "This rig was exhibit A for a well-run rig" -- Wolf.

BLITZER: All right. Allan, thanks very much -- Allan Chernoff reporting.

Jack Cafferty is off today.

Up next: the new video raising new questions about the Times Square bomber and his ties to militants, details of his meeting with the leader of the Pakistani Taliban.

Also, does the White House blame the news media for the Shirley Sherrod controversy? We are going to talking about that, President Obamas's call to her today and much more with our CNN political contributor. She is standing by.

And times so tough in one major city, workers may soon be told -- get this -- they have to bring their own toilet paper to work.

(COMMERCIAL BREAK)

BLITZER: New video has just surfaced of a meeting between the man who confessed to the failed Times Square bomb plot in New York and the leader, the leader of the Pakistani Taliban.

Peter Bergen is here to give us some insight on what is going on.

Faisal Shahzad, he is cooperating with U.S. officials right now, the Times Square bomb plotter, and video of him meeting with the top Taliban leader in Pakistan.

PETER BERGEN, CNN TERRORISM ANALYST: Yes.

It is not entirely surprising. He had said in his interrogations and also in his plea, when he entered a guilty plea, that he was trained by the Pakistani Taliban, but he didn't say that he was actually meeting with the leader of the Pakistani Taliban.

BLITZER: It seems to give him a much more important role. He is not just meeting with elements of the Taliban, but the top leader, Hakimullah Mehsud. That is a big deal.

BERGEN: Right. But they also understood that Faisal Shahzad was a big deal. Here's a guy. He is an American, been living in the States for a long period of time, worked in Stamford, Connecticut, as a financial analyst, the perfect recruit for what they were planning to do.

BLITZER: The perfect recruit, although we now learn that some of the materiel he was planning on using, the fertilizer in particular, was not a very good quality and may have been the reason why the whole thing did not work.

BERGEN: Yes. But you see, in fact, he was smart enough to realize that if you buy fertilizer suitable for a bomb, ammonium nitrate, that that would actually send up a huge red flag, so he bought other forms of fertilizer.

So, in fact, it was not that he was being dumb. He was actually being quite smart. However, the plan didn't work out. Making a fuel- air explosive, which is what he was trying to do, is pretty complex. He only got five days training in the Federally Administered Tribal Areas in Pakistan. If he had got 30, he probably would have had his act together better.

BLITZER: We think this video is authentic based on everything you are hearing, right?

BERGEN: Yes. These are guys. There's no doubt about that.

BLITZER: Yes, it's not just made up or anything like that, Photoshopped?

BERGEN: No.

BLITZER: This seems to be authentic. And everything I am hearing -- and I'm sure you are hearing the same thing -- he is still cooperating with U.S. law enforcement right now and telling what he knows.

BERGEN: Right.

And, in fact, he has appeared in another Taliban video with the official stamp of the Taliban on the video. So, there's no doubt that they saw him as an important propaganda opportunity. And they were hoping to milk a successful attack on Times Square, not a failed attempt.

BLITZER: We are going to be learning a lot more, I'm sure, in the weeks, months and years to come.

Peter, thanks very much.

BERGEN: Thank you.

BLITZER: Last-minute efforts are now under way in Arizona to keep the state's controversial new immigration law from taking effect next week.

CNN's Casey Wian is working the story for us. He's on the scene.

What is going on, Casey, right now?

CASEY WIAN, CNN CORRESPONDENT: Well, Wolf, you may able to see right behind me. We have got police officers who are arresting some of the activists who are protesting Arizona's controversial anti- illegal immigration law outside of the U.S. courthouse in Phoenix.

About half-a-dozen or so protesters gathered in the intersection here. Other protesters surrounded the intersection. They basically have stopped traffic and blocked off that intersection. The police have moved in and have arrested so far three or four protesters. It looks like, maybe five or six in total are going to be taken into custody.

Now, all of this comes after a U.S. judge decided not to issue a ruling on two requests by different groups, one the Obama administration and one civil rights groups, seeking to block Arizona's law from taking effect. It goes into -- scheduled to go into effect in one week's time.

The government is arguing that only it has -- the federal government is arguing that it only has the authority to regulate immigration. And the activist groups are arguing that this law could lead to racial profiling U.S. citizens and legal residents being harassed and impacted by this law.

But, so far, the federal judge has said she is going to take this issue under advisement and has not said when she is going to issue a ruling. There have been protests out here all day. They have been largely peaceful, other than the fact that they have occupied this intersection and the police are now starting to take some of those protesters into custody -- Wolf.

BLITZER: We will stay on top of this with you, Casey. Thanks very much. The woman at the center of the firestorm, the ousted agriculture official, Shirley Sherrod, she spoke on the phone with President Obama today. Our own John King later spoke with Shirley Sherrod. You are going to find out what happened during that seven-minute phone call she had with the president.

And one of the most outspoken critics of the military's don't ask, don't tell policy says he has now been formally discharged from the United States Army. We're going to tell you why.

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

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: Imagine if key elements of the country's infrastructure were infiltrated and rendered useless by cyber-terrorists. Those mega-hackers could bring the U.S. to its knees, but defenses against such attacks may be another cause for concern.

CNN's Brian Todd takes a closer look.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice over): They power our houses, steer our planes, they're also soft targets, vulnerable to cyber attacks. Now word that the computers controlling America's power grids, air traffic control systems, and possibly nuclear power plants are getting a new protective shield called Perfect Citizen.

It's already controversial, because the National Security Agency, the eavesdropping arm of U.S. intelligence, is involved in it and much of it is classified. The NSA wouldn't give us details on how the program will work, neither would Raytheon, the defense contractor, which according to "The Wall Street Journal", got a big contract for the project.

I spoke with Jim Lewis at the Center for Strategic and International Studies. As part of his research, Lewis has been in contact with government officials who know about the cyber shield project.

(on camera): What do we know about this perfect citizen program and what it hopes to accomplish?

JAMES LEWIS, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: The Department of Defense has been concerned for more than a year about the problems that the U.S. has been having in cyberspace, both on DOD networks, but also against critical infrastructure. And there's a real fear that some of our foreign opponents had the ability to maybe attack us through this, to hurt DOD. And so there's a real interest in making DOD better able to operate in cyberspace and this is one of the initiatives that the department is making to do that.

TODD: Lewis and other experts say U.S. intelligent officials are getting more and more concerned that Chinese and Russian operatives are surveilling computer systems that control places like this, power plants, and other key parts of America's infrastructure.

(voice-over): Contacted by CNN, an official at the Chinese embassy in Washington called that notion ridiculous, unwarranted. And said in a statement, "We want to see no more of such allegations of China targeting U.S. infrastructure by using through the Internet." An officials at the Russian embassy would not comment.

As for the Perfect Citizen project, itself, the NSA's mere involvement is creating dispute. "The Wall Street Journal" which first reported this story says in order to detect possible cyber attacks on power grids and other utilities, the NSA "would rely on a set of sensors deployed in computer networks that would be triggered by any unusual activity."

In other words, a government spy agency would be putting sensors in the computer networks of private utility companies. If that's the case, it would contradict a promise the president made last year.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Our pursuit of cyber security will not include, I repeat, will not include monitoring private sector networks or Internet traffic.

TODD: The White House will not comment officially, but the NSA says its not contradicting what the president said. In an e-mail to CNN, an NSA spokeswoman called "The Wall Street Journal" story an inaccurate portrayal of the agency's work.

The NSA calls this a research effort and says, "It does not involve the monitoring of communications or the placement of sensors on utility company systems."

A representative for "The Wall Street Journal" told us, "The Journal" stands by its story. Even if the NSA is not monitoring the private grid, Marc Rotenberg, of the Electronic Privacy Information Center, has a problem with any involvement by the NSA in private business.

(on camera): What about the argument that America's infrastructure, in some areas, is more vulnerable now than it has been for in a long time, and it needs this kind of security from government agencies.

MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: We think there is a need to promote better security in the United States, certainly, but the question is whether it should be done by the government, by the private sector, or in this instance by a secretive agency that's not very accountable. We prefer a private sector-led initiative with support from a government agency that is more open, more accountable.

TODD (voice-over): The NSA would not respond directly to that. But the agency did say that any suggestion that there are illegal or invasive domestic activities associated with this contract are simply not true. Brian Todd, CNN, Washington.

(END VIDEOTAPE)

BLITZER: President Obama talks to Shirley Sherrod. She talks to CNN's John King. He is standing by with details of his interview with the unfairly ousted USDA official.

Plus, one cash-strapped city weighs drastic action to slash costs, possibly even cutting out toilet paper.

(COMMERCIAL BREAK)

BLITZER: All right.

We are getting new information just coming into THE SITUATION ROOM right now, a very disturbing development involving weather in the Gulf of Mexico.

Let's bring back Chad Myers, our meteorologist, severe weather expert.

What is going on, Chad?

MYERS: Well, at the top of the hour, Wolf, when I described the system I said that there was a weather service air force reconnaissance plane flying back and forth and we knew it found a higher wind speed than 35. In fact it found 45, and the hurricane center says that's close enough to 40 to upgrade it to tropical storm Bonnie. Although it did not happen at 5:00 or 8:00 or 11:00 when the updates always come out, in between, they sent out an e-mail and said, it is TS Bonnie and no longer tropical depression number three. As it gets bigger and into the Gulf of Mexico, there is a lot of warm water there for it to work with, Wolf.

BLITZER: Yes, this is a disturbing development, and just when things seemed to be falling into place. All right. Thank you, Chad, very much.

President Obama spoke by phone with Shirley Sherrod, the former agricultural department official forced to resign after a misleading video clip falsely implied that she discriminated against a white farmer. That followed apologies to Sherrod by the agriculture secretary Tom Vilsack, and the white house.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: On behalf of the administration, I offer our apologies. Again, this is more directed at everybody at large here, because I think that everybody has to go back. We have, and we will continue to, and look at what has happened over the past 24 to 36 hours, and ask ourselves how we got into this. How did we get into -- how did we not ask the right questions? How did you all not ask the right questions? How did other people not ask the right questions?

BLITZER: Let's talk about this with our CNN political contributor the Democratic strategist Donna Brazile who has been very much involved in trying to find out what is going on like all of us and you have been specifically looking at lessons learned and we have to come out of that with lessons learned, and I want to get to that, but first there are questions in your mind about what happened, and for instance what?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, first of all, I agree with Robert Gibbs. How did the white house act without facts? How did someone at the white house make a judgment call on Mrs. Sherrod without Googling her name, which I did, and you come up with all of this interesting information about Mrs. Sherrod as well as her husband, Charles Sherrod. I wanted to know who inside of the department of agriculture authorized Mrs. Cook to call. There are a lot of outstanding questions and I hope to get to the bottom of it, because as an African-American, as a woman who not only supported President Obama, but as member of the Democratic Party, I want to be able to tell people when they come to me to say, I know what happened and here is what the white house did to correct the problem, so it will never happen again.

BLITZER: Some say this is an administration who is too afraid of conservative media, and what they would do with this little video clip. Do you believe that?

BRAZILE: Well, the administration is not the only entity that overreacts to the conservative media. At times we react to the conservative media and national organizations and bloggers, so they are right now controlling the negative. But I hope that one of the lessons that we learn is that we wait, that we wait to check the facts, and that we look at the material, and not be so quick to go and put this information on the news.

BLITZER: Because everybody was rushing to judgment. It was a false judgment. Based on this little clip that should have been much more thoroughly investigated and you did it, and you came to conclusions which was very, very important but not just the white house and the NAACP, but a lot of people did.

BRAZILE: Do you know how many freedom fund dinners I give every year and I can tell you first of all nobody gives a 12 minute speech at the NAACP. You have to come there to come low, and go slow, and sit down and strike fire, and that is a 45-minute speech she gave, so the first thing I wanted the know the context of the speech and I wanted to listen to it and that is what I did before coming on the air.

BLITZER: Let's take look at the poll numbers here at CNN Opinion Research Corporation poll which has just come out. Among all Americans how many supporters of the tea party movement are prejudice against minorities. 25 percent, almost all or most. 56 percent say some or few, 17 percent say almost none. Among African-Americans, the same question was asked, 41 percent believe almost all or most of the supporters of the tea party movement are prejudice against minorities, and 52 percent, some or few, and 2 percent almost none. More African- Americans than Americans in general believe that there is a prejudice among the supporters of the tea party movement. Why? BRAZILE: Well, if you look at my father's generation and my generation, we grew up an era where there was segregation and there was racism and there were people shouting and people downed, and there were acts of violence. When you see signs of that creep back into the culture, you get worried. Now, I can't speak for my niece and nephews and their generation, but I can tell you, Wolf, there are times when I am alarmed by the rhetoric, but I know that the members of the tea party as a whole, they are out there, and they disagree with President Obama philosophically, but I am not willing to smear them.

BLITZER: Thank you, Donna, for all of the work you are doing.

BRAZILE: Thank you.

BLITZER: A big phone call with the boss, and ousted agriculture member Shirley Sherrod spoke with him for several minutes. Does she want to go back to work for the government? Candy Crowley and John King are standing by.

And Newark, New Jersey might be saying no more toilet paper for city employees. What is behind this drastic move? We'll have a live report.

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

(COMMERCIAL BREAK)

BLITZER: All right. President Obama has granted an interview to ABC News and he spoke about the Agriculture Secretary Tom Vilsack's decision to go ahead to fire Shirley Sherrod, and listen to this.

PRES. BARACK OBAMA (D), UNITED STATES: He jumped the gun partly because we now live in this media culture where something goes up on YouTube or a blog, and everybody scrambles, and I have told my team and I told my agencies that we have to make sure that we are focusing on doing the right thing instead of what looks to be politically necessary at that very moment. We have the take our time and think these issues through.

BLITZER: The president of the United States. All right. Let's bring in Candy Crowley our chief political correspondent and host of "STATE OF THE UNION" which airs Sunday mornings at 9:00, and John King who hosts "JOHN KING USA" which comes up right at the top of the hour. You spoke with Shirley Sherrod, John. She had a seven minute phone conversation. The president called her. How did that conversation with you go?

JOHN KING, CNN ANCHOR: The conversation went very well. We finished just a few minutes ago. She said she had a very good, brief conversation with the president, and she is grateful. She said he did not use the words I'm sorry, but everything he said was right in that vain that he regretted what had happened. Interestingly, she said she still has questions and she still believes that someone, and not the president, and she believes him, but someone in the white house she still thinks was involved in her firing. Other things, Wolf, she is not sure if she will take the job and she is exhausted and wants to think about it, very, very tough words for the NAACP and how they treated her in this, and I asked her about Andrew Breitbart, the conservative who put those edited we now know out of context clips on the internet and said what do you think of him?

(BEGIN VIDEO CLIP)

KING: Miss Sherrod, if you had 30 seconds with Andrew Breitbart, what would you say?

SHIRLEY SHERROD: I would tell him he is a liar. He knew exactly what effect that would have on the conservative racist people he is dealing with. That is why I started to get the hate mail. And that is why I started to get the hate calls. He got the effect he was looking for.

(END VIDEO CLIP)

KING: She said it would take a very long time, and she would have to have deep personal conversation with Andrew Breitbart, and she will forgive the white house, and Secretary Vilsack, but not Andrew Breitbart.

BLITZER: Well, what is your take, Candy. I have been anxious to speak to you over the last couple of days. What do you think about this?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: I think that the post racial presidency isn't. I was having a conversation with someone today and I said the white house seemed to kind of try to take President Obama out of this, and sort of keep him above it, and yet he makes this phone call, and I said, that there is no way to keep this president away from racial issues. He is the first African-American president, and naturally, I mean, I was trying to think that if this, if the gates, the Harvard thing that happened with the policeman, and the professor, if that had happened under George W. Bush, nobody would have looked at him to say something, but they do look to Barack Obama to say something, because he is president and made history and something they know they have to live with.

BLITZER: So, it is not just that the buck stops here as Harry Truman said, but also because he is African-American.

CROWLEY: Sure, sure. Ask any other -- and look at any other president trying to put him in position of the particular Harvard incident and no one would have expected that they would have to put something out there, but they do expect it of President Obama, and they do also expect, and they did political 101, get rid of the problem. That is what everybody's first reaction is when a political problem comes up, everybody has learned to get rid of the problem, and that is a problem for them, except he is exactly right in this day and age --

BLITZER: It turned out to be a big problem.

KING: Except that she was not a problem and gave a remarkable and redemptive speech. Remember when the Gates thing happened the president regretted that the Cambridge police acted stupidly and now his administration has acted stupidly. They responded to pressure from the right. They didn't check out whether this speech was in its entirety and they fired the problem because they accepted Breithart's description that she was a racist and she was a problem and it looks especially bad when it is the administration of the first African- American president, and the NAACP, an organization founded on the basic premise to treat everybody fairly, that they jumped the gun, and didn't give this woman a fair hearing, and they have egg on their face and they know it.

BLITZER: John's interview with Shirley Sherrod coming up at the top of the hour. We look forward to that John. Thank you. Look forward to "STATE OF THE UNION" Sunday morning.

We'll have much more on the Sherrod story as well. CNN's Jeanne Moos is getting ready to take a most unusual look.

And a big city mayor explains why toilet paper may soon be axed from the budget.

(COMMERCIAL BREAK)

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

LISA SYLVESTER, CNN CORRESPONDENT: Well, President Obama has just put pen to paper extending the unemployment benefits for nearly 3 million Americans. A vote in the house earlier today ended a seven- week standoff sending the bill to the oval office. The stroke of the president's pen now pushes back the deadline to file for extended benefits to the end of November. Jobless Americans stopped getting the checks in early June.

Once bankrupt General Motors is spending $3.5 billion in cash to buy subprime auto lender AmeriCredit and this gives the car maker its own finance arm once again. General Motors used to own GMAC which made car loans and was a major subprime mortgage lender. This is GM's first major purchase after merging from bankruptcy one year ago with taxpayer help. GM is expected to go public again later this year or in early 2011.

This horrific mangled mess is a Greyhound bus that was filled with passengers. Six people are now dead, and dozens are injured after a collision involving two other vehicles. It happened overnight on highway 99 near Fresno, California. Witnesses say that the impact was like a bomb going off, and the fatalities were four women and two men included the bus driver and at least one person in the SUV. Wolf?

BLITZER: What a sad story that is, and those pictures are so dramatic. All right. Thank you, Lisa, very much.

Drastic times call for drastic measures so why is one New Jersey city possibly axing everything from printer paper to toilet paper for the employees and what are the city workers about to do? A live report that is coming up. And it seems that it is the thing to do this week. Just about everybody is now saying I'm sorry to Shirley Sherrod, and Jeanne Moos is coming up with a most unusual string of apologies.

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

(COMMERCIAL BREAK)

BLITZER: Disturbing story involving Northwest Airlines just coming in. Allan Chernoff is getting the details for us. What are you learning, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, the U.S. office of special counsel has substantiated the allegations of a whistleblower who worked for the Federal Aviation Administration and he had charged that Northwest Airlines had violated more than 1,000 airworthiness directives. Those are safety directives from the FAA. This is over the course of more than a decade beginning in 1998 all of the way to 2008, and this is a serious, serious matter. The case had been brought by an FAA inspector who had watched over Northwest Airlines, complained about noncompliance and it turned out the FAA, instead of penalized and fining Northwest, actually just worked with the airline to resolve the issues just issuing letters. So now the office of special counsel has substantiated those complaints. Wolf?

BLITZER: We'll see where this goes from here. Allan, thank you.

Times are so tough in Newark, New Jersey that the mayor is making drastic cuts to the city's budget. With a growing, growing deficit, Mayor Cory Booker is slashing everywhere. He's even proposed cutting the toilet paper from the city's budget. Mary Snow is joining us now with more on this story. Times are pretty tough, Mary.

MARY SNOW, CNN CORRESPONDENT: They are, Wolf. Newark's mayor is making what he calls draconian cuts to avoid raising taxes. About toilet paper and printed paper, he says by cutting those contracts he could save thousands of dollars, and this cash strapped city needs it.

(BEGIN VIDEOTAPE)

SNOW: A glimmer of hope in a struggling city, a clothing store opening. But for the rest of Newark, New Jersey, the picture is grim. Mayor Cory Booker plans to slash spending everywhere. One thing that caught our attention, you said you were even cutting back on toilet paper. Are you really serious about that?

MAYOR CORY BOOKER, NEWARK, NEW JERSEY: I'm telling you that we're going to stop spending everything from printer paper to toilet paper, stop washing windows, anything that we need to do to keep the fiscal integrity of our city strong and solid. Everybody is watching us from bondholders to local residents who are worried about their fourth quarter tax bill. So I would much rather go without some of these things than have my taxpayers in the city of Newark, my homeowners and my renters face yet another cost of living increase they can't take right now. SNOW: Besides the prospect of having to bring in their own paper and toilet paper to work, non-uniform city workers could be cut to a four-day work week. More than 300 firemen and policemen stand to lose their jobs in a city where the unemployment is 15 percent. All city pools are slated to shut next month. Booker says the cuts are necessary. He had hoped to raise revenue by converting the city's water system into a municipal utility authority, a new agency that could sell municipal bonds, but Newark's city council rejected that idea and accuses booker of using scare tactics.

RAS BARAKA, NEWARK CITY COUNCIL: That's the most ridiculous thing I ever heard of. You're not going to buy toilet paper, you're not going to do these kinds of things. These are extreme kind of things to force the council to participate or vote for municipal utilities authority that we think is bad public policy.

BOOKER: This is not scare tactics. This is a fact of life right now.

SNOW: Booker is predicting the next couple years will be the most difficult Newark has seen in a long time.

BOOKER: I have so much faith in our people that we will not only survive this but we will come out of it and find was to thrive at greater and greater levels.

(END VIDEOTAPE)

SNOW" These cuts will go into effect barring any action from the city council in the next couple of weeks, and that means in late September nearly 1500 city workers will begin four-day work weeks. Wolf.

BLITZER: Mary Snow, thank you.

John King speaks with Shirley Sherrod at the top of the hour on "JOHN KING USA." When we come back Jeanne Moos with a most unusual look at this entire controversy.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some hotspots. In Sydney, dancers rehearse a routine inspired by evolution and diversity.

In India, women are splashed by a passing car after heavy rain flooded parts of the country.

At a botanical garden in Tokyo, two girls admire a giant blooming flower.

And in Mince Belarus, look at this, a sparrow steals food off a plate at a restaurant.

Hot shots, pictures worth 1,000 words.

So sorry, that's the message everyone has for the ousted agriculture official Shirley Sherrod these days. Well, almost everyone. Jeanne Moos takes a most unusual look.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: She's become omnipresent, practically a human microphone. A few days ago we never heard of her, and now we're on a first-name basis.

ALI VELSHI: We'll try to talk to Shirley.

UNIDENTIFIED MALE: Shirley.

DENNIS MILLER, RADIO TALK SHOW HOST: I'm sure whether to list Shirley under collateral damage or friendly fire.

MOOS: Some of us didn't even know how to pronounce her last name.

UNIDENTIFIED MALE: Who is Shirley Sherrod? Shirley Sherrod or Sherrod, whatever, okay.

MOOS: Almost overnight she went from villain.

NEWT GINGRICH, FOX NEWS CONTRIBUTOR: Viciously racist attitude.

MOOS: To heroine.

WHOOPI GOLDBERG: Please welcome Shirley Sherrod.

MOOS: Applauded on "THE VIEW" and patted on the back but she's been showered with apologies.

UNIDENTIFIED MALE: I ask for Shirley's forgiveness.

MOOS: From the secretary of agriculture and from the NAACP and even FOX News host Bill O'Reilly. First he asked for her head.

BILL O'REILLY, FOX NEWS HOST: Miss Sherrod must resign immediately.

MOOS: 48 hours later.

O'REILLY: I owe Miss Sherrod an apology for not doing my homework.

MOOS: Next on the apology parade, the white house spokesman.

UNIDENTIFIED MALE: Apparently she's watching this briefing, Shirley Sherrod, on CNN right now. Is there anything you want to say to her?

GIBBS: On behalf of the administration I offer our apologies.

MOOS: There was still the apogee of apologies.

UNIDENTIFIED FEMALE: Do you think you deserve a phone call from President Obama? SHERROD: I think I do.

MOOS: First you have to pick up the phone.

He said he tried to get me a couple of times last night.

UNIDENTIFIED FEMALE: Maybe that's what that unknown number is.

SHERROD: I've been answering it because I've been getting these crank calls.

MOOS: But instead of the president getting cranky when she finally called him back.

GIBBS: He expressed his apologies.

MOOS: Leaving one to go from --

SHERROD: The gentleman that started this, and I can't think of his name.

UNIDENTIFIED FEMALE: Andrew Breitbart.

SHERROD: Yes.

MOOS: Or as MSNBC's Keith Olbermann put it.

KEITH OLBERMANN, MSNBC: The scum that is this assassin Breitbart.

UNIDENTIFIED MALE: Tell me about this Breitbart.

UNIDENTIFIED FEMALE: Where is the apology from Andrew Breitbart?

UNIDENTIFIED FEMALE: He's unapologetic.

UNIDENTIFIED MALE: It's sort of ugly and contemptible and if he had any decency he'd apologize to Shirley Sherrod.

MOOS: But being Breitbart means never having to say you're sorry.

UNIDENTIFIED MALE: This was never about Shirley Sherrod.

MOOS: Shirley may be getting friendly rubs on "The View." What's his name is rubbing her the wrong way.

SHERROD: I can't think of his name.

UNIDENTIFIED FEMALE: Andrew Breitbart.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. "JOHN KING USA" starts right now.