Return to Transcripts main page

The Situation Room

Pelosi Rejects Calls to Step Aside; U.S. Jobs on President's Agenda Overseas; Keith Olbermann Off the Air

Aired November 05, 2010 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: Thanks very much, Brooke.

Happening now, the outgoing House speaker answers that she -- she will decide to run for minority leadership of the House of Representatives. Nancy Pelosi's decision to fun for the minority leader has caused some concern. Republicans are pouncing. Even some Democrats are upset. We have details.

The president is heading overseas right now, just days after what he calls his election night shellacking. He says he's taking the message sent by voters to heart.

Critics say he still doesn't get it. And MSNBC anchor, Keith Olbermann, is suspended indefinitely without pay. The network responding to the revelation that Olbermann violated NBC News ethics policies by donating to Democratic candidates.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

One of the most divisive figures of the 2010 campaign is polarizing some members of her own party right now, with her just announced plan to run for House minority leader. This is part of a letter the outgoing House speaker, Nancy Pelosi, wrote to Democrats explaining her decision: "As a result of Tuesday's election, the role of Democrats in the 112 Congress will change. But our commitment to serving the American people will not. We have no intention of allowing our great achievements to be rolled back."

Let's bring in our senior Congressional correspondent, Dana Bash.

She's working the story for us -- Dana, she says she's been encouraged to run for the minority leadership position by other Democrats. But I assume there are some other Democrats who don't want her to do that.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. You know, I just got off the phone with a source close to Pelosi who said she did tell this person she seriously considered stepping down, but it was because she made calls -- in fact, she spent about two-and- a-half days on the phone making calls to her colleagues. And she said that she felt encouraged to stay on. And because, I'm told by other sources who are close to her, that she said doesn't feel like she's finished. She doesn't want to slink away in defeat. She wants to stay on, try to get Democrats back in the majority and wait until some of the topics, the policy legislation that they pushed takes hold.

Now, it's important to note that she does have the votes to win. And nobody whom I've talked to says otherwise.

BLITZER: But, Dana, the -- but there are Democrats who don't want her to run.

What's been the public reaction so far from those Blue Dog Democrats and others, who say, you know what, she should have just retired gracefully?

BASH: Very, very interesting. I have talked to Democratic Congressmen all day long today, Wolf. And there really does seem to be a divide -- a split among Democrats about whether this is the right thing do. And it really does seem to re--- reflect the divide in the House Democratic Caucus after they got the drubbing that they got on Tuesday.

First, you have the so-called progressives, those who are -- tend to be her natural base in the party. Many of them are publicly supporting her. I'll tell you one, George Miller. He actually made calls from -- for her. I'll put up the statement that he put out on the screen. He said: "Nancy Pelosi is the single most effective member of Congress. She had accomplished more than any other speaker in history."

Now, even though he said that and he certainly believes that, I'm told that even some so-called progressives -- liberals who are going to support her -- say that they wouldn't have been really that upset if she didn't actually run, because of the fact that they think that maybe it's time to have a new face for the party. Then, on the other side of the Democratic political spectrum, you have conservatives. I talked to many of them today, Wolf, who say under -- in no uncertain terms, they think that this is a bad idea for Nancy Pelosi to run again.

One of those Democrats I talked to was Pennsylvania's Jason Altmire. And he said he's not going to vote for her. I'll put up on the screen what he told me in a telephone interview. He said: "I don't get the sense that Speaker Pelosi understands what happened on Tuesday. We lost middle America. The Democratic Party got crushed." -- Wolf.

BLITZER: There's going to be a fight for the number two position in the Democratic leadership, as well, isn't there?

BASH: There is. And this is going to be, frankly, where the real drama is about the -- the heart and soul of the new Democratic minority. It is going to be between Steny Hoyer, who is now the number two Democrat, and James Clyburn, who is now the number three. There's sort of one of those jobs goes away in the minority. So they're going to be fighting now for the number two spot.

James Clyburn is not only the highest ranking African-American in Congress, he also tends to represent the more liberal wing.

And then you have Steny Hoyer, who tends to represent more moderates. The problem Steny Hoyer has is that many of his natural base, they got wiped out. Almost -- or more than 20 Blue Dog moderate Democrats, Wolf, they lost.

So that is going be a potential problem for Steny Hoyer. But both of these people are very well liked among their colleagues. This is going to be a very tough one, but again, a fight for the heart and soul of the new Democratic minority moving forward in the House.

BLITZER: Fighting amongst Democrats on Capitol Hill. I guess we shouldn't be too surprised, given the setbacks they suffered on Tuesday.

Thanks very much for that, Dana.

Let's bring in our senior political analyst, Gloria Borger.

We'll dig deeper a little bit.

What are you hearing right now about how she came up with this decision and why decided to do this?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I think that she was considering leaving. And I think that there were a lot of liberals -- progressives who came in to her and said -- particularly after some members of the caucus publicly said that she shouldn't run again and who said, you know, we've got the power in this caucus right now and we want you to run.

I think what's really interesting to me, Wolf, is that when you listen to the explanations about why they think it makes sense, the most credible explanation I heard was from a Democrat, who said, look, it's kind of like Nixon going to China. If this caucus has to move to the center at some point, Nancy Pelosi has the credibility with the liberals to say, you know what, you're going to have to just go along with it on this vote and follow me, because we need to cut a deal here, if she's willing to do that. They say she's strategic. She -- she, you know, understands what's occurred in the country, so that she could actually move the liberals a little bit easier than -- than a moderate could, because she's already got a great reputation and some credibility with that -- with that party -- the party.

BLITZER: Because a lot of her critics -- and they used her picture, her image in a lot of the ads...

BORGER: Yes.

BLITZER: -- attacking Democratic representatives...

BORGER: Right.

BLITZER: -- and -- and the Democrats lost a -- a lot of seats, in part, because...

BORGER: Sure.

BLITZER: -- they were burdened, presumably, by...

BORGER: Sure.

BLITZER: -- being linked to Nancy Pelosi.

BORGER: She's been completely vilified. She also raised $65 million, though, for the Democratic Party. So they also say -- and these are her defenders -- they say, look, Barack Obama is going to be the subject of the ire of the Republican Party. Nancy Pelosi will be the leader of the minority. And she's good. And she's strong. And she can lead the liberals.

Don't forget, there are so many more liberals, as Dana was just saying, in this party right now and in this Demo -- you know, in the Democratic Caucus in the House in particular.

So the White House was not consulted. She informed the White House that this is what she was going to do. And they're not complaining about it, so far as I can tell.

BLITZER: All right. Thanks very much, Gloria.

We'll have you back shortly.

But I want to talk right now to one of those moderate House Democrats who urged Nancy Pelosi publicly to step aside from her leadership role and isn't very happy that she rejected that advice.

We're talking about Congressman Dan Boren of Oklahoma.

He's joining us on the phone.

Congressman, why didn't you want Nancy Pelosi to run for minority leader?

REP. DAN BOREN (D), OKLAHOMA: Well, I think it's so important that our country has a has a -- you know, has a leader that will bring people together. Nancy Pelosi, the -- for her, this is not personal. I think, really, it's time to move forward. We need bipartisanship. People are thirsting for it right now.

I can tell you, in my district, they don't like the direction of the Congress. They didn't like the way the health care bill was handled. They didn't like cap and trade.

And for the Democratic Caucus to -- to basically go back and say, well, we lost 65 seats and this is -- this is the track that we're going to stay on, to me, is baffling. I think the speaker was given room to -- to leave gracefully. And, frankly, I'm going to be voting, whether or not she wins in the caucus, on the floor of House of Representatives, I'm going be voting for a more conservative Democrat. We've got to come to the center. And, frankly, hopefully, the president also got this message. We cannot lurch too far to the left. BLITZER: Do you have any chance of beating her, you and your colleagues who oppose her as the new Democratic minority leader?

BOREN: I think it's very difficult. You know, frankly, as was mentioned before, the base of the party is still there. A lot of my colleagues and the Blue Dogs, new Democrats, were defeated. But, frankly, I'm -- I'm reaching out to some of those folks, even in the progressive wing, that, you know, maybe they'll make the determination that, you know, we may agree with Nancy Pelosi, but the facts are the facts. You lose 65 seats, there is something wrong. It's not just the economy. It's the way that the process was done in Congress. We need more transparency. We need more time for members to read bills. I mean all the disgust that was going on out there in the public was toward the speaker.

And it's time -- it's time to move in a different direction.

BLITZER: So do you think that Democrats, who are up for reelection in the House -- and all of them will be in 2012 -- are going to be, once again, burdened by having Nancy Pelosi as the face of the House Democratic leadership?

BOREN: I -- I think so, frankly. And I -- you know, that's why I think you'll see a lot of us not vote for -- for her on the floor. They're are going to be a lot of us who are going to -- to support a more conservative Democrat, you know, not voting for the Republicans, but voting for someone who's a centrist, who's a consensus builder. You know, they could be a strong Democrat, but they've got to be someone who is going to reach across the aisle, look for bipartisan, common sense, reasonable solutions to America's problems. Someone that is just going to be out there whipping up the base is not going to be effective to solve our problems.

BLITZER: Congressman Dan Boren, Democrat of Oklahoma, thanks very much for joining us.

BOREN: Thank you, Wolf.

BLITZER: A new sliver of hope for unemployed Americans, but the president still has a lot of work cut out for him on his new mission to create jobs.

And U.S. authorities bust an arms smuggling ring and point a finger at Special Forces returning from the war zone.

(COMMERCIAL BREAK)

BLITZER: Right now, a new unemployment -- a new employment report, I should say, is giving American workers and President Obama something to cling to after painful losses in the jobs market and the Democrats' trouncing on election day. The government reports a net gain of 151,000 jobs in this country last month. That's better than many analysts were expecting and the best overall increase since May. Still, no dent in the unemployment rate. That's holding at 9.6 percent. The president played up the numbers and the work that still needs to be done. (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Based on today's jobs report, we've now have seen private sector job growth for 10 straight months. That means that since January, the private sector has added 1.1 million jobs.

Let me repeat, over the course of the last several months, we've seen over a million jobs added to the American economy.

In October, The private sector has added 159,000 jobs. And we learned that businesses added more than 100,000 jobs in both August and September, as well. So we've now seen four months of private sector job growth above 100,000, which is the first time we've seen this kind of increase in over four years.

This is a reminder, as well, that the most important competition we face in this new century will not be between Democrats and Republicans, it's the competition with countries around the world to lead the global economy.

And our success or failure in this race will depend on whether we can come together as a nation. Our future depends on putting politics aside to solve problems, to worry about the next generation instead of the next election.

We can't spend the next two years mired in gridlock. Other countries, like China, aren't standing still. So we can't stand still, either. We've got to move forward.

(END VIDEO CLIP)

BLITZER: The president spoke shortly before boarding Air Force One and heading to Asia. He landed, by the way, just moments ago at the Ramstein Air Base in Germany on his way to his first stop of history 10 day trip, the first stop being India.

Our senior White House correspondent, Ed Henry, is already in Mumbai.

He's joining us now live.

The main purpose -- I take it the main purpose of this trip, or at least one of the main purposes, is to help U.S. exports, thereby creating jobs in the United States, looking for markets in India, Indonesia and elsewhere.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Absolutely, Wolf. I mean this White House knows that they're going take some heat from Republicans back home for leaving the country so quickly after those disastrous midterm elections that were all about jobs. But -- but that's why they're going to push back hard and say, look, this trip is all about American jobs, specifically here in India.

In fact, we've just learned the president, tomorrow, is going to have an op-ed in "The New York Times" on Saturday that's going to lay out his economic vision and is going to make this case, that basically if you look at the Indian economy, it's raging right now. It's on fire -- 8 percent growth. That's forecast to continue for the next few years, despite the international financial crisis.

And that means that right now, Indian companies are the second fastest growing companies in the U.S., in terms of investment, back in America, supporting 67,000 jobs right now.

The president hopes, obviously, that investment continues and that expands.

Secondly, you've got the fact that U.S. exports coming into the Indian market, it's quadrupled in recent years, now $17 billion. The president hoping to expand that. In fact, one of the things he wants to try to hammer out here is some big, big deals that would include the Indian military, as well as Indian airlines buying U.S. planes. That would mean contracts worth billions and billions of dollars. Again, that's U.S. jobs back home -- Wolf.

BLITZER: He's got other issues on his agenda, as well, strategic issues, the overall U.S. relationship with India.

But I take it terrorism is also a key subject.

HENRY: Absolutely. It's just two years ago, you'll remember, they had these awful Mumbai terror attacks right here. The president is going to be staying at the very hotel where those attacks played out. He's going to give remarks there, sign the guest book, meet with some of the families of the victims and make clear that the U.S. and India cooperating in terms of fighting terrorism. But also, this region, the fact that India is neighbors with Pakistan, there are some tense issues there, India very skeptical of all the U.S. aid to Pakistan. They don't believe that Pakistan is really an ally in the war on terror. So that's an issue.

Then you had John McCain back home in the U.S. today, charging that if the U.S. pulls out of Afghanistan too quick, that's really going to harm US-India relations, because India is very worried about what's going to be left behind in Af -- Afghanistan if the U.S. pulls out.

Again, another neighbor -- and yet, of course, China is a neighbor of India, as well. They are right in the middle of a lot of big, big global issues -- Wolf.

BLITZER: Ed Henry on the scene for us in Mumbai.

We'll stay in close touch.

Thanks very much.

This is what President Obama might see in his next stop in Asia after India -- we're talking about Indonesia. A volcano has been spewing ash, gas and rocks for the last 24 hours or so. It's being called the largest interruption yet of Indonesia's mountain of fire. As many as 113 people have been killed since the volcano became active 10 days ago. Thousands of people have been running for cover.

One day after a Qantas Airlines jet lost part of an engine after takeoff, another in-flight scare for passengers flying on the same airline out of the same airport. We have new details.

And the MSNBC host, Keith Olbermann, gets in hot water with his bosses over at NBC News for a potential conflict of interest.

We're going to tell you why they're taking him off the air.

(COMMERCIAL BREAK)

BLITZER: More engine problems for another Qantas flight.

Let's go to Fredericka Whitfield.

She's monitoring that and some other important top stories we're following right now.

What's going on here?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again, Wolf.

Well, for the second time in two days, a Qantas jet has returned to Singapore's airport due to engine problems. In today's incident, a passenger aboard the 747 said he saw flames outside the jet's window shortly after takeoff. Yesterday, a Qantas Airbus jet also made an emergency landing after one of its four engines shut down. The Australian Transport Safety Bureau is now investigating.

And another delay for NASA. The space agency has postponed today's launch of the Space Shuttle Discovery due to a gas leak. This follows several other delays for issues including bad weather, gas leaks and electrical glitches. The soonest they'll reschedule the launch is November 30. This will be the 39th and final launch for Discovery.

And cheese sold in Costco stores in five states is being linked to E. Coli. The Bravo Farms Dutch style raw milk gouda cheese was sold during October in Arizona, California, Colorado, New Mexico and Nevada. The Food and Drug Administration says no one has died, but 25 people have gotten sick from E. Coli. It says people who bought the cheese should throw it out in a closed plastic bag. Costco is also offering refunds -- Wolf.

BLITZER: Gross.

WHITFIELD: Yes. Yuck.

BLITZER: Yes.

WHITFIELD: No grilled cheese.

BLITZER: No. OK.

All right, thanks. WHITFIELD: No cheesy anything.

BLITZER: Thanks, Fred.

Keith Olbermann bosses over at MSNBC say he broke the network's rules against donating to political candidates. We're going to talk about the decision to suspend him without pay.

And the people of Haiti got brushed by a powerful storm and they brace for yet more misery.

(COMMERCIAL BREAK)

BLITZER: MSNBC is suspending Keith Olbermann indefinitely without pay after news that he contributed more than $7,000 to two Democratic House candidates and a Democratic Senate candidate. The network says Olbermann, the host of the prime time show, "Countdown," violated network ethics policies barring employees from making political contributions without permission.

Let's discuss this and more in our Strategy Session.

Joining us, our CNN political contributor, Roland Martin, and our CNN political contributor, the Republican strategist, Ed Rollins.

Guys, thanks very much for coming in.

ED ROLLINS, CNN POLITICAL CONTRIBUTOR: Sure.

BLITZER: Ed, I'll start with you.

Is MSNBC right to suspend Keith Olbermann?

ROLLINS: If that's their rule and he violated the rule, then they're right. You know, at the end of the day, I think everyone knows that Keith Olbermann is -- is a -- is a screaming liberal. I don't watch him, so I can't comment too much beyond what I know from a -- in a public arena. But if that's their rule, you know, if they don't like it, they can change the rule or he doesn't have to work there.

BLITZER: Bill Kristol, the conservative editor of "The Weekly Standard," said this. He said: "Perhaps Olbermann violated NBC News policy and standards, but NBC doesn't have real news standards for MSNBC, otherwise the channel wouldn't exist. It's a little strange to get all high and mighty now."

What do you think...

Roland?

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: Well, first of all, it's interesting that Bill Kristol would have the audacity, the unmitigated gall, to talk about being high and mighty when he was one of the people who was championing leading us into a war we should not have been in. So maybe "The Weekly Standards" need their own standards.

But look, when you think about a network, MSNBC, understand, you have NBC News, you have -- you have Universal, you have General Electric. So you really have company standards.

Here at CNN, this is CNN Domestic. We have HLN, International. With have radio. And so you really fall under that umbrella.

If there are rules and it's clear and concise, you violate them, then that's the case.

But you know what?

We have a situation where on Fox, you have people who were literally on the air, you know, raising money for people. There were instances of MSNBC anchors, you know, saying call this number, donate.

So there's a problem there, I think. From an audience standpoint, we need to separate people who literally are campaigning on the airwaves, as opposed to disseminating information for the purpose of the viewer to be able to learn from.

BLITZER: Ed, do you want to react to that or do you want to move on?

ROLLINS: No, I mean, I personally think anybody should be able to give whatever money they want to and it's part of free speech. And I'm an advocate, obviously, for that. I think disclosure is the key thing. And I think that the bottom line is maybe they need to change their rules, since MSNBC has now become pretty much a liberal bastion, just as Fox -- Fox is to the right-wing.

But I think if you're doing that, you can't pretend you're neutral and you can't pretend you're not what you are. And if he would have stood up and said, listen, I just gave $2,500 to this person that I'm interviewing in an hour, just understand that, I'm supporting his candidacy, then, you know, it's honest.

But I -- I don't think -- at this point in time, I think the issue is they have standards. They have rules. I'm sure he signed a contract. If he violated that contract, it's their prerogative to do whatever they want with him.

BLITZER: More on this story in the next hour. He's not been fired. He's only been suspended indefinitely without pay. So he's not been fired.

ROLLINS: He will not be missed.

MARTIN: I think some people will miss him, Ed. Come on, now.

ROLLINS: I won't -- I won't miss him.

MARTIN: You secretly watch in the basement, Ed.

ROLLINS: I don't even know MSNBC, Keith Olbermann. I had to read -- he used to be an announcer. I watch CNN.

MARTIN: Sure, Ed. Good answer.

BLITZER: All right, let's talk about President Obama. This trip to India and Indonesia and this trip to Asia has been planned for a long time. It's sort of awkward coming right now. But what do you do? You've got to go. He's already twice postponed a visit to Indonesia which is the largest Muslim country in the world.

ROLLINS: President's travel is very important. This is scheduled. He's a world leader. The fact that the elections didn't go well for his team doesn't effect that. My sense is he needs to get over the fact that the president needs to spend a great deal of their time conducting foreign affairs and it costs a lot of money to travel and protect the president. I worked for a couple of presidents so I totally understand that. The bottom line is nothing is going to happen of the significance that's going to need him here in the next couple weeks. It's not like running away or not like he's not going to be on TV every night.

BLITZER: The critics are making a big deal of how much money is spent to protect him, the hotel rooms, the flights, all of that. You heard all of that commotion on the conservative talk radio shows.

ROLLINS: I heard it for 30 years when I was in the white house. You get lousy salaries, you get a few perks when you go on the road. But we need to protect our president. We have one, whether Democrat or Republican. And whatever it costs to communicate, to move him around, whatever, should not be an issue.

MARTIN: This is the childish stuff we see now with people on the left and the right who complain about some of the most basic functions of our government. We can't talk about how do we engage folks across the world if we talk about Asian economy, when we talk about China being the number two economy in the world. When you talk about traveling to the region of Pakistan and on the border of India. We have to have those kinds of relationships. So it is childish to sit here and say, oh, they're spending money. Duh, Republicans are spending money, Democrats are spending money. We have to protect our president. If anything happened to our president, the same thing people who were crying saying where was the security? Why was there no protection? This is one of those ridiculous stories that's just ginned up by the folks on the right. Shut up, talk about something that's really important. Not a foreign trip.

BLITZER: I remember when I covered President Clinton's overseas trips to Asia or China or South America, there were always stories written about how much this is costing American taxpayers. But you know what, he's president of the United States, he's got to travel. He's got to meet with the world leaders.

MARTIN: The figures are false. Anderson Cooper did a great job.

BLITZER: Figures are way, way, way --

MARTIN: Anderson Cooper did a great job breaking it down exposing the people who are fraudulently passing this on. He's not exposed to that. That's how you keep people honest.

ROLLINS: The more important issue is he should go across the border and visit Pakistan. That's an important ally as long as that neighborhood. There's the Indian rivalry and there's the only criticism that's legitimate. I think both sides would argue --

BLITZER: Talk about worrying about security in India. You can imagine with security in Pakistan.

ROLLING: You got all of the planes and all of the secret service, you can go anywhere, you would think.

BLITZER: You would think. All right guys. Thanks very much.

It may be the last thing Haiti needs right now. It is. It's a monster storm. It's blowing past the earthquake-ravished country. We're going to see how bad it is. Stand by, it's bad.

The leaked video creating new tension right now between Japan and China.

(COMMERCIAL BREAK)

BLITZER: Hurricane Tomas has been passing Haiti pounding the already-devastated nation with high winds and heavy rains. Our meteorologist and severe weather expert Chad Myers is following all of this from the CNN hurricane headquarters. This is a horrible situation right now. There are hundreds of thousands of people living in tents -- or they were living in tents. What's going on?

CHAD MYERS, CNN METEOROLOGIST: Now they're just exposed to everything. Because they got moved out of there by the flood waters. And if you think about the south end of the island -- I'll draw you a map here in a little bit -- that's what this looks like. Water actually came in from the sea. Water -- this is the island. Here's Haiti itself right here. There's that big peninsula cuts itself off from the Dominican Republic which is there. As the south end of the island was getting basically the eye of the hurricane this morning, this is where most of the damage has occurred. Now, that said, the storm has been moving. Now the low is up here. And that is a different story for Port-au-Prince which is right there. Because the wind is going to start coming in like this. When the wind pushes in to the bay, it will push water in to the bay. But it will also push rain and clouds up the hill. Up the hill of Port-au-Prince. Port-au- Prince right here. All there. Here's the ocean a couple of piers there. Mountain -- mountain, mountain, mountain. Mountain -- all the way through here. All the rain that's going to get funneled in here tonight is going to get down and funnel into these little rivers and creeks and valleys that you see here in blue. Those are the places that people actually were setting up the tents because there were no homes there. People didn't put homes in the street -- stream and creek valleys because, well, there was going to be flooding there sometimes. That is the only place to put up buildings and tents. They didn't fall down. Now they're scrambling out of the river valleys and the flood plains to something a little higher. It's just a mess. This storm isn't over. Although the storm has passed by, its closest approach to Port-au-Prince never really gave it a lot of wind. The tent cities didn't get blown down. Winds are 30 or 40 miles per hour. They stood up. Now what we knew was going to be the problem was the rainfall as it spins in here. 24 hours more rainfall will cause which is basically a deforested country, Wolf, they cut down all of the trees to make charcoal and to burn them for their fuel. So the hillsides have nothing to hold them together. New trees are being planted. There are great efforts to plant new trees but they are young and they can't hold back big mountains.

BLITZER: Our heart goes out to all of those people in Haiti. What a disaster. Chad, thank you very much.

With the Republicans preparing to take over leadership of the House of Representatives, how much is really going to change? I'll talk to the Republican Congressman who's been tapped to lead the transition. Stand by.

And less than a month ago, he was getting pulled out of a mine in Chile after being trapped for more than two months. Now he's rocking American late night TV viewers with his Elvis impersonation.

(COMMERCIAL BREAK)

BLITZER: A viral leaked video that could raise tensions in Asia. Fredricka Whitfield is monitoring that and some other top stories in THE SITUATION ROOM right now. What's going on Fred?

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello Wolf. Take a look at the video. It's all the talk in Japan. The 45 minute leaked footage appears to show the September collision of the Chinese fishing boat and a Japanese coast guard ship. It happened in disputed waters between the two-countries and sparked a bitter diplomatic fight. The Japanese government was hoping to keep the video under wraps to avoid further problems.

One of the rescued Chilean miners put on a real show last night in "The Late Show with David Letterman." He said he loved Elvis Presley sang and showed off some of his best Elvis moves. If you don't believe

He's got to work on his bashfulness. He's a little too shy. Got to come out of that shell. Pena is reportedly in town in New York, of course, to run the New York marathon this weekend. He and 32 others were trapped in that Chilean mine for 69 days.

So what if one city banned Happy Meals? That is exactly what San Francisco has tried to do. City officials support a ban on McDonald's Happy Meals because they offer toys to attract kids while not meeting nutritional standards. The proposal would give McDonald's and other fast food chains a year to approve the meal's nutrition if they want to keep giving toys to the kids. McDonald's says, quote, it's extremely disappointed with the decision. It describes the meals as, quote, wholesome food. San Francisco expects a legal challenge if the ordnance does indeed go through. The very sad meal. What was once a happy meal to many.

BLITZER: I loved that Chilean miner.

WHITFIELD: That's my favorite.

BLITZER: He does great. Did you hear him do "Return to Sender?" You're too young to remember Elvis. You don't remember Elvis.

WHITFIELD: I do. I loved all of the Elvis movies.

BLITZER: Let's watch a little bit more of this.

WHITFIELD: OK. Good deal.

BLITZER: Watch this.

WHITFIELD: That's my favorite move right there.

BLITZER: Yeah. You got a little Elvis in you too.

WHITFIELD: Everybody loves Elvis.

BLITZER: "Blue Hawaii." I could go on.

WHITFIELD: Do mine on the next commercial.

BLITZER: Can't wait to see that.

WHITFIELD: You won't, don't worry.

BLITZER: Oh, darn, come on.

Nancy Pelosi says she'll run for minority leader in the House of Representatives. How do Congressional Republicans feel about that? I'll talk to the GOP lawmaker who's been asked to head the transition of power.

And an elderly white man transforms to a young Asian male in midair. What's going on? We'll have an exclusive report of a bizarre case of an airline passenger who disguised his identity.

(COMMERCIAL BREAK)

BLITZER: Nancy Pelosi took the speaker's gavel almost four years ago after Democrats won control of the House of Representatives during the 2006 midterm election. Now the tables are about to be turned with the Republican John Boehner all but certain to take the gavel back and become the next speaker of the house. Boehner has tapped Oregon Congressman Greg Walden to head up the transition to Republican leadership and review the way the House works right now. Congressman Walden is joining us from Capitol Hill. Congratulations to you, congratulations to the Republicans. Let me get your quick reaction to Nancy Pelosi's decision to run for minority leader of the House of Representatives. How do you feel about that?

REP. GREG WALDEN (R), OREGON: Well first of all, it's obviously the decision of the Democratic caucus to decide who leads them. I'm sort of surprised in some respects. It's not a model others have followed. But I think it's a reflection that their conference has left further to the left that it left than it was before the elections and they're going to pick somebody most likely to lead them that represents the very progressive liberal wing of the party. So I'm not stunned in that it's kind of what they're left with at this point. But it's clearly their decision to do. It shows I think some tone deafness of the message of Americans.

BLITZER: Do you think it's good for the Republicans who will be up in two years, the House members that she will presumably still be the Democratic leader of the House?

WALDEN: Well actually Wolf I think what we'll be judged on is did we do what we said we'd do. Did we accomplish our mission and goals, did we keep our pledge to Americans, did we open up and reform the process and did we put jobs first and did we do the best job we could to reduce deficit spending and get the spending under control? It will be a measure on us and a referendum, so we will see how it plays out, but we are going to do everything we can.

BLITZER: And I know you emerged from a meeting with the incoming speaker John Boehner and what did he say, and I don't want any confidential information --

WALDEN: Don't worry about that.

BLITZER: But as far as issue number one, what is the top priority right now for the Republican incoming leadership?

WALDEN: You know, obviously our big issues are jobs and the economy and dealing with this deficit spending and spending spree that has been on auto pilot, but what we are focused on now is the transitional period and reaching out to the new members coming in. Wolf, we're going to have 80 or more new Republican members in our conference and reaching out to say, how can we reshape this place to put it back in touch with the American people so they can participate in the legislative process, because it is more open and transparent?

BLITZER: How important is it to repeal the health care law?

WALDEN: I think it is very important to vote on the repeal and replace the health care law.

BLITZER: Even though it probably won't pass in the Senate and even if it were to pass in the Senate, the president would veto it?

WALDEN: Here is why it is important, because it is something we said we would do. I don't know about the other candidates, but I was very clear with the voters in my district. This is how government works. It's government 101. You have to have a majority in the House and at least 60 in the Senate and a president that will sign it, but I think the important thing is to try and fulfill the promises, and one of them is to put it up for a vote, and then we'll do the analysis and really do what Speaker Pelosi told the National Association of Counties, you have to pass it to find out what is in it. We will find out what is in it through oversight and really reveal what the true meaning and cost and consequences of the government takeover of health care is.

BLITZER: Should the Obama administrations start lawyering up, because the new chairman of the majority and you are the chairman are going to start issuing subpoenas and investigating?

WALDEN: You know, Wolf, this is not -- they should not have any reason to lawyer up. We are about public policy review. I think that is what the Americans want us to do. I don't think that our conference is in any witch hunts to require lawyering up. What we are into is what are the implications of the policies and the implication of the economy and the effect on jobs. It should be policy based review. That hasn't been done in a long time. Frankly even when the Bush administration was in place, we didn't do an adequate job of oversight of these federal programs and agencies, and we need to look at fraud, waste and abuse. And in the meeting that I was just in with Leader Boehner is, is this worth borrowing 40 cents and sending your child the bill? So I think we'll have some good guiding principles coming out of our process.

BLITZER: Congressman, thanks very much for coming in.

WALDEN: Wolf, good to be with you. Thank you.

BLITZER: Greg Walden of Oregon leading the transition for the Republicans.

A U.S. Navy S.E.A.L. is arrested for allegedly selling Iraqi weapons to undercover police here in the United States.

The terror threat inside of the USA. Three Somali Americans now stand accused of funding the work of a group linked to al Qaeda.

(COMMERCIAL BREAK)

BLITZER: U.S. authorities say they have busted an arms smuggling ring that involved a navy S.E.A.L. returning from war. Our Pentagon correspondent Chris Lawrence is joining us with details. What happened, Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, this sounds like some sort of movie script except that the guy you expect to come to the rescue and catch the bad guys is, well, accused of being the bad guy. A navy SEAL by the name of Nicolas Bickle is accused of stealing AK 47s from the Iraqi military, smuggling them home and then selling them to gun runners who were turning around and funneling them to Mexican drug gangs. I know it sounds amazing when you hear about it, and one of these co-conspirators, one of the accomplices when the federal agents raided his home, they found C-4 military grade explosives, night vision goggles and grenades

So how did this ring get busted? Well, a confidential informant tipped off the Bureau of Alcohol, Tobacco and Firearms. The ATF then sent an agent undercover and started buying guns from this ring. In the criminal complaint, the navy SEAL and his co-conspirators were at one point doing target practice at a gun range when Bickle allegedly threatened one of the other men. Take a look at this, quote, if you ever blank me, you know who we are, we are the government, and we will catch you. Well, the threat didn't work and he flipped and started to work and talk to the ATF. So how did he allegedly get so many guns back stateside? Well, all troops have to go through a customs screening near the battlefield before they leave to come back home, but one defense official told me that the search procedures for special forces are not as robust, that in some cases, it is more self- policing than anything else. In this case, we are talking about 84 AK 47s, but 60 of those had already been sold by the time the ATF busted the ring. That means that 60 guns are out there, and defense official told me that we have border patrol agents out there risking their lives fighting some very dangerous gangs and operating on both sides of the Mexican border and now we have a navy SEAL arming the very people that we may be fighting. Wolf?

BLITZER: Chris Lawrence reporting for us. Thank you.

Meanwhile, three Somali Americans are being held without bail in San Diego. They face five counts or for providing funds for terrorists back in Somalia. CNN's Casey Wian is following the story.

CASEY WIAN, CNN CORRESPONDENT: Wolf, those three Somali Americans appeared in San Diego in federal court today and they will remain jailed in solitary confinement until at least next week.

(BEGIN VIDEOTAPE)

WIAN: Three U.S. citizens of Somali descent are accused of providing thousands of dollars to al Shabaab, which is designated a terrorist group by the United States and trying to overthrow the weak Somali government. Dozens of the San Diego Somali community attended the hearing for the three men who are associated with this local mosque. Defendant Muhammad al Mahmoud is its imam. Members of the mosque expressed surprised at the charges.

ABDULLAHI AHMEN, MEMBER OF MASJID AL-ANSAR: I have never heard that about those guys, and I want to say that Shaikh Mohammed, our imam is supposed to give them to Somali.

EDGAR HOPIDA, COUNCIL ON AMERICAN-ISLAMIC RELATIONS: The Somali community is very fearful right now that their communities are under attack. These Somalis here are refugees through a war-torn country and the vast majority of them, if not 99% of them are against al Shab.

WIAN: Prosecution filings allege co-defendant Basaaly Moalin was heard talking with an al Shab military leader who told him, "It is time to finance the jihad." Moalin, a San Diego cab driver, also was heard on government wiretaps telling the imam to find "30 people or 20 that you can trust will be enough. You tell them to pay this much, something they can afford." And in another intercepted call another al Shabaab operative allegedly told Moalin, "One rocket-propelled grenade fired at them costs $270 just that single rocket."

MARC GELLER, ATTORNEY FOR BASAALY MOALIN: Well, at this time I've seen no evidence to show he's done anything illegal.

WIAN: All three defendants have pleaded not guilty to three counts of providing material support to terrorists, one count of conspiracy to kill in a foreign country, and one count of money- laundering.

(END VIDEOTAPE)