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"Enough is Enough," Rand Paul's Fight to Cut Spending; The Power to Investigate President Obama; How Twitter is Changing the World; Obama Commission Goes Public With Deficit Cutting Proposals

Aired November 13, 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, THE SITUATION ROOM: A new blueprint for slashing trillions of dollars from the federal deficit. A presidential panel's new draft report puts tax hikes and Social Security cuts on the table. This hour, the proposals and the political in-fighting surrounding them.

Also, he's accused the president of being corrupt. Now, Congressman Darrel Issa is getting the power to make the last two years of the first term of the Obama administration an investigative nightmare.

And those little messages that are changing the world. I'll speak with a Twitter co-founder Biz Stone, and share questions from my own Twitter followers.

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

It is a sweeping blueprint to cut $4 trillion from the spiraling U.S. deficit, but getting there will be politically difficult and financially painful. The co-chairman of President Obama's bipartisan deficit commission released their proposals this week and nothing is sacred. Everything from Social Security to the tax code would see major changes along with deep spending cuts across the board.

These proposals, and more, will be put to a vote by the 18-member panel next month; 14 votes are needed to send the recommendations on to Congress, which would also need to approve them.

(BEGIN VIDEOTAPE)

BLITZER: We're joined by Democratic Congresswoman Jan Schakowsky of Illinois, along with our Senior Political Analysts Gloria Borger and David Gergen.

Congresswoman, let me start with you. You hate these proposals and you're a member of the commission. Why?

REP. JAN SCHAKOWSKY, (D) ILLINOIS: I'm a member of the commission. We were told from the beginning that nothing would be done to Social Security that would be affect current beneficiaries. Of course, the proposal does exactly that. It changes the cost of living adjustment, the way we calculate it, that would affect current beneficiaries. And of course, in addition, does raise the age of retirement that will affect future beneficiaries as well. That's a nonstarter. It is just not going to happen.

In terms of Medicare, which takes an increasing bite out of Social Security, we see that the proposal includes increased cost sharing for seniors who are already spending about 30 percent of their income on health care. So you're going to see absolutely a firestorm of opposition from older and near older Americans against this proposal.

BLITZER: Why did they release these recommendations publicly today, because it caught all of us by surprise, Congresswoman?

SCHAKOWSKY: Well, you're not the only one. We went into the meeting today, thinking that it was going to be-the co-chairs' proposal and that's what we got. And until the very end, about an hour and a half into the meeting, we thought that it was going to be just a closed meeting and that we would reconvene next week to talk about those proposals. All of a sudden it was suggested that they don't they release it publically? And sure enough, at 1:00 o'clock press conference was called, and that was that. I objected to that, but here we are. So we were surprised as well.

BLITZER: Let me bring David Gergen and Gloria into this conversation as well.

David, you know these two co-chairmen Alan Simpson, the former Republican senator from Wyoming. Erskine Bowles, of North Carolina, he was Bill Clinton's chief of staff at the White House If you are going to deal with the national debt, and cutting that national debt. You are going to have to bite the bullet and make difficult decisions on Social Security, Medicare, entitlements, national security spending, and taxes. There is no other way, is there?

DAVID GERGEN, CNN POLITICAL ANALYST: There's no other way. I must say, our political leaders, with the support of the American people, have put us on a road to bankruptcy. And now it's going to take acts of leadership and courage to get us off and to get us to a much better place.

In my judgment, the proposals that have been put forth are sensible. You can disagree with aspects of them. But there is there's no other way you're going to get there without a package like this. It was an act of political courage, for Erskine Bowles and Alan Simpson, the co- chairs to put this forward, this set of proposals today. And for those who reject them out of hand, I think it is an act of political irresponsibility and, indeed, political cowardess.

(CROSS TALK)

GLORIA BORGER, CNN POLITICAL ANALYST: I just want to ask the

BLITZER: Hold on, hold on. Gloria, hold on, I would just want the congresswoman to respond and then I want to bring you in.

Go ahead, Congresswoman.

SCHAKOWSKY: All of us agree that we have to-that we are on an unsustainable path, fiscally. But we also, there are certain aspects of this that are just not acceptable.

When Erskine Bowles and Alan Simpson announced the proposals they said that about 70 to 75 percent is coming from cuts and about 25 to 30 percent comes from revenue. Well, some of us think that is not a good balance. In terms of Social Security, they claim that 57 percent comes from cuts, but the Social Security subcommittee, of the Ways and Means Committee, says actually it's closer to 76 percent of the changes in Social Security come from cuts.

BORER: But, Congresswoman, with all due respect, don't you have to start somewhere? The American people just had an election. They said they want the deficit taken care of. They want it fixed. This is not a proposal to privatize Social Security in any way. It's a very gradual raising of the retirement age. So why not say, instead of being reflexably negative, why not say, OK, let's talk about this? If we also talk about X, Y, and X?

SCHAKOWSKY: First of all, let's talk about $700 billion, if we don't extend the -- if we do extend the Bush tax cuts for the wealthiest, the same people who seem amenable to the cuts in Social Security want to see us extend tax cuts for the wealthiest Americans. We are concerned that for older Americans, who have an average income of $18,000 a year, and by the way --

BORGER: There's a safety net in this. There is a safety net in this for the poorest on Social security and in the chairman's mark.

SCHAKOWSKY: Again, the committee staff of the Social Security Subcommittee says that, in fact, it will increase poverty, not decrease poverty, because the qualifications for getting that increased benefit -- look, of course we need to discuss this and of course we need to make cuts. There are cuts that we agree on. And I think that we may come up with an agreement, maybe not a total comprehensive one. I agree with that. We should go with that.

GERGEN: Congresswoman, can I just ask you this? Gloria points out there is a safety net here. And there are also tax increases on the affluent in this package. And the real question is going to be, are you willing to say, if the Republicans were to agree to raise taxes, which so far they have been resisting, are you willing to do a serious entitlement reform? If both sides-if the Democrats refuse to touch Social Security and Medicare and Republicans refuse to raise taxes, why are we and the rest of the country to conclude anything but that you all can't govern?

SCHAKOWSKY: But see we can fix Social Security in a very simple way. Look, the proposal was not to --

BORGER: We can?

SCHAKOWSKY: Yes, we can. The proposal was not, by the way, to use Social Security as deficit reduction. That's a good thing.

BORGER: But it's not. They're not. The money is going back into Social Security. SCHAKOWSKY: I just said that. I just said that. It was not. It's a good thing. It's for the long-term solvency of Social Security. But to do it 76 percent from benefit cuts? No. That's not acceptable. We need to take a different look at it.

BLITZER: Congresswoman, you know these 18 commissioners, you are one of them. You need 14 to send these recommendations to the House and the Senate as legislation. Do you think 14 members, a super majority, will agree on a package to send to Congress?

SCHAKOWSKY: The question is how comprehensive that package will be. There are a number of things that we can agree on. For example, there's a large consensus around defense cuts. There is a consensus around some of the tax expenditures, which are just the same thing. Those are tax breaks that the same things as spending.

GERGEN: What tax expenditures are you willing to agree on?

BORGER: Right.

SCHAKOWSKY: I think that we can agree on taking a look at what-the value of a home that gets exempted from any kind of a taxes we can look at-

BLITZER: You mean mortgage deduction, mortgage interest deduction.

SCHAKOWSKY: But not to eliminate the mortgage interest deduction. I think that is a non starter for many people.

BLITZER: But, Congresswoman, most of these Republicans and a lot of Democrats say, no new taxes. They will resist anything that feels like taxes are going up.

SCHAKOWSKY: Well, I'll tell you what, you have to talk to the Republicans about that and that includes, by the way, their resistance to the top 2 percent getting taxed right now. And they want to extend the Bush tax cuts.

BORGER: But, you know, the Republicans have not come out and said, we don't like X, Y, and Z. They have held their fire. So I guess my question is, why not hold your fire until you meet as a committee, and perhaps can try-a commission-and try and present something to the United States Congress?

SCHAKOWSKY: Well, I think, certainly we're going to come up with a proposal and I believe we can come up with a proposal that reaches the $250 billion mark, by 2015. But I think it's important to lay some ground rules that Social Security and Medicare, certainly as proposed by the two co-chairman is just not going to hold. That it's a nonstarter for many of us.

BLITZER: Jan Schakowsky is the congresswoman from Illinois.

Congresswoman, thanks very much for coming in. We'll continue this conversation.

SCHAKOWSKY: I look forward to it.

BLITZER: Tackling the deficit is only part of the problem. What about jobs? Will they come back, or are employers learning to do more with fewer workers?

Plus, my interview with Rand Paul, the GOP senator-elect from Kentucky. He says that he was misquoted on earmarks. So where does he really stand? I'll ask him.

(COMMERCIAL BREAK)

BLITZER: For President Obama, there is no escaping the economic misery that helped cost his party control of the House of Representatives. He travelled to South Korea this week for the G20 summit. Back here at home there is a lot of concern that employers still are not creating enough jobs. I spoke with Mark Zandi, he is the chief economist for Moody's Analytics.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk about what the president said the other day, that there could be a new normal, that these big corporations, these big companies, they simply get used to dealing with fewer workers. And that this economic recovery is going to be a jobless economic recovery. That's what keeps him up at night, worrying maybe that the companies will do better but they are not going to hire a lot more people.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, it should keep him up at night, even under the most optimistic of forecasts, it's going to take years to get back the 8 million jobs that we lost during the recession; it is going to take a good solid, four or five years to get unemployment back to where we would consider it to be close to full employment.

But I am optimistic. In this regard, as well, that I think American businesses, if they survived what we went through, they must be doing something right. They either have a market niche they sell into globally, or they are very cost competitive. Their earnings are strong, their balance sheets are strong. I think with a little bit of policy certainty, and a little bit of time between the Great Recession. I think they will get their groove back. We'll get more jobs, and we'll be headed in the right direction. But, you know, going to take under any circumstances it is going to take a number of years to get back to where we are all going to feel comfortable about the way things are going.

BLITZER: Members of the House and Senate, they are coming back to Washington next week. The old members, the losers, those who are retiring, they still have a few weeks of work left before the new Congress comes in, in January. ' One item that they have to deal with, the Bush tax cuts that were passed in 2001, 2003. They do nothing it goes back to the tax rates that existed, the higher tax rates during the Clinton administration. What do you think they are going to do? What should they do? ZANDI: Well, I think the economic recovery is still very fragile. And it don't think it can digest higher tax rates. So I think it would be prudent to extend the tax cuts for at least one more year. In fact, I think that is what is going to happen. I think policymakers are coming to that conclusion. I think in 2012, 2013, when the economy is in a better place, and I think it will be, it can digest higher rates, particularly on upper income individuals, but not in 2011. I don't think that would be prudent and I don't think they will do it.

BLITZER: Will they continue the employment benefits for 2 million unemployed workers, about to expire, could cost about $34 billion over six months?

ZANDI: Yeah, there too, going back to the weak recovery, I wouldn't do anything to jeopardize that. It would also be prudent to extend those emergency benefits, at least for another several months, say three months. That would get us into next year and hopefully by then we start to see some better job creation.

At this point, if we want to address our long-term fiscal problems, we have to have an economy that is growing. We can't go back into a recession. The risks are still very high that we might. So we have to do everything to ensure that it won't happen. That means no tax increases in 2011 and let's give a little bit more to these unemployed workers, so they don't pull back on their spending and we get this recovery moving forward.

BLITZER: Right now the unemployment rate is 9.6 percent. If it's anywhere close to that in two years when President Obama's up for re- election, he's going to be in real trouble. Where, realistically, will the unemployment rate be in two years?

ZANDI: You know, I think it will be closer to 8.5 to 8 percent. We'll be creating a lot more jobs by then. The economy will be headed in the right direction. Still, 8.5, 8 percent is still a very high rate of unemployment. But I don't think that the economy is going to be in the face of incumbents, it will be to their back.

BLITZER: Mark Zandi, thanks very much.

ZANDI: Thank you.

BLITZER: The Tea Party Movement certainly made his Senate win possible, but does Rand Paul's loyalty lie with the movement or with the GOP? My interview with the Senator-elect from Kentucky? That's next.

And House Republicans will soon have the power to investigate President Obama, but will they investigate? How hard will the investigations be? I'll ask the man poised to lead a powerful House committee, Congressman Darryl Issa.

(COMMERCIAL BREAK)

BLITZER: Republicans took new steps forward this week preparing to take control of the House of Representatives and dramatically strengthen their numbers in the Senate. GOP leaders are trying to get a handle on freshmen elected with the support of the Tea Party movement, and where their loyalties lie.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Bowling Green, Kentucky, the Senator-elect from Kentucky, Doctor Rand Paul, Republican.

Thanks very much, Doctor Paul, for coming in.

RAND PAUL, SENATOR-ELECT, (R) KENTUCKY: Good to be with you.

BLITZER: I congratulated you last week so I won't congratulate you again. But you have an exciting six years ahead of you.

Let's get to some specific issues in the news right now. Do you support or oppose earmarks for the State of Kentucky?

PAUL: I'm opposed to earmarking and I won't use earmarks as a senator. I think that the earmarking process is really-it shows some of the abuse of Washington. People don't like things being stuck on unrelated bills, in the dead of night, by someone who doesn't have their name attached often. (AUDIO GAP) have said that I will advocate for Kentucky, within the context of the committee process, and the context of a balanced budget, two very important provisions.

BLITZER: Because in "The Wall Street Journal" interview that you gave the other day, an article by Matthew Kaminsky, he wrote this. He said, "In a bigger shift from his campaign pledge to end earmarks, he tells me that they are a bad 'symbol' of easy spending but will fight for earmarks and federal pork, as long as it's doled out transparently at the committee level and now parachuted in, in the dead of night. 'I will advocate for Kentucky's interests," he says, "So you are not a crazy libertarian? Not that crazy," he cracks."

So that has generated a lot of commotion, including from "The National Journal", asking if you've sold out on this whole issue of earmarks.

PAUL: Yeah. It's amazing how one little misquote can make a big difference. We've called him and asked him to correct that. I never, ever said that I would earmark, and I will not use the earmark, no matter what the Republican caucus says, or what anybody does I will not put earmarks on bills. But id did tell him what I told you. I will advocate for things that Kentucky needs to the committee process, where we deliberate on what are the most important projects. And also in the context of a balanced budget. Those are two important provisos but that is not earmarking, and I won't do earmarking.

BLITZER: It was "The National Review", that asked if Rand Paul is selling out, not "The National Journal." So, in other words, on this issue, you and Mitch McConnell, the Republican leader in the Senate, you disagree. He says, if you don't earmark, that gives the Obama administration, the executive branch of the government, to dole out the money as it seems fit. If Congress doesn't say, you've got to spend it here, or there, it's going to let the executive branch dole out the money.

PAUL: Right. There are good people who disagree with me on this issue. My dad and I have disagreements on this issue. I think earmarks have come to represent a symbol of waste. Even though numerically they are not a large part of the budget, I don't like the idea that a senator goes to Washington and Mrs. Smith gave him a lot of money so he puts 100 million in for Mrs. Smith's museum, in a certain city. I don't like that. I think it should go to the committee process. We're $2 trillion in debt. We should not be adding on these little special projects that Senators add on as bonus points, that they are giving to particular individuals. And I don't think it should occur that way.

BLITZER: Because some like McConnell and other Republican s and Democrats say there are bad earmarks and good earmarks. If an earmark goes to a hospital, for example, in Bowling Green, Kentucky, would that be a good earmark?

PAUL: I think it should go through the committee process. Let's say we're going to spend money on roads in Kentucky. Let's determine which roads need to be repaired, which bridges need to be prepared, in deliberative processes, in the committees. But let's not have a clerk put it on at 2:00 it the morning and then call it Rand Paul's bridge. I'm not going to do that. I think it's wrong and it's evidence of where Washington is broken. The people want it to end. I think the House of Representatives will go forward with a ban on earmarks. And hope that the U.S. Senate will also.

BLITZER: And you've just signed on with Senator Demint, to support legislation that would all earmarks, is that right?

PAUL: Yes. I've also taken a pledge during the campaign not to earmark. That's why it's a little disturbing that that is was misreported in the news. Because I've signed a document saying that I won't earmark from the Citizens Against Government Waste, and I'm not changing that pledge. That's a steadfast pledge.

(END VIDEOTAPE)

BLITZER: There is much more on my interview with Rand Paul, including the question of loyalty. Where does his lie? With the Tea Party or with the GOP?

Plus, the Twitter revolution and its impact on politics. I'll talk about that and more with the company's co-founder. Biz Stone.

(COMMERCIAL BREAK)

BLITZER: A new promise this week by the Republican leadership in Congress to listen to new members elected in the party's November 2nd significant triumph, including those backed by the Tea Party. More now with my interview with Republican Senator-elect and Tea Party favorite, Rand Paul. I asked him about comments that he seemed to make in that "Wall Street Journal" interview that the Tea Party was more important to them than the Republican Party.

(BEGIN VIDEOTAPE)

PAUL: Well, I'm not sure I really said that. I did say, though, that the Tea Party is shaping the debate. It's an enormous movement. I don't think I've ever seen a political movement like this. There is no leadership from the top down. Every individual city has a Tea Party. Maybe not every city, but many cities in Kentucky have Tea Parties; they don't communicate even with each other, much less the national party.

But there are people who are concerned and worried about the debt. And it's not just us. Look at the statements from Bernanke. Look at the statements from Greenspan. Reasonable people who are trying not to be alarmist are all out there saying the debt is a major ticking bomb. And we have to have an adult conversation, who are we going get rid of the debt.

BLITZER: He quotes you, Kaminski, in that Wall Street Journal. He says that Mr. Paul puts the movement in his words above partisan loyalties. I'm somebody who believes that the issues are more important than the party. That was the quote that he had for you.

PAUL: I do agree with that and I think I've always thought that. I have people coming into my office every day and they all tell me that the man and the woman is more important than the party and I've always thought that.

And I guess, going back to your original question, maybe I did say it that way, but I don't mean it to be disparaging to my party. I think the Republican Party does believe in limited it government. I do believe in the Republican Party platform. I've always been a Republican.

But I think we need to be more true to our platform and we need to represent the party of small limited government and balanced budgets. One of the other things that are going to be pushed here, which I think is bigger than earmarks is we're going to push for a balanced budget amendment. We're also going to push through spending cuts.

Because, you know, many on the other side come up to us and say, that's all good and well but these taxes, you know, the Bush tax cuts, if we keep them, lose a lot of money to the Treasury. Well, I say, let's cut money, then. Let's have spending cuts.

So I will be part of introducing a balanced budget and I will be part of introducing bills that have significant spending cuts so we can get our fiscal house in order.

BLITZER: But before any of that happens, Congress in the coming months is going to have to raise the debt ceilings about $14 trillion right now. Do you understand what would happen if Congress fails to raise the debt ceiling? What would happen?

PAUL: Well, I think before we even get there, that's going to be two or three months down the line. I propose that in January we propose a spending plan that balances our budget. I propose also that we talk about reducing spending. I agree with you that just talking about extending the debt ceiling has ramifications if we don't do that and they could be significant. But what I'm saying, before we get there, let's talk about reducing spending. Let's talk about having a balanced budget plan that doesn't cause us to add new debt.

Now, can we do that in two or three months? That's yet to be seen and the vote will be taken, but I will tell you I'm not someone who's going to Washington to try to shut down the government. I want to fix things so we can operate the government and we can operate it without raising taxes on folks, but we operate it by cutting spending.

But someone has to stand up and say, enough is enough, it's not that the emperor has no clothes, it's that the emperor has no money. We have to cut spending.

BLITZER: But because at some point, you know, and I appreciate what you're saying about balancing the budget and all of that. But at some point you're going to have to vote yay or nay on whether to raise the debt ceiling and if it doesn't pass, the United States will go into bankruptcy. You appreciate that, right?

PAUL: Well, I think we have to look at what the ramifications are of the exact vote and I think we have to see where it is at the time. But I'm not going to Washington with this plan to shut down government or to say we no longer will have the debt.

We still have to do - we have to make payments on our debt and we have to honor our obligations, but we should not be adding to the debt. That's the big thing here.

It's not can we get rid of the $14 trillion debt, but could we get rid of $2 trillion annual deficit? I think we could, but it's going to take people to stand up and say enough is enough. We've got to cut spending.

BLITZER: Dr. Paul, good luck to you. Welcome to Washington. We'll see you here in the nation's capital.

PAUL: Thanks, Wolf.

BLITZER: My interview with the co-founder of Twitter. Who does he follow? You might be surprised.

And Republican Congressman Darrell Issa called President Obama, quote, "one of the most corrupt presidents of modern times," end quote.

I'm going to ask if he could back those words. My interview with Darrell Issa that is next right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The new Republican majority in the House of Representatives could make the last two years of President Obama's first term very difficult if they want to. There were congressmen placed to be the new chairman of the House Oversight and Governmetn Reform Committee is Darrell Issa of California.

(BEGIN VIDEOTAPE)

BLITZER: Congressman, thanks very much for coming in.

REPRESENTATIVE DARRELL ISSA (R) CALIFORNIA: Thanks very much, Wolf.

BLITZER: Are you going to make their life miserable or they all have to start hiring lawyers?

ISSA: No, no. Look, we're going to try to get to the bottom of where money went and whether it was well spent. We're try and roll back the direction of government.

Many people are talking about reducing 100 billion of nondiscretionary or discretionary spending. Well, the fact is we're rolling back $350 billion a year, which was the stimulus over two years, each year, that's a lot of money that we have to figure out where it was spent and how we're going to live without it.

BLITZER: That's going to be the primary focus of your investigation?

ISSA: It's going to be a big part of where we start. I've said that I have two priorities. One is public safety. Things like the FDA and obviously MMS, the oil spill, and places where it affects people's lives and the money spending that is not led to jobs, those are real priorities for the American people right away.

BLITZER: Because you know some Republicans, some Conservatives would love you to go over the ACORN investigation or the new black panthers, and some of the highly publicized activities.

ISSA: You know, there's always going to be things on everyone watch where you have to follow up and ultimately refer it to the attorney general and so on, but that's not what our committee is about.

Our committee is supposed to be about finding waste, creating reform, making the government do its job and do it with a smaller budget, not a larger budget.

BLITIZER: Here's what you said on the Rush Limbaugh show back on October 19th. There will be a certain degree of gridlock as the president adjusts to the fact that he has been one of the most corrupt presidents in modern times. He has ignored the very laws that he said were so vital when he was a senator. Wow! Those are strong words - now you got to back it up. You said he's one of the most corrupt presidents in modern times.

BLITZER: It was a campaign and I make no bones about it. If I had to do all over again, I would have parsed my words a little more carefully.

But when you hand a president a trillion dollars in walking around money, he uses it for political pay backs, that's corrupt. When you have things like ACORN, the president wants to receive money to work for them and there seems to be no follow up, even while states recognize that this is was a pretty corrupt organization, there's a problem.

The new black panthers that you mentioned, which is really not in my lane, it's in another congressman's lane, Lamar Smith -

BLITZER: -- the chairman of the judiciary.

ISSA: He'll be the chairman there and I expect he'll follow up because it's voter intimidation and fraud and wasting money. These are important, but let's understand, corrupt is often taken by people to be breaking the law. It's not necessarily breaking the law.

Getting all of that money and using it in a way that was not its intended purpose. It did not create jobs. That is a problem. I need to be fair to the president and say, I come here to work with you. I come to make your administration more successful because you comply with the will of the people, particularly in light of this election.

I'm going to have a working relationship if we're going to bring hundreds and millions of dollars spending out of it. So my goal is to say never again will we hand you congressional earmarks. Never again will we give you walking around money that essentially becomes discretionary earmarks by the president.

BLITZER: So if you had to take it back, you would take back the words one of the most corrupt presidents of modern times? That was political campaign rhetoric?

ISSA: I would say that the administrations, if you will, ability to be corrupt because of the nearly trillion dollars that Congress gave them and let him do whatever they wanted with it should have been approached in the sense that the House, the Senate, and the president wasted a considerable amount of money and they did so in a way that was political.

That's a big difference between saying one of the most corrupt. Do I think this president has a long way to go to make the kind of changes that he's promised to make? Absolutely. You know, the Sestak issue was an issue of not about a new crime or a new wrong doing, but about saying we're not going change --

BLITZER: Joe Sestak when he was running against Arlen Specter for the Democratic nomination, he was approached and said you will get a job or you get some sort of title in the Obama administration if you drop out. You're saying what?

ISSA: That I can only take on an issue like that that obviously occurred in the Bush administration if I take on the whole problem. I can't say this president is wrong. I find out that President Bush, his administration --

BLITZER: So you're not going to investigate that?

ISSA: I'm going to look for changes so it doesn't happen in the future, but I've got to recognize just as the problem in the Gulf and MMS began on President Bush or maybe even President Clinton's watch that I've got to be fair and bipartisan. If we need reforms, we need reforms for all presidents, not just this one.

BLITZER: Just to be precise and clean this up, you don't or do think that the president is corrupt?

ISSA: I think this administration is going to have to make a change and the word corrupt is not an unreasonable. Black's law would say that getting $800 billion and spending it in political paybacks to a great extent to public employee unions and governments was in fact, a misuse that I would call corrupt.

Do I think the president is corrupt? No. I never should have implied that or created that in a quick statement on a radio call in.

BLITZER: You were supposed to meet today with the Vice President Joe Biden to start, I guess, a new dialogue. He called you to invite you in? What happened?

ISSA: We had a good conversation, fairly lengthy, in which we talked a little bit about what we needed to start doing together. I think when the vice president had scheduled it, perhaps the fact that the president was going to be out of the country. It really hadn't hit him how busy his schedule is going to be.

They've said they want to reschedule next week. We have a number of issues we've got to work on together. We certainly have to deal with the fact that the special IG on the stimulus and TARP, they don't have subpoena authority. They need to have it.

We have a bill in the Senate, it was passed in the house and trapped there that would give them the ability to do that. Additionally, one of the things that I want to lobby the vice president is we do not have mandatory reporting. We have voluntary reporting on all the stimulus money.

That's not going to work because we're getting the reporting of the rights spending and not the reporting of the wrong spending.

BLITZER: Should officials in the White House right now start thinking about lawyering up?

ISSA: No. If anything, what they should think about is one of my number one priorities is to give all 74 IGs, inspector generals, subpoena authority.

I believe they are the ones that need to be able to use subpoena, be able to do investigation and be free of fear of being fired for doing it. A lot of what I want to do is make the administration to be able to do their job better.

There are not enough of us in a little committee to be able to really go after government. We can go after the White House, but the mistake is the White House is not the problem. Bureaucracy to a great extent is the problem.

BLITZER: So you, I assume, have studied what happened after President Clinton lost the majority in '94 and '95. The Republicans took over and the White Water investigation, the Paula Jones investigations, there was subpoena after subpoena after subpoena. What I hear you saying is you're not going to do that.

ISSA: I have no intention on doing that. The fact is we were out of power for over 40 years. I don't think we knew how to lead. We've only been out of the majority for 4 years.

We've learned lessons by being voted out, but we have also - there's pretty good amount of knowledge of how do you lead? How did Tom Davis bring about real reforms when he was chairman? How do we do the things that the American people want us to do? And we've got to do those first.

BLITZER: The whole country will be watching.

ISSA: Thanks, Wolf.

BLITZER: Thanks very much, Congressman, for coming in.

ISSA: My pleasure.

BLITZER: Good luck.

(END VIDEOTAPE)

BLITZER: The word Twitter has now become part of the global cultural lexicon. But wait until you hear some of the other names that were considered only three years ago? The Twitter co-founder, Biz Stone, he's here in THE SITUATION ROOM, that's next.

(COMMERCIAL BREAK)

BLITZER: They connect presidents, pop stars and millions of just plain folks. They're the little messages that are changing the world in 140 characters or less.

(BEGIN VIDEOTAPE)

BLITZER: Joining us now here in THE SITUATION ROOM, Biz Stone. He is the co-founder of Twitter. Three years ago. It's been a business for three years, right? How did you come up with this concept?

BIZ STONE, CO-FOUNDER, TWITTER: Well, actually, the concept was born from kind of a hack week or two that we had. We were supposed to be working on an entirely different project and my co-founder, Evan William said, you know what? We're not emotionally invested in this project. Everyone pair up and create something cool.

And so I've become friends with one of the engineers who was working at this other project, Jack Dorsey. We took those two weeks to build a prototype of Twitter and we had a lot of fun doing it. Most people thought it was stupid, but we loved it. That's how Twitter is born.

BLITZER: How did you get the name?

STONE: Well, there were only a couple of us at that time so it was very mobile centric in the beginning as it is now. The idea was something that would, you know, it would just vibrate in your pocket. It had the sense of urgency.

So we came up with names like Jitter and Twitch and in near Twitch and thesaurus was Twitter. I just loved it because I recognized it as a real word that references nature. The birds twitter in the trees.

And I think most of the technology really is just, in many cases, these large systems like Twitter are just mimicking natural systems. I was so passionate about it. The other guy just said OK, Twitter just to set you up.

BLITZER: Did you notice that my questions are 140 characters or less? Your answers are much longer.

STONE: Yes. I prefer longer format in the talking world.

BLITZER: When we tweet, it's got to be 140 characters or less.

STONE: Or less.

BLITZER: Here's another question in 140 characters or less. What do you think Twitter's biggest impact has been?

STONE: Well, I mean, from my perspective, I think that Twitter's biggest impact is that it really doesn't matter how sophisticated our algorithms get or how many machines we add to the network.

That if Twitter is to be a triumph, it's not to be a triumph of technology, but a triumph of humanity. Well, we've seen people using it for during times of crisis and to raise awareness and funds for charities and to, you know, in journalism and in just everyday life has show us that people are basically.

And when you give them a tool to do - to do good things, they'll prove it to you on a daily basis and that has been a sort of big inspiration for all of us working on Twitter.

BLITZER: Name a few politicians that you follow.

STONE: I actually follow President Medvedev on Twitter even though he tweets in Russian. I have a little - iPhone have a translate button so it's kind of cool. I follow the White House and Obama and I think that's about it as far as I can recall. I think I might follow Claire McCaskill too because I met last April and she was a hoot.

BLITZER: What about me?

STONE: Of course, I will now be following you.

BLITZER: I want to check to see if you follow me. I want to make sure you do. Do you?

STONE: I'm going to check.

BLITZER: You better check. Obviously it hasn't made a big impact in your life, my tweets --

STONE: But now that I've met you, I'm definitely going to follow you.

BLITZER: All right, social media in general, are we giving too much personal information out there, putting it out there, whether in tweets or Facebook or other places?

STONE: I think we're still figuring that out. I think a lot of people think we've got it figured out, but really, you know, when you look back, the web is still young. There are bunch of physicist got together and figured out a way to share and that turned in to everything from blogging to banking.

And people are still discovering blogging and then they're discovering social networking and now they're discovering Twitter and I think we're still discovering what the lines are in terms of the benefit of putting information out there and meeting new people and getting a job.

And the disadvantages in saying something that you regret and revealing too much information. So I think we're still identifying what those correct boundaries are and that's - we're in the process of that now.

BLITZER: I asked some of my Twitter followers for suggested question and let's put a few up behind you and we'll see. This one came in from Wisdom in Bloom, I would ask him if he could sum up the real point of Twitter. What would it be?

STONE: I would say the real point of Twitter is to help people discover and share what it is that is happening around them in the world. It really has become an information network that is very focused on realtime.

BLITZER: Here's another information from (Gail Harrier) and I'll put it up there if you want to take a look. What's his next project?

STONE: My next project is continuing to work on Twitter. We are very much invested in putting all of our time into Twitter. I do advise a few companies on the side, but mostly I spend most of my time thinking and working on Twitter.

BLITZER: Yankiefan 25, are you surprised at how much impact social media has on the daily news cycle and it's used by people in suppressed nations?

STONE: I'm surprised by the rate in which it's been adopted, but I'm not completely surprised because my co-founder, Evan Williams and I have been developing these large scale systems that allow people to express themselves and communicate for more than 10 years now having developed blogging platforms.

So to see the media and journalism take to Twitter was not entirely surprising. I thought actually very early on that we could be complementary to the service of journalism and that's proving I think to be true. BLITZER: We have another one from (Agencynote). How do you make money on Twitter with the lack of advertising?

STONE: Actually, we have advertising on Twitter. One of the things that we focused on very early was building value before profit and we could have put traditional banner ads all over the site earlier and made money earlier.

But we wanted to grow the network and make it relevant, make it useful to many people around in their everyday life before we introduced a relevant and meaningful way to monetize the system. My co-founder used to work at Google and did a really good job of creating ad words, which are actually advertisements that are also relevant to users.

So when you're searching for something like coffee and a result happens to be from Starbucks, but it's what you were looking, but it's also an ad that's great. It's native to the system.

So we make our money right now using a suite of promoted products we called promoted tweets, promoted accounts, and trends. All of these are just native aspects of Twitter. A tweet is in Twitter, but a company can pay to promote that tweet, in other words, have more people see it.

BLITZER: One final question, 140 characters why?

STONE: Well, the international limit on text messaging is 160 characters and from the very beginning we knew that we wanted Twitter to be sort of agnostic with regards to device that you use to tweet from.

We wanted tweets to be able to be written and read in their entirety on all five billion mobile phones that are active on the planet today as well as the two million web accounts that people are using. Since 160 is the SMS, we reserved a little bit of room in front of the tweet for author's name so you know who wrote it and we standardized on 140.

BLITZER: But still you have some technical problems now and then, as a Twitter user I can testify.

STONE: Yes. I mean, we had a lot of growing pains in 2008 and 2009 as we just skyrocketed and we're still growing by 370,000 people sign up every day to Twitter. We've gotten a much better handle on it, but we're still suffering some growing pains due to this amazing growth.

BLITZER: Well, you've done an amazing job. Biz Stone, congratulations.

STONE: Thank you so much.

BLITZER: Thanks for coming into THE SITUATION ROOM. A few years ago, you probably never thought you'd be in THE SITUATION ROOM.

STONE: No, I would not think I'd be in THE SITUATION ROOM.

BLITZER: But you're here. STONE: I'm in THE SITUATION -- thank you.

BLITZER: Good luck.

(END VIDEOTAPE)

BLITZER: More fallout from that erupting volcano in Indonesia. We're going to show what it looks like. That and more in today's Hot Shots. That's next.

(COMMERCIAL BREAK)

BLITZER: Here's a look at Hot Shots. In Indonesia, a man walks across a river covered with volcanic ash. In China, a worker waters flowers for the Asian games which started this week.

In the Netherlands, people celebrate the beginning of carnival season and at a zoo in Switzerland. Look at this, a green Iguana eats a salad for lunch. Hot Shots, pictures worth a thousand words.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. Join us weekdays from 5:00 to 7:00 p.m. Eastern, every Saturday at 6 p.m. Eastern right here on CNN. At this time every weekend on CNN international. The news continues next on CNN.