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Missing Radioactive Package Found; France To Search For Flight 447 Debris; Three Space Station Crew Members Back; President Obama's Fat Lip; North Korea "On Brink of War;" U.S. Diplomatic Secrets at Risk; Shopping Today Could Mean Jobs Tomorrow; Crackdown on Al Qaeda- 149 Arrested; Hitting Rahm Emanuel Where He Lives; Saving the Tiger

Aired November 26, 2010 - 17:00   ET

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

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Brianna.

Happening now, the president's national security team is on alert for diplomatic secrets to be spilled at any moment. The world is waiting for new leaks from a whistleblower Web site. And U.S. relations with critical allies could be strained.

Also, doctors examined three teenage boys who defied the elements and the odds. We are following their amazing survival story after being lost at sea for almost two months.

And a new summit to save one of the most endangered species on earth. This hour, how tigers are bringing a president and movie star together.

Wolf Blitzer is off today.

I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

First this hour, President Obama, well, he's used to being roughed up politically, especially after the mid-term elections. But right now, he is nursing an actual blow that required a dozen stitches.

I want you to take a look at the president as he left a basketball game with friends and family today.

You see how he's holding a cloth or a compress to his lip?

I want to go straight to our senior White House correspondent, Ed Henry, to tell us about how all of this happened.

We're calling this Elbowgate, by the way, Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Suzanne...

MALVEAUX: What do we know?

What happened?

HENRY: Yes. Yes. We don't mean to make light of it. I mean, obviously, it's serious. The president got 12 stitches here. But you're right, it's sort of a freak injury. And the president can't catch a break. As you said, he has been roughed around politically. Now he tries to make sure he doesn't get a flabby belly from Thanksgiving calories and he ends up with a fat lip.

But the bottom line is he went to Fort McNair, the military base here in Washington to play a little basketball with friends and family.

We're told that in the fifth of five games, the president was playing defense. An opposing player, still unnamed at this hour, went up for a shot, smacked the president in the mouth with an elbow.

Robert Gibbs says that when he came back, the doctors decided to give him 12 stitches. They did it here in the basement of the White House with a local anesthetic. So he didn't need to go under. He didn't need to go to a local hospital or anything like that.

We're also told that the reason why there was a lot of stitches is that they used a specific method that requires more stitches, but means it likely will be a smaller scar. Obviously, that a concern for the president.

Now it's turned to what everyone wants to know, who done it?

Who -- whose elbow did this?

We're told by White House aides it was not Reggie Love. He was playing. But as you know, he used to play for Duke University. He plays with the president a lot. It wasn't his elbow. It wasn't the elbow of Arnie Duncan, the Education secretary, who was also playing. And that there was a presidential nephew, Avery Robinson, playing. He didn't do it, either.

So you can tell that -- that the suspects are narrowing at this point. A lot of people -- I teased a White House aide, will the person with the elbow get a presidential pardon?

And this aide just laughs.

MALVEAUX: Yes, it's a process of elimination right now, huh, just trying to find out who did it. Somebody has got to fess up by the end of the day.

HENRY: That's -- yes, exactly.

MALVEAUX: We'll see.

Obviously, this -- kind of this fat lip is going to make for a funny photo-op next week, though, because he's going to be meeting with Congressional leaders from both sides, Republicans, to talk serious business -- some shop about bipartisan efforts to get ahead in the lame duck session.

What do we know?

HENRY: You're absolutely right, Suzanne. I mean the president has got a big week next week to head that so-called Slurpee Summit that had been put off last week. It's going to be this coming Tuesday.

And as you look ahead, top White House aides say they realize that it's a pivotal moment for this president as he gets ready to head into the new year, which -- with what will be a Republican House and a shrunken Democratic majority in the Senate. They've got some business to deal with now, though, namely those Bush tax cuts. They're expiring at the end of the year. They've got to deal with them in this lame duck session of Congress.

The president put out in his weekly radio and I thought address sort of an olive branch to Republicans, saying, look, let's work together.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And in the coming weeks and months, I hope that we can work together, Democrats and Republicans and Independents alike, to make progress on these and other issues. That's why next week I've invited the leadership of both parties to the White House for a real and honest discussion, because I believe that if we stop talking at another and start talking with one another, we can get a lot done.

(END VIDEO CLIP)

HENRY: Now, what White House aides say is -- is a likely scenario is you've seen the president stake out ground where he wants to make sure and extend the -- the tax cuts for the middle class, has been reluctant for a permanent extension of the tax cuts for the rich, something the Republicans have wanted. But they -- the White House may be willing to give on that and at least have a one or a two year extension on the tax cuts for the rich.

I mean, look, if they can't settle this in a cabinet room, they could always at least maybe have the president challenge John Boehner to a little one-on-one basketball game -- Suzanne.

MALVEAUX: Hopefully, no one else will get hurt.

All right, thanks, Ed.

HENRY: Absolutely.

MALVEAUX: Let me know if you know who (INAUDIBLE) that elbow.

HENRY: All right.

MALVEAUX: OK.

HENRY: OK.

MALVEAUX: Thanks.

Well, a fresh warning today from Korea that the region is on the brink of war. The U.S. and South Korea are preparing for joint military exercises on Sunday, just days after North Korea's unprecedented artillery attack on the South. Now, CNN's Stan Grant has an update on the military threats, the fears that they'll explode in the days ahead.

(BEGIN VIDEOTAPE)

STAN GRANT, CNN CORRESPONDENT: Tensions are rising on the Korean Peninsula and all eyes are on these Palestinian military exercises between the United States and South Korea due to begin on Sunday. The USS George Washington is heading to the Yellow Sea for these exercises, North Korea saying it will take the region to the brink of war.

Now, these exercises were some time in the planning. They were meant to be defensive. But, of course, taking on a whole new meaning after these clashes between North Korea and South Korea at Yeonpyeong Island.

Now, North Korea also saying that as far as it's concerned, this is a provocation by what it calls "the puppet group," the puppet regime of South Korea, a puppet of the United States.

Now, South Korea announcing a new defense minister, at the same time, after the former defense minister resigned. And rising tension on the streets of Seoul. Veterans of the first -- of the Korean War 60 years ago saying that they want to see Kim Jong Il dead. Younger South Koreans that we spoke to say they are tired of, quote, "being slapped around by North Korea and would rather see an all-out war until someone loses."

I also had the chance to speak to some close observers of North Korea who are offering some sort of a clue as to why we're seeing these tensions at the moment. They say it's all to do with leadership. Kim Jong Il has been unwell for some time and plans to hand over to his son, Kim Jong-un, what they're saying here could be an attempt by the younger Kim to establish his leadership credentials as someone who would stand up to South Korea and the United States.

Stan Grant, CNN, Seoul.

(END VIDEO TAPE)

MALVEAUX: I want to go back to Ed Henry at the White House -- Ed has resolved Elbowgate here, hot off the presses.

The person -- revealing the person who had elbowed the president during this basketball game that gave him 12 stitches today?

HENRY: That's right. Our colleague, White House producer, Jamie Crawford, just getting this information literally while you and I were going back and forth. So I have now got it on my BlackBerry.

Ray Decerega -- he's got -- he -- his elbow injured the president during this basketball game. Ray has put out now -- he's sort of fessed up but also put out a lighthearted statement now saying, quote, "I learned today the president is both a tough competitor and a good sport. I enjoyed playing basketball with him this morning. I'm sure he'll be back out on the court again soon."

We're told that Ray works for the Congressional Hispanic Caucus Institute. And, you know, the president obviously received 12 stitches because of this.

Obviously, an awkward moment for anyone to be involved in this kind of a freak injury like that. But, obviously, Ray Decerega just wanted to get it out there and be done with it. It's a little bit funny, but also a little bit serious, because the president got some stitches. Now everyone probably wants to move on -- Suzanne.

MALVEAUX: We'll see if he gets invited back to another game so...

HENRY: Yes. But I mean the president is a good sport, as you know. He'll probably invite him back.

MALVEAUX: The Republicans a lot of pressure on that guy to come clean. Boy, I'll tell you.

HENRY: Your right, Suzanne.

MALVEAUX: Five minutes on the air and he's like putting out a statement here. Although...

HENRY: You know, everyone has always said that, you know, the president has it easy when he plays these games because there's Secret Service agents around. And so Reggie Love and the other guys never give him a hard foul, because they're afraid the Secret Service will come after them. I guess Ray Decerega not so worried.

MALVEAUX: I guess not. And, Ed, it will be interesting, we're going to talk to somebody who normally plays basketball with the president and see if there are any rough elbows and trash talking that goes on typically here. But that's going to come up later in the show.

Thanks a lot, Ed.

Appreciate it.

HENRY: Happy Thanksgiving, yes.

MALVEAUX: Happy Thanksgiving.

On another note, any minute now, thousands of sensitive communications between the State Department and its embassies may be exposed to the world. The Obama administration fears that the next online document dump by the group WikiLeaks could be the most damaging yet.

I want to bring in our foreign affairs correspondent, Jill Dougherty, to tell us about what kind of messages that we think will be released soon.

What do we know, Jill?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, you know, they're diplomatic cables. And it's got a kind of an old-fashioned ring to it, doesn't it?

But cables are the latest weapon in a cyber onslaught against the United States government.

(BEGIN VIDEOTAPE)

HILLARY RODHAM CLINTON, SECRETARY OF STATE: We've had an excellent day.

DOUGHERTY (voice-over): Diplomacy -- in public, handshakes in smiles. Behind-the-scenes, frank, sometimes embarrassingly critical views of foreign leaders. All of it and more goes into the State Department's classified internal messages, called cables.

During the U.S. embassy in Kabul this summer, with Ambassador Karl Eikenberry, I saw how cables are part of the lifeblood of the State Department.

UNIDENTIFIED MALE: And you're turning that into a cable?

UNIDENTIFIED FEMALE: Yes. And we send it out (INAUDIBLE).

UNIDENTIFIED MALE: OK. Good.

DOUGHERTY: Now, the unvarnished back story of America's foreign policy could be exposed to the world, allegedly thanks to this U.S. soldier, Bradley Manning, accused of downloading more than 150,000 diplomatic cables from U.S. embassies and consulates around the world. Officials warn with each new batch of documents published, U.S. relations around the world are at stake.

ROBERT GATES, SECRETARY OF DEFENSE: It seems to me that, as a result of this massive breach of security, we have considerable repair work to do in terms of reassuring people and rebuilding trust, because they clearly -- people are going to feel at risk.

DOUGHERTY: From highly encrypted telegrams to e-mail messages to raw, unfiltered analysis from embassies and consulates. This classified cable was published earlier this year by WikiLeaks. In it, Iceland's ambassador is quoted as telling U.S. officials his president is considered "unpredictable" -- an admission clearly meant not meant for public consumption.

The new document dump, diplomats tell CNN, could be highly damaging to U.S. foreign policy and to the diplomats who carry it out, revealing things like secret strategy on negotiations; perhaps, some diplomats say, like the START Arms control agreement with Russia.

Other possible hot points, Guantanamo, the war in Afghanistan. The State Department already has briefed Canada and a number of other allies on the potential fallout. U.S. diplomats warn the leaks could create tensions with other countries, erode trust in the U.S. and even put lives in jeopardy.

(END VIDEO TAPE) DOUGHERTY: Now the U.S. soldier accused of leaking the cables sees it differently. In instant messages published by "Wired," Bradley Manning boasts, "Diplomatic scandals will be revealed, creating worldwide anarchy" and he calls it "beautiful and horrifying."

MALVEAUX: Wow! That -- it's so dramatic.

Do we have any sense, Jill, about, when it comes to U.S. relations, which countries do we think there might be a problem, a challenge or even damage done to the relations?

DOUGHERTY: Well, you know, the initial indications were that it would be Russia, China, there could be some on Afghanistan. I guess it's anybody's guess at this point. But the Russian foreign minister said that they had not been briefed by the United States. So, again, a little -- I guess we'll know when they come out.

MALVEAUX: Fairly soon.

DOUGHERTY: Yes.

MALVEAUX: OK. Thank you so much, Jill.

We'll all be watching.

Well, on this day after Thanksgiving, the rush to go shopping should have a payoff for unemployed Americans.

And an expected lawsuit hits Rahm Emanuel where he lives -- could it derail the former White House chief of staff's campaign for Chicago mayor?

(COMMERCIAL BREAK)

SUZANNE MALVEAUX, CNN ANCHOR: Right now shoppers appear to be giving the U.S. economy a much-needed boost. We are told that larger than expected crowds are jamming the nation's malls and discount stores for the traditional day-after thanksgiving shopathon. Poppy Harlow, CNNMoney.com has more on the financial benefits of what's called Black Friday.

POPPY HARLOW, CNNMONEY.COM: Hi, Suzanne. We are in front of Macy's in the middle of New York City for Black Friday. It has been an insane day. We've been here since 4:00 in the morning when 7,000 people lined up outside of this store. That's a big increase from the 5,000 that lined up last year, but the big focus is just how much can consumers spend this holiday season and help pull this economy out of the rut that it is in.

What we're hearing is it's that expected across the country, 138 million Americans will have hit the store this Black Friday. In terms of retail sales, the National Retail Federation is saying that holiday sales are expected to be up 2.3 percent this year from last year. That is a good increase. What they're saying is more than $447 billion will be spent. We spent most of the day here talking to shoppers, not only from the U.S., from Ireland, from Asia, from around the globe who came here just to shop on Black Friday. Here's what they said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Just wanted to give the kids good experience this year. Work has been good for me. So, we've been able to spend a little extra this year.

UNIDENTIFIED FEMALE: I'm really finding some great values that maybe because it's Black Friday, but I am having an extremely wonderful experience.

(END VIDEO CLIP)

HARLOW: One of the things, Suzanne, that we've noticed is more people are spending cash instead of using their credit cards. Though, a lot of people are still putting purchases on credit cards. They're more conscious about what they have to spend. Of course, Americans are saving more than they have in decades right now. One bright spot from all of this is the hiring that is going on. Earlier today, we spoke with the CEO of Macy's who said they hired 65,000 seasonal workers just from October to December.

They're planning to keep on 2 to 3,000 of those workers full time if they do have a strong holiday season. The CEO of Best Buy, another big retail chain who we also spoke with today, said they hired 20,000 seasonal workers. They are hoping to hang on to about a quarter of those full time or about 5,000 employees full-time. Of course, it doesn't solve the unemployment crisis, but if we do see consumers spending in a meaningful way this season, that's going to help create full-time jobs.

Of course, two-thirds of our GDP in this country is consumer's spending, and the next month or so is really mission critical for these retailers, in November and December. That is when they do about half of their sales for the entire year. So, simply an interesting Black Friday, thus far. A lot more on Black Friday. All the statistics you can see on CNNMoney -- Suzanne.

MALVEAUX: Thanks, Poppy. On Wall Street, investors did not buy into the excitement over Black Friday. The Dow Jones Industrial average was down 95 points when the closing bell rang earlier at 1:00 p.m. today. Now, I'll explain the slight in stock prices on worries about Europe's growing debt crisis. We're going to see new action next week to try to slash the federal deficit in this country. I want to bring in our senior political analyst, David Gergen, to talk a little bit about that.

Happy Thanksgiving, David. The president's bipartisan deficit commission are going to be releasing their formal recommendations next week. A lot has been leaked already and people are not happy about hearing the retirement age going up, Social Security benefits going down. One of the co-, Allen Simpson, said this. He says, I've never had any nastier mail or had been in a more difficult position in my life, just vicious.

People I've known, relatives saying, you son of a bitch, how could you do this? His life, wish not ours (ph), but clearly, I mean, to tackle the deficit here, if you can't tackle Social Security, I mean, how are these guys going to do this without just being slammed all around?

DAVID GERGEN, SENIOR POLITICAL ANALYST: Well, it's a very, very tough proposition, and we're really on -- I think United Nation and president and Congress are now going to have to face some very tough decisions. Just think about Poppy's report here, the very encouraging report about the shopping today. Folks from Ireland here shopping that's good news. But at this very moment, Ireland is about to go bankrupt, and you know, had to be bailed out by the European Union.

At the same time now, fears are spreading about Portugal and maybe about Spain, which is a much, much bigger economy. So, this question of when a government gets too far and the debt is serious and it can have huge consequences, and what we know now is the bipartisan commission is supposed to report next Wednesday on whether it can come to an agreement on how to deal with America's exploding deficit. Our national debt has almost doubled. To nearly -- has nearly to nearly doubled to $14 trillion in just the last seven years.

MALVEAUX: Well, David, let me ask you this. Obviously, they have some examples, some recommendations they've made, and perhaps, these are not going to be put into effect right away. The other co-chair, Erskine Bowles, says that the changes will be relatively slow. None of our recommendations take place in 2011 while the economy is still going through its recovery.

In 2012, we'll have $69 billion worth of cuts. What it will do is send signals to the market that America is serious about dealing with this deficit. Do you think this is going to work? Is it -- is that going to be enough?

GERGEN: It could work if, in fact, the White House and the Congress will rally to it. And Suzanne, I think this is a big test, another big test of President Obama's leadership. You know, we've had this one test now we talked about a couple days ago with Regard to China and South Korea whether you can get the Chinese to help play ball with the United States and get the North Korean situation under control.

Here, this is his commission. Is he going to put pressure on this commission now between now and Wednesday and really come to an agreement and get the kind of votes they need in there to make a recommendation or is he going to sit back on the side lines? Is he going to send people from the White House to talk quietly to the commission and assure them if they offer tough medicine, he, the president, will support it? He's much more likely to get the votes if he's willing to take the tough steps, and it starts with Social Security.

MALVEAUX: All right. David, thank you so much. Appreciate your time.

GERGEN: Thank you.

MALVEAUX: Happy Holidays.

FedEx's two-day search for a missing radioactive package. How could a sensitive cargo get almost hopelessly lost?

And French officials reopen the search for answers to an air France crash that left 228 people dead.

(COMMERCIAL BREAK)

MALVEAUX: The search for a missing radioactive package tops the list of some of the other top stories that Brian Todd is monitoring, coming in the SITUATION ROOM right now. Hey, Brian.

BRIAN TODD, CNN CORRESPONDENT: Suzanne, how are you? FedEx now says it has found that missing package containing radioactive material. The parcel which contained a radioactive rod used in CT scans was misplaced at a shipping station in Knoxville, Tennessee. A company spokeswoman says employees found it in an unlabeled container this afternoon. They opened it and found a metal cylinder which itself had remained closed. She says employees were never exposed to the radiation.

French officials say they'll try for a fourth time to find important pieces of debris from that air France plane that crashed into the Atlantic Ocean last year, killing all 228 people on board. Flight 447 bound from Rio de Janeiro to Paris mysteriously crashed in June 2009. Large part of the plane including both flight reporters have never been found. The new search will begin in February.

And NASA says a Russian space craft bringing three crew members home from the international space station made a bull's eye landing in Kazakhstan this morning. NASA astronauts, Doug Wheelock and Shannon Walker and the Russian cosmonaut were aboard the capsule. Since the 2003 shuttle Columbia accident, Russia's Soyuz spacecraft has transported crew members to and from the space station.

I had trouble getting into work myself on time much less making a bull's eye landing in Kazakhstan. Imagine.

MALVEAUX: But hey, they did a good job.

TODD: Right.

MALVEAUX: Thank you, Brian.

Well, there is little disagreement that a tired pilot can be dangerous, of course, in the cockpit. But there's a fight that is underway over updating rules on how much rest they should get. And your safety could be on the line.

And dozens of suspected al Qaeda members busted. Details on their alleged terror plot.

(COMMERCIAL BREAK)

MALVEAUX: You're in the SITUATION ROOM. Happening now, he says he took a shellacking in the midterm elections, well, now, he's got a bloody lip. Really? We'll tell you about it. What happened that caused President Obama to need stitches. And three teenage boys lost at sea in the pacific for almost two months, and they survived to tell the remarkable story.

Wolf Blitzer is off today. I'm Suzanne Malveaux and you're in the SITUATION ROOM.

Well, a big new crack down on al Qaeda. Saudi security forces say they arrested 149 alleged members of the terrorist group over eight months. Now, the suspects are mostly Saudis. And they are accused of plotting to kill government officials, security forces, and media employees. A Saudi government spokesman said that the militants were trying to use the Muslim pilgrimage to recruit terrorists and create unrest. We're joined by CNN national security contributor Fran Townsend. She served as President Bush's homeland security advisor. Fran, happy holidays. Good to see you.

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Good to see you.

MALVEAUX: Tell us what this means. How significant is this? 149, that sounds like a rather large number.

TOWNSEND: It is a large number but this is over eight or nine months and typically the Saudi government waits and they do this in big pieces. We'll hear hundreds are arrested at one time but they have done that over a period of time. Normally they don't announce them right away because we're hoping that some will cooperate which will lead you to others. The timing of this one is particularly interesting. They represent a real -- we liken it to nine super bowls in our terms over three days in Saudi Arabia, to give you an idea of the size of this thing. So with so many people coming in for the religious pilgrimage, these are opportunities for bad guys to get in with those that are really there to observe the religious holiday.

MALVEAUX: Do you think this is the tip of the iceberg?

TOWNSEND: It's interesting. Remember, the Saudi king, they just announced publicly, is ill and here in the United States for medical treatment. I suspect, based on talking to folks, that the timing of this is not an accident. They want to show that they are strong, on top of this, regardless of whether the king is ill or not.

MALVEAUX: Are these bit players or are these big folks who are operational and make things happen?

TOWNSEND: We don't really know yet. They haven't -- unlike American officials, they haven't released names or specifics about this. We know there was a lot of money and weapons confiscated and presumably, I mean, after all, the Saudis gave us the lead on the packages coming from Yemen. They also helped us identify the underwear bomber technique prior to we actually saw it last Christmas in Detroit. There is a lot of information flowing when we have to assume that American officials are getting the intelligence.

MALVEAUX: You brought up a very good point. They are trying to show, despite the fact that the Saudi royalty is in some trouble, at least physically or having some challenges there, do we think that this is a sign of weakness or a success that there are so many al Qaeda members that were arrested? Is that still a problem?

TOWNSEND: It's much less of a problem than it was five, ten years ago. I actually think that this is a continuing show of Saudi leadership. The Saudi internal security service is the most confident throughout the region. They are a tremendous ally and share more information with us than we share with the British. They are very competent and despite the illness of the king, they've continued to be very effective.

MALVEAUX: Fran Townsend, happy holidays to you.

TOWNSEND: Thanks.

MALVEAUX: Now to a potential safety threat for thousands of people flying during the holiday season. The Federal Aviation Administration is proposing new rules to try to crack down on pilot fatigue. But the airline industry is opposing these rules. Our CNN senior correspondent Allan Chernoff has more on this.

ALLAN CHERNOFF, CNN CORRESPONDENT: Suzanne, pilot fatigue has been tied to fatal airplane accidents and the FAA acknowledges the rules or motive. But the airlines, pilots, and regulators have been unable to agree on new rules to give pilots more rest, even though lives are at stake.

(BEGIN VIDEOTAPE)

CHERNOFF: When you're at cruising altitude and you're cruising just for hours, it's easy to get fatigue.

MAXINE LUBNER, VAUGHN COLLEGE OF AERONAUTICS & TECHNOLOGY: Very easy. Fatigue or distracted, all of those things.

Fatigue is a dangerous thing. It's caused many accidents and deaths.

CHERNOFF: 13 people died six years ago from this crash in Missouri. The National Transportation Safety Board blamed pilot fatigue and the investigation of the 2009 crash near Buffalo, New York that killed 50 people revealed that the pilots were not well rested. The same rules have governed pilot rest and duty hours for 25 years. Even though a growing number of accidents have been tied and what is taking so long to get better rules in place? Industry players just can't seem to agree. The FAA says that pilots are permitted to work no more than 13 hours a week and given down time, at least nine hours prior to a flight assignment, an increase of one hour from the current rule. Not enough, say pilots.

CHESLEY "SULLY" SULLENBERGER, CAPTAIN OF US AIRWAYS FLIGHT 1549: Every human has a physiological need for sleep and scientists tell us that we need about ten hours in a hotel room to be able to get eight hours of sleep.

CHERNOFF: But the fiercest opposition is coming from airlines that want flexibility in scheduling employees. Their trade group, the air transport association, calls the proposal operationally onerous.

MARK SICHEL, AIRLINE PASSENGER: It seems to me like passengers are much more safe with who are pilots well rested.

CHERNOFF: That, says the NTSB, is reason enough to get new rules in place as quickly as possible.

MARK ROSEKIND, NTSB BOARD MEMBER: I think everybody who flies should be outraged that there are known changes to benefit safety in this area and absolutely everybody should be pushing to see these changes happen now.

(END VIDEOTAPE)

CHERNOFF: Changes are coming, even with the complaints the FAA is pushing forward. Congress has mandated new rules into effect by August 1st of next year. Suzanne?

MALVEAUX: Thanks Allan.

Authorities call in the military to stop days of violence in one of Brazil's largest cities. We'll have details.

Also, did you know that there's actually a dress code for New York cab drivers? Yes and guess what it's being changed.

(COMMERCIAL BREAK)

MALVEAUX: Brian Todd is monitoring some of the other top stories that are coming into THE SITUATION ROOM right now, including new forces in the fight to stop violent outbursts in Brazil. Brian, what do we know about that?

BRIAN TODD, CNN CORRESPONDENT: Suzanne, Brazilian authorities have called in the military to stop five days of deadly violence in the slums of Rio de Janero. About 800 soldiers have been dispatched to the city to protect areas occupied by police. At least 25 people have been killed and almost 200 have been detained or arrested since the violence broke out on Sunday. Officials say rival gangs joined forces to launch the attacks.

In Manchester, Vermont, police say a prank gone wrong has left one man dead and another man facing manslaughter charges. According to police 23-year-old Nicholas Bell tried to wake his sleeping friend with the sound of an air rifle but they say Bell mistakenly used a real 22- caliber rifle, killing the man. Bell is in jail with bail set at $250,000.

New York City's cab driver dress code now getting a makeover. Yes, there is a dress code for cabbies in New York. You may not have realized that in your last ride. The drivers' manual says no tube tops, no tank tops, no bathing trunks. Failure to comply could mean a $25 fine but the regulations are considered too specific and way under-enforced, believe it or not. Now New York taxi and revision policy is revising that cabbies must present a professional appearance.

MALVEAUX: When is the last time you saw a cab driver in a tube top?

TODD: And then if you're a cabbie you're thinking, what do I want to drive people around Brooklyn?

MALVEAUX: Strange. Thanks again, Brian.

Republican Party insiders may have the votes to force Michael Steele out. We're going to talk about whether the RNC chairman deserves the ax or credit for party games in the midterm elections.

And the legal challenge in the works that could derail Rahm Emanuel's campaign to become Chicago's next mayor.

(COMMERCIAL BREAK)

MALVEAUX: Sarah Palin is slamming the media. Even the president boggles every now and then. Does she have a point? Joining me for today's strategy session is Democratic strategist Hilary Rosen and Republican consultant Alex Castellanos. I want to start off by talking about the RNC chair, Michael Steele. A big debate going on within the Republican ranks themselves. The Associated Press conducting an interview with 51 member of the RNC. 39 said that they don't want Michael Steele on the ballot when it comes to becoming the new RNC chair come January. It didn't manage the money well and they don't want to see a big fight amongst Republicans. They think it's going to be very damaging here. What do you make of this? I'll start with you, Alex. Do you think he should get credit or should he get blame or be kicked out?

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: You have to do a pretty disappointing job not to get credit when Republicans gain 60 seats in the house, when you gain six seats in the Senate. The biggest gain since the middle of the last century. Unfortunately, Michael Steele doesn't get the credit for any of those. When you look at his record, I supported him for this job. So blame me. It's almost a political manager at the RNC and, for example, the RNC people feel raised $10 million less than they should have. The cost of fundraising for every dollar they raised, they spent 50 to 70 cents raising it. One week before the election they told state parties, you know the get out to vote effort that we fund, we're not going to do it this year. We had the best hand of cards that any party has had in over 60 years and we didn't have any chips to put on the table. That's why people feel it would be gracious of Chairman Steele to step down and let some new leadership emerge.

MALVEAUX: Hilary if you were advising the Republicans, do you believe Steele should go?

HILARY ROSEN, DEMOCRATIC STRATEGIST: Well, no good political consultant gets in the way when their opponents are tearing each other up. Far be it for me to give them advice. It's notable that Alex is out there suggesting that Chairman Steele step down because he was one of the big supporters. I think he's been a bust for the Republican Party but you can't beat somebody with nobody.

CASTELLANOS: There are some candidates out there that -- the chairman of the Michigan party, Maria has worked with the RNC for years. Plus, big names I think, coming out soon as well. MALVEAUX: I want to turn the corner, if I can, to Israel, the Middle East peace process. We have seen obviously Republican who have been very strong and supporting Israel under the Obama administration. We now have tea party members, party members like Rand Paul who are coming in who are saying, look, they are questioning whether or not there should be as much U.S. aid to Israel, whether or not there should be such a strong alliance. Is that going to be a problem for President Obama? Alex?

CASTELLANOS: I don't know if it's going to be a problem for President Obama. And the division, I think, in the Republican Party is a little overstated. Rand Paul is more of a libertarian than he is a tea party activist. He's just against all foreign aid. I think if you look at the Democratic Party, whether it's Jimmy Carter who has been strong anti-Israel or the black caucus in Congress that's been strong anti- Israel, whether you look at President Obama, the human rights council, had nine anti-Israel resolutions to vote on. Do you know how many the U.S. opposed over the Obama administration? Zero. So I think that the Democratic Party is that -- is a problem maintaining its support among Jewish community.

MALVEAUX: Hilary, you're shaking your head.

ROSEN: Yeah, because, you know, the Republicans would love to divide the Jewish community and build more support for Republicans which has historically been pro Democratic. I think that there is a problem that Republicans are going to have to face, which is that a lot of they are not trying to make a distinction between Israel and other countries. I very clearly believe that U.S. national security is dependent on a strong Israel. And I think President Obama does, too. He's made that clear. What he has done, though, is something that a lot of people like me support. Which is to say, you know, if we're going to have peace in the Middle East, you're going to have to deal with the settlement issue. You can't pander to Israel onset sets and then somehow fantasize that you're going to have peace in the Middle East. And so I think what President Obama is saying, we can keep going the way we are going but if we want to change things, everybody is going to have to change. And that is not taking one ounce of support away from Israel.

MALVEAUX: We're going to have to leave it there. Happy holidays. Thank you to both of you.

CASTELLANOS: Happy holidays.

MALVEAUX: Rahm Emanuel prides himself on his Chicago roots but has the former white house chief of staff lived there long enough to legally run for mayor.

And what's more unusual? The fact that Russian president Vladimir Putin is teaming up with Leonardo Dicaprio?

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MALVEAUX: A potential setback for Rahm Emanuel's campaign to be Chicago mayor. A local attorney has filed a legal challenge today questioning the former white house chief of staff's residency. Under Chicago law, a candidate has to live in the city for at least a year before running for office. Now, Emanuel only recently returned to Chicago to live in Chicago full time after over 2 1/2 years in the Obama white house and serving as Congressman before that. We are joined by Lynn Sweet who is Washington bureau chief for the Chicago Sun Times and a columnist for politicsdaily.com. Thank you for joining us here. What do we know about Rahm Emanuel's status as a resident of Chicago?

LYNN SWEET, CHICAGO SUN TIMES: Well, greetings from Chicago. What we know is that it is an open legal question. It is a question that the Rahm Emanuel campaign would rather not be asked, but the challenge is going to go forward and it will probably end up in court to decide whether or not he should be on the ballot. I think Rahm has made good legal case to say that he intended to come to Chicago and he only left to serve the commander in chief, and the chief lawyer who filed the chief objection for him argued that the issue is whether or not you had a physical presence in the city a year before the February primary.

MALVEAUX: We know that the attorney Bird Olson is filing the suit, and does he have a political motive behind it or what do we make of it?

SWEET: Well, we know that he does not support Rahm Emanuel's mayoral candidacy, but we know that he is an activist election judge. We know that one of the people who are in the plaintiffs in the suit, of this kind of going with all of the stories of one representing Drew Peterson, attorney, so there is a little bit of, I guess, of a motive to be a player in the important question to the people of Illinois, but I think even if it weren't him, there were other people who would file challenges, too. So either way, this question would have come up.

MALVEAUX: How big of a problem is this for Rahm Emanuel, because they had to know it would happen?

Well, I will tell you, that I just realized the more I have been in Chicago, it is a bigger political problem than legal problem. I went to two thanksgiving dinners with different groups of cousins who are interested in Chicago politics and they asked us, did Rahm have to live in the city? There is a little chatter on it, and it does not help, because everyday there is a discussion about Rahm's residency, is a day he cannot talk about the issues, which his opponents welcome.

MALVEAUX: Lynn tell us what's the time frame for all this to play out?

SWEET: Well, the ballots have to be finalized by December, so I imagine it is expedited all of the way up to the state supreme court.

MALVEAUX: All right. Lynn Sweet, thank you so much, and have a great holiday.

We are digging into deeper into what we're calling elbow-gate, and we will talk to one of the people who played basketball with the president who is now sporting a fat lip he got on the court.

And when Vladimir Putin met Leonardo DiCaprio, the odd alliance in order to save an endangered species.

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MALVEAUX: The world's tiger population, wild tiger population has dwindled to only a few thousand. The creature has a powerful advocate in Russian Prime Minister Vladimir Putin. He hosted a 13 nation tiger conservation forum in St. Petersburg. You will see him here with actor Leonardo DiCaprio who is helping rebuild the tiger population. They are taking a stand against tiger poaching and destruction of tiger habitats. What if we could bring back tigers from the brink of extinction? Here's CNN's Colleen McEdwards.

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COLLEEN MCEDWARDS, CNN CORRESPONDENT: They used to be one of the most dangerous species on earth, now they are one of the most threatened. There are only about 3,500 tigers left in the wild. Russia is making some headway, but boosting the population is a tough task. The safari park in Russia is a breeding facility. It is currently home to 11 tigers including Mosha who is quite the celebrity. This tiger was given to Vladimir Putin as a birthday present in 2008 and he later gave her to the park. Nikolay Zosin, the park's director, says that one of the reasons that the tigers breed so well here is because it is not a zoo. It began as an animal shelter. According to the world wildlife fund, Russia has developed an effective strategy of saving this endangered species which includes setting aside protected areas and anti-poaching activities and a ban on hunting.

IGOR CHESTIN, CHIEF EXECUTIVE, WWF RUSSIA: They've allowed us to bring our population from about as low as 50 animals in the middle of the last century to 300 by the end of the '80s and now we are for the last 20 years, we have more or less stable population of the level of 400 to 500 animals.

MCEDWARDS: A small increase is positive news not just for the tigers, themselves, but for millions of people around the world who love them. However, in many countries, these beautiful animals are still on the brink of extinction, survival still very much in question.

Collene McEdwards, CNN, Atlanta.

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