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The Situation Room

Texas Parking Structure Collapse; Rep. Flake Announces Arizona Senate Run; Giffords Talking More Everyday; Egypt Struggles to End Protests; Who's Punting on Budget Cuts?; GOP Pushes for Spending Cuts Now; Cheney, Rumsfeld Booed at CPAC; Egypt Revolution Changes Young Minds; The Making of "Mama Grizzlies"

Aired February 14, 2011 - 17:00   ET

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

JESSICA YELLIN, GUEST HOST: Happening now, a new curfew takes effect in Egypt, as the country's military rulers grow impatient with protesters. Thousands still are not satisfied with the pace of change after the revolution.

Plus, fiery protests in Iran -- will the Islamic regime crush the anti-government anger spreading through the country and the region?

And a reality check on the president's new budget plan -- both parties are failing to do what it takes to stop deficit spending. This hour, I'll ask the White House budget director where are the grownups who are willing to make tough choices?

Wolf Blitzer is off.

I'm Jessica Yellin.

You're in THE SITUATION ROOM.

New aftershocks from the revolution in Egypt are playing out across the country and the region right now. In Cairo, it's just after midnight and a new curfew is taking effect. Military rulers are clearing out protesters who have tried to stay in the main square three days after President Hosni Mubarak quit.

In Iran, tens of thousands of people took to the streets today, in defiance of the hard line Islamic government. Witnesses say security forces beat protesters and threw tear gas canisters at them. There's a late report from Iran that one person was shot and killed. The U.S. is watching unrest especially closely in Iran.

And in Yemen, where Al Qaeda has a very active branch, clashes broke out in Yemen's capital city today between pro-and anti-government protesters for at least the fourth day in a row.

Let's get an update now on the situation in Egypt.

CNN's Fred Pleitgen joins us from Cairo -- hi, Fred.

What's the latest there?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Hi, Jessica. Well, you said it, there are more and more smaller protests that are sort of springing up here. And the military is actually shutting a lot of those down very quickly.

One of the interesting things is that now police officers are also staging their own protest, which is interesting, because the police here was actually so repressive and they were one of the reasons why this revolution started. Now they want better working conditions.

Here's what they said. (BEGIN VIDEOTAPE)

PLEITGEN (voice-over): Hundreds of cops cheer as this officer tears the epaulet off his uniform at a police demonstration at Egypt's interior ministry. "We want better wages," this policeman shouts. "And we have colleagues who have been fired who need to come back to work."

A protest by members of what's, arguably, Egypt's most unpopular profession, but one that's badly needed these days. Anti-government demonstrators and police fought raging battles in Cairo and other Egyptian cities more than two weeks ago. Then, as the army rolled in, Egyptian police, notorious for allegations of corruption, random arrests and brutality, disappeared. In the aftermath, some police stations were looted and set ablaze.

Now Mustafa Ahmed (ph) and some others are volunteering to renovate this one in Cairo, in a bid to restore law enforcement authority. "This is our country," he says, "and we worry about it. We fight the destruction that comes its way. I can sleep much better knowing the police are around."

(on camera): Refurbishing a building is one thing. But whether you liked the police before or not, law enforcement authorities are necessary. That's why the officers have set up makeshift offices here outside the building. And as you can see, they are in high demand.

(voice-over): Mustafa Magi (ph) is filing a verbal abuse complaint against his landlord. He says the once heavy-handed cops seem to be friendlier these days. "Before, we had to wait a long time for someone to listen to us," he says. "They didn't seem concerned. Now things have completely changed."

But distrust remains. Only traffic police are back on the streets. Regular cops still don't walk beats in Cairo or other cities, a spokesman says, out of fear of being harassed. Citizens have organized neighborhood watches to protect their belongings and CNN obtained this amateur video of citizens allegedly arresting inmates after a jail break and handing them over to the army, since the police where nowhere to be seen.

Meanwhile, many cops continue their protests, demanding more money and better working conditions, as Egypt struggles to establish an institution many hate, but everyone needs.

(END VIDEO TAPE) PLEITGEN: And, Jessica, the average police officer here makes about $100 a month. And, clearly, there's a lot of people who believe that the cops should be making more. They were joined by some of the people who have been In Tahrir Square for a very long time, mixing those protests. And, clearly, the military was not in the demonstration -- Jessica.

YELLIN: Fred, other than the police, there were also workers protesting, demanding higher salaries.

Would you tell us about that?

PLEITGEN: Yes. There were workers protesting today,, as there have been in the past couple of days. Some of them were hospital workers. And there were also other public workers who were -- who are on strike today, as well.

It appears to us as though there's more and more of these smaller demonstrations that are springing up, more and more sectors that are protesting. And this is clearly a huge concern to this military council that's currently governing the country.

They issued a statement today calling on all people to go back to work, calling the conduct detrimental to the country and especially to the country's economy. So it really appears as though, a this point in time, the military is losing its patience and it's clearly fed up with a lot of the demonstrations that are going on here.

So it's sort of turning into somewhat of a -- of an iffy situation on the ground here, as the military is really trying to assert itself -- Jessica.

YELLIN: All right. Fred Pleitgen for us in Cairo.

Thank you, Fred.

Now, here at home, $3.7 trillion of your tax dollars at work. Yes, that's the total amount of President Obama's new budget blueprint for 2012. It includes billions of dollars of spending cuts -- airports, heat subsidies for the poor, water treatment pant -- plants, Pell Grants for higher education. Those are just some of the targets.

And we're taking a hard look at budget and how both parties are dodging the biggest, most painful cuts, despite all of those I just mentioned.

So let's bring in our White House correspondent, Dan Lothian -- Dan, look, the bottom line is despite all those cuts, critics are pouncing.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. They really are. You know, I should say, first of all, that from the president on down, other aides here at the White House, they do say that there is a lot of pain in this budget, that they did have to make some tough choices.

But Democrats think that it went too far. Some Republicans say that it didn't go far enough, especially when it comes to tackling the massive federal deficit.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): President Obama's own Debt Commission laid out an ominous assessment last year, warning of fiscal cancer without drastic surgery on the federal deficit.

ERSKINE BOWLES, CO-CHAIR, NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM: It's going to destroy our country from within. The problem is real. The solutions are painful.

LOTHIAN: But the 208-page budget proposal doesn't come close to reducing the $14 trillion federal deficit as aggressively as suggested by the Commission.

President Obama's defense?

This is just a start.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So what we've done here is make a downpayment. But there's going to be more work that needs to be done.

LOTHIAN: But conservatives aren't buying it.

ALISON FRASER, HERITAGE FOUNDATION: We're in a very political era right now. But the fact is that the president punted last year on tackling the long-term situation.

LOTHIAN: Instead of the Commission's goal of shaving the deficit by $4 trillion over the next decade, the White House numbers only $1.1 trillion in that same time period, slashing hundreds of domestic programs and increasing tax revenue.

FRASER: I think, really, this is a giant missed opportunity, to put it politely. And -- and other people could even say that he's thumbed his nose at his own Deficit Commission.

LOTHIAN: For example, the budget doesn't touch on long-term solutions for Medicare or Social Security, which the Commission had said could be made healthier by reducing cost of living increases, benefits for wealthy seniors and raising the retirement age.

But President Obama's budget director, Jack Lew, says Social Security is not contributing to the deficit in the short-term and he dismissed criticism that the Commission ignored.

JACK LEW, DIRECTOR, OFFICE OF MANAGEMENT & BUDGET: The budget draws heavily on the ideas of the Commission in areas like corporate tax reform, which I mentioned; medical malpractice reform; even the government organiz -- re-organization and handling of surplus property.

LOTHIAN: Lew praised the, quote, "good work of the Commission" but suggested other difficult proposals to hammer out long-term solutions would take time and require a serious bipartisan effort. (END VIDEO TAPE)

LOTHIAN: Now, the president is also calling for investment in high- speed rail; also in high -- high broadband access; and also green jobs. And conservatives and those critics say that they're all for job creation, but they think that this needs to be less about the government, less spending and more in the hands of the private sector -- Jessica.

YELLIN: All right. Thanks, Dan.

And later in the show, I'll be asking Jack Lew, the budget director, why this budget didn't take on those entitlements.

Well, it is no surprise, yes, that the Republicans are pouncing on the president's new budget blueprint. But this week, the new GOP leaders in the House have their own chance to get tough on spending. They're unveiling a bill that would fund the government through September of this year.

Let's bring in our Congressional correspondent, Brianna Keilar -- first of all, we should clarify, Brianna, the president's budget is talking about 2012. Right now, we're going to talk about the Republicans trying to fund 2011.

And do they take on Medicare, Medicaid or Social Security?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: They don't for 2011. And that's because they say they cannot do this in the type of bill that is going to be on the floor this week, which they cannot do.

But House Republican leaders say they will target entitlements come spring, when they're talking about their budget proposal for 2012.

So they slammed President Obama today for not tackling this issue. They say he's punting on the deficit. House majority leader, Eric Cantor, was pressed today for specifics on how Republicans might tackle this issue.

Of course, we want to know, do they want to raise the retirement age for Social Security?

Do they want to increase Americans' tax contributions to entitlement programs?

No specifics there. They were certainly more focused on criticism of the president's budget.

But what's -- what else is here?

They don't call Social Security, of course, the third rail of politics for nothing. So if they did get into specifics on that today, you know, we would be all over them; certainly critics would be all over Republicans. And then the story would change away from their criticism of President Obama's budget.

YELLIN: So not -- politics is getting in the way a little bit.

KEILAR: Exactly.

YELLIN: Well, tell us what's on the chopping block on the House floor this week.

KEILAR: Yes. It's -- it's quite a bit of money. This is $60 billion. This is what they're proposing. It's going to be on the House floor tomorrow -- $60 billion in cuts for the remaining seven months of the fiscal year. Examples of what's on the chopping block here, $747 million in cuts to the nutrition program for Women, Infants and Children. You may know it as WIC. There is over $500 million in cuts from community policing programs. There's also about $3 billion in cuts -- a lot there -- from the Environmental Protection Agency.

Now right now, the government is being funded by a temporary bill. It expires March 4th. Yes, that's just around the corner.

So what's happening on the House floor this week, it raises the specter of a government shutdown, especially because you can see where it's going to hard to find a consensus between Senate Democrats and the White House, on one hand, and then, on the other hand, House Republicans, who are demanding these very deep cuts and they're indicating they don't want to bend on their demands.

So conventional wisdom, of course, is that no one really wants that to happen. But it's out there that it could.

YELLIN: And we are headed toward some kind of a showdown one way or another.

KEILAR: Exactly.

YELLIN: It looks...

KEILAR: Yes.

YELLIN: And we have just -- here is a copy of the president's budget, heavy as it is. I don't know if we can see that, but it's on the table. That is the president's budget this year. We just got it.

KEILAR: That is very large.

YELLIN: And it still doesn't take on the biggest part of what we need to tackle.

Thanks so much, Brianna.

KEILAR: All right.

YELLIN: Iran's hard-line regime is the latest target of protests sweeping through the region.

Will anti-government anger there unleash a revolution like the one in Egypt? And rumors are swirling about the former Egyptian President Hosni Mubarak. We'll tell you what we're learning about his health, his money and his future.

(COMMERCIAL BREAK)

JESSICA YELLIN, CNN ANCHOR: The revolution in Egypt is raising new questions about whether we'll begin to see more governments fall in that region. CNN foreign affairs correspondent, Jill Dougherty, joins us now with more. Hi, Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Hey, Jessica. You know, it really is extraordinary, Jessica, no matter where you look right now. It could be in North Africa. It could be in the Middle East. People are taking to the streets, and many of them are inspired by what happened in Egypt, and the administration here is looking at this very, very closely. No country is more under the microscope than Iran.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): Is this what the Obama administration hopes could be the next people's revolution? Iranian police clash with demonstrators on the streets of Tehran and Secretary of State Hillary Clinton connects the dots with Egypt's revolution.

HILARY CLINTON, SECRETARY OF STATE: We wish the opposition and the brave people in the streets across cities in Iran, you know, the same opportunity that they saw their Egyptian counterparts seize in the last week.

DOUGHERTY: As Iranian police round up activists, the state department begins tweeting encouraging messages in the Farsi language telling Iranians we want to join in your conversation. Just days after revolution toppled Egypt's longtime ruler, Hosni Mubarak, unrest is rippling through the region, and the U.S. is trying to figure out how to handle it. In Algeria, protesters clash with security forces and the state department proclaims their support for the universal rights of the Algerian people, adding, these rights apply on the internet.

The government of Syria puts a blogger on trial for espionage, the state department calls for her freedom. In Jordan, the chairman of the U.S. joint chiefs of staff and a top state department official meet with King Abdullah II to show support for the new government he swore in following anti-government protests. Yet nothing is settled in Egypt. trying to muster international support, President Obama has been speed-dialing fellow leaders in Great Britain, Jordan, and Turkey to help keep pressure on the Egyptian military to turn a revolution into a real Democracy.

Secretary Clinton called the Egyptian foreign minister and her counterparts in eight other countries. The tide of Democracy opens opportunities, officials say, but a former CIA director says this is not a stack of dominoes.

MICHAEL HAYDEN, FORMER CIA DIRECTOR: The challenge is how does one manage that during the transition period so that you don't see some of the more radical, and, unfortunately, those are generally the best organized groups, seizing control, capturing the revolution and taking it into a direction that's very dark.

(END VIDEOTAPE)

DOUGHERTY (on-camera): And you can add a few more names to that list of countries that are dealing with demonstrations and protests such as Bahrain and Yemen. And just a few minutes ago, Jessica, we got a list of phone calls that Vice President Joe Biden has been making. It really is a full-court press.

YELLIN: All right, Jill. Jill Dougherty at the state department, thank you.

As we know now young people helped drive the Egyptian revolution, and they're now spreading the message of freedom on campus and online.

And Congresswoman Gabrielle Giffords Valentine's Day gift to her husband? More progress in her recovery.

(COMMERCIAL BREAK)

YELLIN: A building collapses in Texas. Lisa Sylvester is here monitoring that and some of the other top stories in the SITUATION ROOM. Hi, Lisa. Tell us what you have.

LISA SYLVESTER, CNN CORRESPONDENT: Well, it's nice to have you here, Jessica.

YELLIN: Thank you.

SYLVESTER: And welcome. Well, two construction workers were injured when a parking structure collapsed in San Antonio. CNN affiliate, KSAT, reports one of the workers is now in critical condition. Officials say the crew was working on the seven-storey structure when they heard a rumbling noise.

Republican Congressman Jeff Flake of Arizona, he has made it official. He will run for the seat of retiring Senator Jon Kyl. Flake as Kyl has set the bar extremely high, and he's going to try to meet that standard. Democratic Congresswoman Gabrielle Giffords was considering a Senate run before she was shot last month.

And speaking of the congresswoman, Gabrielle Giffords is talking more every day. Her husband tells NBC News that if he asks a question, Giffords will answer. Mark Kelly also says she is putting together small sentences. Giffords was shot in the head last month outside a Tucson grocery store. And she's doing remarkably well. It was last week that she said that she wanted toast.

YELLIN: Toast. And I read that she started -- they had her singing a little bit. Apparently, singing is a really good way to get the recovery.

SYLVESTER: That's fun for rehab and her therapy. I wouldn't be surprised, but you know, I have a feeling before too long she's going to be doing her first interview very soon.

YELLIN: I think so. I think so. That will be a happy moment. Thanks, Lisa.

OK. Coming up, standby for a reality check of the president's new budget blueprint out today. I'll ask the White House Budget director why the administration didn't make the toughest decisions to cut spending.

And my exclusive interview with the creators of a video promoting Sarah Palin's campaign for momma grizzlies. They're speaking out for the very first time on television.

(COMMERCIAL BREAK)

YELLIN: You're in the SITUATION ROOM. Happening now. Rumors running rampant about the whereabouts of former Egyptian president, Hosni Mubarak, just days after his fall from power. Is he sick? Will he leave the country? We'll take you to the resort city where he's believed to be hiding out.

Plus, it is some of the most elite training the military offers. Ahead, military snipers learn to take the perfect shot amid some of the worst conditions.

Wolf Blitzer is off. I'm Jessica Yellin. You're in the SITUATION ROOM.

It is time to get real about the new Obama budget blueprint and the failure by either party to make the toughest choices to cut spending. The White House brags that its new 2012 budget would shrink deficits every year over the next ten years reducing them in total by $1.1 trillion. OK. But under the president's plan, the federal government would still spend hundreds of billions of dollars more than it takes in every year over that ten-year period, and the country would sink trillions of dollars deeper into the red.

So, we keep piling on to the total amount we owe to other countries. That's over $14 trillion on the national debt clock right now. Well, here's why the president's plan barely makes a dent in the debt. It only takes a whack at about 16 percent of the federal budget. It doesn't touch the biggest ticket items. That includes most defense and mandatory spending programs.

(BEGIN VIDEOTAPE)

YELLIN: Joining me now to discuss all this is the White House Budget director, Jack Lew. Mr. Lew, thank you so much for being with us. Big day, big budget, but you really can't balance the budget by tackling only about 16 percent of our spending. Why didn't you guys take on the really hard stuff, entitlements?

JACK LEW, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: It's good to be with you, Jessica. I would challenge the notion that this budget does not solve the problem in the short and the medium term. We've put forward a budget that tackles almost every part of the budget that you just described.

It would reduce the deficit to a place in the middle of the decade where we'd stop adding to the national debt. We would still have interest payments on the old debt but, you know, like a family that has a problem with its credit card, you have to start adding to the balance before you can pay it down.

We'd accomplish that by the middle of the decade. So, I think it's a very big step, when we get our budget enacted. In terms of the proposals in the budget, we do take $400 billion over the next ten years out of the portion of the budget you're describing which is annual discretionary spending. That would bring spending in that category down to the level it hasn't been at since the Eisenhower administration, but we also take on defense.

We cut $78 billion from the defense programs as they were outlined just a year ago, and we have savings in mandatory programs where in order to pay for Medicare, we have $62 billion in savings in health programs.

YELLIN: So with respect, there is a difference between the deficit, our yearly red ink bill and the debt, how much we owe overall? And it's even -- Kent Conrad, a Democrat, has said we need to be much more serious than when this budget says. He says we need to take a much more - look at a much more robust package of deficit and debt reduction.

So, if we're going to have an adult conversation about Social Security, Medicare, Medicaid, doesn't it need to come first from someone presenting the budget, from the White House, for example?

LEW: Well, I think that we are taking a step today putting a budget out there which frames the issues in exactly the right way. It takes real actions now so that between now and five years from now, we can get our deficit under control so that we can stabilize things so that we're not adding to the debt anymore.

YELLIN: Do you agree that Social Security, Medicare, Medicaid should be reformed?

LEW: I think that they each need to be treated separately, address Social Security. I think it's very important not to confuse the importance of dealing with Social Security in the long term with these short-term deficit reduction challenges. They're different issues.

I think if you look at health care, there's no doubt that health care is a very significant factor in our whole economy that's driving spending. The spending in the government on health care is just reflective of the broader trends across the economy.

I think that the important steps taken in the - in the Affordable Care Act will start to chip away at that. That's why the - the savings in the - in the proposal - in the law that's been enacted, are so important, and it's important that it be implemented.

I think in this budget there's a very important provision, which I should take a minute to explain. You know, for years Congress and successive administrations have been adding to the deficit by just suspending a provision in law that would cut what we pay doctors under Medicare by 30 percent. There's a bipartisan agreement that that wouldn't be a good idea.

In the past, we just put it on the national credit card. What this budget says is we should pay for it. We've put $62 billion of real proposals out there to pay for it for the next two years.

YELLIN: Sir, but our credit card is going so heavily into the red, and the - what you're talking about, that one proposal, is just a fraction of a fraction of what we owe. So if you're acknowledging that we do need at some point to talk about social security, Medicare, Medicaid, is this slightly a political move, this budget?

Isn't it really politics in saying we're going touch - we're going to touch non-discretionary - not going to touch non-discretionary spending. We'll let the Republicans go first.

LEW: I - I actually don't think that's right. I think that this budget is the first comprehensive approach put out there, with $1.1 trillion of deficit reduction, two-thirds of it on the spending side, one-third of it on the revenue side. We have proposals in domestic discretionary, we have proposals in defense. We have proposals on these entitlements, and we have proposals on the tax side.

We bring the deficit down, frankly, to meet the target that the Deficit Commission was asked to meet. So we've accomplished it with a plan that we think is a sound, responsible, balanced plan.

We know that it wouldn't be a plan that all agree with, and there will be questions asked. We challenge others to put their plans on the table, and we also offer to work together on a bipartisan basis to see where can we agree and where can we agree in the short term, because these problems should be dealt with now, not five years from now.

YELLIN: And the Republicans do have a plan out now for this existing year.

We're already into this fiscal year 2011. The Republicans have proposed slashing $100 billion out of the rest of the spending for this year.

Are - is there anything that you would object to in their current spending package, including the elimination of AmeriCorps, for example; they would propose eliminating PBS. Anything the White House objects to in their package?

LEW: The president has put forward a balanced package. Congress is still working. I don't want to pre-judge the outcome either in the House or the Senate of what they're doing. We're obviously going to need to work together and find the things that we can agree on. There will be things that we don't agree on. I think we have to work through that.

The challenge is going to be have a balanced approach and to not put all the burden in one place. Our budget doesn't put all the burden on that small slice of the budget.

The challenge is not just to reduce spending. We agree, we all need to reduce spending. We need to reduce the deficit, and in the comprehensive plan, that does that.

YELLIN: All right, Mr. Lew. We'll have to leave it there. Thanks for your time. This will be -

LEW: Thank you.

YELLIN: -- a long conversation going forward.

LEW: It will. This is the first step.

YELLIN: Yes.

And we also have tough budget questions for a top Republican, coming up. I'll ask a leading House Budget Committee member, Jeb Hensarling if his party will get serious about cutting entitlement programs.

I'll also tell you who's claiming responsibility for a new suicide bomb attack in Afghanistan.

And Russian cosmonauts are on a virtual mission to Mars.

(COMMERCIAL BREAK)

YELLIN: Another deadly attack in Afghanistan. Lisa Sylvester is here.

You've been monitoring the story and some of the others, but tell us what's happening in Afghanistan.

LISA SYLVESTER, CNN CORRESPONDENT: Jessica, a suicide bomber killed at least two people in Kabul. The attack on a shopping mall happened this afternoon. Officials say the dead included a guard and a civilian.

The Taliban reportedly claimed responsibility for that attack.

Most Americans think the U.S. is losing to China. A new Gallup Poll shows an overwhelming majority, 52 percent, say China is the leading world economic power. Only 32 percent say the U.S. is tops. Two years ago Americans said china and the U.S. were on equal ground.

And a mission to Mars, of sorts. Six international researchers are on a simulated trip to the red planet. They have been shut in the cramped Moscow simulator since last June. Today, they pretend to walk on the surface of Mars.

The cosmonauts are following a very strict diet and exercise schedule, and the mission will last a year and a half.

And you can imagine that being president of the United States, well, it has got to be one of the most stressful jobs out there. President Obama told some middle school students how he deals with it. (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The one thing that I think helps me handle the stress is if I feel like at the end of the day I've done the best possible job I can do, even if not everything's worked out exactly the way I've planned it, then I feel OK, you know?

The - what - what bothers me is if I feel like I should - I could have done - I could have done better on that.

(END VIDEO CLIP)

SYLVESTER: That's pretty good advice. You can't really argue with that.

And, you know, Jessica, he can't resort to smoking cigarettes anymore.

YELLIN: That's right. He quit smoking.

SYLVESTER: He gave up - quit smoking.

YELLIN: I do have to say, when you're in his presence, he seems like one of the most internally calm people you'll ever meet. Like, he has an internal Zen. That's amazing.

SYLVESTER: Yes. That's kind of - that's kind of good for a president, you know? One of the qualities.

YELLIN: He's a -

SYLVESTER: So in the next - 2012 we'll look for it -

YELLIN: Right.

SYLVESTER: -- (INAUDIBLE) that quiet Zen.

YELLIN: OK. Thanks, Lisa.

SYLVESTER: Thanks.

YELLIN: It was a surprising welcome for former Vice President Dick Cheney and Donald Rumsfeld. Members of his own party booed him and the former Defense Secretary. Could it be a sign of a growing divide in the GOP?

We'll talk about it in our "Strategy Session."

Plus, the mystery man behind Sarah Palin's momma grizzlies now speaking out for the first time on television. You'll see it only in THE SITUATION ROOM.

(COMMERCIAL BREAK)

YELLIN: Is there a growing divide between older establishment Republicans and the new Tea Party ideology? Joining us in today's "Strategy Session," two CNN political contributors, Democratic strategist James Carville and Republican strategist Ed Rollins. Thanks to both of you for being here.

JAMES CARVILLE, CNN CONTRIBUTOR: Thank you.

YELLIN: Ed, I'll start with you.

I attended CPAC last week, the Convention of Conservative Political Activists, and when Donald Rumsfeld and Dick Cheney walked out on stage, they got booed. So is this a sign of a schism between the new Tea Party folks and sort of the old neo-cons?

ED ROLLINS, CNN CONTRIBUTOR: Well, many - many of the CPAC attendees, who obviously Ron Paul was the leader in their CPAC poll, are libertarian and are very anti-war. And, you know, there are Republicans who didn't like the war. The Republicans who didn't like what Cheney and Rumsfeld obviously did, and I think to a certain extent it's a different generation.

Being as old as I am, I've been through all these generations, and the Tea Party is about fiscal policy. It's not about going to war. It's not about neo-con. It's not about a lot of the things that Rumsfeld and Cheney were the leaders of. So I - I'm not - I'm not shocked by it in any way, shape or form.

If -

YELLIN: But isn't it a growing moment? And it's a growing - they're gaining momentum, these younger people who are anti-war. They were always there.

ROLLINS: Well, as they should. I mean, this is about younger people, and the - and the Rumsfelds and the Cheneys and the Ed Rollinses are an old generation, and we have to step aside. And I think to a certain extent the idea of - of the neo-con movement, which was obviously very dominant in the - in the '80s and - and the - and the '90s and the 2000s, is no longer a factor, I don't think, to these young people.

These young people basically wanted - want jobs. They want - they want democracy around the world, but they don't want us to be the implementer of it. But I'm not -

YELLIN: James, I'm sure -

ROLLINS: I'm not shocked by it.

YELLIN: James, I bet you're going to agree that there is a schism. You're happy to see it. But my question is I - where are the - why aren't the Democrats taking advantage of it?

CARVILLE: Well, I mean, first of all, I think that the people that were - they're not a - I don't pretend to be an expert on the nuances and the - the schisms and -

YELLIN: The Tea Party Movement -

CARVILLE: -- cults or sects of the Republican Party, but I think those were libertarians, and I think they're a little bit different than - than the Tea Party people. The - the Ron Paul people are a little bit of a different breed, and they're a little bit different than people you saw at the - at the rallies, but I defer to somebody who's - who's a little more schooled in that than I am.

Well, I don't know if the Democrats, you know, that - one more - what's striking to me, when you're at the CPAC conference, how many - how many times did you hear Egypt mentioned? How much speeches were given about what was going on in Egypt? But my guess is not very many.

YELLIN: That's right. Almost none at all.

CARVILLE: Because they're uncomfortable about all of this. None at all. It's - and it's kind of odd that - that you had, you know, a political movement that you had these sort of - what anybody would assume is humongous events in the world, and they didn't even address them. They're kind of an odd - they're an odd lot, if you ask me.

YELLIN: Well, Ed, let me put that to you, because there were some people - Santorum, Rick Santorum, Newt Gingrich - a few people acknowledged Egypt - Ron Paul - but most people, when you're sitting there in CPAC with all these conservative activists, you wouldn't know what's going on overseas.

Why do you think so many Republican - potential presidential candidates are afraid of addressing that?

ROLLINS: Well, I think when they address that group, they address their interests. I - certainly every Republican candidate is going to have to deal with Egypt and the new democracies and what have you.

There are several candidates who weren't out there. Those who were were basically trying to deal with the issues that matter to that audience, which pretty much were the fiscal stuff. There's really no true libertarians that are running for president that I know of, other than Paul.

So I think it was just really trying to hit the audience as opposed to the audience beyond, and CPAC has always been a very, very determined group.

YELLIN: James?

CARVILLE: This is the largest gathering of Conservatives in the United States, and the fact that you have this and it's almost like what's going on in the world doesn't happen, but, you know, it - it says something.

YELLIN: Yes, it was interesting. You could also miss what was happening.

CARVILLE: Glad I'm not one of them, I'll tell you that. ROLLINS: James, I promise -

CARVILLE: I would find it too very interesting at all.

ROLLINS: -- I promise you, you are not one of them.

YELLIN: Let me turn to a topic that was rather -

CARVILLE: I know - I know it. I wouldn't - yes.

YELLIN: A topic that was relevant to all those activists and to so many of our viewers is the budget and the deficit. The president came out with his budget plan today.

James, first to you. You know, the president ordered a Deficit Commission Forum. They recommended overhauling entitlements, and then the budget doesn't touch it. What was the point having a debt commission then?

CARVILLE: Well, I'm going to say that this is probably something tactical that they did. The truth of the matter is, is that if somebody doesn't do something about rising health care costs, everything is - the Republicans' proposals are nothing as this is nothing about the deficit.

This is all about some posturing and what things people want and don't want, and they can talk about entitlements. They can talk about this and that, but if health care costs keep - keep going up, it's going to break the country, then there's no doubt about that. And the sooner that somebody acknowledges that to the American people about how awful it will be.

YELLIN: And we also have to talk about Social Security, Medicare, Medicaid, don't we? Is it a question of who goes first?

ROLLINS: There's no - there's no question. And I think the bottom line here is what the debt commission did do is show you how difficult it is to tackle these. But each of these big entitlements have gigantic constituencies, they called them the third rail of American politics. If you want to go there, you're going to pay a price.

The president put his - tipped his toe into the water here with his budget. Republicans have put certainly both feet in the water in trying to cut back, and it's a long hard battle to go here. And I think at end of the day, you need more revenue and you need basically less spending and you're going to have to go across the board and change the whole way we structure of how we tax.

YELLIN: But James, how does this play out? I mean, how do we get from this budget to actually talking about reforming these - the third rail of politics? And does it happen before an election?

CARVILLE: You know, unfortunately, first of all, the Republican Party is talking about cutting $100 - $100 billion from the $3.5 trillion budget. If they think that's something, if they'll suffer under that illusion and they're nuttier than I thought they were. But at any rate, as long as we spend - we spend 17 percent, a little bit more actually of our GDP on health care costs and no other industrialized country breaks 10. If we're not willing to address how to slow that, they can shift it all around and they can have every commission that they want to have.

I think Senator Simpson and Erskine did - made some commendable things, there's some things I don't agree with, but I think that hopefully that they'll take this and somebody will run with some of the things in here.

Social Security is nowhere near, nowhere near the problem. People put Social Security and Medicare or what I would call health care costs in the same breath. It's not even close. This is the most difficult - I believe rising health care costs is the greatest threat to the security of the United States than al Qaeda is.

YELLIN: All right. Well, we're going to have to leave it there, gentlemen. This is a conversation we'll all continue having for many weeks to come.

ROLLINS: Great. Thank you.

CARVILLE: Thank you.

YELLIN: James Carville and Ed Rollins, thank you.

New questions are surrounding former Egyptian President Hosni Mubarak. He's supposed to be in one of the most beautiful resort cities in the Middle East, but no one has seen him. So, is he there, and how is his health? We're live to answer those questions.

Plus, for those Marine snipers, it's all about one shot. Ahead, we're taking you into some of the most elite military training on earth.

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YELLIN: This Saturday, Wolf Blitzer takes you inside North Korea. Wolf traveled with then New Mexico Governor Bill Richardson as he led talks with one of the most secretive nations in the world. Be sure to tune in Saturday at 6:00 P.M. Eastern for Wolf's full documentary "Six Days In North Korea."

The historic revolution in Egypt is not only changing the face of the country's government. It's also changing the way people there are thinking, particularly young people.

Here's CNN's Arwa Damon.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): For Egypt's technology generation, the talk these days for the most part no longer centers around the newest app or hottest model. Nor although quite visible the latest fashion trends. On the campus of the American University of Cairo, AUC, it's about governance, and for many for the first time, their role in their country's political future. AHMED SAAFAN, CONSTRUCTION ENGINEERING MAJOR: Everyone needs to do something, but people doesn't know what to do. Everyone had the way and had the power, but they just need directions.

DAMON: Twenty-two-year-old Ahmed started a Facebook page, "AUCian's for Egypt," to help his fellow students get that direction. Starting with organizing prayers for the fallen of Tahrir Square who gave their lives to free Egypt from the clutches of a dictator. A revolution that not only changed Egypt, but transformed many of these young minds.

SAAFAN: I was actually planning to go abroad and to work with my father. But after the revolution came, I told my father, it's not - you have to come back to our country. All that I knew outside Egypt should come back and help the country.

DAMON: Twenty-one-year-old Farida just finished her Communications Degree. Unable to sit back, she joined the demonstrators, but she is realistic about the uphill struggle her country is going to face.

FARIDA EL-FIKY, MASS COMMUNICATION GRADUATE: For the time being, things are not going to be, like - things are not going to be just easy. You have to really work. You have to - for the companies to increase. And hence, I should share in more community service activities because it's something that Egyptians are not really aware about.

My worry is that people will be disappointed at first. And people need to understand that it's not going to happen overnight. It's going to take time.

MOHAMED SOLIMAN, POLITICAL SCIENCE MAJOR: So I think our priorities have shifted. I think - we now think that we can change the country. Like my father would always tell me, you know, you should get into politics. Grow up and become president and I would always say, you know, it's a lost cause. You know, unless you know someone, you're not really going to get in there.

DAMON: Now, this 18-year-old freshman is considering pursuing a political career.

SOLIMAN: OK. We need to change Egypt. We need to get into politics. It's up to us to fix this country. I think it's up to us to do something about it. It's selfish if we don't.

DAMON: The boundaries of what he can and says he should do endless.

Arwa Damon, CNN, Cairo.

(END VIDEOTAPE)

YELLIN: And in just a few minutes, we'll take you back live to Egypt. He is gone from power, but not from the headlines. Former Egyptian President Hosni Mubarak is supposedly hiding in a resort town, but is he really there? We're searching for signs.

Plus, reports of mass anti-government protests in Iran. Could another revolution be in the works? We're digging deeper.

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YELLIN: Here's a look at "Hot Shots".

In Finland, a woman cross-country skis in record low temperatures. In Serbia, soldiers fire artillery in commemoration of the country's Statehood Day. In Pakistan, women shop for Valentine decorations at a roadside stand. In England, a couple gets married underwater at the London Aquarium.

"Hot Shots" - pictures worth a thousand words.

The term "Mama Grizzlies" has come to define Sarah Palin politically. That's partly because of the popular video she launched last year touting female Conservatives. You might remember that video became an internet sensation with a ton of buzz and it left a lot of people asking who made it.

Well, now the creators of that video are speaking out for the first time in an exclusive television interview. It turns out it was made by some young guys with a background in country music. One is Josh Gatlin, son of Larry Gatlin from the Gatlin Brothers and the other Eric Welch. He's a music video producer who shot one of the Gatlin Brothers videos. We spoke with them about how they produced it and what made it so unique.

(BEGIN VIDEOTAPE)

ERIC WELCH, "MAMA GRIZZLIES" PRODUCER/DIRECTOR: I was out on the road for five events just filming all around her, following her. Like a fly on the wall. And then there was an emphasis, they wanted to focus on the 2010 midterms being very focused on women. So I kind of geared the lens toward finding the women in the audience and the crowd behind her, wherever. And that eventually turned into the "Mama Grizzlies" video.

SARAH PALIN, FORMER ALASKA GOVERNOR: All across this country, women are standing up and speaking out for common sense solutions.

YELLIN: What do you think made this distinctive?

WELCH: I think the thing that made it distinctive, obviously we tried to bring a little bit of a music video edge to it through some of the - the crafting and some of the art of it. But it really is her.

PALIN: There in Alaska, I always think of the mama grizzly bears that rise up on their hind legs when somebody's coming to attack their cubs.

YELLIN: It doesn't take a genius to figure out that, hey, we should take the quality and emotional power of music videos and put them into political ads. What do you - do you think this is the next thing?

JOSH GATLIN, "MAMA GRIZZLIES" PRODUCER/DIRECTOR: You've got to find a new way to reach people. Now, music videos aren't necessarily new but they're new with respect to politics. Once you find that great shot and you find the great words that go along with it or the great music that go along with it, I mean, you want to move people. You want to inspire people.

WELCH: And you're talking about music videos. Well, there is emotion there. It's the using of imagery and music together that's so powerful. And I think that we can do that through creativity in the political world, as well.

YELLIN: And would you work for Democrats as well?

WELCH: They can call.

(END VIDEOTAPE)