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The Situation Room

Hundreds Killed in Storms; Pakistan Criticizing United States?

Aired April 28, 2011 - 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: Visit our Impact Your World page. That's at CNN.com/impact.

And to our viewers, you are in THE SITUATION ROOM.

Happening now: hundreds of people dead, billions of dollars in damage, six states ravaged by the worst tornado outbreak in almost four decades.

Also, sources tell CNN Pakistan is urging the Afghan president to dump the United States and move closer to Pakistan and China. Is that true? I will ask the Pakistani ambassador to the United States this hour.

Breaking news, political headlines and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

There's shock, grief, and destruction on an epic scale across much of the southern parts of the United States in the wake of a monstrous tornado outbreak. A series of twisters ripped across the region from Mississippi to Virginia, leveling entire neighborhoods and leaving many communities crippled.

At this point right now, 284 people are confirmed dead, but the toll has been rising throughout the day. More than 1,700 people have been treated for injuries, many of them serious injuries. And President Obama will visit hard-hit Alabama tomorrow.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The loss of life has been heartbreaking, especially in Alabama. In a matter of hours, these deadly tornadoes, some of the worst that we've seen in decades, took mothers and fathers, sons and daughters, friends and neighbors, even entire communities. Others are injured, and some are still missing. And in many places the damage to homes and businesses is nothing short of catastrophic.

We can't control when or where a terrible storm may strike. But we can control how we respond to it. And I want every American who has been affected by this disaster to know that the federal government will do everything we can to help you recover.

(END VIDEO CLIP)

BLITZER: CNN's Martin Savidge is in Pleasant Grove, Alabama. He's joining us live right now.

What's it like, Marty, where you are?

MARTIN SAVIDGE, CNN CORRESPONDENT: Well, just as the president described, it's a catastrophic kind of scene that you see here. We got here at 2:00 in the morning. It was pitch dark, only the kind of dark you can have when there is absolutely no electricity.

Still there were people out there searching, trying to find those that may still be trapped in the rubble. We knew when daylight came that it would be an absolutely horrible scene. And this is the proof of it. And really this is just a minuscule example of it, Wolf. We followed two families as they returned to their homes today, two families that know each other very well. Here is what we found.

(BEGIN VIDEOTAPE)

SAVIDGE: The Grays and Hudsons have been neighbors for years. Now these neighbors are going back together to see what's left of their homes. And the answer is simple. Nothing.

JEANNIE GRAY, TORNADO SURVIVOR: I just can't believe this.

SAVIDGE: Charlisse Hudson didn't even know which house was hers at first. Then something looked familiar.

CHARLISSE HUDSON, TORNADO SURVIVOR: Only reason I knew this was house because my car was on top of it.

SAVIDGE: Next door at the Grays', the broken gas line hisses menacingly and the busted water line gushes incessantly.

Jeannie and Jeff ignore both, too caught up in the shock and the awe.

JEFF GRAY, TORNADO SURVIVOR: Can you believe looking at this?

JEANNIE GRAY: I can't. I thought -- I can't. I walked over here last night. And I just -- I just couldn't comprehend. Our neighbor's house right there, I mean...

SAVIDGE: The Hudsons left before the storm because their power went out.

(on camera): Lucky thing you do.

GRAY: Yes, it was a blessed thing we did. And a couple -- or one of our neighbors said, well, I'm going tough it out. I'm going to stay home.

SAVIDGE: Do you know where that neighbor is?

GRAY: Not sure.

SAVIDGE: Neighbors for years made homeless in an instant, both just grateful to see the other alive. (END VIDEOTAPE)

SAVIDGE: And as you would know, Wolf, one of the things that is so striking about these stories as you hear them from people is that it is those decisions, those split-second, maybe innocent seeming decisions that they make, like the family that left because the power was out, and others who left, or others who stayed, made all the difference between life and death -- Wolf.

BLITZER: You just came back from Japan, Marty, where you saw devastation. Obviously a very different kind, but some similarities as well.

SAVIDGE: Absolutely right.

I'm struck by that as I walked around these communities. Compared to Japan, it's a smaller microcosm of devastation, but still in the areas that were affected by the tornado, the devastation eerily the same, except the difference is, of course, in Japan, it was caused by water. All of this was caused by wind.

BLITZER: And do they look like they have the equipment, the search-and-rescue equipment, the medical equipment, everything they need in place or is this just beginning right now?

SAVIDGE: Well, I think in the short term, they have been adding to their resources throughout the day. Keep in mind that even though you have a community here that has been devastated, Pleasant Grove, there are many other surrounding areas that immediately began responding, sending their fire engines, sending their police officers, sending their emergency rescue teams, sending in their heavy earth moving equipment.

So it has all been building throughout the day. Slow to start in the morning. But now they have most of the roads wide open here. So it is clear that they have started the process. Very long haul ahead of them, though, Wolf.

BLITZER: Marty Savidge in Pleasant Grove, Alabama, for us, Marty, thank you very much.

Take a look at this terrifying sight repeated across the region over and over yesterday. This tornado bearing down on the University of Alabama in Tuscaloosa. At least three dozen people in the city were killed. The mayor describes a path of destruction five to seven miles long and up to a mile wide. He calls the devastation unparalleled, says he doesn't know how anyone could have survived.

The university now canceling final examinations for next week, postponing commencement until August.

Let's bring in the severe weather expert, our CNN meteorologist, Chad Myers, who is joining us now.

I want you to show our viewers the path of this destruction, where it went and how devastating it was. CHAD MYERS, CNN METEOROLOGIST: Well, we showed that live video on the air during your show, Wolf, yesterday, as it was going in bearing down on Tuscaloosa from the tower cams in Tuscaloosa out of the Birmingham TV stations.

The storms started in Mississippi. They moved into Alabama. They actually for a while skipped Georgia and got up into Tennessee, then, in the late -night hours, got into Georgia. They were all the way up into Virginia. Eight people lost their lives in Virginia. That's very far from where all this started back in Mississippi.

Let me show you now and go to the video from Tuscaloosa. Here is what it looks like on the ground, under where the tornado went over. We are now estimating from the damage and literally the lack of buildings still there, that this must have been at least a storm with 200 miles per hour winds in the circle, of course, as a tornado to do this type of damage, literally scraping buildings away.

Let's move farther to the east, what happened in Birmingham. And eventually this was the same storm on the ground all along I-22 or I- 20 as it just rolled up 2059 and into Hueytown, Alabama, and an awful lot of damage there in those (INAUDIBLE) areas and also into Hueytown, not quite as much into Birmingham.

One loss of life in Birmingham as the storm was slightly to the north of the metro area. And then this storm kept going. Others were developing and coming, but it moved into Ringgold, Georgia. And this is when it starts to get really bad. I know this is daytime video, but this happened at about 10:30 at night in the dark. Can't see it coming. Probably asleep. You may not hear the sirens.

This is when you need that NOAA weather radio to wake you up. Did lose lives here in North Georgia as well. And then will take you into Tennessee, farther to the north. Eastern Tennessee must have had -- I didn't count them all, because I don't even know how many total tornadoes we had. There must have been at times 20 to 30 tornado warnings going on at the same time across the country. And most of them were in Tennessee, right there from Knoxville, down to about Chattanooga. In fact that video there from Chattanooga in Tennessee, they got hit twice.

And even Cleveland in Tennessee was hit. That's just kind of a suburb of Chattanooga. It was one very long night and it kept going even into the overnight hours for many people and that's when other people lost their lives because they simply just couldn't wake up. They didn't hear it coming.

BLITZER: Chad Myers, we will stay in touch with you.

This disaster also knocked out power to a nuclear power plant in Alabama. Substitute the words earthquake and tsunami for tornado, you potentially have the same scenario that led to Japan's nuclear crisis.

CNN's Jeanne Meserve has details of a very disturbing development.

What happened in the South?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, Wolf, once again, you had nuclear reactors directly in the path of a major natural disaster. Played out a little differently this time.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): The double whammy of earthquake and tsunami triggered a nuclear disaster in Japan. When the Fukushima plant lost power, backup generators failed, batteries ran out and cooling systems shut down.

Radiation spewed from damaged reactors and spent fuel pools. The tornadoes that spiraled through Alabama knocked out power to three units and at the Browns Ferry nuclear plant. The reactors automatically shut down and officials say that the safety systems worked.

GREGORY JACZKO, CHAIRMAN, U.S. NUCLEAR REGULATORY AGENCY: All available diesel generators started and loaded and ultimately the cooling systems are operating normally. In addition, the spent fuel cooling is currently in service. So all these plants are stable.

SAVIDGE: The Tennessee Valley Authority says the plant was designed to withstand a direct hit from a major tornado. It didn't get that in Wednesday's storms, which were nonetheless, experts say, a credible test of the plant's safety systems. But were they the ultimate test?

ARJUN MAKHIJANI, INSTITUTE FOR ENERGY AND ENVIRONMENTAL RESEARCH: The ultimate test is something very severe that takes out both your diesel generators and your off-site power, which is what happened at Fukushima. And I don't believe we are ready for a prolonged loss of both off-site power and diesel generators.

(END VIDEOTAPE)

MESERVE: Now, outside power has been restored to the plant, but the reactors are nonetheless being shut down. So many transmission lines are down. There's no way to distribute the power reactors might generate -- Wolf.

BLITZER: And this was a similar kind of design, the plant in the south, to the one in Japan?

MESERVE: Yes. It has the same kind of backup systems. It has those diesel generators and then it has the battery system. But the generators here worked. They weren't dealing with a tsunami the way they were in Japan.

BLITZER: Did not work in Japan. They worked here. All right, thank God for that. Jeanne, thank you.

We are covering all angles of this historic disaster. We are going back to Georgia, where more than a dozen people were killed. Emergencies have been declared in 16 counties. That's coming up. Also, oil companies earning huge profits while getting huge tax breaks, while we pay near record prices for gas. What's going on?

And is Pakistan dissing the United States, dissing the United States to Afghanistan? The Pakistani ambassador to the United States is here live this hour in THE SITUATION ROOM. We will talk about some disturbing reports about Pakistan, what it is doing in Afghanistan. Stand by.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: In case you haven't heard, of course, you heard, but in case haven't heard, there is a pretty big to-do planned for tomorrow on the other side of the pond, where Prince William will marry Kate Middleton in Westminster Abbey tomorrow in London.

It's the first high-profile royal wedding in Britain in decades. And you cannot turn on a television, open a newspaper, log on to a Web site without hearing all about it. All the big U.S. broadcast and cable networks, including CNN, will carry the event live with coverage beginning at 4:00 Eastern time tomorrow morning. The wedding itself begins a couple of hours later.

So it's a really big deal, right? Not so much.

A poll in Britain commissioned by an anti-monarchy group found four out of five Britons are -- quote -- "largely indifferent" or "couldn't care less" -- unquote -- about the royal wedding. Really? They're not even excited about watching it and it's going to be on in the middle of their workday and it's their royal family and it's happening in their country.

So what about Americans?

Do we really care enough to get up at 4:00 in the morning and watch a wedding on a workday? A "New York Times"/CBS News poll found only 6 percent of Americans say they have been following news about the royal wedding "very closely" and 22 percent say "somewhat closely." So once again, not so much. It could be a real letdown for the U.S. media spending a boatload of money to cover this thing. But Prince William isn't our future king, and people on both sides of the Atlantic Ocean apparently have other things to worry about.

Anyway, here's the question: How excited are you about the royal wedding?

Go to CNN.com/caffertyfile. And post a comment on my blog -- Wolf.

BLITZER: Jack, you know, it is a fascinating thing. Those 3 percent or 6 percent that are really, really interested -- watch this video -- I don't know what this is.

What is this video?

CAFFERTY: I don't know.

BLITZER: These are -- oh, let me tell you. It's some video of a crowd in Central London today, folks shaking hands. Tomorrow, by the way -- this is Prince William. Oh, that's what it is. We are just getting this video in right now. Some people are excited.

The people who are really excited, Jack, about this wedding, 3 percent, 6 percent, or whatever that number was, they are really excited, 90 percent not so excited. But the 3 percent or 6 percent are very, very excited and they will be glued to their TVs, no doubt about that.

CAFFERTY: Indeed. I will not be among them, however.

BLITZER: Yes. A lot of people -- there will still be a lot of people out there.

(CROSSTALK)

CAFFERTY: Are you going on get up and watch it?

BLITZER: No. but I'm sure a lot of people will get up and watch.

(CROSSTALK)

BLITZER: I will get up a little earlier and watch probably the tail end of it.

CAFFERTY: Well, and those of us who don't get up at 4:00 in the morning will be able see this thing replayed ad nauseam all day tomorrow.

BLITZER: Oh, yes. We will get the three-minute highlights. We will be fine.

CAFFERTY: Absolutely.

BLITZER: All right, Jack, thank you.

Let's move to some other news right now. If you have been to the gas station lately, chances are you are feeling some big pain at the pump. Today one major oil company is reporting huge profits while getting some huge tax breaks in the process. What is going on?

We asked Mary Snow to take a closer look -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, get this. ExxonMobil reported a 69 percent spike in its quarterly earnings. That's thanks in part to higher oil prices.

And big oil profits are at the heart of a political fight over whether they should be getting big tax breaks.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Stunned motorists discover gas prices topping $4 a gallon in some places. Oil giant ExxonMobil reports it earned an eye-popping $11 billion in just the first three months of this year alone.

It comes as President Obama wants to cut tax breaks to oil companies amounting to roughly $4 billion a year. Republicans say it is not the time to slap on taxes. What are these multibillion-dollar breaks? We asked tax law expert professor Michael Graetz of Columbia Law School.

MICHAEL GRAETZ, COLUMBIA LAW SCHOOL: Well, the rules are terribly arcane. They're terribly complex. I don't try and teach them to my students in a basic income tax class.

SNOW: One goes back to 1916 that Graetz says allows oil companies to deduct roughly 70 percent of the cost of creating a well that produces oil.

A more current one came in 2004 called the domestic manufacturing deduction, a tax break for manufacturing at home rather than abroad. Eliminating it says the left-leaning think tank Center for American Progress would save the government $1.7 billion a year. Another tax break says Graetz dates back to the 1950s' Cold War era, when President Eisenhower was trying to sway Saudi Arabia into the U.S. camp rather than the Soviets'.

The U.S. allowed an accounting change so U.S. drillers no longer paid royalties to the Saudis, but taxes, which they could claim as tax credits at home.

GRAETZ: By treating them as taxes, they offset, U.S. taxes, dollar for dollar, whereas a royalty would only be deductible against U.S. taxes, and save the company 35 cents on the dollar.

SNOW: Bottom line, U.S. companies can claim a 100 percent deduction. With oil companies making billions, do they really need these tax breaks as incentives?

We asked Brian Johnson with the American Petroleum Institute, which represents the industry. He says that the tax breaks encourage production and create jobs. And he says if the government wants more revenues, it should allow more production and drilling.

BRIAN JOHNSON, AMERICAN PETROLEUM INSTITUTE: That's really where our focus needs to be, is on increased access, not nitpicking these little issues to try and raise money in the short term and using political rhetoric. We need to focus on increased access.

(END VIDEOTAPE)

SNOW: Well, with these profits comes public anger and as ExxonMobil report its earnings, it is also firing back at critics. It said it paid $9.8 billion in U.S. taxes last year. Here is how it is broken down. It amounts to $1.6 billion in income tax, U.S. income tax, $6.2 billion in sales taxes and $2 billion in other taxes such as property taxes. But, Wolf, "Fortune" magazine lists ExxonMobil as one of the 10 companies with the most untaxed foreign income since it makes most of the money overseas.

BLITZER: So whatever it pays in so-called taxes to the Saudis, dollar for dollar, it does not have to pay to the American treasury. So last year they made a profit of how much, ExxonMobil, for example?

SNOW: It was one of the highest in 2008. I remember something like $35 billion.

BLITZER: And it will be a lot more last year and then this year even more. But what you are saying, in terms of income tax, they paid $1.6 billion?

SNOW: For 2010. Now, in 2009, we take a look and, you know, it paid about $15 billion in international taxes, this was back in 2009, but none in U.S. income taxes.

BLITZER: Yes. It's sort of like General Electric. They make $14 billion a year around the world, $5 billion profit, just profit in the United States, and pay zero income tax to the federal government. It looks like ExxonMobil pays some money to other countries like the Saudis, but very little to the U.S. treasury. And then on top of that, they get , what, billions of dollars in tax subsidies from the American taxpayers.

It will cause a huge uproar in this debate to try to lower the deficit, struggle with that budget deficit. The oil industry will, I assume, will wind up paying more in taxes down the road. But we shall see. Mary, thanks very much.

The U.S. has spared no expense to recruit Pakistan as a critical ally, but parts of that country remain a haven for Taliban fighters, al Qaeda operatives. Is Washington throwing good money after bad? I will speak about it live. Pakistan's ambassador to the United States, Husain Haqqani, he is here in THE SITUATION ROOM.

We will also go back to Tuscaloosa, Alabama, where dozens of people are dead, buildings are leveled, piles of rubble stretched for blocks. CNN is there.

(COMMERCIAL BREAK)

BLITZER: More now on the deadly tornadoes that ravaged the southern part of the United States. Tuscaloosa, Alabama, has been particularly hard hit. With at least three dozen people killed. Only moments ago, we confirmed that two students from the University of Alabama in Tuscaloosa now confirmed dead as well.

The mayor says he doesn't understand how anyone could have survived these tornadoes.

CNN's Reynolds Wolf is on the scene for us in Alabama. So set the scene for us, Reynolds. Walk through this area where you are and just give us a little flavor of this devastation.

REYNOLDS WOLF, CNN METEOROLOGIST: Absolutely.

You know, I have to tell you, Wolf, in some respects it is amazing that anyone survived this tornado. It was just huge. It was devastating. As you look over in this direction you see a couple of apartment buildings. We touched on those a short while ago. Many of the cars over there just obliterated. Many of the apartment buildings just ravaged by the strong winds, some in excess of 200 miles per hour winds.

But as we make a little bit of a turn over to this area to my immediate left, you will see something altogether different. This is the National Guard armory, the old armory here in Tuscaloosa. Going to step across some of this debris. I want to you take a look at some of these. And to any of our friends tuning in across the country who may have served time in the military, served our country, you will notice that you got a lot of trucks here.

Some of these are five tons. These things are the type of vehicles that are designed for handling rough conditions overseas, certainly in combat. Well, these things have just been ravages by those strong storms. And at the foreground here, you are seeing these poles, these fence posts that have just been pushed, and even closer up to the side of these large vehicles, you see a little bit of the chain-link fence.

What happened, Wolf, is you had the debris that was pushed across the roadway in excess of 200 miles per hour, hit this chain-link fence and then pushed everything against these five ton vehicles. Farther up here, you will see a different type of vehicle, one that might be very familiar to many of you, this Humvee.

Again, this is a battle-tested vehicle. And you see it just ripped apart in some cases over here even to shreds by all the debris that was lashed against it. It's not unusual. This is a scene we have been seeing playing out up and down parts of central Alabama, back into Georgia, Tennessee, Mississippi.

Of course, just a short while ago we saw some of this in Saint Louis, Missouri. Unbelievable storm season. People trying to come to terms with this and how it all came together. To be honest with you, it was a pretty simple process. We had plenty of moisture that came in from the Gulf of Mexico. That combined with some daytime heating and that strong frontal boundary that came in from the West all came together to give us a very unstable atmosphere. And everything, of course, erupted yesterday afternoon -- Wolf.

BLITZER: Reynolds, you are a severe weather expert, a meteorologist. You're a son of the South from Alabama. Have you ever seen destruction from a bunch of tornadoes like this?

WOLF: Nothing. Nothing like this. Nothing can really compare to it. Just the sheer violence of this. It really is breathtaking. Very hard to really come to terms with a lot of this stuff.

Something else is interesting, Wolf. You have to look at just some of the small little things. Everywhere you look there's something that is just perplexing. Right here -- John, I don't know if can you get a good view of this. It might be a bad angle. This one might be a little bit better.

We have got some wood shards that have been driven in deep into the ground almost like javelins. True testament to the things we tell people about how dangerous these winds and the debris happen to be. This thing pounded right into the ground. It looks like it is at least two or three feet deeper into the soil.

Imagine getting impaled by something like that. That's just an idea of how violent this stuff is.

Different side note, too. You have got a lot of people that have been making their way up and down this street. Some of them are locals. They are looking for family members. There are still some people missing, others looking to try to find some of their belongings.

But a lot of people know that this is a very historic event. This has been nothing like this ever before in certainly in Alabama, possibly the country. As this bears out, they know that this is certainly an amazing and horrible thing -- Wolf.

BLITZER: Horrible indeed. All right. Thanks very much, Reynolds.

Another look at the tornado that caused all that damage in the loss of life in Tuscaloosa. The mayor says it cut through -- a path through his city five to seven miles long, up to a mile wide. And listen to what it sounded like.

(BEGIN VIDEO CLIP)

(SOUND OF TORNADO)

(END VIDEO CLIP)

BLITZER: Moments later, stunned survivors prayed amid the rubble. One doctor who treated some of the hundreds of people injured in Tuscaloosa says it looks -- it looked like an atomic bomb went off in a straight line.

One of the survivors is joining us on the phone right now. Rachael Mulder in Duncanville, Alabama.

Rachael, thanks very much. You and your husband, you rode out the tornado there by taking shelter in your bathtub. Tell us what happened.

RACHAEL MULDER, TORNADO SURVIVOR (via phone): Well, I had been asleep the night before, because I was asleep because I was working the night before as a nurse. My husband was sleeping. And I just remember him running in and grabbing me and saying, "Honey, hurry, get in the tub."

And we ran in the tub and took shelter. And probably 30 seconds later it was just like -- so loud and it was just like -- an earthquake almost.

And so after we -- we could tell that it passed. And then Dan walks out and opened the bathroom door, and we were outside. Like just our bathroom was standing. And there was nothing left.

BLITZER: We have the pictures that you shared with us of your apartment. Your apartment complex, I take it, totally, totally destroyed, is that right?

MULDER: Oh, yes. I mean, it's two stories. And -- and both the stories on certain parts were completely leveled out.

BLITZER: Your bathroom was on the -- the first level or upstairs on the second level?

MULDER: We were on the second level. And I feel so blessed that we were -- we survived because -- well, after -- my husband -- we were trying to figure out what to do, and my husband was walking around looking for survivors. And he called me over and he said, "Rachael, come here. Someone is dying."

And so I ran down the stairs. I grabbed my first aid kit and ran down the stairs to try to help her. And I tried to stop her bleeding and save her, but she was taking her last breath. And -- and she passed away right there.

BLITZER: This was -- this was a neighbor of yours? Did you know this woman?

MULDER: I didn't know her, but she was young. She was in her 20s.

BLITZER: And you're a nurse. And so you had your first aid kit. You tried to save her. I assume there were other people who were injured and -- and some who died in your neighborhood, as well.

MULDER: Yes. It was -- it was horrible.

BLITZER: How did you survive? I mean, you and your husband, how did you survive?

MULDER: We were blessed by the grace of God. We were saved. I mean, the hand of -- the hand of God watched over us, and we were -- we were spared in that bathtub. I feel very blessed.

BLITZER: You are blessed and your husband is blessed. So what do you do now on this day after with -- what's it been like?

MULDER: It's been chaos here. People are trying to do what they can to help. But we're trying to find a new place to live. And -- a new car. And just kind of get started over. But so many people are affected. It's overwhelming to know what to try to do. BLITZER: And all your possessions have been destroyed basically?

MULDER: A good majority of them. We were able to salvage some things, which I'm still thankful for. A lot of people weren't.

BLITZER: At least you're OK and your husband is OK.

MULDER: And -- and we're all grateful, and we thank God for that.

BLITZER: Rachael, good luck to you. Good luck to everyone in Alabama throughout the south. These people have suffered enormously.

MULDER: Thank you so much. I appreciate it.

BLITZER: Thank you.

And we're going to have much more on the disaster, on the tornado disaster, the fallout coming up.

Also, other important news we're following, including some very disturbing reports that Pakistan is urging the Afghan president, Hamid Karzai, to distance Afghanistan from the United States. Pakistan's ambassador here in Washington, he's live in THE SITUATION ROOM. We'll ask him about the reports. Very disturbing information just coming in.

(COMMERCIAL BREAK)

BLITZER: There are some very disturbing new reports coming out right now, raising troubling questions about the U.S. relationship with Pakistan and Afghanistan, two of its most critical allies when it comes to fighting terror.

The Pakistani ambassador to the United States is here to talk about what's going on. Ambassador Husain Haqqani.

Mr. Ambassador, thanks very much for coming in.

HUSAIN HAQQANI, PAKISTANI AMBASSADOR TO U.S.: Always a pleasure, Wolf.

BLITZER: Why did your Primary Minister Gilani urge the president of Afghanistan, President Hamid Karzai, effectively to dump the United States?

HAQQANI: First of all, Prime Minister Gilani and President Karzai have both denied this story. This is internal Afghan politics. There are Afghan factions that want to get rid of President Karzai.

BLITZER: So you're saying that these reports in "The Wall Street Journal," our own reporting, Jill Dougherty reporting from the State Department, quoting sources, Afghan sources and others, saying that there was this urging from the Pakistani prime minister to dump the United States is a complete fabrication? HAQQANI: Complete fabrication. In fact, President Karzai's own spokesman has denied it. He says first of all, the Pakistanis would never say such a thing. And if they did, President Karzai wouldn't do it.

Look, everywhere there is politics. And in Afghanistan, the politics is to try and get the Americans on the side of whoever is the emerging faction. So people who don't like President Karzai want to make it seem as if President Karzai is not a reliable American ally.

BLITZER: Here's -- here's from "The Wall Street Journal." The headline, "Karzai Told to Dump U.S." "Mr. Gilani, the prime minister of Pakistan, told Mr. Karzai that the U.S. had failed both their countries and that its policy of trying to open peace talks while at the same time fighting the Taliban made no sense."

HAQQANI: Here is my question for you, Wolf. Where are Pakistan and Afghanistan going to go by dumping the United States? The fact of the matter is that Afghanistan is a country that needs the Americans to rebuild Pakistan is a country that needs American assistance.

BLITZER: Has the U.S. failed both countries?

HAQQANI: It certainly has not. Pakistan and the United States have some disagreements on the way forward. So do the Afghan leaders and the Americans. But very interestingly, only last week -- it's very interesting that the story broke yesterday.

And only last week Ambassador Grossman, who's Ambassador Holbrooke's successor, the Pakistani foreign secretary, agreed that we are going to try and create a trilateral mechanism. They're having a meeting in Islamabad on the 3rd of May. We are expecting the foreign -- the secretary of state to visit the region in the near future.

BLITZER: Hillary Clinton.

HAQQANI: Absolutely.

BLITZER: The end of May.

HAQQANI: And Admiral Mullen was in the region. He spoke to our military leaders. And on this particular issue, the head of Centcom and I have personally spoken, and we are very clear that this is -- just internal Afghan politics playing out in American newspapers.

BLITZER: Here is the other disturbing part about this report in "the Wall Street Journal." And now other news organizations following up. Mr. Gilani added that America's economic problems meant it couldn't be expected to support long-term regional development. A better partner would be China, which Pakistanis called their, quote, "all-weather friend," according to this.

HAQQANI: China is definitely an -- friend of Pakistan.

BLITZER: A better friend than the United States? HAQQANI: However -- however, however, we have never -- and we have been friends with China since 1949. We were the country that helped the United States and China come close together. We have never looked upon the United States and China as rivals for our friendship. We have always respected both of them, and the United States is a key ally in the effort against terrorism.

BLITZER: The relationship that you have with Afghanistan -- because it used to be tense with Musharraf and Hamid Karzai. I covered those. They were some pretty ugly moments. But right now you're saying it's better?

HAQQANI: It is a very warm relationship. And not only that. If you notice, Pakistan is also working very hard on building good relations with India with whom we have had problems in the past. And that has been a major obstruction for peace in the region.

Look, we will have a lot of such stories as we move forward. The key thing is that all the key players, United States, Afghanistan, and Pakistan, understand that the way forward is we have to defeat some people in Afghanistan, and we have to engage some people.

BLITZER: Does the U.S. -- does the CIA coordinate the drone attacks against al Qaeda's suspected targets, Taliban targets in Pakistan, with your intelligence community?

HAQQANI: Wolf, that's a question that creates lots of problems in Pakistan politically. So I am, with your indulgence, not going to answer it. All I'm going to saying is that, whatever we do, we want to move forward as partners and friends. Occasionally, there are things the Americans do. You heard about the case of the gentleman who killed two Pakistanis in broad daylight and created problems between our countries.

BLITZER: You let them go back to the United States.

HAQQANI: Thank God we were able to resolve that within Pakistani law in accordance with our traditions and our religion.

But at the same time, there are occasions when there are things that -- Americans feel Pakistanis have done that are not necessarily the best. But we remain friends and allies, and we are committed to this alliance.

BLITZER: In recent years the United States has provided your country, Pakistan, with $10 billion. Correct?

HAQQANI: Go on, yes.

BLITZER: The question is this. In the budget-cutting atmosphere of Washington right now, there are some members of Congress who would like to end that. What would happen if U.S. aid to Pakistan and...

HAQQANI: First of all American aid to Pakistan is a means to ensuring American security. Nine-eleven happened because America turned its back from Pakistan and Afghanistan, ignored what was happening there. Al Qaeda found a home in Afghanistan.

So right now this is not the time to cut assistance either to Afghanistan or Pakistan. What is needed, however, is that we should not become dependent on the assistance. We do not want to take money from American taxpayers forever. We want to be able to build our country in a manner in which we can move forward on our own steam. And that is the objective.

BLITZER: So just to repeat, because the headline I think coming from you is you expect the secretary of state, Hillary Clinton, to show up in Islamabad at the end of May for this trilateral meeting?

HAQQANI: I think that Pakistan, Afghanistan and United States will work together. Secretary of State Hillary Clinton is committed to it. She's the leader in this effort. We look to her leadership. And we expect her to be in the region. We hope that we will be moving forward together, together. And that these stories are going to die, as many similar stories have died in the past.

BLITZER: You deny it completely?

HAQQANI: Absolutely.

BLITZER: Mr. Ambassador, thanks for coming in.

HAQQANI: Thank you very much for giving me the opportunity.

BLITZER: Thank you.

A check of the day's other top stories coming up next. Then President Obama says he does no want distractions from what he calls carnival barkers. Now real carnival barkers are having their say. You're going to want to hear Jeanne Moos' "Most Unusual" report.

(COMMERCIAL BREAK)

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

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, in Syria security forces are unleashing their full strength on the town which gave birth to the protest movement. Witnesses say tanks are rolling through Daraa while helicopters buzz overhead. The streets are reportedly littered with dead bodies. Residents of the southern city are said to be paralyzed with fear as agents break into homes to make arrests.

And if you have a Bank of America credit card in your wallet, you could be in for a nasty surprise at the end of the month. The bank plans to raise interest rates for customers who make late payments as high as nearly 30 percent. Bank of America says that the amount of the increase will depend on a customer's credit profile. B of A says it will give card holders 45 days notice before hiking the rate as the law requires.

Federal agents accused 10 current or former Delta employees in Detroit and Houston of handling a lot more than baggage. Authorities say they abused their position to smuggle drugs into the country. The investigation, dubbed Operation Excess Baggage, began last year after Jamaican authorities seized a suitcase stuffed with 53 pounds of marijuana. Two other suspects were arrested.

And actor Charlie Sheen may know all about wrong. Well, now he is trying to do some right. Sheen plans to donate money from merchandise sales at Saturday's stage show in San Francisco to the Brian Snow Fund. You may recall Snow was the 42-year-old baseball fan who was brutality beaten outside Dodgers Stadium in Los Angeles. Sheen's one-month national tour ends next week in Seattle. Just in case you're keeping track.

BLITZER: I'm glad he's doing the right thing, raising some money. That was a brutal, brutal mugging over at Dodgers Stadium. Thanks very much, Lisa, for that.

BLITZER: How about the upcoming wedding? How excited are you about it? That's Jack's question. Stand by for his e-mail.

Then President Obama takes a direct swipe at what he calls carnival barkers. Jeanne Moos gets their reaction.

(COMMERCIAL BREAK)

BLITZER: Jack is back with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: "How excited are you about the royal wedding?" Coverage on CNN begins at 4 a.m. Eastern Time tomorrow morning.

Monica writes, "I can't wait. It's something positive to watch, take my mind off the troubles of the world for a few hours. No bickering politicians, no wars, no natural disasters."

Lincoln in Austin, Texas: "Yes, indeed. I plan to watch and enjoy the wedding. Upbeat moments and stories on live TV are rare and welcome. Hopefully for a few hours, we see beautiful horses, carriages, and happy Brits. If protests or terrorists don't mess it up."

Excuse me.

J.B. writes, "Not excited at all. Remember the last royal wedding? Diana married a cad. My opinion. Let these folks have their wedding in private. And then when they've been married 50 years, we'll have a big celebration."

Keith in Ohio writes, "Very good question, Jack. Just a minute. Let me ask my wife."

David in Virginia: "I think this is a way to relive our childhood fantasies of castles and kings and queens and handsome princes and beautiful princesses and horses and knights and golden carriages. For just a few moments, the stuff that dreams are made of. Limitless, fanciful, fun, without regret. Some day, perhaps sooner than we realize, royal weddings will be gone, and with them those brief moments of escape to a wondrous carefree zone."

Joe in Ohio writes, "Saturday can't come soon enough."

Tim in Texas: "I find the consideration of what might be living under Donald Trump's comb-over more exciting."

Deb writes, "I'm very happy for the couple, but unless the dog needs to go out and I can't go back to sleep, I doubt I'll be watching the wedding live. I'm positive I'll see the best of the best during the day with highlights from any one of the hundred news stations that are there to cover it."

And Yomi writes, "Very excited. Good couple, it's good news. It's a distraction from all the bad news that one hears from you guys anyway. It's good news, and it's a big deal, so please smile. It is nothing to be gloomy about."

If you want to read more, go to my blog: CNN.com/CaffertyFile.

BLITZER: Smile, let's see you smile.

CAFFERTY: Leave me alone.

BLITZER: Smile. All right, good, he smiled. Thank you, Jack.

Politicians like to make a lot of noise, but they've got nothing on these guys. Now carnival barkers are ending up as the butt of some jokes. And they're not too happy about it.

(COMMERCIAL BREAK)

BLITZER: Some jobs just get no respect. Take carnival barkers, for instance. CNN's Jeanne Moos takes a closer look at the beating they've taken over the past few days.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hello, everybody.

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When President Obama wants to insult Donald Trump without using Trump's name, he brings up...

OBAMA: Sideshows and carnival barkers.

Carnival barkers who are going around trying to get attention.

MOOS: Yes, well guess who's insulted now.

UNIDENTIFIED MALE: Come on, people, this is the game that you've been waiting for.

MOOS: Turns out carnival barkers don't call themselves that and don't like hearing it.

UNIDENTIFIED MALE: I was kind of appalled. DICK ZIGUN, FOUNDER, "CONEY ISLAND SIDESHOW": It's my job to correct the president. He used the wrong terminology. At the sideshow, we are eloquent. We are masters of verbosity. We do not bark.

MOOS: And they're getting rare. More numerous in movies.

UNIDENTIFIED MALE: Mama, the headless beauty from continental Europe.

MOOS: Than in reality. The founder of Sideshows by the Seashore in Coney Island says instead of barkers they prefer talkers.

ZIGUN: A barker says, "Check it out."

A talker says, "Freaks, wonders and human curiosities. They're here. They're real. And they're alive."

MOOS: The owner of a carnival business called Wade Shows says the president showed talkers in a stereotypically negative light.

FRANK ZAITSHIK, OWNER, WADE SHOWS INC. (via phone): He wasn't calling Donald Trump a carnival barker to flatter him, that's for doggone sure. Am I right? I mean, come on.

MOOS: But other talkers like Chris Christ say they weren't bothered...

OBAMA: Carnival barkers.

MOOS: ... by the president.

(on camera) You're OK with barker?

UNIDENTIFIED MALE: Yes, of course.

MOOS (voice-over): As for the man at whom the insult was aimed...

JOHN KING, CNN ANCHOR: You don't consider yourself a sideshow or a carnival barker, I assume?

DONALD TRUMP, REAL-ESTATE MOGUL: I am a very serious person.

ZIGUN: He is a spectacle 24/7. In our business if Donald Trump worked here, he would be a self-inflicted freak. I'm sorry, Donald.

MOOS: As a senator once said about former Enron CEO Ken Lay...

UNIDENTIFIED MALE: I'd say you were a carnival barker, except that wouldn't be fair to carnival barkers.

MOOS (on camera): So the next time you call someone a barker, they better have four legs.

(voice-over) Jeanne Moos, CNN... UNIDENTIFIED MALE: You'll see the two-headed cow.

MOOS: ... New York.

(END VIDEOTAPE)

BLITZER: Thanks very much, Jeanne, for that.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"JOHN KING USA" starts right now.