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The Situation Room

U.S. Issues Sanctions Against Syria; Judge Clears Missouri Levee Breach; Devastation From Tornadoes; 'Strategy Session'; Betting on Online Poker

Aired April 29, 2011 - 17:00   ET

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

WOLF BLITZER, HOST: Brooke, thanks very much.

Happening now, destruction as far as the eye can see. President Obama sees disaster in Alabama up close. We get a stunning new perspective on how much damage just one monster twister can actually do.

Plus, a show of support for Syrians under siege in the deadly crackdown by government forces. The U.S. slaps sanctions on top of officials in the Assad regime.

And a royal wedding scrap of the pomp, the fashion, the celebrities and the celebration. Richard Quest puts his spin on this fairy tale.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

All right, check out this new video. It captures the raw power of the tornado that blew Tuscaloosa, Alabama to shreds. Aerial surveys of the city suggest the twister left a path of destruction 200 miles or even longer. The death toll in Alabama climbing today to at least 228 -- that's in Alabama -- pushing the total number killed in the thunderstorms this week up to 316.

President Obama says he's never seen devastation like he saw in Alabama today. He visited the disaster zone and promised to do everything possible to help tornado survivors rebuild.

Let's immediately go to our CNN meteorologist, Reynolds Wolf.

He's in Tuscaloosa.

You've been touring the same of these areas -- similar -- same areas where the president visited today. And it's an awful, awful sight.

How are the folks there doing -- Reynolds?

REYNOLDS WOLF, CNN METEOROLOGIST: They're doing as well as can be -- as be canspected -- as can be expected. And I'll tell you, as an Alabamian, these -- these people are very resilient, they've been working very hard. But there's a lot to deal with. In fact, just to see what they've been dealing with over the last couple of days is complete destruction. Anywhere you happen to turn, you see all kinds of still just things that are not as they should be. You've got debris everywhere, structures that have been damaged. You've got cars thrown into yards. And just over the last couple of days, it's really been a story of both death and destruction.

But I have to tell you, Wolf, at the same time, there are also amazing stories that are emerging about something entirely different. We're talking about stories of survival. One amazing story from a man named Chris Wozniak (ph) takes place in what is left of this home.

(BEGIN VIDEO CLIP)

CHRIS WOZNIAK: When I went outside and looked this way, you know, the hurricane -- the tornado was -- was -- just filled from horizon to horizon. There was just a spot of daylight on either side. And just the rest of it was just a wall of tornado. You know, there's -- and you couldn't see anything. It was literally coming directly at me. And that's when I -- you know, I ran back into the house and -- and attached the dogs to me. You know, I grabbed the motorcycle and put it on. And I got in the tub.

You know, the ground was rumbling and then the house started to shake violently. And I knew at that point that I was going to get just directly hit.

And, you know, it's hard. It was a surreal thing, because I couldn't believe it. I was like I am not in a tornado, you know, it was just -- it just doesn't seem like that should happen, you know.

And but, you know, being inside the bathroom, there -- you know, which had no windows and, you know, I thought I was -- I'm going to get trapped in this little room and I, you know, I didn't know if It was the right thing to do, but I thought, you know, maybe if I open the door, I'll have some kind of escape hatch.

So when I opened the door, the front of the house flew away. And then the Krispy Kreme truck sailed right through upside down, right through the living room. And then the roof blew off. And I ducked down and I pushed the dogs down as best I could inside the tub.

But at that point, you know, the back of the house also blew out and the dogs got sucked out. They were just like -- they were like kites on a string, you know. But they were tethered to me on -- on their leashes and I was able to hang onto them and push them down, you know. And then the rest of the house just fell on us.

(END VIDEO CLIP)

WOLF: Chris is very fortunate to be alive, obviously. Something else that is a sign of just remarkable luck is what you see on top of this hill, Wolf. Off in the distance -- you can barely make it out -- is the regional medical center, a thing that was spared, despite many of the houses in the foreground that have been destroyed, that remained untouched. Now, as the tornado struck, that was half full of people that were suffering from different ailments, but today, it's almost completely full with people who were hurt by the same tornado that came right through this part of the world.

The death toll, as I mentioned, is -- in the city of Alabama it well exceeds 200. But unfortunately, in the coming days, and certainly in the coming weeks, that number may rise -- Wolf.

BLITZER: It's amazing that Mr. Wozniak survived that rubble behind you there. I mean it's just -- it's almost a miracle, I would say.

WOLF: It truly is. No question about it. But, you know, I think over the coming days and weeks, we will hear more stories, the stories of survival and, of course, the stories of rebuilding, which is going to come. I can tell you that we've heard, in the background, sounds of hammers, people starting to build things right back up. But there's still obviously quite a bit of cleanup through the weekend and for days and weeks to come.

BLITZER: Reynolds Wolf on the scene for us in Tuscaloosa.

Thank you.

After President Obama toured some of the storm-damaged areas of Alabama, he flew to Florida. Even though he planned -- the planned the launch of the Space Shuttle Endeavor was scrubbed.

Our White House correspondent, Dan Lothian, is over at the Kennedy Space Center right now.

It was very moving for the president earlier in the day, Dan, when he toured some of the devastation in Alabama.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It really was, Wolf. You know, coming here, though, this would have been only the second president to actually witness a lift-off. The first president was Bill Clinton back in 1998. He was here for the launch of Discovery.

So there was some disappointment here for the president. But nonetheless, he came for a visit. But before coming here, the president was in Alabama, where as you pointed out, he did get a chance to witness the devastation up close.

(BEGIN VIDEO CLIP)

LOTHIAN: It's one thing to see the pictures on television...

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And this was all blown right around these houses.

LOTHIAN: It's quite another to witness the devastation in person. Enough of this (INAUDIBLE) lined that street up in ruins.

LOTHIAN: Days after a tornado outbreak punched the South in the gut, the president and first lady heard gripping stories.

OBAMA: Basically, they got thrown from the house.

LOTHIAN: And surveyed the destruction in one of the hardest hit cities, Tuscaloosa, Alabama.

OBAMA: I've got to say, I've never seen devastation like this. It is heartbreaking.

LOTHIAN: Some people are still missing and across the region, hundreds have been killed and thousands injured. Officials say recovery will take time. President Obama promised to help.

OBAMA: We can't bring those who've been lost back. The -- you know, they're alongside God at this point. But the property damage, which is obviously extensive, that's something that we can do something about.

LOTHIAN: Before visiting Alabama, President Obama signed a disaster declaration for the state, freeing federal funds to help victims in the hardest hit counties clean up.

MAYOR WALT MADDOX, TUSCALOOSA, ALABAMA: Your visit here has brought a confident hope to this community.

LOTHIAN: It wasn't a disaster in Florida, but it was a disappointment. The expected launch of Space Shuttle Endeavor was scrubbed. But the first family still paid a visit, touring the orbiter processing center where space shuttles are maintained, inspected and tested.

(END VIDEO TAPE)

LOTHIAN: Now, a White House official says that President Obama also did meet with Congresswoman Gabriel Giffords for 10 minutes. He also met with the crew of Shuttle Endeavor. He met privately with Giffords' husband, where he gave the president an update on her condition.

And, by the way, it's unlikely that President Obama will return here for the rescheduled flight -- Wolf.

BLITZER: Yes, supposedly maybe Monday, assuming everything is OK.

Did we get any word on how she is doing from White House officials, impressions that the president may have had?

LOTHIAN: No. The -- the White House is tight-lipped about what happened in that meeting. In fact, we haven't even seen any pictures from that meeting, other than -- what we've been told is that he just got an update on the situation from Mark Kelly and then they joked a little bit about how the president hoped to see him lift off today. But other than that, no specifics on what was discussed in that private meeting -- Wolf.

BLITZER: All right, Dan.

Thanks very much.

Let's get back to the tornado devastation. It goes on for miles and miles.

Our own Tom Foreman is over here.

He's mapping it out for us.

It really is amazing, the devastation -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: It is, Wolf. And we have a brand new image from GeoEye of what happened.

Let me give you some reference first. This is the overall storm area. Look at this -- Arkansas, Mississippi, Alabama, Georgia, Tennessee, up here into Virginia -- a huge, huge swath we're talking about.

But if we move in here to Tuscaloosa, the area we've been talking about so much. I want you to look at this area right through here, where these little yellow dots are. This is this GeoEye image and this is just stunning, because you can actually see the track of the tornado. You can't always see it.

Watch as I fade it in here. This is what it looks like. That brown line all the way through there is a cut made by a tornado right through Tuscaloosa. Look at the damage from that.

I want to take you and show you a few details on this, because they're just absolutely amazing. If we move in here, this is a lake in one part of town here. This is what it looks like in normal times, nice and clean and around the edges. It's a measure of the damage, if you just look at the amount of debris that gathers in this lake after the storm. Look at this and in an area like this.

Let's move up here to the Wood Square Shopping Center, a popular place here. I'll tell you, this university is not far off here. Many, many, many students and faculty members and all live out in these areas, come around these areas all the time. A very popular shopping center here.

Take a look at this, as we make the change over here. This is the shopping center before the storm hit. And look at what happened afterwards. Just unbelievable devastation in that area. We'll move along from there to the Alberta Baptist Church up here. I want you to take a look at this. This right here doesn't look like a whole lot now, but that was a real thriving church. Take a look at the how neat and tidy it looked before all of this hit. That was the whole church complex beforehand. This is the church complex now, as captured by GeoEye. Just unbelievable. I want you to look at an elementary school. In many ways, this is fortunate because the storm came, you know, 5:00-ish, something like that, so it's past school hours, basically. This is an elementary school. Look how nice and tidy everything is. This is that same area now -- devastated, everything around it.

And you can see, when I showed you that brown cut, you can see why it looks that way. I mean this isn't just houses, but this is earth itself churned up by the power of this storm. You're talking a lot about it being a mile wide storm. We measured this from side to side and at the -- the widest part, you're pushing maybe a quarter mile in terms of the intense destruction that, of course, at the edges of the storm that would go beyond that.

I want to show you just a couple more here that I think are pretty interesting to look at. Here's an apartment complex, which is really pretty amazing to look at, further up the way. And you can see -- and we've just been following the line. Look at this apartment complex over here. Everything looks nice, all put together there. The storm comes through and look at what happens to these apartments.

Isn't this astonishing?

Just utter, utter devastation. I've seen a lot of tornadoes and there's just nothing to compare to the power in the middle of one of these. And a big one like this, it's just unbelievable what it does. Look how far things have been thrown here. We know there were people who were thrown, in some cases, 50 yards away from their homes, some who survived, some who did not. Tremendous destruction like that.

I want to show you one more place here. This is the Alberta Church of God up here, also another neighborhood completely wiped out. But a lot of streets like McFarland, 15th here, Wolf, there are many landmarks that people have known their whole lifetime -- shopping centers, churches, success, that are simply gone.

And, interestingly, enough, we talked about NASA earlier today, NASA, in one of their images, recorded two other tracks just like this track. But they found them to the north and the south of town, sort of out in the woods. So the same kind of a cut, just a little bit more faint and it was in the woods instead of the city.

But this one hit here and we've seen the damage. Unbelievable -- Wolf.

BLITZER: Yes. It's amazing. You know, this is a city, Tuscaloosa, with 100,000 people, the population. The county of Tuscaloosa, 200,000 people. So as bad as it was, it could have been even been so much worse. A lot of people survived. Thank god for that.

Tom, thank you.

To find out how you can make a difference to help tornado victims in the South, visit our Impact Your World page. It's easy to do so. Go to CNN.com/impact. Some critics are calling President Obama a hypocrite. He's poised to gain big time from secretive fundraising groups a lot like pro-Republican organizations he's criticized.

And the royal newlyweds drive off into the sunset.

Our own Richard Quest is following the celebrations. They are still underway.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(SINGING)

ROWAN WILLIAMS, ARCHBISHOP OF CANTERBURY: Hold of God to this holiest state should continue in pureness of living.

KATE MIDDLETON, WIFE OF PRINCE WILLIAM: I will.

WILLIAMS: Who giveth this woman to be married to this man? I vow to give you my troth.

MIDDLETON: I vow to you I give you my troth.

PRINCE WILLIAM, UNITED KINGDOM: I vow to you I give you my troth.

(END VIDEO CLIP)

BLITZER: Some flavor from the royal wedding ceremony today. We'd have much more coming up later. A lot of people in Britain have been partying right now into the night. CNNs Richard Quest is over at Buckingham Palace. He's been following every minute of his historic celebration. Richard, it was a very exciting time. A lot of celebrities were there as well. Give us a little flavor.

RICHARD QUEST, CNNI ANCHOR: The celebrities who are here were more of the royal nature, if you like, rather than, perhaps, the movie stars or all the big -- we did have David Beckham and his wife. We Had Sir Elton John and his partner who were also here. There were other leading dignitaries from the sporting world, in thought, the Olympic swimmer was here.

But I think the main celebrities, if you will to put it like that, were really the royal families of Europe, the British royal family, and there was this incredibly family feel about what was a semi-state occasion, Wolf, but at the same time, had there's amazingly touching moments, the sort of which you saw and showed just a moment ago. And now, tonight, it is a quarter past 10:00, but the party is still going strong at Buckingham Palace. And, Wolf, it's expected to go well, well late into the night, early morning.

BLITZER: I'm sure it will. Now, what about all of those crazy hats that the women were wearing. I used the word crazy because it looked a little crazy at times, but I'm sure they're very glamorous and gorgeous.

QUEST: Now, you and I are on very thin ice when two middle-aged men start talking about hats. We need to be a little bit careful at this particular point, but I can tell you, there was a lot of things with feathers, there were a lot of things sprouting in different directions, and then, there was the hat of one of the daughters of the duchess of the duke of York, Princess Beatrice, who was wearing the most extraordinary confection on her head.

And the actually Abbey itself, you could barely see necessarily what was going on behind her. And Victoria Beckham wore a fascinating hat, that was sort of long and pointed and did strange things. Overall, hats are worn at English weddings, and we had a fine crop of hats for this particular event.

BLITZER: Except for the wife of the prime minister, David Cameron. She did not wear a hat when she went into the church. Why was that?

QUEST: Absolutely no idea why she wouldn't particularly wear a hat. It is a tradition to wear a hat, but certainly, if you choose not to, it is not considered to be the faux pas of the century. In fact, if you look at the sort of hat people are wearing, this fascinate as we saw again and again which is, you know, just a couple feathers but a lace and old twig stuck in their head, some of them were barely hats at all.

BLITZER: A lot of people were wondering, thinking about Princess Diana. Was there any mention at all of the mother of the groom?

QUEST: Yes and no. Her presence was there throughout. There were references in the address, but I think if you look at the hymns particularly, you see the references to the princess of the late princess of Wales. Despite what was said openly about her, there were two particular hymns of the three. One was played at Diana's wedding. A one was played at her funeral.

Now, if you factor in as well the fact that the duchess of Cambridge, Kate Middleton, as it was, is wearing Diana's engagement ring, you start to actually see that Diana's presence was absolutely front and center throughout this ceremony.

BLITZER: So sad she wasn't alive to see her son get married. Richard, thanks very much.

QUEST: That's no question.

BLITZER: Yes. Sad for all of us who remember her. Appreciate it very much. we're going to have more on the wedding coming up.

And by the way, our CNN viewers here in the United States and around the world can relive the entire experience later tonight, 8:00 p.m. eastern. A special two-hour edition of Piers Morgan tonight. You'll want to see that. Two hours, later tonight.

A horrifying four minutes in a closet. Just ahead, how one woman survived with a baby as her home was ripped apart by the deadly tornado.

Plus, President Obama taking some tough new action against Syria right now in the wake of a worsening government crackdown. All the details coming up.

(COMMERCIAL BREAK)

BLITZER: An important new development today in the escalating Syria crackdown. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now. What's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf. Well, President Obama is issuing an executive order declaring sanctions against Syrian officials and others for human rights abuses. This, as one witness says, 19 people were killed and dozens wounded in new military clashes with anti-government protesters. CNN has been denied access to report from inside Syria and cannot independently confirm these accounts.

A federal judge has ruled the army corps of engineers may intentionally burst a levee to ease pressure on already flood-engorged Mississippi River. The move is an effort to prevent flooding in the Illinois town of Cairo downstream. Missouri attorney generally says the plan will flood 130,000 evacuated areas. Most of it farmland in the southeastern portion of the state.

And CNN has just obtained dramatic, never before seen footage of the Japanese tsunami as it hit the Sendai. Take a look here. You can see everything from helicopters to cars, trucks, boats, literally being swept away. At least 14,000 were killed in the March disaster. 11,000 people are still missing, Wolf.

BLITZER: I assume those 11,000 are dead, too, but they haven't officially made that determination. Thanks, Lisa. Thanks very much. Dramatic pictures.

When tornadoes ripped through the southeast, this check never made it into the mail, but wait until you hear where it did go.

And a tornado survivor tells us how she and her one-year-old granddaughter survived and what they're going through right now.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our top story right now, the devastation from those tornadoes in the South.

Another measure of the strength of those tornadoes that ravaged the Southeast this past week was this plastic wrapper. It was a plastic wrapper for a book and it was found in east Tennessee that had an address from Ringgold, Georgia, a town hard hit by the tornado, about 160 miles away.

And another discovery in Tennessee, a check dated from 1985 from Rainsville, Alabama. It also apparently was blown well over 100 miles during the storms. Let's go to Tennessee right now, where at least 34 people were killed during the tornado onslaught.

Our national correspondent Susan Candiotti has been standing by on the scene for us.

So what town are you in right now, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, Wolf.

This is Apison, Tennessee, and it's considered a suburb of Chattanooga. It is rural, it is agricultural. The population is only about 3,000, and they're still assessing the damage here. But over my shoulder and up and down these rolling hills, almost as far as the eyes can see, a lot of heavy damage to this particular area. They are still assessing how much damage from tornadoes that swept through this area, some reaching wind speeds of 190 miles per hour.

In this county alone, nine fatalities. This, however, is a House where people survived. I talked earlier this day with William Gambrell, 69 years old. His wife is 68, Roxy (ph). They were able to come through it, but look how their House wound up.

It used to be up on a foundation here. You can see where the front of the House used to be. It slid down because of that twister and now it's standing at a 45-degree angle.

Here's how William said they somehow came through it all. Listen.

(BEGIN VIDEOTAPE)

CANDIOTTI: Now, this was to be your retirement home, huh?

WILLIAM GAMBRELL, RESIDENT: Yes. See this green pickup truck? It was parked over next to that Saturn. The House was sitting right here on this foundation.

CANDIOTTI: And where was the porch?

GAMBRELL: The porch was right here.

CANDIOTTI: Right here. And now it's over there.

GAMBRELL: You got it.

CANDIOTTI: Look at that.

GAMBRELL: Yes. And the foundation, look how far it pushed it back. It's unreal.

You know, me and my wife were sitting in the living room at 6:00 watching the local news, and they said tornado warning is out for (INAUDIBLE) and Collegeville (ph). And I told her -- I said, "Honey, that's getting real close." She can't walk.

CANDIOTTI: So you just grabbed her and --

GAMBRELL: I just grabbed her and squeezed her and held on.

CANDIOTTI: Held on for dear life?

GAMBRELL: Yes. But all that was running through my mind, this is it. It's over.

But I'm one lucky dog, baby. I am one lucky dog.

I ain't got no home. I ain't got no truck. I ain't got no car. But me and the wife and little dog Barney is still here. And what I'll do next, I don't know.

(END VIDEOTAPE)

CANDIOTTI: You might have been able to make out that T-shirt he was wearing. It says, "What the deal?'

But as William tells you, amazingly, he's somehow convinced that he'll be able to come through this. He's one of the lucky ones. He has insurance. A lot of people do not.

Right now they are in the recovery mode here. They think they have accounted for everyone, but they still have to account for all the damage.

As you said, a lot of loss of life throughout the state. On this one street alone, four people lost their lives, just down the street there, beyond our satellite truck. However, there were five people in that House. One of them only 8 years old managed to survive. They were all thrown from the House, but this 8-year-old wound up in a pile of trees and came through it.

Wolf, back to you.

BLITZER: What a heartbreaking story, but at least, as he points out, he's alive, his wife is alive, they have their dog, and they will start afresh.

CANDIOTTI: That's right.

BLITZER: Good luck to them, to all the folks in the South.

Thank you very much, Susan, for that report.

We have another gripping tornado survival story right now. We're joined on the phone by Colleen Robbins of Tuscaloosa, Alabama.

Colleen, thanks very much for joining us. Tell us where you were, who you were with when this tornado hit.

COLLEEN ROBBINS, TUSCALOOSA RESIDENT: Well, just a few minutes before the tornado hit my House, I had my granddaughter, and we had a little bit of calm. And I had told my husband and my daughter I would be in the middle closet of our House because that was the center of the House and it would be the safest place if the tornado hit our House.

But I really didn't expect it to. But four minutes before my power went out, and then the windows started to rattle and stuff started to hit it, debris, and I just dived into the closet with my granddaughter. And that's where I was.

BLITZER: And we're seeing pictures of your House that you shared with us. It is so destroyed, it's a miracle. And we see McKenna (ph), your little 1-year-old granddaughter there.

How long did it seem you were stuck in that closet?

ROBBINS: It seemed like -- well, I know afterwards it was only, like, three minutes or so, but, boy, that seems like a long time when you're in there and it's just whipping around. And I looked up and the roof had come off my House and I could see the blue sky, and I thought, oh, it's going to suck us out of here like the movie "Twister." You know? I thought we were going to be sucked out of the House and I just held on to my baby and just stayed down.

BLITZER: You know, what is amazing is that you survived, McKenna (ph) survived, your husband survived.

How many people in your neighborhood actually died?

ROBBINS: They said they pulled out 30 bodies just in our little area, on our street.

BLITZER: Thirty people in your little area. I'm told also in one home alone, a number of people were killed. How many?

ROBBINS: There were seven people in one home.

BLITZER: Seven people. And I assume you knew these people.

ROBBINS: Yes, we know them.

BLITZER: Such a horrible, horrible story.

Well, Colleen, good luck to you, good luck to your whole family and all your friends there, your neighbors. We're praying for all of you. Thank God you survived.

Appreciate it very much.

ROBBINS: Thank you. And we feel so blessed, and we just want to thank all the people that have called with concern, and our family out West, let them all know that we are safe.

BLITZER: Thank God you are, Colleen. Thank you very much.

We're going to have more stories coming up, much more coverage of the disaster that unfolded in the South. Stand by for that.

Other news we're following, including President Obama. He's complained many times over the past year or so about those secretive campaign donations to Republicans. Now he appears poised to get the same kind of help. I'll ask Paul Begala and Michael Steele whether that makes the president of the United States a hypocrite.

And why the online poker industry is saying something you don't want to hear a lot -- go ahead, regulate us.

(COMMERCIAL BREAK)

BLITZER: Democrats are joining forces in a new fund-raising effort to defend President Obama against what's expected to be huge amounts of money raised by independent Republican-leaning groups in the 2012 battle for the White House. But the strategy is something the president once fiercely opposed.

Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They are being helped along this year, as I said, by special interest groups that are allowed to spend unlimited amounts of money on attack ads. They don't even have to disclose who's behind the ads.

The American people deserve to know who's trying to sway their elections. And you can't stand by and let special interests drown out the voices of the American people.

(END VIDEO CLIP)

BLITZER: All right. Joining us now, our CNN contributor, the Democratic strategist, Paul Begala. He's now a senior strategist for Priorities USA and Priorities USA Action, two new groups being launched today in this effort.

Also joining us, the former chairman of the Republican National Committee, Michael Steele. Former lieutenant governor of Maryland.

I assume, Paul, this new group that you're creating, you'll disclose all the names and the amounts of money that these individuals will contribute to help the Democrats.

PAUL BEGALA, CNN CONTRIBUTOR: We'll disclose to the fullest extent of the law. But the law does allow some people to donate without being disclosed. Now, I'd like to see that law changed. OK? But until it is, I have to play by the same rules as everybody else.

The notion that the Democrats should have a double standard and let the Republicans tell lies with millions of dollars of money from the Koch brothers, these billionaire polluters, or Mr. Karl Rove, or the Chamber of Commerce, and the Democrats don't get to respond, or the liberals don't get to respond --

(CROSSTALK)

BLITZER: The names will be secret.

BEGALA: Some will and some will not. It depends on the donor and the law and --

BLITZER: If the donor doesn't want to tell how much he or she is providing, or provide his name, you will keep that secret?

BEGALA: There is one group which is a nonprofit -- well, they're both nonprofit, but one is under the IRS Section 501(c)(4), where donors, I'm told by the lawyers, would be allowed to keep their identities confidential. Again, I hope that law changes. OK? But until it does, you cannot expect Democrats to allow -- or progressives, rather -- it's not just Democrats, there's a lot of Independents and Republicans who don't much like what the Koch brothers and Mr. Rove are trying to do.

BLITZER: Michael Steele, if I'm a Republican -- and you're a good Republican -- I would start getting nervous right now, because they are going to raise a ton of money going after Republican candidates.

MICHAEL STEELE, FMR. RNC CHAIRMAN: Well, look, this isn't anything that the Democrats haven't been doing for quite some time. When I was chairman, I made a point of noting that through George Soros and a number of other independent organizations that were already in existence, the Democrats have been doing this.

Now the playing field has changed a little bit because of the Citizens United case. But the reality of it is, my good friend here Paul is sitting up here now saying to the fullest extent of the law, which means they are not going to disclose a thing. Trust me, they're not going to disclose a thing because it's not in the interest of the party and it's not in the interest of the donors for their names to be out there, to go into the same kind of attack that these guys wanted to put against our guys.

So the reality of it is this is the new age of politics. This is the new playing field that we're on, and they're going to play the exact same way Republicans are playing.

BLITZER: You would expect the Democrats to unilaterally disarm?

STEELE: Oh, heck, no. Just like Barack Obama unilaterally disarmed in the 2008 campaign by not following campaign finance laws and saying, well, you know what? I'm not taking public money, I'm going to go raise $5 million.

BEGALA: Right. He followed the law. He just didn't take taxpayers' money. OK?

(CROSSTALK)

STEELE: But it's the same candidate, now president, who made a point of saying that, you know, specifically, that's why campaign finance reform is important, so that you don't have the infiltration of all this big money coming in that he took.

BLITZER: You understand why some are saying this is hypocritical on your part, the Democrats' part? BEGALA: It is not -- I understand people say that, and I have a principled disagreement with them. OK?

What this is --

(CROSSTALK)

STEELE: -- from Karl Rove's or anybody else's?

BEGALA: Well, first off, we'll tell the truth and they lie. That's a big difference.

STEELE: Oh, please. Oh --

BEGALA: But we will abide by the same laws. We will not have a double standard.

STEELE: What did they lie about?

BEGALA: OK. Karl Rove ran tens of millions of dollars of ads that said -- and I quote -- "Democrats want to gut Medicare." It's not true. Democrats want to save Medicare.

STEELE: You wanted to take $500 billion out of the Medicare budget.

BEGALA: Well, first off, it didn't gut --

(CROSSTALK)

BEGALA: It didn't cut Medicare recipients. It took it out of corporate welfare, part of it, which the Bush people put in, called Medicare Advantage. But it does -- we do have to do something about entitlements.

STEELE: I thought you guys like Medicare Advantage.

BEGALA: No. We love Medicare, don't much like Medicare Advantage. At least I don't.

STEELE: You seem to be taking advantage of it.

BEGALA: Here's the thing. Mr. Rove -- Politifact, other objective organizations have labeled many of his ads as untruthful. The same thing with the Koch brothers. OK?

We're going to tell the truth. In that sense, we won't be like them. But we will play by the same rules legally. I mean, the days of Republicans being able to have an unfair advantage are over.

STEELE: Oh. So, let me get this straight. One man's lie is another man's truth? Is that how this works?

BEGALA: No, not at all.

STEELE: So, when you guys say it, it's going to be truthful but. But if a Republican says it --

BEGALA: Republicans want to end Medicare as we know it to give tax breaks to the rich.

STEELE: No, we don't.

BEGALA: Yes, you do.

(CROSSTALK)

STEELE: Wait a minute. What kind of a break is George Soros going to get?

BEGALA: George Soros hasn't give us any -- I hope he does. Mr. Soros, we could use your money.

STEELE: I mean, but whether or not he gives to your organizations, which was just formed today --

BLITZER: Hold on a second. What would be the difference if George Soros giving you, let's say, a million dollars, or the Koch brothers giving Karl Rove's group a million dollars? What's the difference?

(CROSSTALK)

BEGALA: Well, first off, here's the difference. First off, Soros hasn't given us any money. I hope he will.

STEELE: Let's say he does.

BEGALA: Let's say Wolf Blitzer -- you can't, OK, but Steele is a wealthy man. Say he gives us a million dollars. Here's the difference. We advocate policies for the middle class.

In other words, making the rich pay more, making oil companies pay their fair share to preserve Medicare and to preserve student loans and to preserve nursing homes. That's a huge difference. We're all about preserving, protecting and defending the middle class. Karl Rove and the Koch brothers are all about preserving and protecting entrenched power and wealth.

That's what they're all about. That's the distinction.

STEELE: You know, I like you, but you're full of bunk. The reality of it is, your message and our messages go along where we philosophically disagree. We believe that the empowerment (ph) rests in the hands of the people, not the institution of government.

BEGALA: The elite.

STEELE: Not the --

BLITZER: Here's a question.

(CROSSTALK) BLITZER: Do you know -- you're one of the principles of this new group, these two new groups.

BEGALA: I'm a senior adviser.

BLITZER: A senior adviser. Did the president of the United States, the leader of your party, the Democratic Party, personally sign off on you and Bill Burton and others putting these groups together?

BEGALA: No.

BLITZER: Did he know about it?

BEGALA: I have no idea.

STEELE: So how do you think the president is going to feel about --

(CROSSTALK)

BEGALA: You have to ask his spokesman.

To quote my 10-year-old, Patrick, who says to my 13-year-old, Charlie, "You're not the boss of me." I love our president, I want him to be reelected. But we will be independent of him and every other political campaign in America. It's what the law requires, it's what we will do.

I come on your show and criticize the president when I disagree with me. I still will.

BLITZER: He does.

BEGALA: We are an independent organization. We do not serve any political candidate. Obviously, I want the president re-elected.

STEELE: So if we have a Republican candidate that fits in line with what you're saying, are you going to write him a check?

BEGALA: I haven't thought about that. We're not going to write checks to politicians.

STEELE: I know, but you're going to communicate --

(CROSSTALK)

BEGALA: I would be open to, Michael. If we had a Republican who wanted rich people to pay their fair share for a change and save Medicare and not make it a voucher system for seniors, my lord, I would --

(CROSSTALK)

BEGALA: Of course, a Republican like that would be called a Democrat. STEELE: Right.

BLITZER: It would be called a moderate Republican.

STEELE: A moderate Republican.

(CROSSTALK)

STEELE: Just like there's no more Blue Dogs. So what are you going to do about the Blue Dogs in your party who -- are you going to support them?

BEGALA: Well, again, we're not going to -- sure. We're going to support people who support the middle class.

STEELE: So, a Blue Dog --

BLITZER: A Blue Dog is a conservative Democrat.

BEGALA: Right.

STEELE: A conservative Democrat who supports reforming our Medicare to Medicaid system, or making sure the tax code remains somewhat progressive, but recognizes that wealth creation is in the hands of the people, not the institutions of government who makes those decisions.

BEGALA: When Republicans talk about reforming Medicare, it's like we reformed my dog Major and that used to work real well don't work no more because we took it away.

(CROSSTALK)

BLITZER: Here's the difference, I think, between your organization and the Karl Rove organization. You hope the law changes and these organizations are disqualified.

BEGALA: Yes. Absolutely.

BLITZER: You hope the law doesn't change, these organizations can continue.

STEELE: My particular hope is, yes, the more the merrier. I believe in a system in which the only thing you have to do is fully disclose who you're getting your money from. It works in Virginia, it can work nationally.

BLITZER: Michael, Paul, guys, thanks very much. Good discussion. Good debate.

BEGALA: PrioritiesUSAAction.org. Had to get that in.

BLITZER: Should Congress place its bets on online poker -- stand by -- when it comes to stimulating the economy?

(COMMERCIAL BREAK) BLITZER: As the spending battle heats up here in Washington, the debate is growing over what the United States can do to potentially bring in some more money. What if Congress could place its bets on online poker as one possible solution?

We asked our congressional correspondent, Kate Bolduan, to take a closer look at this possibility -- Kate.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: I'm sure a few viewers are scratching their heads. I know it's a little bit out of the mainstream, but online poker is a multibillion-dollar industry. And right now it's not regulated by the government. It also has some big-name support on Capitol Hill.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Matt Matros makes his living playing poker.

MATT MATROS, POKER PLAYER: A good day for me online would be winning, like, between $10,000 and $15,000. And that may sound like a lot of money to some people, but there are some online professionals that win or lose a whole lot more than that in a day.

BOLDUAN: He's one of the estimated eight to 10 million Americans playing the game for money online. But his winnings suffered a serious blow this month when the Department of Justice indicted the founders of the world's three largest poker Internet poker companies for bank fraud, money laundering and circumventing U.S. gambling laws. It blocked the Web sites from U.S. users.

MATROS: I knew it was going to be a tough time for online poker.

BOLDUAN: It's not illegal to play poker online. It is against the law for companies to accept money from Americans gambling over the Internet.

PokerStars, one of the companies indicted, said it "categorically denies" the allegations. But as poker players continue to flock to these sites, the industry argues the laws are too vague and they want Congress to pass legislation to license and regulate the game.

JOHN PAPPAS, EXECUTIVE DIRECTOR, POKER PLAYERS ALLIANCE: I think it's a galvanizing moment for the poker community.

BOLDUAN: John Pappas is the executive director of the Poker Players Alliance, a D.C.-based lobbying group. He says now, more than ever, as the debate heats up over federal deficits and debt, Congress should welcome a potential new revenue source, not fight this multibillion-dollar business.

PAPPAS: We talk about the debt ceiling. We talk about a number of social programs in jeopardy because the government can't pay for them. Here's an industry and a people saying hey, tax us, regulate us. We want to help the economy here, not hurt it. BOLDUAN: He has some key allies on Capitol Hill. Senate Majority Leader Harry Reid, from Nevada, supports legalizing online poker. And House Democrat Barney Frank has pushed for legalizing most Internet gambling. But any legislation would almost certainly have to pass by the top Republican on the House Financial Services Committee, Spencer Bachus, who opposes any federal right to gamble and think it's addictive.

REP. SPENCER BACHUS (R), FINANCIAL SERVICES CHAIRMAN: My main concern is the youth of this country. You know, whether it's drugs, whether it's gambling, the earlier one engages in a conduct, the more addictive it is and the harder to break that addiction.

(END VIDEOTAPE)

BOLDUAN: Now, supporters of online poker called that accusation a myth, but in terms of momentum, the Poker Players Alliance says the 72 hours following the Justice Department's indictment becoming public, they raised more money than ever before as an organization. But it remains a very big question, Wolf, if that momentum can now carry back on to Capitol Hill.

As you very well know, when they return from recess on Monday, it's a jammed-packed schedule with many big issues to talk about.

BLITZER: Yes. But at this stage, though, the government needs more money. And people are going to gamble, so they say the government at least should take a piece of that action.

BOLDUAN: That's why they're making a push now.

BLITZER: Yes. All right. Kate, thanks very much.

BOLDUAN: Of course.

BLITZER: We're learning more about the power of the tornado that tore through Tuscaloosa, Alabama. Our meteorologist Rob Marciano is there. He's standing by investigating.

We'll go to him in a minute.

(COMMERCIAL BREAK)