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Boy Played With Kids From Osama bin Laden's Compound; Soaring Gas Prices: Reality Check; Navy May Allow Same-Sex Marriages; Pakistan Blasts Bin Laden's 'Blame Game'; Bracing For Historic Floods

Aired May 09, 2011 - 17:00   ET

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

WOLF BLITZER, CNN ANCHOR: Thanks very much, Brooke. Happening now --

(BEGIN VIDEO CLIP)

BLITZER (voice-over): Pakistan's prime minister angrily, angrily denies that anyone in his government helped protect Osama Bin Laden, calling the idea absurd, but is the Obama administration buying that?

Plus, we're learning new information about Bin Laden's wives, and Pakistan's terms for letting the U.S. question them.

And an epic battle against flooding in parts of the south and the Midwest. We're in the danger zone where the Mississippi River is rising to a record level and could cause major new damage any moment.

(END VIDEO CLIP)

BLITZER (on-camera): We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in the SITUATION ROOM.

Pakistan's prime minister says he won't let his country be stigmatized by the Osama Bin Laden blame game. His fiery speech today is driving home the red hot tension between Pakistan and the United States right now. The Obama administration says it's taking Pakistan's concerns very seriously, but it won't back down from tough questions about who may have helped Bin Laden or from its defense of the raid that killed him.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We also do not apologize for the action that we took, that this president took. He said dating back to the campaign, if there is an opportunity to bring Osama Bin Laden to justice and he's on Pakistani soil and this is the only way we can do it, do it unilaterally. He will take that chance and do it, and he did. It simply is beyond a doubt in his mind that he had the right and the imperatives to do this.

(END VIDEO CLIP)

BLITZER: Let's go to Islamabad right now. CNNs Reza Sayah is standing by. Very tough speech today by the prime minister of Pakistan, Reza. Update our viewers here in the United States and around the world.

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Yes, Wolf. You can easily describe this as a speech where Prime Minister Yousuf Raza Gilani actually went out and turned up the heat when it comes to the U.S.-Pakistani partnership, actually escalating tensions. The only new thing that came out of this speech was his announcement that Pakistan planned to investigate Osama Bin Laden's presence in this safe house. Beyond that, there was nothing new.

This was a speech that was filled with nationalistic rhetoric, attempts by the prime minister, deflecting accountability. This was a very aggressively defensive Prime Minister Yousuf Raza Gilani who also, sometimes, went on the offensive taking shots at the U.S. At one point, he suggested that the U.S. was partly to blame for the creation of al Qaeda.

He said it was the U.S. that joined the 1980s Afghan jihad against the soviet occupation in Afghanistan, funded and supported Islamist militants, and he suggested that it was that movement that gave birth to al Qaeda. Here's what he had to say.

(BEGIN VIDEO CLIP)

YOUSUF RAZA GILANI, PAKISTANI PRIME MINISTER: It is perhaps necessary to remind everyone about that era, which has been so well documented, including in the CNN series on the Cold War showing video footage of high ranking U.S. officials exhorting the Afghans and the Mujahedeen to wage jihad, to go back to their homes, to go back to their mosques, in the name of Islam and as a national duty.

(END VIDEO CLIP)

SAYAH: Pakistan's prime minister taking a clear shot at Washington, but at the same time, he came out and reached out to the U.S. saying, Pakistan values its partnership with the U.S., and the two should press on this fight against extremism, Wolf. So, a lot of mixed messages, but absolutely no indication that Pakistan is planning on going on a new direction, perhaps, embarking on a new policy when it comes to the fight against extremism, something I think the Obama administration was eager to hear.

BLITZER: Reza, that's what he's saying in public, but is he saying something different based on what you're hearing in private in order to maintain that good relationship with the United States?

SAYAH: It's certainly possible, Wolf. I think the fact that he delivered this speech and the Pakistani parliament meant that this was mostly for domestic consumption. Certainly behind the scenes, there could be moves to improve relations with Washington, to redouble their effort in this fight against extremism, but I think from the Obama administration's viewpoint, there has to be some solid tangible evidence that they're doing this.

This entire episode involving the death of Bin Laden goes to the heart of the biggest problem when it comes to this partnership and that's the suspicion that Pakistan is playing a double game, on one hand supporting the U.S. fight against extremism, and on the other hand, maintaining some links with militants, and I don't think anything that the prime minister said today is going to relieve the Obama administration that they're turning the page and going in a new direction.

BLITZER: Yes. This is a work in progress to be sure with enormous, enormous consequences at stake. Reza Sayah in Islamabad for us, thank you.

Let's get some fresh details now about what's being described as a treasure trove of information seized from Bin Laden's compound. Our Pentagon correspondent, Barbara Starr, is digging deeper on this story, up to the minute into the investigation. What are you learning right now, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Wolf, it has been described as enough information to fill a small college library, the largest intelligence trove ever. I'm going to take this out. We're having some technical issues, but let me go through it for people. What they are telling us is, so far, they have found only information about aspirational goals, the performance goals, if you will, of al Qaeda. Nothing about time, date, or place activities that would suggest imminent attacks.

That does not mean, however, that they are not scrubbing through all of this as fast as they can. It is a major concern. If they find any leads, they want to chase them down. Now, an official tells us, they expect to learn a lot more about how Bin Laden communicated, who he communicated with, how often he communicated, what guidance did he pass on, that sort of thing, how he operated, and what operatives out in the field expected from Bin Laden.

Wolf, there is a major government task force now pouring through all of this -- Wolf.

BLITZER: Barbara, you're also learning new information about who is actually looking through all of this information that was picked up in Bin Laden's compound.

STARR: Wolf, it is an alphabet soup of U.S. government agencies, some I have to tell you, I hadn't even heard of before, but let's walk you through some of it. Of course, it is the CIA who is doing most of it, but also in conjunction, of course, with the FBI, the DHS, the Department of Homeland Security, the NTCT, the Counterterrorism Center, the National Geospatial Agency, they look at imagery, the national security agency, the NSA, they look at communication intercepts, and we found one in there that I wasn't familiar with, the National Media Exploitation Center

Top secret organization, they look at documents, they look at computer media and try and exploit it, learn what's in there and what it may all mean, Wolf.

BLITZER: Barbara Starr at the Pentagon. We're learning a whole lot more about all of this, thank you. U.S. officials certainly are very, very eager for any information that could help them find fugitives now at the top of their most wanted terror list. Let's bring in our national security contributor, Fran Townsend. She's a member of the external advisory boards for both the Department of Homeland Security as well as the CIA. Do you see any signs, Fran, that the U.S. is already acting on some of the intelligence that has been picked up?

FRAN TOWNSEND, NATIONAL SECURITY CONTRIBUTOR: You know, Wolf, we're not seeing any signs of that publicly. But, in fact, we can expect that behind the scenes, working with the Pakistani ISI, that they would be working these leads. This is not something you're going to see any public displays of until, frankly, there's a raid or an attempt to make a capture.

BLITZER: I think we're having some technical problems with Fran. So, we're going to get back to you, Fran, in a moment. I just want to make sure that our viewers appreciate. She couldn't exactly hear what I was saying, but we're going to come back to Fran in a few moments. Don't go too far for Fran.

So, let's move on and take a quick break. We're going to have a lot more of what's going on in Pakistan, what's going on in the hunt for other terrorists who are out there. Now that Bin Laden is dead, will the wives who hid him -- who hid with him reveal any of his secrets? We're going to tell you what we're learning about these women.

Plus, there's a new proposal to try to keep terrorists off trains in the United States after evidence al Qaeda was plotting to attack America's rail system.

And we're in the middle of the flooding and the danger. Memphis and other cities are bracing for the worst as the Mississippi keeps rising. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our national security contributor, Fran Townsend. Fran, we were talking about this treasure trove as it is called of information that was picked up at Bin Laden's compound, and U.S. officials are going through it. I think hundreds of officials are now trying to determine what exactly is inside, but there's a time sensitivity. Is there an expiration date on any of this information?

TOWNSEND: You know, Wolf, most of it becomes perishable the minute it's revealed that they've got it, right? Bin Laden's organization, anybody mentioned in any plots, people will start to scatter assuming that the American officials will get to the bottom of it, but here's what's not perishable. If there are indications of operatives, there are names or the locations, the American officials can still act on that.

They will look for -- even though those people may have moved, they will begin a manhunt for those people that they can identify. They'll begin to harden targets that may have been part of a plot or plan, even if it was in its nascent stage. And so, while some of it is perishable, that is the immediate ability to find somebody, the ability to identify them over the longer term and capture them will be able to -- they'll still be able to act on that.

BLITZER: And as you know, Fran, so much of the U.S.-Pakistani relationship not only involves cooperation in the war on terrorism, what's going on in Afghanistan, but deep concern about Pakistan's nuclear arsenal and hoping it won't get into the wrong hands. Here's the question. The tough talk from the prime minister Gilani, the tough talk from the army chief, is that simply for public posturing? Is there cooperation actively going on behind the scenes?

TOWNSEND: You know, Wolf, I can remember going back to my time in the White House from 2003 to 2008, we often saw very senior Pakistani officials including the prime minister make very tough statements, very impassioned pleas criticizing the United States when we knew behind the scenes privately that they were trying to cooperate with us. Look, Wolf, in the end, Pakistan does need The United States and that relationship just as we want it for the very reasons you mentioned.

Pakistan gets billions of dollars in aid that they don't want to lose from us. And so, I think despite what you saw today from the prime minister and their parliament, you will see them make real efforts to try and rebuild the -- some level of trust and cooperation with the U.S. counterterrorism officials in particular.

BLITZER: And there's some hope, I know, from my conversations with U.S. officials that the Pakistanis will actually do something dramatic like hand over to the U.S. or hand over to Afghanistan, Mullah Mohammed Omar, the leader of the Taliban who's hiding out some place in Pakistan or maybe even Ayman al-Zawahiri, the number two and now maybe the number one al Qaeda official. We'll see if that happens. Fran, thanks very much.

Much more on what;s going on in the aftermath of the death of Bin Laden. That's coming up here on the SITUATION ROOM, but let's get to Jack Cafferty right now. Jack, I know some of the budget woes certainly on your mind right now. You've got the "Cafferty File."

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, Americans are paying the smallest share of their income in taxes since 1958, 23.6 percent according to an analysis that was done for "USA Today." During the 1970s, 1980s and 1990s, Americans spent about 27 percent of their income on taxes. If we were paying that amount now, $500 billion in additional taxes would be collected each year. $500 billion. That's about a third of this year's projected federal deficit.

Now, conservative groups are quick to point out that this fall in tax revenue is due to a weak economy and not just lower tax rates or tax breaks, and they have a point, to a point. Deficit reduction advocates disagree, though. Either way, you do have to wonder what the country might be able to do with an extra $500 billion right about now. The report comes as President Obama plans to meet with Democrats and Republicans separately over the next few weeks to talk about reducing the deficit. Senate Democrats are due to go to the White House this Wednesday, Republicans follow on Thursday. House Democrats and Republicans will go in the next few weeks. Last December, a Deficit Reduction Committee created by President Obama recommended cutting spending and eliminating tax breaks in order to trim nearly $4 trillion from the deficit over the next decade. So far, all of their recommendations have been ignored.

President Obama came out with his own plan last month that calls for $2 in spending cuts for every $1 in tax increases. Republican Congressman Paul Ryan came up with a 10-year, $4.4 trillion plan, calling for spending cuts and the overhaul of Medicare but doesn't mention raising taxes, at all. We're still waiting for a third deficit reduction plan from the so-called gang of six, a bipartisan group of six senators. We're still not sure what that's going to look like.

So, the question is this, should raising taxes be more of a priority than cutting spending? Go to CNN.com/caffertyfile and post a comment on my blog.

BLITZER: It's a good question and an important question. Jack, thank you very, very much.

Desperate efforts under way, meanwhile, near New Orleans this hour to ward off the swelling Mississippi River as flooding of historic proportions now engulfs eight states across the south and Midwest. President Obama has just signed a disaster declaration for the state of Tennessee. CNN's David Mattingly is joining us now live from Memphis with an in depth look. A lot is at stake here as well, David, and people are very, very concerned.

DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT: That's right, Wolf. This water is almost done with its encroachment on Memphis. We're just looking at a couple of more inches to go before it peaks sometime tomorrow, but the damage is already done. This river here in Memphis is normally only about half a mile across. Take a look at it now. It is now three miles across, a massive amount of water.

Surprisingly here in Memphis, most of the damage has not been along the riverfront, but rather in areas where tributaries, other rivers try to empty into the Mississippi because this water is backed up. Their water has nowhere to go. So, we've seen pockets of flooding around Memphis. This has been very dramatic for some neighborhoods, inundating some homes, threatening others. We see about 300 people right now in shelters around Memphis right now, and it could be that they are there for a while because, Wolf, this water may have come up here in days, but it's going to take weeks to get out of here.

It may be June by the time this water is back down within the banks of the Mississippi, and, of course, all of this, just a hint of what's to come. We missed making a record here in Memphis, just barely missed it, but we will see this water mixing with more water and hitting record high water marks all the way down to the Mississippi as it goes to the Gulf of Mexico -- Wolf.

BLITZER: So, what do they expect? When do they think the worst of this might occur, David?

MATTINGLY: Well, the worst of it is already occurring right here in Memphis right now, but as you see, this water is the worst. We're only seeing a couple more inches of it coming up. We're going to see a big bulge of water somewhere around Vicksburg, Mississippi more than a week from now.

We're going to see also Louisiana, when they -- if they have to open a floodway in Louisiana later this week, we're going to see thousands of people potentially affected there as they try to possibly relieve some of the pressure that's on the river to protect New Orleans and Baton Rouge. The damage behind this flood and the drama and the pain behind this flood has only just begun -- Wolf.

BLITZER: We're going to have more on this story later. David, thank you very much. Good luck to all the folks out there. Meanwhile, new signs Bin Laden's death could have a significant role in the 2012 race for the White House, but will it give President Obama the serious boost he needs to get himself re-elected?

Plus, in Abbottabad, Pakistan, we're taking a closer look at lingering evidence of the U.S. raid that took Bin Laden down.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, the compound has been sealed off by the military for days, but for the people who live around it, there can be little doubt the Americans were here in force because of these pieces of helicopter they keep finding. This one particularly light and large and it seems part of the fuselage in the stealth design used.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: The death of Osama Bin Laden is shaping up to potentially, potentially play a significant role in the 2012 race for the White House. Our national political correspondent, Jessica Yellin, is back in Washington with our "Strategy Session" -- Jessica.

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Hey there, Wolf. You know, there is little doubt that Osama Bin Laden's death will play prominently in next year's presidential race. So, let's talk about it now with Democratic strategist and CNN political contributor, Paul Begala. He is now a senior strategist for the Democratic fundraising group, Priorities USA and Priorities USA Action. And also with us, former chairman of the Republican National Committee, Michael Steele.

All right. Gentlemen, thanks for being with us. First of all to you, Mr. Steele.

MICHAEL STEELE, FORMER CHAIRMAN OF THE REPUBLICAN NATIONAL COMMITTEE: Yes.

YELLIN: Before the Republican argument against President Obama on national security, but he's indecisive, he is too weak, he won't use our military the way we need it to, after Osama Bin Laden, that narrative, is it dead? What will you say against him now?

STEELE: It's not dead so much. It hasn't changed really that much. And I think this is one incident in a long litany of stories and incidences over the past two years where the president hasn't engaged the way we have, at least, traditionally expected the president to engage on the international stage. Now, keep in mind, Republicans have also supported this president who largely adopted the Bush strategy in dealing in the war of terror, whether it was Gitmo or as we've seen now in pursuing Osama Bin Laden --

YELLIN: But to be fair, publicly criticized him as weak for not using --

STEELE: Yes, but not the way you're making it seem like every day they were out there pounding on the president on Afghanistan and Iraq and beyond. I mean, there were particular instances where Republican leadership was not happy with the speed with which things are going. But, I think, by and large, they've stood by this president much more than the Democrats have in terms of pursuing, you know, some of the strategies with respect to the war on terror.

YELLIN: Yesterday, on the "60 Minutes" interview, President Obama, in detail, laid out how involved he was in the process of going after Bin Laden, how he made the final decision. Is this going to be a big topic for the Democratic campaign in 2012?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Well, you know, a lot of people, not even just Republicans, as a Democrat, I need to eat my share of crow. I have been a critic -- I said very often, the president is a little too professorial for me.

YELLIN: Right.

BEGALA: OK. Now, he is like -- he is a tenured (ph) professor (INAUDIBLE) because he went over there and killed Osama Bin Laden as George W. Bush did not, and he did not continue the Bush policy on this. The Bush policy was to walk away from Bin Laden. In fact, in 2006, he told Fred Barnes of the "Weekly Standard," the president did, President Bush that Bin Laden was not a priority. It wasn't a focus anymore.

He shifted our focus to Saddam Hussein in Iraq, with, I think, disastrous consequences. It was President Obama who campaigned saying I will kill Bin Laden. And then, in his calm, quiet, Gary Cooper way, who's no longer professorial now, he's tough. He showed us all that there's no strength (ph). It is a spine of steel.

YELLIN: In fairness, go ahead.

STEELE: I was going to say, one event does not, you know, foreign policy guru make. I mean, you know, the reality of it is you got a hesitancy in dealing with Libya, you got a hesitancy in dealing with Afghanistan. What is the strategy in Afghanistan beyond leaving? I mean, we have no idea what we're going to leave behind or what the strategy is going to be to get us to get out of there cleanly so we don't have --

YELLIN: So, your big point is you can still use national security as an issue, just kind of shift attention away from the Osama Bin Laden --

STEELE: The economy will still drive this presidential nugget over the next 18 months without a doubt.

BEGALA: There's an important forum for this before the presidential election.

YELLIN: Yes.

BEGALA: And that is General David Petraeus' confirmation hearings to run the CIA.

STEELE: OK.

BEGALA: General Petraeus supports President Obama's ending of torture. He broke with the Bush policy of waterboarding, which is torture. General Petraeus supports that. Marco Rubio, who's the Justin Bieber of the Republican Party --

(LAUGHTER)

BEGALA: Now the hot, young star, has said he wants to revisit waterboarding.

YELLIN: Senator from Florida.

BEGALA: Right.

(CROSSTALK)

BEGALA: Let's have these armchair generals in the Republican Party debate General Petraeus about this.

STEELE: Well, but General Petraeus is not the definitive word nor is he the only --

BEGALA: He's a four-star general --

STEELE: But there are a lot of four-star --

(CROSSTALK)

STEELE: And he's not the only authority or the only voice on the subject. So --

YELLIN: Gentlemen, do voters care about this?

STEELE: They do. No, I think they do, because it goes to the core of how we project power, how we collect information, and how we, as a people, feel comfortable or not comfortable with that projection of power and gathering that information. YELLIN: OK. Let's switch to another topic. I don't know if you call President Obama a professor of (INAUDIBLE) on this one, but I do like that phrase. On immigration reform, you know the president is making a big push on immigration reform. He held a private meeting at the White House, and this week, he's going to the border, talking about it. Jay Carney in his briefing, the White House press secretary said that he's dedicating so much time to immigration reform that they actually believe they can get something done.

Can you tell me, look me dead in the eye and say Democrats seriously believe they can pass comprehensive immigration reform before the 2012 election?

BEGALA: They have to get Republican votes for it. The Democratic votes will be there, and it's a tough issue for both parties. This president is showing courage. And this one I will give Bush credit on. George W. Bush was right about immigration. We have to punish those who've come here illegally but then give them a path so they can have some kind of legal status and that is what George W. Bush supported.

It's what Barack Obama supports. It's the Republicans who are the problem. And he's going to try to bring them over and God bless him for doing so.

YELLIN: I'll ask Michael about that in a minute, but to push you on this, is this politics? The president promised Latino voters he would push immigration reform in his first term. He would pass something.

BEGALA: And he's pushing it. He's pushing it very hard.

YELLIN: But is this politics? Do they really believe they can get it done?

BEGALA: We have to ask them. It's policy and politics, and I think the best politics over time is always the best policy. And he's pursuing the right policy which is to reach out to immigrants, to give those who are here undocumented some path to legal status, punish them first, fines, pay back taxes, get in the back of the line. I mean, there are serious punishments in the Bush and now Obama proposal, but at some point, we need to have some system where we can have people have some sort of status here.

YELLIN: Paul makes a point. You got to have both sides to play to pass this.

STEELE: You do have to have both sides to play in order to pass something, but the reality of it is this is about as political -- an overture to the Hispanic community I've seen from this president in a long time, because the reality of it is, I don't care if you're talking the Senate, I don't care if you're talking the House, nothing is going to pass on immigration over the next 18 months.

There is going to be a lot of blather, a lot of noise, and it's going to lead a lot of the immigrant community down, I think, a dead end road because it's not going to be a serious discussion about the components of what our immigration policy will look like.

YELLIN: Do you blame both parties for that?

STEELE: I do, because we're --

BEGALA: One party is for reform and one party is blocking reform.

STEELE: Wait a minute. Both parties -- no, no, no. Stop it, Paul.

Both parties want reform, but it is the degree to which we are prepared to deal with the realities that we're talking about here -- border control and security and the integration of personnel, as well as technology, and then the path to citizenship. You say path to citizenship, a lot of people hear --

BEGALA: I said path to legal status, but I'm for citizenship, too.

STEELE: Whatever. But I'm just saying you're hearing this full-blown -- all this amnesty, amnesty, amnesty. So we have got to define the terms and be very clear.

BEGALA: OK. Let's define it. Amnesty is what Ronald Reagan was for when he signed the ---

(CROSSTALK)

STEELE: Well, that was Ronald Reagan then. A lot has changed in the last 20-some years.

BEGALA: OK. But let's talk through this.

STEELE: What we didn't address, border security and control.

BEGALA: That's right. George W. Bush did not. In fact, he cut funding for the Border Patrol --

STEELE: And neither did Bill Clinton. And neither did Bill Clinton. And neither did Bill Clinton, so don't give me --

BEGALA: Barack Obama has more people, more federal personnel on the border than any time since we were hunting Pancho Villa 100 years ago. OK? He has toughened up the border, stronger than any president in American history.

YELLIN: Is this one of those third rail issues that's just not going to get done anywhere --

BEGALA: It is for the Republicans because there is a strain of nativist xenophobia in any Hispanic strain in that Republican Party.

(CROSSTALK)

STEELE: Now I've got to go get my dictionary.

YELLIN: Xenophobia.

STEELE: We're not afraid of anybody. The reality of it is, what we're afraid of is --

BEGALA: You're not, but some of your brother and sisters in the party are.

STEELE: We're afraid of a border that is not secure, first and foremost. And we're afraid of subverting the rule of law by just blanketly allowing people to flout that law and claim citizenship when they haven't earned it.

YELLIN: All right. Well, I have a feeling we're going to be having this conversation not only all this week, but even after the 2012 election.

STEELE: I'm working on him. Folks, I'm working on him, really.

BEGALA: And I'm praying for him.

YELLIN: Thanks, guys.

Wolf, back to you.

BLITZER: All right, Jessica. Thanks very much. Good "Strategy Session." Thank the guys for me.

While Osama bin Laden was hiding out in that compound in Pakistan, some of the children who actually lived there with him were venturing out into the world. One of their playmates is now telling us what he saw. Stand by for that.

And a new twist in the unrest in Syria -- the arrest of hundreds of civilians.

(COMMERCIAL BREAK)

BLITZER: While Osama bin Laden was hiding out in Pakistan, it turns out some of the children actually living in his compound did have contact with the outside world. We're getting new information.

CNN's Nick Paton Walsh talked to some of bin Laden's unsuspecting neighbors in Abbottabad.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT (voice-over): When President Obama says bin Laden had a Pakistani support network, its simplest form would have been here in the neighborhood where he got 10 liters of milk a week and goats, where kids he lived with brought sweets at the local shop, and from where dozens have been arrested already by police.

(on camera): Well, the compound has been sealed off by the military for days, but for people who live around it, there can be little doubt the Americans were here in force, because of these pieces of helicopter they keep finding. This one, particularly light and large, and it seems part of a fuselage in the stealth design used. An example, really, of the kind of resources America was willing to risk to get bin Laden.

(voice-over): But away from the high tech hunt for terrorist number one is a simpler story of life in his village that we went to find. The eight or nine children in bin Laden's house, some perhaps his grandchildren, played with others in the village, including Zarar Amjed Turk age 12.

ZARAR AMJED TURK, BIN LADEN NEIGHBOR (through translator): The kids said the guy with them is their father Nedin (ph). One says he has two wives. One is speaking Urdu, the other Arabic. He had a brother, who is fat guy with a goatee and mustache. I don't know why they had security cameras installed outside the house.

We used to knock on the door for 10 or 20 minutes, then someone used to come to talk. That was strange for us.

WALSH: He says he didn't know the names of the children he played with.

TURK (through translator): We used to play cricket used to their house. Whenever our cricket ball went into the compound, we knocked on the door and asked for the ball, but the guy always said our ball was lost, gave us 50 rupees and asked us to buy a new one.

WALSH: It seems now that the D is dead. Does that make you sad?

TURK (through translator): Yes. I feel sorry for Uncle Nedin (ph).

He never did anything wrong. He took my grandmother to the hospital and asked her to call him if she needs help as he can drive her anywhere. He was a great person. I feel sorry for him.

WALSH: If you point to the child who, until this week, had never heard the name "Osama bin Laden."

Nick Paton Walsh, CNN, Abbottabad.

(END VIDEOTAPE)

BLITZER: We're learning more about bin Laden's wives at the same time as the U.S. government is fighting to get information out of them. Our Brian Todd has brand new details. Stand by for that.

And we're going to tell you who doctored that famous photo of the president and his national security team over at the White House Situation Room during the bin Laden raid. Why is the secretary of state, Hillary Clinton, missing from the photo?

A reality check on Washington's response to rising gas prices.

(COMMERCIAL BREAK)

BLITZER: We're getting new information on Osama bin Laden's wives. Brian Todd is working the story. Stand by. We'll go there in a few moments.

But first, Lisa Sylvester is monitoring some of the other top stories in THE SITUATION ROOM right now.

Lisa, what's going on?

SYLVESTER: Hi there, Wolf.

Well, Arizona Governor Jan Brewer has announced that she will petition the U.S. Supreme Court to lift the injunction on the state's controversial immigration law. The legislation would require a local law enforcement to apprehend and help deport illegal immigrants, but the Justice Department sued the state, arguing that only the federal government has that authority.

Analysts put the estimated insured losses from those massive tornadoes that devastated parts of the South anywhere between $3.7 billion and $5.5 billion. Last month's storms killed more than 300 people and left thousands homeless. It's one of the deadliest weather systems in U.S. history.

Syrian security forces are allegedly using soccer stadiums as makeshift prisons to hold the hundreds of civilians being arrested. This comes after 10 people were reportedly killed in a bus attack yesterday.

CNN has been denied access into Syria and cannot independently verify these accounts. Meanwhile, a U.N. humanitarian assessment team due to visit the country has not been allowed to enter.

And the lawyer for the three American hikers charged with spying in Iran says he expects the court to issue its verdict at a hearing Wednesday. Shane Bauer and Josh Fattal have been jailed in the country since being arrested almost two years ago. Their friend Sarah Shourd was released on bail in September. The three are maintaining their innocence -- Wolf.

BLITZER: All right, Lisa. Thanks very much.

The national average of price for a gallon of regular gasoline in the United States is $3.96. And that's just 15 cents below the all time high.

Our new CNN/Opinion Research Corporation poll shows most Americans blame oil companies and speculators for these soaring prices. Only about a fourth blame the Obama administration or the Congress. That's not deterring Washington officials, though, from trying to do something about the high gas prices, or at least look like they're trying to do something.

Our senior congressional correspondent Dana Bash is here with a reality check for us.

Dana, the proposals on the table right now have a very familiar ring to those of us who have covered this story for 10, 20, even 30 years.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: You're exactly right.

Now, listening to members of Congress talk about this, and the president, too, they're trying to get the upper hand politically on increasing gas prices. But as you said, thinking about covering these politicians over the years, we realize we have seen this movie before.

(BEGIN VIDEOTAPE)

BASH (voice-over): As gas prices started spiking, President Obama talked tough about investigating price gouging.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I asked my attorney general to look into any cases of price gouging so we can make sure nobody is being taken advantage of at the pump.

BASH: If that sounds familiar, it is, part of the rhetorical playbook politicians have used for years when gas prices go up.

AL GORE, VICE PRESIDENT OF THE UNITED STATES: The need for investigation of collusion, antitrust violations, and price gouging.

SEN. JOHN KERRY (D), MASSACHUSETTS: There has been a real gouging going on in the field.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: State authorities will be monitoring gasoline prices to make sure consumers are not being gouged.

BASH: Experts say price gouging investigations don't lead anywhere, and politicians know it.

AMY MYERS JAFFE, RICE UNIVERSITY: That's just camouflage. That's just, "I want to pretend I'm doing something, even though I'm doing nothing."

BASH: Then there is the page from the Republican playbook -- oil drilling. Gas prices are up, so House Republicans pushed to drill more at home.

REP. LOUIE GOHMERT (R), TEXAS: You lower energy prices by using more of our own energy.

BASH: Yet another solution debated for decades when there is pain at the pump.

BUSH: We have got abundant supplies of energy here in America, and we better get after it and better start exploring it.

SEN. JOHN MCCAIN (R), ARIZONA: Lift the ban on offshore drilling.

CROWD: Drill, baby, drill! Drill, baby, drill!

GOV. SARAH PALIN (R), ALASKA: You betcha! Drill, baby, drill.

BASH: To be sure, oil drilling doesn't get far because of environmental concerns and partisan differences. But politicians also tend to drop it when gas prices drop.

JAFFE: Politicians swirl around and talk about proposing bills when gasoline prices go up, but then they don't follow through. We stopped feeling the pressure to have an energy policy or a good energy bill, and it all passes by us. And that's been the pattern for 30 years.

BASH: As for the Democrats' playbook, they want to end subsidies for oil companies.

OBAMA: They still have a tax loophole that is costing taxpayers $4 billion every year.

BASH: Again, an oldie. Democrats slapping oil companies is standard gas crisis fare.

GORE: We'll have a president who is willing to stand up to the big oil interests.

SEN. HILLARY CLINTON (D), NEW YORK: I have been putting forth plans that would require the oil companies to give up their tax subsidies.

BASH: But experts say it would not affect gas prices short term. In fact, a reality check, nothing either party is pushing now would.

JAFFE: There is nothing that a politician is talking about in Washington today, not the Democrats, not the Republicans, that are going to help the average American at their gasoline pump. These are all red herrings.

(END VIDEOTAPE)

BASH: Now, some things that experts say that politicians can do is to actually tell people to conserve, drive less, to use public transportation, to carpool. But, Wolf, as you know, since the days of Jimmy Carter, since he got hammered for telling people to turn down the thermostat, politicians are generally not really too keen on doing thing like that for fear of looking weak politically on this issue of energy -- Wolf.

BLITZER: I'm old enough to remember the Jimmy Carter presidency and that whole moment.

Dana, thanks very much.

An iconic photo that has come to symbolize some of the tensest moments of that U.S. mission to kill bin Laden. So why did one newspaper choose to Photoshop it, removing the secretary of state, Hillary Clinton?

Stand by.

Plus, a controversial move to try to save one Midwest city from mass flooding now igniting charges of racism.

(COMMERCIAL BREAK)

BLITZER: Let's get right back to Jack Cafferty for "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: Should raising taxes be more of a priority than cutting spending?

Bob in Florida writes, "No, Jack. That's a moronic question. We spend too damn much money that we don't have."

"We didn't get into this mess by cutting taxes too much. We got here by spending more than we brought in. Raising taxes would enable the left to spend more money and create more and more government dependence."

Karl in Michigan says, "We need to go back to the Clinton tax rates when everybody paid a fair share and we had a surplus. Bush's tax cuts for the wealthy pushed the burden on the middle and lower class incomes and flushed those surplus down the drain. We also need to raise Social Security and Medicare contributions."

Marvin in Missouri says, "Raising taxes on big oil, the filthy rich, big business, and Donald Trump would offer an immediate effect on the deficit and would not hurt the middle class or the poor."

Bill in New Mexico says, "Major tax increases, as well as budget cuts are required. Unfortunately, this action will stop any chance of economic recovery. We need a president and Congress to do what must be done and forget about the next election. Fat chance. More importantly, we need a president and Congress that will motivate us and unite us in making the sacrifices that are necessary to save this country."

M.C. says, "Raising taxes will only lead to more spending, not deficit reduction. If Congress can't prove that they can control their spending, there is no reason the people should give them any more money to waste."

Alex in Washington, "The fiscal hole we have dug for ourselves is too deep to be solved by spending cuts alone. A balanced approach should be considered, say 50/50, spending cuts and tax increases. The American people are now aware of the problem, and many will accept the pain necessary to solve it as long as the pain is shared by all."

And Bruce says, "Cut spending. Washington will spend any money you give them, as they have proven for decades. Cut, cut, cut. Please. Do it for our grandchildren."

If you want to read more on the subject, go to my blog, CNN.com/caffertyfile -- Wolf.

BLITZER: Jack, thanks very, very much.

We're going to go right back to CNN's Lisa Sylvester. She's monitoring a developing story just coming in to THE SITUATION ROOM.

Lisa, it involves the U.S. Navy and same-sex marriages. What's going on?

SYLVESTER: Yes, Wolf. This is related to the U.S. policy. The military right now considering the "Don't Ask, Don't Tell" rules. What we are hearing right now is there is a preliminary Navy plan that would allow same-sex couples to marry in military chapels. Now, this issue, there are a number of Congress members that are questioning this, Representative Todd Akin among them.

He has written to the secretary of the Navy asking for this policy to block this change, this potential change in the policy, saying that it would violate the federal Defense of Marriage Act. So you can imagine that this is going to be a controversial issue as this moves forward -- Wolf.

BLITZER: It's going to cost somewhat of an uproar, I am sure. We'll stay on top of it. More information just coming in.

Lisa, thanks very, very much.

We've just confirmed the identities -- yes, the identities -- of some of Osama bin Laden's wives as Pakistan lays out conditions for letting them talk to the United States.

(COMMERCIAL BREAK)

BLITZER: A new effort to beef up security in the United States in the wake of Osama bin Laden's death.

Let's bring back Lisa. She's working this story for us.

What's going on, Lisa?

SYLVESTER: Wolf, U.S. Senator Chuck Schumer is proposing a new system to keep potential terrorists off passenger trains. You heard of the no-fly list. Well, this would be a no-ride list.

Schumer says the nation's rail system is vulnerable to an attack. And we decided to hop on a train and to check it out for ourselves.

(BEGIN VIDEOTAPE)

SYLVESTER: Insert credit card.

(voice-over): I purchase a ticket.

(on camera): A one-way ticket to New Carrollton.

(voice-over): And I'm off.

(on camera): So I just bought my ticket, and right now I'm going to Gate J.

(voice-over): They check to make sure I have a ticket, but that's about it. No bag screening, no security checkpoints.

(on camera): You don't have to go through any kind of security screening. I'm about to get on this train, and the only thing I've had to do so far is just purchase the ticket and get right on. I think we can get on right here. (voice-over): Easy to travel, yes, but Senator Chuck Schumer of New York says Amtrak passenger trains are a potential target for terrorists. Schumer wants to create a no-ride list similar to the no- fly list for airlines where passenger lists are checked against terrorist watch lists.

SEN. CHARLES SCHUMER (D), NEW YORK: By alerting law enforcement about passengers on a no-fly list, we've been able to catch and deter terrorists, preventing them from boarding planes or launching further attacks. We can do exactly the same for Amtrak at virtually no extra cost.

SYLVESTER: At Osama bin Laden's compound there was evidence suggesting al Qaeda was considering sabotaging train tracks in the United States, possibly around the 10th anniversary of 9/11. We asked passengers what they thought of a no-ride list, including Isobel Kennedy, who used to work at Cantor Fitzgerald in the World Trade Center. Many of her former colleagues died on 9/11.

ISOBEL KENNEDY, RAIL PASSENGER: I think we have to stay one step ahead of the terrorists. I mean, no doubt about it. Mostly, people have to pay attention.

BILL CARTER, RAIL PASSENGER: I think it's prudent. It think it's much needed. Coming on a train, I'm kind of real surprised of how open and lax it is.

ELIZABETH SCHMIESER, RAIL PASSENGER: I don't know. I think it brings up some issues. I don't know, some privacy issues.

SYLVESTER: Amtrak says it supports countermeasures that protect the rail system.