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The Situation Room

Ex-IMF Chief Gets Bail in Sex Case; President Obama's Mideast Vision; Interview With U.S. Ambassador to the U.N. Susan Rice; 'Strategy Session'; U.S. Congress Demands Say on Libya Intervention

Aired May 19, 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: Thank you very much.

Happening now, the breaking news we're following. The now former head of the International Monetary Fund is getting out of jail even as he faces a new sexual assault indictment. This hour, the price and the terms of his bail and what happens next in this very high-profile case in New York?

Plus, President Obama declares the U.S. has had an indispensible role in supporting change for the Middle East. We are going to get reaction to his vision for the region and the controversial way he is pushing the Israelis and the Palestinians to make peace.

And a new lead on a famous cold case, the deadly tainting of Tylenol capsules back in 1982. The FBI wants DNA samples from one of the nation's most notorious killers.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

Let's begin with the breaking news, the financial power broker who bailed out countries now is getting bailed out himself as he awaits trial on sexual assault and attempted rape charges.

The breaking news this hour, a New York Supreme Court judge's decision to grant bail to Dominique Strauss-Kahn. The former head of the International Monetary Fund has to pay $1 million in cash and post as $5 million bond to get out of Rikers Island jail where he has been held since his arrest over the weekend.

Defense lawyers disputed prosecutors' claims that Strauss-Kahn is a flight risk.

(BEGIN VIDEO CLIP)

WILLIAM TAYLOR, DEFENSE ATTORNEY: It's a great relief for the family to be able to have him with them. We look forward to continuing the defense of this case. We're due back in court on June 6th. That's really all we have to say.

JOHN MCCONNELL, ASSISTANT DISTRICT ATTORNEY: The complainant in this case has offered a compelling and unwavering story about what occurred in the defendant's room. She made immediate outcries to multiple witnesses, both to hotel staff and to police. And the -- the quick response to the hotel staff and law enforcement did help apprehend the defendant before his flight to France took off.

(END VIDEO CLIP)

BLITZER: Let's get some analysis from our senior legal analyst Jeffrey Toobin whose joining us on the phone.

I want to get to the bail in a moment, but the fact that this indictment, seven-count indictment came so to quickly after this woman's testimony yesterday before a grand jury, what does that say to you?

JEFFREY TOOBIN, CNN LEGAL ANALYST (via telephone): Well, it says that the New York district attorney does not have any doubt about whether this case should proceed. They feel they have a case they can win in front of a jury. They feel like Dominique Strauss-Kahn is looking at many, many years in prison and it certainly looks like this case will go to trial.

BLITZER: Here are the seven counts in the indictment, I will put them up on the screen for you and viewers -- criminal sexual act, another criminal sexual act, attempt to commit rape, sexual abuse, unlawful imprisonment, sexual abuse, forcible touching. Seven counts, some misdemeanors, but also felonies, obviously.

Potentially, if convicted on all of those counts, he could spend a long time in jail, couldn't he, Jeff?

TOOBIN: This is a sex crime of violence. You know, the number of counts is less relevant than what we call in the criminal business the top count.

The top count here, the same facts are behind all of these charges, which is a sexual assault. In New York state, like every state in the United States, that is a very serious crime. People go away for many years in New York state prison if they are convicted.

BLITZER: Yesterday, when you broke the news here in THE SITUATION ROOM, Jeff, that he could be released as early as today on bail, I got tweets from followers out there on Twitter saying no way, no way should this guy be allowed on the streets.

Explain why the judge decided, yes, it would be appropriate to let him await trial free on bail.

TOOBIN: Well, what he said was Dominique Strauss-Kahn is presumed innocent at the moment. So this isn't about the strength of the case against him, this is about whether he is a risk of flight.

And his attorneys put forward, frankly, what I thought was a compelling package of guarantees that Strauss-Kahn will show up, $1 million in cash, a $5 million bond, that is a promise to pay $5 million more if he disappears, and most importantly 24-hour house arrest with electronic monitoring.

But I think the district attorney was very hard-pressed to argue that given all of those guarantees, that Strauss-Kahn was a genuine risk of flight, and I think the judge made a genuine understanding to release him on those conditions.

BLITZER: We're going to have much more on this breaking news later this hour and next, but Jeffrey, thanks very much.

Another huge story we are following today, President Obama's big speech on the Middle East. He says that in the midst of an historic outcry for freedom and after the death of the world's most wanted terrorist, America must seize this moment of opportunity.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Those shouts of human dignity are being heard across the region. And through the moral force of nonviolence, the people of the region have achieved more change in six months than terrorists have accomplished in decades.

(END VIDEO CLIP)

BLITZER: In his speech today over at the State Department, the president promised U.S. support for reform across the Middle East and North Africa, and that includes a $2 billion financial aid package to help Egypt, struggling after the fall of President Mubarak, as well as Tunisia.

Mr. Obama also had some strong words on the crackdown of anti- government protestors in Syria. He said President Bashar al-Assad can lead the transition or, and I'm quoting the president right now, "get out of the way."

(BEGIN VIDEO CLIP)

OBAMA: The Syrian government must stop shooting demonstrators and allow peaceful protests. It must release political prisoners and stop unjust arrests. It must allow human rights monitors to have access to cities like Daraa, and start a serious dialogue to advance a democratic transition. Otherwise, President Assad and had his regime will continue to be challenged from within and will continue to be isolated abroad.

So far, Syria has followed its Iranian ally, seeking assistance from Tehran in the tactics of suppression. And this speaks to the hypocrisy of the Iranian regime, which says it stands for the rights of protesters abroad, yet represses its own people at home.

(END VIDEO CLIP)

BLITZER: The president says the uprisings in the Middle East make peace talks between the Israelis and Palestinians more urgent than ever.

Let's bring in our feign affairs correspondent, Jill Dougherty, she's over at the State Department for us.

This part of the speech causing a bit of a stir already, Jill?

HILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: It is, Wolf.

A little history lesson here. You know, with the previous president, George W. Bush, Israel had a friend in the White House because Mr. Bush rejected that idea of going back to the 1967 borders. In fact, in a letter to former Israeli Prime Minister Ariel Sharon, he said that settlements create a reality on the ground.

Now the Obama administration says that was never official U.S. policy and today, President Obama took that a step further.

(BEGIN VIDEOTAPE)

DOUGHERTY (voice-over): It's an idea the U.S. has supported unofficially for years, but no president has ever before stated it as policy.

OBAMA: The borders of Israel and Palestine should be based on the 1967 lines, with mutually agreed swaps, so that secure and recognized borders are established for both states.

DOUGHERTY: In return, Obama called on the Palestinians to guarantee Israel's security and recognize its identity as a Jewish state.

Those 1967 borders were in place before the Six-Day War in which Israel captured the Golan Heights, the Sinai Peninsula, the West Bank and the Gaza Strip from its neighbors. Since then, nearly half a million Israeli Jews have settled in those areas and giving that land took create a Palestinian state is an idea that Israel rejects.

Mr. Obama's statement puts pressure on Israeli Prime Minister Benjamin Netanyahu on the eve of a high-profile visit to the United States. Immediately after the speech, Netanyahu called the idea indefensible.

But Mr. Obama had plenty to anger the Palestinians, too, calling for a non-militarized Palestinian state, criticizing the Palestinian Authority Unity Agreement between Fatah and extremist group Hamas, and trying to head off their plans to seek recognition at the U.N. General Assembly.

OBAMA: Symbolic actions to isolate Israel at the United Nations in September won't create an independent state.

DOUGHERTY: The initial Palestinian reaction was positive, but they had a key question.

NABIL SHAATH, SENIOR PALESTINIAN NEGOTIATOR: What would be the American role in getting Mr. Netanyahu to accept this?

DOUGHERTY: The president's balancing act gave a little to each side, but one observer says Mr. Obama may have been too careful not to stick his neck out.

DANIELLE PLETKA, AMERICAN ENTERPRISE INSTITUTE: I think he didn't want to displease any particular constituency, but what that meant was that he wasn't going to take a lot of risks. And when you're not following take risks on the Middle East, you are probably not going to make a lot of news.

(END VIDEOTAPE)

DOUGHERTY: And Mr. Obama will have two more chances this week, Wolf, to define his policy on the Middle East. He will be meeting with Prime Minister Netanyahu tomorrow at the White House, and then he also has a big speech before the Jewish lobbying group, AIPAC.

And, Wolf, the only problem is, even as the president was deliver they can major speech here at the State Department, Israel announced approval of more construction of settlements, another sign that the peace process is in real trouble.

BLITZER: See how those talks go tomorrow between the president and the prime minister.

Thank you, Jill, for that.

Jack Cafferty was listening closely to what the president said. Jack is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: President Obama had a message for Middle East nations in his much-hyped speech today at the State Department. If you promote reform and choose Democracy, we will help you financially.

Well, that's great. We can borrow some more money from China and give it away to the Middle East. Just brilliant.

In a sweeping speech that applauded reforms and condemned the use of force by Middle East dictators against protesters, the president said this is not just about handouts but encouraging Democracy. This in a part of the world where most people can't even spell Democracy.

He also said, quote, "It's important to focus on trade, not just aid and investment not just assistance."

The president announced the United States will give economic aid to Middle Eastern and North African countries that transition to Democracy. He also said the U.S. will encourage investment in those regions.

President Obama said the United States is prepared to forgive Egypt of $1 billion in debt and that we will help that country regain access to markets, as a Democracy, by guaranteeing $1 billion additional in borrowing.

Egypt has an unemployment rate of about 30 percent. The majority of Egypt's population is under the age of 30.

It's a noble gesture, to be sure, but we've got a few problems, economically speaking, right here at home -- high unemployment, mounting debt, the inability of Congress to agree on anything. There are people here in the United States who could use some help. And we're broke, flat broke.

Here's the question: Is now the time to increase aid to the Middle East?

Go to CNN.com/caffertyfile, post a comment on my blog.

BLITZER: I think a lot of people would like to see some of the oil-rich Arab states, whether the Saudis, UAE, Qatar, Kuwait, they could come in and help a little bit with some financial aid for Egypt and Tunisia, some of the other countries as well.

CAFFERTY: How much money do you think Mubarak got out of town with?

BLITZER: Well, he's not out of -- he is still -- he's some place under house arrest some place.

CAFFERTY: I mean, billions and billions of U.S. taxpayer dollars --

BLITZER: Oh, yes.

CAFFERTY: -- in his pocket.

BLITZER: Over the years, a lot of money.

CAFFERTY: Yes, yes.

BLITZER: Fair point.

CAFFERTY: So I mean, come on.

BLITZER: Thank you.

We heard President Obama's new warning to Syria's president, but how long is the U.S. willing to wait for Bashar al-Assad to get out of the way? I will ask the United States ambassador to the United Nations, Susan Rice.

And harsh new comments about the president by an African-American scholar and former supporter who is now questioning whether the president of the United States is black enough.

(COMMERCIAL BREAK)

BLITZER: Leaders around the world listened very, very closely to President Obama's speech about the Middle East today, including top diplomats over at the United Nations.

And joining us now from the State Department, the United States ambassador to the United Nations, Susan Rice. Ambassador, thanks very much for coming in.

SUSAN RICE, U.S. AMBASSADOR TO THE U.N.: Good to be with you, Wolf. BLITZER: A big day, the president delivering major, major speech. Let's get through some of the specifics. Referring to your job in particular, he said symbolic actions to isolate Israel at the United Nations in September won't create an independent Palestinian state. Does that mean, A, you're trying to avoid any General Assembly resolution on a Palestinian state?

RICE: Well, Wolf, obviously, as the president said, you can't vote a state simply by passing a resolution in the General Assembly. A Palestinian state, to which the president reiterated his commitment, living side by side with the Jewish state of Israel, can only be accomplished through direct negotiations, which is why the president today took the important and historic step of framing, from a U.S. point of view, two of the core principles that ought to guide those negotiations and encouraging the parties to return to the negotiating table as soon as possible to begin negotiating on the principle of security for Israel and a Palestinian state based on mutually agreed swaps on the '67 lines.

But in New York, Wolf, as you know, at the U.N., there is a bit of a head of steam building for a resolution that would be designed to declare a Palestinian state. But you cannot create a state simply through a piece of paper. We will not be supportive of efforts that seek to bypass the very crucial and critical step of direct negotiations.

BLITZER: So you'll vote -- the United States will vote against any such United States -- United Nations General Assembly resolution?

RICE: We've been very clear, Wolf, that you -- we are not going to support efforts in New York or Geneva or elsewhere to bypass the absolute necessity of the two parties negotiating between themselves to establish this two-state outcome which is so crucial for Israel, for the Palestinian people, for the United States and our national interests and for the region.

BLITZER: Remind me, back in February, when you raised your hand to veto a United Nations Security Council resolution that basically called on the Israelis to freeze settlement activity, which the United States wants Israel to do -- why did you veto that resolution?

RICE: Well, we've been clear for decades, Wolf, on the part of the United States government that we don't accept the legitimacy of continued settlement activity. But we opposed that resolution for the very same reason that I just described. We cannot resolve crucial final status issues that can only be dealt with through direct negotiations by bypassing those direct negotiations and coming to the Security Council and the General Assembly. It doesn't work as a practical matter.

These are core, tough issues that have been out there for decades, and they can only be resolved through direct negotiations. And that's why I was instructed to cast that veto and did so.

BLITZER: Let's talk about the Syrian leader, Bashar al Assad. How much time does he have to be involved in a transition to democracy before the Obama administration says to him what it said to Mubarak in Egypt, what it says to Gadhafi in Libya, that it's over, it's time for you to go?

RICE: The president was very, very clear today on Syria and said that Bashar Assad has to either lead this transition right away to a credible democracy or get out of the way. We have been very, very clear in condemning the violence that has been perpetrated by the Syrian government against its own people and laying out very specifically the steps that the Syrian government must take if it is to show that it's ready and willing to lead to a genuine transition.

Yesterday, we added to the already very substantial sanctions that we have in place on Syria by designating President Assad himself, and those closest to him, as violators of human rights and freezing their assets. So these are very significant steps, and they show that the patience of the Syrian people is running out, the patience of the international community is running out, and Assad has to act and act swiftly and do the right things, or as the president said, he will find himself only increasingly isolated.

BLITZER: All right, define "swiftly." How much time does he have?

RICE: I can't give you a timeframe, Wolf. But what you can see is with the violence intensifying, the people becoming much more restive, the international community, led by the United States, making very clear that this is not the behavior befitting a credible government and imposing additional sanctions, time is short. And Assad needs to prove that he will either lead a credible transition, or as the president said, get out of the way.

BLITZER: Tell us why it's in America's interests, even at these tough economic times, to be providing billions of dollars in economic assistance to Egypt and Tunisia while cutting so much spending here at home.

RICE: Well, Wolf, we're obviously deeply and responsibly committed to reducing spending in this country and trimming our deficit, but that doesn't mean that we have the ability to simply walk away from the world and not invest in crucial opportunities, like the president outlined today that are transpiring in the vital region of the Middle East and North Africa.

It matters enormously to American national security and our national interests that the democratic transitions under way in Egypt and Tunisia are still young and still fragile succeed. And our ability to invest through debt relief in the case of Egypt, trade agreements in the case of Egypt and Tunisia, and additional forms of effort to spur private sector investment are crucial to shoring up and helping to give foundation to those democratic transitions.

That's in our national interest. And as the president said, we will make those investments, make them wisely, frugally, but do so because it matters to our national security.

BLITZER: Ambassador Rice, good luck. RICE: Thank you very much. Good to be with you.

BLITZER: Later in THE SITUATION ROOM, we'll speak with Tony Blair, the former British prime minister, who's a special envoy to the region. Stand by for that

Meanwhile, Congresswoman Gabrielle Giffords gets a good report from doctors after surgery to replace part of her skull. She's getting well -- getting well wishes from outer space, as well.

And "CNN in Depth," where the jobs are, a field where some Ph.D.s are applying for factory jobs.

(COMMERCIAL BREAK)

BLITZER: A new development along the Mississippi River as it continues to overflow. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

What's going on, Lisa?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, first, the swollen Mississippi River claimed the first reported life in the state bearing its name. A 69-year-old man died after being pulled from flood waters near Vicksburg, Mississippi. The river crested there at historic height, thousands of homes destroyed, including the governor's lake house.

Meanwhile, there are new concerns the massive flooding, coupled with dry weather in other parts of the country -- well, that that could hit you hard at the grocery store this summer. Planting conditions for wheat and corn are currently suffering, and prices for both crops are on the rise.

Doctors have nicknamed Congresswoman Giffords "gorgeous Gaby" following a nearly four-hour surgery to replace a part of her skull that was shattered when she was shot in the head. The procedure is expected to improve her recovery. Giffords' husband, NASA astronaut Mark Kelly, who is currently commanding the space shuttle Endeavour's final mission in space -- he described her condition in an interview with CBS.

(BEGIN VIDEO CLIP)

MARK KELLY, SHUTTLE COMMANDER: I had the chance at the end of the day to call her mom and her chief of staff and my brother periodically through the -- as the surgery was going on, and she's doing really well. Everything went as planned. Her neurosurgeons are very happy. She's recuperating and she's actually getting back to therapy today. So it went really, really well.

(END VIDEO CLIP)

SYLVESTER: And we are so happy to hear that. And this footnote. At the end of that interview, take a look, you can see the astronauts having a little bit of fun. They were performing a group somersault from space, literally doing cartwheels in space, Wolf.

BLITZER: Very cool. We wish them only success. Thank you.

A leading African-American activist who once fiercely backed President Obama now taking issue with President Obama and his race. Ahead, why he says the president is, quote, "a black puppet."

Plus, new concerns President Obama could be on the brink of breaking the law if that deadly military mission in Libya continues. What's going on? Dana Bash is on Capitol Hill to explain.

(COMMERCIAL BREAK)

BLITZER: We're just getting this in from our senior White House correspondent, Ed Henry. CNN has now learned that there has been a deal, a deal worked out with the congressional leadership that would extend the Patriot Act for another four years.

According to Ed's sources, the deal has the backing of the House Speaker, John Boehner; the Senate Majority Leader, Harry Reid; the Senate minority leader, Mitch McConnell. The move would largely take this whole issue off the table through the next election, extending it well beyond November, 2012. The Patriot Act, under a lot of controversy from the liberal left over the recent years for some of the steps that's been taken.

We're going to assess this in a moment -- right now, in fact -- with our "Strategy Session."

Joining us, Roland Martin, our CNN contributor, also CNN.com contributor, form speechwriter, David Frum. He's the editor of FrumForum.com.

What do you think about this deal that apparently has been worked out according to Ed Henry's sources?

DAVID FRUM, CNN.COM CONTRIBUTOR: Well, I think the most important thing about the Patriot Act is to preserve it as a piece of temporary legislation. I don't think anybody wants it to be a permanent ongoing part of American life.

With the killing of bin Laden, we hope to see a huge reduction in the threat from al Qaeda. And we can look forward to a time when we normalize some of these emergency regulations. So a time limit is a good thing.

BLITZER: The Patriot Act, as you remember, Roland, allows law enforcement to have much greater authority in surveillance, wiretapping, going through records. A lot of liberals don't like it very much. Some conservatives don't like it either.

ROLAND MARTIN, CNN CONTRIBUTOR: Look, we're still operating in a world where we are combating terror, and so we cannot lose sight of that. And so, therefore, we have to do certain things to be sure that Americans are protected. And do understand, when people criticize, even liberals, moderates, even some Libertarians, when they criticize it is overreaching, but when something happens tragically, then the question always is, why didn't they do more?

BLITZER: What did you think of the president's speech today?

FRUM: I thought it was an extraordinarily cautious speech, but it represents a huge move away from the Barack Obama of the campaign. This is not a president who is going to meet with Ahmadinejad anymore, and he's certainly not being friendly with Assad anymore.

The president, who was understanding of America's enemies, is not so understanding. In many ways, this was a speech that sounded a lot like the Bush second inaugural, but edited with a lot of the excesses removed. And that's, I think, a good thing.

I think there were also some very sharp warnings for a number of regional leaders, including the Palestinian leader, Mahmoud Abbas, who was told this plan he has got of forcing this issue at the U.N., the United States, is not going to be behind him on that, and it didn't sound like a man who was in a great hurry on the Israeli/Palestinian issue.

BLITZER: Susan Rice, the ambassador to the United Nations, the U.S. ambassador, says the U.S. won't support this resolution to call for -- at the General Assembly -- calling for a Palestinian state.

MARTIN: Look, you have to take certain steps, baby steps, first. And I think for the president to sit here and say let's look at those 1967 lines, and we have to confront the reality that, look, we could keep talking about this back and forth, but you have to have some stability when it comes to the Palestinians and the Israelis. And so both sides are going to have to give, and so the president should be challenging them, because we can't keep having the same dialogue every single year, start/stop, start/stop. There has to be progress.

FRUM: He just said it's more than he won't support this act. Of course the United States wouldn't support it.

What he's saying to the Palestinians is, if you proceed, there are going to be consequences. And what he also said, he endorsed the key idea of Prime Minister Netanyahu, that the issue is not where is the border? The issue is the security of behavior of the Palestinians on the other side of that border. It doesn't matter if it's a quarter mile this way or a quarter mile that way if there are rockets firing into Ben Gurion Airport.

BLITZER: Now you've been following this controversy involving Professor Cornel West --

MARTIN: Just a little bit.

BLITZER: -- the Princeton university scholar who was a major supporter of President Obama. But he recently said this -- listen to this -- he said, "I think by my dear brother, Barack Obama, has a certain fear of free black men. It's understandable."

"As a young brother who grows up in a white context, brilliant African father, he has always had to fear being a white man with black skin. All he has known culturally is white. When he meets an independent black brother, it is frightening."

MARTIN: Well, I won't say frightening. The president met me on many occasions, and I can certainly say I'm free and independent.

Look, here is what you have here. This is a very complex issue that is taking place, and that is you have individuals like Dr. West who are driving this whole issue of saying, what more are you doing when it comes to the poor, the disenfranchised? Critical of economic policies, saying more should be done. And so then you have others who do meet with the president, civil rights leaders, and they also have a much different view.

Among African-Americans, they are protective of this president, do not like criticism of the president because they say, look, he is getting criticized by everybody else, everything else, birth certificate, is he a Christian, so why should African-Americans contribute to this? But the real issue is, from a policy standpoint -- and look, the White House will say, we want to be -- we should be doing more as well, laying out -- these are things that we have done, but this is the problem -- when it becomes personal, people then begin to turn you off.

BLITZER: Personal? Listen to this. He also says -- this is Professor Cornel West, who's a very distinguished scholar at Princeton. He says of the president of the United States, he is " -- a black mascot of Wall Street oligarchs and a black puppet of corporate plutocrats."

FRUM: I don't know what it is about this president to make everybody feel like an amateur psychoanalyst. Why can't you say that the guy -- I don't like the stimulus plan without saying it has to do with his relationship with his father, and whether that is some people saying that his father was too black or other people saying had his mother was too white, that everyone acts like these important economic decisions, for good or for ill, are to be taken into the realm of psycho babble? And that's just wrong.

I think one of the things we saw in this Middle East speech was this president is operating on the liberal side of the American mainstream, and that's where American presidents operate. And if you don't like it, there are a lot of ways to play that game of politics.

MARTIN: Wolf, part of the problem here is that -- and I was critical of this -- and that is too many people trying to associate the election of President Barack Obama with Dr. Martin Luther King, Jr. President Obama is a politician. Dr. King was a prophetic leader. Different responsibilities, different roles.

And so, then when people say, well, he is not the black president, well, the reality is he is the black president, the Hispanic president. He is the rural, the city, he is a social conservative president.

Different constituents look at him to get different things. You do have African-Americans saying, look, got 95 percent of the black vote. There should had be a return on our investments. Gays and Lesbians and Hispanics said the exact same thing.

But I believe when you begin to make it personal, when you begin to talk about you didn't get inauguration ticket, the problem there is people begin to turn you off. And I think the issue should be, if you want to be critical of the president, it's a matter of tone, but also be specific about policy, not personal.

BLITZER: All right, guys. Unfortunately, we've got to leave it there, but we're not going to leave this story. It's going to be a source of some discussion.

MARTIN: Well, I have Dr. West on my Sunday morning show, so we'll have an interesting conversation.

BLITZER: It will be fascinating to watch.

Roland, thanks very much for coming in.

David, thank to you as well.

President Obama's critics now say he is at risk of actually breaking the law. We're going to tell you why, what it could mean for U.S. military intervention in Libya.

And we're also learning more about the woman who had Arnold Schwarzenegger's child out of wedlock. Stand by to hear what her neighbors are saying.

(COMMERCIAL BREAK)

BLITZER: In Libya today, crowds danced and cheered in the streets of Tripoli in support of Moammar Gadhafi. The demonstrations apparently were in response to state TV reports that Libyan rebels are losing support in their stronghold in Benghazi. But CNN journalists there say they haven't seen any sign of a counter-revolution.

Libya is responding to questions about possible defections within Gadhafi's family as well. Reuters is reporting the country's foreign minister, denying that Gadhafi's wife and daughter have fled to neighboring Tunisia. This, as President Obama had some very harsh words for the Libyan regime.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The most extreme example is Libya, where Moammar Gadhafi launched a war against his own people, promising to hunt them down like rats. As I said when the United States joined an international coalition to intervene, we cannot prevent every injustice perpetrated by a regime against its people. And we have learned from our experience in Iraq just how costly and difficult it is to try to impose regime change by force, no matter how well-intentioned it may be.

But in Libya, we saw the prospect of imminent massacre. We had a mandate for action and heard the Libyan people's call for help.

(END VIDEO CLIP)

BLITZER: A short while ago, a Libyan government spokesperson reportedly called President Obama -- and I'm quoting this Libyan official -- as saying, "President Obama is delusional," adding that, "Only the Libyan people can decide Moammar Gadhafi's fate."

President Obama also getting some heat for members of Congress, at least some of them, about U.S. military action in Libya.

Let's bringing in our senior congressional correspondent Dana Bash with this part of the story -- Dana.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, Wolf, you know, there are few things that bring together the left and the right these days. But lawmakers in both parties are telling us that as of tomorrow, President Obama could be violating the law with military action in Libya.

(BEGIN VIDEOTAPE)

BASH (voice-over): U.S. military action in Libya began 59 days ago. Now the president may be on the brink of breaking the law if he continues the mission without congressional approval.

REP. BRAD SHERMAN (D), CALIFORNIA: Bring democracy to Libya while shredding the Constitution in the United States.

BASH: At issue, the 1973 War Powers Act which says if the president does not get congressional authorization 60 days after military action, the mission must stop within 30 days. The president formally notified Congress about the Libya mission in this letter March 21st, which makes tomorrow the 60-day deadline.

Inaction is roiling lawmakers on the left --

SHERMAN: He cannot continue what he's doing in Libya without congressional authorization. And when a president defiantly violates the law, that really undercuts our effort to urge other countries to have the rule of law.

BASH: -- with rare agreement from the right.

SEN. RAND PAUL (R), KENTUCKY: I mean, no more important decision than sending someone to war who could lose their life, and yet we are going to have no debate on it? The people's representatives would not be allowed a debate on it? I found that really appalling, and it's a terrible precedent.

BASH: To be sure, presidents in both parties often ignored another part of the War Powers Act, that the commander in chief should get congressional approval before military action. But it's virtually unprecedented for a president to continue a mission beyond 60 days without a resolution from Congress.

The administration is deliberating what to do JAMES STEINBERG, DEPUTY SECRETARY OF STATE: We are actively reviewing our role going forward. Throughout, the president has been mindful of the provisions of the War Powers resolution and has acted in a manner consistent with it. He will continue to do so.

BASH: Angry lawmakers in both parties say part of the problem is that their own congressional leaders are not raising a stink.

PAUL: Very few people are talking about this. They are just letting the president do whatever he wants. And I think that's Congress abdicating the rule of law and abdicating constitutional restraints that they should obey.

SHERMAN: Some of my colleagues would just as soon not do our job because this is a difficult part of it.

(END VIDEOTAPE)

BASH: Now, with the clock ticking toward tomorrow's 60-day deadline, the administration could try to get around violating the War Powers Act in a few ways, Wolf. They could argue that the U.S. only has a minor role in what is NATO's mission. They could say that the U.S. will temporarily stop involvement there and then try to restart that 60-day countdown. They could even ask for an extension.

But some Republicans we talked to, they say it is time for the Supreme Court to act. The Supreme Court has actually never ruled on the War Powers Act, and maybe it is time for them to do that -- Wolf.

BLITZER: The U.S. military has already spent nearly $1 billion trying to deal with this situation in Libya as well.

BASH: They have.

BLITZER: Dana, thanks very much.

Three journalists freed by Libyan officials crossed into neighboring Tunisia today. The location of the fourth journalist released yesterday is not clear. The four were captured and imprisoned by the Libyan military over a month ago and originally sentenced to prison for a year. A Libyan government spokesman says they were released early after paying a fine for entering the country illegally.

We are following the breaking news. The ex-IMF chief Dominique Strauss-Kahn just granted bail, facing a number of alleged sexual assault charges against a hotel maid. We are going back to the courthouse for a live report.

Also this -- Ph.D.s being forced to apply for factory jobs in a race to find work. A "CNN In Depth" report, that's coming up.

(COMMERCIAL BREAK)

BLITZER: All this week, CNN is showing Americans were the jobs are. These Fortune 500 companies had the biggest job growth last year, expanding their workforce by 20 percent or more.

Apple gained 12,600 jobs, fueled by demand for the iPhone and the iPad. The online retailer Amazon added 9,400 positions and had the biggest percentage increase of any of these firms, a whopping 39 percent. The Las Vegas Sands Hotel and Casino Company also on the list of top job hirers, along with online giant Google, clothing maker Levi Strauss, the natural gas and oil firm Chesapeake Energy, and the government-backed lender Fannie Mae.

For more now in our in-depth look at where the jobs are, let's turn to CNN's Mary Snow. She has got more useful information -- Mary.

MARY SNOW, CNN CORRESPONDENT: Yes. Well, Wolf, we took a look at a company on a much smaller scale. And as one 60-year-old new hire put it, he looked to green jobs because it's the future. But as we found out with one green energy company that is small but expanding, it's not always easy to fill the jobs.

(BEGIN VIDEOTAPE)

SNOW (voice-over): At one company boasting of cutting-edge green technology, it's not just the machinery being reinvented, it's the people, too. Take Brett Luedde.

The recession forced him to shut his financial services business. Unemployed, he landed a job in business development at FlexEnergy, where now he is the one doing the hire.

BRETT LUEDDE, FLEXENERGY: Everything that we post, we literally received thousands of responses within the first day. And I've got to tell you, as an employer, it really -- it's gut-wrenching at times, because you really get to see the true effect of what our country has gone through over the last few years, how it has affected literally millions and millions of people.

SNOW: Ph.D.s, he says, with decades of experience, applying for jobs far below their skill sets. On the manufacturing side, another challenge is the lack of skills among applicants.

Mark Schnepel is in charge of manufacturing at the company's site in Portsmouth, New Hampshire.

(on camera): It seems like you have been in a unique situation where you have jobs but you couldn't fill them.

MARK SCHNEPEL, FLEXENERGY: In the past, yes. We really struggled to find the right candidates for our job openings.

SNOW (voice-over): Schnepel plans on hiring about 20 people in coming months to expand manufacturing of systems that convert waste into clean energy.

SCHNEPEL: Due to the technical, complex nature of this work, it's hard to find people that are a direct match for our requirements. So we're going to have to train them in order to bring them up to speed. SNOW: To help retrain workers going forward, the company won a grant from the state. But the lack of trained workers prove to be an opportunity for 60-year-old Kurt Wahtera, who has decades of experience.

KURT WAHTERA, NEWLY HIRED: I use a little machining technology, a little common sense.

SNOW: Wahtera was hired last month. He has been unemployed since the fall after retiring from the Coast Guard. He says he sent out hundreds of resumes with no response and watched peers his age give up and opt out of the workforce. But he sees hope for older workers and has this advice --

WAHTERA: Sell your experience. You know, they have lots of experience, and any company that wants to get ahead should be, you know, hiring people with experience to be successful.

(END VIDEOTAPE)

SNOW: Now, this particular company is a turbine manufacturer, and in demand are people who served in the military and worked, for example, as aircraft technicians, as well as electricians with manufacturing experience. Now, the company says it's had difficulty filling positions quickly because similar companies are scarce in the region -- Wolf.

BLITZER: Mary Snow reporting for us.

Good report. Thank you.

New insight into Arnold Schwarzenegger's mistress and the child she shares with him, what her neighbors are now saying.

And "TIME" magazine wants to know -- and it's a powerful question -- what makes powerful men act like pigs? The answer is coming up.

(COMMERCIAL BREAK)

BLITZER: Just days after former California governor Arnold Schwarzenegger admitted to fathering a child out of wedlock, we are learning new details about his mistress and the son they share.

CNN's Thelma Gutierrez is at her house in Bakersfield, California, where neighbors are now speaking out -- Thelma.

THELMA GUTIERREZ, CNN CORRESPONDENT: Wolf, we are learning that Mildred Baena purchased this home in this upscale Bakersfield neighborhood last summer, but didn't start living here full time until two-and-a-half months ago. Neighbors here say she talked openly about working for the Schwarzeneggers, also about her desire to retire here with her 14-year-old son.

Mildred Baena is 50 years old. She's a native of Guatemala and has worked for the Schwarzenegger family for the past 20 years as their housekeeper. A neighbor next door described the 14-year-old son as very well behaved and very respectful, also saying that the mother, Baena, kept a very low profile ever since she moved in.

(BEGIN VIDEO CLIP)

MARILYN STEELMAN, NEIGHBOR: The son is a wonderful, very respectful, very intelligent young man. It's just his whole overall manner that makes you really lean towards how -- what a nice person he is.

(END VIDEO CLIP)

GUTIERREZ: Neighbors say while they only say Baena visit this home on the weekends since she purchased it last summer, the boy, the 14-year-old boy, has lived here full time since then with a man that everybody here thought was his father -- Wolf.

BLITZER: Thelma Gutierrez, thanks very much.

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

CAFFERTY: The question this hour: Is now the time for the United States to increase aid to the Middle East?

Richard writes from Washington, "With all the U.S. homeland's debt ceiling debate, irrevocable entitlement programs, contentious universal health care issues, sweeping natural disasters, and congressional urgency to minimize the national debt, now is not the time to be spending yet more billions on those who are being robbed by their corrupt leaders."

Remo writes From Texas, "No. We have done enough, both good and bad. It's time they sink or swim. We have meddled there since the Crusades and nothing came of that."

M.D. writes, "Can I ask where this money is going to come from? Oh, we'll just add it to the national debt. Here we go again trying to buy our way into somewhere where we don't belong. Apparently the Middle East doesn't have any extra oil money to spare."

Mark writes, "Yes, now is the time. This could potentially be the first step toward developing a lasting democratic stronghold in an area where it could be very influential to surrounding nations. Who knows when another opportunity like this will come along?"

Don writes, "To reward countries for encouraging democracy seems misguided. America is proving day by overspending day that its brand of corporate capitalism is separating itself from democracy. Perhaps a better idea would be for other countries to send America money to encourage the true democracy here in the USA. You know, like governing for the good of all of the people."

Rhone (ph) writes, "If the U.S. doesn't, the Chinese will. And then where will we be? We need to keep trying to bring peace to the Middle East. Staying on the sidelines doing nothing, not a viable option."

Jack in Lancaster, Ohio, writes, "No. It is time overdue to send aid to the middle class, not the Middle East."

And Curt in Indiana says, "Of course. The U.S. should increase aid to the Middle East. We can do away with Social Security and Medicare, close all the schools so we can increase payments to countries that hate us and hate what we stand for. That ought to help drain our faltering company. Dumb questions deserve dumb answers, Jack."

BLITZER: Thank you very much, Jack.