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The Situation Room

U.S. Stock Market Rallies; EU Comes to Deal on Greece Bailout; Secretary of State Hillary Clinton Says U.S. May Negotiate with Terrorists; Perry May Skip Some Debates; Herman Cain's New Campaign Ad Draws Criticism; U.S. Economy Picks up in Third Quarter; Panetta's Expensive New Year's Toast; Defining A "Person"; Confidence in Debt Super Committee?; Madoff Wife Reveals Suicide Pact

Aired October 27, 2011 - 16:00   ET

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

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Thanks very much, Brooke.

Happening now, a break from relentless bad news about the U.S. economy. Stocks are soaring, the economy is showing new signs of strength. We have complete coverage from Wall Street, plus James Carville standing by with his take.

Also, why Hillary Clinton now says the U.S. is willing to talk with terrorists.

And a shocking revelation from the wife of Bernie Madoff, details of the couple's suicide pact.

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

Let's begin with the breaking news. A banner day on Wall Street as ripples of relief spread from Europe across the world markets. A deal has been reached to tackle the EU financial crisis stemming from Greece's staggering debt. European leaders have agreed to expand the EU bailout fund while private sector investors will take a 50 percent loss on Greek bonds.

The European agreement translated into a huge day for U.S. stocks. Let's go straight to CNN's Alison Kosik. She's over at the New York Stock Exchange. Alison, the closing bell just rang. How did stocks finish? We don't know the final number, yet but we know it's very positive.

ALISON KOSIK, CNNMONEY.COM CORRESPONDENT: It is very positive. The numbers are settling. But we're seeing the Dow up 340 points. The NASDAQ S&P up more than three percent. The bulls busted out of the opening bell and never looked back. This is indeed what investors have been waiting for. These debt problems plaguing Greece were years in the making. And besides plugging Greece's debt hole, this debt deal also tries to safeguard against future shocks. It's really a big step forwards in instilling stability and confidence in the marketplace, Wolf.

BLITZER: Being there is such a powerful positive reaction, do investors see this as a done deal? Is this crisis over there over? KOSIK: I think what you're seeing isn't just a lot of hope this is the real thing, but there is some skepticism. A lot of details still have to be worked out. The plan that European leaders came up with overnight is really a broad outline. Now, they have to really deal with the fine print and actually implement it fast. And there are still remaining questions, like will it be enough? The bailout fund was boosted to $1 trillion. But Italy is swimming in its own pool of debt. It's got $2.5 trillion in outstanding debt. So it's really questionable whether the crisis as a whole is really over.

BLITZER: We got a double dip, a positive bit of news today, I should say. Wall Street had this new report showing the U.S. economic growth in the third quarter picked up nicely, not great, but pretty good. How did this factor into the markets today?

KOSIK: I think it added to the optimism today that you say play out for stocks today. We found out that third quarter GDP grew at a 2.5 percent annual pace. It's really a big improvement from where we've been. You look at the first half of the year, the economy grew at a less than one percent pace.

And if you look deeper into the report, the GDP report, a lot of good things are in there. Consumer spending picked up. Businesses spent more. That shows there's more confidence growing in the third quarter. But the reality is, Wolf, that the growth rate is still below normal. The good, positive takeaway is that it is strong enough to put to rest another more top of another recession in the U.S. at least for now.

BLITZER: Dow Jones above 12,000. That's pretty good. Thanks very much.

Let's get more now on the strengthening economy. Erin Burnett is standing by. Erin is the host of "ERIN BURNETT OUTFRONT." Erin, put this GDP growth into some context, really good, average good? What do you think?

ERIN BURNETT, CNN HOST, "ERIN BURNETT OUTFRONT": I guess there's the absolute and the relevant. As you point out, at the absolute level, our economy can do a whole lot better than last quarter with the 2.5 percent. But relatively given we went through the crisis over the debt ceil, the concern about paralysis in Washington, you would think with all that and a lot of people did think, we would do a lot worse. So 2.5 percent is twice as fast as we grew in the second quarter. That's the good news.

And within this number, Wolf, a couple of things I think are worth highlighting. Personal consumption, consumers in America, two-thirds of our economy, 2.4 percent growth. That is much stronger than had been expected. We were only looking for 1.9. so that shows strength just in the average American. Also an improvement in construction and software. So again I want to say on an absolute basis we can do a lot better. On a relative bases, we're doing a lot better than earlier this year and there are some real bright spots in the number.

BLITZER: One of the bright spots is there is continues economic growth. The double dip recession, the economists say two successive quarters of negative economic growth. We haven't seen that, so is it fair to say that fears of a double dip recession at least as of now given all these quarters of positive growth with over?

BURNETT: I think a lot of the economists and investors I've spoken to over the past two months, Wolf, they've been consistent. They didn't see it coming. There were a lot of articles about it. For a lot of Americans, it feels as if the economy isn't growing. So as we all know, that sort of gap between what regular people are experiencing and some of these horrible numbers we get.

But I think that, yes, it is off the table, but in terms of getting that robust growth which starts to put a real dent in the $8 million jobs we lost, we don't see signs of that happening.

BLITZER: We should point out, as we always do, for the millions and millions of Americans who are unemployed or underemployed, it's not just a recession, it's a depression for millions of Americans. Erin, all day we've heard about the deal in Europe. It's obviously a deal that generated positive news on Wall Street. Is it really a done deal? Is what they're doing to Europe going to stem this problem?

BURNETT: Everything comes down to this. Everyone says Greece is interesting, but why does it matter? It matters big time, Wolf, because Europe is the most important trading partner for the United States of America. It is the most important trading partner for China, which puts Europe in the cat bird's seat for those two most important economies in the world. So Europe matters a whole lot to us.

This deal is good. I want to say there have been 14 summits of European leaders in 21 month, all right. So, they have shown a real inability to get anything done. This time, they got something done. And as Alison was saying, there's a lot there. There are a lot of details to work through, and that's really important.

But I think it's worth saying when you look at the debt that Greece had, if everything's worth a dollar, now, it's worth 50 cents. Those investors just took a 50 percent cut. That is good for the banks. The banks are in the United States and around Europe, so that's a positive thing. But a lot of people think they needed to take a bigger quote unquote haircut and lose more money, and because they didn't do that, that could put Greece in a tougher situation. And that could mean, Wolf, we're not quite done. This may come back and bite us in the behind again. Use different word.

(LAUGHTER)

BLITZER: Something like that. I want to make a quick turn because I know you have a new special later tonight. You have one of the biggest newsmakers on your show later tonight. Let me show our viewers once again the video we're all talking about.

(BEGIN VIDEO CLIP)

(MUSIC) (END VIDEO CLIP)

BLITZER: You don't have Herman Cain, but you have his aide, his chief of staff Mark Block. He's the guy who was smoking in that ad. He's smoking out there. Tell us what you thought when you saw that commercial?

BURNETT: Smoking in a lot of ways. I have to say, I think I was a little bemused, as in, really, are you kidding me? Then you think that takes courage. You're going to come out and do it your own way. What's really the takeaway? We've been reading the stories that sort of go on one track, that this camp isn't serious, it's falling apart. On the other track, this shows that being genuine and authentic is what people want and keeps climbing in the polls. We're going to find out what's going on, and Mark Block was really thinking when he did that.

BLITZER: Good guess. Erin Burnett up at 7:00 p.m. eastern only here on CNN.

BURNETT: Thanks so much, Wolf.

BLITZER: Erin, we'll be watching. Thank you.

For decades, it's been a corner stone of American foreign policy, a steadfast refusal, at least in public, to negotiate with terrorists, but the Obama administration raising some fresh doubts today about that policy with the secretary of state Hillary Clinton saying the U.S. is in fact right now willing to talk with terrorists in some circumstances including the head of the Taliban. Our foreign affairs correspondent Jill Dougherty has more.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: More attacks by the Taliban in Afghanistan, brutally perfect timing for Secretary of State Hillary Clinton to explain to the House foreign affairs committee why the Obama administration is willing to negotiate with terrorists, including the head of the Taliban in Afghanistan, Mullah Omar, responsible for many attacks on coalition forces and Afghan civilians.

REP. STEVE CHABOT, (R) OHIO: Are we prepared to in effect negotiate with Mullah Omar, and if so, under what circumstances, and what would our conditions be?

HILLARY CLINTON, U.S. SECRETARY OF STATE: The negotiations that would be part of any Afghan led peace process would have to include the Quetta Shura and would have to include some recognition by the Quetta Shura, which, based on everything we know is still led by Mullah Omar, that they wish to participate in such a process. That's what I meant when you said you don't make peace with your friends.

DOUGHERTY: The U.S. already has met with the Haqqani terrorist network based in Pakistan, Clinton said, at the request of Pakistan's security service, the ISI. CLINTON: There was such a meeting. It was not a negotiation. There was no follow up meeting. This was done in part because I think the Pakistanis hope to be able to move the Haqqani network towards some kind of peace negotiation, and the answer was an attack on our embassy.

DOUGHERTY: Clinton insists there are some red lines when it comes to talking with terrorists.

CLINTON: Trying to distinguish between so-called good terrorists and bad is ultimately self-defeating and dangerous. No one who targets any civilians of any nationality should tolerated or projected.

DOUGHERTY: Which raises a question.

REP. ILEANA ROS-LEHTINEN, (R) HOUSE FOREIGN AFFAIRS COMMITTEE: Which is it, Madame Secretary, crack down or negotiation with the Haqqani network, or a little bit of both?

CLINTON: It's both, Madame Chair. As I said, we want to fight, talk and build all at the same time. Part of the reason for that is to test whether these organizations have any willingness to negotiate in good faith.

DOUGHERTY: Clinton says she's realistic. And 2,500 Taliban have given up the fight and reintegrated, but not all are willing to give up their ideology. So far, she says, this is a testing process.

Jill Dougherty, CNN, the State Department.

(END VIDEOTAPE)

BLITZER: One tactic still used, drone attacks. Two suspected U.S. drone strikes killed nine people today in Pakistan's tribal region. Intelligence sources say one strike in South Waziristan killed five senior members of an anti-American group with direct ties to the Haqqani Network. Another suspected drone fired in North Waziristan, killed four suspected militants.

Jack Cafferty is coming up next. Then, Bernie Madoff's wife reveals their desperate act as his massive Ponzi scheme collapsed. What was that desperate act? A suicide pact. We'll explain.

And why Rick Perry says he may skip some future Republican presidential debates. We'll talk about that and much more with James Carville and Ed Rollins. They're standing by live in our strategy session.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty here with the Cafferty File -- Jack?

JACK CAFFERTY, CAFFERTY FILE: Wolf, it's been nearly three months since that so-called supercommittee was created. We've had months of closed door secret meetings. Only a few public appearances as the panel's deadline approaches. The public's been shut out of the negotiations. The lobbyists, of course, have continuous access to the members. How's that transparency thing that President Obama promised is working out for you? Sort of reminds me of the health care legislation.

So far, there are no signs the committee has agreed to any meaningful cuts. Democrats did propose a plan for cutting $3 trillion. Republicans quickly rejected it because in addition to the cuts, the Democrats also wanted to increase taxes by $1.2 trillion and Republicans said no chance on that.

They call the plan outrageously absurd and a nonstarter, and some accuse the Democrats of leaking the plan because they think the panel will fail and I think it will, too.

The super committee has until November the 23rd. If no agreement is reached, across the board trigger spending cuts will go into effect in 2013. Not next year when there's an election, 2013.

House Speaker John Boehner says the trigger cuts are unacceptable and that it's important for the supercommittee to meet its goals -- this from the speaker of the House that hasn't even bothered to do a budget this year.

A lot of people don't think it's going to happen. And while politicians fiddle, the country's $14 trillion national debt just keeps getting bigger.

Here's the question: how much confidence do you have in the supercommittee to do anything meaningful about the national debt in the next four weeks?

Go to CNN.com/CaffertyFile, post a comment on my blog as soon as you stop laughing or go to our post on THE SITUTION ROOM's Facebook page.

Wolf, this thing is going nowhere.

BLITZER: Yes, one tiny correction. Maybe not too tiny -- they did pass a budget in the House, the Paul Ryan budget. Never went anywhere in the Senate. Senate hasn't done a budget in a long time, but they did pass the budget in the House.

CAFFERTY: That was my error. The point being the last two years, there's been no budget passed last year by the Democrats.

BLITZER: Right.

CAFFERTY: This year by the Republicans. That's part of their job. They're just throwing it in the garbage can. They don't even make an effort anymore.

BLITZER: And that's the Senate. The House did pass a budget.

CAFFERTY: My error.

BLITZER: By the way, very good "Cafferty File." I write a similar column on our CNN.com/SituationRoom Web site on my blog there today, if our viewers are interested and what I have to say about this as well. They might be. Maybe not.

There's been a change of pace in plans for regime change as it's called in North Korea. Lisa Sylvester is monitoring that and some of the other top stories in THE SITUATION ROOM right now.

Lisa, what's going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, North Korea's Kim Jong-Il appears to be feeling better and U.S. military sources say that's slowing a change in leadership for the nation. He's been traveling around North Korea and China, and this is a big change from 2009 when he was thought to be battling cancer.

Next in line is his son. He's still in his 20s and he's already taking on official duties. We will have a full report on this coming up in our next hour.

The United Nations Security Council voted unanimously this morning to end military operations in Libya. That removes the mandate for military intervention, effectively canceling NATO's mission there as of next Monday.

The council also expressed concern about proliferation of weapons in Libya and reports of reprisals and execution style killings.

One of the largest cities in Asia is being evacuated. Thousands of people are fleeing Bangkok, Thailand, as the worst flooding in 50 years engulfed the capital. The holiday was declared so the residents could escape to hire ground. The flooding which may take more than a month to recede has already killed almost 400 people nationwide.

And the federal case against John Edwards is set to begin in January. A judge rejected motions to have his indictment dismissed. He faces six felony and misdemeanor counts related to donations and payments from his failed presidential bid in 2008. If convicted on all accounts, he could face up to 30 years in prison and a fine, Wolf, of more than $1 million.

BLITZER: We'll watch this trial unfold. Thanks very much.

Rick Perry is trailing right now in the polls and now, his campaign is suggesting he'll avoid some of the upcoming debates. Is that a good idea?

And Herman Cain says his campaign's unusual web video featuring smoking staffer is quote, "hilarious." James Carville and Ed Rollins, they are standing by live for their take.

All that coming up and a lot more here on THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer. Here are some of the stories we're working on for our next hour:

A liberal group launches a fresh attack on Senator Marco Rubio over the story he's been telling of his parents' immigration from a Cuba. And now, the senator is fight back.

A key Republican lawmaker wants to kick Iranian officials out of the United States, accusing them of espionage. Are they stamping visas here in Washington or spying?

We have details also on a new proposal from Republicans on the so- called supercommittee where they cut trillions of dollars. Stand by.

You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: Republican presidential candidate Rick Perry is trailing in the polls after a series of uneven debate performances and now he says he may skip some debates.

CNN's Joe Johns is working the story for us.

So, Joe, what's going on right now with Governor Perry?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, Rick Perry admits making the mistakes and so it's up to the voters to measure his candor, if you will. But he also sees the debates as part of the problem. And while it's true his debate appearances have coincided with a drop in the polls, the question is whether he has anything to blame but himself.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The latest excuse for Rick Perry's uneven performances in the presidential debates comes from the candidate himself. The problem he says is the set up.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: These debates are set up for nothing more than to tear down a candidate.

JOHNS: Oh, wait, maybe it's because Perry's views are so complex they don't lend themselves to sound bites.

PERRY: It's pretty hard to lay out your ideas and concepts with a one-minute response.

JOHNS: So, now, Perry says he may skip some future debates in favor of pressing the flesh with real people. No surprise really. Before this campaign, he hadn't done that much debating.

PERRY: Yes. There may be slicker candidates and there may be smoother debaters, but I know what I believe in.

JOHNS: But for the record, is it really fair to blame the debate format? Northeastern University professor Alan Schroeder wrote a book about presidential debates.

ALAN SCHROEDER, NORTHEASTERN UNIVERSITY: I think the fact that Perry has had some rough moments in these debates is probably the real reason why he doesn't want to do many more of them.

JOHNS: Perhaps the most cringe worthy moment of all for Perry was that pre-rehearsed attack line that got so garbled.

PERRY: Is it the Mitt Romney that was on the side of against the Second Amendment before he was for the Second Amendment -- was it before he was before the social programs from the standpoint of he was for standing up for Roe versus Wade before he was against Roe versus Wade?

JOHNS: Schroeder said it wasn't about format, it was about fumbled delivery.

SCHROEDER: It seems to me that all you have to do really is memorize that 30 or 40 seconds and deliver it accordingly. But for some reason, Perry has had a lot of difficulty achieving that.

JOHNS: And there's actually a real risk for the candidate if he starts no showing at debates.

SCHROEDER: Rick Perry is not a frontrunner. His status in this group is not solidified. He is -- you know, if he were the front-runner, he might be able to duck these debates or not do as many, but he really sort of needs the debate at this point as a way of getting his message across and trying to build those numbers a little higher.

JOHNS: Nobody ever said getting up in front of millions of people and facing off against opponents is easy, especially when it involves defending and explaining points of view.

But these days, that's how you run for president.

(END VIDEOTAPE)

JOHNS: Not clear right now what debates Perry might skip. There have been something like eight Republican debates so far. Five since Perry got into the race -- Wolf.

BLITZER: Joe Johns, thank you.

Let's discuss with our political contributor, the Democratic strategist James Carville, and Ed Rollins, the Republican strategist, the former Michele Bachmann campaign adviser.

Guys, thanks very much for coming in.

If he skips an upcoming debate -- Ed, I'll start with you -- would that smart from his perspective?

ED ROLLINS, POLITICAL STRATEGIST: I don't think it's smart. I think the bottom line is he was the last man in. He came in at 30 plus percent in the polls leading everybody. He has to prove to the debates that he can put two sentences together.

And I'm sure he can if he practices, but it's a very much a part of this thing. And it's one of the ways he has to gain traction.

BLITZER: James, he clearly doesn't want to do any debates. My sense is the only way he could win, let's say, some skipping some debates if a Herman Cain or a Mitt Romney decided, you know, we're going the start skipping, too. That would give him some cover by skipping some of these upcoming debates.

JAMES CARVILLE, CNN CONTRIBUTOR: Right. I have an editorial quibble with you and Joe. His performances have not been uneven. They've just been horrible across the board, but any way.

Look, the question he's going to get asked is, well, if you skip these and you don't like to debate, if you're our nominee, will you debate President Obama? Every candidate since 1976 has debated and these Republicans, you know, they want to beat the president. They think they got better ideas and you've got a guy that's running away from promoting or articulating his ideas.

This is not going to sit well at all. This is -- it is a disaster, that's ongoing disaster that's going on. This guy is blowing himself up every day. It's really remarkable to watch.

BLITZER: The other candidates, I take it, Ed, you know this better than I do. You worked for Michele Bachmann's campaign. They have no desire to skip any of these debates because millions and millions of people watch these debates. It gives them a chance to make their case.

ROLLINS: Well, absolutely. You know, first of all, there's been a lot of debates and it takes a lot of preparation. I would advise the governor just spend the time and energy and get ready. He's been in public life for 25 years and 10 years as governor. And if he can't articulate who he is and what he is, then I think he's going to be a bad candidate anywhere.

I think the key thing is he's got to get back in these debates. He's got to have one or two that exceed expectations. He's got to tell us about him as opposed to beating up the other guys.

BLITZER: In the last debate, you remember he tried to come back. He really went after Mitt Romney, James, on the issue of a lawn service that may have hired some illegal immigrants. It didn't exactly work out well for him.

CARVILLE: No, it didn't. I think people want to know, honestly, they want to know about Rick Perry. They kind of know who Mitt Romney is. They're not flocking to him. But they've got a good idea of who he is.;

And Perry, he just a bad candidate. I hate to say it. I was kind of hoping that he'd do better than he's doing. But right now, he's been a colossal disappointment here.

And his whole behavior like blaming the format and everything else -- I mean, this is uncharacteristic. Generally, Republicans culturally sort of don't cotton to whining or making excuses or something like that. You know, they're kind of eat peas kind of group of people. And this is not playing very well at all, I promise you.

BLITZER: Let me make a turn to the economy, which is issue number one, jobs, jobs, jobs. Take a look today at the Dow Jones ending above 12,000, up about more than 300 points on some good economic news, at least relatively speaking, coming out of Europe. Also, some positive job growth -- the economy growing 2.5 percent over the last quarter. This is several quarters now of positive, not great, modest job -- modest economic growth, which is certainly a lot better than negative growth which could lead to a double dip recession.

Here's the question for you. If this modest economic recovery continues, how does that play out a year from now?

ROLLINS: It depends on how it continues to go. As an American, not just as a Republican, we all want the economy to get better. We don't want people to be unemployed. None of us are sitting here wishing for the president to fail and fail miserably. He'll be judged on the first three years and this last year. If the economy gets better and he performs better -- incumbents are always tough to beat, but we can't wish for a bad economy so we can defeat Obama. We've got to go beat Obama because we have better ideas.

BLITZER: But there are still millions of Americans unemployed, James, nine percent unemployment. But the trends are moving in the right direction. Is that enough to turn things around for the president?

CARVILLE: I don't know, but it sure does help. If he can make the case that things will start moving in the right direction and we can't afford to go back, that gives him a great help.

Look, 2.5 percent growth is not much, but it's better than minus one that some people predicted. And I think if somebody went and looked, I think the Dow is not doubled, but done pretty well since its low in march of 2009. It's bounced back real good. And the stock market is not the problem. The job market is the problem. Hopefully, he'll show some progress. It's bound to help him a little bit if it will continue. I have no idea if it is or not. Let me be clear about that -- none.

BLITZER: The Dow was down around 7,000 four years ago. Now, it's over 12,000, so that certainly has done well over these past few years despite the economic misery.

Guys, stand by, we have more to discuss, including Herman Cain. He's got a most unusual campaign web video. Guess what. It's almost now been seen by a million people on YouTube. We're going to discuss what's going on. Herman Cain says the video is hilarious. What do James and Ed think? More of our "Strategy Session," that's next.

(COMMERCIAL BREAK) BLITZER: Let's get back to our "Strategy Session." Once again joining us, our CNN political contributor, the Democratic strategist, James Carville, and Ed Rollins, the Republican strategist, the former Michele Bachmann campaign adviser.

Herman Cain is doing amazingly well I think it's fair to say in all of the polls, national polls, state polls in Iowa, New Hampshire, South Carolina, Florida. But there was a tough piece "The New York Times" today quoting unnamed former campaign aides, some of them unnamed. Among other things, they said this about Mr. Cain. "Mr. Cain has hardly shown up in New Hampshire and Iowa some of his former staff member said, spending the bulk of his time on a book tour through the south. He occasionally mishandled potential big donors or ignored real voters. Some former aides said they had longed to see the problem solving side of Mr. Cain or see Mr. Cain at all."

What do you make of this grumbling, Ed, that some of his former staff members are putting out there?

ROLLINS: Herman Cain does not have a campaign. Herman Cain is a big personality who's done extremely well in the debates and has attracted a certain segment of the electorate to say to the pollster that I like him. There's no organization out there. There's no commercials of any merit. And I think to a certain extent in the near future when we start voters traipsing through the snow to go vote in Iowa, New Hampshire, and elsewhere, he won't do very well.

BLITZER: Says he's got a new strategy for getting the Republican nomination. James, he's not doing the traditional work you did for Bill Clinton that Ed has done now for Reagan and several others. He's got his own technique, his own style. And if you look at the polls, James, it seems to be working.

CARVILLE: Well, look, there are reasons that people run for president other than to be president. Herman Cain doesn't have any hope to be president. I don't think he even wants to be president. But apparently he's doing good for Herman Cain brand and they're having a pretty good time in the process.

And I think these people in the campaign went over there thinking they had a chance to win or that the candidate cared about winning the nomination. That's not what he's in here for. It's pretty clear they're in there to entertain themselves and entertain us and pick up some motivational speaking fees along the way and increase their brand. And I can appreciate that. He's pretty funny and his campaign manager is pretty funny, and there's some kind of creative people in the midst of all of this, and they've proven to be quite entertaining.

BLITZER: That web ad on YouTube has gotten almost a million hits. Let me remind our viewers. Here's a little excerpt.

(BEGIN VIDEO CLIP)

MARK BLOCK, HERMAN CAIN'S CAMPAIGN MANAGER: We need you to get involved because together we can do this. We can take this country back. (MUSIC)

(END VIDEO CLIP)

BLITZER: That's the smoking ad. Herman Cain says it's a good ad. He says "We were in Vegas and we knew we wanted to put something new out there. I trusted Mark Block," that's his chief of staff, "which I still do, and I thought he did a great job with the ad." He's got a lot of hits out there, Ed. You can't deny that.

ROLLINS: People now know who Mark Block is. The idea that your campaign manager goes on says, I really like my candidate, I think he'd be a great president. Let me show you how I'm a cool guy by smoking a cigarette. That's the most idiotic campaign ad I've ever seen in my life. This guy's raised his name. Now, everybody's Googled him and found out he was suspended for four years from campaigning for bad practices in Wisconsin. This is not a serious campaign.

BLITZER: Is that more idiotic, James, than "I am not a witch"?

CARVILLE: I know what he was smoking at the end of the ad. I'm just curious as to what he smoked before the ad.

(LAUGHTER)

CARVILLE: This guy is not like he's running. He thinks he's going to win. He's a creative guy. They're out in Las Vegas. They're having a good time. And we got to understand this. He's not -- this is not like a Ed Rollins, Karl Rove, James Carville kind of thing. They're doing something entirely different and we ought to just sit back and enjoy their sort of gumption here and creativity and don't worry about it. It's fine. It's funny.

BLITZER: Very quickly, Ed, "I am not a witch," the smoking ad, which one more idiotic from your perspective?

ROLLINS: I am not a witch. That was a serious candidate that day until that ad.

CARVILLE: I think the smoking ad is accomplishing everything that they want. I think it's utterly brilliant. They're not looking for votes.

BLITZER: It's getting a lot of attention. Guys, thanks very much.

Coming up, a controversial effort to ban abortion could also impact birth control, fertility treatments as one state faces the question of how to define a person.

Plus, victims of the Bernie Madoff's Ponzi scheme speak out about new revelations of his so-called suicide pact.

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is here. She's got some of the other top stories we're following in THE SITUATION ROOM. What else is going on, Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, an 18-year-old was pulled from the rubble of an apartment building after being trapped for nearly 100 hours. He is reportedly in good health, dehydrated, but otherwise OK. The rescue came as the Turkish state news agency announced the death toll from the earthquake now stands at more than 500.

Two roadside blasts in eastern Baghdad have killed at least 10 people and wounded more than 30 others. The pair of attacks targeted the police patrol and witnesses tell CNN that officers are among the dead. The attacks come less than a week after President Obama announced that virtually all U.S. troops will leave Iraq by the end of the year.

And Defense Secretary Leon Panetta has a special New Year's Eve toast planned, and it's been 10 years apparently in the making. The Pentagon confirms that he will open a bottle of wine worth more than $10,000 and the secretary will join friends toasting the military mission that killed Osama bin Laden. A California restaurant owner made a bet with Panetta that if he ever got Bin Laden, he would open the oldest bottle of wine in his restaurant and apparently, Wolf, that wine is worth $10,000.

BLITZER: Can you imagine drinking wine that cost $10,000?

SYLVESTER: I can't even imagine.

BLITZER: I would take that bottle wine. If it's worth $10,000, auction it off for charity. Give the $10,000 to a good charity. Let somebody else drink the wine.

SYLVESTER: That is a great idea, Wolf.

BLITZER: You think it's a good idea.

SYLVESTER: Yes, Panetta --

BLITZER: I'm going to speak to Leon Panetta about this. I think he's going to want to give that money to charity rather than drinking.

SYLVESTER: I think excellent idea.

SYLVESTER: I know him. He's a very decent man.

BLITZER: Thank you. Could outlawing abortion make some forms of birth control illegal even some fertility treatments?

Plus, shocking revelations about a suicide pact, but some of his victims say Bernie Madoff is still counting people and now, they're speaking out.

(COMMERCIAL BREAK)

BLITZER: How do you define a person? A ballot initiative in Mississippi is hoping voters would support a definition that would ban all abortions, no exceptions. Our Mary Snow reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (voice-over): Our founding fathers guaranteed all persons life, liberty and the pursuit of happiness. But who is a person?

MARY SNOW, CNN CORRESPONDENT (voice-over): In Mississippi, abortion opponents want voters to say a person is defined at the moment of fertilization. Initiative 26, if passed would ban all abortions.

UNIDENTIFIED FEMALE: Initiative 26 doesn't make any exceptions for rape or incest. It goes too far. It would be so bad for women and families.

SNOW: Abortion Rights supporters say it could potentially ban some birth control like the morning after pill and IUDs. In vitro fertilization could also be affected says Caitlin Borgmann.

Borgmann is a constitutional law professor and Abortion Rights supporter. She just returned from Mississippi where she took part in a symposium on the measure.

CAITLIN BORGMANN, CUNY SCHOOL OF LAW: The implications for fertility treatment are uncertain and quite problematic because if embryos and zygotes are person, then you have in fertility clinics, a bunch of persons who are frozen. You can't just leave them there. You can't discard them, right?

SNOW: Answers to questions like that are unclear. Abortion opponent, Rebecca Kiessling is a Michigan attorney and spokeswoman for the Personhood Movement. She tells the story of her own mother's rape.

Using it as an example of why there should be no exceptions to abortion laws. She says while any impact on birth control or IVF wouldn't take place immediately, she adds this.

(on camera): What about fertilized embryos that are already created? What would happen to them?

REBECCA KIESSLING, FAMILY LAW ATTORNEY: That is something that would have to be determined legislatively. You know, I could foresee that there might be some people who would want to transfer their embryos out of state. That could very well happen for purposes of storage. And certainly, there would be nothing to prevent people from doing that.

(END VIDEOTAPE)

SNOW: Well, one fertility doctor we spoke with in Mississippi says he's been getting a lot of calls from patients who are very concerned about what will happen if this passes.

It's won support from both candidates for governor, the Democratic candidate says though he has some concerns about the ramifications such as birth control and IVF. In a similar measure it was voted on in Colorado, but failed -- Wolf.

BLITZER: Mary, thank you. Let's go back to Jack. He's got the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is, is how much confidence do you have in the "Super Committee to do anything meaningful about the national debt in the next four weeks? That's how much time they have left.

Warren writes "The Super Committee is another mechanism for President Obama to avoid taking responsibility for the problems or their solutions. While seeming to take a page from President Reagan's script appear to be above the fray.

The problem is this president is not offering any leadership either and that was at the heart of President Reagan's script. In short, the "Super Committee" is a super waste of time and nothing will come of it."

Gary in Michigan writes "Here we have all these politicians who created this mess obviously half heartedly trying to clean it up. I don't know what stupider them for handcuffing themselves by their absolute ideologies and then expecting to make progress or us for expecting anything different."

Kristen on Facebook writes, "I have little confident the "Super Committee" will get anything of significance passed ever. They're the same group just smaller of the people who can't pass any other bills."

Tom in Pennsylvania writes, "None, Jack. It's all smoking mirrors even though after no deal on the required budget cuts in defense and entitlements are put in place. Their implementation doesn't occur until 2013. What frauds."

Bit in Alabama writes, "Really Jack? Please." Em writes, "I have zero confidence in the "Super Committee's" ability to formulate an effective plan of action. They're too concerned about their own political futures.

They will just push all of the hard decisions onto the next generation. The reality of our situation is we're going to have to sabre some veins in order to save other. Counting on the government as our life support system will prove to be fatal."

If you want to read more about this, go to my blog, cnn.com/caffertyfile or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Good idea, Jack. See you in a few minutes. Bernie Madoff's wife is revealing details of a suicide pact she made with her husband. What Madoff's victims are saying?

Plus, stamping visas by day, spying by night. Next hour, a closer look at Iranian officials here in Washington, D.C. A key Republican member of Congress is accusing them of spying.

(COMMERCIAL BREAK)

BLITZER: Some shocking revelations involving suicide and Bernie Madoff in prison for running the largest Ponzi scheme in U.S. history. Our national correspondent, Susan Candiotti spoke to some of Madoff's victims. What are they saying, Susan?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, Wolf. Well, it should come as a surprise to no one that many of Bernie Madoff's victims are fuming over the latest round of interviews with Madoff, his wife and daughter-in-law.

Simply put those victims say they feel the public's being conned every time one of the Madoffs speaks.

(BEGIN VIDEOTAPE)

CYNTHIA FREIDMAN, PONZI SCHEME VICTIM: I think anything that comes out of their mouth is self-serving and are lives.

CANDIOTTI (voice-over): Richard and Cynthia Freidman lost their life savings to Bernie Madoff. So did Ilene Kent's parents. So when they heard Ruth Madoff talked about a failed suicide attempt in a new "60 Minutes" interview --

RUTH MADOFF, WIFE OF BERNIE MADOFF: I don't know whose idea it was, but we decided to kill ourselves because it was so horrendous, what was happening. We had terrible phone calls, hate mail. Just beyond anything. And I said I can't, I just can't go on anymore.

CANDIOTTI (on camera): Do you believe it?

RICHARD FRIEDMAN, PONZI SCHEME VICTIM: I don't believe it. If it's a Madoff, you cannot trust anything they say.

CANDIOTTI: Assuming that she's telling the truth about taking pills, do you feel badly about that?

ILENE KENT, PARENTS VICTIMIZED: I just can't assume it. I think anything that they say is extremely self-serving. Ruth has been quoted in the past as saying that she's very concerned about the victims and she feels awful and she feels terribly. Well, why open the wound three years later?

CANDIOTTI (voice-over): Victims scuff at Barbara Walters description of her ABC Bernie Madoff interview. He says he's happy in prison because he feels safe there.

BARBARA WALTERS, ABC: For 16 years, he has lived in fear that he was going to be found out. And now, he's not in control of his life and so, he is happier there than he was on the outside.

KENT: I was very much against sending him to a maximum security prison because I thought that would be revenge and not justice. But he's really just snubbing his nose at the system, his snubbing his nose at us.

CANDIOTTI: Then there's Stephanie Madoff, whose husband, Mark committed suicide last year, depressed over his father's crime.

STEPHANIE MADOFF, WIDOW: If I saw Bernie Madoff right now, I would tell him that I hold him fully responsible for killing my husband and I'd spit in his face.

CANDIOTTI (on camera): So every time you hear an interview, every time you read an article, involving an interview, what goes through your mind?

CYNTHIA FRIEDMAN: I get a visceral reaction. I really feel sick to my stomach.

KENT: I wish we could get that kind of publicity so people understand who the victims are. They're everyday people.

CYNTHIA FRIEDMAN: If they were sincere, they'd give the proceeds to the charities he's scammed.

CANDIOTTI: You're hearing people ask them a lot of questions. Do you have any questions that remain in your mind that you'd like to ask him?

KENT: If I knew that Bernie Madoff would actually tell the truth for a change, I would say why, how and who helped you?

(END VIDEOTAPE)

CANDIOTTI: For the victims, there are many questions they feel may never be fully answered. Prosecutors have not charged Madoff's children nor his wife. She's living in a borrowed home in South Florida.

And the more interviews come up, Wolf, these family members, victims, say they bring themselves to watch it, they have to at least to see what they have to say, but like you heard them of say it makes them sick.

BLITZER: Yes, they have every right to hate these people. Thanks very much, Susan, for that.