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The Situation Room

Supreme Court Looks at Health Care; Another Millionaire Moment for Romney?; North Korea Prepares a Launch Pad; Gingrich: Downsizing, But Not Out; Poll: Obama Tops GOP Rivals; Activists: No Peace In Syria Despite Deal; Three Missing Children Found on Boat Near Florida; AAA: Average Gallon Of Gas Is $3.90; Soldier Charged with Killing 17 Afghans

Aired March 28, 2012 - 16:00   ET

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

WOLF BLITZER, HOST, CNN'S THE SITUATION ROOM: Happening now: The U.S. Supreme Court ends its hearings. And the key element which holds the health care law together may, repeat, may be doomed, why that could topple the rest of the massive reform law.

Also just in, we have stunning results of our latest poll. It puts President Obama head to head against Mitt Romney and Rick Santorum in hypothetical November matchups -- what the voters are saying now.

And another millionaire moment for Mitt Romney. We have the latest on the fancy upgrade plans for his California beach house with its four-car garage and car elevator.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It's looking more and more as if the Supreme Court will cut the heart out of health care reform law. That's the part which would require Americans to buy insurance if that mandate is found unconstitutional and we won't know it until June. It's an open question whether the rest of the law could survive.

The court wrapped up three days of historic arguments today.

CNN's congressional correspondent Kate Bolduan and our senior legal analyst Jeffrey Toobin, they were both inside during the oral arguments.

Let's start with Kate.

What's your take, Kate? How did it go today?

KATE BOLDUAN, CNN CORRESPONDENT: Wolf, after three days of oral arguments and four issues being debated and more than six hours of debate, this historic case is a bit exhausting and I'm sure even for the justices and for the attorneys arguing before them. This all wraps up with still the same question at the center of this case. Is the individual mandate constitutional?

And with that very question in mind, the justices today took a look at the question and examined if the mandate cannot stand and if it is unconstitutional, does the remainder of the law need to fall or can it survive?

The justices were divided on this issue, offering very tough questions to both sides of the argument. Just listen here to Justices Ruth Bader Ginsburg and Antonin Scalia, two ideological opposites on the high court.

(BEGIN AUDIO CLIP)

RUTH BADER GINSBURG, ASSOCIATE JUSTICE, U.S. SUPREME COURT: It's a choice between a wrecking operation, which is what you are requesting, or a salvage job, and the more conservative approach would be salvage rather than throwing out everything?

ANTONIN SCALIA, ASSOCIATE JUSTICE, U.S. SUPREME COURT: My approach would say if you take the heart out of this statute, the statute's gone. That enables Congress to do what it wants in the usual fashion, and it doesn't inject us into the process of saying this is good, this is bad, this is good, this is bad.

(END AUDIO CLIP)

BOLDUAN: It is tough to say where the majority will emerge on this one as well as on the final question of the day. This question had to do with the expanded Medicaid program in the health care overhaul. The question was does the expanded Medicaid program unfairly step on states' rights in requiring that they take on more costs in paying for and covering this program?

It's very important to note at this point, Wolf, the real work begins. The justices will meet in just a few days to take a vote in private on where they stand on these four issues. And then the arduous task of writing the final opinion on these four issues begins. And not until we get that final written opinion will we actually have the final opinion of the high court on this case, Wolf.

BLITZER: Despite all the clues we won't know for sure until at least mid-June, maybe the end of June, when we will get that final decision from these nine U.S. Supreme Court justices.

(CROSSTALK)

BLITZER: All right, Kate, thanks very much.

Let's dig a little bit deeper now with someone who has been closely watching the Supreme Court for many years. We're talking about our senior legal analyst, Jeffrey Toobin.

Jeff, you said yesterday after the second round of oral arguments it was a train wreck for the Obama administration. What do you think of this third and final round of arguments heard today?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I think it's a possibility it might be a plane wreck as well.

BALDWIN: Why? TOOBIN: Because I thought this morning went very badly for the Obama administration because the issue was severability, which is can you cut the heart out? Can you cut the individual mandate and what else can you preserve?

Anthony Kennedy asked at least 10 questions based on the premise that the individual mandate is unconstitutional. Now it may be that he is just doing that as an intellectual exercise, but it sure sounded to me like he was trying to figure out what happens after you find the individual mandate unconstitutional because he, the swing vote, had already reached that conclusion.

But even more surprising, there were several justices starting with Antonin Scalia, but not only him, who were very openly suggesting that the whole law had to go, all 2,400 pages. And going into this on Monday, the idea that it was a serious possibility that this entire law would be invalidated was something that I thought was a remote possibility, but doesn't appear -- it's not a done deal by any means, but is certainly a live possibility after listening to them talk.

BLITZER: Listening to Scalia, his point and he has a lot of influence on that court, his point is in order to pay for all of these benefits you have to have the mandate, and he doesn't want the Supreme Court to legislate, if you will. He said if you take the heart out of this, let the Congress go back to the drawing boards and come back with a new plan.

TOOBIN: Anthony Kennedy at one point made a very similar point. He said it's not for us to decide what the important parts of this law are. That would be judicial activism.

Now, he also made other comments that suggested perhaps a different view, but again, he talked that way. Chief Justice Roberts, at times, talked as if, well, we don't want to declare unconstitutional parts of the law that are clearly appropriate as everyone agrees, but at other times he said why should we be put in the position of deciding what's good and what's bad?

So there are some votes to invalidate the whole law. How many, I don't know, but the idea that that's a possibility is really a strange, big deal.

BLITZER: Because we have had many conversations before these three days of oral arguments and you seem to have always been convinced that in the end the justices would uphold the law. You certainly didn't think they'd reject the mandates and then go ahead and kill the entire -- all the other provisions and all of the other benefits from this health care law. So you have basically gone 180 degrees differently now than you were before Monday.

TOOBIN: Based on what I heard in the courtroom, absolutely.

If you look at the records of these justices and if you look at Antonin Scalia having written an opinion upholding a law banning medical marijuana under the Commerce Clause, very expansive definition of the Commerce Clause, you would think that he would be more sympathetic to this law, but you would be wrong because he was not sympathetic to this law at all.

BLITZER: Did the solicitor general, the lawyer representing the Obama administration, who you suggested yesterday didn't do a great job, he did a pretty poor job.

TOOBIN: Yes, I did.

BLITZER: Did he do a better job today?

TOOBIN: He definitely did a better job today. In fact, the last hour was the best hour for the Obama administration.

That was the time when the administration talked -- the issue before the court was the big expansion of Medicaid which is part of the law where the federal government is insisting that the states cover more poor people under Medicaid, is that a violation of states' rights?

I don't know how the court will come out, but certainly the Obama administration has a fighting chance on that issue. And Don Verrilli, who I thought had a bad day yesterday, had a much better day today. And I don't know how that will come out, but certainly, frankly if I had to bet today, I would say they'd uphold that part of the law given the comments of the justices.

BLITZER: The other lawyer, Clement, you thought he had three solid days?

TOOBIN: It was really a tour de force.

When you think about how much material Paul Clement had to cover, he was the solicitor general under the George W. Bush administration. He's argued more than 50 cases, even though he's a young guy. It was really an extraordinary piece of lawyering by him. I thought he did a good job. He had some tough questions and he didn't persuade everybody, but overall just an amazing performance.

BLITZER: Jeffrey Toobin, glad you're here as part of our team. Don't go too far away. We have more questions later.

TOOBIN: Glad to be here.

BLITZER: This just coming into CNN. Our latest poll shows President Obama now with double-digit leads over both Mitt Romney and Rick Santorum in hypothetical November matchups.

The CNN/ORC poll has Obama as the pick of 54 percent of registered voters across the United States compared to 43 percent for Romney. Obama tops Santorum by a very similar 55-42 percent.

Our chief political analyst Gloria Borger is here.

Gloria, the president's numbers seem to be improving. What's behind this?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It seems to me, Wolf, when you look at these double-digit leads that clearly the Republican primaries have been better for President Obama than they were for the Republican candidates when it comes to the general election.

When you dig deeper into our poll you will also find that the president's approval rating is above 50 percent and that is for the first time since last May, after Osama bin Laden was killed, but most of all, Wolf, when you look at our polls, what is important to the president is that people seem to believe the economy is taking a turn in the right direction.

Take a look at this. We asked all Americans, Republicans and Democrats, economic conditions are good. When you look back at January 2009, when Barack Obama was inaugurated, only 13 percent thought so, bottomed out in September 2011. Now up to 31 percent. Now, that's not great. Only 31 percent of Americans think economic conditions are good, but it's a lot better than it was back when the president was inaugurated.

So there is a sense of optimism out there, and, of course, that's going to benefit President Obama.

BLITZER: We are now in the fourth year of the first term of this president's administration.

BORGER: That's right.

BLITZER: We asked, who did the American public think is more responsible for the country's economic problems right now?

These numbers surprised me. Bush and the Republicans, 56 percent. Only 29 percent blamed Obama and the Democrats and that's a pretty significant number.

BORGER: It is, and it surprised me as well, because -- but at the start of this administration, remember, Barack Obama used to like to say that George W. Bush drove the economy into a ditch.

At a certain point after about a year or so, he had to really stop saying that because it seemed a little whiny. Even though he stopped saying it, it certainly seems to me like it sunk in. Take a look at this. We called out independent voters here, asking that same question that you just raised. Who is more responsible for the country's economic problem? And you see 54 to 26, almost mirroring the public at large, and as you know, Wolf, elections are decided by these swing, independent voters and they are blaming the Republicans.

BLITZER: We also looked at the enthusiasm of Democrats and Republicans.

BORGER: Right, enthusiasm important because it is such a predictor of turnout.

And when we asked who is extremely or very enthusiastic about voting in November, now, we have always presumed Republicans are more enthusiastic and you can see they remained enthusiastic. But let's go back to October 2011, before the primaries -- 64 percent of Republicans were enthusiastic.

Now that's down and Democratic enthusiasm has remained about the same, but after the primary process you see Republican voters not as enthusiastic. That's not a great sign for the general election and turnout. Again, this is just a snapshot. Anything can change. Republicans can coalesce around their nominee, presumably Mitt Romney. But right now they have lost a bit of that get-up and go and vote.

BLITZER: You still have plenty of time, though. Both parties have plenty of time to raise that enthusiasm level. Gloria, thanks very much.

(CROSSTALK)

BLITZER: A CNN exclusive. We have satellite pictures of a launchpad where North Korea says it is preparing to file a long-range missile. The U.S. is already retaliating. Stand by.

Newt Gingrich downsizing, but insisting he's in the race until the end -- why he's cutting back on his campaign.

And the latest on Mitt Romney's plans to expand one of his homes by adding a car elevator. Can he avoid what some are calling another millionaire moment?

(COMMERCIAL BREAK)

BLITZER: Let's go to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, there's dramatic change under way at some of the nation's colleges and universities. In an effort to attract more students and improve the financial bottom line, a lot of these schools are cutting tuition and graduating students faster.

CNN Money reports that some private colleges are cutting tuition by more than 20 percent. Others are offering three-year degree programs. Of course, that means fewer classes. Some experts worry these fast-track degrees are a bad idea, that it would short change students on learning critical skills like reading and writing, something you should be able to do when you're in college.

Meanwhile, no secret, the cost of attending college, through the roof -- tuition, room and board rising much faster than the rate of inflation for years. The average tuition at four-year private colleges now stands at $29,000 a year. That's the average. So, the savings from finishing in three years instead of four, that ain't chump change.

It's estimated the total college student loan debt in this country, more than $1 trillion. That kind of debt forces people to postpone decisions like buying a home and that can slow the housing recovery.

Meanwhile, a lot of these young graduates are not buying homes because they're not moving out. They get out of college and move back in with mom and dad because they can't find a job. A recent Pew poll shows nearly 30 percent of young adults between the ages of 35 and 34, 30 percent, are living with their parents, in the parents' home. That's the highest level since the 1950s. The number shoots up to 53 percent for people younger than 25.

So, here's the question, is paying less tuition for a three-year college degree a good idea?

Go to CNN.com/CaffertyFile, post a comment on my blog, or go to our post on THE SITUATION ROOM's Facebook page.

I had no idea, Wolf, that many young people were moving back home into their parents' houses.

BLITZER: Yes, I had no idea either. It's a good point. I'm anxious to hear what our viewers think as well.

Thank you, Jack.

Let's get to a CNN exclusive right now. We have pictures on the activity on the launch pad where North Korea says it will fire a long- range rocket, and the United States is hitting North Korea where it hurts in response to the planned launch.

Let's bring in our Pentagon correspondent Barbara Starr.

Barbara, show our viewers -- tell our viewers what's going on.

BARBARA STARR, CNN PENTAGON CORRESPNDENT: Well, look, Wolf, we are often up here talking about the threats from North Korea, but this time, the entire Asia-Pacific region and the U.S. may be facing a new crisis.

(BEGIN VIDEOTAPE)

STARR (voice-over): All eyes now this launch pad in North Korea where the regime says it will fire a long-range missile carrying the satellite in mid-April. This new Digital Globe satellite image exclusively obtained by CNN shows increased activity. You can see trucks and the assembly crane on the launch pad.

United Nations resolutions prohibit North Korea from firing long-range missiles.

PETER LAVOY, ACTING ASST. DEFENSE SECRETARY: North Korea had agreed to implement a moratorium on long-range missile launches. During those discussions, the United States made it very clear that a satellite launch would be a deal breaker.

STARR: The U.S. has stopped promised food aid in the wake of North Korea violating the ban.

LAVOY: We have now no confidence that the monitoring mechanisms to ensure that the food assistance goes to the starving people and not the regime elite.

STARR: If the missile flies south as planned, the first stage of the rocket will land in the Yellow Sea. The second stage off the east coast of the Philippines, but it could be a disaster in the making. North Korean missile technology is highly unreliable.

LAVOY: I don't know if we have any confidence on the stability of the missile or where the actual impact will be.

STARR: So depending where the missile goes, the Pentagon calculates the missile or debris from it could fall on South Korea, Japan, Okinawa, the Philippines or Indonesia. There could be casualties.

On his recent trip to the region, President Obama tried to convince Pyongyang to abandon its plans.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: By now it should be clear: your provocations and pursuit of nuclear weapons have not achieved the security you seek. They have undermined it.

(END VIDEOTAPE)

STARR: And another threat emerging. U.S. officials say North Korea has now trained computer hackers and that they have been used against U.S. and South Korean military, government and private sector targets -- Wolf.

BLITZER: Barbara, thanks very much. Huge ramifications as we know.

Meanwhile, in the world of politics, Newt Gingrich lays off a huge chunk of his staff, but the financially strapped candidate says it's a good thing. Stay by for his eyebrow-raising strategy to try to stay in the race.

And while the Gingrich campaign struggles with finances, Mitt Romney may have a different money problem right now. The story of his car elevator. That's right. There are elevators for cars. Mitt Romney wants one. Stand by.

(COMMERCIAL BREAK)

BLITZER: Mary Snow is monitoring some of the other top stories in THE SITUATION ROOM right now, including some new details coming in about the pope's last day in Cuba. Mary, what's going on?

MARY SNOW, CNN CORRESPONDENT: Hi, Wolf.

Well, after celebrating mass in Havana, Pope Benedict had a meeting with former Cuban leader Fidel Castro. Castro had requested a meeting with him despite the Pope saying Cuba's political system no longer corresponds to reality. The Pope also met with Fidel's brother, President Raul Castro and Venezuelan President Hugo Chavez, who is there for cancer treatment.

Nike is suing Reebok for selling New York Jets apparel with a name Tebow on it. The trade for Tim Tebow happened at a rare time when no company has the rights to sell licensed NFL apparel with the team logo and player name on it. That's because the right to sell apparel is switching from Reebok to Nike, but because of the license, it doesn't actually start until April.

And the winner for Friday's mega-millions jackpot will behalf way to becoming a billionaire. The winnings are now estimated at $500 million who is easily an all-time mega millions record, beating the previous record by over $10 million.

Now, before you get too excited, just keep in mind that the odds of winning are 176 million to 1.

But, Wolf, there's a lot of early retirement drains out there despite those odds.

BLITZER: Maybe it's time for me to buy one of those tickets. I never do, but those odds are pretty steep, but I'm sure a lot of people are going to go buy those tickets. Thanks very much.

Is it another millionaire moment as his critics say for Mitt Romney? The latest on plans to upgrade one of his homes with an elevator for his cars.

And a stunning results with our latest poll that puts President Obama head to head against the Republican rivals in a hypothetical November election. Our strategy session is standing by.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer.

Here are some of the stories we're working on for our next hour.

A JetBlue pilot has a scary in-flight meltdown. Were there any warning signs about his mental health?

And it turns out that a popular drink of Starbucks has a surprising ingredient. Bugs.

Stand by. You're in THE SITUATION ROOM.

(MUSIC)

BLITZER: Unable to gain ground on the leaders in the Republican race, Newt Gingrich is cutting back on his campaign, but he insists the campaign will go on.

CNN's national political correspondent Jim Acosta is joining us now from Georgetown University, where the former speaker is getting ready to deliver a speech. What's the latest?

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, that's right. Newt Gingrich is getting ready to talk to students here at Georgetown University within the hour. It is a sign that his campaign is not over, but it is different. His campaign advisers say the campaign is getting leaner, but not meaner.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Newt Gingrich, who once welcomed the tag grandiose is downsizing his staff, but he insists he's not shrinking away.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Well, we're staying in. It's exactly why we're downsizing and doing what we need to, to be able to stay in.

ACOSTA: And it's for the same reason Gingrich is now charging his supporters $50 to have his picture taken with him. He's running out of money.

GINGRICH: Have to respond to reality and we had cash flow is lower than we'd like it to be, and we're doing appropriate things to be able to campaign.

ACOSTA: Hours before making the decision to cut back on his staff, Gingrich told reporters he was staying in the race in the hopes of a contested convention should Mitt Romney fall short of the 1,144 delegates needed to clench the nomination.

GINGRICH: That's why you voted for people other than Romney.

ACOSTA: But in another telling sign, the former speaker softened his rhetoric on his one-time nemesis.

GINGRICH: If he gets the majority, obviously, I will support him and I will be delighted to do everything I can to help defeat Barack Obama.

ACOSTA: It was quite a departure.

UNIDENTIFIED FEMALE: You know what makes Barack Obama happy? Newt Gingrich's baggage.

ACOSTA: After months of vicious attacks and TV ads from the Romney campaign in a pro-Romney "Super PAC" that led Gingrich to coin a new catch phrase in Iowa.

Gingrich came back from the dead and won South Carolina only to get clobbered again in Florida, that and his ill-advised talk of a lunar colony.

GINGRICH: We will have the first permanent base on the moon and it will be American.

ACOSTA: He never regained his momentum.

UNIDENTIFIED MALE: Running for president is not easy.

ACOSTA: Gingrich's chief of staff, Patrick Millsaps says in spite of the bitter battle with Romney, the focus is now on the president.

(on camera): Is that something that we're going to be seeing more of? PATRICK MILLSAPS, GINGRICH CHIEF OF STAFF: Absolutely. The moment that Obama is caught on tape trying to cut a deal with Russia so that he can get re-elected, that changed the ball game for Newt Gingrich. Obama is the person that we need to beat.

ACOSTA: Gingrich's campaign will also be known for its detours and will stay on the hunt for more delegates, but he's leaving the GOP cage fight to Rick Santorum and Romney.

Romney who picks up the official endorsement of former President George H.W. Bush Thursday told Jay Leno, the longer the battle, the longer the odds.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think if we would have waited until the end of August to have a nominee, it would make it a lot tougher to be successful in replacing our president.

(END VIDEOTAPE)

ACOSTA: Now the subject of Gingrich's speech here at Georgetown is how privatizing Social Security benefits would be beneficial to younger workers. It's a fitting subject, you might say for Republicans when talking to young people.

It sounds a lot like Newt Gingrich is back on the lecture circuit, but no, his campaign advisers say this is all a part of the next stage of his campaign. He is focusing on big ideas instead of his big fight with Mitt Romney and Rick Santorum.

Wolf, I have to tell you. I talked to a Santorum adviser earlier today. They are relishing the prospect of this one-on-one chance that they have with Mitt Romney.

We were talking about with that adviser about that revelation that Mitt Romney is adding a car elevator to his home out in California. Santorum as you know lately has been bowling a lot on the campaign trail. The Santorum campaign likes that contrast between bowling balls and car elevators -- Wolf.

BLITZER: I'm sure they do. All right, thanks very much. We'll stay in touch with you, Jim Acosta.

And as he says it may be another millionaire moment for Mitt Romney. He's taking some flack over word that he's renovating one of his houses and adding an elevator for his cars.

Our senior correspondent Joe Johns is here. Give us some context. What's going on here, John?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, Wolf, as you know, Mitt Romney has said he's been very successful and he's not apologizing for it and frankly, nobody's asking him to, really. The only thing he can say about the plans for his new house on the west coast is wow!

(BEGIN VIDEOTAPE) JOHNS (voice-over): Mitt Romney's reputation as Mr. Money bags just stepped up a notch with the latest reports about the big upgrade on his beach house south upscale and amazingly beautiful La Jolla, California near San Diego.

It goes all of the way back to 2010 as first reported by a San Diego newspaper, Romney puts in renovation plans basically to raze his already multi-million dollar house that's only 3,000 square feet and replace it with an 8,000 square foot house with a gigantic basement.

One of the distinguished features according to "Politico," which broke the story nationally, a four-car garage with an elevator for the cars.

JOE LA CAVA, LA JOLLA PLANNING BOARD: They're actually proposing a full elevator solution that the entire floor of the garage is essentially the floor, the elevator, if you will. That entire floor descends down into the basement level.

And then from above there is a second element that actually drops down from the ceiling, and then allows two new cars to pull into the garage. So, I would say it's fair to characterize it as a car elevator.

JOHNS: A project so complex, San Diego City records showed Mitt Romney hired a lobbyist in 2010 to push it through the permitting process, but La Cava makes the point that for people who have the money to live out on this part of a coast, this kind of renovation is actually no big deal.

LA CAVA: How remarkable is how unremarkable the application and proposal was.

JOHNS: Romney has gotten bad publicity because of how rich it makes him look like when he said his five drives two Cadillacs, but there's absolutely nothing wrong with a big fancy redo on the California beach house says the spokesman for Newt Gingrich. Though you he concedes it's not how everybody lives.

UNIDENTIFIED MALE: I am a rabid capitalist, and if -- if you want to have an elevator for your car and you can afford it, have an elevator for your car. I mean, have fun. Now, if you're running for president, there are not a lot of people out there that can relate to that.

(END VIDEOTAPE)

JOHNS: The Santorum campaign's Hogan Gidley also said there's nothing wrong with Romney making a lot of money, but he does question Romney's hiring of a lobbyist to push the project through.

The lobbyist, we actually talked to him, Matthew Pearson told us he's really a land use lawyer. What he does is very different from what the general public considers lobbying at the state or national level.

But what everyone wants to know is how much does it cost to get a subterranean elevator or car lift installed? One west coast company we checked with says it starts about $40,000 and Wolf, the most expensive is over $100,000.

BLITZER: Mitt Romney himself has not said anything about this?

JOHNS: No, and we've reached out to a number of the spokespersons on the campaign. Nobody got back to us especially as to whether he is going to continue and go forward with this renovation while the campaign is under way or if he's going to put it on hold.

BLITZER: I'm sure if he knew about this car elevator or the architects and others when he got himself involved in that. It's a question we should check.

JOHNS: Absolutely, that's a really good question, too.

BLITZER: Thanks very much. We just learned as you just learned about Romney's car elevator, but how will it play out there on the campaign trail? I'll discuss that with our experts that coming up in our "Strategy Session."

We have a brand new CNN poll that shows Republican frontrunners right now losing big time to president Obama? Does it spell trouble for the Republicans in a general election? We'll assess that as well.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our "Strategy Session." Joining us, the Democratic strategist and CNN contributor, Maria Cardona and the Republican strategist and CNN contributor Mary Matalin.

Mary, let me start with you. You just heard Joe John's piece. A lot of people are saying two words a presidential candidate probably never wants to hear, car elevator. How much of a problem potentially is this for Mitt Romney?

MARY MATALIN, CNN CONTRIBUTOR: It is zero problem. In that neck of the woods you add a car lift to reduce your footprint. It's an environmental thing and a zoning thing as Joe Johns was implicit in Joe Johns' reporting.

Furthermore, Joe Johns' reporting is correct and it costs somewhere between $40,000 and $100,000, including how many job, someone to assemble to make the parts, someone to assemble the parts, someone to deliver the parts and someone to install the lift, someone to service the lift.

This is how capitalism works. Rich people buy things and they create lots of jobs so every time the Democrats bring up something like this they show how detached they are, not Mitt Romney.

BLITZER: All right, that's a good explanation or is it just spin, what do you think? Maria. MARIA CARDONA, CNN CONTRIBUTOR: I think it was a really good effort on Mary's part. Loo, yes, it will hurt Mitt Romney not because of this one incident, Wolf, but because it goes to a huge pattern.

Americans already dislike Romney. They already distrust him. They already see him as someone who is completely out of touch with what middle-class families and working-class families are going through.

And when you add in the car elevator thing no matter how you try to explain it away, it adds to that perception and it's the perception that's hurting Romney. It's not this one-time car elevator thing.

It's the whole perception that this is not somebody who's going to be able to get the kinds of problems that middle class families are going through.

And when people elect a president they go with their gut and at the very gut level right now, all polls show that they don't see Mitt Romney as somebody who understands them and that's a big problem.

BLITZER: Well, let's take a look at our new CNN poll, which we released this hour. Mary, we asked in this hypothetical matchup between President Obama and Governor Romney who registered voters across the country, Democrats, Republicans and liberal, conservatives and independents and who would they vote for, 54 percent said right now Obama, 43 percent said Romney. This, potentially is a problem for the GOP nominee if he, in fact, becomes the nominee.

MATALIN: Well, there is a reason why we always preface everything if the election was held today. The election will be held over eight months from now. We're in the middle of a primary. We haven't had the convention.

We haven't had the mano a mano contest. We haven't had the contrasting ideas in the campaign. The last two Democratic presidents, Obama at this time was still locked into a primary and Bill Clinton was in third place. These are not relevant numbers.

What could are possibly illustrative numbers are Obama's in the battleground states where he has yet to achieve a break of 50 percent threshold.

So I've never been in an election in 30 years where the primary numbers were quantitative to the general election numbers. So let's have this conversation after Labor Day where it will have some meaning.

BLITZER: Yes, there's still a lot of time, Maria, between now and Labor Day, let alone November for these numbers to change dramatically and we see how quickly these numbers can change.

CARDONA: Yes, absolutely. This, I completely agree with Mary. Look, these numbers are great for Obama today and I love them and I'm sure the campaign loves them and the White House loves them, but they understand the reality.

We are months away from the election and this is just a snapshot in time. Hopefully by Labor Day these numbers will be better for Obama, but they certainly can't bank on that and that's why Obama's out there every single day talking about how he's going create jobs.

Talking about how he's going to help those middle-class voters and the working-class voters that Mitt Romney has had absolutely no luck in connecting with and when you hear about car elevators makes it worse.

They're focused on that election day that Mary Matalin so rightly points out is the poll that matters and right now, I think the trends are going in Obama's favor.

BLITZER: The trends certainly are, at least for now, Mary. I'll put more numbers up on the screen. How is the president handling his job right now? It's up to 51 percent approve of the way he's handling his job right now. There you see it.

What about economic conditions. Look at these trends though going back to last September. Only 10 percent of the American public back in September thought the economic conditions are good -- were good in the country and it went up to 13 percent in October, 18 percent in January and now 31 percent, Mary. That's a positive trend and pollsters like to look at trends.

MATALIN: So the new normal, Barack Obama economy is unprecedented unemployment for unprecedented duration and the new normal politics is 70 percent who think the economy's going in the wrong direction is positive for the president.

These are terrible numbers and if they don't, and I looked at the other numbers in the poll, if they don't blame the president they don't credit him for this trend. They say the policies have been made worse.

You have to look at what is in these numbers and they don't feel their own lives are improving and they think the overall economy may be improving and it's because of the hard work they, the families put into it. They do blame the president for higher energy prices and the things that affect their everyday lives.

BLITZER: Very quickly, Maria.

CARDONA: So even if we take everything that Mary said as true, the problem is that Romney is in a much, much worse position than President Obama right now.

And he has absolutely no positive message to give those middle class voters and those working families who are struggling today. He only can either -- he can only go after Barack Obama or he can talk about, frankly, how rich he is and how many NFL team owners he knows and that's his problem. He can't connect.

BLITZER: Maria and Mary, guys, thanks very much.

Other news we're following including three children missing since last summer. Guess what? They're found alive. You're going to see why it took the coast guard so long to find them.

Breaking news, the JetBlue pilot who had a mid-flight meltdown has just been charged. We're learning new details about what happened in the cockpit aboard the JetBlue plane and how other pilots were able to save the flight and the passengers. That's coming up as well.

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BLITZER: Mary Snow is monitoring some of the other top stories in THE SITUATION ROOM right now. What's the latest, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, activists say there's no evidence the Syrian government is carrying out the U.N. backed peace deal the regime just agreed to yesterday. The activists group say at least 26 people are dead as the shelling continues and military presence is actually growing in some places. U.S. diplomats were skeptical of the deal given President Bashar Al-Assad's unkept promises over the past year.

Here in the U.S., three children missing since August have been rescued by the Coast Guard. They were found on their father's boat 30 miles off the coast of Florida. The dad was accused of kidnapping after failing to return the children to their mother in Montana last summer. The Coast Guard is working to reunite the kids with their mother.

And we're closing in on $4 a gallon gas and if the piece continues, we'll hit the all-time high in just about a month. AAA says gas is now more than $3.90 a gallon. That's the average price and that's 20 cents shy of the record -- Wolf.

BLITZER: All right, Mary, thank you.

A U.S. soldier has been charged with the murder of 17 Afghan villagers and now Staff Sergeant Robert Bales, his attorney is talking with CNN's own Erin Burnett. Erin is joining us now from New York. How did that conversation go, Erin?

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUTFRONT": It was a wide ranging conversation. We just spent about 25 minutes talking face to face. Very, very fascination what John Henry Browne had to say about his client.

First of all, Wolf, he said he's talked to him for 11 hours in total over a two-day period with his client, Sergeant Bales. He said Sergeant Bales really did a lot more talking than he thought or that he expected that he would do.

He also says he expects to see him again as soon as tomorrow morning. So that is some important information, but I wanted to just give you a sense of some of what we talked about, Wolf.

I asked him whether Sergeant Bales understands what he is accused of and whether he knows what he is accused of doing. And his answer to that was very interesting. Here's John Henry Browne.

Looks like we don't have the sound bite yet and literally, we just finished it. But basically what he said was, he doesn't really have any memory at all. He said -- he has no memory of what -- I don't think he's remembered what he does. He knew the allegations were, but he doesn't have any memory.

And what John Henry Browne said Sergeant Bales may have a memory of is certain little windows. For example, smells he may recall, which could include something like gun powder or smelling blood. There are little windows, but he doesn't remember what happened that night.

And also very interesting, Wolf, he said that Sergeant Bales does not know or remember what medications he was on at that time or what medications he was on before. So as you know, there's been a lot of speculation. For example, about malaria medication and whether that could have played a role.

That we have some important information on that tonight from this interview that I'll share with you, but Sergeant Bales does not even remember his medications. So it appears that if there is a memory disturbance, his lawyer is trying to make the case that it is just in that incident, but it's also things that could have happened further back in the past.

So we talked about that, what defenses he may make PTSD and his views of the death penalty. So all of that coming up on "OUTFRONT" tonight.

BLITZER: I'll be watching at 7 p.m. Eastern as I do every single day, Erin. Thanks very much.

Should someone have seen it coming, a veteran airline pilot has a scary breakdown. We're taking a closer look at what went wrong on that JetBlue flight from New York to Las Vegas. What's being done about it right now?

And I'll speak with the witness of the meltdown, a passenger who was upfront. We'll talk about that very troubling flight and what the passenger did to save a lot of passengers.

Just ahead, is paying less tuition for a three-year college degree a good idea. Your answers to Jack Cafferty, that's next.

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

CAFFERTY: Wolf, the question this hour, is paying less tuition for a three-year college degree a good idea? A lot of schools are starting to offer three years degrees and cut the amount of tuition in an effort to boost the bottom line.

Michael in Virginia writes, "I graduated in three years by taking summer school and testing out of half a year. It's a wonderful way to save money especially if you're going on to graduate school. In the future, however, the first two years of any school should be publicly funded with employers then hiring people after that and paying for the rest."

C. in Alabama says, "I was a double major in college, but even with such a heavy load, a percentage of the classes I took were electives unrelated to my degree. Those electives enrich my educational experience and my life and I wouldn't trade what I learned for the world. But considering the difficult economic environment, a three-year degree centered solely on the courses pertinent to the degree obtained should be acceptable to employers who require a traditional college degree."

Susan in Denver says, "If a student goes to summer school and completes four years of course working three years, fine. But don't degrade a four-year bachelors degree by chopping out 25 percent of the content. If students want less, they can get two-year associate degrees."

Joe writes, "It depends on what the degree is in, a focused three-year degree in an engineering field definitely worth it. A degree in comparative Medieval Literature or Advance Basket Weaving isn't worth it even at half the price. There's a huge disconnect these days between the degrees we say we need and the degrees that our education system keeps cranking out."

And Pete writes, "Jack, our current four-year college degrees are a true and honest equivalent to a high school diploma obtained in the 1950s and '60s with a possible excepts of the fact that high school graduates back then could actually spell words found in the English dictionary. If there is to be a conversion to a three-year college degree, after graduation, who would then teach them to dress themselves?"

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

BLITZER: As we do every single day, Jack. Thank you.