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The Situation Room

New Obama Attack on Romney; Interview with South Carolina Congressman James Clyburn; Borrowing a Page from Perry, Gingrich; Yahoo's Scott Thompson is Out; JPMorgan Chase Lost $2 Billion; Jaywalking While Texting Fine $54 in New Jersey

Aired May 14, 2012 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: We're watching a lot that is going on right now.

Happening now: a new attack by the Obama campaign targeting Mitt Romney in critical battleground states, painting the presumptive Republican nominee as simply out of touch with working people.

Also, the number three Democrat in the House of Representatives going one step farther than President Obama on same-sex marriage. James Clyburn, he's standing by live in THE SITUATION ROOM to explain his stance.

Also, the banks that were too big to fail are now even bigger and still making risky multibillion-dollar bets. So what happened to the new rules that were supposed to prevent another financial crisis?

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

The latest skirmishes in the battle for the White House are being fought on college campuses, with both President Obama and Mitt Romney courting key members of their respective bases. For Romney, it was evangelicals and for the president women as he delivered the commencement speech at Barnard College in New York City today.

But neither candidate is saying much, not saying much at all about same-sex marriage.

Our chief White House correspondent, Jessica Yellin, is joining us from New York right now.

So, Jessica, what exactly did the president say when he addressed the graduates today?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Wolf, the president had a real message of empowerment with a little bit of politics for the women grads in caps and gowns.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): From President Obama, a message to female graduates that equality can be theirs.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is simple math. Today, women are not just half of this country; you're half its work force.

(CHEERING AND APPLAUSE)

YELLIN: If they work for it.

OBAMA: Don't just get involved. Fight for your seat at the table. Better yet, fight for a seat at the head of the table.

YELLIN: Wonder if this is part of the campaign's appeal to women voters? Politics did creep into his message.

OBAMA: Whether you'll be able to earn equal pay for equal work, whether you'll be able to balance the demands of your job and your family, or that you'll be able to fully control decisions about your own health.

YELLIN: Though the president shared the stage with Evan Wolfson, one of the leaders of the gay marriage movement,he made only glancing reference to the issue that's dominated headlines.

OBAMA: That no matter who you are or what you look like, no matter who you love or what god you worship, you can still pursue your own happiness.

YELLIN: Mitt Romney also passed on an opening to take on the issue during a weekend graduation speech at the evangelical Liberty University, with just this one line.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Marriage is a relationship between one man and one woman.

YELLIN: At Barnard in New York City, among young voters, the president's gay marriage position is popular.

UNIDENTIFIED FEMALE: I think it's awesome. I think it's about time.

UNIDENTIFIED FEMALE: I think absolutely. I think that makes me actually like support him even more. I am definitely for gay marriage, so I think that that definitely -- it was a big day.

YELLIN: But a mixed reaction after Sunday services at Salem Bible Church in Atlanta.

JOSEPH L. WILLIAMS, PASTOR, SALEM BIBLE CHURCH: I support the president. I just disagree with him on the issue of gay marriage, per se. I think it's between a man and a woman.

JONATHAN DAVIS, SALEM BIBLE CHURCH: It does change the way I feel about him, because I don't think he had that view when he came into office, but he may have been persuaded to change his mind.

YELLIN: The issue is likely to get a warm reception Monday night at a New York City fund-raiser hosted by gay activists and the pop star Ricky Martin.

(END VIDEOTAPE) YELLIN: And, Wolf, the president today also taped an appearance on the talk show "The View," which, as you know, has a largely female audience. No doubt you can guess he will get a few questions there about his position on gay marriage.

And here's a little bit of a change. The president in addition to his fund-raiser with Ricky Martin has a fund-raiser with Wall Street executives. He's had some trouble raising money from Wall Street, but tonight he's going to get some. They expect to raise a total of a little over $3 million from his two fund-raisers in New York today, Wolf.

BLITZER: Spending a lot of time fund-raising, as obviously he needs to do.

He's also spending some time speaking with African-American pastors around the country, isn't he?

YELLIN: Yes.

After his announcement on gay marriage last Wednesday, he had a phone call with 13 pastors to discuss how he came to his decision and his staff continues to reach out to both African-American and other progressive pastors who have been allied with the White House to continue what they call sort of a dialogue on the issue -- Wolf.

BLITZER: Jessica, thanks very much.

The number three Democrat in the House of Representatives differs somewhat with President Obama on the issue of gay marriage.

James Clyburn welcomes the president's support, but feels it doesn't go far enough.

Representative Clyburn is joining us now from his home state of South Carolina.

Congressman, thanks very much for coming in.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: Thank you.

BLITZER: Tell us why you believe the president does not go far enough in his declaration saying that he personally supports gay marriage?

CLYBURN: Well, thank you so much for having me, Wolf.

I don't disagree with the president. What I said was and I genuinely feel that, as a 71-year-old growing up -- having grown up here in South Carolina, I can remember when marriage between two people of different races was not allowed in South Carolina.

But it was allowed in other states. So I think that when you have something like this, you have to be very careful that you don't have a state-by-state approach that could very well have people jumping across state lines, having people's conditions changing late in life, and finding out that they're in the state where certain things may not be recognized and it could have very severe legal consequences going forward.

So I just think we need to really look at this issue, study it very well, and be very, very careful how we implement it.

(CROSSTALK)

BLITZER: Because I just want to make it clear -- Congressman, I just want to make it clear, the president, in announcing his support for same-sex marriage, said this was a personal view but it should be left up to the states.

You disagree with him on that. You believe this should be a federal issue not left up to the states because you see it as a civil rights issue; is that right?

CLYBURN: Yes, it is personal with me as well.

And so -- civil rights are very personal with me as well. So if we are going to say this is in fact a civil rights issue, then it ought to be an issue for all Americans, not just based upon what state you might live in. That's what I'm talking about.

We have been down that road, where my rights here in South Carolina were different from rights in, say, a New York or Pennsylvania. I don't think that we can tread too lightly here. We have got to be very, very careful of how we put these kinds of issues together.

Look, I just signed the amicus brief on DOMA, Defense of Marriage Act, because I want the federal courts to rule that law that I voted for several years ago, but have evolved to the point where I am today. So I am all for the federal courts determining that to be unconstitutional. That's why I signed that.

I supported President Clinton's position some years ago when it came to don't ask, don't tell. I voted against don't ask, don't tell last year last year or whenever it was because I had evolved to that point. This is an issue that all of us know that's been challenging all of our lives. I'm a preacher's kid, born and raised in the...

(CROSSTALK)

CLYBURN: But I have been married to the same woman for 51 years.

So we all are difficult in how we approach this. And I just think that we have to be very careful that we don't tread on people's rights.

BLITZER: Well, Congressman, it raises the issue because as you well know -- and you're in South Carolina -- and a lot of African-American ministers, pastors this past Sunday, they were speaking out against the president's support for same-sex marriage.

Here's a blunt question. If the Reverend Dr. Martin Luther King were alive today, today, where would he stand on the issue of same-sex marriage?

CLYBURN: I think Dr. King would have evolved, much like President Obama has evolved, much like I have evolved.

Al Sharpton, a lot of us have evolved on this. I don't believe that at the time that Dr. King passed away or was taken from us that he was then where I am today. I just don't believe that. I don't remember him ever addressing this in any of his writings or speeches, but I believe that all of us grow

I think it was Thomas Jefferson who once said one should not be expected to wear the same jacket as a man that he wore as a child. That's the way I feel. And I think that I have grown to a different size jacket today when it comes to this question.

BLITZER: Will you introduce legislation in the House of Representatives that would allow same-sex marriage to go forward across the country?

CLYBURN: Well, once again, I'm not going to do anything willy-nilly.

I'm going to sit down with members. I would hope that it's an issue that could be dealt with in a bipartisan way. But there's a big difference in us doing something in statute and something being determined constitutionally.

That's why I signed the amicus brief, because I want this issue addressed by the judicial body that will get the opportunity to determine what I may or may not have done is in fact constitutional. That's -- I'm big for health reform. And now we all sit and wait with bated breath to see what the Supreme Court is going to do about the constitutionality of that.

So it's one thing to do something statutorily. It's something else for the constitutionality to be determined. I just think that this is an issue that we have to read very lightly when we're dealing in it.

BLITZER: Hey, Congressman, thanks as usual for coming into THE SITUATION ROOM.

CLYBURN: Oh, thank you so much for having me.

BLITZER: Jim Clyburn is the assistant Democratic leader in the House of Representatives.

BLITZER: The Obama campaign is hoping to make it a four-letter word with voters. We're talking about Bain, B-A-I-N, Mitt Romney's old venture capital firm. We're going to show you the new attack ad that the Obama campaign is now airing in several key states.

Also, Ron Paul announcing he will stop actively campaigning for president of the United States, but he's not dropping out of the race, at least not yet.

And who -- and for anyone who thinks American politics is dysfunctional, take a look at this political battle.

(COMMERCIAL BREAK)

BLITZER: Let's go to Jack Cafferty, he's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, Washington hard at work.

ABC News reports that our government is just out with a study about a study of studies. Try to keep up now. Back in 2010, Defense Secretary Robert Gates complained his department was, quote, "a wash in taskings for reports and studies." He wanted to know how much they cost.

So the Pentagon commissioned a study to find out how much it costs to produce all these studies. Fast forward two years, Pentagon review still going on, so Congress asked the Government Accountability Office to check in on them. So now the GAO is out with its reports and not too promising. You're surprised, right?

They found only nine studies that had been reviewed by the Pentagon review in two years and the military was unable to, quote, "readily retrieve documentation for the nine reports." They couldn't find 2/3 of them. You want to know how much they cost, don't ask. The GAO says, "The Pentagon's approach is not fully consistent with relevant cost-estimating best practices and cost accounting standards," unquote. Which means these are our tax dollars that are going down the porcelain facility.

Meanwhile, try understanding what these reports even say. Quote, "GAO's cost guides state that cost estimates should include all costs but allows flexibility for the estimates to exclude cost, where information was limited as long as steps were taken to clearly define and document what cost are include or excluded. Say what?

Perhaps it should come as no surprise, anytime anything goes wrong or someone drops the ball in Washington. Politicians like to start a study or name a commission to investigate. The hope is that after the results come out, we will have forgotten about it in the first place.

Here is the question: what does it mean when a government is issuing a study, of a study of studies? Go to CNN.com/CaffertyFile, post a comment on my blog, or go to our post on THE SITUATION ROOM's Facebook.

Can't make this up, Wolf.

BLITZER: No, it means a lot of government money, a lot of taxpayer dollars are being thrown away. you might as well rip it up, throw it away. For years, I have been hearing from federal workers here in Washington that they have all these studies that are commissioned. A lot of them outsourced to private consulting that are simply a waste of time. Nobody bothers even reading these studies, but they are costing tons and tons of money. You're on to something there.

CAFFERTY: Well, I thank ABC for that, because they're the ones that came one this.

BLITZER: Well, whoever commissioned the study of studies of studies, obviously is on to something, because they got to get rid of a lot of these studies. CAFFERTY: But you can't fire the people who do all these work because you can't fire anybody in Washington. It's a rule.

BLITZER: Very hard.

CAFFERTY: Yes.

BLITZER: All right. Jack, thank you.

Meanwhile, a new line of attack for President Obama's reelection campaign and it's now going directly after Mitt Romney's business background. Take a look at this ad airing now in five critical states.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's running for president and if he's going run the country the way he ran our business, I wouldn't want him there. He would be so out of touch with the average person in this country, how could you care for the average working person --

(END VIDEO CLIP)

BLITZER: Let's bring in our Gloria Borger, our chief political analyst. She's watching this.

So, what's the point here in reviving the whole Bain Capital/Romney issue right now because they went through it a lot during the Republican primaries?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They sure did.

Well, what the Obama campaign is trying to do right now is two things. They're trying to define Mitt Romney and then disqualify him as a potential president of the United States. They want to define him as somebody, as you heard from that gentleman out of touch, somebody who doesn't share your values, somebody who is much more interested in making money than creating jobs.

I mean, don't forget, Wolf, during the primaries, Mitt Romney said he created or helped create over 100,000 jobs. So, what they want to do is take on that storyline and say, you know what? He didn't do that, and he doesn't care about people like you.

But here's my problem with their theory of the case, which is that, in the end, I believe that President Obama is going to be judged on his record. He can say he wants to disqualify Mitt Romney because he doesn't care about you, but in the end, he's going to be judged on Barack Obama's record. And when these two men go mano-a-mano on those presidential debates, people will judge for themselves.

BLITZER: When Newt Gingrich and Rick Perry tried to use Bain Capital and Romney's efforts to shut down some steel mills, or whatever he was doing, it didn't exactly work out well for them because he came band and said, Bain Capital also has create Sports Authority, Office Depot, they created hundreds of thousands of jobs and in the job of venture capitalists, sometimes it works and sometimes it doesn't.

BORGER: Right.

BLITZER: So, why does the Obama campaign think they're on to something now if it didn't work before?

BORGER: Because in a Republican primary, Wolf, it didn't work very well when Rick Perry called him a vulture capitalist, or Newt Gingrich's PAC ran a 28-minute ad against Bain Capital. But these were Republicans. I mean the Obama campaign believes that this is going to work better with independent voters.

But let me tell you a little bit of a web video that the Romney campaign just released within the hour in response to the Obama campaign.

(BEGIN VIDEO CLIP)

NARRATOR: SDI almost never got started. When others shied away, Mitt Romney's private sector leadership team stepped in.

UNIDENTIFIED MALE: I'm holding a dream with 6,000 employees today.

UNIDENTIFIED FEMALE: If it wasn't for company like Steel Dynamics, this county wouldn't have a lot.

(END VIDEO CLIP)

BORGER: So Bain Capital helped this company Steel Dynamics get off the ground in the mid-'90s. It's now the fifth largest U.S. steel maker.

To your point, some things work and some things don't work. And the Romney campaign spokesman came out today and said, you know what? Mitt Romney helped create more jobs through being governor of Massachusetts and the private sector than Barack Obama -- to be continued.

BLITZER: Of course there will be. There's going to be a big, big fight out there. Thanks, Gloria.

Republican presidential candidate Ron Paul, the last man standing between Mitt Romney and the Republican nomination finally decides to stop campaigning. We're going to take a closer look at his passionate run for president, how it affected the race.

And Rick Santorum says Romney has a, quote, potent weapon to beat President Obama, what his formal rival says is Romney's key to victory.

(COMMERCIAL BREAK)

BLITZER: Two presidential candidates, two very, very different commencement addresses. Let's discuss that in our strategy session.

Joining us right now, the Democratic strategist Jamal Simmons and Republican strategist Alice Stewart. She's the former spokesman for Michele Bachmann's presidential campaign.

Guys, thanks very much for coming in.

I'm going to play two clips, very different clips, Mitt Romney Saturday at Liberty University. President Obama today at Barnard College in New York.

(BEGIN VIDEO CLIPS)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Marriage is a relationship between one man and one woman.

(APPLAUSE)

ROMNEY: From the beginning, this nation has trusted in God, not men.

(APPLAUSE)

ROMNEY: Religious liberty is the first freedom in our constitution and one of the causes justice for the persecuted, compassion for the needy and the sick, or mercy for the child waiting to be born, there is not greater good in the nation than Christian consciousness on the tornado.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Making your mark in the world is hard. It takes patience. It takes commitment. It comes with plenty of set backs and it comes with plenty of failures.

But whenever you feel that creeping cynicism, whenever you hear those voices say you can't make a difference, whenever somebody tells you to set your sights lower, the trajectory of this country should give you hope. Previous generations should give you hope. What young generations have done before should give you hope.

Young folks who marched and mobilized and stood up and sat in, from Seneca Falls, to Selma, to Stonewall, they didn't just do it for themselves, they did it for other people. That's how we achieved women's right, that's how we achieved voting rights, that's how we achieved workers rights. That's how we achieved gay rights.

(END VIDEO CLIPS)

BLITZER: Alice, which line of attack, if you will is going to be more success in winning over those undecided moderates, independents, Democrats and Republicans that will make a difference in these key battleground states?

ALICE STEWART, REPUBLICAN STRATEGIST: Well, it's still going to be about jobs and the economy. I mean, the independents, the people in the middle, and the undecided, they're concerned about the things that everyone is concerned with -- who's going to be the person best equipped to deal with creating jobs and turning the economy around. And polls have shown that more people trust that Mitt Romney is the person to do that.

Right now, obviously, the social issues of taking center stage with the marriage discussion. But as we get closer to November, it's going to be jobs and the economy. That's going to be the big focus and certainly, we're seeing that the current situation with our economy, with the jobless rate continuing to be at above 8 percent. For the longest point in recorded history, we're seeing almost double gas prices. We're seeing the median household income has dropped $4,000 per home. I mean, these are issues that people are talking about around the breakfast table.

BLITZER: All right.

STEWART: And they don't see Obama with the right answers.

BLITZER: Most of the conservatives I have been talking to, Jamal, they don't really want to talk about gay rights. They want to talk about the economy because they see that as the president's great weakness right now. How does the president deal with that?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Well, ultimately, Wolf, I think this will be an argument and Alice is right, that it will be an argument about the economy. And when it comes to this issue of gay rights, the country has moved on a lot. I mean, I was doing campaigns back in 2004 and 2005, where being for civil unions, which were considered a pretty forward position. Now gay marriage is kind of a forward position. This is moving very fast.

And ultimately, where a lot of people come down, if you're against same-sex marriage, then you shouldn't marry somebody in the same sex. But I will tell you, I had a 40-minute conversation with a pastor Friday night after the president's decision and it was very hard to get an African-American pastor, it was hard to get him to take the president and be comfortable with his position, he was really uncomfortable with his position.

And I think ultimately the argument just sort of has to be the government of the United States can't be in the position of discriminating against people and even if you're vehemently opposed to this because of your religious beliefs, your religious beliefs do not have to have an impact on everybody else in the country.

BLITZER: You worked for Santorum for awhile, Alice. He has this advice for Mitt Romney saying, you know what, use this issue of gay marriage, the social issues much more aggressively.

Listen to Santorum.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), FORMER PRESIDENTIAL CANDIDATE: This is a very potent weapon. For Mitt Romney if he's willing to stand up and take advantage of a president who is very much out of touch with the values of America.

(END VIDEO CLIP)

BLITZER: Do you agree with your former boss? ALICE STEWART, REPUBLICAN STRATEGIST: Well, certainly, it is an issue that's going to show the stark contrast between Governor Romney and Obama on this issue. And the polls are one thing. But what we're seeing state after state after state that attack should brought this to the people. We are seeing that overwhelmingly, people across in country are standing up for traditional marriage and for gay marriage.

BLITZER: So, the Santorum right that Romney should be much assertive in declaring a stance on this?

STEWART: Certainly, this is a big issue for senator Santorum. He is very strong in social issues. But what we're seeing four or five days out from this announcement, the Romney campaign is focusing on what people are concerned with, jobs and the economy. Certainly, social issues are topic of discussions.

But he is going to be focus on where his strengths are which is creating jobs and turning the economy around. And he's made it quite clear where he stance on this issue. He firmly believes that marriage is a relationship between one man and one woman. And that's the majority of people across this country believe as well.

BLITZER: On the Democratic side, Jamal. Who's right, President Obama or Jim Clyburn? Clyburn says the federal government should deal with this. This is a civil rights issue. The president says gay marriage should be left to the states, who's right? JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Well, if anybody can make a civil rights argument, it is congressman Clyburn. I mean, he kind a pay it for that, his own action as a young man.

But I will tell you, with most African-Americans in particular, calling it a civil rights issue is kind of a non-starter. They viewed the gay rights movement has maybe equal rights movement, a human rights movement, a justice movement. But the civil rights movement is a very particular thing for most African-American voters, they don't really like to hear it to be compared -- I have done a lot of research on this.

Instead, I would argue that people do talk about this in terms of equal rights, a very separate movement having the president's on the right path here by sort of saying here's where I am. The country is going to make some decisions but he has expressed himself in a very appropriate way.

Meanwhile, Governor Romney though, has sort of devolved. The president is evolving, Governor Romney is devolved. He said when he ran against Ted Kennedy, he would be better on gay rights issues than Ted Kennedy. He has now become worse. And I think he is going to have to answer for that as he goes forward.

BLITZER: Jamal Simmons, Alice Stewart. We are out time, unfortunately. But, guess what, the subject is not going to go away.

Thanks to both of you for coming in.

Imagine being trapped in a car for three days only able to drink some rain water a little soda to survive. One woman's incredible story of survival, that's coming up.

And remember the words too big for fail, how one bank's risky moves reveal serious problems that were supposed to be fixed. But, guess what, it never actually was.

(COMMERCIAL BREAK)

BLITZER: Mary Snow's monitoring some of the other top stories in "the SITUATION ROOM" right now, including an incredible story of survival.

Mary, what happened?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the family of a West Virginia woman is calling it a miracle that she's still alive. Veronica McCoy was trapped in her van for three days after it rolled off the road into a 30-foot embankment. Her husband says she survived on rain water and soda before finally crawling back up the hill which she somehow did with a broken ribs, a broken back, a broken arm and a broken clavicle.

Yahoo CEO is out and could owe the company millions. Scott Thompson left the job for apparently lying on his resume claiming a degree on computer science that he never actually got. Yahoo hasn't released the terms of his departure deal, but, if they say that he resigned as supposed to being fired, he may have to pay the money back up to $7 million.

And if you think politics are like a boxing match, check out this clip out of South Korea. An actual fist fight broke out at a political meeting over alleged culprit scandal. At least one party member suffered injuries to his back and neck. Political brawls are nothing new in Korea. Last year a lawmaker set off two gas cans in parliament makes Congress look very, very tame.

BLITZER: Yes. That's it. Politics looks like it. A lot of activity going on over there, although not necessarily legislative activity.

Thanks very much.

JPMorgan Chase loses $2 billion in the series of rather risky bets. After the financial collapse of 2008, how is this even still possible?

And police in one town say that texting while walking is such a problem in tracking down on something you may do every day. They have already written over 100 tickets for jay walking, stand by.

(COMMERCIAL BREAK)

BLITZER: Fresh fallout from that $2 billion loss from JPMorgan Chase to the series of risky bets. The standard banking committee now said it will hold hearing on the hold issue and the company announced today that its chief investment officer is stepping down. The stunning loss by the largest U.S. bank is an echo on the financial crisis 2008. The new rules were supposed to prevent that kind of meltdown from happening again.

CNN's regulation correspondent Lizzie O'Leary is working this part of the story for us.

What's going on her, Liz?

LIZZIE O'LEARY, CNN REGULATION CORRESPONDENT: Well Wolf, Americans would be right to know that this is a bit of a deja vu. And if you learn from school house rock about how a bill becomes a law, they didn't tell us about the part that happens now, after a law has been passed to prevent the kind of financial meltdown. But before all the rules are in place, it can get watered down and that's what's going on right now.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Thank you very much.

O'LEARY: This wasn't supposed to happen again.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Reform will also rein in the abuse and excess that nearly brought down our financial system.

O'LEARY: That reform called the Dodd-Frank law was intended to keep Americans' money safe. But it hasn't even gone into effect. It is being fine tuned with plenty of loopholes that bankers lobby form. For example, banks like JPMorgan can still take in customer money on one side and also make multimillion dollar risky trades for themselves on the other side. As we saw last week, that can rattle the banking system.

SEN. CARL LEVIN (D), MICHIGAN: We read the law. We carry the law around with us. Here it is. Do you want me to read to it you?

O'LEARY: Senator Carl Levin is pushing for the regulation to have some teeth.

LEVIN: We are all doing is everything we know how to do it to tell the regulators hey, this is the law. We wrote it. Live by it. Don't put a loophole in there just because a lot of big Wall Street firms have a full hardly and lobbyist here trying to persuade you to do that.

O'LEARY: More than 500 companies have lobbied on this law, including the five biggest U.S. banks. Those banks, once called too big to fail, so large they couldn't collapse without hurting the U.S. economy are now even bigger.

Back in 2006, they held about $6 trillion, 43 percent of everything the U.S. economy produces. Now they hold about $8.5 trillion. That's 56 percent of U.S. GDP.

DAN ALPERT, WESTWOOD CAPITAL: Too big to fail goes to the point that you can't lose the institution itself. The issue of course is who gets to won it.

O'LEARY: The new law means shareholders would get wiped out. And the government would be able to slowly wind down a giant bank, hopefully without the taxpayers footing the bill. (END VIDEOTAPE)

O'LEARY: Now, all of these rules need to be finished by July. One question, Wolf, is whether this JPMorgan disaster would be allowed under Dodd-Frank. Now, a source close to some of these negotiation says actually, these could happen under the new law because of an exemption, get this. That is pushed by the Obama treasury department. That would allow banks to make these kinds of trades to hedge their entire portfolio, not just one trade, but they can say, hey from, 30,000 feet, this is an OK thing to do and it would be legal, Wolf.

BLITZER: This debate is only beginning now afresh in Washington.

Lizzie, thank you.

Let's take a little bit deeper on this important issue. Now that a top JPMorgan executives out, is the CEO Jamie Dimon potentially next?

Erin Burnett is here in Washington. She is the anchor of CNN's "Erin Burnett, OUTFRONT."

Lot of pressure, Jamie Dimon right now, what do you think? Is he in trouble?

ERIN BURNETT, CNN ANCHOR, ERIN BURNETT OUTFRONT: Well, you know. One thing that might happen and I have seen this just over the past few days, some of these very powerful advisors to big institutional investors. So the same investigators and investors of 401 (k) pension plan, a few of these guys have said look, Jamie Dimon should not be CEO and the chairman of his company. He is actually both at this time.

So, it seems most likely if anything were to happen, he would lose the chairmanship. And in terms of the CEO job, I think, that would be a big shocker at this point. He's come out strong and said I didn't know about it. I'm livid. This isn't the way we operate. So in that position, he remains very solid right now.

BLITZER: In the scheme of things, how big of a blunder is this?

BURNETT: It's big, Wolf. I mean, it's an interesting way to put it because it shouldn't have happened and it shows that these banks, you know, the fact of someone like Jamie Dimon who seem (INAUDIBLE) as you point to Tony Stewart of bank, right? I mean, if a guy like this can't steer the car, then, you got a big problem.

But, just to give you a sense of how big it is, right now JPMorgan Chase is, as Lizzie is saying, this thing is bigger. JPMorgan Chase is 45 percent bigger, 45 percent bigger than it was before the financial crisis. Its assets alone are 50 percent of the entire U.S. economy, just for JPMorgan Chase.

So, relative to the size of the bank, this is absolutely nothing. It's irrelevant. But it's the fear that it could be a lot bigger than much more significant and that is raising all of these, you know, it seems very fare calls for better and stronger regulation. But in terms of size of JPMorgan, frightenly (ph), it's not that big.

BLITZER: I know you have a lot more on this. Why are you here? We love having you on Washington. But tell us why you're here today and tomorrow.

BURNETT: Well, you know Wolf, I had an obsession with the super committee and I have been heartbroken ever since it failed and hopeful that it won't. It will come back and succeed.

But, I'm here for a fiscal summit tomorrow. Timothy Geithner is going to be there. John Boehner is going to be there. Bill Clinton is going to be there talking about the real fiscal crisis facing this country and hopefully to bring people together to try to get this done because by the end of the year, as you know, we're all going off a cliff like a bunch of lemons unless we fix it.

BLITZER: You love that super committee. I remember you did, didn't turn out to be that super.

BURNETT: Yes. BLITZER: We will see you at the moment.

BURNETT: All right.

BLITZER: Thanks very much.

Government studies run amok. Jack Cafferty is standing by with your e-mail.

Also, we'll show you what happened when Biden met Bush, Will Ferrell returning to "SNL."

(COMMERCIAL BREAK)

BLITZER: Will Ferrell returns to NBC "Saturday Night Live," reprising his famous impersonation of President George W. Bush and sharing a hilarious moment with vice president Joe Biden. Take a look at this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm just so sick of the way presidents are always riding me. I mean I'm an adult.

UNIDENTIFIED MALE: Hey, hey, I've been there. I used to catch grief all the time for president Cheney. I would be in the oval office hooking up the slurpee machine, settling in to Charles and charge marathon and that penguin would come one in and yell, get your damn pants on, we're about to bomb, blah, blah, blah. Besides, whatever happened to being a kid exactly?

UNIDENTIFIED MALE: Politics isn't fair.

UNIDENTIFIED MALE: No, sir. Well, mission accomplished.

UNIDENTIFIED MALE: What's that supposed to mean? UNIDENTIFIED MALE: It's what I say when a problem isn't solved, but I don't want to talk about it anymore.

(END VIDEO CLIP)

BLITZER: Very funny stuff, Jack. Now, you like it too.

JACK CAFFERTY, CNN CORRESPONDENT: Kind a surprise.

BLITZER: That's a very nice stuff.

CAFFERTY. That's right. It really is.

Joe Biden has got himself right on the front page for all the wrong reasons yelling in. That story has got so much bigger, I think, than anybody expected it might back last week when President Obama gave his little statement to Robin Roberts talking there in ABC.

Any who, question this hour, what does it mean when the government's issuing a study of a study about studies.

Dale in Massachusetts, "something's making a bundle on all the studies, even if it's just the paper supplier, with the do-nothing congress and political system studying is all they can agree on and accomplish. Studying doesn't get you in trouble with your base, whoever they might be at the moment."

Anne says, "It reminds me of a dog chasing its tail, but this time it isn't funny. It's either indicative that somebody is trying to hide something or the people in charge don't know what they are doing. Either way, money's being spent in a pointless exercise."

Susan in Ohio, "Those who can do, do, do. Those who can't do, study."

Rich in Florida. "Despite a whole lot of studying, looks like nothing actually gets learned. What we probably need to do is study before we can actually be sure about this."

Richard in Texas. "The government is trying to investigate its own investigators. The problem with all of this is that investigating is it does nothing to correct the problem. For each investigation it conducts and then finds that the investigations who were investigate needs some investigator. Abbott and Costello used to do a similar thing; it's called "who's on first."

Y in Memphis, Tennessee. "Jack, of course, they have to do something to keep increasing the deficit. Why not do a study of study of studies?

And Dave writes. "It must be coming from the department of redundancy department."

If you want to read more about this so many list, your pie is not silly costing all the money, go to my blog, CNN.com/caffertyfile, or through our post on the situation book page. Finish up that study, mission accomplished. BLITZER: It's not silly at all. These studies waste a ton, a ton. Some of them are good. Let's not - some of them are very good.

CAFFERTY: You have to do a certain a lot of this, but they do get carried away in D.C.

BLITZER: Absolutely.

All right, Jack. Thank you.

Coming up at the top of the hour, CNN's Anderson Cooper, he's on the border of Syria and Turkey, tens of thousands of people have fled what's going on in Syria, fearing for their lives. We're also going to speak with Anderson.

Also, coming up next. How one town is cracking down on texting while walking.

(COMMERCIAL BREAK)

BLITZER: Most people know the dangers of texting and driving, now one New Jersey town is trying to make the same point about texting and walking.

CNN'S Mary Snow is joining us once again with details. What's going on here, Mary?

SNOW: Well Wolf, the town of Fort Lee, New Jersey is now punishing people for something all of us do every day, I know I do, and that's jaywalk. The police chief said he decided to step up enforcement to make pedestrians take notice and it's drawing a lot of attention.

(BEGIN VIDEOTAPE)

SNOW (voice-over): When this video of a woman in a Pennsylvania mall went viral, she may not have realized it would serve as a constant reminder of just how distracting walking and texting can be. And this man who became so engrossed in his smart phone that he almost had an encounter with a 400-pound bear.

Now, one New Jersey town says, destructions are so severe, it is cracking down on pedestrian.

CHIEF THOMAS RIPOLI, FORT LEE, NEW JERSEY POLICE: People aren't being alert. They're walking with their cell phones, not watching where they're going. They're texting.

SNOW: Fort Lee police Chief Thomas Rapoli says he has seen a rise in accidents involving pedestrians including two fatal ones this year. While he can't say exactly how many involve smart phones, he believes they're the main culprit, to try to force people to pay attention. He's aggressively enforcing a ban on jay walking, violated and it will cause you $54.

So far, about 120 tickets have been given out.

Do you find it extreme?

RAPOLI: I feel that my job is to keep everyone safe and that at this time, I feel I'm doing the right thing and we're doing the right thing.

SNOW: The stepped up enforcement is sparking a lot of reaction, some question the use of police officers' time.

UNIDENTIFIED MALE: It's just foolish. It's unbelievable. You know, that's worse than a parking ticket, $54? Unbelievable.

SNOW: But some drivers say the jay walking ban is a good idea.

UNIDENTIFIED FEMALE: People are constantly texting and not paying attention to what's going on the street. So sure, it's a little nerve-racking when you see somebody across the road without looking.

SNOW: This man doesn't live in the town and was unaware of the jaywalking fine. But the sticker shock to fee, he says, will make him think twice.

UNIDENTIFIED MALE: Ouch. $54. I won't do it again, that's for sure. I'm not taking the chance.

(END VIDEOTAPE)

SNOW: And technically jay walking was never allowed in ft. Lee like it isn't in many towns and cities. It's just that at two months ago, the police chief started enforcing the ban with a fine -- Wolf.

BLITZER: So, if you're walking on a sidewalk though in Fort Lee and you're texting, that's OK, is that right? Only if you're crossing the street texting while jay walking, you might get fined?

SNOW: Correct. You can walk and text. It's only if you are jaywalking that you can face the fine.

Mary, thanks very much.