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The Situation Room

Romney's Tax Returns; Outsourcing Debate; Chicago Mayor in the Hot Seat

Aired July 10, 2012 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: If you want to be president of the United States, the American people are entitled to know almost everything about you, your life automatically becomes an open book.

If you want to keep secrets, don't run for president. Mitt Romney has a huge decision he has to make. He is under increasing pressure from the Obama campaign to release his full tax returns.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think what's important if you are running for president is that the American people know who you are, what you have done, and that you're an open book. And, you know, that's been true of every presidential candidate dating back to Mr. Romney's father.

(END VIDEO CLIP)

BLITZER: Romney felt the same kind of pressure during the primary season from some of his Republican opponents.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), FORMER SPEAKER OF THE HOUSE: Why not release it.

RICK SANTORUM (R), FORMER U.S. SENATOR: I don't know why he isn't releasing his tax returns.

GOV. RICK PERRY (R), TEXAS: Every candidate up there, they should put their taxes out, including Mitt.

(END VIDEO CLIP)

BLITZER: In response, he did release his 2010 return back in January, along with an estimate of his 2011 tax return, and suggested he would give us more down the road.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I don't know how many years I will release. I will take a look at what our documents are.

(END VIDEO CLIP) BLITZER: I assume Mitt Romney will eventually release several years of returns because that's what all presidential candidates, Democrats and Republicans, have done in recent years. He says he has paid all of his taxes, he says he has done nothing wrong. And I certainly believe him.

But I also believe if he has nothing to hide, he should open up the books so he can focus on the really important campaign issues.

On that point, I agree with what the former Republican Party chairman, former Mississippi Governor Haley Barbour, told me yesterday.

(BEGIN VIDEO CLIP)

BLITZER: Should he release the tax returns?

HALEY BARBOUR (R), FORMER MISSISSIPPI GOVERNOR: I would, but should it be an issue in a campaign? I don't think it amounts to diddly.

(END VIDEO CLIP)

BLITZER: The bottom line in all of this, just do it, release the returns, move on to the economic issues, the job issues, the national security issues that the country wants to hear about.

Let's get on and talk about some of the other top stories. I felt exactly the same way about the president of the United States when he was running, about the president right now. They have got secrets, they shouldn't be running for the highest office in the land.

KATE BOLDUAN, CNN CORRESPONDENT: And what makes it even most interesting about Mitt Romney is his own father is the one who set the precedent, releasing 12 years of his tax returns, not an issue that's going to go away. Thank you, Wolf.

(NEWS BREAK)

BLITZER: Let's get back to the presidential race right now -- some fighting words between the Obama and Romney campaigns.

We have been hearing a lot lately about taxes, about the middle class. Now add outsourcing to the list.

Let's bring in our White House correspondent, Brianna Keilar.

Brianna, the president went to Iowa today. He had a little company in the process.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf.

He did have some company in the form of Reince Priebus, the chairman of the Republican National Committee, in Cedar Rapids, trying to steal some of the president's limelight, and I will say that it worked. He was there unveiling a new Web site called ObamanomicsOutsourced.com.

And he was there to claim, as we heard Mitt Romney do from Colorado, that the president has outsourced jobs because of stimulus money going to some foreign renewable energy companies, Wolf. The DNC sort of fighting back there, as well as Obama campaign officials, one DNC official saying they're making this stuff up, Wolf.

BLITZER: See Marine One landing right now. We can show you live pictures of that.

Do a little fact check, Brianna, for us. Is it true? What's going on?

KEILAR: Some of the claims, Wolf, and there's a lot of them on this Web site, are credible, but there's definitely some that are completely untrue.

For instance, one claim on this Web site is that a Finnish company received a $500 million loan guarantee, and then made expensive luxury electric sports cars in Finland. It is true they made these cars in Finland, but this is a claim that was made by a conservative super PAC a couple months ago and it was fact checked by PolitiFact, found that this was untrue on the basis that this was a loan guarantee, but it wasn't even part of the stimulus.

It was actually part of a loan guarantee program signed into law by President George W. Bush, the president's predecessor. And then also, there's no doubt about it. There's stimulus money that went to some of these foreign companies, foreign renewable energy companies.

And when you talk to experts, they will say some of it did create jobs here in the U.S., but it also benefited these companies overseas, created likely jobs overseas as well. The thing, though Wolf, is, even if some of this doesn't meet the strict definition of outsourcing, that doesn't mean it isn't damaging, because a lot of voters may just have a problem with the fact that these foreign companies benefited from their taxpayer dollars, and also this just reminds voters that the stimulus which still remains very unpopular has the president's signature on it.

BLITZER: Yes, it does. All right, thanks very much, Brianna Keilar, over at the White House.

It is being called an election-year time bomb that could send shockwaves through the Pentagon. I will talk about that with two people with inside knowledge, Congressman Mike Rogers, former Representative Jane Harman.

Also, that mystery illness killing children hours after they show symptoms, only hours. We sent our own Dr. Sanjay Gupta to Cambodia to investigate. We are going live to Phnom Penh. We will tell you what he has now found.

And that surprise culprit in the case of the missing cemetery flags.

(COMMERCIAL BREAK)

BLITZER: It is horrific enough that dozens of children have dropped dead from a mysterious illness. But now we're learning more about the terrible pain and suffering they're going through in their final hours.

Our chief medical correspondent, Dr. Sanjay Gupta, will join us live from Cambodia in just a few moments.

But, first, look at this report first he filed from a Cambodian hospital.

(BEGIN VIDEOTAPE)

DR. PIETER VAN MAAREN, WORLD HEALTH ORGANIZATION: We are by no means that the conclusion of our investigation.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): An investigation into the mystery of what's killing some of Cambodia's children at a frightening pace.

VAN MAAREN: The majority of these cases, and mostly under the age of 3, were seriously ill and many of them had died within 24 hours of admission.

GUPTA (on camera): I mean, that's -- I mean, that's pretty frightening I think for people to hear.

VAN MAAREN: Absolutely.

GUPTA: I mean, there's a lot of diseases in this part of the world. Many parts of the world. But to kill that quickly.

(voice-over): The backdrop is important here. Kantha Bopha Hospital treats thousands of children suffering from dengue fever, malaria and tuberculosis. Every week. And remember this is a part of a rural, where bird flu and SARS originated. Still, right away, Dr. Beat Richner knew this was different.

DR. BEAT RICHNER, KANTHA BOPHA CHILDREN'S HOSPITALS: It's a new picture for us. We never seen this in Cambodia before.

GUPTA: He is the head of the hospital. And he allowed us into the ICU where the patients are treated.

(on camera): To give you an idea of how busy this is, even as we were talking, there's another child in shock. That's the emergency right now.

(voice-over): After Richner says 66 children came to this hospital with the mystery illness. For 64 of them, it was 24 hours of hell before they died. You heard right. All but two died.

(on camera): And many of these children, it started off rather mild. A mild fever. But then things progressed quickly from there. For example, in Rathanan's (ph) case, who's 2 years old, we don't know what's causing his encephalitis but this is typically what happens. The fontanel over here starts to bulge. And the eyes, as you can see over here, it become disconjugate as well. From there it just becomes merciless. It's goes from the head to the brain to the lungs.

RICHNER: You see this lungs, 8: 42, and five hours later, you see the lungs.

GUPTA (voice-over): In the last few hours of life, this unknown illness completely destroyed the child's lungs. And there was no way to stop it.

(on camera): You've never seen anything like this before.

RICHNER: No, this is the first time at the end of April. And this make us worry.

GUPTA (voice-over): Something called Enterovirus 71 typically associated with hand, foot and mouth disease, was found in more than a dozen patients. But that's only adding to the mystery.

(on camera): Would the Enterovirus lead to this?

RICHNER: Never, never, never, never. Never.

GUPTA: So it has to be something else?

RICHNER: I think so. That we cannot prove. But we must look for.

GUPTA (voice-over): And that's where the investigation goes next. Cambodian health officials and the WHO say they're now looking into whether expired medication, the wrong medication or inappropriate medication such as steroids could be to blame.

(on camera): And steroids can also make a relatively harmless infection suddenly much more severe.

VAN MAAREN: Yes, that is a -- that is definitely a possibility.

(END VIDEOTAPE)

BLITZER: And Sanjay is joining us now live from Cambodia.

Sanjay, I understand they're doing some tests to see if certain drugs may have caused all of this. Is that true? How hard is it to determine what's going on?

GUPTA: That's the prevailing theory right now, Wolf, talking with doctors in the hospital.

Could this enterovirus somehow have been worsened by a combination with one of these medications? As mentioned, it is hard to figure out. Wolf, you can do blood tests. But you're heard even in the case of the enterovirus, it was tough to pin that down. Finding a particular drug is even more challenging.

What they're going to try and do is go to some of the places where these children lived, find out if they had been prescribed certain medications, what they took, and see if there's something in common here. That may help them drill it down. But this is a real medical investigation, Wolf.

BLITZER: So, should people in Cambodia, adults, others traveling to Cambodia be worried now? Does this just affect children? What do we know about that?

GUPTA: It seems to just affect children for the time being, you know, and this has been since April now.

So, I think this is unlikely, first of all, to affect adults. And, typically, when you talk about hand, foot and mouth disease, it does typically tend to be a disease of children. I will also say that if there is some good news in all of this, Wolf, it does not appear to be contagious, even within households where these children lived, didn't appear to spread within the household.

It did not appear to cluster, as they call it, within communities. We're not exactly sure why, because typically Enterovirus 71 would behave that way, but it isn't in this particular case, so some good news, but still, as you see, Wolf, some unanswered questions.

BLITZER: Lots of unanswered questions, indeed. Thanks so much, Dr. Sanjay Gupta, reporting to us from Cambodia.

Kate, this is an important story. I'm really proud that CNN sent Sanjay there to work on this story. I don't know how many other news organizations did that.

BOLDUAN: We have been talking about this. So great that they were able to put Sanjay there and get the eyes of the world kind of focusing on this. Most of these children are under the age of 3 that are getting sick and dying from this. It's so sad. It's so unbelievable.

Thank you, Wolf.

OK. So let's go to Chicago right now. Chicago Mayor Rahm Emanuel is in the hot seat, defending his police strategy as the murder rate soars. Homicides are up almost 38 percent since last year. But Emanuel is sticking with his plan to use beat cops instead of specialized units to combat the violence.

Our Ted Rowlands is live in Chicago.

Hey there, Ted.

You have been talking to community leaders. What are they saying about this?

TED ROWLANDS, CNN CORRESPONDENT: Well, Kate, they're not happy. Some of them say they're seeing people in their communities die and they believe that the police strategy here in Chicago needs to change.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): Chicago Alderman Anthony Beale says his constituents are fed up and it is time for a change in strategy to combat violence in Chicago.

ANTHONY BEALE, CHICAGO ALDERMAN: It is not just the gangbangers right now. Innocent kids and women are being shot on a daily basis, and it just appears that nothing is being done.

ROWLANDS: Beale says the problem is a policing strategy that spreads resources around the city, instead of concentrating them in areas like his ward, where the murders are happening.

BEALE: I hope that the mayor sees that, you know, the numbers are going through the roof, and hopefully he will make a call to the superintendent, say maybe we need to sit down and figure something else out because the path we're going on right now is a dark one and it is not working.

ROWLANDS: Mayor Emanuel says he understands that local leaders like Alderman Beale are upset.

RAHM EMANUEL (D), MAYOR OF CHICAGO: Their constituents are my constituents. I understand the their level of impatience. And so I press not only Garry. I press all of our departments to make sure our kids are getting the type of environment and atmosphere and ability to grow up like I want my own kids to grow up.

ROWLANDS: Despite the murder rate, Emanuel is standing behind his police superintendent, Garry McCarthy, whom he handpicked just over a year ago. But Felicia Davis from the mayor's office says when it comes to strategy, the door is always open for change.

FELICIA DAVIS, CHICAGO MAYOR'S OFFICE: There's a constant review and analysis that goes on to make sure that things are trending well.

ROWLANDS: The mayor's office also points out that crime overall is down 10 percent in Chicago this past year, a stat that is great for most areas of the city, but doesn't resonate with Alderman Beale.

BEALE: No crime is good. But when you have one stat going down, but then murders going up, what's your priority? The life is the priority.

(END VIDEOTAPE)

ROWLANDS: Bottom line here, Kate, is that Mayor Emanuel and the Chicago Police Department are sticking with their strategy.

They say their plan is a solid one. They're adding to it every day. Just yesterday, they announced $4 million will be put into this system to tear down old buildings where gangs are hanging out and shut down businesses where gangs are hanging out. They say they're sticking to their guns, and they think eventually it is going to work. BOLDUAN: Eventually, but everyone is watching in the meantime. Ted Rowlands in Chicago, thanks so much, Ted.

So, coming up next, an unbelievable picture -- an infant in a handbag, sent through an airport X-ray. Hear why the parents say they did it.

(NEWS BREAK)

BOLDUAN: You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: I just got an e-mail from Sanjay. He's really doing amazing work over there in Cambodia. And he's sticking around. He's going to help us find out what's going on with those kids.

BOLDUAN: That's fabulous, and he's working some long hours at the same time. We have gotten to watch him do that.

(NEWS BREAK)

BLITZER: Airport security officials got the shock of their lives when a carry-on bag rolled through the X-ray scanner, and they could see legs and a tiny head.

It was a five-month-old baby, and it happened in the United Arab Emirates.

And Mohammed Jamjoom is joining us from Abu Dhabi right now.

Mohammed, this is a pretty shocking story. They put a little baby, what, 5-month-old baby through the X-ray machines in an airport? What was happening? What happened here?

MOHAMMED JAMJOOM, CNN CORRESPONDENT: Well, Wolf, it is shocking.

And according to the police in charge here in the UAE, they say that the family arrived last Friday, that when they tried to enter the UAE that they were told that their 5-month-old baby didn't have a visa and that it would take at least two days for them to get paperwork processed and that they'd have to wait at the airport.

The police say that, by the next day, that the father had grown really impatient and that he persuaded his wife to try to smuggle the baby into the country, to put the baby into carry-on luggage, and then put it through the X-ray machine, hoping that the security there at the airport wouldn't notice.

But there's this amazing picture that was captured from the X-ray scanner where you can actually see the outline of the baby. You very clearly see the baby's legs in that handbag. The police have said it's the most surprising thing they have ever seen at the airport. They can't believe that the parents did it.

And they're just happy that, thankfully, that infant is safe and sound -- Wolf.

BLITZER: That infant very, very young. Going through an X-ray machine like that can be dangerous.

How is the baby doing, based on the reports you're getting?

JAMJOOM: Well, one of the things we saw clearly in the statements issued by the police today was that they were heralding the fact this baby was spared anymore radiation. You know, the suggestion that this baby could have been -- could have been exposed to a lot of radiation going through this X-ray scanner if it hadn't been caught at the time that it was caught. So there was concern for the baby's safety.

But the police saying that the baby is safe and sound. The parents are being charged. They're being charged for endangering the life of that 5-month-old and also for trying to smuggle it into the country.

BLITZER: The story has shocked folks not only where you are but all over the world. Mohammed, thanks very much for updating us.

JAMJOOM: Thanks.

BLITZER: And we looked into how that baby might have been affected by going through the X-ray scanner, the baggage scanner.

The American College of Radiology tells us most baggage scanners have very low levels of radiation. Of course, this incident was in the United Arab Emirates. We don't know what kind of standards they have. Children are more sensitive to radiation certainly than adults.

So no one can say definitively that the baby won't be affected. We will stay on top of this story for our viewers as well.

What a story it is.

BOLDUAN: It's one of those stories there's no words.

BLITZER: Who puts a baby going through an X-ray scanner?

BOLDUAN: I could go off on that one.

BLITZER: Questions about -- were these people so desperate to save a day to get into the UAE?

BOLDUAN: Exactly.

BLITZER: Terrible.

Pentagon officials are anxious about automatic budget cuts on the horizon. But isn't there room for some serious cutbacks within the world's largest military? Stand by. We will have a discussion.

(COMMERCIAL BREAK)

BLITZER: Happening now, a mystery woman appears with North Korea's mysterious leader and rumors fly.

The U.S. military braces for automatic budget cuts and civilian layoffs.

And is there something fishy about a clam eating salt?

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

Top military officials are telling me they're deeply worried about the Pentagon's budget. Kate has some background before our discussion.

BOLDUAN: Yes. We need to remind everyone, we're talking about $500 billion in cuts to the defense budget over the next decade. This is all set in motion last summer in the debt ceiling agreement. That represents about 8 percent of the Pentagon's current budget and a lot of jobs. Here is CNN's Pentagon correspondent, Chris Lawrence.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): All of that bang, bang, bang? It's the sound of nearly 500 workers in a small town Pennsylvania plant. What you don't hear is the clock ticking on their jobs.

UNIDENTIFIED MALE: At the end of the day, these workers that you see in here are going to be laid off, because we won't have the money coming in to keep them employed.

LAWRENCE: Come January, automatic budget cuts kick in across the board. The Pentagon would have to chop $50 billion a year for the next decade. That's a lot of lost business for big defense contractors, leaving scraps for small suppliers like JWF.

UNIDENTIFIED MALE: The Lockheed, the BAEs (ph), they're going to protect their own jobs. It is first year contractors like us that will feel the impact.

LAWRENCE: The median income in Johnstown is under $25,000, half the national average.

UNIDENTIFIED MALE: And the impact to this town is a lot more brutal than it will be down in the Beltway of Washington, D.C., because there's fewer jobs available here for these people to go get.

LAWRENCE (on camera): There's no politics on the factory floor, but a lot of these workers are dependent on what Republicans and Democrats do end of the year.

(voice-over) Congressman Mark Critz is the local Democrat.

REP. MARK CRITZ (D), PENNSYLVANIA: My worry, we have a short window to work with.

KEITH ROTHFUS (R), PENNSYLVANIA CONGRESSIONAL CANDIDATE: I'm Keith Rothfus. LAWRENCE: Keith Rothfus is the Republican running to oust him.

ROTHFUS: He voted to allow defense cuts to go through.

LAWRENCE: Rothfus argues that House Republicans passed a plan that would have saved defense jobs.

ROTHFUS: And my opponent, Mark Critz, voted you know, against preventing the defense cuts.

LAWRENCE: But that bill would have cut programs like Medicaid and Meals on Wheels for seniors. No Democrats backed it.

Defense contractors say they'll have to send layoff orders with 60 days' notice days before the November election. So it's a huge campaign issue in towns where contractors are major employers.

CRITZ: They're already, you know, putting their people on notice that this could be very painful.

(END VIDEOTAPE)

LAWRENCE: Nobody's arguing that the Pentagon doesn't have places to trim, but it's across-the-board cuts that are really causing consternation. A lot of folks saying where a scalpel is needed, this is more like taking a hatchet to the problem.

And the real deadline is going to come a lot sooner than the end of the year, because these defense contractors, they have long lead times for some of these projects. If Congress doesn't reach a deal until say Christmas time, well, a lot of those folks will have to wait, will have to be out of work for probably a couple of months, because it's going to take weeks and months to get that money flowing again -- Wolf, Kate.

BOLDUAN: Excellent point. The political will, if it's there. Chris Lawrence, thank you so much.

BLITZER: All right. So let's talk a little bit more about this with Congressman Mike Rogers. He's the Republican representing Michigan. He's the chairman of the House Intelligence Committee. Also joining us, Jane Harman, president of the Woodrow Wilson Center here in Washington. That's a think tank. Former ranking member of House Intelligence Committee. Thanks to both of you for coming in.

Congressman Rogers, Mr. Chairman, let me start with you. Folks are worried. I understand Defense Department officials are worried. But let's get -- have some perspective. The U.S. spends what, about 600, $700 billion a year in DOD funds. That's more than the next 14 countries combined, including adversaries, friends, NATO allies. So a cut, even a -- a mandatory cut, is not the end of the world.

REP. MIKE ROGERS (R-MI), CHAIRMAN, HOUSE INTELLIGENCE COMMITTEE: Well, the way they've structured it, it very well could be. You're going to have -- for two reasons. Just like the report you just heard, they're required, these contractors require 60 days out before they're going to lay off somebody to do notifications. That day is coming. There will be hundreds, or tens of thousands, likely over 100,000 pink slips going to people, saying, "In 60 days, you're going to lose your job." One hundred thousand people.

That doesn't include the military folks who, A, won't get paid, B, will be also laid off. That has huge implications not only for our national security posture but also for the economics that go with it.

BLITZER: And it has huge implications for defense contractors who are building new-generation fighter jets, or new tanks, or aircraft carriers.

The question is, can't that be cut somewhat in these tough economic times with troops coming home from Afghanistan, troops coming home from Iraq? Does the United States still need that huge, huge defense budget, which doesn't even include the billions spent through the Department of Energy on a nuclear weapons program or the intelligence community budget? This is so much more than the rest of the world spends.

ROGERS: Well, and -- but there's also the reason the rest of the world looks to the United States for influence around the world and the fact that we have -- there has been no greater force for good in the world than the United States.

But think about where we are today. You have North Korea developing nuclear weapons, rattling their saber. You have Iran threatening a nuclear arms race in the Middle East. If they get a nuclear weapon, that's going to spread throughout the Middle East, Turkey, Saudi Arabia, Egypt have all talked that they, in fact, may have to go nuclear if Iran goes nuclear.

You have Venezuela in the south here, South America here, giving us some trouble and certainly trying to stir up trouble. We have al Qaeda maybe shifting around, al Qaeda (UNINTELLIGIBLE). The problems aren't going down; they're going up. You have China, by the way, which is actually threatening U.S. naval forces in the South China Sea. This is no time to start backing away from our strong...

BLITZER: Do you agree with that? Because there's a lot of waste. All of us know this. I covered the Pentagon for a long time ago, but there's a lot of money that's being spent on some very, very expensive weapons that the country probably could live without.

JANE HARMAN, PRESIDENT, WOODROW WILSON CENTER: Well, Secretary Panetta just cut, I think, a half a billion dollars, or no, $500 billion or more from the defense budget.

BLITZER: Over the next ten years. That's 50 billion a year.

HARMAN: But he cut it carefully with a scalpel and got rid of a lot of waste. I think more could be cut. And I think that our best argument is not always our military if we want a safer world. The U.S. narrative has to include diplomacy and development, and we need more of those. But I think cutting it all of a sudden, lump sum at the end of this year in the way that we will if sequestration goes into effect, does risk our defense.

We've seen this movie, Wolf. I was elected to Congress in 1992. After we cut the defense procurement and intelligence budgets -- Bush 41 did that after the Cold War, because we thought there would be a peace dividend. Well, guess what happened in the South Bay of Los Angeles, which I represented over nine terms, there was devastation. Triple Ph.D.'s were out in the cold. And we had to build back carefully over more than ten years.

And now we face, I agree with Mike, a dangerous world with new threats that we haven't envisioned before. Yes, we can get rid of some old legacy programs. It's tough to do, but yes, we should do it. But we have to do it carefully, not, you know, falling off a fiscal cliff.

BOLDUAN: But talk about the reality here. The reality is these cuts really -- these pending cuts were never supposed to happen. This was supposed to be the threat that forced Congress to do its job, to reach a debt deal that would reduce the deficit by $1.2 trillion. This was the threat.

But Congress knew that this was coming, and there have been no real effort since the debt deal kind of fell apart, and since the super committee fell apart, for any kind of real deficit reduction to happen. So is this just the punishment that Congress is facing because it hasn't done its job?

ROGERS: I disagree a little bit in the sense that when the authorization bill went through, there was a pay for to make up for military defense cuts that were coming in sequestration. So what you'll find next week is on the defense authorization bill, you will find another way. They have to cover about $109 billion.

HARMAN: I think there were several missed opportunities, both for the White House and for the Republicans in Congress, to push for Simpson-Bowles, which is the right template, in my view, going big for reducing $4 trillion. There's still time left before the election, and I think whichever party embraces this, moves forward has a big leg up in November.

BLITZER: Don't hold your breath for anything substantive between now and November 6. Everyone stand by. Mike Rogers is here, Jane Harman is here.

A new warning from a top U.S. general about the latest threat to American security, we'll discuss that.

Also, a mystery woman spotted with North Korea's supreme leader. Who is she? What is she up to? We have new information.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) GEN. KEITH ALEXANDER, COMMANDER, U.S. CYBER COMMAND: I think we're the most vulnerable and we need to do something about it. And now is the time to do that.

(END VIDEO CLIP)

BOLDUAN: General Keith Alexander, he had some pretty dire predictions. He is the head of U.S. Cyber Command. Pretty dire predictions about the state of cyber security in our country today.

You just pushed through -- help to kind of spearhead this cyber security bill through the House in April. So where is -- what is the state of cyber security in the states today?

ROGERS: Well, I'll tell you, the government protects itself very well. The National Security Agency, CIA, others, FBI domestically, they do a really good job. Because they take the threats that they know, they find overseas, and incorporate them on protecting their systems.

BLITZER: WikiLeaks did a pretty good job getting some State Department documents out there, didn't it?

ROGERS: Well, that was a very -- that was a very different operation. Somebody inside the system was reaching into the pipe of information flowing by and picking it up.

BLITZER: So somebody -- so bottom line, somebody didn't do a good job of protecting all of those secrets.

ROGERS: Yes.

BOLDUAN: Immediately, the question is, what about the power grids and gas pipelines, and real infrastructure questions that really affect...

BLITZER: Let me let Jane get into this conversation. Because there's concern that bad guys out there could decide use cyber warfare to destroy our power grids.

HARMAN: There's no question about it. And we do need cyber security legislation. Keith Alexander's right. But we need it for two reasons. It's not just to protect the dot gov space. It's not to protect any dot mil space but the dot com space. All of our information is compromised.

We do need legislation. There's a dispute in the Senate about which bill is better. With all affection for Mike, I'm very partial to the Lieberman-Collins bill, which the White House has endorsed, but there needs to be a compromise.

And the second reason there needs to be one is to protect personal privacy. We can do both things at the same time. Security and liberty aren't a zero sum game here. And without legislation, that's not going to happen, and we'll probably have an overreaction, should we have some major attack, which could easily happen. BOLDUAN: Before the election?

ROGERS: I think so. I've had some great discussions in the Senate. We all realize the seriousness of the threat.

You talked about somebody on the inside, the insider threat, stealing, which is government information, problem enough. But 95 percent of the networks that are getting attacked today are private- sector networks.

So the Chinese are going in and stealing intellectual property, repurposing it back in China and competing against those companies. Huge problems. Tens of thousands of jobs lost every single year for that one event alone.

Then you have this, the prospect of a cyber-attack. So they go in and shut down your grid. They shut down your ability to access your financial information. Pretty serious stuff.

And by the way, now it's not just interfering with a few hours and they reboot it. They can actually physically break your machines now.

HARMAN: WikiLeaks was a leak issue. And we have a huge problem with leaks. And the political declassification of secrets, which has gone on over numerous administrations. People die; sources and methods are compromised. And I think we have the same view, that leaking of critical secrets is a violation of our national security and we have to do more to stop it.

BLITZER: Jane Harman, thanks for coming in.

Congressman Rogers, thanks very much to you for coming in, as well.

ROGERS: Thanks for having me.

BLITZER: He's North Korea's supreme leader, but he can't stop people talking about the mystery woman who's been appearing at his side.

(COMMERCIAL BREAK)

BLITZER: When I reported from North Korea, I saw firsthand how secretive its leaders can be. Now, one of Kim Jong-un's secrets may be in the open, at least if you believe all the rumors swirling out there about that mystery woman who's being seen right at his side. Brian Todd is looking into all of the theories.

Brian, that are you discovering?

BRIAN TODD, CNN CORRESPONDENT: Well, several theories out there, but they center on two possibilities, Wolf. Is this woman who's been by Kim Jong-un's side his sister or someone romantically involved with him? The North Koreans certainly aren't saying.

(BEGIN VIDEOTAPE)

TODD (voice-over): The face that launched 1,000 rumors. North Korea watchers are abuzz over this young woman, seen twice in recent days next to the country's new leader, Kim Jong-un. She was spotted once at a high-profile musical performance seen on state TV, which happened to include Disney characters that Disney didn't authorize.

Then she was seen at an event paying tribute to Kim's late grandfather.

(on camera) Who do we think this mystery woman is?

VICTOR CHA, DIRECTOR OF ASIAN STUDIES, GEORGETOWN UNIVERSITY: Well, the short answer is that we don't know for certain.

TODD: The speculation is rampant and centered on two possibilities. One South Korean newspaper said the woman seemed to be Kim Jong-un's younger sister, Kim Yo Jong.

Victor Cha, former National Security Council official who dealt with North Korea, thinks that would be unparalleled.

CHA: There is only one leader in North Korea. There's no leadership by tandem. There's only one leader. And this fellow who has been the anointed person. So for them to then suddenly put a younger sister right next to him and make her look, at least, almost like a co-leader would be highly unusual and would give you the sense that they're not doing things the way they've been doing them in the past.

TODD (voice-over): The other possibility? A prominent South Korean newspaper, citing South Korean intelligence officials, identifies the woman as Hyon Song-wol, a former singer for a group called the Bochonbo Electronic Music Band.

(on camera) That band was hugely popular in North Korea, had sit songs with titles like "I Love Pyongyang" and "Excellent Horse-like Lady." We're not making this up. How could we?

(voice-over) That newspaper reports that Hyon Song-wol and Kim Jong-un became romantically involved about a decade ago, but that his father objected. She then married someone else, according to the paper. As if you needed another twist, there's a family pattern.

CHA: When the father of Kim Jong-Il was around a similar age as the current leader, he became interested in a young female performer who was also married to somebody else. And that person no longer was relevant anymore. And, you know, in North Korea if the Kim family wants you, then they have you.

(END VIDEOTAPE)

TODD: Victor Cha and other analysts say the North Koreans have an interest in projecting this woman as a possible wife for Kim Jong- un, not only to make him seem more human but also to show that there's going to be another generation of the Kim family after this one, that the dynasty will continue. It is crucial, analysts say, for the Kims to project that kind of strength, Wolf, because they could be threatened if they don't.

BLITZER: It's also in marked contrast with some other people surrounding Kim Jong-Il.

TODD: Victor Cha, the analyst points out if you look at the video of Kim Jong-un, pictures of him at rallies, things like that, everyone around him is in his 60s, is male, has a military uniform on.

It could be a very desperate attempt by the regime now to project some youth, some vigor, because, again, you know, they have to project some kind of continuity here, some future. And maybe putting this woman out with him is part of doing that.

BLITZER: They love Mickey Mouse.

TODD: They do.

BOLDUAN: A lot of western things.

BLITZER: They certainly do. I can testify to that.

BOLDUAN: Exactly. You saw when you were there. Brian Todd, thank you.

In a world where you see odd videos all the time, this one certainly stands out. Next, the story of a clam who seems to have a thing for salt.

(COMMERCIAL BREAK)

BOLDUAN: It's a mystery that's baffled police in a New York town. Who was stealing dozens of flags from Civil War-era graves? A surveillance camera shows the answer, next.

(COMMERCIAL BREAK)

BOLDUAN: Police in Hudson, New York, say they've never seen a case quite like this one. Stolen flags at a local cemetery. Thirty- five American flags vanished from tombstones last week. Police thought youngsters might be responsible. The flags were replaced and then 17 more disappeared in one night.

So the cops mounted cameras on trees to catch the thief, and it turns out the culprit is none other than a woodchuck. A surveillance photo shows it standing next to one flag, munching away. There was even more evidence, though. A camera lowered into a woodchuck hole revealed none other than pieces of a destroyed flag. Case closed.

BLITZER: "Caddyshack." Reminds me of the movie "Caddyshack."

BOLDUAN: We were talking about that. Do you want to do the dance?

BLITZER: No. BOLDUAN: No?

BLITZER: No, you can do the dance.

Finally, a clam who seems to have a thing for salt. It's a truly strange video, and it's not exactly what it appears to be. If you're having seafood for dinner, you might not want to take a bite until after you see this report from CNN's Jeanne Moos.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT (voice-over): This is the story of a clam that did not clam up. And that little slurp launched an Internet star as it slithered across a heavily salted tabletop.

UNIDENTIFIED FEMALE: The video doesn't appear to be fake, just not very nice.

MOOS: It was one of those images that, once seen, cannot be unseen. "Clam eats salt" was its slug. Its biggest effect was to gross people out and make them swear off seafood. Though some saw the clam as seductive: "Ladies must love him."

One Web site dubbed it, "Wonder Clam," the first celebrity clam ever, if you don't count man-eating mascots and bit part characters in "The Little Mermaid."

(MUSIC: "UNDER THE SEA")

MOOS: Adrift on YouTube, the clam's caption reads, "Considerate clams flavor themselves before being eaten." But in reality...

(ON CAMERA) It is not flavoring itself?

REBECCA BRAY, MARINE BIOLOGIST: No, in fact, it's trying to save its life.

MOOS (voice-over): So says marine biologist Rebecca Bray from Mystic Aquarium. She sees clams do this all of the time when they're disturbed.

UNIDENTIFIED FEMALE: Gross, OK.

MOOS (on camera): And that tongue? That's not a tongue.

BRAY: It's actually the animal's foot. It's a very strong, muscular tissue.

MOOS: Clams move it to move or to bury themselves in the sand to hide from predators.

As for the salt, it agitates clams. A YouTuber shared his technique of sprinkling salt down a hole made by a razor clam to see it surface. Others force-feed a clam a potato chip.

BRAY: It would be a lot like rubbing salt on a wound. It's very sensitive tissue. MOOS: This salt is way more concentrated than the salt in the ocean.

As for the foot, often mistaken for a tongue...

(on camera) You know, when you eat a clam, you actually eat that foot. Technically, you've got its foot in your mouth.

(voice-over) The moral of the story? Take talk of salt-eating clams with a grain of salt.

(on camera) We can assume that this is -- this clam is not as happy as a clam.

BRAY: Not even close.

MOOS (voice-over): Even the marine biologist admits to eating clams. But salt would just be adding insult.

Jeanne Moos, CNN...

(SOUND EFFECT: BURP)

MOOS: ... New York.

(END VIDEOTAPE)

BLITZER: Did you hear that burp?

BOLDUAN: I thought it was you.

BLITZER: No, not me. You like clams, though?

BOLDUAN: I don't know if I'll be having them for dinner tonight.

BLITZER: Not tonight.

BOLDUAN: I love what that marine biologist said: the clam was trying to save his life. Very serious.

BLITZER: Remember, you can always follow what's going on in THE SITUATION ROOM. I'm on Twitter, @WolfBlitzer. Kate is on Twitter, @KateBolduan. You can follow THE SITUATION ROOM on Facebook. Go to Facebook.com/CNNSituationRoom.

Thanks very much for joining us. I'm Wolf Blitzer in THE SITUATION ROOM. "ERIN BURNETT OUTFRONT" starts right now.