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Swine Flu Outbreak; Paul Ryan for Vice President?

Aired August 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: Happening now: three American troops on a special forces mission killed by a gunman in an Afghan military uniform.

"The Wall Street Journal" wants this man to be Mitt Romney's running mate. What would Congressman Paul Ryan bring to the ticket?

And a disturbing new strain of swine flu now in several states, and spreading.

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

When I heard this morning that at least three more American special forces soldiers had been killed by an Afghan police officer in Southern Afghanistan, my heart sank. I immediately focused in on the men who died. I know that each is someone's father, son or brother.

And I immediately recalled what Senator John Kerry told Congress when he returned from the Vietnam War four decades ago.

(BEGIN VIDEO CLIP, 1971)

JOHN KERRY, VIETNAM VETERAN: Each day to facilitate the process by which the United States washes her hands of Vietnam, someone has to give up his life so that the United States doesn't have to admit something that the entire world already knows, so that we cannot say that we have made a mistake.

Somebody has to die so that President Nixon won't be -- and these are his words -- the first president to lose a war. And we are asking Americans to think about that, because how do you ask a man to be the last man to die in Vietnam? How do you ask a man to be the last man to die for a mistake?

(END VIDEO CLIP)

BLITZER: There are still some 90,000 American troops serving in Afghanistan. President Obama says they will be withdrawn over the next two-and-a-half years. He says they will all be out by the end of 2014.

But here is a question. Why do they have to remain there so long? Will it really make any difference in the long run, when American forces leave? Afghan police and military personnel, our supposed allies, are now routinely killing American forces. So what is the point? Keeping all those U.S. troops in Afghanistan still costs U.S. taxpayers about $2 billion a week, more than $100 billion a year. My gut tells me it is time to accelerate that withdrawal. Too many Americans' sons and daughters have already been killed in Afghanistan.

I want to talk with this with the former NATO supreme allied commander, retired U.S. Army General George Joulwan, who served two tours in Vietnam.

You remember that history. It sounds like we're repeating a bit of that history right now to me. Give me your perspective.

GEN. GEORGE JOULWAN (RET.), U.S. ARMY: Absolutely.

And I was there at the tail end. When Kerry spoke in '71, I was in Vietnam in '71 and '72. And I know that condition. Nobody wanted to be the last soldier killed. But the mission continued. And the issue came down to being, we called it Vietnamization now. We're calling it Afghanization.

So I believe the issue, what is the strategy? Do we need that many troops there to train the Afghan police and military to be able to provide for their own security. And what is the impact of these green-on-blue killings that we're seeing?

BLITZER: These are Afghan police or military killing Americans, and we're training them, in effect, to kill Americans. We're making them better soldiers so they can go after our troops.

(CROSSTALK)

JOULWAN: Well, we saw some of that in Vietnam. The Soviets saw it in Afghanistan. The British saw it in Afghanistan as they were drawing down. We should have been anticipating this.

It is psychological on the part of the Taliban to kill coalition forces. And they're doing that. The question is, how do we shift or adapt our strategy to recognize these circumstances?

BLITZER: Listen to the General John Allen -- I assume you know him -- he's the top U.S. military commander in Afghanistan. This is what he said back in March.

(BEGIN VIDEO CLIP)

LT. GEN. JOHN ALLEN, COMMANDER, INTERNATIONAL SECURITY ASSISTANCE FORCES: Well, on green on blue, what we also call the insider threat, we're going to continue very closely to partner with the Afghans.

As I think you're aware, we have done that significantly in the last several months. The Afghans themselves, who also suffer from what is euphemistically called the green on green, they have taken a lot of steps themselves, with an eight-step vetting process.

So I think between what the Afghans have done for themselves, what they're doing for ourselves and how we're partnering together, we seek to reduce this tragedy to the maximum extent possible.

(END VIDEO CLIP)

BLITZER: Go ahead, and respond to your fellow general.

JOULWAN: Well, he is making a lot of good points.

The issue is that this -- the casualties that are being caused, there are less casualties than there were a year ago, both of coalition and American forces, and civilian casualties.

BLITZER: But the irony is that most of the American casualties now are not by the Taliban or al Qaeda -- and al Qaeda has a very limited presence in Afghanistan -- but by the U.S. allies, the Afghan military and police.

JOULWAN: Which are influenced by the Taliban.

You have to understand the culture you're dealing with in Afghanistan. And there is a lot of pressure on police, on their families, where they live. And we ought to expect that and anticipate that. How do we reduce or shrink the force to do only what is barely necessary in the next year?

BLITZER: General, if you were advising the commander in chief, the president of the United States right now, would you say, stay there for another two-and-a-half years, or would you say, accelerate that withdrawal?

JOULWAN: I would say change the strategy to one where you have special forces, you have the CIA operatives. You work that, where you're targeting key personnel. We know how to do that. We have been very successful at doing that.

Why you need soft-skinned targets, why NATO -- 50 nations are involved.

BLITZER: In addition to the 90,000 Americans, there's another 30,000 or 40,000 NATO troops there, and I'm sure they're just as frustrated as those American troops.

(CROSSTALK)

JOULWAN: And the French have been losing -- we forget that. The French have been losing blue on green. Since January, they have been losing a couple every month.

So this is taking a toll psychologically on the coalition, which is exactly what the Taliban wants. How we respond to that is going to be extremely important. I think we need a shift in the strategy and be able to then understand shrinking the force, what the goal is at the end of all of that.

BLITZER: Yes, I say I agree. Get them out there a lot more quickly than two-and-a-half years from now.

JOULWAN: But you still need a force there.

BLITZER: You can do a limited force, special operations, as you say, some CIA personnel. But the bulk of these tens of thousands of troops, they're not going to do any good. And in the end, Afghanistan is going to be Afghanistan whether we stay there or not.

JOULWAN: And let me just also say, contractors are being killed...

BLITZER: AID workers.

JOULWAN: ... NGOs, et cetera. So anything that is providing a sort of help and support to women in particular, to the poor, shelter, any of that, they're targeting.

BLITZER: General Joulwan, thanks very much for coming in, good discussion, important stuff.

(NEWS BREAK)

BLITZER: Meanwhile, a Romney-Ryan Republican ticket. Who is the man "The Wall Street Journal" wants to see as the Republican vice presidential nominee?

And coming up at the bottom of the hour, almost two-thirds of Americans say the economy here in the United States is doing poorly -- what the number means for Romney and for President Obama.

(COMMERCIAL BREAK)

BLITZER: Mitt Romney is expected to announce his running mate any day now. But one very influential newspaper is already making its choice known. We're talking about "The Wall Street Journal" editorial page.

They want the House Budget Committee, Paul Ryan of Wisconsin, to be the Republican vice presidential nominee.

Our chief national correspondent, John King, has been looking at all the top contenders.

John, what would Congressman Ryan bring to the ticket?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's a great question, Wolf.

You know, the congressman is back home in Janesville, Wisconsin. He came home today, there were reporters outside his house and they said what about all the vice presidential speculation? Congressman Ryan said -- quote -- "I don't want to get into that."

He may not want to talk about it, Wolf, but a lot of his friends are.

(BEGIN VIDEOTAPE)

KING (voice-over): For Paul Ryan, debating Joe Biden may feel like a demotion.

REP. PAUL RYAN (R-WI), BUDGET COMMITTEE CHAIRMAN: So my question is, why not start freezing spending now, and would you support a line- item vote and helping us get a vote on it in the House?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me respond to the two specific questions, but I just want to push back a little bit on the underlying premise, about us increasing spending by 84 percent.

RYAN: The discretionary spending, the bills that Congress has signed -- that you sign into law, that has increased 84 percent.

OBAMA: We will have a longer debate on the budget numbers there, all right?

KING: Ryan is the GOP's numbers guy, the House Budget Committee chairman who is not afraid to say, in his view, the only way back to fiscal sanity is to dramatically shrink government and fundamentally change Medicare.

RYAN: If you don't address these issues now, they are going to steamroll us as a country. And the issue is, the more you delay fixing these problems, the much uglier the solutions are going to have to be.

KING: In short, he is a lightning rod. And if Mitt Romney taps Ryan to share the ticket, he will dramatically reshape the 2012 race.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It would be a bold choice. It would be a risky choice. It's hard for me to see Mitt Romney, who has played it safe all the way through this campaign, making that kind of gamble.

KING: There are upsides. It would energize a GOP base sometimes suspicious of Romney. Ryan is an energetic debater and campaigner.

And, at just 42, he would add youthful vigor to the ticket. Close friends like former House colleague Mark Green say Ryan would help Romney in Wisconsin and across the Midwest.

MARK GREEN, FORMER U.S. CONGRESSMAN: I think he does get Wisconsin, but I think, more importantly, he gets that sort of blue- collar conservatism that I think is the heart of the Republican Party.

KING: But tapping Ryan is a big gamble because of the House GOP budget that bears his name. Up to now, Romney has done everything to make this campaign a referendum on the incumbent.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The president's policies are not creating jobs.

KING: Add Ryan to the ticket, and there is no escaping this:

SEN. CHARLES SCHUMER (D), NEW YORK: The Ryan plan to end Medicare as we know it must be taken off the table. KING: Other potential downsides? Ryan has never run statewide. He has no foreign policy experience. And some will question whether a 42-year-old House member is ready to be commander in chief.

GERGEN: One of the stars of the Republican future over the next 10 to 20 years. Whether he is ready at this moment, only the campaign trail could tell. And he is going to get -- I will tell you, he is going to take a real beating.

KING: Ryan says family history makes him a fitness fanatic, leading House colleagues in grueling cross-training workouts.

RYAN: My dad died of a heart attack at 55, my grandfather at 57. So I have always had this incentive to stay healthy.

KING: And an avid hunter, as Green learned one day when he sent an e-mail from his post as ambassador to Tanzania.

GREEN: I got this terse response saying: "I'm sitting in a deer stand. It is hunting season. Leave me alone."

KING: He is a self-described nerd, but don't underestimate Ryan's ambitious or his competitive streak. It is clear, if he had his druthers, he would rather debate the president.

RYAN: I love the idea of Barack Obama. I love the fact that we have elected an African-American man as our president. I think that that is just a really cool thing. I just don't like the idea it is coming from Barack Obama.

KING: But it is Romney who will share the biggest fall debate stage.

RYAN: Governor Mitt Romney, hopefully the next president of the United States of America.

KING: And Romney who decides whether to place a risky bet on Paul Ryan.

(END VIDEOTAPE)

KING: And you might ask, is Congressman Ryan sitting by the phone in Janesville waiting for Governor Romney to call with the yes or the no?

Wolf, he says he is taking his family on a vacation. I'm sure he has got a phone, though.

BLITZER: I am sure he does. It won't be hard to find him.

Here's the question. When do we expect this big announcement to happen?

KING: That is the question, isn't it?

And as you know, your reporting is consistent with mine. Most senior people in the Romney campaign say next week. He is on this big bus tour across the country. But, but I will tell you I talked to several people today inside, who said maybe we will wait until the week after next. That would be the week beginning Monday the 20th.

So a little bit of playfulness in the Romney campaign. They say they have not gotten final word from the governor themselves. And I think they're starting to think that, because of the hype, because of us trying to figure out who this choice is, maybe they will get a lot more attention on this bus tour if they string it out a little bit.

BLITZER: Yes, probably will.

And you and I and a lot of other journalists will be on standby 24/7 waiting for the word to come forward. Of course, we will look forward to that.

John, thanks very, very much.

It is exciting.

That's why, Kate, we went into the business. We want to be part of the big stories.

KATE BOLDUAN, CNN CORRESPONDENT: It will be a very big story.

These have been fascinating looks into these potential V.P. contenders. I think John has done a great job with these.

BLITZER: He certainly has.

BOLDUAN: He absolutely has.

Coming up: reams of data beamed from Mars by the Curiosity rover. We will take you inside the control center that takes it all in at 50 past the hour.

Plus, the ultimate backyard toy? A roller coaster

(COMMERCIAL BREAK)

BOLDUAN: Here is a quick look at some of the stories trending right now on CNN.com.

First off, take a look at the sinkhole that opened up this month in this Louisiana bayou, about 80 miles west of New Orleans. It's roughly the size of a football field, more than 100 yards deep and growing. Authorities issued a voluntary, not a mandatory, evacuation order.

(BEGIN VIDEO CLIP)

DENNIS LANDRY, BUSINESS OWNER: So, definitely wasn't -- come and knock at your house force you to leave. It was a little bit alarming, a little bit upsetting.

BETTY THIBODAUX, RESIDENT OF LOUISIANA: They are worried about their belongings and their housing. Nobody really knows what's happening. And it stays on your mind. You don't rest.

(END VIDEO CLIP)

BOLDUAN: One guess is the sinkhole was caused by the collapse of an underground salt cavern.

Also trending, real estate values seem to be all right in this part of Florida, but, as they say location, location, location. This 10-bedroom mansion 14-bath mansion on two acres on the water just sold for $47 million. That's a record for the most expensive home sale ever in Miami Dade County. Looks like a pretty beautiful home.

Also, don't you wish your parents had the time, energy and know- how to do this? Natasha and Jon Cain built a backyard roller coaster out of plastic pipe, lumber and concrete. It includes a 12-foot drop that somebody is obviously enjoying very much. Actually, a lot of people are enjoying it. The video has absolutely gone viral online.

The husband and wife, they told an Australian TV station, Wolf, that they built this in three weekends.

BLITZER: I am nervous to see that. Put a little kid in there?

BOLDUAN: What, you didn't build this for your daughter?

BLITZER: No. No. I'm very nervous. I'm just a nervous Nellie.

BOLDUAN: You're just a nervous Nellie, but that is OK.

BLITZER: Yes. Thank you.

They're not necessarily the numbers the Obama campaign wants to see, but they're not helping Mitt Romney the way his campaign would hope. We're going inside the brand-new polling on the economy.

Plus, swine flu spreading in the United States -- why this outbreak is different from anything health officials have seen before.

(COMMERCIAL BREAK)

BLITZER: Happening now: Americans voice their fears about the U.S. economy. How will grim poll numbers impact the presidential race?

The growing concern over a swine flu outbreak. This is a strain no one has seen before.

And we will take you inside Mars mission control.

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

Americans' economic fears are plain to see in CNN's latest poll results, some grim numbers on the issue that is certainly number one for so many voters. So what do they mean for President Obama and Mitt Romney? And joining us now, two economists. Austan Goolsbee is joining us. He is the former White House chief economist. He obviously supports President Obama. Also joining us, Douglas Holtz-Eakin, former congressional budget director, worked for Senator John McCain four years ago. He obviously supports Romney right now.

Gentlemen, thanks very much for coming in.

And, Austan, I want to get right to you -- 63 percent, according to our brand-new poll, of the American public, they now say the economy is doing poorly. Is it the result of the high unemployment, the income? What is going on over here, from your perspective?

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Well, I think you saw the GDP growth, how fast the economy is growing, slowed down.

We have got a worldwide downturn. The U.S. is having modest growth, at best, and that is the fastest in the entire advanced world. So, I don't think the fact that people are discouraged by conditions in the U.S. and around the world is surprising. I mean, it -- it's been a tough year.

BLITZER: And it looks like the numbers are going from the president's perspective, Doug, in the wrong direction on the economic issues, which raises a serious question: why isn't Mitt Romney doing better right now, since the economy is, after all, issue No. 1?

DOUG HOLTZ-EAKIN, FORMER CONGRESSIONAL BUDGET DIRECTOR: Well, I think the biggest reason is that the president has devoted an enormous amount of his -- his campaign budget to an ad splurge that really is very negative, and trying to harm the image of Mitt Romney. So I think the real fact is he's doing better than you would expect, given that the sitting president has spent two months attacking him.

BOLDUAN: And also take a look at the poll. I want to put this up for our viewers. It says that -- shows that less people think that the economy is starting to recover. It shows more people think that the economy is actually getting worse. And pretty much the same amount of people think the economy is stabilizing. These right-track, wrong-track numbers are going the wrong direction for President Obama. That's not good.

GOOLSBEE: Well, I agree it is not good. But as I said, it's because the -- you know, as we've gone through the year 2012, you've got the rest of the world basically dragging us under like a giant anchor. I mean, Europe is teetering on the edge of financial collapse. And China has slowed substantially.

So if we were looking to get even a little boost from elsewhere, it's gone the opposite way. I mean, I think the economy is -- the growth rate did slow. So I'm not surprised you see that in the polls.

BLITZER: Here's another reason, Austan -- it should be Doug -- why the -- why Mitt Romney is probably not doing as well, given the state of the economy right now, as he should be doing. And I'll play a clip from what the president said yesterday in Colorado. Listen to the president.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The centerpiece of Mr. Romney's entire economic plan is a new five trillion dollar tax cut. A lot of it is going to the wealthiest Americans. But last week we found out he expects the middle class to pick up the tab to pay for it.

(END VIDEO CLIP)

BLITZER: Now, that line of attack seems to be resonating out there. How does Romney respond to this notion that he's primarily interested in only the richest Americans? That's the accusation.

HOLTZ-EAKIN: Well, I mean, certainly, the president's campaign theme has been the middle class is hurting. It's the fault of Wall Street rich people, and look at the Republican's candidate.

Mr. Romney has to, first of all, disavow -- debate the facts. The study that the president's pointing to is actually a mischaracterization of his position.

And the second thing is he has to point out that, you know, all of their economic success does not begin and end with the tax cut. It actually has something to do with having the economy grow, having a better plan for jobs and for income growth. Because without that, no amount of discussion of fairness in tax policy is going to make much of a difference.

BLITZER: Well, let me let Austan respond. That tax policy study came out of the Brookings Institution. That's the one the president is referring to. You just heard Douglas: all I can say it's false. You say?

GOOLSBEE: Well, I don't think it's false, but rather than get into the details of that study, I would simply point out that a plan that echoes what George W. Bush did, -- big tax cuts for high-income people, big tax cuts for corporations, and counting on trickle down to be a growth strategy -- is patently wrong, false, has been proven many times. It doesn't work. And it didn't give us rapid growth in the 2000s, and it wouldn't work if you did it now. I think that's why Mitt Romney is not doing well in the polls.

HOLTZ-EAKIN: Wolf, I'd just like to point out that it is a plan that's based off the president's own Bowles-Simpson Commission, which the president ignored. So not surprising the president doesn't like it. But this isn't something that hatched out of the George Bush era, this is falling the guidance of the best bipartisan commission we've seen.

BOLDUAN: Now, I want to take a...

GOOLSBEE: One hundred percent not following that. But let me just clarify. Bowles-Simpson says let's have three dollars of cuts for one dollar of new revenue. Mitt Romney has said he will not have any new revenues, that he wants to cut revenue and make up for it by having bigger cuts on entitlement. So it's not patterned on Bowles- Simpson in the slightest way.

BLITZER: Do you want to respond, Douglas?

HOLTZ-EAKIN: Well, I don't think that's right. What he has said is that he wants to have a static revenue neutral tax reform that provides economic growth, that will put more revenue on the table. It's the same strategy that Republicans offered in the super committee. The Democrats are simply unwilling to accept the revenue offer, because they don't want to touch entitlements. That's the stalemate.

BOLDUAN: All right. So sticking on the campaign trail, Austan, listen to something that Governor Romney said, targeting President Obama in Des Moines, Iowa, earlier this week. Take a listen to this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The president also said when he was running that he would reduce the cost of health insurance by $2,500 a family. Instead it's gone up by $2,500 a family. That's a $5,000 difference. This has really hit middle-income families. Gasoline prices doubled. Food prices are up.

(END VIDEO CLIP)

BOLDUAN: Gas is up; food prices are moving way up. But Austan, how much is a president, one president to blame for things like gas prices, food prices? I'll get to health care in one second, because these two issues are always issues on the campaign trail, no matter -- no matter who we're talking about.

GOOLSBEE: Well, I mean, I think it's fair to say that the main thing driving the economy is not the president nor Washington, D.C. It's what the market conditions are in the U.S. and around the world: the demand for gasoline, the demand for food.

On health care, I mean, I think that that's a pretty deliberate mischaracterization of the facts. Everybody knows that health-care costs have been rising dramatically faster than inflation for the last 35 years. The president said we would slow the rate of health-care costs and inflation.

And in fact, the last few years have been the slowest rate of health-care cost increase in many decades, so to say, well, look, prices for health care are higher than they were three years ago. Of course they are. They've been growing even than they have the last three years for 30 years before that.

BLITZER: All right. Go ahead, Doug. You buy that?

HOLTZ-EAKIN: Well, on the health care, I think it's -- it's a well-understood fact that the structure of the plan, the mandated benefits, the taxes that are levied on health insurers, on medical device companies, all of these are going to raise the cost of health insurance. There's no way around it. In some cases, it's going to be double-digit increases in individual or small group policies.

So that's the result of the law. And it's the fact that you're mandating more expensive coverage. There's no way around it. It's nice that health-care costs have slowed down in the last few years. It proves that if you have a really bad recession and a poor recovery, health-care costs grows slower like everything else, but that's not really good news.

BLITZER: We'll leave it on that note, guys. As usual, we'll continue this discussion down the road. Thanks to both of you for joining us, Austan Goolsbee, Douglas Holtz-Eakin.

HOLTZ-EAKIN: Thank you.

GOOLSBEE: Thank you.

BLITZER: And here's a new medical warning you need to hear about at 42 minutes past the hour. You're going to find out about a new strain of swine flu that has U.S. doctors very concerned.

Later, we'll take you inside mission control for the new Mars rover. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There are some new medical problems you need to know about. Texas officials declared a public health emergency in Dallas County because of an outbreak because of the West Nile Virus. Nationwide, the virus is now reported in 42 states, making it the biggest outbreak since 2004. Symptoms include fever, headache, body aches, joint pain, vomiting, diarrhea or a rash. And it could kill you, potentially.

Meantime, a new strain of swine flu also has doctors very concerned. The Centers for Disease Control and Prevention now says -- say at least 145 cases of the H3N2V virus have been reported across four states, and those numbers are only expected to go up.

Our senior medical correspondent, Elizabeth Cohen, is working the story for us. She's joining us now with details.

Elizabeth, how widespread is all of this?

ELIZABETH COHEN, CNN CORRESPONDENT: Well, thankfully, this isn't as widespread as it might be, and I'll tell you why. This disease can spread relatively easily from a pig to a person. It does not spread that easily person to person.

So let's take a look at the number of cases and hospitalizations. In the four states that you mentioned, 145 cases. Only two people have been hospitalized. Thank goodness, there have been no deaths. Now, most of these cases are children 16 years of age and younger.

BLITZER: Why are most of the cases children?

COHEN: You know, we asked the CDC that, and they said it's pretty simple. These are mostly cases that are spreading at, say, the county fair. And most of these kids that will come up and touch the pigs. It's kind of a kid activity.

BLITZER: The key word is don't touch the pigs. How severe is this flu?

COHEN: It's similar to any kind of seasonal flu. I mean, people certainly can feel very ill, but as we saw, very few hospitalizations. But again, similar to the flu that people get all the time in the winter.

BLITZER: So what's the message for parents who are watching right now?

COHEN: The message for parents, as you said, is that if you are concerned about this, you can just tell your child not to touch a pig. You also want to be careful, because your child or you could get it, even if you don't touch the pig. For example, if you're just nearby, and that pig sneezes on you. So even if you're near pigs, don't eat near pigs. You know, sort of -- you might want to keep your distance. It's not officially being recommended, but it certainly is common sense.

BLITZER: Common sense would be good, especially with a disease like this. Thanks very much, Elizabeth Cohen.

Erin Burnett is "OUTFRONT." She's coming up right at the top of hour. She's got a preview for us.

ERIN BURNETT, CNN ANCHOR: Wolf, tonight "OUTFRONT," we got an announcement from the U.S. Treasury today, saying that they're going to sanction a Syrian oil company for doing business with Iran. That makes sense, you say, right?

Well, when I read the press release, one sentence stood out. It says this: any business that continues to irresponsibly support Iran's energy sector to evade U.S. sanctions will face serious consequences. That also makes sense.

But then we looked into it. And it turns out a whole lot of American allies are doing just that, and American is looking the other way. An "OUTFRONT" investigation and special report.

Plus, a man who was taken hostage by al Qaeda and lives to tell the tale, tells his terrifying story. That's coming up at the top of hour, Wolf. Back to you.

BLITZER: All right, Erin. Thanks very much. We'll see you right at the top of the hour.

All week, we've marveled over the pictures from NASA's new Mars rover. In a moment, we're taking you inside mission control. And you will meet some of the people guiding everything the rover does. Also, stick around for the U.S. military's new super blimp. There it is, the super blimp. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It's the worst drought to hit this country in six decades. The Agriculture Department now projecting a huge surge in corn prices, due to the harvest slump.

But farmlands isn't all that's suffering. One of the country's most critical waterways, the mighty Mississippi River, is rapidly shrinking with all the heat. CNN's Martin Savidge has an in-depth look at this crisis.

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN CORRESPONDENT: Wolf, you might have thought I brought you out to a desert. I haven't. This is actually the exposed bottom of the Mississippi River here in Memphis, and it stretches for a long way behind me here. It's all the impact of the drought, and it's hard to believe that just a year ago we were talking about record flooding. Now they're talking about the possibility of a new record: a record low.

The Mississippi River here, a year ago was three miles wide. Now, it is three tenths of a mile wide. The river has dropped 55 feet in the last year. And those who work the river and have been on the water say they have never seen the water fall so far in so short a time.

Now, there are some benefits. Look at this. New beaches. In fact, some have quipped that the Mississippi River now has more beaches than the state of Florida, which would be funny if it wasn't for the devastating impact that it's having on the commercial trade on the river.

This river is used to move a lot of stuff that we all use ourselves. Things like coal, like oil, and like grain. The problem is, the barges now have had to be lightened quite a bit just to make it up and down the river. And there are some concerns that, even with that, they're running aground.

The fear is that perhaps they might have to close the river like they did in '88. But take a look at this.

So I brought you out here to show you something pretty cool. This is a rock dyke. The Army Corps of Engineers has built thousands of them along the Mississippi River. And this is what they do. The water comes downstream, and during the drought it's re-directed, deflected into the center of the river. It makes the channel deeper, and it scours out the silt.

But no matter what the Army Corps of Engineers or even the barge companies do, it still comes down to needing a lot of rain up river, to try and raise the water levels here. And that simply is not in the forecast, which is why the long-range prediction is that here in Memphis, at least, they will break the record low water mark. Whether the river can keep operating, right now that's anybody's guess -- Wolf.

(END VIDEOTAPE)

BLITZER: Martin Savidge reporting for us. Mighty Mississippi River, look at that.

BOLDUAN: The drought is a huge story. Food prices are going up. We've been talking about it. Corn prices are surging. That's important to all of us.

BLITZER: It's not just for people who like corn. That's a lot of people.

BOLDUAN: Not just for me because I come from Indiana do I care about this. But I mean, it affects everything. Food prices are surging. It's a huge story. That's a great report by Martin Savidge.

I guess we should get a check of what's going on at the White House as well and across Washington. President Obama is hosting his fourth Iftar dinner at the White House tonight. The tradition began during the Clinton administration. It continued under George W. Bush.

The Iftar dinner celebrates the Muslim holy month of Ramadan. Guests include leaders in the Muslim-American community, as well as elected officials, diplomats and leaders from other faiths.

Over at the State Department, they're watching -- officials there are keeping a close eye on the case of a captured American citizen in Venezuela. President Hugo Chavez claims the man appears -- appears to be a mercenary working to destabilize his government. Today, CNN repeatedly pressed the Venezuelan embassy in Washington for a name and any other information. No response.

So take a look up in the sky. Well, maybe when you go outside. But it's a blimp. Not just any blimp, mind you. This is the Army's long endurance multi-intelligence vehicle or LEMV to make it a little shorter. Longer than a football field and about seven stories high. It's a souped-up blimp designed to fly around the clock for up to 21 days, providing full surveillance of an area. It's made its 90-minute maiden flight this week in New Jersey. So watch out.

BLITZER: It's a nice blimp.

BOLDUAN: It's a nice blimp.

BLITZER: It's got military value.

BOLDUAN: It does, and it can fly very quietly, I bet.

BLITZER: Twenty-one days.

BOLDUAN: Twenty-one days.

BLITZER: Who wants to stay up there for 21 days?

BOLDUAN: Well, I don't.

BLITZER: No. Somebody will.

Right now, the rover Curiosity is collecting enormous amounts of data from the surface of Mars, and all of it is being beamed back millions of miles to one room where NASA engineers comb through every bit of it.

CNN's John Zarrella takes us inside.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT: Wolf, I'm in the surface mission support area. And this is where all the data comes down from the spacecraft and is initially gathered. Now, it's quiet in here right now. It's a little bit of a lull, but Mike Watkins, mission manager, is joining us here.

Mike, your shift is just about over. I know you want to get some sleep.

MIKE WATKINS, MISSION MANAGER: Yes, absolutely. I've been up here for quite a few hours.

ZARRELLA: So take us through. What happens here?

WATKINS: OK, so this room here -- and normally, it's packed with engineers here. We're kind of staffed 24/7 for the first, you know, couple of weeks of the mission. Normally, it's packed with engineers. We're taking a little break. We scheduled in a shift break for the folks, because we're about to start our big flight software transition we talked about earlier today.

So normally, data comes down from Curiosity. It comes down, usually via the -- our Mars Odyssey or Mars Reconnaissance orbiter. A little bit comes by the big antennas of the deep space network. But generally, the orbiters send us down a downlink.

And that downlink comes first through this room. And each of the engineers sitting at these stations take a look at what that data's telling them about the state of Curiosity.

So if you look at each of these stations, we've got power and system engineering and thermal. We've got the payload -- the payload health, flight software, attitude, all of these kinds of things. The engineers take a look at that data, and they make sure that the rover's healthy. They make sure the rover's in a state they want. And they get a first look at new pictures, at the first payload telemetry, how the instrument's doing: is everything healthy.

ZARRELLA: And then it goes to the science team from here. And the science team does what -- they look at...

WATKINS: That's exactly right. That's exactly right. So the engineers are here making sure everything is healthy and everything looks good. A lot of that stuff is science data, right? So the telemetry -- is it warm, is it powerful, all the kinds of stuff. So engineers are looking at that.

But a lot of this stuff is science data. And so the scientists take that data and look at it and say, this is an interesting rock. I should drive over there, or I should take more pictures of this rock. And we do that over in a separate science area where the scientists can talk a lot and interact and take a close look in high-definition television and other stuff of all the science data we're getting down.

ZARRELLA: And how often are you getting data? Is it like once a day, twice a day? How often does data come down from the spacecraft?

WATKINS: So the orbiters fly over us about twice a day. So each orbiter flies over in the afternoon, around 3 or 4 p.m. in the afternoon and then again around 3 or 4 a.m. in the morning Mars time. And of course, because Mars' rotation is a little bit different by about 40 minutes each day, the time of those downlinks kind of move throughout the Earth day.

So it can be any time of day our time but moving by about 40 minutes a day, but always the same time on the planet Mars.

ZARRELLA: So tell us real quick. Everything looks real good, right. I mean...

WATKINS: Everything looks fantastic.

ZARRELLA: Hard to believe. I mean, it's almost like...

WATKINS: It's exceeding our expectations, really. It's going as well as we could have both hoped in our best dreams. -- Wolf

ZARRELLA: So Wolf, again, we're here at the surface support operations center. And as you can see, it's quiet now, but this place will be packed with engineers within just an hour or so.

(END DIRECTION):

BLITZER: John Zarrella, thanks very, very much.

Kate, you know I still have this little dream that one of those cameras gets some little thing crawling on there. Can you imagine? Now, that would be breaking news.

BOLDUAN: I would -- to say the least, that would be breaking news.

BLITZER: Not necessarily green but little tiny thing. Waving.

BOLDUAN: It could be any color. A little hello. That would be nice.

BLITZER: That would be cool. BOLDUAN: Hello, Wolf Blitzer. Yes, realistically, though, it's pretty impressive how flawlessly this thing has gone so far. It's pretty, pretty neat.

All right. Coming up, equal opportunity makes a giant leap forward in the NFL. We'll meet the referee who's making history.

(COMMERCIAL BREAK)

BOLDUAN: Swimmer Ryan Lochte made a huge splash at the London games, winning gold, silver and bronze medals. The 28-year-old may be about to make a big splash on reality TV, as well.

His agent says Lochte has been offered several reality show ideas. Lochte has said he's not counting out appearing on "Dancing with the Stars," and he said he wants to move to L.A. to create his own fashion line. I think he's got a lot of options before him.

And also, we gave you a head's up about this earlier in the week. Take a look at football history in the making. Shannon Easton became the first woman ever to referee an NFL game last night. Yes, the big guys noticed.

(BEGIN VIDEO CLIP)

NORV TURNER, CHARGERS HEAD COACH: I got my picture taken with her before the game because it's, you know, it's history.

ANTONIO GATES, CHARGES STARTING TIGHT END: She held her own. She did a phenomenal job. And I think as professionals you just respect people who understands their craft and do the best they can at what they do.

(END VIDEO CLIP)

BOLDUAN: It isn't like Easton's never done this sort of the thing before. She's officiated college football games for 16 years. And by the way, the cap she wore last night is going to be in the NFL Hall of Fame.

I was kind of thinking, why is this taking so long?

BLITZER: Your career had gone in a different direction if you had decided to.

BOLDUAN: You have no idea. That's what I do during NFL games. I like to call the penalties.

BLITZER: We've got to go. That's it for us. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.

BURNETT: "OUTFRONT" next, the U.S. comes out today, slamming a company for doing business with Iran.