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Mitt Romney and Women Voters; Courts vs. President Obama; Obama Signs Bipartisan JOBS Act; Interview with Governor Nikki Haley; "We Went Into Survival Mode"; Running Against the Ryan Plan; "American Idle" Video Sparks Outrage; Sentencing for "Merchant of Death"; Rick Santorum for President?

Aired April 5, 2012 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now: The administration answers an extraordinary demand from a U.S. appeals court explaining where the president stands on the right of judges to overturn his health care law. Stand by.

Mitt Romney is already running into some trouble with female voters. I will ask South Carolina's Governor Nikki Haley what Romney has to do to fix that.

Also, new video just surfacing of a government worker joking around about how much of your taxpayer money his agency is lavishly spending. We're talking about hundreds of thousands of taxpayer dollars wasted.

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

The Obama administration replies to a rare order from a federal appeals court, the latest round in a sharp dispute over the nation's health care reform law. It began when President Obama warned the Supreme Court against overturning his cherished legislation.

Judges hearing a separate case took offense at what the president of the United States said, and they demanded a three-page written explanation.

Let's go straight to our congressional correspondent Kate Bolduan. She's working the story for us.

Today, the attorney general of the United States complied with that demand.

KATE BOLDUAN, CNN CORRESPONDENT: Complied with that demand. I guess to use a sports metaphor the ball may still be in play on this one.

I wouldn't quite call this letter a bombshell, but it's definitely another strange twist in this political battle with no end in sight.


BOLDUAN (voice-over): Three pages, single spaced, that was the unusual order by a federal circuit court. Attorney General Eric Holder personally responded, saying nothing has changed. "The power of the courts to review the constitutionality of legislation is beyond dispute."

President Obama's top law enforcement official saying, of course, the administration believes the courts have the power to declare acts of Congress unconstitutional, a long-accepted pillar of constitutional law. Still, this seemingly academic exercise is at the center of a testy political dispute over the Supreme Court's review of the health care law.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I'm just saying there's a lot of -- it's kind of ridiculous to believe that the president wasn't talking about the context of the case.

BOLDUAN: The White House remains on the defensive, with many Republicans happy to continue the fight.

Senator Mitch McConnell Thursday telling the president to "back off." All of this stems from these comments by the president Monday.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.

BOLDUAN: Remarks some interpreted as challenging the court's authority, and fueling the flames federal Judge Jerry Smith Tuesday demanded an explanation. The attorney general in his letter defends the president, saying his remarks were fully consistent with the principles of judicial review, though don't expect this to mark the end of the controversy.

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: He's making it clear to the court that the position of the president of the United States and the executive branch is that the courts basically should keep their nose out of the shaping of economic policy, except in the most dire of circumstances. So I think there's still quite a bit of tension now between the executive and judicial branches of the government. And this is rare.


BOLDUAN: And while passions remain high, this is all political talk since the reality is the final word comes one place and one place only, the Supreme Court, and this public spat isn't likely to have any impact on the justices specifically and their final decision expected in June, Wolf, but it is very interesting to see this, what may be private tension fall into the public sphere.

BLITZER: This president's had a rocky relationship with the Supreme Court over these past three-plus years. We all remember some other earlier incidences as well.

BOLDUAN: State of the Union, exactly. BLITZER: State of the Union and the chief justice was not happy and others were not happy as well, Samuel Alito in particular. Thanks very much for that, Kate. Good reporting.

The Harvard Law School professor Laurence Tribe, who taught President Obama at Harvard, said the president misspoke when he seemingly warned the United States Supreme Court. Tribe said President Obama "didn't say what he meant and in order to avoid misleading anyone, he had to clarify it."

Let's bring in our senior legal analyst, Jeffrey Toobin, who I believe also studied with Laurence Tribe among others at the Harvard Law School.

Correct me if I'm wrong, do you disagree with your former professor, Laurence Tribe?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I revere Laurence Tribe and I think he's completely wrong here.

I don't get what this controversy is about. It is a totally phony, made-up controversy. Barack Obama did not suggest he was not going to comply. He did not suggest that the Supreme Court didn't have the authority to overturn the health care law.

He simply said the court, in his opinion, should not do it. Presidents express opinions about the constitutionality of laws all of the time. He signed this law. Of course he thinks it's constitutional. So the idea that there is some challenge to the court seems to me completely absurd.

BLITZER: But, Jeffrey, the president said it was unprecedented that if the Supreme Court were to overturn a law passed by the House and the Senate signed into law by a president of the United States. That's what the U.S. Supreme Court has been doing for a couple hundred of years.

TOOBIN: Right. Since Marbury vs. Madison, they have the authority to overturn laws and nobody's challenging that.

What's unprecedented in the president's opinion is a ruling saying this law is unconstitutional, because the president believes that the law, the precedents of the court itself justify what Congress did in passing the law. I don't see how you could be so willfully looking for a fight to say that the president was somehow defying what the Supreme Court has historically done here.

BLITZER: Yesterday, right here in THE SITUATION ROOM, you remember this, Jeff. You accused that appeals court judge, Fifth Circuit, of what you called a judicial hissy fit by demanding this three-page letter.

Eric Holder, though, the attorney general, he formally responded with a very serious legal opinion. What do you make of the response? What do you make now, you have had a chance to digest this, this whole exercise between this Fifth Circuit Court of Appeals judge and the attorney general of the United States?

TOOBIN: I thought over what I said to you and then I decided to say it again on in an opinion column.

I think this was completely outrageous on the part of the Fifth Circuit. The president is entitled to his opinion on any number of matters, including the constitutionality of laws. The attorney general, of course, had to respond when a judge makes an order and -- you had better comply, especially if you're a litigant before that judge.

I did think it was interesting that even though the order was for a three-page single-spaced letter, the way I look at that letter, it's basically two-and-a-half pages.

BLITZER: Yes, but it was on three pages, though. The third page was not complete.


TOOBIN: I think you would make a good lawyer there.


BLITZER: It was on three pages.

I'm going to play the clip of what Laurence Tribe says the president misspeaking on Monday. Laurence Tribe, well known, a liberal law professor at Harvard. These conservative judges from the Fifth Circuit, they seem to agree with Laurence Tribe. Here's what the president said. Let's talk about this a little bit more.



OBAMA: I'm confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.


BLITZER: That's the clip. As you know since 1803, Marbury vs. Madison, that's exactly what the Supreme Court has been doing and now he's saying as Laurence Tribe points out this would be unprecedented?

TOOBIN: Well, he is saying it would be unprecedented in this context. I mean, remember, this is a president who is asking the courts to overturn the Defense of Marriage Act.

It's obvious that the president knows the courts can overturn laws. The courts have been doing this for many, many years. You don't have to be a lawyer to know that the United States Supreme Court has the power to overturn a law. I don't know how you could be so willfully obtuse, with all due respect to my beloved Professor Tribe, to think that the president is saying it is outside of the power of the Supreme Court to overturn a law. That clearly is not what he was saying there.

BLITZER: I think what Laurence Tribe was saying and what I say as well is what the president did on Tuesday, give some context, some perspective, he should have done on Monday, instead of just speaking the way he did because he could leave the wrong impression not only with his critics, conservative judges down in the South, but also with someone like Laurence Tribe. I think the context would have been much more important on Monday, but that's just me.

TOOBIN: Exactly. And you're in good company with Laurence Tribe. That's for sure.

BLITZER: I think we are.

Jeffrey, thanks very, very much.

In the Republican presidential campaign, Mitt Romney is in Pennsylvania, where Rick Santorum may have a home field advantage in the upcoming primary. Romney is looking ahead to another contest.

Our senior correspondent Joe Johns is here watching all of this.

It's all about as far as Romney's concerned the general election or is it more about Pennsylvania? He wants to crush Santorum in his home state.

JOE JOHNS, CNN SENIOR CORRESPONDENT: It's probably both, but make no mistake, Wolf, Mitt Romney is definitely trying to make it about this November.

The truth is he's been talking for months like he is in a general election campaign, but now he's going a step further and actually starting to gear up for the fall campaign, even though he still needs to get through a bunch of primary races and sew up hundreds of delegates to the Republican National Convention.


JOHNS (voice-over): Mitt Romney is visiting a phone bank in not so hostile territory, Pennsylvania, basically, Rick Santorum's home turf, though the polls have diminished Santorum's lead here in recent days.

Still, Romney was lowering expectations that he'd win the primary.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I think everybody expects someone to win their home state.

JOHNS: But not really conceding anything more than the moment.

ROMNEY: I'm going to win Pennsylvania in November.

JOHNS: With the nomination race looking more and more like a thing of the past, a couple of Romney milestones, for one thing, bringing on former RNC Chairman Ed Gillespie as a senior adviser, but even more importantly, the campaign is essentially starting its fall fund-raising push, as if Romney's already gotten the nomination, going back to deep pocket donors who bankrolled his primary races and asking for another check, which isn't expected to be much of a problem for Romney's wealthy friends.

GENTRY COLLINS, FORMER RNC POLITICAL DIRECTOR: I think the average Romney donor, I don't know about average, but certainly the prototypical Romney donor today is able to make another contribution to the general election. Now that that window has opened up, I think he will find a lot of success there.

JOHNS: Though some say Romney's fund-raising could still be hurt by the marathon nomination fight, which, for the record, is not over yet.

CRYSTAL WRIGHT, CONSERVATIVE COLUMNIST: People are clinging to their candidate of choice, and they want to feel good about it, but it also holds everybody on the sidelines as contributors. Well, I don't know. Is it really going to be Romney? There's a hesitancy here that we can ill afford. We need to just settle this, wrap this up so that we can have Romney take the fight to Obama.

JOHNS: Making that very point was the stop Romney meeting with conservatives attended by Rick Santorum in Virginia on Tuesday. Among the items of the agenda, sources told CNN they discussed whether an exit from the race by Newt Gingrich might help or hurt Santorum's cause or whether Gingrich's votes might go to Romney.

Santorum supporters have said Gingrich's continued presence in the race dilutes Santorum's political power.


JOHNS: However, to be clear, multiple sources have told CNN that the purpose of that meeting was not to figure out a way to force Newt Gingrich out of the race. Gingrich spokesman R.C. Hammond told me on the phone a little while ago he believes, Gingrich believes there is a way to assure a conservative nominee and that involves taking the issue to the convention -- Wolf.

BLITZER: Joe, thanks very much. Go exercise and do some workouts. You will be filling in for me tomorrow right here in THE SITUATION ROOM. Appreciate it very much.

JOHNS: Barbells.


BLITZER: So is Rick Santorum becoming irrelevant? Jack Cafferty is coming up next with "The Cafferty File." That's his question.

Also, why critics say you should be angry about the bipartisan jobs bills just signed into law. Plus, growing up brown in a black-and-white society. South Carolina Governor Nikki Haley writes about her experiences growing up brown in South Carolina in her powerful new book. We also talk about the GOP presidential race, Mitt Romney and women. Stand by for the interview.


BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, for a conservative Christian, Rick Santorum is rapidly becoming a candidate without a prayer. In fact, there's so much handwriting you can hardly see the wall. Pennsylvania, his home state, the place he said was going to get his second half of the campaign off to a rousing start is the same Pennsylvania that voted him out of the United States Senate by a margin of 18 points.

Well, guess what? Apparently the feelings of the voters in that state haven't changed all that much when it comes to Rick Santorum. Mitt Romney is surging in the polls in the Keystone State, and Santorum who once led there by double digits is rapidly losing ground.

Santorum is going from serious candidate for president of the Unites States to the butt of jokes. CNN political contributor James Carville said, "Santorum is like a chicken with his head chopped off. The chicken is dead. The only person that doesn't know it is the chicken," unquote.

Senator John McCain is calling Santorum irrelevant. McCain knows from irrelevant.

And a growing number of Republicans say he ought to go. Now, we find out that Santorum is going to take four days off from campaigning. I wonder what that's all about besides the Easter weekend. Do you suppose a little soul searching might be in order?

There's absolutely no way Rick Santorum is going to be the Republican presidential nominee, you know it. I know it, the voters know it, and on some level Rick Santorum knows it, too. So why stay too long at the dance and se what little credibility you might have left ripped to shreds as people watch you refuse to accept reality.

Here's the question. Rick Santorum for president? Seriously?

Go to Post a comment on my blog or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Jack Cafferty, thank you.

Back-to-back displays of bipartisanship here in Washington. For the second day in a row, the president has signed a bill flanked by lawmakers from both parties, including Eric Cantor. This time, it's the Jobs Act meant to give a special boost to small businesses. But there's small criticism from some consumer groups.

Our chief White House correspondent, Jessica Yellin is joining us. She's got the details -- Jessica.


It was an unusual sight. President Obama and Leader Cantor right there next to each other in the Rose Garden agreeing on the piece of legislation. But you know who doesn't like it? Many advocates for investors.


YELLIN (voice-over): It's touted as a major bipartisan accomplishment.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Start-ups and small business will now have access to a big, new pool of potential investors -- namely, the American people. For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: It's a straight-up, solutions-oriented bill.

YELLIN: The Jobs Act is meant to help companies raise money from investors, allowing them to advertise with direct mail online and other means, use the Internet to raise small dollar investments and let private companies go public without some SEC regulations and disclosure requirements.

But critics say this bill roles back protections that go back to the Great Depression.

ROBERT JOHNSON, INSTITUTE FOR NEW ECONOMIC THINKING: This bill should make us very angry because it's more business as usual.

YELLIN: Take, for example, the major investor losses after accounting irregularities at Groupon, a dot-com right before it went public.

Darren Robbins is suing on behalf of investors.

DARREN ROBBINS, ROBBINS GELLER RUDMAN & DOWD LLP: And the remedies that are now available to investors who have been victims of this alleged wrongdoing might well not be available had the Jobs Act been law when the claims were brought.

YELLIN: That's because this bill allows companies to avoid disclosing some critical, financial information. For example, companies worth less than $1 billion don't have to get outside accounting firm audit before going public.

The bill also lets investment banks once again peddle the research on the very investments they're selling to their clients.

ROBBINS: By decreasing regulation and allowing for less disclosure, I think it will be harmful to investors and ultimately harmful to honest companies because it subsidizes those who are willing to take advantage using false and misleading statements from the capital.

YELLIN: But the president says, I directed my administration to keep a close eye as this law goes into effect and to provide me with regular updates.


YELLIN: Now, Wolf, even the head of the SEC has said that parts of this bill could lead to abuse. But in his remarks today, the president used the opportunity to tell Congress they have to keep funding the SEC so it can keep a close eye on companies and make sure they're doing the right thing. We'll see how it goes, Wolf.

BLITZER: Jessica, thanks very much.

It's impressive the two days in a row, bipartisan legislation passed and the president signs it into law. Something's going on. We'll see what happens. Thank you.

Mitt Romney's problem with female voters, plus the Republican veep stakes. We're going to talk about all that and a lot of more with one of the rising stars in the Republican Party, the Tea Party favorite, the South Carolina Governor Nikki Haley. She is here in THE SITUATION ROOM. My interview with her is next.


BLITZER: When you talk about the Republican vice presidential nominee, her name frequently comes up. But this week, the South Carolina Governor Nikki Haley flatly said she's not interested at all. However, that doesn't mean she's not closely following the race for the White House and strongly backing her candidate.


BLITZER: And the governor of South Carolina, Nikki Haley, is joining us here us in THE SITUATION ROOM.

Governor, welcome.

GOV. NIKKI HALEY (R), SOUTH CAROLINA: Thanks, Wolf. I'm thrilled to be with you.

BLITZER: You've really written a powerful book and you really get into your life, "Can't Is Not An Option: My American Story." I want to get to it in a moment.

Let's talk politics a little bit. You want Mitt Romney to be the next president of the United States?

HALEY: I absolutely do.

BLITZER: You know this recent Gallup poll shows he has a significant problem with American women voters in swing state, the key battleground states that will determine who the next president is. Fifty-four percent in this poll say they support the president, 36 percent support Romney.

Why is he suffering among women voters right now?

HALEY: You don't look at what the issue is. You look at where the problems are.

And so, obviously, Governor Romney has not related to women. He needs to get out there and talk about the issues they care about -- they care about jobs, the economy and raising families, and all of those things. But they obviously are not relating to him as much as we want them to.

So that means he's got to work harder, he's got to continue to do that and he needs to bring the one golden bullet he's got, which is Ann Romney. When they see how strong she is, the fact that she's a cancer survivor, MS survivor, great mom, great wife, strong supporter, and hear her talk about him, I think that he'll do a lot better.

BLITZER: You know, she is a terrific asset. I've met Ann Romney. She's a wonderful woman.

Here's my analysis and tell me if you think I'm wrong. A lot of women out there are afraid that if he's the next president of the United States, he will work to take away their rights to contraception, birth control pills, abortion rights, that he's going to take all that away like a lot of the Republicans on the right are suggesting. And they're scared.

HALEY: Well, I think women are more thoughtful than that. I think they actually look at those issues as well as other issues, and I think they need the ability to ask them those questions. And I think he has to look them in the eyes and give them the answers, because that's what this is about. You don't go and talk to the people that you already have support. You go and talk to the people that have questions.

And if there are women that are questioning him, they should ask him those questions. That is the power of people's voice to do that.

BLITZER: If he is the next president, he could name one, maybe two Supreme Court justices who may overturn Roe versus Wade, which allows women to have abortions in the United States. And a lot of women are nervous about that.

HALEY: And they should ask that question. And I, without question, know that during the general election, when it is President Obama versus Governor Mitt Romney, all of those issues are going to come out. And that's where you're going to start to see the shift of women because --

BLITZER: Where do you stand on those issues -- like abortion rights, contraception, birth control pills? Should the government be involved in helping poor women, for example, have access to that kind of health care?

HALEY: Well, I tell you, I'm strongly pro-life not because the Republican tells me to be, but because, like I say in the book, my husband was adopted. We had difficulty having both our children. So that is where my beliefs come from.

In terms of contraception, I think all that you're hearing -- you are hearing a lot of talk from the media about contraception. What I'm saying is that women don't just vote on the contraception issue. They're smarter than that. They're broader than that.

What we're saying is, government should not mandate any organization or association to have to have contraception in their coverage. They should be able to have the right to choose that. That's what we're saying. It's not a matter of whether we believe in it or not, it's a matter of whether government should mandate that an organization that doesn't want to have that coverage has to cover it.

BLITZER: Let's talk about "Can't Is Not An Option." I was moved by several passages -- and if you don't mind, I highlighted a few that were significant, and I'd like you to read those to our viewers.


BLITZER: And then we'll talk about these sections.

Here is one in the beginning part of the book.

HALEY: We were the first Indian family ever to live in Bamberg, in a time and place that only knew black and white, we didn't fit either category. We weren't dark enough to be black or pale enough to be white, we were brown. That difference, our difference was an inescapable fact.

We cope the only way we know how, we went into survival mode. We clung to one another tightly. We worked hard. We were respectful to our neighbors. We tried to fit in.

BLITZER: And you looked different because your father, you come from a Sikh family. He had a turban.

HALEY: My father wore a turban. My mother wore a sari. We came into this -- I was born in that town, but we lived in a small southern town where they didn't understand us and we didn't know how to fit in with them.

But what we saw, whether it's the story that I talk about because we were disqualified from a pageant because they didn't know to put us in the white category or black category. Whether it's the fact that my father and I went to a produce stand and immediately two police were called in and we had to deal with that situation.

I mean, all of those stories while they are challenges, while they were hard, what I hope people understand is that same town is the one that took us in, allowed me to be a part of the girl scout.

Supported my brother when he was deployed to "Desert Storm" and the same town now has a sign that says the proud home of Nikki Haley. BLITZER: And they should be proud. You write about when you were a little girl you and your sister went to this little beauty pageant and read this section to our viewers, if you don't mind.

HALEY: The pageant tradition had two winners. A black queen and a white queen, but before they revealed who the winners were the organizers of the pageant said that they had an announcement to make.

They called Semi and me out of line and said we don't have a place for you. Then thanked us and handed us gives. I got a beach ball.

BLITZER: Explain why that beach ball was significant. I highlighted another line there.

HALEY: Not wanting either race to get upset, the judges disqualified us.

BLITZER: Because you weren't black and you weren't white. What happened?

HALEY: They didn't want to upset either group, and my mom went to them and said will you at least let her sing her song. She's been practicing. I sang "This Land Is Your Land, This Land Is My Land."

BLITZER: And you did well?

HALEY: I did well. I stumbled a little bit. My brother was playing the saxophone right in front of the stage and he was laughing at me. I, at the time, thought they gave me a beach ball because I did so great at my song. Later, my sister already knew, but later, I realized it was because we were disqualified.

BLITZER: All of these must be so etched in your mind. You remember all these moments and there was --

HALEY: And let me just tell you that, you know, it's amazing how things stick with you because my daughter just was in her school pageant a couple of weeks ago, and I was terrified.

And I told my husband, Michael, I said, I know this doesn't make sense, but I'm so worried she's going to be disqualified. He said, Nikki, you know that's not going happen.

And it was such a sweet moment because she got first runner-up and it just reminded me again how far we've come.

BLITZER: Certainly have and then there was a kick ball game in your third grade and you had this incident.

HALEY: I was stunned, why I asked? You can play with us, but you have to pick a side. Are you white or are you black? She replied, I was in a panic, which side could I choose? What was I?

Then I saw the solution, changed the subject. I grabbed the ball from the girl and ran as fast as I could in the field. I'm neither, I yelled. I'm brown.

Before I knew it, we were playing kick ball on the play ground. I had dodged the issue once again, but something told me it wouldn't be the last time I'd have to.

BLITZER: And it wasn't the last time you had to, you spent your career sort of dodging that issue one way or another.

HALEY: Until the governor's race.

BLITZER: And now you're going to be governor and you're not going to disappoint the people of South Carolina and become a vice presidential nominee, is that what you're saying?

HALEY: No. They took a great chance on me and I owe them the commitment to be a great governor.

BLITZER: So you are in the governor's mansion at least for this first term.

HALEY: You know, how great does it say a about South Carolina that they elected a 38-year-old Indian-American female for governor of their state. It shows how proud we are of South Carolina and how proud we should be in our country.

BLITZER: And you told Mitt Romney, don't vet me. Don't talk to me. I'm not interested. Is that right?

HALEY: No cabinet position and no vice president.

BLITZER: No cabinet position either.

HALEY: No, listen, I made a promise to the people of my state. I am so thankful and I love the state of South Carolina and I'm going to finish what I started.

BLITZER: And if you do a good job, maybe 2016 and 2020. There's a long time ahead of you. You're still young.

HALEY: We're taking it a day at a time.

BLITZER: The book is entitled "Can't Is Not An Option, My American Story." It's written by the governor of South Carolina, Nikki Haley. Thanks for coming in.

HALEY: Thank you so much. It's a pleasure.

BLITZER: Not now, how about later? Could Governor Nikki Haley be a presidential contender in 2016 or beyond? Our "Strategy Session" coming up next. We'll talk about that and more.

Hundreds of thousands of taxpayer dollars simply wasted. We have new video of a government worker joking about how much of your money, his agency, is spending right now. You're going to want to see this.


BLITZER: Let's get right to our "Strategy Session." Joining us now the CNN contributor and Democratic strategist, Maria Cardona and CNN contributor, David Frum, former speechwriter for President George W. Bush.

Quickly, Nikki Haley, she's a very impressive woman. You got to admit. She's not doing anything this cycle, 2016, 2020. You see her as a potential Republican presidential candidate one of these days?

MARIA CARDONA, CNN CONTRIBUTOR: I think there's certainly a possibility for that, Wolf. I saw the interview. I think she's very impressive and she's got a terrific story. I actually was one of the ones that was defending her when she was running when there were the salacious innuendos about her, and I was very glad she won. So we'll see. Right now, apparently, her approval rating is suffering, but 2016, 2020, I say she should go for it.

BLITZER: Is she the future of the Republican Party?

DAVID FRUM, CNN CONTRIBUTOR: She could be a big part of it. Approving ratings are bad in South Carolina. South Carolina is one of the states worst hit by this economic crisis. Unemployment is very tough there.

Plus they have the terrible question mark over the future of Charleston and it's very hard to make everybody happy in that debate and governors get caught up in that.

But she's doing something very smart. She's working in getting herself re-elected as governor. Re-elected governors make much better presidential candidates than first term governors.

BLITZER: Along those lines, David, you write in "The Daily Beast," among other things. You write this, you say, Democrats want to run this election not only on Obama's record, but on Paul Ryan's plan and that the Republicans have decided to make it as easy as possible for the Democrats to do it."

The Republicans, Romney wants to associate himself with Paul Ryan. The Democrats think fine, that's great. Who's smarter in this area?

FRUM: Well, we don't know what Romney wants to do. We know what he's been backed into doing both by his own party.

BLITZER: To endorse the Ryan plan.

FRUM: Governor Romney released an economic plan in September that was not the Ryan plan. It was very different from the Ryan plan.

BLITZER: The original Ryan plan.

FRUM: And all subsequent iterations. His September plan was a very sophisticated document and you can download it on your Kindle. BLITZER: When he co-author with Ron Widen, the Democratic senator from Oregon?

FRUM: This is on Romney's website and it was introduced by Greg Mancue and Glen Hubbard. It's a very impressive piece of work.

BLITZER: The Romney plan or the Ryan plan?

FRUM: The Romney plan.

BLITZER: Because Ryan came out with a subsequent plan that he co- authored with Ron Widen, the Democrat from Oregon.

FRUM: But the point is that Romney spent the months from September to December trying to find a way not to endorse the Ryan plan. Then in December, he was really trapped and now he has to wear it, but it's not where he wants to be. It's just where he is.

CARDONA: That shows that Romney is no profile and encouraged no one putting into his head to embrace the Ryan plan. He had to do it in order to get the nomination, which was exactly his problem to begin with.

And the Ryan plan is a very dramatic and right wing plan and in fact, Newt Gingrich even called it right wing social engineering. I think in a moment of truthfulness and I think that is a problem that Romney has.

BLITZER: Because even Donald Trump has complained about the politics of the Ryan plan because he dealt with entitlements like Medicare, for example, which gives the Democrats a huge opening.

FRUM: Yes, I don't know about the phrase even Donald Trump connected to anything that is -- but when you are challenger and face an incumbent president who's has a pretty weak record, you do not need to make yourself the story?

He's the story. How does he do? Does he deserve to be re- hired and then the challenger just needs to surmount the barrier acceptability. Be acceptable, show that incumbent is unacceptable.

The Republicans have backed themselves into this position where they are the story and every day they're talking about this, that we are not talking about. The economy in 2012 is not better than the economy was in 2009. President Obama can't say there are more people back to work. We're still below --

CARDONA: Actually, he can say that.

FRUM: We're still below the level of the --

BLITZER: The jobs number tomorrow morning. If it's another 200,000 or more that would be good political news for the president and good news for the American people as well.

CARDONA: Very good news for the American people. And this is what the American people understand, that President Obama was handed a horrible economy. And the same, exact policies that put us in the horrible economic hole are the same economic positions that Mitt Romney and the Ryan plan are embracing.

BLITZER: The president wants to cut half a trillion from Medicare and end Medicare as we know it. The Democrats often say about the Republicans, but Romney said it about the president.

CARDONA: Which is so funny because in 2010 the Health Care Act actually did cut a lot of the waste out of Medicare, and that was something that Republicans ran against the Democrats. And they keep saying that this president has not put a plan forward to fix all of these entitlements.

BLITZER: Very quickly.

FRUM: The debate is how do we save money? Do we do it by bureaucratic fiat or market mechanisms and that's what the best parts of the Republican plan say, market mechanisms in Medicare not more --

BLITZER: We will continue, guys, but not right now. Thanks very much for coming in.

A newly surfaced video sparking fresh outrage over a lavish Las Vegas conference paid for with your taxpayer dollars. We have details about a surprise new twist in a growing controversy.


BLITZER: There's a new twist in the uproar over a lavish Las Vegas conference organized by the federal government's General Services Administration that cost American taxpayers well over three-quarters of a million dollars.

Our senior congressional correspondent, Dana Bash, she's got new details here and details of a new video that has just surfaced. Awkward stuff that's going on here.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I think this deserves a classic Wolf Blitzer OMG. This is just really remarkable.

Our viewers, of course, remember this week started with news that GSA administrator, Martha Johnson, resigned after scathing report detailing excess spending at a training seminar at a lavish Las Vegas resort in 2010.

Now we have something that you need to see to believe. It turns out that at that conference, which cost taxpayers $822,000. The GSA picked a winner of a video contest and an employee from a regional office in Hawaii won.

Take a look at this video and listen to employee making fun of excess spending and says he would never be under investigation.

Now the other thing you heard there in that rap was him saying that every GS-5 would get a top hat award. The GS-5 is an entry-level government employee and the top hat award we also found out today, is something that the GSA awarded employees that gave $200,000 of taxpayer-funded iPods, electronics and gift cards.

Meanwhile, the GSA held an awards ceremony for that winning video and they held it, yes, at the excessive Las Vegas conference and what you're about to see is the deputy commissioner of Public Building Service, a federal employee giving out an award where he appears to mock oversight of the GSA.


UNIDENTIFIED MALE: Now there are just a couple of small matters. The hotel would like to talk to you about paying for the party that was held in the commissioner's suite last night.

You need to take care of that and Eleanor Holmes Norton, our chairwoman on the Oversight Committee called and she has questions about the proposed pay increases for executives that you mentioned outside something about going against the Obama administration discussion about executive pay and incentives.


BASH: Now we got all these video from Capitol Hill today. I'm told that the House Oversight Chairman Darryl Isa's office got it on a disk from the GSA inspector general as part of the congressional investigation.

All of this excess spending and of course, they then released it to the public. Wolf, we just got a statement from the GSA responding and they said that this video is, quote, "Another example of the complete lack of judgment exhibited during the 2010 western regions conference. Our agency continues to be appalled by this indefensible behavior and we're taking every step possible to ensure that nothing like this ever happens again."

BLITZER: It's pretty shocking that four years into the Obama administration stuff like this is going on, and I understand there are other even more damaging video material potentially out there?

BASH: That's right. Our Deidre Walsh, our congressional producer learned from a congressional source today that who is familiar with this investigation that the GSA had an agency internal web site that had video clips like this and probably others about the conference in Las Vegas.

That web site isn't up anymore internally. So the House Transportation Committee, which is investigating is demanding more information about it and other things that Deidre learned is that the committee requested information on the GSA budget earlier this year.

And that's when they noticed that other federal agencies' budgets were going down and the GSA budget and although that was going up and that's when they got suspicious. So this is something that is the beginning of what we're going to see.

BLITZER: And the woman, as you know, the president appointed to run the GSA, a political appointee, she is gone now.

BASH: She's gone. She resigned on Monday in what appeared to be a very carefully coordinated and orchestrated resignation by the administration that recognized right away that this was a big problem.

BLITZER: This is hugely embarrassing to the administration. We'll see the next steps. Thanks very much.

BASH: Thank you.

BLITZER: -- for that shocking and it still goes on. I've been hearing about this for years and years, but even in this day and age --

BASH: In this day and age.

BLITZER: They go and do this.

BASH: With YouTube. You can't keep secrets like this.

BLITZER: What are these people thinking?

BASH: I don't know.

BLITZER: The Muslim Brotherhood making a good will visit to the White House amid concerns they'll turn Egypt into a fundamentalist Islamic state. What is going on? We'll go there in a moment to check.

A Russian arms dealer dubbed the merchant of death is facing a long prison sentence in the United States. Erin Burnett is standing by.


BLITZER: Sentencing in New York for convicted Russian arms dealer. His accusers call the merchant of death. He is in court this hour facing 25 years to life.

CNN's Erin Burnett is out front with this story. Erin, you're talking to someone who knows this individual really well. Tell us what you're learning.

ERIN BURNETT, HOST, CNN'S "ERIN BURNETT OUTFRONT": It's pretty amazing. We are literally waiting for the sentence to come down, Wolf, at any moment. And the way that it is supposed to be is a minimum, mandatory 25 years up to life in prison, as you just said, for Victor Boot.

This guy is -- there are a lot of arms dealers still out there doing their jobs and you can only imagine people who are making a lot of money, for example, on what's going on in Syria right now.

But Victor Boot was among the prolific arms traders in history, surface-to-air missiles, machine gun, sniper rifles and 10 million rounds of ammo just in Colombia alone, Wolf.

So he was prolific and as you know, of course, for the "Lord of War" movie with Nicholas Cage in 2005. Nicholas Cage was playing Victor Boot. We're going to talk to a woman named Kathy Lynn Austen and I've been talking to her during this entire trial, Wolf.

She has spent 10 years, she's spent following Victor Boot through Africa and through the Congo basically under cover trying to find out what he was doing and doing deals with him, for example, when he wanted to buy planes to transfer his weapons in and out of the Congo.

She's at the trial today and she's going to be our guest tonight and it will be very interesting to see what the sentencing actually is.

BLITZER: We'll be watching at 7:00 p.m. Eastern later tonight. Erin, thank you.

BURNETT: All right, thanks, Wolf.

Amid fears they'll turn Egypt into a strict Islamic state, members of the Muslim Brotherhood meet with key Obama administration officials at the White House and the State Department. Stand by.


BLITZER: Jack Cafferty is back with "The Cafferty File" -- Jack?

JACK CAFFERTY, CNN ANCHOR: The question this hour is Rick Santorum for president, seriously?

Kathy writes, "Santorum's worse than the guest who refuses to acknowledge he's overstayed his welcome, any believe me, he has. He's right up there with Sarah Palin when it comes to handing out irritation big time. Santorum's ego so big it hasn't dawned on him that he's not our gift from God."

Allen writes, "With Santorum, we get more religion in government. That works so well in Iran, what could possibly go wrong here?"

Dominic in Atlanta, "I just became a United States citizen three weeks ago. I might be going back to Canada if Pope Santorum ever becomes president and after 12 years, I was starting to like it here."

Ram writes, "Seriously, if you're a hard core, right wing conservative who is not convinced by flip-flop Romney, what choice do you have? You're not going vote for the president. The only place to turn to is Santorum, Gingrich, Paul or not vote at all."

Paul writes, "No, not seriously. The old saying is familiarity breeds contempt. Well, the voters in Pennsylvania are most familiar with wacky Rick and his chances there are nil. No one but Santorum and handful of diluted followers have ever taken his candidacy seriously. Santorum has progressed from odd to strange to weird to irrational to off the chart nuts. What's left?"

Frank in L.A., "Mitt Romney for president, seriously? Newt Gingrich for president, seriously? Rick Perry, Herman Cain, Michele Bachmann? The Republican Party is in serious condition, seriously."

And Sandra writes from Texas, "Maybe he thinks there will be an immaculate election." I love these. If you want to read more about this, go to my blog or through our post on THE SITUATION ROOM's Facebook page. The viewers are the best.

BLITZER: They are terrific. We love them. Thanks to all of our viewers and Jack, thanks to you.