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New Information on Kabul Attack; Bachmann's Candidacy

Aired June 29, 2011 - 19:00   ET


JESSICA YELLIN, CNN ANCHOR: Thank you, Wolf. Good evening. I am Jessica Yellin sitting in for John King.

We begin tonight with new information on the deadly insurgent attack at the Intercontinental Hotel in Kabul, Afghanistan. Nine gunmen and suicide bombers staged that attack and all nine were killed by NATO and Afghan security forces.

Twelve other people including two police officers were killed in that violence. Despite the Taliban's immediate claim of responsibility, today, the Afghan government blamed the attack on the Haqqani network.

That's an al Qaeda linked militant group based in Pakistan. An American PhD student who is staying at the hotel as the attack unfolded told CNN there were explosions all around him.


SAIZ AHMED, AMERICAN SURVIVED AFGHAN HOTEL ATTACK (via telephone): When they got closer, my room started to shake. I was on the floor in the corner of the room, the safest place I could think of.

One of them went off below me because I felt like I kind of popped up a little bit. I didn't go flying into the air, but I felt the ground move up and then I was just praying that the next one wouldn't be right under me or above me.


YELLIN: We are joined now by Jerome Starkey, a reporter with the "London Times" who was in Kabul. Jerome, at first it was thought Taliban were behind this.

But now this group related to al Qaeda is believed to be responsible. Tell us a little bit about who they are and generally what do we know about them?

JEROME STARKEY, REPORTER, TIMES OF LONDON: Well, the Haqqani are particularly active in east in Afghanistan where mostly U.S. forces are based in the mountainous area along the border with Pakistan.

But their headquarters, their base, their safe haven we understand is in fact in neighboring Pakistan. They're led by a man Jalaluddin Haqqani and his son.

They are widely considered one of the most extreme, one of the most hard line of the three main insurgent groups fighting here inside Afghanistan.

They are also considered to be the least amenable to possible future peace talks. Certainly this attack on Kabul's Intercontinental Hotel has all of the hallmarks of the Haqqani network.

In the past, there have been the Haqqani network that has pulled off the most mordacious, the most complex, and daring attacks against particularly difficult or well defended targets.

Afghan officials and indeed U.S. and NATO officials here in Kabul say they believe this attack has all the hallmarks of being carried out, planned and carried out by Haqqani fighters.

YELLIN: As you allude to it, it was a brazen bombing. But we're still learning more how it was pulled off. What new information do you have?

STARKEY: Well, interestingly, we understand that there were nine attackers who managed to sneak up on the hotel through a wooded slope underneath the building, thereby avoiding the only road in and out, which is heavily defended by two police check points.

Afghan police are still sifting through the debris of this attack, searching for clues amongst the rubble, searching for anything that will help them identify the people responsible and crucially now identify the people who helped the nine attackers.

All nine men involved in this attack were killed during the course of the battle, which lasted more than seven hours. But we understand the Afghan police have launched a major investigation.

They are trying to identify who it was who drove these men, complete with rocket propelled grenades, AK-47 assault rifles, and indeed a Russian made heavy machine gun.

How did these men get driven to the scene of the hotel, who was their support network, who was behind it, that investigation very much in full swing at the moment.

YELLIN: And I understand you were nearby when the attack took place, would you describe what you saw on the scene at the time?

STARKEY: Well, I moved to a nearby hilltop a few hundred meters away from the Intercontinental Hotel where I knew I would be able to see what was happening.

As I crested the hill, it was very late at night, it was darkness. I thought I could hear helicopters overhead. But as I came over the crest of the hill and I saw the hotel on the skyline in front of me, I realized it wasn't helicopters.

That sound was in fact just the sheer weight of gunfire coming from the hotel, traced the fire from a heavy machine gun possibly from an anti-aircraft arching into the sky interspersed by the explosions.

We think possibly suicide bombs and grenades going off. It was a very intense battle going on in the hotel.

YELLIN: Terrifying scene, no doubt. Jerome Starkey reporting for us from Kabul. Thank you so much.

Today at the Intercontinental Hotel, a conference was supposed to have been held detailing the plans to transfer security in Afghanistan from international forces to the Afghans themselves.

It is all part of President Obama's objective to begin reducing America's military presence there. So what's really going to happen in Afghanistan when the U.S. military leaves?

CNN's Nick Paton Walsh has some answers from an isolated military outpost.


NICK PATON WALSH, CNN CORRESPONDENT (voice-over): Everywhere you look here on Afghanistan's eastern border, the choices aren't good. Outpost caught between hills full of Taliban.

If the Americans leave, militants from Pakistan will flow through the valley. If they stay, then every few days this happens. Mortars hit the base.

The last attack was long enough ago there's panic. They are worried the Taliban have been preparing a big one. For days they have finally amassed around the compound and attacked.

UNIDENTIFIED MALE: Come on, hustle up, grab it and be ready.

WALSH: They use mortars first aiming for Taliban dug into the hills, but the incoming fire is very accurate here. They arrange cover from heavy machine guns.

UNIDENTIFIED MALE: As soon as they go, go quick.

WALSH: But the bullets are too close.


WALSH: Locals scatters, just before huge American fire power have the last word. Four massive air strikes on the hills and then the Taliban fall silent. America knew why it came here, but isn't sure why it's staying.

Ten minutes later, jets swoop in to strike the hills, a show of force for the Taliban are now either gone or dead, at least five killed by the soldiers' count.

The next morning, it starts again. Mortars and rocket propelled grenades pound the base.

(on camera): For a second time in just 15 hours, under attack. Much heavier this time, and appears they have taken casualties.

(voice-over): More air strikes. This valley is vital strategically, but doesn't want to be conquered. Medics fly in to collect one soldier. His injuries are not life-threatening.

There's no real victory to be had here. Just a question of how long they will stay growing louder. Nick Paton Walsh, CNN, Puna, Afghanistan.


YELLIN: Coming up next, here in the U.S., is Michele Bachmann getting more media scrutiny than her male counterparts in the GOP race? Is that because she's a woman? We will get some answers.

And later, what do protesters in Greece have to do with the economy here in the United States. Our Richard Quest explains the global domino effect.


YELLIN: Republican presidential candidate Michele Bachmann told people in South Carolina today that the media is looking for her to get into a mud wrestling match with Sarah Palin, and she won't do it.

She is getting a lot of traction and a lot of attention since she announced her candidacy, but is she also receiving unfair treatment from the media because she's a woman?

Republican strategist Mark McKinnon says the answer is simply yes. We are also joined by Democratic pollster Cornell Belcher who's a CNN political contributor as well.

So Mark, let's start by taking a look what you wrote in "The Daily Beast" this week. Conservative women in politics run a punishing gauntlet. They endure psychological evaluations and near gynecological exams that their male and liberal counterparts do not.

Bachmann you say is not crazy, but the media are if they continue to view her as such. My question is why do you think this is specific to conservative women?

MARK MCKINNON, FORMER BUSH CAMPAIGN MEDIA ADVISER: Well, maybe because I'm watching conservative women more than I am women in general. Perhaps there could be a case it applies to women across the board, but there is no question.

You know, I disagree with Sarah Palin. I disagree with Michele Bachmann. They are not my candidates in the Republican primaries if Palin runs, but I just see a pattern and recognize the pattern that the way that they get treated.

They amplify the gaps. They amplify things you don't see with the male counterparts, including the president, and I think if you look at it historically and look at over the last couple years, there's no question. You have a legitimate point. It may apply to Democratic women as well.

YELLIN: Cornell, do you think this a story line where Republicans and conservatives want to push because they see Michele Bachmann as a real threat and a contender. And they want to give her as much lift as they can or do you think it is legitimate that she's getting unfairly attacked?

CORNELL BELCHER, DEMOCRATIC POLLSTER: Well, to jump in here, I mean, I like Mark actually watch women in general. That said, I think when you look at the women do have a higher threshold.

No one associated with the Hillary Clinton campaign last time around would say conservative, only something that conservative women have to go through. You look at some of the stereotypes that impact with minorities as well as women running for office, they have to overcome those.

The toughness factor is one key stereotype women have to deal with, whether conservative or liberal, whether tough enough for the job. So there are still stereotypes women have to overcome that men are not challenged with.

I think Bachmann, I take very serious. I think - and I said it after the CNN debate. I think she is the one with the highest up side in the end. She speaks to the grass roots, Tea Party grass roots of the Republican base in a way that I think guys like Pawlenty and Romney just don't.

YELLIN: I want to ask about the comment of Amy Kremer of the Tea Party Express made. Mark, she warns that Bachmann would be, quote, "Palinized in this election," meaning that the media will tear her apart. Listen to what Representative Bachmann herself said today in South Carolina if you would.


REPRESENTATIVE MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: I have a very good relationship with Governor Palin. It seems to be their sideline right now. They want to see two girls come together and have a mud wrestling fight and I'm not going to give it to them.


YELLIN: So do you agree that's what the media is looking for, it is media that's driving this?

MCKINNON: I think the media loves conflict, and I think that Representative Bachmann is playing it very smartly. On the other hand, you have to recognize and acknowledge that they are going after the same base voters.

I mean, the demographic and the voters that the Palin and Bachmann are appealing to idea logically are the same pool of voters. There is some really conflict there, whether they want to acknowledge it or not. YELLIN: At the same time, Cornell, I hear people say all the time that Michele Bachmann's success must drive Sarah Palin nuts and that must be why Sarah Palin is circling the campaign trail because they go to the same base.

But you don't hear that about Rick Perry the governor from Texas who also goes after the same base. You don't hear it about other conservative men who are going after the same similar base of voters.

So I do hear the media in particular say if Sarah Palin gets in, Michele Bachmann's career is over.

BELCHER: I wouldn't disagree with that. And by the way, while the candidate is not going directly after Sarah Palin because it would be unwise from a strategy standpoint, her surrogates are.

I mean, look, I think Ed Rollins is someone who is part of that campaign, and Ed has said some things that sort of try to push Sarah Palin off the stage.

But guess what, they need strategically to push Sarah Palin off the stage because they go after that same demographic. But again, if you're asking if there's a double standard in politics and in society in general between how we treat women candidates and women in business and men, absolutely there is.

Do they get more scrutiny? Absolutely they do. Do they have to overcome more to get to the positions of power? Absolutely they do. It is unfair, but that's the way our society works unfortunately.

YELLIN: Let's give a little scrutiny to one of the -- go ahead, Mark.

MCKINNON: I just wanted to add that I think Governor Rick Perry will go after the same base as Sarah Palin and Michele Bachmann, they will all be fighting for the same votes. If Rick Perry gets into it, there will be the same conflict with Rick Perry.

YELLIN: But you don't hear them describe it as an either or in the same way. It's either Bachmann or Palin, but if Perry gets in, it's Perry and Bachmann will be going after the same base.

There's a slight -- I hear your point, there's a slightly different way that somehow the narrative is constructed.

MCKINNON: I agree with you.

YELLIN: Let's talk about Palin. Palin went to the premier of a movie about her political life last night in Iowa. After the movie, she said this to the audience. Take a listen.


SARAH PALIN (R), FORMER ALASKA GOVERNOR: The movie isn't about me, it is about America's values. It is about work ethics that you here in Iowa, you all embrace. (END VIDEO CLIP)

YELLIN: So she says it is not about me, it's about my values. It's about my life. I'm curious, Mark, how does she get away with this, that she can always endlessly deflect, even if it doesn't exactly make sense. And if the media calls her out on stuff like this, we get blasted for being unfair to her.

MCKINNON: Well, listen, she has become very adept as playing the victim card and then playing to her base. The base feels like they are victimized.

They feel like they are victimized by the president and by the current government. So she plays into that sense of victimization that her base feels and she plays it pretty well.

YELLIN: Interesting. Cornell, let's look at the Republican field. We have seen recent polling that shows Michele Bachmann is outperforming expectations, tied for first place in Iowa, second in New Hampshire.

She is up a lot in a short time, but let's put it all in perspective. A recent "The New York Times" CBS News poll shows that GOP Republican voters are still unsatisfied.

When we asked is there any candidate you feel excited about, 67 percent say no, 7 percent say they are excited about Mitt Romney, 7 percent say they're excited about Michele Bachmann. I know you don't speak for Republicans, but you're a pollster. Let's be fair, is it actually too early to read into this lack of enthusiasm?

BELCHER: It is way too early to look into this lack of enthusiasm nationally because one thing that Mark and I both know being on the campaign trail is that these primaries are not a national primary. They are state by state battles.

The first state is Iowa, then New Hampshire, and so on, and those states are where you have to battle and win, and Bachmann has pulled even with establishment front runner, and the first states speaks about what is soft or paper tiger, frankly Romney.

No one who watch what the Tea Party grass roots did over the last year or so tossing out candidates left and right in the primaries and caucuses can say that you know, a guy like Romney who establishment candidate is going to run easily through the primary and caucuses.

Because the Tea Party is going to have a say in whether it will be Rick Perry or Bachmann who right now I think speaks to that Tea Party grass roots. They are going to have significant say in this, just the way I think our lefts had significant say against the anti- establishment candidate last time around.

And gave a rise to Barack Obama, you know, that sort of hunger in the grass roots for something different. I think you see that same sort of hunger for something different anti-attachment on the grass roots on the right, right now, and that's not Mitt Romney and certainly isn't Tim Pawlenty.

YELLIN: Gentlemen, thank you so much. Mark McKinnon and Cornell Belcher.

And just ahead, a big victory for the Obama administration in the fight over the new healthcare reform law.

And we will speak with Congressman Ron Paul of Texas who's running for the Republican nomination for president. We'll get his position on the debate over military activity in Libya and the war powers resolution.


YELLIN: Welcome back. If you're just joining us, here is the latest news you need to know right now.

A federal appeals court upheld a controversial part of the healthcare reform bill. It ruled that the individual mandate provision, which will require nearly all Americans to buy health insurance is constitutional.

The federal judge overseeing Jared Loughner's case declined a defense request to stop prison doctors from forcing Loughner to take medication. Lawyers say his rights are being violated. Loughner is accused of shooting and wounding Congresswoman Gabrielle Giffords in Tucson and killing six people.

Fire officials in New Mexico say they believe the Los Alamos National Lab will be spared by a wildfire raging right near the complex. They say all toxic materials are secure.

And Tropical Storm Arlene is expected to hit the Gulf Coast of Mexico tomorrow. Twelve Mexican states are now under heavy rain warnings.

Coming up, outspoken Congressman Ron Paul who is running for president. How does he feel about the president's dire forecast if congress fails to raise the debt ceiling? We'll ask him next.


YELLIN: President Obama stated emphatically today that the American military mission in Libya does not fall under jurisdiction of the 1973 War Powers Resolution. The administration's position has angered not only many Republicans on Capitol Hill, but many Democrats as well.

We are joined tonight by Congressman Ron Paul from Texas, also running for the GOP presidential nomination. Congressman Paul, thank you for joining us.

First of all, you think the president does not have the right to engage the U.S. in the NATO led effort in Libya without Congress's approval. Today in his press conference, the president made clear that he believes the law does allow him to make this commitment on his own. Listen to this a moment if you would.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I am not a Supreme Court justice so I'm not going to put my constitutional law professor hat on here.

Do I think that our actions in any way violate the War Powers Resolution, the answer is no. So I don't even have to get to the constitutional question.


YELLIN: Simply, sir, what's your reaction?

REPRESENTATIVE RON PAUL (R), PRESIDENTIAL CANDIDATE: That's a horrible statement. No, he should get to the constitution. He doesn't have to be a constitutional lawyer. You take an oath of office to obey the constitution. If we don't know what it says, how can we take the oath?

The Constitution is very clear. You don't go to war without a declaration. I agree there's some confusion with the War Powers Resolution, because technically it legalized war rather than prevented war. So, I don't particularly like that bill, but even, it is the law of the land. Even that he has violated, because he can't go to war by talking to the United Nations and NATO and refusing to talk to the Congress.

I think this is so sad and the kind of thing I had been fighting with both parties for decades now. I think it's taken one step worse because he's been a little bit more aggressive in declaring that he is the unitary president, that he can do what he wants. He doesn't have to tell the Congress.

So, I find it rather sad he has taken that position.

YELLIN: We'll get back to the question of consulting Congress. But, first, I want to ask you about a point Senator John Kerry raised. As you know, he is chair of the foreign relations committee in the Senate and he raised the point that if Congress wanted a say in this, they actually had a chance.

Listen to this.


SEN. JOHN KERRY (D), MASSACHUSETTS: You're saying the president violated the process here and didn't come to the Congress. He did come to the Congress. He sent us a letter requesting us to do the authorization. And we didn't do it. That's the simple fact here.

(END VIDEO CLIP) YELLIN: He's saying Congress dropped the ball at the very beginning. Do you acknowledge that Congress could have done something and didn't?

PAUL: Well, they could have done a lot more sooner, that is true. They shouldn't have waited for more than 90 days. They should have immediately let the president know that he was violating the War Powers Resolution and the Constitution.

But I don't know why he's talking about appropriations. He has no explicit appropriations for this war. So, he doesn't have the money and he doesn't have the authority.

And we're slipping into another war. Nobody can even count the wars. Nobody knows if it is number four or number five.

With a country that's flat out broke and we allow our presidents to do this, this just means that, you know, the constitutional process and the economic situation in the country is totally out of control.

YELLIN: Foreign relations -- well, today, the president said -- you raise the question of consultation. Today, the president said that the criticism he has not sufficiently consulted Congress is actually just partisan politics. He says he has consulted with Congress repeatedly, had people in repeatedly -- addressed this repeatedly.

Are you using this issue simply to score political points?

PAUL: He hasn't called me and he hasn't come to the Congress. And, you know, the Congress is everybody. And if you follow the laws, the law says -- the Constitution says if you go a war, you have to have a declaration. You can't replace that saying, well, we had a U.N. resolution. We went to NATO.

You know, many, many years, after World War II, when NATO was set up, Mr. Republican Robert Taft says don't get into NATO because before you know it, we'll use NATO for having -- slip into these wars, and his predictions were exactly right. The sovereignty of this nation depends on us and not the U.N., and the Constitution is the law of the land, and we don't have to be constitutional lawyers to understand that, we don't need lawyers to tell us what to do and not to do, because we shouldn't be in office if we don't understand what the Constitution says. It's plain and simple.

So -- but he's not the first. It's been going on for so long. As a matter of fact, Truman was the first one to do it. He went in under the U.N. resolution. I'm sure if I had been in Congress back in 1940, 1950, I would have been as outraged as I am now.

But that's a slippery slope, and unfortunately, it's leading -- it's large participant in our bankruptcy. Right now, it's estimated that wars in Iraq and Afghanistan, the new estimates will be over $4 trillion. It's so hard to estimate at a time when you can't even pay medical care for people in this country. YELLIN: You know, the president also made a point about the message that this debate that's happening in the U.S. is sending to the broader world. Here's what he said.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We should be sending out a unified message to this guy that he should step down and give his people a fair chance to live their lives without fear. And this suddenly becomes the cause celebre for some folks in Congress? Come on.


YELLIN: This guy -- he is talking about Gadhafi, that the you guys should be unified in saying Gadhafi should step down.

PAUL: Oh, yes.

YELLIN: He seems to be implying --


PAUL: Gadhafi is the only bad guy in the world?

YELLIN: Well, do you agree that members of Congress who are calling for U.S. troops to leave Libya are sending mixed messages to Gadhafi and is it important that U.S. politicians are unified on the issue?

PAUL: Well, no, it's not important. What is a free country supposed to do? What is a democracy supposed to do? What are debates all about?

This idea is that you can't dissent from a president that we sincerely believe is thwarting the Constitution, we're not supposed to say anything? I mean, that's just beyond imagination.

So -- but the whole idea because he's a bad guy and we don't like him, he might have done something if we hadn't gone in, well, they said he might -- Gadhafi might kill civilians. Well, how many civilians have been killed since we've been involved and bombing. Maybe hundreds, if maybe thousands of individuals being killed over there and Gadhafi is not killing his own people.

But there are a lot of bad people in the world. Does he want to do that in every dictatorship around the country?

What we have since the Cold War ended, we assumed this responsibility that we have to dictate to every single country which dictator should run their country, so when there's a good dictator, you know, we sort of give them a lot of money. When they turn against us, or we decide he's a bad dictator -- I mean, it wasn't that many years ago we were doing business with Gadhafi, just a few years ago.

It is just over and over. At one moment, we're their best friends. You know, we were on the same as bin Laden was when the Soviets were in Afghanistan, then he became our arch enemy.

Saddam Hussein was our best friend in the '80s. We helped him and we even helped them get a nuclear reactor at one time.

And so, it's flip-flopping around and we forget about the purpose of the Congress and the president to protect the sovereignty and safety of this country, not to take care of the whole world and police and decide which dictator is going to run every country.

YELLIN: Switching gears, sir, if we could for a moment. You're opposed -- let's talk about the economy here. You're opposed to cutting a deal to raise the debt ceiling. You argued that we should let that deadline come and go and that we'll survive without a financial crisis.

But in a press conference today, the president disagreed.


OBAMA: I want to address what I've been hearing from some quarters, which is, well, maybe this debt limit thing is not really that serious. We can just pay interest on the debt.

For the U.S. government to start picking and choosing like that is not going to inspire a lot of confidence. Moreover, which bills are we going to decide to pay? Are we really going to start paying interest to Chinese who hold treasuries and we're not going to pay folks their Social Security checks?


YELLIN: So, sir, which bills would you pay or do you dispute the whole proposition?

PAUL: Well, for the president to imply we don't think it's serious, as a matter of fact, we think it's very, very serious. We just think that continuing the process is worse than facing up to the fact that we are out of money and we're flat out broke.

So, don't -- he should never challenge and tell us we're not seriously worried about this.

But the whole thing is: fear tactics is the tool of big government. Just think of how we go to war, this whole thing about Saddam Hussein, how he unleash nuclear weapons on us, so we go to war and none of that was true. And then, also, when the crisis hit of 2008, oh, if we don't bail out all these big banks and corporations, the Fed doesn't double and triple the money side, it will be the end of the financial world and end of Western civilization.

YELLIN: Bottom line -- do you think if we --

PAUL: So, and people say, OK, we better do it. So, now, once again, he's using the fear tactic.

YELLIN: Bottom line, if we do not raise the debt ceiling, you think the U.S. will not suffer a financial crisis?

PAUL: Well, we're in the middle of financial crisis and it's going to get worse no matter what we do, and it's going to get much worse if we don't quit spending and printing money, because we're defaulting.


PAUL: They say this, we can't do this or we will default on our promise. We've done this many times. We default every single day when prices go up because that's depreciation of the money, so we are in the middle of default.

YELLIN: Thank you so much. I wish we could continue, we're out of time.

Thanks for being with us, Congressman Ron Paul.

PAUL: OK, thank you very much.

YELLIN: Always a pleasure.

Up next: the Greek parliament makes a major move to fix the country's ailing economy, but protesters worried about their jobs and their salaries vent their anger in clashes with riot police.


YELLIN: Greek lawmakers passed a new round of painful budget cuts today, slashing jobs and reducing pay for public workers. While passage was hailed by European leaders and finance officials, but protesters once again crashed with riot police outside parliament in Athens. Police say at least 19 officers were injured and dozens of people were sickened by the tear gas.

CNN's Becky Anderson is in Athens.


BECKY ANDERSON, CNN CORRESPONDENT: Jessica, there may have been relief in the Greek parliament today when this controversial package of austerity measures were passed today, relief across the Euro Zone. But on the streets here in Athens, nothing but rage -- the violence sort of ebbed and flowed.

We got in amongst protesters, just after the vote, and it was really quite a frightening experience. There were thousands of protesters outside here, Constitution Square, outside parliament buildings. Many of whom were here, protesting peacefully.

But it must been 200 or 300 what you could describe as anarchists, who were really making it very difficult for the police. And there were thousands of them. They were throwing rocks, they were throwing chairs and tables -- anything they could get their hands on. In return, the police were using tear gas and they're using stun guns to keep the protesters at bay every so often. The violence would start again, the police would try and move protesters away, down the sort of side streets, trying to get them away from the main square. But it was really an extremely physical and violent situation for sometime.

This time, now at night, after midnight here in Athens, things have quieted down a lot. We've got the police still in a standoff behind me with protesters, but nothing like the violence we saw earlier on this Wednesday.

What happens on Thursday is yet to be seen. There are still more votes to be had on implementing some of what was agreed on today. Who knows what's going to happen Thursday. But as I say for now, at least, things are much, much calmer -- Jessica.


YELLIN: Thank you, Becky.

The new round of cuts opens the door for Greece to receive billions of dollars in additional bailout funds from European Union countries and the International Monetary Fund.

For some global perspective, we turn to CNN's Richard Quest, also in Athens.

YELLIN: In your view, is this move going to be enough to help the Greek economy now turn the corner?

RICHARD QUEST, CNN CORRESPONDENT: It is the old question: will it cure it or will it kill it? There are those people who here who say this second round of austerity is too much, too fast, too deep, too painful, and that there's no hopeful growth involved with it.

And then there are those like the IMF and the Europeans who say this will restructure systematically the Greek economy and put it on a firm, solid footing for the future.

Those are the stun grenades that have been going on hour after hour after hour as the police battle against a hardcore of protesters. And then the tear gas locked up into the square, breathes over, everyone will have to sort of grab these goggles -- otherwise you can't be out here.

But back to your question on economics, Jessica, something had to happen, and what's happening is serious severe austerity. But whether or not it's too severe, ask me in a year or two's time.

YELLIN: OK. Well, we appreciate your enduring the discomfort you must be going through there.

In terms of the economy, how much worse -- I know there's no certainty, but in your view, how much worse is it going to get there for the Greek people and what's the likely next move?

QUEST: Oh, it's going to get a lot worse, and the reason it's going to get a lot worse is because it's hitting every part of the economy at the moment.

Quite a lot of tear gas now is being thrown up into the air.

Every part of the economy, every person on benefits will find them cut. Jobs will be lost in the public sector. Taxes will rise on everybody, direct and indirect taxes.

A comfortable way of life will exist no longer. Pensions will be cut. People will be working longer.

This is a root and branch assault on what Greek people believe is normal and correct way of life.

So, it will have -- I mean, I'll give you one example. One of the famous tax dodges has been people who got swimming pools don't pay tax on them. Guess what, if you've got a swimming pool in this Mediterranean country, you'll be paying tax on that in the future.

YELLIN: Well, we can't weep for them exactly.

My last question, and please go ahead and put on the goggles if you need to, don't be shy just because you're on air. One of the reasons, this is a larger question, one of the reasons the E.U. is now being forced to grapple with this whole issue, is it because the Greeks were less than honest about their debt load? It seems they were kind of allowed to cook the books.

So, what kind of broader reforms does the E.U. need to prevent similar problems in other countries, and might they consider broader reform?

QUEST: Excellent, excellent question that goes to the heart of what this is all about. Every European official tells me now that it is not just enough to bail out Greece, that is if you like the starting point. That gets you into the game.

But there has to be root and branch reappraisal of all European institutions. We have in this Euro Zone, we have monetary union, but not fiscal union. Imagine the United States with the fed, but not the U.S. Treasury. Imagine U.S. Treasury didn't exist, and each state was able to borrow in dollars, but not have to worry about the debt. That's what happens in the Euro Zone.

And so just about everybody accepts and needs to be changes. And those changes will be 2013 and 2014. There's no question, Jessica, that the Euro Zone has had a brush with death and they are not quite out of intensive care yet.

YELLIN: Time to learn some lessons. All right. Richard Quest, thank you so much. And please take care of yourself.

Up next, the looming August 2nd deadline to raise the debt ceiling. Is that real or political rhetoric?

(COMMERCIAL BREAK) YELLIN: Today in his news conference, President Obama called on members of Congress to do their job and hammer out a deal to raise the debt ceiling before the August 2nd deadline. But the Obama administration has laid out four different dates where it said the debt ceiling should be raised or the nation would face dire financial consequences. Three of those dates have come and gone and so far no debt ceiling has been raised.


TIMOTHY GEITHNER, TREASURY SECRETARY: I find it inconceivable that the Congress would not act to increase the limit. We've run out of room on May 16th.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We do not need to play chicken with our economy by linking the raising of the debt ceiling to anything. We should do that right away.

GEITHNER: We have into June to solve this basic problem, but we don't have much more time beyond that.

REPORTER: The markets think you're going to default, they could start reacting in a way that would really hurt us way before August 2nd.

CARNEY: We do believe that it is important that action be taken in a timely manner.


YELLIN: Joining us now to discuss all this from Aspen is Kai Ryssdal, the host of American Public Media's "Marketplace."

Kai, I understand you watched this press conference earlier today. I asked the president about his administration moving the target on raising the debt ceiling. Here's the president.


OBAMA: We haven't given out four different dates. We have given out dates that are markers for us getting into trouble. It's the equivalent of you're driving down the street and the yellow light starts flashing.

The yellow light is flashing. Now, it hasn't been a red light yet.

August 2nd is a very important date, and there's no reason why we can't get this done now.


YELLIN: He sounded a little frustrated. In your view, is the president playing chicken or is he Chicken Little saying if we don't have this vote the world will fall into economic crisis? KAI RYSSDAL, HOST, "MARKETPLACE" AMERICAN PUBLIC MEDIA: Well, two things, Jessica. First of all, I don't think we really want to find out. What was interesting about that cut you played from the president was the way he kept on talking and talking and talking, as if that's going to drive home the point anymore, right?

I mean, he couldn't stop himself.

Here's the facts: you were right in your question. There have been four dates. The government blown them all. Here's the two most important ones, May the 16th when we actually did hit the debt ceiling. We hit $14.3 trillion.

Ever since then, the Treasury Department has been moving money around. Government hasn't done itself any favors, the administration and treasury secretary, Timothy Geithner, by saying, OK, no, not that date, this date. OK, not this date, the next date.

The latest one is August the 2nd. Whether that's the real date or not, we don't want to find out. That's the point, you don't want to know.

And here's why you don't want to know -- it's not a political question, it's not a consumer confidence question, it's a markets question. The markets are watching Washington much closer than Washington is watching the markets. As that date gets closer and as those interest rates start to react, that's when we'll really see things happen.

But nobody really wants that to happen at all.

YELLIN: Because the markets are watching, how hard is it for the president to talk up the risky stakes, to talk up the danger of seeing August 2nd come and go out a deal, without damaging consumer confidence and the broader economy?

RYSSDAL: OK, so, here's the thing. Let -- I'm going to get a little technical on you. You remember back in the financial crisis, we heard about these things called credit default swaps, where you basically bought insurance against somebody else's debt. You were betting that that person's debt would or would not default, and you paid off on that insurance policy.

You can buy credit default swaps against the American debt. You can buy it against treasury bonds and notes. Those credit default swap prices have been rising. The market already thinks bad things are happening.

It's truly not a question of consumer confidence. It's not a question of whether or not you're going to spend more money on an iPad or buy a flat screen television. It's the macro-story of what the market thinks will happen when Washington does nothing.

YELLIN: So, does the president have to be more careful about his language and how he talks about this because things will get even worse as they delay a deal? RYSSDAL: You bet, that's exactly right. So the president, as we heard in that clip you played, is trying out a whole bunch of different messages -- yellow light, red light, flashing light, we haven't put out different dates. I mean, pick whatever image you want.

The president is driving trying to dance around this thing of bad things happening. And make no mistake, I mean, it's bad things will happen. If the government decides one day it can no longer pay its debts, OK?

That is a very difficult thing for the president to negotiate his way around. The other thing is you've got Congress here saying, wait a minute, people on the GOP side of the House and the Senate are saying, you know what, this date, it's not real. It may or may not be real, we don't really know because the treasury can move money around as much as it wants.

But the problem is we don't want to get that close. If we get close, the markets will react and it will be ugly.

YELLIN: A lot of this sounds like we're talking about big money and Wall Street. But to the average American, will a failure to raise the debt ceiling have any practical effect?

RYSSDAL: Oh, sure. Interest rates are going to rise, your credit card interest rates are going to go up, your car payment is going to go up, your mortgage payment if you've got an adjustable rate or a thing that floats with the market, that will go up.

This will not be good news for the consumers. Bad things will happen throughout the economy.

It will happen in a very macro context. You will see things like yield spreads on treasury bonds and all kinds of technical things happening that you don't want to pay attention to, but you will hit it in your pocketbook as a consumer if this happens, no doubt about that.

YELLIN: OK, you're pretty clear that's not a pretty picture.

More broadly, in listening to the president's press conference today, did you hear anything he said that would actually help create jobs?

RYSSDAL: So, here's the other thing that the president has to deal with, right? The American economy is an intractable beast. You can't go out and say, I'm going to spend $4 trillion and hope you're going to turn this thing. As we've seen, we are nibbling around the edges with jobs programs, with stimulus, with the payroll tax credit the president talked about this morning.

He's doing what he can. The problem is that as with any president, there's only so much the president can do. These things have to work themselves out.

And let's think about what's going on in the economy, right? First of all, joblessness, 9.1 percent -- a huge political problem for the president in the next 12 months. Housing, an overhang of unsold properties and foreclosed properties that is going to take years to work its way through the economy.

And then this thing you mentioned a couple of times, consumer confidence. It's back up from where it is two and a half years ago. Two and a half years ago, consumers were not in the mood to spend money at all. Now, we are. We've got this pent-up demand that we want to go out and spend money, but there are other things holding us back. And there's only so much government can really do about that.

YELLIN: Kai, you are always so clear and you make the big economical issues accessible to us. Thank you.

Kai Ryssdal joining us from Aspen.

RYSSDAL: My pleasure.

YELLIN: And that's all from us tonight.

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