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Michele Bachmann Under Fire; Karzai Brother Assassinated

Aired July 12, 2011 - 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: And to our viewers, you're in THE SITUATION ROOM.

Happening now: a surging campaign, but now an unwelcome controversy for Republican presidential candidate Michele Bachmann. Questions are swirling about her husband and a controversial therapy some say can make gay people straight.

Also, surprising reports of an elaborate CIA ruse, a fake vaccination program in Afghanistan whose real purpose was to get DNA from Osama bin Laden's family.

Plus, a shocking killing in Afghanistan, the brother of president Hamid Karzai assassinated by one of his own bodyguards.

We want to welcome our viewers in the United States and around the world. Breaking news and political headlines all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We're now exactly three weeks away from the day when all -- by all accounts, the U.S. will hit its legally mandated debt limit and possibly, possibly begin to default on its obligations around the world.

With no progress in talks between the White House and congressional Republicans, President Obama's increasing the pressure, now warning that Social Security checks may not go out on time next month unless, unless an agreement is reached.

But with no deal in sight, some backup plans are now being floated, but they come ladened with baggage.

Let's get some more from our congressional correspondent, Kate Bolduan.

Kate, what are you hearing on Capitol Hill right now?

KATE BOLDUAN, CNN CORRESPONDENT: A lot going on, it seems, Wolf. The clock -- as you very well point out, the clock is ticking. And today the prospects of a deal seem to be fading with new proposals surfacing.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Despite continued talks inside the White House, outside, prospects of a deal appeared grim Tuesday, with little sign of progress and both sides hardening their positions.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president talks a good game, but when it comes down to actually putting these issues on the table, making decisions, they can't quite pull the trigger.

SEN. CHARLES SCHUMER (D), NEW YORK: Protect millionaires and cut Medicare benefits instead. This approach is not balanced. It's not fair. It's not moral. And it will not be accepted.

BOLDUAN: And with little time left before the debt ceiling deadline, the top Senate Republican offered a pessimistic prediction.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: After years of discussions and months or negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.

BOLDUAN: Now Mitch McConnell is pitching his own so-called backup plan, a complicated proposal that would give president authority to request a debt limit increase without any required spending cuts.

MCCONNELL: Legislation would authorize him to get to the amount he says he needs, based upon the advice of his secretary of the treasury, in three tranches, the first tranche, $700 billion, the second tranche, $900 billion, the third tranche, $900 billion.

BOLDUAN: But that authority comes with a catch. It would mean three politically tough votes before the 2012 election. And if lawmakers voted against those increases, the president would be forced to veto the measure, pinning on him the responsibility for the new debt.

MCCONNELL: I'm not happy, and I hope we don't have to go to this option. I still want to cut spending.

(END VIDEOTAPE)

BOLDUAN: Now, Wolf, I will tell you, my colleague Ted Barrett just caught up with a Democratic senator, Dick Durbin, who's involved in those negotiations as he returned back to Capitol Hill from the latest meeting.

And he says the senator is reporting that they're making progress and my colleague, Ted Barrett, did ask if this McConnell plan, this proposal that were just discussing, is viable. And the senator said that we are discussing that as one of the options, yes.

At the very same time, though, Wolf, the top Democrat in the Senate, Harry Reid, he's floating his own idea, one that would reduce the debt by more than $1 trillion, while not requiring any new taxes or tax increases and not requiring any cuts to entitlements.

This really is a show, a sign of the real growing concern up here that they may not cut a deal in time, Wolf. BLITZER: That's encouraging, though, that Dick Durbin is now sounding a little bit more hopeful than a lot of people only a few hours ago were sounding.

Jessica Yellin is over at the White House. We're going to check in with her later. We're going to get all the latest information from all of these sides.

Thanks very much for that, Kate Bolduan, up on Capitol Hill.

So what happens when the U.S. does reach its debt limit?

CNN's Tom Foreman is looking at the implications of a government default.

What could we expect if that were to happen, Tom?

TOM FOREMAN, CNN CORRESPONDENT: Well, as you know, Wolf, the problem is we don't really know what to expect. But by and large what we're looking at is an earthquake moving through interest rates, because if the government can't pay its debt, it's kind of like you not paying your credit card. The interest rate goes way up.

And that can affect all sorts of interest rates. For example, the average family sitting out there, one thing it could mean is that interest rates on homes could rise. And so mortgages could rise at a time really people don't need to see that and housing rates are already in trouble.

Take it out to the garage over here. In your garage, the rates for buying a car could rise. Gas prices could increase as a result. And roads, of course, could be of much worse quality because the government can't afford to take care of them.

What if you're one of the people who helps take care of this family? Say you're the father here. You could wind up unemployed if your dealer cannot deal with these rising costs in various ways. You could lose money in your savings plans. These are all projections that are out there that all seem to be of varying degrees of validity, depending on whom you're talking to. But a lot of people seem to think these are all real possibilities.

You could have a difficult time getting a loan if you're a small businessman and you're trying to grow a business at a time like this, which means you won't hire any other people, which has to be there for the economy to get better. What if you're a mom and you work for the government? You could be furloughed. You could see credit card rates rise. That's one of the concerns here. Let me bring the house back where it belongs.

What if you're the daughter who is in the military? Your salary could be limited or delayed. You could possibly be getting I.O.U.s from the government instead of checks for a period of time. And this is a really important one. Private contractors who provide all sorts of things to government offices all over this country and to the military and to the people who are there could find themselves being, told, look, we cannot fulfill our contracts right now, we can't pay you. So they could be laying off people.

And starts running into an awful lot of people being affected. What about the son who wants to go to college? Student loans could be much harder to obtain. You could have restrictions of financial aid. And finally as the president mentioned today, what about grandma or grandpa? Their Social Security could be delayed, retirement benefits reduced.

Here's the catch in all of this, though, Wolf. And it's worth bearing in mind because it keeps coming up in these talks. Many of these things we're talking about also may have to be part of austerity measures as we try to bring our spending under control in the government. So one way or the other you can see how many voters out there, as we enter this uncertain, unknown zone, could truly be caught between a rock and a hard place -- Wolf.

BLITZER: All right, Tom, thank you. Good explanation.

Let's dig deeper though with CNN's chief political analyst Gloria Borger and senior political analyst, David Gergen. They have both written new columns for CNN.com about this story.

Gloria, yours is entitled "A Process Hijacked By Purists." What do you mean by that?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, I mean there are purists on both sides that will not let a deal with cut. I particularly talk about the Republican purists here, because I would argue that the Republican Party which cared tremendously about the deficit and was also anti-tax and anti-big spending has now made a decision that the bumper sticker no new taxes matters more to them than the deficit.

The president and the House speaker were coming together on a deal that offered $3 of spending cuts for every dollar of tax increases. Republicans would have rejoiced about that, but not today.

BLITZER: All right, hold -- we're going to get your mike fixed. Hold on for a second.

David, in your column, you suggest that you're worried, you're deeply worried that the president right now has tied his own hands. What do you mean by that?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, yesterday, he came down with a very, very hard statement that he would not accept any short-term patches, that anything up to 180 days was unacceptable to him.

And you just heard earlier in the reporting that's exactly what's now being put on the table by Mitch McConnell and by Harry Reid. The fact is, the negotiators are not able to get the big mega-deal. They're not going to get there. Everybody knows that now. The question is, can they get to a modest sized package? Modest is $2.5 trillion to $2.7 trillion. They're a long, long way from that. Thursday hundreds of billions short of that just with spending cuts. So it's going to be very hard to get to that. So I think we're looking at a short-term patch. I have always thought that. Bill Clinton has been arguing that. And from my point of view, look, after I wrote yesterday that the Republicans have painted themselves into a corner, as Gloria said, the Democrats have painted themselves into a corner, I was worried the president had painted himself in a corner.

I had a call from someone who's very high up, very familiar with the president's thinking today and walked me through the president's thinking on why he's opposed to a short-term fix. If you would like, I will go through that briefly.

BLITZER: Hold on for a second. I want to go through that, but I want to read a little bit of Gloria's column today and get her to elaborate for us.

You write this. You say: "Republicans are fond of claiming that Obama does not pay homage to the notion of American exceptionalism. But how can you level that claim when your party is happy to let the nation default on its debts?"

BORGER: Yes. I think that's a real problem for Republicans.

You have Republican presidential candidates out there, Tim Pawlenty, for example, saying that he hopes and prays that the debt ceiling is not raised. Well, what does that mean? That means we're defaulting on our debts. Michele Bachmann does not want the debt ceiling to be raised.

If we're to be a country that people look up to, that our word matters, we should not be defaulting on our debt. That should matter to us, particularly to people who talk about the notion of American exceptionalism being important.

BLITZER: Yes. Well, the leadership in the meetings -- maybe some of the Republican presidential candidates, are willing to play this up. And the leadership, the Republican leadership that's been meeting, Boehner and McConnell and the others, they're saying they don't want to see any default.

(CROSSTALK)

BORGER: They don't want to see any default. But there's no give on either side either -- Wolf.

BLITZER: Well, let's talk a little bit about this short-term proposal to try to at least get through this August 2 deadline.

David, the president yesterday made it clear he's not going to sign, he's not going to accept 30-, 60-, 90- or even a 180-day stopgap measure. You think that's a mistake?

GERGEN: I think he should leave himself some wiggle room. But after hearing from this high-ranking administration official today, I'm much more sympathetic with what his arguments are about why he does not want to do a short-term deal.

He feels, of course, that the momentum will slip away for any kind of big major thing. The longer you -- if you just delay the real negotiations several months, you get much closer to elections and it gets harder. But there's this other issue, Wolf, that's out there, and that is if we only get a short-term deal, will the credit rating folks like Standard & Poor's downgrade America's credit rating?

GERGEN: That would cost us billions upon billions of dollars and would be in effect a tax.

And the president is really anxious to avoid that. But as I look at this, Wolf, if it comes down to a choice for the president, either take the patch or we go into default, I think he has to take the patch.

BORGER: Right. But the Republicans are proposing a patch now, David, that would essentially give the president all of the responsibility for raising the debt. They would have no fingerprints on it, essentially. And, of course, they would get no spending cuts out of it as a result, but it seems to me it doesn't work for either side.

GERGEN: Well, I'm not sure exactly. The McConnell proposal is a little hard to read.

They're clearly not going to give him a clear and clean lift of the debt ceiling. They're going to insist on something in exchange. And I don't think we quite understand that. But I do think increasingly it looks like the deal that is going to come out, whatever it is, that there is an agreement, a consensus as you pointed out, Wolf, in the leadership, let's not go into default. But what they're going to give the president is something he doesn't really want, and that is a short-term patch.

BLITZER: I loved the way Jay Leno last night described this debate that's unfolding at the White House. I will play the clip.

(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Democrats, Republicans still haven't come to any agreement over this debt ceiling and the -- you know, have you watched these people? Go to C-SPAN. Show them arguing.

UNIDENTIFIED CHILD: No.

UNIDENTIFIED CHILD: I said no.

I said no (INAUDIBLE).

UNIDENTIFIED CHILD: I said no (INAUDIBLE).

UNIDENTIFIED CHILD: I said no (INAUDIBLE).

UNIDENTIFIED CHILD: Be quiet. UNIDENTIFIED CHILD: No, you be quiet. No.

UNIDENTIFIED CHILD: You be quiet.

(CROSSTALK)

(LAUGHTER)

LENO: That's going to go on.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: I guess that about sums it up, guys. You can't do much better than that, I think you will both agree. David Gergen, Gloria Borger, guys, thanks very much.

The husband of a leading Republican presidential candidate now accused of offering a controversial therapy designed to try to make gay people straight.

And the brother of the Afghan president assassinated in his own home.

We have details as well of an elaborate ruse the CIA allegedly used to try to get DNA from Osama bin Laden's relatives.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN ANCHOR: Go figure. For a second straight day, a new poll of likely voters in Iowa, voters in the caucuses there, has Minnesota Congresswoman Michele Bachmann as the front- runner among the current field of Republican candidates.

She's big with Tea Party voters, running on smaller government, no new taxes. But she's come under criticism most recently from fellow Minnesotan and GOP candidate himself Tim Pawlenty for not having much of a record on anything while she was in Congress. She also has some strong views on social issues that will likely turn independents and more moderate Republicans off.

Last week, Bachmann signed something called the Marriage Vow penned by an uber-conservative group in Iowa. It's a vow to be faithful to one's spouse and to the Constitution. It condemns adultery, quickie divorces and pornography. It also describes homosexuality as a choice.

And the initial draft suggested that life was better for black children during slavery because more African-American children are born out of wedlock now than they were back then. Lovely. That part was later edited out and the group said it was all a misinterpretation. Is someone who would sign a document like that really the best the Republicans can do? Apparently a lot of the voters in Iowa think it is. Then there's the question of who else might enter the race, specifically former Alaska Governor -- who quit in the middle of her first term -- Sarah Palin, who's been playing games with the media for months now.

In this week's cover story in "Newsweek" magazine, Sarah Palin says she thinks she can be president. She made these comments following the premiere of a documentary produced by a conservative filmmaker highlighting all the positive aspects of her political career. It's not a very long film.

Palin also said that even if she's not the nominee -- she's not even in the race yet -- she thinks President Obama's beatable in 2012. Maybe so, but not by her or Michele Bachmann.

Here's the question. Michele Bachmann's leading in Iowa. Sarah Palin thinks she can be president. Are the Republicans in trouble?

Go to CNN.com/caffertyfile and have some fun.

BLITZER: And they will. We will look forward to what our viewers think, Jack.

(LAUGHTER)

BLITZER: Thank you.

CAFFERTY: Serve up those watermelons.

BLITZER: Yes.

All right, there's a growing controversy that's also beginning to dog Michele Bachmann's campaign. And it centers on her husband and the Christian counseling center they own together where critics say controversial therapy is being used to supposedly cure homosexuals.

CNN's Jim Acosta has been investigating this story for us.

Jim, what are you finding out?

JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, Michele Bachmann and her husband, Marcus, run a Christian counseling service that's come under scrutiny in recent years.

The clinic, Bachmann & Associates, located outside Minneapolis has faced accusations it encourages gay and lesbian patients to change their sexual orientation. We sat down with one of the center's former patients, Andrew Ramirez, who says he went to Bachmann & Associates when he was 17 years old to talk about his own homosexuality. He told he was immediately skeptical of what he heard from one of the counselors at the clinic.

(BEGIN VIDEO CLIP)

ANDREW RAMIREZ, FORMER PATIENT: It was therapy that would help me change from being homosexual to straight.

ACOSTA: That's how he described it?

RAMIREZ: Yes.

ACOSTA: He basically said, if you do this, what? You wouldn't be gay anymore?

RAMIREZ: If I did this and worked his therapy program, God could perform a miracle and I could no longer be gay.

(END VIDEO CLIP)

ACOSTA: This week, a gay rights group called Truth Wins Out released its own hidden camera video recorded by one of its activist who posed as a patient at Bachmann & Associates. The footage shows a counselor who suggests homosexuality can be treated at the clinic. But that counselor also says in the video he's not an expert on the subject.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A significant number can actually leave homosexuality completely and become heterosexual?

UNIDENTIFIED MALE: Oh, yes, yes, definitely, definitely. Oh, I believe (OFF-MIKE).

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: And it's happened. It really has.

(END VIDEO CLIP)

ACOSTA: The Bachmanns declined our request for interviews. But the campaign did release a statement to CNN, saying -- quote -- "The Bachmanns are in no position ethically, legally or morally to discuss specific courses of treatment concerning the clinic's patients."

The Republican presidential contender was also asked about this clinic on the campaign trail in Iowa. She dodged the question. She did say she is proud of her family business. And we will have more on this tonight on "A.C. 360" -- Wolf.

BLITZER: We will look forward to that.

Thanks very much, Jim Acosta reporting.

Ahmed Wali Karzai, he wasn't just the Afghan president's half- brother; he's also one of the country's most powerful, some would say notorious politicians. We're taking a closer look at the events surrounding his assassination.

And none of James "Whitey" Bulger's neighbors ever guessed he was a notorious mobster. They might have if they'd seen what was in his apartment. We will show you. We now have the video. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The violence in Afghanistan is hitting very close to home for President Hamid Karzai. His half-brother Ahmed Wali Karzai, a provincial official in Kandahar, has been shot and killed, assassinated in his own home.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Islamabad, our national security analyst Peter Bergen.

Peter, this assassination of the half-brother of Hamid Karzai, the half-brother Ahmed Wali Karzai, who was responsible for this?

PETER BERGEN, CNN TERRORISM ANALYST: Well, it's still a little murky about who's ultimately responsible.

But it's clear that one of his bodyguards, a longtime associate, killed Ahmed Wali Karzai, had access to him, was able to do this. Quite what his motivations are I think are pretty murky. The Taliban have claimed responsibility. But the fact is that Ahmed Wali Karzai, who is generally known as AWK in Afghanistan, had a pretty wide range of enemies, including people even potentially within his own family, which is pretty large, but also, you know, people in the political scene in Kandahar, which he controlled largely.

There were allegations that he was involved in drug trafficking. You know, so, Wolf, you know, while we know the identity of the assailant, we don't really understand the motivations and who put this bodyguard up to this attack.

BLITZER: How did it happen?

BERGEN: Well, the bodyguard took him into a room. And obviously this is somebody that had spent, you know, many years around Ahmed Wali Karzai and, therefore, you know, wouldn't have been surprising that he was able to take him into a room and -- you know, and then he shot him.

So, you know, it's a pretty good demonstration that, you know, it doesn't matter how powerful you are in Afghanistan, somebody can get to you if they want to.

BLITZER: So what's the likely impact of this assassination going to be?

BERGEN: Well, I think it's pretty large, Wolf.

You know, arguably, this was the second most important player in Afghan politics, after his half-brother Hamid Karzai, the president. Ahmed Wali Karzai was the main power broker in Kandahar, Kandahar being, of course, the major city in Southern Afghanistan, the former heartland of the Taliban. And this man controlled most of the business and politics that went on there. And so, you know, what will replace him isn't really clear. He was certainly kind of a strongman. And there have been rumors that he was, you know, on the CIA payroll. He's certainly been close to the United States government.

And in his absence, you know, who will be the person who kind of is the next strongman in Kandahar is a pretty big question. I don't think we have an answer to that, Wolf.

BLITZER: Because, over the years, as you well know, Peter, there have been all these accounts about Wali Karzai, that he was a good guy, a bad guy, a drug dealer involved in the opium trade over there making a lot of money, really hurting the United States, on the other hand, as you point out, some suggestions he was on the CIA's payroll.

Give us some perspective, who he was.

BERGEN: Well, you know, he did -- he was elected in 2005, so, you know, it wasn't that he just -- you know, he's not -- he's more than a strongman. He does have a popular base in Kandahar.

You know, Kandahar and the neighboring province Helmand are essentially the two largest provinces for opium growing anywhere in the world. Although he's never been charged with drug smuggling, he's been alleged to have benefited. And certainly anybody at the top of the power structure in that area would probably benefit from the fact that drug smuggling is the main occupation, the main source of income, and growing opium is the main source of income for the population.

But that said, you know, he's never been charged with a crime in a U.S. court. And it's one of those cases where different arms of the U.S. government had different kind of attitudes toward him. The Drug Enforcement Administration took a pretty dim view of Ahmed Wali Karzai, while, you know, reportedly the CIA was also putting him on the payroll.

So it gets to the complexities of and the realities of what life is like in Southern Afghanistan, Wolf.

BLITZER: And if I'm Hamid Karzai, the president of Afghanistan, or indeed any top leader in Afghanistan or any major U.S. official in Afghanistan relying on these security guards, these Afghan bodyguards, I'm taking another look at these guys who are well armed to see if the Taliban has, in fact, infiltrated the whole security network over there.

That's the big challenge right now.

Peter, we will stay in close touch. Thanks very much.

(END VIDEOTAPE)

BLITZER: James "Whitey" Bulger knew that the key to staying out of jail was laying low. He and his companion, Catherine Greig, did little to draw attention to themselves. But in a hearing yesterday for Greig, prosecutors showed that, behind closed doors, the couple was anything but ordinary.

Deborah Feyerick is joining us now. She has seen some of the evidence at the hearing.

What is going on here, Deb?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, you know, Wolf, it appears that reputed crime boss Whitey Bulger was ready to put up a fight. Take a look at these weapons which FBI agents say they confiscated from Bulger's Santa Monica apartment. There's an assault rifle, a 12-gauge shot gun, several semiautomatic pistols, revolvers, a silencer, even a Derringer and a triple knife, a deadly weapon, all of them.

The weapons are hidden in the bathroom and living room walls of Bulger's modest third-floor apartment, according to law enforcement, along with stacks of hundred dollar bills. Bulger and his longtime girlfriend, Catherine Greig, started paying cash for this month-to- month rental 15 years ago, soon after they disappeared from Boston after getting a tip from a corrupt FBI agent.

Now, these pictures were presented during a detention hearing for Miss Greig in which her court-appointed attorney is asking that she be released pending trial on charges of harboring a fugitive.

Prosecutors also released -- released a brief security camera video of Miss Greig. You can see her there, walking in and out of a local drugstore picking up a prescription which prosecutors say was under a fake name.

FBI agents finally captured Bulger in June after running a public service announcement that focused on Bulger's girlfriend, and suspecting that Bulger might be armed, FBI agents lured him into the apartment garage, placing a phone call saying someone had broken into his storage unit. We spoke to one source who tells us that when Bulger was arrested, he told the arresting agent, quote, "You did it the right way."

Now, Bulger has pleaded not guilty to 90 counts of murder and, Wolf, the story gets more and more fascinating every day. We hope you're going to tune in when we go inside, bring you up close this coming Sunday, July 17, with my special, "Stone Cold Killer." Learn why Whitey Bulger became one of the most hated crime bosses in FBI history and why he may have felt safe in Santa Monica. Again, that's this Sunday, July 17 at 8 p.m., "CNN PRESENTS," "Stone Cold Killer" -- Wolf.

BLITZER: We'll be watching for sure, Deb. Thanks very, very much. Amazing story.

The goal was to get DNA from Osama bin Laden's family. And now we're learning new details of an elaborate ruse the CIA allegedly put in place to get it.

And has FOX put out a news blackout on the parent company's hacking scandal? We're going to show you what FOX viewers didn't see.

(COMMERCIAL BREAK)

BLITZER: The latest round of talks on raising the U.S. debt limit ended at the White House just a little while ago. Let's go to our chief White House correspondent, Jessica Yellin. Jessica, what are you hearing? Any progress?

JESSICA YELLIN, CNN CORRESPONDENT: Well, Wolf, I'm told that there was no breakthrough in this meeting, which ended just a short time ago and that it was a fairly bleak mood even going in, with a sense that both sides are more dug in.

Now, that unusual alternate proposal that was floated from Senate Minority Leader Mitch McConnell was discussed in the meeting, multiple sources tell me. But it was just one of several options that was discussed today in a meeting that several sources say was another day in which many parties believe there were more discussions and ongoing debate.

But there's this growing sense from parties, Wolf, that while there's a lot of political point scoring both before and after these meetings, there's just a lot of conversation that is not necessarily getting parties closer to a deal, Wolf.

BLITZER: So where does everyone go from here?

YELLIN: Well, there -- there are several options on the table. Of course, there is this one you discussed on your show, being laid out by the Senate minority leader. The president has said that tomorrow he would like these leaders all to come back and have more discussion, again. And there's talk in this town, now, that there could be some other options.

For example, perhaps the politics in the House are just too challenging, and there could be this other option where maybe the Senate would go first. And the Senate would come to a deal.

Or, perhaps, the president would ultimately have to accept what he says he won't, which is this very short-term deal which he has flat-out ruled out. But maybe in the end he would have to.

We do know that today the president has said that Social Security checks could potentially not go out on August 3 if this deal isn't done. So something has to get done. This thing has to be resolved quickly, and they do have to find a solution, Wolf. And, again, another day with no solution. So the stakes keep getting higher each day.

BLITZER: Yes, we'll continue to watch it tomorrow together with you, Jessica. I write about this, by the way, on my blog at CNN.com/SituationRoom, about both sides exaggerating, exaggerating what's going on with some of their rhetoric. Thanks very much.

Deborah Feyerick is monitoring some of the other stop stories in THE SITUATION ROOM right now, including a service honoring the life of the former first lady, Betty Ford. What's going on, on that front?

FEYERICK: Well, Wolf, you can take a look at some of the live pictures there, those attending this funeral service. We saw George W. Bush there earlier. That is Maria Shriver.

Now, current and past first ladies are honoring the life of Betty Ford at her memorial service in Palm Desert, California. Journalist Cokie Roberts will be one of the eulogists, along with former first lady, Roslyn Carter.

Roberts told CNN that Ford asked her to celebrate the camaraderie that was once common in Congress. Ford died Friday at the age of 93. She raised awareness of women's rights, cancer, alcoholism and substance abuse during and after her time in the White House.

And Iraq seems to be moving forward with plans to buy as many as 18 F-16 fighter jets. An American military spokesman says Baghdad shelved the plans for the $3 billion sale several months ago, but now it hopes to go ahead with the purchase. It still requires a formal request and approval from Congress and the White House. Most of the cost would be paid for with Iraqi oil revenues.

And scientists say there's a new reason to avoid gonorrhea. The sexually transmitted disease has developed a drug-resistant strain. Up until now gonorrhea was easily treated with antibiotics. It's unclear how widespread the new strain is, but researchers worry it could spread quickly. The Centers for Disease Control and Prevention estimate that 700,000 Americans get gonorrhea every year.

And Japan says there's nothing to fear from meat contaminated by radiation from the cripple Fukushima nuclear plant. The health officials downplayed the health threat after meat from six Fukushima cows found its way to markets where it was probably sold and eaten. The official admitted the meat could pose a danger if it were eaten every day. In one cow, the measured radiation was seven times the government limit -- Wolf.

BLITZER: Thanks very much for that.

The plot to kill Osama bin Laden was about a lot more than helicopters and black-clad soldiers involved in a commando raid. New details suggest the CIA enlisted a Pakistani doctor and used a covert program to try to get the al Qaeda leader's DNA.

And so-called fair and balanced. FOX News, though, appearing to be taking an unbalanced approach in terms of its coverage involving the British media scandal that has ensnarled its owner. We're taking a closer look at that. We're going to take a closer look at that when we come back.

(COMMERCIAL BREAK)

BLITZER: Pakistan is detaining a doctor suspected of working with the CIA in an elaborate ruse. It was reportedly designed to get DNA samples from people inside the compound where it turned out Osama bin Laden was living. (BEGIN VIDEOTAPE)

BLITZER: And joining us now from Islamabad, our own Reza Sayeh.

Reza, walk us through what happened here, because this is a pretty intriguing spy story, if you will. What happened?

REZA SAYEH, CNN CORRESPONDENT: Yes, it's a fascinating glimpse, look, at the lengths the CIA was going to, to find the location of bin Laden in Abbottabad.

Here's what we know. A Pakistani security official is telling us that this Pakistani doctor is in custody, suspected of helping the CIA set up a very intricate plot to confirm the whereabouts of Osama bin Laden.

According to this official, he set up a free vaccination campaign to offer a free vaccination to children of the people of Abbottabad where bin Laden's compound was located. According to "The Guardian" paper, this doctor hired two nurses who were going around town from house to house. The plan was to find the bin Laden kids, somehow extract some blood or use the syringe of the vaccinations to match their DNA with the DNA of bin Laden's sister, who passed away last year in Boston, Massachusetts.

We haven't been able to verify if the nurses actually made it into the bin Laden compound. We talked to one of the nurses who was allegedly involved in this plot on the phone. She repeatedly told us that she can't talk about this matter.

We also talked to residents of Abbottabad. At least six of them told us that, indeed, just days before the raid two nurses were going around house to house, offering vaccinations.

We should note a U.S. official has told "The Guardian" paper that this plot was, indeed, in place, but it didn't manage to get the DNA samples necessary. So just a fascinating glimpse at what the CIA was doing in the days leading up to the raid, Wolf.

BLITZER: And what do we know about this doctor?

SAYEH: Well, we don't know much about him. We know that's he's in custody. It's not clear why he's been arrested. It's not clear if he's going to be charged with a crime.

What we do know is that Pakistan and the U.S. are not getting along, and this relationship really started to deteriorate after the raid on the bin Laden compound. And Pakistan has made it clear that they weren't happy with this unilateral action taken by Washington. Many here view it as a violation of Pakistan's sovereignty.

There's several reasons why he's in custody. This could be a form of payback on the part of Pakistan against Washington. But it also could be an effort by Pakistan to find out exactly how the U.S., the CIA, managed to set up an intricate intelligence network behind their back before this raid -- Wolf. BLITZER: Have you really sensed -- you've been in Pakistan for a while now, Reza. Have you sensed a real deterioration in Pakistani attitudes towards the United States since the bin Laden raid?

SAYEH: I don't think this relationship has been at a lower point. And again, it really started deteriorating after the raid on the bin Laden compound. Before that for years, you'd heard a lot of rhetoric, a lot of finger pointing.

But now both sides are making moves that could substantially change the complexion of this relationship. The U.S. holding back hundreds of millions of dollars in U.S. aid money. Pakistan kicking out U.S. military trainers. So the relationship is struggling. At the same time, there's no evidence that it's going to end.

I think, despite the problems, these are two countries who recognize that they need one another, so I think in the coming weeks and months, you're going to see these two countries, despite the problems, stagger and struggle forward in the relationship.

BLITZER: All right, Reza, thanks very much.

(END VIDEOTAPE)

BLITZER: A scandal is rocking Rupert Murdoch's media empire. How has the FOX News Channel covered the story? Stand by. New information coming in.

And details of big changes in store for Netflix customers.

(COMMERCIAL BREAK)

BLITZER: The British media scandal involving Rupert Murdoch's News Corporation has apparently put FOX News in a bit of a bind. The network has apparently gone out of its way to avoid a lot of reporting on its parent company's troubles. That may become even more obvious in the days to come.

Let's check in with Brian Todd. He's been looking at this story for us.

Clearly, they're doing some reporting on it, but by no means as much as most other news organizations.

BRIAN TODD, CNN CORRESPONDENT: It doesn't appear to be that, Wolf. There have been several questions raised in recent days about the extent to which Rupert Murdoch's news entities have covered the "News of the World" scandal. Questioned fuelled in part by a clip from the FOX News program about the news media, that program called "News Watch." We're going to show you a clip from this past Sunday.

This is streaming video. It's meant for the public, but it's during a commercial and not part of the broadcast. Analysts are talking about a certain news story. Take a listen.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Anybody want to bring up the subject we're not talking about today for the streamers?

UNIDENTIFIED MALE: Sure, go ahead.

UNIDENTIFIED MALE: No, go ahead. I'm not going to touch it.

UNIDENTIFIED FEMALE: With a ten foot turban (ph).

UNIDENTIFIED MALE: Yes

(END VIDEO CLIP)

TODD: Now, it might seem obvious they're talking about the "News of the World" scandal. We've confirmed that's what they were talking about.

We did a search of FOX transcripts to double check. Despite the fact that "FOX News Watch" is about the news media, we found no mentions of the "News of the World" scandal on that program, no mentions of "News of the World" at all since August 2006.

Now, as for the broader FOX News Channel coverage, it does appear to have been more extensive than that, obviously. "The L.A. Times" does report that FOX News stayed mainly silent on the scandal during prime time on Thursday. That's when it broke that Murdoch was shutting down "News of the World."

We found several mentions of the story on FOX News Channel over the past week, including one reporter piece. That's compared to the other major news networks where coverage was fairly extensive.

We couldn't get spokespeople for News Corporation or FOX News Channel to comment. We do have to say, also, though, that our CNN colleagues in Britain tell us that Sky News, one of Murdoch's other news entities, was not holding back in its coverage, going all out on that throughout this.

And our search of the mentions of the story on CNN turns up about 100 over the past week. A fair question, I guess, could be, Wolf, are we over-covering it? You can ask that fairly of us. But you and I both saw clips on FOX News -- the broader FOX News Channel. Several live shots. They've addressed it. No as much as other news networks.

BLITZER: What about the other Murdoch newspapers? How are they handling it?

TODD: Again, it's a mixed bag. You know, we've -- as far as his U.S.-based newspapers are concerned, on the day after this was announced that "News of the World" was shutting down, we're going to show you some newspapers now.

This is the "New York Post." Extensive coverage of the Casey Anthony trial and verdict. A short mention of the "News of the World" scandal on page 29 there on a short news article. That's compared -- this again is on Friday. This is the day after Murdoch announced that "The News of the World" was shutting down. A short mention there on page 29 on his "New York Post" newspaper which he owns.

This is compared to "The New York Times." A major front-page story on that Friday after it was announced that "The News of the World" was shutting down. Same thing for "The Washington Post," major front-page story there.

Now, to be fair, "The Wall Street Journal," another Murdoch news entity -- this is his most distinguished newspaper -- did do a major front-page story. Here it is right here. "Tabloid to Close Amid Scandal" with extensive coverage on the jump page.

And Murdoch's paper, "The Times of London" today has this as its major front-page story, the headline "Murdoch Counts Cost as BSkyB Bid Shelved." So two of his major newspapers, Wolf, "The Wall Street Journal" reporting extensively on the Web and on their front page and the "Times of London" not shying away from this story.

BLITZER: And we're all going to have a lot more opportunity to cover this story, because it's clearly only just beginning this investigation in Britain right now. Thanks very much, Brian.

A senior U.S. official is now saying that there are new developments going on in what's happening in Afghanistan and Iraq. We're going to check those details for you. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: This just coming in. A senior U.S. official tells CNN that CIA agents traveled to Somalia to help with some terrorism interrogations. The official says it was only once or twice and the suspects were under control of Somali forces the entire time. CIA agents helped by suggesting questions.

The agency believes the Somali-based al Qaeda offshoot may be increasing its contacts with terrorists in nearby Yemen. The mission by U.S. agents underscores the government's concern about terror networks in the region.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: "Michele Bachmann is leading in Iowa. Sarah Palin thinks she can be president. Are the Republicans in trouble?"

Brandon in Arkansas: "I believe so. As an independent I find that Republicans have a problem finding candidates who actually recognize the problems faced by this country. Michele Bachmann and Sarah Palin may evoke enormous amounts of patriotism, but I believe it takes much more than that. If it comes down to Ron Paul and President Obama, my vote will go to Ron Paul. However, if I have to choose between other Republican candidates, my vote will most likely go to President Obama."

Riley writes, "If even 20 percent of this country really thinks either of those people is presidential, the rest of the country is in trouble. I don't think the country holds that many dummies."

Michael: "The only way either Bachmann or Palin should be allowed into the White House is with a ticket and a tour guide. Honestly, their advocacy of a theocratic government frightens me. We've tried that already. It was called the Dark Ages, and it worked out so well."

Janie write, "Yes, the Republicans are in trouble. Sarah Palin is a has-been just looking to make a few more bucks before her looks fade. Bachmann is a joke. She just lost the black vote with her stupid remarks about black babies and slavery. This black woman will continue supporting our president, even if he doesn't win reelection. If he does not, the U.S. deserves a Republican president. The whites will suffer right along with the blacks and Hispanics."

Bob writes, "Four years ago who would have thought a first-term black senator from Illinois could beat Hillary Clinton let alone become president? Don't underestimate Obama's unpopularity. Let's just wait and see."

T. writes,, "I'm starting a medical practice based on the fact that I think being a Republican is a choice; it's not inevitable."

And Otis in West Hartford, Connecticut: "Well, Jack, let's see. You've got a couple of schizophrenics, Romney and Huntsman; a set of wingnuts, Paul, Santorum and Cain; two certifiable loons, Bachmann and Palin; an insufferable bore, Pawlenty; and a skirt-chasing windbag, Gingrich. So yes, the modern-day GOP is clearly in trouble with this group of luminaries. And unless sanity is restored, it's headed for extinction."

If you want to read more on this -- got some pretty clever stuff -- go to my blog, CNN.com/CaffertyFile -- Mr. Blitzer.

BLITZER: It could really liven up in the coming days and the weeks, Jack, if Mary Matalin and James Carville are correct in their assumption right now that Sarah Palin is getting ready to throw her hat in the ring, as well. We'll watch that closely together with you. See you back here tomorrow.

CAFFERTY: It would be the greatest show on earth.

BLITZER: All right, Jack. Thanks very much.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. For our international viewers, "WORLD REPORT" is next. In North America, "JOHN KING USA" starts right now.