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Pilots Grounded after Airport Blunder; Christie Faces Trouble On Two Fronts; Interview With Rep. Frank Pallone; New Obamacare Numbers; Christie's Bridge Troubles; President Obama's Recess Appointments; Iran Interim Nuclear Deal Kicks Off; Violence Erupting in Iraq's Key Town; France's First Lady Hospitalized

Aired January 13, 2014 - 17:00   ET


WOLF BLITZER, CNN HOST: Jake, thanks very much.

Happening now, how could an airliner with 124 passengers aboard land at the wrong airport with a dangerously short runway?

You're going to see what the pilots saw.

First on CNN, Governor Chris Christie now facing a new federal inquiry on a completely different matter, even as a state lawmakers look into his traffic scandal. I'll speak with one of Governor Christie's toughest critics.

Plus, daily bombings and a brutal al Qaeda comeback -- two years after the last U.S. troops pulled out, is Iraq now falling apart?

We're going to Baghdad.

I'm Wolf Blitzer.


An unscheduled takeoff following a dangerous and unexpected landing. This Southwest Airlines Boeing 737 departed from an airport outside Branson, Missouri just about an hour or so ago. It was supposed to land in Branson yesterday, but in a shocking and still unexplained move, the pilots landed seven miles away, in a very small municipal airport, with a runway thousands of feet too short for the plane.

Now the pilots have been grounded and everyone is asking, how could this happen?

CNN's Brian Todd is working the story for us.

He's over at a flight simulator in Leesburg, Virginia.

What are you finding out -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, what made this so dangerous was that the plane, packed with 124 passengers, stopped just 500 feet short of the end of the runway at that wrong airport. Well, we came to this airport, went inside a flight simulator and recreated that very same approach in Missouri to look at what could have gone wrong.


TODD (voice-over): This is a pilot's eye view of Runway 14 at Branson, Missouri, where the pilots of Southwest Flight 4013 were supposed to land. This is Runway 12 at Clark Airport, also called Taney County airport, seven miles away, where they actually landed.

STASI POULOS, PRESIDENT, MINDSTAR PRODUCTIONS: One runway at 1-4-0 and one runway at 1-2-0 is 20 degrees difference in the direction that those runways are pointing.

TODD (on camera): Pretty close.

POULOS: Very close.

TODD (voice-over): That's one possible explanation for why that 737 landed at the wrong airport, according to this man. He's a long time pilot and president of a company that builds software for flight simulators.

At the Leesburg Executive Airport in Virginia, inside a simulator called Red Bird, Poulos entered in the exact GPS readings and visual scenery of the approach to both those airports in Missouri.

The GPS instrument is straightforward.

POULOS: We're supposed to follow this magenta line. And it will eventually become this white line. And eventually, you will hit the blue circle, which is the Branson Airport.

TODD: Got it.

(voice-over): Poulos says in these situations, the coordinates of the airport entered are actually the identifiers, like LGA for LaGuardia, or LAX. He says it's unlikely the Southwest pilots would have entered that information wrong in this case, because the identifiers for those two airports are fairly different. Branson is KBBG. Taney County is KPLK.

What could have gone wrong?

Poulos says at the point you're looking at that GPS and steering to that line, both the Branson and Taney County Airports can come into physical view, parallel to each other, through the same windshield panel, they're that close. At that point, it's possible the pilots were only looking out the window.

POULOS: It's clear from looking at it in the simulator that visual will have to be investigated, for sure, because that's one of the definite factors in this kind of situation.


TODD: Former NTSB investigator, Peter Goelz, told us that among noncommercial pilots, landing at the wrong airport does happen on occasion. But he says among commercial flights, this is truly extraordinary.

The pilots in question in this Southwest flight have been removed from flying duty pending an investigation -- Wolf.

BLITZER: Brian, we're also getting some new information on the situation with the air traffic control in this case.

What are you learning?

TODD: Wolf, a source is telling CNN that this flight was cleared to land at Branson by an air traffic controller at the Branson Airport and that controllers didn't know of the mishap until minutes later, when the pilot, who was on the ground at the wrong airport at that particular moment radioed them and told them that he'd landed at the wrong airport, and, also, that the airport where they actually landed, there is no control tower.

BLITZER: Interesting stuff.

All right, Brian, thanks very much.

Let's dig a little bit deeper right now with Kevin Hiatt of the International Air Transport Association.

He was a pilot for Delta Airlines.

Kevin, thanks very much for joining us.


BLITZER: All right, so you studied what's going on.

How could this happen?

A lot of folks are asking.

HIATT: Well, at the flight safety foundation where I currently work, I'm going to IATA here very shortly --

BLITZER: The air traffic --

HIATT: -- we did a study several years ago about geographic disorientation. And in this particular case, as it was just pointed out, it appears that the pilots may have taken over visually and started to go to an airport that they had fixated on instead of actually following what they were seeing in the cockpit.

BLITZER: Because in this day and age of GPS, usually it has pretty good instructions right there in front of you, as we just saw in that simulation.

HIATT: Yes, it will take you right to the end of the runway. So in this particular case, again, they were looking outside. That airport was actually first in the lineup of both of them. So they fixated on that airport. I'm just, you know, taking a guess at this right now. Of course, it will all come out in the investigation. BLITZER: And that will be in time.

But in the meantime, these two pilots, they've been grounded for all practical purposes, right?

HIATT: Right. That's normal procedure after anything of this nature. They'll be grounded and there will be a lot of interviews and research and then also investigation as to what was happening in that cockpit.

BLITZER: With a short runway, this was pretty dangerous for those passengers and crew members on board, because if it would have gone a few hundred more feet, there was an embankment onto a major highway. There could have been a real disaster.

HIATT: Well, they had avoided a real disaster. And it's a good testament to the aircraft itself and the technology that we've got in the air right now. The 737 is a venerable aircraft. It's been in the air for many years. This version is one of the more modern versions, good brakes, spoilers and reverse, that saved that aircraft.

BLITZER: I'll show our -- we have a little picture, a little graphic, of how close it was. You can see over there, you can see where the highway is there and where the plane was coming. This is the Taney County airport.

If it would have just gone a few hundred more feet, with that short runway, those passengers could have been in deep trouble, especially if it went over that cliff, if you will.

If you were leading this investigation, what are some of the questions you would ask?

HIATT: Well, we're going to take a look at some of the human factors in this particular event, such as the duty time of the pilots, how long had they been on duty, when was their last training, what was the last visual approach that they may have done at an airport; also look at the weather conditions and also take a look at the aircraft itself, to the integrity of the instruments on board.

BLITZER: If everything was working and there's a -- the flight data recorders, the voice recorder, all that, you're going to go through all that information.

This isn't the first time that we've seen a plane land at the wrong airport with a much shorter runway.

HIATT: No, it happens. And, unfortunately, when it does, it does get a lot of attention. In this particular case, there was no loss of life. So we'll look at this one and see just what we can do to prevent it from happening again.

BLITZER: And you learn lessons and then you move on.

HIATT: You learn lessons and you build them back into the training programs at the air carrier so we move on.

BLITZER: And eventually, this plane, about an hour or so ago, managed to take off, despite that short runway.

Were you surprised that it didn't have any problems leaving that small airport?

HIATT: No, because of the performance characteristics of that aircraft. They had minimum fuel, no passengers, no cargo or baggage on board. That airplane can lift off and get off safely.

BLITZER: Kevin Hiatt, good luck with the new job.

HIATT: Thanks, Wolf.

BLITZER: Thanks very much.

Next, first on CNN, the New Jersey governor, Chris Christie, now facing a new federal probe, even as state lawmakers armed with subpoena power look into his traffic scandal. I'll speak with one of Governor Christie's toughest critics.

And new ObamaCare numbers are out.

Will there be enough people and enough young, healthy people to make the entire program work?


BLITZER: New trouble for the New Jersey governor, Chris Christie, on two fronts. Democratic lawmakers are forming a special committee with subpoena power to look into the traffic jams that threw a city into gridlock.

And first on CNN, we're also learning there's another inquiry into Christie's office on a completely separate matter.

CNN investigations correspondent, Chris Frates, has been digging into this crisis.

What are you learning -- Chris.

CHRIS FRATES, CNN CORRESPONDENT: Well, Wolf, we're learning that federal officials are now looking into another controversy of Governor Christie's. This one has to do with federal taxpayer money that was for Hurricane Sandy relief.


FRATES (voice-over): When Hurricane Sandy hit New Jersey, Chris Christie led from the trenches. And his skillful response to the devastating super storm rocketed him into political superstardom.


FRATES: But a new federal investigation into how the New Jersey governor spent some of the Sandy relief money could threaten to wash away the foundation of his political brand. CNN has learned that federal investigators will examine the state's $25 million tourism marketing campaign, a campaign that was paid for with Sandy recovery money.


UNIDENTIFIED CHILDREN: The Jersey Shore is open.

UNIDENTIFIED MALE: The word is spreading.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Because we're stronger than the storm.



FRATES: A campaign that featured Christie and his family during an election year.

REP. FRANK PALLONE (D), NEW JERSEY: Instead of working together --

FRATES: Democratic Congressman Frank Pallone, a vocal Christie critic, requested the investigation and federal officials tell CNN it's now moving ahead.

But Pallone says this is not about politics.

PALLONE: This was money that could have directly been used for Sandy recovery. And as you know, many of my constituents still haven't gotten the money that is owed them, you know, to rebuild their homes or to put their, you know, to raise their homes or to help.

FRATES: Pallone says promoting New Jersey tourism after the super storm was a good idea, but he has a big question about how much taxpayer money was spent to make those ads. The winning bid, a $4.7 million campaign featuring Christie and family.

The next lower bid that lost out was nearly half the price, at $2.5 million, and wouldn't have featured the governor, according to Pallone.

The ads caused controversy as they hit the airwaves while Christie was running for reelection.

Christie's opponents slammed him, arguing it gave the incumbent governor an unfair advantage.

And Senator Rand Paul addressed it at a hearing in November.

SEN. RAND PAUL (R), KENTUCKY: You think there might be a conflict of interest there?

You know, that's a real problem. And that's why, when people who are trying to do good and trying to use taxpayers' money wisely, they're offended to see our money spent on political ads. You know, that's just offensive.

FRATES: And today, the governor's office released a statement saying, "Federal agency reviews are routine and standard operating procedure to ensure that funds are distributed fairly. We're confident that any review will show that the ads were a key part in helping New Jersey get back on its feet after being struck by the worst storm in state history."

But after an initial review of the Sandy relief spending, the office of the inspector general at the Department of Housing and Urban Development, has concluded that there is enough evidence to launch a full scale investigation.

PALLONE: Taxpayer dollars that could have been used for Sandy relief were used for ads promoting the governor, because he was in them with his family, during an election campaign.

FRATES: Christie's office questions the timing of the investigation. Indeed, it couldn't come at a worse time for the scandal-plagued New Jersey Republican. Christie's already facing two probes into whether his staff tied up traffic near the country's busiest bridge to punish a Democratic mayor who refused to endorse him.

But as bad as the George Washington Bridge scandal has been for Christie, if the investigation finds he improperly spent Sandy funds, it could get far worst, tarnishing the signature achievement that has helped propel him toward the White House.


FRATES: Now, Wolf, the HUD inspector general's office confirms they're investigating, but it will likely take months before a full report will be released to the public according to Congressman Pallone. And also -- something to know is that at least two Democratic mayors in New Jersey have come out in favor of Governor Christie starring in those advertisements, telling a major newspaper in New Jersey that it was the right thing to do. So, this thing is clearly far from over.

BLITZER: Haven't other governors, though, Chris, done similar campaigns, tourism commercials following disasters?

FRATES: Well, sure, Wolf. Louisiana did one after Katrina. The Gulf States did it after BP. And no one's questioning that spending money on a tourism campaign is a good idea. you know, even the HUD secretary, Shaun Donovan, said so in a Congressional testimony last fall. The question here is, you know, was the money for the campaign spent properly?

BLITZER: Interesting stuff. Thanks very much, Chris Frates, with his good reporting.

Let's dig a little bit deeper right now. Democratic congressman, Frank Pallone, of New Jersey is a longtime Christie critic. He's the one who asked for the federal probe into how taxpayer money was spent on this tourism marketing. The congressman is joining us here in THE SITUATION ROOM. Congressman, thanks very much for coming in.

PALLONE: Thank you.

BLITZER: Anything potentially illegal going on here?

PALLONE: Well, I think the question is how was this contract drawn up or, you know, how was it manipulated, and that's what we don't know. (INAUDIBLE) which is the daily in my district, down at the Jersey Shore, basically did this investigation, and they compared the contracts between the two bids.

And they basically said that the lower bid was not willing to put Christie in the ad. And that was the one that was $2.5 million. And then when the higher bid at 4.7, that firm said that they would put him and his family in the ad, they were chosen. So, I mean, the question is, you know, how was that process going about.

BLITZER: And you think for political reasons in part because he was up for re-election?

PALLONE: I mean, I think that's clearly my concern. I mean, keep in mind, as I think you pointed out, or Chris pointed out, that Christie's whole campaign was that he saved the shore. And so, if you look at those tourism ads that were basically saying that versus his campaign ads, there really wasn't that much --

BLITZER: There were a lot of people in New Jersey think he did do a good job after the superstorm Sandy, right?

PALLONE: Well, I don't think that's the issue. I mean, look, we all worked hard to try to restore the shore. There's still a lot more to be done. But keep in mind that this was a block grant. This money could have been used for, you know, Sandy relief for homeowners, for businesses. And we're still not getting that money. A lot of that money has still not come through.

So, some people said, $2 million. Well, $2 million is a lot of money, and I'm concerned about it. And I think the fact that the inspector general has now said they're going to conduct a full-scale investigation is significant. Let them see what they come up with.

BLITZER: The ad agency that created this ad issued a statement just a little while ago. I'll put it up on the screen. "MWW's proposal," that's the ad agency, "included no mention or suggestion of using the governor in the paid advertising campaign. The decision to include the governor was arrived at after the contract was awarded based on timing, availability, and federal expenditure rules. Assertions to the contrary are simply incorrect. " What's your response?

PALLONE: Well, I think that's rather significant. In other words, if they initially did not suggest that the governor was going to be in the ads, what happened in that period of time when they met with the governor's staff and the other people that chose the contract. You know, there were --one of the things that was in the ad -- was the statement that some of his advisers perhaps were insisting that he'd be in the ad. So, I mean, again, the question is, that needs to be investigated, to what extent was that the case.

BLITZER: What's wrong with the governor appearing in an ad like this, saying we beat back Sandy, it's time to come back, visit the Jersey Shore, spend money here, let's help our economy.

PALLONE: Well, again, I think it goes back -- let me make a comparison. In the case of New York, there was a similar ad campaign that did not use Governor Cuomo. They used Billy Joel and other celebrities. OK? In the case of New Jersey, the governor opted to do that. And we don't know exactly how that came about. The fact of the matter is, he was running for re-election and his re-election was very much linked to his success in Sandy.

And so, these ads were, you know, basically adding another $20 million to promote him. Very close to the election.

BLITZER: Christie's office sent the present e-mail saying they find it, quote, "amazing," in their words, amazing that the inspector general's investigation has now been leaked to the news media. What's your reaction to that? In the aftermath of the traffic scandal, if you will, all of a sudden, this issue comes up?

PALLONE: Well, about six months ago in August, I asked the inspector general to look into this. They did a preliminary investigation that took, I guess, about six months. They just told me within the last few days that now they have decided to do the full fledge audit and investigation. It's just a coincidence that it occurred at the same time. There's an independent agency.

BLITZER: You believe the governor told the truth last week when he denied any knowledge of all of this?

PALLONE: I don't think the issue really is whether he told the truth or not. I think the issue is he created this atmosphere around him. It's a bullying atmosphere. It's an atmosphere take no prisoners which I think, you know, essentially encouraged his staff to threaten mayors and to do whatever was necessary to get elected. And I think that they went too far and it's pretty deplorable.

BLITZER: There's no smoking gun as far as I know directly linking him to the plot, if you will.

PALLONE: I don't know whether he was involved in the plot. I wasn't there. But I will say this, that the atmosphere in that administration is always -- has always been one of, you know, threats and bullying and basically, you know, saying, look, if you don't do this, then we're not going to be too pleased.

BLITZER: Is there evidence at all that he was involved in so-called cover-up?

PALLONE: I have no indication of that. I can't comment on his direct involvement, Wolf.

BLITZER: So, potentially, he could survive this.

PALLONE: Well, again, he's the governor. He was duly elected. To me, the issue isn't whether he survive. The issue is that we need -- we shouldn't have this type of atmosphere, and you know, around the governor's office.

BLITZER: What else do you want to hear from him?

PALLONE: I want to know exactly what happened, particularly, --

BLITZER: He spent two hours answering questions the other day.

PALLONE: Well, no, I'm talking now in terms with the Sandy relief. I'm very concerned because I think this extra money that was spent on the ads to put him on the air during the campaign, you know, that's money that we fought hard for that could be used for other purposes for Sandy relief.

I mean, I still have homeowners that haven't gotten their checks to rebuild their homes or businesses that haven't been repaid for their inventory that was lost during the storm. So, you know, this is federal dollars, taxpayer dollars. And we need to be concerned about it.

BLITZER: And very quickly, what else do you want to hear about the traffic scandal? What question would you ask him that he hasn't yet answered?

PALLONE: Well, I think that there's a lot of unanswered questions --

BLITZER: Like what?

PALLONE: -- about exactly how this occurred. In other words, to what extent was his administration involved and who was involved. I mean, we have some preliminary information on that, but I think this investigation by the assembly will take it further. It needs to be looked at.

BLITZER: Congressman Pallone, thanks very much for coming in.

PALLONE: Thank you.

BLITZER: Up next, there are new numbers showing a surge in Obamacare enrollments, but will there be enough young healthy people to make the new system work, people who actually put money into the system?

And allegations of an affair landing a first lady in the hospital. That's coming up. Stay with us. You're in the SITUATION ROOM.


BLITZER: New numbers in for the first time some details about who's actually signing up for Obamacare. The administration is now sharing demographic information about who's enrolling, including young people who could make or break the Obamacare success system. CNN's Joe Johns is looking into all of this for us. All right. So, these new numbers, what are we finding out?

JOE JOHNS, CNN CORRESPONDENT: Well, Wolf, 2.2 million Americans signed up for Obamacare from the 1st of October through the end of December. The official position of the administration is that they have reached what they call the threshold of preliminary sustainability, which means they think they're now on the way to making the Affordable Care Act stand on its own.

They've always needed a large influx of younger healthier people who actually are paying in in order to make the program work. And today, they said that 25 percent of those signed up now are young adults between the ages of 18 and 34 who would statistically be healthier. Now, these numbers of younger people are lower than they ultimately need to be. The Congressional Budget Office has said that that numbers of young adults need to be closer to 40 percent.

What they've always said is that younger consumers are likely to enroll in the program at the last minute and the last minute in this case would be March 31st. So, there's still plenty of time, Wolf.

BLITZER: Are they saying how many of those younger consumers who have actually signed up for Obamacare are paying customers as opposed to, for example, Medicaid recipients or simply on their parent's program? How many actually are putting their own money into this system?

JOHNS: Right. That's actually a very important distinction, and we don't know right now. We don't have that level of detail. If they don't get the right mix of paying customers and if these numbers don't improve, it could mean Obamacare might be more expensive than was expected. Premiums could go up because there aren't enough young people to pay for everyone else. Insurance companies say it's just too early to say whether Obamacare has hit its sweet spot yet, Wolf.

BLITZER: Joe Johns reporting. Hopefully, we'll get all those numbers behind the numbers shortly. Appreciate it.

Let's bring in our chief political analyst, Gloria Borger, our CNN political commentators, the former Bush speechwriter, David Frum and Ryan Lizza, the Washington correspondent for the "New Yorker."

Ryan, these numbers are critical right now, not only the percentage of young people but how many of them are actually paying into the system.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: Paying, but remember, on the young, it's young and healthy. And right now, we know how many are young people. What you want to also know is how many are healthy. Frankly, it's the young and healthy are going to subsidize the --

BLITZER: It's taking so long. Why aren't they sharing all these numbers with us?

LIZZA: Well, because they probably only want to give us news when they have good news to report, not everything on a rolling basis. But, as the administration has pointed out, this is true Massachusetts's most young people, young and healthy, especially people who don't need health insurance most but don't want to pay the fine, they will jump in at the last second. So, the late March deadline is crucial.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: You know, if you're looking for some good news in this, Wolf, I think what they've avoided with these numbers is the death spiral that everybody was worried about, that you wouldn't get any young people to sign up, that no healthy people would be involved, and therefore, the whole system would not be able to sustain itself. So, I think they're on their way --

LIZZA: It's passed that threshold now.

BORGER: -- avoiding the death spiral. But the problem is that more than half of the people who've enrolled are between 45 and 64. And this is what Ryan's talking about. You need young healthy paying customers.

DAVID FRUM, CNN POLITICAL COMMENTATOR: And the reason they need them so badly was -- remember from the debate, the claim was that Obamacare was going to be deficit neutral. It was not going to cost the treasury anything. And the reason that that -- they could make that claim was it wasn't that it was going to be cheap, it was going to be massively expensive, but the subsidies would happen beyond the treasury, from one customer to another customer.

So if you don't -- this problem they had, this agonizing problem of making sure you have the right customers is a product of the earlier decision to make this program look cheaper than it really was.

BLITZER: You signed up for Obamacare, right?

FRUM: I have eventually --

BORGER: You succeeded?

FRUM: I have succeeded.

BLITZER: How's that working out?

FRUM: We will find out where the first time anybody in my family gets ill, but right now --

BORGER: Is it costing you more?

FRUM: It is costing me more.

BLITZER: A lot more or a little more?

FRUM: It's costing me about -- well, it's costing me about a third more for the policy. It has some differences in some improvements in coverage and it's got a slightly higher deductible.

RYAN LIZZA, CNN POLITICAL COMMENTATOR: But politically, if you're a Republican who is sort of waiting to sit back and wait for Obamacare to just sort of collapse under -- under its own weight because you think it's just impossible for it to work, you probably look at this and saying, well, OK, they have not passed a crucial threshold. This thing they have -- this thing may actually work out.

BLITZER: Gloria, let's move back to the Governor Christie scandal, if you will. You're digging in. You're getting some new information. What else are you learning?

BORGER: Well, there's a series of e-mails. And this was first reported by "The Wall Street Journal" I should say. There are a series of e-mails between Jersey City Mayor Fulop and Chris Christie aides. And what they point to is essentially politics -- I'm sure you'll be shocked about this -- which is that he was elected mayor, set up a bunch of meetings with top Christie officials in the state, he decides -- Christie went around looking for Democratic endorsements because he wanted to get a lot of Democratic endorsements when he was running.

This mayor, Jersey City, says sorry. Around the day or the day after he said sorry, all of the appointments were canceled at the same time.

BLITZER: The meetings, you mean?

BORGER: The meetings. And so Steve Fulop -- and let's put this on the screen, he wrote this e-mail to Bill Baroni who is a senior official at the Port Authority at the time, since resigned.

"I'm not sure if this is a coincidence that your office canceled the meetings several weeks back that seemed to be simultaneous to other political conversations elsewhere that were happening. Prior to that, you were always very responsive and I sincerely hope the two issues are not related."

Of course, he believes that the two issues are related. Today, a Christie spokesman said, and I'm quoting here, again, "Mayor Fulop's words and actions must be viewed through the lens of partisan politics and his attempt to advance his own political agenda."

And what they're talking about there is that they believe Fulop is a leading Democratic contender to run for the governorship in 2017.

BLITZER: After Christie -- how much trouble is Christie in?

FRUM: He's -- he faces a real risk of trouble. This is not an irretrievable situation. In a way, he's encountering something that governors often encounter when they run for president, which is that the instincts of the staff that take you a certain way toward national office then become inadequate or even dysfunctional.

That's very much, for example, what happened with Bill Clinton's Arkansas operation in 1991. You have to grow. These politicians, they all have demons to slay. I mean, every human being has demons to slay. Politicians seem to have more of them and they have to slay them sort of in public in a way that most of us are spared.

So the question for Chris Christie is, can he use this as moment to say, you know what, I need to be a larger kind of person than New Jersey politics has called for to date. LIZZA: And I think the problem is look, I think canceling meetings is not the biggest deal in the world, right? I mean, if -- anyone who's covered politicians know that they do this with the press all the time.


BORGER: Yes, but it's kind of hilarious, right? That one day they're all on, and the next day, they all cancel at the same time, right?

LIZZA: Politics is transactional.

BORGER: Right.

LIZZA: And in New Jersey, it's more transactional than other places.

BORGER: Right.

LIZZA: I think the danger for him is he presented himself to the national audience as someone who did things differently in New Jersey, you know, he came in and said, I know what you thought about New Jersey politics but we're going to clean house, we're going to make it -- we're going to make a different under my regime.

I think what's happening now is a lot of these stories as they come out, the accumulation makes it seem like, well, wait a second, maybe he wasn't all that different than the previous Jersey politicians after all.

BORGER: And what you discover when you're president is, to David's point, is that you can't be that petty, because when you're that petty, people don't think you're large and worthy of the office of the president of the United States.

So if you're canceling appointments on a petty basis, I mean, remember this, I keep thinking about this, President Obama had Joe Lieberman, who endorsed John McCain and he had an opportunity to take him out of the chairmanship of the Homeland Security Committee after he was elected and he said, you know what, leave him there, I'm not going to do that.

There were lots of reasons for him to do that politically but also he looked -- he looked like someone worthy of a big office and not -- and not petty.

BLITZER: And petty politics.

LIZZA: You know, it's funny, sometimes Obama has been criticized for not being more --

BORGER: Exactly. I know.

LIZZA: Into paying his opponents back.

FRUM: This is going -- this is a growth moment. This may -- this could be the thing that makes Governor Christie, if he rises to it, and if he learns, and if he gets new kinds of people who played by larger and bigger and national --

BLITZER: And it's why so many of his supporters -- everything he said the other day turns out to be true which --

BORGER: And by the way, you can -- you might be able to do this in New Jersey but on a larger scale I think governors often find out you can't.

LIZZA: It's very difficult. New Jersey Governor's Office is also very powerful. So he has a lot of levers.

BORGER: Yes, exactly.

LIZZA: Not just meetings.

BLITZER: Ryan, Gloria, David, guys, thanks very much.

Up next, is Iraq on the verge of simply falling apart? A bloody wave of deadly violence is inundating the country. We're going to Baghdad.

Plus, some of America's favorite liquors get an international twist. We have details of a new multibillion-dollar deal.


BLITZER: At the Supreme Court today, extraordinary constitutional test of the president's executive power. In what is a rare case affecting all three branches of the federal government, the justices heard arguments over President Obama's recess appointments to a federal agency made without formal Senate confirmation.

Our senior legal analyst Jeffrey Toobin was there, heard all the arguments for us.

The president of the United States, he likes these recess appointments right now --


BLITZER: -- because the Republicans -- but when he was a senator, he didn't like those recess appointments.

TOOBIN: No. This is a classic, you know, who's ax score trouble. When Barack Obama was the United States senator, he didn't like it when George W. Bush made --

BLITZER: John Bolton.

TOOBIN: John Bolton, the U.N. ambassador. Today, he has responded to Republican obstruction in the Senate by making recess appointments. He's trying to defend them. That's the clash in the Senate -- in the court today. And the justices were very intrigued. And it wasn't exactly clear how they're going to come out.

BLITZER: All right. Let's talk about a recess appointment.

TOOBIN: Very good.

BLITZER: Explain exactly what it is.

TOOBIN: OK, at the founding of the Constitution, in the 18th century, it was a very big country and the Senate, you couldn't get around very easily. In the horse and buggy era when the senators were gone, they were gone from the Senate months at a time. So the framers of the Constitution said let's have a provision that the president can fill these vacancies without the Senate being present.

In the current day, that's still on the books, even though the senators can always be called back on a moment's notice.

BLITZER: But sometimes there's a recess that's not a formal recess because you have a Maryland senator who lives outside of Washington, D.C. or a Virginia senator who lives outside who just comes in, gavels and then goes home.

TOOBIN: It's become sort of a game. Whether the Senate wants nominees confirmed or wants them not to be confirmed, they keep themselves in session or not. And the justices seemed inclined basically to say, look, senators, we're not going to tell you how to make the rules. If you want to have these what they call pro-forma sessions, we're not going to tell you that they are not appropriate. It's up to the Senate to make its own rules.

BLITZER: Bottom line, what do you think is going to happen?

TOOBIN: Bottom line is that Barack Obama's party better control the Senate in 2014 if he wants to get anything done. Because the justices seem inclined to say the Senate can make whatever rules it wants. So if Harry Reid is still the majority leader, Obama will be in pretty good shape. But if Mitch McConnell, who is in court today, is the majority leader, he is going to be able to gum up the works even more than he has now. So the stakes for the 2014 campaign seem to get higher in that courtroom today.

BLITZER: And we'll get the result by the end of June, right?

TOOBIN: Yes. Yes. Of the decision. Yes.

BLITZER: Of the decision. Of course. Thanks very much, Jeffrey.

Other top stories we're following here in THE SITUATION ROOM. Leaders and dignitaries from around the world attended a memorial for the former Israeli prime minister Ariel Sharon outside the Israeli parliament today. The Vice President Joe Biden representing the United States.

Sharon died Saturday after eight years in a coma that resulted from a stroke. He was buried later in the day in his family ranch in the Negev Desert.

Some top-selling American spirits are changing hands. The Japanese beverage company Santori is buying Beam in a $16 billion deal that includes Jim Beam and Maker's Mark. The combined companies will be the third largest premium spirit maker in the world.

She wasn't a runner until now. In fact, Celeste Corcoran says she hated running but nine months, after she lost both legs in the Boston marathon bombing, she's walking, running, swimming and more. She's just got her new running prosthetics and learned to run in only two days. Corcoran says she refused to give up because she wants the best life she can possibly have. Good for her.

Just ahead, President Obama and lawmakers, at odds as a critical milestone in the nuclear deal with Iran approaches.

Also, Iraq, unraveling before our own eyes. The civil war, even greater civil war, right now, imminent. We'll go to Baghdad.

Plus, an alleged affair, the first lady in the hospital. Details of new developments in a real-life soap opera that's still unfolding.


BLITZER: The clock is finally about to start ticking on that interim nuclear deal with Iran. But lawmakers here in Washington are also working, trying to keep up the pressure on Tehran. That meant a juggling act for the Obama White House.

Let's bring in our chief national security correspondent Jim Sciutto with the very latest.

A little complex but critically important.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: No question. You can argue that the administration had two very difficult negotiations under way. One with Iran over its nuclear program. Another with Congress to hold off new sanctions on Iran while this diplomatic path is open.

Now at least those first negotiations are moving forward. The landmark nuclear deal with Iran will spring into action on January 20.


SCIUTTO (voice-over): One week from today, U.N. inspectors will be inside Iran to begin verifying the requirements of the nuclear agreement. Including that it stops enriching uranium to near weapons grade and dilutes its current stockpiles.

And soon Iran will reap the economic rewards. Beginning February 1st over six months sanctions relief will be paid out in eight installments of roughly half a billion dollars each for a total of $4.2 billion in unfrozen overseas assets.

MOHAMMAD JAVAD ZARIF, IRANIAN FOREIGN MINISTER: The agreement that we reached in Geneva is the beginning of a long and difficult road in order to address this issue and in the process create a bit of confidence.

SCIUTTO: That confidence has been shaken, however, by a growing push on Capitol Hill for new sanctions against Iran.

President Obama's position repeated since the two sides reached agreement in Geneva in November -- wait until Iran fails to live up to the agreement before imposing new penalties.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now is not the time to impose new sanctions. Now is the time for us to allow the diplomats and technical experts to do their work. We will be able to monitor and verify whether or not the interim agreement is being followed through on and if it is not, we'll be in a strong position to respond.

SCIUTTO: That argument, however, has not swayed a majority in the U.S. Senate, 59 senators have signed on to support a new sanctions bill. That includes the Democratic chairman of the Foreign Relations Committee Bob Menendez who wrote in "The Washington Post," "Opponents of prospective sanctions against Iran argue that sanctions are like a spigot -- easy to turn on and easy to turn off."

But he argues passing legislation in Congress paired with implementation takes time.

Throughout Iran's position has remained clear. Deputy Foreign Minister Majid Ravanchi told CNN, quote, "The enactment of sanctions by the Senate will ruin the entire agreement. We hope we will not face that."


SCIUTTO: Now as this interim deal kicks in, the two sides will then begin talks on a long-term agreement. Secretary Kerry traveling in Europe calls the next phase very difficult. And as if to highlight that difficulty and insulate themselves from opponents at home, both sides have been emphasizing, Wolf, that the deal is reversible if either side doesn't live up to its commitments.

BLITZER: Now, you know there were reports that Iran and Russia have worked out a new deal that would provide the export of a lot of Iranian oil to Russia.

SCIUTTO: This is a significant problem. Reports coming out that Iran and Russia are in negotiations for an oil for goods swap worth $1.5 billion a month. That's a lot of money considering we're only talking about half a billion dollars a month under this interim nuclear deal.

The White House reacting very strongly, they supplied this statement just before I came on the air here. If the reports are true, they say, such a deal would raise serious questions as it would be inconsistent with the terms of the P-5 Plus 1 agreement with Iran and could potentially trigger U.S. sanctions.

That Kagan Hayden at the National Security Council. And this does is it blows up the whole design of this year. It was very measured reversible sanctions relief as Iran meets each of these gateways in terms of curtailing its nuclear program. Right here this would be $1.5 billion dwarfing the sanctions relief under the agreement with the U.S. BLITZER: And Russia is a signatory, is one of the members, permanent members of the Security Council to this deal.

SCIUTTO: Exactly. And we're told that Secretary Kerry did raise this with Russian Foreign Minister Lavrov today.

BLITZER: When they were both in Jerusalem for the funeral of the former Israeli prime minister.

BLITZER: All right, thanks very much. Not Kerry, he wasn't there. Biden was there.


BLITZER: Lavrov was there. He represented Russia at that funeral. Biden represented the United States.

All right, thanks very much.

SCIUTTO: Thank you.

BLITZER: CNN is on the ground in Iraq right now where there are renewed fears of an all-out civil war. Two years after the last U.S. troops pulled out, is Iraq now falling apart?

And Michael Holmes is joining us from Baghdad right now.

Michael, I know you were there in 2011 when U.S. troops left Iraq. You say the situation right now is a whole lot worse than it was then. What are you seeing?

MICHAEL HOLMES, CNN ANCHOR AND CORRESPONDENT: It is, Wolf, I mean, from the moment we came in from airport -- from the airport down the old Route Irish as the military used to call it, the number of checkpoints and just sheer security presence is more than it was back in 2011.

Not as much. I mean, I've been coming here since the war began. And, of course, in 2006, '07 and the like it was more than it is today, but it was certainly a great deal more tense, if you like, than it was when the Americans left, no doubt about it. And you've seen that unfold in the bombings that have gone on. Even today there's been four in the space of three hours just here in Baghdad.

BLITZER: What are Iraqis on the ground saying to you, Michael, about this uncertain future for Iraq?

HOLMES: They're fearful, Wolf. I think it's fair to say. I've spoken to a lot of Iraqis who are very worried. You know, it seems mellow dramatic to say, you know, on the brink of all-out sectarian civil war. But it is a possibility, it could go that way if some sort of compromise is not reached.

Nouri al-Maliki of course portrays this as a fight against terrorism, a fight against al Qaeda in Anbar Province in particular and there are those elements there. There's no doubt about it. But the root cause of the dissatisfaction among Sunnis is the fact that they feel disenfranchised, completely alienated by a Shia-dominated government that when Mr. Maliki came to power promised to power share. Promised reconciliation. They say they've seen none of it and frankly they're fed up to the point where they are picking up guns.

BLITZER: The U.S. is going to try to provide some weapons, maybe a little bit of training or whatever, to the Iraqi government, but not send back U.S. troops. Nobody here is ready to send back U.S. troops. So militarily speaking, can the Iraqi military security forces alone get the job done?

HOLMES: It depends where and how. If they got that -- the things that we've been talking about, like hellfire missiles, apache helicopters and they tried to take on al Qaeda in the desert camps that they're in in Anbar Province near the Syrian border, they can probably do so very effectively with that sort of hardware and drones and the like.

Going into a place like Fallujah would in the eyes of many be a big mistake. Going in and trying to take on the elements that are in that city indeed. The tribes say let us do it. And it's interesting Nouri al-Maliki was threatening to go in with the army to Fallujah. He's now backed off that. He said he's going to wait, in his words, as long as it takes, as long as the tribes take care of the al Qaeda in their cities.

And it has to be said, you know, those Sunni tribes in places like Fallujah, most of them are no fans of these al Qaeda-linked guys. They don't like the way they run things and the brutality in which they do it. So it's a bit of a standoff at the moment. Nouri al- Maliki saying OK, I won't come in with the troops into Fallujah, the tribes saying, OK, and don't try that anyway, by the way, or we will make this a fight that goes well beyond Fallujah.

They've said that. And so now it's a wait and see to see if those tribes do get on to the al Qaeda militants outside their towns and cities and see what happens from there. But you know, there's not a meaningful compromise on the political inclusiveness side of this. That this restiveness, this anger, this bubbling, fermenting annoyance by Sunnis isn't going to go away. It will still stay there. This is a country that's sort of rumbling along on that sectarian divide -- Wolf.

BLITZER: And Michael has written an excellent article on His own eyewitness account of what's going on in Iraq right now.

Michael, be careful over there. And thanks very much.

And coming up, a chemical nightmare leaves hundreds of thousands without water. Is loose regulation to blame?

And a steamy scandal puts a first lady in the hospital.


BLITZER: Affairs aren't normally aren't a big deal in France. But the one allegedly involving President Francois Hollande is making headlines.

CNN's Erin McLaughlin reports.


ERIN MCLAUGHLIN, CNN CORRESPONDENT (voice-over): It's the international love saga that's playing out in the tabloids. The first lady of France, Valerie Trierweiler, the nine-year partner of President Francois Hollande, has been hospitalized since Friday with exhaustion after allegations surfaced that he was having an affair with French actress, Julie Gaya.

The French tabloid "Closer" reported that Hollande allegedly shown here in a black helmet would slip out of the Elysee Palace where he and Trierweiler lived and be driven on a motor scooter to and from Gaya's apartment. Hollande does not deny having the affair, but he is threatening legal action against the magazine.

CHRISTINE OCKRENT, FRENCH JOURNALIST (via telephone): There is feeling of embarrassment because it is not, of course, the dignity of the head of state to have his name and indeed his photograph to be involved in such a story.

MCLAUGHLIN: Hollande is no stranger to having his private life in the public eye. He's never been married. He spent 30 years with his long time partner, Segaline Royale, before leaving her for Valerie Trierweiler in 2007. A relationship that began two years earlier while they were both with their former partners.

It all plays out in an oh-so-French way where extra marital affairs of states aren't given a second thought.

UNIDENTIFIED FEMALE: We're not very interested in the personal life of the president.

UNIDENTIFIED FEMALE: It's not political. It's just love story.

UNIDENTIFIED MALE: We don't really care.

CHRISTINE OCKRENT, JOURNALIST: We have always had a much more tolerant attitude towards sex stories.

MCLAUGHLIN: Erin McLaughlin, CNN, London.