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THE SITUATION ROOM

Iran Suggests U.S. is Encouraging Post-Election Protests; Obama Plans for Financial Overhaul; Health Care Reform Hits Stumbling Blocks

Aired June 17, 2009 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Rick, thank you.

Happening now, breaking news, Iran's really stunning claim it's suggesting that the United States, the Obama administration, is guilty of fanning fires of post election protests. We are going to Tehran.

Who's looking out for you? President Obama says he is. He says parts of the nation's financial system failed you, so he plans to change it. He says they are the most sweeping changes of the financial system, ever since the Great Depression.

And many gays are still angry at what they say President Obama is not doing. Still, he is about to hand same-sex couples some major benefits. Will it be enough? I'm Wolf Blitzer in CNN's command center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

In Iran right now, anti-government protesters risk condemnation, beatings, even death for their cause. And Iran's government has hit a new level of intolerance over the post-election protests.

Those protests today, a blatant disregard for calls for unity from Iran's supreme leader. Supporters for pro-reform candidate, Mir Hossein Moussavi, took to the streets and now the Iran's government is suggesting that the United States, the Obama administration is directly fanning the fires of those protests.

Iran's state-run media reports the government is accusing the U.S. of meddling and calling all of that intolerable, and the U.S., the administration is responding in forceful words.

But first, let's go to Tehran. CNN's Reza Sayah has the latest for us. Reza.

REZA SAYAH, CNN CORRESPONDENT: For the fifth consecutive day supporters of Mir Hossein Moussavi rallied in the streets of Tehran in defiance of the Iranian government and in support of a candidate who is rejecting the controversial results of Friday's election.

CNN, of course, and other members of the foreign media have been banned by the Iranian government from covering and broadcasting images of these rallies, so we've depended on a lot of eyes and ears and witnesses on the grounds to describe these rallies to us.

And they describe another large, silent march. And that's really become the trademark of supporters of Mir Hossein Moussavi, these silent marches. It's an effort on their part to avoid clashes with police. Essentially, they walk with slogans on posters and their peace signs in the air.

This political drama unfolding on a football field in Seoul, South Korea. The Iranian national team taking on South Korean. When some of the members came out, they were wearing green wrist bands in apparent show of solidarity for the green flag supporters of Mir Hossein Moussavi.

In the meantime, the Iranian government's crackdown on dissent continues throughout Iran. Once again on Wednesday, several Web sites, including Facebook, were blocked. No text messaging service for the sixth day. And for a portion of the day, no cell phone service either.

The Revolutionary Guard also coming out with what they call results of an investigation that they say show some news Web sites have been funded by American and British companies designed to incite violence and destabilize the country.

The Iranian government, though, says a partial recount of the vote is under way, but for Moussavi supporters that is not good enough. They are demanding a new vote. More demonstrations scheduled for Thursday.

BLITZER: Reza Sayah reporting for us from Tehran.

We'll go back there shortly but I want to bring in our senior White House correspondent, Ed Henry. He's getting reaction from the Obama administration. Tough words. They called in the Swiss ambassador in Tehran to protest. The Swiss ambassador represents U.S. diplomatic interests in Tehran, but what's the Obama administration's reaction to this accusation of meddling?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Tough accusation. And the White House spokesman, Robert Gibbs, just told reporters a short time ago that basically it's nonsense, that he believes the administration has been striking the right tone, the right balance, by not meddling.

In fact, we heard the president in the Rose Garden saying he was not going to be meddling and, in fact, he's faced criticism from people like John McCain, his former Republican rival, saying he should be meddling more.

Also interesting that Secretary of State Hillary Clinton, just in the last few moments, meeting with reporters after wrapping up a session with the Israeli foreign minister, and she basically said, look, this is for Iran to deal with, but she did keep the heat up in terms of saying that the government needs to listen to the will of the Iranian people and once again, very interesting, she pointed to the influence of social networking sites like Twitter in this whole debate.

Take a listen. (BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: The people of Iran deserve the right to have their voices heard and their votes counted. The outcome of any election should reflect the will of the people and it is for the Iranians to determine how they resolve this internal protest concerning the outcome of the recent election.

But it is a fundamental value that the United States holds with respect to free and fair and credible elections.

(END VIDEO CLIP)

HENRY: Free, fair, credible elections. Obviously, stopping short of saying that this past election in Iran was not credible, but a not-so-subtle signal to the Iranian people and also on the issue of Twitter and Facebook.

The first lady -- the former first lady, current secretary of state, sort of made a joke about it at one point saying look, I don't know Twitter from tweeter but this is a very important influence in this whole debate, is the social networking sites allowing not just people in Iran but people all around the world, Wolf, to participate in this debate and really keep it as an open dialogue.

BLITZER: That's amazing because it's only a day after an official at the State Department formally asked Twitter to make sure they keep up service in Iran, have no delay in order to allow these discussions to continue.

HENRY: They continue maintenance and regularly scheduled to shut the site down. And you're right, the State Department intervened yesterday, basically said don't do that, we need to keep this debate going.

So there it was, some action there, obviously, by the Obama administration but by and large, they reject this allegation that they're meddling.

BLITZER: And we're going to constantly be bringing you new pictures in from Iran. You see one right behind you over there. A lot of angry folks are out there. We're getting a lot of information. And we'll stay on top of this story. We're not going to go very far away from what's happening in these post-election days in Iran.

We also want to turn our attention to another story right now, a major story right here in Washington. Some of President Obama's biggest supporters have been not necessarily been entirely happy with him in recent months.

Gays and lesbians say he's been slow to act on their top priorities but today, some same-sex couples will start getting some benefits.

Let's go to our White House correspondent, Dan Lothian. He's working this part of the story for us. All right. The president is getting ready to host a meeting in the Oval Office, sign a document that will do what?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. Well, he will be signing a memorandum that will extend some benefits to federal employees. The White House seeing this as the first step, not the final step.

One administration official saying that they're simply putting the federal house in order. But I can tell you that there are some people that say that there are bigger issues that need to be resolved.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): On the campaign trail, a friendly embrace to the gay and lesbian community.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Surely, we can agree that our gay and lesbian brothers and sisters deserve to visit the person they love in the hospital and to live lives free of discrimination.

LOTHIAN: Now the president plans to off earth domestic partners of federal employees long-term care insurance and health care benefits for their children. Bosses will be required to allow employees to take sick leave to care for them and for the partners of Foreign Service employees, the use of medical facilities overseas, among other things.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: This is a matter of fairness.

LOTHIAN: Ed Horvath, who works full time for the Government Accountability Office, says this is a good start but with a husband of five years who battled pancreatic cancer, what this couple really wants is to share full health care benefits.

ED HORVATH, FEDERAL EMPLOYEES: I feel like we've been treated like second class citizens.

RICHARD NEIDICH, DOMESTIC PARTNER OF FEDERAL EMPLOYEE: To me, being treated fair on all issues is the fundamental issue that we're after to see resolved.

LOTHIAN: But health benefits, along with other demands from the gay and lesbian community, like Don't Ask, Don't Tell and ending the Defense of Marriage Act, can only be changed by Congress.

HORVATH: I'm disappointed that it can't go far enough. I understand the limitations on what he can do.

LOTHIAN: Now there's pressure on the president to push hard.

JOE SOLMONESE, HUMAN RIGHTS CAMPAIGN: He must call on Congress to give him that legislation that would provide health care benefits for the domestic partners of federal employees. That would complete the picture.

(END VIDEOTAPE)

BLITZER: He has been under an enormous amount of pressure to start doing something as far as these important gay issues are concerned, hasn't he, Dan?

LOTHIAN: He really has been under a lot of pressure. And you know I asked Robert Gibbs today at the briefing whether or not that pressure is what led to today's memorandum. He says not at all, this is something that had been in the works for quite some time.

And he said -- but I pressed him on that in terms of the timing and the pressure on the White House. Then he said, listen, there are interest groups who have concerns and opinions but he stopped short of saying whether the White House felt any pressure at all from these groups to sign this memorandum today, Wolf.

BLITZER: All right. Dan, thanks very much. And we're going to have coverage of that. That's coming up later here in THE SITUATION ROOM. The president will be in the Oval Office. He has invited some gay couples there as well. They'll sign this memorandum. You'll see it here in THE SITUATION ROOM. Stand by for that.

Let's go to Jack Cafferty, though, right now for "The Cafferty File"-- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, whether or not there's another political revolution inside Iran there is no doubt the country is already witnessing a technological revolution.

Iranian officials trying hard to clamp down on the flow of information and all the ways that these thuggish regimes do, restricting the coverage of western journalists, kicking others out of the country, shutting down Web sites, going through the streets, knocking people around, it's a lovely thing.

But it's not working so well this time in Iran and one of the big reasons is social media networks, like Twitter and Facebook. Many of the young demonstrators -- 70 percent of Iranians are under the age of 30 -- have used these technologies as a tool to coordinate their protests over the elections outcome.

They are also posting graphic pictures and videos of the crackdown by Iranian police. The U.S. State Department points to Twitter as one of the ways Iranians can get the word out.

And officials in this country are even following these social networks. In fact, our government contacted Twitter at one point and asked them to delay a planned update that would have shut the system down temporarily.

Thomas Freedman wrote in the "New York Times" about the diffusion of technology as one of the major factors changing the Middle East. He points to all this stuff, the Internet, blogs, YouTube, cell phone, text messaging, as a way for people to, quote, "communicate horizontally, to mobilize politically and to criticize their leaders acerbically, outside of state control," unquote.

Here's the question. "Will technology like Facebook and Twitter eventually help to bring down the establishment in Iran?" Go to CNN.com/caffertyfile. You can post a comment on my blog.

Technology versus tanks, it looks like so far, the technology's holding its own.

BLITZER: Yes. It's amazing. We don't understand it but it seems to have an enormous impact right now on the streets of Tehran. We are watching it closely, Jack. We're not going to go very far away from this story, because there are important developments happening right now.

We'll go back to Tehran. We're getting reaction from all over the world as well.

There's fear, certainly, over what's happening in Iran right here in the United States. We are going to go to the place with the largest population of Iranian-Americans. People there obviously very anxious, they are very nervous. We'll tell you what's going on there.

And President Obama essentially says never again. He says parts of the financial system failed all of us. So he's proposing the most sweeping changes ever since the Great Depression.

And scandal surrounds a disgraced senator and now that Republican Senator John Ensign of Nevada admits an affair, he's to longer holding a powerful post.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All right. Take a look at this. This is amateur video that's just coming into THE SITUATION ROOM from YouTube, other sources, showing very, very clearly scuffles between dissidents in Iran and police, secret police, uniformed police and not uniformed police.

We're watching what's happening on the streets of Tehran and other cities in Iran as best as we can, despite the enormous restrictions that have been imposed on the foreign news media in Iran, but we're getting a lot of information out there and we're going to share it with you. Stand by.

There's other important news, though, that we're following today. The president of the United States unveiled a sweeping overhaul of how banks and financial firms are regulated. He says his plan will help prevent another economic meltdown.

(BEGIN VIDEO CLIP)

OBAMA: We're proposing a new and powerful agency charged with what -- just one job, looking out for ordinary consumers.

(END VIDEO CLIP)

BLITZER: Our chief business correspondent Ali Velshi is standing by in New York. Let's go to Mary Snow, first, with more on this enormously significant set of regulations.

Mary, what do we know?

MARY SNOW, CNN CORRESPONDENT: And very broad-based, Wolf. The president says he wants a system that works for both business and consumers.

Here's a look at some of the key points and what they aim to do.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Calling it a transformation not seen since the Great Depression, President Obama unveiled financial regulatory reforms aimed at preventing a future financial crisis like the country experienced this past year.

OBAMA: A culture of irresponsibility took root from Wall Street to Washington to Main Street.

SNOW: Among key changes, the Federal Reserve would be given more power over the largest financial players, not just the banks and limit the amount of risk they could take. Financial adviser Gregory Olson says that is key.

GREGORY OLSEN, LENOX ADVISORS, INC.: If these things were in place three years ago, five years ago, we certainly wouldn't have had the severity of meltdown.

SNOW: Another change aims to prevent taxpayer bailouts of companies, like the kind given to American International Group, to ensure it survive.

OLSEN: Well, it seems to give the Fed more power in terms of being able to unwind a large financial institution, should that -- should they deem necessary, if they are not -- if they don't have the proper capital levels.

SNOW: Consumers are also a big part of the picture. A new watchdog agency would be charged with looking out for consumers when it comes to credit cards and mortgages. One policy analyst says that could create a potential clash.

JARET SEIBERG, POLICY ANALYST, WASHINGTON RESEARCH GROUP: You could see the Consumer Protection Agency actively pushing policies that could make it unprofitable for banks to offer certain products. And that could force the banks to pull back in the provision of credit while the safety and soundness agency, you know, is trying to push the banks to lend in a prudent way.

(END VIDEOTAPE)

SNOW: These reforms have to go now through Congress and is expected they would be watered down since there's already heated debate about some of these changes. In the meantime, though, some analysts say one potential immediate impact is to restore investor confidence in a system that needed to be fixed. Wolf?

BLITZER: Good points, Mary. Thanks very much.

Let's bring in our chief business correspondent, Ali Velshi. He knows a great deal about what's going on.

All right. Some rapid fire questions, Ali. Quick answers. If these regulations that the president is proposing, assuming Congress goes ahead and codifies them and puts them into law -- if they had been in existence years ago, would Bear Sterns and Lehman Brothers have gone down?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Maybe not, because it would have prevented them from being involved in unregulated derivatives, which are more complicated than normal stocks and bonds and things like that. That said, it would probably not have prevented a recession. Recessions happen and they happened over time. It may have presented this one from being as deep or as long as it's been, Wolf.

BLITZER: Would it have prevented AIG from requiring billions and billions of U.S. taxpayer dollars in order to survive?

VELSHI: Absolutely. Absolutely yes. That's the one thing it would have done because AIG was brought down by a very small part of the company that was involved in some very risky behavior. This would have caught that and that would have probably prevented the failure of AIG.

BLITZER: Would it have prevented the very risky behavior of Fannie Mae and Freddie Mac?

VELSHI: It would have.

BLITZER: The mortgage giants.

VELSHI: Yes. Because that's called the securitization market, that's part of derivatives. They are not regulated. Under these proposals they would be regulated. So, again, some of the major failures, including Fannie Mae and Freddie Mac, would probably be prevented if these rules have been in place.

BLITZER: One final point. Bernard Madoff, he has confessed to stealing, what, $65 billion in the biggest Ponzi scheme ever. Would these regulations have had any effect in preventing him from doing this?

VELSHI: Hard to know because what he did was illegal. What a lot has happened in the economy, what a lot of companies have done was entirely legal. What this might do is create an atmosphere, an environment that p-- about regulation in Washington, one that many critics have said has been absent for the last couple of decades. Under that circumstance, it might have been caught because there may have been more will to find wrongdoers and that might be what changes under these regulations.

BLITZER: Good answers, Ali, thanks very much.

President Obama certainly under pressure to speak out more forcefully on Iran's elections. Would that be helpful or harmful?

And did a man wearing wigs, makeup and dresses to look like his dead mother -- what was going on? So he could get government benefits, that's what was going on, for six years. We've got the story for you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're going to get back to Iran in a few moments. But let's check in with Fredricka Whitfield. She's monitoring some other important stories incoming into THE SITUATION ROOM right now.

Fred, what's going on?

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, Wolf. Hello, everyone.

Experts say autopsy evidence suggests that Air France, that plane, broke up in the air. A spokesman for Brazilian medical examiner say that victims had multiple fractures of legs, hips and arms. A former NTSB official suggests that's a sign of a mid-air breakup.

The plane crashed in the Atlantic Ocean last month with 228 people on board.

Republican Senator John Ensign of Nevada is stepping down as chairman of the Republican Policy Committee. That's the fourth ranking spot in the leadership. This comes one day after Ensign admitted that he had an extra marital affair with a woman who was on his campaign staff.

Ensign was away from the Capitol today and aides declined to answer additional questions.

And look at this video. Thousands of Los Angeles Lakers fans trekked to coliseum for a rally celebrating the team's 15th NBA title. There were so many fans who waited through the night that by dawn, the coliseum's outer gates were opened to accommodate them six hours before the rally was scheduled to actually begin. The parade began at Staples Center before ending at the coliseum -- Wolf?

BLITZER: Congratulate...

WHITFIELD: I'm surprised you weren't there.

BLITZER: Actually, I'm...

WHITFIELD: Knowing the huge NBA fan that you are.

BLITZER: I'm a huge NBA fan. Loved the Washington Wizards. Like the Lakers a lot, except when they play the Wizards. All right.

WHITFIELD: Yes. Wizards die-hard fan all the way.

BLITZER: Thank you. Stand by.

Amid death and unyielding protests, how should President Obama respond to what's happening in Iran right now? Some are urging him to speak out more forcefully. Others say that would not necessarily be wise.

And we are getting new iReports in from Iran as well. What viewers are saying in their own words. We're going to have the latest pictures for you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM. Happening now, President Obama getting some heat for his response to the crisis in Iran. Iran complains he's interfering in its affairs while a senior Israeli official insists the president is not doing enough. Stand by.

British Airways making an astounding request to its employees. You can work, but without pay. We are telling you what led to this drastic proposal and how employees are reacting.

And a story right out of a horror movie. A New York man is accused of dressing up like his dead mother, makeup, wigs, the whole deal, all allegedly to collect her Social Security for years.

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

But let's get back to our top story, the breaking news out of Iran. The regime there is blocking foreign journal less from covering election demonstrations so video posted to social networking sites are becoming a primary source of information.

The amateur videos of these anti-government protests aren't just coming in from the capital of Tehran but they are coming in from all parts of that big country.

Our Internet reporter Abbi Tatton is here. She's been going through this. We've got a whole team looking at all these videos. It's amazing what's coming in right now.

ABBI TATTON, CNN INTERNET CORRESPONDENT: Right. We're combining it with the reports, coming into CNN, these videos, the reports on Twitter as well.

Take a look at evidence we've got from demonstrations happening around the country since the results of this election came out. From the southwestern city of Shiraz, we've got report there that there have been protests daily since Saturday, since the weekend, when this video appears to have been uploaded to YouTube. A 28-year-old protester there tells CNN that there's now more people out on the streets, more police out on the streets, and because of that she doesn't want to go back out. We've heard from the human rights group, Amnesty International, they're looking into reports that security forces used tear gas at a university there in Shiraz.

Now to the northwest of Iran, to the city of Tabriz. This is an area where Moussavi was born. This is an area that Ahmadinejad won in those elections. We've seen street demonstrations from the weekend, videos being uploaded to Facebook, to YouTube.

Also Esfahan. This is a place that we told you about yesterday when we saw vides coming out. We've seen videos of huge crowds there. Unconfirmed videos. We are not able to verify it at this point. We've also seen reports about violence against young people, against students.

Many reports like that on Twitter that we've been following as well.

BLITZER: It's amazing. These young people, largely young people, sending us these iReports, sending us these messages, these video clips, they are pretty courageous because it takes a lot of guts in a country like Iran to be doing what they are doing.

TATTON: Right, and Iran's revolutionary guard today has spelled it out as well that there will be heavy penalties they say for anyone that goes into cyberspace, as they put it and creates rumor, creates tension, all of that on top of the fact that many of these sites are already blocked that it's pretty hard to get on them right now.

BLITZER: Very sensitive stuff. But you're going to stay on top of it. We're going to keep showing our viewers what we can as long as we can. We are not going to leave this story for long.

As election protests in Iran are raging on, another debate is intensifying right here in the United States about President Obama's response to the Iranian crisis. CNN's senior political analyst Bill Schneider is joining us right now with more on this part of the story. Bill, the president finds himself in a rather difficult situation right now?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Yes, he does. He has to find a balance between realism and idealism.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): President Bush was the idealist in world affairs.

GEORGE W. BUSH: It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture with the ultimate goal of ending tyranny in our world.

SCHNEIDER: President Obama is the realist. PRESIDENT OBAMA: The use of tough, hard-headed diplomacy, diplomacy with no illusions about Iran and the nature of the differences between our two countries, is critical when it comes to pursuing a core set of our national security interests.

SCHNEIDER: But the president is under enormous pressure to speak to out in support of the pro-democracy protestors in Iran.

OBAMA: I think it would be wrong for me to be silent about what we've seen on the television over the last few days.

SCHNEIDER: So, he has spoken out, cautiously.

OBAMA: Not productive, given the history of U.S./Iranian relations to be seen as meddling, the U.S. president meddling in Iranian elections.

SCHNEIDER: Too cautiously, say his critics.

SEN. JOHN MCCAIN, (R) ARIZONA: We are not meddling in any country's affairs when we call for free and fair elections and the ability of people to exercise their human rights.

SCHNEIDER: But a former CIA operative who has written a book about the U.S. and Iran says --

ROBERT BAER, FORMER CIA OPERATIVE: John McCain is absolutely wrong, he is incredibly wrong. I just can't believe he said that. The last thing the Iranians need now the democrats, is American interference in their elections in any form.

SCHNEIDER: In the end, President Obama needs to negotiate with the hard-liners.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president is committed to direct engagement with the Iranian government on issues of our national interest, including their pursuit of nuclear weapon and their sponsorship for terror.

(END VIDEOTAPE)

SCHNEIDER: Still, it is ironic that this president who leads his own idealistic political movement finds himself on the defensive for being too cautious about Iran. Of course he can argue that it was President Bush's idealism that got the U.S. in trouble in the world. Wolf?

BLITZER: Bill Schneider, thanks very much.

As we've reported, Iran's state-run media is insisting that the U.S. is meddling, meddling in what it calls Iran's affairs and says that is intolerable. The Obama administration strongly denies that. Let's bring in republican Congressman Mike Pence of Indiana, he's the chairman of the House Republican Conference, a key member of the Foreign Affairs Committee. You have introduced a resolution in congress to support the dissidents, what you called the dissidents in Iran. Would that be seen as meddling congressman in Iranian affairs?

REP. MIKE PENCE, (R) INDIANA: I'm not really worried about how it would be seen by the tyrants in Tehran. What I'm interested in doing is what Americans have done throughout our history and that is to stand with those and to give encouragement to those that are courageously standing for free elections, for free expression, for democracy and it's hard to look at these past five days and the images that have been so well covered here on CNN and across the internet and not be deeply moved by the courage of people that are at least risking their liberties and probably risking their lives for free and fair elections and democracy.

BLITZER: Specifically congressman what do you want the president to say and do?

PENCE: Look, I appreciate the fact that the president said the protesters have a right to be heard and respected and I appreciate the fact that he said he is troubled but I respectfully disagree with the administration's decision to essentially draw the line at not meddling and not interfering. Look, the cause of America is freedom. And in that cause, we must never be silent. And if the president wants to draw the line and say that we are not going to stand with those brave citizens of Iran who are taking to the streets the last five days on behalf of democracy, on behalf of the freedom of speech and free elections, then I think the Congress behind me ought to take up a resolution that very simply expresses the support of the American people through their elected representatives for the people of Iran who are taking a stand for freedom.

Wolf, I really believe we may have an opportunity for a fresh start here, not with the tyrants in Tehran, not with Ahmadinejad, who even looks at what this administration is doing and accuses them of meddling but rather with the good and decent and courageous people of Iran who are stepping forward and risking their liberty and their lives for principles that we as Americans cherish.

BLITZER: The president was on CNBC in an interview and he said the differences between Ahmadinejad and Mousavi may not necessarily be as significant as a lot of folks on the outside are hoping they are. I'm going to play a little clip for you. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: Although there is amazing ferment taking place in Iran, that the difference between Ahmadinejad and Mousavi in terms of their actual policies may not be as great as has been advertised. Either way, we were going to be dealing with an Iranian regime that has historically been hostile to the United States.

(END VIDEO CLIP)

BLITZER: Is he right congressman?

PENCE: Well, look, I don't think we should be in the business of endorsing the opposition candidate. What I want the Congress of the United States to do, and frankly what I would like to see the president of the United States of America do is speak a word of support to the people of Iran. Those demonstrations, those soccer players playing in South Korea, at least for half of the game, are wearing the green arm bands. They are walking out onto the streets of Tehran in their own country and they're taking a stand. I would suggest not so much for a person but for a principle. It is the principle of free and fair elections, it is the principle for a free and independent press, the freedom of association.

We ought to affirm the fact that hundreds of thousands if not millions of Iranians are risking their liberty and even perhaps their lives to take a stand for the values upon which we have really founded this nation. Again, the president can draw the line where he wants. I'm working with republicans and democrats here on Capitol Hill to give the opportunity for the American people to be heard through their elected representatives. I think Congress ought to pass a resolution that says to the people of Iran who are standing for freedom and free elections, that we support you. And that's message that Americans have sent around the globe for generations.

BLITZER: We have to leave it there congressman. Good luck. Thanks very much.

PENCE: Thank you, Wolf.

BLITZER: On the road to health care reform, a bump today. What might this stumbling block mean for your health? We will explain.

And now that President Obama is extending some federal benefits to same-sex partners, might there be political fallout?

And a major airline wants some workers to keep working without pay. What's going on?

(COMMERCIAL BREAK)

BLITZER: This is a dramatic development that CNN has just confirmed. The defeated presidential candidate Mir Hossein Mousavi and, get this, the former president of Iran, Mohammad Khotemi, they are both calling on the Iranian authorities to release all of those Iranians, all of the protestors, who have been arrested over the past days since the election. A significant development this has just been reported on Mousavi's campaign website. We're staying on top of this story, we're also getting new video coming in. The video you're seeing right now coming in from the Tehran Metro Station. A lot of very courageous young Iranians are sending us these video images. We're going to continue to stay on top of this story for you. Dramatic developments unfolding.

Another important story we're following involves the efforts to reform the nation's health care system. There was a major stumbling block of sorts today. One bill is most likely stalled in the senate while debate on another bill got off to a rather rocky start. Our congressional correspondent Brianna Keilar is joining us live on Capitol Hill. All right Brianna, explain what happened.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, a significant day for health care reform here today on the hill, something of a beginning of this debate taking shape but certainly a preview of just how heated it's going to get.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: This is about as historic as it gets for all of us.

KEILAR (voice-over): For the first time, republicans and democrats on the senate health committee gathered to go through their 615-page bill, section by section, line by line. It could be more than a week before the final committee vote but it only took minutes for an argument to break out over the cost.

SEN. JOHN MCCAIN, (R) ARIZONA: It is a joke if we run through this stack of papers here without having some provision. And I suggest we not move forward until we have some provisions as to how we are going to pay for it.

KEILAR: But Senator Chris Dodd, pushing the bill in Chairman Ted Kennedy's absence, said the committee cannot put a price tag on the bill until it tackles 388 proposed changes, almost all from republicans.

SNE. CHRIS DODD, (D) CONNECTICUT: Can't score a product that you haven't really developed and that's what we are doing here.

KEILAR: The bill would create a so-called health care exchange where consumers compare and purchase insurance coverage. It would require every American to buy insurance, some with the help of subsidies and insurers would not be allowed to deny coverage because of pre-existing conditions. Democrats are also proposing a contentious government-run insurance plan to compete with private coverage but republicans say it will push private insurers out of business.

SEN. JUDD GREGG, (R) NEW HAMPSHIRE: This just is deja vu all over again, as I said. This is "Hillary Care Plus." This is elite of the elite deciding how everybody else is going to get health care in this country.

SEN. BARBARA MIKULSKI, (D) MARYLAND: This bill has just been accused of being somewhere -- another -- a combination between Ruth Goldberg and Karl Marx. However, our current system is a combination of Adam Smith, Darth Vader and the invasion of the body snatchers. So I like our plan better.

(END VIDEOTAPE)

KEILAR: The other senate committee is so key to health care reform, the senate finance committee, hit a significant snag today, postponing votes on its bill until after July 4th and Wolf really threatening that tight time line that democrats have laid out for health care reform.

BLITZER: All right Brianna, stand by. Gloria Borger, our senior political analyst is here. Is this a real setback for the White House?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: I think it is Wolf because the longer a piece of legislation stays out there, the more of a target it's going to become. And this is a moving target, this legislation. And health care is as contentious as it gets, you've got these Congressional Budget Office estimates that it's going to cost as much as $1.6 trillion over the next 10 years. They have to figure out how to pay for it and Congress isn't very good at that because they have to figure out how to raise your taxes. They don't like to do it.

BLITZER: When is the decisive moment when the rubber hits the road?

BORGER: I was talking to somebody, a senior adviser at the White House today, who said you have to kind of look at this throughout the summer. The bills from the House and Senate, this senior adviser said, has to be done by July 31st. And then they go to conference committee and then, some time this fall is when the real work gets done and a bill will be written in that conference committee, they hope, so that the president can sign it in mid October.

BLITZER: Wow, let's see what happens.

BORGER: We will see.

BLITZER: Thanks very much, Gloria will be back.

We are following the breaking news out of Iran right now, the defeated presidential candidate Mir Hossein Mousavi is calling on Iranian authorities to release all of those individuals arrested in recent days. We don't know how many have been arrested. We only know many have been arrested.

And President Obama is about to make a major announcement on extending benefits for same-sex partners of federal employees, all federal employees. This as same-sex marriage proponents mark a bitter anniversary.

(COMMERCIAL BREAK)

BLITZER: We are getting ready, the president is getting ready to go into the oval office over at the White House and sign a memorandum extending same-sex benefits for people who live together, who aren't married, who are gay. Let's talk about this in our strategy session. Democratic strategist and CNN contributor Hilary Rosen is here and republican strategist John Feehery. It is a step, I guess not everything you would have liked to have seen the president do as far as gay rights are concerned but it's an important step today.

HILARY ROSEN, : Wolf, it is a big, important step, we had candidate Obama who said a lot of things, most importantly about including gay and lesbian families into the fabric of America in real policy ways. Today, they are signing some things that do that for federal employees. Remember the president can only do so much. What he can do is what they have power over doing, which is over federal employees and this is a big recognition on that part. BLITZER: What he is saying, what he will say and we will see it here in THE SITUATION ROOM, whatever he can do that doesn't require legislation he is doing now, extending these federal benefits to same- sex couples.

JOHN FEEHERY: I don't think this makes its activists left all that pleased and all that excited. It will certainly probably energize the conservative base of the Republican Party to a certain extent. So we'll see if he gets anything out of this politically. I do think that the next step for him would be gays in the military, which is the thing that seems to be causing the most trouble, of course it caused trouble for Bill Clinton 20 years ago. Things are different than they were in the Clinton administration, I think things have changed on attitudes towards the gay couples and things like that, but we will see if this really plays out politically in the next...

BLITZER: Years ago, you will remember this Hilary, then- president Bill Clinton signed into law the Defense of Marriage Act, barring same-sex marriage. And now, the Obama Justice Department sent a memorandum to the courts, defending the Defense of Marriage Act, in rather blunt ways causing Barney Frank, the democratic congressman from Massachusetts, himself gay to say this, "I think the administration made a big mistake. The wording they used was inappropriate. I have been in touch with the White House and I'm hoping the president will make clear these were not his views." Over at the White House today, the press secretary, Robert Gibbs, he didn't know if the president actually read that legal brief.

ROSEN: Well unfortunately no the president read it I just think he read it too late. The president is going to say today that he is for a repeal of the Defense of Marriage Act, something he has promised for a long time. That means those couples that have been married in states where they approve same-sex marriage would be eligible for federal benefits. The problem is, and I think the president has to do everything he can. I think he ought to stop the discharges in the military. He ought to make the announcements he is making, but Congress has a role here. And we can't put this all on the president. You know, Nancy Pelosi and Harry Reid have long said when there is a democratic president in the White House who will sign the things that we are with willing to pass, we can all work together.

BLITZER: Is congress...

ROSEN: Congress has to work to meet the president halfway here.

BLITZER: The president says he opposes same-sex marriage even as he wants to repeal the Defense of Marriage Act.

FEEHERY: There are a lot of things Congress is supposed to be doing right now, health care, cap in trade, immigration policy. I don't know where this is going to fit in this year. That is something that Nancy Pelosi is going to consider. None of these issues are easy and that's a problem for the democrats. They have a lot of tough issues and they're having a hard time getting any of them done. BLITZER: We will have coverage here in THE SITUATION ROOM when the president is in the oval office in a little while. We'll show our viewers what he says when he signs that memorandum. Very quickly, there was a Gallup Poll recently and asked this question, how would you describe your political views? Forty percent of those who responded said conservative, 35 percent said moderate, only 21 percent said liberal. Almost twice as many people see themselves as conservative than see themselves as liberal. How do you explain that?

ROSEN: I'm not sure it's that relevant with those kind of labels, politically, we know that republican registration and identification is down, democrats are up, independents are up. I know a lot of people who consider themselves conservative but they vote democratic. And liberal is a personal perspective rather than a political one. I think it is hard to fit it into these partisan lines.

BLITZER: I would have just seen these numbers I would have thought the republicans would have won in the last election.

FEEHERY: They probably should have. The fact of the matter is that what's interesting in this, 20 percent of democrats consider themselves to be conservative, which goes to show why it is so hard for the democrats to get anything done in congress, because you have cap in trade, conservatives don't want to do it. This health care bill, conservatives don't want to pass it because it's too expensive but it also bodes well for republicans. If they can get the messaging right, if they get their policies right, they can actually have a good rebound in the next election. The other thing that is interesting, with only 21 percent of people calling themselves liberal, the president considers himself liberal and the speaker of the house considers herself liberal. So right now the Congress and the White House, led by liberals and they are out of step with what a lot of people want.

BLITZER: We have to leave it there we are out of time. But the democrats they do have conservatives, they do have liberals and that's that at the stage of the game.

We are following breaking news out of Iran right now. Defeated presidential candidate Mir Hossein Mousavi is calling on Iranian authorities to immediately release all of those people arrested in recent days. Also, Jack Cafferty will be back with your e-mail. Will technology like Facebook and Twitter eventually help bring down the establishment in Iran?

Also, the protests are in Iran but the White House finds itself on the defense. Are criticisms about the administration's handling of this issue fair?

And it's not like much else you have ever heard. A man is accused of pretending to be his dead mother so he could get her government benefits.

(COMMERCIAL BREAK) BLITZER: I just want to remind our viewer what's going on. We are following breaking news out of Iran. The defeated presidential candidate, Mir Hussein Mousavi, teaming up with the former president of Iran, Mohammad Khotemei, insisting that all those people who have been arrested in recent days, all of those people must be released. This sets the stage for what the opposition is now hoping will be a huge demonstration yet again tomorrow. A demonstration that the authorities don't want to take place. Let's check in with Jack Cafferty right now for "The Cafferty File." Jack?

JACK CAFFERTY: Interesting stuff Wolf. The question this hour is will technology like Facebook and Twitter eventually help to bring down the establishment in Iran? Bill writes, "Jack, it used to be that you announced a shoot-to-kill curfew, took over the radio and TV stations and you were done. We are so far beyond that now, I don't think the genie is going to go back into the bottle again." HD in Phoenix writes, "Not hardly, Iran is an Islamic dictatorship, the only thing that will bring that down would have to be on the level of a national revolution. People are giving Twitter and especially Facebook way too much credit here." Matt writes, "Twitter and Facebook are things we take for granted in our society. We forget that they make the world a smaller place and allow thoughts and ideas to travel anywhere instantly. The brands may change but the technology which is bringing the world together will define where we go from here on out."

Ray in Texas writes, "The outcome of this still up for grabs but video cassettes bootlegged into Eastern Europe depicting the western world and its lifestyle is really like have been given some credit for the downfall of the Soviet Union. The truth has a way of empowering an oppressed society." Fred writes, "Facebook and Twitter versus the Iranian government. Let me see, Jack, I pick the Iranian government. I haven't seen Twitter stop a bullet to the head, have you?" And Parisa in Houston writes this, "I have big hopes for Iran, my father's country. I hope that the new majority in Iran, which is comprised of 20 and 30 somethings will be the ones to bring down the establishment there. I'm staying tuned into events via Twitter and Facebook myself. I know change won't come about easily or peacefully, but this is truly the beginning of the end for Iran's current establishment."

If you didn't see your e-mail here, you can go to my blog cnn.com/caffertyfile, look for yours there among hundreds of others.

I wonder what the implications would be, Wolf, if they are successful in taking down the Ahmadinejad government, what inmplications there might be in Iraq. I guess theere might be some?

BLITZER: Enormous implications around the world and the nation, Jack. Stand by.

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