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U.S. Source Says Syrian Forces Mixing Chemicals; Living in Fear on the Front Lines; Pentagon Expanding Spy Operation?; White House Rejects GOP Fiscal Cliff Plan; Duchess Hospitalized with Acute Morning Sickness; McAfee Out of Hiding?; Murder-Suicide Rocks NFL

Aired December 03, 2012 - 17:00   ET

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

WOLF BLITZER, HOST: And you're in THE SITUATION ROOM.

Happening now, President Obama issues a clear warning to the Syrian president, Bashar al-Assad -- there will be consequences if you use chemical weapons against your own people.

New details of the tragedy that shocked the sports world and orphaned a newborn baby -- what drove an NFL player to commit a murder/suicide?

And a royal pregnancy results in a royal health scare -- why morning sickness has land the Duchess of Cambridge in the hospital.

We want to welcome our viewers in the United States and around the world.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We begin this hour with new signs that Syrian President Bashar al-Assad may be preparing to unleash chemical weapons on the rebels in his own country, maybe even against civilians.

Just a few minutes ago, President Obama issued this sharp warning to the Syrian president.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And I want to make it absolutely clear to Assad and those under his command, the world is watching. The use of chemical weapons is and would be totally unacceptable. And if you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable. We...

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: Our Pentagon correspondent, Barbara Starr, has more on what's going on -- Barbara, what are you hearing about Syria and its chemical weapons stockpiles?

BARBARA STARR, CNN CORRESPONDENT: Well, President Obama's words, Wolf, so sharp, so pointed. And it's all because, over the weekend, there was disturbing new intelligence out of Syria.

(BEGIN VIDEOTAPE)

STARR (voice-over): This Syrian chemical weapons site near Aleppo is just 10 miles from the latest fighting -- one of dozens of chemical weapons sites across Syria. At least one of these sites. U.S. officials say their latest intelligence shows Syrian forces, over the weekend, began mixing two chemicals needed to make deadly sarin gas, raising significant new concern that Bashar al-Assad may be preparing a gas attack.

HILLARY RODHAM CLINTON, SECRETARY OF STATE: We've made our views very clear. This is a red line for the United States. I'm not going to telegraph, in any specifics, what we would do in the event of a -- credible evidence that the Assad regime has resorted to using chemical weapons against their own people, but suffice it to say, we are certainly planning to take action if that eventuality were to occur.

STARR: In response, the Syrian Foreign Ministry said Syria will not use chemical weapons on its own people. But it has threatened to use them against foreign forces if invaded.

U.S. officials believe Assad has not yet ordered an attack, but is getting ready, possibly, for a limited strike. Intelligence suggests the regime might use artillery shells filled with sarin against opposition forces, hoping to roll back their advances.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: You're hearing from me about our increased concern. You're hearing from me the fact that we are consulting with our allies and international partners, as well as the opposition, about this.

STARR: Assad faces world outrage if he attacks. Sarin, 500 times as deadly as cyanide, can kill in minutes. It's a nightmare scenario that has worried Syria's neighbors for months.

NASSER JUDEH, JORDAN FOREIGN MINISTER: We're right there. We're right next door. So whether they are used, by whichever party, especially if they fall into the wrong hands, we have to be prepared and we have to be vigilant to protect our own country. So this is something that is studied very, very carefully, over many months, not just today.

(END VIDEO TAPE)

STARR: Now, one U.S. official says the move appears to be an effort by the Syrian military to give Assad options for a possible strike. But right now, Obama administration officials say they are not at all certain what Assad may do next.

We want to credit our friends over at the Web site, Wire.com. They were the first to break the news that all of this involves sarin gas -- Wolf.

BLITZER: So what can the United States, potentially, do about this?

STARR: Well, look, this is a very tough neighborhood in the Middle East. There is going to have to be an effort, officials say, again, to get neighboring countries involved.

Israel, will they let this happen?

Perhaps not. We shall see.

Jordan, of course, we talked to the foreign minister just on Friday, most vulnerable, potentially. U.S. Special Forces have been going in and out of Jordan for several months now -- we have covered this story -- to help the Jordanian military be ready and be prepared if the war crosses borders, one way or the other, into their country -- Wolf.

BLITZER: Barbara Starr, very alarming news.

Thank you.

Syrian civilians are especially vulnerable to a chemical attack. And this latest development is making life even more uncertain for those caught near the front lines of the civil war, especially children.

CNN's senior international correspondent, Arwa Damon, is risking her life right now, one of the few Western reporters on the ground inside Northern Syria.

ARWA DAMON, CNN CORRESPONDENT (voice-over): They are home again, but they are cold and broke and still in danger. About a third of the families who fled the Sakho (ph) neighborhood of Aleppo have come back, only to find out that these streets are now on the front lines.

If the regime can retake Sakho, it can cut off the main artery for opposition forces in Aleppo and reopen a route to the airport.

On a nearby hilltop, the neighborhood of Suleyman Halabib (ph). The rebels used to control that, as well, but lost it a month ago.

The battle lines here are constantly fluid and snipers are a constant threat.

(on camera): The front line is visible just through here. And we can barely make out the three bodies. The rebel fighters are telling us that there are two male and one female. There were five. They managed to extract two, but they can't reach the others.

(on camera): For the children here, gunfire has become background noise. Twelve-year-old Kawla (ph) hardly notices. She says she's not afraid anymore. To start with, little Halai (ph) is also chatty, but then gets scared. Her father says she thought the rebel fighters with us were Assad's forces. Despite his efforts to reassure her, she's still anxious.

And with reason. Salah Hadidi (ph) was shot in the arm at a checkpoint. "The bullet was going to hit my daughter," he tells us. "But I had just put my arm around her."

She, just four years old, blinks hard. Yes, she ended up drenched in her father's blood.

As gunfire rings out again, her father takes away the bullet casings she's collected. Nearby, a woman who doesn't want to be filmed takes me aside.

"Sometimes I want to die, rather than live like this," she whispers.

(END VIDEO TAPE)

BLITZER: And Arwa Damon is joining us now from Northern Syria -- Arwa, what about these reports?

You've heard the secretary of State talking about it, that the Syrian regime may be moving around their chemical weapons. If they are, that's a -- a red line that the U.S. will have to deal with.

Are the rebels where you are concerned that Bashar al-Assad's regime could use chemical weapons against them?

DAMON: They most certainly are, Wolf.

First of all, they believe that this regime will do just about anything to stay in power. And the concern, as voiced to me by one of the opposition members here, is that he is, perhaps, saving that ability for the moment when Aleppo eventually falls. That is a card that people here, the rebel fighters, do believe that the Syrian government has yet to play. And it most certainly is a weapon against which they have absolutely no defenses whatsoever. And they do believe that the more choked they are able to get government forces, especially in Aleppo, and in other parts of the country, the more desperate the government is going to become, the more likely it is that the government could possibly employ these types of weapons against areas, where the rebels are known to be establishing significant strongholds, because the gains that we've been seeing the rebels make, especially in this part of the country, have been fairly significant -- Wolf.

BLITZER: What did you see today?

You were out and about. Tell our viewers what -- what you saw today.

DAMON: We went to the Mushad Military Academy (ph) that is just to the north of Aleppo. And it lies on a very strategic route north. If the rebels can capture it, they will effectively have cleared a northern route in and out of the city. It is very strategic.

They have this military academy under siege, which means that they have three different brigades surrounding it, and another unit that is stationed on the road, as well, another example of how better coordinated the rebel fighting force is becoming.

That being said, there are still a fair amount of clashes in this area. They estimate that there are around 450 government soldiers still inside. The vast majority of them are Alawites. There have been a number of regular defections that have been taking place. Supplies for the forces still inside are coming in by air. They're running low on -- on food. They're running low on fuel. Their communications are largely shut off. The rebels have also shot their water supply.

But we spoke to some defectors and they were telling us that those who are still fighting inside believe that this is a fight until the very end, that they believe that if they do not continue battling rebel forces, there have been some communications between both sides. Rebels have been asking them to lay down their weapons and hand themselves over. And they have been refusing, because, as I was saying, they do believe that this is a battle for their very survival at this point in time.

The rebels claim that if they wanted to, they could, in fact, overrun the base. They said they don't want to do so because they believe that there are dozens of soldiers inside still waiting to defect -- Wolf.

BLITZER: Arwa Damon reporting for us from Northern Syria.

Arwa, thank you very much.

And when we come back, a fiscal cliff proposal and counterproposal -- the White House hates what the Republican is -- Republicans are proposing. The Republicans hate what the White House is proposing. They apparently are no closer to a deal. We'll have the details on the latest Republican counteroffer to the president's proposal.

(COMMERCIAL BREAK)

BLITZER: In Egypt, growing unrest over the government's new draft constitution.

Kate Bolduan is back.

She's monitoring that and some of the other top stories in THE SITUATION ROOM right now.

It's going on every single day.

KATE BOLDUAN, CNN CORRESPONDENT: Yes, this is a story that continues to develop and we've been following very closely.

Egypt's Supreme Judicial Council has agreed to oversee this month's referendum on a new constitution drafted by a panel dominated by Islamists. The vote had been uncertain after Egypt's top judges suspended work when President Morsi's supporters blocked them from entering the courthouse.

But, Morsi opponents protesting the new constitution say they'll hold a general strike tomorrow.

And Mitt Romney is getting back to work. He'll be rejoining Marriott International's board of directors in a job he held before his failed bid for the White House. Since the election, Romney's stayed mostly out of the spotlight and pretty quiet. He and former GOP runingmate, Paul Ryan, met with President Obama in Washington last week.

Witnesses say it was terrifying, a crushing tunnel collapse about 50 miles west of Tokyo. Authorities have recovered nine bodies, most of them from burned vehicles. Experts say aging parts in the tunnel could be to blame. The disaster has prompted Japanese officials to order emergency inspections of dozens of other tunnels with similar designs across the country.

And here's a sign of the times. The pope is on Twitter. The Vatican today revealed Pope Benedict's personal handle is @pontifacts. And Pontif's first tweet is slated for Wednesday of December, folks, to set the calendar when he will answer a question about faith. As the Vatican said, Pope Benedict believes the Catholic Church must be present in the digital arena.

That's going to be hard to answer a question about faith in 140 characters.

WOLF BLITZER, CNN ANCHOR: Yes.

BOLDUAN: But, he can pull it off.

BLITZER: So, he'll probably have a million followers in probably two hours.

BOLDUAN: I just look before I came up. He has more than 230,000 followers. And he hasn't even had a single tweet. His name means bridge builder in Latin, another name for the pope.

BLITZER: Yes. I'll follow him.

BOLDUAN: I will be following as well.

BLITZER: See what he has to say. Thank you very much. Maybe if I follow him, he'll follow me, too.

BOLDUAN: That would be a very great thing.

BLITZER: @WolfBlitzer. Maybe he'll follow you @KateBolduan.

BOLDUAN: I doubt that will happen. But I think it's more likely he'll follow you.

BLITZER: You never know.

(LAUGHTER) BLITZER: All right. Thank you very much for that.

What's going on in Syria right now? There are dramatic developments, a direct warning from the president of the United States today to Bashar al Assad. Fouad Ajami, the Middle East expert, is standing by live. We'll talk to him when we come back.

(COMMERCIAL BREAK)

BLITZER: House Republicans have made a counteroffer to President Obama's initial proposal to keep the country from going over the so- called fiscal cliff. And the president just rejected the Republican proposal outright.

So, where does that leave us right now? Tax hikes, spending cuts will automatically take effect January 1st, unless, the two sides can reach an agreement on debt reduction before then. Our chief national correspondent, John King, is joining us right now. It seems like they're posturing big-time, but that clock is ticking.

JOHN KING, CNN CORRESPONDENT: You had the president's plan. Now, you have a House Republican plan. So, at least, you have two pieces of paper with the plans on the table. The question is, can they move? The Republicans on this counter proposal don't budge on the president's top priority, which is that trophy.

He wants higher tax rates on wealthy Americans. And their counter proposal, the Republicans try to put some pressure on the Democrats by laying out $600 billion in health savings, Medicare and the like. They ask for adjust that cost of living increase for Social Security and other federal programs. The liberal base doesn't like that.

So, the president's proposal puts pressure on Republicans on rates. Now, the Republican proposal puts pressure on the president on entitlements and that cost of living adjustment. The question now is, do they negotiate or they just posture?

BLITZER: Well, that's a good question. Are you at all surprised that they're both negotiating in public with specific details of their respective plans instead of just doing this quietly behind the scenes, let their representatives go about a serious negotiation?

KING: There are some staff members on Capitol Hill who are circulating what they think will be ultimately where they have to finally -- as we get closer to Christmas and the like, sit down and cut out a deal. I'm not surprised that the Republicans came forward with a public counterproposal because they thought the political dynamics the president was winning with his proposal.

Even though the Republican say it was funny. It was a joke. It was a non-starter. Now, the president has the bully pulpit. He had his team up this weekend saying here's the plan. And the White House is making the case. The president won the election campaigning on higher tax rates for wealthy, that he should, at least, have that as a mandate.

The Republicans want to do it a different way. The question is, will the president ever give up on that or will the Republicans, at least if you won't give up on higher rates, agree to something? You can do the math on taxes any different. But in the fight over how to do it, the clock is ticking.

And there's a big question about whether they can, at least, get a short-term agreement before we hit the cliff and then worry about the big picture, the grand bargain.

BLITZER: Because the Republicans are saying, you know what, we're not going to raise that rate from 35 percent to 39.6 percent for those families making more than $250,000 a year. The Republicans come back and say, you know, don't raise the rate, but cap deductions for those wealthy individuals. And the White House is saying, it's not -- it does not going to add up to the numbers that you need.

KING: There's about $800 billion apart right now, because the Republicans say with tax reform, we would give you $800 billion Mr. President in new revenues. The president says, I want $1.6 trillion in new revenues. The president insists (INAUDIBLE) says I want 1.6 trillion also new revenues. That's a lot of money.

So, again, the question is, whatever they ultimately might negotiate in the long term to do tax reform -- if you're going to do loopholes, you're going to do deductions, you're going to lower everybody's rates, that's going to take several months at a minimum.

The question is, can they negotiate some short-term deal to avoid the cliff, which is the automatic tax increases and those spending cuts that many economists would be devastating and send the economy back into recession. This is what happens in Washington.

You have to put out point counterpoint, and now, the question is, can they star negotiating the policy proposals and can they start building the big listing ingredient here which is trust.

BLITZER: They're so pressured they had a year and a half to do this. They knew this was coming and they wait in the last two or three weeks.

KING: They wanted to wait for the election. And now, they know the results of the election, but their positions sure haven't changed much.

BLITZER: All right. John, thanks very much.

A royal celebration tempered by a health scare. Prince William's wife is pregnant, now in the hospital. We'll have details of her condition.

(COMMERCIAL BREAK)

BLITZER: Let's get some more of this hour's top story. U.S. official telling CNN Syrian forces are now combining chemicals to make deadly sarin gas for possible use against rebels and civilians. The Obama administration is underscoring that the United States won't stand for chemical warfare by the Syrian regime.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: We have made our views very clear. This is a red line for the United States.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable.

(END VIDEO CLIP)

BLITZER: Let's get some more. Joining us, the Middle East scholar, Fouad Ajami. He's a senior fellow at the Hoover Institution, author of the book "The Syrian Rebellion." Fouad, thanks very much for coming in. Do you think President Bashar al Assad would actually use chemical weapons against his own people?

FOUAD AJAMI, SENIOR FELLOW, HOOVER INSTITUTION: Well, you know, Wolf, it's been hard to know what Bashar al Assad would and wouldn't do. We never thought he would use his air force. We never thought the fighter jets would be used in a civil war. But he has used fighter jets.

And I think there's something very odd, morally and politically, about the American position drawing this kind of red line, that we will not permit the use of chemical weapons, but we have stood aside and we have watched the slaughter now for 19 months. And what's the difference between chemical weapons and the use of the air force?

I mean, this is a very peculiar way of drawing that moral red line. In a way, it almost says to Bashar, short of using chemical weapons, you are free to do whatever you wish.

BLITZER: So, your assumption is, if he's used the fire aircraft attack helicopters, he wouldn't necessarily hesitate to do what the late Saddam Hussein did back in the 1980s, use chemical weapons against his own people, the Kurds in Northern Iraq?

AJAMI: It's hard to call this one, Wolf. It depends on the despair of the regime. I've always thought that the use of chemical weapons would be an option. This would be the last resort. This would be an option right as the regime is about to fall, because one thing about Bashar, he knows what these red lines are. He wishes to have a free hand in dealing with his own population.

And he wishes to keep the powers at bay and the powers away. So, I think the use of chemical weapons, he'll have to think hard about it. He has pretty much opted for the Samson strategy, if you will. He has wrecked the country. He has destroyed it. He has destroyed Aleppo and is now the battle for Damascus as begun.

BLITZER: I noticed a nuance, a difference in what the president said about Syria and its chemical weapons stockpiles back in August during the campaign and what he said today at the National Defense University here in Washington today.

As you just heard, he said, if you make the tragic mistake, referring to Bashar al Assad, of using these weapons, there will be consequences and you will be held accountable. Listen to how he phrased that back in August.

AJAMI: Sure.

(BEGIN VIDEO CLIP)

OBAMA: We have been very clear to the Assad regime but also to other players on the ground that a red line for us is we start seeing a whole bunch of chemical weapons moving around or being utilized. That would change my calculus. That would change my equation.

(END VIDEO CLIP)

BLITZER: All right. So then he said if they're utilized but also if they're just being moved around, that would be a red line. Am I reading too much into these nuances or do you see a significant difference what he said then as opposed to what he's saying now?

AJAMI: To be honest with you, Wolf, I don't really see the difference. I mean I think I see there had been a determination on the part of the president and on the part of his secretary of state to stay away from the Syrian conflict and to stay away from it so long as the president were running for reelection.

I've always thought at some point after the president's -- after the bid for a second term, there would be greater leeway for the Obama administration. But again and again we must look at what's happened in Syria. Four million people in Syria are internally displaced, 40,000 people at least have been killed, 750,000 people have, you know, fled across the borders of Syria.

The Syrian people are now spending their second winter in -- outdoors in the middle of this horrendous weather. So I think all the things that happened, when you look at what happened over the last 19 months, if now we draw a red line, it's not a moment too soon.

BLITZER: I interviewed the Jordanian foreign minister, Nasser Judeh, today. And we spoke about this apparently increasing threat of al Qaeda in Syria gaining a foothold. Listen to what he told me.

(BEGIN VIDEO CLIP)

NASSER JUDEH, JORDANIAN FOREIGN MINISTER: This is the ripe environment for any terrorist organization to thrive.

(END VIDEO CLIP)

BLITZER: How concerned should we be about al Qaeda trying to exploit what's going on in Syria, create a base there?

AJAMI: Well, you know, Wolf, this is what we've been saying. I mean we've been saying it on your show now for 19 months. And those of us who have favored intervention in Syria have always said it will be a choice. Either the cavalry comes, either the rescue from the outside world comes, either the rescue comes from the United States or we will have these jihadists coming into Syria and doing the dirty deeds that they do.

We can't complain about the jihadists. They're the ones who came to the rescue of the Syrian people. And the Syrian people -- as far as they're concerned, if the devil comes to their aid, they will take it.

BLITZER: Fouad Ajami, joining us, as usual, appreciate it very, very much.

AJAMI: Thank you.

BLITZER: Meanwhile, a new report says the Pentagon wants to set up a spy network that would rival the CIA. Our national security contributor Fran Townsend is joining us. She's on the CIA's External Advisory Board. I'll ask her what's going on.

(COMMERCIAL BREAK)

BLITZER: A spy agency the size of the CIA inside the Pentagon. "The Washington Post" is reporting that the Defense Department plans to send hundreds more spies overseas in an effort to make the Defense Intelligence Agency more attuned to emerging threats and more closely aligned with the CIA.

Let's get some more -- some perspective on what's going on. Joining us, our CNN national security contributor, Fran Townsend. She's a member of the CIA's External Advisory Board.

Fran, what sort of immediate effects are we going to see because of this new project with the DIA, the Defense Intelligence Agency?

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: You know, Wolf, I think most people don't realize that to recruit, train and deploy a case officer, a clandestine human intelligence officer, takes years to do that effectively. But what in the near term we can expect is the re-deployment, DIA, the Defense clandestine service, will look at the people, the personnel they have, and see if they are not working on missions that are as high a priority as the collection mission. And may redeploy them to places around the world where -- to support the war fighter.

Oftentimes these sorts of deployments, Wolf, as you point out, are done in coordination with the director of CIA. After we had intelligence reform post-September the 11th, the -- the director of CIA is the human intelligence manager across the government. So these sorts of deployments by the Defense Department would be done in coordination with the director of CIA.

BLITZER: Last July over at the Aspen Institute in Colorado, I interviewed Admiral William McRaven, the head of U.S. Special Operations Forces. And we had this little discussion, I'll play a little clip. (BEGIN VIDEO CLIP)

ADMIRAL WILLIAM MCRAVEN, COMMANDER OF U.S. SPECIAL OPERATIONS: You tend to think that the FBI's lane is very clear and that the CIA's lane is very clear, and that Defense Intelligence is very clear. But in reality, they're all talking to each other all day long, making sure that the information they've got, the intelligence they've got is right. They are checking and double-checking.

(END VIDEO CLIP)

BLITZER: All right. So how do you make sure that CIA officers aren't tripping over DIA officers, if you will, that spies from the CIA aren't tripping over spies from the DIA?

TOWNSEND: Well, Wolf, as you can imagine, for a long time, that was the case. They did trip over each other. Sometimes it was CIA and FBI. Sometimes it was CIA and the Defense Intelligence Agency. Post the Intelligence Reform and Prevention Act after 9/11, what happened was there were mission managers. And so, for example, the director of the National Security Agency is the coordinator for all signals intelligence, no matter which agency is doing that collection.

On the human intelligence side, the director of CIA is responsible for coordination and de-confliction of all human intelligence collection anywhere around the world. And so what you find, Wolf, is one agency like DIA may have access in a country that's denied or difficult for CIA to operate in. And the reverse is also true. CIA has operatives in countries where the Defense Intelligence Agency can't get into.

They share their assets, they share the information they collect and they jointly collect information against the requirements. It may be a war fighter requirement, it may be a policymaker requirement for information. But it doesn't matter whose asset it is. They'll collect that information, they'll share it, and the director of CIA will make sure all those requirements get fulfilled and they're de- conflicted. So we're using the human intelligence assets we have most effectively.

BLITZER: We'll continue to watch this story, Fran. Thanks very much for joining us.

Fran Townsend is our national security contributor.

We're getting more reaction now from the White House to the fiscal cliff counteroffer that House Republicans have put forward today. Let's go back to our chief White House correspondent, Jessica Yellin. She has new information for us.

Jessica, we heard the White House's blistering public response to Speaker Boehner's counterproposal. But will they sit down to actually negotiate where things stand now?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, Wolf, in response to this offer, they are not going to sit down and negotiate. They were -- they will be open to talking. They will be open to receiving phone calls. But, you know, the White House has said that if Speaker Boehner presents a counteroffer in response to what Secretary Geithner presented last week, they will begin negotiations. They think this is not a serious offer and so they say this will not be the start of those negotiations.

BLITZER: So what is the one thing the White House hates the most about this Republican counterproposal?

YELLIN: The fact that it does not raise rates on the wealthy. They say that it actually would reduce rates on the wealthy. They argue that it also doesn't do enough on entitlement. It doesn't have enough specifics in general. But it does not meet that one fundamental test for the president on rates -- Wolf.

BLITZER: So if the Republicans don't blink on raising that 35 percent current tax rate for families making more than $250,000 a year, what happens?

YELLIN: We're in a bit of a staring contest at this point, Wolf. Tonight, I'll tell you there is a holiday reception at the White House. They call it a congressional ball. But it is a black tie holiday reception where there's a receiving line where members of Congress will be at the White House and they'll each get a picture taken with the president if they want it. So members of Congress, Republican leadership can have a chance to talk to the president if they want to bring up some of these issues. They can bring them up with the president there.

Also some of his senior staff will be there to talk to them as well while they're mingling. We're also told that the phone lines are open. Conversations can happen anytime. But the folks I talk to here at the White House are telling me, my sources, they're prepared in a sense to go over the cliff if Republicans -- they put it on Republicans -- aren't willing to raise rates, Wolf.

BLITZER: So they --

YELLIN: They're not there yet. But -- yes.

BLITZER: The White House clearly thinks they still have more leverage than the Republicans?

YELLIN: They're emphatic about it, yes. They -- the point is, the red line is those rates. But they clearly believe that Republicans will be blamed if the nation goes over that cliff. They also think we have time to avoid that. But the blame in their view would be placed on the Republicans -- Wolf.

BLITZER: Reminds me of that stalemate back in the '90s during the Clinton administration when Bill Clinton was president, Newt Gingrich was speaker, the threat to shut down the government. Bill Clinton didn't blink. The Republicans didn't blink. They shut down the government. The Republicans were blamed by and large for that shutting down the government even if it was only for a few days. A lot of the Democrats who served worked for Bill Clinton at that time are working for this president right now. They remember that government shutdown standoff. And let's see if that affects their thinking going forward right now.

All right. Thanks very much, Jessica, for that.

There's bad flooding in California right now. So what does it mean for the state's most famous wine producing regions? We're going to have the latest on that. A lot more news coming up.

(COMMERCIAL BREAK)

BLITZER: A royal baby watch is on in Britain. Prince William and his wife, Catherine, are expecting a baby. But the former Kate Middleton, the duchess of Cambridge, is now -- not even 12 weeks along and her morning sickness is so severe she's now in the hospital.

Our senior medical correspondent, Elizabeth Cohen, is on the story for us.

Elizabeth, how often do women end up in the hospital with morning sickness during the first trimester?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Wolf, any woman can tell you, morning sickness is quite common, it happens to a lot of women. A relatively small percentage end up in the hospital.

Now what's also interesting is morning sickness doesn't just happen in the morning. Take my word for it. It can go on all day long. Some women when they get to that 13, 14-week mark, it just kind of magically goes away. Other women experience it all pregnancy long.

BLITZER: And so what's the treatment?

COHEN: The treatment is, you put someone in the hospital if it's really severe because you need to get the medicines and nutrition and fluids IV. If the woman can't keep anything down, you give them anti- nausea medications IV. And also fluids and nutrition. It all has to be IV because she's throwing everything up.

BLITZER: Let's hope the best for -- for the -- for Kate, as we used to call her. The former Kate Middleton, the duchess of Cambridge.

Thanks very much for that, Elizabeth.

Northern California is cleaning up from a series of storms. The latest packing gale force winds and dropping as much as 15 inches of rain in the coastal mountains. There was flooding in some areas. Hundreds of flights were canceled. Hundreds of thousands of people were left without power.

CNN's meteorologist Chad Myers has the latest from the CNN Severe Weather Center.

Chad, these powerful storms in less than a week. Could it have been a whole lot worse?

CHAD MYERS, AMS METEOROLOGIST: Certainly. And it will be. There are four more storms to come, Wolf. So we had three. One comes tomorrow and three lined up just like planes heading into national airport. This is just going to be one very wet week.

Already 23 inches of rain. Not snow. We've had feet of snow in the higher elevations. But 23 inches of rain in spots that has to all run off. Now the ground's saturated. It's going to do anything except run off every time it rains again.

Talked about power outages. Look at this. This is category 2, 3, 4 wind gusts here in parts of California in the highest of elevations, knocking trees down, knocking power lines down as well.

Backing up to last night, storm moved onshore, kind of dried out today a little bit. But another batch of moisture is coming on shore tomorrow. And rain starting tomorrow about 10:00 local time. And then it rains in Northern California, the same spots that's been raining now for days, like 10 days.

Raining right now in parts of Seattle down to Portland. This is light rain at best. It gets worse than this. And it's going to be one mess for just the next day after day after day as we get one storm after another.

Here's the story now for today. This morning, it was dry. Tonight, still dry. Tomorrow morning, done. Raining by 9:00 in the morning. Northern California, rains all day and into Wednesday. Dries out Thursday, Friday.

Let me zoom it out for you because this is where it gets scared. Not only is it light rain on Saturday just a little bit here. We have a storm for Tuesday. We have a storm for Thursday. And another one back here for next Saturday. That's four storms in 10 days in a place that's already flooding -- Wolf.

BLITZER: So what I hear you saying is that folks in Northern California's wine country, they are by no means out of the woods?

MYERS: Well, you know, this would be a whole lot worse. Had this backed up -- let's say this was August or September and this storm system came through, 2012 would have been wrecked. There'd no wine at all. The grapes would have been popping. Way too much rain late in the season makes wine thin, just a lot -- very, very watery. At least it came when the grapes and all the vines are at least dormant for now.

BLITZER: Let's hope for the best out there, Chad. Thank you.

Meanwhile, new information coming in to THE SITUATION ROOM about the murder-suicide rocking the NFL right now. Relatives and team officials are speaking out.

(COMMERCIAL BREAK) BLITZER: John McAfee is a famous pioneer of anti-virus software but he's been on the run for weeks now. Authorities in Belize want to question him about the killing of his neighbor. Nobody had seen McAfee until he contacted CNN's Martin Savidge and agreed to an exclusive interview that was anything but normal.

(BEGIN VIDEOTAPE)

MARTIN SAVIDGE, CNN CORRESPONDENT (on camera): The search to find John McAfee began right here at the airport. Not long after I landed. And it began with three simple words. "Sorry, I'm late." A prearranged code word to let me know I'd met the person who would take me to McAfee.

But it wasn't that easy. What followed was a long drive through winding, twisting streets, and when you thought it was coming to an end, instead we get into a parking lot, quickly jump out, get into another vehicle, and drive off again. This time with switchbacks, U- turns and back alleys. It was clearly meant to confuse us as well as anyone following.

(Voice-over): And then, there we were. Face to face. Observation number one. With John McAfee, there is no such thing as a simple answer.

(On camera): You are John McAfee?

JOHN MCAFEE, SOFTWARE COMPANY FOUNDER: I think so, yes. I am John McAfee.

SAVIDGE (voice-over): He seemed nervous, anxious, fidgeting.

(On camera): Are you afraid?

MCAFEE: Wouldn't you be, sir?

SAVIDGE (voice-over): He used that "sir" thing a lot. His hair is jet black. Part of his disguise, he says, and by his own admission, he's vain. Asking us to wait for his hair to dry before starting our interview. And that interview ranged from completely convincing like when I asked him about his neighbor's murder.

(On camera): Did you kill Greg Fall?

MCAFEE: I barely knew the man and why would I kill him? He was a neighbor that lived 200 yards down the beach.

SAVIDGE (voice-over): To off the wall.

(On camera): Do you really believe the government is -- this is a vendetta by the government of Belize to take you down and kill you?

MCAFEE: Absolutely, sir.

SAVIDGE (voice-over): He says he's not on drugs and he hasn't touched alcohol in 30 years but he has started smoking again which he puts down to current circumstances, and he's not alone. Running with his 20-year-old girlfriend, and McAfee, who is 67, openly speaks of many more.

MCAFEE: It's absolutely real that I had six -- how many?

UNIDENTIFIED FEMALE: Fifty.

SAVIDGE: It seemed almost surreal right down to the coffee I drank with him. Before we parted there was one more question I had to ask of this software genius.

(On camera): Are you a smart man? I mean, I know you're an intelligent man.

MCAFEE: I don't think so. If I were smart, would I be here? I'm a foolish man. I know that much.

SAVIDGE (voice-over): And you know what? I believe him.

(On camera): Thank you.

MCAFEE: You're welcome.

SAVIDGE (voice-over): Martin Savidge, CNN, Belize City.

(END VIDEOTAPE)

BLITZER: Family members and team officials are speaking out about the murder-suicide involving the Kansas City Chiefs Jovan Belcher and his girlfriend.

CNN's Ed Lavandera is working the story for us.

Ed, tell us what's going on.

ED LAVANDERA, CNN CORRESPONDENT: Yes, we're still trying to get to the bottom of the question that everyone is asking. Why did this happen? We spoke with a spokeswoman close to the family of Kasandra Perkins and they say that they had no idea, no clue, that something like this could happen.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I believe our suspect is a Chiefs player so whoever goes over there, proceed with caution.

LAVANDERA (voice-over): You're hearing the voices of Kansas City police officers racing to make sense of what's happened, just moments after Jovan Belcher shot his girlfriend, Kasandra Perkins, at least three times.

UNIDENTIFIED MALE: OK. I've got two coaches, one other employee here, who's trying to beg with this guy.

LAVANDERA: At that moment those coaches did not know that Belcher had just killed his girlfriend. Head coach Romeo Crennel was standing right in front of him.

ROMEO CRENNEL, KANSAS CITY HEAD COACH: I was trying to get him to understand that life is not over. He still has a chance and let's get this worked out.

LAVANDERA: But Jovan Belcher did not listen.

UNIDENTIFIED MALE: We've got shots fired. Self inflicted. One in the head. Get in there.

LAVANDERA: Belcher's football career was a poetic rise to the top. A young player from the University of Maine, not a school known for producing professional football stars. Belcher's coaches say fierce determination made him a starter. Kansas City Chiefs players say they never saw warning signs in Belcher's recent behavior.

Brandon Siler was the teammate called on to replace Belcher in the line-up.

(On camera): You guys are young age. High-profile jobs. He's a young father. I mean, did you ever get the sense that he was struggling to kind of deal with all, you know, pressures?

BRANDON SILER, JOVAN BELCHER'S REPLACEMENT: We never seen anything. He never gave up a sign like he couldn't handle anything or pressure was getting too much. He was always happy.

LAVANDERA: Did Jovan Belcher ever expressed to you any troubles that he was having in his personal life?

CRENNEL: No major troubles in his life. Everybody has some issues in their personal life. I mean, all of us here have issues in our personal life. And everybody handles issues differently. He seemed like a strong-willed individual to me. He's a leader. He was sitting in the front of the classroom. He's a first to the drills. And I'm not a psychologist. I don't know what made him snap.

LAVANDERA (voice-over): Kasandra Perkins' family spokeswoman says there were never any signs of trouble in the couple's relationship, described them as a loving couple, Belcher never abused Kasandra, they say, and the family is struggling to figure out why it happened. Jovan Belcher's family says they can't explain it either.

UNIDENTIFIED FEMALE: We will cherish the wonderful memories we have of Jovan and pray that those memories will bring us peace as we grapple to understand the unpredictable and tragic ending of his life and the life of Kasandra Perkins.

LAVANDERA: Inside the Kansas City Chiefs locker room as players answered questions about their teammate an eerie snapshot, Jovan Belcher's locker left untouched, frozen in time.

(END VIDEOTAPE)

LAVANDERA: And, Wolf, as you know there's been a lot of talk in the NFL about the effect of concussions on football players. Long term. His coach was asked about whether or not Jovan Belcher had suffered any concussions and his head coach here in Kansas City says not that he was aware of.

And unfortunately, because Jovan Belcher shot himself in the head it won't -- it will be impossible to do any analysis of his brain as has been done on other players in the NFL who have committed suicide as well -- Wolf.

BLITZER: What a sad, sad story indeed. Ed Lavandera, in Kansas City for us. Thank you, Ed.

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