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Susan Rice Won't Be Secretary of State; Other Obama Advisor Candidates Examined; Rice: Secretary of State Job "Not Worth It"; Interview with Congressman Mike Rogers of Michigan; "Still A Work In Progress"; Boehner and Obama Meeting Soon; Looming Cyber Attack Targets Banks

Aired December 13, 2012 - 15:57   ET

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

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer in "The Situation Room" and we have breaking news. Susan Rice, the United States ambassador to the United Nations is withdrawing her name to secede Hillary Clinton.

Jessica Yellin is joining us with more details. No more Susan Rice, potentially, as secretary of state.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf. It clears the path for President Obama to choose without controversy, if he was going to name Ambassador Rice to that post.

In a statement the president released, he said, in part, quote, "Today, I spoke to Ambassador Susan Rice and accepted her decision to remove her name from consideration for secretary of state.

"While I deeply regret the unfair and misleading attacks on Susan Rice in recent weeks, her decision demonstrates the strength of her character and an admirable commitment to rise above the politics of the moment to put our national interests first.

"The American people can be proud to have a public servant of her caliber and character representing our country."

Wolf, as you know, Susan Rice has been caught up in this drama over the Benghazi conflict and the deaths of Americans in the assault on the U.S. consulate there. While Susan Rice was not responsible for security of the consulate, she did go on Sunday shows and talk about the U.S. response there.

And she has been accused of deliberately mischaracterizing what happened. All sides -- or the White House has adamantly insisted and she has insisted that she in no way deliberately mischaracterized what happened. She was reading from unclassified talking points, but, nonetheless, this has been caught up in a back and forth.

And, Wolf, if I may, I'm going to read from part of her statement, her letter, I should say, to the president. What she wrote to the president says in part that -- quote -- "I am now convinced that the confirmation process would be lengthy, disruptive, and costly to you and to our most pressing national and international priorities. That tradeoff is simply not worth it to our country." She also goes on to say the position of secretary of state should never be politicized.

Somewhere else in the letter, Wolf, she points out and says: "I look forward to building on progress in your second term," which seems to leave the door open to the possibility she could serve in the administration in the second term. And according to my sources there has been some talk of Ambassador Rice serving in the White House in the capacity as the president's director of national security.

Now, that's a position that does not require Senate confirmation and so she can possibly enter that role without the kind of conflict that would be involved in a confirmation hearing. This also opens the door for the possibility that Senator Kerry, now chair of the Senate Foreign Relations Committee, to get the nod for secretary of state perhaps as early as next week, Wolf.

BLITZER: It does look like John Kerry now is certainly the front- runner to be the next secretary of state. He's the chairman of the Senate Foreign Relations Committee. He's made no secret that he would like to be the secretary of state, even there has been some speculation maybe he could be the secretary of defense, although I think his preference has always been secretary of state.

The president needs to put together his new national security team in the coming days in order to get confirmation of all of these individuals in January, so they can get going by the time he's sworn in for his second term on January 20. Right now, John Kerry, if he becomes the nominee to become secretary of state, there's also speculation that Chuck Hagel, the former senator from Nebraska, Republican, could be nominated to be secretary of defense.

A lot of speculation about the CIA director. That position is open right now and a lot of speculation about the secretary of the treasury, who has a lot of national responsibilities as well. What are you hearing?

YELLIN: Well, it's my understanding that Senator Kerry is the odds-on favorite to be secretary of state, but he has told people that he does not want to be secretary of defense. But that's sort of a nonissue right now with Susan Rice clearing the way, so this could allow Senator Kerry to get the nod for State.

Senator Chuck Hagel, as you say, a Republican, is the president's, according to my sources, odds-on favorite to become secretary of defense. Gloria Borger has been reporting that as well. Senator Hagel is well-liked by the president. He's seen as a team player by the president. He's also seen as a statesman who doesn't claim too much credit, can get things done, but he does have some challenges and would no doubt have some issues in confirmation because pro-Israel groups object to some of the positions he's taken in the past opposing Iran sanctions in the past, not recognizing Hezbollah as a terrorist group, other issues.

That would create some sticky situations. And then there's a question of CIA. The big question has always been whether John Brennan, currently the director of Homeland Security, wants that job. The way it's been put to me by some is it's his if he wants it. The question is, does he? Otherwise, acting Director Morell could get it.

But all of this, Wolf, makes a much neater picture now that Susan Rice has issued this letter and the president could perhaps make all of these announcements next week.

BLITZER: Stand by for a moment, Jessica.

Jill Dougherty is our state correspondent who is watching what is going on.

So, it looks potentially, Jill, like John Kerry could be the man that you will be covering in the weeks and months and maybe years to come, John Kerry, the chairman of the Foreign Relations Committee, the Democratic presidential nominee back in 2004. What are you hearing?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, obviously now that Susan Rice is out of the picture, it would be very logical to turn to him.

He is well-known for international affairs. Every type of issue, he seems to have a statement ready within seconds. He's a heavyweight. He knows all of the issues.

And he wouldn't have difficulty, it would appear, in the Senate for being confirmed for that post, as some other people, obviously, Susan Rice would have. And it also clears the way I think now for Secretary Clinton to move on to her next venture because don't forget that she was saying she would stay at the State Department until that process of getting somebody in her place was over.

And now if it's a smoother sailing, then she could leave after the inauguration and that could be a lot easier for her. And then the other thing on the timing, Wolf, is don't forget next week we're expecting that this accountability review board on Benghazi on which Susan Rice made those comments is going to be coming out.

We expect that it will be coming out next week. Secretary Clinton will be testifying up on the Hill both to the Senate and to the House and so there's a lot of tight timing on this, but it could be very, very interesting, because don't forget what brought her down of course was the criticism of that Benghazi -- and next week the accountability review board is that investigative body that the State Department puts together.

It would be reporting directly to Secretary Clinton and then Secretary Clinton briefs the Congress. So we will know a lot more about Benghazi presumably next week.

BLITZER: Secretary Clinton is scheduled to testify before Congress on December 20 and that accountability board led by the retired U.S. Ambassador Thomas Pickering, a very distinguished group of individuals reviewing what happened.

I want everyone to stand by, Jill Dougherty over at the State Department, Jessica Yellin at the White House.

Let's go to Dana Bash. She's up on Capitol Hill.

What are you hearing up there?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, not a lot of surprise. The fact of the matter is that Susan Rice did not do herself any favors in the meetings that she had a couple of weeks ago which we covered intensely, the meetings that she had with John McCain and Lindsey Graham, her chief foes here, but more importantly the meeting she had some people who were kind of on the fence, like Susan Collins, the moderate Republican from Maine.

By all accounts -- I talked to somebody who was very well-versed in that meeting -- said it did not go well at all, that instead of answering what the senator thought were pretty mundane questions, Susan Rice got very defensive and the feeling by Susan Collins and others after those meetings is if she can't deal with United States senators who are kind of fellow Americans, so to speak, how is she going to be on the world stage when she's dealing with some of the world's foes?

So that was a big concern here. It certainly was political as well. But that was a big concern from those senators who were not as political. There's a lot of respect for her intellect here. People think that she's very, very smart, that she knows the issues.

But there is some concern, not just from Republicans but also Democrats I have talked to about her personality, whether she had the personality to be the secretary of state and to represent the U.S. on the world stage.

BLITZER: No statements, I take it, yet from either Senator McCain, or Senator Lindsey Graham or Senator Ayotte, any of those who were so strongly critical of her?

BASH: No, no statement at all. I expect that we're going to get something relatively soon.

From the beginning, as soon as Susan Rice's name even was floated a little bit, Senator Graham especially told me in the hallway that there was no way he was going to let her nomination go forward. As you just heard Jessica report from the White House statement, the president made a point of noting that he was very unhappy with what he called the distortions of Susan Rice, particularly on her record on Benghazi.

But it's important to note that Benghazi was the flash point that might have taken her nomination down before it even started, but it was beyond that. It was also just the feeling that she was maybe too political and may be better to be the national security adviser, as Jessica just reported, because that's more political inherently and because she doesn't need Senate confirmation.

BLITZER: All right, stand by. Everyone, stand by.

Our chief political analyst, Gloria Borger, is here in THE SITUATION ROOM watching what is going on as well.

We were bracing for an announcement of the new national security team next week. We didn't know if the president was going to dig down and fight aggressively for Susan Rice. By writing this letter to the president, she has withdrawn her name.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes. I just spoke with a source close to the White House since this news had been revealed and he was not really surprised, Wolf.

Like Dana was reporting from Capitol Hill, senators there not very much surprised because the sense was the longer that the nomination sort of held out there, or the potential for the nomination hung out there, the more difficult a slog the White House recognized that it actually had.

So I think that this one source said to me, look, I think they underestimated the importance of the club and also really came to understand the difficulty that she had when she went up to visit those senators on the Hill, as Dana was talking about, particularly Susan Collins, who would have been a natural ally, and, instead, came out of that session with more questions than answers on Benghazi.

And that was a very, very bad sign for her.

BLITZER: Yes. Once Susan Collins made those comments -- she had introduced Susan Rice when she was being considered for the United States ambassador to the United Nations.

BORGER: Yes.

BLITZER: We just got a statement in from Senator McCain on the Susan Rice announcement. I will read it to our viewers.

"Senator McCain thanks Ambassador Rice for her service to the country and wishes her well. He will continue to seek all of the facts surrounding the attack on our consulate in Benghazi that killed four brave Americans," a terse, short statement from Senator McCain.

Basically, I assume, he's fairly relieved that this is over with and if John Kerry is the nominee, I think there's no doubt he will support John Kerry's nomination.

BORGER: That's right. I don't think anyone would want to say John McCain single-handedly brought down Susan Rice., because I think there were lots of senators as she made their visits to the Hill and, as Dana points out, not only on the Republican side, but also some Democrats who had questions about Benghazi.

No doubt John McCain would have led the charge. But I don't think the president would have been swayed one way or another by a single senator, but clearly John McCain will support John Kerry if he's indeed nominated. And that seems likely, more and more likely to be the case.

BLITZER: Yesterday, you reported that Chuck Hagel, the former Nebraska senator, a Republican, was emerging as a front-runner supposedly to be the next secretary of defense. What are you hearing today?

BORGER: I think it's still the case and probably more so at this point.

We know that Chuck Hagel, a Republican, has met with the president, has met with the vice president. This doesn't mean that it's going to be easy for Chuck Hagel, Wolf. He believes in soft power. He didn't early on in the 2000s believe in Iranian sanctions. There may be a problem with the Israel lobby. At one point in his career, he believed in talking to Hamas, for example.

But this is someone who has been very involved and continued to be involved in foreign policy, the president's intelligence advisory board, somebody well-respected inside the administration. Remember, he crossed party lines, Wolf, to support Barack Obama when he first ran for the presidency in the 2008 campaign.

BLITZER: Let me just read the statement that Lindsey Graham just released, put it up on the screen if we have it for our viewers. If not, I will just read it.

"I respect Ambassador Rice's decision. President Obama has many talented people to choose from to serve as our next secretary of state. When it comes to Benghazi, I'm determined to find out what happened before, during, and after the attack. Unfortunately, the White House and other agencies are stonewalling when it comes to providing the relevant information. I find this unacceptable." Lindsey Graham adds, "The story of Benghazi is a story of national security failure and we must work to prevent it from ever happening again. I will continue working diligently to get to the bottom of what happened in Benghazi."

We have now heard from Senator McCain, and we have now heard from Lindsey Graham. We will be hearing from many more.

BORGER: And the question on Benghazi might also affect the question of who leads the CIA, for example.

I know Jessica was talking about that earlier because the question is whether the deputy director becomes tarnished because of the CIA role in Benghazi or not disclosing information on what had actually occurred.

BLITZER: Yes. He's got to put together a national security team, secretary of state, secretary of defense, secretary of the treasury. He's got to get a new CIA director. Maybe he will want to get a new security adviser. Tom Donilon wants to do something different. There's a lot of issues on the president's plate right now beyond the fiscal cliff.

Stand by, Gloria, for that.

We're getting new information on why Susan Rice, the U.S. ambassador to the United Nations, made this dramatic decision today. Stand by, much more on the breaking news right after this.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: Susan Rice, the United States ambassador to the United Nations, has written to President Obama, asking that he no longer consider her as a possible secretary of state to replace Hillary Clinton who's made it clear she wants out at the end of this first term. The president has issued a letter in return, saying he's reluctantly accepted her decision.

Elise Labott is our foreign affairs reporter.

You're getting more information on why she made this decision and announced it today. Elise, what are you hearing?

ELISE LABOTT, CNN FOREIGN AFFAIRS REPORTER: That's right, Wolf. I just spoke to former administration official with knowledge of Ambassador Rice's decision and basically it's a lot of what she said in the letter. She felt like this whole campaign against her really unprecedented in its scope for a nominee for secretary of state was a manufactured distraction, and what this person told me is Ambassador Rice has a lot of honor, a lot of dignity and a lot of patriotism and she was determined to put her country first.

This person -- Wolf, I've also been speaking to Ambassador Rice's aides, people that have worked with her at the U.N. over the last couple of weeks and months since this happened, and they feel as if this distraction, this campaign against her has really taken away from a lot of the important work that Ambassador Rice has done at the United Nations, such as getting very tough sanctions against Iran over at the U.N., really fighting for U.S. involvement in Benghazi, saving thousands of lives and also helping defend Israel from attack.

And what this person and others have said to me over the last few weeks is no matter what Secretary Rice -- excuse me, Wolf -- Ambassador Rice has a long future ahead of her. Obviously, very close to the president, a trusted member of his national security adviser and she'll continue to serve her country, Wolf. This person told me that the president again today, was very unequivocal and firm in his support for her and he said he continues to rely on her close counsel, Wolf.

BLITZER: Remember at that news conference, that very strong statement he made -- don't go after her, go after me if you want to go after anyone. That was a strong statement that the president made then. But he has now reluctantly accepted her decision to withdraw her name for consideration as secretary of state.

Elise, thanks very much.

Mike Rogers is the congressman from Michigan. He's the chairman of the House Intelligence Committee.

Let's get your immediate reaction to the breaking news. What do you think about this, Congressman?

REP. MIKE ROGERS (R-MI), INTELLIGENCE CHAIRMAN: Well, Wolf, I think it was probably for the best. I think Ambassador Rice was facing an uphill battle in the Senate for any confirmation that she may have received for secretary of state, and I think it would have distracted from the issues of North Korea and what's going on there and Syria and the chemical weapons and an opposition we don't fully understand. We have a growing al Qaeda threat in Libya.

So, when you look at all those challenges and all the challenges the secretary of state is going to face, this would have been horrifically distracting from those issues because I think there are a lot of senators who were concerned about her statements and her positions when it came in the Benghazi aftermath.

BLITZER: As chairman of the Intelligence Committee, you're privy to the most sensitive information out there. Are you confident you now know everything you need to know about what happened in Benghazi?

ROGERS: I think we're getting a better picture every day. We had another closed hearing today in the intelligence committee to try to see days after Benghazi, and it's going to take some time to go through all of the information.

I have a -- I feel very strongly, Wolf, that there was a gross negligence when it came to the physical security of the ambassador at the mission there in Benghazi. That was very clear to me. Some very, very bad decisions were made and I think contributed to the death of the ambassador and three other great Americans.

So that part I think is taking great shape. I think the intelligence part is coming together. It sounds to me or looks to me when I review everything that it looked pretty good leading into the day and the days after. I think it's clear that there was some political interpretation of the intelligence and the days after.

We still have more questions. The investigation is still under way by the FBI. And now, we need to focus on what we were trying to do today, Wolf, is focus on getting the people responsible and holding them accountable for their actions that killed and took the life of four Americans.

BLITZER: You're talking about the al Qaeda affiliate organizations --

ROGERS: Yes.

BLITZER: -- that may have been responsible for these four Americans, including Ambassador Chris Stevens. But when you say there was gross negligence, that suggests that there were American officials who should have known better or should have had better security for the ambassador and his colleagues and they were negligent.

Do we know who these individuals who were negligent are?

ROGERS: Well, that picture is much clearer today than it was even a short time ago. Again -- BLITZER: Can you tell us who they are?

ROGERS: I think it's best to wait until all of the details are assembled and a report will be issued. But I will tell you, Wolf, when you look at all of the information, information leading up on the day and the days after, it was very, very clear that there was a serious security threat there in the State Department just did not make the right decisions to secure the ambassador himself and there's all kinds of evidence of all sorts leading up to that conclusion.

And again, there will be a report soon. I think, again, on the Ambassador Rice thing, all of that would have been rehashed in the Senate and is not helpful to the real issues that we're facing today which is North Korea, Syria, growing al Qaeda in Libya, all of those issues.

BLITZER: Well, let's get to Syria for a moment while I have you. How secure are those chemical warfare stockpiles in Syria right now? Do you believe that President Bashar al Assad will use chemical warfare against his own people?

ROGERS: Well, his father -- at least there's lots of reporting that his father did in fact use chemical weapons or something very close to it in his suppression of the population. We know that he has made it available, meaning that in some of these chemical weapons, there are certain procedures you have to go through to make them a viable weapon. I believe that that's happened. I believe that they are available for use at a very short notice.

Now, the desperation of dictator who is facing his ending days of his regime who was -- I believe, has made these chemical weapons out of the stockpile available for use. I don't know and we know his father used it. It would be irresponsible, I think, of the international community to lead in and say, well, we don't think he's going to use them.

The modeling on this, Wolf, is not good. It could be hundred and thousands dead, millions who would be impacted by it and refugee problems all across in the Middle East that would be staggering and destabilizing to that whole region of the world.

So, this is, I mean, as serious as it gets and this is not a decision I argue we should get wrong. We need to come together very soon and we have unique capabilities to intervene in this use of these chemical weapons and if we have that level of confidence that he is in that position, we need to take serious consideration of maybe doing that.

BLITZER: You know, you think about the use of chemical weapons. I assume when you're talking about when Hafez al Assad, his father, slaughtered about 20,000 Syrians in the town of Hama in the early 1980s. Do you have information he used chemical weapons to kill those Syrians at that time?

ROGERS: There are mixed reports and there has been forensic issues taken there that would lead one to believe that chemical weapons could have been used. And I'll tell you one thing, in the Middle East, our liaison partners across the Middle East passionately believe those were chemical weapons that were used. So, there is lots of belief that it was.

And, again, now you have his son who certainly grew up with all of that. You just had -- in addition to the fact, Wolf, that he's taking an affirmative action to put those weapons available for use. Those are all very concerning steps, and I think we've got to be prudent about making sure we don't have a catastrophic humanitarian crisis with the use of these chemical weapons.

I worry about what that means for humanity in general, let alone the people of Syria who would be killed and maimed in a horrific way and then all of the refugees and all the problems that would cause an instability in that region is, as I said, as serious of a problem as I can imagine in what is already a serious humanitarian crisis.

BLITZER: We're out of time, Congressman. One final question -- looking back now at 2007, when Israelis took out that nuclear reactor in Syria that North Korea was building for them, imagine what the situation in Syria would be like right now if there were nuclear weapons involved in what's going on, chemical weapons bad enough, nuclear weapons potentially could be even worse.

Have you considered that situation in 2007 when the Israelis did what they did?

ROGERS: Listen, we look at that with Iran, with North Korea, with Syria, you have these despotic regimes who are not rational in their decisions and it is terrifying to believe that Iran could get that capability, North Korea could get that capability and Syria almost had that capability. They were well underway to get it themselves.

It is concerning. It's why guys like me stay awake a lot of nights trying to figure out how to work our way through these issues. They're serious and they can cause huge international stability and huge humanitarian crisis with their use.

BLITZER: Hey, Congressman, Mr. Chairman, thanks very much for joining us, as usual.

ROGERS: Hey. Thank you so much for having me, Wolf.

BLITZER: Mike Rogers is the chairman of the House Intelligence Committee.

We're going to continue the breaking news right after this. Susan Rice has written to the president saying she no longer wants to be considered as secretary of state. The president has accepted her decision.

Much more coming up on the breaking news right after this.

(COMMERCIAL BREAK)

BLITZER: We're continuing to follow the breaking news about Susan Rice, the U.S. ambassador to the United Nations who has withdrawn her name for consideration as Hillary Clinton's successor, as secretary of state.

She says it's become way too partisan, way too political, the best course right now is to let the president select someone else. Let's bring in our "Strategy Session." Joining us now, the Democratic strategist and CNN contributor, Donna Brazile, and the former Bush White House speechwriter, David Frum, also a CNN contributor.

What was your reaction, just a little while ago, David, when you heard the dramatic news that Susan Rice was pulling herself out of consideration?

DAVID FRUM, CNN CONTRIBUTOR: I was surprised. Here is a strongly re- elected second term president. This seems to have been the person he most wanted to have. At least that's we've been led to believe. He got pushed back from it.

I was surprised by that. He gave a sacrifice to his opponents. I don't think other presidents in his position would have yielded in the way that President Obama has yielded.

DONNA BRAZILE, CNN CONTRIBUTOR: I agree with everything that David just said. First of all, I was angry. I got a call from Roland Martin who said, have you heard the news? I said, absolutely, she should not stepped down.

President Obama has not even made his intentions know and yet for two months, she's been attacked viciously. I've been in Washington for 30 years. I understand the attack game.

But she was attacked for her qualifications and she was bludgeoned over Benghazi before we have any information that's going to come from Ambassador Pickering. I think it's unfair. I thought the attacks were gratuitous. I thought its mean spirited.

This is the old boys' network. So as you can tell I don't like it. Susan is more than qualified to hold the position. I wish the president would have gone forward and women like myself and perhaps some good men like David would have found reasons to support her.

I understand there's a partisan nature of this and the Republicans are having issue with her, but this is a very well qualified woman and she should have had the job.

BLITZER: So you're saying he should have fought for her?

BRAZILE: Absolutely.

FRUM: Here's the question I am left with, does this mean that the Benghazi story is something that the president dearly wants to put to bed. That there is something in this story that is so embarrassing that he wants to avoid hearings?

And Susan Rice has rightly wrongly become the target for the hearings and maybe there is some kind of understanding that if she steps off the stage, she becomes the blood sacrifice and maybe she goes to some other job. Now there are fewer questions asked because something went terribly wrong. Four people are dead. There is a resignation due from somebody, maybe that question now will not --

BLITZER: You heard Mike Rogers, the chairman of the House Intelligence Committee say flatly there was, quote, "gross negligence" by U.S. officials in not protecting Ambassador Stevens and the three other Americans who were killed in Benghazi.

We're going to get Ambassador Pickering's report next week and the Secretary of State Hillary Clinton scheduled to testify before the House and the Senate on December 28th on all of this. So presumably we will know who was responsible for what Mike Rogers calls gross negligence.

BRAZILE: Absolutely. And the Congress should put themselves on the agenda because remember they cut back on embassy security. But Susan Rice went out there in September and then all of a sudden after the president she was viciously attacked by Senator McCain.

You know, I've always said good things about McCain. He's a man of honor. But the way he went after Susan, it's personal and gratuitous. I don't understand all of the politics and I don't even want to understand all of the politicians.

But Susan Rice is a very smart woman. As ambassador, she's done so much, I'm going to write about it, I'm going to tweet about her tenure and I hope the president finds some place in his cabinet and administration so that Susan Rice can continue to --

BLITZER: Maybe she should have said something differently on those five Sunday talk shows. You can't blame Susan Rice for gross negligence with these diplomats that were killed.

FRUM: But I think the drama as you know, the drama and logic of these Senate moments is they want a resignation. They've got one. In effect they've got one. And now whoever it was is breathing a sigh of relief somewhere because the Senate probably does not need two resignations over Benghazi.

BLITZER: She's a good soldier for doing this. She tries to make it easy for the president. But Donna, I rarely see you as upset and as angry and disappointed in the president of the United States as you are right now.

BRAZILE: Let me be honest. I'm not just disappointed that President Obama didn't go forward. He accepted her resignation not to put her name forward. I can understand that the president doesn't want to use all of his political capital, refight these battles.

And he said he's very sad, he regretted the kind of partisanship. That said, Wolf, you know this city. They had the knives out for Susan, a whole bunch of people. This is an old boys' network. This is how it operates.

They don't want women to continue to step up the ladder. This is what they do. They pull the chair from underneath you. All I'm saying is that Susan is a very bright, successful woman and the way she was attacked, David, they attacked her qualifications, they attacked her background --

FRUM: We haven't had a white men as secretary of state in, what, eight years?

BRAZILE: I didn't mention race. I said sexism. You understand that's a difference?

FRUM: We've had some female secretaries of states before also, three of them. So I don't think that's what's going on. What is going on, there is a need for Benghazi sacrifice. There's the president's need to protect other people in his administration who maybe he cares about more.

Now, the next chapter is this. If the president goes ahead with nominating Chuck Hagel as secretary of defense, which is rumored today, how will Senator McCain feel that the president has chosen a former Republican Senate colleague of John McCain who did not support John McCain for the presidency?

BRAZILE: Ambassador Rice is a very smart. She is tough. Wolf, she's handled so many tough issues, the Israelis, North Korea, the situation in Syria, I mean, Africa.

BLITZER: She could stay on as the U.S. ambassador to the United Nations. She doesn't have to go through confirmation like that again.

BRAZILE: They have tried to tarnish her reputation. I knew her father. She's a hardworking and good person.

BLITZER: How would you feel if for some reason, Tom Donolan, the president's national security adviser, moves on to something else and there's rumors he might want to do something else, the president names Susan Rice to be his national security adviser? She doesn't need Senate confirmation for that?

BRAZILE: Look, President Obama respects Susan Rice. I hope he will find a place for her at the table because she deserves to have a seat at the table.

BLITZER: Donna, not missing words.

BRAZILE: And I came in today. I wasn't supposed to but I came in.

BLITZER: Thank you, very proud of you. Proud of you, David.

BRAZILE: Very proud of Susan Rice.

BLITZER: She's a very good lady. Guys, thanks very much. We're going to continue the breaking news and much more right after this.

(COMMERCIAL BREAK)

BLITZER: We're only 19 days away from the so-called fiscal cliff. John Boehner and President Obama are expected to meet at the White House any minute now. Let's bring in our senior congressional correspondent Dana Bash. She is getting new information for us. What are you learning, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well that the speaker is probably on his way as we speak to the White House to have this meeting with the president, which we learned about late this afternoon.

It's the kind of meeting that's certainly probably doesn't happen enough and that is certainly true if you talk to former leaders like I did today on both sides of the aisle.

Tom Daschle and Trent Lott who worked for six years together hashing out deals much like this one and they said, this is exactly what needs to happen, talk.

(BEGIN VIDEOTAPE)

BASH: I used to stand in the hall as a reporter outside the meetings that you used to have when you were trying to cut a deal and it was a question of when would the deal happen and what would it look like. Now it's will they get a deal. What's changed?

TRENT LOTT (R), FORMER U.S. SENATE LEADER: Times are different. A lot of things that are going on that are different now. News media is more omnipresent, all of the new social media, traveling back and forth and different personalities. You know, Tom and I had our difficulties. Something we get involved in a little revision history like everything was always just perfect.

BASH: I was there. I know it wasn't.

LOTT: It wasn't perfect. And I still am convinced and hopeful, at least, that they are going to come to an agreement. There's an argument that you don't want to make it too early because that gives people not too happy with it more time to undermine it. So the tempo and timing is important.

TOM DASCHLE (D), FORMER U.S. SENATE LEADER: Partly our experience also was that we were crisis-driven. We had huge crises. We have the impeachment of a president and then we had 9/11 and then we had the anthrax attack in my office. Anytime there's a crisis of that magnitude, it does bring people together. It's a little bit easier to bring caucuses and individuals and provide some direction in ways that you don't really have today.

BASH: But isn't this a crisis, getting ready to go off a fiscal cliff that every economist right and left says the country will be brought back into recession?

LOTT: It could be but we're not there yet.

BASH: You all had a hotline, a special phone, tell me about that.

DASCHLE: Well, we both decided that there were going to be times that we need to call each other immediately and not go through staff and that it was so urgent when that phone ran rang, we knew we had to take it right away. I never got a busy signal when I called.

LOTT: We used it the morning of 9/11.

BASH: Did you really?

LOTT: I basically said, Tom, we better get out of here.

DASCHLE: And the anthrax attacks, too.

LOTT: And sometime, you know, staff didn't like it when we would talk. Sometimes I would get up from my desk and go into the back door of Tom's office and we would talk. I mean, it's a little thing, but sometimes for leaders, well, I don't want to do that. It looks like I'm conceding to him.

DASCHLE: We would also have these balcony moments.

BASH: Kind of like this.

DASCHLE: Exactly.

BASH: Do you think Republicans should just understand or admit that they are going to have to raise rates for the wealthiest Americans?

LOTT: There will come a moment when the speaker is going to have to make a decision on that and they need to do it in concert. It's like you've got to have the winds and the brass come together.

BASH: Hold hands and jump off the cliff together?

LOTT: It would be more fun on the way down at least you have company.

DASCHLE: Gives new meaning to another cliff.

(END VIDEOTAPE)

BASH: And Wolf, Senator Lott said that he, of course, thinks that Republicans, his fellow Republicans are going to have to give on raising rates and Senator Daschle, the Democrat said his party is going to have to give on cutting entitlements.

And those are certainly issues that we hope are being discussed at the top of the hour when the speaker goes to meet with the president. I'm told by a Democratic source that the president has some kind of offer or counteroffer to give to the speaker.

And it likely has something to do with more specificity on those spending cuts that the speaker has been demanding. They've been very, very careful not to give too many details. We can cross our fingers that they make progress.

BLITZER: Let's see if there is a breakthrough at this meeting at the White House that is supposed to take place any moment now. We'll be standing by, all of our cameras, our reporters, our producers, at the White House watching the speaker of the House go in, go out, see if he says anything afterwards. Dana, thank you.

We're also continuing to watch the breaking news here in Washington, the U.S. ambassador to the U.N., Susan Rice, withdrawing her name for secretary of state. If President Obama chooses Senator John Kerry to succeed Hillary Clinton, we're going to dig into his chances of getting approved, confirmed by the U.S. Senate.

Also, victims of identity theft know how much money that crime can cost someone. But imagine a cyber attack designed to actually start withdrawing money from your bank accounts.

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BLITZER: Some of the most prominent banks may be the targets of a massive cyber security threat aimed at draining money out of people's accounts. Wow, Brian Todd's got the details. What is going on here, Brian because everyone's got money in the bank? And then I want to see cyber warfare going on taking their money out.

BRIAN TODD, CNN CORRESPONDENT: Many of us do online banking, of course, Wolf. You know, Prominent Cyber Security firm says this attack is being planned and has already been tested out. It's likely coming from Eastern Europe and has the codename "Project Blitz Free" is being led by a mysterious Russian hacker and many who are targeted may not even realize it.

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TODD (voice-over): You're a regular online banking customer, someone with a substantial amount of money in your account. You logon one day and have less money in the account than before maybe a small enough amount that you don't even notice that it's gone, but you've been hacked.

That could happen to thousands of Americans this coming spring. A new report by a top digital security firm says some of America's biggest banks, 30 of them, are at risk of a massive cyber attack next spring that could siphon millions of dollars from unsuspecting customers.

PAT CALHOUN, SENIOR V.P. MCAFEE: The name of the project is "Project Blitz Crig" and we've found to date somewhere between 300 and 500 devices that have been infected within the U.S.

TODD: Pat Calhoun is senior VP and general manager of the antivirus software firm McAfee, which issued the new report. It backs up a similar report a few months ago by the security firm, RSA.

McAfee won't name the individual banks, but we know account holders in many of America's large mainstream banks are targeted. McAfee says this attack is from a cyber gag led by a mysterious Russian hacker with a handle "Vorvzakone."

CALHOUN: He's trying to build a little army of hackers to really expand the scope of the project. So that's the first thing. But how it's actually executed in the project itself is that he has computers that are basically monitoring and controlling all of these infected devices.

TODD: Calhoun says the hackers are going after individuals who have a lot of money, are limiting the number of targets, and are only planning to take fractions of cash from each account so that the account holders and the banks themselves may not even notice it at first.

(on camera): How do they get in? Calhoun says they start either with a phishing scam. You get an e-mail with an attachment, click on the attachment and the malware infects your computer or it's downloaded by a malicious web site.

Then the computer is controlled by servers operated by the hackers. When a user connects to his or her bank, the hackers can monitor the account, including the passwords. Then they access the money and transfer it out. But if you get targeted, are you on the hook for the amount stolen?

(voice-over): Doug Johnson of the American Bankers Associations says if you monitor your account, keep in close touch with your bank.

DOUG JOHNSON, AMERICAN BANKERS ASSOCIATION: Because you've alerted the bank that, as we've suggested, that the transaction was unauthorized. Essentially the bank will reimburse you after they've investigated that and confirmed that.

(END VIDEOTAPE)

TODD: But for some it's already too late. The attacks have already started on U.S. targets, Calhoun says, have been carried out sporadically and some $5 million has been already been stolen from some victims. But the major attack again originating in Eastern Europe is expected by next spring -- Wolf.

BLITZER: That's pretty scary stuff. So you're going to stay on top of the story for us, Brian. Thank you very much.

We're going to get back to the breaking news this hour, the United States Ambassador to the U.N. Susan Rice withdrawing her name for consideration as the next secretary of state.

What could this mean for her future, for the president and his Democratic base out there? Many of whom -- you just saw Donna Brazile there, deeply disappointed in the president right now.

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BLITZER: Rock legends came together last night to help victims of Superstorm Sandy. Icons like Bruce Springsteen and Rolling Stones play to a packed Madison Square Garden and also on stage, Pink Floyd featuring a cameo by Pearl Jams' Eddie Vedder.

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