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The Situation Room

No Budget Deal; Sinkhole Swallows Man; Interview with NBA Commissioner David Stern; Michigan Takes Over Detroit's Finances; Adidas Unveils College Hoops Uniforms; Budget Cuts Blame Game; New Report On Controversial Pipeline; Dennis Rodman's Sports Diplomacy

Aired March 01, 2013 - 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: Happening now: a last-minute meeting, but no deal. Now $85 billion in drastic budget cuts, they are about to kick in.

A sinkhole swallows a man sleeping in his bed. We're going to hear an emotional interview with his brother, who tried but failed to save him.

Plus, basketball, diplomacy, and a very odd couple. Dennis Rodman buddying up with North Korea's leader, Kim Jong-un. Could that be a good thing? I will speak with the NBA commissioner live this hour, David Stern.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It's a deal few thought would ever become a reality, but in just a few hour, it will. Back in 2011, Congress and the White House they hung a sword over their heads to force them to get the nation's fiscal house in order. They set up budget cuts so severe they would force action to prevent those cuts, but both sides underestimated Washington's dysfunction and tonight, $85 billion will be slashed from the budgets across the board.

Our chief White House correspondent, Jessica Yellin, begins our coverage this hour.

It's an ugly sight. What's the latest, Jessica?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Hi, Wolf.

President Obama is here and at work, but he has not yet signed the order that will trigger these spending cuts. When he does, it will be low-key and behind closed doors. He says it will create a ripple effect that will be felt across the economy.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Congressional leaders summoned to the White House for a last-minute meeting left less than an hour later with no deal. Soon after, the president came to the Briefing Room to give his side of the story.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: None of this is necessary. It's happening because a choice that Republicans in Congress have made.

YELLIN: At issue, Mr. Obama wants to raise some money by closing tax loopholes. Republicans want no new taxes. Instead, replace these unpopular cuts with more targeted cuts. Both sides are dug in. Mr. Obama insists he's done everything he can to reach a deal.

OBAMA: What more do you think I should do? OK. I just want to clarify. You know, because if people have a suggestion, I'm happy to -- this is a room full of smart folks.

YELLIN: Some in his own party have suggested the president could use the power of his office to pressure both sides to move past their lines in the sand.

(on camera): Couldn't you just have them down here and refuse to let them leave the room until you have a deal?

OBAMA: I am not a dictator. I can't have Secret Service block the doorway, right?

I understand. And I know that this has been some of the conventional wisdom that's been floating around Washington, that I should somehow, you know, do a Jedi mind meld with these folks and convince them to do what's right.

YELLIN: The president also tried to paint a picture of the spending cuts' impact.

OBAMA: Border Patrol agents, FBI agents, civilians who work at the Pentagon, all will suffer significant pay cuts and furloughs.

YELLIN: The administration has come under fire for those warnings, including from New York's billionaire mayor.

MICHAEL BLOOMBERG (I), MAYOR OF NEW YORK: There's a lot of posturing, I'm going to lay off my employees unless you do something.

(on camera): What do you say to the people like Mayor Bloomberg, who think that the effects of spending cuts are being overstated by the administration?

OBAMA: The notion that my school for my children on an Army base might be disrupted because Congress didn't act, that's an impact. Now, Mayor Bloomberg and others may not feel that impact. I suspect they won't. But that family will.

YELLIN (voice-over): Zing. Still a careful balancing act for the president who is trying to keep public sentiment on his side over what could become a fiscal crisis.

OBAMA: This is not going to be an apocalypse, I think, as some people have said. It's just dumb. And it's going to hurt.

(END VIDEOTAPE)

YELLIN: Wolf, this sets up the next fight between the White House and Congress, first over funding for the government to avoid a shutdown at the end of this month and then another potential debt ceiling fight in May.

All sides are hopeful that the spending cuts battle will be resolved before either of those two is upon us, but it does seem as though it could all roll into one huge confrontation, Wolf.

BLITZER: But we did hear from the House speaker saying that he's ready to see what's called a continuing resolution pass legislation that will keep the government opened beyond the end of this month. The president seemed to say exactly the same thing.

So it looks -- there might be some details that need to be worked out. It looks like that crisis might be resolved.

YELLIN: There's some differences between what the speaker is proposing and the White House supports and between what necessarily can get through all of Congress, but there is hope that at least that would keep the government funded could get done by the end of this month. It doesn't mean the spending cuts fight or the debt ceiling fight would be resolved and we will have to wait and see if the government shutdown doesn't get sucked into this battle, too.

BLITZER: Yes, I would be shocked if there were a government shutdown. The Republicans lived through that back in the '90s and it didn't exactly work out well for them. I would be shocked if they went down that road and the president went down that road right now. I'm sure they will work that out.

But then again, I didn't think this would happen either, this so- called sequester. Jessica, thanks very much.

No surprise House Speaker John Boehner has a very different take than the president. He says Republicans already gave the president what he wanted and he's not getting any more tax increases.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The American people know that Washington has a spending problem. And while there are smarter ways to cut spending than the process that we're about to engage on, the House shouldn't have to pass a third bill before the Senate does anything.

The House has laid out a plan to avoid the sequester. I would hope that the Senate would act. But let's make it clear that the president got his tax hikes on January 1. This discussion about revenue, in my view, is over.

It's about taking on the spending problem here in Washington. I did lay out that the House is going to move a continuing resolution next week to fund the government past March 27. And I'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time. The House will act next week and I hope the Senate will follow suit. Thanks.

(END VIDEO CLIP)

BLITZER: A significant statement from the House speaker. Let's dig a little bit deeper right now with our chief political analyst Gloria Borger, our chief business correspondent Ali Velshi and our chief national correspondent John King, who is joining us from Boston.

On that continuing resolution issue, John, it looks like they are posed both sides to work out a deal so at least there won't be a government shutdown at the end of the month.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And we will see, Wolf, what happens there. It's possible. Republicans say they could even give the president some flexibility to deal with the sequester cuts, to give agencies more leeway in how that plays out.

But even the continuing resolution, Wolf, is another example of government by Band-AIDS and gimmicks. And that's why we're in this mess to begin with. They haven't passed a real budget in 16 years. So this president and the Republican House has never actually passed a budget the way Congress is supposed to pass a budget.

And so you see the president using the bully pulpit today. We will see if the continuing resolution can make this all go away or whether it just gives the government the money to go on looking forward and then we still have the sequester, forced cuts, whatever you want to call the mess.

BLITZER: But even if the Republicans want to give the president some flexibility, John, on defense spending, let's say, there's no guarantee that the president wants that flexibility. It's raising a lot of questions, why wouldn't he want it?

KING: Well, one of the questions is, he doesn't want political ownership of the pain in this. Look, again, this has been largely political posturing and not anything serious in the past week. We both covered the White House for a long time, some of that together.

The president has a bully pulpit. He's using part of that today by coming into the Briefing Room. You can use a bully pulpit to change a debate, and you can use a bully pulpit to move public opinion. In some ways, today, frankly, he was using the bully pulpit to try to change the facts or at least blur the facts.

Remember, this gimmick, the sequester, they all share responsibility for it, but it was his idea. He says this is a Republican choice that we're going into these forced budget cuts. The president made a choice too. He made a choice to travel the country earlier in the week and to only call this meeting today. He could have called this meeting on Monday, he could have called this meeting last week. They are all to blame in getting us here and again when you're governed by Band-Aid and gimmick, this is where you get.

The question is, will they ever be able to find a circuit-breaker to get back to a point where they actually say pass a government that covers the government for a whole year? Then they could have some other conversations. Then they might have some other debates. They might actually get to other issues as well. But when you have these constant crises, it's political dysfunction and when it comes to the financial markets and everything else, it's uncertainty.

BLITZER: It certainly is.

Gloria, how did we wind up in this awful place right now?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: The dysfunction of Washington, that seems like it's all we're covering, right?

I think part of it was what the House speaker was talking about there in front of the White House which is that on January 1 they decided not to go over the fiscal cliff because the default position would have been too terrible, which was tax increases for everybody. They couldn't possibly have done that.

So as part of that deal, they raised revenues. They let the tax cuts for the wealthy expire and they raised revenues. Republicans said, OK, we already gave at the office. We are not going to do that again. And I think the White House underestimated Republican resolve...

(CROSSTALK)

BORGER: Like they are going to turn around and close loopholes not in the context of tax reform seven weeks after they gave in on the tax issue?

(CROSSTALK)

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: There were even Republicans encouraging other Republicans to say go with what the president has to say because as long as we get those revenues off the table now, then it has to become about spending later. They were counting on the fact that this would have to be about spending cuts and they didn't blink.

BLITZER: It's interesting that the market keeps going up even in the midst all of this dysfunction in Washington. Explain that to me.

(CROSSTALK)

VELSHI: Well, there are a couple things going on. One is we just don't know.

Uncertainty is the new normal. Right? We say markets want certainty, but there just isn't any of that anymore. Number two, interest rates are very, very low right now. So if you're trying to make money, that's your only option. The Dow closed a quarter-point higher; 14160 and change is the all-time high. We're not there yet, but it's kind of remarkable.

You and I were on TV and so were you when this all changed, right, when the markets were down and then all of a sudden you heard President Obama say they are going to try and work out this so-called continuing resolution which as John says we use in America in place of budgets, and all of a sudden the market went up and stayed up for the rest of the day.

BORGER: Because when you look at the continuing resolution issue, the question of keeping the government funded, both sides have self- interests in wanting to keep the government, because then they would look worse than they even look right now.

(CROSSTALK)

BORGER: The default position now is there are budget cuts, there are cuts and it's going to affect people, but it's not going to affect everyone equally.

VELSHI: Right.

BORGER: So this is the kind of pain politically both sides can live with for a certain period of time.

BLITZER: But here's what I'm worried about, Ali, and you can tell me if you are. In a couple months, three months, they have got to raise the debt ceiling once again. Otherwise, the U.S. can default on some of those loans or make major cuts. The sequester cuts are small potatoes.

(CROSSTALK)

VELSHI: These are real problems.

BLITZER: Yes. That would be a huge problem.

VELSHI: One thing that we don't think about it is that it costs the U.S. government 2 percent to borrow money for 10 years. Right? And that's actually gone up a fair amount in the last year.

If this debt ceiling thing happens again, that's interest rates, that's your mortgage. That becomes very serious. That hits everybody in the country.

(CROSSTALK)

BORGER: And they will get a deal on that because it does hit everybody.

VELSHI: Yes, but we will be here until 11:00...

(CROSSTALK)

VELSHI: ... the night before.

BLITZER: Guys, stand by. I want to continue this.

Maybe we won't notice anything different when we all wake up tomorrow morning but in the coming weeks and months, more and more Americans will feel the impact of these budget cuts.

Tom Foreman is joining us now with a closer look at what's in store.

Walk us through, Tom, what we can expect.

TOM FOREMAN, CNN CORRESPONDENT: Wolf, you're absolutely right.

If you look at what happened today, on March 1, the simple truth is the forced budget cuts went into effect. And what does that mean for most of us? It doesn't mean anything to us because nothing really has changed right now. But this is like a tiny fire breaking out in a weed patch.

Over these next few weeks here, as we move through here, you may yet see nothing here, you may see nothing here, but something is going on. That fire starts spreading through the government to all these different agencies. They are sending out notices saying to people, OK, it's real now, we are going to have people out of work, OK, we're going to have to cut programs back. OK, this is really going to go on.

Once that's built up to a certain point you're going to reach a point where down here finally you start really seeing it. That's when the furloughs are going to kick in. All of these employees are going to be advised about this, places like national parks and airports. They will be some cutbacks.

Now, how much you are going to see it, you're absolutely right, it depends on who you are and where you go and what you do as to whether or not this will really affect you and some people even here may think it's not about them. But, but, if we keep going to the end of the month, look at the other deadline, 27th. That's when funding for the government expires, Wolf, and that's the next crisis that you were just talking about with John there, Wolf.

BLITZER: What happens after March?

FOREMAN: Yes. After March that's when this just grows and grows.

As you move into April here, you would be talking about budget negotiations trying to go on. But as this is going on, you would be seeing throughout April more of these problems starting to show up for different people. Now, whether or not they will be enough to make a difference to a lot of people out there, that's hard to say again, but nonetheless they will grow and they will grow and then when you get beyond that, once you get past April, once you get past April and you start talking about the month of May, by this time you're going to see things like smaller unemployment checks for about two million people who are on long-term unemployment right now.

That number by September would grow to about four million people. It's not a huge cut, but this money is very important to these people and then you could start seeing more delays throughout the system. The simple truth is, like I said, this starts right now today with like a spark out there, not that big, but left unattended, if they cannot deal with these issues that you have just been discussing, then it will grow and it will grow and more of us will feel it -- Wolf.

BLITZER: Certainly will.

All right, these coming weeks are going to be critically important. Appreciate it very much, Tom Foreman.

Other news we're following, including news involving the basketball star Dennis Rodman praising a brutal regime, declaring North Korea's leader a friend for life. So, what's going on?

I'm going to speak about sports diplomacy. The NBA commissioner David Stern, he's standing by live. We'll discuss.

Also, drastic action to save a city on the brink. What Michigan is now doing to try to save Detroit.

(COMMERCIAL BREAK)

BLITZER: It's seen around the world as a totally brutal regime that has starved its own citizens, threatening the United States with nuclear attacks. But there was praise, serious praise, for North Korea today during the eye-popping visit by the former NBA star Dennis Rodman. He engaged in some extraordinary basketball diplomacy this week but he calls the current leader, Jim Jong Un, and I'm quoting him now, a friend for life.

(BEGIN VIDEO CLIP)

DENNIS RODMAN, FORMER NBA STAR: His grandfather and his father are great leaders and he's such a proud man. As a young kid, a common kid, that's why he's so awesome.

(END VIDEO CLIP)

BLITZER: All right. Let's discuss with the NBA commissioner David Stern, who is joining us now.

Commissioner, thanks very much for coming in.

DAVID STERN, NBA COMMISSIONER: Pleasure.

BLITZER: Did you know that Dennis Rodman was going to North Korea in advance or did you learn about this, like all of us did, when we saw him pop up in Pyongyang?

STERN: We did not know and the color photo of Dennis watching game -- a basketball game with Kim Jong Un was as interesting and surprising to us as I'm sure it was to all of your viewers.

BLITZER: So what do you think? What do you think about his decision to go there and meet with the new young North Korean leader, go to a game with the Harlem Globetrotters, what do you make of this?

STERN: Well, it's interesting. A few years back we had a request from the Iranian national team. They would like to play in our summit league. And so what we did initially was to call the state department and say, what would you like us to do? And their response was, we will try to be helpful with that invitation. We consider it people to people. We understand that government is going to denounce but it would be OK and we'll try to expedite the visit and then indeed while the rhetoric was going, the Iranian national team played in Utah with the authorization, if you would, of the governor's office, you know, Senator Hatch and the State Department.

But we wouldn't do something like Dennis is doing without checking with the State Department. Although, I rush in to say that the New York Philharmonic has been there, recently Eric Schmidt, the chairman of Google, was there. This is not unprecedented. But it's an interesting time since we're at the U.N. denouncing that regime for its most immediate test and there's Dennis having a high old time. I'm going to go to a window to see if there are pigs flying by because anything is now possible.

BLITZER: We checked yesterday with the organizers. This group in New York, VICE, which is doing a documentary on this for our sister network HBO, and they told us flatly they did not get any green light, check with the State Department about this trip.

But the notion of Dennis Rodman calling Kim Jong Un, his father Kim Jong Il, "awesome", if you will, saying these nice things. What does that say? Does that hurt basketball, if you will? What does that do to the reputation, if anything, to the NBA?

STERN: Nothing at all. I think -- I think Dennis may be a bit imprudent here and it doesn't reflect on his colleagues in the NBA or the NBA itself. I think if anything, it highlights what can be done if sports is properly used. When apartheid was coming to an end in South Africa, there's some belief that it was hurried along so the South African Olympic team could participate in the Olympics.

We have a huge number of examples where sports would sometimes shuts down the world so everyone can watch whatever their politics are, the Olympics or the World Cup or the like, being very successful. So I think it reaffirms the notion that sports is a leveler, but I think there was a little bit of an imprudent action and statement here.

BLITZER: It wouldn't be the first time Dennis Rodman did that. All of us who watched him play over the years certainly appreciate that.

Go ahead.

STERN: Wolf, in 1990, some odd, we went to Paris with the Chicago Bulls. The 16,000 fans at Bercy Arena, we new immediately when the music started and the lights went down what the right introduction was coming, and the prime minister leaned over to me during the game and said, "Can I ask you a favor?" I said, "Sure." He said, "Can I meet Dennis Rodman after the game in the locker room?" "Yes, sir, Mr. Prime Minister."

Wolf, go figure.

BLITZER: Yes. You know, when I was there in North Korea couple years ago, I saw how obsessed they were with Michael Jordan. The former secretary of state Madeline Albright brought to Kim Jong Il an NBA basketball signed by Michael Jordan. It's got a spot of reverence, if you will, in Pyongyang right now.

So here's the question. If Michael Jordan were to come to you, the commissioner of the NBA, and say, what do you think, Commissioner, should I go to Pyongyang? What would you say?

STERN: I'd say, "Just a minute." I'd pick up the phone and say, "Secretary Kerry, what do you think?"

BLITZER: You'd want to get the green light before you did that. Look, diplomacy with the Chinese seems to have worked -- seems to have worked out pretty well.

STERN: We had the Atlanta Hawks in the former Soviet Union in 1988. Ping-pong diplomacy worked out.

I think -- we had early discussions before the philharmonic went with young Mr. Kim Jong Un's father about a possible visit by a team that had NBA stars on it but, you know, I'm just not sure about the nuclear issue that -- someone's being denounced at the U.N. while you're sending a delegation, I think there may be some issues but it's a heck of a lot more fun to talk about than continuing resolutions, government shutdowns, sequestration, and old men behaving badly.

BLITZER: Fair point. Commissioner, thanks very much for coming in. Hopefully, we're going to be speaking to Dennis Rodman in the coming days and we'll get his take on what he saw and the Harlem Globetrotters, the guys who were there as well. Appreciate it very much.

STERN: Thank you. Looking forward to it.

BLITZER: And coming up here in THE SITUATION ROOM, despite the controversy, can Dennis Rodman sports diplomacy play a role in easing tensions between the United States and North Korea? We'll continue that later this hour.

(COMMERCIAL BREAK)

BLITZER: The state of Michigan steps in to take over the finances of the city of Detroit which is basically broke.

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

Lisa, what's the latest?

LISA SYLVESTER, CNN CORRESPONDENT: Well, Wolf, you said it.

Detroit is practically insolvent. So, today, Michigan's Governor Rick Snyder announced that he will appoint an emergency manager to run that city government. That person has yet to be named but will have the power to cut spending and throw out city contracts and we'll ask Governor Snyder about the takeover when he joins us live in the next hour of THE SITUATION ROOM.

Eight police officers in South Africa are under arrest tonight, accused of police brutality. On Tuesday night, they took into custody, the man seen right there, in the middle of your screen and the red shirt. But it's what happens next that has people now calling for justice. The suspect was handcuffed to the back of the police van while sitting outside it. The van then drove away dragging him along. That suspect later died in police custody.

And on to other news, OK, take a look at this. Adidas has unveiled six uniforms for six of the top teams in college basketball. From left to right, you see the outfits are for Cincinnati, Kansas, Notre Dame, Baylor, UCLA, and Louisville.

Adidas says the colors are unique to each school. The uniforms would be worn in post-season play. So I'm very curious what our viewers think of that, they can always tweet us to give us their opinions.

WOLF BLITZER, CNN ANCHOR: Tweet me at @wolfblitzer. Love to hear from them. They can tweet you too.

SYLVESTER: @lsylvestercnn.

BLITZER: Let's get ready for the tweets. Thank you. President Obama's budget cut strategy. We're going to talk about that and much more in the "Strategy Session." That's coming up.

(COMMERCIAL BREAK)

BLITZER: Get back to our top story right now, the forced budget cuts that are about to go into effect, the blame game over those $85 billion set to kick in later tonight.

Let's get to our "Strategy Session." Joining us, two CNN contributors, the Democratic strategist, Paul Begala and the former Bush speechwriter, David Frum. Guys, thanks very much. Let me play a little clip. This is the president speaking earlier today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We just need the Republicans in Congress to get catch up with their own party and their country on this and if they did so, we could make a lot of progress.

I do know that there are Republicans in Congress who privately at least say that they would rather close tax loopholes than let these cuts go through. I know that there are Democrats who would rather do smart entitlement reform than to let these cuts go through.

So there is a caucus of commonsense up on Capitol Hill, it's just that it's a silent group right now.

(END VIDEO CLIP)

BLITZER: Do you believe there's a caucus of commonsense up on Capitol Hill?

DAVID FRUM, CNN CONTRIBUTOR: I don't think there's any commonsense in either the White House or Capitol Hill on this measure. We released today, statics show American incomes shrank by 3.5 percent in January because of the impact of the end of the payroll tax holiday.

Now we're going to have spending cuts. The idea that we need is to close tax loopholes, raise tax rates, and cut spending, in the fact of this still very weak economy that is a total lack of commonsense.

The president has joined the same mistaken view as the sequester caucus in believing what we need now is more fiscal tightening. That is not what we need and it doesn't matter whether you're doing it through canceling the payroll tax holiday or whether you're doing it through spending cuts because it's the wrong approach.

BLITZER: They raised taxes for those making more than 400,000 a year in January. But they are not talking about raising rates anymore. They are talking about eliminating loopholes and deductions --

FRUM: It's contractionary. The economy doesn't care. A dollar is a dollar is a dollar. When you're taking dollars out of the economy at a time when the economy needs it, some dollars may be more powerful than other dollars, but still we should be adding dollars to the economy, not taking them away.

PAUL BEGALA, CNN CONTRIBUTOR: David is a truly smart person. Every so-called smart person who says we should follow what Simpson and Bowles said. My old boss, Erskine Bowles was chief of the staff of the White House, Allan Simpson, a Republican senator, they did this bipartisan --

BLITZER: We wouldn't be in this mess right now if everyone had accepted their recommendations a couple of years ago.

BEGALA: And at the heart of their recommendation is what David Frum is talking about. They wanted short-term stimulus, boosting economic activity in the short term and a long-term commitment to deficit reduction because it is a terrible long term problem.

But the near term right now is terrible. And we have all the best private sector and public sector economists saying this is going to cost us 700,000 jobs or more, could cost us half a percent of GDP growth when we're only growing maybe 1 percent or 2 percent. It is folly and I can understand why the president is so frustrated.

FRUM: Wait a minute. The president is not a victim here. The president has also joined the idea that fiscal policy is more important today than economic policy. The president is not laying out an economic plan.

He is not laying out a plan for the growth of the American economy. He's laying out a budget plan. He's got ideas about how to fix the government's finances. The challenge now is to fix the country's finances.

BEGALA: In his defense, in his "State of the Union" address, the eight most important words in that speech, he said deficit reduction alone is not an economic plan. And that's what David is saying.

FRUM: That's right.

BEGALA: So if you look at what the president has actually proposed, it's very different. "The Sequester" is stupid, dumb, and arbitrary. BLITZER: It's not a -- it's not a no-brainer. They need a grand bargain that will deal with tax reform in a serious, substantive way, at the same time deal with entitlement reform. Come up with a grand bargain, if you will and we can all move on.

FRUM: I think it's a great thing to do in 2015. It's not a bad thing to do in 2013.

BLITZER: Because you think it will hurt the economy?

FRUM: You're answering the wrong question. We have a patient here who is suffering both from arterial sclerosis and has been hit by a truck. Deal with the truck injuries first, the arterial sclerosis later.

BEGALA: Look at Italy, they have gone through austerity. Lots of other countries have in Europe too. In Italy, they've gone through painful austerity, tax increases, spending cuts, you know what happened? Unemployment doubled and their debt did not go down. Austerity does not even reduce the debt because it crushes the economy.

BLITZER: Hold on for a minute because I want to move on from a little lighter note from what the president had to say. In the middle of the president's political rhetoric, the very serious discussion about the forced spending cuts, there was also a little sci-fi moment.

(BEGIN VIDEO CLIP)

PRESIDENT OBAMA: I know that this has been some of the conventional wisdom that's been floating around Washington that somehow, even though most people agree that I'm being reasonable, that most people agree I'm presenting a fair deal, the fact that they don't take it means that I should somehow, you know, do a Jedi mind meld with these folks and convince them to do what's right.

(END VIDEO CLIP)

BLITZER: So the problem is if you're a "Star Wars" or "Star Trek" fan, you probably haven't heard the exact term, the Jedi mind meld. You might know what a Jedi mind trick is. Watch this clip from "Star Wars."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let me see your identification.

UNIDENTIFIED MALE: We don't need to see his identification.

UNIDENTIFIED MALE: These aren't the droids you're being looking for.

UNIDENTIFIED MALE: These aren't the droids we're being looking for.

UNIDENTIFIED MALE: You can go about your business.

(END VIDEO CLIP) BLITZER: Or a Vulcan mind meld, like this one in "Star Trek." But again, not a Jedi mind meld. Twitter didn't exactly go easy on the president for combining these two. Here are just a few of the scores of tweets that exploded right after he made those comments. I'll read some of them to you.

"Obama just confused "Star Trek" and "Star Wars" by saying Jedi mind meld. I think it's time to impeach." Here's another one, "It's as if a million nerds suddenly cried out in anger over President Obama mistakenly using the term Jedi mind meld."

And later this afternoon, the White House responded with a tweet of its own. Sending people to a new web address. Watch this, whitehouse.gov/jedimindmeld for more information on the budget cuts. A lot of nerds out there paying attention. What do you make of this?

FRUM: Being president certainly interferes with your TV watching.

BLITZER: He obviously knows both of these subjects, but he got a little confused right there.

BEGALA: A big fan of both films. He always reminded me of Mr. Spok, who is supremely logical. I think that's why today he seems so frustrated because what we're doing is so irrational.

BLITZER: Are you saying, Paul Begala, he is Mr. Spok? Is that what you're saying?

BEGALA: I think our president is Mr. Spok.

BLITZER: Wow. You heard that?

BEGALA: Because he's all brains and all rational and logical, and yet he's dealing with people who are irrational.

FRUM: Well, he certainly does -- winning his first big national race to a former "Star Trek" star, Gary Ryan.

BLITZER: All right, guys, thanks very much.

A long awaited report on a controversial pipeline. Guess what, it's just coming out. We're going to have the latest for you when we come back.

(COMMERCIAL BREAK)

BLITZER: We've been waiting for more than a year for the Obama administration to make a decision on a key pipeline that's supposed to carry oil from Canada through the United States, lots and lots of jobs at stake but there seems to be movement towards a final decision.

Dan Lothian is here getting some new information. What's the latest?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. As you know, the State Department had been reviewing to find out whether or not this pipeline would have any kind of environmental impacts and this report that came out is just a draft report. So it doesn't come down one way or the other saying that this pipeline is detrimental or it's OK.

But what's interesting is that it does point out that there are some areas where there are these environmental impacts, but they could be mitigated. And one thing I think it was telling, there was a summary of impact where it said the analysis of potential impacts associated with construction and proposed projects suggests there would be no significant impacts along the proposed project route.

Those who want this pipeline that's been controversial, it's been hanging out there for over four years, they see this as good news. Again, this is very early in the process. No decision coming down, but certainly nothing in this report that says that this pipeline will be detrimental to the area.

BLITZER: A lot of people have said to me in recent weeks they were anticipating this, this would certainly not put any more barriers in the way and that the president and the White House presumably are suggesting is leaning. Now that he's been re-elected, in favor of going ahead with the construction of the Keystone pipeline. That seems to be what is going on but you tell me.

LOTHIAN: Well, that does seem that that's the direction and certainly there will be a lot more pressure on the president if this report in the final analysis says that there's no harm that will come from the pipeline, then that puts a lot of political pressure on the president where he can't say, look, I'm not going to do this because there could be environmental impacts.

You know, the president rejected this in 2011 because he was concerned about the grasslands in Nebraska. He sort of pundit it back to Trans Canada to say, come up with a new route. We'll review it at that time.

So still early in the process, but those who support it, like it, environmentalists don't like it at all and of course, they are big supporters of the president. That's one reason the president did not make a decision before the election in 2012.

BLITZER: And we'll see if he does right now. A lot is at stake one way or the other. Thanks very much, Dan Lothian, for that Keystone pipeline information.

One minute he's sleeping in his bed. The next minute, he's swallowed by the earth. We have details of a giant and apparently deadly sinkhole. That's next.

(COMMERCIAL BREAK)

BLITZER: Inside this Florida home, an unthinkable nightmare. A man sleeping in his bed was literally swallowed, swallowed by the ground when a massive sinkhole opened right underneath him. His screams for help echoing through the house.

CNN's John Zarrella is on the scene for us. John, what's the latest on this tragedy?

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, Wolf, you know, when you look at that house behind me, anybody that looks at that, you have no idea of the tragedy that took place in there last night. And 24 hours ago at this time, family members were coming and going and had no idea that the ground beneath their feet was literally going to give way within hours.

As you mentioned, last night, the hole in the back bedroom -- the back bedroom is on the back side of house, a sinkhole literally opened up underneath there and swallowed Jeff Bush. His family members tried to get him when they heard what they said was an enormous noise.

They could not rescue him or could not pull him out of the hole. What we're seeing right now, Wolf, that's a ground penetrating cone. They are looking for safe areas, how far out does the sinkhole extend? They are trying -- and the men working that a few minutes ago are there in the background.

They are all wearing safety harnesses because the concern, Wolf, if is that that ground could collapse. That entire house could collapse into the sinkhole as it expands, if it's still expanding, swallowing everything up. They are being very, very careful.

This is a recovery operation now. It is no longer a rescue operation. The authorities fear for the worse for Jeff Bush and, again, they do not want anyone else to get hurt so they are taking their time before they figure out a plan to go in and try and find Jeff's body -- Wolf.

BLITZER: You know, we just got the recording of the 911 call that was made. I'm going to play it, John, and then we'll discuss. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We need an ambulance -- stuck underneath the house. The house fell through.

UNIDENTIFIED FEMALE: OK, what happened to the house?

UNIDENTIFIED FEMALE: The bedroom floor collapsed and my brother-in- law is in there and he's underneath the house.

UNIDENTIFIED FEMALE: OK. Hold on one second. Let me connect you, OK?

UNIDENTIFIED FEMALE: OK.

(END VIDEO CLIP)

BLITZER: All right, so there it is. You can see the shock and the pain in the voice. You know, this -- it's almost unbelievable how this happened. How extraordinary is this because you've covered these sinkhole episodes in Florida over the years?

ZARRELLA: Yes. You know, Florida has a limestone base under it and when you get running water in that limestone, over time it can begin to deteriorate the limestone and collapse that limestone base. But I can tell you listening to that 911 call, Wolf, those people had no idea.

That who knows how long this has been going on, but we did talk to Jeff's brother, Jeremy, and Jeremy described exactly what he did to try and pull his brother out, to rescue his brother, just these terrible attempts that he went through to try to get his brother out of there.

(BEGIN VIDEO CLIP)

JEREMY BUSH, LOST BROTHER IN SINKHOLE: Heard a loud crash, like a car coming through the house and I heard my brother screaming. So I ran back there and tried going inside his room, but my old lady turned the light on and all I see is this big hole, a real big hole and all I seen was his mattress and that was it. Basically, that was all I seen.

UNIDENTIFIED MALE: You tried jumping in after him?

BUSH: Yes, I jumped in the hole and was trying to dig him out, but I couldn't find him. I thought I could hear him hollering for me to help him.

(END VIDEO CLIP)

ZARRELLA: It was desperation, Wolf. Family members tell me that they do have a place to stay, someone in the community has offered them a place for the next couple of months, but all their belongings are in that house and they can't get to them -- Wolf.

BLITZER: What a story. All right, thanks very much, John Zarrella. We'll stay in close touch with you.

More news coming up, more on Dennis Rodman, he takes on one of America's heated rivals. But can his controversial trip to North Korea actually help? That's next.

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BLITZER: The basketball hall of famer, Dennis Rodman's, trip to North Korea certainly shocked the world, took all of us by surprise, but it's a bit of sports diplomacy that has worked in the past. Here's CNN's John Berman.

JOHN BERMAN, ANCHOR, CNN'S "EARLY START": Wolf, just a short while ago Dennis Rodman tweeted that he is back in the USA, this after his whirlwind tour meeting mysterious world leaders or at least sitting side by side with North Korea's Kim Jong-Un.

The question surrounding Rodman or "The Worm" as he was once known, is this, is he the latest participant in sports diplomacy?

(BEGIN VIDEOTAPE) BERMAN (voice-over): Dennis Rodman could play defense, work the boards and, yes, dress like no player ever, but can he negotiate? OK, maybe not negotiate but at least engage in diplomacy. His assessment of the mysterious new North Korean leader, Kim Jong-Un --

DENNIS RODMAN, FORMER NBA PLAYER: I love him. The guy's awesome.

BERMAN: After the two men watched members of the Harlem Globetrotters in Pyongyang and apparently ate sushi, Rodman called Kim, a friend for life.

RODMAN: He was so honest and his father and grandfather are great leaders. And he's such a proud man.

BERMAN: Given reports that millions of North Koreans might be starving and the country's violations of nuclear treaties, Rodman's words might be misguided.

PATRICK VENTRELL, ACTING DEPUTY SPOKESMAN, STATE DEPARTMENT: This is a private visit by a private American citizen. Mr. Rodman does not represent the United States. He's never been a player in our diplomacy.

BERMAN: But Rodman in North Korea for a documentary for "Vice" magazine to air on HBO, Rodman is not the first athlete to find himself in the middle of foreign policy. In 1971, the U.S. table tennis team visits China, what will forever be known as ping-pong diplomacy.

It paves the way for a summit between the two countries. For years, cricket has been a way to create dialogue between rivals India and Pakistan and just this week, the American participation in the wrestling world cup in Tehran was a topic of friendly banter (ph) during nuclear talks involving the U.S. and Iran.

Sport is a force that can bring people together. Rugby in post- apartheid South Africa as depicted in "Invictus," or perhaps, most famously in the belt between Ivan Drago and Rocky Balboa in "Rocky 4".

SYLVESTER STALLONE, ACTOR: If I can change --

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

STALLONE: And you can change --

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

STALLONE: -- everybody can change!

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

BERMAN: Sadly, despite what Rocky says, maybe not everybody can change. President Obama and House speaker, John Boehner, famously played golf together, and yet, they still could reach no grand bargain on the debt, and today, we get $85 billion in forced spending cuts.

(BEGIN VIDEOTAPE)

BERMAN (on-camera): Maybe what the speaker and the president needed was Dennis Rodman in their foursome. So, Rodman also tweeted that he will be here in New York City on Monday talking about his trip to North Korea. He promises to set the record straight. He says, to tell what is true and not true about what you have heard and read. So, that should be interesting -- Wolf.

BLITZER: It will be. John Berman, thank you.