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The Situation Room

U.S. Edging Closer To Fiscal Cliff; CIA Chief Resigns Over Affair

Aired November 09, 2012 - 17:00   ET

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

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

Happening now, the head of the CIA resigns over an extramarital affair.

Republicans blindsided by Mitt Romney's loss.

How did so many get it so wrong?

And anger bow -- boiling over New York -- over in New York, where gas is now being rationed and thousands of people -- thousands are still without power.

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 a bombshell announcement rocking the intelligence community and sending shockwaves across Washington and way beyond.

David Petraeus, the highly decorated U.S. Army general who's run the Central Intelligence Agency for the last 14 months, has suddenly resigned, citing an extramarital affair.

Our Pentagon correspondent, Chris Lawrence, is joining us now with more -- Chris, you've got some more details.

What can you tell our viewers?

CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Wolf, we can tell you that David Petraeus sent this letter to the rest of the CIA this afternoon admitting that he had an affair and telling the CIA that he had gone to the White House yesterday and asked President Obama to accept his resignation. We're also told that President Obama was initially opposed to accepting that resignation, but David Petraeus felt that it was a matter of honor.

We're also told that the FBI had been alerted to this and was looking into this issue.

In the small picture it means David Petraeus will not testify next week in many of those committees on the situation in Benghazi.

And what happened?

It means that his number two will now take over the CIA on an interim basis. And it really throws the president's national security team into a -- a bit of flux, just days after the election.

(AUDIO GAP)

BLITZER: Unfortunately, that -- that tape is not working right now. We're going to try to fix that -- that problem. And -- and let me just underscore, Chris, how significant this is right now in terms of not only the intelligence community, but the U.S. military. As you know, General Petraeus, a graduate of West Point, a highly decorated four star general, served in Iraq, was called on an emergency basis to try to fix the situation in Afghanistan. Had a brilliant, brilliant career, a scholar, was a professor of international affairs at West Point after getting a Ph.D from Princeton.

This is really a shocking -- a shocking development for so many in the national security community.

LAWRENCE: And that is the reaction, Wolf, that you're getting here in the Pentagon today -- people just surprised, shocked by what they've heard, just did not see this coming.

You know, of course, David Petraeus, you know, for all of his accolades in the last 10 years or so in these theaters in Iraq and Afghanistan, he -- he was a 50-year-old general by the time he first set foot in combat.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): By the time David Petraeus got his first taste of real combat, he was a 50-year-old major general. In 2003, he commanded the 101st Airborne during its march on Baghdad. It was in Iraq that he rhetorically asked a reporter, "Tell me how this ends," suggesting trouble the U.S. would have there in later years. There he gained the nickname King David, used affectionately by his supporters and derisively by those who labeled him a celebrity general.

In 2007, President Bush appointed Petraeus to lead all troops in Iraq. Petraeus essentially rewrote the Army Field Manual and his ideas on counter-insurgency became known as the Petraeus Doctrine.

A scandal of a different sort brought Petraeus back to command another war. When President Obama fired General Stanley McChrystal for his unflattering comments to "Rolling Stone," Obama tapped General Petraeus as the man to save the Afghan war effort.

GEN. DAVID PETRAEUS, U.S. ARMY:

PETRAEUS: It has, again, been the greatest of honors to serve here.

LAWRENCE: But because of his name recognition among the American people, Petraeus was surrounded by speculation that he had political ambitions. Some wondered if he'd appear on the Republican presidential ticket. But Petraeus knocked down those rumors.

PETRAEUS: We're not out there running a political campaign, we're running a war.

LAWRENCE: At his Senate confirmation hearing to head the CIA, Petraeus admitted President Obama decided to withdraw thousands of troops from Afghanistan significantly faster than Petraeus wanted.

PETRAEUS: The ultimate decision was a more aggressive formulation, if you will, in terms of the time line, than what we had recommended.

LAWRENCE: Petraeus' wife, Holly, sat behind him during that testimony and Petraeus publicly praised her.

PETRAEUS: She is a symbol of the strength and dedication of families around the globe who waited home for loved ones while they're engaged in critical work in Afghanistan, Iraq and elsewhere. She has hung tough while I've been deployed for over five-and-a-half years, since 9/11.

(END VIDEO TAPE)

LAWRENCE: There's been praise for Petraeus from both sides of the political aisle in the hours that follow this resignation. Senator John McCain calling him one of the greatest military generals of -- of any time. And, really, if you look at a -- the -- the head of the Senate Intelligence community -- Committee, Senator Dianne Feinstein, a Democrat, she said she very much regrets the fact that President Obama accepted the resignation. She calls it a -- a tremendous loss to the intelligence community -- Wolf.

BLITZER: There's no doubt that the -- the whole Benghazi time line -- I know the -- the Pentagon is about to release some sort of time line. They're getting ready for hearings next week.

Do you get any indication at all that General Petraeus' resignation, Chris, has anything to do with what happened in Benghazi?

LAWRENCE: I don't get that indication, Wolf. I -- from everything we had heard, that this testimony was due to happen next week, that there was nothing holding it up. And, you know, having heard the Pentagon time line this afternoon, there was nothing earth-shaking in its, you know, revelations that would sort of rise to this level. So I -- I just don't think that it had anything to do with that. And I -- I think that President Obama and others fully expected that Director Petraeus would testify next week, until this personal matter took precedence.

BLITZER: Thanks very much, Chris Lawrence, for that.

Let's dig a little deeper right now on the shocking Petraeus resignation with our national security contributor, Fran Townsend.

She's a member of the CIA's External Advisory Board and knows General Petraeus -- I assume you were just as shocked and surprised as all of us were. FRANCES TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I -- I was, Wolf. In fact, I had an appointment to be down at Langley the middle of next week...

BLITZER: The CIA headquarters.

TOWNSEND: Right -- to help in the preparation of General Petraeus for his hearing on Thursday. So, look, I think Dianne Feinstein, whom I do not always agree with, said it exactly right.

BLITZER: And she's the chair of the Senate Intelligence Committee.

TOWNSEND: She is. And she -- she sort of made the point that this is a terrible loss for the country. I mean putting aside what one's moral judgment may or may not be about his personal conduct, he's taken responsibility for it. He has been an extraordinary mili -- effective military leader and a leader of the CIA. You know, the -- there have been tremendous successes in every command he's had.

And in many respects, this is a loss for the nation.

I mean our -- our thoughts and prayers go to he and his family.

But I -- I think it's really unfortunate.

BLITZER: The -- the author Tom Ricks, who was here in THE SITUATION ROOM in the last hour, he's an authority -- he's just written a new book on the general and knows General Petraeus well. He suggested that the president actually tried to talk -- talk him out of it and said, are you sure this is enough for you to give up your career and go out like this?

And General Petraeus said, yes, this is the honorable, the right thing to do, which -- that doesn't surprise you.

TOWNSEND: It does not surprise me. And I -- I think, look, what we don't -- we don't -- there's a lot of things we don't know and, frankly, are better left as private matters. We don't know how long the relationship was or whether it's ongoing, whether or not -- I mean the president -- Petraeus' statement talked about, um, his career in the military and his marriage.

Um, we don't -- we don't know whether or not, going forward, what General Petraeus is going to decide, together with his wife, about his personal life, his professional life. And I think they need time and space and privacy to do that.

BLITZER: Because you're on the Advisory Committee over at the CIA. If someone, a clandestine officer, for example, a CIA officer, were to -- who has top secret security clearances, knows what they call sources and methods, engages in an extramarital affair with someone who is not necessarily in the intelligence community and from the outside -- we don't know who he or she may be -- that, potentially, could be a forced resignation, if you will. That -- that goes against the rules. TOWNSEND: Well, it does, Wolf. But I, again, you know, these things are handled in sort of, you hope, a mature way. If the relationship of the clandestine officer is not with a member of a Foreign Service or is a foreign national...

BLITZER: But you don't know that.

TOWNSEND: -- that...

BLITZER: You don't know that.

TOWNSEND: That's right. But you would. And in other words, if there was a -- a case officer or a career professional who found themselves in this circumstance...

BLITZER: In what they call a honey trap.

TOWNSEND: That's right -- you'd then ask yourself the question, you'd have to do an investigation to understand it. There have been clandestine officers who've career -- whose careers have not been ended over that. Sometimes it's the Foreign Service who's actually set the honey trap, unknowing to the officer.

And so it actually requires more than a visceral reaction or a moral judgment. You need some more facts to make those judgments.

BLITZER: Tom Ricks said this in the last hour -- I'll play this little clip -- when I asked him that specific question.

TOWNSEND: All right.

BLITZER: Well, I -- I guess we don't have it, but we have -- I'll read it to you. He says, "My guess is that at the CIA, if you haven't had an affair, you're not considered a player."

(LAUGHTER)

BLITZER: I mean he was being sarcastic a little bit.

But is there a cultural issue here, do you think?

Is there a problem here...

TOWNSEND: No.

BLITZER: -- whether it's the CIA or in the military?

TOWNSEND: No. I -- and I think it's unfair to draw broad generalizations from a single unfortunate incident. We see this time and again. Let's remember, right, so President Clinton had Monica Lewinsky. Newt Gingrich left his -- left his wife and married his mistress.

I mean on both sides of the aisle, we've seen marital infidelities. And -- and, frankly, with politicians, they not only survive, they often thrive. And so I think we need not sort of suggest...

BLITZER: Take a deep breath right now.

TOWNSEND: Right. Exactly.

BLITZER: Do you have any...

TOWNSEND: Exactly.

BLITZER: -- who might replace him?

TOWNSEND: Um, look, I -- I think there are many good names bandied about. Mike Morell, the act -- now -- he was the deputy director, now the acting director, a very respected career official at the CIA. And I think he would do the -- the administration well.

Jane Harman, a former Democratic member of Congress and on the House Intelligence Committee, beloved both at Langley and respected on the Hill, would do well sort of in the tradition of Leon Panetta, now the Defense secretary.

So the president is going to have lots of good choices.

BLITZER: And John Brennan, who is the president's homeland security counterterrorism adviser, former -- formerly of the CIA. His name has already been mentioned, as well. I don't believe there's ever been a female who's been a CIA director.

TOWNSEND: There has not, Wolf.

BLITZER: There has been in -- in Britain, we -- we know...

TOWNSEND: That's right.

BLITZER: -- we know her as M.

TOWNSEND: That's right.

BLITZER: If you watch the James Bond movies.

TOWNSEND: No female directors of CIA, FBI or secretaries of defense.

BLITZER: I think there -- this is something the president might want to do. Maybe Jane Harmon does have a op...

TOWNSEND: She'd be great.

BLITZER: -- opportunity.

TOWNSEND: She'd be great.

BLITZER: All right. We'll see.

Thank you very much.

TOWNSEND: Sure.

BLITZER: President Obama says a majority of Americans agree with him on how to reduce the deficit. But the House speaker, John Boehner, is not among them. We're going to hear what both men are saying about approaching that so-called fiscal cliff.

Plus, why many Republicans were convinced Mitt Romney would win.

(COMMERCIAL BREAK)

BLITZER: President Obama and House speaker, John Boehner, are both laying out their opening positions ahead of negotiations to keep the United States from going over the so-called fiscal cliff. The president will meet with Boehner and other Congressional leaders at the White House next Friday.

Today, in his first public remarks since election night, the president said he's open to compromise.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to be clear, I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas. I'm committed to solving our fiscal challenges. But, I refuse to accept any approach that isn't balanced. I am not going to ask students and seniors and middle class families to pay down the entire deficit while people, like me, making over $250,000 aren't asked to pay a dime more in taxes.

(APPLAUSE)

OBAMA: I'm not going to do that.

(APPLAUSE)

OBAMA: And I just want to point out, this was a central question during the election. It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach. And that includes Democrats, independents, and a lot of Republicans across the country as well as independent economists and budget experts.

OBAMA: That's how you reduce the deficit, with a balanced approach. So, our job now is to get a majority in Congress to reflect the will of the American people. And I believe we can get that majority. I was encouraged to hear Speaker Boehner agree that tax revenue has to be part of this equation. So, I look forward to hearing his ideas when I see him next week.

And let me make one final point that every American needs to hear. Right now, if Congress fails to come to an agreement on an overall deficit reduction package by the end of the year, everybody's taxes will automatically go up on January 1st. Everybody's, including the 98 percent of Americans who make less than $250,000 a year. That makes no sense. OBAMA: It would be bad for the economy and would hit families that are already struggling to make ends meet. Fortunately, we shouldn't need long negotiations or drama to solve that part of the problem. While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody, not Republicans, not Democrats, want taxes to go up for folks making under $250,000 a year.

So, let's not wait. Even as we're negotiating a broader deficit reduction package, let's extend the middle class tax cuts right now. Let's do that right now.

(APPLAUSE)

OBAMA: That one step, that one step would give millions of families 98 percent of Americans and 97 percent of small businesses the certainty that they need going into the New Year. It would immediately take a huge chunk of the economic uncertainty off the table. And that will lead to new jobs and faster growth. Business will know that consumers, they're not going to see a big tax increase.

They'll know that most small businesses won't see a tax increase. And so, a lot of the uncertainty that you're reading about, that will be removed. In fact, the Senate has already passed a bill doing exactly this. So, all we need is action from the House. And I've got the pen ready to sign the bill right away.

(APPLAUSE)

OBAMA: I'm ready to do it.

(APPLAUSE)

OBAMA: I'm ready to do it.

(END VIDEOTAPE)

BLITZER: The president of the United States speaking earlier today. The other major player in all of this, the house speaker, John Boehner, who spoke out before the president. Our Congressional correspondent, Kate Bolduan is here. She's got more on this part of the story -- Kate.

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Speaker Boehner is also talking compromise, but it is a very delicate dance. The two men are talking nice, but at least, for the moment, are still sticking to their very different positions.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): House speaker, John Boehner, laid down his marker once again in the fight over the looming fiscal crisis saying the ball is in the president's court.

REP. JOHN BOEHNER, (R) HOUSE SPEAKER: This is an opportunity for the president to lead. This is his moment to engage the Congress and work towards a solution that can pass both chambers.

BOLDUAN: While neither side is offering any detail of how they want to avoid the so-called fiscal cliff, Boehner did continue his post- election change in tone Friday.

BOEHNER: I don't want to box myself in. I don't want to box anybody else in. I think it's important for us to come to an agreement with the president.

BOLDUAN: Republican and Democratic aides tell CNN key lawmakers and committee staff have been working through various legislative scenarios for months. A senior House Republican aide adding that includes staff level talks between Speaker Boehner's office and the White House. But as with every big battle in Washington, any final deal will come down to the people at the top.

And the major sticking point is still taxes. The president argues any deal must include a tax increase on wealthier Americans, something he campaigned on.

OBAMA: We can't get this done, unless, we also ask the wealthiest households to pay higher taxes on their incomes.

BOLDUAN: Speaker Boehner maintains tax hikes are a no-go.

BOEHNER: Raising tax rates will slow down our ability to create the jobs that everyone says they want.

BOLDUAN: Though, he is open to raising revenue by cleaning up the tax code, closing loopholes, and eliminating deductions, but the devil is in the details, which of course, no one has at the moment.

(END VIDEOTAPE)

BOLDUAN (on-camera): But reading between the lines here, there may be a way to maneuver. Look what they're not saying. The president today did not mention an increase in tax rates specifically in his speech.

So, both sides could possibly claim victory by closing those loopholes and deductions to make wealthier Americans pay more but not through increasing their tax rate. But again, Wolf, we are a long way away from a deal at the moment.

BLITZER: Yes. These negotiations only just beginning.

BOLDUAN: Yes.

BLITZER: Most of them will be behind closed doors.

BOLDUAN: Sometimes, that's the better thing to do.

BLITZER: Thank you.

A huge moment for civil rights in the United States. The landmark voting rights act of 1965 heading to the Supreme Court. We're going to tell you why. (COMMERCIAL BREAK)

BLITZER: Landmark voting rights act of 1965 heading to the Supreme Court. Lisa Sylvester's back. She's monitoring that and some of the other top stories in the SITUATION ROOM right now. So, what's going on here?

LISA SYLVESTER, CNN CORRESPONDENT: Yes. This is big news, Wolf. The court agreed today to decide whether a key provision in the law, which gives the federal government oversight of states in areas with a history of voter discrimination is still constitutionally necessary. The case is one of the biggest the justices are expected to tackle this term and a ruling could have huge implications for civil rights in this country.

A judge has ruled that a JetBlue pilot who suffered an apparent in- flight meltdown and had to be restrained by passengers be released from the government medical center where he's being treated. The pilot can be seen on passenger cell phone video from the March incident yelling things like, quote, "we're all going down." He's being ordered to continue mental health treatment following his release.

And CNN is projecting that Washington State now joins two other states passing ballot measures making same-sex marriage legal. Voters in Maine and Maryland approved similar measures on Election Day. And Maine could begin granting marriage licenses to couples as soon as next month.

Also, on Tuesday, Wisconsin elected the country's first openly gay senator, Democrat, Tammy Baldwin. And I know that, you know, they were very optimistic that they could possibly get something -- gay rights activists were confident that they might be able to get something passed in Maine, but now, it looks like they're going to get all three states.

BLITZER: Yes, Maryland, Maine, and Washington State after being rejected gay marriage like 30 times over the previous years.

SYLVESTER: Yes. That's the big thing. And the reason why people say this is so historic because it's the first time that it was put to the voters, not a state legislature, but put to the voters, and it won the popular vote. Not just in one state but in three states now, Wolf.

BLITZER: First time this one. OK. Thanks very much, Lisa.

Mitt Romney's loss Tuesday night has left some devastated Republicans scratching their heads. They're wondering how they could get it so wrong. Were they in denial? We have details.

(COMMERCIAL BREAK)

BLITZER: Last Tuesday morning the outcome of the presidential election was certainly far from certain for either candidate. But many Republicans were totally confident Mitt Romney would win making this loss, obviously, all the more disappointing for them. Lisa is back. She's working this part of the story.

That false sense of optimism, as it turned out to be the case.

LISA SYLVESTER, CNN CORRESPONDENT: Yes.

BLITZER: Where was it coming from?

SYLVESTER: Well, you know, the polls show that President Obama was leading in several of the swing states, but there was a sense among some conservatives that the polling, that maybe it just didn't capture some of the Tea Party voters who don't trust the government and don't participate in these polls.

They also thought that the economy would be an issue that hurts the president. And they counted on momentum, which wasn't on their side.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): The optimism among conservatives was riding high starting with Mitt Romney's spectacular showing at the first debate.

SEAN HANNITY, FOX NEWS ANCHOR: As he continues his final swing state push on election eve, we have the proof that his message is in fact resonating with crucial voters across these states.

GLENN BECK: You're missing the whole thing on momentum. Momentum. I'm saying -- I'm saying that there is anywhere from three to seven points of just momentum in these states.

SYLVESTER: That overconfidence, even if it conflicted with polling data, made the letdown election night even harder for Republicans to bear.

Following Twitter and Realtime on election night, you can see the deflation. This one from Donald Trump saying, "This election is a total sham and a travesty. We are not a democracy."

Some in the GOP like Karl Rove simply refuse to believe that Ohio had gone the president's way and clinched his re-election.

KARL ROVE: Big swatches of Butler County, Delaware County and Warren County, all of which are Republican counties that have big chunks of their vote out.

MEGYN KELLY, FOX NEWS ANCHOR: Is this just math that you do as a Republican to make yourself feel better? Or is this real?

SYLVESTER (on camera): What are your colleagues on the Republican side saying? I mean, have you heard some of these saying, some of the reports for, like, Mitt Romney, that they felt blindsided. Blindsided is the word that I've seen a lot.

MARK MELLMAN, THE MELLMAN GROUP: Well, yes. Again, I think a lot of them misjudged the circumstances. A lot of them thought that the president couldn't be re-elected in these circumstances, that no president could be re-elected in these circumstances. Again, that represents, I think, a fundamental misjudgment of the economy, of the electorate, of the demographics of the electorate.

SYLVESTER (voice-over): The truth is the tide had been turning for President Obama. Unemployment dipped under 8 percent in the last two months. But even that was challenged. Most notably by former CEO of GE, Jack Welch, who suggested a conspiracy theory over the jobs numbers in his tweet.

CNN host of "RELIABLE SOURCES" Howard Kurtz sees a trend here. Don't like it? Deny it.

HOWARD KURTZ, CNN'S RELIABLE SOURCES: People who don't like the way policy is going in this country, they challenge the unemployment numbers, they challenge the polls, remember polls have turned out to be right. And in this case they challenged the legitimacy of Obama's election.

SYLVESTER: Now that the election is in the rearview mirror, many Republicans are wondering, how did they get it so wrong?

(END VIDEOTAPE)

SYLVESTER: And many of the Republicans we reached out to for this report, they are still recovering from the bruising campaign and the outcome. And today also many of them were busy on conference calls as they tried to figure out the way forward -- Wolf.

BLITZER: Interesting stuff. Thanks very much.

Let's dig a little bit deeper on what's going on right now.

Joining us our CNN political contributors, the Democratic strategist, Donna Brazile, the Republican strategist, Mary Matalin.

Mary, you want to quickly respond? How do so many of these Republican pundits get it so wrong?

MARY MATALIN, REPUBLICAN STRATEGIST: Well, it wasn't just Republicans. Two of the gold standards of polling, Gallup and "The Wall Street Journal" -- yes, I think the last "The Wall Street Journal" had in a point in the margin of error, and Gallup had it up a lot. So we have to look back at that. But we also did not understand and we have to fix this. And this is pretty obvious. I don't have to state the obvious. They got their vote out. We didn't get our vote out.

He didn't get as many -- Romney did not get as many conservatives out as John McCain did. So that's a problem. I wouldn't read more than that into it. And all of this -- this is all the chattering classes. I never talked to one voter out there who said, how should these polls be weighted or anything like that. But you're -- we're right. No president's ever won in this kind of economy with this level of unemployment, with this non-recovery, this much debt.

There was just a lot of fundamentals that seemed irrational that this incumbent other than being an incumbent would -- could succeed.

BLITZER: Yes, but there were plenty -- and I'll bring Donna into this conversation. There are plenty of pundits out there, you know, Karl Rove -- not necessarily a pundit but he plays one, let's say, on TV. He's a serious political analyst. Dick Morris, certainly others who were predicting -- who were insisting that a lot of these polls overweighed, Donna, the Democrats who were in the polls as opposed to the Republicans and that's why they suggested these so-called mainstream polls were incorrect.

It turned out to be the weight of the Democrats versus the Republicans in the polls was pretty much right on.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: I mean, throughout the last two years, Wolf, we saw that the number of Democrats in terms of registered Democrats was increasing, while the Republicans were static, independents increasing.

Look, let's give credit where credit is due. I know we need to spend a lot of time, you know, figuring out how to help the Republicans heal from their wounds. And Mary knows how to do that. And I don't have to give her any lessons. So here's what I should tell the Democrats what they did right. First of all, they learned the lessons of 2008. They went out there and they enlarged the electorate.

The Obama campaign, along with many of their allies and the progressive movement, organized labor, NAACP and others, they registered over two million new voters. And number two, they targeted people who voted in 2008 but did not vote in 2010 and they had a very sophisticated targeted program that reached those individuals where they live, where they work, where they play and where they pray.

And last but most importantly, what they did on Election Day, they opened up satellite headquarters all throughout the country. So when we saw people standing in those long lines, they encouraged them to stay. They brought them food and bottled water and what have you. So this was a very sophisticated campaign. They knew exactly where their targets were and they went after them.

BLITZER: All right. Let me go back at Mary. And, Mary, I want to read to you what you wrote on the "National Review" because it's generating a lot of commotion out there. And I'll read to you what you wrote about the president.

"A political narcissistic sociopath leveraged fear and ignorance with a campaign marked by mendacity and malice rather than a mandate for resurgence and reform. Instead of using his high office to articulate a vision for our future, Obama used it as a vehicle for character assassination, replete with unrelenting destructive distortion, derision, and division."

A narcissistic sociopath -- I looked up what a sociopath was in the dictionary. A person with a psychopathetic personality, whose behavior is anti-social, often criminal and who lacks a sense of moral responsibility or social conscience.

Mary, is that what you're calling the president of the United States?

MATALIN: It was -- I said the campaign. This was a sociopathic campaign and that it did absolutely maligned the character of a very good man, Mitt Romney, called him everything from a tax cheat to a dog abuser, ridiculed his wife, distorted his positions, he wasn't against banning birth control. And they -- and they divided Americans. They did a good turnout job, but they did it by distorting his records, maligning his character and causing fear in people.

BRAZILE: Mary, that's Romnesia. That is Romnesia.

MATALIN: I don't -- what -- how many women told me he was going to ban birth control?

BRAZILE: He said he would defund Planned Parenthood. That caused a lot of concern. Personhood Amendment, he embraced the Personhood Amendment.

Mary, Mitt Romney had so many self-inflicted wounds. He had an opportunity to go to the middle, go to the center, reach out to independents, reach out to Americans, but he decided to become a severe conservative. After five years of running and three nights of a Republican convention, he decided he had to become a moderate.

Mitt Romney, these are self-inflicted wounds. Don't blame it on President Obama who is upbeat, optimistic -- he's very pragmatic, he has integrity and he ran a very good campaign given the nature of the opposition and all the negativity we've seen over the last four years.

BLITZER: All right. We've got to go. Ladies, very quickly, very quickly, Mary, just for the record, are you saying the president of the United States is a political narcissistic sociopath?

MATALIN: I'm saying that campaign was narcissistic and sociopath. It -- made a complete spring slaughter on Romney. This is all -- they documented, they're saying this, all they want to do is destroy Romney. That's sociopathic. All they want to do is divide and scare America. That's sociopathic. And it's narcissistic to care more about his re-election than the recovery and the jobs and the spirit and the security of America. Yes, I stand by that.

BRAZILE: Mary, Mary --

BLITZER: All right. Ladies --

BRAZILE: Mitt Romney ran the most negative campaign in Republican primary. I was at many of those debates.

BLITZER: All right.

BRAZILE: He was not kind and friendly.

BLITZER: Let's continue this conversation. We got to take a break because we have more breaking news developing right now getting new information on General David Petraeus' resignation today as head of the CIA after acknowledging an extramarital affair. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: We're getting new information right now on the sudden, very surprising, dare I say, shocking announcement today that the CIA director, the retired U.S. Army General David Petraeus, has resigned, citing an extramarital affair.

Our intelligence correspondent Suzanne Kelly is here. Fran Townsend, our national security contributor, is here as well.

What are you learning right now, Suzanne?

SUZANNE KELLY, CNN INTELLIGENCE CORRESPONDENT: Right, Wolf. Well, CNN can now confirm from a U.S. official that the FBI had a tip that David Petraeus was involved in an extramarital affair. And that's the way that they would have sort of started an investigation. The FBI would have been the ones to look into that.

The official told us that the FBI Counterintelligence Unit investigated this to see whether or not there was a potential security risk really, whether anyone could have taken this information and then blackmailed General Petraeus with it, which would have been a security risk.

The official said that there's no suggestion that the FBI was investigating Petraeus for any possible wrongdoing but more that they were looking at him for potential vulnerability.

BLITZER: They were looking to see if this affair which he has now acknowledged potentially could have resulted in classified information going to an inappropriate source, is that what you're saying?

KELLY: That's one possibility that the FBI looks at when they conduct investigations like this. Another would have been if somebody had information on him that they could have used to blackmail him. Look, if you don't do what we want you to do, we're going to take you public with this, we're going to ruin your career. That's how these things work, and that's what the FBI stepped in to investigate.

BLITZER: Fran, you know General Petraeus as well. You're on the advisory committee -- over the advisory board over at the CIA. What do you make of this, that the FBI had been tipped off and they actually launched an investigation into General Petraeus' extramarital affair?

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: The key to what Suzanne is saying here is that it's the counterintelligence unit. Counterintelligence units look at was this -- was the woman -- the party of the second part, in the extramarital affair, was she a foreign agent? Was she -- if she was an American, was she controlled by a foreign agency?

Was there some way that they were going to use this relationship to get information from him, sensitive classified information. And the way they would get it is just as Suzanne says to extort from him -- to threaten to expose him.

BLITZER: You know, our own Kyra Phillips from our sister network HLN is also getting some information.

You've been working your sources, Kyra, what are you learning?

KYRA PHILLIPS, HLN ANCHOR: Well, Wolf, just as in the past few minutes I spoke with very reliable sources close to Petraeus who say the woman who he was having an affair with, an extramarital affair, was not under his command while he was in the military. It was a woman not under his command also at the CIA.

I'm learning this from a very reliable source, very close to Petraeus, Wolf, that the woman he was having an affair with was not under his command while in uniform and she was not a member of the Armed Forces nor a CIA employee.

Wolf, my source also telling me Petraeus is extremely disappointed in himself for engaging in dishonorable behavior and that he, quote, "screwed up terribly." As for Holly Petraeus, his wife of 37 years, my source tells me the general is devastated, Wolf, that he hurt her. And that he feels she is, quote, "far better than he deserves."

Tough time obviously for the general, Wolf. Tough time for a man that I worked very closely with in the battlefield. And I have to admit, I am shocked that this happened.

BLITZER: And so --

PHILLIPS: This is not an individual that I ever thought would do this.

BLITZER: And so many people are shocked. And the point about someone who is not in the chain of command, someone not at the CIA, under the military's uniform code of military justice, that would be a crime if he were engaged in a relationship, a sexual relationship with someone who is junior, for example, in the ranks. So that's against the military law, if you will.

And so what you're learning right now is that there was the woman -- and we don't know who this woman was or is, we don't know who she is, that this woman was not in the military and not in the intelligence community.

PHILLIPS: That is correct. My sources very close to him said that this is a woman that was not under his command in the military when he was in uniform and that this woman that he had an affair with was not a member of the CIA.

BLITZER: Kyra Phillips with that information. Thanks, Kyra, for sharing it with our viewers.

Fran, what do you think?

TOWNSEND: Well, look, I think what -- you know now, once the FBI is involved in an investigation, even a limited one for counterintelligence purposes, they do the ordinary investigative things. They're going to look at phone records. They're going to look at text messages. They're going to look at e-mail. They're going to look at all sorts of things to either -- one, to identify the woman, and, two, to understand the nature of the relationship to determine -- for the sole purpose of determining whether or not there's a national security threat.

So you be sure there is law enforcement sources now out there who have this information that journalists will be chasing.

BLITZER: And we can only assume that this FBI investigation which was triggered a while ago continued for a long time.

KELLY: Well, you don't really know sometimes the way these things unfold how long the investigation has been going on. You know, sometimes when you're involved in relationships like this, they could take a bad turn. I mean, you have to wonder, too, you have to ask yourself about the timeline of this. How long did the affair last? How long was it going on? And why is he coming out now in saying that he's very sorry and that he regrets doing it?

Why didn't those feelings come a bit earlier? I mean there are a lot of -- you know, and the election, of course, being this week. I mean, there are a lot of very interesting questions that still need to be answered and some more timelines we should take a closer look at.

BLITZER: We're going to have more coming up at the top of the hour on this story.

Guys, thanks very much. Sad story indeed.

Patience is running thin in New York right now. There's still no power after the superstorm Sandy and various parts of New York and New Jersey. We're going to update you on what's going on.

(COMMERCIAL BREAK)

BLITZER: President Obama will head to New York to meet with victims of the superstorm Sandy.

Outrage, meanwhile, is boiling over with more than -- get this -- still 100,000 residents going almost two weeks without no power.

Our national correspondent Deborah Feyerick is in Queens, in New York City, for us. So what's the latest there, Deborah?

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, you know, Wolf, this is what we can tell you, here in the Rockaways, there are no lights. People are angry, they are frustrated, they can't understand why LIPA, which is a state owned power authority, why they can't get the lights turn on.

They're turning the light here on the Mount Carmel Baptist Church, they were serving warm meals here today. But a lot of the volunteers simply had to leave when sunset came because they've got to get out. And the trains are not running here, so they can't use the trains to get out, so they were taking whatever transportation, buses, a couple of people were able to drive but there are no lights here.

And that means, Wolf, that -- not only is there no heat, there are no washers and driers, there's no way to charge any cell phone to stay in touch with people. This area is effectively cut off, and the people are really feeling it. Take a listen.

(BEGIN VIDEO CLIP)

TONY SANTINO, HAMPSTED, NEW YORK, SENIOR COUNCILMAN: The most important thing is power.

Cuomo, send in the National Guard. We are fed up and we're not going to take it anymore. Thank you.

(END VIDEO CLIP)

FEYERICK: And Wolf, I want to show you, we've been seeing a caravan of ambulances coming in -- just basically using this road really for the last 10 minutes. And I asked somebody why all the ambulances, and they said that they're beginning to evacuate seniors because there is no power. And these folks did get out in time so now ambulances are coming in and they're to get them to places where they can be warm, where they can be taken cared of.

Remember, you've got no electricity means you have no oxygen tanks, you have no back-up systems. And so right now the people here really do feel like they are in a crisis, and they're asking for help, and they're asking for LIPA, that state-owned power authority, to do something to try to get the lights back on -- Wolf.

BLITZER: And gasoline, are they still rationing gas for your car?

FEYERICK: Yes, still rationing gas. You know, the refineries got hit, again, in the hard-hit areas where there's no electricity. Just can't work, just can't pay, can't use credit cards so they're instituting even-odd numbers. And -- people are just trying to get back on their feet. But it is really slow. And the folks are really, really feeling it out here -- Wolf.

BLITZER: My heart goes out to all of them, Deb, thanks very much.

Coming up right at the top of the house, we have more on the breaking news. General David Petraeus resigning as director of the Central Intelligence Agency after admitting an extramarital affair.

(COMMERCIAL BREAK)

BLITZER: This week's presidential election certainly giving the late- night comedians a lot to work with. Watch this.

(BEGIN VIDEO CLIP)

JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": Actually, hang on a second, I mean, just -- OK, yes, here we go. Roll the clip.

BLITZER: Voters in Washington state and Colorado approved ballot initiatives legalizing marijuana from recreational use.

(CHEERS AND APPLAUSE)

STEWART: I know my audience. The news brought mixed reaction, starting in the consumer/enthusiast community.

UNIDENTIFIED MALE: It means I'm going to smoke a lot of weed tonight. Whoo!

(LAUGHTER)

STEWART: Yes, and by the way, what would it mean if you had lost the referendum?

UNIDENTIFIED MALE: It means I'm going to smoke a lot of weed tonight. Whoo!

STEWART: And what would it mean if the Broncos beat the Panthers on Sunday?

UNIDENTIFIED MALE: It means I'm going to smoke a lot of weed tonight. Whoo!

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Just when we thought that the worst was over, we got hit again.

UNIDENTIFIED FEMALE: A new nor'easter is slamming New York and New Jersey.

UNIDENTIFIED FEMALE: A brutal nor'easter.

UNIDENTIFIED FEMALE: Nor'easter.

UNIDENTIFIED MALE: Nor'easter.

UNIDENTIFIED MALE: Nor'easter.

COLBERT: Yes, a nor'easter. A storm so powerful it can wipe out a region's supply of T's and H's. And folks --

(END VIDEO CLIP)