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Budget Cuts Looming; Daring Diamond Heist; Social Media & Obama's Message; Chinese Army Tied to Hacking Attempts; Any Hope of Budget Compromise?

Aired February 19, 2013 - 18:00   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: cops and alarm bells, how President Obama is ramping up fears about forced budget cuts.

A brazen heist. Robbers steal $50 million worth of diamonds in a very public place. The Blade Runner's defense. Is his explanation of his girlfriend's death believable?

A gunman's obsession -- new clues about a possible motive for the Newtown massacre.

And in control -- inside the White House campaign to shape media coverage of the president. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The president clearly wants all of us to be very, very worried about the budget axe that's about to fall. He's warning that a lot of people will lose their jobs if forced spending cuts are allowed to take effect 10 days from now. And he says many more Americans will suffer in some way.

Listen to these clips of his newest attempt to light a fire under Congress.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Meat cleaver approach, jeopardize military readiness, eviscerate education, energy, medical research. Emergency responders, degraded. Border Patrol agents, reduced. FBI agents, furloughed. Federal prosecutors, let criminals go. Airport security, cutbacks. Thousands of teachers, laid off. Parents, flu vaccinations, and cancer screenings. Threat of these cuts not well thought through, not smart, not fair, hurt our economy. This is not an abstraction. People will lose their jobs.

(END VIDEO CLIP)

BLITZER: That's a shortened version of what the president had to say.

Let's go in depth with our chief White House correspondent, Jessica Yellin, who is here.

This is a big issue right now. JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: It really is, Wolf. And it's just 10 days now until these forced budget cuts go into effect.

Top administration officials tell me, if that happens, the president believes the politics are on his side.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): With Congress out of town, President Obama took to the bully pulpit, warning about the effects of forced spending cuts that hit every part of government next Friday.

OBAMA: There is a smarter way to do this, to reduce our deficits without harming our economy.

YELLIN: He's talking about more than $1 trillion in painful cuts that can still be avoided if Congress reaches agreement on deficit reduction. The package of cuts came from the 2011 debt ceiling deal, and it was never meant to go into effect. During the presidential campaign, Mr. Obama said as much.

OBAMA: It will not happen.

YELLIN: But Congress has not been table to reach a compromise that would replace these cuts with smarter deficit reduction. So the sword is about to fall. Among the immediate effects, funding cuts for 70,000 kids on Head Start, possible five-hour waits to get through security at the airport, deployment of one aircraft carrier has been postponed, and the Navy has suspended overhaul of another. That's not to mention temporary layoffs, including first-responders, like the ones behind the president.

OBAMA: Now, if Congress allowed this meat cleaver approach to take place, it will jeopardize our military readiness, it will eviscerate Job-creating investment.

YELLIN: In a statement, Senator Mitch McConnell slammed the president, saying, "Today's event at the White House proves, once again, that more than three months after the November election, President Obama still prefers campaign events to commonsense bipartisan action."

Still, no compromise. The crux of the dispute, Democrats want revenue. Republicans want spending cuts, including more changes to entitlement programs like Social Security. One prominent budget expert said the president's legacy rests on finding a solution.

ALAN SIMPSON, FORMER CO-CHAIRMAN, NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM: If he can't cut the mustard with solvency of Social Security, under honest appraisals of the trustees, he will have a failed presidency.

(END VIDEOTAPE)

YELLIN: The idea for the sequester came from the White House, but 174 House Republicans voted for it. So everyone is in the same boat on this one. And, Wolf, Kate, I will tell you, most people I talked to in Washington expect next Friday's deadline to come and go without a deal, so we should all brace for these cuts to come into effect.

BLITZER: It doesn't look like there's heavy-duty negotiations going on between these various sides. So we will see what happens. Thanks very much for that, Jessica Yellin.

(CROSSTALK)

BLITZER: By the way, later, I will be discussing all of this with a Republican senator, Tea Party favorite Rand Paul, the looming budget cuts. He's our guest. I'm going to be filling in for Anderson Cooper on "A.C. 360" tonight, 8:00 p.m. Eastern.

Kate Bolduan is here, as usual, with the first look at what's going on in South Africa right now with the Blade Runner's case. This is a huge development today.

KATE BOLDUAN, CNN ANCHOR: A big day in the murder case against Oscar Pistorius, Wolf. The Olympic track star says a sense of terror rushed over him and minutes later, his girlfriend was dead. We now have a detailed account from Pistorius himself, his version, of what happened to Reeva Steenkamp on Valentine's Day.

CNN's Robyn Curnow is following this really sensational case in South Africa -- Robyn.

ROBYN CURNOW, CNN CORRESPONDENT: Wolf and Kate, this is the first time we're hearing from Oscar Pistorius, his version of events, his description of what happened on that tragic morning when Reeva Steenkamp was shot dead.

Take a look at this.

(BEGIN VIDEOTAPE)

CURNOW (voice-over): As Oscar Pistorius arrived for his bail hearing, his brother and family joined him to give him support.

Journalists jostled to get inside the small courtroom and officials seemed unable to cope with the huge media interest.

And outside, a group of protesters are calling for an end to violence against women. But inside the court, the state argued and persuaded the magistrate that Pistorius should be charged with premeditated murder.

And with our iPhone and snatches of footage taken after the magistrate had left the court, we can show you how startled, scared, and lonely Oscar Pistorius looked. He cried or sobbed throughout the bail hearing, despite the presence of his family.

Pistorius looked so different from this athlete who broke stereotypes to run in the Olympics, despite being a double amputee. He continued, though, to breakdown when his legal team readout an affidavit.

This was a shortened version of Pistorius' version of the story: "I woke up went to the balcony to get the fan and close the sliding doors. I heard a noise in the bathroom. I felt a sense of terror rushing over me. There were no burglar bars across the bathroom window and I knew that contractors had left ladders outside. I did not have my prosthetic legs on. I grabbed my 9 millimeter pistol from underneath my bed.

I screamed to get out of my house and for Reeva to phone the police. It was pitch dark in the bedroom and I thought Reeva was in the bed. I fired shots at the toilet door and shouted to Reeva to phone the police. She did not respond. When I reached the bed, I realized Reeva was not in the bed.

That's when it dawned on me that it could have been Reeva who was in the toilet. I found the key and opened the bathroom door. Reeva was slumped over but alive."

Later in the affidavit, Pistorius says, "She died in my arms."

REEVA STEENKAMP, MODEL: I love you very, very much.

CURNOW: Reeva's last moments will no doubt be further examined on Wednesday during the second day of the bail hearing, as the state will try to reinforce why they don't believe his version of events and why Oscar Pistorius should be kept in jail until a trial.

(END VIDEOTAPE)

CURNOW: And while Oscar Pistorius was facing that magistrate, don't forget that Reeva Steenkamp was being laid to rest. She was cremated and there was a very emotional memorial service for her in her hometown of Port Elizabeth. People, loved ones, people who knew her, calling her an angel -- Wolf, Kate, back to you.

BOLDUAN: Robyn Curnow, thank you. Such a sad story.

And to another sad story. Now to the unsolved mystery of the Newtown massacre. What was Adam Lanza's motive? It has been over two months, if you can believe it, since he opened fire inside Sandy Hook Elementary School, becoming one of the most notorious mass killers in the world. There's new evidence suggesting that's exactly what he wanted.

Here's CNN national correspondent Susan Candiotti.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Kate, many wonder what was going on in Adam Lanza's mind. What drove him to kill so many innocent children and teachers, and even his own mother?

(BEGIN VIDEOTAPE)

CANDIOTTI (voice-over): Lanza was, quoting here, "obsessed with mass murders," a source with knowledge of the investigation tells CNN. And the source adds, there's alleged evidence to back it up. One of those mass murderers, according to CBS and "The Hartford Courant", is Norwegian mass murderer Anders Breivik who in 2011 killed 77 people, mainly teenagers, in Oslo and nearby island. Unlike Lanza, Breivik was caught and convicted. One theory is that Lanza idolized Breivik and wanted, as sick as it sounds, to outdo his body count.

Lanza reportedly may have chosen Sandy Hook Elementary because his targets, children and teachers, were in a confined area.

Apparently, there may be some evidence to, in part, back up a possible obsession with Breivik."The Hartford Courant" says investigators found several news stories about the Norway murders in the Lanza bedroom at the home he shared with his mother. We also know Lanza was into violent video games and he played them in a game room at his house.

Federal agents have also said Lanza and his mother went to several gun ranges. Authorities have said she kept her guns in a lock box but some of those guns were used to kill her and the 26 children and teachers at Sandy Hook Elementary.

(END VIDEOTAPE)

CANDIOTTI: "The Hartford Courant" also says Connecticut State Police Went to Washington last week to share their theories with federal authorities. The FBI is still trying to retrieve information from Lanza's hard drive that he smashed into a million pieces before launching his massacre. Will we ever truly know what was going on in Adam Lanza's mind?

Police say wait for their final investigative report in a few months -- Kate.

BOLDUAN: Susan Candiotti, thanks so much.

It's amazing to think it's already been two months since that massacre happened. It still feels like it was yesterday.

BLITZER: And I suspect she's right. We probably will never know completely what motivated...

(CROSSTALK)

BOLDUAN: How can you wrap your mind around that, you know?

BLITZER: All right. Thank you.

It took eight thieves and only a few minutes to steal a treasure- trove of diamonds, get this, $50 million worth of diamonds. Up next, the true crime story that sounds like a Hollywood-style heist.

(COMMERCIAL BREAK)

BLITZER: Massive hunt under way right now for jewel thieves behind the biggest diamond heist in recent memory. BOLDUAN: It's an amazing story and police say these guys were professionals and they were bold. This wasn't a robbery in some dark back room. It was on an airport tarmac and they got away with some $50 million worth of jewels.

Our senior international correspondent, Dan Rivers, is in Brussels.

Dan, what are you learning this evening?

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it sounds like "Ocean's Eleven," but this is the Brussels eight. The stones are gone, the men have disappeared, and the authorities appear to have not a single clue about how to recover them.

(BEGIN VIDEOTAPE)

RIVERS (voice-over): It required chutzpah, inside knowledge, and some very fast driving, one of the biggest gem heists ever and the question is, who did it? Who would dare to steal $50 million worth of diamonds from a supposedly super secure European airport?

(on camera): It all sounds like the plot of a Hollywood blockbuster, a rather unbelievable Hollywood blockbuster. The sheer audacity of this heist is breathtaking. They simply drove into Brussels International Airport, flashed their guns, and drove off with tens of millions of dollars worth of diamonds, and all without a shot being fired.

(voice-over): At 7:47 local time Monday night, the gang cut through a perimeter fence near a building site and drove parallel to the busy runway in two cars. They knew where to go, stopping a Swiss airliner, holding three people at gunpoint, stealing bags of uncut diamonds that had been unloaded from a Brink's security truck.

JAN VAN DER CRUYSSE, BRUSSELS AIRPORT: They have returned to the car and sped off again, left the airport perimeter, exactly 11 minutes after they have entered. The operation at the airport has taken exactly three minutes. So this was a very quick hit and run, very well organized.

RIVERS: The diamonds were being transported from Antwerp to Zurich. Antwerp is the world's diamond capital -- $200 million of the stones are transported through this airport each day. Traders here say they fear damage to their status as a world hub could be significant amid rising concerns over security. But experts say the mastermind of this heist will be tough to uncover.

HARRY LEVY, LONDON DIAMOND BOURSE: I imagine whoever commissioned the heist would keep as far a distance as he can, as far as identification is concerned, between himself and the people who actually carried out the robbery.

RIVERS: The thieves were reportedly dressed in uniforms to make them look official. With Europe's open borders they could have driven to any one of two dozen European countries by now, with the loot that's extremely difficult to trace.

(END VIDEOTAPE)

RIVERS: And this isn't the first time that Brussels' airport has been targeted. Four separate attacks in the last decade, all targeting cash and diamonds. Some of them got away with it, some of them didn't. They certainly got away with this latest one.

BOLDUAN: And, Dan, the ease with which it seems they pulled this operation off and got it done in, what, 11 minutes, this clearly seems like they had inside help, if it wasn't entirely an inside job. What are authorities saying about that question?

RIVERS: They're pretty tight-lipped here, but, yes, of course, they must have had inside knowledge here. They didn't dither. They made a beeline for that plane. They didn't take any other bags. They only took the two bags with the diamonds in it and they were out in 11 minutes. They knew what they were doing.

They had submachine guns with laser sights on them, almost a military-style operation. They clearly had some knowledge that these diamonds were going to be there. Clearly, there are going to be some really difficult questions for the head of security at this airport.

BOLDUAN: Yes, absolutely. Dan Rivers in Brussels for us. Thanks so much, Dan. Of course, a big question is where do those diamonds go now?

Still ahead, a breakfast cereal is possibly contaminated with glass fragments. We have details of the recall under way right now.

Plus, controlling the president's message. We go inside the White House media machine, next.

(COMMERCIAL BREAK)

(NEWS BREAK)

BLITZER: One news organization is likening President Obama to a puppet master. We're going to talk about White House efforts to control the mainstream news media's coverage of the president.

Also ahead, Tiger Woods breaks his silence about a golf outing with the president that was kept under wraps.

(COMMERCIAL BREAK)

BLITZER: We're learning more about the way the White House is trying to create an Obama brand, carefully controlling the media's coverage of the president.

We certainly saw it today during his remarks about forced budget cuts, and, as usual, everything was highly choreographed, including the police officers in the background, to drive home his message. He gave a statement and left. No reporter questions were allowed.

And that's just one slice of a very sophisticated 24/7 operation.

And joining us now, Jim VandeHei, the executive editor of Politico, and Mike Allen, the chief White House correspondent for Politico.

Guys, thanks very much for coming in.

The article, explosive, "Obama: The Puppet Master," puppet master of the media. What is he doing differently, Jim, than other presidents used to do?

JIM VANDEHEI, EXECUTIVE EDITOR, POLITICO: I think what he's done is he's taken the old techniques and put them on steroids.

He's frozen out reporters from "The New York Times," "Wall Street Journal," Politico, "Washington Post." Places that used to get presidential interviews have gone years without presidential interviews. He's also greatly limited the number of impromptu appearances he has, where he can get questioned by anybody in the press, particularly after they do these staged photo-op events.

Bush did 350 of these where he then took questions, Obama 100 in the exact same time period. So there's just a lot less of it. And then there's this new dimension of just creating their own content and going around the media, creating their own photos, their own video, their own blog posts, and then shooting them through Twitter or Facebook to get the government's message out, as opposed to opening the White House up to scrutiny.

BLITZER: But everybody pays attention to all those tweets, those photos, all the stuff that the White House is putting out on social media. The mainstream media rushes to put it out there, to give it some publicity.

MIKE ALLEN, CHIEF POLITICAL CORRESPONDENT, POLITICO: That's right. One of the photographers who's been frustrated by the fact that something in the past, he would have been called in cover instead now goes out as a White House photo.

He said, I don't blame the White House for doing this, because people use them. But what we heard again and again...

BLITZER: Should we not be using those photos, those official White House photos that come out of the president doing something?

ALLEN: Well, it's a different question. And the news photographers say that people used to be much less likely to use them.

I remember when that photo came out of the president taking a dip in the Gulf after the oil spill, AP wouldn't run it. There used to be much more resistance to it, but both because of the new technology that makes it easier and because so many news organizations are cash- strapped now, they're much more likely to.

And what we heard again and again from reporters in the room is, yes, this president does a lot of interviews. We found out he has done three times as many interviews as George W. Bush does. But it's not with the people who cover him day to day, like you used to when you were there in the front row.

Ann Compton of ABC, who has covered every president going back to Gerald Ford, she hasn't been in the Oval Office in six months, which she says is the longest time in 39 years on the beat that she hasn't...

(CROSSTALK)

BLITZER: You mean when she went in there for a photo opportunity, where she could ask the president a quick question. Jay Carney, the White House press secretary, he responded to your article today. Among other things, he said this.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Having been where you are, I understand, and I doubt that there's ever been a White House press corps that's ever been wholly satisfied with the level of access that they have been afforded. But we work very closely with all of you to try to provide access to the president.

(END VIDEO CLIP)

BLITZER: When I was a White House correspondent, seven years during the Clinton administration, we used to complain all the time about access. So the criticism that we're hearing right now is, to a certain degree, nothing new.

VANDEHEI: Right. There's no doubt we're a whiny, needy bunch in the White House when I covered it. You're always complaining and you always want more access.

I think the thing people need to be worried about is you think, every new president follows what the previous administration did. So they're going to continue to use more and more controls. And technology has essentially tipped the power of the balance towards the government against the media.

So you might love Barack Obama and you might want to look at those great pictures of him looking very pensive and in control now, and you might want the content that the government's producing and wants you to see and to think about when you're digesting stories.

But what about when you have a president that you don't trust or actually might be up to nefarious activities? The more that there's not a press that can offer true scrutiny, ask tough questions, be in front of the question, ask about, "Why are you doing what you're doing on immigration? Why aren't we paying more attention to debt? What happened in Libya? Explain more about the drones program." That stuff matters.

So that the fringes might want to bellyache all the time about the mainstream press, but somebody has to be the watchdog, and that has always been the greatest utility, I think, of the mainstream media.

BLITZER: Was your article, in part, inspired by the failure of the White House to allow us to get a picture of the president playing golf with one of the greatest golfers in the history of the game, Tiger Woods?

ALLEN: Not about the golf. We were doing this story before that, talked to White House officials about it before that. And what we heard again and again from reporters in the room was that people trying to cover the day-to-day development of policy, gun control, immigration, that they worked knowing who the president was meeting with, weren't getting readouts, weren't getting the information that reporters, including yourself, were used to be -- used to getting.

Instead, they get "West Wing Week," which is the White House's podcast, which takes zippy music, snappy graphics, and behind-the- scenes footage that in the past might have been available to networks, but instead now is only available to White House photographers, packages that up, and they're producing their own TV show.

VANDEHEI: And the Tiger Woods flap is kind of a distraction. The president is entitled to go and golf and do whatever he's going to do on the weekend. Sure, there should be more access.

I think by looking at one trivial matter, I do think it distorts a much broader debate. And that's that every single person that's covering this White House is sort of seeing the exact same thing. It's just the greater use of all these tools for being able to manipulate coverage of the White House. And then just going around and circumventing the mainstream media.

And it's happening at a time where the government increasingly has all of these tools, not just social media, to go around the media...

BLITZER: But if you listen to the right-wing media, they say the mainstream media, Politico, CNN, "The New York Times," whatever, that we're in, basically, with the White House and we allow them to manipulate us.

ALLEN: Well, and what we did with this behind-the-curtain column was make it clear that's not what's going on. Mike McCurry, press secretary under Clinton, interestingly enough, told us that he felt it was his obligation to represent the press.

He would say that when he would talk to you guys in the gaggle and you would talk about what you needed for the day, he would go into the senior staff meeting and talk about what the press needed. And he said that he talks to White House reporters now, and they feel like that there's not someone there who feels like they need to cooperate, which makes it harder to do our job.

BLITZER: What's been the reaction from the White House to your article?

VANDEHEI: No reaction. BLITZER: No reaction? No direct phone calls?

VANDEHEI: No direct phone calls.

You know what the interesting reaction is on the right. Rush Limbaugh and others have torn us to pieces on their shows today, saying, "This is the media. They're just using this as an excuse for the fact that they've failed to provide aggressive coverage of Barack Obama," as opposed to actually looking at the story, which I think most people would interpret as a fair, if not critical, look at the control mechanisms that this White House uses on the media.

ALLEN: And what the White House says is yes, the mainstream media is losing power, but that doesn't necessarily alter that the White House has been disaggregated, and all kinds of outlets that didn't exist before, don't have journalistic standards, don't necessarily have an obligation to be fair. So they say that's one of the reasons they have to crank up their machine.

BLITZER: Guys, thanks very much for coming in. Jim Vandehei, Mike Allen, appreciate it.

ALLEN: Thanks for having us in THE SITUATION ROOM.

VANDEHEI: Appreciate it.

(END VIDEOTAPE)

BLITZER: Tiger Woods, by the way, is now talking about his golf outing with the president last weekend, the one we didn't get to see, because the White House would not allow any photos. No journalists were allowed to cover that event. Here's what Tiger Woods told the Golf Channel.

(BEGIN VIDEO CLIP)

TIGER WOODS, GOLFER: Playing with Mr. President was pretty cool. He's just a wonderful person to be around, and we won.

(END VIDEO CLIP)

BLITZER: A bit later, Woods was asked how he and the president made their golf date.

(BEGIN VIDEO CLIP)

WOODS: Yes, he calls up and says, "Hey, Tiger, do you want to play?"

UNIDENTIFIED FEMALE: He does not.

WOODS: OK. No, it -- obviously, there is a process that's involved. And I was invited to play. And -- and it was an invitation that certainly you don't turn down, and especially being he's an avid golfer and so am I. So we went out there, and we had just a great round of golf with Ron and Jim, and it was -- it was a good day. (END VIDEO CLIP)

BLITZER: We'll see if the game -- the president's game has really improved as a result of those lessons he got over the weekend.

Other news we're following, including about a secret group of hackers, reportedly based out of one building in China and going after big U.S. corporations, government entities. Wait until you hear who's behind it. That's coming up.

(COMMERCIAL BREAK)

BLITZER: One of the world's most powerful militaries reportedly has a secret unit of hackers.

BOLDUAN: The Chinese military, now army, now is being tied to a massive cyber spying campaign, targeting big American corporations, oil pipelines, and power grids. CNN's Brian Todd is here.

Brian, these are really frightening details.

BRIAN TODD, CNN CORRESPONDENT: They are frightening details, Kate and Wolf. And this report traces the hacking of a very single, very secretive unit of the Chinese military over the course of seven years.

The report says that unit's hacked into American companies, stolen content, and even threatened utilities, and it even pinpoints the building where much of it was done.

(BEGIN VIDEOTAPE)

TODD (voice-over): It's a dreary-looking 12-story office building in Shanghai, but according to a new report, it houses part of a shadowy Chinese military unit, responsible for thousands of hacks into American businesses and government agencies.

The report from the cyber security firm Mandiant says the group goes by discreet code names like Unit 61398, whose nicknamed the Comment Crew and is a secret division of the Chinese military, sanctioned at the top levels of the government.

(on camera): What are they stealing?

KEVIN MANDIA, CEO, MANDIANT: That's a great question. And it actually sort of depends on industry, but at the end of the day, it's hard to eliminate anything. It's Word documents, PowerPoint documents, e-mail, PDF documents, Xcel spread sheets.

TODD (voice-over): It gets more ominous. Mandiant CEO Kevin Mandia says Chinese hackers in general -- he wouldn't say this specific unit -- have targeted vital American services. We got more specific information.

(on camera): Cyber security researchers say that Chinese military unit also trains its attacks on infrastructure in North America. Electrical grids and switchers like this one, oil and gas facilities, water treatment plants.

One prominent cyber security researcher told us that last September, a company that designed software giving oil and gas companies and power grid operators access to things like valves and switches was successfully hacked by that military unit.

(voice-over): That firm, Telvent, says it's working with its customers and law enforcement.

Mandiant says even though information may have been hacked on utilities, none of them have been actually disabled. Mandiant says the typical hack from this unit starts with so-called spearfishing, an e-mail sent to a company official in the U.S., masquerading as coming from someone familiar. The victim opens an attachment or a ZIP file, and their computer is infected.

Mandiant says his firm's tracked this military unit's hacking for seven years. How? He says Mandiant would monitor the infected computers of victims who hired his firm and go back click by click, one key stroke at a time.

MANDIA: We saw somebody log into the victim network here in the United States and then start checking their Gmail account. Well, it's in plain view. We're catching the traffic. Law enforcement would call this a wiretap. We just call it full content monitoring.

TODD: The Chinese government has blacked out some of CNN's reporting on this story, even as it emphatically denies sanctioning hacking.

HONG LEI, CHINESE FOREIGN MINISTRY SPOKESMAN (through translator): Making baseless accusations is irresponsible and unprofessional, and it doesn't help solving relevant issues. China resolutely opposes to any form of hacking activities.

(END VIDEOTAPE)

TODD: The White House, Pentagon, and State Department are all aware of the Mandiant report. The White House says it's taking steps to strengthen computer networks, protect infrastructure, and to confront senior Chinese officials about hacking.

Senate Intelligence Committee Chair Dianne Feinstein says she has raised this with Chinese official herself, and she says they're in denial -- Kate and Wolf.

BOLDUAN: And this firm, Mandiant, even uncovered, down to like the specific person, some of the folks involved with this.

TODD: Mandiant says through its own tracking, back to the origins of these hacks, it's learned the handles of some of these hackers that go by monikers like Ugly Gorilla and Dota (ph). Mandiant says that they acknowledge that when they -- now that the Chinese are onto them and know that they're onto them, they'll be harder to track now. But they're going to keep at them.

BOLDUAN: Scary stuff. Brian Todd, thank you.

BLITZER: Thank you.

BLITZER: All right. This is just coming into THE SITUATION ROOM. CNN's Elise Labott has confirmed that the secretary of state, John Kerry, is expected to meet with Syrian opposition leaders next week in Rome, as part of his first official overseas trip as America's top diplomat.

Kerry said last week that he has some ideas on how to change the current situation in Syria. He plans to address those ideas with European and Middle Eastern leaders while on his trip, which starts on Sunday. They released the itinerary earlier today.

Among the places he's visiting, the United Kingdom, Germany, France, Italy, Turkey, Egypt, Saudi Arabia, the United Arab Emirates, and Qatar.

President Obama, meanwhile, is putting new heat on Republicans to prevent those forced budget cuts from taking effect. Kate will ask a top House Republican if there's room for compromise over the next ten days.

(COMMERCIAL BREAK)

BOLDUAN: We heard President Obama describe the impact of forced budget cuts in some pretty extreme terms today. With just ten days left until they go into effect, is there any hope for any compromise with Republicans?

We're joined by Congresswoman Cathy McMorris Rodgers now, the chair of the House Republican Conference, a key member of House Republican leadership.

Congresswoman, thanks for taking the time.

REP. CATHY MCMORRIS RODGERS (R-WA), CHAIR, HOUSE REPUBLICAN CONFERENCE: Thank you, Kate. Good to be with you.

BOLDUAN: Of course. So the president, I'm sure you know, had some pretty tough words for you and your fellow Republicans today, in terms of these massive spending cuts that are heading our direction in ten days. Listen here.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Republicans in Congress face a simple choice. Are they willing to compromise to protect vital investments in education and health care and national security, and all the jobs that depend on them? Or would they rather put hundreds of thousands of jobs and our entire economy at risk, just to protect a few special-interest tax loopholes that benefit only the wealthiest Americans and biggest corporations? That's the choice.

(END VIDEO CLIP) BOLDUAN: So President Obama says there -- this is a choice, and that is your choice. I mean, we've been down this road so many times before. It's deja vu having this conversation with you, and I'm sure you feel the same way. Is there room for compromise? Will Republicans compromise?

RODGERS: Well, the Republicans very much want to work with the president, want to work with the Senate Democrats in setting priorities for spending, within the federal government. But we need the president, we need the Democrats to recognize that Washington, D.C., has a spending problem.

And President Obama, today he's calling for raising taxes. Before we talk about raising taxes on hard-working Americans, we need to address the wasteful spending that we continue to -- continue to see within the federal government. This year alone, we spent $2.2 billion on free cell phones in 2013. And the list goes on and on.

And yet the Democrats are not recognizing we have a spending problem or the impact of out of control spending on our economy.

BOLDUAN: And I know Republicans and I saw a statement from Speaker Boehner today, saying that raising taxes is not on the table. The revenue question has -- the revenue debate has been closed.

So can you say at this point with 100 percent certainty that Republicans will not go along with any tax increases, even on the wealthiest Americans, even on big corporations?

RODGERS: We need to address the spending side of this equation. And that is -- that's where the Republicans believe that -- that we can find the common ground. The sequester, these across-the-board cuts, drastic cuts that disproportionately impact the military and our defense, they were President Obama's idea, and they came into effect because we didn't agree on spending cuts. And what -- and so as we reach, as we reach out, first, we need...

BOLDUAN: But also, Congresswoman, these also went into effect -- this might have been the president's idea, but you well know these would not have gone into effect unless Republicans, including yourself, would not have overwhelmingly agreed to it back in the summer of 2011.

RODGERS: We agreed to find the spending reductions, $1.2 trillion in cuts. That is what we agreed to. It was President Obama who proposed the sequester if we didn't find that agreement to cut the spending.

And the Republicans twice now, we've put forward proposals to replace these cuts with more reasonable approaches. And we passed a proposal six weeks ago. We passed a proposal six months ago, and we need the Democrats to put their proposal on the table before March 1.

BOLDUAN: I kind of get the sense that everyone kind of seems resigned to the fact that ten days out, a deal's not going to be struck. I mean, the brinksmanship seems to be at an all-time high and the partisan divide seems to be wider than ever. I mean, we're ten days out. Where is the sense of urgency? The House is not -- is not in this week. Are we going to be going right up again to another self-imposed deadline, Congresswoman?

RODGERS: Well, I think it's very unfortunate, and we've known for some time that March 1 is coming, and that's why the House did take action. The House showed what our proposal was going to be, and we passed it out of the House. We passed -- we passed it twice now.

And what we need is for the Democrats to acknowledge that there's a spending problem. But instead, we have President Obama calling for raising taxes. We have Nancy Pelosi, who was saying it's not a spending problem, it's a deficit problem. Well, you get deficits by spending too much. Steny Hoyer was saying it's a pay-for problem.

The Democrats refuse to acknowledge that Washington has a spending problem. We're on the road to Greece and Europe if we do not address this spending, and it is dragging our economy down. It is costing us jobs right now.

And until we acknowledge there's a spending problem, start making the tough decisions, setting priorities, our economy's not going to grow. So that's why it is so important that we -- we have to agree first of all that we're going to reduce the spending, start living within our means.

BOLDUAN: I think you would agree this is also a result of both Congress and the White House kicking the can down the road one too many times.

Congresswoman Cathy McMorris Rodgers, we have to leave it there today. But thank you so much. We're counting you on, ten days out.

RODGERS: OK.

BLITZER: Vice President Joe Biden became pretty animated during a town hall on guns today. Listen to how he answered a question about the proposed restrictions on some weapons and some high-capacity magazines.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: If you want to protect yourself, get a double-barrel shotgun, have the shells, a 12- gauge shotgun, and I promise you, as I told my wife -- we live in an area that's wooded and somewhat secluded. I said, "Jill, if there's ever a problem, just walk out on the balcony here, walk out, put that double-barrel shotgun and fire two blasts outside the house." I promise you, whose ever coming in is not going -- you don't need an AR-15. It's harder to aim, it's harder to use, and in fact, you don't need 30 rounds to protect yourself. Buy a shotgun.

(END VIDEO CLIP)

BLITZER: As for objections that gun restrictions violate the Constitution, Biden says it's OK for the government to restrict some weapons. Otherwise, people could go out there, buy their own military weapons, even tanks.

When we come back, our Jeanne Moos introduces us to a horse with a special talent. And she can open just about anything. You've got to see.

(COMMERCIAL BREAK)

BLITZER: A horse in Michigan isn't the fastest, strongest or youngest on the farm.

BOLDUAN: That's mean to say. But as CNN's Jeanne Moos shows us, she has a very special talent.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): This horse doesn't just let herself out of the barn. She opens doors for all the other horses. Except her mother. More on those mother/daughter issues later. But first, meet Houdini horse.

SANDY BONEM, HORSE OWNER: Her motivation is really just food.

MOOS: Her real name is Mariska, a 9-year-old living at Misty Meadows Farm in Michigan, where her skill at opening everything from coolers to gates prompted owner Sandy Bonem to post a compilation of her greatest escape moves on YouTube.

As someone commented, "Just goes to show how far one trick can take a pony."

(on camera): Her owner says Mariska was always good with her mouth. For instance, when she was a baby...

BONEM: She would grab onto my zipper tabs, and she would zipper our coats up and down, up and down.

MOOS (voice-over): But now she's more interested in letting herself into the grain room for a snack. They had to put a chain on the door. Much as the owner of Piggy the dog had to put a lock on the fridge because Piggy was always managing to open it.

UNIDENTIFIED FEMALE: Then I stick it through the hole, and then I screw this down.

MOOS: The owners of Mariska have likewise had to modify all of their latches.

(on camera): Mariska never, ever gives up.

(voice-over): But when her video went viral, everyone wondered why she just walked right by her mother's stall without opening it, yet opened the stalls of all the other horses.

BONEM: That was her mother in there. Her mother is the boss. She's very bossy. MOOS (on camera): OK. Maybe there is one other famous horse that's even better with his mouth.

ALLAN LANE, VOICE OF MR. ED: Hello. I'm Mr. Ed.

MOOS (voice-over): Mr. Ed can even open a mailbox. As for Houdini horse...

BONEM: Yes, someone said she should be Mrs. Ed.

(MUSIC: "A horse is a horse, of course, of course...")

MOOS: ... unless it's a lock-picking horse.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BOLDUAN: I see a reality show coming.

I used -- I remember I used to try to convince my dogs growing up to open the door themselves so they could let themselves out. Was not successful.

BLITZER: Not that smart.

BOLDUAN: No. My poor dogs.

BLITZER: My beautiful dog Dolly could do it in Buffalo.

BOLDUAN: Well, thank you. Of course you had to show me up.

BLITZER: Very smart, beautiful dog. Miss Dolly.

I'll be back, filling in for Anderson Cooper in an hour on "AC 360." Don't forget. In the meantime, you can tweet me, @WolfBlitzer. You can tweet Kate, @KateBolduan.

BOLDUAN: Yes, you can.

BLITZER: You can tweet the show, @CNNSitRoom.

That's it for us. Thanks very much for watching. "ERIN BURNETT OUTFRONT" starts right now.