Bernard Madoff Guilty Plea; President Obama Takes on His Party; 'Terrorists to the Bone'
WOLF BLITZER, CNN ANCHOR: Happening now, prisoners accused in the 9/11 attacks declare they're terrorists to the bone. They're mocking the U.S. and calling war crimes charges badges of honor. President Obama takes on some of his party's most powerful supporters by offering rewards to the best teachers. The worst ones, he says, should be fired. This hour, his plan to stop the decline of America's schools. And war games triggering real threats of war. North Korean troops right now on alert, accusing the U.S. of planning an invasion. I'm Wolf Blitzer. You're in</s>THE SITUATION ROOM. ANNOUNCER: This is CNN breaking news.</s>BLITZER: But first, the breaking news we're following right now, a plea deal for the alleged swindler Bernard Madoff, accused of one of Wall Street's biggest frauds, if not the biggest fraud ever. This is Bernard Madoff as he left the courthouse today. We're now told by his lawyer, who told the judge that his client will plead guilty later this week, probably on Thursday -- Thursday -- to 11 counts, including money laundering, perjury and securities, mail and wire fraud. All of this -- all of this could result in a prison term of up to 150 years in prison. He's 70 years old right now. CNN's Allan Chernoff is on the story for us. All right, Allan. Tell us what's going on. Why has he decided to go ahead and plead guilty?</s>ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Wolf, what's happening here is that Bernard Madoff has decided on his own -- on his own he has decided that he is going to plead guilty to those 11 criminal counts that carry a maximum term of 150 years in prison. The government is emphasizing this is not a plea bargain, not a deal, not a quid pro quo with the government. Often, that's what you see, but that's not happening over here. A hundred fifty years the maximum term, 11 counts. The plea expected on Thursday -- Wolf.</s>BLITZER: So if it's not an agreement, a plea agreement, he is just going to plead guilty, does that mean he doesn't necessarily have to cooperate with the prosecutors? And as a plea agreement, as you know, Allan, part of the plea agreement, you get a reduced sentence. In exchange, you have to tell all, and if the prosecutors determine you are lying, then that plea agreement is off. If there's no plea agreement now, can he remain silent, in effect, as far as his wife or sons or others who may or may not have been involved in this scheme?</s>CHERNOFF: Wolf, an excellent point that you bring up. Precisely, the government clearly would like to get some cooperation from Mr. Madoff. He has claimed that he pulled all of this off by his own, this alleged $50 billion fraud. That estimate his own estimate, his own number. Very few people -- no prosecutors believe that at all. They've been investigating. They believe that many people were involved. They'd like to have the information from Mr. Madoff. We don't know if they've gotten anything out of him. But as you point out, it's Mr. Madoff who here has made the decision, and the judge just a few minutes ago wanted to be sure that Mr. Madoff was aware that -- of exactly what he was doing, and aware also that his attorney had no conflicts of interest -- Wolf.</s>BLITZER: All right. We're going to get more on this story from you and our other reporters and analysts. Allan, thanks very much. The Dow Jones Industrials, by the way, take a look at this, up 379 points right now. They are still doing some final tabulation. It could change, but it's almost 400 points. A huge day on Wall Street after several days of negative activity. A big day on Wall Street. We're going to have more on this part of the story coming up as well. What is going on that triggered this uptick today? We'll explain that. That's coming up. Meanwhile, it's a carrot for America's teachers and a poke in the eye for some powerful labor unions. President Obama today embraced the idea of paying educators based on how well they perform. And he acknowledged it's a proposal that doesn't often sit well within his own party. Let's go to our White House Correspondent Dan Lothian. Dan, the president laid out his vision for education reform, and he is clearly willing to take on some entrenched elements in the Democratic Party like the teacher unions.</s>DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. And the reason is because he believes that the U.S. is falling way behind other countries. So he wants to give education a boost, he says, from cradle all the way through college and into careers. Now, he rolled out this overhaul for the education system here in this country, but the one thing that was getting a lot of attention today is his push for teacher merit pay.</s>LOTHIAN (voice-over): President Obama is raising the bar for teachers, but he also wants to raise their pay. There are strings attached.</s>BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Good teachers will be rewarded with more money for improved student achievement and asked to accept more responsibilities for lifting up their schools.</s>LOTHIAN: It's a controversial plan that, when tested on the campaign trail before members of the National Education Association, got a smattering of boos.</s>OBAMA: Find news way to increase teacher pay that is developed with teachers, not imposed on teachers.</s>LOTHIAN: Mr. Obama knows there's resistance. He acknowledged the friendly fire as he unveiled his education plan before the U.S. Hispanic Chamber of Commerce.</s>OBAMA: Too many supporters of my party have resisted the idea of rewarding excellence in teaching with extra pay, even though we know it can make a difference in the classroom.</s>LOTHIAN: Those supporters the president is referring to are union members, the teachers union, a powerful voting bloc that helped get him elected. Some just don't buy that merit pay works.</s>DENNIS VAN ROEKEL, NEA PRESIDENT: Depending on the definition, the answer is probably no, if they mean that it's an arbitrary, subjective decision by some person about who gets more and some gets less.</s>LOTHIAN: But the NEA doesn't think that's what the president means now.</s>VAN ROEKEL: He talks about rewarding teachers for performance. I don't take that as some of these failed merit pay plans of the past.</s>LOTHIAN: Clearly, the largest teachers union isn't ready to pick a fight with a very popular president. But, Wolf, you know, the president was very clear in what he was saying today, that any teachers, that good teachers out there, should be rewarded and the bad teachers, well, they should be fired -- Wolf.</s>BLITZER: The president also spoke about the possibility of having longer school days. Give us the background. What's going on here?</s>LOTHIAN: Well, first of all, Wolf, I can tell you, this is not something that my kids would embrace. And the president himself said that his own daughters would not find this very popular. But he did talk about how other countries had longer school years, perhaps even a month more than here in the United States. And so he was saying that as part -- we should look at this as an option -- longer school days, or even additional weeks added to the year, because he believes this would really help students here in terms of learning. And again, Robert Gibbs today was asked about this, and he pointed out this is another option for the president, but really it boils down to the states and the school districts that would have to deal with this -- Wolf.</s>BLITZER: I'm going to be speaking at length about all of these issues with Arne Duncan, the education secretary, later here in THE SITUATION ROOM. He's going to be joining us. We'll speak about longer school days, longer school years, among other subjects. Here's one reason President Obama appeared at the U.S. Hispanic Chamber of Commerce today. Twenty-three percent of children enrolled in kindergarten through 12th grade here in the United States are Hispanic. Whites still make up over half of all public and private school students, 15 percent are African-American, 4 percent are Asian. Let's go to Jack Cafferty right now. He's got "The Cafferty File." A busy news day once again here, Jack.</s>JACK CAFFERTY, CNN ANCHOR: Indeed. THE SITUATION ROOM is a beehive of activity. "The U.S. economy has fallen off a cliff, is going through a death by 1,000 cuts. And those who think it will recover this year are delusional." Those are all quotes from a couple of the sharper financial minds out there. Nouriel Roubini, a professor at New York University's business school, told CNBC there is no hope the current recession, which is already 15 months old, will end this year. He says it will more than likely last into 2010. Roubini says most of our financial institutions are entirely insolvent and the government should temporarily take over the banks, clean them up, and get them working again. Although he says there will be a light at the end of the tunnel, Roubini believes things will probably get worse before they get any better. And if that's not a dismal enough assessment for you, there's Warren Buffett, also talking to CNBC. The billionaire investor described the current economic crisis as an "economic Pearl Harbor" and says the economy has fallen off a cliff. He says you can't turn it around on a dime, and that a turnaround will not happen quickly. Buffett predicts unemployment will get worse before it gets better. He says inflation has the potential to be worse than it was in the 1970s. Buffett suggests that five years from now, five years from now, the economy will be running fine. Five years. That's a long time for the millions of Americans who are already suffering and have been for months without jobs, with rising costs for health care and education, and with decreased home values and mounting foreclosures. So here's the question. How will you cope if the current recession lasts for a number of years? Go to cnn.com/caffertyfile. You can post a comment on my blog. A pretty gloomy assessment from a couple of pretty bright guys.</s>BLITZER: Yes. A lot of smart economists out there. There are a lot of them scratching their heads, wondering what next? All right, Jack. Thank you. A new round of suicide bombings in Iraq. A trail of blood that could affect President Obama's plans to bring the troops home. Can the U.S. get out on time, and will it cost more lives? Plus, the growing ranks of America's homeless, it's not just adults on the street. The number of children without a roof over their heads right now astounding. And later, he blackmailed some of Europe's richest women.</s>UNIDENTIFIED MALE (voice-over): When the man dubbed "The Swiss Gigolo" entered the courtroom, he was smiling. Asked what he expected, he said, "I have no idea." Helg Sgarbi soon found out."