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CNN LATE EDITION WITH WOLF BLITZER

Interviews with Evan Bayh, John Cornyn, Roy Blunt, Steny Hoyer, John Snow, Thomas Kean, Lee Hamilton, Javad Zarif and John Dickerson

Aired December 19, 2004 - 12:00   ET

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


WOLF BLITZER, CNN ANCHOR: It's noon in Washington, 9 a.m. in Los Angeles, 5 p.m. in London, 8 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."
We'll get to my interview with four key U.S. lawmakers just back from Baghdad in just a few minutes. First, though, let's get a quick check of what's making news right now.

(NEWSBREAK)

BLITZER: More details now on our top story, a very violent day today in Iraq. Three deadly attacks in three cities. At least 60 people have been killed. Dozens more have been wounded.

CNN's Karl Penhaul following all of these developments for us. He's joining us now live from Baghdad.

Karl?

KARL PENHAUL, CNN CORRESPONDENT: Hi there, Wolf.

Security officials and hospital workers have now told us that at least 64 people have been killed and more than 120 others wounded in two car bomb attacks in two of the holiest sites in Iraq for the Shia Muslim majority. The biggest of those car bombs came in Najaf midafternoon. A car bomber drove his vehicle into a funeral procession, a funeral procession for one of the local prominent tribal leaders there. More than 48 people were killed in that, we're told, and 90 wounded. But the hospital workers say the death toll could rise, because of the severity of some of the injuries that those victims suffered.

And then in Karbala, about two hours before the Najaf blast, a car bomb there went off close to the city's main bus terminal. At least 16 people died there, and more than 30 others were wounded.

So far there's been no claim of responsibility in either of these attacks, though security officials have said that this could be a Sunni-based resistance group launching these attacks to stoke sectarian violence ahead of the January 30th elections.

Similarly, leaders from the Shia Muslim group have said that this could be members of their own Shia community, due to threats recently by tribal leaders to expel any Shias from those tribes who are seen to be supporting anti-coalition resistance efforts. But there was blood, too, on the streets of Baghdad. This morning, around 7 o'clock local time, a gunman on Haifa Street -- that's a main thoroughfare in downtown Baghdad, very close to the Green Zone, the headquarters for the U.S. and Iraqi administration -- gunmen there pulled out a senior election official and two of his bodyguards from a car. They forced them to kneel on the ground and shot them in the back of the head, execution-style.

Wolf?

BLITZER: Karl Penhaul reporting on the latest developments in Iraq, unfortunately all pretty deadly.

Thanks, Karl, very much.

Joining us now, four United States lawmakers who've just returned from Iraq this past week.

Democratic Senator Evan Bayh of Indiana is a key member of the Senate Armed Services Committee, also serves on the Select Intelligence Committee.

Republican Senator John Cornyn of Texas is also a member of the Senate Armed Services Committee.

Republican Congressman Roy Blunt of Missouri is the U.S. House of Representatives majority whip. He's the number-three leader in the House.

And Democratic Congressman Steny Hoyer of Maryland is the number- two Democrat in the House of Representatives.

Gentlemen, welcome back to "Late Edition." Thanks very much for joining us.

All of you just were there, on the scene.

Senator Bayh, let me begin with you. Is it as bad as it would appear to be today? This situation looks very grisly, but you were just there. Give us your perspective.

SEN. EVAN BAYH (D), INDIANA: Well, Wolf, if you ever wanted a clear demonstration of what separates us from our adversaries, these killings today are it. You know, we want democracy. We want freedom. Clearly they're trying to keep that from happening.

And the heart of the challenge all comes back to a lack of security. We're not going to have successful elections, we won't have a growing Iraqi economy, we won't have stability there without security.

And regrettably, we have our challenges cut out for us there. I had a top U.S. intelligence official tell me -- I asked him directly...

BLITZER: In Baghdad? BAYH: In Baghdad -- which do you think is growing more rapidly: the insurgency or the Iraqis' capability of handling the insurgency? And he said very directly, the insurgency. That should be troubling.

BLITZER: Why is this insurgency apparently as popular among rank- and-file Iraqis as it seems to be?

BAYH: One of the tragedies here, Wolf, is that we have contributed to our own problems today by sending the Iraqi army home, not the top generals who were in bed with Saddam, but the privates, the corporals, the captains and lieutenants. We're fighting some of those people today. They should have been on our side.

The decision to send all of even the lower-level functionaries of the former government home, most of whom were Sunnis, saying to them, "You have no future in Iraq," they are now opposing us too.

We need to recall those people to give them a stake in the future of Iraq even while we're trying the criminals, the human rights violators. That's one of the ways that we'll re-enlist the Iraqi people in the cause of democracy and free elections.

BLITZER: One of the things that was most disturbing -- all of these deaths, Senator Cornyn, very disturbing, but this execution- style killing of these election workers. They're trying to get ready over the next six weeks to get these elections January 30th. They're pulled out of a car, and they're shot in the head execution-style.

That presumably is designed to send a message to any Iraqi who cooperates with the scheduled election, you're on their hit list.

SEN. JOHN CORNYN (R), TEXAS: Well, that's right. It's a process of intimidation.

But, Wolf, I came back from Iraq feeling very strongly that these elections will go forward, notwithstanding the difficult security environment.

General Casey, commander of our forces in Iraq, said that, really, out of 18 provinces, only four are problematic. That's not to minimize it. But many parts of Iraq we're not seeing on TV because they're relatively peaceful.

BLITZER: But some of those four provinces, the Al Anbar province around Baghdad, this is a large chunk of the population and most of the Sunni Muslims who live in Iraq.

CORNYN: I don't mean to minimize the problem. They're serious. But these elections are going to go forward. And I think that will be a seismic point in Iraqi history.

We've seen an election in Afghanistan. Once the Iraqis feel invested in their own success and they no longer feel like they are merely working for the coalition forces who are occupying their nation, I think we'll see it turn a corner. BLITZER: So despite, Congressman Hoyer, the car bombings today, the execution-style killings, you think these elections can go forward under these circumstances January 30th?

REP. STENY HOYER (D), MARYLAND: If you talk to the U.N. representatives, as Roy Blunt and I did, there is a commitment to go forward with the January 30th elections because they believe there was a political agreement to do so.

He, very frankly, said to Congressman Blunt and I, he would prefer to do three or four more weeks but didn't think that was politically feasible.

Wolf, however...

BLITZER: As far as the U.N. is concerned, Kofi Annan this past week said, what do they have, 20 United Nations personnel on the ground? For a huge election with millions of people, 20 United Nations monitors or organizers, that sounds pitifully low.

HOYER: In terms of what they're doing, I agree with that.

But Valenzuela, who is the U.N. representative on the commission, has been in a very great number of elections in very troubled spots of the world. So I'm not so much saying how he's going to implement it, but his observation.

But let me say about today's event: I think this is tragic confirmation of what Prime Minister Allawi said.

We've made a lot of mistakes. One of the biggest mistakes we've made is we have not put enough people on the ground in Iraq to stabilize, to prevent the chaotic situation that now exists and foments and assists the insurgency.

It's a real tragedy that we didn't get a handle on this at the very beginning and, as has been pointed out, that we let so many of the people who were involved but not part of the terrorist cabal that Hussein headed -- we let them go. And we don't have sufficient people to fill that slot.

BLITZER: Congressman, you were just there. Did you come away more encouraged or less encouraged, by what you saw, that this mission, this overall U.S. operation, this effort to create a democratic Iraq can succeed?

REP. ROY BLUNT (R), MISSOURI: I think what we're looking for, what I've been looking for for sometime is what we call now, these days, the next big thing: the thing that will make the difference in Iraq.

And as Senator Cornyn said, turning over responsibility to a government that the people of Iraq felt like they put in place. The credible result, not a perfect result, but a credible result is important here. It's important that the world community see it as meaningful, but it's much more important that the Iraqis see it as meaningful.

And one thing you said earlier, Wolf, why does the insurgency seem so popular? I don't think the insurgency is very popular at all. You've got the worst of a bad lot. People who have repressed this country for a long time, the minority within the minority that's ruled this country, they don't want to give up.

And obviously they are in a desperate situation to not move to what may turn this situation around, and that is a government in place with the Iraqis themselves.

BLUNT: But you heard Senator Bayh quote a U.S. intelligence official in Baghdad as saying the insurgency is growing more rapidly -- I think I'm quoting you accurately -- than the ability to create a security environment that can deal with this.

But that doesn't mean it's getting more popular. Even if that's accurate, that doesn't mean it's more popular. It does mean that we are constantly working to try to get the Iraqis more able to deal with this situation on their own.

Troop presence is one thing. Nobody will argue that the ultimate troop presence, the ultimate police presence is Iraqis able to do this job.

BLITZER: Is that right?

BAYH: Wolf, the U.S. intelligence official told me, he said there's one thing keeping this country together today: that is the U.S. presence, the U.S. forces. Clearly if we're going to be successful there, which we must, if these elections are going to be successful, which they must, we need to increase the Iraqis' capability of dealing with this violence. Because until we have security, the democracy is not going to take root.

BLITZER: Do you see that happening?

BAYH: Well, we need to do two things or three things.

First, in the short run, I think Steny's right. We've never had enough troops there. If the mission was to go in and remove Saddam, we had enough forces to that. If the mission was to stabilize a country of 26 million people and try and create a democracy where there's no history of one, we've never had enough troops to do that. So, in the short run, more U.S. troops.

In the longer run, though, get the Iraqi army back, get the bureaucracy back, get up their capabilities.

BLITZER: They're moving up to 150,000 U.S. troops.

I have spoken with former U.S. commanders, retired generals, who had a plan throughout the '90s for how to deal with the post-Saddam era in Iraq. They said you need 300,000, 400,000. Remember the first Gulf War, the U.S. had a coalition had 500,000 troops in place. How many more troops, Senator Cornyn, as a member of the Armed Services Committee, do you believe the United States needs over the next year to really stabilize the situation in Iraq?

CORNYN: Well, I look to the combatant commanders, and I believe that's what the Pentagon has done and asked them, how many do you need? And now General Casey has said we need more building up to the election, perhaps 160,000. And that's what they're going to get.

BLITZER: I thought they're saying 150,000. You're hearing 160,000?

CORNYN: Well, it could go higher.

But the problem I have is, I don't know how we in Washington tell the combatant commanders there on the ground how many troops they need when they, themselves, are the ones that are saying, "This is what we need." And they're getting what they ask for.

HOYER: John, let me say respectfully, I think the problem is, it is the politicians who have set the numbers in Iraq, not the generals.

Shinseki said we needed 200,000 troops at least.

Powell never commented on it publicly, but I'm convinced the implementation of the Powell doctrine would have required far more. In fact...

BLITZER: It wasn't just the Powell doctrine. It was the Rumsfeld doctrine, too, the Weinberger doctrine. They all wanted, Congressman Blunt, overwhelming use of U.S. force to get the job done, to try to minimize U.S. casualties in the process.

BLUNT: Well, overwhelming use of force, certainly in terms of the first Gulf War, was what we did. And that had great success, as far as it went.

We need more forces on the ground. Senator Cornyn has mentioned a number. When we were all in Iraq, I suppose we heard the same number about Iraq national guard, Iraqi police, it's about 117,000 now. So you add that to the 160,000. By the middle of '06, we hope to get that number to 272,000.

And, you know, these are all milestones along the way that will make a difference.

BLITZER: Very quickly, because I want to take a break.

CORNYN: You go to war. You plan for the worst. You hope for the best. Unfortunately in this case we planned for the best, and now we're reaping some of the worst.

The intelligence official told me things would be 100 percent better today, 100 percent, if we hadn't sent the Iraqi army home.

BLITZER: Well, everybody seems to agree that disbanding 400,000 Iraqi troops with their weapons, the way it was done was a mistake, including the interim president of Iraq, Ghazi al-Yawer, who I interviewed last week here in Washington.

All right, gentlemen, we're going to take a quick break. We have a lot more to talk about.

More with our panel of lawmakers, just back from Baghdad, on where things stand right now, just six weeks until the Iraqi elections.

And later, major intelligence reforms finally signed into law. The conversation with the chairman and the vice chairman of the 9/11 Commission about what the changes really mean for U.S. security and the war on terror.

LATE EDITION continues right after this.

(COMMERCIAL BREAK)

BLITZER: Our Web question of the week asks this question: Do you approve of the job Donald Rumsfeld is going as secretary of defense?

You can vote right now. Go to cnn.com/lateedition. We'll have the results later in our program.

We'll also ask the lawmakers what they think of the job Donald Rumsfeld is doing.

But up next, the countdown to elections in Iraq: More with the U.S. lawmakers who have just returned from there about what's going on, what needs to be done in these critical weeks before the voting.

You're watching LATE EDITION, the last word in Sunday talk.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're continuing our conversation with four United States lawmakers just back from Iraq.

Senator Cornyn, you spoke with U.S. troops on the ground. Did you get the sense that they were frustrated, angry, gung ho? What impression did you get from those troops you met?

CORNYN: Morale is very high. I mean, they understand that what their job is, and they're there to finish the job. And they understand the American people are behind them, regardless of the fact that it is as tough as it is.

And they're making some good success. I think the one thing we keep hearing, Wolf, and less we paint too negative a picture, is that in 14 of the 18 provinces things are going pretty well. General Casey said you can't generalize about Iraq as a country. You can talk about regions but not the entire...

BLITZER: One of those provinces, those 14 provinces, where things supposedly were going pretty well, was in Najaf and Karbala, where there were huge car bombings today.

So you may want to reassess something in the southern part, the Shiite-dominated part, of southern Iraq.

CORNYN: There's no question it continues to be a dangerous place with vehicle-borne explosive devices, and someone is willing to give their own life in pursuit of their cause. It's very difficult to defend against. There's no question.

BLITZER: Here's an assessment that General George Casey, the commander of the U.S. troops in Iraq, offered this week on his vision, what could happen between now and December of next year. Listen to this.

(BEGIN VIDEO CLIP)

GENERAL GEORGE CASEY: My view of winning is that we are broadly on track to accomplishing our objectives, which is a constitutionally elected government that is representative of all the Iraqi people and with Iraqi security forces that are capable of maintaining domestic order and denying Iraq as a safe haven for terror. And I believe we will get there by the end of December '05.

(END VIDEO CLIP)

BLITZER: Steny Hoyer, December '05, that's a year from now. He thinks this objective will be achieved then.

Is that realistic?

HOYER: I certainly think it's an objective we want to achieve. Whether I think it's realistic -- without more people, I do not think it's realistic.

I'll give you a for instance: Roy talked about the numbers of Iraqi police. There are less than a third of the Iraqi police that, our assessment is, that are well-trained now to our standards. Although there are 90,000 plus, you mentioned 120,000, on board. Most of those have not yet been trained.

So I think we have been very optimistic, as Senator Bayh said. We planned for the best scenario not the worst. I hope we attain those objectives. I'm doubtful that that can be accomplished.

BLITZER: We have a caller in Florida who wants to weigh in and ask a question.

Go ahead.

CALLER: Yes, it's obvious that our troops will be in Iraq for a long time, and enlistment numbers are low. So is it time for the draft to be reinstated?

BLITZER: Roy Blunt?

BLUNT: Well, there's no support in the Congress for the draft. I don't believe it's necessary in any way to look at the draft at this point.

The regular troop numbers are not challenged. Clearly the Reserve and Guard numbers are, and that's one of the reasons that probably all of us have been talking now for several months about the importance of being sure we have the regular force component we need, so that we don't abuse, take advantage of those Guard and Reservists who have signed up to be there at a peak crisis moment but haven't anticipated being part of the regular force.

BLITZER: Do any of you think that it's time to at least consider reviving the draft?

UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: No.

BLUNT: We aren't out of troops, Wolf. We're out of balance. We have more than 2.5 million men and women in uniform, and we certainly should have more deployable troops out of that 2.5 million than we do now.

That's why General Schoomaker, the Army chief of staff, is going about a transformation in the Army, to create more deployable troops out of that 2.5 million.

BAYH: We're going to be adding two division, too.

Can I get back to one thing General Casey said?

This next 12 months is going to be a critical period. The elections, as Roy indicated, are critically important.

One of the things we heard there is there's been such a legacy of fear and intimidation, that a lot of Iraqis are sitting on the fence wondering which way this thing is going to go.

By sticking with the elections, by persevering, hopefully many of them will come to our side, cooperate in fighting the insurgency.

And the second thing is they're going to be drafting a constitution in the next year.

So, as the elections will hopefully show -- that the Sunnis are willing to participate in a majoritarian of government. The constitution needs to guarantee minority rights, reassuring the Sunnis that they, too, will have a place in...

BLITZER: That constitution will be drafted after the election, assuming the election goes well.

Let's listen to another point that General Casey made about foreign interference in what's happening in Iraq. Listen to this.

(BEGIN VIDEO CLIP)

CASEY: We have fairly good information that there are senior former Baathists, members of what they call the new regional command, operating out of Syria with impunity and providing direction and financing for the insurgency in Iraq. And that needs to stop.

(END VIDEO CLIP)

BLITZER: Congressman Hoyer, were you briefed on that?

HOYER: Yes, we were. And as a matter of fact, Prime Minister Allawi specifically said that Syria, which the general referred to, and Iran, we know, is participating in the elections, sending people into Iraq, sending a lot of money into Iraq to affect the outcome of the election. And so there clearly is foreign involvement.

BLITZER: So, Senator Cornyn, what do you do about that if there's evidence that there's foreign involvement from Syria and/or Iran? What should the United States be doing as far as Syria and Iran are concerned?

CORNYN: Obviously, we need to be doing everything we can to discourage it.

But the problem is there are porous borders, and people who can just flow across those borders literally at will. One of the problems we have, Wolf, is we don't have adequate human intelligence. This has been a chronic problem, and we don't really know exactly what is happening in so many parts of the Middle East because we don't have the trained human intelligence sources in order to get that information.

BLITZER: Senator Bayh, you're on the Intelligence Committee.

Is that true?

BAYH: Well, we need more intelligence.

We do know that the Syrians are sort of being what I'd call passive-aggressive. I don't think they're doing much to assist the former Baathists, but they're not doing much to dissuade them either.

BAYH: That needs to change.

The Iranians are trying to exert their influence. We do have some intelligence about how they're doing that. But don't forget, Wolf, they're a different ethnic background than most of the Iraqis. I think a lot of the Iraqis look at Iran and say, "You know, we're co- religionists, but that's not the kind of government we want."

So the thing I would focus on today is discouraging foreign involvement, yes, but I think, as Tom Friedman pointed out today, encouraging Iraqi involvement, getting the Sunnis involved in the election. That's the single most important thing we can do.

BLITZER: All right. We're going to take another break, but we have much more to talk about.

When we come back, still ahead, our conversation with the senators and the representatives about Iraq's next chapter. I'll also ask them what they think about Donald Rumsfeld as secretary of defense. We'll get to that.

Also a quick check of what's in the news right now, including an update on that deadly car bombing, series of car bombings today in Iraq.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Now, why do we soldiers have to dig through local landfills for pieces of scrap metal and compromised ballistic glass stuff from our vehicles?

DONALD RUMSFELD, SECRETARY OF DEFENSE: As you know, you go to war with the army you have, not the army you might want.

(END VIDEO CLIP)

BLITZER: A controversial exchange between the defense secretary, Donald Rumsfeld, and a U.S. soldier in Kuwait, a controversy that's continuing to grow right now.

Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

We're continuing our conversation with four United States lawmakers who have just returned to Washington from Iraq: Democratic Senator Evan Bayh of Indiana, a member of the Senate Armed Services Committee and the Select Intelligence Committee; Republican Senator John Cornyn of Texas, a member of the Armed Services Committee; Republican Congressman Roy Blunt of Missouri, he's the House of Representatives majority whip, that makes him the number-three leader in the House of Representatives; and Democratic Congressman Steny Hoyer of Maryland, the number-two Democrat in the House.

Gentlemen, the controversy, the uproar over what Donald Rumsfeld said, "As you know, you go to war with the army you have, not the army you want," Senator Bayh, you want him to resign.

BAYH: Well, Wolf, I don't have much use for the blame game here in Washington and asking for people's heads on a platter when things go wrong.

But I am concerned about the fact that mistakes have been made that have jeopardized our chances for success, and I think success in Iraq is vitally important -- mistakes that have not been admitted, learned from or corrected. So what we really need is a new policy more than anything else. But if changing personnel is what it takes to get a new policy that makes it likely for us to succeed, then that's what we ought to do. And I'll give you an example. General Petraeus mentioned to us that the genesis of this problem with having a lack of armor goes back to the fact that we did not anticipate adequately the strength of the insurgency. Not enough troops, not enough armor, planning for the best instead of the worst -- that's what's happened here, Wolf. And so, eventually there has to be accountability.

BLITZER: Senator McCain says he has no confidence left, he has no confidence in Secretary Rumsfeld.

Senator Lott, Trent Lott of Mississippi, said, "I am not a fan of Secretary Rumsfeld. I don't think he listens to his uniformed officers. I would like to see a change in that slot in the next year or so."

This is what Senator Chuck Hagel said on this program last week, Republican of Nebraska.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R), NEBRASKA: I don't like the way he has done some things. I think they have been irresponsible. I don't like the way we went into Iraq. We didn't go into Iraq with enough troops.

(END VIDEO CLIP)

BLITZER: Do you have confidence, Senator Cornyn, in Secretary Rumsfeld?

CORNYN: I do. I think, unfortunately, we know hindsight is 20/20, and there is a lot of things, now looking back on them, that we can say now we would have changed.

But the fact is, this would be handing a gift to the jihadists and the insurgents and those who want to see us defeated in Iraq for Donald Rumsfeld to resign now.

BLITZER: But for the mistakes, who should accept responsibility for the mistakes, for example, sending troops into battle without proper armor on their vehicles or on their bodies?

CORNYN: Well, there should be accountability, because we do have a moral obligation to make sure our troops have everything they need, but...

BLITZER: Where should the buck stop on that?

CORNYN: Well, with Secretary Rumsfeld, and I think he's acknowledged that they've responded to a change in tactics by the insurgents.

We never dreamed, at the time we went into Iraq, that we would need to up-armor all of these Humvees because we would have this epidemic of IEDs and vehicle-borne explosive devices, and now we're responding to that. It's very serious, and I think there has been a reasonable response.

BLITZER: Is that right, because you're on the Intelligence Committee, that no one envisaged the kind of insurgency that has developed?

BAYH: Well, if they didn't envision it at least as being a possibility, they didn't understand anything about the history of the country or the culture of the country and the divisions that exist there.

Look, you had to anticipate something bad happening.

But another point, Wolf. We make these up-armored Humvees in Indiana. I've been making this point for more than a year, as have some other people.

Where has been the sense of urgency? Where has been the outrage, to say our troops deserve the very best that we have to offer, and what can we do about it, right now?

I haven't gotten that sense of urgency, and frankly, when lives are at risk, that's not acceptable.

CORNYN: Wolf, no member of Congress has been making this argument until this question was asked of Secretary Rumsfeld...

BAYH: Oh, John, that's just not true.

CORNYN: I have not heard this sort of indignation on the part of...

BAYH: In April, before our committee, General Casey came to testify. At that point, they thought that the most we could produce every month was 300. I said to him, General Casey, that's not true, we can make 450 a month.

And in the exchange last week with the secretary, he said, well, we're producing at the most we can make, that we can't produce any more. That also was not accurate. We can make 100 a month more, and we should.

BLUNT: Wolf, the real lesson to be learned here is, we are now fighting a different enemy than we've ever fought before. The terrorist enemy is a different enemy. He attacks in a different way, willing to give his own life and take the lives of innocent people as freely as not. That's never been the case before.

We need to learn that lesson and move forward. We are fighting a different enemy than we've ever fought, and consequently we have to fight in a different way.

Clearly, anything that can be done to expedite armored vehicles and armor for individuals is important.

BLUNT: But it's also important to understand that the first time we were in Iraq, we had the same vehicle mix, but we weren't yet in this terrorist environment...

BLITZER: Do you want...

BLUNT: No, no, the vehicles behind the front lines have never been up-armored, but you never had a terrorist enemy before.

That's the lesson to be learned here. Certainly everybody in the administration, including Rumsfeld, needs to learn it.

But to act like we should known everything about how you fight a world terrorist war before September 11th is, I think, a lot of hindsight.

BLITZER: Is it, in your opinion, Rumsfeld should stay or go?

BLUNT: My opinion is -- my opinion is he should stay. But my more important opinion, the opinion that matters here, is the president's opinion. This is the president's decision.

BLITZER: Well, his chief of staff, Andy Card, was on ABC this morning, and he spoke out on this issue rather bluntly. Let's listen.

(BEGIN VIDEO CLIP)

ANDY CARD, WHITE HOUSE CHIEF OF STAFF: Secretary Rumsfeld is doing a spectacular job, and the president has great confidence in him. He's helping to lead our troops as they meet an awesome responsibility to protect us and to bring freedom to others, but he's also transforming the military. And any time you do that, there are controversies.

(END VIDEO CLIP)

BLUNT: Let me make a number of points.

First of all, when we met with Prime Minister Allawi, he specifically said he anticipated the level of opposition we are now seeing. And indicated that prior to the war.

Secondly, I don't agree with Secretary Rumsfeld's observation. In Korea we went to war with the army we had. Why? Because it was an invasion. In Iraq, one and two, we were the ones that set the timing, we were the ones who prepared for it, and we were the ones that had the opportunity to anticipate what we would need, because it was a war of choice, in the sense that it wasn't an invasion. Korea was an invasion.

Thirdly, let me say with respect to Secretary Rumsfeld, I think what you've just heard is absolutely correct. It is the president whose policies are being carried out. It is the president who makes these decisions. Now, the American public has just re-elected the president. So I don't think it's Secretary Rumsfeld's policy as much as it is President Bush's policy.

BLITZER: I read in The Washington Post today, Senator Cornyn, that Donald Rumsfeld has been using one of these machines to sign these letters, condolence letters to families of troops killed in Iraq. More than 1,000, 1,200, 1,300 almost, troops who have been killed.

And instead of personally signing these letters to the parents or the wives or the children of these soldiers and Marines killed in Iraq, he's been using a machine. And now he's going to stop using that.

That sounds pretty callous, doesn't it?

CORNYN: Well, it sends a bad message, and he's had a tough week or so.

But the truth is that we are making great progress. We've turned around Afghanistan. We're on a good pathway there. We've seen Libya give up their weapons of mass destruction.

And if we have the resilience, if we have the staying power in Iraq necessary to see the job done, I believe we're going to see similar developments there.

BLITZER: Don't you think he should be signing those letters personally?

BLUNT: I don't think he's trying to defend not signing personally, and I'm not going to defend it for him. Of course he should sign those personally, and I think he's said that, and will.

BLITZER: But the critics say, Congressman Blunt, that this is indicative of the kind of callous attitude that comes out of the Pentagon under Donald Rumsfeld, that he couldn't even find the time to personally sign these letters to these families.

BLUNT: Well, I think, to do that, you have to assume that he didn't know the letters were going out, didn't know the people that were being killed.

Signing the letter is a mechanical but an important thing. It's better for him to do it, and he's acknowledged that. And I think that's the right decision.

BLITZER: It was a blunder. It was a mistake.

BLUNT: It was a mistake, and it's a mistake that he's now said he'll rectify.

More importantly, I think the president signed all the letters that he sent to these families, and he's the head of this government. He thought it was important enough to sign the letters. Secretary Rumsfeld should too.

BAYH: Wolf, he should sign the letters. He's going to sign the letters.

But what's most important here is that we do what it takes to minimize the number of letters that have to be sent.

And when you see Andy Card say, "Hey, everything has been great, there have been no mistakes, we don't have to correct anything," you have to wonder what's going on. Look, it's better that wisdom come late than not at all. And we have to learn from these mistakes so that we do better to minimize the number of casualties to win this thing so that we can ultimately come home.

And it's the lack of any introspection that I find to be very troubling.

BLITZER: But I want to just press you on this point. You're a moderate Democrat, well-known.

Do you think he should resign?

BAYH: Well, reluctantly, Wolf, I've concluded that we have to have a different perspective. The commander in chief will be in place for the next four years, so that doesn't leave us many alternatives.

BLITZER: So you want Rumsfeld out?

BAYH: Well, I think that that is the way to go.

But if we don't have different policies, frankly, it will just be a game of musical chairs. What is important here is that we have better policies so that we can be successful in these things.

HOYER: I think most of us supported the policy objective, and I still support it. An ongoing democratic Iraq is going to be very helpful to the United States, to stability in the Middle East, and that's a worthy objective. I think most of us -- all of us, I suppose, supported that objective.

UNIDENTIFIED MALE: Still do.

HOYER: However, in carrying out the policies to -- or the execution of that policy, somebody has made some very serious mistakes.

HOYER: That somebody, Andy Card perhaps says he's carrying out the president's policies. I can see why the president, if he thinks somebody is carrying out his policies, does not want to replace him.

BLITZER: So you want him to resign?

HOYER: Well, I think that somebody has to be responsible for very serious mistakes that have been made.

BLUNT: I want to go back to my point, too. I think it's important to realize here that some of these mistakes are made just like pre- 9/11. We are just now beginning to understand this enemy, how vicious they are, how their view of the world is so different than ours. And we've got to respond to that in new ways and different ways than we ever have before.

BLITZER: All right. We're going to talk about 9/11, and we'll talk about the intelligence reform. Osama bin Laden's got a new audio tape that just came out in the past few days. Much more with our senators and our congressmen. Please stand by.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. We're talking with four United States lawmakers just back from Iraq.

Osama bin Laden had a new audio tape that came out this week, and among other things, he said this. Let's listen to this translation.

(BEGIN AUDIO CLIP)

OSAMA BIN LADEN (through translator): The clear truth is that the regime is responsible for the mayhem inside Saudi Arabia because it failed to maintain security and stop the bloodshed by dealing with infidels and bringing God's punishment on the country.

(END AUDIO CLIP)

BLITZER: Senator Bayh, you're on the Intelligence Committee. Michael Scheuer, who was known as "Anonymous," CIA analyst on Osama bin Laden and al Qaeda, tells the new issue of Time magazine, he fears this audio tape suggests that al Qaeda will attempt, in his words, a large attack on the U.S. or U.S. interests in the near future.

Is that the prevailing assessment, that before a major attack, Osama bin Laden gives one of these speeches?

BAYH: Well, I don't recall any warning before 9/11, Wolf, although there is the school of thought that perhaps that's what he has in mind here.

But, look, the potential threat from Osama and al Qaeda is ever present. We have to never let down our guard from that. So I assume that he'll attack us as soon as he can when he has that capability, with or without a warning.

The broader issue here is, what do we do to remove the support, to dry up the swamp where he gets sustenance from? And that is by standing for democracy and freedom in that part of the world.

And that's why we're all dedicated, Democrats and Republicans, to try and be successful in that regard: defend our country by fighting terror in the short run, provide a peaceful alternative to the Islamic world through freedom and democracy in the long-run.

And hopefully, in the meantime, we'll catch him and we won't have to see these sorts of tapes anymore.

BLITZER: Based on information you've received, is there any progress being made in the hunt for Osama bin Laden, as far as you can tell?

BAYH: Well, John and I, Senator Cornyn and I, met with the special forces in Afghanistan who are in charge of -- sorry, in Iraq, who are in charge of the hunt for Zarqawi. They're also in charge of the hunt in Afghanistan. They said they can now put him in a somewhat smaller box.

But, look, it's going to take an intelligence breakthrough of some kind. It could happen tomorrow. It could happen a year from tomorrow. We'll eventually get him. Apparently it's getting a little better.

BLITZER: Better for Zarqawi or better for bin Laden?

BAYH: Better for bin Laden. The box is tightening. And Zarqawi, there have been a couple of times when literally, you know, he's been heading out the back door and we've been going into the front. So it's just a question of time.

BLITZER: Is that your assessment?

CORNYN: It is. I think we're making great progress.

But I also want to go back to something I mentioned earlier, and that is our lack of human intelligence. I mean, we're talking about, you know, using signals intelligence. We're talking about using drones to, you know, watch what's happening on the ground. But really we still have a deficit when it comes to human beings who are in on the meetings and who know where the bad guys are.

BLITZER: Is that going to get better now that the 9/11 intelligence reform legislation is the law of the land?

CORNYN: Well, I know we're all dedicated to improving that situation. But as George Tenet said, it's going to take a matter of years, not a matter of weeks or months.

HOYER: The major thing, Wolf, hopefully that will happen as a result of 9/11 Commission legislation passing is the sharing of information and the analysis of that information and then acting on the information that we have.

The problem that really the commission found was that a lot of people had bits and pieces of information but had never got together. Hopefully the center and the director will be able to overcome that.

BLITZER: Here's some of the reforms that were included in the legislation. I think all four of you voted in favor of the legislation.

It creates a position of a director of national intelligence. It establishes a federal counterterrorism center, unifies all 15 spy agencies, increases border patrol by 2,000 agents, provides $83 million to hire more air marshals, allows federal agents to pursue independent terrorism suspects and creates civil liberties watch-dog panel.

Who should be the national intelligence director, Congressman Blunt, from your perspective? The law says it must be someone with national security experience.

BLUNT: Well, it needs to be somebody with that kind of experience. It needs to also be somebody that won't allow a bottleneck to occur, as Steny Hoyer was talking about.

What we've done here to share this information, in sharing the information, you also create one point that could become a real problem if you don't have exactly the right person who knows how to manage these agencies, who knows how to analyze what he or she is hearing.

You know, we need to make that choice. It's a choice the president needs to make.

BLITZER: Give us the main two or three that you like.

BLUNT: You know, I don't have any names in mind.

BLITZER: Should Porter Goss be elevated? He's the CIA director.

BLUNT: Porter was a great member of the House. He is well- prepared to do the job he's doing. Whether the president decides that it's more helpful or less helpful to move him from the critical point of running the CIA -- certainly he could do this job. Whether that's in the best interest of the entire new network we're putting together -- remember, this is something we haven't done since 1946, this realignment of how we find out what we know and how we share it. And it's very important.

BLITZER: Who do you like, Steny Hoyer?

HOYER: I don't have a name either. But it ought to be somebody who is an expert as the law requires and somebody who is perceived by all parties and both parties as nonpolitical, nonpartisan, an expert who is interested in one thing only and that's the safety of the American people and of our homeland.

I think the problem with Porter is not that he's not a good guy. I agree with you. He's a good guy. I like Porter Goss. But he was certainly perceived as a partisan figure.

BLITZER: So you would prefer someone like Lieutenant General Michael Hayden, the director of the National Security Agency, who is active military, someone who could come in along those lines?

HOYER: The operative phrase there is, "someone like." And yes, the answer to that is, I want to have somebody who is a professional, knowledgeable and perceived by the Congress, by both political parties and by the American people, as someone focused only on policy, not politics.

BLITZER: Senator Cornyn, what do you think?

CORNYN: Well, I think the president will make his choice. And I wouldn't want to jinx anybody by suggesting a name.

But obviously, this is an important position. There are some dangers inherent in the consolidation of our intelligence structure. We've chosen previously to have diversity, thinking that that would eliminate groupthink. But of course, that created problems with information-sharing, which we've now tried to rectify.

So I hope we've hit the right balance, but it's a tough job for a very important position.

BLITZER: What do you think, Senator Bayh?

BAYH: I think it may be the most important position in the government today, after the president and vice president. You know, back in Napoleon's time, he said, a well-placed spy was worth two divisions.

Today, it could help protect two American cities. So this needs to be someone who is not only competent, but as Steny mentioned, has the confidence of the American people.

If there's one thing, God willing, in Washington that shouldn't be politicized, it's the nation's intelligence system, because that is directly dependent -- it provides for our national security today.

BLITZER: Is there a name that jumps out that you like?

BAYH: No, I wouldn't presume to do that. We'll obviously give serious consideration to whatever the president nominates.

BLITZER: We have to leave it right there. I want to thank all of you for joining us. It was a good discussion and a serious discussion on an important issue.

And we're glad all four of you got back safe and sound to Washington from Iraq. I'm sure your families are very happy about that, as well.

And to all four of you, have a merry Christmas.

Still ahead, their persistence pays off. We'll talk with 9/11 Commission Chairman Thomas Kean and the vice chairman, Lee Hamilton, about the intelligence reforms they recommended that were finally signed into law.

LATE EDITION continues right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

We'll talk about the president's new economic agenda with the Treasury Secretary John Snow in just a minute. But, first, let's get a quick check of what's in the news right now.

(NEWSBREAK)

BLITZER: Details now on what has been a very violent Sunday in Iraq, attacks in three cities have killed at least 64 people, injured dozens of others. This latest series of attacks comes just six weeks before Iraq's scheduled elections.

CNN's Karl Penhaul, once again, joining us from Baghdad with more -- Karl.

PENHAUL: Hi there, Wolf.

There were two car bomb attacks this afternoon in the two holiest cities for Iraq Shia majority, the biggest of those came in Najaf mid- afternoon.

Najaf is a city just south of Baghdad, and in that attack hospital officials have told us that at least 48 people were killed and 90 others were wounded.

That car bomb blast took place as a funeral procession was winding its way from the holy Imam Ali mosque towards the cemetery. It was the funeral for prominent tribal leader there.

Two hours before that blast, another blast in Najaf's sister city, Karbala about 50 miles away. A car bomb there placed near to the city's main bus terminal. In that explosion, 16 people died and at least 30 others were wounded, according to hospital officials.

So far, no group has claimed any responsibility for these attacks, as security officials in Najaf are speculating this could have been the work of Sunni based resistance groups ahead of the January 30th elections.

However, leaders from the Shia communities have said that this could be tribal rivalry from within the Shia community itself that has led to these double deadly attacks in Najaf and Karbala today.

Those, of course, came after more bloodshed on the streets of Baghdad this morning. We've seen some very tremendous, horrendous pictures from the Associated Press showing that scene when insurgents armed with pistols and making no attempts to mask their faces dragged a senior election official and his two bodyguards from a vehicle on the Haifa Street and made them kneel on the ground and put a bullet in the back of their heads, execution style -- Wolf.

BLITZER: CNN's Karl Penhaul reporting from Baghdad.

Karl, very, very dramatic developments there, unfortunately, unfolding, once again today. Karl, thank you very much.

And while Iraq and the war on terror are key parts of President Bush's second-term agenda, he is also focusing in on the U.S. economy, primarily spending the political capital he says he earned by winning the election on tax reform and social security reform.

Just a short while ago I spoke with the point man for the president's economic agenda, the U.S. treasury secretary, John Snow.

(BEGIN VIDEOTAPE)

BLITZER: Secretary Snow, thanks very much for joining us. Welcome back to "Late Edition."

JOHN SNOW, TREASURY SECRETARY: Hey, thanks very much, Wolf. BLITZER: Let's talk, first of all, about the budget deficit.

As you know, in 2000 when the administration took office, there was a surplus expected, $237 billion. In fiscal 2004, it went up to -- it went down, actually, to a budget deficit of $445 billion.

What do you project in fiscal year 2005, the current fiscal year, the budget deficit will be?

SNOW: Well, Wolf, you're right. The surplus that was forecasted never came about. It was just a forecast. It was an erroneous forecast. It was a forecast made before things like 9/11, the recession and so on.

BLITZER: But let me interrupt. That was the actual budget surplus in 2000, fiscal year 2000. There was a real surplus of $237 billion. That wasn't a forecast. That was the surplus in the budget.

SNOW: That's right. But it was a forecast going forward that we would have...

BLITZER: And in years following, they forecasted that surplus would continue.

SNOW: And that was...

BLITZER: Clearly, it didn't continue. But there was a surplus in 2000.

SNOW: There was, indeed. But it was a forecast going forward that proved unrealistic for the reasons I mentioned.

The president's committed to bringing the deficit down. He said he will cut it in half over the course of the next few years.

Only two ways to do that: One, you grow the economy. And we're doing that. The economy's growing. As the economy grows, government receipts rise.

But secondly, we've got to watch spending. And that's the key. We've got to control spending. You'll see in this budget that will be coming forth soon that spending will be under tight wraps.

BLITZER: So what do you project? What do you think realistically the budget deficit will be for 2005, fiscal year?

SNOW: For fiscal year 2005, Wolf, I'm going to leave that to the OMB director to forecast. But let me say that we're on a path to cut the deficit in half over the next few years.

BLITZER: You say you're going to cut spending but you have very ambitious programs that are going to, at least in the short term, dramatically increase spending: for example, extending the tax cuts that were approved during the first four years of the Bush administration. The Center on Budget and Policy Priorities, the Congressional Budget Office, among others, they're suggesting that could cost over the next 10 years $2.2 trillion. And privatizing part of Social Security, they're projecting over the next 10 years, if you get that passed, could cost another $2 trillion.

That's $4.2 trillion over the next 10 years. How do you do that?

SNOW: Well, Wolf, let me go back to what I said. We need a growing, expanding economy to cut the deficit, because then we have more government receipts. When more people are working, when businesses are profitable, the government income stream goes up. And that's happening right now.

When we do our budget forecast, we include making the tax cuts permanent as part of those forecasts. So we've embraced that in our numbers.

BLITZER: Do you accept this figure, $2.2 trillion, to extend it over the next 10 years -- the estate tax, the marriage penalty tax, all the tax cuts that you got through during the first four years?

SNOW: That's on the high end of all the estimates I've seen. But we do build in appropriate estimates of what the tax-cut permanence will cost, along with the fact that making the tax cuts permanent helps the government revenue stream, helps keep the economy strong and growing with job creation.

BLITZER: You're saying the president's going to cut spending as much as he can. Does that mean actual cuts or a cut in projected growth in spending, which is a Washington budgetary adventure, as you know?

SNOW: I don't want to forecast the new budget, which will be out soon. But there will be actual cuts in many programs as a result of this year's budget proposal.

BLITZER: Is there a number that is going to be -- are you talking about hundreds of billions of dollars? Is there a real number that you...

SNOW: Let me just say this, because I don't want to foreshadow what will be in the budget. But it will be a tight, disciplined budget with spending under disciplined control.

BLITZER: Will these cuts, spending cuts, affect defense and homeland security, or will they be everything else?

SNOW: Well, Wolf, again, I'm going to wait until we bring the budget out to have the details. But everything is being looked at and put under the microscope. And I think you will agree, when the budget comes out, that it is a very disciplined approach to the budget.

BLITZER: Do you accept this argument that the greater the deficits, the national debt, the higher the interest rates for the American consumer, the American public?

SNOW: Well, Wolf, deficits matter, we know that. And the current deficit is too large. It has got to come down. The president has acknowledged that. And we are going to bring it down. Sure, deficits count.

BLITZER: And they affect interest rates.

SNOW: Well, over the long term, over the long term.

BLITZER: If the argument is that there is this hidden tax on the American consumer the higher these deficits, the higher the interest rates will grow which is going to be a tax on the American consumer, the American public.

SNOW: You don't find that one-to-one correlation if you go back through time, Wolf. But most economists will tell you, and I agree, that unless the government shows a disciplined approach, and we will, to deficits, it will lose confidence with the financial markets.

And if you don't have the confidence of the financial markets, then the cost of borrowing will rise. So at some point interest rates rise. We're not going to let that happen. We're going to deal with the deficit. The president is committed to it. And it will be cut in half of the course of the next few years.

BLITZER: So let's Social Security, you want to reform Social Security. You have this partial privatization program to let individual retirement accounts get off the ground. People can find a way to invest their money in stocks or bonds or whatever they want to do.

The Wall Street Journal-NBC News poll had about half of the American public thinking this is a bad idea, allowing investment of Social Security; good idea, 38 percent, same poll. Are you confident that Social Security will benefit you during retirement? Completely confident: 8 percent. Very confident: 11 percent. Somewhat confident: 33 percent. Forty-six percent, almost half of the American public, not confident at all.

In the short term, we're talking about 10 years, this is going to cost money to do this plan. It may in the long term work out to be great, but how do you pay for that if the president has ruled out a tax increase?

SNOW: Well, Wolf, first, we've got to recognize the system isn't sustainable. It's really broken. It has got to be fixed. It is broken in the sense that we can't afford those commitments that we've made. They're an unfunded obligation there of -- according to the Social Security Trustee Actuary of $10.4 trillion.

The longer we put off getting a fix, the bigger the problem becomes. So now is the time to act. This is basically a matter of arithmetic. When the system was set up, we had 16 workers to one retiree. Today it has gone to three, with the Baby Boomers coming on it's going to be two. You can't repeal the laws of basic arithmetic.

BLITZER: But you could change some of the benefits. You could raise the retirement age. You could reduce some of the benefits. And that would spread it out, the solvency, over many years. SNOW: The president said four things. One, the system has got to be fixed. Now is the time to do it. It's not sustainable and if we don't fix it now, we're going to have either very large benefit cuts in the future for very large tax increases. That's not the way to go.

Secondly, he said, don't affect people who are currently retired or near retirement. That's the social compact we have with seniors.

Thirdly, he said we need personal accounts. Personal accounts need to be part of it so young people can voluntarily take part of their contributions and contribute them to these accounts and earn a higher rate of return.

BLITZER: But what if the market collapses and they're not going to earn a higher rate of return, that money is going to go away?

SNOW: You know, these are people who are 20 years old, 30 years old, these are people who when polled say they have higher confidence in seeing UFOs in their lifetime than they do in getting their Social Security checks. They are going to like personal accounts.

And Wolf, there are prudent, safe savings vehicles of the sort that federal employees have for their 401(k) plans that will provide higher rates of return and do it in a secure and safe way.

BLITZER: Before I let you go, let's just talk about a couple other issues. Outsourcing right now, allowing -- getting products made outside of the United States because it's cheaper to do so, is this good for the American consumer?

SNOW: Well, the issue that you're raising there is the large question of how we create continuing good jobs for Americans and give Americans opportunities to buy things at the lowest prices.

I'm confident if we keep tax rates low, if we deal with the deficit, keep the spirit of enterprise alive and strong in America, the spirit of innovation, we're going to create lots of jobs.

And trade is good for us. Trade is mutually advantageous.

BLITZER: But especially this holiday season, people buying Christmas presents all over the place, is it better for the American consumer that they can buy these products that are made overseas cheaper than if they had been made in the United States?

SNOW: Well, Wolf, when we can buy things that we want at prices that are attractive to us, consumers are better off, sure.

BLITZER: So outsourcing is good, is that what you're saying?

SNOW: Well, I'm saying trade is good. And I'm saying that we should continue to pursue open markets and trade.

And we need to get the rest of the world to bring the barriers down, so our producers, our farmers, our manufacturers will have access to their markets. That's the real problem. BLITZER: Mr. Secretary, thanks for joining us.

SNOW: Hey, thanks, Wolf.

BLITZER: Happy holiday to you.

SNOW: Same to you, thanks.

(END VIDEOTAPE)

BLITZER: And coming up, the 9/11 Commission co-chairman on Osama bin Laden -- he's still at large -- and America's preparedness for the next terror threat. What has changed since the signing of the 9/11 legislation?

Then, nuclear nation: A conversation with Iran's representative to the United Nations about his country's weapons ambitions.

And did winning a hard-fought election make President Bush TIME magazine's "Person of the Year"?

Stay with CNN. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Three years, three months since the 9/11 terror attacks prompted calls to rebuild American intelligence agencies and rethink how the U.S. spies on the world and digests the masses of information it gets. And now, this past week, President Bush finally signed into law sweeping intelligence reforms.

Joining us now, two of the leading voices for those changes: in New Jersey, the former governor of that state, the former 9/11 Commission chairman, Thomas Kean, and here in Washington the commission's former vice-chairman, the former U.S. Congressman Lee Hamilton.

Gentlemen, welcome back to LATE EDITION. Thanks very much for joining us.

And congratulations to both of you. I know you worked very hard to get this legislation signed into law. You've succeeded.

Let me ask you, Governor Kean, first of all, the language stipulates that the new national intelligence director must have certain qualifications, including extensive national security experience. What are you looking for, as the president considers some nominees?

THOMAS KEAN, CHAIRMAN, 9/11 COMMISSION: Well, first of all, somebody who's going to have widespread respect, somebody who's got some experience in Washington, somebody, perhaps most importantly, who's got the full confidence of the president. This is somebody who's got to put the intelligence we have together, bring that intelligence to the president, make recommendations for what action should be taken, and the president's got to have total confidence in that person.

So that's probably number one.

BLITZER: What about someone who comes from a political background, someone who's either a Democrat or a Republican, would that be appropriate? or would you want some career professional, an active-duty military, a general, for example, or an admiral? Is that someone who would bring more objectivity, shall we say, to this position?

KEAN: Well, of course, political experience can be helpful, particularly for political experience with Congress, because one of the things you've got to work with is, obviously, the United States Congress.

But, you know, there's no one mold for this kind of person. It's just got to be somebody who is really outstanding, who'll be respected, and who can lead this nation's intelligence to heights that it never has achieved before, so we'll have a warning in case of any of these terrible attacks might happen again.

BLITZER: Congressman Hamilton, what are your thoughts? Because you did have specific language in the law now that should be fulfilled.

LEE HAMILTON, VICE CHAIRMAN, 9/11 COMMISSION: Well, he's going to have to be, or she, a virtuoso manager, a very tough manager, because he or she will be dealing with 15 intelligence agencies, very powerful agencies, some of them.

I would hope, in addition to what Tom Kean said, they'd also have a basic, fundamental integrity. In other words, they have to be able to say to the president of the United States, Mr. President, this is what our intelligence shows, this is what we know, this is what we don't know, this is what we think we know, and, when you get around to talking about policy, I'm out of the room.

BLITZER: Give me an example. And these are not names, necessarily, that the president would even consider, but the type of person, a specific name or two that you think would have that overall qualification, beyond politics, to meet the requirements of the law.

HAMILTON: I don't have any name in mind, Wolf. I really do not, and it doesn't make a huge amount of difference to me whether they have a military background or a political background. There are talented people in both areas of life.

So you have to pick very talented people to take this position. They're breaking new ground here. This is an altogether new position in the American government, and they're going to have to be talented managers.

BLITZER: Do you have a name of someone, an example of someone who would fulfill the requirements, Governor Kean, that you like?

KEAN: No, there are some names that come to mind, but Lee is right. I mean, there are a number of people out there who meet these qualifications, and it'd be wrong for me to single out one or two of them, but...

BLITZER: Would Porter Goss, Governor Kean, who's now the CIA director, former congressman, is he someone that perhaps the president should consider elevating to this new job?

KEAN: Well, Porter Goss is a -- I've got tremendous admiration for Porter Goss and his record in public life, but he's got a full- time job at the moment. I mean, you'd have to take him out of that job, then find somebody else to do that one, because reforming the CIA, as we've all discovered, is a very, difficult task.

KEAN: You got in bring in new people, language skills. You've got to bring in more diversity in that agency. You've got to replace the leadership. He's got a huge job on his hands.

So if you take him out and put him in the other job, what you've got to do is then find somebody to fill that job. So it's a little bit like playing musical chairs.

BLITZER: So he shouldn't be Porter Goss.

What do you think about that? Do you agree, Congressman Hamilton?

HAMILTON: I think what Tom said earlier is the key point. They have to have the confidence of the president. Porter Goss clearly has that confidence, so he has to be considered. You've got two very big jobs here: director of national intelligence and then straightening up the reforms in the CIA. He's got that -- one of those jobs right now.

BLITZER: So you might as well keep him there.

Let's talk a little bit about who should brief the president on a day-to-day basis. And I'll begin with Congressman Hamilton.

Who should go over to the White House every single day and tell the president what the intelligence community is developing, what it knows, the threats out there? Should that be the director of central intelligence, the CIA director, or the new national intelligence director?

HAMILTON: It should be the new national intelligence director. The president said that very clearly in his remarks when he signed the bill. He recommended that. That's the way it ought to be done.

BLITZER: And so he should come over to the White House.

Do you agree with that, Governor Kean?

KEAN: Yes, absolutely.

BLITZER: And when he comes over to the White House and brings the information, would it be appropriate to bring the CIA director along to maybe give additional details, or is this person alone should come in and say, "Mr. President, here is what you need to know"?

KEAN: Oh, I would suspect it would depend on the circumstance. He could bring the CIA director. He could bring the FBI director. He could bring both of them, depending on what case they were developing, what scenario was present. This gives flexibility and forces information sharing. And those are two things that haven't been present in the intelligence apparatus before.

BLITZER: There's been a lot of reaction to the signing of this 9/11 legislation into law, some of it not necessarily all that good. There was one family member who lost a son on 9/11, who offered this statement. I want to play it for our viewers -- a brief statement.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I have a monumental problem with accountability. I mean, as far as I'm concerned, no one has been held accountable for my son's death.

(END VIDEO CLIP)

BLITZER: The legislation has changed, the intelligence community is being reformed, but this individual and others say, you know what? Who is responsible? Who screwed up in the U.S. intelligence community and the political establishment that resulted in 9/11? They could have done a better job.

What do you make of that complaint, Congressman Hamilton?

HAMILTON: We looked at that very carefully. We concluded that what really was at fault here was a system, not a person. You can go back and see many people who did not do their jobs as well as they should have been done. But we didn't see any real purpose in bringing that forward.

What we did say was that the real problem was not an individual problem, but a systemic problem. And so we focused our attention on changing the system, the institutions.

I can readily appreciate the comment just made by the family member. There is a desire for everybody. Let's get somebody. Let's say this is the person responsible for 9/11. And we're going to hold him accountable or her accountable. I think the system is just too complex to do that.

BLITZER: There are lots of threats out there. Two retiring members, Governor Kean, of the president's Cabinet, involved in security spoke out in recent days on specific threats. Listen to what outgoing Homeland Security Secretary Tom Ridge said about the difficulties involving securing the nation's cargo.

(BEGIN VIDEO CLIP)

TOM RIDGE, SECRETARY OF HOMELAND SECURITY: From coast to coast, in international ports all over the world, thousands of tons of cargo make their way into this country. With more than 20,000 containers coming through on a daily basis, based on sheer volume alone, cargo security is a difficult job.

(END VIDEO CLIP)

BLITZER: Based on the new law, the intelligence reform, Governor Kean, what makes you confident that they can deal with a specific threat like cargo security better now than they could before the intelligence reforms were enacted?

KEAN: Well, specific language in the bill to where we're going to have some more inspectors, you're going to have some scientific identifications of various pieces of cargo. But it's not going to be safe for a while. I mean, not only cargo, but immigration with the number of people who come across our borders, airline safety.

I mean, there are so many areas. And we try to identify them one by one in our report that really need work and need help. These things are going to happen gradually. These things are going to happen over time.

The bill we passed lays the framework. If you work inside that framework to do not only the things that have been done already under this bill, but the things that were not yet done -- they are still important, we believe in our report -- if you do those things, we will be much safer. But it's going to take time to put those things into place and, in some cases, some money.

BLITZER: One other threat out there, terrorists are attacking food supply. Congressman Hamilton, listen to what the outgoing secretary of Health and Human Services, Tommy Thompson, said on this threat.

(BEGIN VIDEO CLIP)

TOMMY THOMPSON, SECRETARY OF HEALTH AND HUMAN SERVICES: I, for the life of me, cannot understand why the terrorists have not, you know, attacked our food supply, because it is so easy to do. And we're importing a lot of food from the Middle East. And it would be easy to tamper with that.

(END VIDEO CLIP)

BLITZER: That's a pretty dire assessment on the part of Tommy Thompson.

Do you see some -- because of the language, the legislation that you passed, your experiences, that the food supply is going to be more secure now than it was before this became the new law?

HAMILTON: Well, we do. We have provisions in the bill, for example, that say we have to do planning for all of our borders, for our transportation system and all of the food supply and many, many other things that make up our security against terrorist attacks. BLITZER: So your bottom line is Americans can breathe a little bit easier now, rest assured that everything that should be done is being done?

HAMILTON: Look, you don't pass a piece of legislation. It's not a magic wand. The day the president signs that bill, Americans are not immediately safer. No piece of legislation is self-executing.

What you've done is you've put the architecture together. But from this point on, the key is implementation. And if we don't implement it right, then they're not going it be safer. But we believe that they will have the resources now and that they'll have the architecture that can strengthen our security. And they will be safer, as -- are they safer one hour after the president signs the bill than one hour before? Probably not. It takes time.

BLITZER: Congressman Hamilton, Governor Kean, thanks to both of you for your excellent work. And once again, congratulations to both of you, getting the job done, the job that you wanted done, finally. Merry Christmas to both of you, as well.

Up next, a quick check of what's making news right now, including a change by the U.S. defense secretary, Donald Rumsfeld, and the way he communities with military families. We'll have some details.

Then, serious concerns about Iran's nuclear and political ambitions. We'll talk about that with the country's ambassador to the United Nations, Javad Zarif.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

President Bush sent a message to Iranian leaders this week: Don't meddle in the internal affairs of Iraq, especially in these final weeks before the election scheduled for the end of January.

Meanwhile, the United States government continues to express deep concern over Iran's nuclear program.

Joining us now from New York, Iran's permanent representative to the United Nations, Ambassador Javad Zarif. Mr. Ambassador, welcome back to "Late Edition." Thanks very much for joining us.

JAVAD ZARIF, IRANIAN PERMANENT REPRESENTATIVE TO THE U.N.: Good to be with you.

BLITZER: I interviewed the interim president of Iraq, the other day. And listen to what he said about Iran's attitude toward his country, Iraq.

(BEGIN VIDEO CLIP)

GHAZI AL-YAWER, INTERIM IRAQI PRESIDENT: I am very concerned. There is a lot of Iranian interference in Iraqi business. It's -- beyond any doubt -- it's very clear to everybody.

(END VIDEO CLIP)

BLITZER: And a day or two later, the Iraqi interim defense minister said, "I want to warn that Iran is the most dangerous enemy to Iraq and to all Arabs. Iran is the big link in terrorism in Iraq."

I wonder if you want to respond to these allegations that your government is interfering, meddling in Iraq affairs.

ZARIF: Well, I certainly have great respect for the president of the Iraqi interim government. So I will not address his remarks.

But let me make a few general comments. I believe we're moving towards -- the international community moving towards, and most importantly, the Iraqi people are moving toward an important date, that is the date of the election.

The first time in a very long history that Iraqis may have the opportunity to determine and determine their future.

Now, there are a lot of anxieties that are involved, and we understand those anxieties. In Iraq there has been a minority rule for many, decades and perhaps centuries. and that is why there may be some anxieties, here and there, about the outcome of the elections. And some people are trying to, perhaps, question the results of the elections before they take place.

What is important, Iran has been the victim of eight years of aggression imposed by Saddam's regime on Iraq. Iran wants stability in Iraq, nothing more than a Democratic representative government in Iraq, which represents all of the Iraqi people, various groups, various ethnicities, various religious backgrounds. Nothing other than that can ensure and guarantee for Iran that there won't be another aggression rage by an repressive regime against it in the future. So we want Democracy.

BLITZER: All right, Mr. Ambassador -- let me interrupt for a second, Mr. Ambassador, with respect. Are Iranians flooding into the southern part of Iraq, right now, with the hope in trying to interfere, influence or affect the Iraqi elections?

ZARIF: No. There a lot of Iranians -- there used to be a lot of Iranians who went to Iraq for pilgrimage. It is an important --all- important (ph) holy sites in Iraq. And a lot of Iranians are interested in visiting them.

But there are regulations. The Iraqi government -- the Iraqi ambassador, actually in Tehran, has already stated that allegations are misrepresentations and don't have any foundations. We have asked...

BLITZER: Can you state categorically, Mr. Ambassador, that you oppose this violent insurgency, the terrorism? We see some 64 people were killed, only today, including in Karbala and Najaf car bombings. Does Iran have anything at all to do with this insurgency? ZARIF: We condemn in the strongest terms these acts of terrorism and inhumanity. Iran was, in fact, a victim of one of those acts. when many of our pilgrims were murdered by one of those bombings in Karbala.

In fact, Iran has had a lot of its diplomats who have been kidnapped. One of our diplomats was murdered by the terrorists. What is important, at the same time, why we have to condemn terrorism and why we should not provide any possibility for the terrorists to veto (ph) and that is the aim of the terrorists.

They want to postpone and in fact veto (ph) the elections, in order to prevent Democracy coming to Iraq, through violence. And we need to prevent it.

At the same time, it is absolutely essential that we should fight terrorism by preventing the terrorists, depriving them of their breeding ground. We should not and cannot fight terrorism by providing terrorists with even further possibilities for recruitment through indiscriminate killing of innocent Iraqis.

BLITZER: All right, let's move on and talk about deep concerns still here in Washington over Iran's nuclear program. The other day, Secretary Of State Colin Powell gave this interview to the Associated Press. Listen to what he said.

(BEGIN VIDEO CLIP)

COLIN POWELL, SECRETARY OF STATE: We have reason to believe that they have not abandoned the desire to abandon a nuclear weapon. And if you have that desire, then you may well be hiding things. I think it is wise, in this case, to be somewhat suspicious.

(END VIDEO CLIP)

BLITZER: Has Iran, like Libya, completely abandoned any hope of developing a nuclear bomb?

ZARIF: Iran never had any plans for a nuclear bomb. At the same time, Iran has a sophisticated nuclear technology for peaceful purposes and we are determined to continue that.

Now, there is a degree of international concern. Some of it is fabricated. Some of it is overblown because of the statements that are coming out of Washington and elsewhere; but some very legitimate international concerns. Because of the degree of sophistication of Iranian technology, that concern has to be alleviated. And that is why we have started a very serious and difficult process of confidence- building with our European friends and with the international community through the IAEA.

Let me tell you one important thing. Iran has been the subject of the most intrusive inspection regime in the entire international community for the past 14 months. Time and again, the assessment is repeated by the IAEA that there is no indication, no evidence of any Iranian military nuclear program. Our program is entirely civilian, has always been and will always remain entirely peaceful.

BLITZER: Here's what many observers ask. This question: Iran is one of the world's leading exporters of oil. Why do you need to develop nuclear energy if you have so much oil in your country?

ZARIF: Well, first of all, it is our right. And you don't need a reason to exercise our right.

Secondly, Iran's natural oil and gas reserves are finite. They will be depleted within a few decades. Iran will need to develop other means of energy. We are very actively pursuing hydroelectric power. We are at the same time, pursuing all other sources of energy because it will be irresponsible for a government to simply rely on a finite resource and then leave the future generations with nothing to have and no energy for the daily consumption.

Iran's consumption of energy is very high. And with the way our consumption and our rate of development is proceeding, we will be a net importer of oil and gas in a few years. What is important is for Iran to be able to have access to the technology and for the international community to be able to be confident that this access will not be diverted to military use. And we are very ready to prepare and prepared to provide that assurance.

BLITZER: Javad Zarif is Iran's permanent representative to the United Nations.

Mr. Ambassador, thanks very much for joining us.

ZARIF: It was good to be with you, and have a good holiday season.

BLITZER: Thank you. You too.

And just ahead, choosing TIME magazine's "Person of the Year," with TIME magazine's White House correspondent, John Dickerson.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

TIME magazine puts its mark on this TIME magazine man of the year or "Person of the Year," selecting the president of the United States. There it is, the cover.

TIME says it shows the president in part -- and I'm quoting now -- "for sticking to his guns and reshaping the rules of politics."

Joining us now with some assessments, some analysis of why TIME magazine picked the president, Time magazine's White House correspondent, John Dickerson. He interviewed the president this past week.

Thanks very much for joining us, John.

JOHN DICKERSON, WHITE HOUSE CORRESPONDENT, TIME: Thanks for having me.

BLITZER: Well, the obvious reason, the president got re-elected, so he deserves to be the "Person of the Year."

But Bill Clinton, when he got re-elected, didn't get it. Ronald Reagan, when he got re-elected, didn't get it.

Why George W. Bush?

DICKERSON: That's right. And it's interesting you start there.

What Bush did two years ago, when he was thinking about this campaign, is he said, I'm going to do it differently than other presidents who've done this before.

And that's part of why he was picked. He rewrote the rules in a lot of ways, and that'll affect both the way he goes forward in the next four years, and the way other politicians are going to run for office.

So it's in part the way he ran, and the way he went against those normal rules of politics, that he's the man of the year.

BLITZER: So, did the style, the structure -- who were the runner- ups? Who, if he wouldn't -- who was his closest competition for getting this honor?

DICKERSON: Well, since I cover Bush, they keep me away from those discussions. But the editors were looking at a couple of other things that were going on this year. They looked at Michael Moore and Mel Gibson, for the effect they had on the cultural debate in this country. There was a lot of...

BLITZER: The very different films they made.

DICKERSON: Two very different films they made. But both of them sort of becoming all the rage, all the conversation, and affected the political debate this year.

There was also some talk about the bloggers and the effect they had, both on the election, but then also the way we look at information in our society today.

BLITZER: There was some talk that Karl Rove, the president's top political adviser, that he was the brilliant genius behind the president, and he really deserved to get this.

DICKERSON: That's right. Well, the president called him his "architect" for the race, and so the argument was made, well, if he was the architect, then why not make him man of the year?

The decision was made, though, that one of the things you know about George Bush is, you can't phone it in. He wears it on his face, and, if Karl Rove was trying to design a strategy that George Bush didn't believe in, or that didn't really come from Bush's heart, we'd know it in a minute. BLITZER: You spent some time with the president this week. What did you come away with, that you didn't know about him before, if anything?

DICKERSON: Well, again, this president, as you know, wears it on his sleeve, and so you see a lot of his behavior -- he was real loose, though, as you might expect. I mean, he's got -- he didn't have to move out early. He's got four more years to really run out a lot of the -- we all knew he had big plans before. Well, now he has even bigger plans, and he's feeling pretty good that, as he says, he was essentially validated in his first four years.

BLITZER: Did you get a chance to talk to him at all about the controversy surrounding Donald Rumsfeld, the defense secretary?

DICKERSON: We didn't, but one of the things we write about is, when that controversy was going on during the campaign, it was one of the instances in which Republican wise men, in addition to the elites, came -- were saying things like, you've got to get rid of Rumsfeld, during the Abu Ghraib scandal, and they said a lot of other things: you've got to increase the number of troops, you've got to draw down the troops, you've got to admit a mistake.

At each of these turns, the president did exactly the opposite of what the political elites, and even elites within his own party, wanted him to do, and that is part of the reason why he is re-elected.

BLITZER: Who broke the news to the president, that he was going to be TIME magazine's "Person of the Year"?

DICKERSON: I'm sure it was his communications director, Dan Bartlett.

BLITZER: And who told Dan Bartlett?

DICKERSON: People in our magazine.

BLITZER: At TIME magazine?

DICKERSON: Yes.

BLITZER: Because you've known about this for a few days and it didn't leak and came out officially this morning. Are you surprised?

DICKERSON: Well, the news media is an incredible leaky group of people because that's what we do all day. But the White House -- letting the White House know something is very easy because they're very good at keeping things secret.

BLITZER: You did a good job, John Dickerson, from our sister publication, TIME magazine. Thanks very much.

DICKERSON: Thanks, Wolf.

BLITZER: We'll take a quick break. We'll have the results of our Web question of the day when we come back. (COMMERCIAL BREAK)

BLITZER: Now, the results of our Web question of the week. Take a look at the results. Remember, though, this is not -- repeat, not -- a scientific poll.

And that's your LATE EDITION for Sunday, December 19th. See you next Sunday for the last word in Sunday talk.

I'm Wolf Blitzer in Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


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