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THE SITUATION ROOM

Democrats Search for Iraq Strategy; Security Crackdown in Baghdad; No. 2 U.S. Military Commander in Iraq Gives Progress Report; New Surge in Presidential Contest

Aired February 28, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: We're going to have a lot more on the stock prices, the message from the markets, what's ahead. That's coming up this hour.
Also happening now, Democrats searching for an Iraq strategy. Their party divided as one plan after another gets pushed to the back burner or tossed aside. This hour, new tension headaches in the House.

On the bloody streets of Baghdad, is a security crackdown making a dent in the death toll?

The number two U.S. military commander in Iraq gives us a progress report, tells us when we'll know if this plan is working.

And new surges in the presidential contest. We're going to tell you who's gaining ground, who's losing steam right now.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Democrats trying to hold the president's feet to the fire on Iraq are getting their own fingers burned. Top lawmakers of both parties are discussing war strategy with Mr. Bush right now. But the new majority leaders in the House and the Senate went into the meeting still unable to rally their own troops.

We hear from the lawmakers when they emerge from those talks. We'll bring you their remarks.

But up first, our Congressional correspondent, Dana Bash, has more now on Iraq, the Democrats and a House clearly divided -- Dana, what's the latest?

DANA BASH, CNN CORRESPONDENT: Well, Wolf, Democrats here on the Hill clearly find themselves at an early crossroads.

Why?

Because they agree on the fact that they have a mandate from the election to try to end the war in Iraq, but when you talk to them, it's clear that their disagreements on just how to do that may be insurmountable.

(BEGIN VIDEO TAPE)

BASH (voice-over): California Democrat Lynne Woolsey sums up the mood of the Democratic majority on Iraq in one word.

REP. LYNN WOOLSEY (D), CALIFORNIA: Tense.

BASH (on camera): Because?

WOOLSEY: Because we aren't unified.

BASH: And why is that?

WOOLSEY: Well, because we have a huge tent.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: ... 246. The nays are 182.

BASH (voice-over): Just two weeks ago, House Democrats were unified in opposing the president's plan to send more troops to Iraq. But now, Democrats are openly divided on what to do next.

REP. JOHN CLYBURN (D-SC), HOUSE MAJORITY WHIP: We are what America is. We are searching for consensus. We are searching for an honorable way to address a dishonorable situation that we find ourselves in.

BASH: Senior Democrats say an early problem was this...

REP. JOHN MURTHA (D), PENNSYLVANIA: We're trying to force a redeployment not by taking money away, by redirecting money.

BASH: Congressman John Murtha pitching a plan on an anti-war Web site to bring U.S. troops home from Iraq by setting conditions on funding the president can't meet.

Conservative Democrats said no way.

REP. JIM COOPER (D), TENNESSEE: I'm not sure its in our troops' interests to attach too many clauses and legal fine print to this. The troops need the money. They needed it yesterday. Let's get them the money so they have a maximum chance of completing successfully their job.

BASH: So now Democratic leaders are pushing a proposal with less political risk. Instead of cutting or withholding war funding, it would set military readiness standards. If those aren't met, the president would have to sign a waiver and explain why.

But caution is a tough sell to anti-war liberals.

WOOLSEY: I believe that a lot of Democrats still believe that a label of not protecting the troops would be devastating to them in their next elections. And I think they are so wrong.

(END VIDEO TAPE) BASH: There, Wolf, you hear Lynne Woolsey, a liberal Democrat, saying that leaders are wrong not to go forward and really push to do whatever it takes to end the war. But then they are hearing from more conservatives saying just the opposite.

And the bottom line is the frustration here really is palpable. They know they have a job to do, but just how to do it, they're trying to figure that out, obviously -- Wolf.

BLITZER: Well, they're trying to figure it out in the Senate, as well. It looks like there's gridlock there.

BASH: There is. And what has been going on there is Senate Democratic leaders and, really, their staff, they've been behind closed doors since last night, all day today. What they're trying to do, Wolf, is figure out how to break a deadlock on what they want their next move to be, which is to reauthorize the war in Iraq. They thought, coming back from a week long recess, they would be able to move forward on that. But there were and are serious divisions over how to do that.

So what they're trying to do and what we're awaiting is word on perhaps some kind of language to thread that needle. Unclear if they're going to be able to do that in the Senate.

They're working on that, as we speak, though, Wolf.

BLITZER: All right, Dana, thank you very much.

House and Senate leaders, by the way, meeting with the president right now. They're addressing the war in Afghanistan, the war on terror, certain the conflict in Iraq probably will come up, as well.

Are they likely to find any consensus, make any headway?

Let's bring in our chief national correspondent, John King -- what are you hearing about this meeting?

The top leadership in the Congress meeting with the president and some of his top advisers.

JOHN KING, CHIEF NATIONAL CORRESPONDENT: This is the first meeting of what the White House promises will be a continued consultative process with members of Congress. It took a while to work out just how it should work.

The agreed upon agenda today is Afghanistan. Twenty people in the room for 45 minutes. No one is expecting any big headlines out of this. But it does, Wolf, expose a key political question.

Many of the Democrats, when it comes to Afghanistan, say if al Qaeda is on the run, Mr. President, then why does your own intelligence community say it is building new camps and doing new training in the mountains of Pakistan? And what are we going to do about it? Democrats would also say we might not be in this mess in Afghanistan with al Qaeda in Pakistan and the Taliban in Pakistan if we hadn't gone to the war in Iraq.

So there are a number of political points the Democrats would like to make on this issue. But, Wolf, as you know, if, because of this intelligence -- this is a huge policy question -- what will the administration do next? What will the United States do next, especially as the spring comes in Afghanistan?

So key policy questions to deal with in a very heated political environment.

BLITZER: And there is a huge issue involving President Pervez Musharraf, the leader of Pakistan. The vice president was just there. Reports he was squeezing President Musharraf to do more to deal with al Qaeda, to make sure that al Qaeda and Taliban don't have a staging ground from the western part of Pakistan into Afghanistan or elsewhere.

But there are some who are afraid the more the U.S. squeezes Musharraf, there's a danger he could go down if he's humiliated or embarrassed. And the alternative could be a real al Qaeda supporter, a real Taliban supporter with a nuclear bomb.

KING: And because of that concern, the administration does this -- you might even call it a good cop/bad cop approach. The vice president delivers that message in private. Others from the administration tell Mr. Musharraf in private, you have to do more. Then publicly they say he is a supporter.

And publicly they allow President Musharraf sometimes to poke at the United States, to try to show for his domestic political audience that he is not so beholden to the United States.

But the question facing the administration is going to be -- and it will come up in this meeting today for sure -- if Musharraf will not do more and if those training camps continue and if the Taliban and the al Qaeda resurgence continues up in the mountains, will the United States go in there in a bigger, more public way with U.S. forces?

Special Forces h been in there from time to time.

But will the United States or will the NATO alliance in Afghanistan do more across the border in Pakistan?

Something like that, publicly, could also put Mr. Musharraf's government at risk.

BLITZER: Because it's a really delicate, very delicate, extremely sensitive issue right now. And the stakes couldn't be enormous. As bad as Musharraf, some critics might say, is, it could get a whole lot worse.

KING: It could get worse if his government fell and if an extremist took over. You have the short-term -- what do we do about the Taliban and the Al Qaeda resurgence. And the counter point is as you plan that, what is the long-term, if the government of Pakistan falls?

That is what the dilemma the administration finds itself in is. It's the dilemma President Karzai faces in Afghanistan. And it's the question now, even as the military is strained, with the troop surge going on in Iraq, can the United States -- Great Britain is putting some in, there's a lot of pressure on other NATO allies to put more troops in Afghanistan to deal with this.

BLITZER: All right, John, thanks very much.

KING: Thank you.

BLITZER: John King reporting for us.

Right now, jurors are continuing to weigh the charges against the former Cheney chief of staff, Lewis "Scooter" Libby. They injected a bit of drama into the deliberations by asking the judge a question that got answered in a pretty strange way.

Our Brian Todd is watching all of this unfold at the courthouse.

What's the latest -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, as we end -- near the end of the fifth full day of deliberations, you're right, it was answered in an odd way. This was actually the first substantive question from the jurors and a little bit of a window into their deliberations.

The question had to do with count three of the indictment against "Scooter" Libby. That count is a charge of making false statements. The count essentially says that Libby falsely told the FBI that during a conversation that he had with "Time" magazine's Matt Cooper in 2003, that Libby told Cooper that reporters were telling the administration that the wife of administration critic Joe Wilson worked for the CIA, but that Libby did not know that that was true.

That was Libby's claim. The charge indicates that Libby made it falsely to the FBI.

The jurors' question to the judge was this: "Is the charge that the statement was made or about the content of the statement itself?"

Essentially meaning that jurors were asking that if the government -- does the government have to prove that Libby made that statement and does the government have to prove that he knew that it was false when he did make it?

The government does have to prove both of those things.

But the question confused the judge. He asked them to clarify it. Before they could even get back to him with a clarification, they sent another note back to the judge this morning, reading: "After further discussion, we are clear on what we need to do. No further clarification needed. Thank you. We apologize."

So the jurors went right back into the deliberations, Wolf. They've been there since then. Still no verdict.

BLITZER: And they still have another, just a little bit less than an hour before they wrap things up for today.

TODD: Right.

BLITZER: They wrap it up at 5:00 p.m. Eastern, is that right?

TODD: That's correct, Wolf. They wrap it up at 5:00 p.m. Eastern.

Interesting, though, this -- this first note from the juror on the que -- the jury -- on the question came to him right at the end of business yesterday. So anything could happen between now and 5:00.

BLITZER: All right, we'll stay on top of it, together with you, Brian.

Thanks.

Brian Todd, John King, Dana Bash -- they are all part of the best political team on television. Remember also, for the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Jack Cafferty is off today.

Coming up, when will the U.S. military know if a crackdown in Baghdad is actually working?

A top U.S. military commander, the number two commander in Iraq, he tells us what he's looking for. That's coming up right here in THE SITUATION ROOM.

Also ahead, the stock market regained some lost ground after a massive sell-off yesterday.

Should investors be breathing a little bit of a sigh of relief just yet?

We'll give you an assessment.

And a surprising endorsement on the road to the White House.

Is it a statement about the candidates' security credentials?

We're going to tell you who's backing whom and whether it's likely to matter much.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In Baghdad today, police say at least a dozen more people were killed by various bomb attacks. But authorities say some progress is being made in a security crackdown in the Iraqi capital.

U.S. and Iraqi officials report a sharp decrease in the number of bullet-riddled bodies found in the streets over the past three weeks.

But the cycle of violence still far from being broken.

The number two U.S. commander in Iraq says it will take months before we know if this crackdown is actually working.

I spoke with Lieutenant General Raymond Odierno just a short time ago.

(BEGIN VIDEO TAPE)

BLITZER: So when you say it'll take months to really determine whether this new security plan is going to work, can you be a little bit more specific -- six months, 10 months, four months?

ODIERNO: Sure. Well, I don't really know. I really don't. And that's because it's conditions-based.

But let me explain why I'm saying that. We could maintain security here. We could have things look good for one or two weeks. That's what we've done in the past. But when we've done that, we've always had some problems in not maintaining it.

So the key to this is being able to show that we can maintain the security in Baghdad over a long period of time -- six, seven months -- which enables the Iraqi government to mature, it enables the Iraqi security forces to continue to mature and take control of this.

The key is we're doing this jointly. Iraqi-led, coalition forces, Iraqi Army forces, Iraqi police -- we stay together until we get the right level of security and then we turn it over to the Iraqi security forces.

I think that will take some time. I don't want to put an exact time on it, but a minimum of six to nine months.

BLITZER: Who's more deadly, who's more dangerous to American troops, multinational forces in Iraq right now, Shiite extremists or Sunni extremists?

ODIERNO: Well, throughout the entire fight, it's clear that the Sunni extremists conduct about 70 percent of the attacks and others, about 30 percent.

What has gotten some attention about the Shia extremists is the fact that they've used these explosively formed projectiles, which, per event, are the most deadly that we've had. There's a lower number of those that occur, but per event, they're more deadlier. So that's how I would explain that.

BLITZER: And these new explosive devices that are coming in, the more sophisticated ones, are you 100 percent convinced they're coming in from Iran? ODIERNO: I am convinced that they are coming in from Iran. I believe that -- we have tried to see people replicate them here in Iraq and they have not been able to do it. The machining required, the materials that are required, we think absolutely are coming from Iran. And you saw the big cache we found just the other day. Almost 140 of these could be produced from that cache that we found.

BLITZER: But you don't know if this is authorized at the highest levels of the Iranian government or it may be coming in from local leaders or tribal leaders or what? Is that right?

ODIERNO: Well, we don't -- I don't know if it's to the highest level of the government. What I do know is we believe there's involvement of the Quds force, some relationships that they've developed with some Shia extremists and networks that they've developed over time. And we believe it's like a supply network that's coming in from Iran, of both money and supplies.

BLITZER: If you see -- if you see these supplies crossing the border from Iran into Iraq and bad guys going back into Iran, does the multinational force, the U.S. force in Iraq, have authority to cross into Iran to deal with these guys?

ODIERNO: We will not go into Iran to deal with them. What I worry about is, I will deal with them inside of Iraq. If they come into Iraq, and we believe they are acting against the government of Iraq, we'll take action, no matter who it is. And so that's what I focus on.

BLITZER: How many Iranians are being held by U.S. authorities right now?

ODIERNO: I don't know the exact number. We have some in custody. I'd leave that up to General Petraeus, when you have a chance to talk to him.

BLITZER: What about the Saudis right now?

We've heard that they're providing financial assistance to some of the Sunni leaders, the Sunni tribal leaders in the Al-Anbar Province, maybe elsewhere, to try to convince them to get tough with the Sunni insurgents. I assume this is something the U.S. supports.

ODIERNO: We are finding -- we are having some great success right now in Al-Anbar Province, and it has to do with the tribes. We are working extremely close with the tribes. I think a couple things they have realized -- I don't know if they're being funded by the Saudis or not. I don't know.

What I do know, though, is they understand that they do not want to be associated with al Qaeda and al Qaeda associated organizations.

Through the last several months, when they were working with them, in some cases, they found them to be -- they were extremely lethal against their own families. They raped their children, the women. They punished their children. They would intimidate their families. They would take away any economic ability that they had. And they realized that they could not -- they would not live like that. And they realized that they'd like to come in with the coalition and work with the coalition forces to defeat and go against al Qaeda.

And we've seen a significant movement in Al-Anbar Province over the last three or four or five months, and it's continuing to move forward.

We still have a threat out in Al-Anbar Province. But we believe now we have a good way ahead, working with these tribal leaders. We're getting -- we've had -- over the last three months, we've had the largest recruiting months we've ever had -- over a thousand each month joining the Iraqi Army and the Iraqi police in Al Anbar.

BLITZER: We're almost out of time, General.

A final question.

John Murtha, congressman from Pennsylvania, among other critics of the U.S. strategy in Iraq, have suggested that a lot of the American troops who are served there or who are about to be deployed to Iraq really aren't as fully trained as they should be, as equipped as they should be or as rested as they should be.

You're in charge of all these guys. Tell us what the situation is on the ground.

ODIERNO: Yes. And I would also tell you, I had a lot to do with training a lot of the forces that are here now. They have all gone through a significant amount of training before they come over here, both at their home station, and they all go through the National Training Center, all the combat units -- either Twenty-nine Palms for the Marines; the National Training Center in Mojave Desert for the Army; or in the German Training Center we have up in Grafenwoehr and Hohenfels.

They all go through those centers and I feel very confident that they're trained.

BLITZER: General Odierno, good luck to you and all the men and women you command over there. You've got a tough assignment. We'll continue this conversation down the road.

ODIERNO: Thank you very much, Wolf.

(END VIDEO TAPE)

BLITZER: Odierno also says the U.S. military is closely tracking the readiness of the Iraqi forces. So much of what is going to happen with this new strategy in Baghdad depends on the readiness of those 18 Iraqi battalions that are being deployed to the Baghdad area as part of this security crackdown.

If the Iraqis are not ready, this strategy presumably will fail. And he says right now about seven of those battalions are only at around 40 or 50 percent ready. Seven others may be at 65 percent to 85 percent. At least four of the battalions deployed in Baghdad, he insists, are almost 100 percent ready, 95 percent at strength.

General Raymond Odierno speaking with me just a little while ago.

Still ahead, yesterday's Wall Street was a real downer.

But how are the markets doing right now?

We're going to go live to the stock exchange to find out.

And who's got the big mo -- that would be momentum -- in the '08 presidential race?

There are some new and surprising numbers emerging today. We'll update you.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: For many investors, yesterday was a true downer. Stocks saw the worst of the trading since the day after 9/11. The Dow Jones Industrial Average tumbled more than 400 points. Declining markets in China and Europe sparked the massive stock sell-off. That was yesterday, though.

Today, Wall Street recovered some of its losses, closing with some gains. This as the chairman of the Federal Reserve offered some reassuring words earlier today.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: We expect moderate growth going forward. We believe that if the housing sector begins to stabilize and if some of the inventory corrections that are still going on in manufacturing begin to be completed, that there's a reasonable possibility that we'll see some strengthening of the economy some time during the middle of the year.

(END VIDEO CLIP)

BLITZER: Let's check in with Susan Lisovicz.

She's over at the stock exchange.

The numbers were better today, a lot better than yesterday. There was a rally, a little bit, at least.

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right. And I -- that was very reassuring, Wolf.

But having said that, the Dow closed well off its highs. I mean we saw gains of 137 points for the Dow Jones Industrials, actually, while Mr. Bernanke was speaking. He -- he gets credit for reassuring investors in the morning, saying that financial markets were performing as expected and that he had not changed his outlook on the U.S. economy.

But having said that, you know, it's not like we recaptured the losses, you know, erased the losses that we saw yesterday. It was just a fraction of what happened yesterday.

BLITZER: And some people are blaming what happened in China for triggering this massive sell-off yesterday. But there are other issues playing here in the United States, as well.

LISOVICZ: That's exactly right. And Ben Bernanke mentioned one of them, the housing market. That, you know, that is a big part of the economy. It's not only, you know, home builders, but it's retailers like Home Depot. It's all the appliance makers. So it's a big part of the economy, an important part of the economy. And we got another clue as to how it's doing.

Well, it's really under a lot of pressure. New home sales last month plunged nearly 17 percent. That's the biggest one month drop in 13 years.

Home Depot, obviously, the biggest player in retail in that field, said it doesn't think that the housing slump will really go away until the end of the year or next year.

So concerns linger about the U.S. economy. That was one of the reasons why the market sold off yesterday.

BLITZER: Susan, thanks for that.

Now, let's get some more on this stock market issue.

The world market decline made headlines around the world.

Abbi Tatton has got some more on that -- Abbi.

ABBI TATTON, CNN CORRESPONDENT: Wolf, a sell-off that started in China reflected on front pages around the globe today. In Hong Kong, "South China Morning Post," following the mainland China markets, sent tumbling, sharpest decline in a decade there.

Today, we're gaining about half. But other newspapers in the region following the knock on effect to Malaysia, "The Star," "Markets Dip," reporting jitters over a China slowdown. Malaysia's key stock exchange plunging in tandem with regional markets.

And on to Europe. Headlines in France and in Germany, Britain's "Daily Telegraph" reporting this was the first time financial markets reacted so dramatically to events in China.

And on to New York, where the headline in the "Daily News" this morning was "What Now, Dow?"

As we've just heard today, some rebound -- Wolf. BLITZER: Abbi, thank you for that.

There's been a ruling down in Florida on the fate of the remains of Anna Nicole Smith.

Fredericka Whitfield, what is that decision?

FREDRICKA WHITFIELD, CNN ANCHOR: Well, a three panel appellate court ruling of judges have decided that the custody over Anna Nicole Smith's body will remain with the guardian ad litem of the six-month- old baby.

Here's what the clerk of courts said just moments ago.

(BEGIN VIDEO CLIP)

MARILYN BUETTENMULLER, COURT CLERK: ... "v. Richard Milstein and Howard Stern," 4D07-715. The court has entered an order lifting the stay and is issuing an opinion, the effect of which will allow the remains of Anna Nicole Smith to be delivered to the guardian ad litem for burial in the Bahamas.

For further details, please refer to the opinion that the marshal will give you a copy.

(END VIDEO CLIP)

WHITFIELD: Now, it's unclear -- it's unclear just when the guardian ad litem may, indeed, get custody of the body and make its way to the Bahamas for burial. And it's unclear, Wolf, whether the mother, Virgie Arthur, who helped get this appeal going, whether she will now take the case to the Florida Supreme Court. That is always still an option -- Wolf.

BLITZER: So, basically, Larry Seidlin, the judge down in Fort Lauderdale, his decision has been upheld by the court of appeals.

WHITFIELD: That's right.

BLITZER: The court appointed guardian of the infant will now have authority to bury the body, presumably alongside her 20-year-old son in the Bahamas, which is what they originally wanted and which the mother, Virgie Arthur, the mother of Anna Nicole Smith, was resisting?

WHITFIELD: That's exactly right. So that ruling made by Seidlin will stay unless the mother, Virgie Arthur, does decide to take this case a step further -- further, potentially delaying the wishes of Judge Seidlin. It's unclear whether, in fact, they will go to the Florida Supreme Court.

BLITZER: Fredricka Whitfield, thanks very much for that.

And also happening now: If the U.S. were attacked again, what's the likelihood of it coming from Pakistan vs. Iraq? That's the question one senator asked the director of national intelligence. And there was a surprising answer. Also, for years, he lived under the don't-ask/don't-tell rule, but now he's telling, a Marine who's also an Iraq war veteran. He was one of the first to be hurt in the war. He now wants to be known as a gay man who served his country. And he wants to help others like him be able to do exactly the same thing.

And allegations he stashed $90,000 in bribery cash in his freezer caused him to lose a seat on a key House committee. But now he's been given another plum assignment. And that is causing a lot of controversy.

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

There are new ups and downs to report in the race for the White House. A new poll shows two front-runners surging and two others slipping. What does that mean for the primary season showdowns that are still several months down the road?

Our senior political analyst, Bill Schneider, taking a closer look at the campaign by the numbers.

What's the latest, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Wolf, who's got the heat for 2008? One Democrat and one Republican, and, in one case, it's coming from a surprising place.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): The 2008 races are taking on a familiar shape: an establishment candidate and an outsider in each party. And, right now, the outsiders have the heat.

Hillary Clinton is the establishment Democrat. In last month's "Washington Post"/ABC News poll, Clinton had a big lead over outsider Barack Obama. Clinton is still ahead, but Obama is gaining ground, especially with African-Americans. Last month, Clinton led Obama among black Democrats by 3-1. Now Obama is ahead.

It's not that the black Democrats are souring on Clinton. Her popularity with blacks remains undiminished. But Obama is creating excitement.

DAN BALZ, "THE WASHINGTON POST": It's the fact that you have an African-American candidate who has a serious chance of becoming the nominee of the Democratic Party. And that, inevitably, is going to excite African-Americans around the country.

SCHNEIDER: In the 2000 Republican race, John McCain was the outsider. Now he's the establishment candidate.

BALZ: McCain obviously spent a good part of the last year trying to establish himself as the -- you know, as the -- the heir apparent in the Republican Party. And he had some success with that.

SCHNEIDER: Last month, McCain and outsider Rudy Giuliani were pretty close. Now Giuliani's way ahead. Why? Here's a surprise: evangelicals.

Last month, Giuliani and McCain were tied among evangelical Republicans. This month, Giuliani has surged into the lead. Doesn't Giuliani favor abortion rights and same-sex unions and gun control? Yes and no.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

RUDOLPH GIULIANI (R), FORMER MAYOR OF NEW YORK: I am pro-choice, but I -- I'm also, as you know, always have been, against abortion.

(END VIDEO CLIP)

SCHNEIDER: Giuliani makes a distinction between his personal views and what he would do as president.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

GIULIANI: I would select judges who -- who try to interpret the Constitution, rather than invent it.

(END VIDEO CLIP)

SCHNEIDER: And he has something else going for him. That would be 9/11.

(END VIDEOTAPE)

SCHNEIDER: Republicans say, Giuliani is the most inspiring candidate, and Democrats say the same thing about Obama. They're the outsiders. Republicans give McCain the edge on experience, just as Democrats do with Clinton. They're the establishment candidate.

Which is it better to be? Well, establishment candidates usually win the nomination, but only after a tough fight -- Wolf.

BLITZER: The better Giuliani does in all of these polls leading up to the primaries, is it fair to say the more likely some of his critics on the right in the Republican Party might eventually have a change of heart and say, you know what, he might not be that bad?

SCHNEIDER: That could easily happen. On the other hand, his critics could gang up on him, because a lot of them say, you know, if the voters in the Republican Party only knew his positions, they would turn against him. So, either one of those could happen.

BLITZER: Bill Schneider, reporting, thank you.

Still ahead: Name one thing candidates outright fight to get. And that might not even matter that they have that thing. The former homeland security chief, Tom Ridge, has just offered a political gift to one presidential prospect, but will it make a difference? Want to go to all of that.

But Nancy Pelosi, the speaker, now speaking over at the White House, following her meeting with other congressional leaders with the president.

(JOINED IN PROGRESS)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: ... the vice president, the secretary of state, the national security adviser and others. It was on the subject of Afghanistan.

We have long said that that should be the focus of the war on terror. And, today, we were able to share some ideas with the president on that.

It also gave us an opportunity to say that the commitment that is required in the fight that we're in and in the initiative in Afghanistan, in order for that to be sustained, we must recognize the cost to our veterans when they come home. And that was part of what we talked to the president about as well.

But I -- the president and -- and the spirit in which he opened the meeting of hoping that we can work together in a bipartisan way was the spirit in which the meeting was conducted, and I think a good start to a dialogue with the president that had been absent, quite frankly, in sharp contrast to what is happening in Iraq.

Mr. Leader?

SEN. HARRY REID (D-NV), MAJORITY LEADER: As you will recall, these meetings were a suggestion of Senator Lieberman, and we first wanted to make sure that we were part of setting up the meetings. And the speaker and I spoke to the president personally. And the participants at this meeting were chosen by the speaker and me.

I think it was a very, very good meeting. We are, of course, very concerned about what's happening in Iraq, with the spring offensive coming. We acknowledge that there's a lot of work to be done there. And I particularly stressed the need to do something about reconstruction.

We have got -- we -- we're not going to win Afghanistan, unless we have a strong component of our being good at what we do well: building hospitals and schools and roads. And the -- the administration, all the officials there, indicated that they recognized this.

Finally, underlining what the speaker said: spring offensive. We're going to have soldiers going to be hurt -- hopefully, none killed, but it hasn't worked out that way so far.

This program, in addition to Iraq, has brought attention to the American people that we have to do a better job of taking care of the injured and hurt when they come home, not only when they're under the auspices of the United States military, but also when they're transferred to the Veterans Administration.

For the Senate, I have got Senator Levin and Senator Murray, representing the Armed Services Committee and the Veteran's Committee, working to have a program that we have strong oversight with this program. And it's -- it's so, so important.

Any questions?

(CROSSTALK)

QUESTION: (OFF-MIKE)

REID: OK.

BLITZER: All right, we're going to monitor the statements from the congressional leadership. They have just met with the president. You see the secretary of state at least walking with the president there -- a meeting that we will continue to watch the fallout, what's going on over there at the White House -- much more on that coming up.

Also coming up, Jeff Greenfield standing by on a key endorsement in this presidential race, what it may mean -- all that and a lot more right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: There's apparently been a decision involving Jose Padilla.

Let's bring in our homeland security correspondent, Jeanne Meserve.

What are we picking up, Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, the judge in the case has decided that Jose Padilla is competent to stand trial.

This is a matter that's been debated in her courtroom for the last four days. Padilla's defense attorneys have said that the three- and-a-half years he spent in a Navy brig as a enemy combatant seriously affected him. They put psychologists on the stand, who testified that he suffered from post-traumatic stress disorder and Stockholm syndrome.

However, prosecutors pointed out that the lawyers, the prosecutors had never complained before about his mental state, when they had filed hundreds of pages of filings in this case.

They also elicited testimony on the stand from a Bureau of Prisons psychologist, who said that he felt Padilla was perfectly fit to stand trial, although people from that Navy brig did testify that he had been held under difficult circumstances, for instance, that the windows to his cell had been blacked out, that he had sometimes been forced to sleep on a steel frame without any mattress -- but the judge ruling today he is competent to stand trial, that trial scheduled to begin on April 16 -- Wolf.

BLITZER: And where will that trial be?

MESERVE: That trial is going to be in the state of Florida. It's going to be in the U.S. district court down there.

BLITZER: All right, we will watch all of this unfold.

Thank you very much, Jeanne, for that.

Still to come here in THE SITUATION ROOM: The former homeland security chief, Tom Ridge, has just offered a political gift to one presidential prospect. Will it, though, make any difference?

And, in our "Strategy Session": a new surge in the polls for two presidential candidates.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Republican Senator John McCain has just received a coveted gift from a former homeland security chief, Tom Ridge. But will it actually matter?

Let's turn to our senior analyst, Jeff Greenfield, in New York -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Wolf, just how much does it mean when a major candidate wins another politician's endorsement? It's probable, indeed, almost inevitable, that it will be poked and prodded and pondered for every conceivable scrap of significance.

But let me suggest another approach. Let's take a deep breath and try the decaf.

(BEGIN VIDEOTAPE)

TOM RIDGE, FORMER HOMELAND SECURITY CHIEF: I think, as we look to 2008, he's an individual who will be prepared to lead on day one.

GREENFIELD (voice-over): That's Tom Ridge endorsing Arizona Senator John McCain.

Ridge is a former governor of Pennsylvania, a state with lots of convention delegates. And, maybe more to the point, Ridge is the former head of the Department of Homeland Security. Aha. There's the significance. After all, it's former New York Mayor Rudy Giuliani whose work in the hours and days after September 11 made him America's mayor and a viable White House contender.

So, maybe this is a blow to Giuliani -- or maybe not. After all, Ridge's tenure at Homeland Security was not exactly smooth sailing.

(BEGIN VIDEO CLIP)

RIDGE: From a yellow code to an orange code.

(END VIDEO CLIP)

GREENFIELD: For instance, the suggestion that Americans protect their homes with duct tapes drew this derisive tabloid headline. And, as for the famous color-coded warnings, that was pure grist for the late-night comedy mills.

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

JIMMY FALLON, ACTOR: ... officially upgraded the nation to terror alert level orange.

Hey, happy orange alert, everybody.

(END VIDEO CLIP)

GREENFIELD: More broadly, endorsements in general have proven less than consequential.

(CHEERING AND APPLAUSE)

GREENFIELD: Back in 1972, Senator Ed Muskie had virtually the entire Democratic establishment behind him. His campaign was dead by spring.

JOHN SUNUNU, FORMER NEW HAMPSHIRE GOVERNOR: Taxes, downsizing government...

GREENFIELD: In 2000, former New Hampshire Governor John Sununu and just about the whole of the New Hampshire Republican political establishment backed George W. Bush. McCain beat him by 19 points.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: Howard Dean...

GREENFIELD: In late 2003, the surging campaign of Howard Dean was boosted by the backing of the Democrats' last nominee, Al Gore. Coincidence or not, the Dean campaign began to un-surge almost immediately.

HOWARD STERN, RADIO TALK SHOW HOST: I support John Kerry.

GREENFIELD: And, in 2004, two iconic heroes of American males, Bruce Springsteen and Howard Stern, threw their support to John Kerry, who lost the white male vote by a landslide.

(END VIDEOTAPE)

GREENFIELD: So, when does an endorsement matter? When it's a surprise, when it comes from an unlikely source.

So, for example, if Bill Clinton were to back Senator Barack Obama, that might be a pretty big deal -- Wolf.

(LAUGHTER)

BLITZER: I would say so, indeed, Jeff. Thank you for that.

Unlikely to happen, though. Up next: our "Strategy Session." Obama, Giuliani, are they really surging? If so, is it too early? Paul Begala, Bill Bennett, they are standing by for that.

Also, Senator Arlen Specter, he's live here in THE SITUATION ROOM. Does he foresee a constitutional crisis between President Bush and the Democratic-controlled Congress over the war in Iraq? He's got some strong views on this issue.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In today's "Strategy Session": some surprising new poll numbers regarding the race for the White House.

Joining us now, our political analyst and Democratic strategist Paul Begala, and our CNN contributor Bill Bennett, also of the Claremont Institute and the host for the radio show "Morning in America."

Guys, thanks very much for coming in.

Let's talk a little bit on the Republican side first. Look at these new numbers in this "Washington Post"/ABC News poll. Republicans leaning -- or leaning Republicans, Giuliani now gets 44 percent, McCain 21 percent. That's a significant improvement for Rudy Giuliani since last month.

BILL BENNETT, CNN CONTRIBUTOR: Yes.

well, I will go to where I -- where I live, my radio show. I have a right, center-right audience. And I would say it's 2-1, 3-1 in favor of Giuliani. There are people who stand up and call in and say, we can never live with his positions on abortion, gay marriage.

But, for most people, they love the leadership. They love the fact that he's a stand-up guy, that he sent that -- that guy home, that Saudi guy home with his money, and that he's a leader. And, you know, it's very interesting, Wolf.

BLITZER: Because these are registered Republicans in this poll or independents who lean Republican or tend to vote Republican. And he's -- let me -- let me let Paul weigh in as well.

BENNETT: Can I just say quickly...

BLITZER: Yes, go ahead.

PAUL BEGALA, CNN POLITICAL ANALYST: Go ahead.

(CROSSTALK)

BENNETT: Because the issues that -- that we're talking about -- I threw out today the issue of the vaccine, you know, the CDC report... BLITZER: The cervical cancer.

(CROSSTALK)

BENNETT: ... you know, on cervical cancer.

(CROSSTALK)

BENNETT: No calls on that. All the calls were about Iran and Iraq and foreign policy and terrorism.

And I think this is part of why Giuliani, at this stage, is very strong.

BLITZER: What do you think?

BEGALA: It's remarkable, because, on top of that, at least according to "The Post"'s analysis of its poll, Giuliani's growth is among white Protestant evangelicals, the very people who are most opposed to gay rights, which Giuliani supports, abortion rights, which Giuliani supports, stem cell research, which Giuliani supports.

They probably don't like gun control very much. And Rudy is a big gun control guy. This is phenomenal, to be beating John McCain 2- 1. We're a long way away. But to be growing the way Rudy is, not among liberal Republicans, but among the most ardent Republican base, those Protestant evangelicals, it's very impressive.

BLITZER: All right, let's talk on the Democratic side.

A month, five weeks ago, Hillary Clinton, among registered Democrats or those independents leaning Democrat, she had a 41-17 lead over Barack Obama. Now it's been narrowed to 36-24.

What's going on, on the Democratic side?

BEGALA: Well, again, "The Post" analyzed its own poll. It's not our poll.

But he -- that Barack has grown among African-Americans -- Bill Schneider reported that earlier -- that's sensible. You know, I wonder if the Obama camp wasn't hoping for more. I mean, he's got the number-one bestseller hardback and the number-four best-seller paperback. He's on Oprah.

He had a stunningly good announcement, spectacular, 15,000 people. And he gave a brilliant speech. And he's still 12 points behind Hillary.

So, I guess, you know, Hillary's camp is probably not -- I still think they overreacted. They didn't act like they were 12 points ahead last week, when they had that little kerfuffle over David Geffen's comments.

BLITZER: What's your analysis?

BENNETT: But, yet, I mean, he is -- he is moving up. And he is exciting. He is very exciting.

Mrs. Clinton, say what you want about her, accomplished, works hard, diligent, ambitious, she's not exciting. And Obama is. He's lighting them up.

We have a long campaign. It's funny. People talked about, have we started too early? It favors the guy who's interesting and exciting. People think we have to watch this show for two years. But, again, it is very early in both.

But I -- I think he's doing surprisingly well. What -- what -- what's now in play is the idea that Mrs. Clinton is not inevitable.

BLITZER: And Al Gore, even though he's not running, at least not yet, he comes in third, ahead of John Edwards, in this ABC News/"Washington Post" poll.

I assume he's going to get a little bounce from that Academy Award Oscar.

BEGALA: He ought to.

And, hopefully, more people will see his film, which I suspect is his real goal here, irrespective of whether he runs for the president. He believes deeply in these global warming issues. And it -- and it is a real crisis.

So, good for him. It does put him in an interesting position. He's the only person in my party who can sit back and wait. And perhaps Hillary and Obama and Edwards and the rest will just tear each other apart.

Wouldn't it be something if, eight, nine months from now, Al Gore comes into the race then, and he's the fresh face? We're tired of seeing Obama. And Al Gore, who has been doing this for 30 years, would be the fresh face in my party. It's not impossible.

(CROSSTALK)

BENNETT: Maybe he could get some colors coordinated, different blends. You remember that?

(LAUGHTER)

BENNETT: But we have the same situation.

(CROSSTALK)

BLITZER: He can consult with Naomi Wolf.

But let me -- let me pick your brain...

(LAUGHTER)

(CROSSTALK)

BLITZER: ... on another issue, a very important issue...

BENNETT: Yes.

BLITZER: ... immigration.

BENNETT: Yes, sir.

BLITZER: There's now a new momentum. The president supports immigration reform. Senator Kennedy, working with Senator McCain, wants some new legislation, a guest-worker program, a path towards citizenship, obviously, strengthening the borders, border security.

Is this going to be a big issue? Because, if it is...

BENNETT: Yes.

BLITZER: ... on the Republican side, Giuliani and McCain, I don't think, are that far party from the president on this issue.

BENNETT: I think that's right.

I'm going to sneak in what I wanted to say, because Gingrich is finishing third in a lot of Republican polls. And he's not running. He's finishing ahead of Romney. Romney is sinking, and -- and Gingrich is going up. This is an opening for Gingrich, again, if he thinks he wants to get in.

You're right about McCain and Giuliani, as far as we know Giuliani's position. But McCain is so much more identified with this issue. Believe me, among the Republican base, people are very unhappy with McCain's position. The more prominence this gets, I think the trickier it is for -- for McCain here.

BLITZER: We will leave it there, guys.

Thanks very much, Bill Bennett, Paul Begala.

Still to come: We're going to take you inside the threat of war with Iran and the debate over whether the U.S. should go on the attack -- much more coming up right after this.

(COMMERCIAL BREAK)

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