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THE SITUATION ROOM

Reid Threatens to Cut Off All Iraq Funding; Pelosi Goes to Syria; John Bolton Interview; Campaign Fundraising

Aired April 2, 2007 - 16:00   ET

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


SUZANNE MALVEAUX, HOST: Happening now, a stunning new threat in the showdown over Iraq War deadlines. The top Senate Democrat says he's ready to pull the funding trigger unless President Bush blinks.
Also this hour, the House speaker in the Middle East and under fire.

Is Nancy Pelosi's trip to Syria a diplomatic danger?

I'll ask the former U.N. ambassador to the U.N. John Bolton.

And money talks -- we'll tell you which presidential contenders are bragging about their first quarter cash hauls and shattering records along the way.

Wolf Blitzer is off today.

I'm Suzanne Malveaux and you're in THE SITUATION ROOM.

It is the political equivalent of the nuclear option and it was thrown today into the already high stakes Iraq battle between the Democratic controlled Congress and the president.

Senate Majority Leader Harry Reid now is threatening a vote to cut off most war funds if President Bush makes good on his current veto threat. Mr. Bush rejects bills passed by the House and Senate that include timetables for withdrawal.

Vice President Cheney took aim today again at Democrats' push for a deadline, accusing them of aiding the enemy and putting the troops at risk.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: It's time for Congress to stop the political theater and send the president a bill he can sign into law. By delaying funding for the troops, the Democrats believe they can make the president accept unwise and inappropriate restrictions on our commanders. It's nothing less than an attempt to force the president's hand. They're going to find out they've misread George W. Bush.

(END VIDEO CLIP)

MALVEAUX: And let's now bring in our White House correspondent, Ed Henry -- clearly, the White House can't be happy about what's going on.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: You'd better believe it, Suzanne.

In fact, it was almost a double-barreled assault. You heard Vice President Cheney there. But then also the White House, Spokeswoman Dana Perino, coming out and basically suggesting to reporters that over the weekend Harry Reid must have read some sort of a new poll, she said, that shifted his position on all of this.

Dana Perino obviously filling in for Tony Snow, the regular spokesman, while he recuperates, but she's not acting like a stand-in. She's been very feisty at the podium and she pulled no punches today.

(BEGIN VIDEO CLIP)

DANA PERINO, DEPUTY WHITE HOUSE PRESS SECRETARY: There's just these shifting sands when it comes to the Democrats and their decisions. It's almost shifting so fast it's like a sandstorm.

(END VIDEO CLIP)

HENRY: Now, Reid's spokesman, Jim Manley, fired back right away, using that same sand metaphor, saying: "The only thing that has shifted is the public's opposition to the war in Iraq. As more and more Americans demand to see the troops get out of what is clearly a civil war, this administration stubbornly continues to stick its head in the sand."

Now, as you know, both sides were already in a showdown over this war funding bill that the Democrats added a provision that would basically begin pulling out troops within 120 days. The president already vowing to veto that bill.

This is only escalating things. Vice President Cheney saying today if Democrats thought the president was going to back down, they've misread George W. Bush -- Suzanne.

MALVEAUX: So, Ed, does this mean that the White House is sporting for another fight?

HENRY: Oh, absolutely. I think obviously you see that the president is in a tough position in the polls because of the war in Iraq. They think that if they turn this funding fight front and center, they can get the Democrats on the defensive. They're already waving -- the White House is waving around a comment from Harry Reid back in November, when he said: "We're not going to do anything to limit funding or cut off funds."

You remember coming out of the election, the Democrats said they would not cut off funds. Now you have the Senate majority leader talking about it. The White House ready to throw his own words right back in his face -- Suzanne.

MALVEAUX: Ed, thank you so much for keeping us up to date on that. And, of course, now we go to Capitol Hill and the strategy behind the Democrats' new threat to cut off Iraq War funding.

Lisa Goddard of CNN Radio -- she broke this story for us earlier today -- Lisa, congratulations.

Tell us, first of all, is this a stunt or does the senator believe that he is going to get votes to pass this?

LISA GODDARD, CNN RADIO CORRESPONDENT: That is precisely what Republicans are asking, as Ed just alluded to. Senate Minority Leader Mitch McConnell, his staff telling me they don't think the votes could possibly be there, even to get this to the floor.

But the Democrats are defiant here. This is a calculated move. It's a chess match. And it seems to me what's happening here is Democrats are trying inch by inch to move their pieces so that the president has to back into a corner.

This is the next step, Harry Reid says, in a series of moves they hope will make the president change his policy in Iraq.

MALVEAUX: So, Lisa, when would they actually vote on this?

GODDARD: Yes, this is one of those things that I could imagine folks at home picking up their remote control and going click, because it's so confusing in Washington.

We can simplify it. Essentially what will happen now is the House and Senate will try and work out details of the war spending bill that has these general timeliness for withdrawal.

Then the president will decide if he is going to veto that. As Ed says, that veto looks very likely.

After that veto happens, if it does, that's when Harry Reid and the Democrats say they will bring this tougher bill to the floor, to cut off funding.

All of that could happen in just weeks. At the latest, they say, by Memorial Day -- Suzanne.

MALVEAUX: Thanks very much, Lisa, again, and congratulations for breaking that story for us.

GODDARD: Thank you.

MALVEAUX: And now to the race for the White House. Today, there is a new way to measure the candidates' early success or failure. The '08 contenders are releasing fundraising estimates for the first three months of this year, that is, the first quarter.

I want you to take a look at this now. Democrat Hillary Clinton reports a whopping $26 million in contributions in the first quarter.

Republican Mitt Romney comes in second in this cash contest. He estimates raising nearly $21 million.

Republican Rudy Giuliani reports $15 million in the first quarter contributions.

Democrat John Edwards is a close fourth, with an estimated $14 million raised.

Republican John McCain is in fifth place with $12.5 million in donations.

No word yet on Barack Obama's cash haul.

Other contenders report raising far less.

Our senior political analyst, Bill Schneider, here to put all those numbers in perspective.

Obviously some surprises and some things that we also expected.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's right, Suzanne.

The first quarter fundraising figures are starting to come in. Time to show us the money.

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): Records are shattering as we begin to tabulate fundraising for the 2008 campaign.

(BEGIN VIDEO CLIP FROM "CABARET")

UNIDENTIFIED ACTORS: Money, money, money, money, money, money, money.

(END VIDEO CLIP)

SCHNEIDER (voice-over): Senator Hillary Clinton, a cool $26 million in contributions for the first quarter -- nearly three times as much as the previous record holder, Al Gore, for money raise at this point in the campaign.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I'm proud that I have such strong financial support from across the country.

SCHNEIDER: John Edwards reports an impressive $14 million.

Barack Obama -- his numbers have not come in yet, but they're also expected to be strong.

Even the candidates farther down in the polls are posting good results.

MARK PRESTON, CNN POLITICAL EDITOR: Someone like Bill Richardson's ability to post $6 million in the first few months of the fundraising cycle is quite amazing. UNIDENTIFIED MALE: Mitt Romney. Whoo!

SCHNEIDER: A big surprise on the relationship side.

PRESTON: I think that the quarter goes to Mitt Romney. The former governor of Massachusetts raised more than $20 million.

SCHNEIDER: Republican frontrunner Rudy Giuliani's $15 million is not too shabby.

John McCain's $12.5 million looks healthy. But the McCain campaign says, "We had hoped to do better."

Altogether, candidates from both parties have raised more than $100 million so far. That dwarfs the $27.4 million raised in the first quarter of 1999, the last time both parties had competitive races.

Why so much money?

With no incumbent president or vice president running, the race is wide open.

CLINTON: But eventually I think we've got to look toward public financing.

SCHNEIDER: Most of the leading candidates in both parties have concluded that public financing will not be adequate this year, so they're raising money for both the primaries and the general election. We could be looking at the first billion dollar election in the nation's history.

(END VIDEO TAPE)

SCHNEIDER: All that big money does not come from a few fat cat contributors. The most an individual can contribute to a candidate is $2,300 for the primaries and $2,300 for the general election. So it looks like a lot of people out there are willing and able to do that -- Suzanne.

MALVEAUX: So, Bill, it was really surprising -- we saw Mitt Romney, I mean, an amazing amount of cash there. And then McCain pretty much down at the bottom.

What does this say about their campaigns here? Does it pay to be the frontrunner or do we see Romney kind of in the background working his way up?

SCHNEIDER: Well, generally, all the frontrunners did well, the frontrunners in the polls, because they have high name recognition and contributors want to bet on a winner.

The biggest surprise in these figures is Mitt Romney. He has been running third in the Republican polls, but he's running first in fundraising. That's a very, very big net take of over $20 million.

McCain, as he said it, as his campaign said, a little bit disappointing. But $12.5 million is no small sum.

MALVEAUX: Thanks, Bill.

We'll be watching those numbers and see how they do the second quarter, of course.

SCHNEIDER: Sure.

MALVEAUX: And online campaign contributions -- donations, rather -- are playing a huge role in the race for Democratic dollars.

Internet reporter Abbi Tatton has been following the presidential paper chase. You've been doing this for months -- so what are you seeing today?

ABBI TATTON, CNN CORRESPONDENT: Suzanne, that Hillary Clinton is leading in terms of online donations, $4.2 million. But close behind, John Edwards. His almost $3.3 million, representing almost a quarter of his total.

And this follows a three month period where supporters' inboxes have been deluged with these fundraising pitches, pitches that were still coming in just hours before the deadline on Saturday.

And looking at the Web sites today, both Hillary Clinton and John Edwards touting the success of their online fundraising so far -- Suzanne.

MALVEAUX: And, Abbi, we still don't know Barack Obama's numbers here.

Are they being coy here? Do you have any -- any clues?

TATTON: We have some small clues. We've got no dollar amount, but what we do have from the Barack Obama Web site is they're touting the volume of support, the amount of supporters they have, more than 83,000 people. That's more -- those are people making contributions. That's more than the numbers released by the Clinton camp, by the Edwards camp.

But how much those 83,000 people have given, well, that's the number we're still waiting on -- Suzanne.

MALVEAUX: Well, you'll be sure to give that to us as soon as it comes out.

Thanks again, Abbi.

And, of course, Abbi Tatton, Bill Schneider and Lisa Goddard and Ed Henry all part of the best political team on television.

And remember, for the latest political news at any time, check out the Political Ticker at cnn.com/ticker.

Time now for The Cafferty File.

Jack Cafferty joining us from New York.

I'm back -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Suzanne, nice to see you, as always.

House Speaker Nancy Pelosi's Middle East tour continues and so does criticism of it from the White House. After making stops in Israel yesterday and Lebanon today, Pelosi goes to Syria next.

The Bush administration has asked her not to go there, something about the speaker of the House and leader of the Democratic Party meeting with leaders of a country that sponsors terrorism not sitting too well with the Bush administration.

But Pelosi shrugging it off. In fact, she said: "It's interesting, because three of our colleagues, who are all Republicans, were in Syria yesterday and I didn't hear the White House speaking out about that."

On Sunday, three Republican congressmen did meet with Syrian President Bashar Assad and said later they see an opportunity for dialogue with the leadership there.

Pelosi says she's being singled out.

So here's the question -- should Nancy Pelosi be visiting Syria, a state that sponsors terrorism, over the objections of the White House?

E-mail your thoughts to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Suzanne.

MALVEAUX: So, Jack, what do you think?

Do you think Pelosi should head to Syria?

CAFFERTY: I think she should go wherever she feels like going. I don't care where she goes. Glad, you know -- let her do what she wants.

Who cares?

MALVEAUX: Well, do you think it will help at least bring the troops home?

CAFFERTY: Oh, going to Syria help bring the troops home?

I don't -- that's a long way to connect the dots. I don't see a connect there at all. You know, part of it probably is to upstage the Bush administration.

On the other hand, the Iraq Study Group said we should talk to Iran and Syria about some sort of settlement in Iraq. And the White House has rejected that idea. So I don't know.

Who knows?

MALVEAUX: Well, we'll see, Jack, if it makes any difference.

CAFFERTY: Yes.

MALVEAUX: OK.

Thanks, Jack.

And, of course, coming up, if he runs for president, Newt Gingrich may already have alienated a big bloc of voters.

Is he standing by his suggestion that Spanish is the language of the ghetto?

Plus, the outspoken former U.S. ambassador to the United Nations, John Bolton.

Is he following the White House lead in trashing the House speaker's trip to Syria?

I'll ask him.

And if cash is king, is Hillary Clinton reigning over the presidential field?

We'll read between the bottom line of those new fundraising reports with James Carville and Terry Jeffrey.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Now, some Hispanic critics have called his words hateful. That would be comments from Newt Gingrich, the Republican and former House speaker, is blasting bilingual education and doing it by using a very controversial reference.

Our national correspondent, Bob Franken, here with the details.

Obviously, you've covered Gingrich for years now. He's again in hot water, a familiar place, sometimes, for him.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Absolutely.

He may run for president, but the job that he probably relishes more than any other is that of provocateur.

(BEGIN VIDEO TAPE)

FRANKEN (voice-over): In a speech this weekend, former Speaker Gingrich called for English to be the official language of government and all public schooling.

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: We should replace bilingual education with emergence -- with immersion in English so people learn the common language of the country and so they learn the language of prosperity, not language of living in a ghetto.

FRANKEN: The phrase "language of the ghetto" was vintage Gingrich. And so was the outraged response to it.

CHRISTINE NEUMANN-ORTIZ, VOCES DE LA FRONTERA: Three words came into my mind -- ignorance, eliticism and racism.

FRANKEN: Mr. Gingrich's office declined to comment on whether the line was part of his prepared speech.

GINGRICH: The elites in this city will go crazy. They'll say you're not allowed to talk about that. Well, we just did.

FRANKEN: If Gingrich does run for president, he might have to find his support somewhere besides any bloc of Hispanic voters.

ROSA ROSALES, LULAC: It was just very offensive. And I would say to him that I heard he might run for president, that if he expects any kind of support from the Latino community in the United States, that he needs to do much better.

FRANKEN: Many Republicans, including President Bush, have pushed hard to win over Latino voters. In 2004, George W. Bush won 44 percent of the Hispanic vote. Last year's street demonstrations showed that supporters of immigration can turn out high numbers.

But English only advocates say that while Gingrich's choice of words was not ideal, his positions on the subject and English immersion could be a winner with those on the other side.

JIM BOULET, ENGLISH FIRST: Official English has 80 percent support. The mystery is not that Newt Gingrich has endorsed it, but every other candidate, Republican and Democrat, has not.

(END VIDEO TAPE)

FRANKEN: Will Gingrich apologize for his remarks?

Well, his office declined to comment.

But a review of his past speeches has shown that he has supported English only and opposed bilingual education. But his use of the word ghetto shows that when it comes to getting attention, Suzanne, he hasn't lost his touch.

MALVEAUX: And, Bob, I know the White House, the president has used the strategy to gain Latino voters by the president speaking Spanish, also taking on immigration reform.

What is the thinking behind Gingrich here, the strategy?

FRANKEN: Well, he's speaking Gingrich. He's probably reminding what he would perceive the Republican -- Republican core to be that he was their champion, that he has presided over some of their most glorious victories.

Of course, those on the other side would suggest that he has also presided over some failures, too.

MALVEAUX: OK, thanks again, Bob.

And coming up, are some U.S. troops in Iraq getting a reprieve?

New deployment news from the Pentagon ahead.

And imagine if your car got 100 miles to the gallon. We'll find out if it's more than just a pipe dream.

(COMMERCIAL BREAK)

MALVEAUX: Brianna Keilar is monitoring the wires, keeping an eye on the video feeds from all around the world.

She joins us now with a closer look at the other incoming stories that are going on -- what are you finding?

BRIANNA KEILAR, CNN CORRESPONDENT: Hi there, Suzanne.

Well, just in, we understand that an inmate stand-off and a hostage situation in a Columbus, Ohio suburb has come to an end. We have some new video in here -- there you see it -- of a man that police identify as 34-year-old Billy Fitzmorris being led out of this business. It looks like a house, but it's actually been converted into a business.

Police leading Fitzmorris out there. They say that Fitzmorris escaped while getting treatment at a hospital in Youngstown, Ohio. That's in the northeastern part of the state. And that Fitzmorris then drove to the Columbus area, where he has relatives, that he robbed a couple of banks on the way, before holing up in this business. And police say there was one hostage in this situation and that hostage was released unharmed.

Now, in other news, we knew they'd be going back to Iraq, but now we know it'll be sooner than expected. That would be many of the 9,000 troops headed to Iraq as part of scheduled troop rotations. Many are going back before they're able to spend a full year at home.

Today, the Army said about 7,000 will deploy between June and November, with two units deploying before their full year at home is up.

And regarding how terror details at Guantanamo Bay will face justice, the Supreme Court is again refusing to jump into the legal fray. Today the court denied appeals from two groups of prisoners. The vote, 6-3. The court says the details could appeal once the legal proceedings they'll face are done. Some of those proceedings have already started at Guantanamo Bay.

And the Supreme Court hands a global warming victory to environmental groups. In a 5-4 ruling, the court gives states the right to sue the Bush administration to force officials to regulate carbon dioxide emissions from new cars. The court also ordered the government to rethink its conclusion that CO2 is not a pollutant. The majority opinion says U.S. motor vehicle emissions contribute to greenhouse gases and global warming, but the dissenting opinion says the federal government should decide such issues, not the courts -- Suzanne.

MALVEAUX: Brianna, thanks for keeping us up to date minute by minute.

We'll get back to you soon.

And, of course, the question is will your car ever be able to get 100 miles per gallon?

It sounds kind of crazy, but it could happen sooner than you think.

Our Internet reporter, Jacki Schechner, has more on a contest that actually could change how much you pay at the pump.

How does this work -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: It sounds too good to be true, huh?

Well, let me...

MALVEAUX: Yes.

SCHECHNER: Let me take you back.

This right here is Space Ship One. And it won a $10 million X Prize back in 2004 for innovation in space tourism.

Well, now the X Foundation, the X Prize Foundation, is offering a multi-million dollar prize to get people to try to build better transport here on Earth. They want people to build a car that's going to get at least 100 miles per gallon or the equivalent in alternative fuels.

There are some rules. It's going to be up to current emissions standards. It's got to be a viable car, not a concept car or a science experiment.

There's going to be two categories for this contest. One is mainstream, which is going to hold at least four people, and then an alternative car, which will hold at least two people.

We spoke to the X Prize Foundation and they say they have serious interest from all major automakers, but the contest will be open to anyone -- Suzanne.

MALVEAUX: Well, I hope that -- I can hardly wait until they find an answer, huh?

SCHECHNER: Wouldn't that be fabulous?

MALVEAUX: Oh, that would be so cool. SCHECHNER: How much cheaper driving would be, huh?

MALVEAUX: And cool cars for you and I both, I'm sure.

SCHECHNER: That would be fabulous.

MALVEAUX: Thanks, Jacqui.

SCHECHNER: Sure.

MALVEAUX: And, of course, up next, another video of a captive British sailor that Iran is billing as confession. We have the latest on the dispute over details and territorial waters.

I'll also ask a former U.N. ambassador to the U.N. John Bolton, about this stand-off.

Is it more ammunition for a U.S. strike against Iran?

(COMMERCIAL BREAK)

MALVEAUX: I'm Suzanne Malveaux.

Happening now, another shot fired in the battle of the branches. The Senate's top Democrat threatens a vote to cut off nearly all funds for Iraq within a year -- Majority Leader Harry Reid threatens that if President Bush vetoes a bill with the timetable for withdrawal.

Responding, the White House blasts Democrats as having shifting positions on Iraq.

Regarding those 15 British sailors and marines being held in Iran, Iranian media claims all have confessed to illegally entering Iranian waters. Reports say they did so on video, but that video is not going to be aired. Iran's media says it's seeing new, more positive motions from Britain that may help resolve this stand-off.

And a tsunami unleashes death on the Solomon Islands in the South Pacific. Thousands of survivors huddle on hilltops for refuge, as unclaimed bodies float in the water. We'll have the latest on this deadly act of nature.

Wolf Blitzer is off today.

I'm Suzanne Malveaux and you're in THE SITUATION ROOM.

Tough questions today about Middle East flashpoints and risky diplomacy.

We are joined by the former U.S. ambassador to the United Nations, John Bolton.

Thank you so much for being with us today.

Of course, the first question, you've worked for the president. You've put in a lot in foreign policy here. What we're seeing is Speaker Nancy Pelosi says she is going to Syria to deliver a message from Israel to open up negotiations.

Has the president lost control of his foreign policy?

JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: I don't think he's lost control. But this is a very confusing thing to do.

And I think it's naive, at best, and -- and possibly quite counterproductive. I'm at a loss to understand why Speaker Pelosi wants to do something like this.

MALVEAUX: The White House has said, and it has asked her, essentially, that, look, this is not helpful, in terms of our stand. I know the Iraq Study Group says, talk to Syria, talk to Iran. They say, don't do this.

How would you approach her, if you were still in the administration in your ambassadorial kind of -- in your position?

BOLTON: Well, I don't think it's productive for her to go to Syria, at all.

But to pretend to be an envoy not just for the United States, but for Israel, has to be sending, at best, very confusing signals to the dictator in Damascus. So, I would simply hope that people would understand that, under the Constitution, the president conducts foreign policy, not the speaker of the House.

MALVEAUX: But what's strange here is that the prime minister of Israel, Ehud Olmert, I mean, he knows where to go if he wants to have talks, negotiations. Go to Secretary of State Condoleezza Rice. Instead, he goes to Nancy Pelosi here.

I mean, what does that say?

BOLTON: Well, I hope that isn't exactly what he's done. And, if he has, then, I think we need to talk to him, too.

This is not the time for people to misunderstand who speaks for the United States, particularly in the Middle East. So, I think there are a lot of mistakes being made here. And, hopefully, we will have this visit get past without more mistakes being committed.

MALVEAUX: It's hard to believe, because the prime minister really is -- he is very close to the Bush administration. They like the president here. Do you think that we are seeing maybe some back- channel talks that are going on, that perhaps there's a tacit approval from the White House: OK, let this happen?

I can't imagine that he would allow this to go forward, perhaps without a wink and a nod from the administration.

BOLTON: If this is a back channel, it's a pretty public back channel. So, my guess is, there's confusion. And, hopefully, once the trip is over, we can get it straightened out, because, if it's not straightened out, it can only be counterproductive. MALVEAUX: Do you think that this also perhaps portends to something that might happen in the future? I'm being somewhat flip. But, you know, Syria today, Iran tomorrow, I mean, where does it end?

BOLTON: I think that's part of the problem.

I think, when you have members of the House and Senate who are out, essentially, freelancing, it gets competitive. The governor of New Mexico is now about to go to North Korea to conduct some diplomacy. So, I think this is a mistake. I think people ought to let the debate in this country take place and let the president conduct our diplomacy overseas.

MALVEAUX: Mr. Ambassador, I want to turn our attention now to Iran. This -- this your quote from "WEEK AT WAR" with John Roberts just this past weekend. Let's take a listen.

(BEGIN VIDEO CLIP, "THIS WEEK AT WAR")

BOLTON: I certainly don't recommend that as the first step or as an easy step. But, if the choice is between an Iran with a nuclear weapons and military action by the United States to prevent that, yes, then I would favor military force.

(END VIDEO CLIP)

MALVEAUX: So, how close are we?

BOLTON: Well, I am not so sure we're all that close. In fact, I think this hostage crisis may be just about over. If I were in Tehran...

MALVEAUX: Why is that?

BOLTON: If I were in Tehran, I think I have gotten to the question that was posed by seizing these 15 service members.

And that is that the British have reacted in a very soft, very passive fashion. I think that was a low-cost experiment that Tehran has conducted. I think it was part of their overall push for greater influence in the region, and to see just how serious we were about doing something on their nuclear weapons program.

I think the weak British response has told them everything they need to know.

MALVEAUX: So, you say you think the standoff is almost over. Do you have information that indicates that perhaps the Iranians are ready to call it in?

BOLTON: No. I think it's possible.

Again, if I were sitting in Tehran, I would say, I played this card against the Brits, and they did everything but plead with me to give these people back.

I think that tells the Iranians quite a bit about European resolve.

MALVEAUX: In terms of whether or not there would even be some sort of strike against Iran, you say that you would approve of that.

Is this something that clearly the president, our president, has to deal with, or is this a call that perhaps is going to be made by a President Romney or a President Clinton?

BOLTON: Well, my point is that, if the choice is between nuclear weapons in the hands of the ayatollahs and Ahmadinejad or the use of military force, we need to be prepared to do that. That's not to say that that need is imminent or that it's the preferred way to go. But it is an option the Iranians need to know we're serious about.

MALVEAUX: Thank you very much, Mr. Ambassador...

BOLTON: Thank you.

MALVEAUX: ... for joining us here in THE SITUATION ROOM.

(END VIDEOTAPE)

MALVEAUX: And continuing with that standoff between Iran and Britain over those 15 British soldiers and Marines, whose waters are they anyway? That is the central question in this situation.

CNN Pentagon correspondent Barbara Starr is here with more.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Suzanne, the question may be, whose waters are they, and, once you determine that, how do you avoid future disputes?

(BEGIN VIDEOTAPE)

STARR (voice-over): The dispute between Britain and Iran focuses on whether the 15 British sailors and Marines were in Iraqi or Iranian waters when they were seized on March 23.

NATHAN THOMAS SUMMERS, BRITISH ROYAL MARINES: I deeply apologize for entering your waters.

STARR: Both sides have maps and GPS satellite data to prove their case. So, it ought to be easy to figure out who is right. But it's not. Since 1975, the boundary has run down the middle of the Shatt al-Arab waterway, which empties into the Gulf. But even that has been disputed.

TRITA PARSI, PRESIDENT, NATIONAL IRANIAN-AMERICAN COUNCIL: Even if you could pin down where the sailors were, if you have a disagreement on where the boundary is, then you still have a problem.

STARR: It's a growing flash point. The U.S.-led naval coalition patrols the waters to protect Iraq's two vital offshore oil terminals. There are rules for all the ships in the area.

At 3,000 meters, almost two miles, a ship which does not have permission to be there is warned away. At 2,000 meters, we suspend the right of safe passage, says one U.S. officer. That means, if you get that close, you can be shot.

The British insist they were nearly two miles inside Iraqi waters when their troops were seized after inspecting a cargo ship. But experts say the question may be whether the British had the ability to know exactly where they were at all times.

MICHAEL O'HANLON, SENIOR FELLOW IN FOREIGN POLICY STUDIES, BROOKINGS INSTITUTION: I am not clear that they really had a vessel that was equipped with the ability to track that kind of a trajectory. It may just have had the GPS coordinates at a given moment in time, but not necessarily the full record of where the ship had been continuously.

(END VIDEOTAPE)

STARR: Suzanne, the experts say, of course, that Iran wasn't at war with any of the countries in the region or the United States, or Britain, for that matter. So, if there was trespassing, still, it was a minor infraction, that they were operating, the British, under a U.N. resolution, that it never should have gotten to this crisis point -- Suzanne.

MALVEAUX: And, Barbara, what is the Navy saying about all of this?

STARR: Well, the U.S. Navy is watching this very carefully, as you might expect. They say it is still business as usual, that they and the other coalition ships are continuing to do the boarding and inspection type of work that the British were doing.

Now, the British -- let me remind everybody, the British say they were doing that boarding of a cargo ship well inside Iraqi waters, so, there was no question of the exclusion zone; there was no question that any ship was violating any area, that anybody should have been firing shots; it all should have been very routine. And that's what the U.S. Navy says they will continue, routine operations -- Suzanne.

MALVEAUX: Thanks very much, Barbara Starr.

And, of course, coming up: Vice President Cheney is again on the attack. He is out blasting the Democratic push for a deadline on Iraq, accusing them of aiding the enemy and putting the troops at risk. We will talk about that in our "Strategy Session."

And he wants you to know his presidential intentions. Former Wisconsin Governor and former Bush administration official Tommy Thompson, we will tell you what he's expected to say this week.

(COMMERCIAL BREAK)

MALVEAUX: Baseball tops today's "Political Radar." Rudy Giuliani spent a few hours this afternoon at New York's Yankee Stadium to root for his favorite team in their home opener. The Giuliani campaign formally changed its status to a presidential committee. And the former New York City mayor is going to officially declare himself a presidential candidate later this month.

Tom Tancredo made it official today. The Republican congressman from Colorado formally declared he is running for president. The outspoken advocate for cracking down on illegal immigration made his announcement on a conservative radio program in Iowa.

(BEGIN AUDIO CLIP)

REP. TOM TANCREDO (R-CO), PRESIDENTIAL CANDIDATE: I think that this crisis is not only an economic crisis. I think that it threatens the very idea of America. There are -- the great tradition of the melting pot in America, it's not working. The melting pot is cracked.

(END AUDIO CLIP)

MALVEAUX: Tommy Thompson also throws his hat in the presidential ring this week. The former Wisconsin governor and Bush administration Cabinet secretary makes it official on Wednesday with announcements in Wisconsin, Iowa, and New Hampshire. Thompson declared his intentions yesterday on the Sunday talk shows. He is spending much of his time campaigning in Iowa.

Senator Hillary Clinton picked up a big endorsement today. New Jersey Governor Jon Corzine gave his support at an event this morning. He is the first sitting Democratic governor to endorse Clinton over rivals Barack Obama and John Edwards.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I am thrilled to have anybody's endorsement, obviously. This is a long race, and we're putting together a great campaign. But I am especially honored and thrilled to have Jon Corzine, because Jon and I have worked together.

(END VIDEO CLIP)

MALVEAUX: Corzine was a senator before becoming New Jersey's governor. Yesterday, Corzine signed into law a bill that moves the Garden State's presidential primary up to February 5, joining California and a host of other states in coast-to-coast contests.

And up next in the "Strategy Session": The war of words over funding the war heats up, with Vice President Cheney issuing a stern warning.

(BEGIN VIDEO CLIP)

RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: By delaying funding for the troops, the Democrats believe they can make the president accept unwise and inappropriate restrictions on our commanders.

It's nothing less than an attempt to force the president's hand. They are going to find out they have misread George W. Bush.

(END VIDEO CLIP)

MALVEAUX: And what is behind Senator Majority Leader Harry Reid's move to threaten to try to cut almost all funding for the war?

And Senator Hillary Clinton posts a huge number for her first- quarter fund-raising. Has she delivered a knockout blow to the rest of the field?

James Carville and Terry Jeffrey -- coming up here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: They are the leaders of the pack in the mad dash for campaign cash. Two candidates are causing a real surprise.

Joining me now are CNN political analysts and Democratic strategist James Carville, and Terry Jeffrey, editor at large of "Human Events."

I want to start off by just putting out the numbers here. Let's have our audience take a look as well.

This is how it all shook out for the first quarter: Clinton at $26 million; Romney, $23 million; Giuliani, $14 million; Obama, of course, the big mystery -- we don't know yet -- Edwards, $14 million; and McCain, $12.5 million.

Now, first of all, I guess a surprise, some say, Romney coming in pretty darn strong. What do you think that indicates?

JAMES CARVILLE, CNN POLITICAL ANALYST: That he's got a good fund-raising operation. That's a good figure for him. It's a horrible figure for McCain.

But I think that the really big news here is that, if it's correct -- there are reports that Obama is going to report $22 million -- that would mean that the Democrats raised $75 million in one quarter. I mean, there's nothing -- to call this historical is to not even give its proper credit.

I mean, clearly, the amount of money being raised is just off the charts. And, if the Obama -- if the number that's being reported is anywhere close to what the real Obama number is, that's a breathtaking -- $75 million is a breathtaking number.

MALVEAUX: And, Terry, what do you think? I mean, it's not -- it seems like this campaign is going to be a lot different than what we have seen before, perhaps, a lot more focus on fund-raising, and less on the grassroots effort, considering all the primaries really close up.

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": Well, two things to put this in perspective, Suzanne. First of all, in this election cycle, these folks can go out and raise $4,600 at a pop from a person, $2,300 for the primary election, $2,300 for the general election. Hillary Clinton was raising money simultaneously for both elections. Back in 2000, for example, a presidential candidate could only raise $1,000 for the primary.

But, secondly, I think these candidates need money in inverse proportion to the degree that they have natural appeal on the grassroots of their own party. Hillary Clinton got on the wrong side of her party on the Iraq war. She needs more money.

John mentioned that this is bad news for McCain. John McCain has strained relations with the conservative grassroots of his own party. The fact that he's only raised $12 million, it's very bad news.

MALVEAUX: Is this his undoing? Can we conclude that this really, essentially, puts him out of the race?

JEFFREY: No, I don't think it's all over for John McCain. I think John McCain is going to run a serious campaign. But I think he's gotten off to a very bad start.

Back in November, after the fall election, people might have thought John McCain was the front-runner, maybe even the inevitable Republican nominee. Now he is going to have to struggle to stay in this race. He's had a real turn of fortune.

MALVEAUX: Now, both of you, I'm sure, are aware of the -- Pelosi -- Senator Majority Leader, rather, Harry Reid putting forward this threat of legislation.

CARVILLE: Right.

MALVEAUX: He says: Look, if the president vetoes our bill, we're going to put something forward that basically pulls out most of the funds for the troops by March of next year.

I don't think that there's any Democratic candidate who is going to sign on to that. I mean, who would possibly say, OK, that is a winning strategy?

CARVILLE: Well, first of all, what we're doing now is not winning. We don't have a winning strategy now. We can start with that. Fifty-seven percent of the country is against this.

I think what Senator Reid is doing is reflecting what public opinion is in the United States and in -- in the caucus. This is obviously -- people are negotiating a position here, because the Democrats have passed a funding bill that funds through March of...

(CROSSTALK)

MALVEAUX: But they barely did. He can't get the kind of support -- I mean, he cannot get the Democratic support or the two-thirds majority to override it.

(CROSSTALK)

CARVILLE: Again, he probably -- he probably is doing a little bit.

But this war is a very unpopular war. This war has not gone well. This administration has had over four years to conduct this war. They did it with insufficient troops, insufficient armor, insufficient planning.

And you're right. There are a lot of -- a majority of the country has now turned against it. And that's being reflected in the Congress.

(CROSSTALK)

MALVEAUX: But how is this any more than a political stunt here? We have already got a difficult bill on the table the president says he's going to veto.

(CROSSTALK)

JEFFREY: Let me give you the hard evidence that proves this is a political stunt.

I invite anti-war Democrats right now to go to Russ Feingold's Senate Web site, which I did before I went over here, because I wanted to know what this bill said.

And right at the top of Russ Feingold's Web site -- I looked at this afternoon -- they have the explanation of what this bill does. It says, they are going to keep troops in Iraq to fight al Qaeda. They are going to keep troops in Iraq to protect our personnel and our embassy people there. And they are going to keep troops in Iraq to train Iraqi forces.

That's what Reid and Feingold are calling a pullout. That's what Secretary of Defense Donald Rumsfeld recommended to President Bush before President Bush fired him. This is the Rumsfeld plan.

(CROSSTALK)

MALVEAUX: James, let me ask -- let me ask you about this.

Of course, you are a supporter of Hillary Clinton. You do not work for her campaign.

CARVILLE: Correct. Correct.

MALVEAUX: But you have said that you support her.

CARVILLE: I do.

MALVEAUX: Is she the kind of candidate that would sign on to this legislation?

CARVILLE: Well, I don't know if she would sign on to the specific legislation.

But she's already said she wants to get the troops out in '08. This war has gone badly. It's unpopular. The Democrats are reflecting that in the Congress. And you have this punditocracy here in Washington sitting there, pontificating about nothing. It's not going well. And the Democrats are going to shove to get a pullout in '08.

(CROSSTALK)

CARVILLE: That's a fact.

JEFFREY: The problem that Hillary Clinton has and Harry Reid has, if they were actually to effect a real pullout of U.S. troops from Iraq, the Democrats would be responsible for the consequences of what happened in Iraq.

I invite people to read Feingold and Reid's bill. They are not actually calling for a pullout.

CARVILLE: Terry...

JEFFREY: For them to claim they are calling for a pullout is false advertising. Read their bill.

(CROSSTALK)

MALVEAUX: I want to wrap this...

(CROSSTALK)

CARVILLE: Senator Clinton has already said that she would keep people there to fight al Qaeda.

The responsibility for the conduct of this war rests solely on the administration. Don't blame nobody -- don't blame...

(CROSSTALK)

JEFFREY: She voted to authorize it, James.

(CROSSTALK)

CARVILLE: Don't blame the Democrats.

(CROSSTALK)

CARVILLE: She didn't conduct this war. She didn't do the strategy. She didn't send insufficient troops. She didn't fail to arm the troops. She didn't fail to care for troops when they came home.

(CROSSTALK)

MALVEAUX: Let's give Terry a chance, real quick.

JEFFREY: Wait. Wait.

If James thinks that U.S. troops should be pulled completely out of Iraq in '08, and Hillary believes that, and Harry Reid believes that, why have they proposed a bill that actually says it would keep U.S. troops in Iraq? The press ought to read what Feingold's bill says. He's not calling for a pullout. He's not.

(CROSSTALK)

MALVEAUX: I want to turn the corner real quick here.

We heard from Matthew Dowd, of course, one of the president's -- a member of his inner circle, slamming the president over the weekend in an interview. He says to "The New York Times" that, "If the American public says they are done with something, our leaders have to understand what they meant. They are saying get out of Iraq."

How damaging is this? So, you have got -- that's pretty harsh.

JEFFREY: Well, look, I can understand people disagreeing with George Bush the presidential candidate in 2004. I disagreed with him on a lot of things, even though I voted for him.

Matt Dowd worked for him. I would like Matt Dowd to explain to me what it was about George Bush the candidate in 2004 that wasn't completely predictable about the performance of George Bush as the president in the second term. President Bush has followed through on every policy initiative he said he was for, that Matt Dowd helped elect him for. So, it's Matt Dowd that has changed, not President Bush.

CARVILLE: Matt Dowd is reflecting what a majority of Americans think. People have turned against this war. It's been bungled. It's incompetent. It's time, in '08, to start to putting -- taking these troops home.

What Matt Dowd is, is recognizing what people all over this country recognizing.

MALVEAUX: And, James, you know, this is the real serious question, but what's up with the hat?

CARVILLE: The hat.

(LAUGHTER)

CARVILLE: Opening day.

MALVEAUX: What's with the hat?

CARVILLE: I was at the Nats. We didn't do too good. But, you know, when you -- when you are a baseball fan, you are a baseball fan.

(CROSSTALK)

MALVEAUX: You have got to do it. You have got to support the team.

JEFFREY: One instance where I'm jealous of James Carville. He was at the ball game today.

CARVILLE: All right.

JEFFREY: Beautiful day in Washington, D.C.

CARVILLE: You don't want this beautiful crop of hair I got?

(CROSSTALK)

(LAUGHTER)

JEFFREY: Eighty degrees for opening day. The only bad news is, the Nats were getting walloped.

CARVILLE: Yes.

(LAUGHTER)

CARVILLE: If you want to see some home runs, go see them. But it will be the other team.

MALVEAUX: All right.

CARVILLE: Thank you.

MALVEAUX: Thanks to both of you.

CARVILLE: Appreciate it.

MALVEAUX: Appreciate it.

And still to come: Nancy Pelosi bucks the White House by visiting Syria. A smart political move or dangerous diplomacy? Jack will be back with "The Cafferty File."

Former Senator Bill Bradley accuses his party of having a charisma complex. What is he saying about the current crop of Democratic presidential contenders?

I will ask him in our next hour.

(COMMERCIAL BREAK)

MALVEAUX: And Jack is in New York with "The Cafferty File."

Jack, what do you have for us?

JACK CAFFERTY, CNN ANCHOR: The question this hour is: Should Nancy Pelosi be visiting Syria, a state that sponsors terrorism, over the objections of the White House?

Johnny writes from Carthage, Texas: "Perhaps the Bush administration is afraid that Ms. Pelosi might be able to set in motion some arrangement that might benefit relations between both countries. Should it happen, it would certainly highlight the non- productive actions of our current secretary of state."

Harold in Las Flores, California: "Yes, she should go. For six years, this administration sat back and did little or nothing to move the Palestinian-Israeli peace process forward. She will be carrying a message from the Israeli prime minister to the Syrian government. Anything that may help to bring these countries to the bargaining table is of value.

John in Cottonwood, Minnesota: "If Bush objects to Speaker Pelosi visiting Syria, it has to be the right thing for her to do. Given his track record, there's only one chance in 1,000 that Bush might be correct."

Mary in Santee, California: "Nancy Pelosi should not be visiting Syria. She's only going to prove -- in her mind, anyway -- that she has the authority to do whatever she wants, regardless of how it affects our foreign policy. She is a legend in her own mind."

Hugh in Vero Beach, Florida: "By all means, Mrs. Pelosi should visit Syria. And, on her way home, she should stop by Venezuela and Cuba. She might as well open her arms to all of our enemies, and not just a select few."

And Ashby in Atlanta: "Speaker Pelosi's decision to visit Syria should only concern the White House because the political results of her trip might make their anti-diplomatic policies look ignorant and ineffective by comparison" -- Suzanne.

MALVEAUX: Thanks, Jack.

And, of course, you're in THE SITUATION ROOM.

Happening now: high stakes between the White House and Congress getting even higher -- Senator Majority leader Harry Reid now threatening to cut off funding for the war in Iraq.

Also, the White House increasingly at odds with the Democratic House speaker, Nancy Pelosi, about to become the highest-ranking American to meet with Syrian President Bashar Assad. Is she overstepping her role?

And, as Britain works to free its sailors and marines being held captive in Iraq, an American man is now missing in that country, a former FBI official.

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