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THE SITUATION ROOM

Spike in Deaths of U.S. Troops in Iraq; Bill Defeated That Would Have Increased Taxes on Big Oil Companies.

Aired June 21, 2007 - 16:00   ET

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


WOLF BLITZER, HOST: Happening now, Senate Republicans effectively say read our lips -- no new taxes. They've blocked tax increases on the big oil companies. What might that mean for high gas prices?
A top House Democrat claims Dick Cheney often does not want the American people to see what the vice president's office is up to. And Henry Waxman's panel says in one case, Cheney claimed the vice president's office is not -- repeat not -- within the executive branch of the U.S. government.

And the man once known as "The Hammer" has some very tough words about immigration reform. The former House majority leader, Tom DeLay, will talk about that and about the rift that the issue is causing within his own party.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're following three major stories right now.

Just a little while ago Senate Republicans beat back a measure that some had hoped would be attached to a broad energy bill. And depending on whom you ask, the now defeated measure could have had an impact on high gas prices. We're watching this story.

Also, the chairman of a House panel is claiming that the vice president, Dick Cheney, often tries to hide work his office does from the public view. And Democrat Henry Waxman's panel says in one case the vice president claimed his office is not an entity -- and I'm quoting now -- within the executive branch. We're watching this story, as well.

More on both of those stories in just a moment.

But let's begin this hour with Iraq, where the cauldron of violence continues.

CNN's Hala Gorani is in Baghdad.

HALA GORANI, CNN CORRESPONDENT: Wolf, 12 U.S. soldiers were killed in Iraq in the last two days. A single roadside bomb attack killed five American troops, three Iraqi civilians and an interpreter in Baghdad. The latest deaths in Iraq come as the so-called troop surge reaches its peak here. Meanwhile the large U.S. military offensive dubbed Arrowhead Ripper continues north of Baghdad in Diyala Province. The top U.S. military commander in Iraq, General David Petraeus, told reporters he expects Al Qaeda insurgents to continue to respond to this American troop buildup with deadly attacks and has repeatedly warned this could be a difficult summer for American troops.

Meanwhile, elsewhere in Iraq, 15 people were killed in a single truck bomb attack in the northern part of the country -- Wolf.

BLITZER: Hala Gorani in Baghdad for us.

So far 3,545 U.S. troops have died since the war began more than four years ago. We're going to have full coverage of this developing story later, right here in THE SITUATION ROOM.

We'll go back to Baghdad and the Pentagon.

But let's get more now on that defeat of a measure some in the U.S. Senate had hoped would be attached to the broad energy bill.

Our Congressional correspondent, Dana Bash, is standing by on Capitol Hill -- Dana, this involved a multibillion dollar tax increase on the big oil companies, removing some of their tax breaks. Tell our viewers what happened.

DANA BASH, CNN CORRESPONDENT: That's right. This would have been tax breaks for new sources of fuel and new sources of energy, like ethanol and even wind, and oil companies would have picked up the tab.

(BEGIN VIDEO TAPE)

BASH (voice-over): It was a major part of the Democrats' energy plan -- promote research on green sources of fuel by taxing big oil companies.

Republicans blocked it.

SEN. LARRY CRAIG (R), IDAHO: Stick it to the big boys. OK, we're going to stick it to the big boys -- $32.1 billion worth of taxes.

And what will it do for us?

Will it change the price at the gas pump in America today?

No.

BASH: The defeat was a setback for senators attempting to overhaul U.S. energy policy by bolstering alternative sources of fuel instead of the oil industry Congress has supported for years.

SEN. RON WYDEN (D), OREGON: It's time to stop the major oil companies from fleecing taxpayers when they drill for oil on public lands.

BASH: After two weeks of debate, the fate of energy reform, a Democratic priority, is unclear. And the halls of Congress are bustling with activists putting pressure on senators from all sides, especially on the controversial issue of fuel efficiency standards for cars. The bill would require all vehicles, including SUVs and light trucks, to achieve 35 miles per gallon by 2020. This car dealer from Pennsylvania came to lobby against that, saying his business would suffer.

DAVID KELLEHER, AUTO DEALER: It's going to force my manufacturer to build cars that I can't sell, you know, those smaller B cars. The truth is SUVs, the minivans that I sell and the trucks, and ultimately the light duty trucks, are a huge part of our market. And the negative influence of them is -- is going to influence us economically, catastrophically.

BASH: But environmental groups are working senators just as hard, especially Democrats, who promised to reduce greenhouse gases.

TIERNAN SITTENFELD, LEAGUE OF CONSERVATION VOTERS: Unfortunately, there are a number of members of Congress who perhaps receive a lot of campaign contributions from coal companies who seem to just sort of be stuck in the backwards looking energy policies of the past rather than sort of, you know, really relying on American ingenuity.

(END VIDEO TAPE)

BASH: And despite the fact that tax breaks for renewable energy will not be in this bill, the Senate did clear a major hurdle. They voted to continue debate on this energy bill. And the Senate majority leader, Wolf, told reporters just a short while ago he does think, at this point, this energy bill is actually likely to pass -- Wolf.

BLITZER: Is there a compromise in the works on this other controversial part of this, raising the fuel efficiency standards?

BASH: There is. And this actually really a wild card in this debate,, Wolf. This fuel efficiency standard really is at the core of the bill. And major players here -- the auto industry, which is very powerful, they are backing their Senator from Michigan, Democrat Carl Levin. And they have been pushing to try to essentially weaken the standard that is in this to raise fuel efficiency for cars and light trucks. We are told that there is a compromise being finalized as we speak and we're probably going to hear more about it later this afternoon. If that does goes through, that makes it more likely, Wolf, that this energy bill will actually pass the Senate.

BLITZER: And the fact that they're not going to eliminate some of those tax breaks for big oil helps explain why the Exxon Mobil's stock went up almost 2 percent today as a result of probably what happened in the Senate.

BASH: Probably.

BLITZER: Thanks very much, Dana, for that.

As senators talked energy on Capitol Hill, the president talked about energy and Congress down in Alabama. He visited Athens and talked about his administration's energy initiatives.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: I remind those who share my concern about greenhouse gases that nuclear energy produces no greenhouse gases. If you're interested in cleaning up the air, then you ought to be an advocate for nuclear power.

(END VIDEO CLIP)

BLITZER: The U.S. by the way, is the world's leader in nuclear energy production. France is number two. The U.S. has 104 reactors. France has 59. Nuclear power accounts for about 20 percent of the U.S. energy supply. In France, nuclear power accounts for more than 75 percent of energy production. The last nuclear reactor construction here in the United States, by the way, began back in 1977, in Tennessee. That was the last one. Since then, 36 reactors have been built in France.

More now on that stunning charge from House Democrat Henry Waxman. He's claiming the vice president, Dick Cheney, has done some drastic acts to keep some things from the American people.

Our White House correspondent, Suzanne Malveaux, is joining us -- Suzanne, this involves protecting classified security information. But give our viewers a sense of this latest rift between Henry Waxman and Dick Cheney.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, this dispute is a little bit different than what we've seen before. It has always been over whether or not to release classified information. But what this is about is really the public's right to know just how much the vice president is keeping quiet.

(BEGIN VIDEO TAPE)

MALVEAUX (voice-over): The vice president's office is keeping a secret. The secret is over how many secrets it keeps. An order by President Bush requires Cheney's office to tell the National Archives how many documents it classifies or declassifies each year. For years, the vice president's office has refused.

Now, an explosive charge.

The vice president's solution to the dispute?

Abolish the office asking for the records.

That's according to Congressman Henry Waxman, who heads the Congressional committee investigating the matter. He warned Cheney in a letter that his actions could be downright criminal, saying: "I question both the legality and wisdom of your actions."

A Cheney spokeswoman would neither confirm nor deny whether they sought to abolish the National Archives office seeking the vice president's records. But she did respond to Waxman's accusations, saying: "We are confident that we are conducting the office properly under the law."

The law Mr. Bush signed in 2003 requires all agencies and any other entity within the executive branch to report its record for classifying top secret documents. But according to Waxman, the vice president's office is now claiming it is not an entity within the executive branch. That's because as vice president, Cheney also serves as the president of the Senate, which means he's in the unique position of straddling the executive and legislative branches.

UNIDENTIFIED MALE: It's transparently silly. If it were true, then we would have to rewrite all of the textbooks that we all grew up with. It's obvious that the vice president's office is part of the executive branch and to claim otherwise is preposterous.

(END VIDEO TAPE)

MALVEAUX: Wolf, this is really about a pattern from the vice president's office. Of course, it was back in 2001 they refused to release a list of the energy executives that were meeting with the vice president. Also, more recently they also did not want to release those records of visitors to the residence. So this is something that we have seen in the past -- Wolf.

BLITZER: Some are suggesting, though, that there are some major inconsistencies in what the White House is now saying.

What are you hearing?

MALVEAUX: Well, you know, it's really interesting that when you actually take a listen to what the president has said, what the vice president has said in the past, they have always asserted that they need to keep these conversations, these documents, private. And they cite executive privilege and executive power. So it seems like it would be highly inconsistent if now all of a sudden the vice president's office is not a part of that executive branch -- Wolf.

BLITZER: All right,

Suzanne, thanks very much.

Suzanne Malveaux is reporting from the White House.

Let's check in with Jack Cafferty.

He's got The Cafferty File -- lots of stuff going on in Washington. Jack.

You're shaking your head.

JACK CAFFERTY, CNN CORRESPONDENT: Dick Cheney wants to abolish the National Archives?

Is that -- is that what I just heard?

BLITZER: He's saying that his secret information shouldn't necessarily be made available because it's not necessarily part of the executive branch since he serves also as president of the Senate.

CAFFERTY: Like you said, I'm shaking my head.

All right, here we go. With one or two exceptions, the crowded field of presidential candidates very much resembles a drawer full of old socks -- been there, done that. It's the same collection of threadbare, tired, overexposed faces who have been part of the problem in one way or another for years.

Well, guess what?

Here comes another one. Ralph Nader thinking about making yet another run for the White House. The man who many Democrats blame for spoiling the 2000 election for Al Gore tells Politico.com he sees the upcoming race as another one that offers little real choice for voters.

Nader says: "You know, the two parties are still converging. They don't even debate the military budget anymore. I really thinks there needs to be more competition from outside the two parties."

Nader, who is 73 now, thinks Democrats can win in 2008, unless, of course, they screw up. In a line that is far superior to any of his campaign slogans, Nader says this: "Democrats have become very good at electing very bad Republicans."

Nader had particularly harsh words for Hillary Clinton, calling her "a political coward."

As for a potential Independent run by Michael Bloomberg, Nader called the New York mayor "interesting, but unpredictable" and acknowledged that Bloomberg's money would make it much easier for him to get on the ballots around the country.

If he runs, Nader says he would talk about the ever increasing corporate power in our society and the disconnect between the growing economy and the distribution of wealth. When it comes to Iraq, Nader thinks the U.S. should pull all of its troops over a six month period and then have the United Nations sponsor new elections.

So here's the question -- is Ralph Nader what's missing from the 2008 presidential race?

You tell us -- caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Wolf.

BLITZER: And, Jack, our viewers are going to have a chance to hear directly from Ralph Nader. He's going to be joining us here in THE SITUATION ROOM live in the next hour. Ralph Nader will be coming here.

CAFFERTY: Ask him if he gets elected if he wants to abolish anything.

BLITZER: All right.

I assume he'll -- he'll say yes.

CAFFERTY: OK.

BLITZER: Jack, stand by.

Coming up, he was once called "The Hammer." Tom DeLay mincing no words right now about immigration reform. He's standing by live right now. I'll speak with him, ask him how the issue is putting members of his own party at serious odds.

And what do you think of Congress?

For many of you, apparently not very much. Congress' approval rating has collapsed. We have some fresh poll numbers coming out.

And there are already two New Yorkers in the race.

What if a third joined?

We'll take a closer look at how a Michael Bloomberg candidacy might affect the race.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It may just be the most heated debate in the nation right now, right behind the war in Iraq. That would be immigration reform. There's no shortage of opinion over how best to proceed, even among members of the same party.

Joining us now from Houston is Tom DeLay, the former Republican House majority leader.

Congressman, thanks very much for coming in.

TOM DELAY (R), FORMER MAJORITY LEADER: My pleasure -- Wolf.

BLITZER: If you were still in the Congress, would you try to kill this comprehensive immigration reform legislation?

DELAY: Well, Wolf, when I was leader, we had a whole strategy designed to pass immigration reform and border security. And it basically was the House was going on to stand firm on border security. The Senate would do whatever it needed to do, probably pass probably pass amnesty. And then when we got together in conference committee, we would compromise. That's the way to do it. And you...

BLITZER: So let me just be clear.

You think that there's room now for a compromise?

Because that's what the president says, he wants a compromise comprehensive piece of legislation. DELAY: No,, Wolf. This is a complete show of lack of leadership and lack of understanding of how the House and the Senate works and how to pass a bill. You don't go behind closed doors and create a compromise without knowing where your votes are and bring that compromise out, which means you have no room for -- for negotiations -- this is it, folks -- and then try to stuff it down people's throat.

They don't even coordinate with the House and they don't even know if the House can pass this compromise.

BLITZER: Well, I want you to listen...

DELAY: It is an outrageous way to proceed.

BLITZER: Listen to what the president, though, says. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: You want to kill the bill, you don't want to do what's right for America, you can pick one little aspect out of it. You can use to it frighten people. Or you can show leadership and solve this problem once and for all.

(END VIDEO CLIP)

BLITZER: All right, so what do you say to the president?

DELAY: Show leadership and go through what we call regular order. Go through the subcommittees of both Houses. Go through the full committees both Houses. That's where the compromises happen. And then when both Houses pass a bill, you get together and you work out your differences. That's where the major compromise happens.

They started...

BLITZER: Well, let's say it gets through...

DELAY: They started they started bass-ackwards.

BLITZER: Let's say it gets through the Senate -- and there's a lot of pundits out there who are suggesting they'll have the 60 votes they need to get it through the Senate, probably sooner rather than later.

What happens in the House of Representatives?

Because Nancy Pelosi says there's going to be a need for at least 60 or 70 Republicans to support this if it's going to be passed.

DELAY: It's not going to happen. And that's the whole point. You don't put your members in a position, particularly on a bill this controversial, in voting on something that will never become law. In the House, I'll bet you anything that fewer than 30 Republicans will vote for this bill coming out of the Senate. And you've got all these Democrat freshmen that ran on immigration and promised their constituents that they would they wouldn't vote for amnesty. That -- that combination alone will defeat the bill.

BLITZER: Well, let me just be precise. You're saying what the president has proposed and what Senator McCain and Senator Kennedy have worked out, that's amnesty?

DELAY: Oh, definitely. If you -- if you if you give someone who has broken the law a free pass to become a citizen of the United States, then you're going to -- then it's amnesty.

BLITZER: But they do have to pay...

DELAY: That's definite.

BLITZER: They do have to pay a fine. They have to go through several procedures before they qualify for what's called that new Z Visa.

DELAY: Well, but, Wolf, that's a different issue. That's an issue that doesn't work. You're not -- you don't understand these illegal aliens. They're not going to go back to their country of origin. And these people barely make money -- enough money to send home, much less spend $5,000 for an American citizenship. Most of them don't want an American citizenship. So that system's not going to work, number one.

And, number two, to get the Z Visas are amnesty. You're giving them an extra because they broke the law. You're giving them a way to become a citizen of the United States. That is amnesty.

BLITZER: Who do you like on the Republican side?

Who do you think should be the next president of the United States?

DELAY: I have no idea, Wolf. I think it's way too early. We've got so many good candidates running as Republicans, let them -- let them take the next few months to work this out. I'm like 50 to 60 percent of those Republicans who are going to vote in the primary, I'm waiting to see.

BLITZER: What about Newt Gingrich, the former speaker?

DELAY: Well, I wrote a column this week saying he would be a great candidate. He's probably the smartest person in the field. He has a sense of history unlike anybody I've ever known. He'd make a great candidate.

BLITZER: It sounds like you like him.

DELAY: I've always liked Newt Gingrich.

BLITZER: And you might vote for him?

DELAY: Well, we'll see.

BLITZER: Tom DeLay, thanks for coming in. DELAY: My pleasure -- Wolf.

BLITZER: All right. Good.

Still ahead here in THE SITUATION ROOM, what else might the billionaire mayor of New York want?

With two New Yorkers already in the presidential race, what might happen if Michael Bloomberg jumps in, as well?

And up or down -- which way are the summer airfares going right now?

There is new information that you need to hear about. Carol Costello with the answer. That's coming up next. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring the wires, keeping an eye on all the video feeds coming in from around the world into THE SITUATION ROOM.

She's joining us now with a closer look at some other incoming stories -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf. Hello to all of you.

The crew of the Space Shuttle Atlantis gets an extra day of Earth watching. NASA has scrubbed today's landing because of cloudy weather. The next chance for the orbiter to land at the Kennedy Space Center in Florida will be 2:15 p.m. Eastern tomorrow. During their mission, astronauts performed four space walks, one of which was carried out to secure a loose corner on a thermal blanket. They also helped revive computers that shut down on the International Space Station.

For the first time since 2004, summer airfares within the United States are falling, really. The average round trip domestic ticket runs $340 this summer, not cheap. But that's about 2 percent less than last summer, despite rising fuel prices and repeated attempts by carriers to raise fares. AAA is even telling customers it may be more economical to fly than to drive this summer.

A hacker has penetrated the Pentagon's computer system, disrupting e-mail traffic in the defense secretary's office. The infiltration forced the shutdown of e-mail service to a third of Secretary's Robert Gates' staff. About 1,500 users were taken offline. The e-mail in question was unclassified. The Pentagon says military operations were not affected.

Back to you -- Wolf.

BLITZER: Thanks very much, Carol, for that.

Up next, they've always been the tone centers of the political season. But there's been a scheduling change, a major change. How much will New Hampshire and Iowa, as a result, matter in 2008?

It takes money to run a presidential campaign.

Is Senator John McCain's war chest falling on some hard times?

We're watching this story, as well.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Stories we're working on right now, he's run as a third party candidate in the last three presidential elections.

Will longtime figure Ralph Nader make it an even four?

He's standing by to join us live, right here in THE SITUATION ROOM.

Congress debates raising mileage standards while other countries successfully run on alternative fuels. Our special correspondent, Frank Sesno, takes a closer look at what if the U.S. made a real switch to energy overhaul.

And newly revealed documents shedding some new light on the days immediately after the 9/11 attacks. We're about to get a little bit better picture of the Saudi nationals who quickly fled the United States and who helped them get out. Brian Todd working this story.

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

Let's check some other news first, though.

At this stage of the game, there are quite a few candidates taking a shot at the White House. But it's not often you see this many New Yorkers in the race.

Let's bring in our chief national correspondent, John King. He's watching this story.

How's it playing out, John?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, for the record, Wolf, one of these New Yorkers was actually born in suburban Chicago. Another one of these New Yorkers was actually born near where I grew up, in suburban Boston.

But now both call New York home, and some people think it is possible -- possible -- that we will have three candidates who call New York home running for president.

(BEGIN VIDEOTAPE) KING (voice-over): Five years ago, when they were so much easier to label, Senator Clinton, former Mayor Giuliani, Mayor Bloomberg.

Now she's a Democratic candidate for president. He's a Republican contender. And he -- well, he's a giant campaign question mark. Mayor Bloomberg's decision to bolt the Republican Party and become an independent is the talk of the town.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I suppose he just couldn't bear to be in the Republican Party anymore, which I thought showed great, good judgment on his part.

(LAUGHTER)

CLINTON: I don't have anything to say about him running for president. I have already got a candidate in that race.

KING: Of course he does, one who could have the most at stake if she wins the Democratic nomination, and the pro-abortion-rights, pro- gun-control mayor makes an independent run.

SCOTT REED, REPUBLICAN STRATEGIST: If he runs, there will be two liberals in the race vs. one Republican. So, unlike the Perot phenomenon that really hurt Republicans, this has a chance to hurt Democrats.

KING: Maybe, but much of the immediate drama is on this relationship.

(BEGIN VIDEO CLIP)

RUDOLPH GIULIANI (R), FORMER MAYOR OF NEW YORK: Our new mayor, Michael Bloomberg.

(END VIDEO CLIP)

KING: Giuliani helped Bloomberg win election six years ago.

(BEGIN VIDEO CLIP, AD)

GIULIANI: I love this city. And I'm confident it will be in good hands with Mike Bloomberg.

(END VIDEO CLIP)

KING: But their relationship was never very close and strained more of late by Bloomberg's public talk questioning Giuliani's fiscal management.

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: I'm determined that, when I leave the city, we won't have -- my successor, the first year in office, won't have enormous deficits to deal with.

KING: Giuliani, on the other hand, clearly thinks he deserves a share of the credit for any Bloomberg achievements. GIULIANI: Well, when you work as hard as I did at being mayor, you want those things preserved. And he's done a lot of that. And he's done a good job.

KING: But?

GIULIANI: I like Mike very much. I'm disappointed that he left the Republican Party.

KING: In what you might call the president of New York test, Quinnipiac University recently asked statewide voters to pick. Senator Clinton won with 43 percent. Giuliani was next at 29 percent. And Bloomberg trailed with 16 percent.

Even Bloomberg suggests, this is all politics is local in the extreme.

BLOOMBERG: We even have two people from New York who are candidates for president of the United States. I'm not sure the state needs a third.

(END VIDEOTAPE)

KING: Note, for the record, though, he said he's not sure, Wolf. He didn't say, no, I won't run; absolutely, positively, I won't run; never, I won't run; just, not sure.

BLITZER: A lot -- a lot of wiggle room, as we say, John.

Hold on a second. Candy Crowley is joining us as well.

Candy, 22 states, 22 states now have signed up to hold their primaries on February 5, Super Duper Tuesday, as it's now being called. So, here's the question. What does that do to the candidates right now who are running rather strongly in Iowa, New Hampshire, South Carolina? What impact does this February 5 day, with all these huge states, have on those candidates who are running well right now in the early stages?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: You know, the truth of the matter is we don't know, because we have never seen a campaign like this. We don't know what all those states on February 5 will do to the strategy of those running in the standard states, when you start in Iowa, now Nevada, then New Hampshire, and then South Carolina.

But the fact of the matter is that most of the campaigns will say to you now that Super Duper Tuesday only makes those first four states even more important, because not that many people are going on to come out of those of four states still alive. So, you have to get through those first. And they think it only enhances the reputation of those states.

BLITZER: Would any of the candidates be smart now to sidestep Iowa and New Hampshire, South Carolina, and focus exclusively on Super Duper Tuesday? CROWLEY: Well, here's what I can tell you. A memo got out, as you recall, from the Hillary Clinton campaign, where one of her deputy campaign managers said, you know, maybe we should just skip Iowa.

And they could not take that back fast enough. Right now, these campaigns believe that only a couple of people are going to come out of Iowa and New Hampshire and South Carolina. And they need to be in Iowa to play.

BLITZER: Illinois now is going to be on Super Duper Tuesday, February 5. I assume that's great news for Barack Obama. But other candidates presumably will run well there as well.

KING: Well, Illinois, you might know, southern border is Arkansas. Hillary Clinton used to live in Arkansas, although I guess I said she was born in Illinois, and she says she's from New York.

Republicans might play there as well. If you think back, not all that long ago, Jim Edgar, a moderate Republican, was the governor of Illinois, someone who was pro-choice on abortion rights. So, you could say that would be territory for Rudy Giuliani.

But, as Candy said, every cycle, we go through this. Never like this, with so many states up front. But, every cycle, there's someone who says, no, I'm not going to go to Iowa; I'm not going to go to New Hampshire; I'm going to wait.

And then somebody starts winning. And the early candidates -- Mitt Romney is banking on winning now, trying to win Iowa and New Hampshire, and then say, stop me if you can. And you see John Edwards trying to do the same thing as an underdog on the Democratic side, pull off a surprise in Iowa, and get what the former President Bush used to call big mo'.

BLITZER: Guys, thanks very much.

Our viewers know that John King and Candy Crowley are both part of the best political team on television.

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

Coming up: His fund-raising totals were lackluster in the first quarter. Might John McCain see disappointment again? Some are worried the Republican presidential candidate is falling short in the cash race.

And how low will it go? Your confidence in Congress has collapsed to its lowest level in a long, long time. We have some fresh poll numbers coming out.

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

(COMMERCIAL BREAK)

BLITZER: It's certainly not what the people who represent you here in Washington want to hear. But some fresh congressional poll numbers are not flattering at all.

Let's go to our senior political analyst, Bill Schneider. He's watching this.

These latest numbers show the American public right now, Bill, does not necessarily have very high regard for the Congress.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, when it comes to Congress, don't ask. Unfortunately, for Congress, some pollsters did ask.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): If contempt of Congress is a crime, a lot of Americans could find themselves in jail along with Paris Hilton. Confidence in Congress has collapsed to its lowest level in nearly 35 years, lower than big business, lower, even, than HMOs. If you really want to hear contempt of Congress, just listen to Congress.

SEN. DAVID VITTER (R), LOUISIANA: Let me translate for you what the American people just heard. To quote Charlie Brown, wa, wa, wa, wa, wa. The fact is, what Americans are faced with is an energy crisis. And we have all this inside baseball tangling us up in the Senate, in the House, and we're not doing a darn thing about it.

SCHNEIDER: Five polls this month all show approval of Congress at lows for the year. A lot of Republican voters are infuriated over the immigration proposals.

STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": If you talk to staff, in terms of the mail they're getting, the anger, the frustration, they say it's off the chart.

SCHNEIDER: Confidence in Congress has also been dropping among Democrats, but over a different issue, Iraq.

ROTHENBERG: Their view is that Democrats should be able to stop the funding, stop the war. Democrats on Capitol Hill say, we can't.

SCHNEIDER: Ratings for Congress are now as low as they were last fall, when voters threw out the Republican majority. Is the new Democratic majority in danger? Theoretically, yes. Democrats have a narrow majority in the Senate, but Republicans have a lot more seats at risk next year, same thing in the House. The Democratic majority is small, but most of the endangered House seats are held by Republicans.

(END VIDEOTAPE)

SCHNEIDER: For Republicans to win back Congress, we would have to see a tide of anger at Democrats. And that seems unlikely, with an extremely unpopular Republican president. More likely, congressional Democrats will argue, give us a Democratic president, and then we might be able to get something done -- Wolf.

BLITZER: Bill Schneider, watching the numbers for us, as he always does, thank you.

Up next, in our "Strategy Session": the Bloomberg factor. He may not necessarily sound like a presidential candidate, but he acts like one.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: They're wasting their time. I'm not a candidate, so, they should -- they should get down to polling on people who are candidates, and we have got a lot of them in this country.

(END VIDEO CLIP)

BLITZER: If the New York mayor does change his tune, though, what would that mean for the rest of the field?

And Arizona Senator John McCain conceding, fund-raising for him has been very tough -- so, why hasn't it been all that tough for so many other candidates? I will talk about that and more with Donna Brazile and Terry Jeffrey. They're standing by live to join us, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Nothing changes as quickly as the political climate. Rumblings of a possible White House run by newly declared independent Michael Bloomberg created a new wrinkle in this race.

And campaign coffers are shrinking for at least one early favorite.

Joining us now in today's "Strategy Session," Democratic strategist Donna Brazile, and Terry Jeffrey, the editor at large for "Human Events."

Guys, thanks for coming in.

DONNA BRAZILE, CNN POLITICAL ANALYST: Thank you.

BLITZER: How worried should Democrats be right now that Michael Bloomberg, a moderate, now an independent, could join this race, and take a lot of votes away from the Democratic nominee?

BRAZILE: Well, the polls suggest that Democrats are quite comfortable with the candidates who are running. So, I don't think he will siphon votes from Democrats. I think Republicans should be worried, because he is a moderate -- well, he was a moderate Republican, and he could potentially siphon votes from the Republican Party, if they choose a nominee who goes too far from the right.

BLITZER: What do you think?

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": Bloomberg is no moderate. I hope he gets into the general election. He will definitely help Republicans, except for the Iraq war, which is the biggest factor politically in the United States right now.

This is the same country that had a presidential election in 2000 and 2004. In both of those elections, Wolf, the country was deeply divided on cultural issues and very narrowly divided between red and blue states. And some of those states, like Ohio, Florida, Missouri, were very close.

Bloomberg is not just a blue-state guy. He's solid, deep blue. The real dynamic there is, people who are married, have kids, and go to church tend to vote Republican. People who don't tend to vote Democrat. He's of that other bloc.

BLITZER: But is he viable as a third-party candidate? In other words, could be win?

BRAZILE: No.

JEFFREY: No. I agree with that.

BRAZILE: He could not win.

The last third-party candidate to generate electoral votes was George Wallace in 1968. I don't see him taking votes from Democrats. Again, I still believe he will take it from the Republicans.

JEFFREY: The only way a third-party candidate could ever win in the United States is the way the Republicans emerged, 1850s, 1860, where one party turns its back on a core value of its core constituency. Right now, neither party looks like it's going to do that.

BRAZILE: Or one party collapse, which could happen to the Republicans, given all of the deep trouble they're in now with immigration.

(CROSSTALK)

JEFFREY: I'll tell you what. If Rudy Giuliani were to emerge as the Republican candidate, he would deeply alienate part of the Republican base. And, if the Republican Party over the long run...

BLITZER: But they wouldn't necessarily go vote for Michael Bloomberg.

JEFFREY: Well, they would -- they would absolutely not vote for Bloomberg, which is one of the reason he -- Bloomberg would help. A social conservative third-party candidate could take votes away from a Giuliani running as a Republican.

BRAZILE: But, right now, he's probably hurting Giuliani, because it reminds voters that he's -- they have a similar voting record.

JEFFREY: It reminds Republicans that they have a similar voting record.

BRAZILE: That's correct. BLITZER: Because a lot of the social issues, they obviously agree.

Let's talk a little bit about John McCain. He said this the other day. He was quoted in "The New York Times." He said: "It's been very tough. There's a lot of candidates, and the people are a little dispirited. But we're working hard. We weren't going to win this campaign on money anyway."

How -- John McCain looks like he's worried that, in this next quarter, this current quarter, he's not going to raise the kind of fund-raising that he hoped he would raise.

JEFFREY: Well, you know, I think John McCain is in serious trouble. For a while there, it looked like he was hanging in.

And, where, eventually the race was going to boil down to Rudy and the conservative alternative, a lot of conservatives might have said, OK, we will go with McCain. But this immigration bill coming back up this year has really very much hurt him.

And then Fred Thompson jumps in. He's going to take a lot of votes away from McCain. And you have Romney now emerging as the candidate in Iowa and New Hampshire. Things look very much bad for John McCain.

BLITZER: How worried should McCain be?

BRAZILE: Well, I wouldn't write his political obituary. There's no question that the immigration issue was a nail in his political coffin. But he has no momentum. He has no message. And, unless he can change the script, he's in deep trouble.

BLITZER: Because, right now, that immigration issue is really, at least among the core Republican conservative base, apparently hurting him.

BRAZILE: And just ask Trent Lott. It's causing a lot of friction and a lot of conversation in corners that normally agree with one another.

JEFFREY: It's not just the issue itself, Wolf. It reminds conservatives that, every time there's a big fight, John McCain is on the other side. And here he is again.

And now there's two guys, Romney and Thompson, it seems to me, who have the best chance of emerging as the potential conservative alternative to Rudy Giuliani.

BRAZILE: But John McCain has shown leadership on an issue that is very difficult, immigration. And we should applaud him for that. Unfortunately, the conservatives...

JEFFREY: Well, you guys can.

(LAUGHTER) BRAZILE: No, the country should applaud him for that leadership. Unfortunately, the conservatives...

(CROSSTALK)

BLITZER: He's shown leadership on Iraq, too. It may not be the leadership that the Democrats and a lot of the American people want, but it is certainly showing that this is a man of his convictions.

JEFFREY: John McCain is a courageous guy. I believe he has convictions. I believe he's following his convictions on immigration, like he is on the Iraq war. Unfortunately, on immigration, he's completely at odds with the base of the his own party.

BLITZER: How much money do they really need, Donna? And I speak to you as a former campaign manager for Al Gore back in 2000. I know it has changed a lot over these many years. But how much money would be a good number for a front-runner to come up with in this second quarter?

BRAZILE: Well, look, I think that they will have to come up with the similar amount, $25 million, $25 million, at least $25 million, if you're a top-tier candidate -- if you're a second-tier candidate, $5 million.

BLITZER: What do you think?

JEFFREY: Well, the less support you have in the grassroots, the more money you need. And the more money you need -- you have, the better.

And Mitt Romney right now in Iowa and New Hampshire is showing how having a lot of money can count. He's running television commercials. He's building campaign organizations up and spending a lot of money to buy key staff in those states. So, it's paying off for him.

BRAZILE: Money is a megaphone when you are down in the polls, like Mitt Romney.

(CROSSTALK)

BLITZER: And, in this early stage, campaign commercials, 30- second spots in Iowa and New Hampshire not necessarily all that expensive. Once things get going, they will -- the rates will go up.

Guys, thanks very much...

BRAZILE: Thank you.

BLITZER: ... Donna Brazile and Terry Jeffrey, here in THE SITUATION ROOM.

Still to come: "The Cafferty File." Is Ralph Nader what's missing from the '08 presidential race? That's Jack's question. Ralph Nader, by the way, will be joining us in the next hour. Also, why is Joe Lieberman raising money for a Republican? The move is drawing some heat from anti-war liberals online. We're going to tell you what they are doing about it.

And later: the Missile Defense Agency unveiling its airborne laser designed to take down missiles in flight. Our senior Pentagon correspondent, Jamie McIntyre, is one of the first in line to see the highly classified aircraft. That's coming up in our next hour as well.

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

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures likely to be in your hometown newspapers tomorrow.

In Baghdad, a boy holds a melted American assault rifle, after a roadside bomb struck a U.S. military convoy.

In India, a girl prays for the safe return of astronaut Sunny Williams, who is aboard space shuttle Atlantis.

In the Czech Republic, a worker handles turkeys at a farm where tests showed the presence of the bird flu virus.

And, in China, a monkey drinks a bottle of orange juice to cool off from scorching heat -- some of this hour's "Hot Shots," pictures often worth 1,000 words.

Independent Senator Joe Lieberman of Connecticut, formerly a Democrat, is hosting a fund-raiser tonight for Republican Senator Susan Collins of Maine.

Lieberman's helping hand is making some anti-war liberals, though, very angry.

Let's bring in our Internet reporter, Jacki Schechner.

How is the liberal front MoveOn.org reacting to this, Jacki?

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, Wolf, they are specifically asking people to donate money to counter Senator Lieberman's own fund-raising efforts. They sent out an e-mail asking people to support Congressman Tom Allen.

They say that they have raised some $237,000, primarily in small donations, since Tuesday at noon. Allen is going to be running against Senator Collins for her Senate seat next year.

Allen's campaign says, they are happy to have MoveOn.org's support. They're also happy with the building support in the liberal grassroots movement online. See, the liberals online haven't liked Senator Joe Lieberman for some time, primarily for his support for the war in Iraq. And they are building some movement around Congressman Tom Allen, quite the way they did around businessman Ned Lamont, who run against -- ran, rather -- against Senator Joe Lieberman in the Democratic primary, and ended up winning, although Lieberman then became an independent, and beat him in the actual general election.

Now, we spoke to Lieberman's office today. And, while they wouldn't address the MoveOn fund-raising specifically, they did say to us that they are happy to support Senator Collins and they think that Americans primarily want progress before partisanship.

We also spoke to Senator Collins' office, who says that tonight's fund-raiser strikes a blow at those who thrive on base-driven politics and partisanship -- Wolf.

BLITZER: Thanks for that, Jacki.

The measure of a leader doesn't necessarily begin with his or her height. As John King told us earlier, New York Mayor Michael Bloomberg declared himself 5'7''. But take a look at how that stacks up against current and former presidents.

President Bush is just under 6 feet tall. His predecessor, Bill Clinton, is 6'2 1/2'' or so. President Reagan was 6'1''. Among the six top '08 presidential contenders, three Democrats, three Republicans, Romney is tallest at 6'2''. Obama is at least 6'1''. Edwards and Giuliani are about 6 feet tall. Senator McCain is listed at 5'9'' tall. Senator Hillary Clinton, by the way, is 5'6''.

Jack Cafferty much taller than all of them, and not only in your physical...

JACK CAFFERTY, CNN ANCHOR: Oh.

(LAUGHTER)

(CROSSTALK)

CAFFERTY: How tall are you?

BLITZER: I'm about 5'10''.

CAFFERTY: What do you mean about?

BLITZER: Five...

CAFFERTY: Then, 5'8''?

BLITZER: No.

(LAUGHTER)

BLITZER: A little bit more, a little bit less.

CAFFERTY: All right.

BLITZER: How tall are you?

CAFFERTY: Six-three.

BLITZER: I told you. I knew that. You are taller than all those guys.

(CROSSTALK)

CAFFERTY: Well, yes, but -- yes, but that's -- the question is: Is Ralph Nader what's missing from the 2008 presidential race?

Art in Cordova, West Virginia: "We wouldn't be in the mess we're in if Ralph Nader had been missing in 2000. I think the only person that disagrees with that take is Mr. Nader himself. Someone needs to stick a pin in his ego."

Joe in Atlanta writes: "I have proudly voted for Nader in the past two presidential elections. If elected, would he make some mistakes? Certainly. Would he make some big ones? Perhaps. But he's the only legitimate candidate in my lifetime to have the courage and integrity to try and change the corrupt and incompetent status quo in Washington. And isn't that what the American people really want?"

Robert in Houston: "No, what is missing is complete outrage over how corrupt and self-serving politicians have become, how ridiculous and dangerous our government has become, and how badly the political system is rigged by Republicans and Democrats, so that alternative parties and candidates don't stand a chance."

Johnny in Florida writes: "Not only is Ralph Nader not what is needed in 2008. His hint at running again is an insult. Yes, he did spoil the 2000 election for Democrats. And, yes, he would spoil the election in 2008 as well. His perception of a third party is skewed and out of date. I applaud him for challenging mainstream politics, but, should he run again, he simply comes across as a brat who still wants to whine."

Bev writes: "Anybody, including Ralph Nader, would be better than the existing candidates. At least he stands for the people, and not the interests of the corporations. The middle class is being destroyed."

Jorge writes: "America needs Nader on the ballot like it needs another C-average president."

(LAUGHTER)

CAFFERTY: Wolf.

BLITZER: Jack, thanks very much.

Ralph Nader, by the way, will be joining us here in THE SITUATION ROOM this hour.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: another stunning blow to the U.S. effort in Iraq. Even as U.S. forces go on the offensive in Baghdad, a dozen more troops are killed in the Iraqi capital in a two-day period -- one reward for troops who risk their lives, Iraqi orphans, found abused and neglected, now getting some proper care. We're going to have a report on this.

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