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U.S. "Does Not Torture": President Bush on Anti-terror Tactics; Senator Craig Refuses to Resign; Helping Hide Illegal Immigrants

Aired October 5, 2007 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Bush responding to allegations of torture, going out of his way to defend the treatment of terror suspects. This hour, the uproar over a secret memo.
Hillary Clinton portrays herself as a defender of Ground Zero workers. Is it a taste of future attacks on Rudy Giuliani's response to 9/11?

And what's Senator Larry Craig thinking? We're going to try to get to the bottom of his new refusal to resign. Some Republican now even more eager for Craig and his bathroom bust scandal to simply go away.

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

President Bush obviously had something else on his mind during an Oval Office photo opportunity today on the economy. He made a point of telling reporters -- and I'm quoting now -- "This government does not torture people." Mr. Bush spoke out a day after a published report about a secret memo that allegedly endorsed harsher treatment of terrorist suspects.

Let's begin our coverage this hour with our White House correspondent, Suzanne Malveaux. She's standing by.

He certainly went out of his way to make this point when he didn't necessarily have to. It wasn't in response, for example, to a question, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, you're right, Wolf. I mean, this is somebody the president wants to engage in, first of all, because of the ghost of Abu Ghraib prison, the abuses that occurred there, very detrimental to the U.S. image. So the president wanted to hit back hard on these accusations of tortures.

And secondly, this administration has always believed that if the American people understood what's at stake, that they would support those harsh interrogation techniques.


MALVEAUX (voice over): Despite fresh accusations that the U.S. tortures suspected terrorists in its custody, President Bush insisted he'll continue to do whatever it takes to protect the American people. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When we find somebody who may have information regarding a potential attack on America, you bet we're going to detain them, and you bet we're going to question them.

MALVEAUX: But Mr. Bush insists the harsh interrogation methods he had signed off on do not amount to torture.

BUSH: This government does not torture people. You know, we stick to U.S. law and our international obligations.

MALVEAUX: But how do we know?

Thursday, "The New York Times" revealed a once-secret Justice Department memo from February of 2005 which alleged the administration approved harsh interrogation techniques, including simulated drowning, head-slapping, and exposure to extreme cold.

Chair of the Senate Intelligence Committee, Senator Jay Rockefeller, said that's a lot more information than he got when he and other committee members were briefed by the administration. Today he lashed out, saying, "I'm tired of these games. They can't say that Congress has been fully briefed while refusing to turn over key documents used to justify the legality of the program."

The White House says they've been as open as they can.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: What would make it better? What would make it better? That we should tell everybody exactly what we have?

You want to know the techniques that we use so we can tell exactly al Qaeda what we're going to do? That's absurd.


MALVEAUX: So Wolf, does the U.S. engage in torture? It really depends on how you define it. Those who know that definition have pledged to keep it secret, leaving the American people to trust, not necessarily to know -- Wolf.

BLITZER: But what's the explanation coming from the White House, Suzanne, why the chairman of the Oversight Committee, the Senate Intelligence Committee and the ranking Republican, for that matter, the vice chairman, they're not being briefed or not allowed to read these specific memos?

MALVEAUX: Well, what they say is they certainly have gotten enough information, that there's an application they have new information to know what kind of techniques are being used. They don't have to know the specifics of it, but they feel that they don't have to brief them on anything else except for what they already know, that they have enough information to know that this is not torture. But they feel that if this information got out, the specific techniques, that in fact that would tip off the enemy in some way and they would train against those techniques -- Wolf. BLITZER: Suzanne, thanks very much.

Suzanne's at the White House.

Let's go over to Capitol Hill now, where quite a few Republicans are wringing their hands and scratching their heads about Senator Larry Craig's refusal to resign. Senator Craig lost the legal bid to withdraw his guilty plea in connection with that arrest in an airport men's room, but the Idaho Republican now says he's staying in the United States Senate anyway.

Let's go right to our congressional correspondent, Dana Bash. She's been covering this story.

He's putting his Republican colleges, we're told, Dana, in a difficult position.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's certainly what Republicans think. Many of them are downright furious that Senator Craig, they think, is hurting an already ailing Republican Party, and some of -- actually, many of Senator Craig's constituents back in Idaho appear to be equally unhappy with his decision to stay.

In fact, we went back and visited an Idaho radio station that we went to shortly after the story broke.


BASH (on camera): On the airwaves in Idaho, the verdict seems clear.

UNIDENTIFIED MALE: Put me down as disappointed in his decision.

BASH: Nearly every call about Larry Craig to this conservative radio show goes something like this...

UNIDENTIFIED MALE: The honorable Senator Craig needs to go ahead and step down. It would be the honorable thing to do. All the good things he's done for the state are now being harmed.

BASH: Though many Idahoans wish Craig stuck with his decision to resign, especially after his bid to withdraw hi guilty plea was denied, Craig's fellow senator from Idaho is behind him.

SEN. MIKE CRAPO (R), IDAHO: Senator Craig has the right to pursue his legal defense of his case to its fullest extent. And I support his decision to do that.

BASH: But back in Washington, Senator Crapo is a lonely voice. Most of Craig's fellow Republicans who tried to force him out are furious he's staying. They're raising the possibility of public Ethics Committee hearings, hoping Craig will reconsider.

SEN. JOHN ENSIGN (R), NEVADA: Putting the Senate through this kind of embarrassment, especially if they're public hearings, I don't think is good for the institution, Republicans or Democrats. BASH: That's not likely to sway Craig. His attorney says he welcomes the Senate investigation. Since a Minnesota judge dealt him a legal blow, Craig sees the ethics probe as the last viable way to clear his name.

UNIDENTIFIED MALE: I don't think there's anything in the public record -- and this entire case is in the public record at this point -- gives the senator pause or cause for concern were it to be aired in the Senate Ethics Committee. That may be the only place that he gets his day in court.


BASH: Now, Craig's attorney, Stan Brand, says that the Ethics Committee would embarrass itself by opening what he called a Pandora's box by reprimanding Senator Craig for a misdemeanor, but it is important to know that the Ethics Committee now is conducting a preliminary investigation. It's still not entirely clear whether they will open it up to a full-blown investigation, Wolf, much less have public hearings.

BLITZER: Well, besides the ethics committee, do Republican leaders have any other options out there that they could use to reprimand him?

BASH: Not many. You know, GOP leadership aides say that they do have one potential option, and that is to try to take Senator Craig of the committees, the committees that he says he's doing the people of Idaho's work in by staying on those committee.

What they can do is have a secret ballot by Republicans. If that is approved, they would take this to the full Senate and the Senate would have to approve a new committee list without Senator Craig on it.

That is something though that is being debated, probably talked about among some of the rank and file, but it is unclear if the Republican leaders, Wolf, really want to go that route, because that again keeps the story going, because it raises another spectacle on this very embarrassing issue for them.

BLITZER: All right, Dana. Thanks very much.

Jack Cafferty is standing by in New York with "The Cafferty File".

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: So what's worse, getting caught in a sex sting operation in a public toilet in an airport in Minneapolis, making sexual advances toward a police officer, or lying to the whole world by saying you're going to resign your Senate seat and then announcing that you're not going to resign?

Idaho senator Larry Craig is a disgrace on many levels. Five weeks ago, Larry "Wide Stance" Craig announced his intention to resign at the end of September after it got out he pleaded guilty in connection with being busted playing footsie with a cop in a toilet. Pathetic soul that he is, Craig then tried to get his guilty plea to a misdemeanor disorderly conduct charge overturned. The court laughed in his face, as it should have.

Now Craig says he's staying. Good.

Republicans want him to go because he's an embarrassment to their family values party with an election coming up next year. Democrats want him to stay for the same reason. Craig's an embarrassment to the family values Republican Party with an election coming up next year.

I want him to stay, too, but not for the same reason.

The Senate Ethics Committee is investigating Craig. And if he insists on remaining in the Senate, well, there might be hearings, and those hearings likely will be televised. And I can't wait for that.

Senator, could you show the committee that wide stance you said you assumed in that toilet? Senator, you said you reached under the stall to pick up a piece of paper. The cop who arrested you didn't say anything about you having any paper in your hand. And Senator, who picks up paper off the floor of a public toilet in the men's room in an airport?

Senator, like I said, I can't wait.

Here's the question: Should the Senate expel Larry Craig since he refuses to resign?

E-mail your thoughts to or go to -- Wolf.

BLITZER: Jack, thank you.

Jack Cafferty will be back shortly.

Some powerful new ammunition in the border wars. At issue, should cities give safe haven to illegal immigrants in defiance of federal law?

Two U.S. congressmen with strong opinions take on that question.

Also, the Republican presidential candidates are returning to a favorite line of attack against Democrats, but they're using it against one another.

And which White House hopeful talks most about a higher power? We'll consult a new tool online. It's dubbed the "GodoMeter:.

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


BLITZER: Your city could be at the center of a fierce debate. As part of our CNN series on "Uncovering America," we're asking this question: Should cities stand in the way of federal enforcement of immigration laws and provide safe haven to illegal immigrants, or should they help federal officials find them as federal law says?


BLITZER: And joining us now, two members of the United States Congress, Democratic Congressman Luis Gutierrez of Illinois and Republican Congressman Brian Bilbray of California.

Congressmen, thanks to both of you for coming in.



BLITZER: Why do you think these sanctuary cities should not be allowed to operate? Because in a lot of these cities -- and there are cities popping up all over the country -- they don't want to have to report to the federal government about illegal immigrants.

BILBRAY: Well, Wolf, it's absurd. Since 9/11, we've known that there's major information systems that need to share. One of the biggest problems that the 9/11 Commission said is sharing information.

This is -- this is an order by council members or mayors to not allow police officers to even communicate. And this is the absurdity of that. If you know somebody is illegal, if you have them in their custody, to have an order that says an officer does not have the ability to use his discretion at informing another law enforcement agency that they think they have somebody legally in their possession, this is the kind of obstructionism we need to stop.

BLITZER: Congressman Gutierrez, why do you think he's wrong?

GUTIERREZ: Well, I think, number one, we have mayors and police departments, we have police chiefs across this country who basically have -- and remember, when we talk about sanctuary cities, there really is no such thing as a sanctuary city from a legal point of view. We have different municipalities taking on different positions.

In Chicago, basically there's a position of "don't ask, don't tell." People come for services.

The mayor of the city of Chicago, local elected officials see this immigrant community as a vibrant vital instrumental part of that community and want to serve the community. Remember, all of this happens in the absence of any action at a federal level. Some municipalities...

BLITZER: Because the argument is that they're not enforcing federal law.


BLITZER: That they're letting people here who are illegal, who are not supposed to be here, simply go out and get the benefits of living in the United States.

GUTIERREZ: Well, but there are no benefits for living in the United States. Since we passed welfare reform in 1996, any means- tested program of the federal government, you're ineligible, even if you're a permanent resident, so you're here five years. And supplemental Social Security, obviously you have to become a citizen.

So we've dealt with that at the federal level.

BLITZER: Is he right?

BILBRAY: No, he's absolutely wrong. And just in my county of San Diego County, one county, it was $100 million, one third of all discretionary funds in that county go to illegals -- $155 million go for medical, which is mandated. Emergency medical services and other services are actually mandated out there. So there's guaranteed service to everybody in this country in many categories if they're legal or illegal.

BLITZER: What's the counterargument?

GUTIERREZ: Well, the counterargument is, A, they pay sales taxes. Last time an undocumented worker in Chicago bought a gallon of milk, filled his tank up with gasoline. As a matter of fact, when he paid his rent, it went to real estate taxes. Can you imagine -- the city of Chicago has an estimated 300,000 undocumented workers in the city.

BLITZER: So what he's saying is the country is basically making money from these 12 million or so illegal immigrants because of the taxes that they wind up paying one way or another.

BILBRAY: Well, first he said they're not getting services, now he says they're paying for them. The fact is they're not paying $100 million and $250 million in one county. The magnitude of the impact is what's talked about here.

I have been in local government. I was a mayor, I was a county supervisor. I saw the expense...

BLITZER: So is it a net drain or net plus for the U.S. taxpayer?

GUTIERREZ: Let me just say, I didn't say what he just -- I was very clear. I said there are no means-tested programs that they are eligible for. And I also said that they're ineligible for supplemental Social Security. I was very clear.

He responded by talking about emergency services. Anybody that shows up to a hospital in a life-and-death situation does get emergency services.

BLITZER: Whether they're documented or not.

GUTIERREZ: Whether they're -- and that's a humane approach.

BLITZER: You want to get a list of all of these 12 million -- some people say as many as 20 million immigrants -- in the country, and now some of the states say give them driver's licenses and at least you document where they are, who they are, and you can keep track of them.

From your perspective, is that a good idea?

BILBRAY: Wolf, the 9/11 report showed out that seven people that were illegally in the country were given driver's licenses by Virginia. They got on a plane and didn't have to show their Saudi Arabia passports because they had a driver's licenses, and they killed thousands of Americans on 9/11.

Virginia rightfully woke up after 9/11 and said we've got to stop documenting undocumented people so these can use these documents for God knows what. The fact is, it is absolutely scary that after what's happened in New York, that the legislature in New York would actually start to go back and give driver's licenses after what happened on 9/11.

BLITZER: Because in New York, they're getting close to making that. In Illinois they're getting close to it as well.

GUTIERREZ: In Illinois they're very close.

BLITZER: Why do you think it's a good idea to let these millions of illegal immigrants get driver's licenses? Because they can use that as official photo I.D. to get on planes or whatever.

GUTIERREZ: But what has failed to be talked about here is that you have to report these people to the federal government after they get their driver's license. They have to go through a security screening.

The fact is, they drive on the same streets I drive on and that you drive on. I want somebody with a driver's license, and I want them with insurance. And this requires both of them. Since they are -- in the failure of the federal government to respond, we should respond.

Now, let's take this notion of enforcement only. I mean, you've reported on this program about a three-term -- somebody who's returning to Iraq for the third time and their wife is being deported. Under the elimination of these sanctuary cities, the local police would have to pick up that wife of a soldier for his third term.

BLITZER: All right.

GUTIERREZ: The point is, third time out to Iraq. I mean, remember, when the police officers...

BLITZER: Let me let Congressman Bilbray respond to that.

GUTIERREZ: ... knock on the door -- when the police officer knocks on the door, if he starts dealing with immigration problems, he starts losing his connection with the people.

BLITZER: Before we get to that, wrap up this thing on the driver's licenses.

Don't you want people who are driving in the United States to have to go through a test to make sure they can drive and to make sure that they have insurance?

BILBRAY: If they are qualified for driving and getting those documents, and they're not. The fact is we have had the same argument for drunk drivers. They have their license taken away.

Finally, in California, what the answer is, that people driving without a license have their car impounded. That stops that. But when you start accommodating, you end up like Illinois, now saying employers are not going to be allowed to use employer verification system. You've got a state now saying that you cannot use the federal verification system.

GUTIERREZ: I think it's regrettable to equate drunk drivers with people trying to take their kids to school, to the hospital, and get to work. I think the two...


BILBRAY: We're talking about people -- we have people that don't have driver's licenses.

GUTIERREZ: But let's not. Let's not.

And the local municipalities, the states are passing legislation, and you as a member of the Republican Party have instilled in the country, across this country, let the local officials do what they -- they do it better, Washington, D.C., doesn't have the answer.

BLITZER: All right.

GUTIERREZ: And in the failure of our answer, I think local municipality states are taking action.

BILBRAY: Wolf, you know separation of powers and federalism means feds do what they're supposed to be doing, states supposed to be doing those. We protect and make sure the feds don't get into local jurisdictions, but local jurisdictions are now blocking the enforcement of the law.

BLITZER: All right.

Congressman Bilbray had the first word, I'll give you the last word. Ten seconds.

GUTIERREZ: Look, we need comprehensive immigration reform so we can have safety and security here in this country. Let's make sure our border is secure, let's get an I.D. that everybody can respect and is reliable in this country. Let's keep people out of the shadows so we can stop this bickering and fighting at the local level about punishing immigrants or not punishment.

That should be the federal government's job. BLITZER: We've got to leave it there, guys.

GUTIERREZ: Thank you.

BLITZER: Two congressmen joining us.

Luis Gutierrez, thank you very much.

Congressman Brian Bilbray.

BILBRAY: Thank you.


BLITZER: Republicans have a problem on their hands. His name, Senator Larry Craig. Can they convince Senator Craig to finally make good on his promise to resign? The bathroom bust scandal, that's coming up in our "Strategy Session".

And it's payback time for a woman who says she was forced to strip at a McDonald's.

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



BLITZER: Republican presidential candidates are trying to outdo one another as the person who would best save America's money. It's the tax-and-spend debate with a new twist.

And Florida voters are right now in the middle of a fight between state Democrats and their party. And now the fight is going to court.

Stay with us. We'll update you on what's going on.


BLITZER: Happening now, one of President Bush's old political friends and the current housing secretary under investigation. Sources telling CNN the FBI wants to know if Alphonso Jackson improperly helped an associate make $400,000.

We're watching the story.

Also, sources tell CNN that track star Marion Jones will plead guilty to lying about doping. Might that cost her the five gold medals she won at the 2000 Olympics?

And a mystery involving a U.S. soldier. She was found dead on a U.S. military base, shot in the head. Now her family wants answers.

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

Rudy Giuliani says Republicans should be ashamed. He and other Republican presidential candidates are speaking to the anti-tax group Americans for Prosperity. This, as some of the candidates are on the attack regarding the issue of spending.

Let's go right to our CNN senior political analyst, Bill Schneider. He's watching this story for us.

It looks like it's a hot new issue on the campaign trail as far as the Republican race is concerned, Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, Wolf, it's actually a hot old issue for Republicans, taxing and spending. But now they're using it against each other.


SCHNEIDER (voice over): Fiscal conservatism, that's been Republican gospel since Ronald Reagan, a hero to delegates attending the Americans for Prosperity Conference, where Republicans candidates came to testify.


SCHNEIDER: They argue Republicans lost Congress because they abandoned the faith.

GIULIANI: I believe one of the reasons we lost Congress is unfortunately our party in the Congress became just like the Democrats as far as spending money is concerned.

Shame on us!

SCHNEIDER: You even here criticism of President Bush's signature program.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The Medicare prescription drug program, an unfunded liability.

SCHNEIDER: A squabble has broken out between two Republican candidates, each accusing the other of straying from the gospel of fiscal conservatism.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Mayor Giuliani sued the Republican governor to keep in place the commuter tax.

SCHNEIDER: Romney's Taxachusetts hypocrisy, the Giuliani campaign shot back, charging the former Massachusetts governor with increasing taxes on non-residents. Republicans hope to win by returning to the fiscal gospel and drawing a sharp contrast with Democrats.

FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: We know that the Democratic leadership and those who would have the Democratic nomination want to lead us down the road of more government and more taxes and more spending.

SCHNEIDER: "Excuse me?" says the Democratic front-runner. SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I think, if you don't put fiscal responsibility first, you are going to really make a big mistake, because we demonstrated in the '90s it had a lot to do with moving us toward solvency.

SCHNEIDER: Democrats preaching fiscal responsibility? Yes. Which party do voters trust more to handle the federal budget deficit? Democrats, by more than 20 points.


SCHNEIDER: A lot of voters remember there used to be something called a budget surplus in the late 1990s under a Democratic president working with -- notice I said with -- a Republican Congress -- Wolf.

BLITZER: That was then. This is now, though, Bill. Thanks very much.

And, meanwhile, Democrats want you to believe that Republicans do not care about whole blocs of voters, including African-Americans, Latinos, teachers, gays, lesbians, even College Republicans. That's the message from Democrats in a new Web video.


UNIDENTIFIED FEMALE: Not all Republicans are happy about their presidential candidates ignoring minority voters. As former Republican vice presidential candidate Jack Kemp said, what are we going to do, meet in a country club in the suburbs one day?

If this is how they act as candidates, what will they do in the White House?


BLITZER: The Democrats' video is entitled "American Dreams." And Democrats say it highlights that their political opponents have excluded vast numbers of Americans from the Republican vision of the American dream.

President Bush is declaring today that new numbers on the job market show the economy is -- quote -- "vibrant and strong." The Labor Department reports employers boosted payroll by 110,000 jobs in September. That's the biggest gain in four months, but the unemployment rate actually crept up to 4.7 percent, the highest level in a year, still, though, low by historical standards.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You know, I -- I am really pleased with the economic news, but I don't take good news for granted. I understand people are worried about their mortgage payments. They're concerned about sending their child to college. I know that people are concerned whether or not they don't have enough money to meet their need.


BLITZER: Our most CNN/Opinion Research Corporation poll, by the way, found a majority of Americans, 54 percent, say economic conditions in the U.S. right now are good, but they're apparently not giving the president much, if any, credit for it. The new AP/Ipsos on poll shows 64 percent of Americans disapprove of the way President Bush is handling the economy.

There's even more chaos and anger over the 2008 presidential primary schedule. Florida Democrats have filed a lawsuit against the national Democratic Party in a fight to move up their state's contest.

CNN's Tom Foreman is following this fight from South Carolina, another state caught up in the calendar fiasco.

Tom, this is a pretty big deal.

TOM FOREMAN, CNN CORRESPONDENT: Yes, Wolf, this could be quite a big deal, because, even though the Democrats have a lot going their way right now, this fight in their own party this year could hurt them a lot next year.


SEN. BILL NELSON (D), FLORIDA: On behalf of 4.25 million Florida voters, Congressman Hastings and I have filed this lawsuit against Howard Dean and the Democratic National Committee.

FOREMAN (voice-over): Two of Florida's top Democrats in Congress, Bill Nelson and Alcee Hastings, taking legal action against their own party.

This all started when the Sunshine State voted to move its primary up to January 29. That violated Democratic Party rules, which only allow Iowa, New Hampshire, Nevada, and South Carolina to hold their presidential primary contests before February 5. The national party voted to punish Florida Democrats by refusing to seat the state's 210 delegates at the national convention. The lawsuit claims that's illegal, because it takes away Florida delegates' say in choosing the Democratic nominee.

REP. ALCEE HASTINGS (D), FLORIDA: For the DNC to say to the fourth largest contingency of Democrats in the nation that their votes will not matter in next year's presidential primary is not only shocking and ironic, but we believe is illegal.

FOREMAN: The Democratic National Committee disagrees, saying -- quote -- "The political parties themselves, not the states, have the legal right grounded in the First Amendment to the U.S. Constitution to establish the rules by which their candidates for president and vice president are nominated."

The top Democratic White House hopefuls have agreed to not actively campaign in Florida, and some are worried that this intra- party fighting could hurt the Democrats in a state they need to win in order to retake the White House. But Florida Democrats say, that's not a concern.

HASTINGS: One thing about Democrats is, we are a lot like families that have disputes. But, when the deal goes down, we are together.


FOREMAN: The move by Florida to move their primary up to the 29th prompted Republicans here in South Carolina to move their primary up to January 19. Now the Democrats here in the Palmetto State are expected to follow suit, because they have always had the first primary in the South and they would very much like to keep it that way, rain or shine -- Wolf.

BLITZER: Tom Foreman in South Carolina for us.

Tom and Bill Schneider are both part of the Emmy Award-winning best political team on television. And, remember, for the latest political news at any time, you can check out our Political Ticker at

Are you bothered when you see your presidential candidates in campaign ads that feature ground zero? There's some controversy right now over a new Hillary Clinton ad that shows just that. We are going to take a closer look.

And which of the presidential candidates talk about God the most? A new Web tool is keeping score.

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


BLITZER: Back in the days after the 9/11 attacks, Hillary Clinton had a kiss-hello relationship with Rudy Giuliani, the senator rallying behind New York's Republican mayor at the time. Now, in the heat of the 2008 presidential campaign, Senator Clinton is hearkening back to those difficult days and hinting that Giuliani simply fell short.

Let's go right to New York.

Mary Snow is covering this story.

And it involves a new Clinton campaign ad, Mary, that's raising some eyebrows.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, yes, some are critical of it. There is mixed reaction. The images run for just a few seconds, but a new campaign ad running in New Hampshire and Iowa entered new territory.


SNOW (voice-over): Ground zero is an image that hasn't been used in the 2008 presidential ad campaign, until this one from Hillary Clinton.


NARRATOR: She stood by ground zero workers who sacrificed their health after so many sacrificed their lives.


SNOW: The ad focuses on health care, not 9/11, but it wasn't entirely expected.

MARK PRESTON, CNN POLITICAL EDITOR: Since Rudy Giuliani is the candidate who is most closely associated with 9/11, I think we all expected for him to use the image first.

SNOW: To date, Rudy Giuliani has not. He's largely built his candidacy on his days as New York's mayor during 9/11.

But using images in a political campaign can be politically dangerous. In 2004, President Bush's campaign used a 9/11 image that sparked a furor. Critics say he exploited the tragedy by showing a flag-draped body.

The ground zero images in Senator Clinton's ads are very different, showing workers going to the site. Still, specialists in voting behaviors say, using such emotionally charged images carries a risk.

DOUGLAS MUZZIO, BARUCH COLLEGE: There's always risk, but it seems to me that she needs to establish herself as someone who can be positively associated with 9/11.

SNOW: The Clinton camp says, "She has an outstanding record of helping people who were hurt in the aftermath of 9/11, and that's something we want people to know about."

But political observers say the ad also takes aim at Rudy Giuliani.

MUZZIO: She's one of the people who have a legitimate stake in 9/11. She can't allow Rudy to be exclusively the 9/11 candidate.


SNOW: Now, the Giuliani campaign declined any comment; 9/11 families we contacted had mixed reactions to the ad. Some say it's not appropriate to use any 9/11 images for political ads, but others say they don't object to this particular ad by the Clinton campaign -- Wolf.

BLITZER: All right, Mary, thank you -- Mary Snow in New York.

Today in the "Strategy Session": The Republican presidential field is trotting out their tax-cutting credentials.

(BEGIN VIDEO CLIP) MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Quite frankly, reforming our tax code is not enough.

SEN. SAM BROWNBACK (R-KS), PRESIDENTIAL CANDIDATE: I think this should be taken behind the barn and killed with a dull ax.

THOMPSON: We have the second highest corporate tax rate in the industrialized world.


BLITZER: But has the GOP tarnished its fiscally conservative image?

And Senator Larry Craig, his change of heart about stepping down is giving some of his party's leaders heartburn. But what can they do about it? We will talk about that and more. Donna Brazile, Leslie Sanchez, they are both standing by right here in THE SITUATION ROOM.


BLITZER: He's embroiled in scandal. Some of his colleagues simply wish he would go away, but Senator Larry Craig refusing to resign.

We want to talk a little bit more about this, what it means for Senator Craig, what it means for the Republicans in the Senate.

Joining us now in our "Strategy Session," our CNN political analyst Donna Brazile. She's a Democratic strategist. And Republican strategist Leslie Sanchez.

Senator Norm Coleman, Leslie, he said this today. He's a Republican incumbent from Minnesota: "I would have hoped he would have done what he said he was going to do. He's chosen not to. The people of Idaho will have to speak to that and the Ethics Committee will have to speak to that."

The leadership in the Republican Party in the Senate, by all accounts, want him to go away.


I think many of us in the Republican Party want us -- want him to go away. It's a very sad case for him. I think it's a sad case for the country, a sad case for the state, and especially a sad case for the party, because it's a constant reminder of things and -- and probably more of a distraction from things that the party wants to be talking about, economic conservative issues, growing the economy, keeping America safe.

And that really is going to be something just political fodder for more political theater from the Democrats.

BLITZER: If he stays, Larry Craig, in the Senate, and serves out the balance of his term -- maybe he will even run for reelection. You don't -- you don't know what he's going to do.

But, if he stays, let's say, will the Democrats use this to try to beat the Republicans?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, look, five weeks ago, he gave every intention of stepping down. Now the Republicans want Larry Craig to keep his word.

I don't think Democrats are going to get embroiled in this mess. We see the hypocrisy already on the Republican side, by saying Larry Craig must go, but David Vitter can stay. So, I think Democrats are going to leave this to Republicans, especially those 29 Republicans in Idaho that have filed to run to replace him in 2008.

SANCHEZ: There's a big difference between accepting criminality, accepting, you know, a guilty plea, and -- and...

BLITZER: But this was a misdemeanor. There's a lot of people that have misdemeanors. You know, speeding, that could be a misdemeanor as well. Is this worthy of a Senate ethics investigation -- Ethics Committee investigation, the fact that he pleaded guilty to a misdemeanor of disorderly conduct?

SANCHEZ: I don't think there's going to be a fair analysis of that issue. I think the Democrats are going to seize this for more political theater. I think that's the saddest part of this whole issue. It's going to be -- and, like I said, Wolf, another distraction...


BRAZILE: Leslie, read the -- read the clips. It's Republicans, it's Ensign, who said he should resign.

SANCHEZ: Well, in all sincerity...

BRAZILE: It's Coleman. It's Republicans who are fearful...



BRAZILE: ... that this could hurt their reelection chances in some critical states.

Don't blame Democrats for the Republicans' mess.

SANCHEZ: Well, no, I would blame...

BRAZILE: We weren't in the bathroom, trust me.

SANCHEZ: Well, I would blame -- well, let's not go there.

But I would blame Larry Craig. He's the one, in good faith, we thought, said he had an intent to resign. He's definitely gone back on that. And it's set up the party for failure. (CROSSTALK)

BRAZILE: And the governor picked someone to replace him. So, this is a Republican failure, not a Democratic...

SANCHEZ: This is a Larry Craig failure. Let's not take it beyond that.

BLITZER: I will leave this subject, but I will read to you what Congressman Peter Hoekstra of Michigan said.

He said at "Serving in the United States Congress is a position of leadership with many demands. One of the most important is to exhibit behavior that upholds the dignity of the office. Senator Craig has consistently fallen far short of that standard over the past two months. Senator Craig should resign his position immediately."

That's Congressman Peter Hoekstra of Michigan.


SANCHEZ: He's not going to have a lot of friends, you know? And that's one of the interesting statements, I think, that Senator Craig made, is that he still can be effective.

And, well, the nature of the way the Senate is set up, sure, any senator can be effective, but that's not the point. I think...

BRAZILE: He's a distraction.

SANCHEZ: It's a distraction. It's bad politics and it's bad for the country, regardless of what side you're on.

BLITZER: Well, he says he's staying, at least for now. And, so, presumably he will stay.


BLITZER: Let's talk about this other issue that is coming up, all the Republican candidates, virtually all of them, appearing today at this forum here in Washington, making the case that they have to get back to their fiscally conservative roots, because spending has exploded during the two terms of the Bush administration.

The president never used any of those vetoes to cut spending, the pork-barrel spending, the earmarks, all those pet projects during the first six years. Now, all of a sudden, he's decided he's going to use some of those vetoes.

What do you make of this new line of attack by Republican presidential candidates?

SANCHEZ: I think there's two parts. I think there's a very real sense in the Republican Party that a lot of the failures that we saw in the November elections have to do with losing sight of fiscal responsibility, fiscal conservatism.

But what's interesting is, we have seen definitely in the last eight months the rise of political power of economic conservatives, in terms of changing the debate, enforcing the idea of having fiscal restraint among presidential candidates. It's something we needed to be talking about. If you look at what basically the party was founded on, that -- it was that, limited government, controlling our spending. And we have to get back to that.

BLITZER: The president says he's -- he's vetoed already this week the $35 billion expansion of the children's health insurance program, because, he says, it's simply too expensive; the country can't afford it.

BRAZILE: And one Republican senator said it was an irresponsible use of his veto pen.

Look, the Republicans have really accrued over $9 trillion in debt. The Democrats got the fiscal -- their fiscal house in order under Bill Clinton and Al Gore. I don't think the Republicans can reclaim that fiscal mantle.

Right now, Romney is attacking Giuliani as a tax-and-spend liberal. he's attacking him on commuter tax. He's attacking him for some of his other policies. So, this is interesting, to see the Republicans infighting on fiscal responsibility.

SANCHEZ: I think what's interesting is, the Democrats said they were coming into Congress to clean up the House, you know, have open transparency, in terms of earmarks and pork-barrel spending. And they have done everything to the contrary of that.

All they have done is basically herd staff assistants. You know, if you look at "The National Review," and David (INAUDIBLE) talked about that. These new reforms that they just signed basically do nothing more than make it difficult for staffers to have lunch with a lobbyist vs. finding out...

BRAZILE: Well, we restored pay as you go.

SANCHEZ: ... the billion dollars, the billions of dollars that chairmen are adding back in pork-barrel spending.

BRAZILE: We restored pay as you go. And the Democrats are committed to fiscal responsibility. Even this children's health program was paid for, and the Republicans -- well, the president rejected it, because it has broad bipartisan support.


BLITZER: But you know -- but you know, Donna, there are still a lot of Democrats and plenty of Republicans, but a lot of Democrats, who are upset that these earmarks, these pet projects, continue to be so prevalent.

(CROSSTALK) BRAZILE: And that's something the next president will have to tackle, as well as the current Democratic leadership.

Look, no one likes the amount of pork that is in our budget. But, at the same time, we need Republicans to work with Democrats to restore pay as you go.

BLITZER: We have got to leave it there, guys.

Donna Brazile, Leslie Sanchez, good "Strategy Session." Thanks to both of you for coming in.

Can talking about God help a presidential candidate? There's a new Web tool out there. It's tracking just how often the candidates are bringing up God. You may be surprised to learn the score.

And President Bush's housing secretary under investigation by the FBI, sources telling CNN the agency wants to know if Alphonso Jackson improperly helped an associate make $400,000.

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


BLITZER: On our "Political Radar" this Friday: GOP congressional sources confirming that New Mexico Congresswoman Heather Wilson is set to run for the Senate seat of fellow Republican Pete Domenici, who is retiring next year. Wilson is about an hour away from making her formal announcement. She will be the first major candidate to jump into the race. The six-term Republican has been a top target for Democrats in her recent congressional reelection bid.

New Mexico Governor and presidential candidate Bill Richardson says he won't be running for Domenici's seat. The Democrat says being governor is better than being a senator. And, besides, Richardson says, he is going to win the presidential nomination. So, talk of a Senate run is, in his words -- word -- academic.

GOP presidential candidate Mitt Romney is under fire today from a gay Republican group. The Log Cabin Republicans plan to launch a TV ad questioning Romney's credential as a social conservative. Specifically, the spot focuses in on Romney's past support for abortion rights. A Romney spokesman says he's not surprised a national gay rights group would attack the former Massachusetts governor, because he opposes gay marriage.

Another provocative comment today from the wife of Democratic presidential hopeful John Edwards -- Elizabeth Edwards saying she was very disappointed that John Kerry conceded the 2004 presidential election so quickly to President Bush.

In a radio interview, she suggested Kerry should have contested the results in the crucial swing state of Ohio, where he and his then running mate, John Edwards, lost by about 120,000 votes.

Remember, for the latest political news at any time, you can check out our political ticker at

What role does God play in presidential politics? There's a new Web tool ranking candidates according to how often they discuss faith on the campaign trail.

Let's go right to our Internet reporters, Abbi Tatton. She's watching this story for us.

So, how does this work, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, when Senator John McCain said last week that the U.S. was founded primarily on Christian principles, his comments not only drew some fire and a clarification from the senator, but they also put him tying for first on the Republican board of the God-o-Meter, a new tool from the Web site Beliefnet, where McCain made those remarks, that is tracking how often the presidential candidates invoke faith on the campaign trail.

At the opposite end of their Republican scale, Rudy Giuliani, though he did just sneak up a place after being pressed by reporters on his faith this wee. For the Democrats, Barack Obama just moved up past Hillary Clinton, bolstered by his 40 days of faith and family initiative, which has the senator visiting South Carolina churches, all this subject to change. As the candidates speak, the God-o-Meter is constantly recalibrating -- Wolf.

BLITZER: Abbi, thanks for that.

Let's go back to Jack Cafferty. He has got "The Cafferty File" in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is: Should the Senate expel Larry Craig, since he refuses to resign?

Based on these e-mails, I hope he hangs around, because this is a horse we can ride for a while, if you pardon the expression.

Corinne writes from Stockton, California: "No way. I want him to stay in Congress, please. He's the poster boy for the disintegrating Republican Party. I find it hilarious they cultivated hatred and bigotry in their constituency, and now it has come around and stung them on the bottom, so to speak."

Frank in Egg Harbor, New Jersey: "Jack, the Senate should hold hearings, boot this poor excuse for a senator out. This would give him more time to roam the restrooms of his state, looking for whatever he was looking for in Minneapolis. I don't think it was love."

Ray in Lubbock, Texas, writes: "I don't believe the Senate has enough basis to expel Senator Craig. It's only the homophobic Republican leadership that wants him to quit. If they expel Craig, they will need to go after the red light runners and the litterbugs as well."

Christian in Houston: "I was planning to say, yes, the Senate should expel Craig, but you made a very convincing argument. I say let him stay. It should be very entertaining."

Jordan in New York writes: "Being secretly gay is the worst political move in America. Think about it. There are many things less politically dangerous: letting terrorists successfully attack two major cities, letting another major city get destroyed by a flood, using false information to start a war, losing that war, giving bribes, taking bribes and leaving the money in your freezer, driving drunk, smoking crack with hookers, and shooting an old man in the face and having him apologize to you for the inconvenience, just to name a few."

Tom in Illinois writes: "If Lavatory Larry is going to be brought up on ethics charges, then Diaper Dave Vitter needs to be right there with him. They both ought to go."

And Ken in Brooklyn: "Larry Craig should be allowed to serve his full term in the Senate as latrine queen. He would be in charge of flushing out all the gays and perverts that are lurking in our Senate halls, especially those with a wide stance" -- Wolf.

BLITZER: Thank you, Jack.