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Clinton Soars, Thompson Stumbles; Brawl Over Children's Health; Judging A New Attorney General: Senate Confirmation Hearing Tomorrow

Aired October 16, 2007 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, a front-runner soars and a latecomer stumbles. This hour, great expectations in the presidential race. We're only seconds away from releasing our brand- new poll numbers.
Plus, it's getting nastier than a schoolyard brawl. Republicans and Democrats digging in their heels over children's health care. And one side brings in a famous performer for reinforcement.

And New Hampshire's mystery date. Even as White House hopefuls start to register for the primary, it's still anyone's guess as to when that critical vote will actually happen.

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

Right now we have some brand new and compelling snapshots of the presidential race. They show the Democrats, Hillary Clinton, is living up to and perhaps even surpassing great expectations, while Republican Fred Thompson is falling short.

Let's immediately bring in our senior political analyst, Bill Schneider, who is watching these numbers for us.

And some interesting headlines coming out from our poll, Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right. This is our Charles Dickens poll. It's all about great expectations -- some fulfilled, others not so much.


SCHNEIDER (voice over): Fred Thompson got into the Republican race with great expectations.

FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: A stronger nation, a more prosperous nation, and a more united nation. And that's why I'm running for the presidency of the United States.

SCHNEIDER: And sure enough, just after he got in last month, Thompson and Rudy Giuliani were just about tied for front-runner. But since then, Thompson has taken a lot of flack for a lackluster campaign.

THOMPSON: I see no reason to believe that we're headed for an economic downturn. SCHNEIDER: The new CNN poll by the Opinion Research Corporation shows Thompson's support dropping. He's now running second, barely ahead of John McCain. Giuliani is still in front.

Meanwhile, on the Democratic side, Hillary Clinton continues to gain support.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Well, when I'm president, we are going to start being bold again. Bold and practical.

SCHNEIDER: She led Barack Obama by 23 points last month. She now leads the Illinois senator by 30 points. A majority of Democrats favors Clinton, whereas fewer than a third of Republicans favor their front-runner, Rudy Giuliani.

Expectations are building fast. Who do voters expect to win the Democratic nomination? Clinton, 64 percent, four to one over Obama.

Who do voters expect to win the Republican nomination? Giuliani, 50 percent, nearly four to one over John McCain.

And who do voters expect to win the election? Forty-five percent say Clinton. Only 16 percent expect Giuliani to get elected. Nobody else gets more than 10 percent.

So now it's Clinton who faces great expectations. Here is one reason why.

Asked if they would vote for the Democratic candidate or the Republican candidate for president, voters prefer the Democrat by 13 points. But look what happens when you pit the two front-runners against each other. Clinton leads Giuliani by just two points. Statistically, a dead heat.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: I hope you vote for me. I think I honestly think I have the best chance of defeating Hillary Clinton.

SCHNEIDER: Why? Mainly because Giuliani does eight points better than a generic Republican.


SCHNEIDER: The race between Clinton and Giuliani is close not because Clinton is weak, but because Giuliani gets a lot more support from moderate and Independent voters than a generic Republican candidate. Now, that's the irony. Giuliani is trying to sound more and more like a typical Republican to get the nomination, but voters don't see him as a typical Republican -- Wolf.

BLITZER: Bill Schneider, thanks very much.

There's also evidence of Hillary Clinton's strength heading into the first presidential contest. More evidence, that is. Her campaign reporting having a total of over $50 million cash on hand. That's more than $14 million more than her leading Democratic rival, Barack Obama. But if you take a closer look, Senator Clinton can only spend $34 million of that cash during this primary season.

Obama isn't far behind, with just under $32 million in primary season cash. John Edwards trails with a total of $12.4 million in the bank.

Let's turn now to the Republican side. There is less cash in the mix.

Rudy Giuliani leads the pack with a total of more than $16 million cash on hand. He can spend more than $11 million of that in the primaries.

Mitt Romney reports more than $9 million in the bank. All money he can spend during the primary season.

Fred Thompson is third in the money race, with a total of $7 million in cash. Twice as much as John McCain.

Let's also go to an intense battle over money and children's health care that's unfolding right now. There are new developments.

The House holding a vote Thursday on trying to override a presidential veto of what's called the SCHIP bill. That stands for State Children's Health Insurance Program.

Mr. Bush vetoed a bill that would expand that program to cover more than $10 million. About $4 million more than is covered -- four million children than are covered right now.

The bill would increase funding for the program by $35 billion over the next five years. The president has called for just a $5 billion increase. The bill rejected by Mr. Bush would increase taxes, by the way, on tobacco products to help pay for insuring millions more children.

And as lawmakers head toward that Thursday showdown in the House over kids' health care, neither side of this battle seems willing to budge, at least not yet.

Let's go to our congressional correspondent, Jessica Yellin. She is watching the story for us.

In fact, the fighting right now seems to be getting more intense, Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It is, Wolf. In fact, supporters of the bill today called in children and even a celebrity. They said the president's veto of this bill was cruel, even apparently heartless. But Republicans call it all frustrating political theater.

(BEGIN VIDEOTAPE) YELLIN (voice over): On Capitol Hill, the lines are drawn. In one corner, fighting for children's health insurance, rock star Paul Simon.

PAUL SIMON, MUSICIAN: I'm here today to ask those of you who supported the veto to reexamine your conscience, to find compassion in your heart for our most vulnerable and sweetest citizens, our children.

YELLIN: Joining him, little children. And, of course, the Democrats who have until Thursday to win enough votes to override the president's veto.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The moment of truth is approaching. We have 48 hours.

SEN. HARRY REID (D-NV), MAJORITY LEADER: There is a determined minority standing in the way of enacting this bill.

YELLIN: In the other corner, Republicans who say they're not heartless, they're fighting for a less expensive bill.

REP. JOHN BOEHNER (R), MINORITY LEADER: I think this bill was designed to be vetoed. I think it was designed to create this political fight.

YELLIN: But a fight that uses pictures of cute kids against Republicans is making some in the president's party very uncomfortable.

REP. TOM DAVIS (R), VIRGINIA: I think health care is going to be at the top of the agenda for the American people. And I don't think you want to be on the side that's saying we are for less health care.

YELLIN: Adding to the heat, ads like this one running against those who oppose the bill.

UNIDENTIFIED FEMALE: Tell Mitch McConnell to stand up for the children in Kentucky.

YELLIN: Republicans insist they have the votes to uphold the veto, but opponents say that vote will haunt them come election time.


YELLIN: Now, Democrats say they need only about 15 more Republican votes to override the president's veto, but Republican leadership in the House says the Democrats won't get it.

So what happens if the veto stands? Well, today, Harry Reid, the Senate majority leader, said he might be willing to make small tweaks in the bill if it, in his words, "helps the president save face."


BLITZER: All right, Jessica. Thanks very much. And I sat down with the singer/songwriter Paul Simon here in THE SITUATION ROOM just a short while ago. We spoke about this battle over the children's health care. That interview with Paul Simon, that's coming up later here in THE SITUATION ROOM.

Let's go to Jack Cafferty for "The Cafferty File". He's standing by in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, reading, writing, recruiting, that's a "Chicago Tribune" headline that describes a controversial facility opening in the Windy City. The Chicago public schools commissioned the country's first public high school to be run by the U.S. Marine Corps.

The dedication comes just a few days after officials announced plans to open an Air Force Academy high school in Chicago. That in a couple of years.

If all of this happens, Chicago will become the only public school district in the country to have academies dedicated to the Army, Navy, Air Force and Marines. Officials say these schools will give students more choices and an environment that provides structure, discipline, and a focus on leadership.

They say the emphasis is academics, not recruitment, but the critics counter, saying military academies unfairly target poor and minority students for military service. They insist the school district should be in the business of educating children, not finding ways to indoctrinate them into the military. Chicago also has the largest junior military reserve program in the nation.

So here's the question. Should the military be running public high schools?

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

BLITZER: It's a fascinating story and a good question, Jack. Thanks very much.

We are standing by, by the way, for remarks by President Bush about efforts to try to improve health care for America's wounded warriors. He's going to be speaking at the White House. We'll monitor that for you as well.

Also, the president's choice to be the next attorney general facing senators. Is he on track to be confirmed? I'll ask the chairman and the top Republican of the Senate Judiciary Committee, Patrick Leahy and Arlen Specter.

That interview coming up.

And the vice president, Dick Cheney, isn't endorsing any presidential candidate yet. But guess what? He might have a little bit of a surprising reason to like Barack Obama.

We'll tell you what's going on.

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


BLITZER: President Bush's choice to replace Alberto Gonzales as attorney general of the United States faces confirmation hearings tomorrow. Democrats predict retired federal judge Michael Mukasey will be hit with some tough questions on a range of hot-button issues.


BLITZER: Joining us now from Capitol Hill, the chairman of the Senate Judiciary Committee, Senator Patrick Leahy of Vermont, and the ranking minority member, Arlen Specter, of Pennsylvania.

Senators, thanks very much for coming in.

Senator Leahy, Mr. Chairman, will Michael Mukasey be confirmed as the next attorney general of the United States?

SEN. PATRICK LEAHY (D-VT), JUDICIARY CHAIRMAN: I expect that Judge Mukasey will be confirmed, but I think he will also show an entirely different chapter at the Department of Justice. I think he's prepared to do as much as he can the year he will have to rectify a number of the problems caused by the last attorney general.

BLITZER: Senator Specter, what do you think?

SEN. ARLEN SPECTER (R-PA), RANKING MEMBER, JUDICIARY COMMITTEE: He's very well qualified. But I want to hear what he has to say about quite a number of important subjects.

BLITZER: What's the most important question you want to ask him?

SPECTER: I want to know where he stands on executive power, whether he thought it was appropriate that the chairman and ranking member of Judiciary were not told about the terrorist surveillance program. I want know what he thinks about habeas corpus and the combat status review board with a sham operation, and about signing statements, and about reporters' privilege, and about Justice Department activities, compel waiver of attorney/client privilege.

That's -- I'm just out of breath, Wolf, but that's just a start.

BLITZER: That's a bunch of good questions.

Senator Leahy, you had said earlier you wanted to use this occasion for these confirmation hearings to get the White House to hand over to you some documents on alleged torture, on the warrantless wiretap program. The White House, I take it, has not done that but you are still going forward.

LEAHY: They have come up with some of the things. But, you know, what's interesting is somebody in the administration has leaked to the press most of these things that the administration said they didn't want to show members of Congress.

So, usually by "The New York Times". And read the material in greater detail. And usually a lot more accurately than we would have gotten it from the administration had they done it.

We also -- as Arlen has said, there's some very significant questions. I have already sent a number of questions to Judge Mukasey on the issue of torture, for example.

We know that the outgoing attorney general let a memo go to the White House, basically allowing torture, even though the public posture of the president was that we do not torture. I want him to say very clearly what his position is going to be.

There are so many of these issues that he's already answered, a number of them to me. But I want him to state on the record clearly what his position is going to be, because the last -- last attorney general acted as though the president was above the law and that the Department of Justice was an arm of the White House instead of being the Justice Department of the United States.

BLITZER: Do you agree, Senator Specter, with the chairman? Specifically, that the last attorney general and the president acted above the law?

SPECTER: No. I don't agree with that, because the issue was whether his Article 2 power superseded the statute.

Senator Leahy is exactly right, that the president did not comply with the Foreign Intelligence Surveillance Act. But we never have had a judicial determination about whether he was justified in doing it. That's a complex constitutional task. And we have never had that question answered.

BLITZER: Are you ready to move forward now and authorize the continuation of these warrantless wiretaps, Senator Leahy? Because the so-called FISA Court, the Foreign Intelligence Surveillance Act Court, they have authority to continue with this process, what, through February. But there are some significant differences between a lot of Democrats, especially in the House and the White House.

Where do you stand?

LEAHY: They passed a law which allowed Attorney General Gonzales and the director of intelligence basically to tell the FISA Court what to do. I don't agree with that. I think that that did not show a proper respect for a separation of powers.

I think we can write a bill which -- I know what the program is. And, of course, we can't go into that here. but I think we can write a law which will allow real oversight and a real check and balance by the court of surveillance of communications by the White House.

But I don't -- do not believe that something that allows a president or a White House on the president's say so to simply wiretap people, especially Americans, with no court oversight. I think that's wrong.

BLITZER: One of the issues, Senator Specter, as you know, is what's called a retroactive immunity for the major phone companies to cooperate with these wiretaps, whether Verizon or AT&T or any of the other major phone companies.

Is that something you would support, to give them immunity for prosecution?

SPECTER: I certainly would not give them immunity retroactively on programs that we don't know what they are. We tried to get the telephone companies in two years ago to issue subpoenas, and we were blocked by the White House from doing that. That's a complex story. I think it's unreasonable to ask us to give them immunity for things we don't know what they did.

Now, look, if there was a need for it at the time, and if the telephone companies were good citizens, and if they supplied information which was important, then I would be prepared to look at. But I'm not going to buy a pig in a poke and commit to retroactive immunity when I don't know what went on.

They have kept that from us. See, that's the big problem, Wolf.

Pat and I are the two ranking people. He's chairman and I'm ranking. We ought to know what's going on.

Even the top secrets are discussed with the top people, the speaker and the majority leader. That's what you call separation of power and congressional oversight. And until they are prepared to do that, I'm not prepared to pass a law.

LEAHY: I agree with Arlen, because what they are saying is here, we did something. We are not going to tell you what we did, but please just pass retroactive laws saying what we did, even though we won't tell you what we did, was OK. I don't know how anybody can responsibly vote for something like that.


BLITZER: Patrick Leahy and Arlen Specter speaking with me just a little while ago.

Republican presidential candidates are talking tough today. And they are taking direct aim at Iran's president. Are they telling Jewish voters what they want to hear?

Paul Begala and J.C. Watts, they're standing by for our "Strategy Session".

And Bill Clinton may still be very popular among Democrats, but are book buyers losing interest?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Carol Costello standing by with a closer look at some other incoming stories into THE SITUATION ROOM.

What's going on, Carol?


The secretary of the Treasury has a message for millions of Americans. He feels your pain.

Hank Paulson is talking about ways to help those in financial crisis because of troubled mortgages. Paulson is pushing ways to do so without rewarding risky lending or borrowing practices. The Treasury secretary says many families are harmed by the housing downturn and he's calling on the lending industry to take action.

We'll see what happens.

You might not think the housing crisis would have an effect on the -- an effect on auto production, but it does. Many fear the mortgage meltdown could cause deep cutbacks and industrial production if manufacturers get worried about the future. Already we are learning U.S. industrial outfits posted a weak showing in September for a second consecutive month. Part of that was caused by the strike at General Motors, which helped cause a big drop in auto production.

Barack Obama courts the farm vote. The Democratic presidential candidate visits Iowa with a promise of a gift, a fresh plan to help small farms if he is elected. Obama hopes to expand the renewable fuels industry and put into place incentives for organic production. No other state produces as much ethanol as Iowa. It's also where the presidential nomination process will start.

And it appears much of the giving is gone. Bill Clinton's book "Giving" is not receiving much interest these days. Sales have dramatically dropped since its release. It's only sold some 9,600 copies, according to last week figures from the Nielsen BookScan. But that's after it sold 50,000 copies in its first week.

"Giving" is a book about civic activism.

Back to you, Wolf.

BLITZER: Thanks very much, Carol, for that.

U.S. veterans hurt in the Iraq war deserve the best care. That's what President Bush hopes to ensure. He was briefed on that effort today.

We will have more on caring for America's wounded warriors.

And get out. That's what Iraq wants for Blackwater. The private security contractor alleged to have killed innocent Iraqis last month.

You'll want to hear what proof Iraq says it has of Blackwater's guilt. Stay with us. You're in THE SITUATION ROOM.


BLITZER: Happening now, a nightmarish plot line. Terrorists bent on destroying the United States detonate a dirty bomb. It's not real, but a mock attack the government is staging to test its preparedness. Critics call it though a waste of $25 million of your money.

Attention air passengers. A congressional investigator says you should be very concerned. Some U.S. airlines apparently are using foreign companies in an effort against terrorists getting on planes.

We are watching this story.

And we are also watching the U.S. Marine Corps opening up the first Marine-run high school. Are they using it to recruit teenagers to join the military? Should parents be concerned?

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

It's economic advice from one of the word's most famous billionaires. That would be Bill Gates. The man who made his mark with Microsoft is out talking about doing more to innovate the way we work. But Gates is also warning of one thing he says could hurt the economy.

CNN's Ali Velshi sat down with him. Ali is in New York.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Wolf, Bill Gates says the future of the way we work lies in software that brings together all the different ways in which we communicate. And today, Microsoft unveiled some of that software. But Bill Gates was also passionate about restrictive U.S. immigration policies. He says they prevent Microsoft and other tech companies from hiring enough engineers in the U.S., and that's bad for the economy.


BILL GATES, CHAIRMAN, MICROSOFT: I think every country should try and get its own education to be as strong as possible. It's a great investment. You know, my foundation gives a lot to try and make a contribution there.

I also think every country should want smart people to come to their country. They should make it easy and attractive and not put limits on that. So right now, the United States has these immigration limits that engineers who learn in U.S. schools, which is taxpayer subsidized, gets sent back and forced to work in other countries where jobs are going to be created around that person.


VELSHI: And, Wolf, Bill Gates also says that Microsoft has plenty of engineering jobs that pay over $100,000 a year, but they continue to fill those jobs with people from all over the world -- Wolf.

BLITZER: Ali Velshi with that story -- thank you, Ali.

It would be a stunning rebuke of a major U.S. security contractor working in Iraq. An Iraqi official now saying Iraq has asked the U.S. to pull Blackwater out of the country. This follows the killings of civilians last month, killings some Iraqis are alleging Blackwater committed in an unprovoked manner.

Let's go live to Baghdad. CNN's Alessio Vinci is standing by with the latest.

What's the latest on this saga, Alessio?

ALESSIO VINCI, CNN ROME BUREAU CHIEF: Well, Wolf, the Iraqi prime minister is basically saying that the Iraqi investigation into that killing proves, basically, that Blackwater is guilty of unprovoked and random killings.

The adviser to the Iraqi prime minister, with whom we spoke earlier today, said that the prime minister is asking the State Department to -- quote -- "pull Blackwater out of Iraq." The adviser also said that, while the Americans are waiting for the results of their investigation, the Iraqi prime minister, as well as most Iraqis, are -- quote -- "completely satisfied" with the findings on the Iraqi probe and that they are insisting that Blackwater leaves the country.

Now, this is not the first time that the Iraqi prime minister is calling on Blackwater to leave the country. But it is the first time of doing so since the Iraqi and the U.S. have set up a joint commission to investigate not only the incident a month ago, but also to review the overall security operations here involving private security guards, as well as tasked -- being tasked with issuing a series of recommendations that will then be put in place here regarding the role of private security guards protecting U.S. embassy convoys here in Iraq -- Wolf.

BLITZER: Just to give this some perspective -- perspective, Alessio, these Blackwater security contractors, these private guards, they are responsible for protecting American diplomats and other civilians, thousands of them. They can't leave that Green Zone, that international compound, unless they have security. The military can't provide them that security. That's why the government hires these private security contractors.

I thought the Iraqi government was going to wait for this joint U.S.-Iraqi commission, Alessio, to come up with their conclusions. Why are they independently coming up with this conclusion before both sides have had a chance to fully review it?

VINCI: This statement does not come as a surprise to us.

As you know, only days after the incident a month ago, the Iraqi prime minister had already called for Blackwater to leave the country. We also know, in the past few days, that the Iraqi officials have told us that they want Blackwater guards to be tried in this country for premeditated murder.

So, what the Iraqis are saying as to what happened a month ago is pretty much clear. There's no secret about it. There's no secret that all Iraqi officials and the witnesses and the survivors of the incident are all saying -- are all telling the same story. And that it is that Blackwater used unnecessary -- was unprovoked and excessive power in responding to what there -- what Blackwater says was an attack against the -- their convoy.

At the same time, however, as you mentioned, there is this joint U.S.-Iraqi commission. And the ambassador and the embassy spokesperson here told us that this commission is still working and that, before the commission draws its conclusion, there should be no conclusions made beforehand, of course -- Wolf.

BLITZER: It looks like a serious rift between the Iraqi government and the State Department, the U.S. Embassy. We will watch this story with you, see how it unfolds.

Alessio Vinci reporting for us from Baghdad.

President Bush vows to give wounded U.S. troops the care they deserve, but how far is he willing to go to fix shocking problems in the military health care system?

Plus, New Hampshire's primary data is still a mystery. Is it time for candidates and voters to get nervous? We will go there.

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


BLITZER: We're less than three months away from the presidential primary season, and the dates for crucial contests right now still very much up in the air. That uncertainty is weighing heavily, especially on New Hampshire.

Let's go to Manchester, New Hampshire.

Joe Johns is standing by.

It is fighting very, very hard, New Hampshire, Joe, as you know, to be the lead primary state in the nation. What's the latest?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, the candidates are certainly gearing up. As well, they are digging in. But, right now, the primary election calendar in New Hampshire is still very much a moving target.


JOHNS (voice-over): Republican presidential candidate Tom Tancredo in Concord today, the first major candidate from either party to show up and file for the New Hampshire primary, paying a $1,000 fee for the right to appear on a ballot, even though no one really knows when the primary will be held here. REP. TOM TANCREDO (R-CO), PRESIDENTIAL CANDIDATE: This is the kind of situation where somebody like me, somebody who does not have hundreds of millions of dollars of personal wealth, can still make a difference, because you can still get to every little cafe and every community center.

JOHNS: New Hampshire is a little state with an outsized role in picking the presidential nominees. It is also the kind of place that jealously guards its status as the home of the nation's first primary. And at no time has that been more obvious than this year, as other states, like Florida and Michigan, are shaking up the calendar, pushing their dates forward, while New Hampshire keeps its powder dry, refusing to set a date.

The guardian of New Hampshire's first primary status, more than anyone else, is this guy, New Hampshire Secretary of State Gardner. Famously coy, people are parsing his words as if he were the chairman of the Fed. But no matter how you ask the question about when he will set the primary date, he's not saying.

(on camera): So, when is the primary going to be?



JOHNS: You don't know?

GARDNER: I don't know.

JOHNS: You haven't decided even yet in your own brain?


JOHNS: Really? Can you tell me when it is not going to be, how late it is not going to be?

GARDNER: Well, at the moment, it won't be later than the 8th of January.

JOHNS: OK. But you can't tell me whether it's going to be December 11?

GARDNER: Well, no.



JOHNS: And December 11 is not quite a joke. That has been floated as a possibility.

New Hampshire, as you know, says it deserves its first-in-the- nation status because of its ability to vet candidates in a small environment with traditionally sophisticated voters. But some other states say they can do the same job as well -- Wolf. BLITZER: That would be what, less than two months from now, December 11. That's pretty shocking. But they -- but you -- but they are really serious about this, aren't they, Joe?

JOHNS: Well, they are certainly serious about keeping this information close to the vest. That December 11 date is kind of fantastic. You can't really imagine that. That's not really even into the winter yet.

But what's clear is, they are trying to hold on to the date, so that other states simply don't step ahead of New Hampshire.

BLITZER: Joe Johns on the scene for us in Manchester, New Hampshire -- thanks, Joe, very much.

And Joe, as you know, is part of the Emmy Award-winning best political team on television. And, remember, for the latest political news at any time, check out our Political Ticker at

They serve their country, so their country should care for them when they get hurt. Today, that's what President Bush is talking about. It concerns his Commission on the Care For America's Returning Wounded Warriors.

Let's go right to the White House. Our Ed Henry is standing by.

The president has just spoken out on this very, very sensitive issue.

Ed, what's his point today?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, the point here, Wolf -- the president speaking in the Rose Garden -- the point is that he was burned by revelations of shoddy treatment of military veterans at the Walter Reed Army Hospital in Washington. So, the president did what a lot of government officials do when there is a problem. He appointed a blue-ribbon panel. We have heard that so many times before.

Former Senator Bob Dole, Donna Shalala, they issued a report this summer with some recommendations, the president today laying out what he can do by executive action and also trying to prod Congress to go further with actual legislation. Most of this is just bureaucratic changes, changing disability and health payments.

Here's the president.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Medical advances have enabled battlefield medics and hospitals to provide our wounded warriors with care that would have been unimaginable just a decade ago. Yet, our system for managing this care has fallen behind. It is an old system. It is an antiquated system. It is an outdated system that needs to be changed.


HENRY: But, while the president is trying here to show his commitment to veterans, it is worth noting that he's not been quick to fill a key slot that's open in his Cabinet, that a veterans affair secretary. You will remember Secretary Jim Nicholson announced plans back in July, all the way back in July, to step down. He's now left office.

There's an acting secretary. The president still has not filled it. White House spokeswoman Dana Perino said today they are still doing some background searching, but they will have a nominee soon -- Wolf.

BLITZER: Ed Henry at the White House on this important subject for us -- Ed, thanks very much.

In the "Strategy Session," tough talk from Republican presidential candidates about what to do about Iran's nuclear ambition. How their rhetoric is playing with the voters, we will talk about that. We will also talk about Senator Sam Brownback. He's introducing a new topic in the Republicans' race for the White House, apologizing for slavery. How will that issue play?

Paul Begala and J.C. Watts, they're standing by live right here in THE SITUATION ROOM.


BLITZER: It's a lot more money than most of us will ever see, $50 million. But Hillary Clinton apparently has that amount just sitting in the bank, cash on hand, to help her try to win the votes.

We want to take a closer look at what she's doing, what the other candidates are doing, what's called cash on hand. That's going to be discussed right now in our "Strategy Session."

Joining us are two CNN political analysts. Paul Begala is a Democratic strategist. And J.C. Watts is a former Republican congressman from Oklahoma.

Let's take a look, guys, at these Republican numbers cash on hand. Hillary Clinton may have $50 million cash on hand, which is a lot of money. As far as the Republicans are concerned, Giuliani right now has $16.6 million. Eleven-point-six of that, he can use in the primary, the rest if he gets the nomination, $9.2 million for the primary for Romney, $7.1 million for Thompson. Unknown how much is for the primary, how much if he gets the nomination. McCain has $3.5 million, $1.7 for primary.

He does not have a whole lot of cash right now.

J.C., let me start with you.

Your fellow Republicans out there, they are not raising nearly as much money as Hillary Clinton and Barack Obama are. J.C. WATTS, CNN POLITICAL ANALYST: Well, two things. Corporate America, for the most part, they are going to go to where they think the winner is going to be. So, right now, it seems to be trending towards the Democrats. I think that hurts Republicans, too.

That $25, $50 giver that we have always done really well with, we are not doing well with them. They are not necessarily giving to -- to Democrats, but they are just sitting out, not giving to -- to anybody. That $25, $50 giver for us has been pretty big. And...

BLITZER: Because both Hillary Clinton and Barack Obama are raising tons of money on the Internet with those relatively modest contributions.

WATTS: With Democrat givers.


WATTS: But when you compare Republican $25 givers, Democrat $25 givers, we have always outperformed Democrats with that $25 to $50 giver. We're not.


BLITZER: Why? Why? Why?

WATTS: I think our givers, that $25, $50, $100 giver to Republicans, I think they are disillusioned. I think they're disenchanted right now. And I think that they are somewhat demoralized. And I think that's showing in the fund-raising numbers.

BLITZER: What does it say to you?

PAUL BEGALA, CNN POLITICAL ANALYST: Right. Well, I think J.C. is right, that Barack Obama started all this. Well, Howard Dean, to his credit, began it for my party.

But Barack really perfected it, raising huge amounts of money in a wonderfully ethical way. If you give $25, $50, as J.C. says, you are not going to get an ambassadorship. You're not going to get a no- bid contract like Halliburton. You are going to get to express your support for the candidate you prefer.

Hillary has now adapted. This is why primaries are good, right? She watched Barack. She had all the big-dollar donors.

Our viewers should know, by the way, I'm -- I gave Hillary the maximum. I love her. I worked for her husband. But she is not interested in me anymore. She is interested in that $25, $50 donor. So, she has learned from Barack and adapted.

It is a wonderful thing for the system, because at least that's clean money. And Republicans have always dominated -- J.C. is right -- among smaller donors throughout direct mail. Well, it shows -- it is another of the many signs that we have got a Republican collapse on our hands here in this country. BLITZER: Here is the latest CNN/Opinion Research Corporation poll. Among registered Republicans nationwide, right now, Giuliani leads, still, with 27 percent. Thompson has 19 percent. It was 27 percent for him back in September -- McCain at 17 percent, Romney at 13 percent.

It looks like pretty consistent for everyone, except Fred Thompson, J.C., who has slid since September.

WATTS: Well, and what those numbers -- compare the numbers with the giving. McCain has the least amount of money, but he's actually had a bump.

I think the McCain folks, as I have talked to some of the people there, they are pretty encouraged by what they have seen happening over the last six months. They have got a little momentum. They are not flat broke. They are raising a little bit of money, as you could see there.

So, I think Fred Thompson, probably in those numbers, has to be the one that is probably the most disappointing, because they had this big -- this big brouhaha about when he was going to announce.

BLITZER: They had great expectations for him.

WATTS: Great expectations. And I think it -- it hasn't lived up to the billing.

BLITZER: You have seen that before.



BEGALA: Yes, I have.

Thompson, you're right. He was everybody's perfect idea of what a Republican ought to be. He was like Ronald Reagan in that he's big and handsome and an actor. But, you know, it is too high a bar. You can't compare anybody in the Republican Party today to Ronald Reagan.

But Thompson is not even as energetic or successful as George W. Bush, who raised the most money and locked up all the early support. So, I think there is more fizzle than sizzle in brother Fred right now.


WATTS: But, you know, Wolf, we said -- we were talking about this about a month ago. And one of the things I said was, that Republican candidate that can get beyond 30 percent, that's the candidate you have to watch.

I said, when Fred was getting in, I said, where is he going get his numbers from? I think he is kind of settling into his niche. I don't think it is necessarily bad that he is at 19 percent. I mean, Giuliani is at 27 percent. So, as long as Giuliani -- Giuliani is under 30 percent, or any Republican candidate is under that number, I think everybody is fighting for the same pot of votes.

BLITZER: But Giuliani has shown that staying power, even amongst the religious Republican conservatives that a lot of people thought he would just lose right away, given his views on the social issues.

BEGALA: Very impressive. And it is a thing to watch.

A couple of things. First off, he does have the energy that Thompson so manifestly lacks. Second, he is the best debater in the Republican field. But, third, he still benefits from the fact that a whole lot of Republicans still don't even know that he's pro-choice on abortion, pro-gay rights and pro-gun control.

I want to watch those national polls. I generally don't follow national polls, as you know. I want to wait until 50, 60, 70, 80 percent of the Republicans know that he's for those liberal positions on abortion, gun control, and gays. And then let's see where he is.


BLITZER: J.C., hold on one second. I want to throw it -- we only have a limited amount of time.

I want to point out to you what Senator Sam Brownback, himself a Republican presidential candidate, is now saying about slavery in our -- in our history: "They were federal policies. They were wrong. The only way for us to move forward is, at the end of the day, acknowledging those, taking ownership for it, and asking for forgiveness."

He wants a formal apology because of slavery in American history.

What do you think of that?

WATTS: That's not new with Sam. Sam and I have had that discussion before.

I -- Wolf, I think, any time there has been a wrong in a personal life and, you know, different parts of American life, I think, in order for us -- I think there is a bar that says, at some point in time, there has to be forgiveness. But you also have to accept that forgiveness. It has to be a two-way street.

Something that I would encourage Sam to do is, that's something that is not going to take root. You know, I would like to see, you know, people running for president talk about, how are you going to establish more African-American businesses in the African-American community? You know, what are you doing in terms of education?

No president, with the exception -- no candidate, with the exception of John Edwards, has even offered an education plan. So, what are you going to do about education? What are you going to do about African-American business procurement opportunities?

You know, defense industry spend very little money with African- American firms.

BLITZER: All right.

WATTS: Those are the things that really make a difference today.

BLITZER: J.C. Watts, Paul Begala, thanks for coming in.

WATTS: Thanks, Wolf.

BLITZER: On November 15, I will be in Las Vegas to moderate a debate in that key state among the Democratic presidential candidates. Just want to alert you to get ready for that. That is coming up.

It is something that's surprising a lot of people. There's word there are family ties -- get this -- between Dick Cheney and Barack Obama. We will tell you what's going on.

Also, some U.S. airlines apparently are using foreign companies in the effort against terrorists getting on planes. How worried should you be?

And a musician takes on the president -- that musician, Paul Simon, suggesting something President Bush recently did, in his words, a heartless act. It concerns medical needs for America's children. Paul Simon will be here in THE SITUATION ROOM to explain.

We will be right back.


BLITZER: On our "Political Ticker" this Tuesday: Another Republican is eying the exits on Capitol Hill, her spokesman confirming that Senator Kay Bailey Hutchison of Texas won't run for a fourth term in 2012. And she may leave the Senate even before her term ends to run for governor. The next Texas gubernatorial election is in 2010.

In Virginia, former Democratic Governor Mark Warner is claiming a cash advantage in his U.S. Senate race. Campaign finance reports show Warner raised more than $1 million in two-and-a-half weeks alone. And he had more than $1 million cash on hand at the start of October. He is in a race to succeed the retiring Republican Senator John Warner -- no relation.

Virginia Republicans are giving a boost to GOP Senate candidate former Governor Jim Gilmore. State Republicans have voted to hold a nominating convention next year, rather than a primary. Gilmore supporters say he will have a better chance of winning the nomination in a convention, because the gathering tends to be dominated by conservatives.

Senate candidate and Congressman Tom Davis had wanted a primary, hoping it would give him a better chance at the nomination.

And, in case you haven't heard this bombshell, listen to this. The vice president's wife is speaking out about it today. It turns out Dick Cheney -- listen to this -- is a distant cousin of Democratic presidential candidate Barack Obama. A recent report by "The Chicago Sun-Times" found Cheney and Obama are ninth cousins, once removed, related through a 17th century immigrant to the U.S. from France.

Remember, for the latest political news at any time, you can always check out our Political Ticker. Go to

Jack Cafferty is joining us for "The Cafferty File."

I think, if you go back far enough, Jack, we're all going to be cousins.

CAFFERTY: Yes, but it doesn't get any better than that, now, does it?

BLITZER: No, it doesn't.

CAFFERTY: That's as good as it gets right there.

Chicago has agreed to allow the Marine Corps to operate a high school in that city. The question is, should the military be running public high schools?

Kevin in New Hampshire writes: "Why not give the military a chance? Look at the current state of our schools, guns, drugs, et cetera. I think discipline is exactly what is needed. Most of these kids today don't get that discipline at home. But I do agree that the focus should be on education and not military recruitment."

Cathie writes: "Everything we know about our public schools is that the closer to the classroom a decision is made, the more successful it is. Top-down military-style decision-making has yet to prove effective in a public school."

John writes: "I believe their student capacity" -- this is the school in Chicago -- "is only about 10 percent of their applicants. They must be doing something right. I doubt that there is another public school in that city that can match that."

Thomas writes in Florida: "A high school where the students are required to be respectful to authority, that fosters an environment of personal discipline, academic and physical achievement. Sounds preposterous to me. You must be kidding. Why, before you know it, our nation might be churning out mannered, intelligent young adults again. Madison Avenue, Hollywood, and Wal-Mart would never stand for that."

Marilyn writes: "In a country where the rich buy leadership and civil rights are suspended by an intimidating administration, why does a public military academy in this growing fascist nation surprise anyone? At the rate we're making enemies, we will need everybody in uniform."

And Greg in California writes: "My daughter starts high school next year. Can they build one out here in Southern California by then?" (LAUGHTER)


BLITZER: Jack, thank you.

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

Happening now: outsourcing America's security, a surprising new discovery on who the airlines are letting check the names on those airline passenger watch lists.

Once a pariah for sponsoring international terrorism, including the bombing a U.S. airliner, Libya has changed its ways.