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Romney on the Attack; Democrats Ahead in Presidential Race?

Aired December 11, 2007 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now: new ammunition against the Republican on the rise. Will that immigration issue we just spoke about with Lou bring Mike Huckabee down? Mitt Romney's campaign is banking on it in Iowa right now.

Also, only one Republican is showing strength against top Democrats, and it isn't Huckabee. The best political team on television reading between the lines, our brand-new presidential poll numbers. You are going to want to see what's going on.

And a former CIA officer speaks out bluntly about interrogation tactics and those destroyed CIA videotapes. He's sharing first-hand information about the treatment of terror suspects and whether it was torture. He's standing by live.

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

Some are suggesting it's a Hail Mary pass by Republican Mitt Romney, scrambling to reclaim his lead in Iowa and recoup his big investment there. Three weeks before the leadoff caucuses, Romney is launching the first direct attack ad of the 2008 campaign.

And he's aiming it, by the way, squarely at the new Republican to beat. That would be Mike Huckabee. The issue, immigration. And I want you to listen to this.

(BEGIN VIDEO CLIP, ROMNEY CAMPAIGN AD)

NARRATOR: The difference, Mitt Romney stood up and vetoed in- state tuition for illegal aliens, opposed driver's licenses for illegals. Mike Huckabee supported in-state tuition benefits for illegal immigrants.

(END VIDEO CLIP)

BLITZER: Dana Bash is out in Iowa with the CNN Election Express. She's covering all of this for us from the heartland.

So, how is the Huckabee campaign responding to this direct attack from Mitt Romney?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, on the substance of that ad, Wolf, Huckabee himself admits that it's true that he supported college tuition breaks for children of illegal immigrants and reiterated today that stands by it, that he still thinks that's the right thing to do.

But it seemed today he was more interested in boasting about the fact that this new ad against him he thinks is proof that he's doing much better in the polls.

(BEGIN VIDEOTAPE)

BASH: You have a big endorsement.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Yes, we do, actually.

BASH (voice-over): Mike Huckabee has one word for Mitt Romney and his new ad against him: desperate.

HUCKABEE: The more desperate and frantic campaigns get when they see how much money they have spent, and we're winning, I mean, that -- that causes people to -- to do some sometimes desperate things.

BASH: The come-from-behind GOP candidate insists, he's flattered.

HUCKABEE: I seem to be the recipient of the first negative attack ad in the Republican primary.

(BEGIN VIDEO CLIP, ROMNEY CAMPAIGN AD)

NARRATOR: Two former governors...

(END VIDEO CLIP)

BASH: Huckabee is trying to turn a negative ad into a positive event, insisting, it will remind voters he's trying to run an above- the-fray campaign. He warns, the ad will turn Iowans off to Romney, but carefully gets his own digs in, Huckabee style.

HUCKABEE: As the tattletale in the third grade, let met tell you what this guy's doing. We didn't like it when we were in the third grade. I don't think we like it electing it a president either.

BASH (on camera): Is Romney acting like a third-grader?

HUCKABEE: No, I didn't say that. I said what I said. I said, it is like -- I use a lot of metaphors. You should know that by now, Dana. You have covered me for a while.

BASH (voice-over): That Huckabee showed up here in treacherous weather, despite canceling other Iowa events, is a sign he knows he can fall as fast as he climbed.

Aides hastily arranged a news conference to tout the endorsement of Jim Gilchrist, founder of the Minutemen, a private group that patrols the border and tries to keep illegal immigrants out.

HUCKABEE: It is a real pleasure to have Jim with me today, because I think that there are some who want to move away from the fact that the federal government has completely and miserably failed in dealing with this issue.

(END VIDEOTAPE)

BASH: Now, Huckabee tried to use that new endorsement today from a staunchly anti-illegal immigrant group as a counterpunch against Romney's new ad.

But for all of Huckabee's bravado about Romney's desperation, he also admitted he is well aware that immigration is a huge issue here in Iowa and around the country. And that is why both on the stump and in his own new TV ad, he, too, is talking about immigration and boasting about his new plan, he says, which will secure the border and help to stop the flow of illegal immigrants into this country -- Wolf.

BLITZER: Getting intense there three weeks before the caucuses.

Thanks very much, Dana.

Reporters in Iowa today pressed Mitt Romney about his new attack ad and Mike Huckabee's response to it, but the former Massachusetts governor tried repeatedly to avoid those questions. In the end, he did not answer them.

While support for the candidates moves up and down, something else is shifting as well. And it pits worries about war and terror against worries about money and gas prices.

Our senior political analyst, Bill Schneider, is out in Des Moines with the CNN Election Express.

Bill, what else is changing besides the candidates' standing?

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, something is changing besides the candidates' standing: the issues.

(voice-over): Remember the economy, stupid? That was Bill Clinton's winning issue in 1992. It was also the last time we had an election about the economy.

1992 saw an economic downturn. Now, for first time in more than four years, a majority of Americans say the country's in recession. The economy is now the biggest issue in the presidential campaign.

Is the economy that bad?

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I have described the economy today as kind of a trapped door, where you're one medical diagnoses or pink slip or missed mortgage payment away from just dropping through and losing everything.

SCHNEIDER: Republicans prefer to look at the big picture.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: What country has had more success in creating a society of fairness and decency, in creating a society in which people move out of poverty, in which people have social mobility, have a chance to succeed?

SCHNEIDER: Yes, but what about gas prices, home foreclosures and lagging wages? Can Republicans look to national security to save them?

Terrorism, Giuliani's issue, ranks low in importance right now. Security in Iraq may be improving, although that, too, is in dispute.

JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The senator from New York, Senator Clinton said, I would have to suspend disbelief in order to believe that the surge is working. Well, anyone today would have to suspend disbelief to not believe that the surge isn't working.

SCHNEIDER: But there's no evidence of growing public support for the war. Sixty-nine percent, the highest number yet, want to withdraw some or all U.S. troops.

The news that Iran may have halted its nuclear weapons program might not help Republicans. Most Americans believe the Bush administration deliberately misled them about Iran's weapons program.

(on camera): President Bush's job approval stands at 32 percent. No wonder Republicans, as well as Democrats, are trying to run as agents of change -- Wolf.

(END VIDEOTAPE)

BLITZER: Bill Schneider, thanks very much. He's out in Iowa for us.

Jack Cafferty is in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Schneider looks like he has got a piece of that Iowa road kill on his head out there.

(LAUGHTER)

CAFFERTY: What is that thing?

BLITZER: That's a hat.

CAFFERTY: It's a hat?

BLITZER: Yes.

CAFFERTY: That ain't no hat.

Apparently, the airlines would rather that you wait and wait and wait for as long as it takes. And no whining, please.

"USA Today" reporting the airlines are going to try to block a law that would punish them for stranding passengers on airplanes without certain necessities. That's right. The airlines' main trade group is going to go to federal court next week to contest New York State's airline passenger bill of rights. The law, which would be the first of its kind in the country, is set to take effect January 1. It would require the airlines to provide food, water, electricity and waste removal when a flight leaving from a New York airport waits for more than three hours to take off.

It allows New York to fine the airlines up to $1,000 per passenger if they don't comply, but the Air Transport Association wants to stop that law from taking effect. They say only federal authorities can regulate airline service, and their lawyers argue, airlines would be hurt if other legislatures passed laws that would vary then from one state to another.

Come on. Remember last year when some flights were delayed up to 10 hours and beyond and passengers just had to sit there? There was a lot of complaining, but the airlines haven't improved much. In fact, they have gotten worse. The Bureau of Transportation reports the number of flights waiting more than three hours to take off from U.S. airports is up 25 percent since this time last year.

So, here's the question. What message are the airlines sending by fighting against a passenger bill of rights? E-mail caffertyfile@CNN.com or you can post your thing, your letter on this blog deal that I have got. Go to CNN.com/caffertyfile and find something that says add a comment, and add a comment -- Wolf.

BLITZER: All right, Jack, we are going to bring you back in a few minutes with our best political team as well. That's coming up.

Also coming up, it's meant to break a suspected terrorist's silence.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In training, we tried it on each other just to see what it was like.

JOHN ROBERTS, CO-HOST, "AMERICAN MORNING": And?

UNIDENTIFIED MALE: I only lasted five seconds. It's entirely unpleasant.

(END VIDEO CLIP)

BLITZER: The controversial tactic called water-boarding, I will speak about it live with a former CIA officer who says that was done on an al Qaeda figure nabbed back in 2002. He says, though, it probably saved American lives. What does he think about it? Is it torture, though?

Also, Hillary Clinton has a new message for you and it's meant to cast her in a softer light.

And some homes evacuated, with others actually hit by a raging river of mud. We are going to tell you where this ugly picture is happening. Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The director of the CIA, General Michael Hayden, went behind closed doors today, answering lawmakers' questions about those videotapes of harsh terror interrogations that the CIA destroyed back in 2005.

Meanwhile, a former CIA officer is speaking out rather bluntly, confirming that the agency did, in fact, used water-boarding on a top al Qaeda suspect. He says he was even water-boarded himself to learn what was going on.

John Kiriakou is joining us here in THE SITUATION ROOM.

John, thanks very much for coming in.

JOHN KIRIAKOU, FORMER CIA OFFICER: Thanks for having me.

BLITZER: All right. So, you know for a fact that Abu Zubaydah, who was a top al Qaeda suspect, was water-boarded to try to get secrets out of him?

KIRIAKOU: Yes, that's correct.

BLITZER: Because U.S. officials have never really confirmed that. Publicly, they say they were harsh interrogation techniques, but they don't necessarily say he was water-boarded.

KIRIAKOU: Yes, that's correct.

BLITZER: Tell us what water-boarding is.

KIRIAKOU: Water-boarding is where a prisoner is laid on a gurney-like structure with the feet slightly elevated higher than the head. And there's a piece of material around the face, cellophane or Saran wrap-type of material, and a bladder above the person, with water pouring out on to the mouth, so that it induces a gag reflex or a choking reflex.

BLITZER: And it makes that person think that he or she is going to die?

KIRIAKOU: Correct. It makes you feel like you're going to drown. It make your muscles tense up. And it's very, very uncomfortable.

BLITZER: You had it done on you, and you lasted only a few seconds.

KIRIAKOU: Just a few seconds.

BLITZER: And he lasted a few more seconds.

KIRIAKOU: About 30 seconds, 35 seconds. BLITZER: And, then all of a sudden he starts to talk.

KIRIAKOU: The next day, he told his interrogators that Allah had visited him in his cell during the night and told him to cooperate, so that it would easier on the other brothers who had been captured.

BLITZER: You believe this is torture?

KIRIAKOU: I have come to believe that it is torture.

But that's not to say that I still don't think that it was necessary at the time. We were obsessed in the aftermath of September 11 with disrupting or forestalling another attack on U.S. soil. And, so, we were of the belief at the time -- and I still think that this was a correct belief -- that Abu Zubaydah had information that, if we had, we could disrupt an attack.

BLITZER: You believe the information that he eventually shared was significant. And you have suggested it has saved a lot of American lives and resulted in the arrest of other al Qaeda suspects.

(CROSSTALK)

BLITZER: We interviewed Ron Suskind, who is the author of a book on this whole subject, "The One Percent Doctrine." He's not necessarily convinced Abu Zubaydah, A, was such a big fish, and, B, the information he provided was all that significant. I want you to hear what he told me.

(BEGIN VIDEO CLIP)

RON SUSKIND, AUTHOR/JOURNALIST: Zubaydah was oversold as to his value. He did provide some value. There's no doubt about that. But, when it came to that period, that moment, we ultimately said he was more valuable than he was.

(END VIDEO CLIP)

BLITZER: You disagree with Ron Suskind on that?

KIRIAKOU: I disagree.

We never said or we never believed that Abu Zubaydah was one of the planners of the September 11 attacks. But he was the logistics chief of the organization. He was person who made sure that the false passports were being made, the one making sure that al Qaeda members had airline tickets to get out of the country or had applied for appropriate visas to get into other countries in order to launch attacks.

He was the one that was supposed to tie all of these logistical details together.

BLITZER: So, you think it was worthwhile to, in effect, in your word, torture him?

KIRIAKOU: I believe so.

BLITZER: Because -- but it's no longer worthwhile right now.

The CIA, according to "The New York Times," has hundreds of hours of -- had hundreds of hours of videotape of Abu Zubaydah and another al Qaeda suspect that they destroyed back in 2005.

You worked at the CIA, what, for 14 years...

KIRIAKOU: Yes.

BLITZER: ... in both the clandestine side, as well as the analytical side.

That decision is not made just by some clerk over there. That's a major decision, to burn or destroy hundreds of hours of videotape of a guy like Abu Zubaydah.

(CROSSTALK)

KIRIAKOU: Correct. Yes, this isn't a decision made by some working-level clerk. You're absolutely right.

BLITZER: Because there's some suggestion that they're going to scapegoat one guy who's the head of clandestine operations right now. But you believe the decision was made a whole lot higher than that.

KIRIAKOU: I do.

BLITZER: How high?

KIRIAKOU: I think a decision like that really had to go at least almost to the top. It had to go to the deputy director for operations, the deputy director of the agency, or even to the director himself.

BLITZER: The director then was Porter Goss.

KIRIAKOU: Was Porter Goss.

And I should add that a decision like this has to go through the Office of the General Counsel. Because these tapes could possibly be evidence at some point, the Office of the General Counsel would have to issue an opinion indicating that it is OK or not OK to destroy something like...

(CROSSTALK)

BLITZER: Do you think the White House or the Justice Department was consulted on this as well?

KIRIAKOU: I would personally doubt it. I have seen press reports indicating that Harriet Miers may have offered an opinion. But, in my experience, it was probably something done internally.

BLITZER: And you believe that was a huge blunder? KIRIAKOU: I think it was a big mistake.

BLITZER: It was big blunder for -- why?

KIRIAKOU: Well, at the very least, they had some historical value, even if they had remained classified over the years.

BLITZER: But what about General Hayden's argument that it was designed to protect the CIA officers who were interrogating these two al Qaeda suspects and to protect their families? You're a former clandestine officer. You're out. You're on television right now. People know who you are. Does that argument make any sense?

KIRIAKOU: To me, no.

I have no doubt that, if General Hayden is saying it, he believes it. But I think it is a weak argument.

BLITZER: You're in the private sector right now. You no longer work at the CIA. But, once you work in the CIA, they have to really authorize you to go out and speak. Is that right?

KIRIAKOU: Yes.

BLITZER: Did they authorize you to tell us your story?

KIRIAKOU: No.

BLITZER: Did you ask them for permission?

(CROSSTALK)

KIRIAKOU: I did not.

But I haven't revealed sources or methods or classified information.

BLITZER: But you did reveal water-boarding, which they have never publicly revealed.

KIRIAKOU: But the president has talked about water-boarding or a water-boarding type of technique used against Abu Zubaydah.

BLITZER: So, you're doing this on your own.

Why have you decided to go out and tell us what really happened?

KIRIAKOU: Because this was a real intelligence success story. And when the tapes issue broke last week, it immediately brought back the issue of water-boarding.

We have had this national debate. This is a good thing. We should be debating this issue. But, at the same time, I think the American people want to know and want to understand that the agency is working hard to keep them safe. There have been successes. Sometimes, it's not very pretty and, sometimes, there are methods involved that we may not be proud of five years down the road. But this was a success, not a failure.

BLITZER: Why can't we find bin Laden?

KIRIAKOU: I'm not convinced we're looking for him very hard.

BLITZER: Well, why?

KIRIAKOU: I think the problem is that, when we had bin Laden truly on the run, we decided to invade Iraq. And a lot of military personnel were pulled out of Afghanistan and sent to Iraq. And, consequently, a lot of associated agencies moved to Iraq, instead of Afghanistan.

BLITZER: And that's the story right now.

John Kiriakou, thanks very much for coming in and sharing it with our viewers.

KIRIAKOU: Thanks for having me. My pleasure.

BLITZER: It is something that won't make any of the Republican presidential candidates happy. Maybe one of them would be a little bit. A new poll shows most of them losing against the top Democratic candidates, that is all the Republicans, except one. The best political team on television tackling that subject.

And some say it's the right thing to do, but does a government decision today means tens of thousands of crack cocaine offenders could soon be set free?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Carol, who is monitoring some other important stories incoming to THE SITUATION ROOM right now.

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Take a look on the wide screen now at these stunning pictures of a mudslide in storm-battered Oregon. Roads are entirely covered with thick mud, trees and logs. The debris poured across U.S.-30, closing the highway between Portland and Oregon. Two homes hit by all of the debris, but amazingly enough, no one was hurt in all of this, but authorities have evacuated the area.

A fierce ice storm has left at least 23 people dead in the Midwestern United States. States of emergency in effect in Missouri, Kansas, and Omaha. FEMA and the Army Corps of Engineers are trucking in generators and bottled water to blacked-out areas. Travelers are also getting hit by the storm. Some 250 flights were canceled at Chicago's O'Hare International Airport today.

Nearly 20,000 federal inmates could be getting out of jail sooner than expected. That's because the U.S. Sentencing Commission voted today to make retroactive its recent easing of recommended sentences for crack cocaine offenses. The decision takes effect on March 3. Nearly 4,000 inmates could be then eligible for release within the year. But federal judges will have the final say on reducing those sentences.

That's a look at the headlines right now, Wolf.

BLITZER: Carol, thanks very much.

You could call it the Clinton/Obama/Edwards edge. Our new poll shows only one Republican has a shot at beating nay of the top Democratic presidential hopefuls.

Plus, late word about an important endorsement for Mitt Romney that potentially could help him grab some conservative votes from Mike Huckabee. The best political team on television is standing by to guide us through all the new twists of this already wild campaign.

And Bill Clinton's close encounter with an unusual heckler.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: dismal news for Republican presidential hopefuls. In a set of new polls, only one of them comes out on top in a head-to- head match with the Democratic front-runners. Stand by for that.

Also, what's more important to voters as we head into the election, Iraq or the economy? We are going to show you which one has more Americans worried right now.

Plus, Mitt Romney's endorsement coup. You are going to find out who is backing his candidacy right now -- all of this, plus the best political team on television.

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

While many Republicans are focused on Mike Huckabee's dramatic surge, they may want to take some time out to worry about how the Democrats are doing.

Our brand-new presidential poll shows nearly all of the GOP hopefuls would lose to one of the top-tier Democratic contenders if -- if the general election were held right now.

Let's go to CNN's Mary Snow. She's watching this story for us.

The candidates at the top of the Republican pack aren't doing very well against the Democrats, with one notable exception.

MARY SNOW, CNN CORRESPONDENT: That's right, Wolf.

And, you know, this poll is the first head-to-head matchup that includes Mike Huckabee. It shows he has some tough hurdles ahead.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Mike Huckabee has leapfrogged to the top of the list of Republican presidential hopefuls in recent polls. But, in a head-to-head match pitting the former Arkansas governor against his Democratic rivals, the numbers tell a different story.

A CNN/Opinion Research poll shows Huckabee would likely lose to Democratic presidential hopeful Senator Hillary Clinton by 10 percentage points, Senator Barack Obama by 15, and John Edwards by 25.

KEATING HOLLAND, CNN POLLING DIRECTOR: The thing that struck me the most was how poorly Huckabee is something and how well McCain is doing in general election matchups, despite the fact that Huckabee has far more support than McCain in the primary matchups among Republicans.

SNOW: The poll finds, Republican Senator John McCain would fare best against the leading Democratic contenders, and, on the Democratic's side, John Edwards would beat all four leading Republican candidates.

But does that mean they're the most electable? If so, why is Edwards running third in the polls behind his Democratic rivals and McCain placing fourth among his fellow Republican contenders?

Political observers say, it all points to the uncertainty of the race, especially on the Republican side, where voters have been looking for an alternative to the top-tier candidates.

STU ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": They looked around. They looked at Fred Thompson and he didn't impress them. And now they're still looking. And, finally, they found Mike Huckabee. We'll have to see whether they stay in love with him. But for -- for the moment, the polls suggest they're -- they're definitely smitten.

(END VIDEOTAPE)

SNOW: Now, as to why Mike Huckabee isn't doing better in the polls against Democratic rivals, one big reason being cited is that he's still not well known nationally, even though his popularity has been surging among Republican primary voters -- Wolf.

BLITZER: All right, Mary, thank you.

Let's get some more now on those eye-popping poll numbers.

And we're joined by the best political team on television.

Our senior political analyst, Gloria Borger. She's here in Washington.

In New York, our own Jack Cafferty. His best-selling book is called "It's Getting Ugly Out There". Also in New York, our senior analyst, Jeff Toobin. His best- selling book about the U.S. Supreme Court is called "The Nine" -- cited by the "New York Times" now as one of the 10 best books of the year. Guys, thanks very much.

Congratulations to Jeff on that -- Jack, why are the Democrats -- the Democratic presidential candidates -- beating all the Republican candidates decisively, with the exception of John McCain?

CAFFERTY: Well, and it's not -- John McCain -- it's not that big a deal for John McCain. In a hypothetical match-up against Hillary Clinton, he wins by two points. That's a -- statistically, it's a dead heat. He ties Obama and he loses -- McCain loses to John Edwards by nine points. John Edwards is the strength of the Democratic candidates, if you look at these hypothetical national match-ups. He beats everybody. He beats Giuliani. He beats McCain. They all just crush Huckabee and...

BLITZER: Romney.

CAFFERTY: Romney.

But the difference is, you're talking primaries versus the general election. The two conservatives in Iowa -- Huckabee and Romney -- are doing quite well. But when you expand the race out beyond that, a lot of this country isn't interested...

BLITZER: You know, Gloria...

CAFFERTY: ...in having a conservative Republican in the White House.

BLITZER: Jack makes a good point, because John Edwards has made that point to me -- and I'm sure to you and a lot of others -- that he's electable. Hillary Clinton not electable, Barack Obama not electable. John Edwards electable.

Does John Edwards make a fair point?

GLORIA BORGER, SENIOR POLITICAL ANALYST: Well, I think he does make a fair point. But, Wolf, I think what we're really seeing in these polls here now is the difference between the voters in the states like Iowa and New Hampshire -- who are paying attention to the individual candidates -- and the voters in the rest of the country, who are just paying attention to the brands. So the reason that a John McCain might do very well against Hillary Clinton is that he's a very well known quantity in the Republican field and so he can match up against her nationally. But he's not doing so well in Iowa.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Boy, I -- you know, I think these poll numbers are almost totally meaningless at this point. Think about it. You know, these candidates are only campaigning in New Hampshire and Iowa, essentially. And the Republicans are only talking about immigration -- an issue that is apparently of great interest to Republican primary voters in Iowa, but if you look at the whole country, it's about fifth or sixth in importance. The general election will be a completely different race, talked about completely different issues. So these numbers, I think, are just name recognition and nothing more.

BORGER: Right.

BLITZER: You know, Jack, there's a new ad that Hillary Clinton is putting out, trying to show a more kindler, gentler Hillary Clinton.

CAFFERTY: Right.

BLITZER: I want to play this brief little clip from this new ad.

(BEGIN VIDEO CLIP FROM HILLARY CLINTON CAMPAIGN AD)

SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: It is time for America to set and reach big goals again, to restore our standing in the world, to rebuild the middle class dream and to reclaim the future for our children.

(END VIDEO CLIP)

BLITZER: You get the point, Jack.

CAFFERTY: Yes, it's...

BLITZER: What do you think?

CAFFERTY: It's platitudes. They're nice. You know, it's all warm and fuzzy -- rebuild the dream, do things for the children, yada, yada, yada. It's the same crap all the politicians promise everybody every time we have an election.

So what's the big deal?

(CROSSTALK)

BLITZER: But, hold on a second. Because, Gloria, I know you think that there is a strategy...

BORGER: Oh, yes.

BLITZER: ...that the Clinton camp has behind this new -- this new kindler, gentler Hillary.

BORGER: Yes, there is a strategy. Look, you know, they've been -- you know, they're on the defensive right now in Iowa. This is going to be a really close race. This is not the way they have envisioned it. And there have been some real disagreements in the Clinton campaign about whether, when she sort of went on the attack on Obama for the last two weeks, she really hurt herself. Because while voters think she's strong -- and that's interesting for a woman -- they think she's the toughest candidate in the race, they're not quite sure that they like her.

So what you're seeing now is the warmer, fuzzier Hillary Clinton -- the morning in America Democratic version of Hillary Clinton, because they think that might work with Iowa and New Hampshire voters.

TOOBIN: The Clinton people are worried about what happened in Iowa four years ago, where Richard Gephardt and Howard Dean really went after each other and John Kerry slipped ahead of them both because the people attacking looked bad.

CAFFERTY: Well, as Gloria said...

BORGER: Right.

TOOBIN: They don't want that to happen again.

CAFFERTY: Gloria said something interesting -- you're seeing it because the campaign thinks it will work. You're not seeing it because that's necessarily the way she is. You're seeing it because the campaign is in trouble.

So what do we do?

Let's put out a message to counteract the drop in the polls. I mean it's just more manipulation. There's nothing sincere, legitimate about any of this stuff.

BORGER: Well, here's the interesting thing...

TOOBIN: Boy...

BORGER: When Dean and Gephardt went at it in Iowa and sort of killed each other off, the problem here for Hillary Clinton is that she's going at Barack Obama, but he's a little softer candidate. You know, he doesn't push back as hard. So, as a result, she looks worse. She looks nastier. She looks more negative, even when Obama does attack her.

BLITZER: All right. Hold on, guys, because we've got more to talk about -- a lot more to talk about, with the best political team on television. Fifteen years after Bill Clinton said it's the economy, stupid, does that still hold true for American voters or are they more concerned right now about the war in Iraq?

We're going to show you what they're telling us in a brand new poll.

Plus, Mitt Romney picks up what some consider to be a key endorsement.

Will it help him beat back Mike Huckabee in Iowa?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Guess what? It's still the economy, stupid. A new poll shows money matters trumps Iraq as the issue that matters most for voters headed into the election -- at least right now.

We're back with the best political team on television.

Jack, right now in our CNN/Opinion Research Corporation poll, economy is cited by 29 percent as the most important issue; Iraq second with 23; health care with 20; immigration fourth with 14. Iraq used to be cited as the most important. It's now the economy.

CAFFERTY: Well, you can see, if you look at the column on the right, that the people citing the economy has gotten greater as the economic conditions have gotten worse and the people citing Iraq has gotten fewer since -- as the conditions in Iraq have gotten better. Violence is down there.

Look, the economy is slowing down. The Federal Reserve disappointed today by not cutting interest rates by half a point. Wall Street sold off 300 points in an hour-and-a-half because of that. Housing prices aren't expected to recover until some time late in 2009. Recession is increasingly on the tongues of people, as things like holiday season retail sales are reflecting the housing and subprime mortgage crisis. So the consumers worry. And when the consumers worry, he votes his pocketbook in an election. And as long as Iraq is not boiling over at the moment, the voters are focused on the economy -- and not surprisingly.

TOOBIN: You know, I think that list there is a recipe for panic in the Republican Party because...

BORGER: Right.

CAFFERTY: Yes.

BORGER: Right.

TOOBIN: ...you know, the economy is a loser for them, if the economy is bad. But even though the war is down, overwhelmingly, the public is opposed to the Republican position on the war.

CAFFERTY: Right.

TOOBIN: So even though things are getting somewhat better there. So you have bad news for the Republicans on the economy, bad news for Iraq. It's going to be very tough for Republicans to pick an issue to run and win on.

BORGER: And, you know, to add to what Jeff is saying, that, in fact, the Republicans could choose their nominee on an issue -- as Jeff pointed out earlier -- that is somewhere down on this list, which is immigration, which had 14 percent in this poll, which is of concern to those Republican voters. But if you nominate someone because of that issue in the Republican Party, how will that person fare in the general election? CAFFERTY: And the other interesting thing is look at the difference between Iraq and terrorism. Iraq cited as an important issue by 23 percent, terrorism by 10 percent. The public has managed to separate those two, unlike the administration.

BLITZER: Yes. But, you know, it's still a long time on all of those issues between now and November of next year.

CAFFERTY: Sure.

BLITZER: The "National Review," Jeff, has just endorsed Mitt Romney for president, among other things saying unlike some other candidates in the race, Romney is a full spectrum conservative, a supporter of free market economics and limited government, moral causes such as the right to life and the preservation of marriage, and a foreign policy based on the national interests.

I guess under the theory that my dad used to always say, it might not help, but it certainly can't hurt...

(LAUGHTER)

BLITZER: And Republicans...

TOOBIN: I was...

BLITZER: ...Republicans out there, what do you think?

TOOBIN: I didn't know your dad, but, you know, there's an old saying about chicken soup when you have a cold.

BLITZER: Right. That's what he was...

TOOBIN: ...you know, it can't hurt. Apparently the...

BLITZER: ...that's what he was referring to.

TOOBIN: Yes. Certainly, the "National Review" endorsement can't hurt, much as I'd like to think magazines shape the...

BORGER: Yes.

(LAUGHTER)

TOOBIN: ...the public debate.

CAFFERTY: Wrong.

TOOBIN: Boy, I think if you added up the number of people who read the "National Review" in Iowa and New Hampshire, it's pretty small. But it can't hurt.

BORGER: You know, it was interesting, Wolf, that they called Romney a full spectrum Republican candidate. That's probably true, because he's been everywhere on the spectrum...

(LAUGHTER)

TOOBIN: That's right.

BORGER: ...on lots of...

(LAUGHTER)

BORGER: ...o...

(LAUGHTER)

BORGER: ...on lots of positions. And, you know, they found the need in this editorial to defend him, to say that he's changed. But the word "full spectrum" kind of describes it.

CAFFERTY: Well, realistically, who else are they going to pick?

They can't pick Giuliani. He's not a social conservative. They can't pick Huckabee. He's not an economic or a foreign policy conservative. And so the only guy, realistically, that they can endorse is Romney. The one thing they say about him right at the end of the editorial, which could absolutely destroy Romney's chances, is this: "Romney has President Bush's virtues and avoids his flaws. His moral positions and his instincts on taxes and on foreign policy are the same."

I mean that could be a rap on Romney right there.

TOOBIN: Exactly. He's the candidate most like President Bush -- boy, you're not going to hear many people bragging about that in the fall, I think.

(LAUGHTER)

CAFFERTY: No...

BLITZER: Guys, thanks very much.

We'll see you back here tomorrow.

Jack, don't go away yet. We've still got have The Cafferty File coming up.

And this important programming note for our viewers out there. The "Des Moines Register" is hosting two presidential debates in Iowa this week.

And guess what?

You can see both of them live right here on CNN, along with a special expanded edition of THE SITUATION ROOM. Tomorrow at 2:00 p.m. Eastern for the Republicans, Thursday 10:00 p.m. Eastern, it's the Democrats' turn. And our special expanded edition of THE SITUATION ROOM will start immediately after the debates, at 3:30 p.m. Eastern.

It's an unusual campaign appeal. We're going to show you what Mike Huckabee is asking his supporters to do to help keep his campaign on the road.

And Jack Cafferty has your e-mail on this hour's question -- what message are the airlines sending by fighting against the Passenger Bill of Rights?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Checking our Political Ticker right now, new evidence of Fred Thompson's campaign troubles. A spokesman says the Republican is giving up on stumping in New Hampshire, where he trails in the polls. Instead, Thompson will campaign full-time in Iowa until the January 3rd caucuses. Next week, he'll launch a bus tour the Hawkeye State, where he comes in third in some of the recent surveys.

Democrat Hillary Clinton raising campaign cash in California today with someone who knows a lot about making a lot of money. That would be the billionaire financier, Warren Buffett. He appeared with Senator Clinton at an event in San Francisco.

And as for Bill Clinton, he's seen his share of hecklers, of course. But this may be a first. While campaigning for his wife in Iowa last night, he was upstaged by a man dressed as a robot.

Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Bill Clinton...

UNIDENTIFIED MALE: (INAUDIBLE).

UNIDENTIFIED MALE: ...I want you to apologize to Sister Souljah. Robots of the world want you to apologize to Sister Souljah.

(BOOS)

UNIDENTIFIED MALE: We want you to apologize to Sister Souljah...

(BOOS)

(END VIDEO CLIP)

BLITZER: There he is, the robot.

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

Lou Dobbs is getting ready for his show, that begins a that top of the hour.

He's standing by to tell us what's coming up -- hi, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": How are you doing, Wolf?

Coming up tonight at the top of the hour, we're reporting on the rising controversy over a Texas homeowner who shot and killed two burglars. Astonishingly, the homeowner now receiving death threats and, at his home, fending off protests and demonstrations for defending his neighbors. Also, the Bush administration claiming significant progress in its battle to stop drug abuse among our teenagers. We'll tell you what's really going on among our youth. The director of the Office of National Drug Control Policy, our drug czar, John Walters, is among our guests here tonight.

And the left-wing Southern Poverty Law Center at it again -- trying to advance an agenda of socio-ethnic centric special interests. This time, targeting me and other supporters of two former Border Patrol agents. It seems the Southern Poverty Law Center doesn't understand the concept of justice and presumption of innocence.

Well, I'll have a few explanations for all of the good folks at the Southern Poverty Law Center.

All of that and a great deal more tonight, along with the day's news, at the top of the hour right here on CNN.

Please join us -- Wolf, back to you.

BLITZER: We'll see you then, Lou.

Thank you very much.

Let's check back with Jack.

He's got The Cafferty File in New York -- Jack.

CAFFERTY: The question this hour, what message are the airlines sending by fighting against a Passenger bill of Rights?

New York has passed one and it's scheduled to go into effect in January. And the airlines have their shorts in a big knot over this.

Brooke writes: "Airline opposition to the Passenger Bill of Rights sends the same message as cramped seats, endless surcharges, absent service and $5 cheese and crackers do. The message is -- we don't care about our customers."

Mike writes: "In defense of the airlines, a Passenger Bill of Rights is absurd. The airlines are doing everything they can to run things smoothly. It's not a right, but, rather, a privilege to fly. All you complainers can start taking the bus."

Adam writes: "They're saying that considering how long they make us wait and the fact that we keep coming back for more while demanding to pay less, well why should they care? Perhaps we should enforce our own bill of rights with our wallets and decide to pay for only for the service we get."

Katie writes: "The airlines will fight this and other laws like it. We can only hope that the judge who hears the case will have had to spend three or more hours on a delayed flight without water or restrooms. That would be poetic justice."

Bruce says: "What is a good idea for a federal law is not good for state law. The federal government manages Interstate commerce. It's wrong for a state to pass their own airline regulating laws. The airlines are correct to oppose this state law."

And David in Dixmont, Maine: "The message the airlines are sending is go to www.amtrak.com." -- Wolf.

BLITZER: Jack, see you tomorrow.

Thanks very much.

Jack Cafferty with The Cafferty File.

Mike Huckabee may be rapidly rising in the polls right now among Republicans, but the former Arkansas governor is going online to ask for help in keeping his campaign on the road in Iowa.

Let's go to our Internet reporter, Abbi Tatton.

What is he asking for -- Abbi?

ABBI TATTON, CNN CORRESPONDENT: Wolf, this is the Huckabee bus and it needs fuel. In an online fundraising appeal, Mike Huckabee is asking supporters to donate $100 tomorrow for gas for the bus for an upcoming Iowa bus tour.

Now, all the candidates have their online fundraising gimmicks, but this one from Mike Huckabee reflects a reality. He might be surging in the polls, but his rivals' campaign cash is daunting.

Mitt Romney has loaned himself more than $17 million for this campaign. At the end of last cycle, he had more than 9 million cash on hand. Compare that to $650,000 for Mike Huckabee. Since those numbers came out, the Huckabee campaign, at their Web site, has been touting rising online contributions. And this latest push part of an effort to keep cash flow for the Huckabus and for Huckabee flowing -- Wolf.

BLITZER: We'll see if the cash comes in.

Thanks very much, Abbi, for that.

There are just two weeks left until Christmas, but if you still haven't found the perfect gift for your politically attuned significant other, don't despair -- our Jeanne Moos is here to help.

That's coming up.

(COMMERCIAL BREAK)

BLITZER: here's a look at some of the Hot Shots coming in from our friends over at the Associated Press -- pictures likely to be in your hometown newspapers tomorrow. Near Bethlehem, a Palestinian worker hangs a Christmas decoration. That's on the West Bank.

In Oklahoma City, poinsettias are covered with ice. A winter storm in the Midwest has knocked out power to more than 400,000 homes and businesses.

In Peshawar, in Pakistan, a music shop owner cleans up after extremists blew up his store with dynamite.

And in Sydney, Australia -- check it out. A gorilla shows off her new baby boy.

Some of this hour's Hot Shots -- pictures often worth a thousand words.

She's made her list and checked it twice. And she might just have the perfect gift for your political news junky.

Our Jeanne Moos plays Santa with this Moost Unusual look.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): We couldn't find a real snow globe containing all the presidential candidates. But maybe you can bring joy to the world of political junkies on your gift list with a few of our favorite things we did find.

UNIDENTIFIED MALE: It's the talking Ann Coulter doll.

UNIDENTIFIED MALE: At least the right-wingers (INAUDIBLE). There's a point.

BLITZER: We present the best political gifts of the season -- from impeachments to the talking Larry Craig doll.

UNIDENTIFIED MALE: (INAUDIBLE).

UNIDENTIFIED MALE: He's posable. You can even put him in his famous wide stance, which has been in the press so much.

BLITZER (on camera): Bathroom stall not included?

(voice-over): Stupid question. But that's OK, since many of these items come from Stupid.com -- which more than lives up to its name, with items like the yodeling pickle.

(VIDEO CLIP)

MOOS: Liberals seem to offer more gifts than conservatives. For instance, these disappearing mugs.

UNIDENTIFIED MALE: The inconvenient coffee cup.

MOOS: When you fill it with hot liquid, coastlines vanish. Watch Florida recede before your very eyes. There's also the disappearing civil liberties mug and the Democratic dream mug -- just add coffee and all those red states turn into blue states.

(VIDEO CLIP)

MOOS: One item popping up on mostly conservative Web sites recently is the Muhammad Bear -- a poke in the eye to radical Islam, because the Sudanese government threatened to punish a British teacher after her Sudanese schoolchildren named a Teddy bear Muhammad.

There are the usual doggy chew toys. Michael Moore is so popular, he sold out at Stupid.com. And The Huffington Post is offering a poster of famous Bush administration phrases -- "axis of evil," "slam dunk," "shock and awe," "the in Internets."

And what item merits this praise?

UNIDENTIFIED MALE: By far, it's the best-selling political item we've ever had.

MOOS (on camera): Ever had?

UNIDENTIFIED MALE: Yes.

(VIDEO CLIP)

MOOS (voice-over): Featuring stainless steel thighs.

(VIDEO CLIP)

MOOS: Visitors to the Hillary Nutcracker Web site voted that Ann Coulter should be the next nutcracker.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Why not go to war just for oil?

We need oil.

What do Hollywood celebrities imagine fuels their private jets?

How do they think their cocaine is delivered to them?

(END VIDEO CLIP)

MOOS: Imagine that under your tree -- the dolls, not the coke.

(VIDEO CLIP)

MOOS: Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: And this programming note. Once again, the "Des Moines Register" is hosting two presidential debates in Iowa this week. You'll see them live right here on CNN, along with a special expanded edition of THE SITUATION ROOM. Tomorrow at 2:00 p.m. Eastern for the Republicans, Thursday 2:00 p.m. Eastern for the Democrats. Our special expanded edition of THE SITUATION ROOM will start right afterwards, at 3:30 p.m. Eastern both days. That's it for us.

Let's go to Lou in New York -- Lou.

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