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THE SITUATION ROOM

Pundit-in-Chief: President Bush on White House Campaign; Close & Closer in Iowa; Huckabee Fires Back at Romney

Aired December 20, 2007 - 16:00   ET

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


SUZANNE MALVEAUX, CNN ANCHOR: Happening now, the president's take on the candidates for his job. How far is he willing to go when pressed about the race for the White House and who will win in the end?
Also this hour, close and closer in Iowa. We have new polls on the Republican and Democratic presidential contest and the issues that voters care about. Plus, live reports from the state where the wild ride begins two weeks from now.

And a turf battle between John Edwards and Hillary Clinton. Which Democrat has done more to help America's poor? Edwards joins us to defend his record after a veiled shot by Clinton.

Wolf Blitzer is off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

As his second to last year in office comes to a close, President Bush is trying to put out his spin on what Washington did and didn't do in 2007. He is also giving political journalists a holiday gift by talking a little bit more about the race to 2008.

Let's go to our White House correspondent, Ed Henry.

And Ed, what did you get out of this year-ender from President Bush? It looks like he's trying to be a little bit more candid. Just a little bit.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Suzanne. It was interesting.

The president ducked the tough questions about the CIA tape case, saying he wants to reserve judgment until all of these various investigations play out, but you're right, on the 2008 campaign he had first said he didn't want to comment on it, but then he did.

(BEGIN VIDEOTAPE)

HENRY (voice over): At his final press conference this year, President Bush kept insisting he didn't want to be dragged into next year's battle to replace him.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's a good attempt to get me in the race.

HENRY: But he could not resist sticking a toe into the water when asked what qualities his successor needs.

BUSH: If I were asking questions to people running for office, I'd say, what are the principles that you will stand on in good times and bad times? What will be the underpinning of your decisions?

HENRY: And then another toe.

BUSH: How do you intend to get advice from the people you surround yourself with? Who are you going to surround yourself? And what process will you have in place to ensure that you get the, you know, unvarnished opinion of advisers?

HENRY: He would not quite bite when pressed on Republican Mike Huckabee's charge his foreign policy has been arrogant.

BUSH: I suspect my name may come up a lot. And what the American people need to do is sort through the rhetoric and reality.

HENRY: Mr. Bush scoffed at Bill Clinton's suggestion that as president his wife would send the 41st and 42nd presidents on a global tour to restore America's image.

BUSH: Well, 41 didn't think it was necessary. So that sounds like it's going to be a one-man trip.

(LAUGHTER)

HENRY: The president declared he plans to help unify his party after the primaries, and gave a hint of how he wants the general election framed.

BUSH: I believe we will keep the White House. I believe ours is the party that understands the nature of the world in which we live and that the government's primary responsibility is to protect the American citizens from harm.

(END VIDEOTAPE)

HENRY: But selling the American people on national security may not be so easy. The president acknowledged while there have been security gains in Iraq this year, there's still a lot more to be done on reconciliation within the Iraqi government.

And on Afghanistan, he confirmed that his administration is conducting a top-to-bottom review of why that war efforts has hit such a rough patch -- Suzanne.

MALVEAUX: Ed, thank you so much.

Ed Henry at the White House.

Now, fasten your seat belts. The first 2008 presidential contest is exactly two weeks from today. And Iowa caucus-goers, well, they seem ready to kick off things with a bang.

Our senior political analyst, Bill Schneider, here with a new Iowa poll.

And Bill, the race looks very difficult in Iowa -- I was just there this past week -- than it does in the rest of the country. Tell us why.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Because in Iowa, they see the candidates up close and personal.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): It's a tight three-way Democratic race in Iowa between Hillary Clinton, Barack Obama and John Edwards, according to a new CNN/Opinion Research Poll. For Iowa Republicans it's a two-way race, Mike Huckabee and Mitt Romney.

Why is Iowa so competitive? The top issue for Iowa Democrats is Iraq. Clinton has taken criticism for her Iraq policy, but Iowa Democrats say she would handle the issue best. Just behind Iraq, healthcare -- advantage Clinton again.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Fighting for healthcare is one of my motivations for running for president.

SCHNEIDER: The economy is a fast-rising concern, another Clinton issue. Clinton has all three big Democratic issues. So why is Obama breathing down her neck? Because he doesn't sound like a typical politician.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We've got to change how business is done in Washington in a fundamental way.

SCHNEIDER: Iowa Democrats call Obama the most honest and trustworthy candidate and the one who best understands their problems, personal qualities. The top issue for Iowa Republicans, the economy. They rate Romney, a former business executive, tops on the economy.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I spent my life in our economy.

SCHNEIDER: Just behind the economy, illegal immigration, another Romney issue. The number three Republican issue? Abortion, a Huckabee issue.

If abortion is Huckabee's only issue, why is he leading? Because he doesn't sound like a typical politician. He told Larry King the election will turn on...

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Whether or not the people believe that there was need for change in this country and a different kind of leadership.

SCHNEIDER: Iowa Republicans call Huckabee the most honest and trustworthy candidate and the one who best understands their problems, personal qualities.

(END VIDEOTAPE)

SCHNEIDER: On ABC News "Nightline," Senator Clinton was asked about Obama's personal appeal. Her response? "We've already tried the president we'd rather have a beer with."

Suzanne.

MALVEAUX: Ouch. OK. Bill Schneider, thank you so much.

And just moments ago, Rudy Giuliani left a hospital in St. Louis where he was admitted overnight for flu-like symptoms. Giuliani's spokesman says the Republican got a clean bill of health from doctors after they performed a series of precautionary tests.

Giuliani had been campaigning in Missouri for the February 5th primary, and he took time out to be in an interview with our own Wolf Blitzer just yesterday aboard the CNN Election Express. Now, we are told the former New York mayor is heading home to New York this afternoon.

And time now for "The Cafferty File." Jack Cafferty joining us from New York.

Jack, we're told that Wolf did not give any kind of flu symptoms to Giuliani, so...

JACK CAFFERTY, CNN ANCHOR: Well, that's a comfort. Yes, we don't want to be responsible for striking down one of the front- runners.

Democratic presidential candidate Barack Obama has often talked about reaching out across the aisle if he becomes president. ABC News reports Obama's now naming some names of Republicans he would consider putting in his cabinet.

Obama told voters at a town hall event in Manchester, New Hampshire, that it's premature to begin announcing his cabinet, that he still has a long way to go, but then some Republican names began to flow, including senators Dick Lugar, Chuck Hagel from Nebraska, along with California Governor Arnold Schwarzenegger.

Of Lugar, Obama said he's worked with him before on issues of arms control, that he's somebody who embodies the tradition of a sensible bipartisan policy. Obama said Hagel is someone who has a similar approach and that he respects in a similar fashion.

When it comes to Arnold Schwarzenegger, Obama described what he's done on climate change in California as "important and significant," adding the governor has taken leadership on a tough issue and that we haven't seen that kind of leadership in Washington.

So the question is this: Does it make Barack Obama a more appealing candidate when he says he would consider Republicans like Chuck Hagel and Arnold Schwarzenegger for his cabinet?

Go to cnn.com/caffertyfile and post a comment on my new blog -- Suzanne.

MALVEAUX: Jack, thank you so much.

And in Iowa right now, Mike Huckabee may be looking a little bruised. We'll tell you what his Republican rivals are throwing at him now and how the caucus front-runner is handling it.

Also ahead, another one bites the dust. We'll tell you who dropped out of the GOP presidential race and why.

And Democrat John Edwards fighting for the poor and against Hillary Clinton. The former senator joins us to talk about the big issues and whether he can afford to lose Iowa.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: The Republican presidential field is a little less crowded right now. Within just the past hour, Congressman Tom Tancredo of Colorado announced that he is dropping out of the race and endorsing Mitt Romney.

(BEGIN VIDEO CLIP)

TOM TANCREDO (R), PRESIDENTIAL CANDIDATE: This morning I met with Governor Mitt Romney, and although we are not in agreement on all issues, I am convinced that he is committed to the principles I've outlined. And so today I'm doing two things that I believe are in the best interest of this cause. And that cause is, of course, a secure America.

I am withdrawing from the race and I'm endorsing Governor Romney for president of the United States.

(END VIDEO CLIP)

MALVEAUX: Speaking in Iowa, Tancredo said he always knew that the odds against him were incredibly long, but he also says he wanted to promote the fight against illegal immigration. And during the recent CNN/YouTube debate, Tancredo talked about how happy he was that all the other candidates were arguing over his issue.

(BEGIN VIDEO CLIP)

TANCREDO: Well, I tell you, this has been wonderful.

Senator McCain may not be happy with the spirit of this debate. As for a guy who usually stands on the bookend here, the side, and just listens all the time, that's kind of frustrating, you know, in other debates. I have to tell you, so far it's been wonderful, because all I've heard is people trying to out-Tancredo Tancredo.

It is great. I am so happy to hear it.

(END VIDEO CLIP) MALVEAUX: Tancredo exits the race of the bottom of the GOP pack in our latest national poll with just one percent support.

And in Iowa it is turning into a knockdown, drag-out fight between Republicans Mike Huckabee and Mitt Romney, and it is only getting rougher as the January contest gets closer.

Our chief national correspondent, John King, is in Iowa, and so is CNN's Dana Bash.

First to you, Dana.

After taking quite a few hits from Romney, Huckabee seems to be pushing back even harder now.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: He is. And you know, the strategy Mike Huckabee is using to keep his surprising lead here in Iowa is to convince Iowa voters who love an underdog that that's still what he is, somebody who "Wall Street and Washington do not want to succeed." But he's also trying to walk a fine line, essentially trying to portray himself as a nice guy, something that benefits him, but also proving more and more he's not afraid to mix it up.

(BEGIN VIDEOTAPE)

BASH (voice over): For Mike Huckabee in Iowa, being a front- runner means the crowds are suddenly bigger and attacks from opponents stronger. So he as changed his stump speech, now pleading with Iowa voters not to believe his rivals.

HUCKABEE: This nonsense -- what I'm asking you to realize is that when people get desperate, they say desperate things and sometimes dishonest things.

BASH: But in defending his own record, Huckabee is now questioning Mitt Romney's.

ROMNEY: Nice to see you today.

BASH: Romney's new ad hits him for issuing over 1,000 clemencies.

ANNOUNCER: The difference, Romney got tough on drugs like meth. He never pardoned a single criminal.

BASH: Huckabee tells a crowd about a case before Romney in Massachusetts. An Iraq war vet with a juvenile crime record asking for clemency to be a police officer.

HUCKABEE: Out of curiosity, let me see your hands. How many of you, if that were on your desk, how many of you would have granted that pardon for that young man? Let me just see.

OK. How many of you would have not granted that pardon for that young man? OK. One. BASH: Then he goes in for the kid. My opponent said no.

Now, let me ask you, do you believe he acted in the best interest of that young man and his state? Or did he act in the best interest of his own future political career?

That's judgment, folks. You've just decided whose judgment you believed was better.

BASH: The clear message -- Romney made crass decisions for political gain. Huckabee believes in fairness and redemption.

That plays well with Christian conservatives that dominate his crowds and drive his popularity.

Brenda Carnahan (ph) home-schools her children. She's never voted in a caucus, but will for Huckabee.

UNIDENTIFIED FEMALE: I just feel that he represents what our values are the closest of any of the candidates.

BASH: The former preachers still pounds away on those values -- opposition to abortion, gay marriage.

HUCKABEE: At this time of year, sometimes it's nice to pull aside from all of that and...

BASH: He's even trying to turn questions about a subliminal cross in this ad to his benefit.

HUCKABEE: What's wrong with our culture when we can't mention that Christmas is the birth of Christ without having a bunch of people go completely berserk about it?

(END VIDEOTAPE)

BASH: Now, Huckabee, also, despite the fact that he got some "amens" from that particular comment about the Christmas ad, he also got a rather pointed question from a voter who said that he is somebody who is not religious and wanted to know what he plans to do or think about the 12 to 14 percent of Americans like him who are not religious.

And Suzanne, Huckabee was very quick to respond. He said you don't have to be religious to be an American -- Suzanne.

MALVEAUX: And Dana, you've been covering Huckabee for quite some time. What is the mood of the campaign now that it seems to have gotten so nasty?

BASH: You know, if he could float over the ground as he talks to the voters, I think he probably would. You know, he is somebody who has definitely got a lot of spring in his step.

He is very excited about the fact that he's doing well. And it's really interesting the way he tries to play to what he knows Hawkeye voters really like.

As I said, they really like an underdog. So, despite the fact that he's doing extraordinarily well, he's more and more railing against Washington, railing against Wall Street, railing against the fact that his opponent in the race -- he really only addresses Mitt Romney -- has outspent him on dollars 20 to one.

He says we're turning the whole race, we're turning politics on his head. So in that vein, he's really trying to gin up support for him and sort of get people out here who like someone like him to not be complacent. So it's very interesting, the approach he's taken, now that he's in the lead.

MALVEAUX: OK. Dana, thank you so much.

We want to go to John now.

Obviously, you've been following Romney. And how is he playing this out in this kind of slugfest with Huckabee?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Suzanne, Governor Romney says he's not desperate like Governor Huckabee says. What he says he's doing is drawing some legitimate contrast on issues that he thinks the people in Iowa and others need to know about.

I specifically pulled him aside after an event this morning to ask him about Governor Huckabee's counter-punch on the clemency and the pardon issue. Governor Huckabee suggesting, as you just heard there, that Mitt Romney acted on political calculation, not compassion, when it came to considering requests for pardons and clemency.

I asked Governor Romney if perhaps he was too haunted, if you will, by what happened to Michael Dukakis back in 1988 when the Willie Horton furlough hurt the Dukakis campaign. So I said, "Is Governor Huckabee right when he says you are calculated, not compassionate?"

(BEGIN VIDEO CLIP)

ROMNEY: So he thinks 1,033 pardons shows a heart? He thinks giving 12 murderers pardon shows a heart? He thinks giving a repeat drink driver a pardon to get him out of jail shows heart?

I think it shows a softness that's just not appropriate in this kind of a setting. In the case he's talking about with regards to the individual, we had guidelines as to when pardons would be issued. One of the guidelines was that a person that was convicted of a gun offense could not get a pardon for purposes of getting a gun license, specifically, and that was just one of our guidelines that was put in place.

Maybe he can show us the guidelines he had as governor. See, I had guidelines and they were published. Did he have any guidelines, or did he just do it on the fly, and if he liked what he heard, just give somebody a pardon? This is a very defining difference between us. He gave out 1,033 pardons, including murderers and repeat drunk drivers. I said absolutely no.

KING: Is it a presidential issue? Is it crime or judgment in the sense that you talked about the threat of Islamic jihad, you talked about the entitlement questions facing the country, the healthcare crisis facing the country, and you have two leading candidates for president arguing over how many people they pardoned or let out of prison? How is that a presidential issue?

ROMNEY: Well, it certainly was some years ago, and people always look at the strength of an individual dealing with an issue like crime. And frankly, giving out 1,033 pardons, in my view, is extraordinarily excessive. That's more than the three prior governors of Arkansas combined gave out.

I don't know that there's any governor in America that's given out more pardons than Mike Huckabee. And it's worth looking at that. But it's, in my view, particularly giving out pardon to convicted murderers.

(END VIDEO CLIP)

KING: This is not just about crime and punishment, Suzanne, or about the judgment of these two men when they were governor. This is also about the gender gap here in Iowa.

Governor Huckabee now leads Governor Romney 2 to 1 among Republican women who say they will go to the caucuses two weeks from now. Governor Romney trying to erode and erase that gender gap, the advantage Governor Huckabee has at the moment, by stressing issues that are proven in the past to move women voters, crime and education, as part of his appeal to whittle away that big sudden surprise Huckabee lead -- Suzanne.

MALVEAUX: OK. Thank you so much.

Dana Bash and John King are part of the Emmy Award-winning best political team on television.

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

Well, President Bush says you have to have principles to do his job, but, well, did he give his critics an opening to attack and give perhaps comics a punch line? The pundit-in-chief gets analyzed in our "Strategy Session."

Plus, police and protesters clash in New Orleans, new proof of the lingering anger after Hurricane Katrina.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWSBREAK)

MALVEAUX: And John Edwards has a message for Hillary Clinton -- welcome to the discussion of an issue millions of Americans care about. You'll hear what that is and why some suggest Clinton is invading the political turf of Edwards' signature issue.

And John Edwards will be here to talk about this new spat. I'll also ask if one Democrat-turned-Independent senator's endorsement of a Republican is an embarrassment to the Democratic Party.

(COMMERCIAL BREAK)

MALVEAUX: You're in THE SITUATION ROOM.

Happening now, President Bush cites (ph) progress in Afghanistan, but what do military analysts think? We are following that and concerns that NATO is avoiding the fight with the Taliban.

The governor of California is angry with the Bush administration over global warming. Arnold Schwarzenegger suggests it has failed to lead, and hoping to force some action, Schwarzenegger promises he's going to sue the administration.

And a father and his children venture into the California woods to cut down a Christmas tree, but they get lost and are rescued from a freezing wilderness. Well, you'll now hear their dramatic survival story.

Wolf Blitzer is off today. I'm Suzanne Malveaux.

And you're in THE SITUATION ROOM.

And a short while ago, I spoke with John Edwards about the very issue of poverty that is being raised on the campaign trail.

(BEGIN VIDEOTAPE)

MALVEAUX: Senator Edwards, thank you so much for joining us in THE SITUATION ROOM. I know we had a chance to talk on the campaign trail in Iowa. I want to start off -- of course, you have made the central point in your campaign taking on the oil companies, the drug companies and anti-poverty campaign.

But listen to what your opponent Senator Clinton said.

She said just yesterday, "People talk about poverty in this campaign, well, we lifted more people out of poverty during the 1990s than any time in our history."

It certainly sounds like what she is saying is that you don't have a corner on the market on this issue.

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: Well, I'd say first of all, welcome to Senator Clinton to the discussion of poverty. I think it's a great thing. I don't think it's a bad thing. I'm glad that she's now talking about it. I have made it one of the central causes of my life. It's why I ran a poverty center at the University of North Carolina. It's why I have done all the work I've done around the country.

But I would add, I hope Senator Clinton would join me in calling -- if we really want to do something about poverty -- calling for raising the minimum wage to at least $9.5 an hour, and, second, come out with a comprehensive agenda for ending poverty in this country which I have and I would welcome her to that. It would be a great thing.

MALVEAUX: Well, let's talk a little bit about the specifics. Obviously, just two weeks away from the Iowa caucuses, you say you're going to take on these big companies. What is the first industry that you would essentially take to task? Is it oil? Is it health care?

EDWARDS: It's both. You just named them. It's the oil companies and power companies for attacking global warming and, second, doing something about insurance companies and drug companies, so we can have universal health care.

MALVEAUX: Give us specifics. What oil companies?

EDWARDS: Well, all the big oil companies, ExxonMobil. I mean, the list goes on and on. They're having record profits at the same time that gas prices at the pump are through the roof.

So, we have got corporate power, corporate profits standing in the way of the change that America needs. And America can't keep paying these gas prices, and we can't keep destroying the planet, which is what we're doing.

MALVEAUX: You say there is gouging. What is evidence that you have of that?

EDWARDS: No, what I said is, their profits are through the roof. What I would do as president of the United States is use my Justice Department to investigate big oil companies to determine whether in fact they are engaging in price-gouging.

I mean, superficially, it looks like some of that may be going on, but we need to get to the facts and the truth about it.

MALVEAUX: Tell me, you said health care as well. Which one of those -- are you going to take on insurance companies? Name a name, a health care company that you would actually take on.

EDWARDS: Oh, I don't -- listen, the health care industry, insurance companies, drug companies, they are big and there are a number of big players in both industries.

And what we're going to do is not take on a particular company. We're going to take on the entrenched power that's necessary and to fight against to bring about the change we need.

I mean, I know some people would argue, well, all you do is sit at a table and negotiate with these people, and you can take their money, and that's not a problem.

And I don't believe that. I think you have to be willing to fight them and stand up to them, not fight politicians, Suzanne, but fight these entrenched, moneyed interests that stand between America and the change it needs.

MALVEAUX: President Bush today was asked about what the next president needs to do and what kind of qualifications.

Let's take a quick listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If I were asking questions to people running for office, I would say, what are the principles that you will stand on in good times and bad times? What will be the underpinning of your decisions? What will it be?

(END VIDEO CLIP)

MALVEAUX: What's your answer to the president's question?

EDWARDS: That the reason I am running for president is so that everybody in this country gets the same chances that I have had, so it would be equality of opportunity. It would be morality, doing the right thing, what's fair and right for everybody, making sure that, when America engages the rest of the world, we do it in a strong and positive and constructive way.

I mean, those would be some of the basic principles.

MALVEAUX: Let's take a quick look at some of the poll numbers coming out of Iowa, the most recent poll numbers here. Obviously, you're in a dead heat with your opponents, Senator Clinton, as well as Barack Obama, but the Democrats say the most important issue now is Iraq, 30 percent. Then comes health care and the economy. On that issue, you come in third at 21 percent.

If you were elected, if you were president, when would you bring the troops home?

EDWARDS: I would have all combat troops out of Iraq in the first year of my presidency, and I would end combat missions there, and I would have no permanent military bases.

I mean, if we're really going to end the war, we have to end the occupation. And I would do that as president.

MALVEAUX: How many of those troops would you bring home immediately?

EDWARDS: Forty to fifty thousand immediately.

MALVEAUX: The -- Senator Joe Lieberman, independent, as well as Democrat, has -- as you know, has endorsed Republican Senator John McCain. I want you to take a quick listen to what he said about the Democrats in the party.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I actually think that, unless the Democratic candidate for president can convince the American people that he or she will protect them in time of war, that they're going to have a hard time getting elected.

(END VIDEO CLIP)

MALVEAUX: It sounds like a sweeping indictment of the Democratic Party platform on Iraq. Is this embarrassing for Lieberman to come forward and essentially support a Republican?

EDWARDS: No.

I think you also heard Joe Lieberman say no Democratic presidential candidate asked for his endorsement or support. I mean, I have enormous substantive differences with Joe. He is a good guy, but I completely disagree with him about a number of issues, including Iran and what's happening in Iraq.

I think that what a Democratic presidential candidate needs to do and what the next president of the United States needs to do is bring this war in Iraq to an end and to find a way to resolve what's happening in Iran using our economic and diplomatic leverage and our friends in Europe.

That's what we should be doing.

MALVEAUX: Senator John Edwards, thanks for joining us in THE SITUATION ROOM. I'm sure I will see you on the trail sometime next week.

EDWARDS: Thank you. Great...

(END VIDEOTAPE)

MALVEAUX: In the "Strategy Session": President Bush on what it takes to be president.

(BEGIN VIDEO CLIP)

BUSH: People develop principles all different kinds of ways. But you can't be the president unless you have a firm set of principles to guide you as you sort through all the problems the world faces.

(END VIDEO CLIP)

MALVEAUX: Well, so, who in the 2008 crop of potential candidates has the principles to lead?

And Hillary Clinton and Mike Huckabee lead in our new Iowa poll, but not on all of the key issues on voters' minds. We will go inside the numbers with Stephanie Cutter and John Feehery. They are standing by here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

MALVEAUX: Right now, Hillary Clinton is mired in what is essentially a three-way race to win Iowa. So, they're trying to break out of the pack with Barack Obama and John Edwards. Clinton is taking a new tack.

CNN's Jessica Yellin is in Des Moines, Iowa.

Jessica, this involves many issues, particularly two issues that Americans seem to really care about.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: That's right, Suzanne -- those two issues, the economy and foreign policy.

You know, Senator Clinton began this week talking about why voters should like her, but now she is on the offensive in a gentle way.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Iraq is back on the campaign trail. In a new push, Senator Clinton is using the Bush administration's mistakes there to make her case here.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: It is tempting, any time things seem quieter for a minute on the international front, to think that we don't need a president who's up to speed on foreign affairs and military matters. Well, that's the kind of logic that got us George Bush in the first place.

YELLIN: It's a new line clearly designed to draw a contrast with her chief competitor, Barack Obama. The Clinton campaign says he does not have as many years of foreign policy experience as she does. She delivered it literally backed up by a high-powered group of her husband's foreign policy and military advisers.

Senator Clinton is walking a fine line, trying to break away from the pack without getting branded as negative, a label many of her aides believe is unfairly attached to her.

In another effort to set Clinton apart from her closest competitors, the campaign is making it know Clinton has more union support than John Edwards, though he has positioned himself as the working man's candidate. Unions backing her include six million members. His include membership of just over three million.

And then there's this line.

CLINTON: I believe that the economic policies of the Clinton administration in the '90s were not only very important in helping to create more than 22 million new jobs, but we lifted more people out of poverty in the '90s than at any other time in our history. So, I have not just given speeches about this. I have worked on this for 35 years.

YELLIN: A broadside John Edwards pushed back on quickly.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: She said something about people talking about poverty, but what are we going to do about it? Let me just be clear. Ending poverty in this country is the cause of my life.

(END VIDEOTAPE)

YELLIN: And John Edwards isn't the only one pushing back against this new offensive. Barack Obama's campaign quickly responded to Senator Clinton's remarks today. They point out that Clinton's own spokesperson has said comparing any Democrat to George Bush is -- quote -- "the worst kind of political, tactical maneuvering there is" -- Suzanne.

MALVEAUX: Very interesting, Jessica, taking on those two issues, obviously, security and poverty.

Thank you so much. Good to see you.

It could be a nail-biter in Iowa two weeks from today. Why is the leadoff presidential contest getting closer and so much more contentious? Stephanie Cutter and John Feehery are standing by for our "Strategy Session."

Plus, the issues driving the Iowa race -- what are voters there most concerned about?

(COMMERCIAL BREAK)

MALVEAUX: President Bush weighs into the presidential race -- well, sort of. As we told you, the president was asked about what it takes to sit in the Oval Office. And he gave an interesting answer.

Well, here for today's "Strategy Session," Democratic strategist Stephanie Cutter and Republican strategist John Feehery.

We want to start off, first of all, by playing that bite from the president. Obviously, you know, sometimes, he wants to weigh in, but he pulls back a little bit.

Let's take a listen.

(BEGIN VIDEO CLIP)

BUSH: People develop principles all different kinds of ways. But you can't be the president unless you have a firm set of principles to guide you as you sort through all the problems the world faces.

(END VIDEO CLIP)

MALVEAUX: Stephanie, does that ring true to you? Is this a president who has been guided on principles? STEPHANIE CUTTER, DEMOCRATIC STRATEGIST: Well, what that reminded me of is actually what this president ran on. In 2004, he -- he ran on strength, and it's better to be strong and wrong than weak and right.

And that is what they used against John Kerry as painted him as a flip-flopper. And that's what he's trying to tell these presidential candidates, that just stick to what your stated beliefs are. Don't become a flip-flopper. It doesn't matter if you're wrong. Just stay -- stay the course.

MALVEAUX: Is there anyone out of the Democratic bunch that seems to have a platform that's based on one principle?

CUTTER: Well, I think that, on the Democratic side, they're all based on principle. And I'm not saying that just as a Democrat, but we don't have -- we have got a very strong field running.

Hillary Clinton, Barack Obama, John Edwards, Joe Biden, Chris Dodd, they're not succumbing -- at least they're not being attacked on the Democratic side as being flip-floppers. There are many charges on the Republican side of flip-flopping and changing positions and pandering to the base, Giuliani, Romney.

(LAUGHTER)

MALVEAUX: Now, John, one of the interesting things, though, is Huckabee, at least he seems to be coming out with -- very strongly on the issue of abortion. Does that send a signal that they're -- that he -- he bases his position on a principle, whether it's religious or whether it's a moral position?

JOHN FEEHERY, REPUBLICAN STRATEGIST: You know, it's actually interesting to watch President Bush and how he's run his presidency.

He's -- Everett Dirksen once said, I'm a man of principle -- of unbending principles. My first principle is flexibility.

With President Bush, he hasn't been that flexible, until he had to be, when he cut deals. I think you probably want that in the same kind of model with the presidents -- with Republican presidents.

Obviously, Mike Huckabee is going to be someone who is going to be very much anti-abortion. He is going to stick with that. And then that's one of his leadings strengths. Now, Romney has had a little bit of a different story on immigration, but he's been so strong on immigration in Iowa throughout this campaign and so direct on it, that it's actually -- his -- his -- he's getting that belief back there, where people believe him on immigration. And that really helps him.

That's why it's really a two-person race in Iowa.

MALVEAUX: And is there anybody who needs to sharpen their message a little bit on the Democratic side, Stephanie? Because you didn't mention any specifics. CUTTER: Well, I think that the -- this is a testament to the difference in the primary voters in both the Democrats and Republicans.

The Democratic race is boiling down to change vs. experience. The Republican race is really based on these singular issue topics that play to the base, like abortion, immigration, and other issues, fiscal discipline. On the Democratic side, people just want change. And it's people running on that change mantra.

MALVEAUX: Let's take a real quick look here at the latest poll coming out of Iowa here.

This is likely Iowa Democratic caucus-goers' choice for nominee. They put Clinton at 30 percent, Obama 28 percent, Edwards 26 percent, a virtual dead heat here.

But what's interesting about these numbers, Senator Clinton, she comes on top when it comes to health care, economy, Iraq, terrorism, and Social Security. And, yet, she's in a dead, statistic heat, here with the other two.

Why isn't she jumping out a little bit more, when you take a look at the broad picture?

CUTTER: Because I think that this election is coming down to change.

And people -- voters look at issues as a lens to judge candidates. It's a testament to your character, to your strength. And she's passed all those thresholds. But now she needs to convince voters that she can bring about change to Washington and to the country.

Barack Obama and John Edwards have a different test, that they are fit to be president, and they are the -- not just the change agent, but they could be the one sitting in the White House.

CUTTER: And, John, real quick, let's take a look at the Republican numbers here, choice for nominee, Huckabee 33, Romney 25, Giuliani 11.

And, yet, Huckabee, the only issue that he seems to stand out on is abortion. Can he run on a single issue in this campaign and actually get Iowa?

FEEHERY: You know, with Republicans -- and I think also with Democrats -- there's two things that kind of factor in the it factors, leadership and likability.

With someone like Mike Huckabee, he is so likable. He runs these fun commercials. He's got those kind of nice one-liners all the time. He ran a great commercial with Chuck Norris. And people find him likable. A lot of people don't necessarily agree with him on a lot of issues. He's getting a lot of those votes that he wouldn't have gotten otherwise. Now, the problem with the Democrats -- on the Democrats' side, their candidates aren't so likable. Obama is likable, but Hillary Clinton is not -- is not likable. And I think that is why this race in Iowa is so close for the Democrats.

MALVEAUX: She's working on that, the Hillary we all know, know and love.

OK. Thank you. Got to leave it there.

Stephanie Cutter, John Feehery, thanks again.

CUTTER: Thanks.

MALVEAUX: And Rudy Giuliani wants Florida, but is Florida behind Giuliani? We have new poll numbers that may surprise you.

Also, you will hear a dramatic survival story. It's from a family that ventured into the woods to find a Christmas tree and had to be rescued.

And new details about the sex habits of America's teens -- a new study looks at the effectiveness of sex education in schools.

(COMMERCIAL BREAK)

MALVEAUX: On our political ticker: A new poll shows Rudy Giuliani still is the leader in Florida, one of the states he is counting on winning after potential losses in earlier contests. But Mike Huckabee has shot up to just seven points behind Giuliani. A poll of likely Republican voters in a January 29 primary shows Huckabee has made big gains with white evangelical voters.

In the Democratic race, the survey shows Hillary Clinton remains the clear front-runner in Florida with a 22-point lead over Barack Obama.

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

Now we want to take you beyond the horse race and behind those poll numbers. We know the Republican presidential contest in Iowa now appears to be a two-man matchup, but why?

Well, let's go back to our chief national correspondent, John King, in Iowa.

And, John, what are voters saying about the candidates and the issues that they care about?

KING: Suzanne, this Republican race is fascinating, both here in Iowa, in New Hampshire, and across the country.

Not only as the first votes get closer are the voters looking again at who they like; they're also reassessing which issues matter most. (BEGIN VIDEOTAPE)

KING (voice-over): The new look of the Republican race was born here, in places like Martinsdale, Iowa, because restive Christian conservatives, people like Richard and Doris (ph) Nation, finally found a home.

RICHARD NATION, IOWA REPUBLICAN: He comes from a biblical perspective regarding marriage and abortion, the things that are important to us.

KING: He is Mike Huckabee, and his growing support among conservatives is changing the race in Iowa and across the country.

UNIDENTIFIED MALE: We need to stop killing our babies.

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

KING: Huckabee is an evangelical favorite and, at the moment, the beneficiary of a giant gender gap, favored by a 2-1 margin over Romney among Iowa women who intend to vote in the Republican caucuses.

Still, abortion ranks third when Iowa Republicans are asked to rank the issues.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Any income on savings should be taxed at a new rate. And the new rate should be zero.

KING: The economy ranks high among Republicans in both Iowa and New Hampshire. And, so, more and more, Governor Romney stresses his successful business experience.

ROMNEY: I know how the economy works. I know why jobs come. I know why they go away.

KING: The pocketbook issues are responsible for Romney's double- digit lead in New Hampshire, where Huckabee runs a distant fourth.

ANDREW SMITH, UNIVERSITY OF NEW HAMPSHIRE: So, trying to run as a social conservative in a state with very few social conservatives is a difficult thing to do. This is largely a pro-choice Republican state, moderate to liberal Republican state.

KING: But pollster Andrew Smith says a Romney loss in Iowa would cause a major ripple in New Hampshire.

SMITH: He will probably lose 10 to 15 points in New Hampshire right away.

KING: So, Romney is looking to close the gender gap and narrow Huckabee's lead in Iowa by highlighting other issues with proven power among women: education...

ROMNEY: Our state's now ranked number one of all 50 states in education.

KING: ... and crime.

ROMNEY: He thinks 1,033 pardon shows a heart? He thinks giving 12 murderers pardons show a heart? He thinks giving a repeat drunk driver a pardon to get him out of the jail shows heart? I -- I think it shows a softness that -- that is just not appropriate in this kind of a setting.

(END VIDEOTAPE)

KING: Huckabee, of course, responding to Governor Romney's attacks on crime today, saying, Governor Romney had no compassion when he was governor of Massachusetts and gave no pardons or commutations because he was worried about his own political career.

Suzanne, increasingly feisty between these two top men, increasingly fascinating to watch the issues that matter most to Republicans here in Iowa are different from the issues that matter most to Republicans in New Hampshire.

And, of course, Iowa votes first in two weeks, and then we will see what happens from there -- Suzanne.

MALVEAUX: It will be interesting to see how that plays out. Thank you so much, John.

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

Jack, what are you finding?

CAFFERTY: The question this hour is, does it make Barack Obama a more appealing candidate when he says he would consider Republicans like Chuck Hagel and Arnold Schwarzenegger for his Cabinet?

Nicholas writes from New York: "I think Barack Obama's desire to fill his cabinet with Republicans only points to the narrowing differences between the two major parties. I also think it is naive to think he would be able to control his agenda with members of the opposition at the highest levels inside the White House. I think it would be a big mistake."

Eric writes: "As an active-duty soldier in the Army, I am looking for America to elect someone who has broad appeal. And, while that may be asking a lot in the current environment, it says a lot about a candidate that he has not only pledged to reach across the aisle to improve cooperation to tackle America's problems, but that he is actually naming names of those he would like to work closely with in the opposing party."

Fay in Greenville, South Carolina: "He sounds like a little kid trying to get attention, spitting out names prematurely, as he himself admitted. Why? He's casting a wide net to attract a broader scope of voters. Maybe a specific name will hit. Sorry, bud. No experience for the job is still no experience. Come back in 2020."

Cameron in Illinois: "It again shows Obama's ability to be inclusive and open-minded, something we haven't seen for the last three decades that I can personally remember."

Thomas in South Carolina: "Listing these Republicans by name was pretty substantive and specific. If only he would let that type of thing spill over into his actual platform. I don't think anybody knows what Obama really stands for, other than an overgeneralized promise of change. Apparently, and unfortunately, that's good enough for some Americans."

And Carol in Phoenix writes this: "I am so sick of all these bozos, regardless of the party. It all sounds the same. The amount of money wasted on this election would be better served to pay down our national debt" -- Suzanne.

MALVEAUX: Jack, thank you so much.

You're in THE SITUATION ROOM.

Happening now: Iraq is the number-one issue in Iowa for Democrats. Can candidate Joe Biden use that to claw his way back from the back of the pack? I will ask him about that and how a terrible personal tragedy put his career in perspective.

And pepper spray and stun guns -- New Orleans police clash with protesters trying

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