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Criminal Probe of CIA Tapes; Closing the Sale in Iowa; Bhutto Death Probe Expands

Aired January 2, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. A stunning turn in the controversy over those destroyed CIA interrogation tapes. The Justice Department has now announced it's opening a formal criminal investigation.
Also this hour, crunch time in Iowa. The presidential candidates making their final appeals before the caucuses tomorrow night. The best political team on television is out in force across Iowa, covering all the last-minute pitches and potshots.

Plus, John McCain's New Hampshire comeback. Our new poll spotlights the next battleground and tight races for both Republicans and Democrats. What's driving McCain's surge?

I'm Wolf Blitzer at CNN Election Center in New York. And you're in THE SITUATION ROOM.

We'll have complete coverage of the presidential race on this critical day before the Iowa caucuses, but first the breaking news we're following out of Washington right now. The Justice Department is now officially investigating whether the destruction of CIA interrogation tapes was a crime.

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

Ed, a significant development. What does it mean for the Bush administration?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it means new heat on this White House. That CIA tapes case had been dying down at the end of last year, at least the public attention on it. This certainly raises the stakes for the White House, for the president.

Attorney General Michael Mukasey saying in a statement, "The department's National Security Division has recommended, and I have concluded, that there is a basis for initiating a criminal investigation of this matter, and I have taken steps to begin that investigation."

Now, the attorney general also revealed he has named John Durham (ph), a federal prosecutor in Connecticut, to oversee and lead this investigation. He's known as a no-nonsense prosecutor, he sent several Connecticut state officials to jail in a mob informant case.

Now, also significant, this coming on the same day of a blistering "New York Times" op-ed piece written by Tom Kean and Lee Hamilton, the former co-chairs of the 9/11 Commission, basically flat- out accusing the CIA and, by extension, the Bush administration of "stonewalling the commission."

Specifically, Kean and Hamilton wrote that there could have been no doubt at the CIA or the White House that their commission wanted to know about these videotapes of terror suspects, the interrogations of them. Kean and Hamilton concluding in their op-ed, "As a legal matter, it is not up to us to examine the CIA's failure to disclose the existence of these tapes. That is for others. What we do know is that government officials decided not to inform a lawfully constituted body created by Congress and the president to investigate one of the greatest tragedies to confront this country. We call that obstruction."

Now, the White House is not commenting on the op-ed, but White House spokesman Tony Fratto is saying about the criminal matter, "We continue to support the attorney general's investigation into this matter."

Wolf.

BLITZER: Ed Henry at the White House.

Thanks very much.

Let's get some analysis from Jeff Toobin, our senior legal analyst.

You're a former assistant U.S. attorney. You know something about these criminal investigations. How big of a deal is this?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: It's a big deal, because particularly when you assign one prosecutor to investigate one case, it takes a long time. And John Durham (ph) is a very distinguished prosecutor. Janet Reno appointed him to investigate a very controversial case in Boston involving the FBI, ties to the mob. So I don't think anyone will question his qualifications.

But the Bush administration is certainly in for the remainder of its tenure dealing with subpoenas, grand jury testimony about a very difficult subject.

BLITZER: And whenever they have to go testify, whether before a grand jury or to the FBI, and tell what they know, whether a CIA official or White House lawyer or anyone else, they fall into that dangerous area where they might not necessarily tell the whole truth, and then they could be charged with a cover-up, if you will, sort of along the lines of Scooter Libby.

TOOBIN: Well, that situation with Scooter Libby is precisely analogous, because in that case, the attorney general at the time -- I believe it was John Ashcroft -- yes, it was John Ashcroft -- had to appoint an outsider. And he said Patrick Fitzgerald, you come in and investigate.

Patrick Fitzgerald never found the crime he was originally looking for, which was improper disclosure of a CIA agent. He found that his own investigation was obstructed by Scooter Libby. And that's the case that he won against Scooter Libby.

So those are the kinds of things that could happen. I think the one thing they have going for them, the Bush administration has going for them, is it may take longer than 10 months to get this done, so they won't have to deal with the aftermath.

BLITZER: It's an open-ended investigation, and these investigations, as you say, take a long, long time with a lot of pitfalls out there.

Jeff Toobin, thanks very much.

And we're going to be speaking with Governor Tom Kean later, right here in THE SITUATION ROOM. We'll get his reaction to this dramatic development.

Other news we're following -- in Iowa right now, the first presidential contest of 2008 is just a day away, and candidates are practically around every single corner. It's their final shot at trying to sway voters in that state that will set the tone for a lot that happens next. And with two red-hot cliffhanger races, the stakes couldn't be higher in Iowa right now.

Our Mary Snow and our senior political correspondent, Candy Crowley, are out on the campaign trail right now.

Let's go to Candy first, who's covering Hillary Clinton's campaign.

What's her final pitch, Candy, right now?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Her final pitch is a lot like her opening volley, Wolf. She's going to have a two- minute straight-to-the-camera talk tonight around news times, primetime audience here in Iowa, to say, listen, I'm the one with the experience, I'm the one who can walk into the Oval Office from day one and take care of the problems.

This is sort of a farewell to Iowa, as well as that kind of final pitch. She talks about the people that she's met along the way. She said I've heard you, I know your problems, I won't forget you and I won't forget those problems, so stand up for me in the caucuses.

It's very much her campaign speech, no doubt, given at a sort of lower volume to the television audience.

BLITZER: And Barack Obama is making a major pitch to try to bring in some Independents, isn't he?

CROWLEY: He is, certainly on the campaign trail. He's been out there saying, listen, Independents, you know they think you're not going to show up. Well, are you? And the audience responds -- well, come on, you have to come out. So obviously here, if you're an Independent, you can walk into any caucus and re-register as a Republican or as a Democrat. So there are more Independent registered voters here in Iowa than there are either Republicans or Democrats.

So we are talking about a group that could really make a difference. We're also talking about a group that is prone to go toward Barack Obama. So obviously a big pitch there.

He's also putting out a two-minute spot around newstime tonight. They're being very cagey about what he says. We're just told it's going to be a very direct message to the Iowan people.

BLITZER: Candy, hold on a second, because I want to play a little excerpt of what Hillary Clinton told Iowa caucus-goers earlier today. Listen to this.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: They've been coming at me for 16 years, and much to their dismay, I'm still here. And I intend to be still here in November 2008.

So go to the caucus tomorrow. Stand up for me for one night, so that I can stand up for you. And together we'll make progress again in America.

Thank you, all, and God bless you.

(END VIDEO CLIP)

BLITZER: Her suggesting the Republicans have been going after her for a long time, she can withstand it, you can count on her if she's the Democratic nominee. That's been a standard line of hers for sometime now.

CROWLEY: It absolutely has. And it's in response, really, to Barack Obama, who has been saying, listen, we don't need someone who starts off a campaign with half the country not liking her. So this is a kind of, wait a minute, I have taken everything the Republicans have to give to me, I've triumphed over it.

So it's certainly part of the tit for tat that's been going on, albeit sort of tacit going on. They don't often mention each other's names at this point, but the fact is that that really is a response to Barack Obama saying he's the most electable candidate.

BLITZER: All right, Candy. Thanks very much.

Candy's staying out there, she's not going anywhere.

Let's bring in Mary Snow right now. She's covering the Republican side of all of this, including Mitt Romney's final push against his leading Iowa opponent, Mike Huckabee.

What is Romney doing today, Mary? MARY SNOW, CNN CORRESPONDENT: Well, Wolf, that final push, as you can see behind me, Mitt Romney addressing supporters here at Eastern Iowa Airport. He has been jetting around the state today to try to get that last-minute message out, saying the difference between who wins and loses in this very tight race is who shows up.

While Mitt Romney was such a high stake in this race, he's outspent -- spent more money, that his, than his Republican rivals. While he's making that push, he's also taking aim after his rivals, particularly Mike Huckabee.

Huckabee departed Iowa, left for California to be on "The Tonight Show With Jay Leno," kind of an unconventional strategy. Mitt Romney took a jab at him earlier today.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My focus is on the caucuses here in Iowa. I think Mike is more concerned about the caucus in Los Angeles. So my focus is I get the folks out to vote in the caucuses, and connecting my message with the people of Iowa, and I think that's the right course for my campaign. I'm not going to run his campaign, but I guess he's more focused on the caucus in L.A. than the caucus in Iowa.

(END VIDEO CLIP)

SNOW: Now, Romney, who once had a double-digit lead over Mike Huckabee, now neck and neck. And he went out of his way to also take aim at another rival, John McCain, who is challenging him in New Hampshire. He once again brought up John McCain, saying that he is an honorable man, but that he criticized him for supporting President Bush's tax cuts -- Wolf.

BLITZER: Mary Snow, thanks very much.

You're watching -- that was John McCain, but Mitt Romney is also speaking right now. I want to listen in briefly to what Romney is telling some people out in Iowa.

ROMNEY: I want kids to know that before they have babies they should get married, that marriage between a man and woman is key to our future.

Well, I'm optimistic about our future. As you go across the country and you see the heartland of this great land, and you see the values that we share, and as I meet so many friends that I've had around me this last year, I come away more optimistic about our future as a land. I also come away pretty optimistic about my future politically.

Tomorrow's going to be a big day. You guys are going to make a huge difference. You're going to turn out your friends. I'm asking for your help, for your hand, and for your vote. And get out there, make the calls, get on the phones... BLITZER: And we're going to be listening to all of the presidential candidates periodically throughout the three hours of THE SITUATION ROOM. We'll try to get a little flavor to you of what they're actually saying out there on the campaign trail.

If you, by the way, caucus in Iowa tomorrow, we would love to know what it's like. Bring your camera, send us your photos and videos from inside those rooms. We'll air some of the best I-Reports during our coverage Thursday night. Details at cnnpolitics.com.

And please be sure to join us tomorrow night right here at CNN Election Center for complete coverage of the Iowa caucuses. The best political team on television takes you inside this important contest with up-to-the-minute results and analysis. Our special coverage begins tomorrow night, 8:00 p.m. Eastern.

Let's go to Jack Cafferty. He's back. He's got "The Cafferty File."

Jack, welcome back. We missed you. Happy New Year.

JACK CAFFERTY, CNN ANCHOR: Thank you. Same to you, Wolf.

Iowa, New Hampshire go a long way pretty much unnoticed for about four years at a clip, and then every four years they get even with all of us. They are where the presidential first pitch is thrown out.

Some people argue that this is no way to pick a president of the United States, that the current system gives a few hundred thousand voters in these two early states way too much influence. One expert calls the system foolish and outdated.

The Columbus, Ohio, Dispatch newspapers suggests that Ohio would be a better starting place because it better represents the country demographically, economically and politically. Tell you what, when you fix your voting machines in Ohio, we'll talk, OK?

The McClatchy newspapers say Iowa is a foreign place to many Americans. "Why should such a tiny state get such a big say in picking the president? A state where the people are as White as the snow-covered landscape, devoid of the minorities who are changing the country's complexion. A place where people graduate from school in record numbers and live long and healthy lives."

The articles goes on to suggest that Iowa, which has the highest literacy rate in the nation, might be as good a place as any to start. It's small enough the candidates can meet the people face to face, and even though Iowa isn't representative of the rest of the country, no other single state probably is, either.

So here's the question: Are Iowa and New Hampshire the right places to start the presidential election process?

Go to cnn.com/caffertyfile, post a comment on my blog -- Wolf.

BLITZER: Jack, thanks very much. Six days from now, by the way, New Hampshire voters will have their say. We have a new poll from the leadoff primary state. We're going to tell you what issues are driving John McCain's comeback to new highs.

Plus, the candidates in their own words on some of the issues voters deeply care about, including your job security and which candidate would give you a tax break.

And Pakistan's president addressing his nation and the political crisis there after the assassination of Benazir Bhutto. He reveals that help is on the way.

We're live at CNN Election Center in New York. And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's go to Pakistan now, where President Pervez Musharraf addressed the nation in the midst of a growing crisis in the aftermath of the assassination of Benazir Bhutto.

Our senior correspondent, Matthew Chance, is in Islamabad.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Wolf, Pakistan's president has been addressing his nation on a day crucial elections to return the country to democracy were postponed. He used the opportunity to try and curb mounting tensions following the high- profile assassination last week of Pakistan's former prime minister.

(BEGIN VIDEOTAPE)

CHANCE (voice over): Supporters of Benazir Bhutto still grieving her violent death and convinced Pakistan's government, led by an unpopular president, didn't do enough to protect her. "Our leader was murdered," says this party activist. "Our nation was murdered, too." And with elections in Pakistan now postponed for nearly six weeks, the sense of crisis here is intense.

So, President Musharraf's national address was crucial. Speaking on state television, he paid tribute to the former prime minister.

PERVEZ MUSHARRAF, PAKISTANI PRESIDENT (through translator): Benazir Bhutto's mission was to promote democracy and to struggle against the terrorism. I assure you that my mission is, too, exactly the same.

CHANCE: He also promised to fully investigate the murky circumstances of Bhutto's killing, confirming British detectives from Scotland Yard would immediately travel to Pakistan to assist.

But the violence and chaos that followed last week's assassination was condemned. Musharraf said dozens have been killed and millions of dollars worth of damage was wreaked on the country. He must take action, he said. MUSHARRAF (through translator): To protect the lives and property of masses (ph), we have deployed army and rangers. And this deployment, in my view, will continue until the election and maybe beyond that.

CHANCE: Lawbreakers and miscreants, he added, would be crushed with an iron fist.

(END VIDEOTAPE)

CHANCE: Well, all of this is being watched closely by Pakistan's opposition, amid concerns the delay in the elections could be used by Musharraf to extend his power. But the main political parties, including that of the late Benazir Bhutto, indicate they will take part. Pakistan's dream of a return to democracy may yet be realized -- Wolf.

BLITZER: Matthew Chance in Islamabad.

Thank you.

There are new developments in the case of an escaped prisoner in the Washington, D.C., area. He overpowered five guards at a hospital this morning, then shot a driver while stealing a car. We're going to give you the latest. That's coming up.

And everyone is talking about the Iowa caucuses, but what exactly is a caucus and how does it work? We're going to unveil some brand- new technology we have right here in THE SITUATION ROOM to help us explain it all to you.

That and a lot more coming up.

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

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: It's nip and tuck in Iowa, and in New Hampshire as well. Up next, we have some brand-new poll numbers but from the first primary state. Bill Schneider is standing by. He says the Republican race is looking like a steel cage death match.

You're going to want to hear all about it.

Plus, move over, Bill Clinton. John McCain appears to be on track to become perhaps the next comeback kid. John King is standing by and he's watching McCain's rebound. It's dramatic in New Hampshire.

We're live at the CNN Election Center in New York. And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Happening now, a stunning benchmark for the price of oil. Light sweet crude briefly topping $100 a barrel and trading at the Commodities Exchange in New York today.

We're going to tell you about the implications for all of you, the reverberations around the world. An important story we're following.

China's massive military is going high tech, and now there's shocking new information about where they're getting the knowledge from and where the technology may eventually end up.

We're investigating this story.

And police in San Francisco are now looking into whether two brothers who survived that deadly tiger attack at the San Francisco Zoo may have actually provoked the attack. Details coming up in our next hour.

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

For the next two days, it's all about Iowa, but then look for the presidential hopefuls to hightail it to New Hampshire for the first primary of the campaign season. That occurs next Tuesday.

We have some new poll numbers right now coming in from the Granite State. We'll bring in our senior political adviser, Bill Schneider, who's seen these polls.

And they're showing some dramatic developments if you take a look only a few weeks ago to where they are right now, Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right. They're showing the possibility of a new comeback kid. Well, the comeback kid was Bill Clinton in New Hampshire in 1992, but now it could be John McCain.

(BEGIN VIDEOTAPE)

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: And New Hampshire tonight has made Bill Clinton the comeback kid.

SCHNEIDER (voice over): The comeback kid? That was Bill Clinton, New Hampshire, 1992. Could New Hampshire do it again in 2008?

JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: It depends on "win." You know, what "win" means. We all know about the comeback kid and all of that.

SCHNEIDER: John McCain and Mitt Romney are now tied in New Hampshire. New Hampshire is shaping up as a steel-caged death match between the two of them. Only one is likely to survive.

What's driving the surge? The Iraq surge, for one thing. McCain has wrapped himself tightly around the success of President Bush's military buildup.

MCCAIN: I was over there over Thanksgiving. And -- and -- and I'm telling you, we're succeeding.

SCHNEIDER: Republicans agree, and it's paying off for McCain. Most New Hampshire Republicans now see McCain as best qualified to handle Iraq.

But Republicans have a big problem with McCain on illegal immigration, where Romney has a big lead. In fact, Romney has a slight edge among registered Republicans in New Hampshire. McCain leads among independents, who are allowed to vote in the Republican primary. But, this time, unlike 2000, most New Hampshire independents are not voting in the Republican primary. McCain can't depend on them. He has to be competitive with Romney among Republicans.

And the New Hampshire Democratic race, also close -- Hillary Clinton 34, Barack Obama 30. The poll shows Obama making big headway as the candidate of change.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I put myself in positions, I made choices in my life to bring about change.

SCHNEIDER: That attracts a lot of independents, who are tilting to Obama. Independents make up 42 percent of voters in the New Hampshire Democratic primary. They're what's making Obama competitive.

(END VIDEOTAPE)

SCHNEIDER: A new national poll of Republicans by the Pew Research Center shows McCain in first place, slightly ahead of Rudy Giuliani nationally. That could be quite a comeback for a candidate who was considered finished -- or nearly finished -- when he almost ran out of money last summer.

BLITZER: It would be a dramatic -- very dramatic -- development for John McCain.

All right, Bill, thanks very much.

Let's check in on McCain's come-from-behind campaign. The Republican is in New Hampshire today.

So is our chief national correspondent, John King.

John, how are they reacting to these latest very dramatic poll numbers, the McCain camp specifically?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, those poll numbers are one sign of the possibility of a McCain comeback.

If you watch TV here in New Hampshire, attack ads from Massachusetts Governor -- former Massachusetts Governor Mitt Romney another sign that McCain is surging here in New Hampshire. And CNN is told today there are new Romney attack ads on the shelf if he thinks he needs them after the Iowa caucuses here in the state of New Hampshire.

Those are some of the signs of the McCain comeback. Go to his town halls, and the questions are also changing.

(BEGIN VIDEOTAPE)

KING (voice-over): The mood is optimistic.

(CHEERING AND APPLAUSE)

KING: The smile genuine.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: The people of New Hampshire will make a selection that will probably have a significant, if not defining, impact on who the next president of the United States is.

KING: But with talk of a comeback comes reminders of the obstacles.

UNIDENTIFIED FEMALE: And I don't believe in amnesty. And how do you feel about that?

MCCAIN: On the issue of illegal immigration, this meeting is adjourned.

(LAUGHTER)

KING: Immigration remains a McCain weakness with conservatives. He still believes millions of illegal immigrants deserve some path to legal status, but his emphasize is different now.

MCCAIN: And no one in this country will be rewarded for illegal behavior -- no one.

KING: And improved poll numbers have some McCain confronting questions of whether, at age 71, he's up for the job.

UNIDENTIFIED FEMALE: And I'm wondering if you have the health and endurance to do eight years, because it's very demanding.

MCCAIN: If I said that I was running for eight years...

(LAUGHTER)

MCCAIN: ... and I'm -- I'm not sure that would be a vote-getter.

(LAUGHTER)

KING: But McCain knows it's no joke. He says his health is excellent, but also adds, one term at a time.

MCCAIN: We don't have time to waste. We don't have eight years. We don't have eight years to fix Social Security or Medicare. We don't have eight years to secure our borders, so that we can stop the flood of illegal immigrants into this country. We don't have eight years. We have got to get going right away.

KING: On hand to help with the closing argument is Democrat- turned-independent Senator Joe Lieberman.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I truly believe, in a dangerous world, with a threat to our security, he is ready to be president of the United States the day he's sworn in.

KING: After a bacon and egg sandwich for lunch, a more humorous go-around on the health and age issue.

UNIDENTIFIED MALE: ... concern at one point...

MCCAIN: Oh, excuse me.

(LAUGHTER)

UNIDENTIFIED MALE: Better than mine right now.

(LAUGHTER)

MCCAIN: Yes. It's great. Look, just come with me on the campaign trail. Ask the folks who are following us. We out-campaign everybody.

(END VIDEOTAPE)

KING: And the return of that sense of humor and the sarcasm from McCain, Wolf, is the clearest sign that the senator himself is feeling better about his chances. That humor was gone much of the summer.

He's not even here in New Hampshire right now. He's off to Iowa for a quick final day-and-a-half push in a state where he has not campaigned that much. I asked him today if there was a potential downside in that, perhaps raising expectations too high in Iowa, or perhaps taking his eye off the ball here in New Hampshire for a day- and-a-half.

With his trademark sarcasm, he turned and said, "John, if we thought it was a risk, we wouldn't be going" -- Wolf.

BLITZER: I think it's fair to say, John -- correct me if I'm wrong -- McCain is really rooting for Huckabee in Iowa, anything to undermine his number-one rival in New Hampshire, Mitt Romney. Is that right?

KING: Absolutely right. He is hoping that Huckabee beats Romney in Iowa. He believes that will help him here in New Hampshire, because Romney will fall in the polls.

But McCain also hopes, Wolf, that he can place third. He believes that would surprise people. He believes it would drive Fred Thompson from the race, and that he would get, even though it's a modest number, get Fred Thompson's supporters here in New Hampshire and, more importantly, down in South Carolina.

BLITZER: John King, in New Hampshire, where it's very, very cold already, thanks very much.

And John and Bill Schneider, as all of you know, are both part of the Emmy Award-winning best political team on television.

And, remember, for all the latest political any time, check out CNNPolitics.com.

Iowans are getting ready to hear the candidates up close and personal again. Coming up, we will give you a taste of what it's like during these final hours before the caucuses. You are going to hear the candidates in their own words.

Plus, one day before Iowans decide, and anything could still happen. What, if anything, can the candidates say now to seal the deal? That and a lot more coming up in our "Strategy Session."

And, later, what would Republican Ron Paul do about the Iraq war on the first day he would be in the White House? I will ask him. My interview with him coming up live.

We're at the CNN Election Center in New York. And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: According to state rules, Iowa's tens of thousand of out-of-state college students are in fact eligible to caucus, if they choose to. But most students are actually not here in Iowa. They're home for the holidays.

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

Abbi, are any of these students, though, coming back to actually participate in the caucuses?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, Barack Obama, for one, has actually encouraged these out-of-state students to do so.

Young people do not caucus in droves. In 2004, it was 17 percent of caucus-goers who were under the age of 30. This time around, there are Web sites, groups trying to target those out-of-state students to encourage them to come in and caucus. The Democratic Young Voter PAC has been reaching out on Facebook online, offering gas money to these out-of-state students, so they can come back.

Then there's a nonpartisan effort, in partnership with the Iowa secretary of state, reaching out online and talking up the caucus process on college campuses in Iowa.

As for the Iowa universities, some of them have opened up halls of residence so that students who are coming back to caucus have somewhere to stay. But, in terms of people who have signed up, talking to some of those universities today, the numbers are small, very small, in Iowa State University's case, just two students.

A spokesman for Cornell College says that their campus is politically active, but the reality is, it's winter break, and that's a pretty major inconvenience -- Wolf.

BLITZER: Abbi, thank you very much -- Abbi Tatton watching all of this unfold.

Let's bring in our "Strategy Session" right now.

Out on the campaign trail, it could be make or break for a lot of these campaigners out there, a lot of these presidential candidates.

Let's bring in Terry Jeffrey. He's a Republican strategist. Jamal Simmons, he's a Democratic strategist, both of whom are watching all of this very, very closely.

Let's take a look at the Republicans first.

And, Terry, I want to start with you.

In our new CNN/WMUR New Hampshire presidential primary poll, among Republican -- likely Republican primary voters in New Hampshire, we asked them, who would do best -- the best job handling terrorism? Take a look at this. McCain comes in first, with 43 percent. Giuliani comes in second, 31 percent. Romney comes in third at 13 percent.

That's a huge, huge, significant development for John McCain.

TERRY JEFFREY, EDITOR IN CHIEF, CYBERCAST NEWS SERVICE: Yes.

McCain, no doubt, his strong suit is national security and foreign policy, where Mitt Romney doesn't have any experience. He only was a one-term governor of Massachusetts. There's no doubt that's a place where conservatives like McCain best.

BLITZER: And on this other question we asked, who would do the best job handling Iraq, Jamal, McCain also comes out the best among likely Republican primary voters in New Hampshire. Fifty-three percent think he would do the best job, Romney only 14 percent, Giuliani 12 percent.

Those are significant numbers for McCain once again, and certainly helps explain why some are already calling him the comeback kid in New Hampshire.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Yes.

I think anybody who has been watching Republican politics for a long time would have predicted John McCain wasn't dead just yet. I think he's right on the most of the issues the Republican base cares about. He's the person who is next in line. Republicans have a history of picking that person.

And, when you look at these issues that are revealed in this poll, he seems to be winning on most of these issues. And I think that is going to be a very big deal going into the New Hampshire primary. Now, the one wild card here is, you know, what happens if Romney or Huckabee has a really big day in Iowa tomorrow and they're riding a head of steam coming in New Hampshire? How does McCain compete with that? And that's something that we just have to wait and see.

BLITZER: Romney does do much better, Terry, on some of the domestic issues, for example, the economy and immigration, illegal immigration. Romney is seen as -- by 47 percent of likely Republican primary voters doing the best job on the economy. Thirty-five percent say he would do the best job on immigration. McCain and Giuliani are significantly below that.

So, those are important issues for Romney in New Hampshire.

JEFFREY: Well, I think there's a whole host of issues where conservatives and Republican voters disagree with John McCain.

They didn't like his immigration bill. A lot of them, I think, have actually forgotten that John McCain voted against the Bush tax cuts. He -- he voted in favor of federal funding for embryonic stem cell research.

I think that Mitt Romney actually is closest positioned to where Republican primary voters stand on the issues. The question with him is credibility and the fact that he's changed his views on those issues so often. John McCain has been much more consistent, even if he disagrees with Republican primary voters on some pretty important issues.

BLITZER: And look at this on the Democratic side, Jamal. We asked New Hampshire likely Democratic primary voters, who is the most likable? Just like in Iowa, Obama comes in first, 41 percent. Edwards comes in second, 24 percent. Senator Clinton, only 17 percent thought she was the most likable.

So, they -- they may not necessarily like her as much as Obama, or even John Edwards, but she still does well out there.

What do you think about the likability factor?

SIMMONS: Oh, well, the likability factor is always going to be important. And I think we have seen, with George Bush and with some of the others, that likability has a very big deal on -- is a very big deal on Election Day.

I think the thing for Hillary Clinton is that she does very well on the experience question. And I think people -- that for those people who want somebody who is going to be, as she says, ready on day one, she's a -- she's a very good and clear choice for them.

The issue, though, is, there's a lot of people who are looking to shake things up and makes some change. And when you add the Obama and the Edwards numbers up together, you see an overwhelming majority sort of looking for that.

BLITZER: He's right, Terry. On the experience question, Senator Clinton does a lot better than Obama and Edwards. She got 45 percent of the likely Democratic primary voters who thought she had the right experience to be president. Only 13 percent thought Obama did or 10 percent for John Edwards.

So, on experience, she does really well.

JEFFREY: Well, Wolf, every four years people at this time, there are people who come forward and complain that Iowa and New Hampshire go first and say they shouldn't.

I will say this about Iowa and New Hampshire. I think the voters there pay more attention to the presidential campaign earlier on. They follow these candidates closer on the issues. More of them actually turn out to events where candidates show up. And they question them.

These voters that are going to vote in Iowa tomorrow, are going to vote on Tuesday in New Hampshire, they take it very seriously. They know they're electing a president of the United States, not an entertainer. And I think they know that national security is the most important issue for a president, which is one of the reasons John McCain is starting to surge in New Hampshire and why Hillary, despite her unpopularity, has remained strong in the polls in both these states.

(CROSSTALK)

BLITZER: Very quickly...

(CROSSTALK)

BLITZER: Very quickly...

(CROSSTALK)

BLITZER: Very quickly, Jamal, you agree that -- with -- with Terry that Iowa and New Hampshire, these two relatively very small states, should have this inordinate influence in the shaping of the next presidency?

SIMMONS: Well, I think you have to broaden it out to states like Nevada and South Carolina also, especially on the Democratic side, because our electorate is much more diverse than the Republican electorate.

So, the Democrats are looking forward to that. And if there's a mixed result out of New Hampshire and out of Iowa, then everybody goes out to Nevada, and that is going to be a very big deal.

But I will say, it's not just national security. The issue here also is going to be one of trust. And do people really trust Hillary Clinton to do what it is she says she's going to do? And I think that's what McCain has. He's going to shake things up. People know he's going to shake things up, and that's one of the reasons why people still like him.

BLITZER: Jamal Simmons, Terry Jeffrey, our "Strategy Session," thanks, guys, very much.

SIMMONS: Thank you.

JEFFREY: Thank you.

BLITZER: Everyone talking about the Iowa caucuses, but what exactly is a caucus? And how does it work? We are going to unveil our brand-new technology to help us explain this quirky process. That's coming up.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here at CNN Election Center in New York, we're planning to show you the Iowa caucuses as you have never seen them before. We have new technology designed to take you inside this quirky political process and to bring you up-to-the minute results tomorrow night.

Our senior analyst, Jeff -- Jeff Toobin, is keeping us on top of all of this.

Show us this -- this magic wall, as I like to call it.

TOOBIN: Exactly.

So -- so, Wolf, what I think people need to understand is that the Iowa caucuses are not an election. They are a caucus. And a lot of the rules that apply in an election don't apply. For example, it's not a secret ballot. Everybody tomorrow, at 7:00 East -- Central time -- is going to come in and they're going to vote.

And what we have done here is, you and I, we're going to be the voters. The -- there are 100 question marks here. That's about as many people who are often at a caucus. And they are going to the corner of the room who support their candidate.

(CROSSTALK)

BLITZER: This on the Democratic side...

TOOBIN: On the Democratic side.

BLITZER: ... because the Republican rules are different.

TOOBIN: Exactly. The rules are different on the Republican side.

But, on the Democratic side, let's -- let's do it. Come on, Wolf.

(CROSSTALK)

BLITZER: So, there's 100 people here.

TOOBIN: Yes.

BLITZER: And they don't know where they're going to go. (CROSSTALK)

TOOBIN: Everybody is going to vote differently.

BLITZER: We're just randomly putting people in different places.

TOOBIN: Right. We're not going to...

BLITZER: And the buttons become -- these people, all of a sudden, they decide that they're going to be supporters of the various candidates. And...

TOOBIN: There we go.

BLITZER: And we -- we...

TOOBIN: And we have got just a few more here.

BLITZER: And we're showing the percentages at the bottom.

TOOBIN: Right. And that's the key thing here.

(CROSSTALK)

TOOBIN: We got one more.

BLITZER: Here's another one right here. Come on, guy.

TOOBIN: All right.

BLITZER: This one doesn't want to move.

TOOBIN: Here we go.

(CROSSTALK)

BLITZER: Yes. There we go.

TOOBIN: Come on. That's a reluctant voter. There we go.

OK.

Now, the key point about the Iowa caucuses on the Democratic side are the percentages, because there's a magic number. And that magic number is 15 percent. After the first round of voting, after the first time everybody votes, you have to be over 15 percent, or you're out of luck.

All those candidates with less than 15 percent can't continue to the next round. So, here in our demonstration, Hillary Clinton, Chris Dodd, and Barack Obama survive to the next round.

BLITZER: They got that 15 percent threshold.

TOOBIN: Exactly. But now...

BLITZER: And all those who voted for the other candidates, they're now up for their second choice.

TOOBIN: Exactly. And, so, now what you and I have to do is take those second-choice votes and spread them around, because they will get a chance...

(CROSSTALK)

TOOBIN: ... to vote for another candidate.

And this is one other key political issue here, which is second- choice voting.

(CROSSTALK)

BLITZER: Second round of this so-called voting.

TOOBIN: Right, because, on most elections, we don't really care who people's second choices are, but you only get one vote, one person, one vote.

But, here, you get two -- you get two chances. And, you know, here we have a situation where Dennis Kucinich has said he has sort of urged his supporters to support Barack Obama if he's not viable. And, in our demonstration, Hillary Clinton got 35 percent, Chris Dodd got 30, and Barack Obama got 35 as well.

This is what would be reported to headquarters at the end.

BLITZER: From this one caucus.

TOOBIN: From this one caucus. And the minor candidates, they get nothing. So, it is really a system that rewards people who can get to the 15 percent threshold.

BLITZER: So, it's almost as important to be the second favorite, as opposed to being the favorite.

TOOBIN: As long as you're -- you -- that's right. And you have got to be above 15 percent. Fifteen percent is the key rule.

Republican, different. They are just a straight vote.

BLITZER: And Jeff's going to be explaining all of this throughout tonight and tomorrow.

(LAUGHTER)

BLITZER: We have got a lot of technology going on.

TOOBIN: All right.

BLITZER: All right. Jeff, thanks very much.

And, remember, stay right here for complete coverage of the Iowa caucuses. Tonight, we're going to set the stage for tomorrow's big event and where the presidential race may go from here. Please join me and the best political team on television for a special, 8:00 p.m. Eastern, tonight -- right here on CNN.

The controversial documentary filmmaker Michael Moore has shown himself to be very adept when it comes to dishing out criticism, but now he's actually talking nice about one of the presidential candidates. We are going to tell you what he's saying.

Also, he's raised a ton of cash and has some of the most passionate supporters in the campaign. Can Republican presidential candidate Ron Paul translate all that into an Election Day surprise in Iowa, perhaps next week in New Hampshire? I will ask him. He's standing by to join us live -- right here in THE SITUATION ROOM.

And they survived that deadly tiger attack at the San Francisco Zoo last week, but could they actually be at least partially responsible for the tragedy? There are new developments in that case.

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

(COMMERCIAL BREAK)

BLITZER: Checking our Political Ticker right now: The man behind the film "Sicko" is taking aim at Hillary Clinton on this, the day before the Iowa caucuses.

On his Web site, Michael Moore blasts Hillary Clinton's vote to authorize the war in Iraq, writing, "Do you want a president who is so easily misled?" The documentary filmmaker did not endorse any of the candidates, but he praised several other Democrats, and had especially kind words for John Edwards' pitch against big corporations.

A new jab today's at Mike Huckabee's celebrity supporter the actor and martial arts star Chuck Norris. In a new web video called "Roundhouse Kicks," Mitt Romney's campaign pokes some fun at Huckabee and Norris. An announcer says, "Two good men, both men into fitness." Both love Chuck Norris. Norris responded by saying: "I don't roundhouse kick. I choke." Then Norris added that he hates negative campaigning.

Remember, for the latest political news at any time, check out CNNPolitics.com.

Jack Cafferty is here with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is, are Iowa and New Hampshire the right places to start the presidential election process?

Jayne writes from New Hampshire: "Be careful what you ask for. You might just get it. I live in New Hampshire. We are pestered to death by pollsters, push pollers, leaflets, brochures, campaigns, fund-raisers, and newspeople. Yes, it's fun to see the candidates up close and personal. We take the job of primary voter very seriously, but I wouldn't mind sharing the experience. By the way, be sure to invest in caller I.D."

Thomas in South Carolina writes: "I think the current primary system is completely broken. We should have all states vote the same day. That way, the outcome would be much less manufactured, wouldn't be influenced by just a couple of states. These days, with so much national media and the Internet, the candidates don't need to physically campaign everywhere anyway. Ron Paul didn't have to shake my hand to get my vote."

Matt in Wisconsin writes: "I don't know if they're the two best states to hold the primaries in, but I'm sure as hell glad they aren't being held in Wisconsin."

Bob in San Jose writes: "Iowa is ideal, small enough that candidates have to face you eye to eye. Iowans are genuine souls who care deeply about values and common sense. As a black man, I was proud to live there once, and I can't wait to know what Iowans think tomorrow."

G. writes: "Six percent of registered voters participate in the Iowa caucuses. Those few people in a little white farming state, hardly representative of the U.S. as a whole, they should not be able to make such an impact on the election process. We should dispense with tradition, especially that of caucusing. Iowa should have to get in line and have a primary, the way most other states do it."

And Hugh writes in Vero Beach, Florida: "No. I think they ought to start in Hawaii and Alaska. Put the candidates out on the road early, really test their endurance, I say. Plus, then they would be in time zones where we wouldn't have to listen to them 24/7" -- Wolf.

BLITZER: Jack, thank you.

And happening now: $100 a barrel. The price of oil.

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