Return to Transcripts main page


Interview With Presidential Candidates

Aired January 13, 2008 - 11:00   ET


WOLF BLITZER, HOST: This is "Late Edition," the last word in Sunday talk.
The race heats up.


THOMPSON: Nobody's edged anybody out of anything.



ROMNEY: This is the battle for the support of 50 states.



HUCKABEE: We'll continue the momentum that we've seen in this campaign.


BLITZER: John McCain's New Hampshire primary win bounces him to the top of the polls. Can his rivals for the GOP nomination rebound? We'll talk with Republican presidential candidates Mitt Romney, Mike Huckabee and Fred Thompson.

Southern stakes.


EDWARDS: We're very much in this for the long haul.


BLITZER: Democratic presidential candidate John Edwards on his battle plan to win South Carolina. And we'll hear from top Obama campaign adviser Tom Daschle and Clinton campaign national chairwoman, Congressman Sheila Jackson Lee. (BEGIN VIDEO CLIP)

MCCAIN: Tonight, we sure showed them what a comeback looks like.



CLINTON: I listened to you, and in the process, I found my own voice.


BLITZER: After stunning results in New Hampshire, insight and analysis on an unprecedented presidential race with three of the best political team on television.

Plus, a progress report on the war in Iraq from Iraqi Defense Minister Abdul Qadir. The first hour of "Late Edition" begins right now.

It's 11 a.m. here in Washington, 8 a.m. in Los Angeles, 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."

Over the next two hours, we'll bring you my interviews with four presidential candidates as the race for the White House heats up across this nation. The next contest is Tuesday in Michigan. It's the Republican presidential primary. That's where Mitt Romney is hoping for a win after second-place finishes in Iowa and New Hampshire.

He won a little-noticed Wyoming caucus. I spoke with him just a little while ago from the campaign trail in Michigan.


BLITZER: Governor Romney, thanks very much for joining us. Welcome back to "Late Edition."

ROMNEY: Thanks, Wolf. Good to be with you.

BLITZER: Let's talk about of fears of a recession in the United States. There is now the president might want to put forward some sort of economic stimulus package to try to create some jobs and avoid a recession.

If you were president right now, Governor, what would be your immediate first step that you would take?

ROMNEY: Well, immediately I'd go to try and get a reduction on taxes on middle income Americans. Specifically I proposed having people who earn under $200,000 a year be allowed to save their money tax-free.

It means no tax on interest, dividends or capital gains. It keeps more money in their pockets. It also means that we have more capital going into the marketplace available for business startups as well as for homes.

I'd also go aggressively after the housing market to make sure that servicing organizations combine in some cases, perhaps forming cooperatives to work together with homeowners to keep homes that are absolutely not necessary to going into foreclosure, to keep them with homeowners in them so that we don't dump housing product in the housing market and cause a further reduction in housing prices.

BLITZER: So for families earning under $200,000 a year, you'd recommend an immediate -- some sort of immediate tax cut, is that right?

ROMNEY: That's exactly right. This is middle-income Americans. These are where 95 percent of Americans live, and get their tax rates down, allow them to save for the future, allow them to make investments in their homes be able to save for college. The best thing we can do is keep money in the homes of the American people.

BLITZER: Some economists have suggested a reduction in corporate taxes to try to stimulate the economy, create jobs, encourage foreign companies to come invest in the United States, create jobs here. Is that a good idea?

ROMNEY: It is a good idea. It's something I've been proposing for many months. We have a roughly 35 percent corporate income tax rate. It's almost tied with Japan, which is the highest in the world.

Nations like Ireland have learned the game. They've put the rate down at half of ours or less and have attracted a lot of jobs. The challenge with a corporate tax cut is that it takes a while to have an impact.

It has a significant positive impact over time. It's probably not likely to have an immediate boost because it takes a while for companies to make investment decisions. But it is a good idea.

But I think on this recessionary front, we need something that's immediate that moves quite quickly, the needle, to increase the savings and investments by the American people.

BLITZER: John McCain, one of your Republican rivals, seems to suggest repeatedly you're painting an overly rosy picture, especially for the people of Michigan. Michigan has suffered tremendously in recent years.

I'm going to play a little clip of what he said the other day.


MCCAIN: I would be ashamed to tell the people of Michigan or South Carolina that all of these jobs are coming back.

I won the New Hampshire primary because I told people the truth, what they wanted to hear, what they didn't want to hear. These people know that a lot of these jobs aren't coming back.


BLITZER: Did you see those, like some other observers did, as a swipe at you? ROMNEY: Perhaps. But the reality is this: I'm not going to give up on any jobs. And I recognize that of course industries change. I've been in the business world 25 years. Senator McCain has never been in the business world.

But what I know is that there are many, many industries, such as the automotive industry, that politicians in Washington simply write off. And they say, well, there's nothing that can be done about Michigan. It's going through a one-state recession.

That has been going on for 10 years. And it's frankly inexcusable for Washington politicians to stand back and say, well, Michigan's in trouble, tough for the auto industry, and not do anything about it.

And there is action that can make it easier for the auto industry and allow the domestic auto industry to preserve the jobs they have and actually lead in some new areas that can provide new products and new opportunities for citizens here.

So I'm not going to be pessimistic about the future. I'm not willing to write off the hundreds of thousands of jobs that are still in the automobile industry and say they're all going away. I'm going to fight for them and do what I did in the private sector: Take action.

Look at Washington. What have they done to help the domestic auto industry? They gave it CAFE standards, which hurt. John McCain and Senator Lieberman are talking about a new form of tax on energy in this country, which would make it even harder on the domestic companies.

Look, you can't keep on throwing anvils at Michigan and the auto industry and then say, how come they're not swimming well?

BLITZER: Well, their point, I believe, is that you have got to do something about global warming, and maybe that would help in dealing with that problem. I think that's what they are recommending. Isn't that your understanding?

ROMNEY: Oh, sure. And there's nothing wrong with dealing with global warming. And it's a high priority for me. But there is a big difference between talking about global warming, which requires global solutions, and the idea of America warming.

No one talks about America warming. If we're going to have solutions that deal, for instance, with a cap in trade program or a BTU tax or anything of that nature, it has to be global in its sweep.

But Senator McCain and Senator Lieberman's proposition is that we do this as America only. A unilateral effort would only cause higher costs here in this country and give the advantage to Japan, to Korea, to China, nations that already have a substantial cost advantage, and drive jobs further away from Detroit, Michigan, and America.

BLITZER: Mike Huckabee, another one of your rivals, is taking a swipe at you indirectly, although pretty pointedly in this ad. I'll play it for you.


HUCKABEE: I cut taxes, built highways, reformed health care and education, and achieved record job growth. I'm Mike Huckabee, and I approve this message, because I believe most Americans want their next president to remind them of the guy they work with, not the guy who laid them off.


BLITZER: All right. That last line, about "the guy who laid them off," a lot of his supporters are saying that would be you. I wonder if you want to respond.

ROMNEY: Well, you know, as it's been said for a long time, you don't help the wage-earner by attacking the wage-payer. And this kind of divisive, populist approach is like he's channeling John Edwards. It is not working for John Edwards. It's not going to work for Mike Huckabee.

The Republican Party is one where people recognize opportunity, and they welcome individuals who have gone out and taken risks and tried to create jobs. Small companies in this country create the vast majority of jobs in America.

I began a very small business that's grown. My business has not laid people off. It's grown and grown and grown. And I'd mention something else about his ad. He said he's cut taxes. How disingenuous can that be?

Time and again, the last two debates, he was asked, OK, you cut taxes, but didn't you raise taxes more than you cut them? And after many, many attempts, he finally admitted that in fact he had raised taxes $500 million more than he had cut them.

So, you know, sometimes these political ads have to be taken with a very large chunk of salt. And that is just one more example of one.

BLITZER: In one of the recent debates you had, you refused to say whether waterboarding was torture. And in the new issue of The New Yorker magazine, the director of national intelligence, Mike McConnell, he said this flatly, and I'm going to put it up on the screen. I was pretty surprised to read it.

"Whether it is torture by anybody else's definition, for me it would be torture." So here is the director of national intelligence flatly saying he believes waterboarding is torture, and that's why the U.S. doesn't use it anymore, that technique. I wonder if that kind of statement from him would influence you to conclude that waterboarding is torture, because you and McCain seemed to get it on a little bit. McCain came down very, very firmly, saying waterboarding is torture.

ROMNEY: You know, I just don't think it's productive for presidents of the United States to lay out a list of what is specifically referred to as torture.

One of the reasons is that that term is used in the Geneva accord. And once you lay that list out, you are forever prohibiting the United States from ever employing that technique, even in a circumstance where there is the ticking time bomb scenario, where a city might be subject to a potential nuclear attack.

And so we have found it wise, in the past, not to describe precisely the techniques of interrogation that are used here in this country; also, so that people who are captured don't know what might be used against them. They have the uncertainty of not having that list before them, being trained by their Al Qaida operatives as to what to expect.

So there is no particular reason to lay this out, other than to say that we as a nation oppose torture and that, in very extreme circumstances such as the ticking time bomb circumstance, it is my view that the president of the United States should make that call.

We should not turn to the CIA interrogator and say, he'll do the right thing even if it violates the law. That, I believe, is Senator McCain's position. I think it puts a responsibility on the CIA operative that's simply unfair.

The president should have the responsibility and the authority to make that final determination.

BLITZER: Michigan is a critical state that's coming up on Tuesday. You were born there. Your father was the governor -- George Romney was the governor of Michigan.

We did some checking. The first nine days of January, according to our analysis, the Romney campaign spent more than $2 million in advertisements on television, radio in Michigan. McCain spent $359,000; Huckabee, $39,000; everybody else, zero, among the Republican candidates.

How critical is Michigan?

Because some suggest, Governor, this state would be do or die for you.

ROMNEY: Not do or die. We are going all the way through February. But I can tell you, it is very important to me for the personal reasons you describe. I'd like to see Michigan in the win column. I've got to silvers and one gold.

Someone said to me the other day, "Hey, Mitt, the road to the nomination is paved with silver," but I'd would like to have more gold as well.

And I must admit, it's also personal because I believe that I am the one presidential candidate who is devoted to making sure that Michigan comes back.

I will not rest, as president, until Michigan's economy has turned the corner and is growing again. And that's not just for personal reasons. It's also because I believe that Michigan's economy is in some respects a bellwether for what is going to happen with the national economy.

If we can't compete with China here, and with Korea and Japan here, how are we going to compete in jumbo jets and MRI machines and drug patents?

We have to be successful in the key manufacturing sector.

And so I'll compete here with some pretty novel ideas of supporting the manufacturing and automotive sector. And I'm not going to sit back and just watch. I'm going to take action. I can't guarantee the action will work, but I'm going to take action.

And I'm not going to do what most of the people of Washington do, which is to sit back and say, well, those jobs are lost forever; I'm aware of the problem; and do nothing. I will act.

BLITZER: Governor Romney, thanks very much for joining us.

ROMNEY: Thank you, Wolf. Good to be with you.

BLITZER: Good luck on the campaign trail.

ROMNEY: Thanks so much.


And still to come, my interviews with the Republican presidential candidates Fred Thompson and Mike Huckabee and Democrat John Edwards. All that coming up.

But up next, after a surprise New Hampshire defeat, is the Democratic candidate Barack Obama poised to bounce back?

We'll talk about it with a top Obama campaign adviser, Senator Tom Daschle. He's walking in right now.

You're watching "Late Edition," the last word in Sunday talk.

(COMMERCIAL BREAK) BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington. Coming up in our next hour, my interviews with two presidential candidates, Democrat John Edwards and Republican Mike Huckabee. Later this hour, we'll speak with Fred Thompson.

But right now, after a surprise loss to Senator Hillary Clinton in New Hampshire, Democrat Barack Obama received a major boost with some key endorsements.

Joining us now is a top adviser to the Obama campaign, the former Senate majority leader, Tom Daschle.

Senator, welcome back to "Late Edition."

DASCHLE: Thanks, Wolf. Good to be back.

BLITZER: Let's talk about Hillary Clinton. She says the Obama campaign, the campaign you're supporting, is distorting what she and her husband, the former president, have been saying.

She went on "Meet the Press," just a while ago and said, among other things, this.


SEN. HILLARY RODHAM CLINTON, D-N.Y.: In my campaign, any time anybody has said anything that I thought was out of bounds, they're gone, you know. I have gotten rid of them. I have said, that is not appropriate in this campaign.

You know, when Senator Obama's chief strategist accuses me of playing a role in Benazir Bhutto's assassination, there's silence.


BLITZER: She was referring to David Axelrod, who made comments that the Clinton campaign interpreted along those lines. What do you say?

DASCHLE: Well, this is not something that Barack Obama is going to participate in, Wolf. We've seen too much divisiveness, so much of this back-biting.

This is what the American people are tired of. They don't want to see this kind of thing. They want to move on. They want to have our candidates talk about the major issues, not the back-biting kind of thing that you've just seen again today.

BLITZER: Well, this morning...

DASCHLE: So I think that's really what Barack wants to do. He wants to talk about the issues the American people care bout, not who said what in the last round of give-and-take by the candidates.

BLITZER: This morning, in a conference call with reporters, though, he was pretty critical of Senator Clinton, especially her latest comments on "Meet the Press" today.

What we saw this morning -- I'm paraphrasing -- is why the American people are tired of Washington politicians and the games they play.

He was referring to some comments she made about Martin Luther King and his role in the civil rights movement, as opposed to LBJ. You're familiar with all of that.

So it looks like they're getting, a little, back and forth between the two of them.

DASCHLE: But see, that's exactly what Barack has been trying to say from the very beginning, Barack -- Wolf -- that it's really time for us to start putting the focus on issues that the American people care most about.

They care about the economy. They want to see what the candidates are saying about the economy. They care deeply about health care. They want to see what we're going to do about health care and climate change, and all the issues that really affect them directly.

They don't really care about who said what in the last round. And that's what Barack said this morning.

BLITZER: You sound like one of those moderate Democrats and Republicans who met in Oklahoma recently, who want to see the Left and the Right basically move closer together.

DASCHLE: Exactly.

BLITZER: That's where you are, personally, I take it?

DASCHLE: Well, it's not only where I am personally. But I think it's where the American people are. It's where Barack is. It's why Barack is drawing so much support from independent and Republicans across the country. It's why Republicans say, for the first time, you know, I think I can work for that guy -- or work with that guy, because they don't feel as if he's representing the old Washington politics of the past.

This is the politics of the future, and he reflects it.

BLITZER: And she says he hasn't been really honest, if you will, or above board, with the American people, when it comes to his position on Iraq, which is an important issue, the war in Iraq in this campaign.

BLITZER: I'll play another clip of what she said today.


CLINTON: If he was again the war in 2002, he should have strongly spoke out in 2004. He should have followed what he said in his speech, which was that he would not vote for funding in '05, '06 and '07. That is inconsistent with what he is now running his campaign on. The story of his campaign is premised on that speech.


BLITZER: All right.

DASCHLE: To borrow a phrase, there they go again. I mean, that is exactly the kind of thing that the American people are so tired of. If there's anything Barack has been clear, straightforward and very, very courageous on, it's Iraq, going all the way back to the very beginning.

I wish I had the record on rhetoric and on position that Barack Obama has today. This is the kind of thing...

BLITZER: You voted in favor of that resolution.

DASCHLE: I voted in favor of it. I regret it today. I wish I could have that vote back. But I'm telling you, no one has been more clear, more forceful, more straightforward on the issue of Iraq, but this is the kind of thing you expect. And this is the old Washington politics that, as I said, the American people are very tired of.

BLITZER: But she says and the former president Bill Clinton, who I know you admire a great deal, he said it earlier in New Hampshire as well, that he hasn't been consistent. He did have a position before the war against the war, but once he became a United States senator from Illinois, that position seemed to change. Listen to the former president.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: You said in 2004 you didn't know how you would have voted on the resolution. You said in 2004 there was no difference between you and George Bush on the war. And you took that speech you're now running on off your Web site in 2004. And there's no difference in your voting record and Hillary's ever since. Give me a break. This whole thing is the biggest fairytale I've ever seen.


BLITZER: All right. You know, he went on radio shows later to elaborate, to explain. But that's basically -- he's not deviating from that position that Barack Obama has not been consistent on the war in Iraq.

DASCHLE: Well, I think President Clinton would like to take a lot of those words back.


DASCHLE: Well, because I think he regrets them now, that's why. Because it's not in keeping with what people expect of President Clinton, frankly. This is below him. This is beneath him.

BLITZER: But tell us why. If he's trying to differentiate and keep him honest on his position on Iraq, what's wrong with that?

DASCHLE: There's nothing wrong with keeping politicians honest, Wolf, but it's another thing to distort the rhetoric. Those quotes were taken totally out of context. If you look at the entire context from what Barack said, again there is no question he has been as clear as anybody in this race with regard to his position on Iraq all the way back to the very beginning.

So, you can take things out of context, you can take clips, but it isn't going to change the position. The position is, he had the good judgment, he had the ability to forcefully articulate that position all the way through this, and it's one of the reasons I'm supporting it. BLITZER: Karl Rove, the Clinton White House -- excuse me, the Bush White House adviser, former, had a column in The Wall Street Journal in which he seemed to lean a bit personally in favor of Clinton as opposed to Obama.

He wrote this about your candidate: "Mr. Obama has failed to rise to leadership on a single major issue in the Senate. In the Illinois legislature, he had a habit of ducking major issues, voting 'present' on bills important to many Democratic interest groups, like abortion-rights and gun-control advocates. He is often lazy, given to misstatements and exaggerations and when he doesn't know the answer, too ready to try to bluff his way through."

That's Karl Rove writing about Barack Obama.

DASCHLE: I would take Karl Rove's criticism as a badge of honor. you're not a good Democrat unless you've been criticized by Karl Rove at least once.

BLITZER: So, you say thanks, Karl Rove?

DASCHLE: Absolutely. Thank you, Karl. Do it again.

BLITZER: Tom Daschle is a key adviser to Barack Obama. Senator, thanks for coming in.

DASCHLE: My pleasure, Wolf.

BLITZER: Up next, a thrilling win for the Hillary Clinton campaign in New Hampshire, but did her and her husband's comments have some potentially negative cost on African-American voters? We're going to talk about that and a lot more with Senator Clinton's campaign national co-chairwoman, Rep. Sheila Jackson Lee. She's standing by live. We'll be right back.


BLITZER: Senator Hillary Clinton rebounded in a major way in the New Hampshire Democratic primary on Tuesday, but it's becoming clear she's still facing a very tough challenge from Senator Barack Obama as the Democratic campaign goes national. Joining us now from Houston is Clinton campaign national co-chairwoman, Rep. Sheila Jackson Lee of Texas.

Congresswoman, welcome back to "Late Edition." Thanks very much for joining us.

LEE: Thank you, Wolf. Good morning to you and good morning to all of your viewers.

BLITZER: Do you believe that there was an element of racism, if you will, in some of the recent comments that we heard from President Clinton and from Senator Clinton, as some of their critics are suggesting.

LEE: Wolf, this week, all of America will commemorate one of the greatest voices and greatest movement-makers, if you will, in Dr. Martin Luther King. Senator Clinton first heard him at the age of 14 and has acknowledged he is one of the persons she admires the most.

He changed my life. He changed so many lives in America. And it is unfathomable to believe that Senator Clinton and President Clinton do not have the greatest administration for Dr. King, but also for the ideas that he espoused and for the understanding that all people are created equal.

Certainly there is absolutely no racism in this campaign. It is a campaign that welcome everyone, and we're reaching out to every single voter.

BLITZER: Donna Brazile was the campaign manager for Al Gore's campaign back in 2000. You know her. She's a CNN political analyst, a Democratic strategist. She was on my show earlier this week, and she said this. Listen to this.


DONNA BRAZILE, DEMOCRATIC STRATEGIST: For him to go after Obama using "fairytale," calling him a kid, as he did last week, is an insult. And I'll tell you, as an African-American, I find his words and his tone to be very depressing.


BLITZER: All right. Those are strong words from Donna Brazile, a woman you know.

LEE: We respect everyone's opinion, but we also realize that many times the words can be interpreted or skewed, and frankly, the words of President Clinton were in fact skewed. He clearly was not talking about the person or the campaign. It was the issue of the Iraq war and whether or not a candidate was consistent.

Let me say this, that it's interesting when we campaign and we happen to be a woman, happen to be Hispanic, a populist or an African American, you have to be able to welcome legitimate criticism of your record. You cannot transcend race and then use race as an issue.

And so I hope that the campaigns will get back to what Senator Clinton wants to do, is talk about the needs of the American people. That's why she's offered her new economic plan.

We're not interested in characterizing anyone in any tone whatsoever. We want to tell the truth in this campaign. We are telling the truth in this campaign. That's why we're talking about people who are suffering in losing their homes with a new initiative on the subprime mortgage, giving them a moratorium. Providing money to states to help people save their homes.

We're back on the issues that people are interested in. We want for America a better quality of life. That's what Dr. Martin Luther King represented. And as his family celebrates with us, we want to be mindful, if you will, of his family, that they do exist. LEE: And we want to be cautious of how we utilize his name and how we honor him.

BLITZER: You know, the highest ranking African-American in the Congress, Congressman James Clyburn, the majority whip -- he also was deeply concerned about some of these comments.

And he issued a formal statement. He's neutral in the race. He hasn't endorsed anyone. But he said this.

"It is one thing to run a campaign and be respectful of everyone's motives and actions, and it is something else to denigrate those. That bothered me a great deal. To call that dream a fairy tale, which Bill Clinton seemed to be doing, could very well be insulting to some of us."

You know James Clyburn well, as well. What do you make of that?

LEE: Well, first of all, all of us have the greatest amount of respect for Majority Whip James Clyburn. I worked with him as a senior whip. He is enormously thoughtful.

I think we have to put his comments in context. He was called by a newspaper reporter, of course, and given the interpretation of what was said.

And he is a thoughtful person, and I appreciate his thoughtfulness. Both the president, former President Clinton and Senator Clinton have reached out. I know Senator Clinton has spoken to Mr. Clyburn.

We welcome insightful and important thought, and raising the questions about the issues. And therefore, we welcome the discussion. But we also realize that our hearts are where the American people's hearts are: great admiration for Dr. King. He changed my life. He's changed the life of Senator Clinton and so many other Americans.

And so we are clearly supporting the idea of what he represents, but we want to also be involved in actions, working to solve the problems of Americans.

BLITZER: All right.

LEE: Senator Clinton is a person of ideas. We're going to continue to advocate for that. We're going into South Carolina. We're not leaving any vote unturned. We're not going to go and not answer any questions of any voter of where our heart is and where our mind is. We are prepared to fight for every single vote.

BLITZER: And so, just to have the bottom line, Congresswoman, you believe that Hillary Clinton would be a much better president than Barack Obama?

LEE: I find the opportunity for Americans to vote in the Democratic primary exciting. We have a bounty of riches, an African- American, a populist; we had a Hispanic; and we have a woman. I want their votes to be based upon ideas and the individual who can get the job done, who can not only provide the inspiration of their particular station in life, but also get results.

People are hurting. People are losing their homes. They want their young men and women back home from Iraq. Who has the best plan to be able to extricate us out of Iraq and to heal America?

And who has the best plan to allow America, as Dr. Martin Luther King said, to reach the promised land, in the international forum?

I do believe it's Senator Hillary Rodham Clinton who can be the next president of the United States of America.

BLITZER: Congresswoman Sheila Jackson-Lee of Texas, thanks very much for coming in.

LEE: Thank you so very much for having me.

BLITZER: And just ahead, Republican presidential candidate Fred Thompson. He's taking off the gloves when it comes to his rivals. He's walking in right now. We'll be speaking, live, to him, when we come back.


BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington.

He had poor showings in both Iowa and New Hampshire and is lagging in the Michigan polls, but Republican presidential candidate Fred Thompson came out swinging in a South Carolina debate with his rivals this past week, and is hoping for a major breakthrough in that state's Republican primary, which is next Saturday.

Senator Thompson is here. He's joining us now, live. Thanks very much for coming in.

THOMPSON: Minor exception.

BLITZER: What's that?

THOMPSON: I came in third in Iowa.

BLITZER: I know.

THOMPSON: All the experts... BLITZER: All right, all right. You're right.

THOMPSON: ... predicted McCain would win...

BLITZER: You did come in third.

THOMPSON: ... that he would be third.

BLITZER: You came in third in Iowa. THOMPSON: I beat him overwhelmingly.

BLITZER: OK, that's not a minor...

THOMPSON: ... about 300 votes.


BLITZER: It was very close. It was a tough battle for third.

All right. Let's talk about the economy right now. Assume you're the president, facing a recession, a lot of jobs being lost right now, especially in states like South Carolina and in Michigan.

What do you do, if you're president right now?

THOMPSON: Well, we'd all be better off if people didn't think that these tax cuts were going to expire at the end of 2010. I think that that's an underlying thing, but it's a little longer...

BLITZER: That's a long-term...

THOMPSON: ... a little longer-term.

BLITZER: Right now, in 2008, a lot of people are worried.

THOMPSON: Well, it's not something that politicians can snap their fingers and do, but we need to recognize that the Fed plays a very important role in this. And the Fed's been gradually reducing rates. Some people think not quite fast enough, but my strong hunch is that they're going to continue to reduce interest rates. And I think that that will help.

BLITZER: Is that enough?

THOMPSON: I think -- well, it depends. The numbers are still coming in, you know. And there's no question, now, that the subprime market problem has reached over into the housing problem in general.

Credit's drying up, and consumer credit in general. You're seeing it with regard to automobile sales. You're seeing it with regard to credit card interest rates and things of that nature. So it does look like that there's a problem that needs addressing. A stimulus package...

(CROSSTALK) BLITZER: Let press you on a stimulus package. President Bush is reportedly thinking about some plan that would cut taxes for the middle class, that would increase spending, if you will, for some programs to help the middle class, and maybe cut taxes for corporations, for big business, to try to stimulate the economy and create some jobs.

THOMPSON: We've been through this stimulus dance before. And if we can come together on something that's reasonable, I think it might be a necessary thing, but...

BLITZER: From your perspective, what's reasonable?

THOMPSON: But it is usually fraught with pork and different interest groups, additions, and things of that nature.

BLITZER: The additional spending, you mean?

THOMPSON: Yes, the additional spending part. You've got to do something that's immediate, which probably has to do with tax rebates. You can discuss as to who to give that to. You want to help the lower-income first, I think, on something like this, but lower-income does not have a higher rate of participation.

BLITZER: When you mean lower income, people -- a lot of...


THOMPSON: The lower bracket, 10 percent and below. I've seen a proposal that makes a certain amount of sense, that, for a year, you could have a moratorium on that 10 percent bracket; take it to zero, increase the child credit. And that would get money into the hands of lower-income folks.

The problem is that many lower-income folks don't pay any income tax to start with. But you've got to look at that. At some level, I think, a stimulus package and targeted rebates would be beneficial.

I also think, for businesses, things like adjusting depreciation schedules and allowing the write-off for certain capital items instead of having to capitalize, over a period of time -- those are all things that I think would be legitimate to look at.

Mike Huckabee, who won the Iowa caucuses, doing well in the polls in South Carolina, right now, which is an important state for you -- I spoke with him earlier today, and he really blasted you.

And I'm going to play a little clip. Listen to this.


HUCKABEE: Fred Thompson talks about putting America first, and yet he's the one who is a registered foreign agent, lobbied for foreign countries, was in a law firm that did lobbying work for Libya.

HUCKABEE: I certainly wouldn't put my name on something like that.


BLITZER: I said strong words. Those are pretty strong words. Are they factually accurate?

THOMPSON: I was in a law firm that did some lobbying work for Libya. Yes, that's correct.

BLITZER: Did you personally get involved in that portfolio? THOMPSON: No. One of the lawyers talked to me about -- I never talked to any of the clients or anything like that. And I was of counsel. I wasn't even a partner in the firm.

But I've addressed more in the last 15 seconds than the governor addressed the other night when I hit him with about five things he had done. And his response was to return fire with some potty humor. That's the best he could come up with for the last three days.

Now after three days, he's been giving his talking points. And now he's beginning to slam me a little bit. Let's talk about policies that have to do with our country. I talked about his blaming America first, about our arrogant foreign policy.

I talked about him wanting to close down Guantanamo and bring those prisoners to American soil and give them habeas corpus rights. I talked about giving public monies in Arkansas to illegal immigrants. I talked about the fact that he received the NEA endorsement because he opposed vouchers.

BLITZER: National Education Association.

THOMPSON: Exactly. And, you know, to this day that has not been addressed. These are substantive issues. These are not personal attacks. If the governor wants to get into personal attacks and things that happened some years ago and things that they've done and allegations, there's enough on the record in Arkansas that will keep us busy for the rest of this campaign.

BLITZER: But on this...

THOMPSON: I don't want to go there, but I would like to address some of these things like Guantanamo and like our arrogant foreign policy.

BLITZER: But the specific charge, he says you were a registered foreign agent. Is that true?


BLITZER: You never registered with the Justice Department on behalf of foreign...

THOMPSON: No, no, no. It is one of those things that takes about ten minutes to explain. Someone came in to me in that big law firm and asked me a matter about a foreign client that they had, and I made about five minutes' worth of contribution to that client's problem.

And anybody that ever does anything like that has to register and tell what they did. And I did, total public disclosure. Again, I never met with the client or anything. It wasn't my client. I was acceding to something somebody asked me to do in that law firm. That's pretty thin gruel compared to the future United States of America...

BLITZER: What was the country? Where was the claim? THOMPSON: It was Haiti at that time. It was totally consistent with the policies of this country, where a dictatorship had taken over that country and we were opposing that.

BLITZER: He says also when you were a United States senator, your record was limited. And I'll play what he said Friday morning on CNN's "American Morning." This is Huckabee.


HUCKABEE: After eight years in the Senate, I guess he has nothing to show for it other than he attended some meetings and cast some votes, made a few trips and became a Washington lobbyist. Because he's not told us one thing he did in eight years as a senator. He has attacked me. And the point is, if he'd look at my record, he'd know that he's really needing some folks to come off the writers' strike and give him some better lines.


THOMPSON: He left as governor having raised taxes $500 million more than he cut. The Cato Institute gave him a D and an F, this conservative institutes that judges governors in terms of their tax policies. He has come out with these "Blame America first" comments, his so-called populism, you know.

His campaign manager has said that the Reagan revolution is dead. That's what started this thing the other night. The question was asked. I didn't even bring it up. Brit Hume asked the question, you know: "Ed Rollins says that the Reagan coalition is dead. What do you think about it?" And of course, he talked around the subject and smiled and giggled and told a couple of jokes. When I came back, I said, you know, this is about the heart and mind of the Republican Party, because I don't believe it is.

But if you look at the governor's record in terms of immigration policies, he objected when the state legislature in Arkansas tried to make it so that a person had to prove they were an American citizen before they could vote. And he objected to that.

BLITZER: There's clearly some contrasts between you and Huckabee. What about you and McCain? What's the biggest difference between you and McCain?

THOMPSON: The contrast with Huckabee and me is that I'm talking about issues concerning this country. And somebody has dredged up -- he's raised enough money now to get some hit pieces and dredge up personal stuff and personal accusations against me. And now you're seeing the real Mike Huckabee come out.

So, I think we've done a favor to the American people. Because these are serious times, and they require somebody that knows what they're doing and doesn't walk into a situation with foreign representatives and heads of foreign nations with training wheels on.

BLITZER: And very quickly, McCain, is there a real difference between you and McCain?

THOMPSON: Yeah, I disagree with the illegal immigration bill that they proposed last year and the year before last. Said it from the very beginning, didn't think that was the way to go. I've disagreed with him on tax cuts in times past. In 2001, in particular, I know of one time when I supported the tax cut and he didn't. So, yeah. And we've talked about that.

BLITZER: And there are differences I'm sure with Mitt Romney as well.

THOMPSON: It's interesting that this all focuses now, because I've been talking about these things, including on the debates with Romney and Giuliani and sanctuary cities as far as Giuliani is concerned, Mitt Romney's change of positions on various things.

But this kind of hit a nerve. Evidently, Governor Huckabee is not used to receiving criticism and is not used to having the media follow up and say, well, what about these policies?

He went to the National Education Association meeting and criticized fellow Republicans because they were not there. He was the only Republican, which is true. All the Democrat presidential candidates showed up and Mike Huckabee.

BLITZER: Senator Thompson, thanks for coming in.

THOMPSON: Thank you.

BLITZER: Good luck.

THOMPSON: Thank you very much.

BLITZER: And coming up on "Late Edition," our interviews with two more of the presidential candidates, Mike Huckabee -- he'll be joining us in the next hour -- and Democrat John Edwards. "Late Edition" continues right after this.


BLITZER: Coming up, John Edwards and Mike Huckabee, and we'll get a progress report on what's happening in the war in Iraq. Iraq's defense minister, right here on "Late Edition." We'll be right back.


BLITZER: We'll get to my interviews with presidential candidates John Edwards and Mike Huckabee right at the top of the hour, but right now let's turn to the war in Iraq. It may be fading from the center of the U.S. presidential campaign, but the fight is still very much on for U.S. and Iraqi forces.

Just a little while ago, I spoke here in Washington with the Iraqi defense minister, Abdul Qadir.

Defense Minister, welcome to the United States. Thanks very much for joining us on "Late Edition."

QADIR: Thank you.

BLITZER: How long do you believe U.S. forces will have to remain in significant numbers in Iraq? .

QADIR (THROUGH TRANSLATOR): There are some good and excellent initiatives that security is improved in Iraq. There are not many provinces that have been left with terrorism activities on it. I'm personally convinced that (inaudible) victory will happen in 2008.

The same thing that we have achieved in 2007, we're going to continue in 2008. Establishing security will mean that many troops of the multinational forces or American forces will withdraw from the country, but of course, Iraq will still need a force that will be able to establish security on the border of Iraq. When Iraqi security forces will be completed, which I think it will be 2009, I think this force will be able to establish internal security in the country.

BLITZER: Is Iraq, is your government ready for a permanent U.S. military base, military presence there?

QADIR (THROUGH TRANSLATOR): This is what's going to be decided in the long-term agreement that's going to be established and will be decided according to the security of Iraq. And it will all be achieved according -- we will be able to discuss those things depending on the long-term agreement, and it will happen after the negotiations and discussion.

And defending the borders of our country, this kind of agreement will happen with the United States government.

BLITZER: President Bush in a speech in Abu Dhabi today said that Iran, your neighbor, Iran is the leading state sponsor of terrorism. Do you agree?

QADIR (THROUGH TRANSLATOR): There has to be arrangements that need to be done, peaceful arrangements so we can stop some of the Iranian behaviors. Iranian behaviors could be against the multinational forces in terms of transporting ammunition, or maybe they're trying to give some financial support.

Or maybe some other political organizations, they're trying to, with the support of the Iranian government, they're trying to do some operation in Iraq. Iraqi government cannot put Iran as their enemy because they need Iran as a neighboring country.

BLITZER: So you disagree with the president that Iran is the world's leading state sponsor of terror?

QADIR (THROUGH TRANSLATOR): If we are going to look within the negotiations that happened between Iraq and Iran for the last few months, those negotiations were very positive and declined to the -- declined the operations in Iraq, and it's one of the operations that supported the freedom and liberty in Iraq.

BLITZER: Is Iran sending sophisticated weapons, improvised explosive devices to Shiite militants in Iraq?

QADIR (THROUGH TRANSLATOR): We have touched it many times, and I -- it's a fact, I have to say it, yes. They have been used many different areas in Iraq, and especially some different kind of rockets in Iraq. Of course those are weapons that have been sent by Iran to Iraq, but of course in the last few months, those operations have been declined pretty well.

BLITZER: When President Bush a year ago announced the surge, he said by the end of the year, the Iraqi military -- and you're the defense minister -- would be in charge of all 18 provinces. The latest estimate is that you're in charge of only nine of those 18 provinces. What's the problem? Because there's a lot of criticism that your government can't get its act together and do what you need to do.

QADIR (THROUGH TRANSLATOR): Iraqi forces are now are in all the provinces of Iraq, and they're doing absolutely a big rule. We do have about 14 provinces of Iraq that are in a good security situation, and we still have another four provinces that do need some good support.

I think by the end of this year, we are going to -- Iraqi security forces will be able to take care of all the provinces with the timelines that we are working with the multinational forces.

BLITZER: Abdul Qadir, the defense minister of Iraq, good luck to you. Good luck to the Iraqi people.

QADIR: Thank you very much.

BLITZER: And there's much more ahead on "Late Edition," including our interviews with Democratic presidential candidate John Edwards and Republican presidential candidate Mike Huckabee. They're coming up.

We also have all the politics covered. "Late Edition" continues right at the top of the hour.


BLITZER: This is "Late Edition," the last word in Sunday talk.


BLITZER (voice over): South Carolina showdown.

EDWARDS: I intend to be the nominee and I intend to be president of the United States.

BLITZER: The stakes for his campaign are enormous. Democratic presidential candidate John Edwards speaks out about his chances against rivals Hillary Clinton and Barack Obama.

Hopes for a rebound.

HUCKABEE: What you want is somebody who is prepared to lead, and that's what I'm prepared to do.

BLITZER: After placing third in New Hampshire, Republican presidential candidate Mike Huckabee discusses his plan for a comeback.

And we'll dissect what's been a wild week in the presidential campaign with three of the best political team on television.

"Late Edition's" second hour begins right now.


ANNOUNCER: Live from CNN in Washington, this is "Late Edition" with Wolf Blitzer.

BLITZER: And welcome back to the second hour of "Late Edition." In the first hour, we spoke to Republican presidential candidates Mitt Romney and Fred Thompson.

Later this hour, we'll speak with Republican presidential candidate Mike Huckabee, the former governor of Arkansas.

But right now, the Democratic candidate who finished second in Iowa, third in New Hampshire, the former senator, John Edwards. We spoke with him just a short while ago.


BLITZER: Senator Edwards, welcome back to "Late Edition."

EDWARDS: Thanks for having me again, Wolf. BLITZER: Let's talk, a little bit, about the economy. There is a lot of fear of recession. There is now talk the president is going to bring up some sort of economic stimulus package.

The Democratic majority in the House and the Senate, the leadership, Nancy Pelosi, Harry Reid, they are saying they want to work with the president to try to improve the economic climate right now.

If you were president, what would you immediately do to deal with this problem of jobs and economic recovery?

EDWARDS: Well, in the short term, what I've proposed is a very strong economic stimulus package, which is $100 billion, phased in over a period of months. And it's focused on building green infrastructure, modernizing our unemployment insurance laws, getting help to the states that are struggling to do what they need to do.

But I think the economy needs stimulus, given what's happening right now.

BLITZER: Do you believe there should be a cut in corporate tax rates right now to stimulate the economy and create jobs and prevent jobs from going overseas? EDWARDS: That is not what I would do. I think that there have been an awful lot of corporate tax loopholes that have been created over a period of decades now.

In fact, there is actually a tax incentive today for American companies that are sending jobs overseas. I think that needs to be stopped. That loophole needs to be closed.

But that's not what I would focus on. I would focus on making sure that we are building green infrastructure, that we're making this transition off of a carbon, oil-based economy. And in the process, we can create a lot of jobs.

BLITZER: Because some economists say that this very high U.S. corporate tax rate, one of the highest in the world, is really, in the end, hurting American workers because it simply encourages these companies to go overseas where the tax structure is a lot lower.

EDWARDS: Well, I think what we have actually done, both through our trade laws and our tax laws, is incentivize companies to go overseas. I think those incentives need to be changed, both in our trade structure and in our tax structure.

What we need to be paying more attention to is what the impact is on middle class families. I mean, the middle class is struggling mightily, Wolf. We just talked about what we need to do in the short term.

But in the long term, as has been shown over and over in American history, the way we sustain long-term economic growth in this country is to grow and strengthen the middle class. When we're lifting families out of poverty, when the middle class is feeling economically secure, then the economy can grow and it is sustainable.

And there are whole group of structural things we need to do to accomplish that. You know, we need to have universal health care to deal with the dysfunctional health care system. We need to green the economy and get off our oil, carbon-based economy. We need to create jobs.

And as part of this greening of the economy, I think we can create at least a million new jobs. I think we ought to raise the minimum wage. It ought to go to $9.50 an hour. It ought to be indexed to go up on its own. Make it easier for kids to go to college who are willing to work when they go to college.

Basically, a whole set of ideas aimed at strengthening and growing the middle class -- that's the long-term solution.

BLITZER: Let's talk about what is happening in Iraq right now. This past week marked the first anniversary of President Bush's announcement of the so-called surge, the military enhancement, if you will, sending additional troops over there to deal with it.

John McCain, arguably the front-runner right now among the Republican presidential candidates, took a swipe not only at you, but all of the Democratic candidates the other day in saying this.

I will play it for you.



SEN. JOHN MCCAIN, R-ARIZ.: Every one of them, the leading candidates that declared the war lost, that said the surge couldn't succeed, maybe it is time that they 'fessed up that they were wrong.


BLITZER: All right. Do you want to 'fess up and say you were wrong when it comes to the surge?

EDWARDS: No. I want John to say he was wrong. I know John very well and I like him, but I disagree dramatically with what he just said.

What's happened is that the whole purpose for the surge, as stated by Senator McCain, as stated by President Bush; the whole purpose of the surge was to create an environment where there could be some political progress.

Everyone recognizes that unless and until there is some political reconciliation between Sunni and Shia, that there cannot be stability in Iraq and no long-term control of the violence. And there has been no meaningful political progress. So...


BLITZER: Well, they did pass the de-Baathification law, just in -- this weekend.

EDWARDS: Yes, they did. And that's a good thing. I mean, that was one of the big mistakes that Bremer made was removing all the Baathists from the government. But -- and this is a step in the right direction. But it still doesn't deal with the underlying problem of a serious reconciliation between Sunni and Shia.

And until that happens, there cannot be stability in Iraq. And that was the entire premise for the surge. So, no, I think we have not done -- what needs to happen in Iraq has not happened. And my view about what America should be doing hasn't changed.

BLITZER: So what do you think?

What should the U.S. do right now, if you were president?

EDWARDS: I would a series of things. Number one, I would make it clear to the government and to the Sunni leadership that America is going to leave Iraq. I would show that by actually withdrawing a significant number of troops immediately.

I would continue that redeployment, over a period of nine or 10 months. I would intensify our diplomatic efforts in the region, particularly with Iran and Syria, both of whom have an interest in a stable and secure Iraq, as long as America is not occupying Iraq.

And I would also intensify our efforts to make some political progress there, because that is the critical piece.

BLITZER: Your running mate in 2004, John Kerry, this week endorsed your rival, Barack Obama. And he did so, in part, with these words, I will play this little excerpt.


SEN. JOHN KERRY, D-MASS.: There are other candidates in this race with whom I have worked and who I respect, but I believe that, more than anyone else, Barack Obama can help our country turn the page and get America moving by uniting and ending the division that we have faced.



BLITZER: All right. I'm sure you are disappointed that John Kerry decided to endorse Barack Obama instead of you, but tell us what you think about this?

EDWARDS: Oh, I like John very much. And I have enormous respect for him. He would have made a terrific president, which is why I worked so hard to get him elected president.

But political leaders do things for different reasons, Wolf. And I think that Senator Obama is to be congratulated to have Senator Kerry's endorsement. I do believe that voters in South Carolina, where I am now, in Nevada -- caucus-goers in Nevada, and in the February 5th states -- I think voters make their own decisions about who they're going to support and who they are going to vote for.

And I apply that to my own endorsers and supporters. I mean, they are wonderful people. I'm proud to have them. I'm sure the other candidates are proud to have the support that they have, the endorsements that they have.

But I think, at the end of the day, voters are making an individual decision about who they believe should be president of the United States.

BLITZER: Did John Kerry give you a heads-up?

Did he call you in advance to let you know he was going to endorse Barack Obama?

EDWARDS: I had heard, actually, some time ago, that this was likely, so I wasn't surprised by it.

BLITZER: But he never personally reached out to you?

EDWARDS: I did not talk to him, not about this.

BLITZER: All right. He said, at the end of that little remark, that clip we just put out, the country needs someone who can unite and end the division that we face.

And that's one of the criticisms that's being leveled against you, that you're becoming too partisan right now.

Dan Balz, the political writer in The Washington Post, wrote this on Saturday. He said: "Edwards has offended many Democrats with his candidacy. They question his authenticity and see a shift from optimism to anger as the sign of an opportunistic politician."

Now, you have heard that criticism. I wonder if you want to respond to it.

EDWARDS: Well, I don't know. You could go through Senator Obama and launch a group of criticisms against him. You could do the same thing with Senator Clinton.

You know, the one thing, from having done this before, Wolf, is it goes with the territory that some people are going to disagree with what you say and what you do when you run for president.

That goes with leadership. I mean, if you're being strong and you're taking strong positions, that's to be expected.

I actually think, and I believe deeply, that it is the responsibly of the president -- and I would meet this responsibility -- to unite America. We need a president who doesn't divide this country. We need a president who unites America. And we need a president who will work with the Congress and with the leadership of the Congress.

EDWARDS: What I have said, and I stand by it and I believe it, is there are very well-financed, entrenched interests in Washington that stand between America and the progress that needs to be made. And until we have a president who's willing to take those interests on, nothing will change.

But this is not fight with the American people. Lord knows we need to unite America. And it's certainly not a fight with the leaders in Congress.

BLITZER: South Carolina, the state where you were born, right next door to North Carolina, the state you represented in the United States Senate, we checked the first nine days of this year on commercials, on political advertisements, the Edwards campaign has spent $1.856 million; Hillary Clinton's campaign, $460,000; Barack Obama, $609,000.

You have spent obviously a lot more, at least so far in South Carolina, which suggests, at least to some, that this state is do-or- die for you. Is it?

EDWARDS: No. I couldn't have been clearer, and I'll say it again. We're very much in this for the long haul. In fact, this week, after the debate in Nevada on Tuesday, I will be making a trip through several of the February 5th states.

No, I'm very much in this for the long haul. I'm in it through the convention. I intend to be the nominee, and I intend to be president of the United States. You know, I've been through this, Wolf. I'm seasoned at it. I know what is required.

Are we running hard in South Carolina? Yes, we're running very hard here. I mean, this is the place that I was born. It's a place where I expect to do well. And it's a place where I understand what's happening in people's lives in a very personal way.

I mean, the middle class is struggling. They've lost an enormous number of jobs in South Carolina. The rural areas are having a very difficult time. I mean, I understand what's happening here. So yes, I'm campaigning very hard in South Carolina.

But I'll do the same thing in Nevada, and I'll do the same thing in the February 5th states. I mean, I'm in this to be president of the United States. And the causes that are driving me in this campaign have not changed. If anything, they have become more important and stronger. BLITZER: Senator Edwards, good luck. Thanks very much for joining us.

EDWARDS: Thank you, Wolf, for having me.


BLITZER: We're right in the middle of what will be a fast and furious primary season, certainly over the next four weeks. No one makes it clearer than the best political team on television. We're going to have live reports from the campaign trail. That's coming up next.

Also, the former Arkansas governor, Mike Huckabee, once far behind but hoping for a bounce back in South Carolina. We'll show you what's going on. Stay with us. We'll be right back.


BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer in Washington. When a candidate is moving up in the polls, the other candidates begin to attack him. And that's exactly what's happened to the former Arkansas governor, Mike Huckabee.

I spoke with him about the race and about the issues just a short while ago.


BLITZER: Governor Huckabee, thanks very much for joining us. Welcome back to "Late Edition."

HUCKABEE: Well, thank you, Wolf. Great to be back on the program with you. BLITZER: Let's talk about fear of recession in the United States right now. There's some talk the president will announce a short-term economic stimulus package, try to create some jobs and try to improve the economy right now because there is a lot of fear that recession could take place later in the year.

If you were president right now, what would you do immediately to try to deal with this crisis?

HUCKABEE: The main thing we have to do is to make sure that our free trade agreements involve fair trade. And that's something that we've got to do a better job of enforcing, is to make sure that those products which are coming into the United States are free of lead, that they're safe, that they're manufactured in the same kind of standards that we expect our American companies to use when they built things. And that hasn't happened, Wolf.

And one of the reasons we're losing a lot of jobs is that we've been in such a rush to make sure that we exemplify the boundaries of free trade, that we forgot that we're all supposed to play by the same rules. If somebody cheats, you're not playing the game fairly. BLITZER: So if you were president, you wouldn't go forward with another version of NAFTA, the North American Free Trade Agreement, or any of these other free-trade agreements that are in the works right now?

HUCKABEE: No, I think the free-trade agreements are wonderful to have, and I supposed NAFTA and CAFTA. But I always say, then you "hafta" make sure that these free trade agreements are being abided by both parties, and that's not what's happened.

When the Chinese send toys that have lead, they have dog food that causes our pets to die, when we have food that comes to us contaminated, when things that are created by people who have worked in sweatshops and polluted the environment -- how does an American worker expect to compete when all of the regulations and tax policies and the litigation concerns on top of an American company make it very, very difficult.

When I was in Michigan yesterday and Friday, I'll tell you, you can look into the faces of people who for the first time in their lives, they're not sure how they're going to put food on their families' table. And that look on an American's face is something that I will not forget, and it's something we better take seriously, because the one thing Americans want to be able to do is go to work, get a paycheck, take care of their families. And they'd like to think that their government is working for them, not against them, to make that happen.

BLITZER: I interviewed Mitt Romney, your Republican rival, earlier today, and he really went after you on the issue of taxes, because he says you're not a tax-cutter. Listen to what he told me.


ROMNEY: He said he's cut taxes. How disingenuous can that be? Time and again, the last two debates, he was asked, OK, you cut taxes, but didn't you raise taxes more than you cut them? And after many, many attempts, he finally admitted that, in fact, he had raised taxes $500 million more than he cut them.


BLITZER: All right. Do you want to respond to Governor Romney?

HUCKABEE: You know, I hate to say poor Mitt, because a man with that much wealth is hardly poor anything, but you know, it's almost sad to watch him make these kind of claims.

He raised over half a billion dollars of fees in his own state. And he says, well, those aren't taxes. Ask the person who paid them whether it matters if you call it a fee or a tax.

And as I've explained repeatedly, I took a $200 million deficit, I turned it into a $850 million surplus. We built roads. We improved our schools. This last week, they were named the eighth best in the country. That's a long way from 49th. And the support of the business community to do what we did, as well as with the Supreme Court order, meant that what I did was exactly what governors are supposed to do, and that's govern.

I did not leave my state with falling-down bridges and roads that were torn up, and I didn't leave it with jobs that were going away. We actually had the lowest unemployment rates. We created the highest number of jobs.

And if you'll ask the CEOs of the Fortune 500 companies from my state whether I was a business-friendly good governor for business, they will tell you in a heartbeat, you bet he was. And that's what I think matters.

HUCKABEE: When people in -- it doesn't matter where it is.

You know, Ronald Reagan, today, would be attacked by Mitt Romney, because Ronald Reagan raised taxes $1 billion his first year as governor of California.

Interestingly, Mitt Romney did attack Ronald Reagan as recently as a few years ago, when he disavowed himself from being a Reagan-Bush guy, and he said he was an independent.

BLITZER: Let me interrupt for a moment, Governor. Let me just clarify. He says you raised taxes $500 million more than you cut taxes. On that narrow point, is he right?

HUCKABEE: Well, only if you understand that some of those were gasoline taxes. Over the course of 10 1/2 years, if you look at the fact that we did a half-cent sales tax, at the total end of my governorship, the income tax was exactly the same, and the sales tax was a penny higher. The net result was we had a better base of overall revenue.

But I also cut taxes by $400 million, the first ever broad-based tax cuts in the history of my state. I did it 94 different times, different tax cuts, and did it in the headwinds of a Democrat legislature that had never cut taxes before.

Now, that's a record, quite frankly, that I think most people would look at and say, pretty good record.

BLITZER: Well, not if you're Fred Thompson, another one of your Republican rivals. He really went after you, the other night, at that debate. I'll play this little clip and give you a chance to respond.

HUCKABEE: All right.


THOMPSON: He would be a Christian leader, but he would also bring about liberal economic policies, liberal foreign policies.

He believes we have an arrogant foreign policy, in the tradition of "blame America first." He believes that Guantanamo should be closed down, and those enemy combatants brought here to the United States, to find their way into the court system, eventually.

(END VIDEO CLIP) BLITZER: "Liberal economic policies" -- those are fighting words in a Republican contest. Fred Thompson, he really came out swinging.

HUCKABEE: Well, he did. And I said the other day, the Writers Guild strike needs to end soon. Fred's got to get some better lines.

Calling me a liberal would be laughable in Arkansas, where people recognized -- if anything, they called me this ultra-conservative guy.

You know, it's interesting, Fred Thompson talks about putting America first, and yet he's the one who is a registered foreign agent, lobbied for foreign countries, was in a law firm that did lobbying work for Libya.

I certainly wouldn't put my name on something like that. He supported Gerald Ford in 1976 and Howard Baker in 1980. I was supporting Ronald Reagan.

So you know, it's always interesting to me, when people get desperate, they start grabbing for anything.

The one thing you can always look at, when these kind of attacks come, is that you must be well in front of them, or they wouldn't be coming at you like this. And that's a form of flattery. It's not all that pleasant, but it's part of what goes with the territory.

And what I think people are looking for is they want competence in leadership. They want someone who can lead conservatively. They want somebody who has convictions and who hasn't gone all over the board with his own, I guess, choices, deep within, and is consistent on everything from the second amendment to the sanctity of life, as well as the taxes, and to a strong, very secure America with an incredibly effective military. BLITZER: The largest newspaper in South Carolina, "The State," endorsed John McCain for the Republican nomination, and then they said this about you.

They said, "Huckabee's utter lack of knowledge of foreign affairs is unsettling. Our commander in chief will need a far broader and deeper understanding of our relationship to the world than on-the-job training can adequately provide."

That's one of the criticisms that's leveled by your Republicans rivals against you, that you really have no foreign policy experience and you don't know a lot about the world. What say you?

HUCKABEE: I've been to 41 countries. I've been to the Middle East repeatedly, virtually every country in the Middle East. I've been to Iraq, Afghanistan, Pakistan, Kuwait. I've been to Syria, to Lebanon. I've been to Egypt and I've been to Jordan. I've been to Asia and to Europe.

I've hosted conferences at the United Nations, when I was the chairman of the U.S. Chapter of the World League for Freedom and Democracy. I presented papers in Moscow at a meeting of the World League.

You know, if the tree falls in the forest and someone's not there to hear it, did it make a sound?

Just because Fred Thompson or Mitt Romney, or even somebody in the media doesn't know where I've been, what I've done, the persons with whom I've met, the prime ministers I've sat down and talked to face to face, does that mean it didn't happen?

And besides, you know, if you want a person who's been a bureaucrat in the State Department to be president, let him run. But people elect presidents because they have leadership qualities, because they have clarity in their judgment.

And as a governor, the one thing I have had is a sense of having to make tough decisions, not just isolating an issue and championing it and then being able to have the luxury of making some speeches and taking four or five significant votes every year, but, every day, making dozens of decisions that affected people's lives.

A president makes those kind of decisions every single day, and what you want is somebody who is prepared to lead. And that's what I'm prepared to do. That's why I think that there is a groundswell of support, not just in a few of these early states, but across this country, for my campaign.

BLITZER: Governor Huckabee, good luck. Thanks very much for joining us.

HUCKABEE: Thank you, Wolf. It's always a pleasure to be on "Late Edition."

(END VIDEOTAPE) BLITZER: And coming up, I'll be joined by three of the award- winning best political team on television. We'll have an in-depth exploration of what to expect in next week's crucial primaries.

But straight ahead, the latest on what's actually happening out there with the Democratic and Republican candidates. We're going to go to the campaign trail. Stay with us. "Late Edition" continues, right after this.


BLITZER: CNN's Jim Acosta and Mary Snow -- they're co-anchoring our ballot bowl this weekend, CNN's unique campaign coverage, where we bring you the candidates speaking on the issues in their own words. That's coming up right after "Late Edition."

Jim, meanwhile, is standing by in Las Vegas, where the Democrats are looking ahead to next Saturday's Nevada caucuses. Let's get this -- a little lay of the land from you, Jim. What's the latest?

JIM ACOSTA, CNN CORRESPONDENT: Well, Wolf, it is Vegas, baby, Vegas, for Hillary Clinton and Barack Obama this weekend. They are going all in, across the state of Nevada, trying to pick up those votes in anticipation of next Saturday's Nevada caucuses.

And in Las Vegas, the big voting bloc that these two candidates are going after is the Hispanic vote.

Hillary Clinton was at a sheet metal workers union yesterday with a message that was directly appealing to Hispanic voters. She stood in front of a sign that said "Juntos con Hillary," which, in English, means "Together with Hillary."

Barack Obama has also been adopting some of this language. He was adopting a slogan from the old United Farm Workers Leader Cesar Chavez, in one of this events on Friday evening, when he picked up the endorsement of the Culinary Workers Union, which is a union that represents a lot of casino workers in this town.

ACOSTA: He was using the old Cesar Chavez catchphrase, "si se puede," or "yes, we can." So both Hillary Clinton and Barack Obama going after that big enchilada here in Nevada, and that is Hispanic voters.

Barack Obama incidentally will be at this largely, predominantly African-American church this afternoon. And he is hoping that these culinary workers, these casino workers, come out for him big time. Meanwhile, John Edwards is not in the state. He's down in South Carolina, which is a make-or-break state for him, of course, Wolf.

BLITZER: All right, Jim, stand by. Mary Snow is in a much colder climate, Michigan, right now. The Republicans have a huge contest on Tuesday. Their primary, give us a little preview, Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, the stakes are so high here, especially for Mitt Romney, because he is hoping to win here in Michigan. He's only won Wyoming so far, and his main rival here, of course, is Senator John McCain.

Mitt Romney is hoping that his personal ties to Michigan will give him an edge. His father was governor here in the 1960s. He was raised here. The economy is the number one issue. These candidates are fighting it out over who can best help Michigan.

The state's unemployment rate is higher than most of the nation and this particularly because the auto industry was so hard hit. Mitt Romney is making the case that he will fight to restore jobs that have been lost here and gone overseas. John McCain has been saying that it's unrealistic to think that these jobs are coming back. He, instead, is focusing on retraining workers.

John McCain, of course, won here in 2000. He is hoping to repeat that victory. But also don't leave out Mike Huckabee. He is going to be returning to the state later today. Wolf?

BLITZER: All right, Mary, thanks very much. And remember, all afternoon, right after "Late Edition," "The Ballot Bowl," Jim Acosta and Mary Snow, they'll be co-anchoring from out on the campaign trail. You're going to want to see it. They're going to a chance to hear in- depth what the candidates are telling voters right now.

Up next here on "Late Edition," our political panel is ready to assess what's going on. We'll talk about the presidential race in both parties. The best political team on television standing by. We'll be right back. (COMMERCIAL BREAK)

BLITZER: It's been a wild ride this past week in the world of politics. Let's get right to our panel. Our senior political analyst, Bill Schneider, our correspondent Joe Johns, the guy who keeps politicians honest for "Anderson Cooper 360," and our Congressional correspondent Jessica Yellin. She's been out on the campaign trail covering all of this during this Congressional recess. Guys, thanks very much for coming in.

Bill, I'll start with you. The New Hampshire Democratic primary last Tuesday, Hillary Clinton in first with 39 percent, Obama second, 37 percent, John Edwards distant third, 17 percent.

But let's look ahead now, next Saturday, January 19th, the Nevada caucuses, a big contest for the Democrats. And the Saturday after that, January 26th, the South Carolina primary. It looks, and you got your finger on the pulse right now, like in Nevada, first of all, given the endorsements that Barack Obama has received in recent days, he's poised potentially for a win there.

SCHNEIDER: Well, we can't be certain. It's a caucus, and they've never had an event this early in Nevada before, so it's a big question who will show up. But at this point, Obama seems to have a lot of crucial endorsements, principally the culinary workers, one of the fastest-growing unions in the country.

And I think the Clinton campaign is worried that Obama could win both of those contests, Nevada because of unions and maybe Hispanic voters. We don't know. It's not clear yet. In South Carolina, where the contest is very much over the African-American vote, they're about half the voters there, and there is a real fierce battle with a lot of racial overtones between Clinton and Obama.

BLITZER: About 50 percent of the Democratic expected vote in South Carolina could be African-American.

JOHNS: Absolutely. And there's obviously a big question there among African-Americans in South Carolina as there is in other places about whether Barack Obama could be the guy to beat if he ever gets the nomination. People are very worried about electability, and they look at Hillary Clinton and they say, hmm, she might be the person who's more likely to win in November.

Very worried about getting a Democrat in the White House. There's also that issue, the Martin Luther King thing comes up. You have questions about racial politics making its way...

BLITZER: We're going to get to that in a moment. But I'm just trying to get a lay of the land right now. You've been out there. What do you think?

YELLIN: Well, I think that...

BLITZER: In Nevada and in South Carolina.

YELLIN: Barack Obama has a lot of momentum. But Senator Clinton also has a historic ground operation with old-time politicians who have been working the field for quite some time now, and it will be a fierce race. We would be mistaken to try to predict this one the way we did so inaccurately in New Hampshire.

BLITZER: So much commotion this past week, Bill, on comments that Bill Clinton made involving Barack Obama, his record on the war in Iraq. He went on radio shows, including Al Sharpton's radio show this past Friday, to try to explain what he meant. I'll play a little clip.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: He put together a great campaign. It's clearly not a fairy tale, it's real. He might win.

I stand by what I said. But the reports that I claimed that his campaign, or that he personally -- or in any way was disrespectful and said they were a fairy tale, that's just not true.


BLITZER: All right, give us some perspective. What's going on here?

SCHNEIDER: Well, the Clinton campaign believes, they argue, that the Obama campaign is trying to racialize this contest in order to rally African-American voters in South Carolina so that he can win South Carolina.

They've taken comments made by Bill Clinton, talking about Iraq and referring to the fairy tale of how the press portrays Obama and tried to put it into a larger racial context. Comments that Hillary Clinton made about Lyndon Johnson and Martin Luther King, arguing that he didn't show proper respect for Dr. King. Their belief is that the Obama campaign is racializing this.

BLITZER: Jessica?

YELLIN: Well, the Obama campaign maintains they're not the ones racializing this. This is Senator Clinton and her husband who injected not just race but arguably racism into this whole debate. And the fact that Senator Clinton is going out now saying I don't think we need to look at race or gender in this election is a little odd.

I mean, the fact is, this is the first woman, this is the first African-American who are both viable presidential candidates. Of course, you have to acknowledge race and gender. You just don't have to talk about racism and sexism.

And Senator Obama, I asked him this question in a conference call this morning, was he offended. He wouldn't say if he was personally offended, but many people, including Clinton supporters, were offended by the Clintons' remarks, and he described them as ill-advised.

BLITZER: Donna Brazile, CNN Democratic strategist and a former campaign manager for Al Gore, she says she was offended. James Clyburn, the number three Democrat in the House, African-American, the leading African-American, the top African-American in Congress, he said he was offended.

BLITZER: What do you think?

JOHNS: Well, it's a story, OK? It's a story about how the Democrats deal with this issue and the possibility of another -- the first African-American president, ever.

On the other hand, this is pretty mild stuff. When you look at race politics in the United States, the Willie Horton ads, the black and white hands in the senator from North Carolina's ads, years ago, this is so mild, compared to the potential for what you could see in November.

So, it's Democrats fighting among each other. So far, it's actually been pretty respectful, given the circumstances.

BLITZER: Here's how Senator Obama discussed it, on Wednesday morning, on "American Morning." Listen to this.


SEN. BARACK OBAMA, D-Ill.: So, you know, the notion that, somehow, that diminishes my clear, unequivocal statements of opposition to the war, even before the Congress voted to authorize it, actually doesn't make much sense. And Bill Clinton was taking some liberties with my statements.


BLITZER: Because that was the point you were making, Bill Clinton suggesting that the press has given him, Obama, a free ride. And hasn't really gone in, in depth, in seeing the contradictions the Clintons say were there.

SCHNEIDER: And most specifically, that he wasn't referring to anything racial when he used the term "fairy tale." He was talking about the way the press has portrayed the Obama campaign and his position on Iraq, that it's all been a fairy tale. But there was nothing racially said in his remarks.

BLITZER: All right. We're going to continue this conversation.

Hillary Clinton in a political battle royale with Barack Obama. We're going to tell you what she had to say this morning in our very popular "In Case You Missed It" segment.

Much more "Late Edition," including our panel, the best political team on television. We'll be right back.


BLITZER: And now, in case you missed it, let's check some of the highlights from the other Sunday morning talk shows here in the United States.

On NBC, Democratic presidential candidate Senator Hillary Clinton explained why she's challenging her rival, Senator Barack Obama, over the war in Iraq.


SEN. HILLARY RODHAM CLINTON, D-N.Y.: He gave a speech opposing the war in Iraq. He gave a very impassioned speech against it, and consistently said that he was against the war; he would vote against the funding for the war.

I think it is fair to ask questions about, well, what did you do after the speech was over?

And when he became a senator, he didn't go to the floor of the Senate to condemn the war in Iraq for 18 months. He didn't introduce legislation against the war in Iraq. He voted against timelines and deadlines, initially.


BLITZER: On Fox, Republican presidential candidate Rudy Giuliani addressed his drop from front-runner status and why he's putting all his political stock, apparently, right now, in Florida's upcoming primary.

(BEGIN VIDEO CLIP) FORMER MAYOR RUDY GIULIANI, R-N.Y.: You get a great deal of momentum, a bounce from winning. But the reality is, you know, we've got a good, long campaign here in Florida that we've put on for quite some time.

Everybody has to have a strategy that fits their strengths, their weaknesses, the places where they can get their message across the best. And we think this is a place for us to get our message across the best.


BLITZER: On ABC, Democratic senator John Kerry talked about the current political atmosphere in Washington and why he believes Democratic presidential candidate Barack Obama represents the best chance to change things.


SEN. JOHN KERRY, D-MASS.: This city is worse than I have ever seen it, in all the years that I have been here. And I think we need a fundamental break with the past.

He has the ability to inspire, the ability to create a movement, the ability to mobilize people around ideas. I think Barack Obama is showing the ability to do that, and has shown the ability to do that.


BLITZER: Also on ABC, the former House speaker, Newt Gingrich, offered his assessment of the message sent by the Iowa and New Hampshire voters.


FORMER HOUSE SPEAKER NEWT GINGRICH: I think that the votes in Iowa and New Hampshire were overwhelming endorsements of change, in both parties. And I think that a State of the Union that got up and said, here are 10 or 12 or 15 things we could do together in the next 90 days...



GINGRICH: It would be useful to challenge both parties in the House and Senate.


GINGRICH: To respond to the American people.


BLITZER: Highlights from the other Sunday morning talks shows, here on "Late Edition," the last word in Sunday talk. Up next, our political panel returns, and we'll take a look at the Republican race for the White House. "Late Edition" continues, right after this.


BLITZER: We're back with three of the best political team on television, Bill Schneider, Jessica Yellin, and Joe Johns.

Joe, let's start with you, right now. In Michigan, the Republicans have their primary this Tuesday. It's followed, in South Carolina, next Saturday, January 19th, the Republican primary in South Carolina. The Democratic primary there is a week later. They do it on separate days.

BLITZER: This is a wide-open contest among Republicans. Huckabee may have won in Iowa. McCain won in New Hampshire. We don't know who's going to win in Michigan. We don't know who's going to win in South Carolina.

JOHNS: Right, and everybody's watching Mitt Romney because he spent so much money around the country and, except for Wyoming, has very little to show for it. He certainly has deep pockets that he can reach into and spend more and more money there in the state of Michigan.

It does sound like his issue of the economy is really playing pretty well there. He's pushing it very hard. There are a lot of people hurting in Michigan as we heard, that the employment numbers are very high there.

He has very strong ties in the state, too, of course. His father was the governor of the state. He grew up there. So, everybody's watching him, and meanwhile we have McCain.


JOHNS: And who knows what he's going to do there? It's a fabulous situation.

BLITZER: The economy, now, Bill -- and you watch this very closely -- among Democrats and Republicans is now issue of concern number one. More than the war in Iraq, more than the war on terror, more than health care. The economy is the highest concern for Americans, at least according to our most recent poll.

SCHNEIDER: When the economy is bad, the economy's the issue. And the economy most people think is in recession.

BLITZER: Or getting close to recession.

SCHNEIDER: Well, they think it is recession. Almost two-thirds of Americans believe the economy is in recession and getting worse. They look at the stock market figures and they're very worried.

That ought to be Romney's issue. He's, quote, "expected" to win Michigan. If he does win Michigan he'll be, by my counts, the third comeback kid in this election after McCain and Clinton.

Do you know what Rudy Giuliani's dream is? McCain won New Hampshire, Huckabee won Iowa, Romney wins Michigan, he hopes, Fred Thompson wins South Carolina. Everything is wide open, and Rudy Giuliani suddenly emerges in Florida from nowhere.

BLITZER: And Florida's got more delegates. I don't know if they add more than the other states.

SCHNEIDER: More than any others. That's his dreams.

BLITZER: But they certainly have a lot of delegates. Listen to John McCain, because he says he's the only Republican that can really rally the Republican base and bring in new voters. Listen to this.


MCCAIN: I'm confident that I will attract the, quote, "establishment" and the social conservatives, and I think I will win these races because I will have support throughout the political base of the Republican Party.


BLITZER: And that's an attractive appeal to Republicans, that he could beat Hillary Clinton or Barack Obama or John Edwards and the others couldn't.

YELLIN: Especially in the Barack Obama scenario in which Obama's appealing to independents and McCain also wins those independents. And it's fascinating that the man who's the most establishment figure within the Republican Party is the one who's seen as the one who can reach across the aisle and make some inroads into the swing voters.

But, you know, this race is so fluid right now, you should talk to some reporters who are covering the Republicans. They don't know what to pack. They think they'll be going to so many states. This race is going to last so long on the Republican side.

BLITZER: It might not be over by February 5th, Super Tuesday on the Republican side if there's no clear-cut winner of those delegates.

JOHNS: For sure, and on the Democratic side as well, people are talking about that national strategy to just keep going and going until you figure it out. I know Hillary Clinton's people are talking about that, too. So, you know, there's a real good possibility that we could not know after that day who will be the nominee on both sides.

And it's wonderful for American politics. It means a lot of people are very engaged in the system, which is what you want.

BLITZER: And there more contests after Super Tuesday. It doesn't just end on Super Tuesday. If there is no majority in the delegates for the Democrats or the Republicans, there are more contests down the road. There's February and March and April. SCHNEIDER: And June! All the way to -- you know, I remember when they used to go to June if things weren't decided, and that could happen again. But let me add, there are two things that I've noticed in this campaign that are unchanging, and they set the condition of this campaign.

Number one, President Bush's job approval remains extremely low, about 32 percent. That's driving the demand for change. Number two, even though most Americans or an increasing number of Americans believe that things are going better for the United States in Iraq, their view of the war in Iraq has not changed.

They continue, by really substantial majorities, almost two- thirds, to disapprove of that war, to say that they oppose it. We should get out as quickly as possible. Those are the two conditions that set the boundaries of this campaign. They haven't changed, and Republicans are aware of that, too.

BLITZER: It's interesting on the Republican side, Jessica, that, you know, Huckabee and Mitt Romney and Fred Thompson, you know, we heard a lot of that on this program, that they're really going after each other. But they're really not going after John McCain that much. And he's sort of above the fray, coming across as the nice guy, the war hero. What do you think about this?

YELLIN: There's a way in which McCain is untouchable. People feel he's paid his dues so significantly to this country, and he has such profound respect within the party that they're afraid of hitting him.

And also, he has such credibility on the war. Even though it's not the leading issue, they all look to him as the man with the most gravitas on this issue. No one wants to alienate him. That's a real advantage, a quiver in his quill, what's the saying?


BLITZER: Whatever it is, We've got to leave it right there, because we're out of time. Jessica Yellin, Bill Schneider, Joe Johns, thanks to all of you.

This program reminder, you won't want to miss our next CNN Democratic presidential debate. It's co-sponsored with the Congressional Black Caucus Institute. January 21st, Myrtle Beach, South Carolina. I'll be there. I'll be moderating the debate.

Joe Johns and Suzanne Malveaux, they'll be with me, joining in the questioning. If you'd like to throw us an idea, by the way, go to right now. I've got a little ticker item right now appealing to you for some help in getting questions to the Democratic presidential candidates.

If you'd like a recap, by the way, of today's program, you can also get some highlights on our new and improved "Late Edition" podcast. Simply go to

"Late Edition" will be right back.


BLITZER: Let's take a look and see what's on the cover of this week's major newsmagazines in the United States. Time has a New Hampshire special that says "It's the Voters, Stupid." Newsweek covers Hillary, race and gender in the presidential election. And U.S. News and World Report looks at "Alternative Medicine That Goes Mainstream."

And that's your "Late Edition" for this Sunday, January 13th. Please be sure to join me next Sunday and every Sunday at 11 a.m. Eastern for the last word in Sunday talk. We're also in "The Situation Room" Monday through Friday 4 to 7 p.m. Eastern.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washington. For our international viewers, stand by for world news. For those of you in North America, see the presidential candidates unfiltered. CNN's coverage of the "Ballot Bowl" starts right now.