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Interviews With Presidential Candidates; Interview With General David Petraeus

Aired January 27, 2008 - 11:00   ET


WOLF BLITZER, HOST: It's 11 a.m. here at the CNN election center in New York, 8 a.m. in Los Angeles and 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."
The next big presidential contest is this coming Tuesday in Florida. The polls there are getting tighter and tighter, and so is the rhetoric. This weekend Mitt Romney and John McCain have been locked in a bitter dispute over their positions on the war in Iraq, each accusing the other of distorting the truth.

I caught up with Mitt Romney earlier today on the campaign trail in Miami.


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

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

BLITZER: All right. You've got a problem going on with John McCain right now. He's really going after you on the war in Iraq, the so-called surge that's going on. Listen to what he said on Saturday.

Listen to this.


SEN. JOHN MCCAIN, R-ARIZ.: In the conflict that we are in, I'm the only one that said we had to abandon the Rumsfeld strategy and Rumsfeld, and adopt a new strategy.

Governor Romney wanted to set a date for withdrawal, similar to what the Democrats are seeking, which would have led to the victory by Al Qaida, in my view.


BLITZER: All right. So he's basically saying you are like a Democrat when it comes to the war in Iraq. What do you say to him?

ROMNEY: Well, he knows that is a dishonest statement. And it has been shown such by the media that looked at what he said. But obviously he's doing his very best, I think, desperately trying to change the topic from the economy, trying to get it back to the war in Iraq.

And he knows that like him, I'm in favor of the troop surge. I've never suggested that we set a date certain to withdraw from Iraq. But he doesn't want to talk about the economy, because frankly he has pointed out time and again that he doesn't understand how the economy works.

And right now, that's the biggest issue that voters here in Florida are concerned about. And they want somebody who does understand the economy. And having him time and again say, I don't understand how the economy works, I have got to get a V.P. that will show me how it works, that's a real problem for him.

BLITZER: Here is what he says he was referring to, an interview you did on "Good Morning America" last April 3rd in which Robin Roberts, the anchorwoman, said, "Do you believe that there should a be timetable in withdrawing the troops?"

And here is how you responded. Listen to this.


ROMNEY: Well, there is no question but that the president and Prime Minister al-Maliki have to have a series of timetables and milestones that they speak about. But those shouldn't be for public pronouncement. You don't want the enemy to understand how long they have to wait in the weeds until you're going to be gone.


BLITZER: All right. So that is what he says he is referring to. Does he have a point?

ROMNEY: No, he doesn't have a point. Those are the same kind of timetables we're dealing with right now. For instance, in bringing our troop strength down by July, we bring down by five brigades. Timetables and milestones, and what, of course, you have is you manage a particular setting.

But I've never said that we should have a date certain to withdraw. He knows it. I've been asked that question time and again. He's simply being dishonest. He knows that.

But he desperately is trying to change the subject, because he does not understand the economy, has no experience in the private economy. And right now, that's the biggest issue people are facing. So, he's doing his best to change topics.

BLITZER: And we're going to talk about the economy in a moment. But I'll just wrap it up with his insisting that you apologize to the men and women in uniform. He said this, listen to this.


MCCAIN: Now, Governor Romney has said maybe that he thinks that I should apologize for saying what is clearly on the record as his support for timetables for withdrawal. I think the apology is owed to the young men and women who are serving this nation in uniform that we will not let them down in hard times or good. That is who the apology is owed to.


BLITZER: All right. Are you going to apologize, should he apologize? Where should the apology come from?

ROMNEY: Nice try, John. That's all I can say to him.

BLITZER: So you want to leave it right there.

ROMNEY: Look, he's trying very hard. And everybody who's looked at what he said has found it to be completely misleading and inaccurate. It's dishonest. He knows that. But you know, he's trying very hard, and I appreciate his effort to try very hard.

But you know, time and again, he's been talking about the fact, quite honestly, that he doesn't understand how the economy works. He said it time and again. And right now, that's just killing him here in Florida. And so he is trying to do everything he can to divert attention from that fact.

And frankly, I'm not going to let him do it.

BLITZER: Does he have a point, though, when he -- if that is, in fact, his strategy, to divert attention from the economy, to try to get the subject national security, the war in Iraq, that he has an advantage over you when it comes to national security?

ROMNEY: No, I don't think he has an advantage there. I think he has an enormous disadvantage when it comes to the topics of changing Washington or fixing our economy. There's no way he can pick up the story about changing Washington. He's been there 25 years. He's a creature of Washington.

You have someone like Barack Obama, who last night had a stunning victory, and his message was all about change. And that's not a message that John McCain is able to carry forward.

And likewise, if you're talking about the economy, and right now with the economy in fragile condition, with a need to have a strong economy so we can have a strong military, John McCain doesn't want to talk about the economy.

So, it's his disadvantage in the areas of change and strengthening our economy, something that's really in my DNA, he doesn't want to get into those topics at all.

BLITZER: What is the biggest difference between you and John McCain when it comes to the economy? A lot of fear right now of recession. People are hurting. What's the biggest difference between your strategy and his?

ROMNEY: Well, the list is very long. The last time we had a recession, in the Bush years, President Bush recognized the best thing you can do is lower taxes and put forward a tax bill. And John McCain was one of only two Republicans to vote against it, and said he'd go back and vote against it again if he could.

He does not understand the first lesson of Reaganomics, which is, you cut taxes to grow the economy. And then secondly, right now, one of the things I find extraordinary is he pushes this bill known as McCain-Lieberman.

It is a -- effectively a tax on all energy in this country. It would raise gasoline prices by about 50 cents a gallon, and that is according to the Energy Information Agency. He would raise electric rates by some 20 percent, put a huge burden on us.

And it basically would slow down our economy without helping the environment at all, because major users of energy would take their production to countries like China that wouldn't sign the deal.

It is basically saying the cost of global warming would all be borne by American rate-payers and consumers. He just doesn't understand how the economy works.

BLITZER: He says that the biggest difference on the economy between him and you is this. I'll play the clip. Watch.


MCCAIN: You can hire managers all the time, people who do the mechanics. Governor Romney is touting his qualities and his experience and resume as a manager. I am telling the American people, and they know it, that I am a leader.


BLITZER: All right. He says, you're just a manager, he is a leader.

ROMNEY: Well, you know, I think I can -- I'm pretty proud of my record, 25 years in the business world, starting a business, making it an enormous success, turning around a company that was in trouble, going to the Olympics and helping get the Olympics back on track.

From there, becoming the governor of Massachusetts, leading a state. I think my track record as being an executive leader is pretty clear. Senator McCain has been in the Senate for the last 20 years.

And frankly, being a committee chairman is not leading a great organization or making great things happen. And for that matter, you know, what's happened in Washington in the last 25 years?

Have you seen the kinds of results that America wanted? Did they get the job done? Unfortunately not.

So if he has been a leader, where has it led us? Look at his legislation. McCain-Feingold, that hurt our First Amendment rights? McCain-Kennedy, that was granting amnesty to 10 million illegal aliens? And then now, McCain-Lieberman, that wants to put a huge tax, effectively, on American gasoline buyers and rate-payers?

His record is not of the kind of leadership you'd want to have. And I'm proud to be a leader that time and again has proven his mettle.

BLITZER: What would you do differently than the president would do? He's worked out a deal -- an economic stimulus deal with the Republican and Democratic leadership in the Congress.

BLITZER: What would you do differently? Because there are parts of it, I'm sure, you like, but there are other parts you're not necessarily thrilled by.

ROMNEY: Well, there are two things that I'd probably add to the legislation that relate to long-term growth incentives. One is to say to people who are making under $200,000 a year, they ought to be able to save their money, tax-free, no tax on interest, dividends or capital gains.

That allows people to save money. It builds capital for the economy. It puts more money in people's pockets, as well. It's a good thing, to get the economy going, long-term. And secondly, something which, I think, is an idea whose time has come: For people 65 years of age and older, my view is that they should not have to have payroll taxes taken out of their incomes. And that would encourage them to stay in the workforce. It would give employers a big incentive to hire older workers, and that would grow our workforce and add jobs.

BLITZER: The Democrats -- the Democratic presidential candidates basically already nominated John McCain to be the Republican presidential candidate, at their debate the other night in Myrtle Beach. Listen to these little clips.


EDWARDS: It's becoming increasingly likely, I think, that John McCain is going to be the Republican candidate.



SEN. BARACK OBAMA, D-ILL.: The polls I've seen show me beating John McCain...



SEN. HILLARY RODHAM CLINTON, D-N.Y.: I am better positioned and better able to take on John McCain...


BLITZER: When you hear that kind of talk from the Democrats, what do you think?

ROMNEY: Well, it doesn't disturb me very much, I must admit. You know, it was -- for a long time, it was Rudy Giuliani, and then it was Fred Thompson, and then they go for John McCain.

But, frankly, I think they'd find a race against me to be the most challenging.

And I really imagine, as you think about, let's say, Barack Obama -- let's say he catches fire and continue to catch fire. Obviously, last night, he caught fire in a big way. But let's say he continues to catch fire across the nation, and we're going to be talking about change and dynamism and energy and passion for the future of America.

I can't imagine a better person in our field, right now, to have that debate with Barack Obama than myself. My record of accomplishment, compared with his rhetoric, is going to be a pretty stark contrast. And I think we'd take the country in a very different direction.

I'm all about the future, all about progress for America. Senator McCain is somebody who's been there for 25 years. He can talk about the past better than anybody I know, but I don't believe that America wants to turn back. America wants to take Reagan principles of economic strength and apply them to the future and build a brighter future.

BLITZER: How are you going to do, Tuesday, in Florida?

ROMNEY: I'm planning on winning here in Florida. It's real close. You know, I know that the political establishment is going to try and pull for John McCain, but I expect that I'm going to get the support of the people, because people are very anxious to see change.

And they do not want to see a person lead this country, and stand up the Republican nominee, who says he doesn't understand how the economy works, who voted against the Bush tax cuts, and is now pushing McCain-Lieberman, which is an enormous tax increase, effectively, on gasoline and energy. That's not something people here in Florida are going to sign up for.

BLITZER: Governor Romney, Thanks very much for coming in. Good luck.

ROMNEY: Thanks so much, Wolf.


BLITZER: And this footnote. We've just learned that the vice president, Dick Cheney's daughter, Elizabeth Cheney, will endorse Mitt Romney. Cheney is a Washington lawyer, a former State Department official in the Bush administration. She had been working on Fred Thompson's campaign before Thompson dropped out earlier in the week. Her father, the vice president, has not endorsed any Republican candidate for president.

Coming up, another disappointing finish for John Edwards last night. What's next for his campaign?

We'll hear from the Democratic presidential candidate.

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


BLITZER: Welcome back. We're at the CNN Election Center here in New York. The Democratic presidential candidate John Edwards finished a disappointing third place in the South Carolina primary yesterday. That's a contest he won four years ago.

I spoke with him last night.


BLITZER: Let's speak with Senator John Edwards, right now. He's joining us from the Edwards headquarters in Columbia, South Carolina.

Senator, thanks very much for joining us.

We heard your speech. This must be a disappointment, though, coming in third in South Carolina.

EDWARDS: Actually, Wolf, we're very encouraged about what happened. If you look at what happened, over the course of the week, we were way, behind and we moved up during the course of the week, I think, partly as a result of the debate, which you helped moderate, on Monday night, in Myrtle Beach, but also subsequent to that, because I was taking the high road while the two of them were attacking each other personally.

And even in the last couple of weeks, we've had extraordinary online contributions. And I say thank you to all those who have been supporting us. It puts us on sound financial ground. So we're in a very good place. And I'm actually very encouraged.

I'd rather win, of course, but, you look at the progress we've made, and we made very good progress this week.

BLITZER: So let's be precise. You're in this; you're staying put; you're not going anywhere. Do you have enough money, enough staff, enough organization to pursue what, in effect, could be a national campaign on February 5th, Super Tuesday?

EDWARDS: Absolutely, we do. I mean, it's what I was just making reference to. We're on sound financial footing, in large part because we've actually raised more money online, in the last two weeks, than the entire -- any other time during the course of my presidential campaign.

People are responding remarkably. And it's giving us the strength and the support to make sure that I can give voice to all those people I'm trying to give voice to, the forgotten middle class, working people, the uninsured, people who are living in poverty, veterans who aren't getting the care and the treatment that they deserve.

I mean, their cause is why I'm running for president, Wolf. It has not gone away. And I am in this thing for the long haul.

BLITZER: Hillary Clinton and her campaign said the voters in Florida should be allowed to have their say, this coming Tuesday, even though the Democratic party has sanctioned Florida and Michigan for moving up their primaries before the schedule that was supposed to let them do so.

What do you say to that?

EDWARDS: Well, I stay out of that process, Wolf. I let other people worry about that. My job is to be a candidate for president of the United States.

Of course, voters in Florida ought to be able to have their say. But as to how the process worked and what the DNC did, I'm staying out of that.

Here's what I know. I know there are millions of people who are going to be voicing their view about all of this and helping shape our party and the future of our country over the course of the next couple weeks. And then it will continue after that.

We clearly have a three-person race. This is very different than any race I can remember, in recent history, where we have three of us that are getting a sizable chuck of the vote. This thing's going on a very long time.

I heard Congressman Clyburn say, earlier tonight, he thinks it's headed to the convention. And I think that's a very real possibility.

BLITZER: And will you stay until the convention, if necessary?

EDWARDS: I am so in this for the long haul, and to give voice to all those people that I'm speaking for.

BLITZER: Some have suggested you're looking to play the role of king-maker, to accumulate a bunch of delegates, that you could decide where they would go, at the convention in Denver.

Is that the kind of role you envisage?

EDWARDS: No, the role I envisage is being president of the United States.

EDWARDS: And I still believe very strongly that I'm the strongest general election candidate, and I'm the one who can beat what looks like it may be the front-runner John McCain now. And I hope Democrats will continue to focus on that as we go forward.

But the most important thing, Wolf, is for me to speak for people who need a voice in this country. And that's what drives me every day. It's what gets me going and what keeps me going.


BLITZER: John Edwards speaking with me last night.

Still ahead, what's next for Mike Huckabee? My conversation with the Republican presidential candidate when we come back.


BLITZER: Welcome back to "Late Edition." In our next hour, we'll get a progress report on Iraq from the top U.S. military commander there, General David Petraeus. My exclusive interview with him. That's coming up.

But right now, more on presidential politics. Since his dramatic win in Iowa, the Republican presidential candidate Mike Huckabee has not scored a victory. I spoke with him just a short while ago.


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

HUCKABEE: Thanks, Wolf. Great to be back.

BLITZER: Let's talk about the economic stimulus package that the president and the Republican and Democratic leadership in Congress have gone forward with. You've got some reservations.

I want to play this little clip, what Mitt Romney, one of your Republican presidential rivals, is saying. He is suggesting it's basically a good package. Listen to this.


ROMNEY: He is getting money back to consumers, given the fact that two-thirds of our economy is a consumer economy, getting money back into the hands of our citizens, a lot of them paying a lot for gasoline, a lot for heating oil. A lot of people concerned about how to make ends meet. That makes sense to me.


BLITZER: All right. You've got some serious problems, though, with the package. What is the basic difference, as you see it, between yourself and Mitt Romney, for example, on the Republican presidential side?

HUCKABEE: Well, kudos to the president and Congress for finally agreeing on something and doing something. But as I expressed in the debate the other night, the problem I have is that what we are really doing is borrowing about $150 billion from the Chinese, which is where this money has got to end up coming from, in the trade deficit.

Then we're going to give rebates to taxpayers, and that's great. I'm glad. But what will most of them do with it? They're going to buy things that were imported from China. So I have to ask, whose economy is being stimulated the most?

What I suggested was, we have a nation whose infrastructure is crumbling. Our roads, bridges, airports clogged up. People don't get home to be with their families. They're stuck in traffic.

Texas A&M did a study, found that the average American in an urban setting loses 38 hours a year -- that's a full work week -- stuck in traffic because of clogged traffic patterns. That's a week's worth, not on vacation, not with the family, not being productive, that's lost sitting behind the steering wheel, banging on the wheel because they can't get home.

Now, $150 billion would expand the interstate by two lanes, I-95, from Bangor, Maine, to Miami. There are places all over America, whether it is in my state of Arkansas, California, Texas, all over the place where our infrastructure is choked, where people are stuck on runways because they are overburdened, and their highways are clogged. We have bridges falling down in Minnesota.

Every billion dollars we spend on infrastructure creates 47,500 jobs. And we do it with American labor, American cement, American steel. That's why I'm saying that that's a real long-term stimulus package. But it does more than just stimulate the economy, it actually stimulates jobs for Americans for a change.

BLITZER: I'm about to interview the secretary of the treasury, Henry Paulson. So if you could pass a message on to him, what would that message be?

HUCKABEE: Well, it would be that I appreciate the fact that the president and this administration is taking action. And again, I support the first step of being active. But I hope that we will be looking at some long-term ways to stimulate American economy and do something that provides lasting treasure and value, and that is infrastructure. We're neglecting our infrastructure. If you look at what's happening to -- the fact that our sewer systems, water systems, roads, they were built 50, 60, sometimes 80 and 100 years ago, and they simply are not able to keep up with the growth.

And as a result, we're not just having trouble today, but look at the problems that we're passing on to the next generation on top of a $9 trillion national debt. Now we're going to give them an infrastructure that is falling apart and the cost of rebuilding that and fixing it is four times the money we're putting into it to actually keep up with it.

BLITZER: Let's talk a little bit about what is happening in Iraq right now. I want to follow up on a question you were asked at that Republican debate in Boca Raton the other night, when you suggested that there may still have been Saddam Hussein's weapons of mass destruction that were moved.

And I'm going to play this little clip of what you said.

(BEGIN VIDEO CLIP) HUCKABEE: Now everybody can look back and say, oh, well, we didn't find the weapons. It doesn't mean they weren't there. Just because you didn't find every Easter egg didn't mean that it wasn't planted.


BLITZER: Well, do you believe that the president of the United States and the top national security advisers, the military commanders were all wrong when they now acknowledge there were no WMD under Saddam Hussein when the U.S. went into Iraq?

HUCKABEE: They all say they weren't there when we went into Iraq. My point was, Saddam Hussein bragged that he had them. We know that he in the past had used them. So there have been weapons of mass destruction.

And I'm simply saying that because when we went in we didn't find them, everybody wants to criticize the president and say, oh, the president lied to us. The president didn't lie to us. The president acted on information that he had, that he believed, and intelligence services believed that they were weapons of mass destruction.

And Democrats in Congress believed it too, and that's why they voted with the president to go into Iraq. Did those weapons end up in Syria or some remote location in Jordan? I don't know, may not.

But for us to categorically say they never existed, that was my point. They didn't exist when we got into Iraq, but that didn't mean they never were there.

BLITZER: Here's the follow-up question, because you were asked at that debate, along with the other Republican presidential candidates. With the exception of Ron Paul, all of you said that despite what we know right now, the war was worth it in terms of blood and treasure. Nearly 4,000 U.S. men and women killed, hundreds of billions of dollars spent.

Do you really believe that this war was worth it if there were no WMD, if there was no connection to Osama bin Laden -- between Saddam Hussein and Al Qaida, and there was no connection to the 9/11 terrorist plot. Was this war, with hindsight, worth it?

HUCKABEE: Well, that -- the way the question is asked, Wolf, is impossible to answer because you are always saying, is it worth it in light of what we know but what we didn't know then.

And that's the whole issue of making tough decisions. And believe me, as a governor, I often made tough decisions based on the information that I had. Later, when the information was clearer, you know, maybe you would have made a different decision.

But I support that the president did what he believed was necessary. I support that even Democrats in Congress agreed with him that at the time we could have faced a serious threat to our own national security, Al Qaida believed to be building bases of support there.

The fact that we get in later and say, well, it wasn't quite as bad as we thought. It still was bad for the people of Iraq. Tens of thousands being murdered by Saddam Hussein, certainly not a nation friendly to us.

And if we had it to do all over again, would we do it differently? We probably would. But that's just it. It's so easy to decide what the quarterback should have done on Monday at breakfast when you're sitting around with your pals.

HUCKABEE: But when you're out there on the game, and guys that are weighing 320 pounds are rushing at you, you know, you have to make split-second decisions. And sometimes they're not always perfect.

You're never going to elect somebody to make perfect decisions. But to second guess the president now, I think, is really not a very prudent thing to do. It doesn't make us feel any better.

And I think what we've got to do is to say, let's make the best of what we have in Iraq. Let's make sure that we don't make a bigger mistake by a premature pullout that does leave Iraq vulnerable to an Al Qaida long-term training facility and a complete, just, breakdown of that structure, a vacuum into which Iran or any other sorts of maybe governments or terrorist groups could get into.

BLITZER: The New York Times the other day endorsed John McCain, your rival, for the Republican presidential nomination, and then they said this in their editorial: "Mike Huckabee, the former governor of Arkansas, is an affable, reassuring Baptist minister who talks about a softer Christian conservatism. His policies tell the real story. To attract Republican primary voters, he has become an anti-immigrant absolutist. His insertion of religion into the race, herding Mr. Romney into a defense of his beliefs disqualifies him from the Oval Office."

What do you think about those strong words from The New York Times?

HUCKABEE: Generally, if The New York Times is beating you up on the editorial pages, that's a real plus for you as a Republican. So I take that as a badge of honor. And obviously, they're wrong about my positions. You know, people want to say, oh, he's this Baptist guy.

Look, I was a governor longer than I was a pastor. Nobody goes back 17 or 20 years and says that that's all there is to talk about of Mitt Romney, John McCain or anybody else. It's an attempt to show in some ways, I think, the soft bigotry we have toward Christian evangelicals.

It is becoming very apparent that -- the question that I was posed the other night in the debate I thought was very revealing. It was that some high official in the administration said that he is queasy about Mike Huckabee because of my faith.

Wolf, think about what that's saying. There was a time in this country when we would have been queasy if a person didn't have any faith. Now we are saying we are queasy if a person has some?

Is our culture so shifted dramatically that the fact that I was a governor and led in education reform, in health-care reform, rebuilt our road system, we forget all of that, that I cut taxes, streamline government, we forget all of that?

All we want to do is say, this guy is a Christian. Is that what we've become? I think that is really pretty revealing if the only thing people want to talk about in relationship to my candidacy for the presidency is that I happen to believe that there's a God.

And again, I said the other night, I'll say it again, that I don't think that disqualifies me to be president. What qualifies me is more executive experience in running a government than anyone running for president, and being successful at it.

Being a person who believes that we do need to have an efficient, effective government, and having a record of doing that at the state level, and proving that -- you know, Time magazine said I was one of the five best governors, Governing Magazine gave me kudos for our health care reforms, as did AARP. Those are the things that qualify me to be president of the United States.

And I think a lot people are agreeing with it. That's why our campaign, despite all odds, still is moving forward, second in national polls, and I believe we're going to be on our feet, not just after Super Duper Tuesday, but on the platform to take the nomination in Minneapolis.

BLITZER: Well, good luck, Governor. Thanks very much for coming in.

HUCKABEE: Thank you, Wolf.


BLITZER: I've asked my questions to the presidential candidates. It's your turn coming up as well. We'll explain. And the treasury secretary, Henry Paulson, on the U.S. economy, the economic stimulus package and what it means for you. We'll be right back.


BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer. Next week, CNN, along with the Los Angeles Times and the Politico Web site, will be sponsoring two presidential debates.

On Wednesday, the Republicans face off at the Reagan library out in California. Anderson Cooper will moderate. I'll moderate the Democratic presidential debate the next night at the Kodak Theater in Los Angeles. These are the final debates before the Super Tuesday elections on February 5th.

Here's what you can do. You can submit your questions if you'd like to on the Web site. Here are some that have been coming in so far. "Most candidates have addressed global warming in one way or another. However, global warming is only one of the many issues facing our environment. Aside from global warming, what do you think are the top two environmental problems, and what do you plan to do about them?"

That's one question that's come in. Here's another one.

"All signs point to the economy going into some sort of recession in the coming year and possibly past that. How would you institute your universal health-care plans at a time when the last thing people would want is to pay more taxes?"

Once again, you can vote on your favorite questions, add your own to the list at And watch the debates unfold right here, Wednesday night and Thursday night, 8 p.m. Eastern.

Up next, a bipartisan deal to try to boost the U.S. economy. Is it enough to avert a much-feared recession? We'll talk about it with the treasury secretary, Henry Paulson.

"Late Edition" continues right after this.


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

With unusual speed, the White House and the Congress reached a $150 billion deal to give millions of Americans a tax rebate to help boost the sagging U.S. economy.

Just a short wile ago, I spoke with the Treasury secretary Henry Paulson, himself a former chairman of Goldman Sachs.


BLITZER: Mr. Secretary, thanks very much for joining us. Welcome to "Late Edition."

PAULSON: Wolf, it's great to be here.

BLITZER: Let's talk about a recession. There's a lot of fear out there that there could be a recession. I know the technical definition has not been met, the definition that economists like to say, but are we already in a recession, for all practical purposes?

PAULSON: Wolf, I don't believe so. But, for all practical purposes, the economy has slowed down rather markedly. We were growing at 5 percent, almost 5 percent, in the third quarter. The year-end slowed down.

I think we're going to keep growing, albeit more slowly, much more slowly. But the risks are to the downside, and the cost of doing nothing is too great, and that's why we're moving quickly with this bipartisan stimulus package.

BLITZER: Because psychologically, when people fear a recession, they stop buying. They start hoarding their money, and that merely fuels that potential problem.

PAULSON: You're right, and fear is the enemy here. And you know, there is no reason to be fearful. We have an economy in the U.S. that is structurally sound. The long-term fundamentals are healthy. Growth has slowed down, but there are positives here. And again, we're moving to take action.

The major risks, as you know, are the housing downturn and what's going on in the capital markets. And we've got programs to deal with both of those things. And again, we're very focused on our economy here.

BLITZER: Well, let's talk a little bit about those capital markets. If we take a look at the stock markets, since October 9th, last October 9th, the Dow Jones industrial's down 13.9 percent; NASDAQ down 16.9 percent; the S&P down 14.6 percent; a lot of nervous investors out there, and those markets are going down, down, down.

What's going to be the result of this?

PAULSON: Well, I don't make market forecasts, Wolf, but I've been watching markets for a long time. You're always going to see volatility. I keep my eyes on underlying economic fundamentals, and I think that's really what we should be watching here.

Global growth is still very solid, very good throughout Asia, Europe, Latin America, developed and developing countries. Growth in the U.S. is slowing down. I know the eyes of the world are on the U.S.

Economies don't go up forever. But I will tell you, I believe that we're going to keep growing. I believe the growth is going to slower for a while here.

I freely acknowledge that the risks are to the downside. And the cost of doing nothing is too great. But again, we have a solid economy, fundamentally healthy, and you know, all of the long-term fundamentals are good here.

BLITZER: Why is the dollar so weak?

PAULSON: Wolf, I think you know, and I think most of your viewers know that I believe a strong dollar is in our nation's interest. And you know, our economy, as we've just been talking, like any other, is going to have its ups and downs. It's going to have its ups and downs.

I've told you I believe we're going to continue to grow, and that -- and I also believe that our currency, the dollar, is going to reflect these fundamentals.

BLITZER: As you know, the president announced, together with the Democratic and Republican leadership in the Congress, a short-term economic stimulus package to try to jump-start the economy. And people are going to be getting checks back from the U.S. government, a lot of middle-class workers and families. When will those checks start arriving?

How long will it take to get all that money out to the individuals out there?

PAULSON: Well, Wolf, the key is to get something through Congress. We don't have it yet. We have a -- you know, I think the American people were pleased. I think the markets will be pleased to see us all come together in Washington and work something out. We had bipartisan spirit. We came to a quick agreement with the House last week.

Now the Senate needs to take action. And I'm optimistic here. I don't think the Senate is going to want to derail this program. And I don't think the American people are going to be anything but impatient if we don't enact this bipartisan agreement quickly.

But first, we need legislation. If we get legislation; we get it signed quickly, I would be optimistic that the American people are going to start seeing these checks beginning in May. And by mid-year, they will be out into the economy.

BLITZER: So by June, July, you think all those checks will be disbursed?

PAULSON: Yes, again, we've got to get something done first. We've got to get the Senate to act. But I believe by mid-year, they'll be out. Because, more or less within 60 days of enactment, we'll be able to start getting the checks out.

BLITZER: But is that too late?

PAULSON: Wolf, this is not a precise instrument. I've been debating people that say, well, why are you doing a stimulus program like that when it's not clear that the economy is going to stop growing?

We're trying to be ahead of this and get it out as soon as possible.

We can get it out in time to make a difference in the economy this year. And I think that will be a -- it will make a difference, and it will send a positive signal to the markets if Washington can come together, Democrats and Republicans, putting aside their short- term political interests and focusing on something that the whole American -- all of the American people care about, the strength of our economy.

BLITZER: Here is the criticism that came in from John Sweeney, the president of the AFL-CIO.

He said this: "The latest economic stimulus proposal simply is not enough to make a real difference for America's working families. It is up to the Senate to extend unemployment benefits and increased food stamps to get money into the hands of those who will spend it quickest and need it most. Economists agree these programs will have the most immediate impact on the economy and the most bang for the nation's buck. Anything less will not be sufficient to keep our economy from diving headlong into recession."

And Max Baucus, the chairman of the Finance Committee that's going to have to review this proposal, as you know -- he told me this week he wants to tweak it as well. Listen to what he says.


SEN. MAX BAUCUS, D-MONT.: We're going to take a long, hard look at that, because especially food stamps gets a great bang for the buck. That is, everyone agrees, Congress all agreed that the people who receive food stamps are going to spend it, and that's going to help stimulate the economy. That's especially important. Unemployment insurance is also very important.


BLITZER: You didn't include food stamps or unemployment insurance in this package. Why not?

PAULSON: Well, this, Wolf, was a very carefully crafted package. It's got good balance. And this is focused on giving checks to people. These are on temporary programs, getting money into the economy as quickly as possible; then it stops. And you're giving the money to the American people and letting them decide, as opposed to putting it into programs.

I believe that what we've got here is something that will -- that will work and will work quickly, and more quickly than some other alternatives.

And again, once you start considering additions -- the food stamps, unemployment insurance and so on -- it's a slippery slope, and there is a real danger that we're going to bog down and screech to a stop.

You know, those ideas that were put out -- trust me, there are strong constituencies for those ideas, and there were strong constituencies in the House. But the leaders of the House -- you know, the speaker, Nancy Pelosi, John Boehner -- they were wise enough and decisive enough to recognize we need to keep this simple. And only by keeping it simple could we reach a quick agreement and get the money out where it can make a difference.

And I believe -- I'm optimistic that the leaders in the Senate are going to do the same thing. We've got strong leaders in the Senate. And again, trust me, Harry Reid, Mitch McConnell -- they made it easier for us to reach this agreement because they encouraged us. They said, work out an agreement with the House first, and then we'll take up action quickly.

I believe they will, and I'm very hopeful they'll keep it simple.

BLITZER: I spoke earlier with Mike Huckabee, the Republican presidential candidate. And he says, basically, you should be spending this money on infrastructure in the United States. He says this economic stimulus package will stimulate the Chinese economy, not the U.S. economy. Listen to what he told me.


HUCKABEE: The problem I have is that what we're really doing is borrowing about $150 billion from the Chinese, which is where this money has got to end up coming from, in the trade deficit. Then we're going to give rebates to taxpayers, and that's great. I'm glad. But what will most of them do with it? They're going to buy things that were imported from China. So I have to ask, whose economy is being stimulated the most?


BLITZER: All right.

PAULSON: I would say the answer is, our economy is going to be stimulated the most.

Now, I appreciate the fact that the presidential candidates are going to have views, but again, what we're focused on is this year. And I think many of their views are focused on the longer-term, next year.

You know, there's -- I've heard good support for infrastructure spending.

PAULSON: And I'm sure that there will be ideas there that will be taken up and considered on a different time track. But what we're again focused on here is something that will be simple and get money into the economy quickly to make a difference.

And infrastructure spending doesn't do that. It just plain doesn't do that. What does this is giving money to people and the kinds of business incentives we're proposing here.

BLITZER: Secretary Paulson, appreciate your joining us. Thanks very much.

PAULSON: Thank you, Wolf.


BLITZER: And up next, could the Democrats be headed for a brokered convention at the end of the summer in Denver? The third- ranking Democrat in Congress, James Clyburn, he weighs in on that and Senator Barack Obama's huge win in South Carolina. "Late Edition" continues right after this.


BLITZER: Welcome back to the CNN election center here in New York. It's beginning to look like Super Tuesday might not necessarily decide the Democratic presidential nominee. The number three Democrat in the Congress, James Clyburn, shared his thoughts with me last night after Barack Obama's big win in South Carolina.


BLITZER: Congressman, thanks very much for joining us. What do you think, Barack Obama the big winner in your home state of South Carolina tonight? What do you think?

CLYBURN: Well, I feel real good about this, Wolf. We worked very hard so that African Americans could have a say in this process early on So that we would be able to vet our candidate among those voters in a way that would give us some idea about how the base reacts.

So I'm very pleased that this primary has been so successful, and I am hopeful that we can now get this whole issue of racial differences behind us and go forward talking about the vision that our candidates have. They're competing visions for this great nation and about our vision of the Democratic Party.

BLITZER: I know until today you have been neutral throughout this entire process. You have not expressed a preference for any of these three Democratic presidential candidates. Are you ready to tell our viewers who you voted for today?

CLYBURN: No, sir. I'm not ready to do that. I think we're going to go all the way up to the convention. I want to be involved in this process as a fair and impartial arbiter if I need to be that.

I plan to be traveling this entire country for the next few weeks on behalf of the Democratic Party, and I want to have credibility as I go out. So, I'm not sharing with anybody who I voted for today.

BLITZER: I know you told me the other day you thought it could go all the way to the Democratic convention in Denver. There could be a brokered convention at the end of the summer that none of these three candidates necessarily would have enough delegates to guarantee that they would get the nomination. You still feel like that?

CLYBURN: Yes, I do feel that way. And I think it would be very, very good if that were to occur, for two reasons. First of all, I do believe that when you allow people to come into the process, we've got a group of super delegates, the officials of the party, the elected officials as well.

They ought to be able to have a calming effect on the entire convention. And also, this front-loading that took place, if we can get back to a cool, calm, organized process, having Super Tuesday doesn't make a lot of sense to me.

And I think that when we have proportional voting, as we do have, front-loading doesn't make sense unless you've got one dominant candidate. We've got three candidates now. No one of them is particularly the dominant. All three of them going to leave South Carolina with a ticket all the way to the convention. Now, albeit they won't have -- all have first-class tickets, but they'll all have tickets, and they're eligible to be upgraded somewhere along the way.


BLITZER: Congressman James Clyburn speaking with me earlier.

And much more coming up on "Late Edition," including my exclusive interview with the top U.S. military commander in Iraq, General David Petraeus. That's coming up. "Late Edition" continues at the top of the hour.


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


PETRAEUS: I do think that we will have forces here for some period of years.

BLITZER (voice over): But how long will U.S. forces remain in Iraq?

And will there be a permanent U.S. military presence there?

The top U.S. commander in Iraq, General David Petraeus, joins for an exclusive interview.

From South Carolina to Florida, two crucial contests.

CLINTON: We've got to set goals as a nation.

MCCAIN: I will never surrender in Iraq.

Insight and analysis on the Democratic and Republican race for president from Fareed Zakaria, Gloria Borger, and Jeffrey Toobin, three of the best political team on television.

The second hour of "Late Edition" begins right now.


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

BLITZER: Welcome back to our second hour of "Late Edition". We'll get back to presidential politics shortly, but first, a "Late Edition" exclusive.

As the fifth anniversary of the war in Iraq approaches, there's mounting pressure to bring U.S. troops home. Even as Americans focus increasingly on the troubled U.S. economy, it's important to remember there's still a war under way. I spoke, this week, with General David Petraeus, the top U.S. military commander in Iraq, to get a progress report on what's going on. He joined me from Baghdad. (BEGIN VIDEOTAPE)

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

PETRAEUS: Good to be with you, Wolf.

BLITZER: Let's talk about troop levels, in Iraq, right now. I know you're getting ready, later, in March or April, to come back to Washington to testify with Ambassador Ryan Crocker on what's going on, an update on that.

But there were, at one point -- correct me if I'm wrong -- about 170,000 U.S. troops in Iraq. Right now, I think it's down to closer to 160,000. It's supposed to go down to about 130,000 by July.

Is all of that on schedule? Are things working out the way you want?

PETRAEUS: They are, Wolf. We have, as you noted, already withdrawn, without replacement, a brigade combat team and the Marine expeditionary unit that was in here last year. And we are on track to withdraw four more brigade combat teams and two Marine battalions by the end of July.

BLITZER: There was some suggestion, by the defense secretary, Robert Gates, that he would like to see the troop level, by the end of this year, 2008, down perhaps to 100,000. Is that realistic?

PETRAEUS: Well, the guidance that he, in fact, has given me, and the president and my chain of command -- what all of them have said is that reductions, after July, should be conditions-based.

We're working out, right now, what the possibilities are, what the analysis is that should provide the basis for decisions to recommend additional withdrawals. And we're not done with that yet. And I can't answer that just yet.

We will, though, need to have some time to let things settle a bit, if you will, after we complete the withdrawal of what will be over one-quarter of our combat power, one-quarter of what we had during height of the surge.

We think would be prudent to do some period of assessment, then to make decisions and then, of course, to carry out further withdrawals, if the conditions obtain that allow us do that.

BLITZER: Based on your experience -- and you've spent a lot of time in Iraq, perhaps more than any other commander since the war started back in 2003 -- based on your experience, what would happen if all -- all U.S. combat forces were removed from Iraq within one year?

PETRAEUS: Well, Wolf, again, it depends what the conditions are when that happens, or were there to happen. And again, what we're focused on is trying to take forces out as quickly as we can, with a reasonable level of risk. We're keenly aware of the strain that the repeated deployments and the surge have put on our ground forces, in particular, but all of our military that are involved in operations here and Afghanistan and elsewhere.

We want to reduce the level of forces as quickly as we can so that we can reduce that strain, save money, reduce the flow of resources. But we want do it, again, in a way that will allow these gains to be maintained. We don't want to jeopardize what we have fought so hard for.

BLITZER: Because, as you point out, there's enormous pressure on the U.S. military to start withdrawing perhaps even more quickly from Iraq. General George Casey, the Army chief of staff -- he's under pressure to reduce the rotations for soldiers from 15 months to 12 months. He's working on that.

He also said this the other day. He said, "The surge has sucked all of the flexibility out of the system, and we need to find a way of getting back into balance."

He's clearly worried about troop levels in Afghanistan and other contingencies around the world. How much are you feeling that pressure from Washington?

PETRAEUS: Well, again, we're keenly aware of that strain. I obviously talked to General Casey, who was my predecessor here, my boss here, as well, the chief of staff of the Army in which I serve. And we have a regular dialogue. We just exchanged e-mails on some subjects, in fact.

Again, what we're both out to try to help our Army achieve is as much dwell time between deployments as is possible, and of course, to get from 15 to 12 month deployments as soon as we can. The key is to make the timing of that right and to figure out when that will make sense.

BLITZER: The Iraqi security forces, the soldiers and police, well over 550,000 now that they say they have, 343,000 police and 208,000 ministry of defense soldiers, another 4,000 or so special operations forces.

Why aren't they capable yet of taking charge and defending their own country?

PETRAEUS: Well, in fact, Wolf, this are shouldering more and more and more of the security burdens. And I think the most clear indicator of that, the clearest indicator, is the fact that their losses are about approaching three times our losses. They are out there. They are out front in many areas.

We just had the celebration of one of the holiest periods in Shia Islam, Ashura. There were major movements of pilgrims, religious pilgrims to Karbala, Najaf, and Baghdad, over 2 million.

In each of the past years, there has been terrible bloodshed during those celebrations. The Iraqi security forces planned this year the security for that; they deployed and moved forces to support those plans and executed them. And in fact, in Najaf, Karbala, and Baghdad, the celebrations went off with -- virtually without incident.

There was violence in Basra, in the far south, and in Nasiriyah, but Iraqi security forces responded in each of those cases, and dealt with the situations.

So there are a number of indicators of how they are increasingly taking on the burden of security. And interestingly, even if Anbar Province, by the way, which, you'll recall, was close to out of control about a year and a half ago, and now is starting to become a bit of an example of what right looks like in Iraq.

BLITZER: In December, the Department of Defense issued a report to Congress measuring security and stability in Iraq.

And they said this, among other things, of the Iraqi security forces. "Special problems include corruption and lack of professionalism, sectarian bias, leader shortfalls, logistics deficiencies and dependence on coalition forces for many combat support functions."

So here's the question. When do you believe the Iraqis will be able to take charge themselves and allow U.S. forces to move on?

PETRAEUS: Wolf, I can't answer when the ultimate moment will come. What I can say is that, again, while they clearly do have challenges -- and we provided that information -- and there is no question that there is -- there are a host of challenges that they have to deal with, you cannot go from zero to over 500,000 in the space of a few years without having leadership challenges, in particular.

That's the area that is probably the most difficult, because you just can't find captains, colonels and generals out there, in the numbers that they need, by just going back to those who are willing to serve from the old army, not all of whom perhaps have the qualities that one would want in the leadership of the new Iraq army, anyway.

But again, they are dealing with those challenges and they are increasingly shouldering the burdens. And it is not a light switch. It is more, sort of, a rheostat, that you hand over a piece at a time, that, over time, they're going through the door first, instead of us. Then we're, maybe, somewhere else in the neighborhood, then we're across town, and so forth.

PETRAEUS: And that's how that will go. And again, as you know, 9 of 18 provinces have now gone to provincial Iraqi control. And we've seen recently, as I mentioned, in the two provinces where there was violence during Ashura, an ability of Iraqi forces to respond in at least two of those provinces that have gone to Iraqi control.

Again, I don't want to make light at all of the challenges and the problems that are out there. In fact, we just came from a meeting between Iraqi and coalition leaders discussing some of those very issues, and they're still trying to catch up with equipping and with, in particular, the logistical support piece of this.

Because it is easy, relatively speaking, to develop infantry battalions. It is very difficult to develop the institutional underpinnings that support those forces, maintain their vehicles, get them paid on time, feed them and all of rest of that.

BLITZER: Are you working on a long-term military agreement with the government of Iraq that would include permanent U.S. military bases in that country?

PETRAEUS: I am not, Wolf. There is in work a status of forces agreement and then an overarching arrangement, if you will, that could define the security relationship between Iraq and the United States after the current U.N. Security Council resolution runs out at the end of this year.

Clearly, there's a need to determine what the authorities will be, what our responsibilities will be and so forth. And that work is ongoing. It is led by members of the State Department and the NSC. We do have participants in that. And obviously, we have a keen interest with respect to what authorities we would have, as military forces here, following on to those that we have under the U.N. Security Council resolution.

BLITZER: But in principle, are you on board with a permanent U.S. military presence in Iraq?

PETRAEUS: I'm not on board with a permanent military presence, Wolf. I do think that we will have forces here for some period of years. The key there, though, is that I do not envision them at anything like the present level, nor do I see us performing the same mission sets that we're performing right now.

BLITZER: When you say a period of years, can you give us an estimate? Is that five years, ten years, 100 years? PETRAEUS: I can't, Wolf, in part because it's fairly difficult to determine what the conditions might be. Frankly, we've tried to look into this crystal ball in the past over here, and I think that it has shown us repeatedly that sometimes you can get some bad surprises, occasionally you get some good fortune.

And hopefully, you're prepared for that good fortune and can turn opportunities like that into sustained progress. And Anbar Province, I think, is an example of that. And I think our soldiers were prepared intellectually for the concept that there were reconcilables whom we needed to reach out to and try to bring into the -- becoming part of the solution over time rather than part of the problem.

And then irreconcilables. And you try to minimize the number of irreconcilables because at the end of the day, they have to be killed, captured or run out of the country.


BLITZER: Coming up, is Iran interfering with the U.S. mission in Iraq? And what about the Iranian president Mahmoud Ahmadinejad's upcoming visit to Baghdad? He's been invited. Those questions and a lot more when we continue my exclusive interview with the top U.S. military commander in Iraq, General David Petraeus.

"Late Edition" continues after this.


BLITZER: Welcome back to "Late Edition." We'll get back to presidential politics here in the United States shortly.

But first, this. Iraqi lawmakers have taken some steps toward reaching political compromise and overcoming sectarian differences, but a lot of work remains. In part two of my exclusive interview, I asked the top U.S. military commander in Iraq, General David Petraeus, about that and a lot more.


BLITZER: The original stated purpose of the military surge, the escalation in troops, was to give the Iraqi government a better opportunity to forge the kind of political reconciliation, bringing the Sunnis, the Shiites, the Kurds together. Has the government of Prime Minister Nouri al-Maliki lived up to that promise?

PETRAEUS: Well, I think we're just starting to see the government and the council of representatives here perhaps shift into another gear. In recent weeks, last couple of months, we saw them pass a pensions law that extends pension rights to tens of thousands of individuals who were left out in earlier arrangement several years ago.

Then yesterday, they passed the Iraqi flag law in the council of representatives. Now, you might think that's purely symbolic. It's not. It has been a contentious issue for several years. The current flag does not fly in portions of the Kurdish regional government are in Iraq. And so this is an important step forward.

The de-Baathification reform bill, so-called accountability and justice law, has passed -- been passed by the council of representatives. It's with the presidency council. If that is signed into law and is enacted in a way, carried out, implemented in a way that represents reconciliation, it will be another step forward.

The 2008 budget is being debated right now in the council of representatives, and it distributes oil revenues in a way that is in line with the oil revenue-sharing bill that could be debated later in the year. And provincial powers is actually in the council of representatives, and we think that could be debated as early as the end of the week.

So, again, all of a sudden, it's as if there's a new dynamism in the council of representatives. In fact, the ambassador and I are going to host the speaker and the two deputy speakers of the council for dinner tonight to discuss what else they may have in store for their country. But it is -- it has been encouraging to watch the activity of the last couple of weeks in particular. PETRAEUS: We just hope that it leads to legislation that truly does represent reconciliation at the national level.

BLITZER: Has the government of Iran stopped shipping weaponry into Iraq?

PETRAEUS: Wolf, we're not sure. We are obviously watching that very keenly. We have seen certain types of attacks with weaponry that we know has come in from Iran. The very large-caliber rockets, some advanced air defense missiles, man portable, the advanced rocket- propelled grenades and explosively formed projectiles, these very lethal improvised explosive devices.

All of those have come down, although there was an increase in the EFPs in the first week and a half or two weeks of this month, but it subsequently went back down to the reduced levels. So, we're watching this very carefully, frankly. We are trying to interdict it, as you would imagine. We're looking very hard for it.

And we do not have conclusive evidence one way or the other. We do believe -- and we have detained individuals that have given us this information -- that training has certainly continued, that the Quds Force-supported special groups, as they're called, a militia extremist breakoff from the Sadr militia, that that training has continued, certainly up until the October-November time frame. And when the Iranians agree to talks, that would certainly be a subject of discussion at that time.

BLITZER: Is it a good idea that the president of Iran, Mahmoud Ahmadinejad, visit Baghdad?

PETRAEUS: Well, that's a question for Prime Minister Maliki and the government of Iraq, certainly. This is a sovereign country. Iran has had a longstanding relationship with many of the leaders in the country.

Let's remember that when Saddam let them out of prison or chased them around the country, a number of them sought refuge in Iran and have very close ties with the leaders in Iran. Others went to other countries.

It's got a substantial border, and it does substantial commercial traffic with Iraq. Everyone hopes that Iran could have a mutually beneficial relationship with Iraq, that the religious pilgrims, in particular. By the way, I went to the border the other day during Ashura, and there were over 1,500 Iranian religious pilgrims coming through the border, getting on to tour buses, believe it or not, with the flags and so forth. And several of them told me how much they liked Americans, by the way. We had some good conversations with them.

So, again, everyone would like to see that kind of relationship flourish, be established and continue and grow. The concerns of everyone, including the senior leaders in the government of Iraq, have to do with the so-called lethal accelerants that Iran has provided to Iraq in the past. The training, the equipping, the funding and even the directing of particularly the militia special groups that have been highly trained in certain types of improvised explosive devices and other advanced weaponry. That's an enormous concern, not just to us but to the Iraqi leaders. They have expressed that at the highest levels, and the highest levels of Iranian leadership have assured them that it would stop.

And again, that's what we're waiting to see. We would like to confirm the excellence of all the elements of the Iranian government in carrying out the promises of their senior leaders.

BLITZER: We're almost out of time. But I want to ask you one quick question about what you're planning on doing. Anthony Cordesman of the Center for Strategic International Studies here in Washington, he said this in The New York Times on Monday, he said: "We really need military continuity and command during this period in which we can find out whether we can transition from tactical victory to some form of political accommodation. We have in Petraeus and Crocker, the first effective civil-military partners we have had in this war."

Here's the question: What are your immediate plans? What's going on with General David Petraeus over the next many months?

PETRAEUS: Wolf, I'm focused on this mission right here with the greatest diplomatic partner that anybody could have, Ambassador Ryan Crocker. We've linked arms, and we're determined to do all that we can to try to achieve our objectives here in Iraq.

There are folks back there that do know that I've been deployed now for over 52 months, since 2001, nearly 3 1/2 years in Iraq. And I think some of them do think that it would be nice for me to rejoin my family at some point in time. But that's going to be a while from now.

BLITZER: Well, good luck to you, General Petraeus. Good luck to all of the men and women you command over there. We know you have a very dangerous and difficult assignment. We're hoping, obviously, for the best. Thanks very much for joining us on "Late Edition."

PETRAEUS: Thank you, Wolf.

(END VIDEOTAPE) BLITZER: And coming up, we'll go to the best political team on television for some firsthand analysis of the Democratic and Republican presidential contests from the key battleground states.

Also, we're just getting word of a major new endorsement for Barack Obama. Stay with us.


BLITZER: And this just coming in to CNN. We're getting word of another major endorsement for Senator Barack Obama. Our Suzanne Malveaux is joining us on the phone right now. She's in Birmingham, Alabama, where Obama's getting ready to speak to supporters, Alabama being a Super Tuesday state. What are you learning, Suzanne?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Wolf, this is really big, and it's very big for Barack Obama. Senator Ted Kennedy is expected to endorse Barack Obama for president. As you know, really a giant in the party.

A Clinton campaign source told me that the Clinton campaign was told that Kennedy is endorsing Obama, that they are in fact expecting it already. A senior aide from the Clinton campaign reacting on the record to this news that they expect. They have been friends, Senator Clinton and Kennedy, for a long time and that Senator Clinton has a lot of respect for Senator Kennedy.

Now, as you know, this comes right after Senator Kennedy's niece, Caroline Kennedy, endorsed Obama today in a New York Times op-ed entitled "A President Like My Father." This is really kind of extraordinary when you think about the relationship between the Clintons and the Kennedys, the kind of personal relationship that the two have.

Obviously, this is a very big win for Barack Obama.

BLITZER: A huge endorsement for the senator, especially coming on this, the day after his big win in South Carolina.

Thanks, Suzanne, very much.

Let's check the Republicans right now, see what they're up to. A key contest coming up this Tuesday in Florida; John McCain, Mitt Romney locked in a very tight battle.

Let's go to Mary Snow. She's following all of the action for us. She's in Polk City, right now.

What is the latest?

These polls show an incredibly tight race, Mary.

MARY SNOW, CNN CORRESPONDENT: They do, Wolf. And the candidates are really making their final push.

We're here in Polk City, as you just mentioned, with Senator McCain holding an event, as we speak.

And as this race is so tight, it really has intensified between a sharp exchange between Senator McCain and Mitt Romney, this over Iraq. And it spilled over into another day.

Senator McCain is saying that Mitt Romney supports a withdrawal, a timetable for the withdrawal of troops from Iraq. Mitt Romney is saying, and using harsh words, that's dishonest. He said that he never did that.

And he had asked for an apology from Senator McCain. This morning, Senator McCain was on "Meet the Press." Here's what he had to say and how Mitt Romney responded on "Late Edition" earlier this morning.


MCCAIN: I don't believe that Governor Romney's statement indicated anything but that we were going to tell -- we were going to have a timetable for withdrawal.


(BEGIN VIDEO CLIP) ROMNEY: I'm in favor of the troop surge. I've never suggested that we set a date certain to withdraw from Iraq. But he doesn't want to talk about the economy because, frankly, he's pointed out, time and again, that he doesn't understand how the economy works.


SNOW: And, Wolf, Mitt Romney had gone as far to say that he wanted an apology from Senator McCain. Senator McCain said the only apology owed is to the men and women of the military.

All of this was over an interview that Mitt Romney gave back in April, to ABC News, saying that the president and the Iraqi prime minister should have timetables and milestones but do so privately. Wolf?

BLITZER: Mary Snow, watching the Republican contest for us.

Thanks, Mary, very much.

Coming up next on "Late Edition," how will Barack Obama's big win shake up the Democratic race?

We'll get insight from CNN's best political team on television.

And later, McCain, Giuliani, Clinton, and Obama -- they all made appearances on the other Sunday morning talk shows here in the United States. We'll tell you what they had to say in our very popular "In Case You Missed It" segment.

"Late Edition" continues right after this.


BLITZER: Welcome back. Barack Obama gets a huge win in the latest Democratic contest, yesterday, in South Carolina. He beats Hillary Clinton by a more than 2-1 margin. So what impact will it all have on Super Tuesday, February 5th?

Here with some perspective, three of CNN's best political team on television, CNN analyst and editor-in-chief of Newsweek International, Fareed Zakaria and our CNN senior analysts, Gloria Borger and Jeff Toobin.

The final results, Gloria, last night, showed 55 percent for Obama, 27 percent for Hillary Clinton, 18 percent for John Edwards. It was a crushing defeat for Hillary Clinton.

BORGER: It was a blowout -- just a huge victory. I mean, people expected that Hillary Clinton was going to lose. But this margin was completely unexpected, even by the Obama campaign.

And I think he takes this momentum and he goes into the Super Tuesday states, showing that he's a candidate with two wins under his belt, and can go on to do more. BLITZER: And the Democrats -- within the Democratic party, Jeff, as you know, and as all of us know, the Kennedy name is a powerful, powerful name.

So now we're hearing from a source close to the Clinton campaign that Ted Kennedy, as Suzanne Malveaux just reported, is getting ready to endorse Barack Obama. This come on the heels of Caroline Kennedy, the daughter of the slain president, writing, in today's New York Times, these words.

"I have never had a president who inspired me the way people tell me that my father inspired them. But for the first time, I believe I have found the man who could be that president, not just for me but a new generation of Americans."

These are potentially, within the Democratic party, huge endorsements.

TOOBIN: Stirring words and very important endorsements. But we need to remember, Barack Obama need these endorsements because, according to all the polls, he's behind in every single Super Tuesday state, except his home state of Illinois.

So he needs to change the dynamic of the race. Now, this enormous win in South Carolina will probably help. The Kennedy name -- the Kennedy endorsement will probably help. But especially in the Northeast and in Massachusetts, a super Tuesday state, Obama's behind by 20, 30 points. It's -- he's got a lot to make up.

ZAKARIA: In a way also, Wolf, he's battling history. I mean, if you look at the Democratic Party, we think of it as this large and very democratic and loose party. But the insurgent, idealistic candidate -- you know, Eugene McCarthy, Gary Hart, Bill Bradley, Howard Dean -- always losses.

The candidate of the establishment, you know, who people gather around, wins. What Obama is trying to do is to say, I think, this is -- that age is over, where the cautious, quasi-Republican candidate wins; it's a new era for a kind of very bold, unapologetic Democratism.

BORGER: You know, Fareed, but what's going on, though, I think, is Obama splitting the Democrat establishment with Hillary Clinton. And the Ted Kennedy endorsement -- now, you talk about Obama being behind in the polls in Massachusetts. Well, now he's got the governor and the two senators with him. They can move some votes in Massachusetts. Ted Kennedy can move a lot of votes in that state, so... TOOBIN: The other difference between Obama and those insurgents that you named is none of them had any significant minority support.


TOOBIN: Obama comes with enormous minority support. If it's 80 percent, like it was in South Carolina, that makes getting the rest of the race easier to win.

BLITZER: But let me just move on to Bill Clinton, and focus in. Has his very outspoken, aggressive role, over these past few weeks, helped or hurt his wife?

ZAKARIA: I think it's hurt his wife and it's hurt him.

Look, Clinton occupied an almost unique position in the Democratic Party. You have not had a successful Democratic ex- president who has been alive. If you think about it, right, FDR and Kennedy died. Truman was very unpopular. Johnson was very unpopular. Carter was very unpopular.

So Clinton has occupied a, kind of, unique role. And I think people wanted him to be cognizant of that role.

And by getting in there -- and I don't know that he did anything particularly egregious -- but he just became a political operative. He was meant to be a statesman.

TOOBIN: Well, speaking of egregious, think what he said yesterday, comparing Obama to Jesse Jackson's two wins in South Carolina in '84 and '88. Totally unfair comparison. The nomination was already decided in '84 and '88. Those were meaningless primaries.

They were, in fact, not primaries. They were caucuses. So, I mean, the comparison is completely inadequate. It's an attempt to make Obama look like just the black candidate.

ZAKARIA: Well, you know, Dick Morris's theory -- I think since he knows Bill Clinton, it's interesting to point out -- is that Clinton wants Obama to win South Carolina so that he can say, the blacks are all voting for Obama and therefore trigger a white backlash for Hillary on Super Tuesday.

BORGER: You know, it's just a lot of Democrats I talked to found it kind of unseemly that a former president of the United States would become a precinct captain suddenly in the state of Nevada or a vice presidential candidate, which is exactly what he's doing with Hillary. And, Wolf, one thing I think we have to look for now, there's one big endorsement looming out there, and it may or may not happen, and that's Al Gore.

The question is, Democrats know that Al Gore would like, in his heart of hearts, to endorse Barack Obama. But if he were to come out and do that now, the fear inside those who are friends of Al Gore is that it would become about Al Gore and his rocky relationship with the Clintons. BLITZER: His endorsement of Howard Dean four years ago didn't do much.

BORGER: Didn't work so well, and so he may stay out of it.

TOOBIN: But Gore's in a different place now. Gore is a Nobel laureate. He is someone who is so identified with global warming. The argument against him doing any endorsement is that he's got to work with Republicans now on global warming issues. He's trying to separate himself from the political fray.

His current life is pretty good. Getting back into the mess of politics probably wouldn't do him or the candidate he endorses much good.

ZAKARIA: But I think I wonder, it might help a lot because in this case, unlike the last time around, he has worked with Hillary Clinton for eight years in the White House. So what does it say about her greatest claim to experience if the guy who was vice president says I don't think...

BLITZER: It would be a slap at her...

BORGER: But he doesn't want to go back there.

BLITZER: ... and Bill Clinton.

BORGER: It's unlikely.

BLITZER: All right, guys, stand by. We're going to continue this conversation. A lot more analysis from our political panel. That's coming up.

Also, Barack Obama and Hillary Clinton, they were speaking out on the talk shows earlier today as well. You're going to hear what they had to say in our weekly roundup of the Sunday talk shows. Much more coming up right here on "Late Edition."


BLITZER: We'll get back to our political panel in a moment. But 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, Republican presidential candidate John McCain criticized his rival Mitt Romney for his position on the Iraq war.


MCCAIN: Governor Romney obviously said there had to be, quote, "timetables," although they had to be secret, because we weren't going to tell the enemy when we were leaving. I mean, that's just the fact. And if we had done that as the Democrats and some Republicans wanted to do, we would have lost that surge and Al Qaida would be celebrating a victory over the United States of America.


BLITZER: Energized from his big win in South Carolina last night, Democratic candidate Barack Obama explained why he believes his message is resonating with voters.


OBAMA: I think that what we saw in this election was a shift in South Carolina that I think speaks extraordinarily well, not just for folks in the South but all across the country. I think people want change. I think they want to get beyond some of the racial politics that, you know, has been so dominant in the past. And we're very encouraged as we go to the February 5th states.


BLITZER: Undeterred by poor poll numbers in Florida, former New York City Mayor Rudy Giuliani said he's confident that Florida voters will deliver him a much-needed win on Tuesday.


RUDY GIULIANI, REPUBLICAN PRESIDENTIAL CANDIDATE: The reality is, I think the people of Florida are going to make this decision. And I think the people of Florida see in me a proven tax-cutter, someone who has turned an economy around, actually done what they would like to see done on a federal level.

I already did that in New York. And of all of the conditions that are running in the race, I'm the one who has lowered taxes in past and turned around an economy. And I have a significant amount of experience with handling the safety and security of millions of people.


BLITZER: And Democratic candidate Senator Hillary Clinton said if elected, she'll reach out to political opponents but would not waiver on her own core beliefs.


CLINTON: I believe very strongly in finding common ground. That's what I've done in the Senate. But I also believe in standing our ground against some of the very poorly thought-out and ill- conceived policies and ideas that we've had to fight against for the last 15 years.

I don't see a contradiction there. I want, more than anyone to bring our country together and to unify us.


BLITZER: Highlights from the other talk shows on "Late Edition," the last word in Sunday talk. Up next, the Republican presidential conditions have their own big showdown coming up on Tuesday in Florida. Our political panel will take on the Republican race when we come back.


BLITZER: We're talking about the latest developments in the presidential race with three of the best political team on television, Gloria Borger, Jeff Toobin, Fareed Zakaria, in Florida for the Republicans.

Now, in our poll of polls, we averaged the most recent polls.

For the Republicans, look at how close it is: McCain at 27 percent; Romney at 26 percent; Giuliani, 16; Huckabee, 14; Ron Paul, 3 percent. But given the margin of error, this is shaping up as a cliff-hanger on Tuesday.

ZAKARIA: It's a cliff-hanger. And I think one of the reasons the polls have been consistently wrong in the this election, both on the Democratic and Republican side, is you have so many moving parts.

You have more candidates, serious candidates, at this point in the race, than, really, ever before, that I can remember.

You have issues of race and gender, religion, Mormonism, which means that people might not be entirely honest or have made up their minds. And so I think you might find that Florida will turn out to be, on the Republican side, a big surprise, one way or the other.

BLITZER: One of the best sound bites, Gloria, of the week, was the mother of John McCain, Roberta McCain, who's 95 years old, asked by Steve Scully on C-SPAN -- this exchange. Listen to this.


STEVE SCULLY, C-SPAN ANCHOR: How much support do you think he has among the base of the Republican Party?

ROBERTA MCCAIN, MOTHER OF SEN. JOHN MCCAIN: I don't think he has any. I don't know what the base -- maybe I don't know enough about it, but I've not seen any help whatsoever.



BLITZER: All right. That's his mom speaking out bluntly. You've got to love her.

BORGER: Yes. She also went on to say they're going to hold their noses and have to vote for him.

Well, now we know where McCain gets all the straight talk from. We think it's his mother.


He made light of it, but honestly, she's telling the truth. The base of the Republican Party has never been enamored of John McCain.

BLITZER: Because he's a maverick; he's independent?

BORGER: He's a maverick. But what he has done in this election is he's gotten a lot of establishment support. You talk about Florida. Last night he got the endorsement of the very popular governor, Governor Crist, there, lining up establishment to help him out in states like South Carolina and Florida.

That could make all of the difference for McCain.

TOOBIN: But speaking of straight talk, no American politician has gotten more adoring press coverage than John McCain. But let's be clear about what John McCain is doing about Mitt Romney. He's lying.

He's lying about Mitt Romney's position, no question about it. And, you know, I think that this idea that Mitt Romney supports timetables -- now, in fact, most Americans support timetables to get out of Iraq. Mitt Romney doesn't happen to be one of them. But that's really outrageous what McCain is doing, bringing up this ancient interview and distorting it, at the last minute, so he doesn't have to talk about the economy.

BLITZER: And it's interesting what Bill Clinton said, this week, Fareed -- and I'll play this little clip -- about the possibility of a McCain-Clinton race for the White House.


FMR. PRESIDENT WILLIAM J. CLINTON: She and John McCain are very close. They always laughed that, if they wound up being the nominees of their party, it would be the most civilized election in American history, and they were afraid they'd put the voters to sleep...


... because they like and respect each other.


BLITZER: I suspect that's not going to be welcomed news in the Republican Party, to hear that. But what do you think?

ZAKARIA: I doubt, very much, that that would be true, by the way. Neither Hillary Clinton nor John McCain are going to run that kind of campaign, whatever Bill might say.

The interesting question about McCain, though -- I still believe -- we talked about it last time. McCain's fate, I still believe, depends on how core immigration is to Republican voters.

And we still don't have a clear sense of that. Because the polling, until now, for a year and a half to two years has shown this is the one issue that resonates very strongly with a plurality -- not a majority but a large chunk of Republican primary voters. He has to be unacceptable to them because is the author of...


BLITZER: And when I interviewed Mitt Romney, he kept saying these words, "McCain-Kennedy, "McCain-Feingold," "McCain-Lieberman."

BORGER: Right.

BLITZER: Those are various issues that he's teamed up with, with Democrats, that are not necessarily supported by a lot of Republicans.

BORGER: Well, that's a good general election strategy for McCain. But he's got to win the primary first. And Fareed is right. It's immigration.

Another thing Romney keeps talking about, which is what's gotten McCain so angry is McCain and tax cuts, that McCain did not vote for the tax cuts.


TOOBIN: But he didn't. I mean, that's true.

BORGER: Right. And he said -- but then you go on to explain and say, well, he didn't vote for it because he wanted it to be accompanied by spending cuts.

But these arguments -- but, in the long term, however, it's good for McCain that he's not talking about immigration right now.

ZAKARIA: So why is Romney not bringing it up more?

BORGER: He is bringing it up.


BORGER: He's talking about immigration every chance he can get, saying he's not for amnesty; McCain is for amnesty.

BLITZER: How critical is Florida for Rudy Giuliani's campaign Tuesday?

TOOBIN: Whose campaign?


BLITZER: Rudy Giuliani.

TOOBIN: He used to be the mayor, right here in near New York.


TOOBIN: The latest polls have him -- we showed the poll of polls, but the latest polls show him falling to fourth place, behind Huckabee. But he is strongly ahead of Ron Paul...


... who has defeated Giuliani in virtually all of the races so far.

I mean, look, polls have not been accurate. We should wait for the voters to decide. But, as a famous New York Knick once said, "The ship be sinking."


And I think that might apply to Giuliani campaign.

ZAKARIA: It is the most sudden drop in national poll numbers over the course of, really, just about eight or nine months.

BLITZER: We'll have complete coverage, guys, all day on Tuesday, for that. Thanks very much for coming in. The best political team on television. I say it because it's true.


Up next, you're going to see what's on the cover of the major news magazines here in the United States. And if you'd like a recap of today's program, you can get highlights on our new and improved "Late Edition" podcast. Simply go to

Coming up at the top of the hour, you can see the candidates on the campaign trail, unfiltered. Our CNN "Ballot Bowl." That starts right at the top of the hour. We'll be right back.


BLITZER: Let's see what's on the cover of this week's major news magazines in the United States.

Time Magazine calls Republican presidential candidate Senator John McCain "The Phoenix," and asks, can he keep rising?

Newsweek Magazine tells readers whether the U.S. is on "The Road to Recession."

And U.S. News and World Report -- it was a double issue last week that looked at some of the great moments in campaign history.

And that is your "Late Edition" for this Sunday, January 27th. Please be sure to join us again next Sunday and every Sunday, at 11:00 a.m. Eastern, for the last word in Sunday talk.

Remember, we're also in "The Situation Room," Monday through Friday, from 4:00 to 7:00 p.m. Eastern. Until tomorrow, thanks very much for watching. I'm Wolf Blitzer in New York.