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President Bush Holds Press Conference; Likely John Ashcroft Will Resign in Two Weeks

Aired November 04, 2004 - 10:59   ET

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

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


DARYN KAGAN, CNN ANCHOR: A new term will likely mean new faces on the Bush Team. White House correspondent Suzanne Malveaux joins us this morning with news on Attorney General John Ashcroft.
Suzanne, good morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Daryn.

It was just moments ago that the president wrapped up a meeting with his cabinet, and already there is word of a cabinet that is changing. We have learned, CNN has learned from sources close to Attorney General John Ashcroft it is likely that he is going to submit his resignation in a couple of weeks.

He has had some health problems, some health concerns in the past. He has come to symbolize the far right and has been a lightning rod for criticism around the Patriot Act. We understand that he is likely to submit his resignation fairly soon.

There is also a lot of talk -- this is not official until it's official - but a lot of talk around Secretary of State Colin Powell also stepping down. As you know, he was perhaps the most reluctant cabinet member when it came to invading Iraq.

Also, there are -- there's talk, there's some speculation about the secretary of Health and Human Services, Tommy Thompson, the secretary of Homeland Security, Tom Ridge, as two other people who are possibly going to step down. The process, of course, is that these individuals would submit their letter of resignation to the president. It would be the White House that would make the decision when to make that final announcement.

But Daryn, it is safe to say that the policies that we are going to hear the president talk about in his news conference in just moments are really going to be policies that are shaped by a dramatically different looking cabinet -- Daryn.

KAGAN: All right. As you were pointing out, a number of possibilities there. Let's talk about the one that looks like a sure thing.

Later today, John Ashcroft, they don't in Washington wait for the seat to get cold. So who are some possible names that might fill the position, Suzanne?

MALVEAUX: It's much too early to say, Daryn. They are keeping it very close to the chest there.

They are not actually talking about some of those possibilities. Perhaps Justice Department sources have a better sense of that. But there is some interesting talk about the possibility of the president appointing a Democrat, really reaching out to the Democrats, extending an olive branch to those.

There has been a lot of talk about the sense of partisanship here in the city, in Washington. That that might be a consideration for the president.

KAGAN: Well, and we've seen a president cross party lines before. President Clinton did it with Defense Secretary Cohen.

MALVEAUX: Well, absolutely. And that was just one example of an administration that was able to actually do that.

It's going to be a test for this administration. We have heard from the president before. It was just yesterday in his acceptance speech that he reached out to Democrats. This despite the fact that Republicans gained seats both in the House and the Senate, that they are in a dominant position now.

The president saying that he wanted to work with Democrats. He reached out to the 55 million people who did not vote for him, saying that this is a time for the country to come together. We expect that that is going to be one of the messages that he is going to deliver in his press conference just moments from now.

KAGAN: Suzanne Malveaux, at a soggy White House on this Thursday morning. Thank you -- Rick.

RICK SANCHEZ, CNN ANCHOR: Let's go over to John King now. He's at the Eisenhower Executive Office Building, where we understand that this -- this news conference is going to be taking place.

What are we expecting, John?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Rick, we're just a few minutes away here. It's dry inside the executive office building. My apologies to Suzanne.

We expect the president very much in echo of what he said yesterday, saying that the election is over, that he's gratified by winning, and winning a majority, and that he does want to pursue his agenda, which is a conservative agenda, but also try to reach out to Democrats. And that will be an interesting things to watch in the weeks and months ahead.

The president' views on Social Security, on health care, on taxes, are forcefully opposed by the Democrats. So how does he reach across the aisle at a time they have such significant differences on policies?

He also is facing key decisions about the war in Iraq in the coming days. And now, with Yasser Arafat's declining health, the Middle East peace initiative again in question, the future of the leadership of the Palestinian Authority in question.

And all expect significant turnover in the senior staff and the cabinet. Perhaps not right away, but over the next several months.

So as this president celebrates the election victory, quite a bit of work ahead -- Rick.

SANCHEZ: The fear being -- a little bit ahead of the curve -- I'm going to go ahead and ask you this question anyway. We are hearing about John Ashcroft possibly stepping down in the next couple of weeks from sources. We've also been hearing an awful lot seeing an awful lot of Rudy Giuliani. Can you possibly or in any way put those two together for us?

KING: Well, a second term Bush presidency could afford to reach out to a Rudy Giuliani and ask him if he might want to be attorney general. Many conservatives across the county might oppose that because of Rudy Giuliani's view on abortion and other social issues. So -- and Rudy Giuliani has made clear that he would listen to an offer from the president, but that he very much enjoys the private sector.

Other names that come up that should be kept on the list, John Ashcroft's former deputy, Larry Thompson, is someone held in high regard by this White House. So the search for attorney general would be one very interesting thing for this president to have to pursue in the coming days and weeks. And many would watch it, not only to see who would replace John Ashcroft, but perhaps to get a glimpse at the president's thinking about if he has to pick a new chief justice for the Supreme Court. Because many believe in the next few months, if not in the next few weeks, he will be faced with that search as well.

SANCHEZ: From a reporter's standpoint, you're as close to these guys as anybody is, John. What have you sensed -- or what have you seen as the mood with both members of the cabinet, the president, and those working and are close to him in the last 24 hours?

KING: Well, there's a great mood of celebration around here. There's also a little bit of, "I told you so."

This White House has had a contentious relationship with the people in our business. They from time to time complain of what they say is a liberal bias. They were complaining during election night that our exit polls were skewed. They were complaining during election night that many analysts on television on all networks across the spectrum were saying that high turnout would benefit Senator Kerry.

And in the end, of course, that high turnout benefited the president of the United States. So as the president meets with us today and celebrates his victory, it will be interesting to see whether he comments at all on the tone of his relationship with the press.

He had very few press conferences in the first term. It will be interesting to see in the second term, when he doesn't have to think about running for reelection, as to whether he is more open with his relationship with the press or whether he just goes about his business.

SANCHEZ: Had the theme been one of compromise, or even, if I could stretch it a little bit, one of appeasement?

KING: Well, to us, it has been one of "We will talk to you when we feel like talking to you." In terms of reaching out to the Democrats, this is a president who came to office promising to reach out to Democrats. And many Democrats say that he did so only early on or only right after 9/11, and that he didn't want to.

The issue will be how does he do it in a second term? And second-term presidents are very different from first-term presidents.

He does not have to worry about reelection, but he is the leader of a Republican Party that believes it is ascended right now. So as he thinks about his own legacy, he also has to think about the future of his party.

SANCHEZ: Well, you mentioned Republican ascend ascendancy. And we just happen to be looking right now -- we've got a split screen, and we're looking at a picture of Karl Rove. Got to be feeling like a proud peacock, that man, on this day. Would you say?

KING: The president complimented him as the architect yesterday of the reelection strategy. And even some Republicans in the final weeks of the campaign were questioning Karl Rove's strategy, saying it was too focused on social and religious conservatives.

There's some laughter behind me. God knows what it is.

(LAUGHTER)

KING: Hey, Karl Rove, come on in. Here he is right here.

See, Karl Rove, is he proud as a peacock? That was a peacock look right there.

Even many -- even many Republicans criticized his strategy. The president won a record 59 million votes. Economic conservatives, social conservatives, rural -- rural vote is targeted by that strategy. It all turned out. So I suspect by that glance you can tell he's pretty proud today.

SANCHEZ: Yes, that's interesting. We certainly didn't mean to get involved and kind of start this news conference off a little early. But it appears that Mr. Rove is feeling real jovial on this day, huh?

KING: Of course they're feeling jovial. They won reelection in a very contested, very tough election climate.

Mr. Rove has been with President Bush for a long time. One of the trademarks of this administration has been the loyalty of the president's inner circle and his loyalty to them. That is one of the more interesting questions as you go into a second term. Many have said it's time to go into the private life, it's time to get out of the long-grinding days here. Not out of any disloyalty to the president, just out of more loyalty to their families.

So it will be interesting if there is significant change here in the White House. Because the closest circle around this president has been with me since day one, not only of his time as Texas governor, but as his campaigns for Texas governor.

SANCHEZ: There's one thing this president has been extremely -- usually, when you look at this president, there's no doubt that you see that there's one thing that he's been real good with, and that's punctuality. And we're just two minutes behind here, John. I have to ask you, is there a possibility this is going to change in a second administration?

KING: Oh, he has his cabinet over at the White House. He just had a meeting with them, to meet with them after the election, to say thank you for their help on the campaign, to also talk about a second- term agenda.

The cabinet and the president have not been able to interact all that much because he's been out on the road so much. So the president is probably just having a little small talk and a little conversation with his close allies in the government. We suspect he'll be here any minute.

KAGAN: And John, Daryn here. We were talking about the changing faces. It's one thing for people to want to go along with their personal lives, having given their service to the government, the administration. But as you were pointing out, this is a president that prizes loyalty and having familiar faces around him.

How might -- how much encouragement might he have, though, for people to stick around instead of moving on?

KING: Well, certainly, if the president calls you up and says, "I need you to stay a bit longer," most would heed that advice. And no one expects resignations en masse.

What they do expect is, over time, the attorney general, we are told this morning, plans to leave pretty soon. The secretary of state has told friends he doesn't believe he'll stay on too long.

That doesn't mean he'll be gone tomorrow or even by Christmas, or even by the inauguration in January. But over a period of time, I think you will see a series of senior Bush administration officials move on, some for their own personal reasons, others simply to give someone else a chance in the job. They have been in the job for some period of time.

The job of coordinating all that falls the president's senior staff, the chief of staff, Andy Card, the deputy chief of staff. They have to find out who's planning on leaving and perhaps say, OK, you can go now, you need to wait a month or two.

KAGAN: And not to suggest that you've been around a long time, John, but you have covered...

KING: I've been around a long time.

KAGAN: It just feels like it. You've covered your share of administrations from one -- from one term to the next. It's not unusual to see a big turnover no matter who the president is.

KING: It's not unusual at all for there to be a big turnover in the second term. And this administration had relatively low turnover in the first term. So that could magnify the effect a bit.

But again, we are told by talking to these people that many think it's time to move on. But in the next sentence they often talk about their loyalty to this president or their desire that perhaps now the can get more done.

There's been so much focus on the war on terrorism, the war in Iraq in the final three years of the first term that even many Bush administration officials would concede they have not had the time or the energy or the focus or the ability in the Congress to deal with those issues like Social Security. It will be a big issue in the second term. It was a huge issue in the first Bush campaign, health care reform. So some say maybe now there's actually an environment in which they want to stay on to try to see if they can advance some of the domestic items on the agenda.

SANCHEZ: John, I can think of a very prominent Democrat, I believe his name is Tom Daschle, who doesn't have any specific job nailed down at this point, who may be available. I only mention him because there's a lot of talk, I suppose, inside the beltway there about the president actually reaching out and naming a new member of his cabinet and giving that post to a Democrat. What have you been hearing?

KING: I think that is a very high possibility, some would even say a probability in the second term. The secretary of transportation, Norman Mineta, is a Democrat. He was in the Congress from California.

I would look for the president to find one or two positions, cabinet positions or high-level positions in the government in the second term to reach out to Democrats. Would it be Senator Daschle? He would be a big name, of course.

Senator Daschle, if he received a phone call from this White House, would obviously perhaps be torn a bit between his own desire to perhaps move on now with a life in the private sector and his loyalty to the Democratic Party. Some Democrats would say anyone trying to come here into the White House, you know, how could you do that to us?

I understand the president is coming over now from the West Wing.

SANCHEZ: Yes. In fact, we're looking at -- I don't know if you have a monitor there, John, but we're looking at a picture now.

The president's coming in with an umbrella in hand as he's making his way up the steps. I imagine -- how long is it going to take him, John, from where he is now to the podium, where you are?

KING: Oh, it's just a matter of a minute or two, up the stairs or up the elevator. We're up on the fourth floor and he'll be here momentarily.

SANCHEZ: One final question. Colin Powell, what's the talk there about him?

KING: Well, the president obviously holds his secretary of state in high regard. We have -- going back to the middle of the campaign, Colin Powell has told some friends that it's time to move out. Not out of any wish to just get out of the government, but just simply that when he took this job he said he was not going to be a government-lifer.

Most expect the secretary the state to move on soon. Define "soon?" I can't define "soon."

We have Yasser Arafat in declining health. We have the war in Iraq. We have the president about to take one international trip, more scheduled early in the new year, trying to repair some of the tensions in relationships with allies like France. Perhaps trying to revive a Middle East peace initiative if there is a new Palestinian leadership that he finds to his liking.

So there's a long list of items on the agenda that Secretary Powell might look at and say, this is pretty exciting stuff, and have to balance that with his own desire to spend more time with his family.

KAGAN: And then, John, a question here about a second term president. What kind of challenges does President Bush face? He does get four more years, but he's technically a lame duck president because you know he's not running for reelection the next time.

KING: The first six months of the second term will be key in terms of advancing the agenda. He does have a Republican majority in both the House and the Senate. You cannot underestimate the importance of that.

He does not have a Democratic Party that can stand up to him and say "no" on everything, trying to lay the groundwork already for the next campaign. But he's also going to have to rein in his own party on some things, and say, look, I'm the president, I'm the leader of the Republican Party. So the first six months of the second term we will see the depth eighth breadth, if you will, of the second Bush honeymoon.

SANCHEZ: I mean, one of the issues that certainly the Bush administration needs to stay with is encompassing, if you will. I don't know if that's the right word, but the social issues that seem to have kept him in office, if you look at some of the exit polling. What are the plans in that regard, John?

KING: Well, it's a very interesting question because we may have a flash point very quickly. This is a president who is anti-abortion. He says he is pro-life, that's how he would put it.

As he campaigns across the country, especially in those critical rural, small-town America areas, where he won this election, he says he wants to advance a culture of life. He does not say he wants to reverse Roe v. Wade.

What the president has always said is the country needs to have a conversation about this and you have to bring opponents together. And he viewed signing that law banning certain late-term abortions as one step in that direction.

Now, how do you advance that cause? It is perhaps one of the most, if not the most, contentious issue.

Gay marriage, another one we saw on the ballot just this past Tuesday. Another contentious issue where the president has made his views quite clearly known. He doesn't have the votes in the Congress for a constitutional amendment.

How do you advance those things in a second term anyway? And especially, how do you advance them within a matter of weeks or months? He's likely to have at least one, perhaps as many in the second term, three pitched to the Supreme Court.

The Supreme Court picks are the holy grail, if you will, of interest group politics in Washington. Anti-abortion forces and pro- abortion rights forces dig their heels in on that one. That could -- a dustup over a Supreme Court could immediately, would immediately test this promise of bipartisanship and cooperation.

SANCHEZ: John King. Thanks, John, for handing in there with us. We'll certainly be coming back to you in just a little bit.

KAGAN: We'll take a breather right there.

Let's bring in Kelli Arena, our Justice correspondent, to talk about possible names that could fill the Ashcroft seat.

KELLI ARENA, CNN JUSTICE DEPT. CORRESPONDENT: Well, Daryn, I'll tell you, we always have to be real careful, because often many of the names that are circulated don't end up anywhere being on the radar screen of the White House. But we are told by some people who are very interested in where this is going that some of the names that are surfacing are possibilities of former Deputy Attorney General Larry Thompson as a possibility, former New York Mayor Rudy Giuliani as another possibility.

The chairman of the Bush-Cheney campaign, Marc Racicot, now, his name surfaced four years ago as a possibility for attorney general. He said that he needed some time to get out there in private practice, make some money. Perhaps it's time now. But there's some concern about him being a little bit too moderate for the conservative base. Also, counsel to the president, Alberto Gonzalez. Judge Gonzalez's name has also come up as a possibility for the attorney general post.

Again, I want to remind you and everyone else that the attorney general hasn't said anything officially at this point to anyone. This is just the very broad expectation.

He has hinted to -- to Justice officials for months now, suggesting that he may not be up for another four years. Of course, the first person he'll be telling is the president. And then it's up to the White House to decide how to disseminate that news, how to make those announcements as they go forward.

Of course, if we get it, if he does have a staff meeting or something, we'll be able to bring that to you. But something that's widely expected, not a surprise to anyone. But no official announcement yet.

KAGAN: All right. Well, it looks like that official announcement is going to come -- some type of official announcement is going to come in just mere seconds.

Kelli Arena at the Justice -- actually in Washington. Thank you for the latest on that.

We also have John King standing by. And it looks by the camera movement that we are expecting President Bush to come up and hold a news conference, even though we don't know exactly what he's going to say. We do know, as John was pointing out, unusual that he is even having a news conference so soon.

SANCHEZ: Well, and you know, there's a thing that we have not yet talked about. And that is the Senate wins for this president. I mean, you know, just in Florida alone, one of his former cabinet members...

KAGAN: Mel Martinez.

SANCHEZ: ... though the White House will deny this, was -- may have been asked, or there may have been a suggestion, you know, you can go to Florida, you can win this seat, you can help us solidify Florida, you can help us win that I-4 corridor. And if you look at it on paper, right now, according to all the polls, it seems to have happened.

So this has really been a victory for the White House. And not only in Florida, but really all across the country, because they picked up, what, four new seats in the Senate.

KAGAN: Yes, and we heard -- and not only that, but some gains in the House as well.

Does it look -- no, that's not President Bush.

SANCHEZ: No. It looks to me like they have somebody on there. And I'm not sure what this podium shot is that we're looking at there.

KAGAN: Just letting -- yes, many gains in Congress. And it is going to be an interesting second term. John king pointing out, not only gains in the Senate, but gains in the House. And, as he was saying, the first six months key in what this president will be able to get done in this second term.

SANCHEZ: And, of course, the question comes up -- and we don't know if we're going to be hearing some of that now -- is whether or not he'll reach across the aisle, the issue of compromise.

Here now, the president of the United States.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you all. Please be seated.

Yesterday I pledged to reach out to the whole nation, and today I'm proving that I'm willing to reach out to everybody by including the White House press corps.

(LAUGHTER)

This week the voters of America set the direction of our nation for the next four years. I'm honored by the support of my fellow citizens, and I'm ready for the job.

We are fighting a continuing war on terror. And every American has a stake in the outcome of this war: Republicans, Democrats and independents all over our country. And together we'll protect the American people.

We'll persevere until the enemy is defeated. We'll stay strong and resolute.

We have a duty, a solemn duty, to protect the American people, and we will.

Every civilized country also has a stake in the outcome of this war.

Whatever our past disagreements, we share a common enemy. And we have common duties: to protect our peoples, to confront disease and hunger and poverty in troubled regions of the world.

I'll continue to reach out to our friends and allies, our partners in the E.U. and NATO, to promote development and progress, to defeat the terrorists and to encourage freedom and democracy as alternatives to tyranny and terror.

I also look forward to working with the present Congress and the new Congress that will arrive in January.

I congratulate the men and women who have just been elected to the House and the Senate. I will join with old friends and new friends to make progress for all Americans. Congress will return later this month to finish this current session. I urge members to pass the appropriations bill that remain, showing spending discipline while focusing on our nation's priorities.

Our government also needs the very best intelligence, especially in a time of war. So I urge the Congress to pass an effective intelligence reform bill that I can sign into law.

The new Congress that begins its work next year will have serious responsibilities and historic opportunities.

To accelerate the momentum of this economy and to keep creating jobs, we must take practical measures to help our job creators, the entrepreneurs and the small-business owners.

We must confront the frivolous lawsuits that are driving up the cost of health care and hurting doctors and patients.

We must continue the work of education reform to bring high standards and accountability, not just to our elementary and secondary schools, but to our high schools as well.

We must reform our complicated and outdated tax code. We need to get rid of the needless paperwork that makes our economy -- that is a drag on our economy, to make sure our economy is the most competitive in the world.

We must show our leadership by strengthening Social Security for our children and our grandchildren.

This is more than a problem to be solved. It is an opportunity to help millions of our fellow citizens find security and independence that come from owning something -- from ownership.

In the election of 2004, large issues were set before our country. They were discussed every day on the campaign.

The campaign over, Americans are expecting a bipartisan effort and results. I'll reach out to everyone who shares our goals. And I'm eager to start the work ahead.

I'm looking forward to serving this country for four more years.

I want to thank you all for your hard work in the campaign. I told you that the other day and you probably thought I was just seeking votes.

(LAUGHTER)

But now that you voted, I really meant it. I appreciate the hard work of the press corps. We all put in long hours and you were away from your families for a long period of time. But the country is better off when we have a vigorous and free press covering our elections. And thanks for your work.

With that overpandering, I'll answer a few questions. (LAUGHTER)

Hunt?

QUESTION: Mr. President, thank you.

As you look at your second term, how much is the war in Iraq going to cost?

Do you intend to send more troops or bring troops home?

And in the Middle East more broadly, do you agree with Tony Blair that revitalizing the Middle East peace process is the single most pressing political issue facing the world?

BUSH: Now that I've got the will of the people at my back, I'm going to start enforcing the one-question rule. That was three questions.

(LAUGHTER)

Start with Tony Blair's comments.

I agree with him that the Middle East peace is a very part of a peaceful world. I have been working on Middle Eastern peace ever since I've been the president. I laid down a very hopeful strategy in June of 2002, and my hope is that we'll make good progress.

I think it's very important for our friends the Israelis to have a peaceful Palestinian state living on their border. It's very important for the Palestinian people to have a peaceful, hopeful future.

That's why I articulated a two-state vision in that Rose Garden speech.

I meant it when I said it. And I mean it now.

What was the other part of your question?

QUESTION: Iraq?

BUSH: Oh, Iraq, yes.

Listen, we will work with the Allawi government to achieve our objective, which is elections. And we're on the path to stability. And we'll continue to train the troops.

Our commanders will have that which they need to complete their missions.

And in terms of the costs, we'll work with the OMB and the Defense Department to bring forth to Congress a realistic assessment of what the cost will be.

QUESTION: Thank you, Mr. President. How will you go about bringing people together?

Will you seek a consensus candidate for the Supreme Court if there's an opening?

Will you bring some Democrats into your Cabinet?

BUSH: Yes. Again, you violated the one-question rule right off the bat. Obviously, you didn't listen to the will of the people.

First of all, there's no vacancy for the Supreme Court, and I will deal with a vacancy when there is one.

I told the people on the campaign trail that I'll pick somebody who knows the difference between personal opinion and the strict interpretation of the law. You might have heard that several times. I meant what I said.

And if people are interested in knowing the kind of judges I'll pick, look at the record.

I've sent up a lot of judges: well-qualified people who know the law, who represent a judicial temperament that I agree with and who are qualified to hold the bench.

The second part of your two-part question?

QUESTION: (OFF-MIKE) your Cabinet by any chance?

BUSH: I haven't made any decisions on the Cabinet yet.

QUESTION: (OFF-MIKE) bring people together.

BUSH: We put out an agenda that everybody understands and work with people to achieve the agenda.

Democrats want a free and peaceful world. And right away, right after September the 11th, we worked very closely together to secure our country.

There is a common ground to be had when it comes to a foreign policy that says the most important objective is to protect the American people and spread freedom and democracy. There's common ground when it comes to making sure the intelligence services are able to provide good, actionable intelligence to protect our people.

And this is not a Republican issue, it's a Republican and Democrat issue. Plenty of places for us to work together.

All right, Gregory?

QUESTION: Thank you, Mr. President.

On foreign policy more broadly, do you believe that America has an image problem in the world right now because of your efforts in response to the 9/11 attacks? And as you talk down the stretch about building alliances, talk about what you'll do to build on those alliances and to deal with these image problems, particularly in the Islamic world.

BUSH: I appreciate that.

Listen, I made some very hard decisions, decisions to protect ourselves, decisions to spread freedom, and I understand that certain capitals in certain countries, those decisions were not popular.

You know, you asked me to put that in the context of the response on September the 11th.

Our first response, of course, was chasing down the terror networks, which we will continue to do.

And we've got great response around the world in order to do that. There's over 90 nations involved with sharing information, finding terrorists and bringing them to justice. That's a broad coalition and we'll continue to strengthen it.

I laid out a doctrine, David, that said, "If you harbor terrorists, you're as equally as guilty as the terrorists," and that doctrine was ignored by the Taliban and we removed the Taliban.

And I fully understand some people didn't agree with that decision. But I believe that when the American president speaks, he better mean what he says in order to keep the world peaceful.

And I believe we have a solemn duty -- whether or not some people agree with it or not -- to protect the American people. And the Taliban and their harboring of Al Qaida represented a direct threat to the American people.

And, of course, then the Iraq issue is one that people disagreed with.

And I don't need to rehash my case, but I did so -- I made the decision I made in order to protect our country first and foremost.

I will continue to do that as the president. But as I do so, I will reach out to others and explain why I make the decisions I make.

There is a certain attitude in the world by some that says that, you know, it's a waste of time to try to promote free societies in parts of the world. I've heard that criticism. Remember, I went to London to talk about our vision of spreading freedom throughout the Greater Middle East.

And I fully understand that that might rankle some and be viewed by some as folly.

I just strongly disagree with those who do not see the wisdom of trying to promote free societies around the world.

If we are interested in protecting our country for the long term, the best way to do so is to promote freedom and democracy.

And I simply do not agree with those who either say overtly or believe that certain societies cannot be free. It's just not a part of my thinking.

And that's why, during the course of the campaign, I was -- I believe I was able to connect, at least with those who were there and explain my policy when I talked about the free elections in Afghanistan.

There was doubt about whether or not those elections would go forward. I'm not suggesting any of you here expressed skepticism, but there was. There was deep skepticism.

And because there is an attitude amongst some that certain people may never be free, and they just don't long to be free, or incapable of running an election, and I disagree with that.

And the Afghan people, by going to the polls in the millions, proved that this administration's faith in freedom, to change people's habits, is worthy.

And that will be a central part of my foreign policy.

And I've got work to do to explain to people about why that is a central part of my foreign policy. I mean, I've been doing that for four years.

But if you do not believe people can be free and can self-govern, then, all of a sudden, the two-state solution in the Middle East becomes a moot point, invalid. If you're willing to condemn a group of people to a system of government that hasn't worked, then you'll never be able to achieve the peace.

You cannot lead this world and our country to a better tomorrow unless you see -- unless you have a vision of a better tomorrow.

And I've got one based upon a great faith that people do want to be free and live in democracy.

John and then I'll get to Terry.

No follow-ups today, Gregory.

QUESTION: Thank you, sir.

BUSH: I can see one -- yes.

QUESTION: Now that the political volatility is off the issue, because the election is over, I'd like to ask you about troop levels in Iraq in the next couple of months leading up to elections.

The Pentagon already has a plan to extend tours of duty for some 6,500 U.S. troops. How many more will be needed to provide security in Iraq for elections, seeing as how the Iraqi troops that you're trying to train up are pretty slow coming on-line? BUSH: Well, first of all, the -- we are making good progress in training the Iraqi troops. There will be 125,000 of them trained by election time.

Secondly, I have yet to -- I have not sat down with our secretary of defense talking about troop levels.

I read some reports during the course of the campaign where some were speculating in the press corps about the number of troops needed to protect elections. That has not been brought to my attention yet.

And so, I would caution you that what you have either read about or reported was pure speculation thus far.

These elections are important, and we will respond, John, to the requests of our commanders on the ground. And I've yet to hear from our commanders on the ground that they need more troops.

Terry?

QUESTION: Mr. President, your victory at the polls came about in part because of strong support from people of faith, in particular Christian evangelicals and Pentecostals and others. And Senator Kerry drew some of his strongest support from those who do not attend religious services.

What do you make of this religious divide, it seems, becoming a political divide in this country?

And what do you say to those who are concerned about the role of a faith they do not share in public life and in your policies?

BUSH: Yes.

My answer to people is, I will be your president regardless of your faith, and I don't expect you to agree with me, necessarily, on religion. As a matter of fact, no president should ever try to impose religion on our society.

The great tradition of America is one where people can worship the way they want to worship. And if they choose not to worship, they're just as patriotic as your neighbor.

That is an essential part of why we are a great nation.

And I am glad people of faith voted in this election. I am glad -- I appreciate all people who voted.

And I don't think you ought to read anything into the politics, the moment, about whether or not this nation will become a divided nation over religion. I think the great thing that unites us is the fact you can worship freely if you choose, and if you -- you don't have to worship. And if you're a Jew or a Christian or a Muslim, you're equally American.

That is such a wonderful aspect of our society. And it is strong today and it'll be strong tomorrow.

Jim?

QUESTION: Thank you, sir.

Mr. President, you talked once again this morning about private accounts and Social Security. During the campaign, you were accused of planning to privatize the entire system. It has been something you've discussed for some time. You've lost some of the key Democratic proponents, such as Pat Moynihan and Bob Kerrey in the Congress.

How will you proceed now with one of the key problems, which is the transition cost, which some say is as much as $2 trillion? How will you proceed on that? And how soon?

BUSH: Well, first, I made Social Security an issue.

For those of you who had to suffer through my speeches on a daily basis, for those of you who actually listened to my speeches on a daily basis, you might remember, every speech I talked about the duty of an American president to lead.

And we must lead on Social Security, because the system is not going to be whole for our children and our grandchildren.

And so, to answer your second question, we'll start on Social Security now. We'll start bringing together those in Congress who agree with my assessment that we need to work together. We've got a good blueprint to go by.

You mentioned Senator Moynihan -- I had asked him prior to his passing to chair a committee of notable Americans to come up with some ideas on Social Security, and they did so.

And it's a good place for members of Congress to start.

The president must have the will to take on the issue, not only in the campaign, but now that I'm elected.

Reforming Social Security will be a priority of my administration. If it were easy, it would have already been done. And this is going to be hard work to bring people together and to convince the Congress to move forward.

And there are going to be costs.

But the cost of doing nothing is insignificant to the -- is much greater than the cost of reforming the system today. That was the case I made on the campaign trail, and I was earnest about getting something done.

And as a matter of fact, I talked to members of my staff today, as we're beginning to plan the strategy to move agendas forward, about how to do this and do it effectively.

QUESTION: (OFF-MIKE)

BUSH: No, no, you're violating the follow-up rule. It would hurt Gregory's feelings.

QUESTION: Mr. President, thank you.

QUESTION: (OFF-MIKE)

BUSH: Hurting Gregory's feelings?

He is a sensitive guy -- well-centered, though.

(LAUGHTER)

QUESTION: I'm not going there.

Mr. President, you were disappointed, even angry, 12 years ago when the voters denied your father a second term. I'm interested in your thoughts and the conversations with him yesterday as you were walking to the Oval Office, and also whether you feel more free to do any one thing in a second term that perhaps you were politically constrained from doing in a first.

BUSH: At 3:30 in the morning on, I guess it was the day after the election, he was sitting upstairs. And I finally said, "Go to bed."

He was awaiting the outcome and was hopeful that we would go over and be able to talk to our supporters, and it just didn't happen that way.

So I asked him the next morning, when he got up, I said, "Come by the Oval Office and visit." And he came by and we had a good talk. He was heading down to Houston.

And it was -- you know, there was some uncertainty about that morning as to when the election would actually end. And it wasn't clear at that point in time, so I never got to see him face-to-face to watch his, I guess, pride in his tired eyes as his son got a second term.

I did talk to him and he was relieved. I told him to get a nap. I was worried about him staying up too late.

So I haven't had a chance to really visit and, you know, embrace.

And you're right, '92 was a disappointment, but he taught me a really good lesson: that life moves on. And it's very important for those of us in the political arena, win or lose, to recognize that life is bigger than just politics. And that's one of the really good lessons he taught me.

QUESTION: (OFF-MIKE)

BUSH: Oh, in terms of feeling free, well, I don't think you'll let me be too free. There's accountability and there are constraints on the presidency, as there should be in any system.

I feel it is necessary to move an agenda that I told the American people I would move.

There is something refreshing about coming off an election -- even more refreshing since we all got some sleep last night -- but you go out and you make your case, and you tell the people, "This is what I intend to do."

And after hundreds of speeches and three debates and interviews and the whole process, where you keep basically saying the same thing over and over again, when you win there is a feeling that people have spoken and embraced your point of view.

And that's what I intend to tell the Congress, that I made it clear what I intend to do as the president and the people made it clear what they wanted, now let's work together.

And it's like earning capital. You asked do I feel free. Let me put it to you this way: I earned capital in the campaign, political capital, and now I intend to spend it.

It is my style. That's what happened after the 2000 election, I earned some capital.

I've earned capital in this election and I'm going to spend it for what I've told the people I'd spend it on, which is -- you've heard the agenda: Social Security and tax reform, moving this economy forward, education, fighting and winning the war on terror.

We have an obligation in this country to continue to work with nations to help alleve poverty and disease. We will continue to press forward on the HIV/AIDS initiative, the Millennium Challenge Account. We'll continue to do our duty to help feed the hungry.

And I'm looking forward to it, I really am.

It's a been a fantastic experience, campaigning the country. You've seen it from one perspective; I've seen it from another.

I saw you standing there at the last, final rally in Texas, to my right over there. I was observing you observe, and you saw the energy. And there was just something uplifting about people showing up at 11 o'clock at night, expressing their support and their prayers and their friendship.

It's a marvelous experience to campaign across the country.

Mike?

QUESTION: Thank you, Mr. President. Do you plan to reshape your Cabinet for the second term, or will any changes come at the instigation of individuals?

And as part of the same question, I'm going to ask you what you've learned about Cabinet government, what works, what doesn't work.

And do you mind also addressing the same question about the White House staff?

(LAUGHTER)

BUSH: The post-election euphoria did not last very long here at the press corps.

(LAUGHTER)

Let me talk about the people that have worked with me. I had a Cabinet meeting today, and I thanked them for their service to the country and reminded them we've got a job to do, and I expected them to do the job.

I have made no decisions on my Cabinet and/or White House staff.

I'm mindful that working in the White House is really -- it is exhausting work. The people who you try to get to leak to you spend hours away from their families. And the word "burnout" is oftentimes used in Washington, and it's used for a reason, because people do burn out.

And so, obviously, in terms of those who want to stay on and who want to stay on, I've got to make sure that it's right for their families and that they're comfortable. Because when they come to work here in the White House, I expect them to work as hard as they possibly can on behalf of the American people.

In the Cabinet, there will be some changes. I don't know who they will be. It's inevitable there will be changes. It happens in every administration.

To a person, I am proud of the work they have done.

And I fully understand we're about to head into the period of intense speculation as to who is going to stay and who's not going to stay. And I assured them that today -- I warned them of the speculative period. It's a great Washington sport to be talking about who's going to leave and who the replacements may be and handicapping, you know, my way of thinking.

I'll just give you a -- but let me just help you out with the speculation right now: I haven't thought about it.

I'm going to start thinking about it. I'm going to Camp David this afternoon with Laura, and I'll begin the process of thinking about the Cabinet and the White House staff. And we'll let you know at the appropriate time when decisions have been made.

Nice try, Mike.

Ed and then...

QUESTION: (OFF-MIKE) BUSH: Learn and not learn about the Cabinet?

QUESTION: (OFF-MIKE)

BUSH: Yes. Well, first I've learned that I put together a really good Cabinet. I'm very proud of the people that have served this government. And they, to a man and woman, worked their hearts out for the American people.

And I've learned that you've got to continue to surround yourself with good people.

This is a job that requires crisp decision-making, and therefore, in order for me to make decisions, I've got to have people who bring, you know, their point of view into the Oval Office and are willing to say it.

I always jest to people: The Oval Office is the kind of place where people stand outside, they're getting ready to come in and tell me what-for, and they walk in and get overwhelmed by the atmosphere and they say, "Man, you're looking pretty."

Therefore, you need people to walk in on those days when you're not looking so good and saying, "You're not looking so good, Mr. President."

And I've got -- those are the kind of people that served our country.

We've had vigorous debates, which you all, in the last four years, to great delight in reporting -- differences of opinion.

But that's what you want if you're the commander in chief and a decision-maker. You want people to walk in and say, "I don't agree with this," or "I do agree with that, and here's what my recommendation is."

But the president also has to learn to decide. You taking -- you know, there's ample time for the debate to take place and then decide and make up your mind and leave. That's what the job's all about.

And so, I have learned how important it is to be -- to have a really fine group of people that think through issues, and that are not intimidated by the process, and they walk in and tell me what's on their mind.

Ed? Ed Stevenson?

QUESTION: Good morning.

Sir, does it bother you that there's a perception out there that your administration has been one that favors big business and wealthy individuals? And what can you do to overcome that, sir?

BUSH: Ed, 70 percent of the new jobs in America are created by small businesses. I understand that. And I have promoted during the course of the last four years one of the most aggressive, pro-entrepreneur, small-business policies: tax relief.

You might remember -- I don't know if you know this or not -- but 90 percent of the businesses are sole proprietorships or subchapter S corporations.

(LAUGHTER)

QUESTION: (OFF-MIKE)

BUSH: Tax relief helped them.

This is an administration that fully understands that the job creators are the entrepreneurs.

And so in a new term, we will make sure the tax relief continues to be robust for our small businesses. We'll push legal reform and regulatory reform. Because I understand the engine of growth is through the small-business sector.

Stevenson?

QUESTION: Sir, given your commitment to reaching out across party lines and to all Americans, I wonder if you could expand on your definition of bipartisanship and whether it means simply picking off a few Democrats on a case-by-case basis to pass the bills you want to pass or whether you would commit to working regularly with the Democratic leadership on solutions that can win broad support across party lines.

BUSH: Do you remember the No Child Left Behind Act?

I think that's the model I'd look at if I were you.

I laid out an agenda for reforming our public schools. I worked with both Republicans and Democrats to get that bill passed.

In a new term, we'll continue to make sure we do not weaken the accountability standards that are making a huge difference in people's lives, in these kids' lives.

But that's the model I'd look at if I were you.

There's a certain practicality to life here in Washington, and that is when we get a bill moving it is important to get the votes. And if politics starts to get in the way of getting good legislation through, that's just part of life here.

But I'm also focused on results.

I think of the Medicare bill. You might remember that old, stale debate. We finally got a bill moving. I was hoping it would get strong bipartisan support. Unfortunately, it was an election year. But we got the votes necessary to get the bill passed. And so, my goal is to work on the ideal and to reach out and to continue to work and find common ground on issues.

On the other hand, I've been wisened to the ways of Washington. I watched what can happen during certain parts of the cycle where politics gets in the way of good policy, and at that point in time I'll continue to -- you know, I'll try to get this done, I'll try to get our bills passed in a way, because results really do matter, as far as I'm concerned.

I really didn't come here to hold the office just to say, "Gosh, it was fun to serve." I came here to get some things done and we are doing it.

Yes. Big Stretch?

QUESTION: Thank you, Mr. President.

I know you haven't had a chance to learn this, but it appears that Yasser Arafat has passed away.

BUSH: Really.

QUESTION: And I was just wondering if I could get your initial reaction and also your thoughts on, perhaps, working with a new generation of Palestinian leadership.

BUSH: I appreciate that.

My first reaction is, God bless his soul.

And my second reaction is is that we will continue to work for a free Palestinian state that's at peace with Israel.

Yes?

QUESTION: Mr. President, as you look at your second-term domestic priorities, I wonder if you could talk a little bit about how you see the sequence of action on issues beyond Social Security: tax reform, education.

And if you could expand a little bit for us on the principles that you want to underpin your tax reform proposal. Do you want it to be revenue-neutral? What kinds of things do you want to accomplish through that process?

BUSH: I appreciate that.

I was anticipating this question that, you know, "What is the first thing you're going to do when it comes to legislation?" It just doesn't work that way, particularly when you've laid out a comprehensive agenda. And part of that comprehensive agenda is a tax simplification.

First of all, a principle would be revenue-neutral. If I'm going to -- you know, if there was a need to raise taxes, I'd say, "Let's have a tax bill that raises taxes," as opposed to, "Let's simplify the tax code and sneak a tax increase on the people."

It's just not my style.

I don't believe we need to raise taxes. I've said that to the American people. And so, the simplification would be the goal.

Now, secondly, obviously, that it rewards risk and doesn't -- it doesn't have unnecessary penalties in it.

The main thing is that it would be viewed as fair, that it would be a fair system, that it wouldn't be complicated, that there's a -- you know, a kind of -- that loopholes wouldn't be there for special interests, that the code itself be viewed and deemed as a very fair way to encourage people to invest and save and achieve certain fiscal objectives in our country as well.

You know, one of the interesting debates will be, of course, in the course of simplification, will there be incentives in the code? Charitable giving, of course, and mortgage deductions are very important.

As governor of Texas when I -- sometime I think I was asked about simplification, I always noted how important it was for certain incentives to be built in the tax code, and that will be an interesting part of the debate.

Certain issues come quicker than others in the course of a legislative session. And that depends upon whether or not those issues have been debated.

I think, for example, of the legal issues -- the legal reform issues. They have been -- medical liability reform had been debated and got thwarted a couple of times in one body in particular on Capitol Hill.

So the groundwork has been laid for some legislation that I've been talking about.

On an issue like tax reform, tax simplification, it's going to take a lot of legwork to get something ready for a legislative package. I fully understand that.

Social Security reform will require some additional legwork, although the Moynihan commission has laid the groundwork for what I think is a very good place to start the debate.

The education issue is one that could move pretty quickly because there has been a lot of discussion about education.

It's an issue that the members are used to debating and discussing.

And so, I think, you know, all issues are important, and the timing of issues as they reach it through committee and floor really depend upon whether or not some work has already been done on those issues.

A couple more questions.

Bob?

You're next.

QUESTION: Mr. President, American forces are gearing up for what appears to be a major offensive in Fallujah over the next several days. I'm wondering if you could tell us what the objective is, what the stakes are there for the United States, for the Iraqi people, and the Iraqi elections coming up in January.

BUSH: In order for Iraq to be a free country, those who are trying to stop the elections and stop a free society from emerging must be defeated.

And so, Prime Minister Allawi and his government, which fully understands that, are working with our generals on the ground to do just that.

We will work closely with the government. It's their government, it's their country. We're there at their invitation.

But I think there's a recognition that some of these people must be defeated.

So that's what they're thinking about. That's what you -- that's why you're hearing discussions about potential action in Fallujah.

QUESTION: Thank you, sir.

Many within your own party are unhappy over the deficit and they say keeping down discretional spending alone won't help you reach your goal of halving the deficit in five years.

What else do you plan to do to cut costs?

BUSH: Well, I would suggest a look at our budget that we've submitted to Congress, which does in fact get the deficit cut in half in five years, and it is a specific line-by-line budget that we are required to submit, and have done so.

The key to making sure that the deficit is reduced is for there to be, on the one hand, spending discipline. And if you noticed in my opening remarks, I talked about these appropriations bills that are beginning to move. And I thought I was pretty clear about the need for those bills to be fiscally responsible, and I meant it.

And I look forward to talking to the leadership about making sure that the budget agreements we had are still the -- are still the budget agreements; that just because we had an election that they shouldn't feel comfortable changing our agreement. And I think they understand that. Secondly, the other way to make sure that the deficit is -- decreases is to grow the economy. As the economy grows, there'll be more revenues coming into the treasury. That's what you have seen recently. If you've noticed, there's been some write-downs of the budget deficit. In other words, the deficit is less than we thought because the revenues is exceeding projections.

And the reason why the revenues -- the revenues are exceeding projections. Sometimes I mangle the English language. I get that.

Anyway...

(LAUGHTER)

QUESTION: (OFF-MIKE)

BUSH: Yes. Very inside.

(LAUGHTER)

The revenues are exceeding projections. And as a result, the projected deficit is less.

But my point there is, is that with good economic policy that encourages economic growth the revenue streams begin to increase. And as the revenue streams increase, coupled with fiscal discipline, you'll see the deficit shrinking. And we're focused on that.

I do believe there ought to be budgetary reform in Washington, on the Hill, Capitol Hill.

I think it's very important.

I would like to see the president have a line-item veto again, one that passed constitutional muster. I think it would help the executive branch work with the legislative branch to make sure that we're able to maintain budget discipline.

I've talked to a lot of members of Congress who are wondering whether or not we'll have the will to confront entitlements, to make sure that there is entitlement reform that helps us maintain fiscal discipline.

The answer is yes.

That's why I took on the Social Security issue. I believe it is -- we have a duty to do so.

I want to make sure that Medicare reforms that we put in place remain robust to help us make sure Medicare is available for generations to come.

So there is -- I've got quite an quite active agenda to help work with Congress to bring not only fiscal discipline but to make sure that our pro-growth policies are still in place.

Herman?

I am probably going to regret this, but...

(LAUGHTER)

QUESTION: Well, I don't know if you had a chance to check, but I can report you did eke out a victory in Texas the other day.

BUSH: Thank you, sir.

QUESTION: Congratulations.

I'm interested in getting back to Stevenson's question about unity.

Clearly, you believe you have reached out and will continue to reach out. Do you believe the Democrats have made a sincere and sufficient effort to meet you somewhere halfway, and do you think now there's more reason for them to do that in light of the election results?

BUSH: I think the Democrats agree that we have an obligation to serve our country.

I believe there will be good will, now that this election is over, to work together.

I found that to be the case when I first arrived here in Washington. And working with the Democrats and the fellow Republicans, we got a lot done. And I -- it is with that spirit that I go into this coming session.

And I will meet with both Republican and Democrat leaders. And I am -- they'll see I'm genuine about working toward some of these important issues.

It's going to be -- it's not easy, you know, these -- I readily concede, I've laid out some very difficult issues for people to deal with.

Reforming the Social Security system for generations to come is a difficult issue.

Otherwise, it would have already been done. But it is necessary to confront it.

And I would hope to be able to work with Democrats to get this done. I'm not sure we can get it done without Democrat participation, because it is a big issue. And I will explain to them, and I will show them Senator Moynihan's thinking as a way to begin the process.

And I will remind everybody who's here that we have a duty to leave behind a better America and when we see a problem to deal with it. And I think Democrats agree with that.

And so, I'm optimistic. You covered me when I was the governor of Texas. I told you that I was going to do that as the governor. There was probably some skepticism in your beady eyes there, but you might remember...

(LAUGHTER)

You might remember -- you might remember, we did, we were able to accomplish a lot.

And Washington is different from Austin, no question about it. Washington -- one of the disappointments of being here in Washington is how bitter this town can become and how divisive. I'm not blaming one party or other, it's just the reality of Washington, D.C., sometimes exacerbated by you, because it's great sport. It's really -- it's entertaining for some.

It also makes it difficult to govern at times. But nevertheless, my commitment is there. I fully -- I'm more seasoned to Washington.

I have cut my political eye-teeth, at least the ones I've recently grown, here in Washington.

And so, I'm aware of what can happen in this town.

But nevertheless, having said that, I am fully prepared to work with both Republican and Democrat leadership to advance an agenda that I think makes a big difference for the country.

Listen, thank you all. I look forward to working with you.

I've got a question for you: How many of you are going to be here for a second term, please raise your hand?

(LAUGHTER)

Gosh, we're going to have a lot of fun, then.

Thank you all.

WOLF BLITZER, CNN ANCHOR: The president of the United States holding his first news conference since being reelected to a second term. The president spending about 45 minutes in the old Executive Office Building, right next door to the White House, answering reporters' questions on a wide range of issues.

A reporter suggesting to the president that Yasser Arafat -- reports of Yasser Arafat being dead. The president said, "God rest his soul."

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired November 4, 2004 - 10:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: A new term will likely mean new faces on the Bush Team. White House correspondent Suzanne Malveaux joins us this morning with news on Attorney General John Ashcroft.
Suzanne, good morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Daryn.

It was just moments ago that the president wrapped up a meeting with his cabinet, and already there is word of a cabinet that is changing. We have learned, CNN has learned from sources close to Attorney General John Ashcroft it is likely that he is going to submit his resignation in a couple of weeks.

He has had some health problems, some health concerns in the past. He has come to symbolize the far right and has been a lightning rod for criticism around the Patriot Act. We understand that he is likely to submit his resignation fairly soon.

There is also a lot of talk -- this is not official until it's official - but a lot of talk around Secretary of State Colin Powell also stepping down. As you know, he was perhaps the most reluctant cabinet member when it came to invading Iraq.

Also, there are -- there's talk, there's some speculation about the secretary of Health and Human Services, Tommy Thompson, the secretary of Homeland Security, Tom Ridge, as two other people who are possibly going to step down. The process, of course, is that these individuals would submit their letter of resignation to the president. It would be the White House that would make the decision when to make that final announcement.

But Daryn, it is safe to say that the policies that we are going to hear the president talk about in his news conference in just moments are really going to be policies that are shaped by a dramatically different looking cabinet -- Daryn.

KAGAN: All right. As you were pointing out, a number of possibilities there. Let's talk about the one that looks like a sure thing.

Later today, John Ashcroft, they don't in Washington wait for the seat to get cold. So who are some possible names that might fill the position, Suzanne?

MALVEAUX: It's much too early to say, Daryn. They are keeping it very close to the chest there.

They are not actually talking about some of those possibilities. Perhaps Justice Department sources have a better sense of that. But there is some interesting talk about the possibility of the president appointing a Democrat, really reaching out to the Democrats, extending an olive branch to those.

There has been a lot of talk about the sense of partisanship here in the city, in Washington. That that might be a consideration for the president.

KAGAN: Well, and we've seen a president cross party lines before. President Clinton did it with Defense Secretary Cohen.

MALVEAUX: Well, absolutely. And that was just one example of an administration that was able to actually do that.

It's going to be a test for this administration. We have heard from the president before. It was just yesterday in his acceptance speech that he reached out to Democrats. This despite the fact that Republicans gained seats both in the House and the Senate, that they are in a dominant position now.

The president saying that he wanted to work with Democrats. He reached out to the 55 million people who did not vote for him, saying that this is a time for the country to come together. We expect that that is going to be one of the messages that he is going to deliver in his press conference just moments from now.

KAGAN: Suzanne Malveaux, at a soggy White House on this Thursday morning. Thank you -- Rick.

RICK SANCHEZ, CNN ANCHOR: Let's go over to John King now. He's at the Eisenhower Executive Office Building, where we understand that this -- this news conference is going to be taking place.

What are we expecting, John?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Rick, we're just a few minutes away here. It's dry inside the executive office building. My apologies to Suzanne.

We expect the president very much in echo of what he said yesterday, saying that the election is over, that he's gratified by winning, and winning a majority, and that he does want to pursue his agenda, which is a conservative agenda, but also try to reach out to Democrats. And that will be an interesting things to watch in the weeks and months ahead.

The president' views on Social Security, on health care, on taxes, are forcefully opposed by the Democrats. So how does he reach across the aisle at a time they have such significant differences on policies?

He also is facing key decisions about the war in Iraq in the coming days. And now, with Yasser Arafat's declining health, the Middle East peace initiative again in question, the future of the leadership of the Palestinian Authority in question.

And all expect significant turnover in the senior staff and the cabinet. Perhaps not right away, but over the next several months.

So as this president celebrates the election victory, quite a bit of work ahead -- Rick.

SANCHEZ: The fear being -- a little bit ahead of the curve -- I'm going to go ahead and ask you this question anyway. We are hearing about John Ashcroft possibly stepping down in the next couple of weeks from sources. We've also been hearing an awful lot seeing an awful lot of Rudy Giuliani. Can you possibly or in any way put those two together for us?

KING: Well, a second term Bush presidency could afford to reach out to a Rudy Giuliani and ask him if he might want to be attorney general. Many conservatives across the county might oppose that because of Rudy Giuliani's view on abortion and other social issues. So -- and Rudy Giuliani has made clear that he would listen to an offer from the president, but that he very much enjoys the private sector.

Other names that come up that should be kept on the list, John Ashcroft's former deputy, Larry Thompson, is someone held in high regard by this White House. So the search for attorney general would be one very interesting thing for this president to have to pursue in the coming days and weeks. And many would watch it, not only to see who would replace John Ashcroft, but perhaps to get a glimpse at the president's thinking about if he has to pick a new chief justice for the Supreme Court. Because many believe in the next few months, if not in the next few weeks, he will be faced with that search as well.

SANCHEZ: From a reporter's standpoint, you're as close to these guys as anybody is, John. What have you sensed -- or what have you seen as the mood with both members of the cabinet, the president, and those working and are close to him in the last 24 hours?

KING: Well, there's a great mood of celebration around here. There's also a little bit of, "I told you so."

This White House has had a contentious relationship with the people in our business. They from time to time complain of what they say is a liberal bias. They were complaining during election night that our exit polls were skewed. They were complaining during election night that many analysts on television on all networks across the spectrum were saying that high turnout would benefit Senator Kerry.

And in the end, of course, that high turnout benefited the president of the United States. So as the president meets with us today and celebrates his victory, it will be interesting to see whether he comments at all on the tone of his relationship with the press.

He had very few press conferences in the first term. It will be interesting to see in the second term, when he doesn't have to think about running for reelection, as to whether he is more open with his relationship with the press or whether he just goes about his business.

SANCHEZ: Had the theme been one of compromise, or even, if I could stretch it a little bit, one of appeasement?

KING: Well, to us, it has been one of "We will talk to you when we feel like talking to you." In terms of reaching out to the Democrats, this is a president who came to office promising to reach out to Democrats. And many Democrats say that he did so only early on or only right after 9/11, and that he didn't want to.

The issue will be how does he do it in a second term? And second-term presidents are very different from first-term presidents.

He does not have to worry about reelection, but he is the leader of a Republican Party that believes it is ascended right now. So as he thinks about his own legacy, he also has to think about the future of his party.

SANCHEZ: Well, you mentioned Republican ascend ascendancy. And we just happen to be looking right now -- we've got a split screen, and we're looking at a picture of Karl Rove. Got to be feeling like a proud peacock, that man, on this day. Would you say?

KING: The president complimented him as the architect yesterday of the reelection strategy. And even some Republicans in the final weeks of the campaign were questioning Karl Rove's strategy, saying it was too focused on social and religious conservatives.

There's some laughter behind me. God knows what it is.

(LAUGHTER)

KING: Hey, Karl Rove, come on in. Here he is right here.

See, Karl Rove, is he proud as a peacock? That was a peacock look right there.

Even many -- even many Republicans criticized his strategy. The president won a record 59 million votes. Economic conservatives, social conservatives, rural -- rural vote is targeted by that strategy. It all turned out. So I suspect by that glance you can tell he's pretty proud today.

SANCHEZ: Yes, that's interesting. We certainly didn't mean to get involved and kind of start this news conference off a little early. But it appears that Mr. Rove is feeling real jovial on this day, huh?

KING: Of course they're feeling jovial. They won reelection in a very contested, very tough election climate.

Mr. Rove has been with President Bush for a long time. One of the trademarks of this administration has been the loyalty of the president's inner circle and his loyalty to them. That is one of the more interesting questions as you go into a second term. Many have said it's time to go into the private life, it's time to get out of the long-grinding days here. Not out of any disloyalty to the president, just out of more loyalty to their families.

So it will be interesting if there is significant change here in the White House. Because the closest circle around this president has been with me since day one, not only of his time as Texas governor, but as his campaigns for Texas governor.

SANCHEZ: There's one thing this president has been extremely -- usually, when you look at this president, there's no doubt that you see that there's one thing that he's been real good with, and that's punctuality. And we're just two minutes behind here, John. I have to ask you, is there a possibility this is going to change in a second administration?

KING: Oh, he has his cabinet over at the White House. He just had a meeting with them, to meet with them after the election, to say thank you for their help on the campaign, to also talk about a second- term agenda.

The cabinet and the president have not been able to interact all that much because he's been out on the road so much. So the president is probably just having a little small talk and a little conversation with his close allies in the government. We suspect he'll be here any minute.

KAGAN: And John, Daryn here. We were talking about the changing faces. It's one thing for people to want to go along with their personal lives, having given their service to the government, the administration. But as you were pointing out, this is a president that prizes loyalty and having familiar faces around him.

How might -- how much encouragement might he have, though, for people to stick around instead of moving on?

KING: Well, certainly, if the president calls you up and says, "I need you to stay a bit longer," most would heed that advice. And no one expects resignations en masse.

What they do expect is, over time, the attorney general, we are told this morning, plans to leave pretty soon. The secretary of state has told friends he doesn't believe he'll stay on too long.

That doesn't mean he'll be gone tomorrow or even by Christmas, or even by the inauguration in January. But over a period of time, I think you will see a series of senior Bush administration officials move on, some for their own personal reasons, others simply to give someone else a chance in the job. They have been in the job for some period of time.

The job of coordinating all that falls the president's senior staff, the chief of staff, Andy Card, the deputy chief of staff. They have to find out who's planning on leaving and perhaps say, OK, you can go now, you need to wait a month or two.

KAGAN: And not to suggest that you've been around a long time, John, but you have covered...

KING: I've been around a long time.

KAGAN: It just feels like it. You've covered your share of administrations from one -- from one term to the next. It's not unusual to see a big turnover no matter who the president is.

KING: It's not unusual at all for there to be a big turnover in the second term. And this administration had relatively low turnover in the first term. So that could magnify the effect a bit.

But again, we are told by talking to these people that many think it's time to move on. But in the next sentence they often talk about their loyalty to this president or their desire that perhaps now the can get more done.

There's been so much focus on the war on terrorism, the war in Iraq in the final three years of the first term that even many Bush administration officials would concede they have not had the time or the energy or the focus or the ability in the Congress to deal with those issues like Social Security. It will be a big issue in the second term. It was a huge issue in the first Bush campaign, health care reform. So some say maybe now there's actually an environment in which they want to stay on to try to see if they can advance some of the domestic items on the agenda.

SANCHEZ: John, I can think of a very prominent Democrat, I believe his name is Tom Daschle, who doesn't have any specific job nailed down at this point, who may be available. I only mention him because there's a lot of talk, I suppose, inside the beltway there about the president actually reaching out and naming a new member of his cabinet and giving that post to a Democrat. What have you been hearing?

KING: I think that is a very high possibility, some would even say a probability in the second term. The secretary of transportation, Norman Mineta, is a Democrat. He was in the Congress from California.

I would look for the president to find one or two positions, cabinet positions or high-level positions in the government in the second term to reach out to Democrats. Would it be Senator Daschle? He would be a big name, of course.

Senator Daschle, if he received a phone call from this White House, would obviously perhaps be torn a bit between his own desire to perhaps move on now with a life in the private sector and his loyalty to the Democratic Party. Some Democrats would say anyone trying to come here into the White House, you know, how could you do that to us?

I understand the president is coming over now from the West Wing.

SANCHEZ: Yes. In fact, we're looking at -- I don't know if you have a monitor there, John, but we're looking at a picture now.

The president's coming in with an umbrella in hand as he's making his way up the steps. I imagine -- how long is it going to take him, John, from where he is now to the podium, where you are?

KING: Oh, it's just a matter of a minute or two, up the stairs or up the elevator. We're up on the fourth floor and he'll be here momentarily.

SANCHEZ: One final question. Colin Powell, what's the talk there about him?

KING: Well, the president obviously holds his secretary of state in high regard. We have -- going back to the middle of the campaign, Colin Powell has told some friends that it's time to move out. Not out of any wish to just get out of the government, but just simply that when he took this job he said he was not going to be a government-lifer.

Most expect the secretary the state to move on soon. Define "soon?" I can't define "soon."

We have Yasser Arafat in declining health. We have the war in Iraq. We have the president about to take one international trip, more scheduled early in the new year, trying to repair some of the tensions in relationships with allies like France. Perhaps trying to revive a Middle East peace initiative if there is a new Palestinian leadership that he finds to his liking.

So there's a long list of items on the agenda that Secretary Powell might look at and say, this is pretty exciting stuff, and have to balance that with his own desire to spend more time with his family.

KAGAN: And then, John, a question here about a second term president. What kind of challenges does President Bush face? He does get four more years, but he's technically a lame duck president because you know he's not running for reelection the next time.

KING: The first six months of the second term will be key in terms of advancing the agenda. He does have a Republican majority in both the House and the Senate. You cannot underestimate the importance of that.

He does not have a Democratic Party that can stand up to him and say "no" on everything, trying to lay the groundwork already for the next campaign. But he's also going to have to rein in his own party on some things, and say, look, I'm the president, I'm the leader of the Republican Party. So the first six months of the second term we will see the depth eighth breadth, if you will, of the second Bush honeymoon.

SANCHEZ: I mean, one of the issues that certainly the Bush administration needs to stay with is encompassing, if you will. I don't know if that's the right word, but the social issues that seem to have kept him in office, if you look at some of the exit polling. What are the plans in that regard, John?

KING: Well, it's a very interesting question because we may have a flash point very quickly. This is a president who is anti-abortion. He says he is pro-life, that's how he would put it.

As he campaigns across the country, especially in those critical rural, small-town America areas, where he won this election, he says he wants to advance a culture of life. He does not say he wants to reverse Roe v. Wade.

What the president has always said is the country needs to have a conversation about this and you have to bring opponents together. And he viewed signing that law banning certain late-term abortions as one step in that direction.

Now, how do you advance that cause? It is perhaps one of the most, if not the most, contentious issue.

Gay marriage, another one we saw on the ballot just this past Tuesday. Another contentious issue where the president has made his views quite clearly known. He doesn't have the votes in the Congress for a constitutional amendment.

How do you advance those things in a second term anyway? And especially, how do you advance them within a matter of weeks or months? He's likely to have at least one, perhaps as many in the second term, three pitched to the Supreme Court.

The Supreme Court picks are the holy grail, if you will, of interest group politics in Washington. Anti-abortion forces and pro- abortion rights forces dig their heels in on that one. That could -- a dustup over a Supreme Court could immediately, would immediately test this promise of bipartisanship and cooperation.

SANCHEZ: John King. Thanks, John, for handing in there with us. We'll certainly be coming back to you in just a little bit.

KAGAN: We'll take a breather right there.

Let's bring in Kelli Arena, our Justice correspondent, to talk about possible names that could fill the Ashcroft seat.

KELLI ARENA, CNN JUSTICE DEPT. CORRESPONDENT: Well, Daryn, I'll tell you, we always have to be real careful, because often many of the names that are circulated don't end up anywhere being on the radar screen of the White House. But we are told by some people who are very interested in where this is going that some of the names that are surfacing are possibilities of former Deputy Attorney General Larry Thompson as a possibility, former New York Mayor Rudy Giuliani as another possibility.

The chairman of the Bush-Cheney campaign, Marc Racicot, now, his name surfaced four years ago as a possibility for attorney general. He said that he needed some time to get out there in private practice, make some money. Perhaps it's time now. But there's some concern about him being a little bit too moderate for the conservative base. Also, counsel to the president, Alberto Gonzalez. Judge Gonzalez's name has also come up as a possibility for the attorney general post.

Again, I want to remind you and everyone else that the attorney general hasn't said anything officially at this point to anyone. This is just the very broad expectation.

He has hinted to -- to Justice officials for months now, suggesting that he may not be up for another four years. Of course, the first person he'll be telling is the president. And then it's up to the White House to decide how to disseminate that news, how to make those announcements as they go forward.

Of course, if we get it, if he does have a staff meeting or something, we'll be able to bring that to you. But something that's widely expected, not a surprise to anyone. But no official announcement yet.

KAGAN: All right. Well, it looks like that official announcement is going to come -- some type of official announcement is going to come in just mere seconds.

Kelli Arena at the Justice -- actually in Washington. Thank you for the latest on that.

We also have John King standing by. And it looks by the camera movement that we are expecting President Bush to come up and hold a news conference, even though we don't know exactly what he's going to say. We do know, as John was pointing out, unusual that he is even having a news conference so soon.

SANCHEZ: Well, and you know, there's a thing that we have not yet talked about. And that is the Senate wins for this president. I mean, you know, just in Florida alone, one of his former cabinet members...

KAGAN: Mel Martinez.

SANCHEZ: ... though the White House will deny this, was -- may have been asked, or there may have been a suggestion, you know, you can go to Florida, you can win this seat, you can help us solidify Florida, you can help us win that I-4 corridor. And if you look at it on paper, right now, according to all the polls, it seems to have happened.

So this has really been a victory for the White House. And not only in Florida, but really all across the country, because they picked up, what, four new seats in the Senate.

KAGAN: Yes, and we heard -- and not only that, but some gains in the House as well.

Does it look -- no, that's not President Bush.

SANCHEZ: No. It looks to me like they have somebody on there. And I'm not sure what this podium shot is that we're looking at there.

KAGAN: Just letting -- yes, many gains in Congress. And it is going to be an interesting second term. John king pointing out, not only gains in the Senate, but gains in the House. And, as he was saying, the first six months key in what this president will be able to get done in this second term.

SANCHEZ: And, of course, the question comes up -- and we don't know if we're going to be hearing some of that now -- is whether or not he'll reach across the aisle, the issue of compromise.

Here now, the president of the United States.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you all. Please be seated.

Yesterday I pledged to reach out to the whole nation, and today I'm proving that I'm willing to reach out to everybody by including the White House press corps.

(LAUGHTER)

This week the voters of America set the direction of our nation for the next four years. I'm honored by the support of my fellow citizens, and I'm ready for the job.

We are fighting a continuing war on terror. And every American has a stake in the outcome of this war: Republicans, Democrats and independents all over our country. And together we'll protect the American people.

We'll persevere until the enemy is defeated. We'll stay strong and resolute.

We have a duty, a solemn duty, to protect the American people, and we will.

Every civilized country also has a stake in the outcome of this war.

Whatever our past disagreements, we share a common enemy. And we have common duties: to protect our peoples, to confront disease and hunger and poverty in troubled regions of the world.

I'll continue to reach out to our friends and allies, our partners in the E.U. and NATO, to promote development and progress, to defeat the terrorists and to encourage freedom and democracy as alternatives to tyranny and terror.

I also look forward to working with the present Congress and the new Congress that will arrive in January.

I congratulate the men and women who have just been elected to the House and the Senate. I will join with old friends and new friends to make progress for all Americans. Congress will return later this month to finish this current session. I urge members to pass the appropriations bill that remain, showing spending discipline while focusing on our nation's priorities.

Our government also needs the very best intelligence, especially in a time of war. So I urge the Congress to pass an effective intelligence reform bill that I can sign into law.

The new Congress that begins its work next year will have serious responsibilities and historic opportunities.

To accelerate the momentum of this economy and to keep creating jobs, we must take practical measures to help our job creators, the entrepreneurs and the small-business owners.

We must confront the frivolous lawsuits that are driving up the cost of health care and hurting doctors and patients.

We must continue the work of education reform to bring high standards and accountability, not just to our elementary and secondary schools, but to our high schools as well.

We must reform our complicated and outdated tax code. We need to get rid of the needless paperwork that makes our economy -- that is a drag on our economy, to make sure our economy is the most competitive in the world.

We must show our leadership by strengthening Social Security for our children and our grandchildren.

This is more than a problem to be solved. It is an opportunity to help millions of our fellow citizens find security and independence that come from owning something -- from ownership.

In the election of 2004, large issues were set before our country. They were discussed every day on the campaign.

The campaign over, Americans are expecting a bipartisan effort and results. I'll reach out to everyone who shares our goals. And I'm eager to start the work ahead.

I'm looking forward to serving this country for four more years.

I want to thank you all for your hard work in the campaign. I told you that the other day and you probably thought I was just seeking votes.

(LAUGHTER)

But now that you voted, I really meant it. I appreciate the hard work of the press corps. We all put in long hours and you were away from your families for a long period of time. But the country is better off when we have a vigorous and free press covering our elections. And thanks for your work.

With that overpandering, I'll answer a few questions. (LAUGHTER)

Hunt?

QUESTION: Mr. President, thank you.

As you look at your second term, how much is the war in Iraq going to cost?

Do you intend to send more troops or bring troops home?

And in the Middle East more broadly, do you agree with Tony Blair that revitalizing the Middle East peace process is the single most pressing political issue facing the world?

BUSH: Now that I've got the will of the people at my back, I'm going to start enforcing the one-question rule. That was three questions.

(LAUGHTER)

Start with Tony Blair's comments.

I agree with him that the Middle East peace is a very part of a peaceful world. I have been working on Middle Eastern peace ever since I've been the president. I laid down a very hopeful strategy in June of 2002, and my hope is that we'll make good progress.

I think it's very important for our friends the Israelis to have a peaceful Palestinian state living on their border. It's very important for the Palestinian people to have a peaceful, hopeful future.

That's why I articulated a two-state vision in that Rose Garden speech.

I meant it when I said it. And I mean it now.

What was the other part of your question?

QUESTION: Iraq?

BUSH: Oh, Iraq, yes.

Listen, we will work with the Allawi government to achieve our objective, which is elections. And we're on the path to stability. And we'll continue to train the troops.

Our commanders will have that which they need to complete their missions.

And in terms of the costs, we'll work with the OMB and the Defense Department to bring forth to Congress a realistic assessment of what the cost will be.

QUESTION: Thank you, Mr. President. How will you go about bringing people together?

Will you seek a consensus candidate for the Supreme Court if there's an opening?

Will you bring some Democrats into your Cabinet?

BUSH: Yes. Again, you violated the one-question rule right off the bat. Obviously, you didn't listen to the will of the people.

First of all, there's no vacancy for the Supreme Court, and I will deal with a vacancy when there is one.

I told the people on the campaign trail that I'll pick somebody who knows the difference between personal opinion and the strict interpretation of the law. You might have heard that several times. I meant what I said.

And if people are interested in knowing the kind of judges I'll pick, look at the record.

I've sent up a lot of judges: well-qualified people who know the law, who represent a judicial temperament that I agree with and who are qualified to hold the bench.

The second part of your two-part question?

QUESTION: (OFF-MIKE) your Cabinet by any chance?

BUSH: I haven't made any decisions on the Cabinet yet.

QUESTION: (OFF-MIKE) bring people together.

BUSH: We put out an agenda that everybody understands and work with people to achieve the agenda.

Democrats want a free and peaceful world. And right away, right after September the 11th, we worked very closely together to secure our country.

There is a common ground to be had when it comes to a foreign policy that says the most important objective is to protect the American people and spread freedom and democracy. There's common ground when it comes to making sure the intelligence services are able to provide good, actionable intelligence to protect our people.

And this is not a Republican issue, it's a Republican and Democrat issue. Plenty of places for us to work together.

All right, Gregory?

QUESTION: Thank you, Mr. President.

On foreign policy more broadly, do you believe that America has an image problem in the world right now because of your efforts in response to the 9/11 attacks? And as you talk down the stretch about building alliances, talk about what you'll do to build on those alliances and to deal with these image problems, particularly in the Islamic world.

BUSH: I appreciate that.

Listen, I made some very hard decisions, decisions to protect ourselves, decisions to spread freedom, and I understand that certain capitals in certain countries, those decisions were not popular.

You know, you asked me to put that in the context of the response on September the 11th.

Our first response, of course, was chasing down the terror networks, which we will continue to do.

And we've got great response around the world in order to do that. There's over 90 nations involved with sharing information, finding terrorists and bringing them to justice. That's a broad coalition and we'll continue to strengthen it.

I laid out a doctrine, David, that said, "If you harbor terrorists, you're as equally as guilty as the terrorists," and that doctrine was ignored by the Taliban and we removed the Taliban.

And I fully understand some people didn't agree with that decision. But I believe that when the American president speaks, he better mean what he says in order to keep the world peaceful.

And I believe we have a solemn duty -- whether or not some people agree with it or not -- to protect the American people. And the Taliban and their harboring of Al Qaida represented a direct threat to the American people.

And, of course, then the Iraq issue is one that people disagreed with.

And I don't need to rehash my case, but I did so -- I made the decision I made in order to protect our country first and foremost.

I will continue to do that as the president. But as I do so, I will reach out to others and explain why I make the decisions I make.

There is a certain attitude in the world by some that says that, you know, it's a waste of time to try to promote free societies in parts of the world. I've heard that criticism. Remember, I went to London to talk about our vision of spreading freedom throughout the Greater Middle East.

And I fully understand that that might rankle some and be viewed by some as folly.

I just strongly disagree with those who do not see the wisdom of trying to promote free societies around the world.

If we are interested in protecting our country for the long term, the best way to do so is to promote freedom and democracy.

And I simply do not agree with those who either say overtly or believe that certain societies cannot be free. It's just not a part of my thinking.

And that's why, during the course of the campaign, I was -- I believe I was able to connect, at least with those who were there and explain my policy when I talked about the free elections in Afghanistan.

There was doubt about whether or not those elections would go forward. I'm not suggesting any of you here expressed skepticism, but there was. There was deep skepticism.

And because there is an attitude amongst some that certain people may never be free, and they just don't long to be free, or incapable of running an election, and I disagree with that.

And the Afghan people, by going to the polls in the millions, proved that this administration's faith in freedom, to change people's habits, is worthy.

And that will be a central part of my foreign policy.

And I've got work to do to explain to people about why that is a central part of my foreign policy. I mean, I've been doing that for four years.

But if you do not believe people can be free and can self-govern, then, all of a sudden, the two-state solution in the Middle East becomes a moot point, invalid. If you're willing to condemn a group of people to a system of government that hasn't worked, then you'll never be able to achieve the peace.

You cannot lead this world and our country to a better tomorrow unless you see -- unless you have a vision of a better tomorrow.

And I've got one based upon a great faith that people do want to be free and live in democracy.

John and then I'll get to Terry.

No follow-ups today, Gregory.

QUESTION: Thank you, sir.

BUSH: I can see one -- yes.

QUESTION: Now that the political volatility is off the issue, because the election is over, I'd like to ask you about troop levels in Iraq in the next couple of months leading up to elections.

The Pentagon already has a plan to extend tours of duty for some 6,500 U.S. troops. How many more will be needed to provide security in Iraq for elections, seeing as how the Iraqi troops that you're trying to train up are pretty slow coming on-line? BUSH: Well, first of all, the -- we are making good progress in training the Iraqi troops. There will be 125,000 of them trained by election time.

Secondly, I have yet to -- I have not sat down with our secretary of defense talking about troop levels.

I read some reports during the course of the campaign where some were speculating in the press corps about the number of troops needed to protect elections. That has not been brought to my attention yet.

And so, I would caution you that what you have either read about or reported was pure speculation thus far.

These elections are important, and we will respond, John, to the requests of our commanders on the ground. And I've yet to hear from our commanders on the ground that they need more troops.

Terry?

QUESTION: Mr. President, your victory at the polls came about in part because of strong support from people of faith, in particular Christian evangelicals and Pentecostals and others. And Senator Kerry drew some of his strongest support from those who do not attend religious services.

What do you make of this religious divide, it seems, becoming a political divide in this country?

And what do you say to those who are concerned about the role of a faith they do not share in public life and in your policies?

BUSH: Yes.

My answer to people is, I will be your president regardless of your faith, and I don't expect you to agree with me, necessarily, on religion. As a matter of fact, no president should ever try to impose religion on our society.

The great tradition of America is one where people can worship the way they want to worship. And if they choose not to worship, they're just as patriotic as your neighbor.

That is an essential part of why we are a great nation.

And I am glad people of faith voted in this election. I am glad -- I appreciate all people who voted.

And I don't think you ought to read anything into the politics, the moment, about whether or not this nation will become a divided nation over religion. I think the great thing that unites us is the fact you can worship freely if you choose, and if you -- you don't have to worship. And if you're a Jew or a Christian or a Muslim, you're equally American.

That is such a wonderful aspect of our society. And it is strong today and it'll be strong tomorrow.

Jim?

QUESTION: Thank you, sir.

Mr. President, you talked once again this morning about private accounts and Social Security. During the campaign, you were accused of planning to privatize the entire system. It has been something you've discussed for some time. You've lost some of the key Democratic proponents, such as Pat Moynihan and Bob Kerrey in the Congress.

How will you proceed now with one of the key problems, which is the transition cost, which some say is as much as $2 trillion? How will you proceed on that? And how soon?

BUSH: Well, first, I made Social Security an issue.

For those of you who had to suffer through my speeches on a daily basis, for those of you who actually listened to my speeches on a daily basis, you might remember, every speech I talked about the duty of an American president to lead.

And we must lead on Social Security, because the system is not going to be whole for our children and our grandchildren.

And so, to answer your second question, we'll start on Social Security now. We'll start bringing together those in Congress who agree with my assessment that we need to work together. We've got a good blueprint to go by.

You mentioned Senator Moynihan -- I had asked him prior to his passing to chair a committee of notable Americans to come up with some ideas on Social Security, and they did so.

And it's a good place for members of Congress to start.

The president must have the will to take on the issue, not only in the campaign, but now that I'm elected.

Reforming Social Security will be a priority of my administration. If it were easy, it would have already been done. And this is going to be hard work to bring people together and to convince the Congress to move forward.

And there are going to be costs.

But the cost of doing nothing is insignificant to the -- is much greater than the cost of reforming the system today. That was the case I made on the campaign trail, and I was earnest about getting something done.

And as a matter of fact, I talked to members of my staff today, as we're beginning to plan the strategy to move agendas forward, about how to do this and do it effectively.

QUESTION: (OFF-MIKE)

BUSH: No, no, you're violating the follow-up rule. It would hurt Gregory's feelings.

QUESTION: Mr. President, thank you.

QUESTION: (OFF-MIKE)

BUSH: Hurting Gregory's feelings?

He is a sensitive guy -- well-centered, though.

(LAUGHTER)

QUESTION: I'm not going there.

Mr. President, you were disappointed, even angry, 12 years ago when the voters denied your father a second term. I'm interested in your thoughts and the conversations with him yesterday as you were walking to the Oval Office, and also whether you feel more free to do any one thing in a second term that perhaps you were politically constrained from doing in a first.

BUSH: At 3:30 in the morning on, I guess it was the day after the election, he was sitting upstairs. And I finally said, "Go to bed."

He was awaiting the outcome and was hopeful that we would go over and be able to talk to our supporters, and it just didn't happen that way.

So I asked him the next morning, when he got up, I said, "Come by the Oval Office and visit." And he came by and we had a good talk. He was heading down to Houston.

And it was -- you know, there was some uncertainty about that morning as to when the election would actually end. And it wasn't clear at that point in time, so I never got to see him face-to-face to watch his, I guess, pride in his tired eyes as his son got a second term.

I did talk to him and he was relieved. I told him to get a nap. I was worried about him staying up too late.

So I haven't had a chance to really visit and, you know, embrace.

And you're right, '92 was a disappointment, but he taught me a really good lesson: that life moves on. And it's very important for those of us in the political arena, win or lose, to recognize that life is bigger than just politics. And that's one of the really good lessons he taught me.

QUESTION: (OFF-MIKE)

BUSH: Oh, in terms of feeling free, well, I don't think you'll let me be too free. There's accountability and there are constraints on the presidency, as there should be in any system.

I feel it is necessary to move an agenda that I told the American people I would move.

There is something refreshing about coming off an election -- even more refreshing since we all got some sleep last night -- but you go out and you make your case, and you tell the people, "This is what I intend to do."

And after hundreds of speeches and three debates and interviews and the whole process, where you keep basically saying the same thing over and over again, when you win there is a feeling that people have spoken and embraced your point of view.

And that's what I intend to tell the Congress, that I made it clear what I intend to do as the president and the people made it clear what they wanted, now let's work together.

And it's like earning capital. You asked do I feel free. Let me put it to you this way: I earned capital in the campaign, political capital, and now I intend to spend it.

It is my style. That's what happened after the 2000 election, I earned some capital.

I've earned capital in this election and I'm going to spend it for what I've told the people I'd spend it on, which is -- you've heard the agenda: Social Security and tax reform, moving this economy forward, education, fighting and winning the war on terror.

We have an obligation in this country to continue to work with nations to help alleve poverty and disease. We will continue to press forward on the HIV/AIDS initiative, the Millennium Challenge Account. We'll continue to do our duty to help feed the hungry.

And I'm looking forward to it, I really am.

It's a been a fantastic experience, campaigning the country. You've seen it from one perspective; I've seen it from another.

I saw you standing there at the last, final rally in Texas, to my right over there. I was observing you observe, and you saw the energy. And there was just something uplifting about people showing up at 11 o'clock at night, expressing their support and their prayers and their friendship.

It's a marvelous experience to campaign across the country.

Mike?

QUESTION: Thank you, Mr. President. Do you plan to reshape your Cabinet for the second term, or will any changes come at the instigation of individuals?

And as part of the same question, I'm going to ask you what you've learned about Cabinet government, what works, what doesn't work.

And do you mind also addressing the same question about the White House staff?

(LAUGHTER)

BUSH: The post-election euphoria did not last very long here at the press corps.

(LAUGHTER)

Let me talk about the people that have worked with me. I had a Cabinet meeting today, and I thanked them for their service to the country and reminded them we've got a job to do, and I expected them to do the job.

I have made no decisions on my Cabinet and/or White House staff.

I'm mindful that working in the White House is really -- it is exhausting work. The people who you try to get to leak to you spend hours away from their families. And the word "burnout" is oftentimes used in Washington, and it's used for a reason, because people do burn out.

And so, obviously, in terms of those who want to stay on and who want to stay on, I've got to make sure that it's right for their families and that they're comfortable. Because when they come to work here in the White House, I expect them to work as hard as they possibly can on behalf of the American people.

In the Cabinet, there will be some changes. I don't know who they will be. It's inevitable there will be changes. It happens in every administration.

To a person, I am proud of the work they have done.

And I fully understand we're about to head into the period of intense speculation as to who is going to stay and who's not going to stay. And I assured them that today -- I warned them of the speculative period. It's a great Washington sport to be talking about who's going to leave and who the replacements may be and handicapping, you know, my way of thinking.

I'll just give you a -- but let me just help you out with the speculation right now: I haven't thought about it.

I'm going to start thinking about it. I'm going to Camp David this afternoon with Laura, and I'll begin the process of thinking about the Cabinet and the White House staff. And we'll let you know at the appropriate time when decisions have been made.

Nice try, Mike.

Ed and then...

QUESTION: (OFF-MIKE) BUSH: Learn and not learn about the Cabinet?

QUESTION: (OFF-MIKE)

BUSH: Yes. Well, first I've learned that I put together a really good Cabinet. I'm very proud of the people that have served this government. And they, to a man and woman, worked their hearts out for the American people.

And I've learned that you've got to continue to surround yourself with good people.

This is a job that requires crisp decision-making, and therefore, in order for me to make decisions, I've got to have people who bring, you know, their point of view into the Oval Office and are willing to say it.

I always jest to people: The Oval Office is the kind of place where people stand outside, they're getting ready to come in and tell me what-for, and they walk in and get overwhelmed by the atmosphere and they say, "Man, you're looking pretty."

Therefore, you need people to walk in on those days when you're not looking so good and saying, "You're not looking so good, Mr. President."

And I've got -- those are the kind of people that served our country.

We've had vigorous debates, which you all, in the last four years, to great delight in reporting -- differences of opinion.

But that's what you want if you're the commander in chief and a decision-maker. You want people to walk in and say, "I don't agree with this," or "I do agree with that, and here's what my recommendation is."

But the president also has to learn to decide. You taking -- you know, there's ample time for the debate to take place and then decide and make up your mind and leave. That's what the job's all about.

And so, I have learned how important it is to be -- to have a really fine group of people that think through issues, and that are not intimidated by the process, and they walk in and tell me what's on their mind.

Ed? Ed Stevenson?

QUESTION: Good morning.

Sir, does it bother you that there's a perception out there that your administration has been one that favors big business and wealthy individuals? And what can you do to overcome that, sir?

BUSH: Ed, 70 percent of the new jobs in America are created by small businesses. I understand that. And I have promoted during the course of the last four years one of the most aggressive, pro-entrepreneur, small-business policies: tax relief.

You might remember -- I don't know if you know this or not -- but 90 percent of the businesses are sole proprietorships or subchapter S corporations.

(LAUGHTER)

QUESTION: (OFF-MIKE)

BUSH: Tax relief helped them.

This is an administration that fully understands that the job creators are the entrepreneurs.

And so in a new term, we will make sure the tax relief continues to be robust for our small businesses. We'll push legal reform and regulatory reform. Because I understand the engine of growth is through the small-business sector.

Stevenson?

QUESTION: Sir, given your commitment to reaching out across party lines and to all Americans, I wonder if you could expand on your definition of bipartisanship and whether it means simply picking off a few Democrats on a case-by-case basis to pass the bills you want to pass or whether you would commit to working regularly with the Democratic leadership on solutions that can win broad support across party lines.

BUSH: Do you remember the No Child Left Behind Act?

I think that's the model I'd look at if I were you.

I laid out an agenda for reforming our public schools. I worked with both Republicans and Democrats to get that bill passed.

In a new term, we'll continue to make sure we do not weaken the accountability standards that are making a huge difference in people's lives, in these kids' lives.

But that's the model I'd look at if I were you.

There's a certain practicality to life here in Washington, and that is when we get a bill moving it is important to get the votes. And if politics starts to get in the way of getting good legislation through, that's just part of life here.

But I'm also focused on results.

I think of the Medicare bill. You might remember that old, stale debate. We finally got a bill moving. I was hoping it would get strong bipartisan support. Unfortunately, it was an election year. But we got the votes necessary to get the bill passed. And so, my goal is to work on the ideal and to reach out and to continue to work and find common ground on issues.

On the other hand, I've been wisened to the ways of Washington. I watched what can happen during certain parts of the cycle where politics gets in the way of good policy, and at that point in time I'll continue to -- you know, I'll try to get this done, I'll try to get our bills passed in a way, because results really do matter, as far as I'm concerned.

I really didn't come here to hold the office just to say, "Gosh, it was fun to serve." I came here to get some things done and we are doing it.

Yes. Big Stretch?

QUESTION: Thank you, Mr. President.

I know you haven't had a chance to learn this, but it appears that Yasser Arafat has passed away.

BUSH: Really.

QUESTION: And I was just wondering if I could get your initial reaction and also your thoughts on, perhaps, working with a new generation of Palestinian leadership.

BUSH: I appreciate that.

My first reaction is, God bless his soul.

And my second reaction is is that we will continue to work for a free Palestinian state that's at peace with Israel.

Yes?

QUESTION: Mr. President, as you look at your second-term domestic priorities, I wonder if you could talk a little bit about how you see the sequence of action on issues beyond Social Security: tax reform, education.

And if you could expand a little bit for us on the principles that you want to underpin your tax reform proposal. Do you want it to be revenue-neutral? What kinds of things do you want to accomplish through that process?

BUSH: I appreciate that.

I was anticipating this question that, you know, "What is the first thing you're going to do when it comes to legislation?" It just doesn't work that way, particularly when you've laid out a comprehensive agenda. And part of that comprehensive agenda is a tax simplification.

First of all, a principle would be revenue-neutral. If I'm going to -- you know, if there was a need to raise taxes, I'd say, "Let's have a tax bill that raises taxes," as opposed to, "Let's simplify the tax code and sneak a tax increase on the people."

It's just not my style.

I don't believe we need to raise taxes. I've said that to the American people. And so, the simplification would be the goal.

Now, secondly, obviously, that it rewards risk and doesn't -- it doesn't have unnecessary penalties in it.

The main thing is that it would be viewed as fair, that it would be a fair system, that it wouldn't be complicated, that there's a -- you know, a kind of -- that loopholes wouldn't be there for special interests, that the code itself be viewed and deemed as a very fair way to encourage people to invest and save and achieve certain fiscal objectives in our country as well.

You know, one of the interesting debates will be, of course, in the course of simplification, will there be incentives in the code? Charitable giving, of course, and mortgage deductions are very important.

As governor of Texas when I -- sometime I think I was asked about simplification, I always noted how important it was for certain incentives to be built in the tax code, and that will be an interesting part of the debate.

Certain issues come quicker than others in the course of a legislative session. And that depends upon whether or not those issues have been debated.

I think, for example, of the legal issues -- the legal reform issues. They have been -- medical liability reform had been debated and got thwarted a couple of times in one body in particular on Capitol Hill.

So the groundwork has been laid for some legislation that I've been talking about.

On an issue like tax reform, tax simplification, it's going to take a lot of legwork to get something ready for a legislative package. I fully understand that.

Social Security reform will require some additional legwork, although the Moynihan commission has laid the groundwork for what I think is a very good place to start the debate.

The education issue is one that could move pretty quickly because there has been a lot of discussion about education.

It's an issue that the members are used to debating and discussing.

And so, I think, you know, all issues are important, and the timing of issues as they reach it through committee and floor really depend upon whether or not some work has already been done on those issues.

A couple more questions.

Bob?

You're next.

QUESTION: Mr. President, American forces are gearing up for what appears to be a major offensive in Fallujah over the next several days. I'm wondering if you could tell us what the objective is, what the stakes are there for the United States, for the Iraqi people, and the Iraqi elections coming up in January.

BUSH: In order for Iraq to be a free country, those who are trying to stop the elections and stop a free society from emerging must be defeated.

And so, Prime Minister Allawi and his government, which fully understands that, are working with our generals on the ground to do just that.

We will work closely with the government. It's their government, it's their country. We're there at their invitation.

But I think there's a recognition that some of these people must be defeated.

So that's what they're thinking about. That's what you -- that's why you're hearing discussions about potential action in Fallujah.

QUESTION: Thank you, sir.

Many within your own party are unhappy over the deficit and they say keeping down discretional spending alone won't help you reach your goal of halving the deficit in five years.

What else do you plan to do to cut costs?

BUSH: Well, I would suggest a look at our budget that we've submitted to Congress, which does in fact get the deficit cut in half in five years, and it is a specific line-by-line budget that we are required to submit, and have done so.

The key to making sure that the deficit is reduced is for there to be, on the one hand, spending discipline. And if you noticed in my opening remarks, I talked about these appropriations bills that are beginning to move. And I thought I was pretty clear about the need for those bills to be fiscally responsible, and I meant it.

And I look forward to talking to the leadership about making sure that the budget agreements we had are still the -- are still the budget agreements; that just because we had an election that they shouldn't feel comfortable changing our agreement. And I think they understand that. Secondly, the other way to make sure that the deficit is -- decreases is to grow the economy. As the economy grows, there'll be more revenues coming into the treasury. That's what you have seen recently. If you've noticed, there's been some write-downs of the budget deficit. In other words, the deficit is less than we thought because the revenues is exceeding projections.

And the reason why the revenues -- the revenues are exceeding projections. Sometimes I mangle the English language. I get that.

Anyway...

(LAUGHTER)

QUESTION: (OFF-MIKE)

BUSH: Yes. Very inside.

(LAUGHTER)

The revenues are exceeding projections. And as a result, the projected deficit is less.

But my point there is, is that with good economic policy that encourages economic growth the revenue streams begin to increase. And as the revenue streams increase, coupled with fiscal discipline, you'll see the deficit shrinking. And we're focused on that.

I do believe there ought to be budgetary reform in Washington, on the Hill, Capitol Hill.

I think it's very important.

I would like to see the president have a line-item veto again, one that passed constitutional muster. I think it would help the executive branch work with the legislative branch to make sure that we're able to maintain budget discipline.

I've talked to a lot of members of Congress who are wondering whether or not we'll have the will to confront entitlements, to make sure that there is entitlement reform that helps us maintain fiscal discipline.

The answer is yes.

That's why I took on the Social Security issue. I believe it is -- we have a duty to do so.

I want to make sure that Medicare reforms that we put in place remain robust to help us make sure Medicare is available for generations to come.

So there is -- I've got quite an quite active agenda to help work with Congress to bring not only fiscal discipline but to make sure that our pro-growth policies are still in place.

Herman?

I am probably going to regret this, but...

(LAUGHTER)

QUESTION: Well, I don't know if you had a chance to check, but I can report you did eke out a victory in Texas the other day.

BUSH: Thank you, sir.

QUESTION: Congratulations.

I'm interested in getting back to Stevenson's question about unity.

Clearly, you believe you have reached out and will continue to reach out. Do you believe the Democrats have made a sincere and sufficient effort to meet you somewhere halfway, and do you think now there's more reason for them to do that in light of the election results?

BUSH: I think the Democrats agree that we have an obligation to serve our country.

I believe there will be good will, now that this election is over, to work together.

I found that to be the case when I first arrived here in Washington. And working with the Democrats and the fellow Republicans, we got a lot done. And I -- it is with that spirit that I go into this coming session.

And I will meet with both Republican and Democrat leaders. And I am -- they'll see I'm genuine about working toward some of these important issues.

It's going to be -- it's not easy, you know, these -- I readily concede, I've laid out some very difficult issues for people to deal with.

Reforming the Social Security system for generations to come is a difficult issue.

Otherwise, it would have already been done. But it is necessary to confront it.

And I would hope to be able to work with Democrats to get this done. I'm not sure we can get it done without Democrat participation, because it is a big issue. And I will explain to them, and I will show them Senator Moynihan's thinking as a way to begin the process.

And I will remind everybody who's here that we have a duty to leave behind a better America and when we see a problem to deal with it. And I think Democrats agree with that.

And so, I'm optimistic. You covered me when I was the governor of Texas. I told you that I was going to do that as the governor. There was probably some skepticism in your beady eyes there, but you might remember...

(LAUGHTER)

You might remember -- you might remember, we did, we were able to accomplish a lot.

And Washington is different from Austin, no question about it. Washington -- one of the disappointments of being here in Washington is how bitter this town can become and how divisive. I'm not blaming one party or other, it's just the reality of Washington, D.C., sometimes exacerbated by you, because it's great sport. It's really -- it's entertaining for some.

It also makes it difficult to govern at times. But nevertheless, my commitment is there. I fully -- I'm more seasoned to Washington.

I have cut my political eye-teeth, at least the ones I've recently grown, here in Washington.

And so, I'm aware of what can happen in this town.

But nevertheless, having said that, I am fully prepared to work with both Republican and Democrat leadership to advance an agenda that I think makes a big difference for the country.

Listen, thank you all. I look forward to working with you.

I've got a question for you: How many of you are going to be here for a second term, please raise your hand?

(LAUGHTER)

Gosh, we're going to have a lot of fun, then.

Thank you all.

WOLF BLITZER, CNN ANCHOR: The president of the United States holding his first news conference since being reelected to a second term. The president spending about 45 minutes in the old Executive Office Building, right next door to the White House, answering reporters' questions on a wide range of issues.

A reporter suggesting to the president that Yasser Arafat -- reports of Yasser Arafat being dead. The president said, "God rest his soul."

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