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JUDY WOODRUFF'S INSIDE POLITICS

Powell's Exit; Is Rumsfeld Staying Put?

Aired November 15, 2004 - 15:29   ET

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


(BEGIN VIDEOTAPE)
ANNOUNCER: Colin Powell stands down. How might the secretary of state's resignation affect Bush foreign policy?

COLIN POWELL, SECRETARY OF STATE: There are many challenges out there. There are many opportunities out there. And I can assure you that I'll be working hard until the very, very end.

ANNOUNCER: Exit strategies with several top officials on the way out. What will the second term Bush cabinet look like?

Plugged in America and the presidential polls. Did the cell phone phenomenon skew the pre-election horse race?

(END VIDEOTAPE)

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

JOHN KING, CNN ANCHOR: Thanks for joining us. Judy is off today. I'm John King.

It was no secret that Colin Powell was inclined to call it quits if President Bush won a second term. But today's announcement of his resignation still packs a punch given the secretary of state's stature in this country and around the world.

Our White House correspondent, Dana Bash, joins us now with more on Powell, another turnover in the Bush cabinet -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, John, the secretary of state officially submitted his resignation to the president on Friday, but he was here at the White House for a National Security Council meeting, and then he shortly thereafter went back to the State Department, back to Foggy Bottom, to go before reporters to get on record with his version of events, and that is that this departure was long planned.

(BEGIN VIDEO CLIP)

POWELL: It has always been my intention that I would serve one term. And after we had a chance to have good and wholesome discussions on it, we came to the mutual agreement that it would be appropriate for me to leave at this time.

Now, I am not leaving today. I just offered my resignation, and I expect to act fully as secretary of state until the day that I do leave. And I suspect that will be a number of weeks or a month or two as my replacement goes through the confirmation process.

(END VIDEO CLIP)

BASH: Now, the secretary of state is the first national security team member to bow out of a second Bush term. And, of course, he was among the first picked four years ago by the president, a president that was coming into office with no foreign policy experience, and certainly hoping that former retired four-star general would help give credibility on the world stage.

There you see a picture, a now famous picture, of Secretary of State Powell at the U.N. in February of last year, essentially using that credibility, of course, to talk about the fact that he thought the Iraq war was important because Saddam Hussein had weapons of mass destruction. That, of course -- using information later to be discredited.

Now, some administration officials say that Secretary Powell did actually want to stay a little bit longer, saw some openings on the foreign policy front, particularly with Yasser Arafat's death, with the Mideast peace, potentially wanting to stay there. But officials said that the president made clear that he is ready to move on.

He wanted to assemble his new team. And Secretary Powell today before reporters was very careful not to say that he asked or the president asked to stay on longer than the two had been planning for a while.

Now, Powell was one of four resignations today, John, of the Bush cabinet. In addition to Powell, you had Energy Secretary Spencer Abraham, who said in his letter of resignation he was eager to go back to a private life after serving four terms. There you see Rod Paige, the Education secretary, and Agriculture Secretary Ann Veneman.

Now, back on the post for secretary of state, administration officials are pointing to Condoleezza Rice, the president's national security adviser. And, of course, very close, trusted advisor to be the leading, if not almost certain, candidate and contender for the secretary of state post. And this seems to be part of a pattern for the second Bush term, putting close confidantes, loyalists of the president out into cabinet posts.

You saw the attorney general post being filled by the White House counsel, Alberto Gonzales. Officials say that a top contender for Commerce secretary is the president's longtime friend Mercer Reynolds, who was also his chief fund-raiser during his campaign. And, of course, today the White House announced this is not a cabinet position but certainly a very important post. Ken Mehlman, the president's campaign manager, is going to now run the RNC -- John.

KING: And Dana, a key adviser to this president as he plots the second term is, of course, the vice president. And he checked himself into the hospital briefly over the weekend. Everyone said it was a cold, nothing to worry about. Back on the job today? BASH: Well, they promised over the weekend that it wasn't anything, as you said, to worry about, and he would be back on the job. And that's exactly what he did.

He was here very early this morning. His aides say even earlier than he normally gets here, at 7:00 a.m. for his security briefings with the president. Has had a very full day and will be here until late tonight, aides say.

KING: Dana Bash, on a busy day at the Bush White House, thank you very much.

BASH: Thank you.

KING: Secretary Powell and Pentagon chief Donald Rumsfeld have not always seen eye to eye during the past four years. Now, is Rumsfeld definitely staying put while Secretary Powell moves on? Let's check in with our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, John, aides to Defense Secretary Rumsfeld say they don't think he's going anywhere anytime soon. Even though he's 72, Rumsfeld is not showing any signs of losing enthusiasm for the top Pentagon job, and perhaps more importantly President Bush is not giving any signals that he expects Rumsfeld to leave.

Here's how Rumsfeld responded to questions about his future shortly after the election, about six days after the election when asked about it in a press conference.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: I've met with him two or three times on totally different subjects since the election, but that's not a subject that's come up. And needless to say, either one of us would discuss it with the other before discussing it with you.

(END VIDEO CLIP)

MCINTYRE: So Rumsfeld insists that subject of his leaving has not even come up in his discussions with President Bush. Rumsfeld is known to want to continue some of the work he's doing in trying to transform the Pentagon, particularly the Army, into a lighter, more mobile force, something he said is the most difficult challenge he's had at the Pentagon.

And also, there's some feeling that he feels that he wants to oversee the situation in Iraq, at least for a while. So the thinking at the Pentagon, Rumsfeld will probably stay at least another year or so, but nobody's ruling out he might even stay longer.

KING: Jamie McIntyre at the Pentagon. Thank you very much.

Now back to Colin Powell. When he spoke with reporters today, he refused to specify any high point or low point of his tenure of secretary of state. But as we have reported, others might cite Powell's U.N. testimony in February 2003 as a low point, when he pressed the president's case for war in Iraq, citing intelligence that later proved to be faulty. This past August we asked Secretary Powell about that testimony and he offered no apologies.

(BEGIN VIDEO CLIP)

POWELL: It was the accepted judgment. We now find that some of that information was not correct.

I'm disappointed. I don't like having gone out there on the 5th of February. I'm disappointed. But, you know, disappointment, you get over it.

What I have to do now is to make sure that we have made whatever improvements, and what the president has to do. And improvements are necessary in the intelligence system so we have a better picture of such a problem in the future.

(END VIDEO CLIP)

KING: Now, for more on the Bush cabinet turnover, let's bring in Ron Brownstein of the "Los Angeles Times" and Mike Allen of "The Washington Post."

Ron, let me start with you. The significance of Colin Powell leaving?

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, I think in terms of how the administration functions, the main significance, John, is to remove the voice of the greatest dissent around the table on national security. Colin Powell often seemed the odd man out on some of these decisions, and that gave him a role both inside and outside.

Because he was someone seen as perhaps more sympathetic to traditional international foreign policy views, he had a constituency that extended beyond the administration. It also made some people in the administration and certainly some conservatives who supported it frustrated at the State Department.

The question now is going to be is the White House really better off in the end with a more coherent and perhaps common view across the administration on foreign policy? It makes it easier to get things done, but you also perhaps, depending on who they appoint -- and if it's Condoleezza Rice, you may lose that voice inside that raises questions that may only now get raised after the fact for critics.

KING: Need to interrupt you both for just a minute. Stand by. Secretary Powell here speaking with the Israeli foreign minister outside the State Department.

POWELL: ... and our conversation really focused on the opportunities that have been presented by the death of Chairman Arafat. We are pleased by the responsible manner in which Palestinian leaders have started to come together, and we are pleased that they have set a date for an election for the new president of the Palestinian Authority.

And the minister and I spoke about what Israel will be doing to facilitate that election.

I said to the minister that I hope that during my upcoming visit to the region, and especially when I'm at Sharm el-Sheikh, we'll be able to convene a meeting of the Quartet to review the bidding and see what the Quartet can do as part of our road map efforts to assist in the process of moving forward down the path laid out by the road map.

I also expressed to the minister my satisfaction that the disengagement plan that the prime minister has put forward and that we have endorsed back in April seems to be moving forward.

And so there are new opportunities that have been presented by recent events.

POWELL: And I'm pleased that the minister sees it in the same way, then we will work together to take advantage of these opportunities and deal with the challenges that are ahead of us.

So, Mr. Minister, it's always a great pleasure to have you here. I invite you to say a few words, sir.

SILVAN SHALOM, ISRAELI FOREIGN MINISTER: Thank you.

Thank you very much, Mr. Secretary. I am very happy to be here once again and to have this discussion with you.

We had a very good and constructive discussion about what needs to be done in the day after in the Middle East. We are having a glimmer of hope that it might be that the new leadership will be more responsible and more moderate.

We would like to enable the Palestinians to have a free and fair election that will take place maybe in January the 9th. Everything that is needed will be given to them in order to ensure that they will have the possibility to elect their new leadership. We would like to see this new leadership is moving to a better peace, better understanding with Israel, to move toward peace with Israel, but there are no shortcuts.

We would like this new leadership to implement its commitments according to the road map. In phase one, it's written very clear, that they should dismantle the infrastructure of terrorist organizations, that they will put an end to terrorism and violence and incitement.

And I asked the secretary to help us to achieve those goals. We would like to see the involvement of the American administration that was always involved in all the peace processes that we had in the past.

We believe that this new leadership can take a quick move by putting an end to the incitement in the radio and television, textbooks, and after it to move toward the dismantlement of the infrastructure of terrorist organizations. I would like to tell you, Mr. Secretary, that I'm very sorry -- I was very sorry and I am very sorry -- to hear that you have decided to leave your position. You are a very good friend of Israel, but more than that, you are a very good friend of peace. And you have done everything you can in order to have better time, better future in our region, to have more stability, to bring hope to our peoples there.

SHALOM: And for that, I would like to thank you very much for your efforts. You'll continue with your efforts next week when you will come to our region.

And I don't want to summarize now, but still, it's a big loss for me personally. It's a big loss for the state of Israel. And it's a big loss for the peace in the Middle East.

Thank you very much, Mr. Secretary.

POWELL: Thank you, Silvan.

QUESTION: Mr. Minister, if I may: You said, Israel's prepared to do -- you know, cooperate with the Palestinians. On the issue of the 200,000 Palestinians or Arabs living in East Jerusalem, should they participate in the balloting in the election?

And, Mr. Secretary, when the Quartet meets, is there a need to revise or update or seriously change the road map?

SHALOM: Jerusalem is the eternal capital -- undivided capital of Israel. And we -- of course we do everything to keep it this way.

About the Palestinians that are living there, I would like you to know that even in the example of the last election in 1996, there were no elections in Jerusalem. Those Palestinians voted then, only through envelopes, through the mail office.

So we didn't have elections, even in 1996 then in Jerusalem. And I believe it should be the same, that there will be no elections in Jerusalem.

POWELL: I don't see any need to revise the road map. I think it lays out the responsibilities and obligations and commitments of both sides very, very clearly.

SHALOM: I would like -- maybe -- sorry, one more thing: The prime minister has said that the final decision about the participants of the Palestinians in East Jerusalem, in the next coming election, will take place in a few days. He will have a meeting, our prime minister, with some of the ministers that are involved with this issue, and we will take a decision about it in the near future.

SHALOM: Thank you.

QUESTION: Last week President Bush said that he was -- his administration would be willing to spend capital needed to advance peace in the Middle East. What specifically do you envision the next administration doing to advance this process? And what do you hope to do in the remaining time of your tenure? Thank you.

POWELL: Well, I hope to meet with the parties in the region who will be attending the Sharm el-Sheikh meetings dealing principally with Iraq, but so many parties will be there that I'm sure we will get into a discussion of the possibilities for moving down the trail of the road map.

And then I'm looking at other opportunities to visit with leaders in the region.

As the president said, he is prepared to invest capital. He did it last year when we all went to Aqaba. And that process did not go as far as we would have liked.

But he's prepared to do it again. When the conditions are right, when Palestinian leadership is in place and when they have made clear what their commitments are and have started to act on those commitments, the president will invest political capital.

QUESTION: (OFF-MIKE) Mr. Minister, the Palestinians have said that they cannot do this alone, that even the moderates who are aspiring to leadership cannot do this without a significant redeployment by the Israeli army and greater access among the settlements and also voting in Jerusalem.

So how can you expect them to crack down on violence when they say you're not giving them what they need to take these steps.

POWELL: My departure does not make anything inevitable. We're going to keep moving forward. It's the president's policies that are being pursued and implemented, not Colin Powell's.

SHALOM: As I've said, we will do everything in order to give them the possibility to enable them to have their election, to have a free and fair election there.

SHALOM: We will do everything that is needed to give them freedom of movement, but of course we will do it while we are not doing anything to harm or to damage our security or our safety. We will do it in a way that will enable them to have the possibility to vote without, as I've said, damaging our security. I think it can be done. And we are planning to do it.

We will give them all the assistance that they will ask for and that they will need, because we would like them to have a free election for the first time. It will be a very positive signal that in January we will have free elections in Iraq and within the Palestinian Authority.

It might encourage some other countries in our region to ask for the same system of democracy, to have an election in their countries. And we had enough being the only democracy in our region for almost 60 years. We would like others to join us.

POWELL: Thank you very much. KING: Outside the State Department now, Secretary of State Colin Powell speaking with the Israeli foreign minister, Silvan Shalom. Secretary Powell, on the day he announced his resignation from the Bush administration, offering his perspective on the prospects for peace in the Middle East.

We're rejoining our conversation now with Ron Brownstein of the "LA Times" and Mike Allen of "The Washington Post."

Mike, let me ask you this, the secretary sounding optimistic and the foreign minister about this opening. There are some in the administration who said that he wanted to stay through March or April to try to explore that opening and the answer from the White House was no. Is that your understanding?

MIKE ALLEN, "WASHINGTON POST": Yes, John. You saw here how awkward this departure is. Just as the secretary is heading out on a Middle East peace mission, he's announced his departure. He says it will be weeks or a matter of weeks or a few months before he goes.

His resignation letter very pointedly said to the president, "I'll depart at your pleasure." The White House has made it clear that these departures -- and if you count the upcoming one of Homeland Security Secretary Tom Ridge, we're up to seven out of the 15 heads of executive departments -- that these are mix of voluntary and involuntary.

And Secretary Powell had indicated his frustration for some time with the administration's bifurcated foreign policy. He thought it was confusing to allies, confusing to people within the administration, and he wanted the president to take decisive action to solve that.

KING: Well, my notebook says perhaps as early as tomorrow we will hear that the president's choice to replace Secretary Powell is Condoleezza Rice, the national security advisor. Do you agree with that, and, if so, what do you make of that? Why is that so important?

ALLEN: Well, John, I almost always agree with your notebook, and this is one time when I certainly do. It's one of the best notebooks in town.

And what we see there is another example of the president in the second term moving to take control of the whole government to build a very durable legacy. We see this in the Justice Department, where the White House counsel, Alberto Gonzales, is replacing John Ashcroft. We see this with changes being made at the CIA. We see this with the president's domestic policy adviser going to Education.

So the departments now are being -- becoming extensions of the White House staff. And this goes to the point that Ron was making earlier about dissent.

One of the points that was made in many of the examinations of the president's leadership style was this sort of closed loop that he's been receiving. And certainly the danger of that is increasing with this approach that he's taking.

KING: Follow more on the danger of that. Obviously this administration, this president, puts a premium on loyalty. He knows there are people he can trust and will do his bidding. What's the downside?

BROWNSTEIN: Well, the downside is whether you hear all the sides of an argument or all the -- the pratfalls ahead in a course that you're choosing before or after. Reality has a tendency to impose itself on presidents. And the question is whether you are really being exposed to all the reasons why not to doing is something.

Look, what the White House and many of the conservatives who support the president are expecting is that if it is Condoleezza Rice that she is only the first step. That there would be widespread changes throughout the State Department to bring it more in line with what the administration wants to do. And that is really the upside of what Mike is talking about as you look at these departments.

There -- it seems we're on a track for more coherence in that there will be less resistance from the departments to what the White House wants to do. But again, the downside is, the question is, are you going to hear all sides of an argument? And as Mike pointed out, in Paul O'Neill and others, that is the common critique you hear of the president's leadership style, very decisive, yes, but not always open to arguments that don't track with what he wants to do.

KING: You mentioned Secretary Ridge perhaps moving on, Mike. Are we done? Is that about it? Or will there be more?

ALLEN: I don't know the answer to that. Secretary Rumsfeld will stay for a while, but not forever.

To pick up on the coherence point that Ron was making, what people in the White House have told you and told us is, "We won." The president believes that the White House is working well. The president believes in his policy.

The president is not looking to remake either his image or his policies. The president is here to cement what he's done. And that's -- that's the direction that you see these changes.

And we knew -- we knew sort of what was going to be happening on Capitol Hill. I think a lot of people are being taken by surprise by the decisiveness and clearness and aggressiveness with which the president is moving to also do this in the executive branch.

BROWNSTEIN: And the stability at the upper level of the White House is a real contrast in the change of the cabinet, really. Except for the people from the White House moving to the cabinet, there is really a lot more stability on that front than we're seeing in the executive departments.

KING: And the president moving quickly. Mike Allen, Ron Brownstein, we thank you both for your insights and patience.

ALLEN: Thanks, John.

KING: Prior to becoming secretary of state, Colin Powell had a distinguished 35-year military career. And while he didn't win every battle Washington, many say his life as a soldier defined him throughout. Bruce Morton now takes a look back at Secretary Powell's career.

(BEGIN VIDEOTAPE)

BRUCE MORTON, CNN NATIONAL CORRESPONDENT (voice-over): He grew up in Harlem, his folks immigrants from Jamaica. Joined the ROTC in college and fell in love with soldiering.

"The discipline, the structure, the comradery, the sense of belonging are what I craved," he wrote in his autobiography. He did tours in Vietnam and wrote that when his generation of officers were calling the shots, "we would not quietly acquiesce in half-hearted warfare for half-baked reasons the American people could not understand."

Years later, as the first African-Americans chairman of the Joint Chiefs of Staff, he put that into practice. The first President Bush assembled a strong coalition to drive Saddam Hussein out of the Kuwait he'd invaded. "What about Saddam's army?" reporters asked Powell.

POWELL: Very, very simple. First we're going to cut it off and then we're going to kill it.

MORTON: And they did. But he resisted chasing Saddam back to Baghdad. "What purpose would it have served?" he wrote, "and would it have been worth major occupation forces in Iraq for years to come?"

Kuwait made him a hero in America, and many wanted him to run for president. (UNINTELLIGIBLE), and he thought about it, but in 1995 said no. He needed a passion to run, he said.

POWELL: The kind of passion and the kind of commitment that I felt every day of my 35 years as a soldier, a passion and commitment that despite my every effort I do not yet have for political life.

MORTON: So he didn't run, but in 2000, George W. Bush did and made Powell his secretary of state. By all reports, he lost some arguments.

He had been to war and knew its costs. The Iraq hawks, Vice President Cheney and Defense Secretary Rumsfeld hadn't been but carried the day. Powell, the good soldier, gave a speech at the United Nations, making the president's case that Saddam had weapons of mass destruction and threatened world peace.

POWELL: The facts and Iraq's behavior show that Saddam Hussein and his regime are concealing their efforts to produce more weapons of mass destruction.

MORTON: The weapons, of course, were never found, and Powell's prestige among his colleagues probably declined. And the invasion went ahead of course.

"Senior officials," Powell wrote once, "cannot fall on their swords every time they disagree with the president." But he'd had four hard years, and he's leaving now having proved, among other things, that public service can still be honorable work.

Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

KING: Still ahead on INSIDE POLITICS, more on what Dana Bash told you at the top of the show. Ken Mehlman is the president's pick to take over the Republican National Committee.

Also, another familiar face from campaign '04. Former Vermont Governor Howard Dean is said to be interested in leading the Democratic National Committee. He's making the case he can help other Democrats get elected.

Stay with us.

(COMMERCIAL BREAK)

KING: Checking the headlines now in our Monday edition of "Campaign News Daily."

Former Democratic presidential hopeful Howard Dean is said to be among those interested in heading up the Democratic National Committee, and he's touting his ability to elect other Democrats to public office. The political action committee Dean founded, Democracy for America, has issued a press release naming all of the successful candidates that group supported. Winners included the two new Democrats headed to the Senate and several new Democratic House members.

The liberal interest group MoveOn.org is joining the call for an investigation of Election Day problems at the polls. The group has posted a petition on its Web site asking people to support calls for a formal investigation. MoveOn.org, of course, spent millions of dollars during the campaign trying to defeat President Bush.

Nearly two weeks after the election, some people are still raising concerns of the accuracy of campaign season polls. And a group of cell phone users left out of the mix. CNN's Jennifer Michael reports now on a new CNN analysis designed to take a closer look at those concerns.

(BEGIN VIDEOTAPE)

JENNIFER MICHAEL, CNN CORRESPONDENT (voice-over): As critics saw it, young, wired and on the move would-be voters were conspicuously absent from the pre-election presidential surveys. Pollsters still make their random calls on old-fashioned landlines, excluding people whose only phones are cell phones.

During the campaign, many Democrats pointed to the cell phone phenomenon to explain why John Kerry was trailing President Bush in the polls. The outcome on Election Day suggests otherwise. And so does a CNN analysis of our exit poll results.

Adjusting for early and absentee voters who were not included in the exit polls, we found 6 percent of all voters in 2004 only used a cell phone, in line with studies of the general population. Of that 6 percent, a little more than half said they voted for Kerry. And slightly fewer than half said they voted for Bush.

KEATING HOLLAND, CNN POLLING DIRECTOR: Because the cell phone- only voters split about 50-50, there wasn't a huge number of people out there who were voting for Kerry that we missed. We missed a lot of Kerry voters, but we missed an equal number of Bush voters in the pre-election telephone polls.

MICHAEL: Pollsters plan to keep an eye on the growing number of cell phone-only voters and their political leanings. But for now, they appear confident their results are not being skewed by the cellular craze.

Jennifer Michael, CNN.

(END VIDEOTAPE)

KING: Turnover or turmoil? Are changes new CIA boss Porter Goss helping or hurting the spy agency? Coming up, I'll speak with Senator Chuck Hagel, a Republican on the Intelligence Committee.

Plus, his comments on abortion and judicial nominees sparked a controversy among conservatives. We'll have the latest on Senator Arlen Specter's fight to take over as chairman of the Senate Judiciary Committee.

(COMMERCIAL BREAK)

KING: Markets are about to close on Wall Street. We're joined now by Lou Dobbs for another installment of "The Dobbs Report" -- Lou.

LOU DOBBS, "LOU DOBBS TONIGHT": Thank you, John.

Oil prices today the big story. Oil prices dipping to an eight- week low. The price of oil dropping below $47 a barrel. Rising fuel inventories easing concerns about a winter supply crunch and pushing prices lower. Unions in Nigeria suspending a general strike that was due to begin tomorrow.

Crude oil settling down 45 cents, at $46.87 a barrel in New York Trading, $9 below the record high set just last month.

Oil giants Exxon Mobil, ChevronTexaco, and BP suffering as the price of oil fell. Over oil stocks today however little changed. The Dow holding steady near the highest level in seven months as the final trades are now being counted. The Dow up a little over 11 points. The Nasdaq Composite also slightly higher on the day.

Treasury prices drifting lower as oil prices pull back. The dollar is hovering near record lows against the euro and is weaker compared to other major currencies as well. Treasury Secretary John Snow is reiterating the White House support of a strong dollar. But when asked whether the U.S. or other central banks should be doing anything to prop up the dollar, Snow said the market should determine exchange rates. Wall Street analysts forecast the dollar could slide even further in the coming months because of our expanding trade deficit.

In other news, the Food and Drug Administration has a new way to combat counterfeit drugs under a program backed by the agency and several drugmakers, miniature electronic tags being placed on the bottles of many widely-used medications. These new devices will track the delivery from production facilities to pharmacies across the country.

Coming up on CNN at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT" we continue our special series of reports on broken borders. Tonight, the hiring in this country of illegal immigrants. Thousands of Americans and American businesses are committing the crime and critics say it's time for the U.S. government to crack down on employers who hire illegal aliens.

(BEGIN VIDEO CLIP)

WAYNE CORNELIUS, UNIV. OF CALIF., SAN DIEGO: Congress deliberately passed a toothless employer sanctions law that contained a gaping loophole that enables employers to get off scot-free if they have just kept their paperwork in order.

(END VIDEO CLIP)

DOBBS: Our special report tonight focuses on why the federal government isn't hard enough on employers who have hired illegal aliens and why that has to change.

Also tonight, a closer look at the shake-up at the Central Intelligence Agency. Senator John McCain, a staunch critic of the agency is my guest tonight, as well as former CIA director James Woolsey and House intelligence chair Peter Hoekstra who will join me to discuss the resignations of top CIA officials and the future of the organization.

Then I'll be joined by former Supreme Court nominee George Robert Bork. We'll have his thoughts on the future of the highest court as President Bush prepares for his second term.

And tensions between Capitol Hill and the United Nations are mounting. We'll have the latest for you on the widening Iraqi Oil for Food scandal and the congressional committee hearings going on now in Washington. Now, back to John King in Washington -- John.

KING: And, Lou, a major debate here in Washington, a major subject of your program tonight, this tension between the new CIA chief Porter Goss and many of the senior deputies. Is it turnover or is it turmoil? DOBBS: It's both, without question, John. The fact is, it is necessary turmoil. This president has made it clear that he is going to move forward with reorganization and Porter Goss has been brought in to do just that. And ironically, the very same deputy-level officials who have been complaining about the way in which they have been treated by Porter Goss and his deputies have very little to fall back on because they are the very same deputies in many cases who have been leaking to the press in ways that the administration finds unacceptable.

KING: Lou, thank you very much. We look forward to the perspective of your guests tonight as well. INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

COLIN POWELL, SECRETARY OF STATE: It has always been my intention that I would serve one term.

ANNOUNCER: Colin Powell is leaving so who is going to replace him as secretary of state?

Members of Congress come back to work, but will they be able to finish unfinished business?

UNIDENTIFIED FEMALE: It would be a tragedy and it would be dangerous to our country if we do not pass the 9/11 commission legislation in the lame-duck session.

ANNOUNCER: Arnold for president? A major hurdle stands in his way: the U.S. constitution. But one group is trying to change that.

UNIDENTIFIED FEMALE: Help us amend for Arnold and 12 million other Americans.

ANNOUNCER: Now, live from Washington, JUDY WOODRUFF'S INSIDE POLITICS.

(END VIDEOTAPE)

KING: Welcome back. I'm John King sitting in for Judy today. Colin Powell may now be a lame duck secretary of state but he insists that will not stop him from aggressively promoting the president's foreign policy until his successor is named and confirmed. The White House today made it official, Powell is stepping down, as many here in Washington expected he would.

(BEGIN VIDEO CLIP)

POWELL: I'm still the secretary of state and as President Bush has made it clear, I operate with his full authority. And so I think that will be recognized by the people that I deal with around the world. And I have good relations with most of the leaders in the nations that I will be working with and visiting. So I think I'll be able to be quite effective for the remaining period of my term. And what am I going to do next? I don't know. (END VIDEO CLIP)

KING: In addition to Secretary Powell, the White House today announced the resignations of three other cabinet members, Education Secretary Rod Paige, Energy Secretary Spencer Abraham and Agriculture Secretary Ann Veneman. No official word yet on who the president will choose as their replacements although CNN is told the likely candidate to replace Secretary Powell is National Security Adviser Condoleezza Rice.

It is Secretary Powell's departure that is expected to make a more significant mark on the president's second term as the administration grapples with Iraq, Middle East peace and other hot global issues. I spoke a bit earlier with Senator Chuck Hagel, the influential Republican on the foreign relations committee and a sometime critic of the Bush White House. We discussed a number of topics but I began by asking Senator Hagel if he is also hearing that Condoleezza Rice will be nominated as Powell's successor.

(BEGIN VIDEOTAPE)

SEN. CHUCK HAGEL (R), NEBRASKA: That's what I'm hearing, but I don't know.

KING: Secretary Powell leaving, a loss for the administration?

HAGEL: Oh, I think it is. This is the most respected, most admired, most trusted leader in America. Interestingly enough, that's how he went into office four years ago and that's how he's coming out. I think he has done a remarkable job in reaching out to our friends, our allies, our allies had great confidence in him. He obviously brought the State Department morale up, he redefined the mission over there, he helped increase the budget. I think he was the one cautious, wise voice in the war cabinet which we won't understand all of the ramifications of that until Woodward's next book or whoever writes the next book but there's no question it will be a great loss for this country and the world.

KING: Condi Rice up to the job?

HAGEL: Well, if she's the nominee she brings in significant experience. Obviously four years as national security adviser to a president, a difficult four years. Before that, deputy national security adviser. She's smart. She has the president's confidence. But if she's the nominee or whomever the nominee is, obviously, the Senate will want to understand more clearly where foreign policy goes, are you going to change things, the what, why? We've got a huge year next year with these Iraqi elections, the Palestinian elections, Iran, North Korea. Big, big year ahead of us here. And we want to know about what her thoughts are and the president's on where they're going to take America.

KING: If you look at the early turnover we've seen in the cabinet, Ashcroft resigns, the president sends a very trusted confidante Judge Al Gonzales as his nominee, we are told he will send Condoleezza Rice to the State Department. Similar word for the openings at the Education Department, the Commerce Department. At the RNC today the president putting a top loyalist in that job. Is it a good thing to put people who are so trusted and are loyal or do you think this administration needs new blood and new thinking in this second term?

HAGEL: Well, obviously, it's up to the president. But I have always believed that whatever organization you are part of, new fresh initiatives, new fresh thinking, new fresh energy is always vital to any organization. If the president continues to assign these open cabinet positions to experienced, trusted aides, there is some advantage to that. But they have to be careful if that's what they're going to do, that they don't become so insulated and so stumble- around-in-their-own-echo-chamber that they don't get the kind of outside counsel that I think is absolutely critical, especially at a time like this in the world.

KING: At a time like this in the world you mentioned. A few months back they turned to Porter Goss to take over the CIA and there are stories in the past 72 hours or so about tension and resignations within the CIA. And some see the White House asking Porter Goss to find people who might have leaked critical or damaging information about this president and his case for war and to get them out. Is that what you see?

HAGEL: I hope not. That's not the role of the CIA director. That's not the role of -- for anyone involved in our intelligence community. I think the CIA has gotten a pretty unfair rap over the last couple years. Listen, if we want to start going back to blame people for September 11, 2001, I think you go to the White House, you go to the Defense Department, you can go to all 15 intelligence agencies. You can go to the FBI especially, and the Justice Department, come to the Congress. We all take some responsibility. We have to be very careful with this CIA thing. If you start eliminating seasoned, experienced CIA people at the top, you leave the top of the CIA very vulnerable. That doesn't enhance America's security, that makes us vulnerable. This has to be done just right.

KING: Let me ask you a question about your own caucus, the Republican Caucus in the Senate. One of the questions you face is should Arlen Specter be the chairman of the judiciary committee? Some conservatives are up in arms. They believe he essentially sent a warning shot to the White House, do not send up anti-abortion judges. Should he be the chairman?

HAGEL: Well, Senator Specter is an experienced long-time member of the judiciary committee. He's going to have an opportunity this week to talk to his colleagues about this on the judiciary committee. That's where this issue really resides. I don't think a United States senator or the Senate in the caucuses in this Senate want to open up to the outside special interest groups who is going to determine our chairmanships. If we're going to start doing that then why even have a Congress? Why don't we just let the special interests run anything?

(END VIDEOTAPE)

KING: This is not your quiet November. Quite a bit going on under the Capitol dome with Congress returning for a lame-duck session and all sorts of political maneuvering under way for that session.

Ahead, we'll have a live report from Capitol Hill. Plus, the Republican who has President Bush's backing to take the helm of the party. I'll talk to would-be Republican National Committee chairman Ken Mehlman.

And does Arnold Schwarzenegger have his eye on the president's job? We'll tell you about the latest push to allow a Schwarzenegger run.

(COMMERCIAL BREAK)

KING: Members of Congress have some unfinished business left over from before the election. So, for a limited time only, they're headed back to Washington. CNN congressional correspondent Ed Henry now on a preview of their agenda.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The campaign and the party are over. So it's back to work for Congress, which returns for a lame-duck session. Their first priority? Passing a stack of spending bills to keep the government from shutting down. But don't expect too much else.

NORM ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: What's the point of doing a lot now? You're going to have more troops to be able to do something next year. All they want to do in this lame-duck session is the minimum necessary and get out of town.

HENRY: With a stronger hand next year, they'll tackle major issues, like Social Security reform and an overhaul of the tax code.

REP. ROY BLUNT (R), MAJORITY WHIP: 2005 is a critical opportunity for us to define our majority, to move forward, the president has put some big items on the table.

HENRY: In the lame-duck session, Republican leaders will try to pass the stalled Highway Bill. There has also been some progress on 9/11 intelligence reform. But Democrats fear creation of a national intelligence director may be delayed until next year when Republicans will have greater clout to cut a deal more favorable to the Pentagon.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: It would be a tragedy and it would be dangerous to our country if we do not pass the 9/11 commission legislation in the lame-duck session.

HENRY: The Treasury Department has asked Congress to raise the nation's $7.4 trillion debt ceiling by $690 billion. Democrats want to force a vote now in an effort to embarrass the Bush administration.

REP. JOHN SPRATT (D), BUDGET COMMITTEE: We should begin addressing the problem of the deficit now and not later. We shouldn't kick the can down the road.

HENRY: Today in the House there is also freshman orientation for the 38 new members of the House. It's almost like the first day of school. They even took a class photo. Also a bit of political housekeeping over in Senate. Democrats decided to pick Senator Chuck Schumer of New York to serve as the Democratic Senate campaign chairman. That's a very, difficult, thankless job trying to pick up the pieces from 2004 heading into the 2006 election. So thankless that they had to give Schumer also a seat on the powerful finance committee in order to get him to do it. Schumer is a very well-known fundraiser that could help Democrats in an election cycle where there are 17 seats that Democrats have to defend. Only 15 seats for Republicans to defend. Also some repercussions in New York. Schumer was going to run for governor but now obviously he's going to stay on as DSCC chairman so he will not be returning for governor -- John.

KING: And a new job for Senator Schumer. Any indications of the latest to the pulse when it comes to Senator Specter and his prospects to get the chairmanship of the judiciary committee? I spoke to Senator Hagel a short time ago and he says, maybe some conservatives are unhappy but it sounded to me that the veterans of the Senate don't want to set any precedent here by dumping Senator Specter.

HENRY: John, Tuesday is seen as a pivotal day for Senator Specter. There was going to be a meeting of Senate Republican leaders face to face at 11:00 a.m. on Tuesday with Senator Specter to try to get him to explain his comments about his belief that it would be very hard to get pro-choice judges, especially justices on the Supreme Court. It was widely noted up here that on a Sunday talk show Senator Frist did not offer an endorsement of Senator Specter yesterday. Also after that there will be a meeting in the afternoon about 4:00 p.m. on Tuesday with all the Republicans on the Senate judiciary committee. Again, Specter having to explain himself. And the Christian Defense Coalition is going to be having a demonstration against Specter here (UNINTELLIGIBLE). A lot of pressure from outside conservative groups and in fact this group is going to end up the day tomorrow praying in Senator Frist's office. A lot of pressure on Frist. Conservatives want him to prevent Specter from becoming chairman and obviously Frist wants to run for president in 2008. So there could be a lot of pressure on him, John.

KING: Interesting week ahead. Ed Henry on Capitol Hill. Thank you very much.

We suspect if you watch INSIDE POLITICS you might occasionally take a peek at the op-ed page of the "New York Times." This news in just this afternoon, William Safire whose op-ed columns have appeared on the op-ed of that newspaper for more than 30 years, 31 years now, said Monday he has decided in his words to, quote, "hang up his hatchet." A most articulate hatchet. We wish Bill very well in his retirement.

He managed the campaign now he's headed for the post of party chairman. Up next, I'll talk with Ken Mehlman, President Bush's choice to become the next leader of the Republican National Committee.

(COMMERCIAL BREAK)

KING: As we've been reporting the former Bush campaign chairman Ken Mehlman is the president's choice to succeed Ed Gillespie and become chairman of the Republican National Committee. Ken Mehlman now joins me live from his soon-to-be new home at the Republican headquarters. Let me ask you first. Just a quick test for you here as the new chairman-to-be, who is your favorite for 2008 for president?

KEN MEHLMAN, BUSH CAMPAIGN MANAGER: My favorite is George W. Bush for the next four years and an incredible agenda that will make whoever our nominee is more likely to be elected. And obviously also, John, as you know, I'm honored by president's support but it's the job of the men and women on the Republican National Committee to make that choice and I'm trying to talk to as many as of them as I can and will talk to all of them hopefully this week to ask for their support personally.

KING: Ken Mehlman passes test one with flying colors. As you talk to them, Ken Mehlman, members of the committee and other constituency groups around the country, some of them are not happy with comments from Senator Arlen Specter that they viewed as some sort of a litmus test that President Bush better not send up anti-abortion judicial nominees to Capitol Hill. Senator Specter has tried to clarify those remarks but what is your sense of dissent if you will, in the party with Senator Specter right now. Should he be the chairman?

MEHLMAN: Well, obviously, it's up to the United States Senate to make a decision of who their chairman would be of the different committees and I think most folks recognize that. We also recognize and we take Senator Specter at his word on this that one of the things the American people said pretty loud and clear on election day is they don't like to see judicial nominees blocked based on litmus tests. And the president won a majority and the president ought to be able to nominate men and women who are qualified to be judges. And I think whoever the chairman is will follow that. And Senator Specter says he will and I take him at his word. It's a decision for the Republicans and the Senate to decide.

KING: After every election, there are groups in any party that raise their hand and say we did the hard work, we deserve something here. In your party there are Evangelical, other religious conservative groups saying we helped get this president re-elected in a very close race. He should listen to us and we don't want Senator Specter as the chairman. Is that your job or the White House job to get involved in that fight at all?

MEHLMAN: Well, as I said, I think it's up to the U.S. Senate to decide who will be the chairman of the different committees. But one thing is very clear that the American people said and that the volunteers said and the activists said, there should not be litmus tests and the era of litmus tests in the U.S. Senate before qualified men and women are confirmed needs to come to an end. The American people have said so and I'm confident that the Senate will follow their lead.

KING: If you watch the president's appointments in recent days, Ken Mehlman to the RNC, Judge Gonzales to the Justice Department, we're told Condoleezza Rice to the secretary of state's post in a day or two, some around town are a little worried. They say this president relies too much on loyalty, puts too much of a premium on loyalty and should in a second term bring some fresh voices in. How would you answer those critics?

MEHLMAN: Well, first of all, it's an honor to be discussed in the same category as Judge Gonzales and as Condoleezza Rice. I think what the president has done in the first term and will try to do it in the second term is put men and women into places who he trusts, people that share his philosophy and people that are committed to a moving forward and a bold agenda.

Look, the American people, John, spoke very clearly on election day. They said to take the battle to the terrorists to protect the American people, they said we want fundamental tax reform, they said, we want to protect and enhance Social Security for the long term, they said we need tort reform. And I think what you're going to see is the president putting people in office and the president putting people in different agencies and all over the government who are committed to this agenda which is the American people's agenda because they endorsed it on election day.

KING: Ken Mehlman, we're short on time today. So I'll end there and say congratulations to you, whether you're Democrat or Republican, one of the hardest working men in the business. Congratulations to you, sir.

MEHLMAN: Thanks.

KING: Thank you.

The elections are over but one TV ad campaign is just getting started. Up next, new spots promote amending the constitution so a certain actor turned governor can run for president. Stay with us.

(COMMERCIAL BREAK)

KING: California Governor Arnold Schwarzenegger is on record saying he would be interested in running for president one day but the constitution says he can't. CNN's Thelma Gutierrez reports several Californians think the constitution is wrong and they're putting their money behind a new TV ad campaign.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): It's no secret that the body builder turned action hero who became governor of California...

ARNOLD SCHWARZENEGGER: Four more years.

GUTIERREZ: And rallied Republicans at the RNC...

SCHWARZENEGGER: America gave me opportunities and my immigrant dreams came true.

GUTIERREZ: Would love to take a shot at the United States presidency.

UNIDENTIFIED FEMALE: He has to be 35 years old, he has to have resided in the United States for 14 years and he has to be a natural born citizen.

GUTIERREZ: And that's where the Austrian-born governor's political aspirations hit the glass ceiling.

UNIDENTIFIED FEMALE: You cannot choose the land of your birth. You can choose the land you love.

GUTIERREZ: So a grassroots effort is under way to amend the U.S. constitution.

UNIDENTIFIED FEMALE: Help us amend for Arnold and 12 million other Americans.

GUTIERREZ: These ads are running on local cable channels and on the Internet. Lisa Morganthaler-Jones, president of AmendUS.org kicked in thousands of dollars of her own money to get the three- person organization off the ground.

LISSA MORGANTHALER-JONES, PRESIDENT, AMENDUS.ORG: We can't be sure that this is going to happen, but I would be happy to take bets if anyone wants to bet against it because I think this will happen.

GUTIERREZ: California Representative Dana Rohrbacher, a Republican, says he came up with the proposal which would pave the way for anyone who's been a U.S. citizen for more than 20 years to run for president.

UNIDENTIFIED FEMALE: When 200 plus years we've only amended the constitution 17 times. I do not think it's likely that this is going to pass the amendment process.

GUTIERREZ: A small sampling of Californians we talked to today had mixed reactions.

UNIDENTIFIED MALE: I believe that if he's been here for most -- majority of his life, I think maybe that's not maybe a bad idea.

UNIDENTIFIED FEMALE: I don't think it's right. I think the constitution should stay as it is.

GUTIERREZ: Governor Arnold Schwarzenegger became a U.S. citizen in 1983. He supports the movement but hasn't officially endorsed the ad. Thelma Gutierrez, CNN, Los Angeles.

(END VIDEOTAPE)

KING: One worth watching. That's it today for INSIDE POLITICS. I'm John King. Thanks for watching. "CROSSFIRE" starts right now.

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