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Inside Politics

U.S. Base Attack in Iraq; Giuliani's Future; A Bartlett Review

Aired December 23, 2004 - 15:30   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.


(BEGIN VIDEOTAPE)
ANNOUNCER: How did a suicide bomber make his way into the heart of a U.S. military base in Iraq?

BRIG. GEN. CARTER HAM, COMMANDER, TASK FORCE OLYMPIA: Well, we don't know how exactly it happened, but we are going to find out.

ANNOUNCER: While investigators search for answers, there's no letup in the fighting.

He won a big victory in November. So why is President Bush dropping in the polls?

UNIDENTIFIED MALE: We see tough fighting going on in Iraq. We see some of the mixed economic reports in the holiday season about retail sales. And I think all those things naturally fall on the play of the president's approval rating.

ANNOUNCER: We'll talk with a top White House adviser.

BERNARD KERIK, FMR. NEW YORK CITY POLICE COMMISSIONER: I plan to take some time off to clear my good name.

ANNOUNCER: The man President Bush wanted as the nation's homeland security secretary steps down from his current job. Will Bernard Kerik's problems hurt Rudy Giuliani's presidential ambitions?

UNIDENTIFIED MALE: So I think it's a blow to him. It's certainly not fatal.

(END VIDEOTAPE)

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

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

As investigators try to piece together how a bomber could have set off explosives inside a U.S. base in Iraq, the U.S. general in charge of the region says the attacker was probably wearing an Iraqi military uniform and likely had help. A military official this afternoon tells CNN investigators believe they have found the remains of the suicide bomber who carried out that attack in Mosul. FBI and military analysts were also working to determine just what kind of explosive was used in the bombing which killed 22 people, including 18 Americans.

Thirty-five soldiers wounded in the attack are being treated at the military medical center at Landstuhl, Germany. The hospital commander says the vast majority of those troops are expected to recover. Nearly half of the soldiers at the facility are said to be in critical condition. Some of the wounded already have been transported back to the United States for further treatment.

Earlier today, U.N. Secretary-General Kofi Annan called President Bush up at Camp David to express his condolences for those killed in the attack. And a short time ago, I spoke with Brigadier General Carter Ham, the U.S. commander in Mosul, and I asked him about the status of the bombing investigation.

(BEGIN VIDEOTAPE)

HAM: What we think is likely but certainly not certain is that an individual in an Iraqi military uniform, possibly with a vest-worn explosive device, was inside the facility and detonated the facility, causing this tragedy. That's preliminary. We'll find out what the truth is and then take necessary actions as we gain more information.

KING: It raises the question, sir, that if there is one infiltrator, there could well be two, three, or more. What steps are you taking to go back and recheck people, whether they be people with Iraqi military uniforms or some of the contractors, the hired hands, if you will, who come in to provide services on the base? What has changed? What are you doing to try to make sure this doesn't happen again?

HAM: John, my highest priority is the protection of our forces. Because if we don't protect our force, we can't accomplish our mission. And so I take that responsibility very, very seriously.

Every day, we make assessments based on the intelligence that we have, the threats that we think we are likely to face, and then determine what are the most appropriate measures to take to counter or disrupt those threats. I think we have a good procedure to do that but, clearly, in this instance, I failed to identify some shortcoming that allowed this to occur. That's why we're doing this investigation, to find out where was that seam that these murderers were able to exploit, and so that we can preclude such events in the future and, again, continue our actions to protect our force to the best extent that is possible.

KING: Now, you say a seam was penetrated, sir. Is -- the protocols in place for force protection, is that your policy or a countrywide policy at that particular base?

HAM: As the commander here, it is my personal responsibility for the force protection of the soldiers entrusted to my command and for all those who serve in this sector. There are certainly some command- wide guidelines that are established, and there are some standards that are applied. And we certainly follow those.

But Iraq is such a varied country. And the nature of the insurgency here is so different from area to area, that generally blanket policies are not particularly effective.

KING: Do you have enough boots on the ground?

HAM: I have enough U.S. boots on the ground. I do not have enough Iraqi boots on the ground.

And ultimately, to defeat this insurgency, it will be Iraqi security forces that will necessarily have to step up and assume an increasing and ultimately total responsibility for security in their own nation. The development of Iraqi security forces has not been as fast as any of us would have liked.

Having said that, some Iraqi security forces appear in Mosul and throughout the area for which we are responsible have performed very, very well for some time, reaching back into -- into early this year. Others, notably the police, early, in mid-November, had not performed well at all in a very disappointing manner.

So the mixed -- the mixed performance of the Iraqi security forces and the slow development is of -- is of great concern, I think, to all of us. And really, that's got to be the decisive effort. That's where we have to apply our energies, is to help the Iraqis get to a point where they can carry this burden themselves.

(END VIDEOTAPE)

KING: You can hear much more of my interview with General Ham at 5:00 p.m. Eastern when I host "WOLF BLITZER REPORTS."

And with me now to talk more about the attack in Mosul and the overall situation in Iraq is CNN military intelligence analyst Ken Robinson.

You heard the general there. They believe it was someone who was wearing an Iraqi military uniform, the suicide bomber. What does that tell you about the insurgency and their intelligence and their ability to infiltrate?

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Well, we've seen from the insurgency the use of these uniforms before at roadside roadblocks, where they've established checkpoints and then conducted targeted assassinations. So the use of uniforms is not new.

The fact that they were able to penetrate the security of the base and have some form of credential to get on base, if that was the case, that is the new. And then now if they end up that this individual was actually Iraqi military, that would even be a larger problem in terms of the vetting.

KING: What do you do on this day when you come to that conclusion? Do you now have to look at every single base where you have U.S. troops alongside Iraqi troops?

ROBINSON: I would. They need to re-look at the entire process of segregation. Now, remember, that's an insurgent objective. They want to separate the military from the population. They want to separate the United States government from the Iraqi military and police.

And so they want to force disproportionate responses to this event. That's part of their strategy. So they've got to very carefully and rapidly get force protection, get some form of segregation that makes sense.

KING: In your view, what would make sense? You have these soldiers in a mess hall, targets, obvious targets. Do you think the United States should go back to a much more secure, pull back -- and we were talking earlier, troops eating MREs, not in group settings?

ROBINSON: I think that they should go to tactical feeding because there's no place in Iraq that's safe. It is hard. General Ham had mentioned earlier that one of the things that was tough was creating a policy that made sense countrywide because the levels of threat had been different at different times. But really, when you think about it, especially on reflection of the other day, there's no safe place in Iraq. And they need to re-examine all their force protection from that line.

KING: And what is the psychology now when you have questions about the reliability and now even possible infiltration of the Iraqi forces, as you say, the insurgents trying to essentially scare the Iraqi people and divide the Iraqi people from the U.S. troops? What now?

ROBINSON: Well, they've got to continue to keep on. I mean, they must engage with the military because the solution for an exit strategy for the United States is train that police force, train that military, and then get them to a tipping point where they are willing to fight and die for their country. And they are not there yet, John.

KING: Ken Robinson, thank you for your thoughts.

ROBINSON: Thank you.

KING: And now on the "CNN Security Watch," some changes in the way airport security screeners will treat female travelers. Effective immediately, airport screeners will change the way they pat down female airline passengers, a response to numerous complaints by women who said they were embarrassed and offended by the searches. Airport screeners pat down about two million travelers a week, usually because those would-be passengers have set off metal detectors twice.

Stay with CNN at 5:00 Eastern. "WOLF BLITZER REPORTS" will have more on this change on security procedures for female passengers. And stay tuned to CNN throughout the day for the most reliable news about your security.

The political damage caused by former New York police commissioner Bernard Kerik's rapid fall from grace may extend far beyond Kerik's personal shortcomings. CNN's Deborah Feyerick reports Kerick's friend and now former business partner, Rudy Giuliani, is also feeling political heat.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Together they were heroes on 9/11, Rudy Giuliani and his top cop, Bernie Kerik, as always at the mayor's side.

RUDY GIULIANI (R), FMR. NEW YORK CITY MAYOR: I grabbed the arm of then police commissioner Bernard Kerik and I said to him, "Bernie, thank god George Bush is our president."

FEYERICK: Whether at the Republican national convention or on a campaign trail this fall, it was clear they were a team.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As Mayor Rudy Giuliani's police commissioner, he had great success in reducing crime in New York City.

FEYERICK: Then days after being nominated to head Homeland Security, Kerik's dazzling fall from power under a barrage of scandal.

KERIK: Last evening I contacted the White House and requested that my name be withdrawn.

FEYERICK: First withdrawing from the cabinet nomination, then resigning from the company he started with Giuliani, who ultimately minimized Kerik's role in the business.

KERIK: The events surrounding my withdrawal have become unfair and an unnecessary distraction to the firm.

FEYERICK: Frequent Giuliani critic and former New York City Mayor Ed Koch says the Kerik matter has inevitably tarnished Giuliani should he decide to run in 2008.

ED KOCH (D), FMR. NEW YORK CITY MAYOR: He will, I believe, be held responsible when he runs again. People will ask about that. But I think with respect to his ambitions to be the president of the United States, that he will not make it simply because of all the wrong reasons.

FEYERICK: Those reasons being Giuliani's seemingly non-red state positions on abortion, gun control and gay rights. Even supporters like the head of South Carolina's Republican Party are being cautious.

KATON DAWSON, CHAIRMAN, SOUTH CAROLINA GOP: You know, his company and his personal interest are something that will maybe be under the political microscope at a later date. But, you know, right now in South Carolina, that doesn't have a large effect to us. When a brighter light turns on, maybe it will.

FEYERICK: So is Rudy Giuliani worried? Certainly not publicly.

GIULIANI: You know, people have a right to evaluate it any way they want. But I don't think it's a major -- it's a major concern from that point of view. (END VIDEOTAPE)

FEYERICK: Giuliani said he did not push Kerik to resign from the company, though he did agree it was the right thing to do -- John.

KING: Deborah Feyerick in New York for us on a story that will no doubt continue. Thank you, Deborah.

And why are President Bush's poll numbers dropping? That's just one of the questions I asked a top adviser to the president. Next up, my conversation with White House communications director Dan Bartlett.

Plus, former President Clinton is back in the headlines. We'll tell you why.

And later, the election that just won't end. There's no winner yet in the Washington State governor's contest. We'll have the latest on this clash at the top of the hour right here on INSIDE POLITICS.

(COMMERCIAL BREAK)

KING: Looking back now at a very busy political year. I sat down this week with the White House communications director, Dan Bartlett, to review some of the highlights and low points for the administration. I began by asking about our new CNN poll showing a drop in President Bush's approval rating since his reelection.

(BEGIN VIDEOTAPE)

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, we are, obviously, just after the election in a period where we're transitioning from a campaign season to a governing season. But just like we all talked about during the campaign, that oftentimes this campaign was formulated by events outside the control of the two candidates, we still live in that environment.

We see tough fighting going on in Iraq. We see some of the mixed economic reports in the holiday season about retail sales and things like that, energy prices, for example. And I think all of those things naturally fall on the plate of the president's approval rating.

But we do believe he's still in a very strong position to lead this country forward. He's working hard right now to bring the country together. He'll do so and speak to those aims in the coming year because we have some great goals and responsibilities, and ones that go beyond just the titles of our parties or the partisanship from a past campaign. And his aim in the new year is to work to bring the two political parties together to achieve some of these -- these issues that we've been talking about.

KING: Let's take a few minutes and look back on that campaign. First, let me just start with, what's your one -- if someone asked you the signature moment for Dan Bartlett over the campaign past, what would it be?

BARTLETT: I still would have to say the convention speech. I think in one speech we were able to capsulize this presidency not only in scope of -- of his leadership qualities and what he brings to the table as president of the United States as a person, but also the issues that he cares deeply about.

I think by the end of that speech, not only did you know what this president cares about, but where he wants to take this country. It was a very forward-looking speech. But he also spoke from the heart.

And that was a proud moment for us who have worked for him personally. And I believe from the standpoint of where it positioned us as an incumbent running for reelection, I think it put us in the driver's seat in going on and winning the election in November.

KING: In the driver's seat from the convention speech there were, as you know, not so favorable reviews of the first debate. What were you and the other members of the team thinking? When the debate was over, did you say, we have a problem here?

BARTLETT: Well, look, I mean, the first thing you ought to recognize is that any time a challenger gets on the stage with -- with the president, they are going to instantly benefit from it, from being on the equal stage. And I think Senator Kerry, as we predicted beforehand, we said that he was going to be a very able debater, that he was going to be skilled at it and he was going to be on offense. And all those things turned out to be true.

But I think also what people lost from that is that, at the end of the day, a week later, two weeks later, I think people knew where President Bush stood on the issues. Where, in fact, with Senator Kerry, they still may be searching for what he was all about. So while he maybe parried back and forth in debate techniques, which he -- like I said, he was very good at, the bottom line was, at the end of the day, people knew where President Bush stood at the end of the issues -- at the end of the day.

So we weren't too concerned about that. We knew there were two more debates in which President Bush would get comfortable with the type of debate setting and those things with somebody who was as seasoned as John Kerry. But we -- knowing that we had a debate so quickly next, we weren't too focused on looking backwards.

KING: Let's fast forward a bit to Election Day. And, by all accounts, after the final swing, the president's team felt fairly confident about what would happen on Election Day.

You wake up, you get pretty good reports from your people out in the field, and then you get the first wave of exit polls. And if you look at the first wave of exit polls, the president was getting beat pretty bad, if you believed what you were seeing. What was the mood among the senior staff? And who told the president, and what was his reaction?

BARTLETT: Well, we were on Air Force One coming in on approach to Andrews Air Force Base. And there with the senior staff cabinet of Air Force One, myself, Karl Rove, I believe Condi Rice and Karen Hughes were in there. And the president came in as Karl was getting the returns over the phone.

And it was -- obviously, it took the wind out of our sails, to say the least. But it was him, it was the president who stopped at us all kind of being worried about it and said, "If that were to be the case in 2000, we wouldn't have won in 2000. So let's not jump to any conclusions."

But, yes, it's a natural human feeling to feel kind of like you've been punched in the gut after feeling like we had such momentum going into that day. But as the day unfolded and as we learned more about the exit polls and why we felt they were fundamentally wrong, as it turned out to be, obviously our optimism grew as the night went on.

KING: Do remember when it turned during the day?

BARTLETT: Well, I think it was probably more around the 4:00 hour when we started really kind of getting more of the underlying data to see exactly what had happened, how it was being over-sampled in particular states, how we were outperforming in other parts with certain demographics, and -- which only could come to conclusions that we felt.

At the same time, when we were getting reports from the field about the targets we were trying to meet with get-out-the-vote efforts, it just didn't add up. So that's when our optimism started growing, and it was confirmed, obviously, as soon as the polls closed and some of the fresh real data came out.

KING: I'll give you a tee ball question here. Is there a lesson for my business in how all that played out? And obviously most organizations don't want this stuff to get out -- leak out on the Internet, and all the numbers did.

And people around the country knew the numbers quite easily. It used to be that a relatively small group of people knew those numbers. But is there a lesson?

BARTLETT: I think there is. I think we have to take the Internet into consideration.

We have to understand that people have instant access to this type of information. My family back in Texas was telling me how they were already sending out condolences to us. You know, it's like, wait a minute, this hadn't happened. They had access to it.

But I do think it also shaped the coverage throughout the day as well, I think very subtly. And knowing the information you had, you could kind of see people already positioning themselves for describing it the way the exit polls showed. And I think that will again give people, hopefully, reservations to rely upon this until the only thing that matters is the actual vote.

And I think it's important people not lose the original intent of the exit poll data. It's to go back after an election and look at why people voted. It's not there scientifically to predict an outcome. And I think that's a critical difference that I think people will pay more attention to in coming elections.

(END VIDEOTAPE)

KING: White House communications director Dan Bartlett there.

Now, President Bush will try again with 20 choices for federal court vacancies proposed during the first term but never voted on by the Senate. The White House says the judges will be re-nominated when the Senate reconvenes.

According to the White House, failure to act on the president's judicial nominees magnified problems with court vacancies and backlogged court dockets. But Democrats say the president is trying to pack the court with ultra-conservative judges. And the Senate Democratic leader, Senator Harry Reid, issuing a statement this afternoon, saying, by re-nominating these candidates, the president is doing the "Senate and the country a disservice by picking a fight" Senator Reid says will distract from more important issues.

He was once a rising Republican star. Today he pleaded guilty to a corruption charge. Up next, the end of a two-year investigation of former Connecticut Governor John Rowland.

(COMMERCIAL BREAK)

KING: News of note about one former and one current state governor leads off our "Political Bites" segment.

Former Connecticut Governor John Rowland today entered a guilty plea to a single felony count ending a two-year corruption investigation. Prosecutors say Rowland accepted more than $100,000 worth of vacations, airline flights and work on his summer cottage from state contractors and others. Rowland resigned from office last July under the threat of impeachment. Sentencing is scheduled in March.

Massachusetts Republican Governor Mitt Romney says he's not ready to make an official announcement just yet, but that he does plan to run for reelection in 2006. Romney also has been mentioned as a potential presidential candidate in 2008. And he has not committed to serving a complete second term if he's reelected.

Former President Bill Clinton today visited with doctors and nurses who diagnosed a heart condition which led to his bypass surgery last summer. Clinton's visit coincided with the opening of a new heart treatment center at New York's Westchester Medical Center.

Next up, the political prognosis in Washington State. They've counted the vote three times now and there is still no official winner. Will the last unresolved campaign contest account of this year extend into the new year?

Plus, should Democrats rethink their position on abortion? We'll get the take from the left and the right a bit later on INSIDE POLITICS.

(COMMERCIAL BREAK)

KING: With the markets about to close on Wall Street, I'm joined by Kitty Pilgrim in New York with "The Dobbs Report" -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Thanks, John.

Well, stocks are ending the short holiday week slightly in the plus column. The market will be closed tomorrow. And that's for the Christmas holiday.

Now, as the final trades are counted, the Dow industrials adding about 20 points. And that's the fourth straight gain for the Dow. The Nasdaq is up a quarter percent.

Investors took in a flurry of economic data. A reading on consumer sentiment was strong this month. And consumer spending in November inched higher. And also orders for durable goods rose sharply last month, and that points to a healthy pace of activity in the factory sector.

Now let's talk about the housing market. It's been a big topic of conversation this year, as people watch property values soar. But now there are new signs of weakness in real estate. New home sales fell 12 percent last month. And that was the biggest decline in nearly 11 years. The new home sales report is the second in a week, signaling a possible slow down. Last week housing starts posted the biggest decline in 11 years. It's too soon to say, however, whether the hot housing bubble has burst. Economists say that the drop in sales, weak construction numbers -- that could be a warning sign of trouble ahead in the real estate market.

The White House has issued new rules for managing our national forests, giving equal weight to economic activity and conservation. Now, the government will no longer require forest managers to prepare environmental impact reports before authorizing logging or drilling, any other commercial activity. Now timber officials had argued that those reports used to take years to prepare and were out of date. Environmental groups are concerned that the new regulations could leave forests open to commercial exploitation.

Well here's a story you might enjoy. Hewlett-Packard wants its employees to go home for the holidays and stay there through the New Year. Most H.P. offices will be closed from Christmas day until New Year's and workalolics can stay home. They can go to the office, but the company is doing everything it can. They're pulling the plug on the coffee pot, the vending machines, custodial services, everything shut down. In most buildings, they're even shutting down the heat and air conditioning, and that's all to save money.

Coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," our "Holiday Homefront" series. A look at one organization helping soldiers keep in touch with loved ones back home. Noah Feldman, author of "What We Owe Iraq," says U.S. responsibility in Iraq does not end with elections.

Plus, the fight for border security continues, but some business owners aren't happy. And we'll tell you why farmers are protesting the border checkpoints. That's the very latest. Now back to John.

JOHN KING, CNN ANCHOR: Thank you, Kitty. I like that go home idea. I suspect this would be slightly inopportune moment to do so.

PILGRIM: Right.

KING: Have a good show.

PILGRIM: Thanks, John.

KING: And INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: More than seven weeks since election day, and one state does not know who will be its next governor. How many times will they have to recount the vote in Washington?

UNIDENTIFIED FEMALE: There is a sacred American right that every legitimate vote must be counted.

ANNOUNCER: They lost in November, but can Democrats turn the tables in December?

UNIDENTIFIED MALE: I think we can make a huge difference in the way corporations choose to put their money into politics.

ANNOUNCER: Will a blue Christmas give Democrats some holiday cheer?

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

KING: Welcome back. I'm John King. Judy is off today. It's the political race that just won't end. After a general election, a machine recount and now a hand recount, the governor's race in Washington state is still not over. Our senior political analyst Bill Schneider is out on the West Coast with more on what may be the closest state governor's race ever.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): How many ballot counts does it take to elect a governor of Washington state? Give up? the answer appears to be three. That's presuming we get an official result on Thursday, two days before Christmas, 50 days after the election.

Some 2.9 million ballots for governor were cast on November 2nd. The result? Republican Dino Rossi led Democrat Christine Gregoire by 261 votes. That result triggered a machine recount. Count two, Rossi by 42 votes. A squeaker got squeakier. Rossi was waiting to take over as Washington's first Republican governor in 20 years.

DINO ROSSI, GUBERNATORIAL CANDIDATE (R), WASHINGTON: Well, we've waited 20 years...

SCHNEIDER: Not so fast, Gregoire said.

CHRISTINE GREGOIRE, GUBERNATORIAL CANDIDATE (D), WASHINGTON: I'm coming back down here.

SCHNEIDER: The Democrats demanded a hand recount. The hand recount was just about complete when low and behold, 735 uncounted ballots turned up in heavily Democratic King County, which includes Seattle.

UNIDENTIFIED MALE: There were mistakes that were made in this election process.

SCHNEIDER: Too late, Republicans said. They got a court order barring the county from counting those ballots.

UNIDENTIFIED MALE: We know of hundreds and hundreds of people around the state who say they voted for Dino Rossi, and their votes weren't counted. But we didn't think we could do anything about that because there was a statutory deadline.

SCHNEIDER: Democrats appealed to the state supreme court. On Wednesday, the court ruled unanimously that King County should include the disputed ballots in its recount.

GREGOIRE: There is a sacred American right that every legitimate vote must be counted. The Washington state supreme court today reinforced that fundamental principle.

SCHNEIDER: Meanwhile, the hand recount, not including the disputed ballots, showed Democrat Gregoire ahead by 10 votes. Squeak! Democrats are confident that when officials count the disputed ballots on Thursday, Gregoire's margin will grow. Is it finally over?

GREGOIRE: I leave the decision about conceding to Mr. Rossi. I've been called on many times to concede.

(END VIDEOTAPE)

SCHNEIDER: The next step comes at 5:00 Pacific today, when the results of the hand recount, including those disputed ballots, are going to be announced. Now, the Washington secretary of state is expected to certify the results next Thursday. Republicans say voters will then get ten days to contest that result. Democrats say the law is vague. So there are more rounds to come -- John.

KING: The law is vague. Bill, reminds us of a presidential election a few years back. If there are more rounds to come, how do you see this playing out?

SCHNEIDER: Well, the Republicans say that they can contest this in court and ask the court to have the election done all over again, to say it's simply too close, we can't get any results. And they may ask the court to just hold a new election, something that wasn't quite done in 2000. KING: Maybe a coin toss. Best two out three. Bill Schneider on the West Coast, thank you very much.

The deadly attack on U.S. soldiers in Iraq has added to the political pressure on Defense Secretary Donald Rumsfeld. Up next, I'll ask Fay Buchanan and Donna Brazile if Rumsfeld can endure the criticism and hold on to his job.

The Republicans tighten their grip on Congress. Is that automatically a good thing for the president? We'll have an interview with House Majority Leader Tom DeLay.

And later, making a political statement through shopping. Why some disaffected Democrats want their supporters to buy blue.

(COMMERCIAL BREAK)

KING: And with me now, former Gore campaign manager Donna Brazile, and Bay Buchanan, president of the American Cause. Ladies, let's begin with Secretary of Defense Rumsfeld. At the close of the year, political heat not just from the Democrats actually more from Republicans in recent weeks. A press conference at the Pentagon yesterday in which he tried to make clear not only defending the policy but a little bit of a personal glimpse into Secretary Rumsfeld and his grieving, if you will, when the troops die as we saw in Mosul this week. Bay Buchanan, is he in trouble?

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: No. He has the trust of the president. That's all he needs to keep that job. But I thought that press conference was very interesting. He was obviously speaking from the heart, it showed a different side of Rumsfeld, I think and I believe that the American people would have responded to that overwhelmingly. I think the president would have, too. I think he's in no trouble whatsoever and I don't think it would be wise for the president to remove him because that would be a clear statement to his enemies that he thinks the direction of the war is wrong. It's not timely to do such a thing as that.

KING: Is it Rumsfeld or does he become the poster child for questions about the policy and maybe questions about the president?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: There's no question the president believes in Rumsfeld, will stand by Rumsfeld. This is the situation where the troops themselves felt personally injured by the comments made by the secretary of defense. You have Republicans from all corners now criticizing this secretary. So I think the president will keep Rumsfeld for the next couple of weeks, get through the elections in Iraq, but I believe you will see a change by next spring.

KING: You think by next spring?

BRAZILE: No question. He's lost the confidence of members of Congress. When you have people like Trent Lott and Hagel and McCain questioning his judgment, not only about his comments regarding armor but also his judgment in terms of whether or not we had the right plans in Iraq, then I think that's a seat change now that the election is over. Republicans are finally speaking out.

BUCHANAN: What a mistake for the president to make that decision. He does have great confidence in Rumsfeld. We all know that. And number two, Rumsfeld has taken the brunt of the criticism which is his job. If he were to throw him overboard the enemy would of the president would say, aha, we got one. They would start to continue to criticize the president and say, look, he has admitted a mistake, he's admitted that they've taken this country in the wrong direction on this war, and look, he overthrew Rumsfeld, threw him out...

BRAZILE: ...it's the troop. What about the men who are out there on the front lines?

BUCHANAN: I mean his enemies in this country. I mean the media, the liberals, all those would just start harping on this war. It would become a bigger issue...

KING: Let's discuss it this way. Let's discuss it this way. Usually post-election the president gets a bit of a honeymoon. The president's approval ratings are down, you have this horrible tragedy in Mosul as we head into the Christmas week. How is Iraq, which the president survived the questions in the campaign about the policy and his leadership, how do you see it affecting the political environment going now into inauguration and second term?

BRAZILE: He survived the issue of terrorism. The American people believe that George Bush was better prepared to fight the war on terrorism. On the issue of Iraq, they thought that John Kerry would do a better job in stabilizing and bringing some peace to Iraq. So I think the president still -- the jury is still out on his performance with Iraq. This is a very tough issue for him because we know, as we get closer to the elections, the insurgents and others will continue to wreak havoc on that land.

BUCHANAN: You know what, Donna? I don't know what poll you watch but it's clear the president had the mandate from the people on this issue. But you are right, John, Iraq is the issue not Donald Rumsfeld. What is happening there, the American people will become less and less patient as we see more and more violence. The violence will increase up to the election. After the election the American people will expect to see movement as if we are kind of getting out of there now, turning over responsibility. But that poll recently that shows more and more Americans concerned about us being there, also shows that they believe our soldiers should stay there until there is order in Iraq and give those people a chance.

BRAZILE: 66 percent also thought that going into Iraq was a terrible decision. And that poll is a national poll. We've had a number of polls since the election, they all point in the wrong direction.

(CROSSTALK)

KING: Another question, let's set aside Iraq. Another question to be answered in January is who will be the next chairman of the Democratic party coming out of this presidential defeat? We are short on time. Listen quickly here to one of the likely candidates, former congressman Tim Roemer. He thinks one of the party's problems is it's too far to the left including on the issue of abortion. Let's listen for a few seconds.

(BEGIN VIDEO CLIP)

TIM ROEMER (D), FMR. INDIANA CONGRESSMAN: I personally don't think that we should have late-term abortions or partial birth abortions. I think that's a moral blind spot. I think our party needs to be bigger and more inclusive as a Democratic party. Most people in this country think we are of one view.

(END VIDEO CLIP)

KING: About 20, 30 seconds each. Donna Brazile, does your party have to be more anti-abortion?

BRAZILE: My party must stand up for its values which include individuals like Mr. Roemer who considers himself pro-life as well as people like Nancy Pelosi who believe in being pro-choice.

BUCHANAN: It's a terrific debate Roemer is raising. Shows real courage but the death grip -- the liberal -- the left wing has a death grip on that party. They are not going to let a move on social issues. And unless they move they're going to running in 20 states in presidential campaigns.

KING: Bay Buchanan, Donna Brazile, thanks for joining us today. Have a wonderful Christmas.

And it's one of the big questions on Capitol Hill, will the Republicans big political gains this past year translate into big policy changes in the coming year? We'll see what the House majority leader has to say after the break.

(COMMERCIAL BREAK)

KING: One of the biggest questions after this year's elections is how will Republicans use their growing strength in Congress in the new year just ahead. Our Ed Henry recently talked with House Majority Leader Tom DeLay and asked if GOP leaders will be able to deliver on the president's agenda, especially now after some of the internal GOP fighting over that intelligence reform bill.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Do you think you will be able to deliver on the president's agenda?

REP. TOM DELAY (R), MAJORITY LEADER: We delivered on the 9/11 bill. There wasn't fighting, there were negotiations. That's what happens. You negotiate, the House negotiations with the Senate, the House and Senate negotiate with the White House. That's what was going on there. We are very excited about the 109th Congress, working with this president, a larger majority in the Senate, we might be able to get some good bills through the Senate to the president for signature. We are excited about doing tax reform, reforming entitlements, reforming Social Security, tort reform, regulatory reform, slowing down spending, reprioritizing spending. We just have a full plate and we're very excited and really ready to go to work.

HENRY: But there was a report in the "Washington Post" that it appeared at your recent leadership retreat that Karl Rove was upset at these private meetings when you were suggesting that the Republicans in Congress will be more aggressive in 2005. Do you think Republicans on the Hill will be more muscular in 2005?

DELAY: We will work with the president, we are all going to be aggressive. This is the first time in 40 or 50 years that we've had an opportunity to really get some good policy done. The president wants to be aggressive. The House wants to be aggressive. The Senate is very excited and wants to be aggressive. We will be aggressive. We will show the American people like we have shown them over the last ten years that not only are we able to govern, but we are ready to govern.

HENRY: But there was a suggestion in that report that perhaps you may be too aggressive for the White House and maybe push back some of their agenda. Is that true?

DELAY: Not at all. We're excited that the president wants to do the list I just named. He is already out there working hard on Social Security reform. He's put together a group to look into tax reform. This is all really exciting stuff.

HENRY: Now, on Social Security, the president is saying the system is in crisis, there needs to be reform. The Democratic line so far has been that that's not true. There's not a crisis. They say private accounts will dismantle the program. What do you say?

DELAY: Let the Democrats keep talking like that, they will stay in the minority. The American people know that Social Security in the future won't be around for our young people. Everybody knows that. Or we are either going to have to cut benefits or raise taxes. We -- everybody knows that we need to do something to fix the Social Security system so that people will have retirement security in the future. Certainly our young people have something to look forward to in their old age. So, everybody but the minority Democrats know that something needs to be done and are looking forward to doing something.

HENRY: Democrats have been highly critical of you for recently changing the Republican party rules in the House so that if you are indicted you will be able to stay on as leader. Do you do that because you are expecting to be indicted in 2005?

DELAY: No. The Democrats have a strategy of personal destruction. They got a partisan district attorney in Austin, Texas to start an investigation that did not need to be started. And they were putting pressure on him to indict me knowing that our rules meant that I would have to step aside if I was indicted. What we said was we will not let the Democrats pick our leadership. If any leader is indicted, then the -- the Republicans will look and see if it's -- if it's a runaway district attorney or prosecutor and he's just doing it for partisan reasons.

HENRY: Last question. What's your new year's resolution?

DELAY: Lose weight.

HENRY: How many pounds?

DELAY: I've got lose some weight.

(END VIDEOTAPE)

KING: A worthy goal, although he looked just fine there. That, the House Majority Leader Tom DeLay with our congressional correspondent Ed Henry.

How you can make a political statement with your last-minute holiday shopping? There's a website out there that has the answer. We will tell you about it when INSIDE POLITICS returns. Please stay with us.

(COMMERCIAL BREAK)

KING: With time running out to shop before Christmas, yes, it is December 23, some consumers still have politics on the mind. In fact they're shopping with a political purpose as CNN's Allan Chernoff reports.

(BEGIN VIDEOTAPE)

SEN. JOHN KERRY (D-MA), FMR. PRESIDENTIAL CANDIDATE: I spoke to President Bush and I offered him and Laura our congratulations on their victory.

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Who would have thought John Kerry's concession would be the beginning of a new campaign. A grassroots campaign to buy blue. Shop at companies that have contributed to the Democrats.

RAVEN BROOKS, CO-FOUNDER, BUYBLUE.ORG: Right after the election a lot of us were feeling kind of disappointed and disheartened. So there were ideas that were getting kicked around for things to do. This is -- I guess the seed of it started there.

CHERNOFF: Santa wouldn't be caught wearing red on Buyblue.org. Of course he is wishing you a blue Christmas. Jason Roberts of Brooklyn, New York, has been taking the website's advice to vote with your wallet.

JASON ROBERTS, BUYBLUE.ORG USER: I think we can make a huge difference in the way corporations choose to put their money into politics.

CHERNOFF: The website lists Costco, Barnes & Noble, Bed, Bath and Beyond and Sharper Image as retailers whose contributions have been heavily Democratic. But none of the money is directly from the companies. LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Costco or these companies are not making the donations especially where there is no political action committee involved.

Who in the company is making the donations? In many of these instances what you'll see is that they are the chief executive officers, they're the vice presidents, they're the people who run the corporations.

CHERNOFF: Buyblue and another site Choosetheblue.com also list Republican donors. Heading the red companies is Wal-Mart where the bulk of its $2 million in contributions does come from a political action committee. Kmart, Circuit City and Home Depot also make the red list. While there doesn't appear to be a competing Republican site, supporters of the GOP can simply use data from the blue site to plan their last-minute holiday shopping. Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

KING: If you are still looking for that perfect holiday gift for our executive producer here at INSIDE POLITICS, Paul Steinhauser now that the Yankees didn't get Randy Johnson, at least not yet, we suggest maybe a Red Sox hat. That's it for INSIDE POLITICS. I'm John King. I'll be back at the top of the hour with WOLF BLITZER REPORTS. We'll see you then. "CROSSFIRE" starts right now.

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 December 23, 2004 - 15:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
ANNOUNCER: How did a suicide bomber make his way into the heart of a U.S. military base in Iraq?

BRIG. GEN. CARTER HAM, COMMANDER, TASK FORCE OLYMPIA: Well, we don't know how exactly it happened, but we are going to find out.

ANNOUNCER: While investigators search for answers, there's no letup in the fighting.

He won a big victory in November. So why is President Bush dropping in the polls?

UNIDENTIFIED MALE: We see tough fighting going on in Iraq. We see some of the mixed economic reports in the holiday season about retail sales. And I think all those things naturally fall on the play of the president's approval rating.

ANNOUNCER: We'll talk with a top White House adviser.

BERNARD KERIK, FMR. NEW YORK CITY POLICE COMMISSIONER: I plan to take some time off to clear my good name.

ANNOUNCER: The man President Bush wanted as the nation's homeland security secretary steps down from his current job. Will Bernard Kerik's problems hurt Rudy Giuliani's presidential ambitions?

UNIDENTIFIED MALE: So I think it's a blow to him. It's certainly not fatal.

(END VIDEOTAPE)

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

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

As investigators try to piece together how a bomber could have set off explosives inside a U.S. base in Iraq, the U.S. general in charge of the region says the attacker was probably wearing an Iraqi military uniform and likely had help. A military official this afternoon tells CNN investigators believe they have found the remains of the suicide bomber who carried out that attack in Mosul. FBI and military analysts were also working to determine just what kind of explosive was used in the bombing which killed 22 people, including 18 Americans.

Thirty-five soldiers wounded in the attack are being treated at the military medical center at Landstuhl, Germany. The hospital commander says the vast majority of those troops are expected to recover. Nearly half of the soldiers at the facility are said to be in critical condition. Some of the wounded already have been transported back to the United States for further treatment.

Earlier today, U.N. Secretary-General Kofi Annan called President Bush up at Camp David to express his condolences for those killed in the attack. And a short time ago, I spoke with Brigadier General Carter Ham, the U.S. commander in Mosul, and I asked him about the status of the bombing investigation.

(BEGIN VIDEOTAPE)

HAM: What we think is likely but certainly not certain is that an individual in an Iraqi military uniform, possibly with a vest-worn explosive device, was inside the facility and detonated the facility, causing this tragedy. That's preliminary. We'll find out what the truth is and then take necessary actions as we gain more information.

KING: It raises the question, sir, that if there is one infiltrator, there could well be two, three, or more. What steps are you taking to go back and recheck people, whether they be people with Iraqi military uniforms or some of the contractors, the hired hands, if you will, who come in to provide services on the base? What has changed? What are you doing to try to make sure this doesn't happen again?

HAM: John, my highest priority is the protection of our forces. Because if we don't protect our force, we can't accomplish our mission. And so I take that responsibility very, very seriously.

Every day, we make assessments based on the intelligence that we have, the threats that we think we are likely to face, and then determine what are the most appropriate measures to take to counter or disrupt those threats. I think we have a good procedure to do that but, clearly, in this instance, I failed to identify some shortcoming that allowed this to occur. That's why we're doing this investigation, to find out where was that seam that these murderers were able to exploit, and so that we can preclude such events in the future and, again, continue our actions to protect our force to the best extent that is possible.

KING: Now, you say a seam was penetrated, sir. Is -- the protocols in place for force protection, is that your policy or a countrywide policy at that particular base?

HAM: As the commander here, it is my personal responsibility for the force protection of the soldiers entrusted to my command and for all those who serve in this sector. There are certainly some command- wide guidelines that are established, and there are some standards that are applied. And we certainly follow those.

But Iraq is such a varied country. And the nature of the insurgency here is so different from area to area, that generally blanket policies are not particularly effective.

KING: Do you have enough boots on the ground?

HAM: I have enough U.S. boots on the ground. I do not have enough Iraqi boots on the ground.

And ultimately, to defeat this insurgency, it will be Iraqi security forces that will necessarily have to step up and assume an increasing and ultimately total responsibility for security in their own nation. The development of Iraqi security forces has not been as fast as any of us would have liked.

Having said that, some Iraqi security forces appear in Mosul and throughout the area for which we are responsible have performed very, very well for some time, reaching back into -- into early this year. Others, notably the police, early, in mid-November, had not performed well at all in a very disappointing manner.

So the mixed -- the mixed performance of the Iraqi security forces and the slow development is of -- is of great concern, I think, to all of us. And really, that's got to be the decisive effort. That's where we have to apply our energies, is to help the Iraqis get to a point where they can carry this burden themselves.

(END VIDEOTAPE)

KING: You can hear much more of my interview with General Ham at 5:00 p.m. Eastern when I host "WOLF BLITZER REPORTS."

And with me now to talk more about the attack in Mosul and the overall situation in Iraq is CNN military intelligence analyst Ken Robinson.

You heard the general there. They believe it was someone who was wearing an Iraqi military uniform, the suicide bomber. What does that tell you about the insurgency and their intelligence and their ability to infiltrate?

KEN ROBINSON, CNN MILITARY INTELLIGENCE ANALYST: Well, we've seen from the insurgency the use of these uniforms before at roadside roadblocks, where they've established checkpoints and then conducted targeted assassinations. So the use of uniforms is not new.

The fact that they were able to penetrate the security of the base and have some form of credential to get on base, if that was the case, that is the new. And then now if they end up that this individual was actually Iraqi military, that would even be a larger problem in terms of the vetting.

KING: What do you do on this day when you come to that conclusion? Do you now have to look at every single base where you have U.S. troops alongside Iraqi troops?

ROBINSON: I would. They need to re-look at the entire process of segregation. Now, remember, that's an insurgent objective. They want to separate the military from the population. They want to separate the United States government from the Iraqi military and police.

And so they want to force disproportionate responses to this event. That's part of their strategy. So they've got to very carefully and rapidly get force protection, get some form of segregation that makes sense.

KING: In your view, what would make sense? You have these soldiers in a mess hall, targets, obvious targets. Do you think the United States should go back to a much more secure, pull back -- and we were talking earlier, troops eating MREs, not in group settings?

ROBINSON: I think that they should go to tactical feeding because there's no place in Iraq that's safe. It is hard. General Ham had mentioned earlier that one of the things that was tough was creating a policy that made sense countrywide because the levels of threat had been different at different times. But really, when you think about it, especially on reflection of the other day, there's no safe place in Iraq. And they need to re-examine all their force protection from that line.

KING: And what is the psychology now when you have questions about the reliability and now even possible infiltration of the Iraqi forces, as you say, the insurgents trying to essentially scare the Iraqi people and divide the Iraqi people from the U.S. troops? What now?

ROBINSON: Well, they've got to continue to keep on. I mean, they must engage with the military because the solution for an exit strategy for the United States is train that police force, train that military, and then get them to a tipping point where they are willing to fight and die for their country. And they are not there yet, John.

KING: Ken Robinson, thank you for your thoughts.

ROBINSON: Thank you.

KING: And now on the "CNN Security Watch," some changes in the way airport security screeners will treat female travelers. Effective immediately, airport screeners will change the way they pat down female airline passengers, a response to numerous complaints by women who said they were embarrassed and offended by the searches. Airport screeners pat down about two million travelers a week, usually because those would-be passengers have set off metal detectors twice.

Stay with CNN at 5:00 Eastern. "WOLF BLITZER REPORTS" will have more on this change on security procedures for female passengers. And stay tuned to CNN throughout the day for the most reliable news about your security.

The political damage caused by former New York police commissioner Bernard Kerik's rapid fall from grace may extend far beyond Kerik's personal shortcomings. CNN's Deborah Feyerick reports Kerick's friend and now former business partner, Rudy Giuliani, is also feeling political heat.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Together they were heroes on 9/11, Rudy Giuliani and his top cop, Bernie Kerik, as always at the mayor's side.

RUDY GIULIANI (R), FMR. NEW YORK CITY MAYOR: I grabbed the arm of then police commissioner Bernard Kerik and I said to him, "Bernie, thank god George Bush is our president."

FEYERICK: Whether at the Republican national convention or on a campaign trail this fall, it was clear they were a team.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As Mayor Rudy Giuliani's police commissioner, he had great success in reducing crime in New York City.

FEYERICK: Then days after being nominated to head Homeland Security, Kerik's dazzling fall from power under a barrage of scandal.

KERIK: Last evening I contacted the White House and requested that my name be withdrawn.

FEYERICK: First withdrawing from the cabinet nomination, then resigning from the company he started with Giuliani, who ultimately minimized Kerik's role in the business.

KERIK: The events surrounding my withdrawal have become unfair and an unnecessary distraction to the firm.

FEYERICK: Frequent Giuliani critic and former New York City Mayor Ed Koch says the Kerik matter has inevitably tarnished Giuliani should he decide to run in 2008.

ED KOCH (D), FMR. NEW YORK CITY MAYOR: He will, I believe, be held responsible when he runs again. People will ask about that. But I think with respect to his ambitions to be the president of the United States, that he will not make it simply because of all the wrong reasons.

FEYERICK: Those reasons being Giuliani's seemingly non-red state positions on abortion, gun control and gay rights. Even supporters like the head of South Carolina's Republican Party are being cautious.

KATON DAWSON, CHAIRMAN, SOUTH CAROLINA GOP: You know, his company and his personal interest are something that will maybe be under the political microscope at a later date. But, you know, right now in South Carolina, that doesn't have a large effect to us. When a brighter light turns on, maybe it will.

FEYERICK: So is Rudy Giuliani worried? Certainly not publicly.

GIULIANI: You know, people have a right to evaluate it any way they want. But I don't think it's a major -- it's a major concern from that point of view. (END VIDEOTAPE)

FEYERICK: Giuliani said he did not push Kerik to resign from the company, though he did agree it was the right thing to do -- John.

KING: Deborah Feyerick in New York for us on a story that will no doubt continue. Thank you, Deborah.

And why are President Bush's poll numbers dropping? That's just one of the questions I asked a top adviser to the president. Next up, my conversation with White House communications director Dan Bartlett.

Plus, former President Clinton is back in the headlines. We'll tell you why.

And later, the election that just won't end. There's no winner yet in the Washington State governor's contest. We'll have the latest on this clash at the top of the hour right here on INSIDE POLITICS.

(COMMERCIAL BREAK)

KING: Looking back now at a very busy political year. I sat down this week with the White House communications director, Dan Bartlett, to review some of the highlights and low points for the administration. I began by asking about our new CNN poll showing a drop in President Bush's approval rating since his reelection.

(BEGIN VIDEOTAPE)

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, we are, obviously, just after the election in a period where we're transitioning from a campaign season to a governing season. But just like we all talked about during the campaign, that oftentimes this campaign was formulated by events outside the control of the two candidates, we still live in that environment.

We see tough fighting going on in Iraq. We see some of the mixed economic reports in the holiday season about retail sales and things like that, energy prices, for example. And I think all of those things naturally fall on the plate of the president's approval rating.

But we do believe he's still in a very strong position to lead this country forward. He's working hard right now to bring the country together. He'll do so and speak to those aims in the coming year because we have some great goals and responsibilities, and ones that go beyond just the titles of our parties or the partisanship from a past campaign. And his aim in the new year is to work to bring the two political parties together to achieve some of these -- these issues that we've been talking about.

KING: Let's take a few minutes and look back on that campaign. First, let me just start with, what's your one -- if someone asked you the signature moment for Dan Bartlett over the campaign past, what would it be?

BARTLETT: I still would have to say the convention speech. I think in one speech we were able to capsulize this presidency not only in scope of -- of his leadership qualities and what he brings to the table as president of the United States as a person, but also the issues that he cares deeply about.

I think by the end of that speech, not only did you know what this president cares about, but where he wants to take this country. It was a very forward-looking speech. But he also spoke from the heart.

And that was a proud moment for us who have worked for him personally. And I believe from the standpoint of where it positioned us as an incumbent running for reelection, I think it put us in the driver's seat in going on and winning the election in November.

KING: In the driver's seat from the convention speech there were, as you know, not so favorable reviews of the first debate. What were you and the other members of the team thinking? When the debate was over, did you say, we have a problem here?

BARTLETT: Well, look, I mean, the first thing you ought to recognize is that any time a challenger gets on the stage with -- with the president, they are going to instantly benefit from it, from being on the equal stage. And I think Senator Kerry, as we predicted beforehand, we said that he was going to be a very able debater, that he was going to be skilled at it and he was going to be on offense. And all those things turned out to be true.

But I think also what people lost from that is that, at the end of the day, a week later, two weeks later, I think people knew where President Bush stood on the issues. Where, in fact, with Senator Kerry, they still may be searching for what he was all about. So while he maybe parried back and forth in debate techniques, which he -- like I said, he was very good at, the bottom line was, at the end of the day, people knew where President Bush stood at the end of the issues -- at the end of the day.

So we weren't too concerned about that. We knew there were two more debates in which President Bush would get comfortable with the type of debate setting and those things with somebody who was as seasoned as John Kerry. But we -- knowing that we had a debate so quickly next, we weren't too focused on looking backwards.

KING: Let's fast forward a bit to Election Day. And, by all accounts, after the final swing, the president's team felt fairly confident about what would happen on Election Day.

You wake up, you get pretty good reports from your people out in the field, and then you get the first wave of exit polls. And if you look at the first wave of exit polls, the president was getting beat pretty bad, if you believed what you were seeing. What was the mood among the senior staff? And who told the president, and what was his reaction?

BARTLETT: Well, we were on Air Force One coming in on approach to Andrews Air Force Base. And there with the senior staff cabinet of Air Force One, myself, Karl Rove, I believe Condi Rice and Karen Hughes were in there. And the president came in as Karl was getting the returns over the phone.

And it was -- obviously, it took the wind out of our sails, to say the least. But it was him, it was the president who stopped at us all kind of being worried about it and said, "If that were to be the case in 2000, we wouldn't have won in 2000. So let's not jump to any conclusions."

But, yes, it's a natural human feeling to feel kind of like you've been punched in the gut after feeling like we had such momentum going into that day. But as the day unfolded and as we learned more about the exit polls and why we felt they were fundamentally wrong, as it turned out to be, obviously our optimism grew as the night went on.

KING: Do remember when it turned during the day?

BARTLETT: Well, I think it was probably more around the 4:00 hour when we started really kind of getting more of the underlying data to see exactly what had happened, how it was being over-sampled in particular states, how we were outperforming in other parts with certain demographics, and -- which only could come to conclusions that we felt.

At the same time, when we were getting reports from the field about the targets we were trying to meet with get-out-the-vote efforts, it just didn't add up. So that's when our optimism started growing, and it was confirmed, obviously, as soon as the polls closed and some of the fresh real data came out.

KING: I'll give you a tee ball question here. Is there a lesson for my business in how all that played out? And obviously most organizations don't want this stuff to get out -- leak out on the Internet, and all the numbers did.

And people around the country knew the numbers quite easily. It used to be that a relatively small group of people knew those numbers. But is there a lesson?

BARTLETT: I think there is. I think we have to take the Internet into consideration.

We have to understand that people have instant access to this type of information. My family back in Texas was telling me how they were already sending out condolences to us. You know, it's like, wait a minute, this hadn't happened. They had access to it.

But I do think it also shaped the coverage throughout the day as well, I think very subtly. And knowing the information you had, you could kind of see people already positioning themselves for describing it the way the exit polls showed. And I think that will again give people, hopefully, reservations to rely upon this until the only thing that matters is the actual vote.

And I think it's important people not lose the original intent of the exit poll data. It's to go back after an election and look at why people voted. It's not there scientifically to predict an outcome. And I think that's a critical difference that I think people will pay more attention to in coming elections.

(END VIDEOTAPE)

KING: White House communications director Dan Bartlett there.

Now, President Bush will try again with 20 choices for federal court vacancies proposed during the first term but never voted on by the Senate. The White House says the judges will be re-nominated when the Senate reconvenes.

According to the White House, failure to act on the president's judicial nominees magnified problems with court vacancies and backlogged court dockets. But Democrats say the president is trying to pack the court with ultra-conservative judges. And the Senate Democratic leader, Senator Harry Reid, issuing a statement this afternoon, saying, by re-nominating these candidates, the president is doing the "Senate and the country a disservice by picking a fight" Senator Reid says will distract from more important issues.

He was once a rising Republican star. Today he pleaded guilty to a corruption charge. Up next, the end of a two-year investigation of former Connecticut Governor John Rowland.

(COMMERCIAL BREAK)

KING: News of note about one former and one current state governor leads off our "Political Bites" segment.

Former Connecticut Governor John Rowland today entered a guilty plea to a single felony count ending a two-year corruption investigation. Prosecutors say Rowland accepted more than $100,000 worth of vacations, airline flights and work on his summer cottage from state contractors and others. Rowland resigned from office last July under the threat of impeachment. Sentencing is scheduled in March.

Massachusetts Republican Governor Mitt Romney says he's not ready to make an official announcement just yet, but that he does plan to run for reelection in 2006. Romney also has been mentioned as a potential presidential candidate in 2008. And he has not committed to serving a complete second term if he's reelected.

Former President Bill Clinton today visited with doctors and nurses who diagnosed a heart condition which led to his bypass surgery last summer. Clinton's visit coincided with the opening of a new heart treatment center at New York's Westchester Medical Center.

Next up, the political prognosis in Washington State. They've counted the vote three times now and there is still no official winner. Will the last unresolved campaign contest account of this year extend into the new year?

Plus, should Democrats rethink their position on abortion? We'll get the take from the left and the right a bit later on INSIDE POLITICS.

(COMMERCIAL BREAK)

KING: With the markets about to close on Wall Street, I'm joined by Kitty Pilgrim in New York with "The Dobbs Report" -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Thanks, John.

Well, stocks are ending the short holiday week slightly in the plus column. The market will be closed tomorrow. And that's for the Christmas holiday.

Now, as the final trades are counted, the Dow industrials adding about 20 points. And that's the fourth straight gain for the Dow. The Nasdaq is up a quarter percent.

Investors took in a flurry of economic data. A reading on consumer sentiment was strong this month. And consumer spending in November inched higher. And also orders for durable goods rose sharply last month, and that points to a healthy pace of activity in the factory sector.

Now let's talk about the housing market. It's been a big topic of conversation this year, as people watch property values soar. But now there are new signs of weakness in real estate. New home sales fell 12 percent last month. And that was the biggest decline in nearly 11 years. The new home sales report is the second in a week, signaling a possible slow down. Last week housing starts posted the biggest decline in 11 years. It's too soon to say, however, whether the hot housing bubble has burst. Economists say that the drop in sales, weak construction numbers -- that could be a warning sign of trouble ahead in the real estate market.

The White House has issued new rules for managing our national forests, giving equal weight to economic activity and conservation. Now, the government will no longer require forest managers to prepare environmental impact reports before authorizing logging or drilling, any other commercial activity. Now timber officials had argued that those reports used to take years to prepare and were out of date. Environmental groups are concerned that the new regulations could leave forests open to commercial exploitation.

Well here's a story you might enjoy. Hewlett-Packard wants its employees to go home for the holidays and stay there through the New Year. Most H.P. offices will be closed from Christmas day until New Year's and workalolics can stay home. They can go to the office, but the company is doing everything it can. They're pulling the plug on the coffee pot, the vending machines, custodial services, everything shut down. In most buildings, they're even shutting down the heat and air conditioning, and that's all to save money.

Coming up at 6:00 p.m. Eastern on "LOU DOBBS TONIGHT," our "Holiday Homefront" series. A look at one organization helping soldiers keep in touch with loved ones back home. Noah Feldman, author of "What We Owe Iraq," says U.S. responsibility in Iraq does not end with elections.

Plus, the fight for border security continues, but some business owners aren't happy. And we'll tell you why farmers are protesting the border checkpoints. That's the very latest. Now back to John.

JOHN KING, CNN ANCHOR: Thank you, Kitty. I like that go home idea. I suspect this would be slightly inopportune moment to do so.

PILGRIM: Right.

KING: Have a good show.

PILGRIM: Thanks, John.

KING: And INSIDE POLITICS continues right now.

(BEGIN VIDEOTAPE)

ANNOUNCER: More than seven weeks since election day, and one state does not know who will be its next governor. How many times will they have to recount the vote in Washington?

UNIDENTIFIED FEMALE: There is a sacred American right that every legitimate vote must be counted.

ANNOUNCER: They lost in November, but can Democrats turn the tables in December?

UNIDENTIFIED MALE: I think we can make a huge difference in the way corporations choose to put their money into politics.

ANNOUNCER: Will a blue Christmas give Democrats some holiday cheer?

Now, live from Washington, Judy Woodruff's INSIDE POLITICS.

(END VIDEOTAPE)

KING: Welcome back. I'm John King. Judy is off today. It's the political race that just won't end. After a general election, a machine recount and now a hand recount, the governor's race in Washington state is still not over. Our senior political analyst Bill Schneider is out on the West Coast with more on what may be the closest state governor's race ever.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): How many ballot counts does it take to elect a governor of Washington state? Give up? the answer appears to be three. That's presuming we get an official result on Thursday, two days before Christmas, 50 days after the election.

Some 2.9 million ballots for governor were cast on November 2nd. The result? Republican Dino Rossi led Democrat Christine Gregoire by 261 votes. That result triggered a machine recount. Count two, Rossi by 42 votes. A squeaker got squeakier. Rossi was waiting to take over as Washington's first Republican governor in 20 years.

DINO ROSSI, GUBERNATORIAL CANDIDATE (R), WASHINGTON: Well, we've waited 20 years...

SCHNEIDER: Not so fast, Gregoire said.

CHRISTINE GREGOIRE, GUBERNATORIAL CANDIDATE (D), WASHINGTON: I'm coming back down here.

SCHNEIDER: The Democrats demanded a hand recount. The hand recount was just about complete when low and behold, 735 uncounted ballots turned up in heavily Democratic King County, which includes Seattle.

UNIDENTIFIED MALE: There were mistakes that were made in this election process.

SCHNEIDER: Too late, Republicans said. They got a court order barring the county from counting those ballots.

UNIDENTIFIED MALE: We know of hundreds and hundreds of people around the state who say they voted for Dino Rossi, and their votes weren't counted. But we didn't think we could do anything about that because there was a statutory deadline.

SCHNEIDER: Democrats appealed to the state supreme court. On Wednesday, the court ruled unanimously that King County should include the disputed ballots in its recount.

GREGOIRE: There is a sacred American right that every legitimate vote must be counted. The Washington state supreme court today reinforced that fundamental principle.

SCHNEIDER: Meanwhile, the hand recount, not including the disputed ballots, showed Democrat Gregoire ahead by 10 votes. Squeak! Democrats are confident that when officials count the disputed ballots on Thursday, Gregoire's margin will grow. Is it finally over?

GREGOIRE: I leave the decision about conceding to Mr. Rossi. I've been called on many times to concede.

(END VIDEOTAPE)

SCHNEIDER: The next step comes at 5:00 Pacific today, when the results of the hand recount, including those disputed ballots, are going to be announced. Now, the Washington secretary of state is expected to certify the results next Thursday. Republicans say voters will then get ten days to contest that result. Democrats say the law is vague. So there are more rounds to come -- John.

KING: The law is vague. Bill, reminds us of a presidential election a few years back. If there are more rounds to come, how do you see this playing out?

SCHNEIDER: Well, the Republicans say that they can contest this in court and ask the court to have the election done all over again, to say it's simply too close, we can't get any results. And they may ask the court to just hold a new election, something that wasn't quite done in 2000. KING: Maybe a coin toss. Best two out three. Bill Schneider on the West Coast, thank you very much.

The deadly attack on U.S. soldiers in Iraq has added to the political pressure on Defense Secretary Donald Rumsfeld. Up next, I'll ask Fay Buchanan and Donna Brazile if Rumsfeld can endure the criticism and hold on to his job.

The Republicans tighten their grip on Congress. Is that automatically a good thing for the president? We'll have an interview with House Majority Leader Tom DeLay.

And later, making a political statement through shopping. Why some disaffected Democrats want their supporters to buy blue.

(COMMERCIAL BREAK)

KING: And with me now, former Gore campaign manager Donna Brazile, and Bay Buchanan, president of the American Cause. Ladies, let's begin with Secretary of Defense Rumsfeld. At the close of the year, political heat not just from the Democrats actually more from Republicans in recent weeks. A press conference at the Pentagon yesterday in which he tried to make clear not only defending the policy but a little bit of a personal glimpse into Secretary Rumsfeld and his grieving, if you will, when the troops die as we saw in Mosul this week. Bay Buchanan, is he in trouble?

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: No. He has the trust of the president. That's all he needs to keep that job. But I thought that press conference was very interesting. He was obviously speaking from the heart, it showed a different side of Rumsfeld, I think and I believe that the American people would have responded to that overwhelmingly. I think the president would have, too. I think he's in no trouble whatsoever and I don't think it would be wise for the president to remove him because that would be a clear statement to his enemies that he thinks the direction of the war is wrong. It's not timely to do such a thing as that.

KING: Is it Rumsfeld or does he become the poster child for questions about the policy and maybe questions about the president?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: There's no question the president believes in Rumsfeld, will stand by Rumsfeld. This is the situation where the troops themselves felt personally injured by the comments made by the secretary of defense. You have Republicans from all corners now criticizing this secretary. So I think the president will keep Rumsfeld for the next couple of weeks, get through the elections in Iraq, but I believe you will see a change by next spring.

KING: You think by next spring?

BRAZILE: No question. He's lost the confidence of members of Congress. When you have people like Trent Lott and Hagel and McCain questioning his judgment, not only about his comments regarding armor but also his judgment in terms of whether or not we had the right plans in Iraq, then I think that's a seat change now that the election is over. Republicans are finally speaking out.

BUCHANAN: What a mistake for the president to make that decision. He does have great confidence in Rumsfeld. We all know that. And number two, Rumsfeld has taken the brunt of the criticism which is his job. If he were to throw him overboard the enemy would of the president would say, aha, we got one. They would start to continue to criticize the president and say, look, he has admitted a mistake, he's admitted that they've taken this country in the wrong direction on this war, and look, he overthrew Rumsfeld, threw him out...

BRAZILE: ...it's the troop. What about the men who are out there on the front lines?

BUCHANAN: I mean his enemies in this country. I mean the media, the liberals, all those would just start harping on this war. It would become a bigger issue...

KING: Let's discuss it this way. Let's discuss it this way. Usually post-election the president gets a bit of a honeymoon. The president's approval ratings are down, you have this horrible tragedy in Mosul as we head into the Christmas week. How is Iraq, which the president survived the questions in the campaign about the policy and his leadership, how do you see it affecting the political environment going now into inauguration and second term?

BRAZILE: He survived the issue of terrorism. The American people believe that George Bush was better prepared to fight the war on terrorism. On the issue of Iraq, they thought that John Kerry would do a better job in stabilizing and bringing some peace to Iraq. So I think the president still -- the jury is still out on his performance with Iraq. This is a very tough issue for him because we know, as we get closer to the elections, the insurgents and others will continue to wreak havoc on that land.

BUCHANAN: You know what, Donna? I don't know what poll you watch but it's clear the president had the mandate from the people on this issue. But you are right, John, Iraq is the issue not Donald Rumsfeld. What is happening there, the American people will become less and less patient as we see more and more violence. The violence will increase up to the election. After the election the American people will expect to see movement as if we are kind of getting out of there now, turning over responsibility. But that poll recently that shows more and more Americans concerned about us being there, also shows that they believe our soldiers should stay there until there is order in Iraq and give those people a chance.

BRAZILE: 66 percent also thought that going into Iraq was a terrible decision. And that poll is a national poll. We've had a number of polls since the election, they all point in the wrong direction.

(CROSSTALK)

KING: Another question, let's set aside Iraq. Another question to be answered in January is who will be the next chairman of the Democratic party coming out of this presidential defeat? We are short on time. Listen quickly here to one of the likely candidates, former congressman Tim Roemer. He thinks one of the party's problems is it's too far to the left including on the issue of abortion. Let's listen for a few seconds.

(BEGIN VIDEO CLIP)

TIM ROEMER (D), FMR. INDIANA CONGRESSMAN: I personally don't think that we should have late-term abortions or partial birth abortions. I think that's a moral blind spot. I think our party needs to be bigger and more inclusive as a Democratic party. Most people in this country think we are of one view.

(END VIDEO CLIP)

KING: About 20, 30 seconds each. Donna Brazile, does your party have to be more anti-abortion?

BRAZILE: My party must stand up for its values which include individuals like Mr. Roemer who considers himself pro-life as well as people like Nancy Pelosi who believe in being pro-choice.

BUCHANAN: It's a terrific debate Roemer is raising. Shows real courage but the death grip -- the liberal -- the left wing has a death grip on that party. They are not going to let a move on social issues. And unless they move they're going to running in 20 states in presidential campaigns.

KING: Bay Buchanan, Donna Brazile, thanks for joining us today. Have a wonderful Christmas.

And it's one of the big questions on Capitol Hill, will the Republicans big political gains this past year translate into big policy changes in the coming year? We'll see what the House majority leader has to say after the break.

(COMMERCIAL BREAK)

KING: One of the biggest questions after this year's elections is how will Republicans use their growing strength in Congress in the new year just ahead. Our Ed Henry recently talked with House Majority Leader Tom DeLay and asked if GOP leaders will be able to deliver on the president's agenda, especially now after some of the internal GOP fighting over that intelligence reform bill.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Do you think you will be able to deliver on the president's agenda?

REP. TOM DELAY (R), MAJORITY LEADER: We delivered on the 9/11 bill. There wasn't fighting, there were negotiations. That's what happens. You negotiate, the House negotiations with the Senate, the House and Senate negotiate with the White House. That's what was going on there. We are very excited about the 109th Congress, working with this president, a larger majority in the Senate, we might be able to get some good bills through the Senate to the president for signature. We are excited about doing tax reform, reforming entitlements, reforming Social Security, tort reform, regulatory reform, slowing down spending, reprioritizing spending. We just have a full plate and we're very excited and really ready to go to work.

HENRY: But there was a report in the "Washington Post" that it appeared at your recent leadership retreat that Karl Rove was upset at these private meetings when you were suggesting that the Republicans in Congress will be more aggressive in 2005. Do you think Republicans on the Hill will be more muscular in 2005?

DELAY: We will work with the president, we are all going to be aggressive. This is the first time in 40 or 50 years that we've had an opportunity to really get some good policy done. The president wants to be aggressive. The House wants to be aggressive. The Senate is very excited and wants to be aggressive. We will be aggressive. We will show the American people like we have shown them over the last ten years that not only are we able to govern, but we are ready to govern.

HENRY: But there was a suggestion in that report that perhaps you may be too aggressive for the White House and maybe push back some of their agenda. Is that true?

DELAY: Not at all. We're excited that the president wants to do the list I just named. He is already out there working hard on Social Security reform. He's put together a group to look into tax reform. This is all really exciting stuff.

HENRY: Now, on Social Security, the president is saying the system is in crisis, there needs to be reform. The Democratic line so far has been that that's not true. There's not a crisis. They say private accounts will dismantle the program. What do you say?

DELAY: Let the Democrats keep talking like that, they will stay in the minority. The American people know that Social Security in the future won't be around for our young people. Everybody knows that. Or we are either going to have to cut benefits or raise taxes. We -- everybody knows that we need to do something to fix the Social Security system so that people will have retirement security in the future. Certainly our young people have something to look forward to in their old age. So, everybody but the minority Democrats know that something needs to be done and are looking forward to doing something.

HENRY: Democrats have been highly critical of you for recently changing the Republican party rules in the House so that if you are indicted you will be able to stay on as leader. Do you do that because you are expecting to be indicted in 2005?

DELAY: No. The Democrats have a strategy of personal destruction. They got a partisan district attorney in Austin, Texas to start an investigation that did not need to be started. And they were putting pressure on him to indict me knowing that our rules meant that I would have to step aside if I was indicted. What we said was we will not let the Democrats pick our leadership. If any leader is indicted, then the -- the Republicans will look and see if it's -- if it's a runaway district attorney or prosecutor and he's just doing it for partisan reasons.

HENRY: Last question. What's your new year's resolution?

DELAY: Lose weight.

HENRY: How many pounds?

DELAY: I've got lose some weight.

(END VIDEOTAPE)

KING: A worthy goal, although he looked just fine there. That, the House Majority Leader Tom DeLay with our congressional correspondent Ed Henry.

How you can make a political statement with your last-minute holiday shopping? There's a website out there that has the answer. We will tell you about it when INSIDE POLITICS returns. Please stay with us.

(COMMERCIAL BREAK)

KING: With time running out to shop before Christmas, yes, it is December 23, some consumers still have politics on the mind. In fact they're shopping with a political purpose as CNN's Allan Chernoff reports.

(BEGIN VIDEOTAPE)

SEN. JOHN KERRY (D-MA), FMR. PRESIDENTIAL CANDIDATE: I spoke to President Bush and I offered him and Laura our congratulations on their victory.

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Who would have thought John Kerry's concession would be the beginning of a new campaign. A grassroots campaign to buy blue. Shop at companies that have contributed to the Democrats.

RAVEN BROOKS, CO-FOUNDER, BUYBLUE.ORG: Right after the election a lot of us were feeling kind of disappointed and disheartened. So there were ideas that were getting kicked around for things to do. This is -- I guess the seed of it started there.

CHERNOFF: Santa wouldn't be caught wearing red on Buyblue.org. Of course he is wishing you a blue Christmas. Jason Roberts of Brooklyn, New York, has been taking the website's advice to vote with your wallet.

JASON ROBERTS, BUYBLUE.ORG USER: I think we can make a huge difference in the way corporations choose to put their money into politics.

CHERNOFF: The website lists Costco, Barnes & Noble, Bed, Bath and Beyond and Sharper Image as retailers whose contributions have been heavily Democratic. But none of the money is directly from the companies. LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: Costco or these companies are not making the donations especially where there is no political action committee involved.

Who in the company is making the donations? In many of these instances what you'll see is that they are the chief executive officers, they're the vice presidents, they're the people who run the corporations.

CHERNOFF: Buyblue and another site Choosetheblue.com also list Republican donors. Heading the red companies is Wal-Mart where the bulk of its $2 million in contributions does come from a political action committee. Kmart, Circuit City and Home Depot also make the red list. While there doesn't appear to be a competing Republican site, supporters of the GOP can simply use data from the blue site to plan their last-minute holiday shopping. Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

KING: If you are still looking for that perfect holiday gift for our executive producer here at INSIDE POLITICS, Paul Steinhauser now that the Yankees didn't get Randy Johnson, at least not yet, we suggest maybe a Red Sox hat. That's it for INSIDE POLITICS. I'm John King. I'll be back at the top of the hour with WOLF BLITZER REPORTS. We'll see you then. "CROSSFIRE" starts right now.

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