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THE SITUATION ROOM

Showdown Brewing Over Port Security As President Bush Threatens Veto; Interview With Representative Curt Weldon; Bush's Nominee For Federal Maritime Administrator Works For Dubai Ports International; Bush Shifts Tone Over Energy, Yet To See Policy Shift

Aired February 21, 2006 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks, Ali. To our viewers, you are now in THE SITUATION ROOM, where new pictures and information from around the world are arriving all of the time.
Happening now, a showdown maybe brewing over port security. President Bush now threatening what would be his first veto. It's 4:00 p.m. here in Washington, where even the Senate Republican leadership is pressuring Mr. Bush to block an Arab firm from operating six U.S. ports.

What is going on at the White House? In addition to that rare veto threat, Mr. Bush has an equally rare on the plane chat with reporters. We'll investigate the politics of port security. We'll also hear from the president himself. He just spoke out a moment or so ago.

And new reasons to question the president's push to kick the oil habit. It's 2:00 p.m. in Colorado, where Mr. Bush today admitted sending mixed signals. We'll examine that and past comments that don't necessarily square with what the White House is saying right now.

I'm Wolf Blitzer and you're in THE SITUATION ROOM.

We begin this hour on CNN's "Security Watch," and a surprise announcement from President Bush. Just a short while ago, he vowed to veto any attempt by the U.S. Congress to block a state-owned Arab company from running six major U.S. ports.

Even the Senate's top Republican leader, Bill Frist, today sided against the president and criticized the deal. It would affect ports in Baltimore, New York, Philadelphia, New Jersey, Miami and New Orleans.

We have correspondents standing by, but first the president speaking on the White House lawn only moments ago. Here's what he had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've just come back from a really good trip to the Midwest and West, talking about our need to change how we used energy. Very encouraged by the technology that I saw and I was inspired by the scientists and engineers that are working on these new technologies.

I also want to address another issue I just talked to the press about on Air Force One, and that is this issue of a company out of the UAE purchasing the right to manage some ports in the United States from a British company.

First of all, this is a private transaction. But according to law, the government is required to make sure this transaction does not in any way jeopardize the security of the country, and so people responsible in our government have reviewed this transaction.

The transaction should go forward in my judgment. If there was any chance that this transaction would jeopardize the security of the United States it would not go forward.

The company has been cooperative with the United States government. The company will not manage port security. The security of our ports will continue to be managed by the Coast Guard and the Customs.

The company is from a country that has been cooperative in the war on terror, been an ally in the war on terror. The company operates in the ports in different countries around the world, ports from which cargo has been sent to the United States on a regular basis.

I think it sends a terrible signal to friends around the world that it's OK for a company from one country to manage the port, but not a country that plays by the rules and has got a good track record from another part of the world can't manage the port.

And so, look, I can understand why some in Congress have raised questions about whether or not our country will be less secure as a result of this transaction. But they need to know that our government has looked at this issue, and looked at it carefully.

Again, I'll repeat. It's a -- if there is any question as to whether or not this country would be less safe as a result of the transaction, it wouldn't go forward.

But I also want to repeat something again. And that is this is a company that has played by the rules, that has been cooperative with the United States, from a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through.

I want to thank you for your interest in the subject. Thank you.

(END VIDEO CLIP)

BLITZER: The president of the United States only moments ago returning to the White House on the South Lawn of the White House, not only defending this deal that allows this Dubai-based company to operate six major parts in the United States, but threatening he would veto any legislation in the U.S. Congress that would try to block it. Let's go to the White House. Our correspondent Dana Bash is watching all of this unfold. Pretty startling news that the president himself twice now on Air Force One returning to the White House calling in reporters -- a rare move -- and now volunteering to stop and speak to reporters as he returns to the White House, putting his marker down, saying this is a good deal and I will try to stop anyone in Congress from blocking it.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Wolf, it's definitely fair to say that this White House was not expecting what, at this point, is a tsunami of opposition, even form the Republican leadership -- the top Republican leadership in Congress -- to this deal, and extraordinary so when you think about it, because it is on the issue of security where Republicans really have been lockstep.

But what you just said is very true. I think what we just saw from this president is lessons learned from what they have done. They admit wrong in a whole host of things, most recently last week with the vice president and his shooting, that they realize that when they have a big political problem which they admit that this has become very, very quickly, need to get out front and that's what you saw by the president coming out there.

And it was extraordinary to hear him really take on his leadership, take on Republicans, take on Democrats and really plant his heels in the ground and say that this deal should go forward.

He didn't necessarily say it here but he did in talking to reporters on Air Force One indicate that if legislation did come to him to block or at least put this deal on hold, that he would veto it, something he has not done in his five plus years in office.

And also the idea that he's saying that this is sending a mixed message. You didn't hear him say specifically that perhaps there is profiling going on here or other things that some have suggested, but he sort of perhaps went down that path by saying that other companies, other countries, have been operating ports, operating other important areas of this country -- foreign governments -- and nobody raised objections.

Why are objections being raised here? He did say that he's concerned that this is sending a mixed message. So this is a move, Wolf, to remember, not only the president coming out and talking to reporters on the plane -- which I can tell you, I've been on the plane a handful of times maybe that he's done that.

But the fact that this president and this White House felt that that was necessary and the fact that he's doing it, not against Democrats, but against the leadership in his own party is fascinating.

BLITZER: Very quickly, Dana, the president can go ahead and veto any legislation passed in the Senate and the House if it comes down to that, but then Congress can override a veto if they pass legislation with a two-thirds majority.

I assume they have done some headcounting at the White House whether or not Congress is going to override a presidential veto, or you think it's premature at this point to even start speculating about that?

BASH: It might be premature. Ed Henry, who I know you're going to talk to momentarily, can tell you better than I. I mean, the kind of opposition to this that has come out today has been extraordinary. It might well be more than the 67 votes, for example, in the Senate that the president needs to hold onto his veto, or they could override the veto.

They may have that much support for what Senate Majority Leader Bill Frist is saying that there needs to be legislation to put this on hold and put it on ice until they can get more information about it. But that's something that certainly the White House is probably thinking about.

I can tell you that, just very quickly, the evolution of the way this went down earlier today the White House -- of course, the president was on the road. He was in Colorado. The folks here at the White House were just trying to get as much information out as they possibly could about how this process works.

I think, as we speak, there's a press conference going on with the Department of Homeland Security, the Treasury Department. We saw briefly from the defense secretary and the attorney general, them trying to explain a little bit.

But it's very clear that they decided -- and, again, maybe learning lessons from some other political problems that they've had in recent past -- that the way to deal with this is to decide how you're going to go forward and obviously they decided to dig in and have the president himself do it in a way that really sends a message. That's what they did.

BLITZER: A major battle unfolding here in Washington. Dana, thanks very much. We'll get more on this coming up this hour. We'll speak to the Dan Bartlett, the White House counselor. He'll explain what the president is thinking.

Let's go up to Capitol Hill right now. Our Congressional correspondent Ed Henry is watching all of this unfold. Ed, first of all, update our viewers on the enormous bipartisanship that this opposition is attracting.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Yes, Wolf, even as the president was digging in, as you heard Dana reporting, and insisting this port deal must go through, just in the last half-hour the Republican speaker of the House, Dennis Hastert, came out swinging, firing off a letter to the president saying this deal must be halted.

He wants further review of it before it moves forward. This dovetails with some very strong comments earlier today by the Senate majority leader, Bill Frist. All of this, if you put it together, are a sure sign that the president is headed for a major political clash with some of his best friends on Capitol Hill.

(BEGIN VIDEOTAPE) HENRY (voice-over): A stunning broadside from Senate Majority Leader Bill Frist, one of the president's strongest Republican allies, demanding the White House halt the port deal.

Raising questions about the security of U.S. ports and griping about the lack of Congressional consultation on these matters, Frist declared the transaction must be put on hold until the administration conducts a more extensive review. Frist warned, "If the administration cannot delay the process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review."

The Republican Chairman of the House Homeland Security Committee, Peter King, joined forces with Democrat Chuck Schumer. The bipartisan New York tandem revealing they also have emergency legislation to stop the port deal next week.

REP. PETER KING, (R) HOMELAND SECURITY CHAIRMAN: My office today has received more phone calls on this than any issue in the 14 years I've been in the United States Congress, and every one of them is in support of what Senator Schumer and I are doing.

HENRY: Frist and King moved as the chorus of criticism from rank and file Republicans up and down the East Coast grew louder. In Florida, Republican Mark Foley was joined by New York Republican, Vito Fossella, at the port of Miami to denounce the deal.

REP. VITO FOSSELLA, (R) NEW YORK: I say we should put the brakes on it.

(END VIDEOTAPE)

HENRY: That criticism also spread to the West Coast in Los Angeles where Democratic Congresswoman Jane Harman was joined by Republican Senator Susan Collins, she is the chair of the Senate Homeland Security Committee, they say they will introduce a joint resolution in Congress, a resolution of disapproval on this port deal. Another shot at the president.

Democratic Senator Schumer today said that when his legislation comes up next week, he thinks it will move through Congress like a hot knife through butter. So to answer your question, Wolf, in terms of whether a veto could be overridden by this Congress, they are expecting wide bipartisan majorities and the president could be in jeopardy of having that veto overridden.

BLITZER: He hasn't not used that veto yet. Certainly if he vetoes and it is overridden, that would be a huge, huge development. Is anybody doing any head counting at this point or is that premature?

HENRY: Premature, just because the veto threat came in just in the last half-hour or so by the president. But I can tell you, a lot of times you'll see this from presidents in either party as you know better than any one, a veto threat. But once they start doing the math if they think it is going to overridden, you'll see that veto threat come down. We will have to see how it plays out, Wolf. BLITZER: Ed Henry, thanks very much. Joining us now in THE SITUATION ROOM, our newest edition here to CNN, John Roberts joining us, our senior national correspondent. First of all, John, welcome to CNN.

JOHN ROBERTS, CNN SENIOR NATIONAL CORRESPONDENT: Good to be here.

BLITZER: You have covered this guy for a long time. I watched him unfold. You were a CBS News chief White House correspondent. Give us your thoughts as you see these dramatic developments unfold today.

ROBERTS: It wasn't unprecedented that the president came to the back of Air Force One today to talk with the press corps as they were flying back from his western swing, but certainly it hasn't happened in a long, long time.

He has brought people up front to the forward cabin to give them a background debrief. The last time I think he appeared on camera was either February or March of 2001, but for the most part he hasn't come to the back of the airplane. So obviously he knows that he's got some problems on this.

He needs to try to get his side of the story out there. The fact that he's now arrayed against Bill Frist against Dennis Hastert, against Chuck Grassley, Peter King in the House and Senator Susan Collins has now come out and says this whole thing needs to be rethought. So he has an awful lot of very powerful Republicans who are saying to him this isn't such a good idea.

And this veto threat, we have seen it many times in the past, that's his way of dealing with Congress to say you have to toe the line. You have to give me what I want. But as Ed Henry just said it looks like Congress is prepared to go head to head with the president on this and he's either going to have to try to make good on that veto threat, facing the fact that it could be overridden, or back down. If he backs down that won't look good for a White House that's already some in political trouble.

BLITZER: I haven't seen Democrats and Republicans on the hill this united over anything in a long, long time.

ROBERTS: Since the education bill.

BLITZER: On this issue they seem to be united and the president is drawing the line.

ROBERTS: Absolutely. National security is a pre-eminent issue in this midterm election campaign. Everybody is trying to gain advantage on this. I think Republicans know what's being said across America that, wait a minute, the control of our ports in terms of the operations will go not only to an overseas country but a country that has some indeterminate links to 9/11.

They are obviously hearing about this. This is a huge concern. They know that this election battle will be fought to a large degree on national security. They want to make sure that they are on the right side of that issue.

BLITZER: One more question before I let you go. If you listen carefully to what the president was saying, he had one audience, the American public in mind; he had another audience in the Arab and Muslim world in mind saying, why would it be OK for a British firm to run these ports but now an Arab firm can't do it.

It seemed to be connected to a bigger battle the United States now has in the Middle East, in the Muslim and Arab world, especially since the invasion of Iraq.

ROBERTS: Absolutely, this White House has to be very sensitive to Arab concerns and concerns in the broader Middle East. He is trying to forge equality among nations and if he has Congress saying we can't give this contract to an Arab country, how is that going to make the White House look when it goes to these Arab nations and seeks cooperation in the war one terror, broader trade and in the further democratization of the Middle East. It will look like the president does not speak from a position of strength.

I think that's why he's digging in his heels so much to say The United Arab Emirates has been a very good ally of the United States, and while people may question that, that's what the White House line is.

And he is saying how can we slap them in the face like this if we expect them to be an ally of ours.

BLITZER: John Roberts, our senior national correspondent, good to have you here in THE SITUATION ROOM. You'll be here a lot.

ROBERTS: Good to be with you. I hope so.

BLITZER: And welcome to CNN. Let's go to New York. Jack Cafferty is standing by with "The Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Wolf, this may be the straw that finally breaks the camel's back. This deal to sell control of six U.S. ports to a company controlled by the United Arab Emirates.

There are now actually senators and congressman and governors and mayors telling the White House, you are not going to do this. It's about time. No one has said no to this administration on anything that matters in a very long time. Well, this matters. It matters a lot.

If this deal is allowed to go through, we deserve whatever we get. A country with ties to terrorists will have a presence at six critical doorways to our country. If anyone thinks that terrorists in time won't figure out how to exploit that than we're all done.

Nothing has happened yet, mind you, but if our elected representatives don't do everything in their power to stop this thing, each of us should vow to work tirelessly to see that they are removed from public office.

We're at a crossroads. Which way will we choose?

Here's the question. What should be done to stop a deal that would allow an Arab company with ties to terrorism to run U.S. ports? Email us at caffertyfile@cnn.com or go to CNN.com/caffertyfile.

BLITZER: Jack Cafferty, thank you very much.

This story not going away. To our viewers, stay tuned to CNN day and night for the most reliable news about your security.

Coming up, a top Republican critic of the deal to outsource control of six critical U.S. ports. I'll speak live with the Vice Chairman of the House Homeland Security Committee, Congressman Curt Weldon of Pennsylvania. Also ahead, the president's energy pitch. Is it being drowned out by disappearing pink slips and by the administration's past statements about oil dependency?

And the secretary of state in the Middle East right now. Is she saying anything new about the peace process, the Palestinians, the Hamas takeover? All of that coming up.

Plus, Dan Bartlett, the White House counsel here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back. President Bush certainly going out on a limb today in the controversy over port security. As we've been reporting, he's now threatening to veto any attempt by the U.S. Congress to try to block the takeover of six ports by a state-owned Arab company.

We're joined now by Congressman Curt Weldon. He's the vice chairman of the House Homeland Security Committee. He's a member of the president's own party, has serious problems with this entire port deal. Congressman, thanks very much for joining us. I want you to listen to what the president said only a few moments ago. Listen to this.

(BEGIN VIDEO CLIP)

BUSH: I think it sends a terrible signal to friends around the world that it is OK for a company from one country to manage the port but not a country that plays by the rules and has a good track record from another part of the world, can't manage the port.

And so, look, I can understand why some in Congress have raised questions about whether or not our country will be less secure as a result of this transaction. But they need to know that our government has looked at this issue and looked at it carefully.

(END VIDEO CLIP)

BLITZER: Well what do you think, Congressman? You're a good Republican. Your president says let this deal go forward.

REP. CURT WELDON (R), PENNSYLVANIA: A couple thoughts, Wolf. First of all, last time I checked the Constitution there are three separate and equal branches. This White House did nothing to communicate with Congress on this deal.

With all of the concern about port security going on in America right now, at a minimum, leaders of both parties should have been brought in from both houses and had this deal reviewed. That didn't occur. And it's a little late right now to announce it and say the government is behind it. We're not going stand for that.

And second, we're not talking about any company from any other country. We're talking about a company with a majority interest owned by another government, a government that does not recognize the state of Israel. That would be like having America as a nation go over and buy the airport in Dubai. The Emirates would never allow that to happen. And we're not going to allow this to happen. It's wrong, it wasn't properly communicated. And the Congress has grave concerns.

In my case, Philadelphia is a strategic military port. We worked hard for that designation. It's where all of our military armaments go through in time of need and to think that we'd have that strategic military port controlled by an Emirates government organization is just ridiculous.

BLITZER: The president's argument is if it's OK for a British- owned company to operate the port in Philadelphia and other ports, why can't an Arab-owned company that he says has a very good track record do the same thing? What kind of signal he's afraid that would send to the Arab world?

WELDON: Well he should have thought about that before this deal was reviewed by the agencies. It reminds me of Bill Clinton when he told the president of Taiwan he couldn't get a Visa to come to America and the Congress overwhelmingly overruled the president. There is a need for communication in this government. We're not subservient to the White House and in this case, the White House did not communicate with the Congress.

BLITZER: Does the opposition, you and Democrats and everyone else, do you think you have enough votes to override a presidential veto? You need two-thirds majority in the Senate and the House.

WELDON: I don't think it will come to that. I would hope there would be an opportunity now for some transparency that should have occurred last week. We found out about this on Thursday. We were given no notice, no opportunity for briefings.

I sit as vice chairman of both Armed Services and Homeland Security. It would have been nice to know the details, to know the process, not to have to face it on national TV as we did over the weekend.

I can tell you my colleagues on both sides of the aisle are extremely upset. We're going to fight this every step of the way. Hopefully the White House will now try to reach out as opposed to using a bully pulpit to beat up on the Congress which is simply trying to do its job.

BLITZER: Well that was possible, to have some sort of compromise or work out some sort of deal. But now as you see, the president going out of his way to draw a line in the sand and get all of this top advisers out there and defend this deal. It looks like he's setting himself up for a huge potential battle.

WELDON: You quoted Bill Frist and you quoted Denny Hastert. The president has really, I think, drawn a line in the sand. It's going to be extremely difficult to move the ball over. All of this could have been avoided. And this White House just didn't see fit to do that. And I'm going to stand resolute with my colleagues in opposing this, at least until we understand.

But in the end, I probably will never support this initiative and will use the power of the Congress legislatively to put language in a bill next week supporting Peter King and Chuck Schumer to stop it.

BLITZER: We heard earlier yesterday here in THE SITUATION ROOM from former President Jimmy Carter who says he think it's a pretty good deal. He's been to Dubai. He sort of likes this deal. And this morning, Tom Ridge, the former secretary of Homeland Security was out on TV speaking about it. Listen to the excerpts of what both of these men said.

(BEGIN VIDEO CLIP)

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: My presumption is and my belief is that the president and his secretary of state, the Defense Department and others have adequately cleared the Dubai government organization to manage the ports. I don't think there's any particular threat to our security.

TOM RIDGE, FORMER HOMELAND SECURITY SECRETARY: I do think that at some point in time you have to say to yourself, would Secretary Rumsfeld and Snow and Chertoff and Rice compromise American security? I don't think so.

(END VIDEO CLIP)

BLITZER: Have you lost confidence in all those secretaries?

WELDON: Wolf, it's about communication. You know, we are a government that has equal branches and it's not a government where the president and the White House roll over the Congress. There is a legitimate process that could have been employed here where members of Congress in leadership or other members who were interested would come in for a briefing.

That was not offered to members of Congress. You don't spring something like this on the members of Congress with no advance notice as to what's going on. Who are the owners? What are their ties? We haven't looked at the board of this corporation to see what ties they have. I've got some information I won't give you on national TV about the board itself of the organization. That's going to require scrutiny by the Congress and we're going to play that role and we're going to do everything we can to fully understand what's at play here. I don't think we've seen the end of the facts still coming out in this case and that's why transparency could have helped avoid all of this, if that would have started last week by the White House.

BLITZER: When you say you don't think all the facts have come out, this is a somewhat -- like a $6.5 billion deal, this UAE, this Dubai-based company purchasing this British company, $6.5 billion. That's a lot of money at stake here. What are you driving at?

WELDON: Well, I think you saw similar attempt when CNOOC, the Chinese company tried to acquire Unocal and the outrage in America was overwhelming and swift and eventually the CNOOC people backed down.

And it wasn't because we didn't like CNOOC, but because we knew it was a Chinese government primarily-owned entity that was attempting to take over a major energy corporation in America. You know, there's nothing wrong with transparency, Wolf, and that's what should have occurred here.

There should have been an opportunity, at a minimum, for Bill Frist, Denny Hastert, and the leadership Nancy Pelosi and others to come in and be briefed on this. That didn't happen. It almost smacks of an arrogance, like it doesn't matter what the Congress says.

"We're going to do what we think and if they don't like our agency heads, if they don't like our departments and what we've done, that's too bad. We'll run rough shot." Well this time the Congress is saying, oh no you won't.

BLITZER: We only have time for one last question. Here's what you said almost exactly two years ago. And I wonder if you want to revise or amend your comments. You said this, "It's clear to me that President Bush understands the task at hand. Regarding national security, President Bush's policies have kept our nation secure." Do you remember saying that?

WELDON: Absolutely. And I've said it more recently than two years ago. I voted for this president. I campaigned for him. But on this issue, he's wrong.

In the end he needs to communicate with the Congress. I talked to Jack Murtha when he stood up on the war and the key concern of Jack Murtha was, there was no communication. You bring a guy like Jack Murtha in and you need talk to him. You have lunch or breakfast with him.

This is a government that needs to cooperate. Democrats and Republicans, administration, executive branch and legislative branch. And when you tear that apart and when you run rough shot, then you automatically have distrust and concerns that maybe could have been dealt with early on that today are now a major obstacle to what he wants to accomplish. BLITZER: Curt Weldon is the vice chairman of the Homeland Security Committee. Congressman, thanks very much for joining us.

WELDON: My pleasure, thank you.

BLITZER: And coming up here in THE SITUATION ROOM, much more on port security. I'll speak live with White House counselor Dan Bartlett. He's standing by. Plus, President Bush us touting energy alternatives in hopes of kicking America's habit on overseas oil. But the president's new calls for energy independence sound a lot different from what the White House used to say. We'll check the facts. Stay with us.

(COMMERCIAL BREAK)

BLITZER: We're following a major development here in Washington. The president of the United States has now threatened to veto any legislation in the Congress that would block a deal that would have a Dubai-based company take over six U.S. ports. The president being firm, speaking out only moments ago. You heard it here on CNN.

The president also may have another problem on his hands. Last month, he nominated David Sanborn to be maritime administrator for the federal government. He's been working as director of ship operations for Dubai Ports International -- that's the UAE company set to take over those American ports. But now that nomination may be running into some serious trouble on Capitol Hill.

In a letter today to the commerce committee, Senate Democrat Bill Nelson says he'll block the nomination unless Sanborn comes back to Capitol Hill for more questioning. He's already been questioned by that commerce committee during his confirmation hearings.

For more now on David Sanborn, let's turn to our Internet reporter Jacki Schechner. She has been digging online -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, there is actually video archives online of those hearings in front of the Senate Commerce Committee. Let's take a listen to David Sanborn in his own words.

(BEGIN VIDEO CLIP)

DAVID SANBORN, MARITIME ADMINISTRATOR NOMINEE: ... and cargo logistics systems. In this effort, it is critical that we ensure that the security of our ports and infrastructure is part of our planning and strategies.

(END VIDEO CLIP)

SCHECHNER: You can watch that whole hearing online at the committee Web site.

We're also learning more about him via the Internet. This is, by the way, the position that he's been nominated for, the maritime administrator. He's going to be reporting to the secretary of transportation. He's going to be helping deal with maritime policy for the United States and also as a liaison for other international maritime groups.

He's well-qualified in that regard because he has lot of experience in maritime issues. He actually graduated in 1973 from the U.S. Merchant Marine Academy. He's was part of the Navy Reserves.

He's worked for several global shipping companies including this one. The American President Line is another global organization. He was a VP of operations there and, of course, we know now he's the director of operations for Europe and Latin American for the company we're talking about in the news, Wolf, DP World.

BLITZER: Dubai Ports World. Thanks very much, Jacki, for that. Up next, how does the White House quiet the storm, if it can, over port security? I'll ask two political experts, Donna Brazile and Bill Bennett. They're standing by here for our "Strategy Session."

Plus, the secretary of state, Condoleezza Rice, arrives in Egypt on her agenda trying to fix America's image in the Middle East. But what should she do? Find out that as well in today's "Strategy Session."

(COMMERCIAL BREAK)

BLITZER: Today in our "Strategy Session," the political standoff over a deal to allow a Dubai-based company to manage several major U.S. ports, that deal continuing to escalate, lots of tensions here. Should the Bush administration consider putting the deal on hold? We just heard the president of the United States say absolutely not.

Were White House officials caught off guard by the opposition? Plus, does the U.S. have an image problem abroad, especially in the Muslim and Arab world?

Joining us now are CNN analysts, Democratic strategist Donna Brazile and Bill Bennett. He's the host of the radio program, "Morning in America."

Are you surprised, Bill, how the president has now drawn this line in the sand, if you will?

BILL BENNETT, HOST, "MORNING IN AMERICA": I'm surprised that they came up with the decision -- the committee -- to recommend this in the first case. Irving Crystal (ph), I remember, wrote an article once called "Smart, Smart, Stupid" about people who are technically able and check all of the details. You know, all the trees are in place but they don't see the forest, and the forest here is that this is not a country that you want to give your port security to.

BLITZER: You think this a bad deal?

BENNETT: I think it's a big mistake. And I think it's a bigger mistake that the president came out so strongly in favor of it because I don't think it will stand. I don't think it will last. He picked a very odd candidate for his first veto. BLITZER: What do you think?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, I agree with Bill on this one. I think it's a bad deal. It's the wrong time, wrong deal, and there's no way the president is going to win this debate.

Members of Congress of both parties -- he's managed to unify people that normally don't stand together on anything. And now members of Congress from both sides of the aisle are saying no, Mr. President, we would like to keep this in American -- at least on this issue, American hands.

BLITZER: You say there's no way he's going to win this debate, but a lot of times Democrats and some Republicans, they've underestimated this president. When he puts his mind to something, he usually gets his way at least over these past five years.

BRAZILE: On national security matters, the 9/11 Commission stated very clearly, they highlighted in the report, that port security is one of our most vulnerable spots and we need to do more, not less. And by giving a foreign owned country this contract, it sends the wrong message. I think that the president may lose this one.

BLITZER: But foreigners owned the contract before. They happened to have been British foreigners as opposed to United Arab Emirates.

BRAZILE: It wasn't owned by a foreign government, it was owned by a foreign company.

BLITZER: It was a private company based in Britain. You understand the president's sensitivity now when he hears from all of these friends in the Muslim world and Arab world, you know what, you can't discriminate against us.

BENNETT: If you support worldwide radical Islam, you are on the wrong side of the line. This is a country that is maybe a click better than Saudi Arabia, and as I said on the show two weeks ago, I think that's a problem for the president.

This is the president who said shortly after 9/11 we draw a line you're with us or not. You know, they gave money to Harvard, the al- Zayed Center at Harvard. Harvard, which is not exactly a conservative institution, gave the money back when it was learned that another al- Zayed, who was the head of the present UAE center was funding radical extremism.

This is -- I know about the president's stubbornness. I admire it. I like his conviction. But this is like the Harriet Miers thing. This is not going to work. This is not going fly. He may get overridden, his veto. But again, it's a very odd choice for the president to have done this. I don't know where the advice is coming from. My guess is in your question is a good one I think. Maybe Karen Hughes is saying -- BLITZER: She is the adviser at the State Department who is trying to reach out and improve America's image in the Muslim and Arab world.

BENNETT: I don't think this is the way to go. Because, we're at war with radical Islam. This country has been too supportive. It is technically very competent. I'm sure they would execute in terms of doing the competent work, but if there were an attack in one of these cities, it would be horrible in itself, but it would be a political disaster of the first order. The president cannot take this chance. Who is advising him?

BLITZER: Here is what Karen Hughes says. I think we have a long way to go in the P.R. battle, referring to America's image in the Middle East. I think there's a lot of misunderstanding out there.

It is interesting that Ibrahim Hooper, who is the spokesman for Council on American-Islamic relations, he is going to be joining us in THE SITUATION ROOM next hour, he says that no one seems to be criticizing the company itself but they're most concerned with the religion and ethnicity of its owners. Is it boiling down to that?

BRAZILE: I reject that this is an issue of race. This is about national security of our country. This administration has put a premium on keeping us safe and secure. At the same time, the Democrats have called for more resources to help protect our ports and they are still fighting with the administration to have a much stronger, tougher border patrol and also security measures so I don't think this is an issue of race.

I know people will raise racism, but this is not race. This is security.

BLITZER: This decision was approved by what's called CIFIUS, it's an acronym for the Committee for Financial Investment in the United States.

BENNETT: Only would you know that.

BLITZER: We're going to be hearing a lot about CIFIUS over the next few days. It's one of the Washington acronyms.

BENNETT: He's showing off. He's showing off.

(CROSSTALK)

BLITZER: But CIFIUS is interesting because it is run by Treasury but representatives from State and Defense and Homeland Security, Commerce, they are all involved and they review this carefully and they concluded that this is a good deal. Rumsfeld said it was good deal today. Alberto Gonzales, the Attorney General, says it's a good deal. Secretary of the Treasury John snow says it's a good deal. Are all of these people politically tone deaf?

BENNETT: No, but I think sometimes in these committee meetings you get the least common denominator. I said it when I was drug czar. I would come to meetings that committee people had put together representing various agencies and it was a little this and a little of that, but it was tone deaf. As Lindsey Graham said, this one is tone deaf.

It's not about race or ethnicity. This is about radical Islam. This country is, as I said, maybe a little better than Saudi Arabia, but they do support the al-Aqsa group, they support the Intifadah fund. These are not happy groups. These are not peaceful groups. These are not groups that mean well toward the United States.

You can't have any ambiguity about this kind of thing. We are at war. Image, we have to win this thing. If people get offended by the fact that we don't like beam bombing our buildings and so on, that's too bad. The president cannot allow for this. Again, I think it's very bad advice. Most important it will not stand and the sooner he reverses on this the better. I think he's going to be damaged if he hangs in there.

BRAZILE: What you hear from lawmakers is a lack of communication. The governors said that. Pataki said that. Ehrlich said that. What you are seeing right now, Wolf, is that this administration believes that they can get away with everything by saying trust us. We have looked at it.

What members of Congress are saying is let us see the materials and let us review it and investigate it but for now halt the process.

BLITZER: The president has achieved one thing. He's united Democrats and Republicans on Capitol Hill by and large. I guess that's one thing. We'll talk about that the next time.

BENNETT: Pyrrhic victory.

BLITZER: Something he wasn't trying to necessarily achieve. Thank you very much. Bill Bennett, Donna Brazile, thank you very much.

Coming up, has the Bush administration been saying or doing anything to undermine the president's energy policy pitch?

And look who will be talking about port security. We'll get political humorist Bill Maher's take on the new firestorm here in Washington. He's among our guest in our 7:00 p.m. eastern hour in THE SITUATION ROOM.

Bill Maher tonight in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some second-day guessing today of President Bush's energy pitch. Some workers at a renewable energy lab in Colorado question why they are suddenly employed again. Back here in Washington the administration's past comments about oil dependency are now under some serious scrutiny.

President Bush's line on energy conservation took a turn this year with five words. Quote, "America is addicted to oil." That's not the way the Bush White House used to describe the nation's gas guzzling ways. Let's bring in our senior political analyst, Bill Schneider. Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, with President Bush going around the country promoting alternative energy, a lot of people are wondering, is this a Nixon goes to China type thing?

(BEGIN VIDEOTAPE)

(voice-over): President Bush is a Texas oil man. When he first got elected, the president's energy policy was dig we must and not conserve we must.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: It should be the goal of policymakers to protect the American way of life. The American way of life is a blessed one. We have a bounty of resources in this country.

SCHNEIDER: Vice President Dick Cheney, another oil man, said in a 2001 speech...

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Conservation may be a sign of personal virtue, but it not a sufficient basis, all by itself for sound comprehensive energy policy.

SCHNEIDER: That's why it was a little startling to hear President Bush say in his State of the Union speech ...

BUSH: America is addicted to oil.

SCHNEIDER: ... and even more startling to hear him say this week in Milwaukee ...

BUSH: We have a chance to transform the way we power our economy and how we lead our lives.

SCHNEIDER: There's clearly been a shift in tone, but critics say they have yet to see a real shift in policy.

DAVID SANDALOW, BROOKINGS INSTITUTION: He actually proposed budget increases that were less than were authorized in last year's energy bill.

SCHNEIDER: What about Bush's proposal to replace 75 percent of oil imports from the Middle East?

SANDALOW: It's only nine percent of our total oil imports. That's not very ambitious.

SCHNEIDER: The driving force here may be politics more than policy. President Bush needs to show he's trying to do something about high energy prices. Remember this picture of Bush strolling hand-in-hand with a Saudi prince on his Texas ranch? The White House would like you to forget it. SANDALOW: One of the objectives of the White House staff this week is to put some new pictures in the public's mind when it comes to President Bush and energy policy.

(END VIDEOTAPE)

SCHNEIDER: Now there's a furor over the Bush administration's allowing a company controlled by an Arab government to manage major U.S. ports. Better to have a picture of President Bush touring the facility that produces cutting-edge energy saving technology -- Wolf.

BLITZER: Bill Schneider reporting for us. Bill, thank you very much. Up next, more on the furor over the president's decision to allow the United Arab Emirates to control America's largest ports. Jack Cafferty has been going through your e-mail. And we'll go live to the White House. One of the president's top advisers Dan Bartlett. He'll join us live to explain the administration's decision. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Still to come, the president's surprise veto threat and the brewing showdown over port security. I'll speak live with presidential counselor Dan Bartlett about the pressure Mr. Bush is getting from his own party. And later, political humorist Bill Maher. He'll share his thoughts on the port storm. A lot more in our 7:00 p.m. Eastern hour right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Jack is back with "The Cafferty File" -- Jack.

CAFFERTY: The question, Wolf, is what should be done to stop a deal that would allow an Arab company to operate six U.S. ports. We are getting tons of e-mail.

Alan in Silver Spring, Maryland: "The U.S. Congress must stand tall and united against the administration's plan. They must force the president to withdraw the government's approval."

M. in Barrington, Illinois: "This deal is nothing short of collusion with a foreign power of unknown intent during war time. The president should be impeached."

Mike writes: "This administration has been going in the wrong direction. They've now turned a trot into a mad dash toward oblivion. This C grade president and his cronies are threatening our existence. This port deal must be stopped."

J.R. -- or excuse me, J.B., Raleigh, North Carolina: "Jack, give someone enough rope, you'll hang himself. The arrogance of the Bush administration has finally caught up with it and we are united at last. Putting George Bush in charge of our country was a huge mistake. And my fellow citizens finally realize that it was a disaster. Time to impeach this president." Eric in Medina, Ohio: "Congress must act to bar turning port security and operations over to foreign governments or foreign companies. Not merely Arab governments and companies, any foreign authority. American ports must be under the control of our citizens."

And David writes from Hawaii: "The last time we had a government that was non-responsive to the wishes of the people they governed, we had a revolution" -- Wolf.

BLITZER: Jack, thanks very much.

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