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The Situation Room

Karl Rove's Legal Peril; Surprise Visits from Rumsfeld and Rice in Iraq; Oil Companies Trying to Address Price Gouging; Similar Oil Problem for Presidents Carter and Bush; Controversy Over Flight 93 Memorial

Aired April 26, 2006 - 19:00   ET

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

WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you tonight's top stories.

Happening now, it's 7:00 p.m. here in Washington. Karl Rove in the hot seat, but is he in hot water? The president's adviser goes before a grand injury for a fifth time just as the president names FOX News anchor Tony Snow as his press secretary. Could that be the first hot topic Snow will have to handle?

It's 3:00 a.m. in Baghdad. Secretaries Rice and Rumsfeld make a surprise trip to Iraq. What, if anything, will that mean for U.S. troops on the ground?

And as gas prices go higher, the American public is grousing about gouging, but there are no complaints in Tehran, where gas costs, get this, just 40 cents a gallon. We're going to take you for a rare look inside Iran.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

New developments tonight offering some fresh evidence of the president's political problems. Just moments ago, a new poll came out showing two-thirds of Americans now believe the nation is on the wrong track. That's considered a key indicator of the political mood of the United States, and it's up five points since last month alone.

And take a look at this, the new NBC News-"Wall Street Journal" poll shows 77 percent of Americans are now uneasy about the U.S. economy, in part because of high gas prices.

And to make matters worse for the White House, the president's top political adviser was called before a federal grand jury today to testify for a fifth time in the CIA leak investigation.

All this clearly overshadowing the White House message today about the man tapped to keep the administration on message. FOX News anchor Tony Snow will be the new White House press secretary.

Our Candy Crowley and our Suzanne Malveaux are standing by.

Let's get the latest on Karl Rove from John King -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, in this high-stakes election year, if you are a struggling president trying to rebound, trying to put your staff back together at the White House, trying to turn around those depressing poll numbers, having your top political aide hauled before a federal grand jury not part of the script.

(BEGIN VIDEOTAPE)

KING (voice over): Into federal court and the grand jury room for the fifth time. Karl Rove hoping one more round of questions will clear him of wrongdoing in the CIA leak investigation. Special prosecutor Patrick Fitzgerald and his team had no comment as they left the courthouse, and Rove said nothing about his three hours of testimony.

In a statement, his attorney said Rove testified voluntarily and unconditionally and that the special counsel has advised Mr. Rove that he is not a target of the investigation. Mr. Fitzgerald has affirmed that he has made no decision concerning charges.

But Rove's conduct remains a subject of the investigation. And lawyers like Lee Blalack, familiar with such politically-charged cases, called another grand jury appearance a calculated risk.

LEE BLALACK, ATTORNEY: It would be unusual for me to imagine Mr. Rove agreeing to go before the grand jury for a fifth time if they didn't think that -- that there was a reasonable likelihood that that testimony would ultimately persuade the prosecutors or the grand jury to close the investigation.

KING: The biggest outstanding issue, why Rove did not initially tell the grand jury back in February 2004 about a key conversation with "TIME" magazine's Matt Cooper. Eight months later, in October 2004, Rove told prosecutors he found an e-mail reminding him of the Cooper conversation and that he had simply forgotten about it. How he came to remember is one of the case's many intriguing twists.

Rove attorney Robert Luskin ordered the e-mail search after having drinks with "TIME" reporter Viveca Novak. She told him Rove was a Cooper source and gave her account of the conversation to prosecutors back in December.

(END VIDEOTAPE)

KING: Now, sources sympathetic to Rove are telling us tonight that they believe he answered the lingering questions in the investigation. They are hopeful his account matches up with the other witnesses, and, Wolf, hopeful that the special prosecutor, Mr. Fitzgerald, will soon say that Mr. Rove has been cleared of any criminal wrongdoing. But Wolf, we must note here, Mr. Fitzgerald said nothing and the Rove team has voiced such optimism before.

BLITZER: All right. We'll see what happens. We're going to get analysis from our Jeff Toobin. He's standing by as well. I'm going to ask him what's the difference between being a target or a subject of these kinds of criminal investigations.

Jeff Toobin will be here in THE SITUATION ROOM.

The incoming White House press secretary, Tony Snow, may already be bracing for Karl Rove questions when he steps up to the podium for the first time.

Our White House correspondent, Suzanne Malveaux, is watching this part of the story -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, I had a chance to talk to Tony Snow today. He is very excited about his new job. The big question, of course, whether or not it's going to be any different than his predecessors, if it will make any difference at all. We know that Snow, of course, advocated for a greater policy role in a position that has been likened to a human pinata.

(BEGIN VIDEOTAPE)

MALVEAUX (voice over): The White House has a new face...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have asked Tony Snow to serve as my new press secretary.

MALVEAUX: ... former FOX News anchor, conservative talk radio host and speechwriter for President Bush's father. Snow understands the importance of loyalty and economy of words.

TONY SNOW, INCOMING WHITE HOUSE PRESS SECRETARY: One of the reasons I took the job is not only because I believe in the president, because, believe it or not, I want to work with you.

MALVEAUX: Snow wasted no time in getting to know us. He said he accepted the job yesterday after he got the final results of a CAT scan revealing he was cancer free. He plays the flute, sax and guitar in what he calls "an old-fart rock band." And he says he's not here to drink the Kool-Aid. He'll tell the president when he disagrees.

JAKE SIEWERT, FMR. WHITE HOUSE PRESS SECRETARY: And the fact that they've appointed someone who's not a loyalist, who's been willing to criticize the administration, will help a great deal.

MALVEAUX: Snow is being brought in as part of White House image makeover, tasked to sell the Iraq war and push good economic numbers at a time when the carnage and gas prices are high and Mr. Bush's approval numbers low.

SIEWERT: He can provide a little bit more openness, a little bit less of the stock answers that we've been seeing out of the White House. And I think that may begin to restore some of the credibility they need at a critical time.

MALVEAUX: The last time a career journalist stood behind this podium was 1974, when President Ford tapped NBC correspondent Ron Nessen. As a conservative commentator and 25-year media veteran, Snow has been critical of the president, at times characterizing him as "guilty," "impotent," and even " an embarrassment. But the spin from the podium today...

BUSH: I asked him about those comments. And he said, "You should have heard what I said about the other guy."

I like his perspective.

MALVEAUX: In other words, the bubble has burst -- maybe.

QUESTION: Mr. President, what does this choice say about what you think you need in the second term.

MALVEAUX: When faced with a question, both scurried away, leaving some doubt whether much will change.

(END VIDEOTAPE)

MALVEAUX: And Wolf, of course another important role for Tony Snow is to reassure conservative Republicans they've got somebody behind the podium that can deliver a very clear and steady message about the president's agenda. And, of course, those conservative Republicans a critical base to the president in the midterm elections. They certainly hope they come out so they can keep those majorities in the House and the Senate -- Wolf.

BLITZER: Suzanne, thanks for that.

Some Democrats are already pouncing on the president's choice for press secretary. The House minority leader, Nancy Pelosi, says Tony Snow was and is a Bush loyalist who will tow the White House line.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: What can I say? As Jay Leno said last night, so he defended -- now his job is to defend the president at the White House, when he's been defending the president on FOX. What's changed?

(END VIDEO CLIP)

BLITZER: Some other Democrats are playing up Tony Snow's past criticisms of President Bush.

Our senior political correspondent, Candy Crowley, has been looking into Tony Snow's paper trail -- Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Wolf, for a job which is going to be very, very difficult, what's interesting is, it has a remarkably simple job description.

(BEGIN VIDEOTAPE)

BUSH: My job is to make decisions. And his job is to help explain those decisions to the press corps and the American people.

CROWLEY (voice over): Good thing Tony Snow's not just another pretty face. He's a wordsmith. He says them on TV. He wrote them for the first President Bush. He's written them about this President Bush.

Last September: "No president has looked this impotent this long when it comes to defending presidential powers and prerogatives."

With a spokesman like that, who needs the press corps? Plus, rhetorically, with a spokesman like that, will the press corps believe him?

HOWARD KURTZ, HOST, "RELIABLE SOURCES": I do think that Tony Snow will have to convince the press that he has not just drunk the Kool-Aid and is now agreeing with the very policies he criticized when he was a columnist and radio host.

CROWLEY: In the beauty and the curse that is cyberspace, it didn't take Democrats long to cherry-pick their way through all those words and e-pass them to reporters. In spin world, it doesn't matter that Snow's assaults come largely from the right.

Last month on big government: "A Republican president and a Republican Congress have lost control of the federal budget and cannot resist the temptation to stop raiding the public fisc."

In an administration seen as inbred, they are selling this as street creds for the new guy.

JULIE MASON, "HOUSTON CHRONICLE": Already, the White House is spinning this as a positive. Well, we need fresh blood and new opinions, and this guy has them. But, some of the things he has said about the president have been extremely harsh.

CROWLEY: There's enough fodder for months, but with a little substance it probably won't last that long.

JOE LOCKHART, FMR. CLINTON SPOKESMAN: If he comes out aggressively and has a new plan of attack, that's a much better story than anything Tony Snow said a year ago.

(END VIDEOTAPE)

CROWLEY: And so it begins, the dance to speak for the president while holding on to your credibility. Asked if he is free to keep telling the president the sorts of things he used to say when he wasn't on the White House payroll, Snow said, "Probably not in those exact words" -- Wolf.

BLITZER: Thanks to Candy, Suzanne and John, part of the best political team on television.

CNN, America's campaign headquarters.

Jack Cafferty also a part of the best political team on television -- Jack.

JACK CAFFERTY, CNN ANCHOR: Oh, you're a nice man, Wolf.

You know, you can say what you want about Tony Snow, but the White House has gotten two days of press coverage on Tony Snow, when the news media might have been focused on something else. So, they're already a couple of days ahead.

Some are calling it the railroad to nowhere, sort of after that bridge to nowhere up in Alaska. Seven hundred million dollars is being proposed to move a rail line in Mississippi. That will come out of yours and my pocket, Mr. and Mrs. Taxpayer.

The project has been included in an emergency spending bill for the wars and for hurricane relief. The total tab is 106 billion. The Senate's debating. And the bill includes about $14 billion in add- ons, like that Mississippi railroad, farm aid, highway repairs, and some aid to the Gulf Coast fishing industry.

President Bush has threatened to veto this bill because it contains too many items that are "unrelated to the war or emergency hurricane relief needs." But supporters of what "The Washington Post" has dubbed "The Great Train Robbery" say that railroad project is essential to protect it from future hurricanes and to bring people back to the Gulf Coast. Not to mention the fact that moving it would benefit the casinos in Mississippi.

So, here's the question: Should funding for a Mississippi railroad and fishing projects be part of the Senate's emergency spending bill?

E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile.

Pretty amazing, isn't it, Wolf? And senators with a straight face can attach these pork riders to emergency funding for our troops in Iraq and Afghanistan and not even blink an eye over it.

BLITZER: Not part of the regular budget. This is emergency spending...

CAFFERTY: Yes.

BLITZER: ... for emergencies. But I've got to tell you, Jack, I have been in Washington for a long time. These supplemental emergency bills, they all contain for years and years tons of pork.

We'll continue to watch this story, Jack. Thank you very much.

Coming up, Condoleezza Rice and Donald Rumsfeld on a surprise visit to Iraq. And word that thousands of U.S. troops could be affected what's going on, on the ground. We're going to tell you exactly what we know.

Plus, gas price outrage. Calls for investigations of gouging at the pump, will it ease your pain in the wallet? And we'll take you to Iran, where you won't believe how much gas costs. We'll give you a clue. It's a lot less than three

Also, Flight 93, it crashed after passengers fought off the hijackers. So, why is one United States congressman blocking a memorial right now? We're taking a closer look.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Much more on Karl Rove's testimony today before a federal grand jury in Washington, his fifth time before that grand jury investigating the CIA leak.

Jeff Toobin, our legal analyst, standing by for that. We'll get to that shortly. But other important news we're watching.

Surprise visits in Iraq today from the defense secretary, Donald Rumsfeld, and the secretary of state, Condoleezza Rice.

CNN's Ryan Chilcote is in Baghdad -- Ryan.

RYAN CHILCOTE, CNN CORRESPONDENT: Wolf, it's a first. The U.S. secretaries of defense and state working together in the field. Both of them arriving here on unannounced visits, as U.S. officials usually do, because this is still far from a safe place.

(BEGIN VIDEOTAPE)

CHILCOTE (voice over): The U.S. secretaries of defense and state arrived within hours of each other. They met with the country's new prime minister, Nuri al-Maliki, privately, encouraging him to build a government of national unity and fill it not only with Shiites from his own sect, but from all of Iraq's religious and ethnic groups.

Rumsfeld and Rice were also here to publicly show their support for Iraq's new leadership.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It's not a governing council. It's a government, the government of Iraq. And that's an important thing. This is sovereign county. And they're making impressive progress.

CHILCOTE: One concern as the U.S. looks to disengage, Iran's influence over events in Iraq and the new Iraqi leader. Al-Maliki lived in exile in Syria and Iran when Saddam ruled Iraq.

Secretary of State Rice told CNN that he reassured here the U.S.' nemesis would not dictate policy.

CONDOLEEZZA RICE, SECRETARY OF STATE: He said that he really thanks the neighbors for the role that they played during Saddam Hussein's regime in sheltering people, but that now it's time for Iraq to control its own affairs. CHILCOTE: The U.S. military's top commander in Iraq has said he thinks Iraq's security forces will be ready so he can start drawing down the numbers of U.S. troops by the end of the year.

Today, boss at his side, he said...

GEN. GEORGE CASEY, COMMANDER, MULTINATIONAL FORCES, IRAQ: I'm still on my general timeline.

CHILCOTE: But there are many variables left, like al Qaeda's leader in Iraq, Abu Musab al-Zarqawi, who could have just as much influence. He's promising more terrorist acts.

(END VIDEOTAPE)

CHILCOTE: But the first thing that has to happen is for the prime minister to form his government and get it approved by the parliament. Only after that can there be serious discussions about bringing the troops home -- Wolf.

BLITZER: Ryan, thank you.

And tonight, plans are under way for trying to reduce the number of U.S. forces in Iraq.

Let's get the latest from our CNN Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, as you got a flavor of it there in Ryan's report, the top U.S. general, George Casey, is not yet ready to sign off on a plan that would reduce the U.S. troop presence in Iraq by 30,000 troops, or perhaps even more by the end of the year. It's an optimistic scenario based on the idea that the Iraqi government will enjoy the support of the people and that the Iraqi army will continue to improve.

Under the plan, the 15 brigades that are now -- U.S. brigades in Iraq that amount to about 130,000 troops would be reduced to 10 brigades, about 100,000 troops, by the end of the year. But again, it depends on conditions permitting. And today, General Casey made it clear that he's not ready yet to make that call.

(BEGIN VIDEO CLIP)

CASEY: We are seeing the situation a little clearer, I'd say. And the clearer I see it, the better I can make my recommendations.

RUMSFELD: The question of our force levels here will depend on conditions on the ground and discussions with the Iraqi government, which will evolve over time.

(END VIDEO CLIP)

MCINTYRE: One of the more optimistic options would involve cutting U.S. troops by 55,000, leaving only 75,000 troops in Iraq by the beginning of next year. But the Pentagon insists, whatever decision is made, it will be made by military commanders like General Casey and not driven by political concerns at home such as the upcoming midterm congressional elections -- Wolf.

BLITZER: Jamie, thank you for that.

By the way, when Secretary of State Condoleezza Rice goes aboard, in this case to Iraq, the American public, at least according to our latest poll, may actually miss her. Rice is the most popular if the top Bush administration officials.

In our new CNN poll conducted by Opinion Research Corporation, 57 percent view the secretary of state favorably. Rice tops her boss. Just 40 percent view the president favorably.

This poll measures opinions of the political figures involved, as opposed to other surveys which measure job approval. In other words, you can like someone even if you disapprove of the job they're doing. That's why that favorability number for the president at 40 percent is a lot higher than the 32 percent job approval number that he gets in our latest poll

Still to come tonight in THE SITUATION ROOM, Karl Rove's latest grand jury appearance. Is it a sign that he's likely to be indicted? Our senior legal analyst, Jeff Toobin, will give us his take on the legal perils for the president's top political adviser.

Also, pain at the pump. Politicians calling for an investigation of price gouging, but is it all talk and no action?

Plus, we're going to take a closer look how much President Bush right now has in common with former President Jimmy Carter.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Back now to our top story. Is a White House makeover being marred by possible legal trouble for a top White House adviser? The president's deputy chief of staff, Karl Rove, today went before the grand jury investigating the CIA leak case for the fifth time. This came as the president named FOX News anchor and analyst, Tony Snow, as his new press secretary.

Aside from overshadowing the Snow appointment, is Rove in any hot water?

Earlier, I asked CNN Senior Legal Analyst Jeff Toobin to offer his assessment of Karl Rove's legal woes.

(BEGIN VIDEOTAPE)

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Wolf, you know, this is an example of how in Washington, the more important you are, the fewer rights you have, in a funny way, because any ordinary person who is under investigation in a white collar case would very simply take the fifth, would never even darken the door of the grand jury, never expose himself to the risk of testifying once, much less five times. But Karl Rove is deputy chief of staff. He can't take the fifth and stay in his job. So, he's got to go back and back each time Fitzgerald wants him there, and each time he's taking a greater risk.

BLITZER: And the risk is, he goes into that grand jury, he does not have an attorney present. His attorney is not present. The prosecutor is there, or the members of the grand jury can ask him questions, and, presumably, he could slip up and say something differently than what he testified earlier, or what he told the FBI.

TOOBIN: Right. The more times you testify, the more chances you have to contradict yourself, especially if you are talking about the same subject matter as, presumably, he is.

After all, this is not the world's most sprawling investigation. It's about a relatively limited set of facts.

So, every time he goes in there, he runs the risk of contradicting himself in appearance two, or appearance four, or appearance one, and that's a problem. But as a high-ranking government official, he simply doesn't have the option of refusing to go in. He's got to take that chance. And so far, it's important to emphasize, he's not been indicted and he may not be indicted for anything.

BLITZER: Robert Luskin, Karl Rove's attorney, issued a statement saying that the special counsel, Patrick Fitzgerald, has advised Mr. Rove that he is not a target of the investigation. You're smiling.

TOOBIN: Well, there are three categories of descriptions of witnesses. There's a witness. And a witness is simply someone who knows something that is of interest to prosecutors. They are not -- they are not a suspect of any kind.

Then, there's a target. If you get what's called a "target letter," you are virtually certain to be indicted.

The category that Rove is in is, he's a subject of the investigation. That means his -- his behavior is under investigation. That means, you may get indicted, you may not. But defense attorneys always say, he's not a target, as if that means they're totally in the clear.

That's not what it means. It means he's under investigation and it could go either way.

BLITZER: The bottom line in all of this, if he were cleared, he would not necessarily be called to testify once again before the grand jury. If Patrick Fitzgerald were simply going to say, you know, "I continued the investigation after the indictment of Lewis "Scooter" Libby, and now I resolved it, and Karl Rove is free and clear," to do that, he would not need to call him again before a grand jury, would he?

TOOBIN: Absolutely not. And, in fact, that's the way most investigations end. They simply just fade away. Prosecutors don't announce the findings of their investigations when they don't return an indictment. Indeed, under the rules of grand jury secrecy, they can't disclose what's said in the grand jury, unless it comes out in a public court proceeding.

There is no public court proceeding if there are no charges. So, the ending here, the best ending from Karl Rove's perspective is, Fitzgerald announced he's completed his investigation, end of story, and none of us really know what happened in the grand jury.

(END VIDEOTAPE)

BLITZER: Jeff Toobin speaking with me earlier. Let's get some more now on Tony Snow, the incoming press secretary. Snow's long paper trail is riddled with criticism of the president. And many of those views are catching up with him online. Let's bring in our Internet reporter Abbi Tatton. Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, you don't have to look far at the Web site for Tony Snow's radio show. In the front section, the "Word From Tony," criticism of Bush's list-less domestic policy, that from a column from townhall.com from February of this year where Snow went on to talk about presidential clunkers, like Bush's energy policy, something that Snow is now going to be defending from the podium.

Because of Tony Snow's previous career, he has a long digital paper trail. The left-leaning Think Progress blog has been rounding up all of Snow's criticism of the president in the last few years, including this one from August 2000 when Snow was quoted as saying, "Bush spoke like a soul tortured with Tourette's." We should point out that in the conservative blogs today, widespread support of Snow's new role -- Wolf.

BLITZER: Thank you, Abbi. And we're also following a developing story tonight. Late this afternoon, the Senate Finance Committee announced it's seeking tax returns for the major U.S. oil companies. The unusual move is part of an investigation into whether the companies paid their fair share of taxes on their record profits last year.

Meanwhile, some of the oil companies are trying to address concerns about price gouging. Let's bring in our senior national correspondent John Roberts, he's here in THE SITUATION ROOM. John?

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT: Good evening to you, Wolf. For the first time since his new round of price fights, the oil industry came out publicly today rejecting any notion that they were gouging consumers.

(BEGIN VIDEOTAPE)

RED CAVANEY, PRESIDENT, AMERICAN PETROLEUM INST: We have been investigated over the past two decades over 30 times by federal trade commissions and others. And every single one of those investigations has exonerated the industry. ROBERTS (voice-over): In fact, the industry said today, if you think big oil is bad, compare its five-year profit average of 5.9 percent with the pharmaceutical industry's 16.7 percent. Or the banking industry's nearly 18.

Even if individual oil companies were grossly inflating prices, guess what? There is no federal law against price gouging. And the head of the Federal Trade Commission has argued, there should never be.

DEBORAH PLATT MAJORAS, CHAIRMAN, FTC: Regardless of how repugnant price gouging is, a law that prohibits it is a form of price control.

ROBERTS: Twenty-seven states and the District of Columbia have anti-gouging laws. But many of them only apply in times of emergency or crisis. And despite repeated investigations, most recently right after Hurricane Katrina, it's usually just little fish that get caught, individual stations or small chains jacking up prices.

CLAY SELL, DEPUTY ENERGY SECRETARY: There have been some successes. But generally speaking, the level of market manipulation is far less, our investigations have led to believe, than what many people feel whenever they're paying these extraordinarily high prices at the pump.

ROBERTS: The main federal worry for the industry is collusion, if they get together to manipulate prices. But with each oil company controlling so many parts of the process, drilling, refineries, distributions and sales, it's easy, says industry watchdog Tyson Slocum, to affect prices without breaking the law.

TYSON SLOCUM, PUBLIC CITIZEN: But the problem is that there's lots of legal of legal manipulation occurring. And that what we don't need is yet another investigation, but what we need to do is to strengthen the existing laws that we have. Because the laws that we currently have are inadequate to protect consumers.

(END VIDEOTAPE)

ROBERTS: So why did the president launch another yet investigation of price gouging? Pure politics, many people say, that he needs to be seen as doing something, even if he's reasonably certainly that the probe will go nowhere. And then of course, Wolf, there's the chairman and ranking member of the Senate Finance Committee, as you said, who wants to see the tax records. Everybody's getting in this game.

BLITZER: A lot of outrage out there. We'll see what, if anything, they do, John. Thank you.

ROBERTS: Let's go up to New York. Ali Velshi is standing by with more on the oil company's record profits and they are pretty enormous, Ali.

VELSHI: Yes, they're huge. And you're going to see the hugest of it tomorrow when ExxonMobil comes out. But for anyone who's filled up their tank this week, and we're angry about how much they had to fork over, you might want to turn the T.V. off right now.

Because I'm going to tell you, ExxonMobil, the biggest oil company in all the world, is going to -- is releasing its earnings tomorrow morning. The analysts say Exxon's profits will top $9 billion. And that wouldn't be a record for Exxon, $9 billion might seem small when you stack it up against how much Exxon actually rang up in sales. That number expected to top $100 billion.

And Wolf, I am talking about three months. Now you need to make some money to make money. So all of Exxon's drilling, exploration and marketing costs do eat away at its bottom line. The nation's three biggest oil companies, ExxonMobil, Chevron, which reports on Friday, and Conoco- Phillips, which opened its books today -- Conoco reported a $3.3 billion profit.

When all is said and done, these big three are expected to post combined first-quarter profits in excess of $19 billion. That would be a 19 percent increase from last year. And Wolf, to give you some perspective on it, those earnings are expected to be 14 times greater than the first three months of this year for Google, Apple and Oracle, all put together.

BLITZER: And that's what outrages a lot of people out there who are paying $3, $3.50 a gallon. Ali, we'll continue to watch these numbers tomorrow. And remember, just for the first quarter, three months of profits alone.

Up ahead, a president with plunging poll numbers suddenly plagued with high gas prices. George Bush? No, Jimmy Carter. CNN's Mary Snow has details of the different ways the two leaders handled a similar situation -- they had some similarities as well.

Plus, controversy growing over a memorial to the 9/11 victims of United Flight 93. We're going to show you how it's pitting some of their relatives against one United States congressman. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: More now on soaring gas prices. In a moment, we'll take you a place where gas costs 40 cents a gallon. But first the politics. What does President Bush have in common with former President Jimmy Carter?

CNN's Mary Snow standing by with the answer -- Mary.

MARY SNOW, CNN CORRESPONDENT (voice-over): Well, Wolf, they come from opposite ends of the political spectrum, even disagree on Iraq. But if you look at the presidency of Jimmy Carter and President Bush, there is some common ground when it comes to oil.

(BEGIN VIDEOTAPE)

SNOW (voice-over): It was a promise that President Carter made in 1979.

(BEGIN VIDEO CLIP)

JIMMY CARTER, PRESIDENT OF THE UNITED STATES: Beginning this moment, this nation will never use more foreign oil than we did in 1977, never.

(END VIDEO CLIP)

SNOW: At the time, President Carter said, the United States got half of its oil from foreign countries. Now:

BUSH: Today, we get about 60 percent of our oil from foreign countries.

SNOW: In the 1970s, Americans were forced to wait on long lines for gas and pay records prices.

(BEGIN VIDEO CLIP)

CARTER: Our excessive dependence on foreign oil is a clear and present danger to our nation's security.

(END VIDEO CLIP)

SNOW: Today, there may be different circumstances behind rising gas prices, but, still, a common theme emerges.

BUSH: America is addicted to oil, which is often imported from unstable parts of the world.

SNOW: So, why hasn't America and its leaders solved the problem? The oil industry points a finger at the government for stalling attempts to open new areas for oil and gas production and stresses, little has been done to promote conversation.

CHRISTINE TEZAK, STANFORD WASHINGTON RESEARCH GRP.: Back in the early 1990s, oil was $10 a barrel. Who's worried about conservation at $10 a barrel? No one.

SNOW: The concept of conservation took a back seat to other issues. This was Vice President Dick Cheney back in 2001.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

SNOW: A far cry from President Carter's earlier conservation kick.

(BEGIN VIDEO CLIP)

CARTER: If we learn to live thriftily and remember the importance of helping our neighbors, then we can find ways to adjust.

(END VIDEO CLIP)

(END VIDEOTAPE)

SNOW: It was a message that was hard to hear back then. But with gas prices on the rise again, Americans have incentive to conserve. A recent CNN poll shows nearly 70 percent of Americans surveyed say rising gas prices has caused hardship on their families -- Wolf.

BLITZER: Mary, thanks very much. And this programming note, the former president of the United States, Jimmy Carter, will be a special guest on "LARRY KING LIVE" tonight, 9:00 p.m. Eastern, 6:00 p.m. Pacific.

While Americans are paying sky-high price at the pump, Iranians are feeling no pain. They're paying just pennies a gallon. But many Iranians don't seem to be feeling any sympathy for Americans as the two nations square off over Iran's nuclear program.

CNN's Aneesh Raman is one of the few western journalists now inside Iraq -- Aneesh.

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ANEESH RAMAN, CNN CORRESPONDENT: Wolf, with gas prices reaching unwelcome heights back in the U.S., here in Iran there's a different problem at the pump.

(voice-over): If cheap gas is your vision of paradise these days, this is paradise, a gas station off of one of Tehran's main roads.

(on camera): In Iran right now, a gallon of gas is just about 40 cents, in part because of government subsidies, but also because Iran has the world's second largest oil reserves.

(voice-over): And with such low prices, virtually everyone here can afford to drive and drive a lot. In fact, all that driving causes so much congestion and pollution, the government is now moving to ration gas so people drive less.

"There is too much traffic," says Rasul (ph). "With rationing, only those who really need it will use their cars, and others will use public transportation."

There's another reason Iran may ration. Iran has oil, but little capacity to refine it. So, the country actually imports 40 percent of its gas, which gives others leverage over them. But rationing is no quick fix, and could further the country's economic divide.

"The poor are vulnerable. This will only be good for the rich," says Gisu (ph). "They will have the money to pay for as much gas as they want."

In the next few months, the Iranian government plans to start handing out ration cards, and those who want to buy above the allotted amount will have to pay five times more, $2 a gallon. So much for the paradise of cheap gas.

(on camera): And as whether Iran should use its oil as a weapon if tensions rise between this country and the West over its nuclear program, a number of Iranians we spoke to at that gas station say yes -- Wolf.

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BLITZER: Aneesh Raman reporting from inside Iran all this week.

Up ahead -- Hillary Clinton blasts her colleagues in the Senate. The controversy over money, the war, and a railroad -- a railroad. We'll tell you what's going on.

And many against one. Some families of 9/11 victims are banding together, protesting against one United States Congressman. We're going to tell you who that is and why it's happening. Stay with us.

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BLITZER: Many consider it hallowed ground, the very place where United Flight 93 went down in Pennsylvania on 9/11. Many victim's families want the site memorialized. But plans for a memorial are now being blocked for unusual reasons. Let's bring in our Brian Todd to explain, Brain.

BRIAN TODD, CNN CORRESPONDENT: Wolf, it happened with Ground Zero. Now it's happening with Shanksville, Pennsylvania. What is supposed to be a common goal of an emotional memorial caught up in politics and fights over money.

(BEGIN VIDEOTAPE)

(voice-over): Who could forget that smoking wreckage, the only real image that we have of United Flight 93's final moments on 9/11. Now controversy surrounds that very field near Shanksville, Pennsylvania. Controversy over the allocation of land and money.

HAMILTON PETERSON, FATHER, STEPMOTHER DIED ON FLT. 93: That community has changed from a quiet area, to now an extreme hot spot in terms of tourists.

TODD: Families of Flight 93's victims on the west steps of the Capitol, already emotional from their screening of a new movie about their loved ones heroic struggle against the hijackers, now they say now they're not angry but concerned that funding from Congress for a Flight 93 memorial has been held up for possibly a third straight fiscal year, by one congressman, Republican Charles Taylor of North Carolina.

We spoke to David Beamer, whose son Todd was quoted as saying "let's roll," to overtake the hijackers.

DAVID BEAMER, SON DIED ON FLT. 93: It has been enough time for the process to run its course and for our elected officials to get on board.

TODD: But Congressman Taylor has his own concerns, like how much taxpayers will have to shell out. More than half the nearly 60 million dollars projected for the Flight 93 memorial is supposed to come from private fund-raising. The rest from the federal government and the state of Pennsylvania.

But Taylor cites other projects like the Oklahoma City Bombing Memorial, where private money didn't materialize as promised. In a statement, Taylor said, "What we don't want to do is embarrass the country or the families of those aboard Flight 93 with a memorial that is only partially funded.

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Taylor says he doesn't want Congress to promise an unrealistic amount of taxpayer money for the memorial and says he'll make sure the passengers and crew on that plane get, what he calls, a realistic and lasting tribute. But the Flight 93 family members and some congressmen from Pennsylvania told us, it's past time to get this going, and no one would be debating all this at an attacked U.S. Capitol, which was likely targeted by those hijackers, if it weren't for the people on that plane. Wolf.

BLITZER: Brian, thanks for that. Let's go up to New York, find out what's coming up right at the top of the hour. Paula standing by.

PAULA ZAHN, CNN ANCHOR: We're going to be talking about two women who were victims of terrible crimes. Spent years for waiting for justice. It may have been delayed but is no longer going to be denies. How did investigators finally get their big break.

We'll also be following up on a story about a doctor who is suspected of putting hundreds of his patients at lives at risk. Did he really give them fake exams, phony injections? Was he actually practicing without a license? Later on in our hour, Wolf, you'll meet a number of his victims and you'll hear from the man himself in an eye-opening jailhouse interview.

BLITZER: Thank you, Paula. We'll certainly be watching.

Still ahead -- your money, Iraq, and pork projects. The Senate finding some creative ways to spend your money. Jack Cafferty's taking your e-mails.

Plus, we'll get Hillary Clinton's reaction. We'll find out why she's blasting her Senate colleagues.

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BLITZER: On Capitol Hill just short while ago, the Senate refused to kill a $700 million railroad project that helped increase the cost of an emergency spending bill. Senators diverted some money President Bush requested for Iraq to effort to increase border security at the same time.

It was an attempt by Republican leaders to win support for the bill from conservatives who complained it's jam packed with pork. Democrats called the move outrageous, accusing the Republicans of short-changing the American forces.

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SEN. HILLARY CLINTON (D), NEW YORK: Now we're standing up here with a straight face saying we're going to cut their body armor funds. We're going to cut the IED research program. We're going to cut the death gratuity so we can score political points and act like all of the sudden we have become fiscally responsible. I'm sorry, Mr. President. I find that a sad commentary about what should be expected from each and every one of us.

SEN. JUDD GREGG (R), NEW HAMPSHIRE: So to come down here and allege that these funds are going to come out of the needs of the people who are on the front line in Iraq or Afghanistan is pure poppycock. To make that representation is hyperbole and waving a red flag which is totally inappropriate.

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BLITZER: Jack Cafferty's got more on this story.

CAFFERTY: They do carry on, don't they. A $106 billion emergency spending bill, it's got $14 billion in add-on. Like the project to relocate a Mississippi rail line which they refuse to kill out of the bill, farm aid, highway repairs, aid to the Gulf Coast fishing industry.

The president's threatened to veto this thing if it gets through. I wouldn't hold my breath on that. He hasn't vetoed anything in five years. The question is should funding for a railroad and fishing projects be part of the Senate's emergency spending bill for Katrina, the wars in Iraq and Afghanistan.

Angie in Palmdale, California. "Why is every time the Senate's working on an emergency spending bill of some kind, the money gets spent on non-emergency stuff."

Vick in Orange Park, Florida. "If the purpose is to help rebuild the state, the answer is yes. We need to rebuild economic opportunity for the seafood industry that was decimated by the hurricane."

Todd in Nashville, writes, "Are you kidding me? We need to keep sending money to Iraq. Don't worry about projects in America that need to get done. We need to fix Iraq first."

Marguerite in Texas. "Sure. And while they're at it, can I get some emergency funding for a fishing pole and about $500 dollars for gasoline so I can drive down to Mississippi and go fishing."

John writes from Miami, Florida, "You're question is highly complex and therefore has many answers. I don't know any of them."

That railroad thing, Wolf, they already spent $250 million to repair the railroad from the damage that was caused by Katrina. Now they want to spend another $700 million to move it. The beneficiary of the move if it happens will be the casino industry in Mississippi.

BLITZER: There may be some emergency poker games that are about to start.

(CROSSTALK)

CAFFERTY: What would we do for amusement if it wasn't for those people in Congress.

BLITZER: Jack I'll see you tomorrow here in THE SITUATION ROOM. In the meantime I'm Wolf Blitzer in Washington. Let's go up to New York. "PAULA ZAHN NOW" starts right now.

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