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THE SITUATION ROOM

President Bush Makes 11th Trip To Gulf Coast While Some Call To Abolish FEMA; Political Frenzy Over Gas Prices On Capitol Hill; Federal Judge Rejected Motion To Dismiss Indictment Against Lewis Scooter Libby; Watered-Down Lobbying Reform Bill In Limbo; CNN Poll Presents Unusual Test Of Leading Presidential Prospect In 2008

Aired April 27, 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 very much, Ali.
And 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 today's top stories.

Happening now, President Bush is on the hurricane-battered Gulf Coast again amid a new storm, this one over FEMA. Senators are now calling for the disaster relief agency to be scrapped. It's 3:00 p.m. in Mississippi. What is Mr. Bush saying about FEMA's future?

Also this hour, can Congress give consumers a break from soaring gas prices? It's 4:00 p.m. here in Washington where Senate Republicans have a new weapon in the fight over fuel: a proposed tax rebate. We'll tell you what that means.

And what's in a name? Maybe a lot if you're a senator and a presidential prospect. That would be Hillary Rodham Clinton. If she loses the Rodham, does she gain or lose support? Find out the answer in our brand new and intriguing poll.

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

Right now, President Bush is on the Gulf Coast serving as a cheerleader and chief for hurricane recovery efforts. But back here in Washington, some senators are stepping on his message with a call for some drastic action.

The Senate Homeland Security Committee says the Federal Emergency Management Agency, FEMA, has become a symbol of what it calls bumbling bureaucracy, and it should be abolished. The panel proposes creating a new emergency response organization. It would still be part of the Department of Homeland Security, but a distinct agency like the Coast Guard or the Secret Service.

Senators say the director of the new agency should have a direct line of communication with the president, and have significant experience in crisis management unlike the former FEMA chief, Michael Brown.

(BEGIN VIDEO CLIP) SEN. SUSAN COLLINS (R-ME), HOMELAND SECURITY CHMN.: FEMA is discredited, demoralized, and dysfunctional. It is beyond repair. Just tweaking the organizational chart will not solve the problem.

(END VIDEO CLIP)

BLITZER: The Homeland Security secretary, Michael Chertoff, says changes have been made at FEMA, but today he sounded open to the Senate proposal. Listen.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Clearly, we have a circumstance now where the name FEMA has made its way into Jay Leno or David Letterman, and if at the end of the day slapping a fresh coat of paint on makes people feel we've, you know, done something different, I don't know that I'm going to march up San Juan Hill to fight that.

(END VIDEO CLIP)

BLITZER: What did Michael Brown have to say about the call to abolish FEMA? The agency's former director will be our guest here in THE SITUATION ROOM in the next hour.

Now to President Bush and his trip to the Gulf Coast that's happening right now. His first stop was New Orleans, where he visited with volunteers helping to rebuild hard hit areas.

Our White House correspondent Ed Henry is in New Orleans. First of all, Ed, any reaction from the president to this proposal to abolish FEMA?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Wolf, the president has not commented yet, but his staff is shooting this idea down hard, saying that one month before the start of hurricane season again is no time to be reshuffling bureaucratic boxes.

In fact, this is the president's 11th trip to the Gulf region since Hurricane Katrina, and he really found the Ninth Ward in New Orleans to be pretty much devastated, homes still demolished, trash piled high, streets still pretty lifeless. And the president put on a carpenter's apron at one point to try to help some volunteers rebuild a home. And he had this message for some residents still shell- shocked by Katrina.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Had a good visit with the governor and the mayor, as well. One of the things we're working on is to make sure that we've learned the lessons from Katrina, we've learned lessons at the federal level, at the state level and at the local level. And we're now working closely together in preparation of the upcoming hurricane season.

(END VIDEO CLIP) HENRY: Message? I care, but that message, obviously, was stepped on by this blistering bipartisan Senate report saying, in fact, the federal government is woefully unprepared for another disaster and that FEMA, as you noted, should be abolished.

The White House homeland security adviser Fran Townsend is pushing back against that proposal hard. Take a listen. She is traveling with the president. Take a listen to what she had to say.

(BEGIN VIDEO CLIP)

FRAN TOWNSEND, W.H. HOMELAND SECURITY ADVISER: We have strengthened FEMA so it has the greatest capability to serve the American people in their greatest time of need. We all agree on that. We have already begun our work to do that with a whole number of measures.

(END VIDEO CLIP)

HENRY: Now, the president is now in Biloxi, Mississippi, meeting with more volunteers from Hands on Gulf Coast. They've put in some 270,000 hours trying to, in fact, help the residents down here, Wolf.

BLITZER: You know, it seems the president can't cut a break on a lot of these issues. Today he's trying to promote the recovery effort in the Gulf Coast. All of a sudden this Senate panel comes up with this proposal led by a Republican chairman, Susan Collins of Maine, to abolish FEMA.

Are White House officials pointing out that on almost any day he tries to have a message of the day, someone is stepping on it? Yesterday Karl Rove's going before a grand jury clearly stepped on the Tony Snow announcement as press secretary.

HENRY: That's right. The White House advisers realize that, you know, when you take a look at what happened over the weekend, Iraqis finally forming their own government, some good news. That stepped on all week by these high gas prices here at home.

As you mentioned, yesterday Tony Snow, conservatives looking at that thinking the message is going to get out better now. That stepped on by Karl Rove's fifth grand jury appearance.

And then today the president trying to show that while the job is not done, progress is being made. He's trying to pitch in a little bit himself. That stepped on by the Senate report. Bottom line, this White House can't catch a break even when they have some good news to promote, Wolf.

BLITZER: Thanks, Ed, on the Gulf Coast for us.

Let's move over to America's pain at the pump right now. The Federal Reserve chairman, Ben Bernanke, is warning today that record high oil and gas prices could cool the economy and pump up inflation. Listen to what he said.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Higher oil prices do create problems for monetary policy. On the one hand, they directly affect the cost of living, inflation. On the other hand, by taking purchasing power away from consumers, they tend to slow economic activity and so it does produce a difficult problem.

(END VIDEO CLIP)

BLITZER: Bernanke spoke today on Capitol Hill where there's a new plan in the hopper to try to help consumers cope with soaring fuel costs. Republican senators are now offering up an amendment to give every American taxpayer a $100 rebate check.

Our Congressional correspondent Dana Bash is following all the political frenzy over gas prices. I think it's fair to say a lot of frenzy up on the Hill today, right, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Absolutely right, Wolf. No one wants to be caught this election year without some idea on how to address sky high gas prices. It's almost as if you can't turn a corner in the halls of the Capitol without hearing somebody talking about the issue or pitching a proposal.

(BEGIN VIDEOTAPE)

BASH (voice-over): From this committee room with the Fed chairman ...

REP. JIM SAXTON (R-NJ), JOINT ECONOMIC CMTE.: How does the oil price increase affect your outlook on the economy?

BASH: ... to this one on the other side of the Capitol ...

REP. BOB GOODLATTE (R), VIRGINIA: Have either of you found any evidence of manipulation in the trading of gasoline or oil contracts?

BASH: ... to the Senate floor.

SEN. JOHN THUNE (R), SOUTH DAKOTA: I want to introduce legislation called the Gas Price Reduction Act of 2006.

BASH: The dizzying frenzy to speak out on sky high gas prices drove House Republicans to show up at their has station press conference in a hydrogen mini van. The speaker parked his SUV in back.

REP. DENNIS HASTERT (R-IL), HOUSE SPEAKER: We're 65 percent dependent on foreign oil from places like Saudi Arabia, Iraq, Iran, Nigeria and Venezuela. Whenever they decide to turn the spigot or raise the prices, our consumers suffer.

BASH: Senate Republicans walked to a park where their microphones were set up. The leader's SUV, needed for security, rode next to him.

SEN. PETE DOMENICI (R-NM), ENERGY CHAIRMAN: We'll get consumers relief at the pump.

BASH: Lawmakers on both sides of the aisle are in overdrive to come up with proposals showing voters this election year they feel their pain at the pump. After Democrats proposed suspending a gas tax they say would save consumers $100 million a day, Senate Republicans scrambled to unveil a multi-part plan which would put money back in people's wallets.

DOMENICI: We are going to ease their burden, the burden of those families who are hit so hard, by giving them $100 rebate to help offset the very steep gas prices.

(END VIDEOTAPE)

BASH: But that particular proposal is linked to allowing drilling in the Alaskan Refuge -- Alaskan Wildlife. That is something that Democrats, most of them at least, very much propose -- oppose, I should say, which leads us to a little bit of a reality check.

On the one hand, it is probably unlikely given the partisanship both sides agree that they will actually pass any of these proposals this election year. It's very unlikely, most people say.

And secondly, even if they do, Democrats and Republicans say the reality is that they are unlikely to actually effect the immediate concern of consumers which is the high gas prices right now.

BLITZER: Dana, I just want to be precise. That $100 proposed rebate, that only goes to people who file federal income tax and pay federal income tax. It doesn't really go to the poorest of the poor who don't necessarily have to pay federal income tax. Is that right?

BASH: I believe that's right. What the Republicans were trying to do is answer the Democrats who were proposing giving a gas tax holiday. So what the Republicans' idea is not to just give a tax rebate, if you will, but to try to get that money right back into the pocket of consumers -- tax-paying consumers.

BLITZER: Dana, thank you for that. And Dana is on the Hill.

President Bush is expected to discuss energy concerns and alternative fuels with the leaders of the big three automakers next month. Today industry officials say they'll meet with Mr. Bush at the White House. It will be the first joint meeting with the president during his administration.

I want to thank Dana Bash and Ed Henry, part of the best political team on television. CNN, America's campaign headquarters.

Zain Verjee is joining us now from the CNN Center in Atlanta with a closer look at some other stories making news -- Zain.

ZAIN VERJEE, CNN ANCHOR: Wolf, this police action cost over half a million dollars, but the government says its benefit to the community is invaluable. Over 9,000 people who long escaped justice have now been caught. It was a part of a nationwide campaign called Operation Falcon II, led by the U.S. Marshal Service. But the 9,000 arrested officials say they took some 1,100 sex offenders off the streets.

Near five years after the World Trade Center was knocked down in the 9/11 attacks, construction on a replacement building begins. Work on the Freedom Tower began at Ground Zero today, this after the owner of the site and the site's developer reached a deal concerning who will get what. The tower is expected to be completed in 2011.

In Bulgaria today, Secretary of State Condoleezza Rice said the world cannot sit by if Iran thumbs its nose at the international community. Rice says Iran is highly unlikely to give into international pressure to suspend its nuclear program. Rice's comments come one day before a United Nations deadline for Iran to stop enriching uranium. Today Iran's president Mahmoud Ahmadinejad says his country will keep up its uranium enrichment, regardless of outside pressure.

And in Iraq, a top U.S. military official called the recent appearance of Abu Musab al Zarqawi in a Web video "an act of desperation." Major General Rick Lynch says the military believes that al Zarqawi is living out his final hours. Meanwhile, the new Iraqi vice president's sister is dead. The sister of Tariq al Hashemi was gunned down in southwest Baghdad today, along with her driver. Just two weeks ago, the Iraqi vice president's brother was gunned down in central Baghdad.

BLITZER: This is horrible, Zain. They're going after relatives of Sunni leaders who are working with this new proposed government, working with the U.S. It's really an awful situation indeed. The brother first, now the sister. These people are really, really bad.

Let's go up to Jack Cafferty in New York. Have you been following, Jack, what is going on in Iraq right now?

JACK CAFFERTY, CNN ANCHOR: Yes, but it's all the news media's fault, right, Wolf?

BLITZER: No, it's not. There's bad people trying to kill totally innocent....

CAFFERTY: Absolutely. No, it's horrible. The insurgency is horrible. There is nothing that I'm too optimistic about that I see going on over there. But the administration thinks the media is not reporting all the good news. Give me a break.

Discredited, demoralized and dysfunctional, and a symbol of bumbling bureaucracy. Those are the words after Republican. The chairwoman of a Senate Homeland Security and Governmental Affairs Committee had that to say about FEMA today. Senator Susan Collins says the agency is beyond repair and that it should be abolished and replaced with a new organization together. The White House understandably doesn't like that idea very much, nor does the Department of Homeland Security.

But what that this all boils downs to is this: nearly five years after 9/11 and about five weeks before the start of the next hurricane season, your government is still trying to figure out how to protect this country from another hurricane, terror attack, you name it. How safe does that make you feel?

Here's the question. Should FEMA be scrapped and replaced with a new organization? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile.

You know, you were talking earlier, Wolf, about the administration being upstaged every time they have a good piece of news by some other event. It occurred to me that they created a lot of the things that are upstaging the administration. The Tony Snow thing was overshadowed by Karl Rove being called before a grand jury. That has to do with leaking the name somewhere in the administration of Valerie Plame's name.

The same thing today. They -- you know, down there doing a photo op in New Orleans, and we got people in Washington who recognize that the agencies created to protect this country are dysfunctional and not working. So they're kind of being hoisted on their own petard a little bit.

BLITZER: Jack, thanks for that. We're going to get back to you very soon.

Coming up, a threat by a top senator today to cut off funding for the controversial NSA domestic spying program. The details coming up next.

Plus, there's been a major ruling in the CIA leak case. We'll tell you what it means for Scooter Libby, the former Cheney chief of staff, for Karl Rove. All of that. That's coming up.

And later, if Hillary Clinton runs for the White House, will her negatives outweigh her positives. We've got some brand new poll numbers that are out this hour, and we're going to share them with you. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

A new threat today aimed at the president's secret domestic wiretap program. The Senate Judiciary Committee Chairman Arlen Specter, a Republican from Pennsylvania, says he's considering legislation right now to cut off all funding for the program. Just a short time ago, Senator Specter complained he's not getting satisfactory answers from the White House about the wiretaps, and he's frustrated.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (R-PA), JUDICIARY CHAIRMAN: The effort by the administration to justify the electronic surveillance under the resolution authorizing the use of force, which was passed on September 14th of 2001, is totally, totally without merit.

(END VIDEO CLIP)

BLITZER: Senator Specter says he's warned President Bush about a possible bill to cut off funding for the NSA wiretaps, and he says he already has several potential co-sponsors for the measure. We'll watch this story, get more information as it becomes available.

Meanwhile, there's been a new ruling today in the CIA leak case. A federal judge rejects a motion to dismiss the indictment against former Cheney chief of staff Lewis Scooter Libby.

Our chief national correspondent John King has been following the story. He's joining us now in "THE SITUATION ROOM" with some thoughts on the ruling, the impact. What is the significance of what happened today?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, the significance is the trial goes on, the trial is scheduled for January. It's no surprise here, but as any defendant would do, Scooter Libby's defense team is trying to challenge the indictment just about any way it can. And one of its arguments was that special prosecutor Patrick Fitzgerald was improperly appointed; therefore he does not have the authority to investigate this case or bring indictments.

But the federal judge in the case, Reggie Walton, disagreed today. If you'll remember back, Attorney General John Ashcroft was in charge of the Justice Department at the time. He recused himself because this involved White House officials' conduct, and the U.S. attorney in Chicago appointed his deputy, Mr. Fitzgerald, to take over this investigation. The Libby team had said that was unconstitutional, they didn't properly report it to Congress. But the judge said sorry, he believes Mr. Fitzgerald has the authority.

So the trial goes. Not a surprise, but it does show you how aggressive the Libby defense team is being. They are challenging the indictment, they are demanding access to the most sensitive intelligence documents in the United States government, issuing subpoenas to news organizations, hauling in reporters, they threatened to do for testimony. So they are being incredibly aggressive. And remember, Wolf, the trial is still eight months away. So a lot of back and forth over the spring, summer and fall.

BLITZER: Not supposed to start until January. So chalk this one up as a victory for Patrick Fitzgerald, a defeat for Scooter Libby and his team.

Yesterday Karl Rove testified for a fifth time before this grand jury. About three hours he was inside that courthouse. What's the mood -- what are you hearing from White House sources and other sources on what may have happened?

KING: Well there's sort of a split opinion, if you will. Publicly Karl Rove has been quite optimistic including today when he arrived and talked to his staff. But behind the scenes, some people view this as quite ominous. Other people who have been subjects of this investigation, witnesses before the grand jury, have had their own conduct looked into by the special counsel. When they have been essentially cleared, some have had to meet with him to tie up some loose ends.

They have done that in person, usually at their lawyer's office. Karl Rove's attorneys hoped that that's where they were at this stage of the investigation. They had hoped to answer any remaining questions Mr. Fitzgerald had and then move on and hopefully get from him a clean bill of health.

But Mr. Fitzgerald said I will answer my questions before the grand jury. If you will answer them, you must come before the grand jury. Many people view that as an ominous sign. I will say though, Karl Rove has told his staff, "Look ahead, be optimistic, get about the business."

One of their most urgent priorities now is moving. He lost his office in the White House staff shake-up. He's moving across the hall. They have to move the computers, move the desks, move the staff and all that. But he's also said, "Book me an aggressive fundraising schedule for Republicans and start reaching out to candidates who might need some advice. Let me meet with them, try to help them." So he says let's do our job, this will be OK. But behind the scenes, people are a little bit nervous about this.

BLITZER: Maybe they'll make him available for some T.V. appearances, as well. That would be -- we'd be happy to book him here in THE SITUATION ROOM.

KING: That request is in.

BLITZER: John, thanks very much.

Coming up, the political fall-out from soaring gas prices. Will angry drivers have the last word come November?

Plus a Senate report calls for an overhaul of FEMA. Is this another headache for the White House already suffering from many migraines as we by now all know?

And it's all part of our "Strategy Session." Paul Begala and Bay Buchanan, they are standing by live to join us. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Today in our "Strategy Session," both political parties are rushing to address rising prices at the pump. Will angry drivers be the deciding factor in the November elections? Joining us now are our CNN political analysts, Democratic strategist Paul Begala and Bay Buchanan, the president of American Cause.

Look at this "Wall Street Journal"/NBC poll that came out last night. Among the greatest concerns of the American public, what's number one with 45 percent? Gas at $3 a gallon. What's number two? Iran building nuclear weapons. Number three? Illegal immigration. Four, the civil disorder in Iraq.

What does that say, Paul Begala, to you.

PAUL BEGALA, DEMOCRATIC STRATEGIST: It's not a very good agenda for the Republicans to run on. They control the House, they control the Senate, they control the White House. And I think the Democrats will be able to go around the country and say, "Look, we can do better, certainly on energy."

Gas was about $1.46 a gallon when President Bush took office. He and Dick Cheney were -- one was a successful oil men, one was a flop, but they both came from the oil industry. And today gas is three bucks a gallon after the Republicans gave the energy companies $14 billion in tax breaks.

BLITZER: Let me interrupt you for a second because I want Bay to come in. During the eight clears of the Clinton administration when gas was relatively cheap and the price per barrel was relatively cheap, I didn't see any major changes in reducing dependency during the eight years of the Clinton administration.

BEGALA: Well we did a couple of things. First off, there was an itty-bitty gas tax of 4.3 pennies which the Republicans screamed and yelled about, which every -- you know, gas tax at least goes to the government of the United States, not to the government of Saudi Arabia.

But also there was a great progress on the partnership for new generation vehicle which was alternative fuel for cars. There was a lot of research done at the Department of Energy that should have been continued. What happened is the Bush administration came in and cut out everything that didn't go straight to ExxonMobil.

BLITZER: But the other point I was saying that when you took office, the Clinton administration -- the dependency was less after it was eight years just as it is higher at 60 percent foreign oil right now. But Bay, I want you to weigh in as well.

BAY BUCHANAN, PRESIDENT, AMERICAN CAUSE: The taxes that Paul was just referring to that happened end of last year, the Democrats and Republicans was overwhelming support for those tax incentives. And the tax incentives have nothing to do with what's happening right now.

In six months, you don't have all of the sudden have this windfall because a tax break that happened six months ago. Those taxes, the purpose of which is to give the oil companies a reason to further investigate and research and so that we can become less dependent on oil. And now to suggest as the parties are that we should throw them out the window when both of us agreed that we should have them six months ago is panic.

BLITZER: But that $100 tax rebate for tax payers is linked to opening up the Alaskan National Wildlife Refuge. And critics will say, "You know what? This is a payoff to the American public. Let us go drill in Alaska and you can get a hundred dollars." BUCHANAN: Exactly, Wolf, first of all, this idea of people getting $100 to help us out is ridiculous. I mean, they're talking about giving a $100 rebate. It's absurd. I mean, $100, what's that going to do? It will help me in two weeks. What am I going to do after three? I mean, this is a problem we're going to be facing for month.

It's time that we -- I think if you are real leaders, you say to the American people, "Look, this is a real problem. It's not going away, we cannot bring prices down overnight. It's been -- many, many things have gone into it. And Republicans and Democrats are both at fault, but we're going to address it in the long run. In the short run, you're going to have to live with high prices."

BLITZER: Here is what the Senate majority leader Bill Frist said today. Listen to this.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: Americans today are unfairly being asked to empty their wallets at the gas pump. Today, yesterday, and tomorrow and there's no end in sight. And thus Republicans come forward with a bold agenda that looks at supply, demand, alternative sources to make sure that the markets are working boldly, are working fairly and working transparently.

(END VIDEO CLIP)

BLITZER: What do you think of this Republican proposal to give every tax-paying American $100 to help deal with the increased cost of gas?

BEGALA: It shows you what the Republicans think you're worth, America. They think Lee Raymond, the CEO of Exxon, is worth $600 million, $13,700 an hour. That's what Lee Raymond made while he was at Exxon. But you and I are worth $100.

The oil companies are worth $14 billion of our money. Oil is at $70 a barrel. They don't need $14 billion of our money as an incentive to drill. What the Democrats are proposing is taking on big oil by recapturing windfall profits. Anything over $50 a barrel, which is an awfully high price, would be recaptured by the American people and invested in alternative fuels so we could finally stand up to Exxon and Mobil in the Saudis and be independent again.

(CROSSTALK)

BUCHANAN: You're suggesting, Paul, here that it's the Republicans somehow have picked and chosen the salaries of the executives for oil companies, which is ridiculous. These are independent companies. They make their own decisions. Their board decides those wages.

(CROSSTALK)

BEGALA: But it is obscene politically, and we should recapture that with taxes, right?

BUCHANAN: I agree.

(CROSSTALK)

BUCHANAN: But this -- we are a capitalist society. And they make money. That's called profits.

BEGALA: That's right.

BUCHANAN: And if you -- we give them incentives, so that they will continue to research and come up with these alternative ideas.

BEGALA: But then that's no longer capitalism. That's the government getting involved. That's not free enterprise.

BEGALA: The government is giving tax incentives to the...

BUCHANAN: And it's one that the Democrats supported.

BEGALA: No, they didn't, Bay. That's just not true. The Democrats opposed...

BUCHANAN: It passed overwhelmingly.

BEGALA: The Democrats opposed that giveaway to big oil. And they opposed the energy bill entirely, because of the giveaways to big oil. It's just that's where my party was, and my party was right.

(CROSSTALK)

BEGALA: And I love the see the Republicans run around now and pretend they are going to take on big oil.

BLITZER: Let's talk a little bit about this Katrina proposal from the Senate Homeland Security Committee, Susan Collins, the chairman, and the ranking Democrat, Senator Lieberman.

Let's listen to what Lieberman said about abolishing FEMA as we know it.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: President Bush won our admiration and our gratitude for the way he took charge, responding to the attacks against America of September 11.

In the case of Hurricane Katrina, he failed to provide that same presidential leadership, when it was needed, and America suffered.

(END VIDEO CLIP)

BLITZER: It seems this administration, as I said earlier, can't cut a break. On any day they try to do something, they are going to be undermined by other developments, including today. BUCHANAN: Well, there's no question. I believe that Katrina is -- has worn its welcome. I mean, and I think we have heard about it. We have heard about it. The American people have responded. The president suffered. It weakened his poll numbers. And -- but to suggest that somehow this is going to continue to play against him, I think the American people are getting a little tired of it, myself.

BLITZER: What do you think?

BEGALA: Well, Susan Collins and Joe Lieberman are the bipartisan geniuses who first took FEMA, the emergency management agency, out of its Cabinet-level status that Bill Clinton gave it, lost it into the middle of this vast bureaucracy, which is part of the reason it couldn't respond.

So, today, Collins and Lieberman want to change the name from FEMA to -- get this -- the National Preparedness and Response Authority. So, they are just going to move some alphabet letters around.

BUCHANAN: It's...

BEGALA: It's D-U-M-B.

What they ought to do is what Bill Clinton did, kick the political hacks out, who Mr. Bush has put in, put competent leaders in there, and show that the government actually can step in. I mean, I was there when Clinton was in office. In '93, there were floods in the Midwest. FEMA responded. In '94, there was a Northridge earthquake in California. FEMA responded. In '95, Oklahoma City.

(CROSSTALK)

BEGALA: In '99, Hurricane ...

(CROSSTALK)

BLITZER: Ten seconds, then we got to go.

BUCHANAN: This suggestion by the Senate that we somehow get rid of FEMA as it is, and make a bigger, better bureaucracy is so ludicrous.

The one that we are -- is there now, Homeland Security, was created by the Congress. And it has failed. It is inefficient. It is huge. And we should not make it -- we should tighten it and make it smaller, and start working with the outside to resolve these problems...

BLITZER: Bay and Paul...

BUCHANAN: ... emergency problems.

BLITZER: ... are part of the best political team on television.

(LAUGHTER) BLITZER: Thanks to both of you for joining us -- CNN, America's campaign headquarters.

The Senate Homeland Security Committee is methodically trying to make its case against FEMA online as well.

Our Internet reporter, Jacki Schechner, is standing by with more on that -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, heated testimony from former FEMA Director Michael Brown, this is part of the vast amount of information that went into the report released today. And it's all available online.

You can go to the Web site of the Senate Committee on Homeland Security and Governmental Affairs. We're talking 22 hearings, more than 300 people interviewed, so, 800,000 documents that you can sift through. Some of the hot-button topics that are online: the levee breaches that we all know about, Hurricane Pam, which was a 2004 simulation that said that a Category 3 hurricane would do devastating effect to New Orleans.

You can also take a look at all of the stuff online at CNN.com/SITUATIONREPORT. We put the links up there for you, including links to today's summaries -- Wolf.

BLITZER: Jacki, thanks.

And what does Michael Brown have to say about the call to abolish FEMA? The agency's former director will be our guest here in THE SITUATION ROOM in the next hour. You will want to stick around for that.

Coming up, will Congress clean up its ethics problems? And, if not, will voters make them pay? We're going to ask our Candy Crowley. She is sanding by.

And, later, he's one of the early Republican favorites in the next race for the White House, but how do voters really feel about John McCain? We have got some new poll numbers out this hour. And we're going to share them with you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On Capitol Hill right now, a watered-down lobbying reform bill is in limbo. Some conservative Republicans agree with Democrats that the measure doesn't do enough to control spending by special interests. Once it became clear they didn't have enough votes within their own party to get it passed, GOP leaders abruptly yanked the measure from the floor today. Listen to this.

(BEGIN VIDEO CLIP)

REP. DAVID DREIER (R), CALIFORNIA: This bill is a vast improvement over the status quo. Mr. Speaker, today, members of the House can show that our desires for meaningful reform and for upholding the integrity of Congress are stronger than partisan divisions and political calculations.

REP. LOUISE SLAUGHTER (D), NEW YORK: This legislation is a sham. It won't do anything to reduce influence-peddling in Washington or to purge this body of the corruption that has infected it so deeply.

(END VIDEO CLIP)

BLITZER: Our senior political correspondent, Candy Crowley, is here in THE SITUATION ROOM to explain some of the political factors at play.

This is a hot-button issue, but it doesn't seem to be going anywhere right now.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It doesn't.

Interesting article in "The Washington Post" this morning, saying that, you know, a number of Republicans went home and realized that it -- it just wasn't out there. It was nowhere in the groundwater. People weren't saying, you guys have got to get lobbying reform.

So, Republicans came back with less fervor for lobbying reform, perhaps, than they had before. Having said that, this has very little to do with the Democratic criticism of the bill, which is that it is too weak and it doesn't do anything. This has to do with internal Republican caucus matters.

They simply didn't have the votes. Now, they are back on the floor. They are in fact, discussing the rule. And they are going to vote on the rule, which, as you know, is the preliminary vote to getting to the bill. But we are still hearing -- Deidre Walsh, our producer up on Capitol Hill,, and sources I have talked to and sources she has talked to, both say there's just not enough votes to pass this.

So, they are going to have to go back to the drawing board, it now looks like.

BLITZER: It was such a big issue, the ethics scandal, the whole lobbying reform momentum after the Jack Abramoff business, and -- and all of the other -- Randy "Duke" Cunningham, the congressman who was forced to resign, pleaded guilty. Is it likely that this issue is going to have legs, as they say, in November?

CROWLEY: You know, I was -- we looked back to see what had happened since Jack Abramoff pled guilty to, among other things, to, you know, trying to bribe members of Congress: Dubai Ports, immigration, Iran and the nuclear problem, gas prices, and the Iraq war. So, it is something that people do think about.

You know, if you ask them, as "The Washington Post" did -- take a look at some of the figures we got in their recent April poll, that said, you know, is this important to you, corruption in Washington? About one in seven say, it's one of the most important things when I go to cast a vote. So, it's up there, but it tends to kind of take a back seat. If you ask people, "Are you interested in getting corruption out of Washington?" they say sure. But other things tend to come up. It adds to the overall atmospherics right now, which is running very much against the Republicans.

BLITZER: Candy, thanks for that.

This footnote: The House Democrat who oversees the party's fight to try to regain control of the House of Representatives is having some fun today with the issue of lobbying reform, at the Republicans' expense. On the House floor, the Illinois Democratic Congressman Rahm Emanuel read a spoof of the famous sonnet "How Do I Love Thee?"

Take a listen.

(BEGIN VIDEO CLIP)

REP. RAHM EMANUEL (D), ILLINOIS: Dear lobbyists, how do I love thee? Let me count the ways.

I love thee to the depth of thy oil wells, four thou shall have $14.5 billion to drill them. I love thee to the heights of thy drug profits, for the Medicare bill gives you $139 billion in profits. I love thee for thy golf courses, private jets, and retirement jobs. I love thee for thy donations, libations, and vacations.

(END VIDEO CLIP)

BLITZER: Rahm Emanuel having some fund at the Republicans' expense.

Coming up, should Senator Clinton run for president of the United States under the name Hillary Clinton or under the name Hillary Rodham Clinton? Which version of her name makes Hillary Clinton more of a political powerhouse? Guess what? We asked that question. We have a new poll. It has the answer.

Stay with us for that.

And this important note: George Clooney brings his star power to Washington. We're going to tell you why he is here. We're going to tell you also that he will be in THE SITUATION ROOM with me tomorrow -- George Clooney in THE SITUATION ROOM.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Right now, we have an all new CNN poll that presents an unusual test of a leading presidential prospect in 2008. That would be Senator Hillary Clinton, or, should we say, Senator Hillary Rodham Clinton. Let's bring in our senior political analyst, Bill Schneider, who is already smiling. He hasn't even started to tell us about the results of this poll -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: What's in a name, Shakespeare asked? Well, we have the answer. Plenty.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): During her first years of marriage, Hillary Rodham kept her maiden name.

Then, after one term as governor of Arkansas, Bill Clinton lost his bid for reelection. When he ran again, two years later, his wife became Hillary Rodham Clinton. And he won. Now she is Senator Hillary Clinton. Or is it Senator Hillary Rodham Clinton?

Nationwide, in the latest CNN poll taken by Opinion Research Corporation, Hillary Rodham Clinton gets a slightly higher favorability rating than Hillary Clinton, 50, as compared to 46 percent favorable.

It makes a big difference what part of the country people are from. Among Southerners, Hillary Clinton is more positively regarded, married name only. Outside the South, people definitely prefer Hillary Rodham Clinton. If you combine responses to both names across the country, the public's view of Senator Clinton is closely divided, 48 percent favorable, 43 percent unfavorable.

Compare that with the public's view of a Republican front-runner, Senator John McCain. McCain gets about the same favorable rating as Clinton, but he has lower negatives. Senator Clinton has been making an effort to establish her bipartisan credentials...

SEN. HILLARY CLINTON (D), NEW YORK: It's also true that I have worked with Newt Gingrich, and it makes strange bedfellows.

SCHNEIDER: ... while Senator McCain has been asserting his credentials as a staunch Bush supporter.

SEN. JOHN MCCAIN (R), ARIZONA: Anybody who says that the president of the United States is lying about weapons of mass destruction is lying.

SCHNEIDER: But the old images persist. Clinton still divides Americans by party, 76 percent favorable among Democrats, 20 percent favorable among Republicans. McCain still has the image of an independent and a maverick. He has a rare nonpartisan image in this highly partisan era.

(END VIDEOTAPE)

SCHNEIDER: That may be an advantage for McCain. But there would be other factors at work, if the two were to face each other in 2008, like the desire for change. Right now, President Bush has a very negative image, 57 to 40 percent unfavorable. And former President Bill Clinton, just about the reverse, 57 to 38 favorable. There may be some nostalgia out there for the good times under the Bill Clinton era -- Wolf.

BLITZER: I love that poll. Thanks for doing it, Bill.

Bill Schneider is our senior political analyst.

Another note here in Washington: A major Hollywood star is on our "Political Radar" this Thursday, the actor, the director, the Oscar winner George Clooney, here in the nation's capital, after visiting the region near Darfur in the Sudan. He was in neighboring Chad, as well as in Sudan. He's trying to use his celebrity status to focus attention on what he calls the first genocide of this century.

Clooney was joined by two U.S. senators, Republican Sam Brownback and Democrat Barack Obama. Even while discussing an extremely serious subject, Clooney poked some fun at Hollywood and at Washington.

(BEGIN VIDEO CLIP)

GEORGE CLOONEY, ACTOR: In a tradition of Hollywood, you will all be getting gift baskets...

(LAUGHTER)

CLOONEY: ... with signed autographs, Senator Obama and Senator Brownback and myself. And we threw in some signed photos of Scott McClellan, too. They were piled up outside.

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: Clooney had a lot to say about his visit to Sudan and the crisis there. And he's not shy about weighing in on American politics. I sat down with him today. We're going to bring you that interview tomorrow, right here in THE SITUATION ROOM -- George Clooney on the genocide that is happening in Sudan.

Up next, should FEMA be scrapped, as some U.S. senators are now urging? Jack Cafferty will be back with more on the storm after Katrina and your e-mail.

And what is driving up gas prices? Many consumers are pointing toward the oil industry. Now one company is opening its books and revealing its profits. We're going to show you the bottom line.

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

(COMMERCIAL BREAK)

BLITZER: There he is, Jack Cafferty, smiling already. I can only imagine what our viewers are telling you in their e-mail.

CAFFERTY: You know, I don't get to be in the wall very often. That's a -- is that a -- like a promotion?

BLITZER: It is. It's a sign of strength.

CAFFERTY: I'm deeply honored.

Five weeks before the new hurricane season starts, and a Senate committee has concluded, FEMA is beyond repair and should be abolished and replaced with a new organization. So, that's the question. Should we scrap FEMA and start over with something else?

Marion in Parkersburg, West Virginia: "FEMA worked just fine during previous administrations, when it was an independent agency headed by professionals. Remove it from the Homeland Security Department. Fire the political appointees. Bring back the professionals at all levels who were driven out or left in disgust, and restore the agency to an independent, Cabinet-level status, as it was before the Bush administration turned it into a low-priority political patronage organization."

Michael in Richmond, Virginia: "Scrapping FEMA for a new organization would be silly. Everyone let go from FEMA when it's scrapped would be rehired in the new organization, and we would be right back where we started."

Lee writes from Los Angeles: "I was in Hurricane Iniki on the island of Kauai. The next morning, FEMA was in the streets with waters and supplies for everyone. A nuclear submarine surfaced in the bay, supplied electricity to the hospital, War Memorial Convention Center and the county seat. By afternoon, the National Guard was in place and we all had somewhere to go to eat and find relief. The only difference was, this administration wasn't in office. I want that FEMA back."

Jack in Cibolo, Texas: "Why would we scrap FEMA, when they so efficiently and expediently moved thousands of trailers into a state where they were not needed?"

And Joy in Verona, New Jersey: "How could we, ordinary citizens, know if FEMA should be scrapped? We only know what you tell us, and you are totally biased. Lighten up, Jim."

The name is Jack, Joy.

(LAUGHTER)

CAFFERTY: Verona is just down the street from my house.

BLITZER: You could call Joy, you know, Jane, or something like that.

CAFFERTY: Yes.

BLITZER: All right, thanks.

CAFFERTY: That's all I got.

BLITZER: Thanks, Jim.

(LAUGHTER)

(CROSSTALK)

BLITZER: Still to come, the man who helped give FEMA a bad name responds to a new call to scrap the agency. That would be Michael Brown. He's standing by to join us live here in THE SITUATION ROOM.

Also, the rap star Snoop Dogg, guess what? Arrested. We're going to tell you where and why.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Zain at the CNN Global Headquarters for a quick look at some other stories making news -- Zain.

VERJEE: Wolf, in Ohio, a man goes on an apparent rampage at Cleveland's Hopkins International Airport. Police say the man attacked two police officers, shooting one of them in the chest with the officer's own weapon.

A third officer shot the assailant, killing him. The injured officer is in the hospital in critical condition, but is said to be awake and alert.

He's long called himself a gangster rapper. Now the rapper known as Snoop Dogg is adding to his rap sheet. The musician, whose real name is Calvin Broadus, was arrested last night at London's Heathrow Airport. The rapper and his entourage were refused entry into the airport's first-class lounge. They allegedly then moved to a duty- free shop, where they threw bottles of whiskey and argued with staff.

Al-Jazeera's bureau in Egypt has been detained. The employee of the Arabic-language network had been covering the aftermath of Monday's bombing of Dahab. Egypt's prime minister says Al-Jazeera broadcast an unfounded rumor that there was an additional explosion near Cairo after the attack in Dahab. The Egyptian prime minister says that was not true, yet the rumor stilled caused panic and it caused Egypt's stock market to dip. Al-Jazeera is outraged at the arrest of its bureau chief -- Wolf.

BLITZER: Zain, thanks.

Would the U.S. be better off if someone other than Ben Bernanke was heading up the Federal Reserve? A group of Columbia University Business School students is having fun with that very idea.

Abbi Tatton has got more -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this is the day last year when President Bush announced his new pick for the Federal Reserve. And, according to a new video online, this man, R. Glenn Hubbard, was not happy, the dean of the Columbia Business School and a rival candidate.

Take a listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (singing): Every single day, Bernanke takes my pay.

(END VIDEO CLIP)

TATTON: That's a look-alike portraying an envious Hubbard, cursing Bernanke.

(LAUGHTER)

TATTON: This is a spoof by a Columbia student group. They took The Police's "Every Breath You Take" and replaced it with their own lyrics, as only Columbia Business School graduate students could do. "While we still stagflate, I will be watching you" is one of the lines.

The students behind the video said this was all in good fun. Columbia Business School says that Hubbard loved it -- Wolf.

BLITZER: Great song, got to say that.

Thanks very much, Abbi.

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