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THE SITUATION ROOM

President Bush Not Saying When U.S. Troops Will Leave Iraq; U.S. Military Identifies al-Zarqawi's Successor in Iraq; Pressure Building for Condoleezza Rice Presidential Bid; President's Personal Assistant Leaves; Cher Works to Support U.S. Troops

Aired June 14, 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: Thanks very much, Kitty. 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, a security crackdown in Iraq and a political offensive here at home.
It's 7:00 p.m. in Washington where President Bush is back from Baghdad and touting progress in Iraq. We'll get a reality check. This hour more high level views of the Iraq vision. President Bush's National Security Adviser Stephen Hadley weighs in on the prospects for a troop pullout and the house minority leader Nancy Pelosi answers some tough questions about a serious democratic split over Iraq. And a surprising new ally for U.S. troops, Cher. The ageless pop icon comes to Washington on a mission. We'll tell you what she's fighting for. I'm Wolf Blitzer you're in THE SITUATION ROOM.

There are major anti-terror operations under way right now on two fronts. Iraqi and U.S. forces have launched a security crackdown in and around Baghdad. Tens of thousands of troops and police are manning checkpoints, searching for weapons and enforcing a curfew. In eastern Afghanistan coalition forces battled militants on the eve of the U.S. led offensive against the Taliban. The biggest such push since the Taliban were toppled almost five years ago.

Back from his surprise trip to Baghdad, President Bush today said steady progress is being made in Iraq. But despite calls to bring U.S. troops home, Mr. Bush made clear that won't happen until Iraq can take care of its own security.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our policy is stand up stand down. As the Iraqis stand up, we'll stand down. But if we stand down too soon, it won't enable us to achieve our objectives. We will support this Iraqi government, that's what I went to tell them. We'll do what it takes to support them. And part of that support is the presence of coalition forces.

(END OF VIDEO CLIP)

BLITZER: New evidence tonight of at least a tiny little baby bounce for the president. A new NBC Wall Street Journal poll taken since the death of Abu Musab Al Zarqawi but before Mr. Bush's surprise trip to Baghdad shows the president's overall job approval rating at only 37 percent. That's just one point of an increase since that last poll by NBC News and the Wall Street Journal. Meanwhile, the debate continues over a U.S. withdrawal from Iraq. Democrats want to put it on the calendar but the pentagon says it all depends on the conditions on the ground. Let's turn to our Senior Pentagon Correspondent Jamie McIntyre. Jamie?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf there are some 260,000 Iraqi security forces. That's twice as many as U.S. troops in Iraq, but they're neither well enough equipped nor well enough trained to allow those U.S. troops to come home, at least so far.

(BEGIN VIDEOTAPE)

MCINTYRE: Fresh from his trip to Iraq, President Bush is still not promising when U.S. force levels will be cut. Meanwhile the pentagon says the number of American troops in Iraq is at its lowest point in almost two years. The departure of an army brigade from the Pennsylvania National Guard without an immediate replacement unit being sent in accounts for the drop from 132,000 troops just a month ago to 127,000 now. But whether it's a short term dip or a long-term trend depends on the next six months.

BUSH: This policy will be driven by the people on the ground. Those are the folks who are going to ultimately make the recommendation and I'll accept it.

MCINTYRE: The delay in Iraq picking a permanent prime minister and getting its new government up and running, put plans for possible U.S. troop cuts on hold for several months. But that planning is once again on the fast track.

DONALD RUMSFELD, DEFENSE SECRETARY: There will be meetings with General Casey and the minister of defense and the prime minister in the weeks ahead discussing at what pace we're going to be able to draw down our forces. It will all be done in a very orderly way.

MCINTYRE: Sources say the pentagon would like to end up with about 100,000 U.S. troops in Iraq by year's end, a reduction of about 30,000. But critics including many democrats want to bring all the troops home to send a clear message to the Iraqis they're going to have to fend for themselves.

SEN. RUSS FEINGOLD, (D) WISCONSIN: So I ask, what is wrong with having a clear timetable to bring our troops out of Iraq by the end of this year? What is wrong with that?

(END OF VIDEOTAPE)

MCINTYRE: Well what's wrong with that according to the pentagon is that it risks the U.S. leaving before Iraq's new government is strong enough to handle the violence. And President Bush argued today that that would make not only Iraq, but the world a more dangerous place. Wolf? BLITZER: Jamie McIntyre, thank you. Is a troop draw down on the drawing board? It depends whom you ask. Earlier I spoke with the president's national security adviser Stephen Hadley on that and whether the president got any firm assurances in Baghdad that Iran would stay out of Iraq's affairs.

(BEGIN VIDEOTAPE)

BLITZER: The Iraqi National Security Adviser told me on Sunday that there would be fewer than 100,000 coalition forces in Iraq by the end of this year. Is he right?

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: I've heard those reports. At this point, those were made of course at a time when we didn't even have a minister of defense. And one of the things that was clear at this trip is the next step is for the new minister of defense to sit down with General Casey, Ambassador Khalilzad and talk about their security plan going forward and how we can support that plan.

BLITZER: What kind of assurances did he get from the prime minister and others that Iran's influence in Iraq won't escalate?

HADLEY: One of the things we've heard consistently is that Iraq now having emerged from tyranny with the fall of Saddam, having an opportunity to bring all communities into the government, are not about to turn over the sovereignty they've now obtained to the Iranians. We think that's true of all communities including the Shia. Obviously we're concerned about some of the Iranian influence in Iraq there are a lot of Iraqis that are concerned about Iranian influence in Iraq. And one of the messages the government is making very clear to its neighbors is they need to be supportive of this effort to build democracy and prosperity and peace, not countering it.

(END OF VIDEOTAPE)

BLITZER: Less than a week after Abu Musab Al Zarqawi was killed in Iraq, U.S. troops in Iraq are busy looking for the new boss of Al Qaeda in Iraq. Our pentagon correspondent Barbara Starr has the story. Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf new information about the next most wanted man in Iraq.

(BEGIN VIDEOTAPE)

STARR: Just hours after Jordanian terrorist Abu Musab Al Zarqawi was killed the U.S. identified another foreigner, an Egyptian, as the new leader of Al Qaeda in Iraq.

MAJ. GEN. BILL CALDWELL, MULTI-NATIONAL FORCE-IRAQ: Probably Abu Al Masri, if you had to pick somebody would be the person that is going to try to occupy the position that Zarqawi had.

STARR: Military officials tell CNN that interrogations from captured insurgents and intelligence gathered in recent raids, has convinced them Abu Al Masri has taken control. The military says Al Masri has been involved in IED attacks but it is providing few details. Most of the troops in Iraq have not heard of him or know what he looks like even if they capture him. Al Masri trained in Afghanistan as an explosives expert where he first met Zarqawi around 2001.

CALDWELL: We know that Al Masri was -- came to Iraq before Zarqawi did, probably located somewhere around the Baghdad area some time and around 2003, established the first Al Qaeda in Iraq cell here in the Baghdad area.

STARR: U.S. military officials say Al Masri is now the senior operational commander for Al Qaeda in Iraq. In Fallujah he worked with Zarqawi lieutenants. He has supplied suicide bombers. He is now said to be responsible for all network operations in Southern Iraq.

(END OF VIDEOTAPE)

STARR: Officials are debating the pros and cons of getting more information about Al Masri out to the troops. They want to make sure they aren't creating another icon like Zarqawi. Right now they believe Al Masri is in the Baghdad area. Wolf?

BLITZER: Barbara thank you very much. And Major General Bill Caldwell who you just saw in Barbara's report is the spokesman for the multi-national force in Iraq. I asked him about Al Qaeda's new man in Iraq.

(BEGIN VIDEOTAPE)

BLITZER: Do we assume that he was hand picked by Abu Musab Al Zarqawi as his potential successor?

CALDWELL: Well we know that before Zarqawi's death, he used Abu Al Masri as his sort of second man in terms of running operations here in Iraq.

BLITZER: So we assume that that's probably why he's the new leader. The president the other day said justice will be brought to this new leader of Al Qaeda in Iraq. What kind of life expectancy do you think he has?

CALDWELL: Well if you talk to my boss General Casey he would tell you that he shouldn't expect to be around for a real long time.

BLITZER: Do you have any idea what part of the country he may be operating in right now?

CALDWELL: Honestly what they -- we have a very intensive effort going on already that's been shifted to look towards this man. We started it the day we got Zarqawi. For operational reasons I really shouldn't say, but there is an intense focus being made on him right now.

BLITZER: Here's a quote that he put out shortly after Abu Musab Al Zarqawi was killed. Abu Al Muhajer (PH) who we now know as Ayub Al Masri said this, "Al Qaeda fighters in Iraq are more determined, more stable and more powerful than anytime prior. The coming days will turn your children's hair gray, and battles will reveal your false power." I wonder if you want to respond to that threat.

CALDWELL: Well what I tell you is we do take the threats very seriously Wolf. And there's no question that we have come to a heightened state of alert as we watch for any retaliatory type of action by the Al Qaeda in Iraq group against coalition forces. But unfortunately this group normally focuses on civilians and innocent women and children. Iraqis here in this country are the ones who really have felt the blow of that group with over 68 percent of our casualties that we've seen here being innocent civilians at the hands of the Al Qaeda.

(END OF VIDEOTAPE)

BLITZER: Major General Bill Caldwell speaking with me earlier. Meanwhile, in the other war, that one being in Afghanistan, troops are matching fire with force. They're taking their fight directly to the enemy in hopes of squashing the re-emergence of a very stubborn foe. Our Brent Sadler is in Afghanistan with details. Brent?

BRENT SADLER, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, U.S. led combat operations are now systematically targeting Taliban militants from the air and on the ground in Southern Afghanistan, triggering fierce firefights. Operation Mount and Thrust began some three weeks ago, softening targets, rooting out Taliban networks. But the offensive is now shifting into high gear, calling on some 11,000 American, Canadian, British and Afghan forces.

Launching attacks in a coordinated effort to destroy Taliban safe havens and command structures. I watched Canadian troops sweep through a huge area of known Taliban activity in Kandahar Province. Canadians as well as Afghan police and army units train and fight together, here preparing their weapons for action. Later a Canadian battle group returned to their base in Kandahar. Exhausted soldiers, their faces caked in dust and grime. Operation mountain thrust battles continue night and day. These military operations are developing into what taskforce commanders describe as the biggest push against anti-Afghan government militants since the Taliban were overthrown some five years ago. Wolf?

BLITZER: Brent Sadler in Afghanistan for us. Thank you Brent very much. Coming up, the former Israeli Prime Minister Benjamin Netanyahu, on new threats to his nation and what's going on with the Palestinians. Is there a Palestinian civil war in the works?

Also, on the brink of a critical house debate, the minority leader Nancy Pelosi confronts a party somewhat divided. With congressional elections looming, could democrats get their act together.

And she's known for pop music hits and a wild wardrobe. Now Cher is focusing in on head gear for U.S. troops. Her mission ahead right here in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: Welcome back. As Palestinians face chaos and possible civil war, Israel is involved in a bloody series of strikes and counterstrikes with militants. Joining us in New York is the former Israeli Prime Minister Benjamin Netanyahu, he's now the leader of the opposition Likud Party in Israel's Kenneset (PH). Mr. Prime Minister thanks very much for coming in.

We all saw that heart wrenching video of that little girl on the Gaza beach crying historically when her family was killed. The allegation is it was done by an Israeli mortar. The Human Rights Watch organization issued a statement on Tuesday saying, "There has been much speculation about the cause of the beach killings, but the evidence we have gathered strongly suggest Israeli artillery fire was to blame." What do you know if anything, about this?

BENJAMIN NETANYAHU, FORMER ISRAELI PRIME MINISTER: Well it's still being looked at but the more we look at it, the more it looks like it may have been something totally unrelated with the Israeli army but it may have been some charge that had been laid there in the sand by Palestinians, it may have misfired. It could have been an accident. In any case, it certainly wasn't something that we directed at innocent civilians and of course everybody in Israel saw this heart wrenching story and felt the same way. The terrible thing is that we have terror strikes from Gaza against Israeli civilians, hundreds and hundreds of rockets that pummel into our towns and villages next to Gaza. We vacated Gaza, we gave every last inch up, why are they firing at us?

BLITZER: This raises another question, the threat now from the Hamas led Palestinian government to break the truce -- the informal truce they've had over the past year and a half or so, not to launch terror attacks against Israel. I've spoken to several Israelis in recent days who say it's in Israel's best interest to try to come to some sort of a truce, if you will, with this Hamas government. Not that they necessarily have to recognize Israel's right to exist but just don't launch terror attacks. Because that could cause a lot of Israeli deaths, economic hardship for Israel as you well know. What should Israel be doing now to encourage this Hamas led government to avoid attacking Israel?

NETANYAHU: First of all the Hamas has not been in a truce with us. They've enabled Palestinian controlled territories, which they control, to be used for rocketing our civilians. And so they've been doing this on and off. More on than off. And in face, as I said, we've had hundreds and hundreds of rockets launched into our cities. Just imagine Detroit, imagine Miami, imagine any town along the Canadian border that receives hundreds of rockets. You can understand how absurd the situation is.

I don't think we can have peace with Hamas. I think there is a battle inside Palestinian society right now between the more moderate elements and the Hamas militants. It's a political battle. Sometimes it flares up into more than that. I think it's in our interest and in the interest of peace, the interest of Israel and the interest of the Palestinians that the Palestinians replace this Hamas militant government, which is really a proxy of Iran, that it replace with a moderate government with which we can negotiate peace, we would and this violence.

BLITZER: On that point let me press you, what can Israel do right now to encourage that more moderate element in the Palestinian community? I assume you're referring to the Palestinian authority president Mahmoud Abbas. What should Israel be doing to encourage a more moderate Palestinian leadership?

NETANYAHU: Well the first thing we should do is not strengthen the Hamas militants. And I think we're getting signals as wide as a barn from the Abu Mas and the Palestinian -- the other Palestinian leader. We're getting signals as wide as two barns from King Abdallah of Jordan. We're having (INAUDIBLE) from the Egyptians about their disapproval of what the government, the current Israeli government plans to do which is to hand over territory gratis to Hamas. That strengthens Hamas, it really weakens the moderates. So if we want to make sure that the moderates prevail, and I do, then the last thing we should do is give freebies, free handouts of territory to Hamas because as I and others predicted, that territory is merely used to launch rockets at Israel. It just makes the rockets move closer not peace.

BLITZER: This is what the prime minister of Israel Ehud Olmert says that a withdrawal from at least parts of the West Bank is inevitable in his opinion. You disagree I know you disagree with him on that. That was a big issue in the election.

NETANYAHU: I disagree on doing it unilaterally. I agree that we should have -- we should encourage the rise of a moderate Palestinian partner with which we can negotiate a final peace settlement which would involve mutual concessions, both on the Israeli side and the Palestinian side. That's a good thing to have real peace. What we have with the Palestinians with these unilateral withdraws and it's becoming apparent after the elections. It's becoming apparent now because we just saw on the Friday poll that there's a growing majority of Israelis, a majority of the over 20 percent against giving unilateral concessions to Hamas in the West Bank. Not because people want to necessarily stay there but because they realize that the only ones who will benefit from the unilateral concessions right now are the Palestinian extremists, that's not good for peace.

BLITZER: We're going to leave it right there. The former Prime Minister of Israel Benjamin Netanyahu, thanks for joining us here in THE SITUATION ROOM.

NETANYAHU: Thank you.

BLITZER: And still to come tonight, the house minority leader's challenge. Can she bring democrats together or will a split over Iraq hurt her chances of becoming the next house speaker. Nancy Pelosi in the THE SITUATION ROOM, that's coming up.

And Condoleezza Rice returns to her southern roots. Is it about religion or is it about politics? Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK) BLITZER: There she is, Zain Verjee. She's joining us from the CNN Center in Atlanta with a closer look at some other important stories making news. Hi Zain.

ZAIN VERJEE, CNN ANCHOR: Hi Wolf. Another member of President Bush's inner circle's calling it quits. We've just gotten word just a few minutes ago that Michael Gerson plans to leave in the next few weeks. He's a Bush adviser and he wrote many of the president's speeches. Gerson says that he plans to pursue writing and other opportunities.

To Africa now, thousands of deaths, hundreds of alleged rapes and large-scale massacres, that's what a prosecutor working with the U.N. says is happening in Sudan's western Darfur region. Today the international criminal court's chief prosecutor said that he plans to file several charges of atrocities against civilians. But he didn't say when. Three years of conflict in Darfur have left thousands dead and over 2 million people displaced from their homes.

It's being called a life-threatening situation in Indonesia. A volcano that for weeks have teased nearby residents, actually erupted today, Mount Merapi sent searing gas clouds down on a nearby village, forcing thousands of residents to flee. Indonesia news reports say that five people are missing and that some uninhabited buildings have been totally scorched. Wolf?

BLITZER: Zain thank you very much.

Just ahead, how divided are democrats when it comes to Iraq? Do more side with Senator Hillary Clinton or with Congressman John Murtha? We'll hear what the house minority leader Nancy Pelosi has to say, that's coming up.

And the singer, Cher, she's sharing her voice on a project very dear to her. We'll learn why she's now here in Washington. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington. Let's return to our top story. Tonight some house democrats say they feel like their hands are tied as they head into tomorrow's debate over when to bring troops home from Iraq. The party is divided on this critical issue that comes at a time when the president is finding at least a little bit of renewed momentum.

Joining us here in THE SITUATION ROOM right now is Nancy Pelosi, the house democratic leader. Thanks for coming in.

REP. NANCY PELOSI, (D) MINORITY LEADER: My pleasure.

BLITZER: You just came from the White House, you were with the president, were you impressed, were you encouraged, what's your reaction?

PELOSI: The war in Iraq of course is a matter of debate in our country. It's being debated all over the country in fact except in the congress of the United States. Finally tomorrow, we will have a chance to have a small amount of time to debate it. I had hoped when we went to the White House that the president would have brought us some good news from Iraq. That there was reason to think that it's time for responsible redeployment of our troops. He's upbeat about the people he met there, he said he went to take a measure of them and he was impressed by them. But I haven't seen anything in what the president has to say, anything less than, stay the course.

BLITZER: So nothing he said in private to you was different than what he said at his news conference earlier in the day?

PELOSI: Well, we were -- I didn't see his news conference.

But, again, he was just talking about taking the measure of the leaders in Iraq. Democrats are calling for a new direction in Iraq. We have said over and over again, 2006 must be a year of significant transition in Iraq, where the Iraqi people take responsibility for their government and for their security.

BLITZER: But that's what the president is saying. He managed -- he won that commitment from this new Iraqi leadership.

PELOSI: But here's where I'm concerned.

After forming a government, the next step was supposed to be to deal with the constitution, in order to allay some of the fears of various sectarian groups in Iraq, that they would deal with this in the constitution. That would help stop the violence, that would help bring reconciliation.

What the president said to us was, when I asked him, are they going to move on the constitution now, he said, oh, they don't -- they don't seem to be in a hurry to do that. I don't think we should insist that they do that. So, it's going to be a longer, longer period of time.

And I think the American people have serious concerns about how the war is conducted, how long we're going to stay there. And I think the American people, as do the Democrats, 100 percent support the troops.

BLITZER: Here's what the president said at the news conference earlier today, referring to the Democratic Party. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There's an interesting debate in the Democratic Party about how quick to pull out of Iraq. Pulling out of Iraq before we accomplish the mission will make the world a more dangerous place. It's bad policy.

(END VIDEO CLIP)

BLITZER: All right. You're -- and there is a debate within the Democratic Party, because Democrats are -- there are moderate Democrats, more liberal Democrats. They seem to be all over the place as well.

PELOSI: But Democrats agree that 2006 must be a year of serious, significant transition. And the president is ...

BLITZER: Well, let me interrupt you on that point, because Steny Hoyer, who is the number-two Democrat in the House, he says this.

Let me read it to you. He says: "A precipitous withdrawal of American forces from that country could lead to a disaster, spawning a civil war, fostering a haven for terrorists, and damaging our nation's security and credibility."

PELOSI: Now, when did he say that?

BLITZER: Steny Hoyer said that in recent weeks.

PELOSI: No, no. He said that last fall. He said that last fall.

BLITZER: Well, we will double-check the exact time he said that.

PELOSI: He said that last fall.

BLITZER: Go ahead.

PELOSI: Since then, Democrats have come together on a real security agenda for a new direction in our securing America, and, again, significant ...

BLITZER: So, you're saying Steny Hoyer has changed his stance since then?

PELOSI: I'm saying that Steny Hoyer, along with everyone else, stood with us when we went forward with our real security agenda.

But that's not the point. The point is, is, the president is -- I think what he said was really beneath the dignity of this debate. Our men and women are in harm's way.

When I talk to my caucus about this, I say, we have to think about one thing, our troops and their safety. We have to think about -- also about the security of America. I contend that the war in Iraq is not making the American people safer.

BLITZER: Well...

PELOSI: It is not making our military stronger. And it is harming our reputation in the world to do those things.

BLITZER: So, sort of pinpoint any of this. Do you think the Democratic Party -- and you're the leader in the House of Representatives -- is aligned with Congressman John Murtha or with Senator Hillary Clinton?

PELOSI: Well, I think they're much closer to Senator -- to Congressman Murtha. But here's the point. Our Democratic Party has never said to members, on a war vote, there's a party position. We are representatives. We're an independent reflection of our districts. And so, members, at different times, have come to the place where we're saying serious transition in Iraq, and, with that, responsible redeployment, responsible...

(CROSSTALK)

BLITZER: Because that's what Murtha -- that's -- Murtha wants a redeployment over the next several months. John Kerry does.

Hillary Clinton, on the other hand, doesn't. But you're saying that Democrats and you are more in line with Murtha than with Senator Clinton.

PELOSI: Well, exactly. Yes, no, I don't think they're -- in the House, there isn't very much support. I don't exactly know what Senator Clinton's position is, so don't let me speak to that.

BLITZER: Well, she says it would be a mistake to have a timetable.

PELOSI: Yes.

Well, it -- the -- but there are milestones that, if they are achieved, then we should be able to move on, because we have just passed the mile -- the sad milestone of 2,500 American troops died, 20,000 injured, 10,000 of those permanently, an enormous cost in reputation to us in the world, enormous impact on our readiness to protect America's interests and our security at home or wherever our interests are threatened, enormous cost in dollars, hundreds of billions of dollars, a trillion-dollar war before it's over.

So, the American people, rightfully, have questions about it. And we all support the troops.

BLITZER: Did you ask Congressman Murtha to withdraw his name as a potential majority leader if the Democrats become the majority in the House? Because he had issued a statement earlier, saying he would challenge Steny Hoyer, who is the new -- who is the minority whip right now...

(CROSSTALK)

BLITZER: ... if the Democrats became the majority. Since then, Murtha has withdrawn.

PELOSI: Mr. -- in the interest of winning the election, and in the party unity that we have, Mr. Murtha said to me that: I will suspend my campaign.

But the reason is, also, we are about to have our new -- our Democratic New Direction for America. You mentioned it, said it was postponed. Out of respect for the president and our troops, when he called the meeting at the White House, we said, we will put that off. But we haven't postponed putting out our message, a New Direction for America, where we will make America safer by the first day, enacting the 9/11 Commission recommendations, a fairer economy. The first day, we will vote for an increase in the minimum wage.

The first day, we will talk about making health care more affordable by giving the secretary the ability to negotiate for lower prices.

The first day...

BLITZER: All right. I will...

PELOSI: ... we will move toward energy independence by rolling back the tax subsidies that they have given the oil companies.

BLITZER: I'm going to...

PELOSI: And, so, you know, we, in the interest of promoting our new -- a new direction, I want all of our members to curb their enthusiasm, in terms of their ambitions, until after the election, and support our New Direction for America.

BLITZER: There's no sense in running for majority leaders if you're still in the minority. I suspect that that's what you're saying.

I'm told, by the way, that you're right. Steny Hoyer did make that comment on November 30 of last year.

PELOSI: Right.

BLITZER: But, if you go to his Web site today, as we have, it's still right there, right in the middle, smack dab, of his Web site. You can see it right behind you. So, he hasn't withdrawn that comment from his Web site.

PELOSI: Well, let me say that that would not be the majority position in our caucus, but not to get into a debate on that.

I'm talking about what we agree on. And I think that you're seeing a big change now, where the American people are weighing in on this. They want answers. They want answers about the cost. Look at the reconstruction. Their own inspector general's report said that billions of dollars are missing in Iraq on reconstruction.

The reconstruction hasn't taken place. The president talks about electricity. Three years after he said mission accomplished, they don't have electricity in Baghdad...

BLITZER: All right.

PELOSI: ... to match what they had before the war.

So, it isn't -- it -- this isn't about, the president's in a good mood and he's bouncing around, because he went to Iraq, and he came back, and he likes the people he met there. This is about the fact that we are losing lives. We are losing limbs. We are losing reputation. We are losing readiness. And we're losing dollars in a war that sees no end.

BLITZER: All right.

PELOSI: You talk about the mission. What is the mission?

BLITZER: Let me move on, because we don't have a lot of time, and talk about Congressman William Jefferson.

He's being investigated right now. He's not been charged with anything, has not been indicted. You want him to step down as a member...

PELOSI: Yes.

BLITZER: ... of the House Ways and Means Committee.

Representative Mel Watt, the chairman of the Congressional Black Caucus, says, this is the totally unfair for you to be making this demand of Congressman Jefferson. He says that, "If the only person you have applied it to is a black member of Congress, then our community will legitimately ask, what in the world are you all doing?" -- strong words, suggesting there's a double standard for a black member, a black Democrat, in the House of Representatives, as opposed to white members.

PELOSI: Well, I will tell you this.

I have been critical of Republicans that -- I have talked about their culture of corruption, incompetence, and cronyism. And if they're -- and if I have criticized the Republicans, I certainly am not going to tolerate corruption in our own caucus.

Whether Mr. Jefferson were black or if he's white, the facts are that I believe he has brought dishonor to the House, and he should step aside from his position on the Ways and Means Committee.

BLITZER: Isn't he innocent until he's proven guilty?

PELOSI: That's ...

(CROSSTALK)

BLITZER: He hasn't even been charged with anything yet.

PELOSI: No, no, no, no. You're talking about a -- the court of law. I'm talking about a higher ethical standard.

And that's -- there are two different things. We -- I believe that members of Congress should be held to a higher standard and a higher ethical standard. And I apply that to all members of our caucus, respecting the magnificent diversity of our caucus.

But, yes, we are high -- having a higher standard now. And any member of Congress who has $90,000 in his freezer can be sure that he's going to hear from me that he or she should step aside.

BLITZER: Nancy Pelosi is the Democratic leader in the House of Representatives.

You would like to become the speaker of the House, I assume.

PELOSI: I would like the Democrats to be in the majority, so we can take the country in a new direction, away from the wrong direction.

The American people -- Democrats, Republicans and independents -- say the country is going in the wrong direction. We have a new direction. And, if we are elected, we have an agenda to -- to take it there.

BLITZER: We are grateful to you for coming into THE SITUATION ROOM.

PELOSI: My pleasure.

BLITZER: We will do this again. Thank you very much.

PELOSI: I look forward to it. Thank you.

(END VIDEOTAPE)

BLITZER: And Congressman Hoyer's office called us to clarify exactly what he's now saying on a withdrawal of U.S. troops from Iraq. The House minority whip tells CNN -- let me quite precisely -- "Democrats are in agreement that 2006 needs to be a year of transition in Iraq, as we stated in our real security agenda."

Up ahead, tonight, imagine picking up the phone, hearing a strange voice on the line, then finding out it's Cher. That's what's been happening lately over at CSPAN. We're going to tell you what's going on.

And how would you like to buy a gallon of gas for $1.99 all year long. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee joining us once again from the CNN center with a closer look at some other headlines.

VERJEE: Hi, Wolf. There's outrage on Capitol Hill over a new audit of FEMA's Katrina relief work. It found the agency may have been defrauded out of more than $1 billion. FEMA officials say that their systems were simply overwhelmed. One lawmaker calls it an affront to the American taxpayer.

An update on the condition of Pittsburgh Steelers quarterback, Ben Roethilsberger. Doctors say that he's awake and alert. He has his family around him. Additional tests show that no brain injuries have occurred from Monday's motorcycle crash. Roethlisberger did break his jaw, his nose and some other bones in his face. He underwent seven hours of surgery. Police say he wasn't wearing a helmet.

Senator Joseph Lieberman is calling for a probe into allegations that the Bush administration is suppressing some scientific work on climate change. He cites what he calls credible reports that four government agencies had their work on global warming suppressed. The administration's top science officer says that he found no basis to support those concerns. Wolf?

BLITZER: Zain, thank you. What if for one full year you were guaranteed not to pay more than $1.99 for a gallon of gas? General Motors is getting a lot of flak for offering just such a program. Let's learn why. Jacki Schechner joining us.

JACKI SCHECHNER, INTERNET REPORTER: The offer is valid in Florida and California for certain cars. Some of them fuel efficient, some of them not so much, like the Hummer.

"New York Times" columnist Thomas Friedman is taking on GM. He wrote a column on May 31st likening GM to a crack dealer looking to keep his addicts on a short leash. GM fired back the following day online on their blog saying that the column was misleading. This is not the GM they know. They reiterated their commitment to fuel efficiency.

They also wanted "The New York Times" to post a letter to the editor. "The Times" says they negotiated in good faith with General Motors but they couldn't agree on language, on tone and on length.

In the day and age of the Internet, the entire encounter was posted on line by GM on their blog. You can see the emails back and forth. For example, here's GM asking for 300 words and "The New York Times" firing back saying it can be done in 200.

As for Friedman, he has posted again today an article in "The New York Times" really calling GM to task for this plan and GM says it plans to address the latest column tomorrow morning on their blog.

BLITZER: Up ahead, she's the secretary of state and some want her to be the president of the United States. Could Condoleezza Rice resist the growing chorus calling for her to run for the White House.

Plus, he's often seen but never heard. Now President Bush is losing his right-hand man. We will show you what he did and where he's going and get this, he's only 26 years old.

(COMMERCIAL BREAK)

BLITZER: "The Bottom Line" on the markets: the Dow, the Nasdaq and the S&P all gained ground today.

Condoleezza Rice got the warm reception today at the Southern Baptist Convention in North Carolina. But her popularity extends well beyond that politically powerful group. Let's bring in our Mary Snow. She's keeping tabs on Rice and her many, many fans.

MARY SNOW, CNN CORRESPONDENT Wolf, the secretary of state is proving that she's getting support in some very unlikely places.

(BEGIN VIDEOTAPE)

SNOW (voice-over): She may rank No. 1 in talk shows and she may grace mountains of magazine covers, but when it comes to picking a dinner guest, men over 25 pick Secretary of State Condoleezza rice as their top choice in an unscientific poll by "Esquire" magazine. She outranked both Oprah Winfrey and Angelina Jolie.

It speaks to Rice's popularity at a time when President Bush's poll numbers have been low.

LARRY SABATO, UNIV. OF VIRGINIA CTR. FOR POLITICS: She has power. And that's intriguing to men. Will her popularity translate into political aspirations for the White House.

MARIE WILSON, THE WHITE HOUSE PROJECT: The women that are on the tips of everybody's tongues are Condoleezza Rice and Hillary Rodham Clinton as candidates for the United States president. They're kind of rock stars right now in one way or another.

SNOW: At the politically powerful Southern Baptist Convention, the crowd gave Rice several standing ovations.

CONDALEEZZA RICE, SECRETARY OF STATE: If I serve to the end of my time as secretary of state, it will have been 12 years since a white man has been the secretary of state of the United States of America.

SNOW: Others want to see her accomplish another first. There's a movement to draft her to run in 2008. First Lady Laura Bush even voiced support for a Rice presidential candidacy during a January interview.

LAURA BUSH, FIRST LADY OF THE UNITED STATES: Sure, I would like to see her run. She's terrific.

SNOW: But Rice has insisted she's not running, as she told "THE SITUATION ROOM" a few weeks ago.

RICE: I have no desire to be president of United States. It's not what I want to do with my life.

SNOW: Some political observers cast doubt that there's no chance that she will run.

LARRY SABATO, UNIV. OF VIRGINIA CTR. FOR POLITICS: Very few people can resist a draft or near draft.

(END VIDEOTAPE)

SNOW: Now, one addition to that "Esquire" poll of favored female dinner guests, Senator Hillary Clinton ranked seventh, tied with Katie Couric, Wolf.

BLITZER: Thanks very much for that Mary Snow as part of the best political team on television, CNN, America's campaign headquarters.

He's been described as part Sherpa, part butler. Now President Bush's personal aid is leaving. Let's bring in our Tom Foreman, he's got the story, Tom?

TOM FOREMAN, CNN CORRESPONDENT: You ever wonder where the real seat of power is in the west wing? Well let's go ahead and take a look at it. Everybody thinks it's that oval office right over there because that's the place where the president sits. But, it's not really. The real seat of power, I'm not giving away any secrets here, we're only showing you a little bit of it, is on a disk outside where a young man sits right there.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): To say he has the president's ear is an understatement. He's also got his back and is always at his side. Blake Gottesman has worked for the last four years as personal aide to the president. The 26-year-old has known the Bush's daughters for years. He's seen here with Barbara and he once dated Jenna.

Gottesman is constantly at the president's side. There to take things off his hand, whether it be his dog Barney or flowers from fans and he's always ready with something for his boss to hand out in return. Gottesman is the one who preps the stage for the president, then he waits in the wings watching should something go wrong. Like this time in Beijing when Mr. Bush tried to exist a news conference through a locked door.

Gottesman has traveled the world with the President, his room, always nearby, whether at Buckingham Palace or Vladimir Putin's vacation home. He's also good for some downtown, just tossing a football with the leader of the free world. We rarely hear from Gottesman, except for the traditional two-minute warning.

BLAKE GOTTESMAN, PERSONAL ASSISTANT TO THE PRESIDENT: The two- minute warning for the press, two minutes.

FOREMAN: But, in an online White House chat, two years ago, he said "I consider myself very blessed and lucky to have had such fantastic experiences and to get to work for such a great person."

(END VIDEOTAPE)

FOREMAN: He's headed to Harvard Business School now and you know you've got something going for himself when you start dating a guys daughter, you get the job, you quit dating her, you keep the job, you're pretty slick.

BLITZER: And we want to wish Blake Gottesman only the best at Harvard Law, Business School, not Law School. Thanks very much for that, Tom.

Let's find out what's coming up right at the top of hour. That means that Paula is standing by. Hi Paula. PAULA ZAHN, CNN ANCHOR: Hi Wolf, thanks. I will be joined by former FEMA director Michael Brown. What does he have to say about that blistering report that shows that his former agency lost as much as $1.5 billion to fraud and in some cases people who listed cemeteries as their address to try cash in on the windfall.

Plus, America's epidemic of overeating, is it a lack of self- control? Well, we've got some startling new research, which shows why some people may have been born to binge. They actually have an excuse to down about 60 oreo cookies in a two-hour period. Actually it's a pretty amazing story tonight Wolf, a big challenge for these folks who have it.

BLITZER: It's a serious issue. Thanks very much Paula for that. Paula coming up at the top of the hour.

Still ahead here in THE SITUATION ROOM, Cher, "C-SPAN" and the United States military. It's an unlikely convergence. Something only CNN's Jeanne Moos can explain. Stay with us, you're in THE SITUATION ROOM.

BLITZER: Welcome back. Might it be Cher's secret obsession, placing anonymous phone calls to unsuspecting people to talk about her views. Right now, the pop icon is calling on Americans to act on an issue she deeply cares about and is very serious. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): The singer known for flirtatiously playing with sailor's hats has turned her attention to helmets. Cher likes to wear her own outrageous head gear.

UNIDENTIFIED MALE: You look lovely as always.

MOOS: Now she's worried about what soldiers wear.

CHER, SINGER: It's the a difference between life and death.

MOOS: Man the battle ships, Cher has come to Washington to fight for the fighting men and women. Her weapon, the quietly serious "C- SPAN."

CHER: The helmet becomes a weapon in itself.

MOOS: Cher has teamed up with a group called Operation Helmet, dedicated to supplying soldiers with padding that improves helmets. The Army has already upgraded theirs, but the other services tend to have old-fashioned webbing instead that allows the helmet itself to strike the head in an explosion. When fitted with the new padding, watch what happens. Remember Sonny and Cher, well now it's Bob and Cher.

BOB MEADERS, FOUNDER OPERATION HELMET: She is the real thing. I can tell you that. She has a heart as big as Texas. MOOS: Retired Navy physician, Doctor Bob Meaders founded Operation Helmet because the military couldn't come up with the money to upgrade existing helmets. Cher herself donated over $100,000. She's been visiting wounded soldiers.

CHER: That one boy really touched my heart so much.

MOOS: When she went to autograph a picture for the boy in the hospital...

CHER: ... How do you spell your name? And I looked over and he had to look at his wristband because he had head injuries.

MOOS: This isn't the first time that Cher has been on "C-SPAN." On Memorial Day Weekend, she called in at 4:30 in the morning without mentioning who she was until she asked.

UNIDENTIFIED MALE: And is this Cher?

CHER: Yes.

MOOS: Which prompted "The Daily Show" to use an "I Got Through Babe" graphic. Cher is an unabashed liberal, who opposes Bush administration policies.

CHER: I just cannot bare these people for another moment.

MOOS: Cher will join Doctor Meaders when he testifies about Operation Helmet before a congressional subcommittee. A performer whose own head gear turns heads may have soldiers tipping their hats to her.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Well good for Cher. That's all the time we have. Let's go to New York, Paula's standing by, Paula.

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