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THE SITUATION ROOM

Bill Gates Decides to Give up Day Job; House Democrats Clashing Over Congressman William Jefferson's Committee Seat; Terrorist 'Treasure Trove'; Bill Frist Discusses the Popularity and Politics of Congress; Operation Nabs Illegal Aliens; Financial Details on Members of Congress Available Online; Bush Signs Law to Create Massive Marine Preserve

Aired June 15, 2006 - 17:00   ET

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


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

Happening now, breaking news.

It's 2:00 p.m. in Redmond, Washington, where the world's richest man decides to give up his day job. Why Bill Gates is taking a new road and what it means for Microsoft, the giant company he co-founded. What it means for all of us.

And it's 5:00 p.m. here in Washington on Capitol Hill, where Democrats go behind closed doors to consider action against one of their own colleagues. William Jefferson is the congressman who allegedly had cold cash in his freezer. Will he now be stripped of a key committee post?

And it's 1:00 a.m. in Iraq, where there's a grim milestone for U.S. troops. And that's helping to fuel a battle over the war in Washington as Congress gives President Bush more money to keep the war going. I'll speak live with the Senate majority leader, Bill Frist.

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

He's the world's richest man, the founder of the computer giant Microsoft. And only moments ago Bill Gates announced he's on his way out.

Let's bring in our Ali Velshi. He's following this breaking news story for us -- Ali.

ALI VELSHI, CNN CORRESPONDENT: Hey, Wolf.

Back in 1975, Paul Allen and Bill Gates founded Microsoft. In 1986, he took that company public and led it until 2000, when he handed over to Steve Ballmer. But he remained the chairman and he named himself the chief architect -- chief software architect of the company. Well, now Microsoft has announced that Bill Gates will leave over the course of two years. He'll be replaced by two people who will start training with him on the job now. In two years he will become the chairman of the company but will have no remaining day-to-day role at Microsoft. He'll also continue to work on his foundation.

I just want to give you a little perspective. Microsoft is worth $225 billion today. They have $40 billion in annual sales. And Bill and Melinda Gates Foundation has about $30 billion in assets.

This is the world's richest man, and he is the face and the image of Microsoft. And, in fact, to many people, the face of American entrepreneurship.

So it's very careful. He's orchestrated his departure from Microsoft. He is 50 years old, Wolf, and he is the face of technology, the face of innovation and entrepreneurship in America.

BLITZER: They waited until after the markets closed to make this announcement. The after-markets after closing, there's market trading going on. What does it look like?

(STOCK MARKET REPORT)

BLITZER: Ali, stand by for a moment. I want to go on the phone.

Andy Serwer of "Fortune" magazine, our CNN contributor, is joining us as well.

What do you make of this, Andy?

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Well, Wolf, it's a surprising development, number one. I was just talking to some people out in Seattle, and it sort of came as bit of a shock. But if you think about it, it makes sense, because Bill Gates has been spending much more of his time lately working on the Bill and Melinda Gates Foundation, which Ali mentioned. And this is a tremendous us endeavor.

It's very, very difficult for the richest man in the world to give away billions and billions of dollars productively and at the same time contribute effectively to an institution and organization like Microsoft. And I think down the road it could well be that this is a person who will be remembered for his philanthropy as much or more than his role at Microsoft. He is really, really driven to work hard in this arena.

And plus, some of the other people who are going to be stepping in, like Ray Ozzie, who is known in the software business, are very, very capable people.

BLITZER: So you think investors are not going to be spooked by this, they're going to have confidence in the way of this transition? And it's not happening tomorrow. It's going to happen over the next two years. He's not leaving until July of 2008.

They're going to be OK with this?

SERWER: Well, I think they're going to learn to be OK. You know, they may be spooked initially, Wolf, but I was talking to someone out in Seattle just a few minutes ago, and they were saying that the time of the announcement is probably made not only to allay investors' fears, but also to make sure that key employees stay at Microsoft.

You know, there has been a brain drain as people there left to go to Google and more exciting places. But this will give them a chance to be convinced to stay and to work with the new people.

BLITZER: Andy, thanks very much.

Ali Velshi is still with us.

Ali, as you hear what Andy was just saying, the ramifications of this announcement are enormous for just average people watching this -- this program right now. They may not even know that their portfolio has Microsoft stock in it.

VELSHI: Correct. Not only that, Microsoft being such a big company -- it's a $225 billion company -- they are purchasers of so many other companies, businesses. America's business is tied to Microsoft.

Microsoft's outgoing chairman now -- or chairman, Bill Gates, has made this point over and over again. That's why he's so -- so committed to the idea of education excellence in the United States, because they have to employ the best people in America.

And Andy made a very good point. Back in the day, Microsoft was the only game in town. Now there are other companies like Google, there are other big challengers in the industry. So Microsoft has to work very hard to ensure its own engineers, technicians and employees that this is still the place to work, which is why Bill Gates said he's going to train two people to do the job that he's been doing for the last six years. They are working very hard to assure investors, consumers and workers that Microsoft will continue on the track that it's been and will continue to be safe.

It's right now at $225 billion. You know, it remains one of America's biggest companies. Many times in the last decade it's been the biggest company in the world.

BLITZER: Ali, thank you very much.

We're going to continue to follow this breaking news. Much more coming up on Bill Gates, the announcement. A bombshell, really. He's stepping down as the leader of Microsoft over the course of the next two years.

Other important news we're following right now. At this moment, in fact, in a secluded location, there is a Capitol confrontation where friends may be fighting like foes. It concerns a U.S. congressman's seat on a powerful committee and what to make of the allegations of tens of thousands of dollars stashed in a freezer.

The congressman is William Jefferson. He's a Democrat from Louisiana. Just yesterday, I asked the Democratic leader in the House, Nancy Pelosi, whether Jefferson should resign his seat on the House Ways and Means Committee.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: 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.

(END VIDEO CLIP)

BLITZER: Let's bring in Andrea Koppel, our congressional correspondent. She's following all these developments.

This is very painful, especially for the Democrats -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: It is, Wolf. It's opened up all kinds of divisions within the Democratic Party itself in the House.

At this hours, members of the Democratic Party are -- have begun to trickle in on the House side for a large caucus meeting that's supposed to begin this hour to decide not just to debate and discuss, but also to vote on the fate of William Jefferson, whether he will be forced to temporarily relinquish his seat on Ways and Means. It's unclear whether Jefferson is going to take up the caucus's offer for him to come and address them again.

Nevertheless, remember that Jefferson caused the raid that the FBI conducted on his office -- caused all kinds of sparks to fly here on the Hill last month when the FBI conducted that surprise raid, taking documents out of his office. He's under investigation for possible corruption, but he hasn't been charged, let alone convicted of this.

Nevertheless, as you said, Nancy Pelosi, the House majority leader, has tried to get Jefferson to voluntarily step aside. He's refused for weeks. Now she's been trying to force him to do so.

Just last week, Wolf, the Congressional Black Caucus chairman accused Nancy Pelosi of a double standard, basically accusing her of racism, because there are other House Democrats, in particular one white Democrat from West Virginia, who has also had charges of corruption sort of swirling around him. And he has not been forced to relinquish his seat on the Appropriations Committee.

We expect a vote by the caucus later this evening -- Wolf.

BLITZER: He did release -- give up his seat on the Ethics Committee, but that's another matter.

Andrea, thanks very much. I want you to stay on top of this story, get back to us as soon as there's word from this closed-door session of the Democrats. Clearly, lots at stake right now.

Andrea Koppel reporting for us on the Hill.

And remember, you're in THE SITUATION ROOM, where political news is arriving all the time.

CNN, America's campaign headquarters.

Also on Capitol Hill today, a bitter war of words over the war in Iraq. In the House of Representatives, Republicans put forth a resolution supporting the war and rejecting Democrats' demands to put a troop withdrawal on the calendar. The sparks -- check this out -- were flying.

(BEGIN VIDEO CLIP)

REP. TERRY EVERETT (R), ALABAMA: If some people continue to preach cut and run from this war, then they will continue to kill Americans, kill Americans and kill Americans. The global war on terrorism must be fought. We can do it in the streets of our home towns or we can take the war to the terrorists.

Either way, it has to be done. And personally, I prefer doing it over in Iraq rather in New York or Washington, D.C., or San Francisco.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JOHN MURTHA (D), PENNSYLVANIA: I know what rhetoric is, and I know what fighting in the front lines are. I know the difference between them.

I know standing here does not solve the problem. And it hasn't gotten better. It's gotten worse. That's the problem.

And you're talking about -- you're not talking about Iraq. The gentleman that was up there is talking about the war on terrorism. I'm talking about Iraq. That's what I'm talking about.

(END VIDEO CLIP)

BLITZER: Democrats denounced the Republican resolution as nothing more than election year ploy.

Other news we're following.

After killing Abu Musab al-Zarqawi last week, the U.S. military found what it's calling a treasure trove of information in the rubble of his safe house. Now al Qaeda in Iraq apparently has a new leader, but those captured documents are said to show that the group is in serious trouble.

CNN's John Vause has the story from Baghdad -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, one document in particular outlines al Qaeda's assessment in Iraq as being bleak as the United States puts a face on the man who has taken Zarqawi's place.

(BEGIN VIDEOTAPE)

VAUSE (voice-over): The new face of al Qaeda in Iraq. According to the U.S. military, his name is Abu Ayyub al-Masri, an Egyptian who trained in Afghanistan, an expert they say in making the car bombs which have claimed thousands of lives here over the past three years.

In the week since Zarqawi was killed, U.S. officials say they've carried out more than 400 raids nationwide, many with Iraqi forces, making more than 700 arrests. And Iraq's national security advisor claims to have evidence that al Qaeda in Iraq is close to breaking point.

MOWAFFAQ AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISER: We believe that this is the beginning of the end of al Qaeda in Iraq.

VAUSE: According to the Iraqis, the information was recovered from computer hardware and documents found in the rubble of Zarqawi's safe house and in raids before and after the airstrike. While CNN cannot verify the authenticity, there are extensive details of al Qaeda's concern over the growing number of Iraqi forces, the inability to attract new recruits, confiscation of weapons and ammunition, and a squeeze on funds.

Described in the documents as "a crisis," al Qaeda outlined the blueprint for sparking a war between the U.S. and Iran by carrying out attacks and planting evidence to implicate the Iranians, leak false information that Iran has weapons of mass destruction and was planning a terrorist attack within the United States.

(END VIDEOTAPE)

VAUSE: Apparently the plan was to open a second front to tie up U.S. forces and take pressure off al Qaeda fighters. They also considered trying to draw more Iraqi Shiites into the conflict -- Wolf.

BLITZER: John Vause in Baghdad.

Thanks very much.

There's also word from the Pentagon today about another grim milestone for the war in Iraq. The death toll for U.S. service members has now reached 2,500.

Let's go live to our Pentagon correspondent, Barbara Starr.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, it was a milestone that the administration and the U.S. military certainly knew was coming, as they continue to count those who have lost their lives in the war in Iraq. Now the toll stands at this: 1,972 having lost their lives to hostile fire in Iraq, 528 having lost their lives in non-hostile action such as actions and illnesses.

It's something that's so difficult to report on, Wolf, because people sort of like to look at markers and try and figure out what it all means. But we've asked around today, we've asked the military what it means. And they, of course, answer with the answer that they believe, of course, is the most appropriate one, 2,500 from the first one to the 2,500th one, they all matter to their family, to their friends, and to their unit in the military -- Wolf.

BLITZER: Our deepest condolences to all the families.

Barbara, I know you share that thought as well. Thank you very much.

Controversy is also raging right now over a report that prisoners who had killed American troops would be part of a new amnesty program in Iraq. But speaking to CNN's Daryn Kagan earlier today, Iraq's national security adviser, Mowaffaq al-Rubaie, issued a sharp denial.

(BEGIN VIDEO CLIP)

AL-RUBAIE: We will never give amnesty to those who have killed American soldiers or killed Iraqi soldiers or civilians. What the prime minister is going to give amnesty to are those who have not committed the crimes, whether they're against Iraqis or coalition, those who will have -- still carrying arms and they might have probably done some minor mistakes in storing some arms or allowing some terrorists to stay overnight or shelter -- give shelter to some of these insurgents.

(END VIDEO CLIP)

BLITZER: That was Mowaffaq al-Rubaie, the national security adviser of Iraq.

Jack Cafferty is off all of this week. He'll be back on Monday.

Up ahead, target Taliban. More than 10,000 coalition troops fighting a growing insurgency right now. We're going to take to you Afghanistan for the latest.

Also, the Senate majority leader, Bill Frist, he's standing by to join us in THE SITUATION ROOM to talk about the war in Iraq and more.

Plus, much more on our top story. Microsoft's Bill Gates decides to step aside from his day-to-day job.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In Afghanistan, a bomb exploded on a bus carrying local workers to a coalition air base in Kandahar. Ten were killed. Military authorities blame the Taliban, who have been making a comeback in their former stronghold.

Today, more than 10,000 coalition troops, most of them Americans, are on the offensive. Their target, the Taliban.

Our senior international correspondent, Brent Sadler, is with Canadian forces in Kandahar province -- Brent.

BRENT SADLER, CNN SR. INTERNATIONAL CORRESPONDENT: Wolf, military operations to crush a raging Taliban insurgency in southern Afghanistan are ratcheting up. The U.S.-led coalition forces are leading the charge, backed up by Afghan police and army units. Military commanders say the Taliban will be systematically weakened and ultimately destroyed by sustained military pressure.

(BEGIN VIDEOTAPE)

SADLER (voice-over): Canadian combat troops prepare for battle in southern Afghanistan, the sharp end of U.S.-led Operation Mountain Thrust in Kandahar province. Afghan police are not so well-equipped, but they're getting better at killing the Taliban, say the Canadians, learning from each firefight. This combined battle group claims the Taliban is being forced into a corner.

COL. IAN HOPE, COMMANDER, TASK FORCE ORION: I know they're tired. I know they're overwhelmed in this particular area. They still can mount attacks.

SADLER: Afghan police captain Ahmed Masood says villagers are fed up with the insurgent violence and are helping the offensive to succeed by feeding information.

(on camera): Captain, how close are we to the Taliban here?

CAPT. AHMED MASOOD, AFGHAN POLICE: One kilometer. And two kilometers in some places.

SADLER (voice-over): But the Taliban know the lay of the land.

MASOOD: Even we have powerful (INAUDIBLE), even we have strong (INAUDIBLE) and airplanes, but they know the area better than us.

SADLER: An advantage, but not one that's going to have much tactical effect on these hunters in pursuit of prey.

(on camera): Operation Mountain Thrust has been hitting the Taliban hard from the air and on the ground. It is a multinational effort. These Canadian troops have been out here for the past few days, sweeping this area of Taliban insurgents.

(voice-over): The offensive is now shifting into high gear, calling on some 11,000 American, Canadian, British and Afghan forces.

HOPE: It is a multi-national effort, where we'll have pressure on Taliban forces throughout the entirety of the southern region of Afghanistan. Simultaneous activity, which is all focused at disrupting them.

(END VIDEOTAPE)

SADLER: No one expects a short-term victory here. And Operation Mountain Thrust is as much about building confidence in Afghanistan's own security forces as destroying Taliban's network of fighters and command structures -- Wolf.

BLITZER: Brent Sadler on the scene for us in Afghanistan.

Thank you.

Fredricka Whitfield is joining us now for a closer look at some other important stories making news.

Hi, Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, Wolf.

A Supreme Court victory for the Bush administration. The justices ruled 5-4 that drug evidence seized in a home search can be used against a suspect even if police fail to knock or wait before entering. The justices divided along ideological line, with the new justices, Samuel Alito, and John Roberts siding with the majority.

Out of Congress and on to the White House. The Senate has approved a $94 billion spending bill earmarked for the wars in Afghanistan and Iraq, as well as to Hurricane Katrina victims. More than two-thirds of the money will go to the Pentagon. And it brings the total spent on the war in Iraq now to almost $320 billion.

A spokesman says Hamas would like to renew its cease-fire with Israel if the Jewish state stops what he called aggression toward the Palestinians. The spokesman says Hamas would be willing to talk to other Palestinian factions about a truce that would end rocket attacks on Israel. Israeli defense forces say there were five such attacks launched from Gaza today, injuring one person.

At least three people are dead and more than a dozen hurt in a series of bombings in southern Thailand. A Thai military spokesman says 33 bombs exploded at police stations and government offices in three predominantly Muslim southern provinces. He blames militant Muslim separatists seeking independence, although no one has claimed responsibility -- Wolf.

BLITZER: Fred, thank you very much for that.

Coming up, Senate Majority Leader Bill Frist, he'll join us live right here in THE SITUATION ROOM. We'll talk about the war in Iraq, his amendment banning flag burning, and more.

Plus, who's afraid of Senator Hillary Rodham Clinton? One Republican says his own party is. We're going to show you who that is and why.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We've been following breaking news out of Redmond, Washington. Bill Gates announcing he's stepping down over the next two years as the leader of Microsoft.

Ali Velshi is joining us once again from New York. He's got that and "The Bottom Line" -- Ali.

(BUSINESS REPORT)

BLITZER: Ali doing some excellent reporting for us on this breaking news story.

Other news we're following.

An emergency spending bill that includes money to keep the wars in Iraq and Afghanistan going is now ready for the president's signature. The measure also contains money for hurricane relief. The Senate approved the $94.5 billion bill earlier today.

Joining us now from Capitol Hill is the Senate majority leader, the Tennessee Republican, Bill Frist.

Senator, thanks very much for coming in.

SEN. BILL FRIST (R-TN), MAJORITY LEADER: Good to be with you, Wolf. Thanks.

BLITZER: You want to make a quick comment on this Bill Gates story? It's huge potential news. He's only 50 years old. He's deciding now over the next two years to step down. He's really revolutionized the world.

FRIST: Wolf, he has. It's interesting, people will cover it from a business angle in terms of the great contributions he's made to our lives in terms of the Internet and information technology. My immediate reaction is the fact that he took head-on the challenge that three million people die of HIV-AIDS every year, that two million people die of tuberculosis every year, that one million people die of malaria every year, and he said, I'm going to do something about it.

It doesn't have much to do with information technology, but he said, I'm going to pull the very best out of the private sector, out of the non-private sector, out of my own foundation. I'm going to go at it. And as a product of that, he has single-handedly, again, with nonprofit organizations over the country, probably done more than at least anybody I know in changing the course of humanity as you address these issues of public health. A remarkable person. And I'm very hopeful that he will continue, and I'm sure he will work in this regard.

BLITZER: Well, he's going to devote all of his energy, as he now says, to that once he formally steps down in two years. Senator, thanks for that.

Let's talk about your business as the leader of the Republicans in the United States Senate. I want to show our viewers a chart of job approval for the U.S. Congress. This is the Republican led Congress. Right after 9/11 in October of 2001, it was at 84 percent. Now in our most recent CNN poll, it's down at 25 percent. That makes the president's job approval numbers -- president's numbers look great in the mid-30s or upper 30s, compared to where this Congress is.

Why do you believe the American public thinks the Congress, led by Republicans, has done such a poor job?

FRIST: Well, I don't think we've done a very good job messaging what we have accomplished even over the last year and a half. When you look that we passed bankruptcy reform, class action reform. We addressed the issues of decreasing regulations, some of the largest tax cuts in the history of this country, which take burden off of small business.

People don't know that a year and a half ago we passed the first comprehensive energy plan -- energy plan proposal, now law of the land, in 15 years that looks at supply, that looks at alternative sources of energy, that looks at demand.

They don't realize that we're securing America's prosperity by securing our borders with $12 billion. Still a lot more to do. Securing America's values by having two Supreme Court justices go through that approval process just over the last year. Secure America's health by right now people are beginning to realize it.

BLITZER: But Senator...

FRIST: Just 2 1/2 years ago, make sure that 39 million seniors today have affordable access to prescription drugs. I mention all that because that's what we're doing, governing with meaningful solutions.

BLITZER: But...

FRIST: You're exactly right, though, that people are not listening and our messaging may not be quite what it should be.

BLITZER: And even some of your supporters are saying that by focusing in on issues like a constitutional amendment to ban flag burning or same sex marriage, you're really not focusing in on the key issues facing the country.

In our most recent poll, which issues are extremely or very important to you as far as your vote for Congress is concerned, terrorism, Iraq, the economy, gas prices, corruption, immigration, surveillance. There's no -- there's no high regard for an amendment that would ban flag burning, which you're putting forward right now, and in recent weeks you did the ban on -- a constitutional ban on same sex marriage was defeated. That's what's generating some concern. Why are you focusing in on these issues when you should be focusing in on the major issues?

FRIST: Yes. I just went through the list of what we've done in the last 18 months. Two Supreme Court justices. A year and a half ago, the largest energy bill in 15 years, $12 billion on the border. You mentioned one day on the flag. Right now, I think even after this show, every veteran may write you to say it's not an important issue because it is the No. 1 issue of the people who have defended the United States of America, the No. 1 issue. We are going to spend a day on that.

But we just spent a month on border security, tightening our borders, having a strong temporary worker program.

So, yes, we can do more than one thing at once. We can secure America's values with a sex -- child sex offender, predators bill. We can actually keep confirming our judges. I mentioned two Supreme Court justices in the last year.

It doesn't mean we're going to say that marriage is not the union between a man and woman and just ignore that, or that we're going to say it's OK to desecrate the flag of the United States of America, which is what a Supreme Court decision said 20 years ago. We can continue to govern with meaningful solutions, and that's exactly what we'll do.

BLITZER: I'm not saying these issues aren't important, Senator. But let me read to you from a letter that 60 conservative groups wrote to U.S. senators, Republican senators, the other day.

"While most of us would support such an amendment banning flag burning, we believe this is a misguided use of time. If Americans continue to see obstruction and hear excuses rather than debate and votes on nominees, senators should not be surprised that, come November 8, the votes they want may not be there."

That's a letter to Republican senators.

FRIST: Yes, and let me just comment real quickly, because you're exactly right. I received that letter. And they don't want to spend a day preventing desecration of the flag, something that we did for 200 years. They don't want to do that because, as you said, judicial nominees.

Yet I just told you in one year we did two Supreme Court nominees. We've done 28 circuit court nominees. We've done over 100 district court nominees. We'll do another circuit court nominee on Monday. That's all in the last year.

So you can't tell me that we're not addressing the judicial nominees in a way that is aggressive, that is consistent with our responsibility.

The thing is we can do more than one thing at a time and that's what we're going to do. We're going to secure America's prosperity, secure America's safety, secure America's health and secure America's values. And that does include things like marriage, flag burning and our judicial nominees.

BLITZER: One thing you did do is send the president this emergency supplemental funding for the war in Iraq, the war in Afghanistan, hurricane relief, $94.5 billion.

Is it time, though, as many of the critics are saying, don't do these supplemental, these separate appropriations. Do it within a formal budget structure so that you can deal with the issue of this burden -- this growing deficit down the road. What do you make of that criticism that you're simply using these extra off-budget vehicles simply too much?

FRIST: Two things on the supplemental. We did pass it today. I think the president will probably sign it tomorrow. It does put over $60 billion in supporting our troops overseas. And most of the remainder going to the Katrina and hurricane victims.

And you're exactly right. There is absolutely no reason -- and the Senate expressed its will in an amendment yesterday on that -- to have supplemental, these huge emergency spending bills come through. It is time now that we're three years into a war right now -- and we know it's going to be continued spending -- to put that into the normal budgetary authorization and appropriation process.

We voted that on the floor of the United States Senate, and I predict we will be able to do that.

One other quick thing on that supplemental. Remember we were taking a lot of criticism of that bill leaving the United States Senate, 107 or 108 billion dollars. The good news, I believe, for us and for the American people, is that we cut that bill down. We got rid of the waste and the abuse in that bill. And we got it down to exactly the number that the president asked for, no more or no less.

BLITZER: And the president had warned, as you remember, he would veto it if you didn't get down to that number. He hasn't cast a veto yet. That would have been his first. But you did what he wanted, and he's going to sign it, as you say, into law.

Senator Frist, thanks very much for coming in.

FRIST: Good to be with you, Wolf. Thank you.

BLITZER: Thank you.

And coming up next, among them, officials say, were gang members and violent criminals. All they -- and they say all of them were illegal immigrants. So where are they now?

And who's afraid of Hillary Rodham Clinton? The senator's political opponent thinks he has the answer. That's creating a bit of a family feud. Stay with us.

(COMMERCIAL BREAK)

BLITZER: In our "CNN Security Watch", a massive effort by immigration and customs officials that's nabbed illegal immigrants, including some violent criminals.

CNN's Chris Lawrence is joining us now live from Los Angeles with details -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, federal agents arrested more than 700 illegal immigrants here in California alone. But the big question is how many will stay off the street.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): The operation was called Return to Sender. And by Thursday, more than a third of the illegal immigrants arrested had already been deported.

JULIE MEYERS, DIRECTOR, IMMIGRATIONS AND CUSTOMS ENFORCEMENT: We've already sent back 829.

LAWRENCE: Immigrations and Customs Enforcement director Julie Meyers has heard the criticism of previous catch and release programs. Agents make arrests, then illegal immigrants are given a court date they never show up for. In this case, only 135 people were released out of more than 2,000 arrested.

MEYERS: Well, they're the worst of the worst.

LAWRENCE: Agents arrested people in 34 states. Their targets included gang members and child molesters. This man was convicted of stabbing and paralyzing a teenage boy, but agents caught him working at an airport rental car counter.

LUIS CARRILLO, DEFENSE ATTORNEY: This is just the tip of the iceberg.

LAWRENCE: Luis Carrillo represents a lot of illegal immigrants. He supports raids that remove criminals from Latino communities but worries about what happens when the next operation targets more than just criminals.

CARRILLO: Too often the Department of Homeland Security officials seek to justify every arrest of undocumented worker in the name of national security.

LAWRENCE: But immigration enforcement officials say they're focusing on those that commit crimes.

MEYERS: I think most immigrants who come to this country, even illegally, want to come to work, want to come to live the American dream. And we want to focus on those who do not want to live the American dream.

(END VIDEOTAPE)

LAWRENCE: In a separate operation federal agents arrested 55 illegal immigrants working at Dulles Airport. They were part of a construction team but officials say they did not have access to the most sensitive parts of the airport -- Wolf.

BLITZER: All right. Chris, thanks very much.

And to our viewers, stay tuned to CNN day and night for the most reliable news about your security.

Still to come, an odd twist in the U.S. Senate race. With Hillary Clinton in the lead in New York, why is the Republican candidate running against her now attacking his own party? We're going to tell you.

And why does President Bush feel like he needs to protect the waters off Hawaii? That's coming up, as well. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs getting ready for his program that begins right at the top of the hour. He's standing by to tell us what he's got.

Hi, Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Hi, there, Wolf.

Coming up at 6 p.m. Eastern here on CNN, tonight we'll be reporting on the first substantive debate on the war on -- in Iraq in the House of Representatives since this war began more than three years ago. Can Republicans seize the political initiative now? We'll be live on Capitol Hill with that story.

Also tonight, the Bush White House appears determined to override the U.S. Congress and the will of the American people in its efforts to sell foreign ownership of our airlines. And we'll have a special report on another great American giveaway, as well.

And we'll be examining the intensifying argument and debate over whether or not global warming is a reality and whether or not our planet faces an imminent threat. Two of the country's most distinguished climatologists with quite different views will join us here. We hope you'll be with us.

Now Wolf, back to you.

BLITZER: Thanks. Sounds good, Lou, as usual. Appreciate it.

It's a tempting question. Who's afraid of Senator Hillary Clinton's reelection bid in New York state? Her opponent thinks he knows who. And you may be surprised to learn who he's pointing a finger at right now.

Let's bring in our Mary Snow. She's in New York with more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, a Republican underdog challenging Senator Hillary Rodham Clinton in New York is gaining attention for a new radio ad that's taking aim at his own party.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Is Senator Hillary Rodham Clinton instilling fear among Republicans? New York Republican Senate hopeful John Spencer thinks so. He's trailing Clinton by roughly 30 points in polls and he's putting part of the blame on the national GOP brass.

JOHN SPENCER (R), NEW YORK SENATE CANDIDATE: I do feel that they're afraid. They're afraid to, you know, participate and run out there against Senator Clinton.

SNOW: In a new radio ad, Spencer goes further, contrasting the lack of GOP help to his combat experience of walking point in Vietnam.

SPENCER: In Vietnam, one of the most frightening duties any soldier had was walking point. You could hit booby traps or ambushes, but you always knew your buddies were behind you. Running for U.S. Senate against Senator Clinton is a lot like walking point. You find out who your buddies are real fast.

SNOW: Spencer, a conservative, says he's not finding many Republican buddies.

SPENCER: I think that they're buying into this rhetoric that, you know, Senator Clinton cannot be beat in the state of New York, and they're fast-forwarding to presidential runs or projected presidential runs, and I think that's a mistake.

SNOW: Contacted by CNN, the nation national Republican senatorial committee declined commit. But some GOP strategists say Spencer's attack is misdirected.

DAVID WINSTON, REPUBLICAN STRATEGIST: Republicans aren't afraid of Hillary Clinton. That's not the question. The question is has he put together a race where he's made it competitive enough that we can put money in that will make a difference.

SNOW: Spencer still faces a primary challenge from fellow Republican K.T. McFarland. Both had less than $500,000 on hand at the last filing compared to Clinton's $12 million. Both plan on fundraising outside New York this summer to raise money.

(END VIDEOTAPE)

SNOW: Spencer says the New York race has national implications and says it's necessary to go to other states for money to compete against what he calls the Clinton machine.

To our viewers, remember, you're in THE SITUATION ROOM, where political news is arriving all the time. CNN, America's campaign headquarters.

Up ahead, what's the price of indecision? When it comes to buying a plane ticket, that price could be sky high. We're going to explain.

And they're in danger, but can they now find safety? That would be seals, turtles, other marine life. We're going to tell you about their new place of refuge, courtesy of President Bush. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Book deals, exotic trips, legal fees, even slot machine winnings, it's an intimate look at the private lives and finances of public figures. Beyond the salary, what are your lawmakers making? The answer is now online. Let's bring in our Internet reporter, Jacki Schechner

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, it's political money line, it's a nonpartisan D.C. watchdog group. And they took the trouble to scan in congressional disclosure forms so that you can get a sense of what your lawmakers are worth. And there's some good stuff in here. It's worth taking a look.

Like House Majority Leader John Boehner, who was on a long road trip last August. He stopped to stretch his legs, put some coins in a slot machine in this casino, and ended up winning some $2,700. Let me get back to that page there.

You can also take a look at Congressman William Jefferson, who is currently under investigation by the FBI for alleged bribery charges. You can see what his defense fund is or his legal trust fund, rather. He's raised some $150,000.

Former house majority leader, Tom DeLay, he's also got himself a legal expense trust. This comes out to about $500,000, but you can juxtapose that with his legal defenses, which he lists at about $1 to $2 million.

The Senate is in here, too. You can take a look at things like book deals, for example, Senator Joe Biden lists his book advance at $112,000 -- Wolf.

BLITZER: Thanks very much, Jacki, for that.

Up next, President Bush creating the biggest national monument ever and it's almost all underwater. We'll have the details of a giant marine sanctuary. That's coming up next. Stay with us.

(COMMERCIAL BREAK)

BLITZER: With the stroke of a pen, President Bush has now created the world's largest ocean sanctuary. The new Northwestern Hawaiian Islands Marine National Monument is home to several rare and endangered species, including seals and turtles.

CNN's Tom Foreman is here in THE SITUATION ROOM to show us how big of a deal this really is. How big is it, Tom?

TOM FOREMAN, CNN CORRESPONDENT: It's huge. This is now the biggest one on the entire planet, bigger than the Great Barrier Reef. Take a look at this.

United States right here. We're moving off to the park area. Look at this. I'm going to highlight it. That's how big this new sanctuary is. And it includes some amazing areas. Look, Midway Island, famous from World War II. Just take a look at this. From the air as you come in, you don't see a whole lot. You just see a lot of ground here. There are the old air fields, the things they fought over.

But take a look at this. This is the amazing part. When you go underneath the water on this, that's the part that makes it astonishing. Under the water you can see that there are these layers of -- well, or maybe you can't see. In any event, in this area, those light blue areas there, that's where the water -- we're able to see down about 90 feet. There you go. And the deep blue areas where it drops off.

Almost all of the life in the ocean lives in those layers. In that first 50, 60, 100 feet of water, that's where it is. That's why this is such a rich area.

And this new designation covers a number of these. You move away from Midway. Over here is called Pearl Hermes (ph), another site, with some beautiful nice shallow areas. Coral reefs all around it. Fabulous stuff.

Over here is another one called Lasson (ph), which is one of the places that people are going to be looking at in the future. Scientists going there, different tourists. You can't see anything this way, but then you move in, you can see beneath the water what is available there.

You've gone over to the -- what's called the Macro Reef, which is another one like this, in that from the air you wouldn't see much. But this is about what's underwater. And look at that, an incredible network of coral reefs. These things are completely teaming with life species that you just won't find anywhere else.

This is a huge designation that has a lot of people very, very excited. You don't get here easily. It's far from anything else. They're all uninhabited. But you can get there now and know that it will be protected for a long, long time for people to go and see.

BLITZER: And the president did it with signing -- just signing on the dotted line. This is about the size of California.

FOREMAN: The size of California, would stretch, if you moved it inland, a little bit, something a lot of us might know from the middle of the country, about from Chicago to Miami. This is a gigantic deal. If you love nature, if you're into this sort of thing, big, big development here that you may not get to for a long, long time. But if you do, what a sight it will be to see.

BLITZER: It's -- thanks very much, Tom, for that. As I said, it's about the size of California. Seven thousand species, many of which can't be found anyplace else on the planet, are now protected there.

Let's get a closer look at some of these exotic creatures online. Jacki Schechner has that. SCHECHNER: Wolf, what you're watching swim around when it comes into view is the Hawaiian monk seal. It's one of the most critically endangered animals in the entire United States, found in the northwest Hawaiian islands, the area that we're talking about right here.

This is one of thousands of species -- birds, animals, mammals, turtles, all of it -- now going to be protected in this area that you mentioned. It is the size of California. This is going to make it one of the highest levels of protection. It goes from a reserve to a national monument.

And NOAA's put all this information online. It wants you to learn more about it. You can go to the web site here when we get done with this video and take a look at the Northwestern Hawaiian Islands online, some of these species, and it will give you a better idea, Wolf.

BLITZER: Jacki, thanks very much for that.

And to our viewers, remember, we're here in THE SITUATION ROOM weekday afternoons from 4 to 6 p.m. Eastern. We're back in one hour at 7 p.m. Eastern. And as we speak, Democrats right now meeting behind closed doors on the future of their fellow congressman, William Jefferson, a member that was caught, apparently, with some $90,00 in cash in his freezer. We'll have an update on that.

Let's go to Lou Dobbs in New York -- Lou.

DOBBS: Thank you, Wolf.

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