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Democrats Fuming Over Proposed Plan for Troop Reduction; Zalmay Khalilzad Discusses Reconciliation Plan in Iraq; Senate Debates Constitutional Amendment to Ban Flag Burning; Bomb Blasts Echo Near Baghdad

Aired June 26, 2006 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks, Ali. To our viewers, you're in THE SITUATION ROOM, where new pictures and information is 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, it's midnight in Iraq. As fresh violence rages, there's a plan on paper for a significant troop cut. That's got Democrats saying they are marching in step with the commander of U.S. forces. Is the White House marching to a different drummer?

Right now, the Senate starts a debate on a constitutional amendment to ban flag burning. It's 4:00 p.m. here in Washington. Would a new amendment weaken the First Amendment? And it's 4:00 p.m. in New York, where the world's second richest man is giving most of his money to the world's richest man, to give it away. Who will benefit from Warren Buffett's benevolence? I'm Wolf Blitzer, you're in THE SITUATION ROOM.

Bomb blasts echoed across Iraq today as a furious new round of violence sweeps the countries. Iraqi police say at least 18 people were killed when a motorcycle packed with explosives blew up in a marketplace in Baquba, that's north of Baghdad. That bomb went off shortly after another blast rocked the main market in Hilla, south of Baghdad.

Police say at least five were killed there, dozens more were wounded. Police say bombs and bullets killed at least a dozen people in Baghdad, where 10 Iraqis were also reported kidnapped. The U.S. military says a marine died after being wounded in action in the al- Anbar Province; 2,520 U.S. military personnel have died in Iraq since the start of the war.

And just a short while ago, the remains of private first class Kristian Menchaca were returned to Brownsville, Texas. He was one of the two soldiers captured and killed brutally by insurgents in Iraq earlier this month.

The latest violence comes admit a flurry of talk about a U.S. troop withdrawal. But President Bush is keeping quiet about reports that the top U.S. military commander in Iraq advised him to trim U.S. troop strength there by up to 7,000 in the months ahead.

There's also a debate underway right now about a reconciliation plan proposed by Iraq's new prime minister, Nuri al-Maliki. The reconciliation part of it is winning endorsements on Capitol Hill, but there is deep concern about an amnesty provisions, which critics say could lead to the release of prisoners who may have killed American forces in battle. CNN's Andrea Koppel is standing by with more on that from Capitol Hill. Let's go to the White House, first, Andrea -- excuse me, Suzanne Malveaux has the latest from the White House -- Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well Wolf, earlier this morning there was a lot of talk about that thunderstorm that passed through Washington and actually knocked down a 100-year- old elm tree here at the North Lawn of the White House. But really, it is a political storm that is brewing that is causing Washington to be all a bluster here.

Democrats are now charging -- accusing here that perhaps the Pentagon's goal to pull out as many as 7,000 U.S. troops out of Iraq by September, that is just a couple months before midterm elections, is something that is politically motivated. President Bush today, asked about that, categorically refuted that charge.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In terms of our troop presence there, that decision will be made by General Casey as well as the sovereign government of Iraq based upon conditions on the ground.

(END VIDEO CLIP)

MALVEAUX: Now, Democrats are fuming over not just one, but two bills that were categorically rejected by Republicans last week for withdrawing -- at least a timetable for withdrawing U.S. troops. Republicans categorized it as a cut and run policy of the Democrats here. Both sides really trying to get the political advantage over this. We hear from Democrats, who are now comparing there proposals, saying very similar to the Pentagon plan. But the White House and other Republicans say that they were not sound.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Difference No. 1, the redeployment or the moving of battalions would be based on conditions on the ground, not on the calendar. No. 2, the ultimate goal would be to win, not to get out.

(END VIDEO CLIP)

MALVEAUX: And that of course, Tony Snow, the press secretary of the White House, making distinctions between what the Pentagon reported plan is and that of some of those Democratic proposals -- Wolf?

BLITZER: Suzanne, thanks very much. Let's go right up to Capitol Hill. Andrea Koppel is our congressional correspondent, lots of buzz up there on these issues, including this reconciliation plan -- Andrea? ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. Democrats in both the House and the Senate are crying foul today accusing the Republicans of hypocrisy of supporting that plan by General Casey to begin redeploying troops by the end of the year from Iraq, just days after slamming Democrats for proposing a similar idea.

Last week on the Senate floor, the debate was heated and angry as Democrats offered two different proposals to begin redeploying troops by the end of 2006. One of those plans offered by Senators Reid and Levin did not set a timetable for the withdrawal to be completed, much as General George Casey's plan does not. Nevertheless, only one Republican, Lincoln Chafee of Rhode Island crossed over to support 38 Democrats just before it was soundly defeated by Republicans who called it a cut and run strategy, a defeatist strategy. Today needless to say, Democrats were fuming.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MINORITY LEADER: Do they believe that what General Casey is suggesting is defeatist? Do they believe that General Casey is unpatriotic? Do they have a plan now of their own, the Republican majority? Or do they still want to stay the course.

(END VIDEO CLIP)

KOPPEL: In a statement issued today, the House Democratic leader Nancy Pelosi said the Bush administration's arrogance on Iraq is in her words, "boundless." She accused the GOP of playing politics with the war. Republicans counter that there is a big difference between a decision that's made by a four-star general and a decision that's made by Democrats who obviously in many instances don't have a military background.

As you mentioned, Wolf, Democrats are also concerned about that vague plan that we heard about over the weekend by the Iraqi government to offer amnesty to Iraqi insurgents. The big question, say senators like Joe Biden of Delaware is the details. As he put it, the devil is in the details, Wolf.

BLITZER: Andrea Koppel on the Hill, thanks very much.

And joining us now from Baghdad is the United States ambassador in Iraq, Zalmay Khalilzad. Mr. Ambassador, thanks very much for joining us. I know it's late there, very late. Let's -- we've got a lot of issues to go through. Let's talk about amnesty first. Listen to what Senator Carl Levin, the ranking Democrat on the Senate Armed Services Committee, said yesterday. Listen to this.

(BEGIN VIDEO CLIP)

SEN. CARL LEVIN (D), MICHIGAN: We liberated that country and the idea that amnesty would be give only to people who killed our troops is just unconscionable.

(END VIDEO CLIP) BLITZER: All right, there's concern, as you know, that this reconciliation plan including amnesty by the new prime minister would allow among the 2,500 detainees they are about to let go, some who have killed Americans. What do you know about this because there's lots of confusion.

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: Of course, we want Iraqis who are opposed to the liberation of Iraq and the establishment of this new Iraq, who fought this new Iraq, to lay down their arm, embrace this new Iraq.

And that's what this reconciliation plan is about. And as part of the effort to end the war, and therefore honor our troops by getting Iraqis to accept what they fought for, amnesty is a possibility.

But that it going to be conditional. It will have to balance the requirements of reconciliation and justice and also the sacrifices of our troops. There has been no decision made with regard to the issue that Senator Levin was talking about. I believe, given our relationship with the Iraqis, we can be sure that our interests will be protected and the sacrifices of our troops will be recognized.

BLITZER: So when Senator Biden and others say the devil is in the details, is it fair to say at this point that we don't know what those details are, that the Iraqi government, the new prime minister is still trying to define who should be eligible for amnesty?

KHALILZAD: Sure. Because there are various kinds of amnesty. There is a general amnesty, there are conditional amnesty. We ourselves in various conflicts, that we have been involved in, have used amnesty as an element to bring about reconciliation.

When you look at the Philippine rebellion at the beginning of the last century, or if you look at the Whiskey Rebellion, or in the aftermath of our own Civil War. But I think it's premature to worry about this. I think the principle of amnesty is out there. I think it's appropriate that in the mix of incentives and disincentives that is being employed, to encourage people to lay down their arms and accept this new Iraq that amnesty is there. But it's very much conditional and it will be context-contingent. And we will have say in terms of what happens on this issue.

BLITZER: But at this point, you can't rule out the possibility that some Iraqis who were involved in killing Americans will be allowed to go free?

KHALILZAD: Well, I can't rule out that some Iraqis would push for that. But I believe that it's highly unlikely and that all Iraqis, or the government of Iraq, will make a distinction and that will allow amnesty for those that killed American soldiers. But that they could be amnestied, but not those that killed Iraqis.

BLITZER: As we speak, there are new reports of another set of horrific attacks, bombings in Hilla and Baquba. Is the security situation, at least in the short term, right now getting worse? KHALILZAD: Well there are significant security problems that remain and will continue. You mentioned Baquba. There are continuing problems in Baghdad. There are continuing problems in Basra. Of course, there are problems in Anbar Province.

I think the new government is very energetic, moving on various tracks, on not only a security track, but on the economic and political tracks. And I believe that strategically it's moving in the right direction, but there is significant security problems that persist.

BLITZER: At a time when these significant security problems persist right now, is it wise to be talking about troop withdrawals, including a few brigades in September, more by the end of this year, and a lot more next year, as apparently General Casey spoke about while he was here in Washington at the Pentagon last week?

KHALILZAD: Well, I believe that for the redeployment to occur, there has to be an agreement between us and the Iraqi government. The discussions about that have not started yet. When George gets back, he and I will meet with the leadership of Iraq, with the prime minister and we will establish a joint committee that will talk about adjustments in our forces, as well as conditions that could relate to, or will relate to whether those adjustments downward will take place or not. And that has not happened, so any judgment that the U.S. will adjust forces by particular numbers within a particular time frame is premature in my view.

BLITZER: We only have a little bit of time left. But I want to refer to that June 6th cable that came from the U.S. Embassy in Baghdad, signed by you, that was published in the "Washington Post." And it showed a very bleak picture of the Iraqis who work at the U.S. Embassy in Baghdad, what they have to endure. Let me read a little excerpt from the cable.

"Some of our staff do not take home their American cell phones, as this makes them a target. Planning for their own possible abduction, they use code names for friends and colleagues and contacts entered into Iraq cell phones. For at least six months, we have not been able to use any local staff members for translation at on-came press events."

There was another quote, it said, "Another employee tells us that life outside the Green Zone has become emotionally draining. He lives in a mostly Shiite area and claims to attend a funeral every evening." And finally this quote.

"We cannot call employees in on weekends or holidays without blowing their cover."

It sounds awful what these Iraqi citizens have to endure simply to work at the United States Embassy, where you are.

KHALILZAD: Well, yes. And that was a factual description of what these very brave Iraqis who work with us to build this free Iraq go through. But yet, they keep working with the embassy. And the Iraqis go vote, other Iraqis, by the millions for this new Iraq. And the Iraqi security forces fight those who want to stop Iraq from progressing.

That should be a source of inspiration to all free people, the sacrifices, the risks that the Iraqis are taking to build this new Iraq. But what was reported was a factual report of what are very brave colleagues, who are Iraqis, who are part of our team are experiencing in order to perform their mission.

BLITZER: Finally Mr. Ambassador, we are told it's about 115 degrees outside in Baghdad and throughout much of Iraq today. With limited amount of electricity, virtually no air conditioning, it looks like the situation is ripe for further anger as people try to make their way in these kinds of awful conditions.

KHALILZAD: Well, the conditions are hard but in fact, on the electricity front, in recent weeks, the situation has improved throughout the country. Now on average there is 12 hours of electricity every 24 hours available. In Baghdad, it's about eight. It used to be a month or so ago, about four. So, yes, conditions are hard but Iraqis are making progress.

BLITZER: I know you have been there for a year now, almost exactly, good luck Mr. Ambassador. Good luck to you, good luck to your staff and to all the U.S. military personnel who are on the scene as well. In fact, good luck to all the Iraqi people, thanks for coming in.

BLITZER: Well, thank you, Wolf. Let's go to Jack Cafferty in New York. He's joining us with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Some people in Washington are not happy about the decision of major newspapers last week to report on the administration's surveillance of financial records. President Bush says it makes it harder to win the war on terror.

(BEGIN VIDEO CLIP)

BUSH: The disclosure of this program is disgraceful. We're at war with a bunch of people who want to hurt the United States of America, and for people to leak that information and for a newspaper to publish it does great harm to the United States of America.

(END VIDEO CLIP)

CAFFERTY: The chairman of the House Homeland Security Committee, Congressman Peter King, is calling for criminal prosecution of the "New York Times." He calls the report, quote, "absolutely disgraceful," says it compromised national security. The editors of "The National Review" are suggesting the White House yank the press credentials from the "New York Times." But some senators disagree from both parties with King's call for an investigation.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D), DELAWARE: There's a lot of thing that newspapers do, and sometimes you guys on television do, that I don't like. But I -- and I understand Senator Specter said something in effect this morning -- I believe Jefferson was right. If you give me a free press or a free government with no press, I'll take the free press.

(END VIDEO CLIP)

BLITZER: The executive editor of "The New York Times" says his newspaper spent weeks talking with administration officials about whether to publish the report.

The question is this: should newspapers be prosecuted for reporting on the government's surveillance of financial records. E- mail us caffertyfile@CNN.com, or go to CNN.com/caffertyfile.

BLITZER: Jack, thanks very much. We're going to have more on this coming up here on THE SITUATION ROOM, as well.

And also coming up, the flap over flag burning. We'll go live to Capitol Hill.

And billionaires are known for accumulating wealth, not necessarily giving it all away. But it appears Warren Buffett isn't your typical billionaire. Up next, we'll tell you what he's doing with his dollars, and why he's teaming up with Bill Gates. Jeff Greenfield standing by.

Plus, it's just what the mid-Atlantic and northeast states probably don't need, but that's what's coming: more rain. We're covering the widespread flooding.

And later, a Republican congressman from Utah is fighting for his political life because he stands with the Republican president on the issue of immigration.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back. Leaders in both parties say the country doesn't need it. But the Senate this hour is debating landmark legislation that could make desecration of the U.S. flag unconstitutional. Critics say a new amendment to protect the flag would jeopardize the first amendment, which protects freedom of speech. Let's go live to Capital Hill. Our Congressional Correspondent, Dana Bash is standing by, Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well Wolf, a flag desecration amendment has passed the House six times, most recently last summer but it has never passed the Senate. This year Wolf, it absolutely could. Supporters say they believe they are just one vote shy of approving this constitutional amendment and that raising the stakes of a debate that critics say is as much about November's election as it is about protecting the stars and stripes.

(BEGIN VIDEOTAPE) BASH (voice-over): Madonna wrapped in a flag. To some, this 1990 MTV ad was patriotic, trying to get young people to vote. To others, she was desecrating America's most sacred symbol. The election year flag debate will not settle those arguments. The constitution amendment before the Senate simply says the Congress shall have power to prohibit the physical desecration of the flag of the United States.

SEN. ORRIN HATCH (R), UTAH: The amendment doesn't ban anything. It just provides a means whereby we tell the Supreme Court, keep your hands off social issues. This ought to be decided by the elected representatives of the people.

BASH: Gop lawmakers have been pushing to amend the constitution since 1989, hoping to overcome Supreme Court rulings that laws banning flag desecration violate the first amendment.

SEN. JOHN WARNER (R), VIRGINIA: Choose some other form of expression of their freedom of speech, but do not trample or desecrate Old Glory.

BASH: A healthy majority of Americans, 56 percent, do favor a constitutional amendment making flag burning illegal. But that support has flipped considerably since 1990, when it was 69 percent. There is no reliable data showing just how big a national problem flag desecration is, but the main lobbying group pushing flag laws only cites 50 flag-related crimes in the last five years.

TERRI SCHROEDER, SENIOR LOBBYIST: This is a solution in search of a problem. It is playing politics with the constitution, with the potential dramatic effect on limiting people's first amendment rights.

BASH: Democrats call this debate now, some four months before election day, a standard GOP ploy to throw red meat to their base.

SEN. RUSS FEINGOLD (D), WISCONSIN: Oh, no. It always comes up just before July Fourth. It's a political game. It's outrageous and we have more important things to deal with.

BASH: Republicans brush off that criticism but do hope this could help galvanize some voters in key states, especially veterans.

HATCH: All states have pretty heavy veterans populations and they're not going to forget at this time. They know we are very close to this.

BASH (on camera): Now, if this does pass Congress and it is still a big if, it would have to go to the states. Thirty Eight states would have to approve it in order for this amendment to be ratified. But Wolf, all 50 states in the past 16 years have passed non-binding resolutions saying they support this idea of amending the constitution to prevent flag desecration.

(END VIDEOTAPE)

BLITZER: They need 67 votes in the Senate to pass it. They are very close. They may have 66. Who are the senators who are being lobbied right now for that crucial 67th vote.

BASH: Well, there are 14 Democrats at this point who look like they are on board to vote for it, interestingly one is Senator Jay Rockefeller from West Virginia, who has been out for months because of back surgery. His office says that he's going to be a yes vote. He plans to be here, but Republicans are looking at Senators like Joe Lieberman, in a very tough reelection campaign, Robert Byrd also up for reelection. Republicans though, they do fear that they will not get them. And even if they do get an extra Democratic vote, they say, some who actually are on the yes side may switch their vote, just to keep Republicans from having a victory Wolf.

BLITZER: Dana Bash, thanks very much for that. We will watch this vote with you tomorrow. Coming up, President Bush keeping quiet, but just about everyone else in town talking about when U.S. troops will start pulling out of Iraq. That includes our Paul Begala and Torie Clarke. They're standing by. Plus much more on what we've just been talking about, the burning issue of flag burning. What's behind today's senate debate? All that coming up.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. I'm Wolf Blitzer in Washington. Zain Verjee is off, Sophia Choi is joining us from the CNN Center with a closer look at some other stories making news.

SOPHIA CHOI, CNN CORRESPONDENT: Hi Wolf, good to be with you in THE SITUATION ROOM. Right now I want to get you caught up on a developing story coming to us out of the University of Colorado where officials have just announced their intentions to dismiss Ward Churchill. You might remember, he's the professor who likened some 9/11 victims to a Nazi and is now accused of alleged research misconduct.

(BEGIN VIDEO CLIP)

PHIL DESTEFANO, UNIV. OF COLORADO INTERIM CHANCELLOR: After conducting the due diligence I felt was necessary, I have come to a decision regarding the recommendations of the standing committee on research misconduct pertaining to professor Ward Churchill. Today I issue to Professor Churchill a notice of intent to dismiss him from his faculty position at the University of Colorado, Boulder.

(END VIDEO CLIP)

CHOI: And, again, that announcement coming just moments ago, let me give you the back story. In an essay written shortly after the 2001 attacks, Churchill describes some of the victims in the World Trade Center as little Eichmans, he said, a reference to a Holocaust architect Adolph Eichman, of course. Now, that essay triggered outcry and calls for Churchill to be dismiss. But officials at the University concluded that they could not dismiss him on those grounds because of free speech protections. They did however order an investigation into allegations of research misconduct which concluded two weeks ago and now this announcement. We're still following that story and others to. Here's some other news that we have for you. Flash flood watches and warnings are going up along the eastern United States. In Washington, officials are urging people to avoid flooded areas, like a tunnel near the IRS building. Take a look at that.

Several federal buildings were closed because of all that high water there. So far, there are no reports of any historic artifacts, though, being damaged. But here are some more pictures of what is going on. In suburban D.C., parking decks have become swimming pools. Thousands of residents lost electricity. A temporary shelter is now in place at Edison High School in Alexandria.

And a deeply divided U.S. Supreme Court has voted 5-4 today to uphold a death penalty law in Kansas. The law says, if juries find arguments for and against capital punishment carry the same weight, they must automatically impose a death sentence. Now, this is the -- actually, the second time the high court has heard the case. The justices deadlocked the first time four to four. Justice Sandra Day O'Connor had retired and had no vote.

Wolf, those are the headlines right now.

BLITZER: Thank you, Sophia, for that. We will get back to you soon.

The billionaire Warren Buffett is giving away most of his billions to another billionaire. That would be Bill Gates. Gates and his wife will then see that all that money goes to very good causes.

Joining us now, our senior analyst, Jeff Greenfield, here in THE SITUATION ROOM -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Well, Wolf, yes, indeed, it is news. It is real gee-whiz news when the second richest man in the world decides to give away the bulk of his fortune, most of it to a foundation run by the richest man in the world.

But there's a bigger story. It's about the massive accumulation of private wealth, the shift toward a less equal America, and the potential of what that wealth might do about it.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: How are you?

BILL GATES, FOUNDER, MICROSOFT: How are you?

UNIDENTIFIED FEMALE: Congratulations.

GATES: Thank you.

UNIDENTIFIED FEMALE: This is great.

GREENFIELD (voice-over): Warren Buffett and Bill Gates made it official today. Some $30 billion of Buffett's fortune will be transferred to the Bill and Melinda Gates Foundation, which already has more money than any foundation in America.

WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: I am lucky to have accumulated it. And all the way along, I felt that it should go back to society. And my wife agreed 100 percent with me. My family agreed. And the question was how to do it.

GATES: A reordering of my priorities.

GREENFIELD: This announcement comes less than two weeks after Gates announced he was giving up day-to-day control of Microsoft to focus more on philanthropy.

It's hardly a new phenomenon. A century or so ago, two of the richest and most criticized members of the American plutocracy, John D. Rockefeller and Andrew Carnegie, gave away much of their wealth, more than $14 billion in today's dollars, to universities, libraries, and foundations.

GATES: You are seeing the three trustees of the foundation here.

GREENFIELD: But the Buffett-Gates news comes at a time when a little discussed issue in America, inequality, is gaining some traction.

By one recent estimate, CEOs of U.S. corporations last year earned 262 times the pay of the average worker. Forty years ago, CEOs earned only 24 times as much as the average worker. Other recent data show a marked increase in equality in recent decades. Today, nearly 43 percent of total income in America is going to the top 10 percent.

And more and more, public policy, especially tax cuts on incomes, dividends, and huge estates, are likely to skew that balance even more. What all this adds up to is an astonishing level of accumulated wealth. According to one study, somewhere between $45 trillion and $150 trillion dollars -- that's trillion dollars -- will be transferred through inheritance over the next half-century.

(END VIDEOTAPE)

GREENFIELD: So, in a time when the idea of using public resources to level the playing field has lost some political traction, the examples of Buffett and Gates suggest a major new role for philanthropy, dealing with such pressing public issues such as health, poverty, and education.

The question, of course, is whether private generosity is what we should be relying on to deal with these issues -- Wolf.

BLITZER: Well, thank God there are people, though, who are willing to give away money of that magnitude, because, presumably, this money is going to go for very good use.

GREENFIELD: What the Gates foundation has already done in Africa is to create a market for drugs to cure terrible diseases that in no way could make a profit if you made those drugs in the private market. They literally are changing the face of health in Africa. And that's just one family, although a fairly well-off family.

BLITZER: Jeff, thank you very much.

And, today, Warren Buffett is making Internet history as well. Bidding online has begun on a chance to dine with the billionaire, with the princess also -- with the proceeds, that is, also going to charity.

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

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, that's right.

He's auctioning off lunch. The auction started last Thursday. It ends this coming Thursday. And, right now, the bidding is up to a half-a-million dollars, $500,000, right there. They do this auction every year. This is the fourth year that it's been on eBay.

All the proceeds go to Glide, which is a nonprofit organization in San Francisco that helps out with the poor, the hungry and the homeless. This half-a-million bid right now puts this item on eBay as the second highest bid for an item that goes to charity. The highest one that was ever auctioned off was actually a Harley Davidson put up by Jay Leno. And the proceeds from that went to tsunami relief. That was for $800,000.

The winner of this lunch will get to dine at Smith & Wollensky, a steak house in New York City. Seven and (sic) your closest friends are -- who get to dine with the billionaire, Warren Buffett. And, again, they do this every year. But this is the fourth year that it has been on eBay -- Wolf.

BLITZER: That's one -- one expensive meal...

SCHECHNER: Yes.

BLITZER: ... right there.

Thanks, Jacki.

Up next, Torie Clarke and Paul Begala, they're standing by for today's "Strategy Session."

And, later, a Republican congressman is fighting for his political life because he stands with the president on the issue of immigration reform. And the big surprise is, this battle over immigration is taking place in Utah, relatively far away from the U.S.-Mexican border.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: In our "Strategy Session"": Does Old Glory need constitutional protection? The U.S. Senate is debating an amendment right now that could make desecration of the U.S. flag unconstitutional. And this comes admit reports thousands of U.S. troops may be leaving Iraq, perhaps within months.

Joining us now, our CNN political analyst and Democratic strategist Paul Begala, and our CNN contributor and former Pentagon spokesman, Torie Clarke.

Here's what Senator Biden, Torie, said yesterday, on "LATE EDITION," when it comes to General Casey's plan for potentially withdrawing troops from Iraq vs. his plan and Senator Reed, Senator Levin, other Democrats.

(BEGIN VIDEO CLIP, "LATE EDITION")

SEN. JOSEPH BIDEN (D), DELAWARE: The plan put forward by Senator Levin and Senator Reed is exactly what Casey called for. I have "The New York Times" here. I read the article this morning.

So, it's a reality. The reality is, you cannot sustain 130,000 troops in Iraq indefinitely, unless you break the volunteer army by having people go back four, five, and six times.

(END VIDEO CLIP)

BLITZER: All right. What do you make of that? Because the Democrats say, you know what? Casey is proposing exactly what the Democrats suggested.

TORIE CLARKE, CNN CONTRIBUTOR: I respectfully disagree. I think there's a huge difference between generals on the ground in Iraq saying we are going to have very appropriate contingency plans, based on conditions in Iraq. We are going to raise or lower the level of troops depending on the conditions in place, doing exactly what they ought they do.

There's a huge difference between generals on the ground in Iraq and senators, God bless them, sitting in Washington, you know, professing to have read "The New York Times" that morning, coming up with their plans, which are just arbitrary numbers picked out of the air.

BLITZER: Go ahead.

PAUL BEGALA, CNN POLITICAL ANALYST: The Democratic plan, in fact, is not arbitrary numbers. It is precisely what the generals on the ground, if General Casey can -- can be believed -- and I think he can -- are calling for.

It's a phased withdrawal with no set deadline. A few Democrats believe in one, but most don't. That's precisely -- so, now you have the Democrats in Congress who want a phased redeployment. You have the generals on the ground who are calling for one.

Certainly, the American military has been polled. And they all want to get the heck out of there within a year. The Iraqi military -- the Iraqi national security adviser, you interviewed him. He said he wants a phased withdrawal of American troops. So, the -- so, only people who don't are the president, the vice president, and the Republican Congress. They are the only ones left who want an open- ended, five-year, maybe 55-year commitment.

(CROSSTALK)

CLARKE: No, no. I think that's completely oversimplifying the matter. And it's too serious to oversimplify.

What you want is your generals on the ground making these decisions, based on conditions. The president has said repeatedly, and has consistently taken the advice of those men on the ground, who are capable and qualified to make the decisions. That is very different than saying it's either/or.

BLITZER: Here's a question I have, Paul, which -- which somebody posed to me. The Democrats say they would like to have a phased withdrawal. General Casey apparently proposes a phased withdrawal, starting in September.

The Democrats say, this is all politics, September, two months before the elections in November. The general is playing politics.

BEGALA: Well, no, what they are saying is that the administration is playing politics.

Last week, a phased withdrawal was called cut and run by the Republicans. I saw you interview Ken Mehlman right here. And he had a whole bunch of cute little -- a guy who never served our country in uniform -- cut and run, cut and trot, cut and jog.

Now General Casey says, let's cut and march. And the Republicans are cutting and running. They're cutting troops and running for reelection. That's what they're doing, even while attacking the Democrats for the same thing. It's very hypocritical for the president and the Republicans.

BLITZER: You are smiling.

CLARKE: Again, I just think he's oversimplifying things.

And -- and I think it is bad when this country is seen and discussing, debating what we ought to be doing in Iraq through this incredibly political prism. It ought to be seen through the national security prism. And it ought to be seen and guided by the words and the actions of the men on the ground in Iraq.

BLITZER: Let's talk flag burning for a moment, the Senate debating it right now, could come up with a vote tomorrow. They may have the votes to pass a constitutional amendment.

When we asked this question, June 8 through 11, a constitutional amendment to make flag burning illegal, 56 percent favor it; 40 percent say oppose it.

You're very patriotic? What do you think?

(CROSSTALK)

BEGALA: I fly the flag at my home. I wear the flag on my lapel with great pride. And...

BLITZER: If you were in the Senate, what would you do?

BEGALA: Well, I think -- I think that there's no problem here. Nobody is burning the flag. I think there's been two reported cases in the last five or 10 years. It's ridiculous.

The Republicans are doing this for political purposes. It polls well. If they now want to take Mr. Madison's masterpiece, our Bill of Rights, and use that as a political stunt, that's desecrating the Constitution. You know, it's interesting that they -- they -- they so say that they revere the flag. But the -- the president won't allow us to see that flag at its most reverential and solemn and important moment, when it's draped over the casket of a fallen hero who has given his life for our country.

The president says, we are not allowed to see it there. But, apparently, he's -- he -- he -- he's fine to use it as a political prop.

BLITZER: What do you think, Torie?

CLARKE: Well, he has got the whole thing about Dover wrong, which is the reference about the president and the flag.

But in terms of what the Senate is doing, I agree completely. I -- I was listening to what Gates and Buffett. They say one of the reasons they are spending their billions of dollars around the world is because they are addressing serious issues that governments, including ours, have failed to address.

There are so many important matters that really make a difference in people's lives that the Senate, the Congress ought to be addressing. I don't think flag burning is one of them.

BLITZER: We have got to leave it right there.

Paul and Torie, as usual, thanks very much.

BEGALA: Thanks, Wolf.

CLARKE: Thank you.

BLITZER: Coming up: A Republican congressman from Utah is fighting for his political life, because he stands with the president on immigration.

Stick around -- Candy Crowley, just back from Utah, with the story.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

In the Republican heartland, a key congressional battle may hinge on the immigration battle. President Bush sent Utah National Guard troops to the border with Mexico. Now a loyal Republican may be feeling the fallout.

Let's turn to our senior political correspondent, Candy Crowley.

You're just back from Utah.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Exactly.

Show me an incumbent candidate who is polling below 50 percent pitted against a challenger with money and laser focus on a hot issue, and I will show you a race worth watching. It's why we went to Utah to look at the Republican primary race for U.S. Congress.

(BEGIN VIDEOTAPE)

CROWLEY (voice over): On any given summer Saturday, this is the kind of place you can find a parade. In political lingo, this is Utah 3, probably the most conservative, most Republican, most Mormon district in the country.

REP. CHRIS CANNON (R), UTAH: The primary on the 27th, I hope you guys get out and vote.

CROWLEY: Chris Cannon is a five-term congressman representing Utah 3. He is conservative, Republican, Mormon, and in trouble.

CANNON: I could lose. There are a bunch of people that are really afraid, and they are going to vote, and they'll vote against me.

JOHN JACOB (R), UTAH CONGRESSIONAL CANDIDATE: Wow.

CROWLEY: John Jacob is a conservative Republican Mormon with a lot of money and a whale of an issue.

JACOB: Well, I think Chris can help with that, because he became the president's point man on -- on illegal immigration.

CROWLEY: Both Republicans want better border security. They differ on what to do with undocumented workers already here. Jacob wants them forced out of the country. Cannon argues, it's impossible and bad for the U.S. economy.

CANNON: That disagreement is whether the Republican Party is going to be some kind of new xenophobic, anti-foreigner party, or whether they're going to be the party of a country that we're thrilled has grown.

JACOB: You need to know, Chris, that it's not anti-foreigners. We love legal immigrants. It's strictly the word illegal...

(CHEERING AND APPLAUSE)

(CROSSTALK)

CROWLEY: As a kind of petri dish for the national debate, Utah 3 has seen an influx of outside money and one very pointed third-party ad.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Congressman Chris Cannon says he's tough on illegal immigration.

(LAUGHTER)

NARRATOR: He says he's never supported amnesty for illegal aliens.

(END VIDEO CLIP)

CROWLEY: Cannon has brought in the big guns, via robo-call.

(BEGIN AUDIO CLIP)

BUSH: Hello. This is President George W. Bush. I'm asking you to vote for Chris Cannon on Tuesday, June 27.

(END AUDIO CLIP)

(BEGIN AUDIO CLIP)

LAURA BUSH, FIRST LADY: We need Chris in Congress, so he can continue securing our borders.

(END AUDIO CLIP)

CROWLEY: The Cannon-Jacob smackdown comes as the House and Senate struggle over when or whether to meet to find a mutually acceptable immigration bill.

(on camera): And if your opponent wins this primary, what's the message?

CANNON: Well, then, I think we go into a conference, maybe. Maybe we don't even get to a conference on immigration. And people say, this is toxic.

CROWLEY (voice over): Utah 3 is being monitored as closely as a canary sent into a cave to detect poisonous gas.

(on camera): And what's the immigration message that your election would send to the Washington establishment?

JACOB: Secure our borders. Make it safe here in America.

CROWLEY (voice over): The vote and the message come tomorrow.

(END VIDEOTAPE)

CROWLEY: On the eve of the primary, a "Salt Lake Tribune" poll found a Cannon-Jacob dead heat among likely voters, and 91 percent of them saying immigration is a somewhat or very important issue. In turnout, the emotional advantage is Jacob's. Angry voters go to the polls. Cannon's job is to convince those who aren't so riled up to come out, too -- Wolf.

BLITZER: Candy, thanks very much -- Candy Crowley reporting.

In our "Political Radar" today: In the battle for control of Congress, Missouri could be a crucial state for Democrats, as they try to recapture the Senate this November. A new poll shows that Democrat and State Auditor Claire McCaskill may be able to oust Republican and sitting Senator Jim Talent. A Research 2000 poll out today has McCaskill now leading Talent by 6 percentage points.

Political analyst Stuart Rothenberg says that, if it wasn't for the war in Iraq, this race wouldn't even be a tossup.

(BEGIN VIDEO CLIP)

STUART ROTHENBERG, "THE ROTHENBERG POLITICAL REPORT": With the war dragging down his party, he's on the defensive. The president is on the defensive. This is a real race. And Democrats see it as an opportunity, and is. The Republicans are going to have to fight awfully hard to hold a seat that, under normal circumstances, they pretty much could have counted on winning.

(END VIDEO CLIP)

BLITZER: We, of course, will keep a close eye on this race, all the races, as the campaign -- campaigns continue.

Here in Washington, the U.S. Supreme Court has dealt a knockout blow to one of the toughest campaign finance laws in the nation. In a sharply divided 6-3 decision, the high court struck down Vermont's campaign spending restrictions. It ruled the restrictions violated candidates' right to free speech and hurt their ability to raise money and to talk to voters.

The 1997 law capped spending for gubernatorial candidates at $300,000 and at lower amounts for other state candidates. But it never took effect because of court challenges.

Up next: "The New York Times" is in the federal crosshairs for reporting on the government's efforts to track terrorists through their bank accounts. Jack Cafferty wants to know what you think. Should newspapers be prosecuted for reporting on the government's surveillance of financial records?

And, later, the Northeast underwater, at least chunks of it -- in some areas, especially right here in Washington, floodwaters are rising. We will have a live report. That's coming up in our next hour.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's go to Jack in New York. He has got "The Cafferty File" -- Jack. JACK CAFFERTY, CNN ANCHOR: Congressman Peter King sent a letter to Attorney General Alberto Gonzales, calling for the government to investigate "The New York Times" and other media outlets, like "The Los Angeles Times" and "The Wall Street Journal," for possible criminal prosecution.

King says the report on the administration's surveillance of financial records compromises national security.

The question is: Should newspapers be prosecuted for reporting on the government's surveillance of financial records?

Mark in Boxborough, Massachusetts: "Thanks to the press, we now know this truth. Our financial records are being searched whenever some troll in the basement of Treasury issues a national security letter. That's what an administrative subpoena is. Look, ma, no judges. So much for Fourth Amendment. Now they want to prosecute the press for providing the only bit of oversight we still have left. Look out, Jack. Once they start jailing the press for reporting an inconvenient truth, how long before they start jailing folks like you for having inconvenient opinions?"

Robert in Westfield, New Jersey: "Individuals and corporations who divulge top-secret national security information should be charged with treason and dealt with accordingly. Freedom of the press is no excuse for reckless behavior -- 'The New York Times, 'L.A. Times,' and presumably 'The Wall Street Journal' more interested in punishing Bush than protecting my right to know."

Dan in Boston: "I love how President Bush throws a hissy fit when the press leaks something he didn't want the public to know about. Yet, he's entirely silent when the leaks, as in Valerie Plame worked for the CIA, are coming from his administration as an act of political revenge against someone who never drank the Kool-Aid about weapons of mass destruction."

Dale in Philadelphia: "George Bush and his ilk continue to confuse the Constitution with Charmin. Professional members of the free press must be allowed and encouraged to stand up to the bullying tactics of the Bush administration and its sock puppets, such as Congressman Peter King of New York."

And Sean (ph) in Pinon Hills, California: "No attacks, almost five years now -- every time the government wants to get more serious about catching the terrorists, the liberals and the major media pounce. So, when the next attack occurs, can we put the blame where it belongs, on the terrorists, the sympathizers, and the liberal elite? No matter what, the media will blame the Bush administration" -- Wolf.

BLITZER: Have you noticed the -- the increasing pressure on the news media in recent years, as a result of a lot of these issues developing? I -- I sense a chilling effect already.

CAFFERTY: Well, and it goes back quite a long ways. Who were the people that did some jail time in the -- in the Clinton administration? What was that woman's name who served a bunch time in connection with the Whitewater investigation?

BLITZER: Right.

CAFFERTY: Susan McDougal, remember?

I guess she wasn't a member of the press. But, no, it's -- it's a -- it's a very chilly environment. There are those who -- who suggest that the Bush administration is not leveling with everybody. And the problem really isn't even with the administration. It's this do-nothing Congress that would rather debate gay marriage and flag burning than to provide any sort of meaning congressional oversight. They are the look-no-evil, see-no-evil, hear-no-evil gang. It's disgraceful.

Radio talk show hosts Hugh Hewitt and Geneva Overholser from the University of Missouri School of Journalism, they are going to debate this issue in the next hour.

Jack, thanks very much -- Jack Cafferty with "The Cafferty File."

Still to come: License plates come in all styles and all causes. Debate over one made it all the way to the U.S. Supreme Court. So, why are the justices staying out of it? That's coming up right after the break.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Is it constitutional to put "Choose Life" on a state license plate? Today, the U.S. Supreme Court refused to take up the issue, leaving intact existing rulings in Tennessee and Louisiana.

Let's get the latest from our Internet reporter, Abbi Tatton -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, these specialty plates were first introduced in Florida. They're now available in about a dozen states, prompting multiple lawsuits from groups that oppose their use.

Because the Supreme Court refused to rule on the issue today, that means these plates are still legal in Louisiana and Tennessee. The ACLU in Tennessee was opposing the use of these plates. One of reasons, they said, is that there were no counterplate opposite, available, no "Choose Choice" plate that was offered.

They said today they were disappointed. They're pushing for this also in Ohio. A spokesman for Choose Life, the organization in Florida, said he had wished the Supreme Court had taken up the entire case to establish settled law on the issue nationwide. Wolf?

BLITZER: Abbi, thank you.

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