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THE SITUATION ROOM

Musharraf Makes Light Of Alleged Threatening Talk by Bush Administration In Days Following 9/11; Lawmakers Studying Fine Print In Terror Compromise; New Push in Congress To Require All Voters To Show IDs; Ed Gillespie Interview

Aired September 22, 2006 - 16:00   ET

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


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

Happening now: President Bush says he is taken aback by alleged U.S. threat to bomb Pakistan back to the Stone Age. It's 4 p.m., here in Washington.

Where Mr. Bush is trying to show he is on the same page with a critical ally in the war on terror, but is Pervez Musharraf holding back from answering tough questions because he has a book deal?

Also this hour, Republicans still are celebrating a new deal on the treatment of terror suspects, but will that deal clear the Congress? We'll read between the lines of the legislation and the politics surrounding it.

And making your vote count: Are some elected officials trying to keep you away from the ballot box?

Wolf Blitzer is off today. I'm John King. You're in THE SITUATION ROOM.

President Bush and the leader of Pakistan say they're standing together against terrorists, including the hunt for Osama bin Laden. At the White House today Mr. Bush and President Pervez Musharraf were grilled about potential threats to their alliance.

One key issue, Musharraf claims former State Department official Richard Armitage once warned the United States would bomb Pakistan, quote, "back to the Stone Age", if it did not cooperate in the war on terror. Mr. Armitage denies using that language in an interview with CNN just today.

Let's begin our coverage with our White House Correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: John, it really all started, President Bush and Pervez Musharraf flattering each other, if you will, talking about the cooperation in the war on terror. Their alliance, as you know, really built out of necessity after the September 11th attacks. President Bush desperately needing Musharraf's cooperation in going after Osama bin Laden and the Taliban in neighboring Afghanistan.

Now remarks from Musharraf, essentially, saying he was forced into cooperating, at least that is what he told CBS's "60 Minutes," saying it was then Deputy Secretary Richard Armitage who told his intelligence chief that his country would be bombed back into the Stone Age, if in fact, they didn't cooperate.

Now, Musharraf was asked about this at the press conference with President Bush by his side, and here is how he responded.

(BEGIN VIDEO CLIP)

PERVEZ MUSHARRAF, PRESIDENT OF PAKISTAN: I would like to -- I'm launching my book on the 25th and, and I am honor bound by Simon & Schuster not to comment on the book before that date.

(LAUGHTER)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In other words, by the book is what he's saying.

(LAUGHTER)

(END VIDEO CLIP)

MALVEAUX: It was quite incredulous, a lot of people just couldn't believe that was the response Musharraf gave. President Bush, of course, was asked about it. He said he had no idea of this alleged threat or even the story 'til he read it in the paper this morning. And of course, Richard Armitage, who is at the center of this controversy says that Musharraf's story is totally false. And that he told him so, yesterday when he met with the president.

(BEGIN VIDEO CLIP)

BUSH: All I can tell you is, is that shortly after 9/11, Secretary Colin Powell came in and said President Musharraf understands the stakes, and he wants to join and help rout out an enemy that has come and killed 3,000 of our citizens. As a matter of fact, my recollection was that one of the first leaders to step up and say, that the stakes have changed, that attack on America that killed 3,000 of the citizens needs to be dealt with firmly, was the president.

RICHARD ARMITAGE, FMR. ASST. SECRETARY OF STATE: Gosh, I've never made a threat in my life that I couldn't back up, and since I wasn't authorized to say such a thing, hence I couldn't back up that threat, I never said it.

QUESTIONS: How could it be misconstrued or otherwise?

ARMITAGE: Well, I did have a long and interesting conversation with Lieutenant General McMudd (ph), the head of Pakistani intelligence, and it was quite strong and I wanted to make sure he understood the depth of our feelings about what had happened. And I saw this as an opportunity to move forward with Pakistan in a new direction. So we had a very straight-forward conversation.

MALVEAUX: Now, since, of course, the U.S. overthrew the Taliban in Afghanistan, both the Pakistan government and the U.S. officials have been working very closely, cooperating and going after Al Qaeda, sharing intelligence. But as you know, John, when it comes to who is controlling that region, and who actually steps forward first and who has ultimately got the power is a very prickly political issue -- John.

KING: Suzanne Malveaux, for us at the White House. Suzanne, thank you very much.

Of course, this is hardly the first time a world leader like Pervez Musharraf would try to dodge a question at a news conference, but it may have just been the first time a sitting head of state refused to talk about a number of important issues, because he is selling a book. James Carville and Bay Buchanan will have some sharp words about that, a bit later, in our "Strategy Session."

And on Tuesday, Wolf interviews the Pakistani president right here in THE SITUATION ROOM.

On Capitol Hill right now, the ink is still fresh on a new agreement on the interrogation and the trial of terror suspects. Just a day after the White House and rebel Republicans struck that deal, many lawmakers are studying it right now to trying to figure out the fine print. Here is our Congressional Correspondent Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: John, less than seven weeks out from midterm elections, in which the Republican control of Congress is in question, you could really hear the sigh of relief go up yesterday when the three rebellious Republican senators announced they had reached a compromise deal with the White House. But Republicans aren't cracking open the champagne just yet.

(BEGIN VIDEOTAPE)

KOPPEL: Senate Republicans were all smiles relieved their public spat with the White House was finally over. When House Republican Duncan Hunter said, not so fast.

REP. DUNCAN HUNTER (R-CA), CHAIRMAN, ARMED SERVICES CMTE.: Our work in the House is not over yet.

KOPPEL: But a day later, after huddling at the White House, and reading the fine print, Hunter called a press conference to announce his change of heart.

HUNTER: We went to the heart of our concern last night, and with respect to protecting American agents and American troops, I like these provisions, these new provisions.

KOPPEL: The deal resolved a number of key sticking points -- how to treat detainees under the Geneva Convention. President Bush wanted a ban on cruel, inhuman or degrading treatment to satisfy U.S. obligation under the treaty. What Senate Republicans wanted and got, a list of specific crimes, or grave breaches, that would be banned, including torture, biological experiments, murder, mutilation or maiming, sexual assault or abuse.

President Bush also wanted to deny accused terrorists the right to see classified evidence, even if it would be used to convict them. The compromise -- leave it up to a judge to decide what's admissible in court. And if it is a summary must be provided to the accused terrorist.

But Senate Democrats and one senior Republican have raised a red flag because the deal does not allow accused terrorists to challenge their imprisonment. Human rights groups agree.

KENNETH ROTH, HUMAN RIGHTS WATCH: What the deal does is say that no detainee can go to court for any reason to invoke the rights under the Geneva Convention. So it's basically trust the Bush administration, and that's something on given the Bush administration's history in using water boarding and the like, people are very reluctant to do.

(END VIDEOTAPE)

KOPPEL: Now to complicate matters even further, the chairman of this Senate Judiciary Committee, Arlen Specter has scheduled a hearing on this matter for Monday morning. Now, John, it's unclear just how far Arlen Specter wants to push the issue, but privately Republican leaders in both the House and the Senate are expressing confidence that they will get a vote on their respective floors next week, and a bill to the president before they adjourn to the end of the month, John.

KING: Chairman Specter, I suspect, Andrea, not so happy. He was left out of some of those compromised negotiations. Is there a simple answer to this question? Who blinked, the White House or those rebel Republicans senators?

KOPPEL: I think both sides can find the ammunition to support their respective positions, that they got what they wanted. But I think both sides would also agree that they have compromised on certain aspects of what they had wanted as well, so I think you could say that both sides gave.

KING: Andrea Koppel for us on Capitol Hill, a very complicated issue. Thank you very much.

Our Zain Verjee joins us from New York, with a closer look at other stories making news.

Escape to New York, huh, Zain?

ZAIN VERJEE, CNN ANCHOR: Yes, I know you were to much for me, in Washington, D.C., John. Let's look at headlines. Supporters cheer in Beirut as militants vow never to give up their arms. Hezbollah's top leader Hassan Nasrallah told thousands of supporters today the group will not comply with the U.N. resolution requiring them to disarm. Instead, he says Hezbollah rebuilt its stockpile to 25,000 missiles. The rockets killed dozens of Israelis in towns as far south as Haifa during the 34-day war with Israel. Nasrallah also called on Lebanese of all religions to unite against outside enemies.

A spokesman for Palestinian Prime Minister Ismail Haniyeh says there will be no unity government in the Palestinian territories if it has to recognize Israel. That is a direct contradiction of what the Palestinian President Mahmoud Abbas told a U.N. General Assembly in a speech yesterday. The unity government and Israeli recognition are considered necessary to restore badly needed aid from the U.S. and Europe.

Firefighters in Baghdad who are trying to put out two blazes were fired at today by insurgents. Police say gunmen set fire it to deserted homes in a Shia neighborhood and then fired at firefighters who responded. One police officer injured.

Meanwhile, police found the bodies of 10 more victims of sectarian violence including four women.

A U.S. soldier killed yesterday in Baghdad when his vehicle was struck by a roadside bomb and brings the U.S. death toll in Iraq to 2,695.

And Pope Benedict XVI is trying to make peace with the Muslims. He has invited ambassadors from Muslim nations to a meeting at his summer home on Monday. He's trying to soothe Muslim anger over a speech he made last week, in Germany. The Pontiff says, some quotes he used in the speech did not reflect his personal views -- John.

KING: Zain Verjee, thank you.

Time now for "The Cafferty File"; Jack joins also, of course, from New York, as well.

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Good afternoon, John.

Torture in Iraq is, quote, "completely out of hand," according to a United Nations human rights investigator. Many Iraqis think it's worse now than it was during the rule of Saddam Hussein. This U.N. investigator says he has credible reports of torture in facilities run by Iraqi forces, as well as by militias and insurgents.

Bodies found in Baghdad often show signs of injuries caused by acid, chemical burns, missing skin, eyes and teeth, broken bones and wounds caused by power drills or nails.

CNN's Nic Robertson recently reported about something that was done to a little girl that is so horrible that not only am I not comfortable telling you the details, but it's the kind of thing that goes far beyond what normal human beings should be capable of doing to each other.

Meanwhile, about 500 people in Saddam's hometown of Tikrit today held a rally. They want him back in power. So, here is the question. What Iraq better off under Saddam Hussein? E-mail us your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- John.

KING: I think you're going to light up the e-mail server with that question, Jack. See you in a little bit. Thank you, Jack.

Coming up here, in the battle for control of Congress, the so- called Security Moms could make the difference. We sat down with them to find out how they feel and how they may vote.

Plus, should you have to produce an ID to vote? That's the question being fought over right now by Democrats and Republicans.

Later, an apparent agreement among Republicans over the questioning of terror detainees, but is the political damage already done? I'll ask James Carville and Bay Buchanan in today's "Strategy Session."

(COMMERCIAL BREAK)

KING: In the battle for Congress many Republican candidates are running as hard as they can on national security, and they are appealing to women who are especially worried about the war on terror and their own safety.

That's true in the Missouri Senate race, where GOP incumbent Jim Talent is in a very close brawl with Democrat Claire McCaskill. In past elections Missouri voters often have mirrored the national political mood. So our National Correspondent Bob Franken, went to the St. Louis suburb of Clayton to talk to so-called security moms.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: John, you were here two years ago when they coined the term "Security Moms." That was when the war on terror was a clear-cut winner for the Republicans. It's not so clear-cut now.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): They're always cited as a key to an election, suburban mothers. Last time around the GOP called them Security Moms and convinced a substantial number to vote Republican.

SUSAN MCGRAW, MOTHER OF TWO: The reason I voted the way I did was for safety reasons. And I do not, you know, feel that I have that safety.

FRANKEN: As the president campaigns again to keep his party's control of Congress by, again, emphasizing the war on terror, these suburban St. Louis mothers, who gathered at our request, made it clear they had real second thoughts. MEG MANNION, MOTHER OF THREE: I felt that the president's administration would help guide him to making the right decision for security. And I don't know if I am as convinced with that right now.

RICKI TISCHLER, MOTHER OF THREE: You know, I'm confused. I'm confused at a lot of reasons as, you know, why we are where we are.

(on camera): The Security Mom issue is a controversy within a controversy. Republicans vehemently deny they are losing them, but many political experts deny they even exist.

KAREN KAUFMANN, AMERICAN POLITICAL SCIENCE ASSN.: When I think about Security Moms, I think about them in the same terms that I do -- like a unicorn. Sort of a mythical being, because there really isn't such a thing as a Security Mom.

FRANKEN (voice-over): Whatever they're called, many are up for grabs.

PATSY GOESSLING, MOTHER OF FOUR: I don't know, at this point, I can't tell you right now how I'm going to vote. But it definitely will affect the way I vote.

FRANKEN: What is definitely disturbing these women is the war in Iraq.

SUZIE FARON, MOTHER OF THREE: I believe the war in Iraq and some of President Bush's policies have contributed to the threat of terrorism in our country.

FRANKEN: Whether they represent a voting block or not, what these women do represent is a key question in this election -- whether, five years after the September 11th attacks, Republicans can still gain the advantage from the war on terror.

SUSAN MCGRAW, MOTHER OF TWO: You know, I think before I thought, well, it's going to be a while for our president to get everything in place, and I was willing to, you know, support and be supportive of that. And I feel, five years later, disappointed -- more and afraid.

(END VIDEOTAPE)

FRANKEN: You can call them Security Moms, can you call them Mortgage Moms, Soccer Moms, but whatever you call them, in the world of political campaigns, they are the mother of all demographics -- John.

KING: Bob Franken us for us in the St. Louis suburbs. Thank you, Bob.

And now we turn to security at polling places. There is a new push in Congress to require all voters to show their IDs similar measures in a number of states are being challenged in court. The national voter ID bill is being challenged by some on political grounds. To explain all this here is our Senior Political Analyst Bill Schneider. Hi, Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Hi, John.

You know, you need a photo ID to get on an airplane. Why not to vote? That turns out to be an intensity controversial question.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Should you have to show a valid photo ID in order to vote? The bipartisan commission on federal election reform, chaired by Jimmy Carter and James Baker, said yes. The public also says yes, over 80 percent of Americans polled earlier this year said they favored requiring voters to produce a valid photo ID.

In a vote this week, the House of Representatives also said, yes but by a close margin. Republicans voted almost unanimously to require a photo ID, almost all Democrats voted against it. For Republicans, the issue is voter fraud.

REP. CANDICE MILLER (R), MICHIGAN: This important reform will ensure that every voter who presents themselves at the polls is who they say they are, and will limit diluting the vote of lawful voters by rooting out fraud.

SCHNEIDER: For Democrats the issue is voter suppression.

REP. JOHN LEWIS (D), GEORGIA: Call it what you may, this bill is a modern-day poll tax.

SCHNEIDER: It can cost money and take time to get a government issued photo ID.

DOUG CHAPIN, ELECTIONLNE.ORG: Democrats, generally, but not uniformly, worry about access of people to the franchise. Republicans generally worry about the integrity of the process.

SCHNEIDER: Why is the issue coming to a head this year? Because the race looks so close. Control of the House and Senate could come down to a handful of seats. And because of the illegal immigration issue. Reformers worry that many non citizens, who marched last spring, may try to vote this fall.

CHAPIN: One side claims that there is rampant voter fraud, but we really don't have any studies that support that. The other side worries that tighter ID requirements will disenfranchise people and we don't really have data for that either. So the resulting debate looks like almost more like a religious argument than it does a policy debate.

(END VIDEOTAPE)

SCHNEIDER: A religious argument? Those are always the fiercest, and the hardest to resolve -- John.

KING: Bill Schneider for us. A fascinating issue, thank you very much, Bill. And Bill Schneider and Bob Franken, part of the best political team on television.

What does the so-called do nothing Congress actually do? Congressmen, of course, would say plenty. But one organization wants proof. Now the group using a brand new online tool to fight for more accountability on Capitol Hill. Our Internet Reporter Abbi Tatton as the details -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: John, if you've got an idea about what your lawmaker does all day, on this site Congress in 30 seconds, let's you speculate.

Here's an early submission. Maybe some lunches, or a spot or two of golf, perhaps. You can make your own video online at this Web site. I'm doing one, right here, dragging and dropping the video. And you can play it and watch it back, and add your text.

This is an organization called the Sunlight Foundation, that wants greater government transparency. It's part of a campaign they have called "Punch the Clock". They are asking -- they're offering a 1,000 bucks cash to anyone that can persuade their lawmaker to post his or her daily schedule, of everyone they meet online at their Web site. So far, no takers on that one.

There have been a number of recent web pushes for greater government transparency, an issue that a divided blog-a-sphere seems to agree on. Recently, blogger, left and right, came together to expose secret holes on a Senate bill, for a Web site of federal government spending and that, now, is moving ahead -- John.

KING: We'll keep track of the first schedule up on that site, Abbi Tatton. Thank you.

Next, up here, he was one of President Bush's top advisors from the campaign trail to the White House, but does he still agree with the president on issues ranging from the war on terror to the immigration battle back here at home? I'll ask former Republican National Committee Ed Gillespie.

Plus, more fuel for the speculation that Barack Obama will run for president. We'll explain in today's "Political Radar". Stay right there, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Welcome back to THE SITUATION ROOM. I'm John King in Washington.

As Election Day nears there is no shortage of Republicans offering advice to members of their own party, including the president of how the Republicans might keep control of the Congress.

The former chairman of the Republican National Committee, Ed Gillespie, has a new book on the challenges facing the GOP in the near future, it's called, "Winning Right: Campaign Politics and Conservative Policies". Ed Gillespie joins us here in THE SITUATION ROOM. Good to see you, Ed.

ED GILLESPIE, FMR. CHRM., REPUBLICAN NATIONAL CMTE.: Thanks, John.

KING: You're in the business of offering advice to candidates including this president from time to time. There is one question on the table right now in which it seems his senior advisors, political advisors, his friends disagree and whether he should the term Islamic Fascism, Islamo-fascism when talking about with the war on terrorism.

GILLESPIE: Yes.

KING: This is from your successor as the Republican National Committee chairman, in "The Wall Street Journal" today, Ken Mehlman, the Republican National Committee chairman says, "Now we understand that we face a radical global movement of Islamic fascists, held together by a totalitarian ideology as deadly as the ones we faced in World War II and the Cold War."

So, Ken Mehlman says they are Islamic-fascist, called them so. But let's listen to Karen Hughes, formerly the president's communication director, a close friend and advisor, now at the State Department, his hand-picked ambassador. Let's listen.

(BEGIN VIDEO CLIP)

KAREN HUGHES, UNDERSECRETARY OF STATE: I, for one, typically don't use religious terms, because I'm afraid that people do hear them wrongly around the world.

(END VIDEO CLIP)

KING: Who is right? Ken Mehlman and the president, or Karen Hughes?

GILLESPIE: How about if I split the difference? Is that allowed?

(LAUGHTER)

Here's where I think we've been inept, or inapt, in talking about the war on terror. I heard Rick Santorum talk the other day and he said that would be like FDR declaring war on blitzkrieg; blitzkrieg is a tactic, terror is a tactic. And those who seek to impose Islamic caliphate and who do not practice the Muslim faith, I think as obviously most Muslims practice it, and who engage in homicide killings, and killing of innocent civilians, and seek to impose their Islamic religion on the rest of the country, like Osama bin Laden, who says that the war in Iraq is the center piece in the battle between infidels and Islam.

We do need to identify what it is -- who our enemy here. And our enemy is not terror, it is those who perpetrate terror to impose that. Whether it is Islamic fascists or another term, I'm not sure. But I think it's a legitimate critique of the ineptness of war on terror as defining what it is we're engaged in.

KING: You split the difference there. I don't think you can split the difference on this one because you would be splitting the difference with yourself. I want to ask you about something in your book. Page 254, Ed Gillespie is talking about the immigration debate facing this country and dividing your party, the Republican Party, over key issues.

And you take issue with the president, on one count. The president says there should be a new guest worker program that would allow millions of those who broke the law, to get into this country illegally, to come out of the shadows, sign up, and the president says, ultimately some of them should get a path to citizenship.

Ed Gillespie writes this, there should be, quote, "a new policy would increase compliance with U.S. laws but not reward with citizenship. Those who are here by virtue of breaking out laws."

Why is the president wrong on this issue?

GILLESPIE: I think we should make these folks legal. They should be able to obtain legal status and work here legally, but if you come here by virtue of having broken the law I'm not sure we should encourage that with citizenship.

My father came here on a ship from Ireland, when he was nine years old. He was processed through Ellis Island, he became a great American, fought hard in World War II, won a Silver Star. And he was a proud American citizen, but he complied with the rules in coming here. Now we have got to modernize the rules. And the president is right to reform the immigration process, as well as to secure the border. And those are ...

KING: But as the son of an immigrant you say the president is wrong to reward someone who broke the law with citizenship.

GILLESPIE: I disagree that we should confer citizenship upon those who broke the law. And I think a middle ground between those who want to only do border security and the president's path to citizenship, is legal status, that would allow for people who have come here illegally to come forward, to acknowledge that, to do some things, pay taxes, and enroll in a process. And obtain legal status, but ultimately not citizenship.

The president says that they should go to the back of the line. I think that makes sense. But there are always others who want to get in the line and comply with the law. To me the way we as Republicans can unite on this issue to do common sense immigration reform, and border security, is to allow for legal status, but not citizenship for those 10 to 12 million who are here illegally now.

KING: Maybe after the president buys Musharraf's book, he'll buy yours. And he'll take that advice. Let's move on to another issue.

You discuss in the book here, you talk about the '08 race, and you're talking about Senator Hillary Rodham Clinton. You are saying this on page 269. I'm allowing people to skip ahead in the book, if they want. "Some of my Republican friends express glee at the prospect of Hillary Clinton as the Democratic nominee, but we underestimate her at our risk. She is very bit as political as her husband (though nowhere near the natural political), every bit as smart, and a whole lot meaner," Gillespie says.

(LAUGHTER)

How is Hillary Rodham Clinton a whole lot meaner?

GILLESPIE: Oh, I just think she is much more serious about winning and about -- and if she were to be a candidate, I think, she would be very tough on her opponents. And I think she'd be very tough on us, and I do think it's a mistake. You know, Democrats underestimated Ronald Reagan in 1980, and that was a mistake. I don't think we should make the mistake of underestimating Senator Hillary Rodham Clinton. I think she would be a formidable nominee.

KING: Well, what's the difference, though, between being someone who's not afraid of hardball and someone who's mean?

GILLESPIE: It's in the eye of the beholder, I guess, John.

(LAUGHTER)

KING: All right. We'll leave that one to '08. I also want to talk about George Allen, Senator George Allen. You are his campaign finance chairman right now or you're working with his campaign?

GILLESPIE: I'm treasurer of his PAC, and I'm a friend of his.

KING: Treasurer of his PAC...

(CROSSTALK)

KING: You write in your book, you're talking about the '08 race and the potential candidates. And you talk about Senator Allen as perhaps the most Reaganesque candidate in the field. He's this very successful former governor and current senator from Virginia. "He has an important niche in the field at the moment, which is that of the optimist. Republicans tend to gravitate to optimists, like Reagan and Bush. And Allen, his stock his rising among the political oddsmakers, and he's made his way to the top tier quickly."

To be in the top tier of '08, he has to win his race in '06, I would assume.

GILLESPIE: Yes, indeed.

KING: And he's in a very tough battle right now. Here's the latest Mason-Dixon poll. It shows Senator Allen with 46 percent against his opponent, Mr. Jim Webb, at 42 percent. There's been a debate this past week. Senator Allen speaking out about finding out about his Jewish heritage back on the mother's side of the family. What has gone wrong with the Allen campaign that has him in, essentially, a dead heat? GILLESPIE: Well, first of all, the state of Virginia, as you know, has always been much more competitive than I think people outside of Virginia understand. We've had two successive Democratic governors, always competitive Senate races. I think to get 52 percent as a Republican in Virginia is great.

The Kerry campaign was in Virginia until July when they pulled out. They were making a play for it. So the boundary or the upper end of Allen's margin of victory was going to be capped by the demographics of the state of Virginia.

That said, you know, he had a rough summer, but I think he's rebounding. And the fact that -- this interesting personal account of his conversation with his mother, and learning his heritage for the first time, and her asking him to, as a good son, pledging him to not even tell his own brothers or his sister or his wife, and then he gets asked about it in a public forum. It's kind of interesting or fascinating to see someone put in that position of having to, "Do I provide a political answer or am I a loyal son?" Tough situation.

I think people of Virginia are remembering what a good man George Allen is. I mean, he stood by his mother and obeyed his mother in that instance, but then she came out and explained that she had told him this. So I actually think that this will allow us to get back onto the issues in that campaign, very significant differences between James Webb and George Allen.

And I think that's what the voters of Virginia really care about is, what are these candidates going to do to improve the quality of life, enhance education, jobs here in Virginia, or my state of Virginia, and win the war on terror?

KING: Out of time here today, but that is a campaign we will watch over the final month, a little more than that. And Ed Gillespie's book, "Winning from the Right," you want to read it, Democrat or Republican, if you like good stories about fun politics, it's a book worth reading. Ed Gillespie, thanks for joining us today.

GILLESPIE: Thank you, John.

KING: Thank you.

And on our "Political Radar" this Friday, a new push today to make values a driving issue in the fall election. The Family Research Council and some like-minded groups are holding what they call the first Value Voter Summit right here in Washington. Possible presidential contenders are attending this event, including Governors Mitt Romney, Mike Huckabee, Senator George Allen, who we just mentioned, and the former House speaker, Newt Gingrich.

In Maryland, GOP Senate candidate Michael Steele is denouncing new radio ads by a national black Republican group that accused Democrats of starting the Ku Klux Klan. And he's asked the group to stop airing the spots in his state, saying they're, quote, "insulting to Marylanders." The ad also claims the Reverend Martin Luther King, Jr., was a Republican. The King Center in Atlanta says the civil rights leader never endorsed candidates from either party.

Fresh speculation today that Senator Barack Obama is mulling a presidential campaign. The Illinois Democrat says he'll head back to Iowa later this month to help raise money for congressional candidate Bruce Braley. Obama was just in Iowa this past weekend, and even his friends acknowledge you just can't go to Iowa without tongues wagging about White House ambitions.

Up next, he once again took on the president, but did John McCain come out a winner? I'll ask two experts, James Carville and Bay Buchanan.

Plus, Pakistan's president at the White House avoids answering some tough questions because of a book deal. James and Bay weigh on this, as well, in today's "Strategy Session." Stay right here. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: In our "Strategy Session," the Republican deal over detainees; Senator George Allen's discovery of his Jewish roots; and is the Pakistani president, shall we say, playing by the book? Joining us now are CNN political analysts Democratic strategist James Carville and Bay Buchanan, president of the American Cause.

I want to start with this detainee deal, struck yesterday, being circulated on Capitol Hill today. There was this great discussion over the last week or so that, oh, boy, this is the last thing the Republicans wanted, an internal Republican feud on national security, the issue they hope to beat the Democrats with a little more than a month before the election. Lasting damage, James Carville, or is this all gone, now that the Republicans have a deal?

JAMES CARVILLE, DEMOCRATIC STRATEGIST: Lasting damage to who?

KING: To them.

CARVILLE: I mean, I don't what that means. Is it lasting damage to McCain or -- no. But this is a nation of 300 million people. We should be able to figure out -- we can try a shoplifter, we should be able to figure out a way to try Khalid Sheikh Mohammed. I mean, this is hardly like rocket science that they went through this. You know, and I think Senator McCain probably...

KING: But Democrats thought it was a great thing that the Republicans were boom, boom, boom.

CARVILLE: Well, eventually, no Democrat that I know thought that they were going to go forever without cutting a deal. I mean, it took them a while, and then, you know, two days after this passes, who's -- this is not really hard stuff, to be able to come up with some system to try these people.

KING: Is it forgotten, Bay, when the president has this Rose Garden ceremony next week, probably, and signs this legislation, and says, "We now have a way to handle this"? Or do people around the country, whether they're Democrats or Republicans, independents, Martians, say, as James said, "Wait a minute. It's five years after 9/11. Why don't we have a system for this?"

BAY BUCHANAN, AMERICAN CAUSE: I think it helps the Republicans, because this dispute gave it national attention. Far more people now are aware that the president and Republicans are fighting to have some kind of system where we can put these guys and try them, but the CIA can do what they need to do. They've made it real clear this is a tool they needed, and they're fighting for it believe they believe it will help keep the country secure. So I don't think it can hurt the president and the Republicans whatsoever.

KING: Let's zero in on one guy who will be in the Rose Garden, and I suspect standing right about here behind the president. That would be Senator John McCain of Arizona. There were all of these people saying, "Oh, my God, how could Senator McCain do this? He's going to make the Republican base angry. He's going to hurt himself going into 2008 in the Republican primaries."

I'm going to take a contrarian view and say so maybe there are eight or 10 guys out there who get mad about this. Most Republicans see him behind the president next week. Does he help himself, James, with conservative Democrats or independents who say, once again, John McCain stood up to the president?

CARVILLE: Well, I don't think he stood up. I think he stood up for a week. I think he was in there for a week. You know, according to the polls, 40 percent of the voters have serious problems with John McCain. A lot of conservatives do. I think Bay is better qualified to speak of what conservative Republicans think of John McCain.

But I don't think this is going to make a big difference one way or the other. I don't suspect it will hurt him or help him, but I think he's probably been hurt on a lot of other things coming into this.

KING: I want to hear Bay's thoughts, but, once, quickly, James, on the issue about all the Republican candidates, though, isn't John McCain someone who worries you in the sense that he is defined as a maverick, sort of a guy who goes his own way, and therefore could have some support among Democrats?

CARVILLE: Could. Could. So could Giuliani. He'll be there. Everything...

(CROSSTALK)

CARVILLE: Well, I think McCain would, too.

BUCHANAN: Exactly. You know, James' remarks are absolutely correct. He's got to first win the primary. And so while it might, John, help him in the general election -- he looks like a maverick, he takes on the president, he's his own man, that's all very positive -- but if you do so and you offend the base of the party continually as John McCain has, then you've got to contend with that in the primary. And social conservatives he's lost long ago on his immigration position, his pro-amnesty position. He's probably lost whatever conservatives are left after the social conservatives abandoned him. So he has a real problem. I know the polls show him strong, but I know social conservatives whose whole gambit for 2008 is to beat McCain, with whomever they can.

(CROSSTALK)

KING: One of the "whomever they cans" who had been making quite a bit of headway and traveling quietly around the country is Senator George Allen of Virginia. And he's had a very tough couple of weeks.

BUCHANAN: Poof!

KING: You say poof. He's in a very close race. If he wins it, maybe it will all be forgotten. But one of the interesting dynamics has been his uncomfortable response to questions about, was his mother of Jewish heritage? And the senator seems to have found a way now that he's willing to talk about this, after having a little bumpy road in getting to it. I want you to listen to something Senator Allen told Wolf Blitzer just yesterday.

(BEGIN VIDEO CLIP)

SEN. GEORGE ALLEN (R), VIRGINIA: I don't know what all the reactions were, whether political or otherwise. I know that the audience also thought it was inappropriate.

But I'll tell you what I was thinking: I was thinking of my mother. I was thinking as a son, and I wanted to protect my mother, and her wishes and the promise I made to her. And I'm glad that she has now released me from that promise. And we, as a family, the Allen family, can now search our records of our history and the lineage through the Lumbroso side, as well as the Allen side.

(END VIDEO CLIP)

KING: James Carville, you live in Virginia. Do voters care at all about this? The issue was, he was asked if he was of Jewish heritage, and he bristled at the question, "Why are you asking me this?" It didn't seem like he wanted to answer it. Now he's saying he has gone back, his mother has told him, yes...

CARVILLE: No, no, I don't think so. I can't imagine that -- you know, Madeleine Albright or John Kerry -- I mean, the only thing is Democrats are excited, and we got a heck of a candidate in Jim Webb. Allen has always struck me as a nice guy. He's very affable. I personally like him. He seems to have been off -- he's generally a very good politician. He seems to have been off his game here for the past four weeks or so.

BUCHANAN: It's absolutely correct. What the problem is in politics...

KING: But some would argue -- some would argue getting bumped up a bit, you were for a guy named Bill Clinton. He got bumped up a bit in some past campaigns that made him a much better candidate by the time he got to the big stage.

CARVILLE: Right, but he had been governor and senator. He's a pretty skilled -- you know...

BUCHANAN: Allen's mistake is he's taken his re-election for granted, and so he's kind of been getting his nice presidential team together. He's probably listening to "Hail to the Chief" at night, because he's not focused on this race.

Then when he has, all of a sudden, some pressure -- he's got a good challenger here -- he's become agitated and angry. In his response, he's self-destructing. It's not Webb that's doing it. His response again to this one, it could have been knocked out of the ballpark. He didn't even have to talk about his mother.

He just had to talk about, "Listen, you want to do research and find out stuff about my heritage? It'd be great, but the best I know is this." Why is he angry? Why is he agitated? I think the pressure of a race that's closing when he was looking at presidential is getting to him. He's got to cool down, calm down, and become the candidate he was in past.

KING: Let me ask you in closing, you're both authors. You had an author at the White House today standing next to the president who refused to answer a question about -- is a policy you have implemented helping Osama bin Laden and Al Qaeda? Could it be helping the Taliban?

This is a very serious question. Are you doing something that could put the lives of Americans and others at risk? President Musharraf said, "I can't answer the question. I can't talk about this. I can't go back on that, because I have a deal with Simon and Schuster. I'm trying to sell a book."

CARVILLE: Well, you know what? Simon and Schuster is my publisher, David Rosenthal.

(CROSSTALK)

CARVILLE: I've got to put in a plug for my book. And, by the way, I think, you know, Bob Woodward has got Simon and Schuster, and he's going to be coming out here. So I'll put in a plug for my publisher.

(CROSSTALK)

KING: To be fair, you got a book you want to sell?

CARVILLE: He's the president of Pakistan. He's not a journalist.

(LAUGHTER)

The thing about all this is, is the president of Pakistan, the president of the United States, the number-two guy in the State Department, and it all seems like a book fair. I mean, they're making serious policy. They're not commentators of...

(CROSSTALK)

BUCHANAN: ... responded about the book, though, was a legitimate one. Something about he wrote in the book and now there's some dispute whether it really happened, so he just threw it off and laughed about it. I saw nothing wrong with it. I saw two human beings out there making a little light that they have a good relationship...

(CROSSTALK)

CARVILLE: But they're two human beings that are leaders.

KING: I've got to manage this book or my publisher -- we'll use the TV term -- will run me out of here. Bay Buchanan, James Carville, thank you very much.

And coming up, Wal-Mart's big week. Does the world's largest retailer have the right prescription?

Plus, a massive victory celebration in Beirut and some tough talk from the head of Hezbollah. A live report from Lebanon next hour, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: It's that time of the week. Many of you worrying about your fantasy football this weekend, and we're worrying about who's scoring political points. Let's bring back our senior political analyst Bill Schneider.

Bill, who gets the political play of the week?

SCHNEIDER: John, this week, private policy seems to be displacing public policy. First, British entrepreneur Sir Richard Branson stepped forward to pledge that he'll invest his own personal airline profits in the development of new energy sources that do not contribute to global warming, as much as $3 billion over the next 10 years.

Who urged Sir Richard to do it? Al Gore, who's concerned that government is not doing it.

Government is also not negotiating with drug manufacturers to lower the price of prescription drugs. So this week Wal-Mart said, "We'll do it." After all, Wal-Mart negotiates with toymakers and clothing manufacturers to get lower prices. Wal-Mart announced the test program to sell generic prescription drugs at sharply reduced prices.

Now, you know, Wal-Mart has been under attack for its low wages and poor benefits. This initiative could score some political points for the company. You know, Sir Richard could make a lot of money on his energy ventures, and Wal-Mart may draw a lot of new customers into its stores to buy things besides medicine. Smart moves financially, and politically the play of the week -- John.

KING: Bill Schneider, Bill, thank you very much. Have a great weekend.

And up next, the spreading threat from tainted spinach. We'll tell you who's sick now and what some people are doing about it.

And a new push to punish Venezuelan President Hugo Chavez for likening President Bush to the devil. We'll check out the campaign online. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Our Zain Verjee joins us now from New York with a look at other stories making news.

Hi, Zain.

VERJEE: Hi, John.

More cases of contaminated spinach. Health officials say a woman in Tennessee who became sick earlier this month was infected with E. coli. That is the first confirmed case in Tennessee, and it brings the tally up to 158 cases in 24 states. Officials are also checking to see if the germ killed a 2-year-old boy in Idaho.

Three lawsuits have now been filed in Wisconsin, Oregon and Utah against the companies that grew and sold the spinach.

NASA says an astronaut who collapsed twice today is now doing fine. They say Heidi Stefanyshyn-Piper is simply suffering from the aftereffects of space travel. Piper collapsed when she tried to speak at the welcome home ceremonies in Houston. NASA officials say that she's now resting at home.

And good news for AT&T and BellSouth. Sources close to FCC Chairman Kevin Martin say he's recommending that the two companies be allowed to merge without any conditions. Word of the move comes even though the Justice Department hasn't yet ruled on the deal. Normally, the FCC doesn't approve mergers unless the Justice Department decides that the plan is good for the public -- John.

KING: Zain Verjee, thank you very much.

Venezuelan President Hugo Chavez angered Democrats and Republicans alike this week by calling President Bush the devil. Now, some conservatives are fighting back, urging Americans not to buy Chavez's most valuable asset, Venezuelan oil. Could it work? Our Internet reporter, Jacki Schechner, has the story -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: John, we saw the call to boycott Citgo start to bubble up online yesterday. And today, it's hit many of the top conservative blogs. Why? Because Citgo is owned by PDVSA America, which is a wholly-owned subsidiary of Venezuela's national oil company.

We got in touch with Citgo today, but they didn't have any comment on the call to boycott. We did find some information on Snopes.com, which is a Web site dedicated to urban legend, often debunking it. They say they've been getting e-mails to boycott Citgo or buy-cott Citgo, as a protect to U.S. foreign policy, since early this year.

We actually found blog postings even older than that. And what they say is that, whether it's going to be a boycott or a buy-cott, it's not likely to have any significant economic impact and mostly all of this, John, is just symbolic.

KING: Jacki Schechner, thank you very much.

And still to come, was Iraq better off with Saddam Hussein in power? President Bush would argue no. How about you? Jack Cafferty will be back with your e-mails right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Jack Cafferty back now with "The Cafferty File."

Hi, Jack.

CAFFERTY: You keep putting me in that wall, it will fall down, John. The question this hour, "Was Iraq better off under Saddam Hussein?"

Jim in Tulsa, Oklahoma: "Because of his absolute unwillingness to share power, he certainly would not have allowed armed militias or terrorist groups to operate in or from Iraq. Moreover, the entire region was better off, because a Saddam-led Iraq served to keep Iran in check."

Gabriella, Massachusetts: "Iraq wasn't better off under a dictator. People are just nostalgic now for Hussein, not because he was a fabulously compassionate guy, but because our government has messed up so spectacularly."

Christine in South Carolina thinks, "We're not better under Hussein, nor were they worse, just different. This administration managed to take the Iraqi people out of the frying pan and through them into the fire. Who benefited? The terrorists and Halliburton."

Andrew in Massachusetts, "I don't care. There is no doubt we were better off with Saddam in power: 2,700 Americans were alive who aren't; 20,000 Americans were whole who aren't; and $320 billion was here that's not. Iran and Hezbollah were much less dangerous, and we hadn't invaded a country that President Bush admits had nothing to do with 9/11."

Ashley in Arkansas writes, "Despite many atrocious human rights violations under the rule of Saddam Hussein, it's well-known Iraq was among the forerunners in the Middle East regarding women's rights. With the new American occupation, Iraq's quickly following into a pattern of strong Islamic theocracy and, with this movement, women's rights are yet again disappearing."

Brian writes, "Rephrase the question. Was Iraq better off before George W. Bush?"

This weekend on "IN THE MONEY," we talk to an expert who says all the elements are coming into place nicely for what could be a big fourth-quarter rally in the stock market. "IN THE MONEY" airs Saturday at 1:00, Sunday at 3:00.

And, John, we expect you to watch it attentively.

KING: Of course I will, Jack.

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

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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