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THE SITUATION ROOM

Manhunt for a Cop Killer Continues in Florida; Woodward Accuses Administration of Dishonesty

Aired September 28, 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, THE SITUATION ROOM: Thanks very much, Cheryl. 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 -- a developing story out of Florida, a manhunt for a suspect who allegedly shot two sheriff's deputies. We'll update out what we know.

Also this hour, Bob Woodward's new bombshell. The veteran journalist accusing the Bush administration of being dishonest about the violence in Iraq. We're examining his reporting and the reaction.

Plus, sealing the deal on terror detainees. It's 4:00 p.m., here in Washington where the Senate got a final push from President Bush. And the House Republican and Democratic leaders blasted one another.

And the Maryland Senate race is now going to the dogs. Puppies are the props of choice for this high stakes contest. Will voters remember the candidates or the canine?

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

We're following developments in Lakeland, Florida. Search now underway for a man who allegedly shot and injured two sheriff's deputies after they stopped his car earlier today. The suspect apparently bolted from the car, fired at officers, and a police dog, when they pursued him.

The deputies have been taken to a Lakeland hospital. Three schools in the area have been locked down. Police are using search dogs to look for the suspect who is considered armed and dangerous.

(BEGIN VIDEO CLIP)

SHERIFF GRADY JUDD, POLK CO., FLORIDA: Listen to me, folks. We will find him. We will bring him to justice, the sooner, the better.

(END VIDEO CLIP)

BLITZER: We're monitoring all the developments. We'll update you on this story throughout our next two hours, as we get more information, as soon as we know it, you'll know it as well. Let's now turn to a powerful new charge by the well-known reporter Bob Woodward. He is accusing the White House of being in a, quote, "state of denial" about Iraq. He is revealing new details from his new book on the war, "The Insurgency," and whether the Bush administration is being honest with the American people.

It's a new blow to the president's effort to defend the Iraq mission. The top concern for many voters, less than six weeks before the midterm elections. Our Senior Political Analyst Bill Schneider is standing by, but, first, Mary Snow has been doing lots of reporting on what we know about this new book -- Mary.

MARY SNOW, CNN CORRESPONDENT, THE SITUATION ROOM: Well, Wolf, the book hasn't even hit the book stores but in publishing circles there is talk it could have the potential to be election altering.

(BEGIN VIDEOTAPE)

SNOW (voice over): "State of Denial: Bush at War, III" is claimed to reveal damaging secrets inside the White House about the war in Iraq. One of those secrets Bob Woodward tells CBS's "60 Minutes", is that the administration isn't telling the full story about the amount of violence. In an interview to air on Sunday, CBS quotes Woodward as saying: "It's getting to the point now where there are 800, 900 attacks a week. That's more than 100 a day. That is four an hour attacking our forces."

HOWARD KURTZ, CNN'S RELIABLE SOURCES: A Bob Woodward book is always a bombshell event. And the fact that the book is even called "State of Denial," suggests that perhaps he is going to be more critical of the Bush administration in its handling of the Iraq war than he has in the past.

SNOW: Critics accused Woodward of being too soft on the Bush administration in his last two books. While this one is under lock and key until it hits the bookstores on Monday, the details he purportedly revealed to CBS indicate it could be highly critical of the white house.

He tells "60 Minutes," there is intelligence being kept under wraps that the insurgency will get worse in 2007. And he reveals that Henry Kissinger, the secretary of State under Richard Nixon, during the Vietnam war, meets often with the president and vice president as an adviser. Kissinger's advice, he reports, is been victory is the only meaningful strategy. Kissinger was traveling and could not be reached for comment, but in an interview with "Late Edition" in march he made a similar argument.

HENRY KISSINGER, FMR. SEC. OF STATE: I do not think that setting a deadline is a useful strategy because then everything is working in the expectation of a fixed deadline in which the insurgents can simply wait us out.

SNOW: A senior administration official downplayed the book telling CNN, quote, "It doesn't appear to be anything new. The president has been very frank with the country about the challenges we face in the war on terror, how ruthless, violent and determined our enemy is."

Some predict Woodward's claims might be felt in the November election.

KURTZ: When Iraq is such an overriding issue in these House and Senate campaigns, undoubtedly, it's going to have an impact and it's going to provide ammunition probably for Democratic candidates, running against Republicans, to try to hang that war and its missteps around the neck of the Bush White House.

SNOW: But Woodward told CBS that President Bush is so certain about staying in Iraq that he told key Republicans, quote, "I will not withdraw even if Laura and Barney are the only ones supporting me."

(On camera): This book is sure to get a lot of publicity as a massive media campaign begins, with excerpts to be printed in "The Washington Post" and "Newsweek" -- Wolf.

BLITZER: And we'll get those excerpts this week, the "60 Minutes" interview airs Sunday night, he'll be on Larry King Live, Monday night, here in THE SITUATION ROOM later in the week, a huge campaign, media blitz, if you will, by Bob Woodward and his publisher, Simon & Schuster.

Thanks very much for that, Mary.

In the run-up to the election day a new charge of White House dishonesty about Iraq is like throwing a match on an already red hot political issue. Let's bring in our Senior Political Analyst Bill Schneider -- Bill?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Wolf, first, an intelligence report. Now, a new book by Bob Woodward. What is the likely political impact?

(BEGIN VIDEOTAPE)

SCHNEIDER (voice over): In his new book author Bob Woodward charges the situation in Iraq is getting worse and the Bush administration is keeping it secret. That, on top of findings from an intelligence report, that the war in Iraq is hurting the war on terrorism.

The American public is already disillusioned over Iraq. More and more Americans believe the war in Iraq is going badly for the United States; 53 percent in January, 61 percent now.

The new revelations could make things worse for Republicans for several reasons. The stories are putting the White House on the defensive.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Isn't that interesting? Somebody has taken upon themselves to leak classified information for political purposes.

SCHNEIDER: Democrats are raising questions about whether the White House is being honest with the American people.

NANCY PELOSI, (D) MINORITY LEADER: It's long overdue for president Bush to speak truth to the American people.

SCHNEIDER: For weeks, Republicans have been trying to frame the campaign around terrorism. The White House is hoping people will see the stories in that context.

BUSH: Everybody can draw their own conclusions about what the report says.

SCHNEIDER: Republicans are doing that.

SEN. BILL FRIST, (R) MAJORITY LEADER: Going back to the intelligence assessment, it said that, first of all, we have no choice but to be victorious because, if not, this will spread and continue to spread.

SCHNEIDER: These stories shift the focus of the campaign back to Iraq. That doesn't help Republicans. Among the nearly half of voters who say Iraq is an extremely important issue, Democrats have a better than 2 to 1 lead.

(END VIDEOTAPE)

SCHNEIDER: The implication is if Iraq is the central issue in this campaign, it's not likely to be good for Republicans -- Wolf.

BLITZER: All right, Bill, thank you. Bill Schneider reporting.

And just a short while ago, President Bush fired back at his Democratic critics on Iraq. He is campaigning in Alabama right now for Governor Bob Riley. He spoke about the recently leaked finding of a National Intelligence Estimate, that the Iraq war has rallied Muslim extremists.

(BEGIN VIDEO CLIP)

BUSH: Five years after 9/11, the worst attack on America homeland in history, the Democrats offer nothing but criticism and obstruction, and endless second-guessing. The party of FDR and the party of Harry Truman has become the party of cut and run.

(END VIDEO CLIP)

BLITZER: Those words from Mr. Bush just weeks after he called for political unity on the fifth anniversary of the 9/11 attacks. We will have much more on the political war over Iraq coming up. Our Bill Bennett and Donna Brazile, they're standing by to join us in our "Strategy Session".

Now to a subject Republicans do want to talk about, that would be the war on terror. President Bush went to Capitol Hill earlier today to personally lobby for a bill on the interrogation and trial of terror suspects. The Senate is now moving toward a final vote on the measure, after a new round of partisan fireworks over which party is more committed to fighting terrorism. Let's go to our Congressional Correspondent Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT, THE SITUATION ROOM: Wolf, the last time President Bush was up here on the Hill, just a couple of weeks ago, Republicans were split over this bill, pitting Mr. Bush against several senior Senate Republicans. Now, they're united and that same bill seems certain to pass.

(BEGIN VIDEOTAPE)

KOPPEL (voice over): President Bush arrived on Capitol Hill on the verge of scoring a big victory.

QUESTION: Good morning Mr. President. Do some Republican minds need changing, Sir?

KOPPEL: He didn't answer, but the president's smile spoke volumes. Only hours earlier, House Republicans handed him a top election year priority. Passing a bill to interrogate and try suspected terrorists. Now, the president was here to rally Senate Republicans to do the same.

BUSH: Our most important responsibility is to protect the American people, from further attack. And we cannot be able to tell the American people we're doing our full job unless we have the tools necessary to do so.

KOPPEL: With Congress set to adjourn this week, ahead of November midterms, Republicans are racing to pass key anti-terror legislation calling Democrats who don't support them, soft on terrorism.

REP. JOHN BOEHNER, (R) MAJORITY LEADER: You can't say that you're serious about taking on the terrorists, if you stand up here every day and vote no.

KOPPEL: Following Wednesday's vote to set up military tribunals, House Speaker Dennis Hastert accused Democrats, who voted against the bill, of coddling terrorists, writing: "In fact, Democrat Minority Leader Nancy Pelosi, and 159 of her Democrat colleagues, voted today in favor of MORE rights for terrorists."

Hastert was asked today if he stands by his statement.

REP. DENNIS HASTERT, (R) SPEAKER OF THE HOUSE: Oh, yeah, absolutely. I mean, what we're trying to do is put terrorists behind bars and make sure that they don't get out and kill people in this country.

KOPPEL: Pelosi fired back.

PELOSI: I think the speaker is a desperate man. For him to say that, would you think that anyone in our country wants to coddle terrorists?

(END VIDEOTAPE) KOPPEL: The name calling and partisan sniping is only expected to get worse and more intense the closer we get to election day on November 7th, but for the next day or so, Wolf, until Congress adjourns, both parties will be focused on passing or blocking legislation in order to best position themselves for that campaign -- Wolf.

BLITZER: Andrea, thank you. Andrea Koppel, Bill Schneider, Mary Snow, they are all part of the best political team on television.

The 109th Congress is wrapping up its work with a mixed record of successes and failures. The past two years lawmakers have passed Medicare prescription drug benefits, pension reform, new limits that make it harder to file for bankruptcy, tax cut extensions and a renewal of the Patriot Act, but they'll adjourn without having achieved some major goals, including Social Security reform, lobbying reform, and comprehensive immigration reform as well, among other things.

Jack Cafferty is standing by with "The Cafferty File"

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR, THE SITUATION ROOM: 2006 was supposed to be the year of the police in Iraq. Police need to play a crucial role in taking over security there before American troops can start coming home.

But the year of the police isn't turning out so well in Iraq. According to a front page story in today's "Washington Post." So, $75 million of your tax money was spent to build the biggest police academy in Iraq. It's turned out to be one of the biggest disasters in the country.

The Baghdad Police College has been so poorly managed, it has become a health risk to its students and may have to be partly demolished now. The structure is so poorly built, that feces and urine come down from the ceilings in the student barracks. Floors have lifted inches off the ground, buckled and cracked apart. So much water drips down in one room, it's been dubbed the rain forest.

The inspector general for Iraq reconstruction has called it a disaster and federal investigators say it raises questions about with whether the U.S. Army Corps of Engineers has failed in its oversight of this project, not to mention other reconstruction projects going on all across Iraq.

So the question is this: What does it mean if the $75 million U.S. project to build the largest police academy in Iraq is now being called a disaster?"

E-mail us at Caffertyfile@CNN.com or go to CNN.com/cafferty file.

BLITZER: It means it's a disaster.

CAFFERTY: Apparently, it is. But, you know, I mean -- how much money are we spending -- somebody sent me something that the expenditures now for the war are run $2 billion a week. And we can't build a police academy building to train these people that doesn't have raw sewage leaks in the ceilings of the student barracks? What are we doing?

BLITZER: Thank you, Jack. Jack Cafferty will be back with your e-mail.

Coming up, we'll have another update on that manhunt in Florida. Police are vowing to find a suspect accused of shooting two sheriff's deputies. The sooner, the better.

Plus, an election-year storm in Florida, over skyrocketing hurricane insurance. Will it be a defining issue for the sunshine state voters?

And you'll want to see this, coming up. A puppy. Our report on dog-eat-dog campaign ad commercials in the state of Maryland. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Let's check in with CNN's Zain Verjee. She is taking a closer look at some other important stories. There are developments on the shooting down in Florida, Zain?

ZAIN VERJEE, CNN NEWS ANCHOR, THE SITUATION ROOM: Police in Lakeland, Florida continue to look for a man suspected of that shooting and injuring two sheriff's deputies. Dozens of patrol cars and helicopters are helping in the search. The deputies have been taken to a local hospital.

Three schools in the Lakeland area have been locked down. Authorities say the suspect fired at the deputies and a police dog after the deputies pulled over his car for speeding earlier today.

Colorado police are still trying to figure out why a gunman took six female high school students hostage, and killed one of them. The suspect is identified as 53-year-old Duane Morrison. Police say he apparently sexually assaulted some of the hostages in yesterday's standoff at the Bailey High School. He shot and killed a 16-year-old girl and then himself when a SWAT team stormed the classroom.

A string of bombings killed at least seven in Baghdad today. The U.S. military says insurgent attacks have surged in the last two weeks. Meanwhile, Iraqi police have found 60 more bodies in Baghdad since yesterday. Most were shot to death. Since Sunday, 122 bodies have been discovered.

A man claiming to be Al Qaeda's new leader in Iraq, Abu Hamza al- Muhajer, is urging followers to kidnap Westerners to be traded for a Muslim cleric jailed in the U.S. In an audio tape, posted on Islamic web sites, he said more than 4,000 foreign militants have been killed in Iraq since 2003. And he urged nuclear scientists and explosives experts to join the group's holy war. Iran may be funding a main Shia Muslim militia group in Iraq. The senior U.S. military official says, Iran has given millions of dollars and weapons to the Mehdi Army, which is controlled by the Shia Cleric Muqtada al-Sadr. The group has become increasingly power of the past year.

Former Hewlett-Packard Chairwoman Patricia Dunn defended herself today on Capitol Hill today. A House panel is looking into allegations that investigators fraudulently obtained employees, as well as journalist, confidential phone records to find a media leak. Dunn told lawmakers that she had been assured that the methods used were legal. Several other former Hewlett executives and private investigators took the Fifth at today's hearing refuse to answer questions -- Wolf.

BLITZER: All right, Zain, thank you very much.

Today's congressional hearing, into that Hewlett-Packard scandal, is giving us some extraordinary insight into the lengths the company went to investigate leaks. Many of those new details are coming out online. Let's bring in our Internet Reporter Jacki, Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, what we're watching right now, live online, are those congressional hearings into the Hewlett-Packard leak investigation.

We did hear from the former chairwoman, Patricia Dunn. Also her written testimony is available online. In that written testimony, she expresses her regret at what happened, but explains that her role in the investigation, in detail, and then explains that what went down, she believes, was completely legal. She says she believed all of this information was obtained under fully legal circumstances.

The first investigation by Hewlett-Packard into corporate leaks started in January 2005 after this article appeared in "The Wall Street Journal." A second investigation was launched in January of 2006, after this article appeared on CNET, which is a technology news web site.

Also today, there is testimony online from Mark Hurd, the current chairman, who apologizes to those who were investigated using the means of pretexting, which is where someone pretends to be you in order to get your phone records.

Now, we just want to mention that pre-texting is currently illegal in terms of getting your financial records, but the House and the Senate are both working to make that legislation really just universal, that pretexting will be illegal under all circumstances -- Wolf?

BLITZER: All right, thank you, Jacki Schechner reporting.

Still ahead, dire predictions, very dire predictions about the violence in Iraq. A new charge that the Bush administration is not leveling with the American people. We'll talk more about the political impact. The fallout from Bob Woodward's new book is coming up in our "Strategy Session."

Donna Brazile and Bill Bennett will give us their report cards on the 109th Congress. Has it done a lot? Has it done nothing? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Back in THE SITUATION ROOM, I'm Wolf Blitzer in Washington.

A massive search now underway in Lakeland, Florida. Police are looking for a suspect accused of shooting two sheriff's deputies. Let's check in with Zain Verjee once again for the very latest developments.

What do we know, Zain?

VERJEE: Wolf, the two deputies, we know, have been taken to the Lakeland Medical Regional Center. Authorities haven't released any details about the extent of their injuries.

It's believed that the deputies stopped the suspect's car and were just asking him his name, when he fled into a wooded area earlier today. He then fired at them, as well as a police dog, when they went after him. Dozens of patrol cars and helicopters are assisting in the search.

(BEGIN VIDEO CLIP)

SHERIFF GRADY JUDD, POLK COUNTY, FLORIDA: The investigation will go on, we'll not sleep, we'll not rest, until we have the suspect in custody for this heinous action today. And it all started with a simple traffic stop, and no driver's license, and failure to identify himself appropriately.

(END VIDEO CLIP)

VERJEE: Police say the suspect is considered armed and dangerous -- Wolf.

BLITZER: Zain, thank you. We'll continue to stay on top of this story.

In today's "Strategy Session," a veteran journalist makes some stunning accusations about the Bush administration and the war in Iraq. Joining us now to discuss this is CNN Contributor Donna Brazile and CNN Contributor William Bennett, of the Claremont Institute, he is also the host of "Morning in America," a radio program.

Here is from the CBS News press release, quoting what Bob Woodward, the Pulitzer Prize winning journalist from "The Washington Post" writes in his new book "State of Denial."

"The truth is that the assessment by intelligence experts is that next year, 2007, is going to get worse and, in public, you have the president and you have the Pentagon [saying] "Oh, no, things are going to get better. Now there's public and then there's private. But what did they do with the private? They stamp it secret. No one is supposed to know."

That's CBS News says from an interview that Bob Woodward has given to "60 Minutes" that will air Sunday night, effectively kicking off the launch of this book.

Let me start off with Bill Bennett and get your reaction, as someone who has written book, many books, over the years.

BILL BENNETT, CNN POLITICAL ANALYST: Well, Simon & Schuster knows how to market and CBS certainly knows what it is up to. "60 minutes" has its agenda, usually. Let's see, Simon & Schuster has Pervez Musharraf and Bob Woodward.

BLITZER: But does Bob Woodward have an agenda?

BENNETT: Well, I don't know. We don't know. The president does give him lots of time and lots of White House people give him lots of time. We have to see the book. I have to read it, and see.

But, obviously, in this town, when Bob Woodward speaks, or writes, people pay a lot of attention. The rest of the country will contain itself, but this town will go a little nutso over it. Despite some of the things Bob Woodward has done. I know Bob. I regarded him, I like him, but there has been some problems with some of his work as you know in the past.

The questions about these claims as to the secret documents. In one sense -- it almost makes you smile. Is there a secret document, which has not been leaked to the press already? I mean, is there a document at CIA, or elsewhere, that is critical of George Bush that hasn't already found it's way to "The Washington Post" and "The New York Times"?

We know there are people who believe this about the war in Iraq , or at CIA, and elsewhere. And, you know, they've managed to get their point of view across. The suggestion that by stamping it secret, it wouldn't be seen, is I think in this day and age, is ludicrous.

BLITZER: Well, we know that this most recent National Intelligence Estimate, they released about three and a half pages of what was said to be a 30-page document.

BENNETT: Right.

BLITZER: So we don't have the other 27 pages, or so. But you know Bob Woodward, you know his reputation. One source close to Simon & Schuster has told me, this is election -- potentially -- election altering. Some of the information he has in there an election altering, good for your side, the Democrats, as opposed to the Republicans.

DONNA BRAZILE, CNN POLITICAL ANALYST: Let's see what the pages will tell us once the book is out. Simon & Schuster is a great publisher, it's also my publisher, so I want to put a plug in for them, as well.

But look, the bottom line is that Bob Woodward has written extensively about George Bush and going to war. He's a great journalist. Everyone knows that the president has never leveled with the American people to the extent that we need to know what's going on in Iraq, what we're doing, each and every day. We don't know.

The administration is spinning their own rose-colored picture what is taking place. We are spinning, according to a new congressional survey, $2 billion a week. The American people deserve to know what's going on.

And I agree, with the 27 pages, I think Senator Schumer, today, sent a letter to the president saying, release the entire document, we should see the entire document.

BENNETT: Since the question of Bob Woodward's credibility versus the president's credibility has been put in play, Bob Woodward did not distinguish himself in the Scooter Libby affair. He has been criticized by both the left and the right, he was involved in that, he was a source. He was commenting about the prosecution being inappropriate, and never letting it be known that he was involved. He also would not even give an interview to his own newspaper, "The Washington Post", on it.

Believe me, when I'm under charge, or someone says something about me, they all over me. I can't get away with that.

BLITZER: I thought he said, from his appearances on "Larry King Live", and other places, that he thought the whole investigation was worthless, and shouldn't go forward.

BENNETT: Yes, well, he did, but he didn't disclose the way in which he was involved in it, which -- which he should have.

BLITZER: He didn't disclose that he was the first journalist to get that information about Valerie Plame Wilson.

(CROSSTALK)

BENNETT: And, then, like the rest of us public figures in Washington, he might be -- he might be held to account.

All right. The question is who to believe. We have to see these documents. But let me bring up one other witness, who was mentioned in the Zain Verjee piece that preceded us.

Mr. Hamza, who is Zarqawi's successor, is pleading for help in Iraq. Now he wants nuclear scientists to get involved, too. That should give us pause, you know, what that's up -- what they are up to.

Every time you get an intercept from Hamza or any of the other leaders of the insurgents or terrorists in Iraq, they are pleading for help, saying that they are losing. I don't think the president is presenting a picture with rose-colored glasses. He has said any number of times how difficult it is. He says, but we will -- we will stay. He hasn't said, it's great and it's going great. He says, it's going very hard, but we will stay.

(CROSSTALK)

BRAZILE: Well, he said that in Atlanta. He said that in Atlanta in a speech earlier this month.

BLITZER: He's -- he's, by the way, the new leader of al Qaeda in Iraq, after Abu Musab al-Zarqawi.

BRAZILE: Yes. Yes.

BENNETT: Right.

BLITZER: The president was at a fund-raiser today for Governor Bob Riley of Alabama.

Listen to what he said, strong words about the Democrats.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Five years after 9/11, worst attack on America homeland in our history, the Democrats offer nothing but criticism and obstruction, and endless second- guessing. The party of FDR and the party of Harry Truman has become the party of cut-and-run.

(END VIDEO CLIP)

BRAZILE: Well, look, I think the president is trying to distract the American people from what's really going on in Iraq.

The fact is, is that, here we are, some three years later. We still don't have a strategy for victory. We heard this past week when the generals came up to Capitol Hill and complained about Donald Rumsfeld. The president has done nothing to keep those accountable.

So, I think for the president to point Democrats as cut-and-run, when members of his own party are growing uneasy about our strategy in Iraq of staying the course, I think it's time the president address us as Americans, and not as Democrats and Republicans.

(CROSSTALK)

BLITZER: You're a good strategist. How worried should Republicans be in close elections, whether in the Senate or the House, that Iraq will hover over this election?

BENNETT: I think, as long as it's made clear by the president and Republicans running, and spokesmen, that this is a central place in the war on terror, indeed, it is the -- is the OK Corral, the central battlefield, I think it's fine, as long as people continue to realize that.

It was a couple of generals who came up there. And, by the way, the Democrats did not like the second half of what those generals said, when they said: We have to stay. We cannot leave. We have got to finish this thing. Victory is winning. And it's difficult, extremely difficult, but that's the goal.

BLITZER: Here is -- here is what the House majority leader, John Boehner, said today, in terms of overall war on terror, once again blasting Democrats.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE MAJORITY LEADER: They voted against condemning the illegal leaks of classified information that could impair our national security. They voted no yesterday on the military tribunals.

And it's pretty clear they're going to vote no today on the NSA eavesdropping program. Now, you can't say that you're serious about taking on the terrorists, if you stand up here every day and vote no.

(END VIDEO CLIP)

BLITZER: All right. That's his -- his line -- a lot of other Republicans saying the same thing.

BRAZILE: Well, again, the Republican strategy is to begin to distract and distort and not tell the truth.

What Democrats are constantly doing is putting forward proposals. Yesterday, the Democrats spent almost one hour trying to bring forward motions to -- to get something on the legislative calendar, and the Republicans ruled them out of order every time.

The Republicans are going to play by their own game. But Democrats are going to stay on the offense on national security and continue to talk about domestic issues as well.

BLITZER: Very quickly.

BENNETT: Well, this offense is costing them. It is interesting. With all the criticism that has mounted, release of reports, Bob Woodward's book -- we will see the effect of that -- over the last couple weeks, the president's ratings have gone up.

Look, the Democrats couldn't even sign up with Lindsey Graham and John McCain. They are insisting on full, the full panoply of rights that we give U.S. citizens for captured terrorists. I -- I don't think it's a winning strategy. But, if they want to pursue it, they can pursue it.

BRAZILE: Well, it doesn't appear that John McCain and Mr. Warner got what they wanted, because it looked like the president -- they acquiesced, and the president is going to get everything he wanted on his detainee bill.

BENNETT: Well, John McCain is not a pushover.

BLITZER: We have got to leave it right there. Guys, thank for coming in.

(LAUGHTER)

(CROSSTALK)

BLITZER: Bill Bennett, Donna Brazile.

BRAZILE: I will get him next time.

BENNETT: Neither are you.

(LAUGHTER)

BRAZILE: No, I'm no not.

BLITZER: Let's bring back Zain Verjee. She is getting additional information on that very disturbing situation breaking right now in Lakeland, Florida.

What do we know, Zain?

VERJEE: Wolf, two sheriff's deputies were shot in Lakeland, Florida, by a man that they stopped for speeding.

We're just hearing now from the sheriff in Lakeland, who says that one of the deputies has died. We don't know the condition of the other deputy. As you can see, that there -- there is a massive and serious search under way for this suspect, everybody coming out full force here, patrol cars, helicopters.

And here, you see officers and -- and patrolmen, all -- all getting involved in trying to locate this man. He is considered armed and dangerous. Three of the schools in this area, Wolf, have been locked down.

We will bring you more details, though, when we have them.

BLITZER: A very disturbing situation -- we will continue to stay on top of it.

Zain, thank you very much.

And up next here in THE SITUATION ROOM: new protests in a Senate race that has been jampacked with controversy. We're going to tell you what is happening right now in the state of Virginia.

And paying the price for hurricanes -- many Florida homeowners are stunned by soaring insurance costs. Will they take out their frustrations on Election Day?

Stay with us.

(COMMERCIAL BREAK)

BLITZER: On our "Political Radar" this Thursday: In Connecticut, a new poll shows the Democratic-senator-turned- independent-candidate, Joe Lieberman, now holding a 10-point lead over challenger Ned Lamont among likely voters. Lieberman had been 12 points ahead in the Quinnipiac University poll in mid-August, shortly after he lost the Democratic primary to Lamont.

A much tighter Senate race in New Jersey -- new polls showing incumbent Democrat Bob Menendez running neck-and-neck among likely voters with his Republican opponent, Tom Kean. The Rutgers-Eagleton poll also shows about half of all registered voters haven't heard of the candidates or don't have an opinion about them.

In the heated Virginia Senate race, Republican incumbent George Allen is launching a new TV ad offensive against Democratic challenger Jim Webb. Two spots feature criticism of Webb from female graduates of his alma mater, the Naval Academy. They charge, a 1979 article Webb wrote against women serving in combat subjected them to hostility and harassment at the academy. Webb says he no longer holds that view about women in the military.

Another Allen ad features the senator as being tough on terror, features fellow Republican John McCain lauding Allen for backing anti- terror efforts. The Allen campaign is spending nearly $650,000 a week to saturate the Virginia television market with his new ads.

Now to a political storm front in the Florida governor's race -- many voters in that state are suffering from hurricane insurance sticker shock.

Will they vent their frustrations on Election Day?

CNN's John Zarrella is joining us now from Miami -- John.

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Wolf, after two terrible hurricane seasons and skyrocketing insurance costs, the question is, who is going to be the next governor of Florida? And that may -- may well be determined by which man can best convince the voters that he can bring the rates down.

(BEGIN VIDEOTAPE)

ZARRELLA (voice-over): Dave Malone was absolutely stunned.

UNIDENTIFIED MALE: Thank God I was sitting down.

(LAUGHTER)

UNIDENTIFIED MALE: But it -- it was definitely a shock.

ZARRELLA: Malone, who lives in Hollywood, Florida, had just gotten his homeowner insurance renewal notice. He expected an increase for hurricane coverage, but not this.

UNIDENTIFIED MALE: It was 250 percent on the hurricane premium.

ZARRELLA: From $1,300 a year, the Malones' (ph) premium just for hurricane coverage was going up to more than $4,700.

He is far from alone. Homeowners across Florida are getting sticker shock renewal notices. Some are so incensed, they have formed grassroots organizations... UNIDENTIFIED FEMALE: Get rid of everybody!

(CHEERING AND APPLAUSE)

UNIDENTIFIED FEMALE: Start all over again!

ZARRELLA: ... and are taking their protests to the state capitol.

Polls show insurance has become the number-one issue for voters here and may determine who becomes the state's next governor, Republican Charlie Christ...

CHARLIE CRIST (R), FLORIDA GUBERNATORIAL CANDIDATE: I want to lower your property taxes, and your homeowner's insurance needs to go down.

ZARRELLA: ... or Democrat Jim Davis.

JIM DAVIS (D), FLORIDA GUBERNATORIAL CANDIDATE: I will be a governor who stands up to this very powerful insurance lobby.

ZARRELLA: The problem for voters is, this pocketbook issue is terribly complex. There is no single silver bullet. And neither candidate is offering any new ideas.

Frist and Davis say they will push for a national catastrophe fund that taxpayers in every state contribute to and would benefit from. And they both want to end the insurance industry's practice of setting up subsidiary companies in Florida that shield the parent company from losses.

CRIST: These companies should not be able to set up these Florida subsidiaries, when the rally is, they have a national company that is making billions after billions after billions.

DAVIS: These companies are making record profits and record prices. And the reason that I'm going to be elected governor of Florida is that homeowners, business owners have had it.

ZARRELLA: Insurance companies say it would be impossible to operate in Florida without this approach. And, even with it, they claim to have lost $13 billion in the state since 1992.

(END VIDEOTAPE)

ZARRELLA: With both Crist and Davis seemingly on the same page, and neither one promising any magic wand solutions to the election's defining issue, the voters may have to decide which candidate they want based not so much on what they are saying, but how they're packaging the message -- Wolf.

BLITZER: All right, John, thanks very much -- John Zarrella, our man down in Miami.

And, remember, for constantly updated political news throughout the day, you can check out our new CNN political ticker. It's at our Web site CNN.com/ticker. If you haven't gone there yet, check it out.

Coming up: The clock is ticking on the November midterm elections, and some are placing bets on who might rake in the votes. Really. Find out who is gambling to win.

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

(COMMERCIAL BREAK)

BLITZER: In the lead-up to the battle for Congress, we're setting our sights on Iowa. The state usually is the focus of presidential elections.

But as -- our Jeff Greenfield sees some signs of the more immediate future in the Hawkeye State.

(BEGIN VIDEOTAPE)

JEFF GREENFIELD, CNN SENIOR ANALYST (voice-over): What you're looking at isn't a riot. It's a futures market at work, in this case, the Chicago Board of Trade.

What these people are doing, essentially, is placing bets on whether the price of a commodity, gold, corn, soybeans, oats, wheat, will rise or fall in the future. You can make or lose a fortune depending on which way the prices go.

What the folks at the University of Iowa Business School have done is to create an electronic futures market, where anyone can bet on political events. It's real money, although there is a maximum of $500, to prevent some megabucks partisan from gaming the system.

As with any real betting system, the more that people want to bet on the outcome, the more it will cost you to make that bet. That's why the odds are so much better on long shots than favorites at horse races.

So, in a political campaign, like the last presidential race, the better the candidate is doing, the higher the price of his futures contract. Now, remember, unlike polling, there is no scientific sampling, no way to know whether the betters are Republicans, Democrats, young, old, men, women, black, brown, white, gay, or straight, or that people are betting on research or hopes or blind hunches.

But look at the way the campaign played out at the Iowa Electronic Markets. By election say, the market suggested that Bush would get just about 51 percent of the total, while Kerry would get about 48 percent. That is exactly what the final result was.

So, what about this year? Well, in the Senate, the overwhelming action is on the Republicans keeping control. On the House side, in the last week or so, the action has shifted a bit toward the view of Republicans holding the House. But almost nobody is betting that Republicans will actually gain House seats. (on camera): Now, it would be a big mistake to read these charts as predictors, especially because politics can be as volatile as commodity markets. But as a fever chart of how things are going, this and other electronic markets, like sports trade, turn out to be an intriguing alternative to the polls you will be buried in for the next several weeks -- Wolf.

(END VIDEOTAPE)

BLITZER: I think you're right, Jeff. Thank you very much. We will be buried in a lot of polls coming up in the next several weeks, as we move toward the election on November 7.

Up next: the political ad campaign, with bite. Our Tom Foreman, standing by, he is going to explain why puppies are all the rage in the Maryland Senate race.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: If you watch a lot of television, you probably have been seeing all sorts of campaign commercials filled with attacks and counterattacks. But, chances are, you haven't seen anything quite like the ad war now under way in the Maryland Senate race.

Our Tom Foreman is here. And he's got a dogged investigation?

TOM FOREMAN, CNN CORRESPONDENT: Yes. This has been great fun.

You know, negative ads are just standard fare in politics, but this campaign has bite.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): They are running hard in Maryland, and, as politicians often do, going straight to the dogs.

(BEGIN VIDEO CLIP, AD)

LT. GOV. MICHAEL STEELE (R-MD), MARYLAND SENATORIAL CANDIDATE: Hey, me again, Michael Steele.

(END VIDEO CLIP)

FOREMAN: And one ad has stirred things up like a cat in a kennel, this one, in which Republican Senate Candidate Michael Steele warns voters that his opponent will try to knock him down.

(BEGIN VIDEO CLIP, AD)

STEELE: Negative ads from the Washington crowd, grainy pictures and spooky music, saying Steele hates puppies, and worse. For the record, I love puppies.

(END VIDEO CLIP) FOREMAN: How many times does Steele mention puppies? Twice. How many times does he say he's a Republican? Zero. And that is a likely plus in this state dominated by Democrats.

(BEGIN VIDEO CLIP, AD)

STEELE: I'm Michael Steele, and this is my message.

(END VIDEO CLIP)

FOREMAN: So, National Democratic leaders didn't want Steele to have the last word, or the last puppy. They jumped into the fray on behalf of Steele's rival, Congressman Ben Cardin.

(BEGIN VIDEO CLIP, AD)

NARRATOR: It's nice that Michael Steele likes puppies, but he's running for the United States Senate. And it's important to know where he stands on the issues.

(END VIDEO CLIP)

FOREMAN: The new Democratic ad dismisses Steele's puppy love, portraying him as an Iraq war-supporting abortion opponent, who is too cozy with the president.

(BEGIN VIDEO CLIP, AD)

NARRATOR: Michael Steele, he likes puppies, but he loves George Bush.

(END VIDEO CLIP)

FOREMAN: Steele bit back, quickly returning to the airwaves with his puppy pal.

(BEGIN VIDEO CLIP, AD)

STEELE: You knew they were coming, nasty ads from the Washington crowd. We don't think much of that.

(END VIDEO CLIP)

FOREMAN: This time, Steele specifically names his opponent, accusing Congressman Cardin of voting against cheaper medicine, and of taking special interest money for 20 years.

Voters may not remember the charges and countercharges, but the dogfight is already one to remember.

(END VIDEOTAPE)

FOREMAN: Bit of a scandal in all this. Turns out that's not his dog. He has got a full-grown husky.

And I know that sets you off, being the great dog lover that you are. I mean, look at this.

(LAUGHTER)

FOREMAN: That was last weekend with -- what -- what did you name them? Paco (ph), Chewy (ph), Suzette (ph), Nanette (ph), and Jack Cafferty, right?

BLITZER: All my sweet little doggies.

FOREMAN: Jack Cafferty in the corner there, the little grouchy dog.

(LAUGHTER)

BLITZER: I grew up in Buffalo. The cute little dog, named Dolly (ph).

FOREMAN: Oh, Dolly (ph).

BLITZER: Dolly (ph), a sweet little puppy.

FOREMAN: Oh, very nice. Go for walks in the park and consider the future of politics.

(CROSSTALK)

BLITZER: Good commercials. Very clever, these guys.

(LAUGHTER)

BLITZER: Good...

(CROSSTALK)

FOREMAN: We will see how it turns out.

BLITZER: We will see what happens.

Thanks very much, Tom. Good report.

And still to come: It's a crime capital, with the insurgent violence on the rise. Does that make a U.S. project to build a police academy in Iraq a disaster? Jack Cafferty with your e-mail, that is coming up next.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Jack in New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: What does it mean if the United States' project, at a cost of $75 million, to build the largest police academy in Iraq is being called a disaster? Because that's what it is.

Bruce in Maryland: "The Iraq police academy construction disaster is just further confirmation that the war in Iraq was initiated and continues only to enrich Bush, Cheney and their wealthy supporters."

Janice in Connecticut: "Oh, come on now. We have no oversight in this country. You really expect we would have oversight on multimillion-dollar construction projects in Iraq? Our president is so concerned with inconsequential leaks on his administration's weaknesses that massive leaks in the Iraqi police college just water over the dam. Damn."

C.E., Brooklyn, New York: "For $75 million, they can't build a proper police academy, and we're supposed to trust them with rebuilding the levees in New Orleans? Give me the money, and I will hire some Dutch contractors I found on Google."

Reed in Huron, South Dakota: "Jack, your comments about our ability to build a critical piece of training infrastructure in Iraq is so sad, it's funny. Why not get a bunch of B-list Hollywood comic actors together, do a 'Police Academy 6' movie?"

Jan in Dallas: "It means the Republicans will say this only proves we must stay the course, until the Iraqis can build a disaster on their own."

And Andrew in Pennsylvania: "Jack, it means that Bush will now overpay Halliburton to open doughnut shops in Iraq, because you can't have good policemen without good doughnuts, you know what I mean?"

BLITZER: I know what you -- I know what you mean, Jack.

Thanks very much. We will see you in a few moments.

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