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ANDERSON COOPER 360 DEGREES

Democrats Win Big; Rumsfeld Steps Down; Can Dems Succeed at Change?; What Led to Democratic Victory?; Bush Responds to Democratic Win with Humor; Retired General Praises Rumsfeld Resignation

Aired November 8, 2006 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Good evening, everyone.
It is a whole new ball game -- breaking news tonight on who controls the Senate, late word from Virginia that could put both the House and Senate in Democratic hands.

(BEGIN VIDEOTAPE)

ANNOUNCER: Voters clean house.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Actually, I thought we were going to do fine yesterday. Shows what I know.

ANNOUNCER: Democrats take the House, and now possibly the Senate in a squeaker -- how they won and how they plan to run things.

Election casualty number one:

BUSH: Secretary Rumsfeld and I agreed that the timing is right for new leadership at the Pentagon.

ANNOUNCER: After six years, two wars, and a whole lot of controversy, Donald Rumsfeld heads for the door.

And meet the new boss. So, who is Robert Gates, former CIA chief, close to the first President Bush? Will he bring changes in Iraq or just a change of tone at the Pentagon? Hear from the people who know him best.

(END VIDEOTAPE)

ANNOUNCER: Across the country and around the world, this is a special edition of ANDERSON COOPER 360: "America Votes 2006."

Reporting tonight from CNN election headquarters in New York, here's Anderson Cooper.

COOPER: Hey, thanks for joining us.

We begin tonight with breaking news out of Virginia. If it pans out -- and it's looking more and more like it will -- the Republicans will control neither the House, nor the Senate. The Associated Press is calling the Senate race between Democrat James Webb and Republican incumbent George Allen in Webb's favor.

CNN is not yet making that call, but we are getting word from inside the Allen that this could all be over by tomorrow.

CNN's Dana Bash is working the story in Washington. John King is right here. Ed Henry is in Richmond.

Ed, first, what are you hearing?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Democratic Senator Chuck Schumer, as you know head of the Democratic Campaign Committee, declaring tonight that this means that, in fact, Democrats now have the majority in the United States Senate.

The Webb campaign is telling me tonight that they will be having a press conference tomorrow at noon to do what they have already done, frankly, which is declare victory. In the wee hours of this morning, Jim Webb went out to his supporters and said: Look, we won.

He wants to reiterate it tomorrow, though, and -- and make it official, do it at a formal press conference.

On the Allen side, a source close to Senator Allen telling CNN tonight that this state-mandated review of the vote count, which currently shows Jim Webb up by about 7,000 votes, officials originally told us that could last up to a week, to go county by county, city by city.

But, instead, we're told by the Allen camp tonight it's going to be done tomorrow. It's moving a lot faster than expected. And that's because it's not uncovering major fraud. It's not putting any serious dent in Jim Webb's lead at this point -- so, the bottom line, the Allen camp admitting, George Allen is not catching up.

This Allen adviser added that, given the lead that Jim Webb has right now, the senator is facing a -- quote -- "daunting proposition" and will have to take a -- quote -- "hard look" at the numbers right now -- the bottom line, this adviser saying that Senator Allen is someone who cares deeply about the Commonwealth of Virginia, not someone who wants to put it through a long ordeal.

What that basically means is that Senator Allen is not looking forward to any sort of a recount or a legal challenge. They're stopping short of saying that he's going to officially pull out of this race, officially admit defeat just yet. But they are saying that he has no plans to drag this out -- Anderson.

COOPER: And...

(CROSSTALK)

COOPER: ... what time is he speaking tomorrow?

HENRY: We don't have an official time for Senator Allen to speak. They did put out a press release this evening, saying that, once this state-mandated review of the vote count is finished, which we believe to be tomorrow, Senator Allen will make some sort of a statement.

COOPER: OK.

HENRY: So, that will depend on when the commonwealth comes up with all of that.

Jim Webb, the Democrat, though, is planning a press conference at about noon tomorrow.

COOPER: Dana Bash, what are you hearing from your sources?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, I spoke with a source close to Senator Allen, who just spoke with him in the past hour or so, who wanted to relay the kind of thing that Ed was just reporting, that the senator has absolutely no intention of dragging thing out.

The bottom line is, as Ed was saying, is that what they are seeing is that, in the canvassing, in looking at how the votes are going, it -- it is going faster than they expected it to go. And they are not seeing very many changes at all.

So, we're sort of really getting a wink and a nod from the Allen camp that we might have a real -- a final decision, not only, of course, on what this means for the state of Virginia, in terms of who their senator was -- will be, but, big picture, what happens right here in the United States Capitol. This really could be a giant shift, of course, when you talk -- when you look at what is going to happen and how things are run around here, if the Democrats do take control of the Senate, Anderson.

Now, we know that, tomorrow -- you -- you heard Ed Henry talk about the fact that Senator Chuck Schumer, who was in charge of getting Democrats elected, he is declaring a majority for the Democrats already. Tomorrow, both Chuck Schumer and the minority leader, Harry Reid, are going to have a press conference. We don't know what time yet.

But Harry Reid did release a statement just a short while ago, saying, "The American people have spoken clearly and decisively in favor of Democrats leading this country in -- in a new direction."

He right now is stopping short of essentially declaring himself majority leader, but we do expect them to do just that in a press conference at some point tomorrow -- Anderson.

COOPER: John King joins us now.

What -- what happened to all that talk of lawyers going down there to Virginia? I mean, they have -- they have had close races in the past. They're used to this kind of thing.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: They have had close races in the past.

But, to put it simply, Virginia is not Florida. They have had close races in the past. They have been handled in an orderly manner. This one is going faster than anyone expected. And the Allen campaign -- you heard Dana say it -- they're -- what they're essentially saying is, unless we see evidence of major fraud, there's no reason to demand the more formal recount.

And we're not seeing that.

COOPER: They are saying, the canvassing is going faster.

What do they mean by the canvassing?

KING: They go back and check all the precincts. They go and make sure that they took the right number out of the machine at the end of the night that said how many votes for Senator Allen, how many votes for his challenger, Jim Webb, make sure, when they took that count, that they put it -- when they have to relay that count to the state, and make sure that all the numbers were put in the right place, make sure they didn't put your votes down where my votes should have been, and those kind of things.

And once they're -- they're doing that now. And we're told they're making very steady progress, and there have been a few minor adjustments, nothing serious.

COOPER: What does giving them the Senate give them that just having the House wouldn't give them?

KING: Quite a bit.

Number one, you don't have Republicans in the Senate arguing with Democrats in the House, and the president sort of sitting on the sideline, being the referee who can break up that fight.

Bill Clinton had that advantage at one point. A president can do that in divided government. Ronald Reagan did that at one point in his presidency. You will have the Democrats. If they can stay unified -- a big if -- if they can stay unified, you have the -- with a new House speaker, a Senate majority leader. They have the power to pass the budget and send it down to Congress. They have the power in the Senate.

This is what makes the Senate so important. If there's a Supreme Court vacancy, if there's a Cabinet vacancy, confirmation goes through the Senate. So, it would be a sea change, giant shift, if the Democrats control both chambers, not just one.

COOPER: But you -- you have -- from -- from what you're hearing from -- from sources, this is happening?

KING: I -- I think that, barring some startling revelation in the canvassing tomorrow, based on everything Dan is hearing, Ed is hearing, I'm hearing tonight, that the Allen campaign, probably by late tomorrow afternoon, unless it hears any evidence tomorrow that they have seen any fraud, any numbers shift dramatically, that every indication is, Senator Allen will not request a formal recount.

And, so, then, the question is, as soon as Virginia certifies the race, Mr. Webb will be the Democrat. He will be the winner. And, come January -- remember, there will be a lame-duck session in Congress, still run by the Republicans. But, come January, when the new Congress convenes, every indication tonight you will Democrats controlling both chambers of commerce -- Congress -- for the final two years of the Bush presidency.

COOPER: A fascinating development.

We're going to continue to follow this throughout the next two hours. If anything changes, we're going to let you know about it.

If all of this bears out, if the Senate falls, it really compounds what President Bush today called a thumping for Republicans. Well, actually, he might -- might have actually said a thumpin'. But thumping, I'll say.

Voters clearly were sending a message, especially on corruption and Iraq. And, in a remarkable news conference today, the president said, in so many words, message received.

The larger headline, though, Defense Secretary Donald Rumsfeld, stepping down.

Here's CNN's Suzanne Malveaux.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): Donald Rumsfeld out; Bob Gates in.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The secretary of defense must be a man of vision who can see threats still over the horizon and prepare our nation to meet them. Bob Gates is the right man to meet both of these critical challenges.

MALVEAUX: Before today, the right man was always Donald Rumsfeld. But that was before the president's party got what he called a thumping in the midterm elections, losing their majority in the House, and possibly the Senate.

Just last week, Mr. Bush said he intended to keep Rumsfeld for the remainder of his term. The president acknowledged he had been less than forthcoming with reporters about his intentions, that he and Rumsfeld had been talking about the possibility of him stepping down, but that Mr. Bush had only met his potential replacement Sunday at the Crawford plant.

BUSH: The reason why is, I didn't want to inject a major decision about this war in the final days of a campaign.

MALVEAUX: But Mr. Bush's decision to dump Rumsfeld was part political, part pragmatic, and part conciliatory.

The election was widely viewed as a referendum on the Iraq war and the president. Publicly, Democrats were calling for Rumsfeld to be fired. And, quietly, a group of Republican strategists and lawmakers with close ties to the White House were telling the administration a dramatic change was necessary.

The election fallout now means Mr. Bush must work with some of his harshest Democratic critics, including the likely new speaker of the House.

(on camera): With all due respect, Nancy Pelosi has called you incompetent, a liar, the emperor with no clothes, and, as recently as yesterday, dangerous.

(LAUGHTER)

QUESTION: How will you work with someone who has such little respect for your leadership and who is third in line to the presidency?

BUSH: This isn't -- you know, this isn't my first rodeo. In other words, I haven't -- this is not the first time I have been in a campaign where people have expressed themselves.

MALVEAUX (voice-over): On the campaign trail, Mr. Bush, too, was fired up.

BUSH: However they put it, the Democrat approach in Iraq comes down to this: The terrorists win, and America loses.

MALVEAUX: But, today, there was a sense of relief inside the White House, that they now know what the political landscape looks like, and can deal with it.

BUSH: See, if the goal is success, then we can work together. If the goal is get out now, regardless, then that's going to be hard to work together.

(END VIDEOTAPE)

COOPER: And Suzanne joins us now.

When did Rumsfeld actually resign, or get fired, or whatever you want to call it?

MALVEAUX: Officially, it happened yesterday, on Election Day, when he turned over his letter of resignation to the president.

But, as you heard President Bush saying, it was the last couple weeks that he and Rumsfeld had been talking about the appropriate timing of this actually happening, of him leaving the administration. And you will recall it was a week ago when the president outright, flat -- right -- denied that Rumsfeld was going anywhere, telling reporters he was going to stick around for the rest of the term.

But the truth was, Anderson, the president was already looking for his replacement. He found his replacement on Sunday at the Crawford ranch, when he met with Bob Gates -- and, of course, the president trying to explain the reason why he did not bring it forward until today was that he didn't want to make it look like he was scoring political points before the midterm elections. COOPER: But...

MALVEAUX: Anderson.

COOPER: But, basically, he's admitting that he intentionally was misleading reporters and -- and the American public last week in his public statements.

MALVEAUX: Well, that's absolutely right. You heard the president in the press conference. He gave two reasons.

The -- the first reason, he said, is that he had not found the replacement yet, although he did not disclose that he was, in fact, looking for one. The second reason was that he did not feel it was appropriate to actually let on that that is what was going on behind the scenes, because he felt, in some way, that would make it look like he was trying to impact the outcome of the midterm elections.

But you're absolutely right.

COOPER: But it -- it certainly would have impacted the midterm elections in a way that was negative for the president. If -- if it had been a positive impact on -- on the president, it's very possible that he would have revealed it, although I guess we will never know that.

MALVEAUX: You know, it certainly could have gone either way.

There's a lot of speculation about that. There are some people who are saying perhaps they would have voted for Republicans had they known that the president had a big change that he was going to make, and that perhaps things were going to get better. But we really don't know.

COOPER: Suzanne Malveaux, thanks.

Replacing a defense secretary is one thing, changing course in Iraq another. A Marine died today west of Baghdad, the 21st American death so far this month. Dozens more Iraqi civilians were slaughtered today, as well.

The bottom line, no matter who is in charge, dealing with Iraq will not be easy.

For more on why the change now, and what comes next, perhaps more importantly, here's CNN's Jamie McIntyre at the Pentagon.

(BEGIN VIDEOTAPE)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Hello, folks.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Returning at day's end to his home in Washington, Donald Rumsfeld showed no sign he had been abruptly replaced by his boss, President Bush, who, just last week, gave him a public endorsement. As the chief architect of an increasingly unpopular war, Rumsfeld had become a political liability, who Mr. Bush says admitted in private conversations over the past few days that the Iraq war needed a fresh perspective.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He himself understands that Iraq is not working well enough, fast enough.

MCINTYRE: Rumsfeld, who always said he served at the pleasure of the president, and gave no indication he would leave on his own, said, in his parting statement, the war against terrorism he oversaw is little understood.

RUMSFELD: It is not well-known. It was not well-understood. It is complex for people to comprehend.

MCINTYRE: While the Pentagon denied Rumsfeld had lost the respect of top military commanders, his departure was greeted by a blizzard of statements from Capitol Hill, both Republicans and Democrats, welcoming the opportunity for a fresh start.

SEN. HILLARY CLINTON (D), NEW YORK: Now we can have a -- a new beginning, a new face at the Pentagon, who doesn't carry the baggage that Secretary Rumsfeld carried.

MCINTYRE: Many Democrats advocate a strategic redeployment of U.S. troops away from the front lines. By picking Robert Gates as Rumsfeld's replacement, President Bush appears to be signaling he will give greater weight to the recommendations of the bipartisan Iraq Study Group, of which Gates was a member and whose recommendations are due out soon.

BUSH: He has traveled to Iraq and met with the country's leaders and our military commanders on the ground. He will provide the department with a fresh perspective and new ideas on how America can achieve our goals in Iraq.

MCINTYRE (on camera): The removal of Rumsfeld clears the way for a major course correction in Iraq, if that's what Republicans and Democrats agree is needed. It's also smart politics. It removes an easy target for the Democrats, and increases pressure on them to agree to any new strategy for Iraq.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COOPER: Well, in a moment, we're going to have more on the president's nominee. Exactly who is Robert Gates? What do you need to know about him? And how will he run the war? Will anything actually change? We're going to get a reality check, also, from the troops in Iraq, see what they think of it all.

And a rundown of the winners and losers at the ballot box -- some big surprises, even a Republican senator who had a 62 percent approval rating, and lost anyhow. And Republicans tried to scare voters about Nancy Pelosi in a lot of places. Voters didn't buy it, it seems. So, what are they getting, now that she and the Democrats are taking charge? We will look at their agenda and whether they can pull it off, "Keeping Them Honest" tonight -- all that and more when this special edition of 360, "America Votes 2006," continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JIM WEBB (D), VIRGINIA SENATORIAL CANDIDATE: I want to say that I appreciated what Senator Allen said not long ago, when he came on the news, and said, we all need to respect the process in this country, the democratic process.

(CHEERING AND APPLAUSE)

WEBB: We all go out. We vote. We argue. We vote.

(CHEERING AND APPLAUSE)

WEBB: But I also would like to say that the votes are in, and we won.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

COOPER: Well, that was Jim Webb in the very early hours of this morning, declaring victory in the Virginia Senate race.

And, tonight, as we reported at the top of the program, breaking news, the Associated Press reporting that Webb is, in fact, the winner -- that would give the Democrats control of both the House and the Senate.

Here's more on the elections, the winners and the losers.

(BEGIN VIDEOTAPE)

COOPER (voice-over): The president is taking the blame.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As the head of the Republican Party, I share a large part of the responsibility.

COOPER: But his party is paying the price.

SEN. RICK SANTORUM (R), PENNSYLVANIA: Just a few minutes ago, I called the -- the new senator-elect from Pennsylvania.

COOPER: And, on Capitol Hill, the shift in power is seismic.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Tonight is a great victory for the American people. COOPER: For the Democrats, it was a landslide victory in the House of Representatives. Needing 15 seats, they picked up at least 29, including 28 Republican-held seats, giving the Democrats control of the House for the first time in a dozen years.

And, in the Senate, the Associated Press reporting tonight the Democrats also have won the majority -- that after Democratic challenger Jim Webb held onto his razor-thin lead over incumbent George Allen. In raw votes, it was even closer in the Montana Senate race...

JON TESTER (D), MONTANA SENATOR-ELECT: Thank you very much. Thank you.

COOPER: ... where Democrat Jon Tester, an organic farmer, was declared the winner over Conrad Burns. But, late today, Burns, the longest serving Republican senator in state history, said he's refusing to concede.

CLAIRE MCCASKILL (D), MISSION SENATOR-ELECT: The great state of Missouri has spoken.

(CHEERING AND APPLAUSE)

COOPER: Down in Missouri, another nail-biter, but also going blue, with Claire McCaskill unseating Jim Talent. The same fate came to three other incumbent Republican senators, conservative Rick Santorum in Pennsylvania, and moderates Mike DeWine in Ohio, and Lincoln Chafee in Rhode Island.

In each contest, the message was clear.

PAUL BEGALA, CNN POLITICAL ANALYST: The one indispensable person for this Democratic victory was George W. Bush. Six out of 10 Americans today reject his leadership in the exit polls. And the war is central to that.

COOPER: From the politicians to the proposals, Americans also used the midterm elections to vote on measures that could have far- reaching implications.

Let's start with the minimum wage. Yesterday, six states decided to raise the wage above the federal rate of $5.15 an hour. Then, there's the contentious issue of same-sex marriage. Voters in seven states voted to ban the unions. Arizona rejected it.

South Dakota could have become the first state to criminalize nearly every type of abortion, but a clear majority defeated the bill. And Michael J. Fox campaigned for it, and Missouri agreed, paving the wave to provide funding for embryonic stem cell research.

As the elections end, a new era begins, and challenges for the parties and the president.

(END VIDEOTAPE)

COOPER: Well, joining me now once again, CNN's John King, along with former presidential adviser David Gergen, and, in Baghdad, CNN's Michael Ware.

David, let's start off with you.

You know, I'm reminded of that movie "The Candidate" with Robert Redford, where he -- he finally wins the election, and he goes, so, what do I do now?

What do the Democrats do now? They have the House and, likely, the Senate.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well, after a 12-year drought, it is -- it is hard to figure that out.

But I think they have the opportunity now to redefine themselves as a party, something they haven't -- they -- they have been on the defensive, basically, as a party since Ronald Reagan came into office. We have had a conservative dominance of our politics now for almost 20 years.

Now it's the -- it's Republican conservatives who are on the defensive. And, finally, the Democrats can go on offensive, and redefine themselves. Whether they use this opportunity well...

(CROSSTALK)

COOPER: Redefine themselves how? I mean, I'm thinking of that "Newsweek" headline about, I think, Harold Ford Jr., not your daddy's Democrat.

GERGEN: Sure.

COOPER: I mean, are they trying to move to the middle?

GERGEN: Well, they have already, I think, begun to redefine themselves, in terms of their candidates. So, they have been more centrist in their candidates here in this election. I think everybody has noticed that.

But I think now they have an opportunity to put -- begin putting forward an agenda in the House and in the Senate of things they would like to see passed. And, if the president will sign it, great. But, you know, if the president vetoes it, Anderson, then they have got an issue for 2008.

They can begin to define what a Democrat -- what it would be like if the Democrats won in 2008; 2006 is like the appetizer for the Democratic Party. Now they have a lineup for the main course, which is 2008.

COOPER: And -- and, yet, the irony is that some of the most moderate Republicans got voted out of office last night.

KING: That is the great irony. And I can tell you, to a person, those moderate Republicans were pretty furious last week, when the president was out, so actively campaigning, saying things, like Dick Cheney will stay, and, especially, Donald Rumsfeld would say. It turns out that wasn't the truth.

Those moderate Republicans were furious when he said it at the time. You can bet they're scratching their heads today, saying, hello?

GERGEN: Whoa.

COOPER: Well, that's thing. I mean, why would -- why would the president either say that last week about Donald Rumsfeld, when, apparently, he now admitted today, he knew all along that wasn't the case? I mean, he basically said today that he was lying.

And I'm not trying to just throw stones at the president, but it...

GERGEN: I...

(CROSSTALK)

COOPER: It goes -- it's like saying, Brownie, you're doing a heck of a job, when you know you're -- you know, you're looking for his replacement already.

GERGEN: Anderson, it was startling, what he said about Rumsfeld last -- last week.

And we all talked about that. And then to now know it was a fiction, that he knew all along he was going to replace him, which is, in fact, the case, I -- I am -- I'm just mystified, because his strong suit -- George W. Bush's strong suit has always been, he's straight- talking. You can trust him. You know, you may not agree with him, but he always tells it to you straight.

And now it is, whoa. You know, here's the fellow who said he would never let politics interfere with Iraq. And, the day after the elections, guess what? He replaces his defense secretary.

COOPER: Let's check in Michael Ware, who is in Baghdad.

Michael, U.S. troops, how are they reacting? How are folks in Iraq, Iraqis, reacting, not only to the election, but also to Donald Rumsfeld's resignation?

MICHAEL WARE, CNN CORRESPONDENT: Well, it's too early to tell, Anderson.

I mean, news of Secretary Rumsfeld's resignation broke here at about 8:00 p.m. local time, just on the eve of the nightly 9:00 p.m. curfew. There's been no official comment so far from the prime minister's office, nor from the national security adviser. And, obviously, the military here is -- is closing ranks and locking down. I'm sure they're trying to assess this -- assess the situation, as much as anyone.

At the end of the day, the only real question that presents itself to any of the players here in Iraq, be it the G.I.s, be it the Iraqi government, even be it Tehran or Damascus, is, how will all of this affect the battle on the ground in Iraq?

One thing is evident. That is that, with the resignation of Secretary Rumsfeld, the nomination of Bob Gates, and the shifting balance of political power in the Congress, America is clearly entering a period of strategic instability, in terms of strategic leadership and direction.

Now, its friends and allies will be looking to see that consolidated and -- and solidified as soon as possible, and, arguably, America's rivals will be attempting to capitalize on that.

COOPER: And -- and -- and, I mean, here on this side of -- of the pond, as we say, I mean, how does the -- the strategy change? I mean, how does even the negotiation over the strategy changing begin?

GERGEN: Well, it's really important that the Democrats capture the Senate quickly, because that means the president is going to have to start dealing with some real heavyweights on the other side.

It's much easier to negotiate with House Republican -- House Democrats than it is the -- the Senate Democrats. He's dealing....

COOPER: He -- he -- he's still the commander in chief, though.

GERGEN: He's the commander in chief.

COOPER: Does he have to negotiate with them on...

(CROSSTALK)

GERGEN: But, suddenly, you have Joe Biden now inserted into this process, who is a potential presidential contender, who also has a plan for Iraq, has been there a lot, can command the airwaves in ways that -- that, you know, Republicans on the House side can't do -- I mean, Democrats on the House side can't do as easily.

This changes the whole weight of the argument. I think the president now is going to be under much, much -- a much heavier pressure to -- he's got two choices here. Does he want to escalate in order to win, or does he want to start disengaging? His heart tells him he wants to escalate. He's now going to be under a lot of political pressure to start disengaging.

KING: And the Republican -- the Republican heavyweights also have more leverage now.

The president...

GERGEN: That's right.

KING: ... largely ignored them, the John McCains, the John Warners, the Richard Lugars, largely ignored them, said: I'm the commander in chief. I will set policy, and you will pass it.

Now he needs their help. He needs the Republicans' help...

GERGEN: He does.

KING: ... to deal with the Democrats. So, there are a lot of people who have been sitting on the sidelines for a long time who are now saying, here we go. We are going to have a big debate.

GERGEN: What we don't know, Anderson, is, what does he mean by victory? Does he really, really mean victory, in which case, he's not going to compromise? Or is he going to disguise victory as some sort of disengagement; he's going to call it victory, but, in fact, it's going to be some sort of disengagement?

What we know about Bob Gates is that he's a pragmatist. He is not a Cheney-like person. He's much closer to Brent Scowcroft than he is to Dick Cheney. I think it changes the equation inside.

COOPER: It -- it's fascinating to see some of these folks from his father's administration...

GERGEN: Yes.

COOPER: ... now coming to the fore.

David Gergen...

(CROSSTALK)

COOPER: ... John King, Michael Ware in Baghdad, gentlemen, thanks.

Coming up: how the Democrats, the leader in the House, plan to lead, and what it means to your paycheck. We're "Keeping Them Honest" tonight. David Gergen is also -- also joining us -- going to join us a little bit later on.

And then this:

(BEGIN VIDEO CLIP)

BUSH: Say, why all the glum faces?

Yesterday...

(END VIDEO CLIP)

COOPER: President Bush putting the best face on a bad night -- an extended look at the president's performance today. In case you missed the press conference, there was a -- well, a lot of people talking about it, some fascinating moments. We will bring them to you from CNN election headquarters in New York, a special edition of 360.

Stay tuned.

(COMMERCIAL BREAK)

COOPER: Well, after the Democratic victory, what is the Democratic plan? What will they change? How will it affect you?

We're "Keeping Them Honest" -- next on 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Yesterday, the beauty and the genius of our democracy and the American people spoke with their votes. And they spoke for change, and they spoke in support of new direction for all Americans. Supporting a great array of magnificent, talented Democratic candidates.

(END VIDEO CLIP)

COOPER: That is Congresswoman and presumptive House Speaker Nancy Pelosi. She has been a harsh critic of the president and a fiery opposition leader. Now she and her Democratic colleagues are going to have to share responsibility of governing -- running the country.

Voters told us this election was about holding people in power accountable, Democrat or Republican. Democrats say they've got a plan, but the question is can they execute?

CNN's Dana Bash, tonight "Keeping Them Honest".

(BEGIN VIDEOTAPE)

BASH (voice-over): The woman who will soon be speaker of the House called the election results a mandate for major change and said there was no doubt what tops the list.

PELOSI: Nowhere was the call for a new direction more clear from the American people than in the war in Iraq.

BASH: Nancy Pelosi and other Democrats didn't have to wait long to see the spoils of their victories. Just as Democratic leaders sat down for a celebratory photo op, word came that Donald Rumsfeld was fired.

PELOSI: It will give a fresh start to finding a solution to Iraq rather than staying the course.

SEN. HARRY REID (D-NV), MINORITY LEADER: If the vote of last night from all over America didn't accomplish anything but this, it was a good night.

BASH: But beyond the Rumsfeld bombshell, the question is even with control of the House and maybe the Senate, to what extent can Democrats change Iraq policy? Not much. Congress does hold the purse strings, so Democrats could try to cut off funding for the war. But they've pledged not to endanger the troops.

PELOSI: The president is the president of the United States. I hope that he will listen to the voices of the people. And that again, putting aside partisanship and looking to a partnership to end this war.

BASH: On the home front, Pelosi will try to fulfill Democrats' campaign promises with an ambitious agenda. In the first 100 hours, she wants to raise the minimum wage to $7.25 an hour, cut interest rates for student loans, try to lower prescription drug prices under Medicare, and more.

But there's a lot there Republicans don't like, and George W. Bush still wields the veto pen. And though a humbled president said he'd look for a common ground, he also said this...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: She's not going to abandon her principles, and I'm not going to abandon mine.

BASH: Pelosi's challenges go beyond building trust with the president she's called dangerous and incompetent. She also needs to win over newly elected conservative Democrats. So she moved to allay concerns about her liberal roots.

PELOSI: I understand my role as leader of the Democrats, but even more important than that, I very, very, very much respect that I will be the speaker of the House, not of the Democrats.

(END VIDEOTAPE)

COOPER: Dana joins us now. That's the Democratic plan. Do the Republicans have a plan in terms of how they recover from this?

BASH: They're currently, I think, sifting through the wreckage of their defeat, Anderson, trying to figure out where to go from here. But several angry rank and file Republicans released statements today, making it very clear they think their party got exactly what it deserved. The Republicans simply lost their way.

And it seems as though they're almost kind of adopting the theme from the Democrats over the election year that perhaps it's time for a change inside their own Republican leadership. We're going to see some of the leaders currently holding positions, especially in the House, challenged in a leadership election next week.

COOPER: Dana, thanks.

The Democrats are preparing for their brighter future, while President Bush has admitted defeat but with a bit of humor. Coming up, how he handled his first news conference after the shift in power. In case you haven't seen it, it was sort of a fascinating day.

And Robert Gates, he's got a tough job ahead of him, to say the least. A look at the man tapped to replace Donald Rumsfeld. What you need to know about him.

That and more when this special edition of 360, "America Votes 2006", continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JIM TALENT (R), MISSOURI: It just looks like we couldn't do it, and I want you all to know that it was not for the effort -- it was not because of any lack of support or work or vigor anywhere around this state. You all did a great, great job. The head wind was just very, very strong this year.

But I think without your support, your effort, your hard work and your belief, there's no way that we could have made it this close. And I want to thank all of you very, very much.

(END VIDEO CLIP)

COOPER: A very gracious outgoing speech from outgoing Missouri Senator Jim Talent.

We're hearing tonight Republicans have lost another seat, thereby the entire Senate. The Associated Press reporting that Jim Webb has, in fact, defeated George Allen in Virginia. That gives the Democrats control of both the House and the Senate.

As for the GOP, it is playing Wednesday morning quarterback, trying to figure out where it went wrong by reading the voters.

Here's CNN's senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN CORRESPONDENT (voice-over): What was the message of this election? Ask the winners.

PELOSI: The more the president campaigned on the war, the fewer votes the Republicans who supported that got. And that took its toll on the Republicans.

SCHNEIDER: The voters' views were clear in our national exit polling. A clear majority of voters said they disapprove of the war in Iraq. Those numbers closely matched people's views of President Bush, suggesting that the Iraq war now defines the president.

But did it affect the vote? Yes. Fifty-nine percent of voters who disapproved of the war in Iraq said they voted to oppose President Bush.

It even took a toll on Republicans who opposed the war, like Senator Lincoln Chafee, who lost his reelection bid in Rhode Island. Chafee voted against the war, but antiwar voters in Rhode Island went nearly 2-1 for Chafee's Democratic opponent.

ALEXANDER BOLTON, "THE HILL" NEWSPAPER: As much as they may have liked Mr. Chafee, they wanted to send a message to Bush.

SCHNEIDER: Message received, sort of.

BUSH: I believe had a lot to do with the election, but I believe there was other factors, as well.

SCHNEIDER: What were the voters trying to say? Simply this: they want to see U.S. troops begin to withdraw.

(on camera) Iraq trumped other issues. Take voters who thought the economy was in good shape but who opposed the war in Iraq. How did they vote? Democratic, by nearly 2-1.

Bill Schneider, CNN, New York.

(END VIDEOTAPE)

COOPER: We saw a bit of it in that piece right there. This morning, President Bush had the difficult task of trying to explain his party's bitter defeat to the press corps in the country. It was a fascinating glimpse of the president, and in case you missed it, here's CNN's Gary Tuchman.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ladies and gentlemen, the president of the United States.

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): On a day in which many Republicans woke up with the political equivalent of a hangover, the president of the United States gave a hint as to what he likely saw in the mirror this morning.

BUSH: Say, why all the glum faces?

TUCHMAN: At his opening statement, President Bush attempted some humor about his conversation with incoming speaker of the House, Nancy Pelosi.

BUSH: And in my first act of bipartisan outreach, I shared with her the names of some Republican interior decorators who can help her pick out the new drapes in her new offices.

TUCHMAN: Among those likely not laughing was current Speaker Dennis Hastert.

But Mr. Bush continued in the spirit of bipartisanship throughout his 43-minute news conference. And when asked what's changed since a few days ago, when he said America loses with the Democrats' approach to Iraq...

BUSH: What's changed today is the election is over, and the Democrats won.

TUCHMAN: And a relaxed looking president didn't even appear to bristle when he was asked this. UNIDENTIFIED MALE: With all due respect, Nancy Pelosi has called you incompetent, a liar, the emperor with no clothes and as recently as yesterday dangerous. How will you work with someone who has such little respect for your leadership and who is third in line to the presidency?

BUSH: Suzanne, I've been around politics a long time. I understand when campaigns end, and I know when governing begins.

TUCHMAN: Mr. Bush spoke like the Texan he is when declaring how he felt.

BUSH: This isn't my first rodeo. In other words, I haven't -- this is not the first time I've been in a campaign where people have expressed themselves. And in different kinds of ways.

TUCHMAN: And he used his Texas twang to describe what happened to Republicans overall.

BUSH: It was a thumping.

TUCHMAN: Regarding that thumping, the man who was working harder than anyone to prevent it, campaign guru Karl Rove, was the subject of the biggest laugh in the news conference. When the president was asked about a contest he and Rove have been having to read the most books.

BUSH: I'm losing. I obviously was working harder on the campaign than he was. He's a faster reader.

TUCHMAN: The president ended the gathering by thanking the reporters for their time. And then left, a leader in a much different position today, but with a sense of humor still in tact.

Gary Tuchman, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, humor aside, the purpose of that news conference was, of course, intensely serious. Coming up, a change in command. Embattled Defense Secretary Donald Rumsfeld stepping down. Who is nominee Robert Gates and what will he bring to the job?

Plus, what the 2006 midterm elections mean for 2008. Did any new front runners emerge? All that ahead on this special edition of 360, "America Votes 2006".

(COMMERCIAL BREAK)

COOPER: The man President Bush has named to replace Donald Rumsfeld, Robert Gates, right there, he's a college president who has lived in Texas for the better part of the last decade. He also has deep and longstanding ties to Washington and to the first President Bush. Now he's being asked to take on what is probably the most difficult job in the nation's capital right now.

Here's CNN's Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT (voice-over): Bob Gates is new to the Pentagon, but a new defense secretary does not end the problems in Iraq.

ROBERT GATES, DEFENSE SECRETARY NOMINEE: Because our long-term strategic interests and our national and homeland security are at risk, because so many of America's sons and daughters in our armed forces are in harm's way, I did not hesitate when the president asked me to return to duty.

STARR: Gates, who served as CIA director and national security advisor for the first President Bush, is regarded as someone who understands both politics and policy.

JOHN MCLAUGHLIN, FORMER CIA ACTING DIRECTOR: He's very well known to Democrats, and I think he's seen across the aisle as a non- ideological person who would bring a realist perspective to this job.

STARR: If confirmed, Gates is expected to have a smoother relationship with his generals than Secretary Rumsfeld had, at least for now.

MCLAUGHLIN: I think they will welcome Bob, because he's generally well known in the military. They'll welcome his style.

STARR: Gates is an old Washington hand from the Reagan-Bush years. He's currently part of the Iraq study group, co-chaired by former secretary of state, James Baker, one of the first President Bush's closest friends. That group is working on options for a new Iraq policy.

Gates is not without controversy. In 1991, he was investigated but cleared of any wrongdoing in the Iran-Contra scandal. Several political analysts tell CNN they do not expect that to hinder his confirmation. But Democrats are getting ready.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: And I don't see this being an easy confirmation unless there is a change in strategy and unless he's willing to come forward with that change in strategy.

STARR: He has not always agreed with the current administration. In 2004, he co-authored a study on Iran for the Council on Foreign Relations, which said, in part, "The United States should not defer a political dialogue with Iran" until differences over its nuclear programs have been resolved.

(on camera) Gates' essential challenge will be to provide that fresh look at Iraq that President Bush now says he wants. But the problem remains unchanged: finding a way to end the violence and bring the troops home.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

COOPER: Getting back to Iran-Contra for a moment. How is this for deja vu.

One of the other players is making a comeback, as well. This guy, remember him? Daniel Ortega, Nicaragua's former community dictator, now its newest president-elect. Everything old is new again.

Trying today to calm U.S. concerns about a return to the Marxist past, he promised not to push for any dramatic, radical changes to Nicaragua's economy.

As for the Rumsfeld resignation, the aftershocks are being felt here and in Iraq. We'll talk to retired Army General John Batiste, a vocal opponent of Rumsfeld, about what the move means for the war.

And more on our breaking news, the Associated Press reporting that Democrat Jim Webb has won the Senate race in Virginia, beating Republican incumbent George Allen. The latest on that, meaning that the Democrats taking control of the Senate, when this special edition of 360 continues.

(COMMERCIAL BREAK)

COOPER: It's been a day of major developments in the news. We've been talking about the departure of Secretary of Defense Donald Rumsfeld about what it means for the war in Iraq and for our troops serving bravely overseas.

Joining us from Washington is retired Major General John Batiste, who well, came out publicly calling for Rumsfeld to step down.

What do you make of today, a good day for you?

MAJ. GEN. JOHN BATISTE (RET.), U.S. ARMY: Anderson, it's good to be with you. It's a great day for our nation and a great day for our incredible military.

COOPER: You say that because?

BATISTE: We need to move forward with a new and powerful strategy to finish what we started in Iraq and Afghanistan. You know that winning the war on the jihadists is the single most compelling issue our country faces today. And fundamental to that is finishing what we started in Iraq and Afghanistan.

COOPER: There are those who said, look, changing the secretary of defense midstream is a dangerous move when troops are in the field. Why was it so important, in your opinion, for Donald Rumsfeld to go?

BATISTE: The architect of our failed strategy needed to step down, in my view, a long time ago.

What's important now is that we have an opportunity. We have a Senate and a House and an executive branch that can form a team of rivals. What a concept. It's what Abraham Lincoln did in 1860 to win the Civil War.

This is fundamentally important, that we develop a new strategy that will win what we started in Iraq and Afghanistan.

COOPER: I want to play just a little excerpt from Donald Rumsfeld speaking today at the White House. Because what you -- some of the things that you and some of the other generals who came out calling for his resignation, for him to step down, had talked about in the past was an arrogance in the way he treated military officers in the Pentagon. I just want to play you one bite from the White House today.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: It is not well known; it was not well understood; it is complex for people to comprehend. And I know with certain -- certainty that over time, the contributions you've made will be recorded by history.

(END VIDEO CLIP)

COOPER: Donald Rumsfeld talking, basically saying the American people sort of don't understand the war, reporters don't understand the war. Does he get it? Does he get it?

BATISTE: I think he's selling the American people short. I think we do get it. I think a short read of the history of the British Empire in Iraq in the last century would be illuminating to a whole bunch of people.

COOPER: And you say that because what?

BATISTE: We got into something that was terribly complex. We had a strategy that was tragically flawed from the beginning. And we've been playing it out ever since.

COOPER: So what needs to happen now? I mean, what can happen to improve the situation on the ground? You can finger point, you know, that's in the past now. Donald Rumsfeld is gone. There are American troops, you know, fighting and dying, as you well know.

You were one of the troops serving over there, commanding our men and women. What can we do to win?

BATISTE: Well, there's a whole bunch of steps that need to happen and they need to happen fast.

The first thing is mobilize this great country of ours, get it on a war footing, properly resource the Army and the Marine Corps, properly resource the Veterans Administration to do what they need to do.

Then we need to look carefully at Iraq and figure out why there's so many unemployed Iraqis that are an endless manpower pool to the insurgents. We need to figure out a way to get these people into national service in larger numbers, either military or a jobs program. We need to incentivize the sheiks to be part of the solution.

You know, an Iraqi doesn't think of himself as an Iraqi. He's first a member of a tribe and then he's either Sunni or Shia, and then he's Arab or Kurd. The last thing on his mind is "I'm an Iraqi." We need to recognize that the sheiks wield incredible influence, and they need to be part of the solution.

We need to secure the borders with Iran and Syria now completely, full stop, any activity crossing those borders. And if that involves enlisting 100,000 ex-military from NATO contributing nations or we encourage countries like Egypt and Saudi Arabia and Jordan to get involved, because it's in their best interest to be there, we need to secure those borders.

We need to stop the militias now. People like al-Sadr should not be given full reign to do what they're doing.

COOPER: Of course, you're taking military. You're talking strategy. There's a political component to it, as well, in this country, and that is what we're going to be looking at in this next hour on 360.

General Batiste, it's always good to talk to you. Appreciate you being on. Thank you.

BATISTE: Thanks, Anderson. All the best.

COOPER: We'll have you on again.

Straight ahead tonight, how the news is being received by troops in Iraq, along with a reality check for Robert Gates, the defense secretary nominee. We'll have two live reports from Iraq.

Also, the latest breaking developments from the Senate race in Virginia. Looking more and more like a Democratic victory tonight, meaning Democrats will also control the Senate. We'll have the latest on that.

And how did Christian conservatives vote this time? Did it tip the election? That story and much more on this special edition of 360, "America Votes 2006".

(COMMERCIAL BREAK)

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