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Battle In Virginia; Battle In Montana; White House Reaction; View From The Hill; Ohio Elections; Iraq & U.S. Vote; Top Tips

Aired November 08, 2006 - 10:00   ET

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

TONY HARRIS, CNN ANCHOR: Upheaval on The Hill. Democrats capitalize on voter anger and crush the Republicans 12-year lock on Congress. The American people voted for change, so says Nancy Pelosi. The California Democrat is now in line to become the first female speaker of the House.
But at this hour, control of the Senate is still too close to call. It may come down to the bitter contest in Virginia. Democratic challenger Jim Webb holds a wafer thin lead over incumbent George Allen. The Virginia race appears headed for a recount. Because of quirks in state law, a final answer could be weeks away.

What we do know, President Bush faces his greatest opposition yet on Capitol Hill. He will enter his final two years with at least half of Congress in Democrats' hands. Tax cuts, the Iraq War, the war on terror, all could be steered in a new direction. We'll hear from the president in an afternoon news conference scheduled for 1:00 Eastern.

HEIDI COLLINS, CNN ANCHOR: Here's how the numbers break down in the newly divided House. The Democrats went into yesterday's elections needing 15 seats to win a majority. They've nearly doubled that goal. CNN projects the Dems will pick up at least 28 seats by the time the final votes are tallied.

Democrats faced a tougher challenge, though, in the Senate -- hold on to two vulnerable seats and win six more. Democrats have held on to their two seats and gained four from Republicans. Two races though, Montana and Virginia, still too close to call.

So that cliffhanger in Virginia, the outcome determines who controls the Senate. The margin is wafer thin and a recount almost certain. CNN's Brian Todd live from Richmond.

Any news, Brian? Can you report it?

BRIAN TODD, CNN CORRESPONDENT: We can report that a senior adviser for Senator Allen is going to speak in about an hour and a half, Heidi. We don't know what he'll say and we don't know whether they're going to request a recount. We may not know that for a couple of weeks.

Now this is a race that both camps were looking forward to the end of. I mean it was a brutal campaign. We chronicled it very well here on CNN. George Allen thought to be a very likely winner just a couple of months ago. That lead dwindled because of his very well documented missteps in this campaign. He still had a lead through much of last night, but it kept getting chipped away at. And by just a little after midnight, it appeared that Jim Webb had come out with a slight lead. At that point, both candidates came out and spoke about what had happened.

(BEGIN VIDEO CLIP)

JIM WEBB, (D) VIRGINIA SENATE CANDIDATE: We all go out, we vote, we argue, we vote. But also would like to say that the votes are in and we won.

SEN. GEORGE ALLEN, (R) VIRGINIA: So the point of the matter is, I've been through it. I think that the counting -- I know the counting will continue through the night. It will continue tomorrow. And I want to thank you all because I know you're going to be like a bunch of eagles and hawks watching how every one of these votes are accurately counted.

(END VIDEO CLIP)

TODD: And those eagles and hawks may actually work for the Virginia State Board of Elections. They'll going to be canvassing the state for a couple more weeks, making sure that the votes are all in and all counted. Key date here, November 27th. That is the certification date. At that date, if a candidate is losing by less than 1 percent, he can request a recount. The recount is not automatic.

So at this point, James Webb has a lead of about 8,000 votes, but we're told now, four precincts still outstanding. And they're waiting at the razor's edge, Heidi, but they may be waiting for a couple more weeks until we know definitely what the vote count will be.

COLLINS: Yes, it might be awhile.

All right, Brian Todd, thank you.

HARRIS: Still counting in Montana. The Senate race too close to call. The outcome crucial to control of the Senate. CNN's Chris Lawrence reports from Billings.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT: The last precincts are just reporting in and Democrat Jon Tester leads incumbent Republican Senator Conrad Burns by a razor thin margin. But there are several factors at play that may prevent an official winner from being declared for quite a little while.

One of those is Montana's recount law. It allows the loser to request a recount if he lost by less than one half of one percent. The numbers are close enough that make that at least a possibility.

The other issue is the provisional ballots out there. These are ballots that say someone went to the polls, they didn't have a proper I.D., they cast a provisional ballot. Then when they bring in their I.D., that ballot is then counted. Well, if say Jon Tester were to win the election by 1,000 votes, but there were still 1,500 provisional ballots out there, that would prohibit the secretary of state from being able to declare the election.

There was no one central issue in this election. Sure Iraq played a part. Definitely some Democrats voted against Republican Conrad Burns because of his ties to convicted lobbyist Jack Abramoff. Some said he was the poster boy for the culture of corruption there in Washington.

But Republicans hammered away at Jon Tester, calling him a high taxer who was too liberal for the state of Montana. The state was almost evenly split among these two men and it remains to be seen which one will win and, therefore, possibly tip the balance of power in the Senate as well.

Chris Lawrence, CNN, Billings, Montana.

(END VIDEOTAPE)

COLLINS: The midterm elections certainly a disappointment for President Bush. And to the White House now with CNN's Elaine Quijano.

Elaine, what's the mood there this morning?

ELAINE QUIJANO, CNN CORRESPONDENT: Well, good morning to you, Heidi.

There certainly is disappointment in the West Wing over those losses in the House. At the same time, this is a White House trying to strike a conciliatory tone. President Bush wanting to demonstrate that he is moving past the acrimony of this last election cycle.

This morning he reached out and called the woman who is set to become the next speaker of the House, Representative Nancy Pelosi. Aides say that he congratulated her and her Democratic candidates on their wins, pledging to work together. And the president also inviting her to lunch at the White House tomorrow.

Now Mr. Bush's first call was actually to the outgoing House speaker, Republican Dennis Hastert. Aides say the president thanked him for his hard work. Said that they ran some good campaigns. And while they came up short, said they are committed to working with Democrats.

But certainly this is the scenario that neither the president nor his aides wanted to publically acknowledge was even possible. The idea of a Speaker Pelosi. There was some harsh rhetoric on the campaign trail on both sides. Still, White House Deputy Press Secretary Dana Perino in a statement signaling that the administration wants to move forward. Saying, of the president, "he is not the first president to see a Congress change and he won't be the last. While Congress has changed, the issues have not. We have plenty of time to get a lot done, but not enough time to waste a single day."

So we'll wait to hear from the president directly. He is, in fact, set to have that news conference later this afternoon, 1:00 Eastern Time. Clearly, though, some big questions looming. Namely, what to do about Iraq. Also whether or not there might be some personnel changes in the works. When asked about that yesterday, White House Press Secretary Tony Snow was rather coy, saying that it was reasonable to believe that people who have been with the administration for some time might be wanting to step down. But, of course, Snow would not go beyond that.

In the larger picture, Heidi, questions about how the president will now approach the remaining two years and whether or not he'll be able to get anything on his agenda done in his time left in office.

Heidi.

COLLINS: Well, he's going to start it tomorrow at lunch with Nancy Pelosi, right? Have we heard whether or not she's accepted that lunch invitation?

QUIJANO: I'm sorry, Heidi, I'm having trouble hearing you.

COLLINS: OK. We'll move on just in case you can't hear me. I'll get back to you later on when we speak with you again about having lunch with Nancy Pelosi, President Bush.

Meanwhile, as Elaine said, CNN plans to carry President Bush's news conference live. That will begin at 1:00 p.m. Eastern, 10:00 Pacific.

HARRIS: The view from Capitol Hill this morning. Democrats are taking control of the House for the first time in 12 years. Congressional correspondent Andrea Koppel joins us.

And, Andrea, what are the plans? Good morning, first of all. What are the plans for the Democrats?

ANDREA KOPPEL, CNN CORRESPONDENT: Well, good morning to you, Tony.

Well, if you ask a lot of the voters out there, they're going to say -- in fact 40 percent of them in a recent poll said they expected if Democrats were to win the House, that they would begin to withdraw U.S. troops from Iraq. Not just begin, but that they would have all U.S. troops out by the end of the year.

Now we know that there is certainly some Democrats who sign on to that, but many others do not. We also know that Vice President Cheney just last week said that even if Democrats did win the House or the Senate, that it was going to be full steam ahead on Iraq. What kind of leverage would the Democrats have that would be the power of the purse? But they've already taken that off the table, saying that they would not withhold funding for U.S. troops in Iraq.

Tony.

HARRIS: So, Andrea, what are the chances of achieving these goals, these plans? KOPPEL: Well, if you look at Iraq, clearly that's going to be a tough nut to crack. There are a whole bunch of other issues that Nancy Pelosi, the next speaker of the House, has laid out, certainly on the campaign trail, and that she said she hopes to get through at least to start working on in her first 100 hours next year. And they include things like raising the minimum wage to $7.25. Things like enacting all 9/11 Commission recommendations, lobbying restructuring. Those are the things that the Democrats want to accomplish.

We just saw, as you see on your screen there, the head of the Republican's congressional campaign committee, Tom Reynolds, basically adopted a somewhat philosophical approach to their loss last night, saying that history was working against them.

(BEGIN VIDEO CLIP)

REP. TOM REYNOLDS, (R) NEW YORK: And from day one, an uphill climb for us. What I've always said is it's a stiff wind in our face. The election really was a matter of history repeating itself. Second term, midterm elections are the toughest for the president's party. And one like last night, is absolutely no different.

(END VIDEO CLIP)

KOPPEL: And now that the tables have turned, and that Democrats are on top in the House, we don't yet know what's going to happen in the Senate. Clearly, Tony, there's going to have to be quite a bit of behind the scenes negotiating that's going to take place on a whole range of issues.

HARRIS: Has to happen. Congressional correspondent Andrea Koppel for us this morning.

Andrea, thank you.

COLLINS: In state capitols across the U.S., more reason for Democrats to celebrate. The party will control governorships in 28 states. Democrats snatched six of those offices from Republicans. Twenty-two states will have Republican governors.

HARRIS: An independent win for a defeated Democrat. The Senate race in Connecticut. Joe Lieberman all smiles now. Find out who else won in the northeast in the NEWSROOM.

COLLINS: America votes, Iraq reacts. What does a shakeup in Washington mean for the war, U.S. troops and the Iraqi people? A closer look in the NEWSROOM.

HARRIS: And a new Supreme Court. An old but controversial issue. The abortion debate. Arguments before the high court today ahead in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Protests outside, arguments inside. The Supreme Court steps square in the middle of the abortion debate this morning. Justices are considering a constitutionality of a federal ban on a late-term abortion procedure. It's commonly referred to as a partial birth abortion. The court has covered this legal ground before. Six years ago you may remember justices invalidated a similar law in Nebraska by a vote of five to four. But since then, the makeup of the court has certainly changed with the additions of Chief Justice John Roberts and Justice Samuel Alito, both appointed by the president. Abortion opponents hope the personnel changes will bring about a different outcome this time around.

COLLINS: The state of Ohio got a lot of attention on Election Day. So how did things turn out there? CNN's Jason Carroll is with us now live from Cleveland.

Good morning to you, Jason.

JASON CARROLL, CNN CORRESPONDENT: And good morning to you there, Heidi.

As you know, Ohio is one of those states that both parties pay close attention to. It's almost evenly split between Democrats and Republicans. A lot of Democrats went into the polls wanting change and change is exactly what they got.

(BEGIN VIDEOTAPE)

CARROLL, (voice over): Commonly known as a political bellwether state, Ohio went from red to blue in key races. Democrat Sherrod Brown ousted Republican Senator Mike DeWine from the seat he held for 12 years. A victory, Brown said, could have a ripple effect on the next presidential election.

SHERROD BROWN, (D) SENATOR-ELECT: As Ohio goes in '06, so goes the nation in '08.

SEN. MIKE DEWINE, (R) OHIO: We fought hard. We did everything we could do, but it just was not to be. This was not the year. We could not win.

CARROLL: Democrats gained another House seat when Zach Space defeated Republican Joy Padgett. Republicans lost the governor's office after two decades. Democrat Ted Strickland handily defeated the Secretary of State Ken Blackwell.

TED STRICKLAND, (D) GOVERNOR-ELECT: They made the unmistakable choice for change.

CARROLL: What happened in this battleground state that twice helped elect President Bush. Allegations of state corruption. Just last week Republican Congressman Bob Ney resigned following his criminal conviction for his dealings with a Washington lobbyist. Ohio's outgoing governor acknowledged the mismanagement of a public employee pension fund. But it wasn't just state issues that influenced voters here. Many Ohioans from both parties say their votes reflected their feelings about Iraq and about President Bush.

UNIDENTIFIED MALE: I'd like to see change. And I have a neighbor of mine that's getting ready to go over to Iraq and, you know, I think that's a big issue.

UNIDENTIFIED FEMALE: I wanted to see Congress stay the same and I wanted to see the Republicans in there.

UNIDENTIFIED FEMALE: I'm very happy with George Bush. I think he's done a great job for our country.

UNIDENTIFIED MALE: Bush has been in office for eight years and we've seen what he's done and I don't see much good that's come from it. So I believe it's just time for a change.

(END VIDEOTAPE)

CARROLL: Another important point. History has shown that a Republican has never been able to take the White House without winning Ohio. So that's a point that both parties are going to be focusing on leading up to '08.

Heidi.

COLLINS: And, Jason, it looks like you really had an opportunity to get out there and talk with some of the voters. I always like to know, does it seem like they were voting on those issues of character and personality or did they really go towards the issues? You mentioned Iraq quite a bit in your piece.

CARROLL: You know, it's really interesting, Heidi, because, you're right, we did have an opportunity to speak to a number of voters. The Republicans that we spoke to said that even though that there were issues here in the state, they really wanted to make sure that their vote was a way of showing that they supported the president, supported the Congress, supported that direction.

On the flip side of that, the Democrats that we spoke to, once again, even though there were definitely issues here in the state, really felt as though their vote was a way of showing that they were not satisfied with the way the country was headed, specifically the way that the White House was deal with the situation in Iraq. So we saw both sides of that.

COLLINS: All right, Jason Carroll coming to us live this morning from Cleveland.

Jason, thank you.

The midterm election brings change and so many problems for voters in several states. To Colorado now. Democrats said there were severe problems at the polls. But a judge declined to extend poll hours. So we're going to be looking into that.

Also in Kentucky, a poll worker was arrested for allegedly choking and pushing a voter. You don't do that.

HARRIS: Yes.

COLLINS: In Albany, New York, it will be Monday before paper ballots can actually be counted. The New York Supreme Court ordered the delay just in case any races are tight.

And in Virginia, the Senate race still hangs in the balance. The FBI is probing reports of deceptive calls to voters.

HARRIS: American voters have spoken. Iraqis no doubt listening. Our Aneesh Raman has the latest from Baghdad.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: They don't know much about who the Democrats are. In fact, most Iraqis know simply that they're not Republicans. But there is a sense in Baghdad this morning that while there has been change in Washington, a balance of power that has shifted, there could perhaps be change in the capital.

Iraqis are eager and now hopeful that perhaps a new balance of power in Congress will force some change on the ground, put pressure on President Bush. They see this situation as stagnant, crippled by sectarian violence. A reminder of that came late yesterday when 17 people were killed by a suicide bomber in the capital. And this morning, Iraqis grasping at what little has changed and then opportunity.

UNIDENTIFIED MALE, (through translator): We hope that the Democrats will be kind to our people and understand our problems.

UNIDENTIFIED MALE, (through translator): As far as I'm concerned, I hope the Democrats will work for providing security for the Iraqi people who suffer a lot in this period.

RAMAN: But, of course, the Iraqi government is fearful that U.S. could precipitously leave Iraq with the Democrats in control of Congress. The U.S. ambassador to Iraq, Zalmay Khalilzad, had a reception with Iraqi parliamentary members there. He said that there would not be dramatic change essentially in the U.S. policy in Iraqi.

He also seemed to speak more to the Democrats than he did to the Iraqis, saying that while the election has been polarizing and exaggerating party differences, leaders that have won must represent all their constituents and not just those that back them. He also said that leaders must have the courage to make difficult decisions. And then reminded the Iraqi politicians that it is still the president, George Bush, who is the chief architect of U.S. foreign policy and commander in chief.

So it seems while we have the U.S. ambassador cautioning the dramatic change is not in the offing and that America is committed still to a success in Iraq, the Iraqi people, at least those, a small sampling that have spoken this morning in Baghdad, are hopeful that any change in Washington, whatever it means, and they don't know much about the Democrats, but they know that they're a new party in power, that some of that change will have an effect on the ground in Iraq. Will have an effect on securing this country. Will have an effect on making things better.

Aneesh Raman, CNN, Baghdad. (END VIDEOTAPE)

COLLINS: We want to talk with Gerri Willis now. She's here to talk "Top Tips."

And, Gerri, stock scams. Boy, they're everywhere and they get pretty personal.

GERRI WILLIS, CNN CORRESPONDENT: Well, indeed they do. Here's one tip you may want to have. Stock scammers may have invaded your e- mail inbox. We'll let you in on the secret coming up in the NEWSROOM.

HARRIS: And we're continuing just to follow the situation out in the northwest. Look at this picture from King County, Washington, right now. Our affiliate out there, KIRO. This is a road just washed out.

Can we take a live picture? There is a house in danger here. OK, it will come in just a second here. There is a house in real trouble right now because of the -- just too much water right now.

We will check in on this situation right now unfolding before our eyes. Just severe flooding out there. The water is just way too high in King County, Washington. We'll check in with Chad for a further update right after the break. You're in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: All right, we're going to take you back to King County, Washington. Now this is what's happening out here, Heidi. It's so much rainfall from this big old Pineapple Express storm. We saw this yesterday. Roads being washed out. New pictures today. More of the same. Let's show everyone that house that is teetering on the brink here in real trouble of being washed away just by all of the water in the rivers.

COLLINS: Yes, this is what we were mentioning earlier. They're got all these dump trucks that are supposed to be coming into the area to dump gravel to keep, you know, the water from washing these homes away. That's one situation.

They're dealing with another. These hunting camps where about 225 elk hunters were evacuated. One person didn't get out. That's the person who was killed. He was a 20-year-old hunter.

And the other, as far as election day goes, one of the highways completely blocked because of all of the rain. I mean, look at the current there. It's just amazing. So they sent in a dump truck there to get about 300 ballots so that they could be counted. So it's really a situation, obviously.

HARRIS: And, Chad, as you continue to watch this, flood warnings, obviously, posted everywhere. What, 19 or so western Washington rivers in some distress right now?

CHAD MYERS, CNN METEOROLOGIST: Well, in this bubble, as we call it, the rain came down so fast that there's this bubble. Almost a storm surge-like in the river where the water comes up, it peaks, and then it crests and then it comes back down. Well during the crest, obviously, this had a lot of erosion.

Trying to figure out where this is. I've been kind of looking at some of the wider shots. I think it's out there around I-90 before you get to Snoqualmie Pass between like maybe Twin Falls State Park. Out that way. Hard to tell. Sometimes the helicopter, as it switches gears, it actually shows the GPS location of where it is.

And I've been watching and really trying to figure out where this is. But that looks like just a little highway that used to be and then there it looks like the I-90 that goes up towards Snoqualmie Pass and then there's the river. Here's where the -- as the river turns -- and this is how the Mississippi has changed course so much with flooding. It erodes one bank and it puts more deposits on the other bank, so it goes straighter and then it cuts itself off and you get horseshoe bends.

But this, as it came around this bend, obviously eroded the dirt there underneath that bridge. And it looked like it was almost the beginning of a little bridge there. Yes, there you go, you can see that bridge that went over the water. So it just kind of washed away part of what was the suspension part of that, you know, the support to that bridge before it actually went back over that river.

HARRIS: Oh, man. Just . . .

MYERS: So when I figure out what river that is, I'll get back to you. But we've heard Raging River, but I don't know that I've ever heard of that. So I will look at it.

HARRIS: And what's interesting, maybe we have a moment -- I don't know if we have a moment right now. But you will tell us about the situation where that storm, as most storms do, move from west to east. And New York eventually will feel the effects of all of this.

(WEATHER REPORT)

COLLINS: Yours may be meager, perhaps massive. No matter the size of your portfolio, you probably know the U.S. stock market is breaking records. That kind of success brings out the stock scammers. So here with some warnings, CNN's personal finance editor, Gerri Willis. She's joining us now from New York.

Gerri, this is always scary. Nobody wants to be taken.

WILLIS: He, no kidding, Heidi. It's fascinating how quickly they jump on these things. Here's how it works. So you open up your e-mail and you find a letter from Chris or Jessica or maybe Fran. The e-mail touts a specific investment opportunity and it seems to have been sent to you in error. Now we're going to show you an example of a real live scam e-mail.

It says: "I was pleased to meet you the other day. The del I was speaking about yesterday involved a company known as" and they insert the company name here. "It's already heading up, but the big news isn't out yet, so there's still time."

Now, you take one look at that and you think, hey, good fortune. I've got a great insider tip. You buy the stock. But here's what you many not be expecting. Price rises, the scammers sell off all their stock and you're stuck with something that is essentially worthless.

HEIDI COLLINS, CNN ANCHOR, CNN NEWSROOM: Ah, so obviously you have to look for the red flags. When you get e-mails from people that you don't know, number one.

WILLIS: Well, that's absolutely right. Why would a complete stranger send you a great stock tip? Right? That makes no sense at all.

Also look for misspellings. You want to be sure to check that out, too. And these stocks typically trade in what's called the pink sheets. Not a great place to be. There's not a lot of regulations in pink sheet stocks. You want a stock? If you're going to buy a stock, by one that's listed on the Nasdaq, or the Big Board.

COLLINS: Yes.

WILLIS: Avoid e-mails that encourage you to do something immediately. And if it says guarantee, hey we know stocks are never guaranteed.

COLLINS: Yes, that's for sure. What about keeping on your toes here, as far as the news goes. Sometimes these stocks go up and down depending on what's happening in the world.

WILLIS: Absolutely true. And the scammers know that. So they are looking for ideas, topics that are really going to get people's attention. So you'll see scams involving energy, oil, gas, ethanol. Bottom line here, you should never rely solely on information you receive from an unsolicited source.

COLLINS: Very good. What else can we do? What can we do to put this whole thing to bed and never be taken again?

WILLIS: Well, if you're suspicious about an offer or if you think the claims might be exaggerated or misleading, contact the SEC. They are governing all this area. They have an investor complaint center at SEC.gov. You can find out if the firm is registered with the NASD by calling the broker check hotline, if a broker is selling it to you. That phone number, 1-800-289-9999.

Now, if you receive one of these e-mails, and you look at it and think, this is a big scam. Hey, why not send that to the feds so they can shut it down.

COLLINS: Yeah.

WILLIS: So send it to spam@nasd.com. They'll come in. They'll investigate. What can be better than that?

COLLINS: No. Nothing. It's almost like the Better Business Bureau for stocks.

WILLIS: You bet.

COLLINS: All right.

WILLIS: You bet.

COLLINS: Gerri Willis with our "Top Tips" today. Great information. Thank you.

WILLIS: Thank you.

TONY HARRIS, CNN ANCHOR, AMERICAN MORNING: America votes. Europe watches. Why the interest? Answers in the NEWSROOM.

COLLINS: The war, the wallet? What single issue drove you to the polls?

HARRIS: And the University of Miami campus in shock. A Hurricanes football player shot to death. Details in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: So the thought going into yesterday's election, hi -- hi, both of us. Both of us?

COLLINS: I love when you direct from the desk.

HARRIS: I'm being screamed at, I'm sure, back in the control room.

The thought going into yesterday was would the Democrats take one? The House, the Senate? Or both?

COLLINS: And what would it mean in 2008?

HARRIS: And what it would mean in 2008,

COLLINS: Presidentially? Interesting, too, we kept saying on and on it's all about voter turnout.

HARRIS: Yes.

COLLINS: And then who was voting on the personalities and the character of these candidates, versus the issues and those things are still to be determined in some areas.

HARRIS: And the thought was that for most of the analysts that the House would be easier -- 435 seats, all of them up -- and that the House would easier for the Democrats to capture than Senate.

COLLINS: Right. Yes. This is true. In fact, we have a breakdown of both. Let's take a look.

Democrats did face a tough challenge in the Senate. They were able to hold on to two vulnerable seats -- they were supposed to hang on to two vulnerable seats -- sorry. And win six more. So far they have held on to their seats and gained four from Republicans. Two races, though, as we've been telling you, Montana, Virginia, still way too close to call.

HARRIS: OK. And here's how the numbers break down in the newly divided House. Democrats went into yesterday's elections needing 15 seats to win a majority. They have nearly doubled that goal. CNN projects the Dems will pick up at least 28 seats by the time the final votes are tallied.

Winds of change sweep the Midwest. CNN National Correspondent Bob Franken is with us from Columbus, Ohio.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN CORRESPONDENT, CNN NEWSROOM (voice over): How many times did Ohio Republican Senator Mike DeWine supporters say it's not over until it's over? Well, it's over.

MIKE DEWINE (R-OH): You know, in this race, we fought hard. We did everything we could do. But it just was not to be. This was not the year. We could not win.

FRANKEN: This was definitely not the year for Republicans. And Ohio was once again delivering on the state's reputation as the nation's political bellwether.

SHERROD BROWN (D-OH): Today in Ohio, in the middle of America, the middle class won.

FRANKEN: One of the toughest Senate fights of all came in Missouri, where Democrat Claire McCaskill and Republican incumbent Jim Talent fought tooth and nail before McCaskill finally nailed it in the wee hours of the morning. And Talent threw in the towel.

JIM TALENT, (R-MO): All of our efforts fell a little bit short this time, but they were worth the making, weren't they?

(APPLAUSE)

CLAIRE MCCASKILL (D-MO): It has been a long time since our party really had something to celebrate.

FRANKEN: But on occasion, the Democratic surge crashed into overwhelming GOP resistance. That's exactly what happened in the heavily Republican suburban Chicago congressional district where Iraq war amputee Tammy Duckworth finally had to concede.

TAMMY DUCKWORTH, (D) CONGRESSIONAL CANDIDATE: It's OK. We put up a tough fight, folks. You guys did a great job.

FRANKEN: Back in Ohio, another closely watched House race was high-ranking Republican Deborah Pryce's battle to keep her House seat. The bitter fight was still being bitterly fought hours after the polls closed. It is still too close to call. DEBORAH PRYCE, (R-OH): This is going to be a victory in the "R" column, and I'm going to enjoy celebrating with all of you at a later date.

FRANKEN (on camera): If she does celebrate, she will be one of the few Republicans who can do so. Bob Franken, CNN, Columbus, Ohio.

(END VIDEOTAPE)

COLLINS: A defeated Democrat, but Senator Joe Lieberman wins as an independent. Connecticut tops our list of races in the Northeast now. And CNN's Dan Lothian reports from Hartford.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT, CNN NEWSROOM (voice over): He lost as a Democrat, but won as an Independent.

SEN. JOE LIEBERMAN, (I) CONNECTICUT: I'm Joe Lieberman, and I approve of this election!

(APPLAUSE, CHEERING)

LOTHIAN: Three-term U.S. Senator Joe Lieberman says voters in Connecticut followed their hearts.

LIEBERMAN: And in doing so chose progress over partisanship. Problem solving over polarization, and the mainstream over the extremes.

LOTHIAN: Next door, in Rhode Island, popular Republican Senator Lincoln Chafee was toppled by Democrat Sheldon Whitehouse.

SHELDON WHITEHOUSE, (D) RHODE ISLAND, SEN. ELECT: You had the choice of a lot of things you could have believed in this campaign. And you believed in me. And I will never, never forget that.

LOTHIAN: The war in Iraq and scandals weighed heavily on voters. But not every race turned on those issues. In New York, Senator Hillary Clinton was easily re-elected despite her initial support of the war.

HILLARY RODHAM-CLINTON, (D-NY): I thank you from the bottom of my heart for sending me back to the Senate to work for the public interest.

LOTHIAN: In New Jersey, ethical questions surrounded incumbent Democratic Senator Robert Menendez, but he was elected to a full term for the first time.

ROBERT MENENDEZ, (D-NJ): In this election, I have walked by faith and not by sight, and my faith has been renewed.

LOTHIAN: And even though incumbent Republican Congressman Tom Reynolds became embroiled in the aftermath of the Mark Foley scandal, Reynolds held on to win in a hotly contested race. REP. THOMAS M. REYNOLDS, (R-NY): The victory belongs to each one of you who helped me make sure that we got our message out.

LOTHIAN (on camera): Some of the television ads in these campaigns were especially negative. Voters seemed to be turned off by it all. One voter telling me last night, at least I don't have to see them anymore. Dan Lothian, CNN, Hartford.

(END VIDEOTAPE)

COLLINS: The voter anger. There was much talk about it, but not as much action as many pundits expected. CNN estimates the nationwide turnout for the election was 36 percent of the voting age population. That's about the same as in the 2002 midterm election.

Meanwhile, exit polls show four major issues motivated voters. Topping that list, more than 40 percent said the issues of corruption and ethics were very important to them. Terrorism and the economy tied for second with 39 percent; and you might be surprised that Iraq came in fourth on the list with 36 percent rating the issue as very important.

HARRIS: That is a little surprising. Well, America votes. And Europe watches. Why the interest. The answer is in the NEWSROOM.

COLLINS: Water, water everywhere. Drenching rains bring heavy flooding to Washington State. We are there live coming up next in the NEWSROOM.

CHERYL CASONE, CNN FINANCIAL CORRESPONDENT, CNN NEWSROOM: I'm Cheryl Casone at the New York Stock Exchange. I'll tell you how Wall Street is reacting to Democrats taking control of the House when NEWSROOM returns. You're watching CNN, the most trusted name in news.

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COLLINS: President Bush plans an afternoon news conference. It is scheduled for 1:00 p.m. Eastern, 10:00 Pacific. CNN will carry it live for you.

HARRIS: The midterm elections from Montana to Connecticut. Votes cast in these political waters ripple across the Atlantic. Let's go to London and CNN European Political Editor Robin Oakley.

Robin, good to see you. Good morning.

ROBIN OAKLEY, CNN EUROPEAN POLITICAL EDITOR: Hello, Tony. Well, I think --

HARRIS: I --

OAKLEY: Carry on.

HARRIS: No, go ahead, Robin. What are your thoughts on it?

OAKLEY: Well, I think British voters have not been surprised to see the president punished in what looked like to them as a referendum on the war in Iraq. After all it did provoke the biggest street demonstrations we've ever seen here in Britain, and all across Europe.

Leaders who backed President Bush in Iraq, Jose Maria Aznar of Spain. He and his party suffered in the election afterwards. The conservatives were turned out of office there. Silvio Berlusconi has been turned out of office in Italy. Tony Blair is under pressure from his own party and forced to quit early next year. And so I think this has been an expected result.

And Tony Blair will now be worried, perhaps, that a House of Representatives controlled by the Democrats might set up some embarrassment inquiries into various aspects of the Iraq war that could really intensify the pressure on him here, Tony.

HARRIS: Robin, I know the NATO summit is scheduled for later this month in Latvia. How do you believe President Bush will be received at that summit? Is the thinking that he'll be thought of as being somewhat diminished by these results?

OAKLEY: Absolutely, inevitably. Sometimes you get leaders like President Chirac sitting at these occasions and when somebody gets up to speak, who they don't think they'll rate particularly, he starts writing his postcards home.

That could well happen to George Bush this time around. Because he's simply lost so much authority as a result of these midterm elections. People always look upon a second term president as a little bit of a lame duck. That effect is going to be exaggerated.

So those at the NATO summit who don't like the idea being pushed by the U.S. and turning NATO into a kind of world policeman, that's the French in particular, the Belgians, the Germans, to some extent. They will be more vociferous in their opposition now because they see President Bush as wounded, Tony.

HARRIS: As a result of the outcome of the U.S. election, and the Democrats taking control of the House, the Senate still up for grabs, what is the view in Europe as to the possibilities with respect to Iran, Iraq and North Korea?

OAKLEY: Well, there again, it's a question of the president's authority. The Europeans have been working with the U.S. in looking for sanctions at the U.N. on the Iranian regime, over its nuclear program. But it's going to be a lot harder to win widespread support at the U.N. for the toughest kind of sanctions that the U.S., and now the Europeans would like to see.

In particular, President Vladimir Putin, who is rather eyeballing President Bush these days, I think will push his opposition rather more strongly than he might otherwise have done. And I think the prospects of President Bush being able to spread his crusade for democracy in the Middle East, that is diminished.

Though I think the Europeans will hope that he will now perhaps turn his intention a little more to the Palestinian question, on which they feel he's been a bit backward up until now, Tony.

HARRIS: OK, CNN's European Political Editor Robin Oakley with us. Robin, that's good, good, good. We appreciate it. Thank you.

COLLINS: Stocks are off to a rough start. But is that entirely due to the election results? It's an interesting question. Cheryl Casone is joining us from the New York Stock Exchange with some answers to that.

Cheryl, what do you think?

CHERYL CASONE, CNN FINANCIAL CORRESPONDENT, CNN NEWSROOM: Stocks are definitely trading lower this morning. But it may not be a simple explanation like just the Democrats were victorious yesterday.

Right now the Dow industrials are actually losing 5 points. That's better than how we opened the day. The Nasdaq composite is also kind of flat-lining at this point.

Remember, the market posted big gains on Monday and on Tuesday, and this could just be another example of you know, that market saying, you buy on the rumor, you sell on the news. You take all the stocks higher then you sell when you get confirmation of a victory.

The Dow has risen to record highs over the past month or so. That sell-off wouldn't be entirely unusual to see and it may not be Wall Street's final verdict on the election.

Now while the Democrats have control of the House, the Senate still up for grabs with two undecided races in Virginia and Montana. So, Heidi, investors don't like uncertainty.

We're looking at so many different things. I know you get excited when I talk about worker productivity, for example.

COLLINS: Indeed!

CASONE: Don't ya?

COLLINS: Always do! We have been talking about something here. A lot of Republicans said the Democrats would raise taxes if they win. Are traders making any predictions about that?

CASONE: What I'm hearing Democrats unlikely to vote for tax increases, but a Democratic Congress is also unlikely to extend key portions of President Bush's tax cuts. In particular, a repeal of the estate tax, which was a top priority of the Bush administration. That doesn't stand much of a chance with Democrats in control of the House.

But there are some taxes that may actually be reduced. Democrats have vowed to pass a tax break on college tuition, that would allow parents to claim a $4,000 deduction for tuition and related expenses. We could see a sales tax deduction that will allow taxpayers to deduct sales taxes instead of state taxes on their federal returns. That's popular in states with no, or low, income tax like Nevada, for example.

So it's, you know, it's -- we'll have to see how this all shakes out over the next couple of days with the recounts. We'll get traders in there to do the recounting of those ballots. And then we'll go with their numbers.

COLLINS: Sounds perfect. I love it. Cheryl Casone from the New York Stock Exchange. Thank you, Cheryl.

HARRIS: Still to come, the battle over abortion, waged at the ballot box. The outcome from election 2006 ahead in the NEWSROOM.

COLLINS: And drenching rains are bringing heavy flooding to Washington State. Incredible pictures that we are seeing this morning. We're live there in the NEWSROOM, after a quick break.

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HARRIS: Take a look at these pictures. Man! Washington State absolutely waterlogged. Just try to hang on for a bit longer, I suppose, is all you can say here.

The National Weather Service says rivers in the western part of the state are now falling. Good news there. But flood warnings remain in other parts. Two days of record-setting rains have forced dramatic rescues and threatened hundreds of homes and businesses. And this one, obviously, being threatened. At least one person has been killed.

COLLINS: Yeah, that's obviously the bad news of it.

Boy, every time I look at that current, Chad, it is absolutely amazing how much water is just rushing.

CHAD MYERS, CNN METEOROLOGIST, CNN NEWSROOM: And it really isn't a very big drainage basin. I just got a nice e-mail from Gail out in Seattle. This really is called the Raging River, a small little basin. It comes down from the Snoqualmie Pass. That was the rain, that was the area that picked up so much rainfall, almost 12 to 14 inches depending on where you are on that basin.

And it came down so quickly. The water went up fast and it eroded those banks. There is the I-90 corridor not too far from there. But it looks like the I-90 that I could tell, looked just fine.

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COLLINS: All eyes on Virginia. A close vote, a potential recount, and control of the Senate at stake. We'll talk about that ahead, right here in the NEWSROOM.

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