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Democrats Take The House; Montana Senate Race Crucial; Cliffhanger In Virginia; Big Increase In Youth Vote; Nancy Pelosi Poised To Become First Female Speaker Of The House

Aired November 08, 2006 - 09:00   ET

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

TONY HARRIS, CNN ANCHOR: And good morning, everyone.
You are in the CNN NEWSROOM.

I'm Tony Harris.

HEIDI COLLINS, CNN ANCHOR: And I'm Heidi Collins.

For the next three hours, watch events unfold live, watch events happen live for Wednesday, November 8th.

Here is what's on the post-election day rundown.

Under new management -- Democrats take the House. They cross their fingers on the Senate. Washington's new political landscape -- we explore it this hour in THE NEWSROOM.

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 now in line to become the first female speaker of the House.

But at this hour, the control of the Senate 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, as we have mentioned before, be weeks away.

And, what do we 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.

HARRIS: 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'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 in the Senate. Hold onto two vulnerable seats and win six more -- Democrats have held onto their two seats and gained four from Republicans. Two races, Montana and Virginia, too close to call.

Let's talk a bit more about that Montana Senate race, the outcome crucial to control of the Senate.

CNN's Chris Lawrence joins us live now from Billings -- Chris, good morning.

CHRIS LAWRENCE, CNN CORRESPONDENT: Good morning, Tony.

Right now, Democrat John Tester continues to hold onto a very, very slim lead over the incumbent Republican Senator Conrad Burns.

But from what we're hearing, it may be some time before we get the winner in this race. It is possible that later this morning or early afternoon we may get an unofficial winner.

But there are several factors that are going into this race that may prohibit us from actually getting an official winner.

One of those is Montana recount law. It allows the loser to request a recount if he lost by less than 1/2 of 1 percent. The numbers are close enough to at least make that a possibility.

The other is the number of provisional ballots that are out there. These are ballots that, say someone came and voted, they didn't have the proper I.D. they voted, then they produced their I.D. later. Their provisional ballot would then be changed over to a normal ballot.

Well, if, say, John Tester won this race by 1,000 votes but you still had 1,500 provisional ballots out there, you can see why the secretary of state would not be able to certify that -- certify Tester as the winner.

So we may be in for a little bit more of a wait in terms of declaring an official winner here in Montana -- Tony.

HARRIS: And, Chris, what are the two candidates saying about where things stand at this point?

LAWRENCE: They're both playing it fairly optimistic and yet hopeful. Neither one wants to really step out on a limb, so to speak. Conrad Burns was here all night at his campaign. They were down for a while when John Tester took a very early lead of about eight to 10 points. But then, as some of those other districts started to come in, those other precincts, they tended to skew Republican.

Those numbers turned for Burns and he made somewhat of a rally there at the end, to close the gap.

Will it be enough?

HARRIS: Yes.

LAWRENCE: We'll still have to wait and see.

HARRIS: Chris Lawrence for us this morning in Billings, Montana.

Chris, thank you.

COLLINS: And a cliffhanger in Virginia, as well. The outcome determines who controls the Senate.

The margin?

Whisper thin and a recount almost certain.

CNN's Ed Henry live now from Richmond this morning -- Ed, maybe we should first talk about the recount law there in that state of Virginia.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, you know, there's actually an interesting precedent, Heidi, just from last year in the state attorney general race. The Republican won after a recount. It was very close, less than 1,000 votes separating his Democratic opponent. He won after a recount that lasted just over a month.

So anybody looking for quick results here is not going to find it. This race had been so nasty, one of the nastiest Senate battles that, frankly, both sides were looking forward to it being over.

The Democrat, Jim Webb, yesterday, after he voted at his polling precinct, even joked to reporters he was looking forward to having a beer. That beer may be on ice for a while.

I'm not standing outside what was the election night headquarters for Republican Senator George Allen. It's not the morning after headquarters, if you will. A lot of shock and awe there last night, as his team saw a very razor thin lead for Allen evaporate by the hour until Jim Webb, the Democratic challenger, finally pulled ahead.

This was supposed to be an easy race for Republicans. Just a few moments ago, Allen was going to have an easy reelection on his way to running for president in 2008. All that turned upside down by the war in Iraq -- a big issue in this race -- but also miscues by the incumbent, such as the use of that word Macaca, charges of racism.

He fired back that Webb, the Democrat, had -- was sexist because of some of his writings in a novel and magazine articles, etc.

Last night, Jim Webb pulled ahead by ethos votes. But there are still six precincts that are outstanding.

Webb came to the cameras and declared victory, but Allen said he's not conceding.

(BEGIN VIDEO CLIP)

JIM WEBB (D-VA), U.S. SENATE CANDIDATE: We all go out, we vote, we argue, we vote. But, also, I 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'll 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)

HENRY: Now, it's important to note that under Virginia law, it is not an automatic recount situation. But if, after all the votes are counted, the loser is only down within 1 percentage point, as it appears this will probably end up, then the loser can request a recount.

Once that's finished, it's not appealable, but that's down the road. It's going to take several weeks to get to that point, if there is a recount -- Heidi.

COLLINS: And quickly, Ed, what about the Independent, Parker?

I mean, there's 1 percent of votes that went that direction.

HENRY: Yes, I think the latest tally I saw was the Green Party candidate had something like 26,000 votes. They sometimes tend to go more toward the Democratic candidate. So it might mean more if Jim Webb, the Democrat, falls behind after more precincts are counted. Some Democrats may be wondering why that Green Party pulled some votes away from their candidate.

At this point, though, with Webb holding a slim lead, maybe those votes won't matter quite as much. But obviously every vote, at this point, counts -- Heidi.

COLLINS: It sure does.

All right, we'll keep checking back with you, Ed.

Thank you so much.

HARRIS: Well, the mid-term election certainly a big disappointment for President Bush.

To the White House now and CNN's Elaine Quijano -- Elaine, good morning.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Good morning to you, Tony.

There is, of course, disappointment in the West Wing over the losses in the House. Still some hope about the Senate. But President Bush is trying to demonstrate already that he is trying to move past the divisiveness of this election cycle.

This morning, he called and congratulated the woman who is set to become the next speaker of the House, Republican Nancy Pelosi. Bush aides say that he offered her congratulations, as well as Democratic candidates, on their wins, pledging to work together. And the president invited Nancy Pelosi to lunch here at the White House tomorrow.

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

But, of course, Tony, this is the scenario that neither the president nor his aides wanted to acknowledge publicly could happen before the elections, the possibility of a Speaker Pelosi.

There was some harsh rhetoric, certainly, on the campaign trail from both sides, really, from Pelosi as well as from President Bush. Still, White House Deputy Press Secretary Dana Perino anxious to signal that the administration very much wants to look ahead, 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."

But, clearly, Tony, the question now is what will happen on some of these big issues, of course, Iraq the dominant topic of conversation here in Washington, if there may be a change in store; also, how may President Bush look to be changing his approach for his remaining two years and what, if anything, on his agenda will he be able to accomplish -- Tony.

HARRIS: Well, Elaine, we wont read anything into the fact that the leaves are falling in your live shot other than to say it makes for a beautiful picture, and, after all, it is fall.

Elaine Quijano for us at the White House.

Elaine, thank you.

COLLINS: 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 joining us now live -- Andrea, what is the first order of business, likely first order of business, anyway, for Democrats here?

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Well, Nancy Pelosi, who, as Elaine pointed out, is set to become the first woman speaker, she has said that within her first 100 hours -- she laid out basically a laundry list of things that Dems want to get through the House, and that is enacting all of the 9/11 Commission recommendations, increasing minimum wage to about $7.25 an hour, eliminating corporate subsidies for big oil, lobbying restrictions, things of that nature.

These are all issues, for the most part, Heidi, that Democrats of all stripes and persuasions can agree on.

COLLINS: Well, how might accomplishing that agenda end up being a little bit complicated, the fact that so many other incoming freshmen are moderate and conservative Democrats?

KOPPEL: Exactly. And that is one of the reasons why Democrats did so well, especially in red states, this year. They were deliberately recruited by the Congressional Campaign Committee, by Rahm Emanuel, because they would make good opponents to the Republicans who were the incumbents there.

And you see people like Heath Shuler, former Washington Redskins quarterback, who is pro-life. He is somebody who is also very environmentally focused.

So, again, likely what you're going to see is the increase in what's known as the blue dogs, the new Democratic caucus. They will be a force to reckon with within the House of Representatives among the Democrats.

And you will probably see, at least in the beginning, Heidi, Nancy Pelosi trying to steer her caucus toward the center, toward issues that are not like abortion, not like gun-control, not about gay marriage, non-controversial issues -- Heidi.

COLLINS: Maybe there'll be a non-controversial lunch tomorrow. We know she's been invited to have lunch with the president tomorrow. We'll see if she accepts on that one.

Andrea Koppel from campaign headquarters, thanks so much.

HARRIS: You'd better go.

COLLINS: Yes.

HARRIS: Let's keep it simple.

COLLINS: I say go.

HARRIS: You'd better go.

Yes, yes.

Still to come, the state of Ohio in the spotlight this election.

JASON CARROLL, CNN CORRESPONDENT: And I'm Jason Carroll in Cleveland, Ohio. The state went from red to blue in several key races. We'll explain what happened and why, coming up in THE NEWSROOM.

COLLINS: And a trip to the polls spells trouble for some voters. Voting irregularities ahead in THE NEWSROOM.

HARRIS: And young voters -- did they play a pivotal role in the battle for Congress?

We will find out, in THE NEWSROOM.

CHAD MYERS, CNN METEOROLOGIST: We told you about all the rain in Washington and Oregon.

Can you believe 31 inches of it?

That's not snow, that's rain. Oregon, 26 inches in Lee's Camp. It had to go somewhere. It ran off and made flooding. That coming up in THE NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: 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 from Cleveland in Cuyahoga County -- Jason, a couple of things.

Any surprises?

The statehouse turned over. The Senate seat turned over.

What about the Congressional races?

Any surprises there?

CARROLL: No real big surprises there. You know, you look at what happened here in the state of Ohio, the Democrats really wanted to see change and that's exactly what they got here.

Democrats did very well in key races. You look at what happened in the Senate race. You've got Sherrod Brown, who beat the two term Republican incumbent, Mike DeWine. A big change there.

You look at what happened in the governor's race. You had Ted Strickland. Ted Strickland, who beat Ken Blackwell, the Republican secretary of state, handily beat Blackwell in that race.

And when we spoke to a number of the voters who were out here yesterday and talked to them about why they were voting, what were the issues that really meant the most to them, it really was national more than local, Tony.

What we saw and what we heard from voters was them telling us is really about the president. Is really about the war in Iraq. A lot of people unhappy here, that we spoke to, about with what was happening. And that showed in how they voted.

HARRIS: Hey, Jason, any problems with the election and how the voting actually took place yesterday?

I recall seeing something that there were some glitches in places like Cleveland Heights, maybe Shaker Heights, all there in Cuyahoga County. CARROLL: Problems right here in Cuyahoga County, some minor problems. Basically what happened was there were several polls that didn't open on time. There were problems with these new electronic voting machines. Some confusion about the type of I.D. people should be showing. And, as a result, a federal judge ordered that 16 precincts keep their polls open an hour-and-a-half later. Those polls didn't close until 9:00 last night.

But, again, the bigger story here is, really, Tony, how well the Democrats did in some of the key races here in the state of Ohio, a battleground state that surely Democrats and Republicans are going to be looking at during the next presidential election.

You even look at what Sherrod Brown said in his victory speech. He said the state in '06, he said the nation in '08. And you'd better believe a lot of people are going to be paying close attention to what happens here in the next few years.

HARRIS: Jason Carroll in the place folks there in northeast Ohio call the best location in the nation, Cleveland, Ohio.

Jason, thank you.

The mid-term election brings change and so many problems for voters in several states.

In Colorado, for example, Democrats said there were severe problems at the polls. But a judge declined to extend the poll hours.

In Kentucky, a poll worker was arrested for allegedly -- listen to this -- choking and pushing a voter. In Albany, New York, it will be Monday before paper ballots can be counted. The New York Supreme Court ordered the delay just in case any races end up tight there.

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

COLLINS: The under 30 crowd -- did young voters make a difference in this election?

Hans Riemer is with us now from Washington.

He is the political director of Rock The Vote.

Hans, thanks for being with us.

HANS RIEMER, POLITICAL DIRECTOR, ROCK THE VOTE: Good morning.

It's good to be here.

COLLINS: We had the opportunity to talk with you before the actual election took place and I believe that you were sort of predicting or thinking that voter turnout for this demographic, 18 to 29 years old, would be much higher than back in 2002.

RIEMER: That's right. And the evidence is coming in. It was really high. We had a big increase in the youth vote. This was a higher turnout off-year election and young people turned out even more than the rest of the population. So it was a big night for young voters.

COLLINS: Wow!

Why do you think that was, Hans?

RIEMER: Well, I think the war in Iraq was really on people's minds. Cuts in college aid were really on people's minds, as well. And this is a new generation. They care more. They're engaged. They have Internet tools to help them get information. They're excited. They want to participate.

COLLINS: What did you have the opportunity to learn from our young people about their feelings on Iraq? Why was that an issue that brought them to the polls?

RIEMER: Well, I think they take it personally, you know?

They see their friends going off to fight. There are people in their community coming home in coffins. This is a war where young people have been asked to sacrifice and they see the impact of the president of the United States and Congress and how that affects their lives.

So it has really motivated them.

COLLINS: You also did sort of an interesting campaign with Facebook.

Why don't you tell us a little bit about Facebook and the relationship and why you think that was so pivotal in helping the young people get the vote out.

RIEMER: Well, Facebook is an online social network where people connect with their peers. And talking to your friends is really the most powerful force in politics. It's what works to get people engaged.

So, Facebook is another way to do that. It's like going door-to- door, almost, or like calling people on the phone. It's just a little different.

So we've worked with Facebook this election cycle. We've got a booming group on the -- on Facebook, 25,000 members, nearly, have joined. Some of the most amazing dialogue happening there.

COLLINS: Really?

Like what?

RIEMER: Well, people talking about issues like Iraq, the death penalty, gay marriage, abortion. People coming in to say that I voted, I voted absentee, you know? This is my first time voting, I'm so excited. It's amazing. COLLINS: Wow!

That's pretty exciting, that's for sure.

What do they see the future to be when you at least hear, you know, you look on those blogs or when you get out and you talk, people are waiting in line to cast their ballot? What do the young people see in their future?

RIEMER: Well, I think young people are looking for a change in direction. You know, the Democratic victory appears to be driven -- one of the major forces, by young voters. They increased their share dramatically and they picked Democrats by almost 22 percent. That's what the exit polls are showing. So that's double or triple what the Democratic margin was with the rest of the population.

COLLINS: Sure. The Senate's still undecided, but the House certainly won by the Democrats.

Real quickly, the last question, Hans.

It didn't seem like there was a whole lot of campaigning toward this demographic, though, was there?

RIEMER: Well, there was more than in cycles past. And we hope that the politicians will sit up and take notice here, that they can win the young vote, the young vote will respond, they will turnout and they will vote when they are targeted. And we did see more targeting of young voters than in the past. It's a really good step in the right direction.

COLLINS: All right, some great information this morning.

Hans Riemer.

He's the political director of Rock The Vote.

Thanks again, Hans.

RIEMER: Thank you.

HARRIS: Well, we are Minding Your Business this morning.

Andy Serwer is here with a preview -- Andy, good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Tony.

How are those election results affecting your stock portfolio and how much you get paid?

We'll explore that coming up in THE NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Here's a question for you -- what impact will the elections have on Wall Street today and down the line? Andy Serwer is here Minding Your Business -- Andy, good morning.

What's the best thinking so far on this?

SERWER: Good morning to you, Tony.

The stock market opens up in about five minutes and right now futures are pointed lower.

A couple of reasons for that.

First of all, the market was up strongly over the past couple of days. But more than that, I think there is some concern about the uncertainty about those two Senate elections, the one in Virginia and the one in Montana that are still up in the air. You know that old saw, the market does not like uncertainty. So that's weighing in a little bit.

Overall, though, if the Democrats do take complete control of Congress, obviously the Republican and the executive branch, markets and business like that, because it's gridlock. It means that Washington won't do anything. It's kind of a cynical perspective, but businesses tend to like that, when Washington has a more hands off way of dealing with things.

HARRIS: Let's say we get that gridlock.

Which industries might benefit?

SERWER: Well, in terms of the Democratic Congress, there are definitely some businesses that stand to be hurt and stand to be helped by the Democrats.

And let's turn to the ones that could be helped by the Democrats, first of all. Fannie Mae and Freddie Mac, the mortgage companies, closely aligned to the Democratic Party. They should help. They've been under a regulatory cloud.

Metals is interesting, like the steel business, they benefit a lot from trade legislation like protectionism. That would tend to do well with the Democrats. Alternative energy -- solar, wind; environmental businesses might do well.

And as far as companies that might not do so well, oil and gas. You know, they've had record profits. They might get attacked. Pharmaceuticals -- drug prices might get capped, although generic drug makers might do well.

And defense, you know, look for that business -- those businesses, perhaps, to get rolled back in terms of contracts.

HARRIS: Yes, got you.

Hey, Andy, minimum wage was also on the ballot in several states.

How did that do? SERWER: Yes, well, it passed. It was in six states, Tony, and six seats raised the minimum wage. Of course, the federal minimum wage, $5.15. You can see here Ohio and Colorado up to $6.85 -- Arizona and Missouri. The bottom two, Montana and Nevada, kind of interesting because Montana it's $6.15 or the federal wage, whichever is higher. So, in other words, if the federal wage goes up above $6.15, Montana will follow. Nevada, that $6.15 is only for companies that don't have no medical benefits.

So now we have 24 states, Tony, that have a higher minimum wage than the federal minimum wage. So it's interesting. The states seem to be taking matters into their own hands here.

HARRIS: OK, Andy, good to see you.

Have a great day, my friend.

SERWER: You too, man.

COLLINS: Major battles on election day in the Southeast. Both parties are celebrating victories and reflecting on losses.

CNN's John Zarrella is in Jupiter, Florida.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): So just what impact did the Mark Foley scandal have?

His district, Republican for nearly a quarter of a century, is now in the hands of a Democrat.

Tim Mahoney, a businessman who had never run-for public office before, was given no chance to win before Foley's fall from grace. Now, he's going to Washington.

In a tight race, Mahoney beat Joe Negron, who had been hand picked by the Republican Party to replace Foley, insisting all along that Foley wasn't the issue.

TIM MAHONEY (D), FLORIDA CONGRESSMAN-ELECT: I think it's really clear that the people of the 16th Congressional District got over the Foley thing. People were going to the polls. They had a clear choice.

ZARRELLA: In Virginia, Republican George Allen and Democrat Jim Webb are locked in a tightest race of any in the country, a race still too close to call and one that may not be decided for days.

And in Tennessee, another hard fought race in the South. Bob Corker, a former Chattanooga mayor, held onto retiring Bill Frist's Senate seat for the Republicans. His opponent, 36-year-old Congressman Harold Ford, a tireless campaigner, kept it close but could never overtake Corker.

BOB CORKER, TENNESSEE SENATOR-ELECT: There was a strong head wind working against us. But in the end, the choice belonged to the good people of Tennessee.

ZARRELLA: All three critical races for both parties. So far, at least two new faces going to Washington and perhaps helping redefine the shape and direction of Congress.

John Zarrella, CNN, Jupiter, Florida.

(END VIDEOTAPE)

COLLINS: Stay with us for an extra hour of post-election coverage.

That's at noon Eastern.

Kyra Phillips and Don Lemon will join us for a closer look at America Votes 2006.

Meanwhile, President Bush plans an afternoon news conference. It's scheduled for 1:00 p.m. Eastern, 10:00 Pacific.

CNN, of course, will carry that live.

(COMMERCIAL BREAK)

HARRIS: Ringing the opening bell this morning and because I know you love this information about these groups and these organizations, these companies that ring the opening bell, Mizuho Financial Group, one of the largest financial institutions in the world, Heidi, offering a broad range of financial services, banking, so on and so forth. Let's see where we go today.

COLLINS: A financial group that banks. Is that what you said?

HARRIS: Well, they own, manage, operate.

COLLINS: Of course. Got it.

HARRIS: We will get more on the forecast for this business day a little later this morning here in the NEWSROOM.

COLLINS: Also the winners the losers and who is now looking forward to 2008. CNN's Bill Schneider crunches the numbers and reads between the bottom lines. He's ahead coming up in the NEWSROOM.

HARRIS: Riding the quest of victory, standing on the brink of history, Nancy Pelosi, up close, ahead.

COLLINS: And a new Supreme Court, an old but controversial issue, the abortion debate. Arguments before the high court today coming up right here in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Well, it's Wednesday, the day after midterm elections, and usually that means that we know what happened. But we only know half of the story. When this whole thing started, I'm sure you remember that in order for Democrats to take over the House, they needed 15 seats. In order for them to take over the Senate they needed six. Right now we know who has the House, the Senate still undetermined.

HARRIS: And even in the waning days leading up to the election it was always thought that it would be a tougher challenge for the Democrats in the Senate first. Here we go. 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, Montana, Virginia, too close to call Heidi.

COLLINS: That's right. Here's how the numbers break down in the newly divided House as you mentioned. Democrats went into yesterday's elections needing those 15 seats to win that majority. They nearly doubled that goal. CNN projects the Dems will pick up at least 28 seats, 27 of which I believe were Republican seats by the time the final votes are tallied. So speaking of the House, she is the lady of the House now, Nancy Pelosi poised to become the first female speaker. Forget about making history, she says it's time to make progress.

A closer look from CNN's David Mattingly.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Nancy Pelosi is what you call a rainmaker. And in this election, she made it pour. The democrats' second biggest fundraiser next to Hillary Clinton. That success at raising money is one reason she's now expected to become the first woman speaker of the House of Representatives.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Maybe it takes a woman to clean house.

KOPPEL: It kind of has a sexist undertone to it.

PELOSI: It does.

KOPPEL: Is that deliberate?

PELOSI: Well, it is. Because the fact is, a woman represents what's new in politics.

KOPPEL: How is that?

PELOSI: At the top of power. Because it's never happened before.

MATTINGLY: Politics is in Pelosi's blood. When she was growing up in Baltimore in the 40's and 50's, her father was a congressman, then the city's mayor. She married and moved to her husband's hometown of San Francisco where they raised their five children and where she rose up the ranks of the Democratic Party. Many Republicans tried to make Pelosi an issue this election, even though most Americans had never heard of her.

UNIDENTIFIED FEMALE: Will Brad Ellsworth vote for liberal Democrat Nancy Pelosi?

MATTINGLY: Pelosi and the Democrats of course made President Bush the issue. This is the way the woman poised to be speaker has been speaking about him.

KOPPEL: You have yourself described President Bush as being incompetent, as being in denial.

PELOSI: In denial, uh-huh and dangerous. The president will have to have a different attitude now that he won't have a rubber stamp Congress.

MATTINGLY: Among the priorities, Nancy Pelosi says she'd push for as House Speaker, raising the minimum wage. Supporting tax cuts for the middle class, but not for the wealthy. Encouraging embryonic stem cell research. Giving the federal government power to negotiate with drug companies for lower Medicare prescription costs.

And unlike so many other Democrats, Nancy Pelosi voted against authorizing the war with Iraq. A war which will certainly weigh heavily on the agenda of the next two years. How rough can a speaker Pelosi make things for President Bush? A Republican's right to fear investigations of the administration. In her interview with CNN's Andrea Koppel, Pelosi would only say this.

KOPPEL: You said that you would have subpoena power.

PELOSI: Of course we'll have subpoena power and we'll have a constitutional responsibility to have checks and balances and oversight.

MATTINGLY: That, she says, is what the Congress does. David Mattingly, CNN, Atlanta.

(END VIDEOTAPE)

HARRIS: So for those keeping score at home, did the Democrats really win last night? We'll explain that question. Or did the Republicans simply lose? The answer could have a profound impact on the 2008 presidential election. Let's turn to CNN's senior political analyst Bill Schneider. Bill, good morning, good to see you, sir.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Good morning Tony.

HARRIS: So, Bill, what happened to the Republican Party last night?

SCHNEIDER: Well, Tony, they lost the senate and they paid a dear price for that. Independent voters went almost 60 percent to the Democrats. They've never swung that heavily behind either party. Republicans for the most part moved very far to the right, particularly on the Iraq war, which Americans were very dissatisfied with. They want to see an end to it. So they took it out on the Republicans who just lost their appeal to voters in the middle.

HARRIS: Well what about the base. Did the base hold firm for Republicans?

SCHNEIDER: Well, you know, it's interesting. The base may -- does seem to have held firm for the Republicans. We don't know about turnout right now, but Republicans and conservatives voted overwhelmingly for Republicans. But this election wasn't about the base.

It was about swing voters. We aren't supposed to talk about swing voters anymore. The idea is it's a competition between the two parties, who can rally their base. You know what? The swing voters determined the results of this election. They swung and they swung heavily and they are not to be discounted any longer.

HARRIS: Did Democrats succeed in nationalizing the election?

SCHNEIDER: Well, I think Bush succeeded in nationalizing the election, as well as the Iraq war. Democrats took advantage of that and we saw all over the country that people would say, and I went to about 12 districts, and people said, I'm voting for the Republican or the Democrat to make a statement about national politics. This election all politics was not local.

HARRIS: And, Bill, what does this portend for 2008, crystal ball it if you will please.

SCHNEIDER: Well, I remember in 1994 when Republicans took over Congress and it was a revolution, Newt Gingrich was in power, Clinton was over. And look what happened two years later. Clinton was handsomely re-elected. So, you know, two years is an eternity in politics.

But we do know that some -- the fortunes of some possible players for 2008 had something to do with 2006. Hillary Clinton was easily re-elected senator in New York. That's a big plus for her. Bill Richardson may run. He's the governor of New Mexico, he was re- elected. Some, oh by the way, John Kerry I think did not fare well at all in this election, if he runs in 2008.

Some Republicans did not do particularly well. Rick Santorum, possible contender, he was eliminated in Pennsylvania. George Allen may yet get elected in Virginia. The recount could happen. But he didn't do himself a lot of good in this campaign and George (sic) Romney in Massachusetts, while he wasn't on the ballot, his lieutenant governor did not do well at all in her bid to succeed him.

HARRIS: Bill, maybe this last question sort of encompasses a bit of everything you've said to us so far this morning. You remember it wasn't that long ago that Democrats couldn't win an election. They are out in the outskirts somewhere. They can't find their way. They can never win another election. What happened here?

SCHNEIDER: The Republicans messed up. That's what happened. Sooner or later, when there's a party in power, particularly if it controls everything, the White House, both Houses of Congress, if you wait long enough, the opposition party is going to mess up. That's exactly what happened. HARRIS: Our senior political analyst, right to the point there, Bill Schneider. Bill, thank you very much. Let's go now to Washington, D.C., Tom Reynolds, who heads up the RCCC is speaking now.

REP. TOM REYNOLDS (R), NEW YORK: In addition, there are several races that are too close to call. Obviously, we are watching those very carefully. This has been 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. In the six elections of this type since the civil war, the president's party has lost on average 41 seats in the House.

But all politics is local. Every race is different. In some cases we managed to keep seats that the pundits had already turned over to the other side of the aisle, including mine. In other cases we had some surprises. As with every cycle, we saw incumbents who waged aggressive campaigns to define their opponents and make their race about local issues to succeed. I am a perfect example. Deborah Pryce, John Porter, Jim Guerloch, Steve Chabot, Jeff Davis, Thelma Drake and Heather Wilson are other examples.

On the flip side, we had some incumbents who were caught unprepared. And by the time they got around to paying attention, because they had not done enough to disqualify their opponent, the environment prevented them from localizing the race. Again, we are always prepared to deal with the wind in our face, which is why the NRCC was as aggressive as it has ever been with voter contact. We spent over $80 million, I'll repeat that, $80 million on House races.

We ran independent expenditure ads in 59 districts. But still, unprepared members were swallowed up by the sour, national environment. We also lost several seats by self-inflicted wounds. We had a number of reliable Republican seats where the member had a problem and either they could not straighten that out with their constituents or they left it to the candidate succeeding them to deal with it.

We lost seats to retirements and swing seats. You know we've said that from pen and pads from a long time. They include Jim Nussles, Bob Boprey, Jim Kolbe and Sherry Bolders. These are seats that have been trending away from us. I want to thank the president, the first lady, the vice president and everyone on their team, including Karl Rove and Sarah Taylor, for all they did to support our candidates. I also want to thank my friend Ken Mehlman and his team for all they have done at the RNC in their efforts to help us.

Finally, I want to congratulate the 13 new members who we will welcome to the House Republican Congress in the 110th congress as of today. California 22, Kevin McCarthy, Colorado 5, Doug Lamburn. Florida 9, Gus Villaracus. Florida 13, Vern Buchanan. Illinois 6, Peter Roskam. Idaho 1, Bill Salley. Michigan 7, Tim Wahlberg, Minnesota 6, Michelle Bachman. Nebraska 3, Adrian Smith. Nevada 2, Dean Heller. Ohio 4, Jim Jordan, Oklahoma 5, Mary Fallon, Tennessee 1, David Davis. With that, I'll open up for questions.

QUESTION: (INAUDIBLE).

REYNOLDS: Well first of all, I've got to congratulate Rahm Emanuel my counterpart for his hard work in achieving the majority. Second, what will be, I believe, Speaker Designate Pelosi to be congratulated as the first woman speaker. My goal and job will be to make sure she never sets the record that Denny Hastert has in the House, that would be the one of the longest serving. I'm sorry?

QUESTION: (INAUDIBLE).

REYNOLDS: No I have a two-term term limit, and I believe in it fully. I think it will be time for a new person on the House Republican conference to take over the chairmanship. We have bylaws that keep it to two terms. I think it's a great idea.

HARRIS: There you have it. Tom Reynolds, the man who heads up the Republican Congressional Campaign Committee, sort of answering the question for everyone this morning. Why did Republicans lose the House. Talked about it being just a hostile environment, running into a strong head wind. The difficulty of picking up seats in the second presidential term. So just a number of factors. A lot of money spent.

COLLINS: Regardless of the money, $80 million spent and all of this phone calling that you may have been someone who got one of those phone calls, really a push the last 72 hours is basically what they were going for. Even though $80 million was spent, he said basically we just were caught unprepared.

But already you probably heard him say, hey you know what? It's only two years. And in two years, as we move toward the presidential election the landscape is going to be completely different and you know, already saying it. It's the day after.

HARRIS: It will still be contentious, there's no doubt about it.

COLLINS: Probably not a surprise.

HARRIS: It's the House.

COLLINS: Indeed. Meanwhile, water, water everywhere. Drenching rains. Look at this. Bring heavy flooding to Washington state.

TED ROWLANDS, CNN CORRESPONDENT: Heidi and Tony, Washington state has been hammered over the past few days. Coming up on the NEWSROOM, we'll detail what one local person said is the worst flooding in 50 years. There's a bit of a reprieve but there's more rain in the forecast. Stay with us.

COLLINS: All right, thanks Ted.

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

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COLLINS: In the pacific northwest, two days of rain have drenched parts of Oregon and Washington state. CNN's Ted Rowlands is in Mt. Vernon now with the very latest. And Ted, one person has been killed. They are sandbagging and dumping gravel to keep homes from sliding into the ocean. Roads are closed. What is the situation as you see it there this morning?

ROWLANDS: Well, it was a real mess this morning, though as the sun is just coming up here in the pacific northwest. It is much better because the rain has stopped and the forecast is good. It's good and bad. Good for the next two days and then it is going to be bad again by the end of the week, according to forecasters.

What you are looking at right now is the Skagit River which is, we're in Mt. Vernon, Washington, about 60 miles north of Seattle. Over the past few days, hundreds of volunteers came out to build this 1400-foot long wall of sandbags. There are over 100,000 of these sandbags. This river crested last night at 10:00 and it held in its banks. That's the good news.

The bad news is this incoming -- the upcoming weather and the hope is that the river can drop enough to absorb what is coming this weekend. But the forecast is bad this weekend. It's supposed to dump more heavy, heavy rains starting on Friday. So a lot of people just hoping that these two days of reprieve will make the difference.

As you mentioned, there was one death in the region and hundreds of rescues. Hundreds of people were stranded caught off guard by rivers that flowed over their banks and stranded them in different parts of the western region up here in the pacific northwest. In both the state of Washington and in Oregon. Eighteen counties in the state of Washington alone were declared disaster areas.

More than 100 members of the National Guard had to come in on Monday and Tuesday to help rescue these people using helicopters and hover craft. They just simply were caught off guard and didn't have any escape routes. The one death was a 20-year-old man who tried to move his pickup truck to get his truck out of harm's way. He was swept downstream and killed fairly instantly. His body was recovered shortly after that.

That was the only fatality and only major injury. And according to state workers here, they say that the disaster plan worked beautifully and they are hoping that next time around this weekend, people hear their advice and in those areas, those low-lying areas, when they are told to leave, they are hoping people will heed the advice and get out so that there isn't the chaos that they experienced earlier this week with all of these rescues.

COLLINS: That's right Ted, and quickly before we let you go, just to drive that point home, if we can get another shot to the left of you there, of the current and how incredibly fast it is moving right behind you. You can see how if you get anywhere near that or mixed up in it, you will be swept away. ROWLANDS: Yes, and you can see, it's only a matter of feet between that river, that current and downtown Mount Vernon. That's why so many people were so very worried. You see all the debris coming down here. As I say, the next two days very critical. Hoping that these rivers drop enough to absorb the next incoming storm.

COLLINS: All right, CNN's Ted Rowlands live for us this morning in Mount Vernon. We'll be watching this one. Thank you Ted.

HARRIS: Chad, I heard the system described yesterday called by the name the pineapple express, is that it?

(WEATHER REPORT)

HARRIS: Well the evidence is clear now. We saw the guy who needed to be rescued on top of his vehicle. And the reports of one death is unfortunate. The evidence is clear now on this. You hear flash flooding, you run for cover.

MYERS: And there are flood watches across the east coast this morning all the way from New York City down into the Delaware water gap because of the rain that's coming in from the deep south this morning. We'll get to that later.

COLLINS: All right Chad, thank you for that.

Meanwhile, a new Supreme Court, an old but controversial issue. The abortion debate. Arguments before the high court today ahead here in the NEWSROOM.

HARRIS: Counting on Virginia, Democrats need it to take control of the Senate. The cliffhanger in the NEWSROOM.

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