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THE SITUATION ROOM

Democrats Take Control of Senate; Has Karl Rove Lost Touch?

Aired November 9, 2006 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. And to our viewers, you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Standing by CNN reporters across the United States and around the world to bring you tonight's top stories.
Happening now, Democrats painting the town red now that both sides of the U.S. Capitol are turning blue. Tonight the Virginia Senate race is settled, sealing Democratic control of the House and Senate. It's 7:00 p.m. here in Washington where a seismic power shift is under way.

Also this hour, can they all get along? President Bush breaks bread with the House Speaker-to-be Nancy Pelosi, but can they break their old habit of attacking one another? And Karl Rove, then and now. Has the president's campaign architect in 2000 and 2004 lost his touch? And is Mr. Bush blaming Rove for the Republican's midterm mess?

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

Tonight, the nation's Capitol is being turned upside down and inside-out by the Democrats' double-barreled election victory. They're set to seize power over the Senate as well as the House now that Virginia Republican George Allen is conceding defeat to the Democrat Jim Webb.

Allen's seat is the sixth Democratic pickup in the Senate and that gives the party a razor-thin majority of 51 in the Senate. Montana also helped seal the deal for the Democrats. Senate-elect Jon Tester is welcoming today's concession by Republican incumbent Conrad Burns. We'll talk to Tester. That's coming up this hour. On Capitol Hill, Democrats are promising a new direction in the Senate as well as they celebrate their reversal of fortune.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D-IL), MINORITY WHIP: Well let me tell you this, two years ago, 45-55, today 51-49.

(APPLAUSE)

(END VIDEO CLIP)

BLITZER: President Bush's facing the new reality here in Washington. He had lunch with the House Speaker in waiting Nancy Pelosi. They both say they're ready to bury the hatchet and work together. In Virginia tonight Democrat Jim Webb is the undisputed senator-elect after Republican George Allen's concession. You can bet Webb and other members of his party have never hung on Allen's words quite like they did today. CNN's Jeanne Meserve joining us now live from Virginia with the latest -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Wolf, Virginia Democrats this evening basking in the glow of having won the Senate seat and with it, control of the Senate.

(BEGIN VIDEOTAPE)

(APPLAUSE)

MESERVE (voice-over): Hoisting his son's combat boots the symbol of his campaign high over his head James Webb completed his march right into the U.S. Senate.

UNIDENTIFIED MALE: The campaign's over.

MESERVE: It was utterly unthinkable just a few short months ago that incumbent Republican George Allen would lose his seat and his party control of the Senate. But with a review of votes showing no significant shift in the tally, Allen decided to forego a contentious recount and accept the result.

SEN. GEORGE ALLEN (R), VIRGINIA: The people of Virginia who I always call the owners of the government, they have spoken. And I respect their decision.

MESERVE: The death spiral for Allen's campaign began when he lobbed an apparent racial slur at a Webb campaign worker of Indian descent.

ALLEN: Let's give a welcome to macaca here.

(APPLAUSE)

UNIDENTIFIED MALE: Welcome to America and the real world of Virginia.

MESERVE: From there the campaign went lower and lower and lower.

UNIDENTIFIED MALE: He's in lock step with Bush and administration.

UNIDENTIFIED FEMALE: The same Jim Webb who declared the Naval Academy a horny woman's dream and women psychologically unfit for combat.

MESERVE: Today James Webb asked for a change in tone and tenor.

JIM WEBB (D), VIRGINIA SENATOR-ELECT: My way of dealing with it is an affirmative way and that is by calling on this president to stand up and denounce these sort of tactics and so we can stop having campaigns that are in the gutter. MESERVE: As for George Allen there was a hint that he might be back.

ALLEN: My friends, sometimes wins political or otherwise can blow the leaves off branches and even break limbs, but a deep-rooted tree will stand. Stay standing. It will re-grow in the next season.

(END VIDEOTAPE)

MESERVE: The next political season, the presidential campaign, George Allen was once seen as a likely contender for the Republican nomination, but after this defeat, most analysts say no way -- Wolf, back to you.

BLITZER: All right, Jeanne, thank you.

On Capitol Hill tonight Democrats could hardly contain their enthusiasm about reclaiming control of both the House and the Senate for the first time in 12 years.

Let's check in with our congressional correspondent Dana Bash -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, they're practically swinging from the chandeliers here, both thrilled and rather surprised at the election results. But for all of their celebration, Democrats have been hitting Republicans hard over the past several years about the way they control government, so they realize there's lot of pressure on them to show Democrats can govern.

(BEGIN VIDEOTAPE)

BASH (voice-over): Taking the Senate is the final step to ending 12 years of Republican rule on Capitol Hill.

(APPLAUSE)

BASH: And minutes after getting the news, giddy Democratic leaders took a victory lap.

SEN. HARRY REID (D-NV), MINORITY LEADER: The election's over. It's time for a change.

(APPLAUSE)

BASH: The soon to be majority leader, Harry Reid, promised an era of bipartisanship. But not before taking a swipe at Republicans.

UNIDENTIFIED MALE: They set a very bad example of not working with us. We're not following that example.

BASH: The shift in power means Democrats, not Republicans, will set the agenda across Capitol Hill. And leaders here promise to make good on broad campaign pledges.

UNIDENTIFIED MALE: We have to have results and doing something to make health care more affordable and more available. We have to do something to create energy and dependence. It's time we do something of course about education the staggering deficits that we have here.

BASH: One irony, a guest worker program for illegal immigrants, a top Bush priority, his own party blocked could pass a Democratic Congress. But the Democrats are taking control of the Senate by one vote, a razor-thin margin. And it takes 60 votes to get most legislation through the Senate. So Republicans can still block anything they don't like.

SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: If we're talking about raising taxes, the answer is no. If we're talking about spending more money in areas where we have already spent a tremendous amount of money without result, the answer's going to be no.

BASH: Controlling the Senate means Democrats get to pass judgment on President Bush's picks for major government jobs and they're already warning the White House to think twice, especially when filling judicial vacancies.

DURBIN: Don't send us a political extremist. There was a time when the president was successful doing that, but I think that time has passed.

BASH: Democrats insist changing tactics in Iraq, the issue they say swept them into power, tops the agenda.

UNIDENTIFIED MALE: The American soldiers are losing their lives. I don't think we can wait. I don't think we can ask them to wait.

(END VIDEOTAPE)

BASH: Democrats can pursue more oversight, more accountability of the administration, but they even acknowledge that there's only so much they can do to change the Iraq policy. But Wolf, tomorrow Senator Harry Reid, again the soon to be majority leader, will go to the White House, meet with the president, and we're told he will formerly suggest a bipartisan summit to start talking about changes in Iraq policy. Wolf?

BLITZER: All right, Dana, thank you. And we're going to be speaking with Congressman John Murtha coming up this hour. He wants to be the majority leader in the House of Representatives, a severe critic of the Bush White House.

President Bush and top administration officials, meanwhile, are promising to try to work with the Democratic leaders on Capitol Hill, but the White House also trying to work with fellow Republicans on some congressional matters before the Democrats actually take over in January.

Let's go to the White House, our correspondent Suzanne Malveaux has more -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, really the big question is how long this honeymoon is going to last. President Bush, a couple of hours ago, picking up the phone and calling Senator Harry Reid, congratulating him, saying he's looking forward to the coffee he's having him here at the White House tomorrow, along with Dick Durbin. The two are supposed to discuss compromises and agenda, a way to move things forward and get something done in the next two years.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Out with the old and in with the new. Over breakfast President Bush consoled the Republican losers. Over lunch he congratulated the Democratic winners. On the menu, pasta and chocolate, but the president's counselor joked today Mr. Bush would be eating crow. The president and incoming House Speaker Nancy Pelosi promised to put their bitter partisanship behind.

BUSH: We won't agree on every issue, but we do agree that we love America equally, that we're concerned about the future of this country and that we will do our very best to address big problems.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: We have made history. Now we have to make progress.

MALVEAUX: But the atmosphere of bipartisanship was pierced by two political lightning rods. Before lunch Mr. Bush came to the Rose Garden with his Cabinet, to challenge the current Republican lame duck Congress to complete unfinished business, including one controversial measure.

BUSH: Another important priority in the war on terror is for the Congress to pass the Terrorist Surveillance Act.

MALVEAUX: That would authorize the administration to wiretap phone calls between people in the U.S. and suspected terrorists overseas without a warrant. Justice Department officials say Attorney General Alberto Gonzales will make a series of appearances in the coming days to urge the Republican Congress to push it through. Then later, Mr. Bush re-nominated John Bolton to be U.N. ambassador. The president has been unable to get Bolton's nomination through the current Republican-led Senate. His chances are considered even slimmer when Democrats take control.

(END VIDEOTAPE)

MALVEAUX: And Wolf, today we heard from Democrat Senator Joe Biden. He is poised to head that committee that would be in charge of Bolton's nomination process. Today he said that that nomination was going nowhere. There were also some senators, Republicans as well, who were saying it's highly unlikely that they would take up this controversial nomination during the lame duck session -- Wolf.

BLITZER: Suzanne, thank you very much. This footnote -- our John King reporting -- quoting several Republican sources, saying that Ken Mehlman, the chairman of the Republican National Committee all but certainly going to be stepping down. Also reporting that the lieutenant governor of Maryland, Michael Steele, who lost in his bid to become the United States senator from Maryland, could be tapped for a significant position in the Bush administration. We're watching both of those developing stories.

In the meantime, let's go the New York and Jack Cafferty -- Jack.

JACK CAFFERTY, CNN ANCHOR: Well here's some good news, the 2008 presidential campaign is under way whether any of us like it or not. John McCain raced to the microphones yesterday to offer his taken on the sudden resignation of Donald Rumsfeld, the secretary of defense. Iowa's governor, Tom Vilsack, is filing the necessary paperwork in order to make a run for the White House.

This makes him the first official prominent Democrat to throw his hat in the ring. And you can bet that others will be along, presidential wannabes, and will be heard from very soon. So, for the next two years, we will all be fed a steady diet of posturing and positioning and speechifying fund-raising, and all the rest of the national distractions that constitute a presidential campaign.

The odds-on favorite among Democrats for the nomination, at least at this point, is New York's junior senator, Hillary Clinton. And it might be tempting in light of Democratic victories in the House and Senate to assume that Senator Clinton is suddenly on the fast track back to the White House. But don't be so sure. In some ways having the Democrats in charge of the Congress over the next two years, might make things more difficult for Senator Clinton.

Here's the question. Does the Democratic victory in the midterm elections help or hurt Senator Clinton's chances of becoming president in 2008? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: Good question, Jack. Thank you.

And coming up -- forced from office, Donald Rumsfeld off today in Kansas while the rest of the Cabinet meets in the Rose Garden.

Also, Karl Rove eating his words. Did he completely miscalculate or deliberately mislead the American public with his election predictions?

And lame duck lunch was it; President Bush dines with Nancy Pelosi at the White House. Jeanne Moos with that story.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back. When President Bush met with his Cabinet today over at the White House, one very familiar face was clearly missing. That would be Donald Rumsfeld. He's being replaced as the defense secretary. He's still on the job though. And today he was on the road in Kansas sticking to his guns, but conceding that the war in Iraq has run into difficulties.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: It's very clear that the major combat operations were an enormous success. It is clear that in phase two of this, it has not been going well enough or fast enough.

(END VIDEO CLIP)

BLITZER: Rumsfeld told an audience at Kansas State University that the war requires more patience. Meanwhile, there are stunning new claims today about the toll being taken by the war in Iraq.

And joining us now from Baghdad our correspondent Michael Ware. Michael, The Associated Press now quoting the Iraqi health minister as saying that during the course of this war in Iraq, three and a half years, 150,000 Iraqi civilians have died, have been killed. An enormous number by all accounts.

MICHAEL WARE, CNN CORRESPONDENT: Absolutely Wolf. And I mean this has been one of the impossible to tell stories of this war. Just how many Iraqi civilians have died in the course of collateral damage, some military operations, in sectarian violence, in the course of the insurgency and suicide bombings? It's a very, very hard thing to gauge.

And numbers conflict everywhere. We have seen more conservative estimates that put it in the tens of thousands, 40,000, 50,000. Many people said the figure around 100,000. Be it the Iraqi health minister or not, and we must be aware that the health ministry is now owned and run by the political faction belonging to anti-American rebel cleric Muqtada al-Sadr, its figures itself are difficult to work from, and have been questioned in the past.

Nonetheless, it's very, very clear, certainly to Iraqis here on the ground, almost everyone has been touched by this war in one way or another. Each family has felt some kind of loss -- Wolf.

BLITZER: And this comes on the heels, Michael, of a United Nations report that estimates that nearly a million Iraqis, more than 900,000, have been displaced since the start of the war, forced to flee their homes, now living elsewhere in various parts of Iraq or going to neighboring Jordan or Syria or Iran or Saudi Arabia or other countries in the region. Nearly a million Iraqis forced to flee their homes. Do you get that sense as well just being there?

WARE: You very much do. I mean there's a sense of -- there's people on the move. But I mean it all comes from this atmosphere of fear, tension and apprehension. I mean this is what is driving people from their homes. We also see this is what's driving the intelligentsia out of the country. Universities, students no longer go to universities for fear of the violence that may happen.

University professors no longer show up. So many of them have been assassinated. So we're seeing it's things like this, where life just can't continue that's driving people out of the country. There's internally displaced in the hundreds of thousands and there are those who have actually left. And we're hearing from U.N. agencies and others that they're simply not geared up to be able to support these enormous numbers, Wolf.

BLITZER: Michael Ware reporting for us from Baghdad. Michael, thank you.

WARE: Thank you, Wolf.

BLITZER: And still to come, a major power shift. Democrats winning control of the United States Congress, both Houses. We'll speak with outspoken war critic Congressman John Murtha on the Iraq factor and we'll find out why he wants to become the new majority leader in the House.

And let the race begin. One candidate already declares a run for the White House, but what about Senator Hillary Clinton. Will she or won't she?

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

(COMMERCIAL BREAK)

BLITZER: America votes. The world now reacting. Now that there's been a major power shift here in Washington and after Donald Rumsfeld's resignation many around the world are responding.

Let's bring in CNN Zain Verjee. She's joining us with details -- Zain.

ZAIN VERJEE, CNN ANCHOR: To Pakistan, few tears shed for the Republican whipping by the U.S. electorate.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The election's over. It's time for a change.

(APPLAUSE)

VERJEE (voice-over): The political earthquakes in the U.S. have triggered seismic celebrations around the world, in Asia, the Middle East and Europe. Their message -- the election has taught the president a harsh lesson. The main reason they say for his defeat, Iraq.

Many are hoping that Democratic control of Congress will force the president to be less confrontational and more conciliatory in dealing with global crises. A joint statement from more than 200 socialist members of the European Parliament says the election outcome is the beginning of the end of a six year nightmare for the world.

Venezuela's Hugo Chavez couldn't resist a dig either, saying the election was a reprisal vote.

In Syria, the information minister called the results a real slap in the face for the Bush administration. Syria says it hopes for some shift in foreign policy.

BOUTHAINA SHAABAN, SYRIAN CABINET MINISTER: I expect if the Democrats reverse their strategy and started to think in a wise and just way, and in respect of human lives, away from the example of Abu Ghraib and the Guantanamo and the Patriot Act, I expect that all parties would be beneficiaries.

VERJEE: One group of Iraqi insurgents gloated over the results of the election, calling the Democratic victory a victory for the Iraqi resistance. Look at British newspaper headlines, too. From "The Daily Telegraph", Rumsfeld is casualty of war. From "The Guardian", Rumsfeld pays price as U.S. sends message to Bush.

From the "Evening Standard" in London, Bush's bitter winter. The possibility of any change in Iraq policy by the U.S. may be troubling, analysts say, to allies like Britain, Japan and Australia who have backed the U.S.-led war in Iraq.

(END VIDEOTAPE)

VERJEE: But even with a Democratic victory and the replacement of Rumsfeld, it's unclear if there will be any major shift in Iraq policy -- Wolf.

BLITZER: All right, Zain, thank you.

And just ahead, as Republicans sift through the post election wreckage, many are asking how the president's right-hand man, the strategist Karl Rove, got it so wrong.

And now that they're both about to take control of Congress, will Democrats summon top Republican officials to testify about the war in Iraq. I'll ask Congressman John Murtha.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Happening now -- mourning a journalism giant. The veteran and respected CBS journalist Ed Bradley has died. And this evening his peers and his fans alike are remembering him.

Also, 150,000 dead. That's how many Iraqis one senior Iraqi official now says have died since the war began. That's three-times the number previously acknowledged by the Iraqi government and it's the first overall casualty figure put out by the Iraqi government.

And with Democrats in charge, they could decide against keeping John Bolton as U.S. ambassador to the U.N. Today the White House resubmitted his nomination. Bolton needs confirmation by the U.S. Senate. Last year Democrats blocked his nomination, prompting President Bush to appoint him in a recess appointment that's set to expire in January.

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

Right now one architect's carefully drawn plans are ruined. The solid walls of Republican majorities that political architect Karl Rove helped direct have suddenly come crumbling down. And now some are asking what happened. Brian Todd joining us now live with more -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, Karl Rove got all the credit when everything was going so well, famously called the architect by President Bush after 2004. Now, there's pile-on with Rove and much of it is because of his brash predictions before Tuesday.

(BEGIN VIDEOTAPE)

TODD (voice-over): Two weeks before midterms, Karl Rove exudes the confidence of a man who's won three national elections for his party. When an "NPR" reporter presses him on polls showing Republican fortune slipping...

KARL ROVE, POLITICAL STRATEGIST: I add up to a Republican Senate and a Republican House. You may end up with a different math, but you're entitled to your math. I'm entitled to the math.

TODD: Now in the wreckage of a Democratic route, Deputy White House Press Secretary Dana Perino tells CNN, there's no tension between Rove and President Bush. She says this comment the day after was a full-hearted joke.

BUSH: I obviously was working harder on the campaign than he was.

TODD: Perino says Rove who declined our request for an interview, doesn't spend a lot of time, quote, on the couch, thinking about his personal role in these situations. But others, even on the conservative side have had it with the image of Karl Rove as political genius.

ANDREW SULLIVAN, AUTHOR, "THE CONSERVATIVE SOUL": He didn't get a majority popular vote in 2000. He squeezed a 51 percent victory in 2004. He's been teetering on the brink ever since, and the base strategy now shows him not to be a genius but to be a real failure.

TODD: One GOP strategist says Rove's political team could have done more to warn voters about a Nancy Pelosi-led House. But some analysts believe Rove played too much to the base.

JIM VANDEHEI, WASHINGTON POST: The problem was it became such sort of a hard edge let's help conservatives, let's fire up conservatives, that they almost tied their hands. It made it very difficult to get out of that strategy and then to try to reach to the Senate.

TODD: But a GOP activist who knows Rove says there were forces at work here that even the so-called architect couldn't control.

GROVER NORQUIST, AMERICANS FOR TAX REFORM: Karl Rove is in charge of the get out the vote effort. In charge of the political campaign. The decision to occupy Iraq was not Karl Rove's and it's not exactly fair to blame him.

(END VIDEOTAPE)

TODD (on camera): Another long-time Republican strategist told me, quote, "no one's going to tell you with a straight face that Karl could have saved this election."

The next election, he says, will also depend on Iraq. And he says Rove and the Republicans cannot get themselves in a situation where they're all defending the war and Democrats are all opposing it -- Wolf.

BLITZER: Brian Todd reporting.

Brian, thank you.

With Congresswoman Nancy Pelosi now set to become Speaker of the House, who's in line to be the Democratic Majority Leader in the House?

I spoke with one candidate, Congressman John Murtha of Pennsylvania.

(BEGIN VIDEOTAPE)

BLITZER: Let's talk a little bit about what's on your agenda. I want to do some housekeeping first, then we'll get to some of the substantive issues.

You want to be the majority leader in the House, is that right?

REP. JOHN MURTHA (D), PENNSYLVANIA: Yes, and at this point I think I have the votes. We've been going over it today and we're pleased at the outcome, we're pleased at the response we're getting and we've been working hard. We put off our campaign asked -- telling people wait until the election is over. Let's win this election first for the American people. And I think we did that.

Now we want to move forward.

BLITZER: So it will probably be a contest between you and Steny Hoyer, the minority whip right now, is that right?

MURTHA: Yes. Yes, exactly. That's what the competition looks like and we're going full steam ahead.

BLITZER: Tell us why members of the House, the new House, should pick you as the new majority leader as opposed to Steny Hoyer.

MURTHA: Well, I think there's a number of reasons. I've been involved in these jobs, involved in foreign policy, involved in defense, involved in synthetic fuels and alternative energy, I've been involved in health care for years and years. And I think those are the issues I've heard about the most.

And I think I could bring that kind of expertise to the leadership. And I can mold some of the more conservative members with the leadership. So working with Nancy Pelosi, I think we'd make a good team.

BLITZER: Because she's very close to Steny Hoyer. If you're going to be the majority leader and she's going to be the speaker, you have to really work as a team with her.

Do you have a good relationship with Nancy Pelosi?

MURTHA: Well, it's an interesting thing, I was her campaign chairman when Steny Hoyer ran against her as the minority whip. I was her campaign manager when she ran against Steny Hoyer -- when Steny Hoyer ran against her for minority leader.

So I do have a fairly good relationship. I worked with her for years when she was on the Intelligence Committee. So we are very close friends and I've been her campaign manager now for two separate events.

BLITZER: Let's talk about Iraq, because over the past year you've been outspoken. You've taken the lead in the House of Representatives in speaking out against the Bush administration's policies.

What practically can the Democrats do, as the majority party in the House and the Senate, to try to change the administration's policy toward Iraq, which you're so concerned about?

MURTHA: Yes, one of the things I'll say right off the bat, Wolf, I was on 143 shows in the last -- in last year talking about Iraq, trying to straighten out what the administration said. But that doesn't mean anything compared to what happened on election day.

I think the American public were way ahead of me when I first spoke out. The president kept talking about the last election being a mandate for him to go forward in Iraq. Well, this election was the opposite. This election was for -- to redeploy the troops in my plan, which is the opposite of his plan, as soon as practicable out of Iraq.

Now, what can we do?

One of the things we can do is say to him look, Mr. President, there has to be a change. We have to work out something. And I think that the first step is that you hold somebody accountable. All right, you fired the secretary of defense. But that's not a change in policy. I was disappointed in what the new secretary designate said. I was disappointed in what the president said.

It's the same old policy.

BLITZER: What specifically...

MURTHA: So firing the secretary of defense is not enough.

BLITZER: What was the specific point they said, Robert Gates, the nominee to become the secretary of defense? What did you not like? MURTHA: Well, it looked like the speech was written by the White House. It said this is still a fight -- the center of the fight on terrorism is in Iraq. That's not the centerpiece of terrorism. We're mixed in a civil war in Iraq and the problem we have is our troops are targets because we've become the occupiers.

They keep saying the same thing over and over again and they keep talking about how it's an open-ended policy, even though they say it's not.

We have -- what we have to do is give a deadline to the Iraqis. We have to work this out so that the president accepts this deadline so the Iraqis accept responsibility. We have to hold them accountable. We have to have hearings. We have to decide, OK, folks, sit down here and tell us what went wrong. Tell us all the mistakes that you have made.

And there's no question about it. The reason the military lost confidence in this secretary is because he didn't listen to them.

One thing about Gates -- and I've known him for years. When he was CIA director I was the chairman of the committee. He will listen to people. He will listen to the military.

And then the other thing that the secretary didn't do is go to the White House and fight for the appropriations that the military needs in order to get themselves back in good shape.

So we've got a new secretary. That's a little bit of a start. But we need a change in the policy and we need to force the president, work with the president but force him...

BLITZER: All right...

MURTHA: ... to see that that's what the people said.

BLITZER: With your expanded oversight opportunities right now, will you, A, use your subpoena power to bring in administration witnesses to get to the bottom of some of the issues that you're concerned about, specifically, the vice president, Dick Cheney? And, secondly, the power of the purse -- will you cut back on funding for the war in Iraq?

MURTHA: The first thing we'll do absolutely is subpoena power, if we need to. Now, most of the time administrations are cooperative, so we don't need to subpoena. But we'll put them under oath and we'll ask them what happened.

Why did we go into Iraq with insufficient forces? Why did we go into Iraq with inadequate body armor, with inadequate Humvees?

We want to make -- find out who's responsible for the mistakes that were made.

Why don't we have an exit strategy?

Then the next thing we'll do is make sure the troops get funded. There's no question about that -- we're going to fund the troops.

Now, most of the Democrats, Wolf, voted against this war because they didn't trust this president. I voted for it because I felt like we gave the president a club. I made a mistake.

Now, most of the Democrats, though, are voting for the appropriations for the war because they believe very strongly that we have to support the troops out in the field. So it's not a matter of cutting off money, it's a matter of reassessing, reassigning money.

The other thing we have to do, we have to get this war money in the base budget. We can't keep putting out supplementals. We've got to say to them be realistic when you propose a budget for us. We want a base budget which takes care of short-term and long-term. We need to rehabilitate equipment.

We need to take care of -- the Army was in desperate shape, almost running out of money, not paying their utility bills. We don't have an active reserve that could be deployed if they needed to, in an area, to prevent war.

BLITZER: I was just about to say you've got a full agenda ahead of you.

Unfortunately, Congressman, we're out of time.

But good luck with your new responsibilities. It's going to be an enormous change here in Washington, I suspect.

Thanks very much for coming in.

MURTHA: Nice talking to you, Wolf.

(END VIDEOTAPE)

BLITZER: And up ahead tonight, his election win helped the Democrats seize control of the Senate for the first time in years. Speak to Montana's soon to be freshman U.S. senator, Jon Tester.

And they haven't been shy about their opinions of each other, but are President Bush and presumed House Speaker Nancy Pelosi putting the past behind them?

We're going to find out.

Stay with us.

You're in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: New Democratic control of the United States Senate will feature some intriguing political personalities, including our guest, organic farmer turned U.S. Senator-Elect Jon Tester of Montana.

(BEGIN VIDEOTAPE) BLITZER: First of all, you're a straight shooter. Are you surprised that the Democrats are now able to reclaim the majority in the Senate?

JON TESTER (D), MONTANA SENATOR-ELECT: Well, I mean, everybody predicted the House. And I'll be honest with you: I wasn't sure. I actually anticipated a tie in the Senate. But we were fortunate enough to get the majority seat just today, and so that's good news.

BLITZER: So you've got a lot of responsibility ahead of you as a member of the majority party in the Senate. Let me read to you what the Democratic leader in the Senate said this week, yesterday, Harry Reid: "The days of the do-nothing Congress are over. From changing course in Iraq to raising the minimum wage to fixing the health care crisis to making this country energy independent, we're ready to get to work."

Are you on board with those priorities that he just outlined?

TESTER: Well, I think, yes, I think they're right on. I think that, quite frankly, as I went around the state of Montana and visited with folks over the last 18 months, health care arguably the number- one issue, energy is a huge issue. And so we need to be addressing those.

And, of course, the war in Iraq is a big issue, along with national security and fighting the war on terror. So, I mean, I think that there's a lot of stuff out there we need to do to really help regular folks make ends meet. And, you know, that, along with, you know, fiscal responsibility, those issues were right on top.

BLITZER: Senator-elect, how big of an issue was the war in Iraq in Montana?

TESTER: Well, I mean, I think that, combined with all the other ones I just mentioned, people are concerned out here about the war in Iraq. Make no mistake about it. And they see what's going on and, with there being no plan and no end in sight, I think they're ready for a change, so we can get a plan, you know, to bring our troops home and really not leave that Middle East upside-down in the process.

So it's a big challenge for us. It's a big challenge for everybody in government, in the House and the Senate and the executive branch. So I look forward to the challenge, and I hope we can all work together to come up with a solution, because I think that's what's really important, if we're going to move this country forward.

BLITZER: The president was out in Montana campaigning for your opponent, Conrad Burns, the senator. Any bad blood when you come to Washington and you have that first direct encounter over at the White House?

TESTER: None whatsoever. I look forward to meeting the president. The fact is, is everybody is trying to get their person elected. I don't have a problem with that at all. And I look forward to working with the president and everybody in the Senate and the House, too, as far as that goes, to, you know, get some policies passed that make sense for average folks, for the middle class.

BLITZER: He still has two years left in the White House, but some Democrats are already calling him a lame duck. Do you think he's a lame duck already?

TESTER: Well, I mean, you know, I don't like labeling folks. I think that the proof is going to be how we perform over the next two years and how he performs over the next two years.

And I think that -- I think we all want to move this country forward, and we all want to have things like health care that's affordable and accessible, and make this country energy independent. And I think we all know that we need a change of direction in Iraq.

And I think that, you know, the proof will be in what we get accomplished over the next couple of years. And if it ends up in a situation of gridlock, I don't think anybody wins, especially not the American people.

BLITZER: We'll look forward to seeing you here in Washington, Senator-elect. Thanks very much for coming into THE SITUATION ROOM, the first of hopefully many appearances here.

TESTER: Outstanding. Thank you, Wolf. Appreciate the opportunity.

(END VIDEOTAPE)

BLITZER: And still ahead -- pasta salad and chocolate. President Bush and one of his most vocal critics, the House Speaker- to-be Nancy Pelosi do lunch. Is it a truce in the making?

And a landslide victory returned Senator Hillary Clinton to office. Could it be a precursor to 2008 and run for presidency? Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: One campaign down and another continues. Now that power's been grabbed for 2006, who will prevail in the 2008 presidential race? Today the Tom Vilsack formally threw his hat into the ring saying he will run. But could a certain other Democrat be next?

CNN's Mary Snow is in New York, she has more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, she's admitted she's thinking about a potential White House run in 2008. Now, just about everywhere Senator Hillary Clinton goes, she's being asked when she will make a decision.

(BEGIN VIDEOTAPE)

SEN. HILLARY CLINTON (D), NEW YORK: Thank you, God bless you. God bless New York and God bless America. SNOW (voice-over): Her landslide Senate victory was light on suspense, heavy on speculation about 2008 -- so heavy that even before Election Day, Senator Hillary Clinton was front and center on "New York" Magazine with the declaration "and now the real race begins."

Political columnist Chris Smith.

CHRIS SMITH, "NEW YORK" MAGAZINE: She's for the past year said, I'm focused on running for reelection. Now, reelection is complete and she's got to come up with other ways to say she still hasn't made a decision about running for president.

SNOW: An example?

QUESTION: When will you address the question of whether you'll be running?

CLINTON: You know, I'm going to relish that victory.

SNOW: That decisive New York victory could prove fruitful, say observers, should she make a run for presidency. They say trends in New York may be used to make the case she can win over critics. Specifically, strategists point to her winning the more conservative areas of New York state, areas that she lost during her first campaign.

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: They didn't vote necessarily with her in 2000, but they voted with her in 2006. A real shift in how people view Senator Hillary Clinton.

SNOW: Polls show she's often viewed as a polarizing figure, and that may be one of her biggest hurdles. Observers say it's all part of a bigger picture being taken into consideration by her team, a team that has time on its side.

CHRIS SMITH, NEW YORK MAGAZINE: One of the advantages of the machine she's put together is that she's not forced to do anything soon. I mean, she's by far and away the best-known potential candidate. She's got more money, she's got more campaign staff in place. So she can wait.

(END VIDEOTAPE)

SNOW: And then there's the question of other options. Might Senator Clinton seek a Senate leadership position with Democrats now in charge? Political observes we spoke with say they see it as a less likely scenario -- Wolf.

BLITZER: Mary, thank you. Mary Snow in New York.

Let's stay in New York. Jack Cafferty's joining us with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is -- does the Democratic victory in the midterms help or hurt Senator Clinton's chances of becoming president? Rob in Seattle writes -- "I doubt giving the Hillary the gavel and the power of a majority position will do anything but hurt, by forcing her to take positions that will be unpopular with half the country. However, I don't think she makes it that far in the race regardless. She's far too moderate, and name recognition will only get you so far."

Cal in New York -- "Hillary's a goner. Have you seen Nancy Pelosi? She's out to capture the attention of America and convince us all that she's even-handed, even-minded and way smarter than anyone we've seen blabbering on TV lately. In other words, she's running for president in '08. She has maybe 20 months to show her stuff before the nominating conventions, and she can dance circles around Hillary."

Jerry writes: "Two strikes against Hillary. Americans may not want another one-party government. Americans may not be ready for two women at the top. So much, so soon."

Vicki in Roanoke, Virginia: "Senator Clinton is an amazing woman, but I hope she doesn't run for president. Therefore, I hope these two years will make it harder for her to run. She'll energize Republicans more than even gays and abortion. She's too polarizing."

Patrick in Louisville, Kentucky: "Nancy in '06, Hillary in '08. The men have messed things up long enough. This is the beginning of the century of women."

If you didn't see your e-mail here, you can go to CNN.com/caffertyfile and read some more of them online.

BLITZER: Jack, thank you. See you here tomorrow. Let's find out what's coming up right at the top of the hour. That means Paula Zahn is standing by -- Paula.

PAULA ZAHN, CNN ANCHOR: And I'll be here tomorrow, too, Wolf.

BLITZER: Good.

ZAHN: All right. Thanks.

The top story we picked tonight is the war in Iraq. The Democrats got elected by promising change. We're going to go in-depth tonight to see what it could be and how soon it could happen.

And now that we know that President Bush was working on replacing Donald Rumsfeld even before the election, but telling us just the opposite, I'll ask a top story panel if presidents can tell white lies without undermining everyone's trust. We'll debate that coming up tonight, Wolf. We heard a lot of talk about whether that was the appropriate thing for he president to do or not.

BLITZER: Appropriate question to ask. Paula, thank you very much. See you in a few minutes.

And still ahead -- President Bush and Nancy Pelosi do lunch. Jeanne Moos has the story for us. You'll want to see this. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let bygones be bygones. As Jeanne Moos found out, humble pie was apparently on the menu today at the White House lunch between President Bush and House speaker-to-be Nancy Pelosi.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Maybe you saw the deer that wandered through the automatic doors into a Target store in Iowa. The deer must have felt like he was a target, out in place.

Sort of like this soon-to-be Democratic speaker of the House, wandering into the Republican White House. Guess who's coming to dinner -- make that lunch.

UNIDENTIFIED FEMALE: She thinks you're going to faint because he's a Negro.

MOOS: Having a Democrat to lunch might not make President Bush faint. This Democrat has been anything but faint in her past criticism.

UNIDENTIFIED FEMALE: You have yourself described President Bush as being incompetent.

PELOSI: Right.

UNIDENTIFIED FEMALE: As being in denial.

PELOSI: In denial, yes. And dangerous.

MOOS: And talk about dangerous. The Republicans have darkly pointed out that Nancy Pelosi is from that den of sin, San Francisco.

UNIDENTIFIED MALE: Just think about it. Every time San Francisco has a gay pride parade, Nancy Pelosi is not going to want to be in her home town and still be the speaker of the House.

BILL MAHER, COMEDIAN: Nancy Pelosi. They try to scare people. She's from San Francisco, you know, like San Francisco is Devil's Island.

MOOS: But a day after the president showed Donald Rumsfeld the door, he opened it to Nancy Pelosi. When the White House counselor to the president made the rounds on the morning shows, he was asked what's on the menu?

DAN BARTLETT, COUNSELOR TO THE PRESIDENT: Well, for the president, it's probably a little bit of crow.

MOOS: Well, actually it was...

PELOSI: Pasta and chocolate. I was raised on it. It was really lovely. MOOS: The White House was making nice, catering to Pelosi's Italian-American roots.

Just days ago, the president was sticking it to Pelosi.

BUSH: She said, we love tax cuts. Well, given her record, she must be a secret admirer.

MOOS: But now, the admiration was mutual, though muted.

BUSH: A very important lunch.

PELOSI: A very productive meeting.

BUSH: Very constructive and very friendly conversation.

PELOSI: We both extended the hand of friendship.

BUSH: We won't agree on every issue.

PELOSI: We have our differences.

BUSH: So, I want to thank you for coming.

MOOS: OK, so the body language was a little strained.

BUSH: I -- I was pleased.

MOOS: But unlike the deer, Nancy Pelosi managed to stay on her feet.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: Only Jeanne Moos can do a report like that. Jeanne, thank you very much.

Want to update what the White House is now saying. At least two White House officials, senior administration officials, to be more precise, telling our White House correspondent Suzanne Malveaux that any suggestion that the housing and urban development secretary, the HUD Secretary Alphonso Jackson might be leaving is false. They say that's not happening. We have been reporting that the lieutenant governor of Maryland, Michael Steele, Michael Steele, who lost in his bid to become the United States senator from the state of Maryland, was being considered for various possibilities. The White House saying he's not being considered. No one's being considered for Alphonso Jackson's job as HUD secretary, because he's staying.

Where Steele might be going remains up in the air. Our John King reporting earlier that the chairman of the Republican Party, Ken Mehlman, he's expected to step down in the aftermath of this election.

We'll stay on top of this story for you. I'm Wolf Blitzer in THE SITUATION ROOM. Paula Zahn is standing by now to pick up our coverage -- Paula.

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