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THE SITUATION ROOM

Valerie Plame Testifies on Capitol Hill; More U.S. Attorney Fallout; Donald Trump Speaks

Aired March 16, 2007 - 16:00   ET

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


WOLF BLITZER, HOST: Happening now, D-Day -- a deadline looming over the White House. Congressional Democrats want to know if the Bush administration will allow Karl Rove and other White House officials to testify about the firings of those federal prosecutors and to testify under oath, or if lawmakers should simply try to force their testimony by issuing subpoenas.
Also, she says the White House "carelessly and recklessly blew her cover" because they didn't like what her husband was saying about the Bush administration. Valerie Plame Wilson publicly speaking out for the first time. Aside from destroying her professional career, she says the leak has put lives at risk.

And "The Donald" firing off -- Donald Trump's unvarnished view of Hillary Clinton, Rudy Giuliani and other presidential candidates. And in a one-on-one interview, Trump reveals if he'll become a political apprentice and compete against them all.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

It's the political equivalent of who's on first -- who first originated the idea of firing those eight U.S. federal attorneys. Today, the White House backed off its earlier assertion that then White House Counsel Harriet Miers did it.

Now, the White House press secretary, Tony Snow, is saying: "People have hazy memories about who said what first."

Meanwhile, Congressional Democrats want to know this -- and they want to know, given the White House a deadline, if they give a deadline of today, they want to know if the White House will allow Karl Rove and other top White House officials to tell Congress what they know about this entire matter or, if necessary, Congress could issue subpoenas.

Right now, White House Counsel Fred Fielding is pondering how to respond. All this as the attorney general fends off calls for his head.

Our Suzanne Malveaux is standing by at the White House.

But let's go to our Congressional correspondent, Dana Bash, first.

She's over on Capitol Hill -- Dana, first of all, what is the latest toing and froing in the Hill involving the White House?

DANA BASH, CNN CORRESPONDENT: Well, the latest is, as you mentioned, the deadline for the White House to tell Democrats whether or not they're going to get their witnesses is today. But there is a growing feeling among aides here that I talked to that that deadline is going to pass without an answer to that.

You heard the White House spokesman, Tony Snow, say today that no decision has been made.

It has certainly been the Democrats who have been most outspoken about this, saying that they are going to issue subpoenas if these witnesses at the White House like Karl Rove don't come and testify voluntarily.

But it's noteworthy that it is also bipartisan.

Listen to what the ranking Republican on the House Judiciary Committee told me earlier this week.

(BEGIN VIDEO CLIP)

REP. JAMES SENSENBRENNER (R), WISCONSIN: Because there was misleading testimony given to the Judiciary Committee by a representative of the Justice Department, it is our obligation, on a bipartisan basis, to bring everybody who has been involved in this mess before the committee, put them under oath and find out what the truth is.

(END VIDEO CLIP)

BASH: So Republicans like James Sensenbrenner feel that they were misled, at best. But right now, Wolf, they're really in a holding pattern, waiting to hear what the White House decides and whether these witnesses are going to come voluntarily.

BLITZER: We know there have been a few Republicans on the Hill who have actually called for Attorney General Alberto Gonzales to resign or be fired.

But what's the prevailing view among Republicans?

BASH: Well, Wolf, that's right, a few Republican senators now have said it's time for Alberto Gonzales to step down. Add to that list Republican Congressman Dana Rohrbacher of California. He's a conservative who, like John Sununu, has long had problems with the attorney general when it comes to civil liberties issues and the Patriot Act.

But that is, right now, a caucus of three. And there doesn't seem to be an active movement, even behind the scenes, to make it clear to the White House it's time for Alberto Gonzales to go. But there clearly is a sense here that he is not long for this world.

As you probably know, Wolf, Alberto Gonzales is not someone who has a sort of a reservoir of goodwill among members of Congress, even those in his own party up here.

BLITZER: And very briefly, Dana, what about conservatives around the country? What are they doing, Republicans, to try to monitor, to assess the mood out there?

BASH: It's really interesting. I talked to a Republican leadership aide today who said that they are actively monitoring the conservative blogs, conservative commentators, to see if -- if this has reached a tipping point, to see if the Republican base is at the point where they say enough already, this is hurting too much, get rid of Alberto Gonzales.

There does seem to be a sense among these conservatives that Alberto Gonzales probably will end up going, but not an actual call for him to go. And that is noteworthy given the fact that Alberto Gonzales is not someone liked by conservatives. You remember when his name was on the list for Supreme Court nominees, many said no way because they think that he is too socially moderate on many issues.

BLITZER: All right, Dana is watching all of this on the Hill.

But how might the White House respond to this deadline?

Joining us now, our White House correspondent, Suzanne Malveaux.

It seems this controversy is sort of taking on a life of its own -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, you know, Wolf, really, what's at the center of all of this is, it's a question of credibility here. I mean what you're hearing and what the White House is saying, all along White House officials have been saying that it's Harriet Miers, the counsel to the president, who originally suggested that all 93 of these U.S. attorneys be fired, that she passed that along to Karl Rove, the deputy chief of staff; that he quickly dismissed it. He did not think it was a good idea.

Now, listen to what White House Press Secretary Tony Snow says today.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Well, what happened was -- and I'll lay that on myself -- I was referring earlier, as I said today to a Kyle Sampson rumor (ph) that came out, that had stated that it was her idea.

But at this point, I think I want to try to err on the side of caution by noting that Karl had a recollection that she had mentioned it to him and that's -- that's really as far as we can go with it.

(END VIDEO CLIP)

MALVEAUX: So, Wolf, what you're hearing today is Tony Snow saying we don't know if Harriet Miers was the one who originally came up with this idea. He also asked the question, what does it matter, because ultimately the outcome was it didn't happen?

That may be true, but it is this kind of factual fuzziness that is driving Republican lawmakers crazy here, saying that you've got a legitimate process to get rid of these U.S. attorneys and now it is turning into something that is close to a scandal.

You've got Democratic lawmakers, as well, who are saying it's just these kind of constantly changing explanations from White House officials and Justice Department officials that makes it necessary to bring Karl Rove under oath before the cameras to talk to the American people.

So that is why you see this going on day by day and getting much, much worse for the Bush administration.

BLITZER: All right, we're standing by together with you, Suzanne, to see if there is reaction from the White House. If they make a decision on whether they're going to let these officials, including Karl Rove, testify, if that happens here in THE SITUATION ROOM, we'll bring it to our viewers right away.

Let's move on to another story, though, we're following. An outed CIA operative speaking out, Valerie Plame Wilson. Today, she spoke to U.S. lawmakers at a House hearing about whether or not the Bush administration mishandled classified information by leaking her identity.

Plame Wilson says she always feared she could be outed by foreign governments, but she says she never, ever imagined it would come out the way it did.

(BEGIN VIDEO CLIP)

VALERIE PLAME WILSON, FORMER CIA OPERATIVE: I worked on behalf of the national security of our country, on behalf of the people of the United States, until my name and true affiliation were exposed in the national media on July 14, 2003.

All of them understood that I worked for the CIA and having signed oaths to protect national security secrets, they should have been diligent in protecting me and every CIA officer.

(END VIDEO CLIP)

BLITZER: Plame Wilson also talked about her reaction to first learning that she'd been outed in an op-ed piece by the columnist, Robert Novak.

(BEGIN VIDEO CLIP)

PLAME WILSON: I found out very early in the morning when my husband came in and dropped the newspaper on the bed and said, "He did it." And I quickly turned and read the article and I felt like I had been hit in the gut. I -- it was over in an instant. (END VIDEO CLIP)

BLITZER: Meanwhile, she's -- she is saying who she thinks is responsible for the entire affair, including the outing of her identity.

Let's bring in our Brian Todd.

He's joining us now with some more details on what we learned today -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, more political theater in Washington today sprouting from CIA leak case and Valerie Plame Wilson's testimony. For the first time, she answers detailed questions about having her covert identity revealed.

(BEGIN VIDEO TAPE)

TODD (voice-over): Valerie Plame Wilson blames the White House for blowing her CIA cover.

PLAME WILSON: My name and identity were carelessly and recklessly abused by senior government officials in both the White House and the State Department. All of them understood that I worked for the CIA.

TODD: But did anyone know she was covert or was blowing her cover just the accidental side-effect of a spin war?

REP. TOM DAVIS (R), VIRGINIA: Because there's no evidence here that anyone out there had any idea that it was an undercover agent.

TODD: A special prosecutor did not charge any administration officials for knowingly leaking classified information and the leakers themselves did not testify today.

But two White House security officials did.

REP. HARRY WAXMAN (D), CALIFORNIA: Because the president said he was investigating this matter and was going to get to the bottom of it.

You don't -- you're not familiar that any -- you're not aware that any investigation took place?

JAMES KNODELL, WHITE HOUSE OFFICE OF SECURITY: Not within my office, sir.

TODD: That does not sit well with Valerie Plame Wilson.

PLAME WILSON: Karl Rove clearly was involved in the leaking of my name and he still carries a security clearance to this day, despite the president's words to the contrary, that he would immediately dismiss anyone who had anything to do with this.

TODD: In an interview with CNN in 2004, Rove denied that he leaked Plame Wilson's name.

Will her testimony open the door to Democrats to pursue the White House on leaks?

JIM VANDEHEI, POLITICO.COM: Is this the most important thing that they should be looking at? Or should they be focusing their resources more on real time, what's happening over in Iraq, what's happening with the dismissal of these U.S. attorneys?

(END VIDEO TAPE)

TODD: Democrats are already in a high stakes showdown, obviously, with the White House in the U.S. attorneys case. On that charge from Valerie Plame Wilson that Karl Rove was involved in leaking her name, the administration did nothing about it, she says.

A White House spokesman had no comment today -- Wolf.

BLITZER: You know, there's been some dispute, Brian, over whether or not she actually was a covert operative, a classified, clandestine agent of the CIA under the very technical definition of that term, as written into the law.

What did she say about that?

TODD: She said she was covert, and there was no disputing, at least in her circles, about that. So, she at least clarified that part of it today.

BLITZER: Brian, thank you.

Brian is going to stay on top of this story for us.

Brian, Suzanne Malveaux, Dana Bash -- they are part of the best political team on television.

And remember, for the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Jack Cafferty has the day off.

Coming up, Donald Trump -- he fires off.

(BEGIN VIDEO CLIP)

DONALD TRUMP: I would probably be inclined not to like on the basis that he lost an election that should have been won.

(END VIDEO CLIP)

BLITZER: So just who is the target of "The Donald's" scathing words?

He'll be here. He's going to tell us all about it.

Also, Republican John McCain uses a phrase many consider racist. We're going to tell you just what the presidential candidate said on the campaign trail just moments ago and how it's already igniting a controversy.

And how long might the attorney general, Alberto Gonzales, last against all the calls for him to step down?

Our senior political analyst, Bill Schneider, is standing by to take a closer look.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're on the campaign trail today with Senator John McCain.

Our senior political correspondent, Candy Crowley, is following the Arizona Republican's Straight Talk Express.

She's joining us now from Cedar Rapids in Iowa -- the whole issue of Iraq, which has been a huge issue for Senator McCain, supporting the troop build-up right now, how much is that coming up as he -- as he takes on this new chapter in his campaign?

CANDY CROWLEY, CNN CORRESPONDENT: Well, I'll tell you what's interesting, Wolf, it does come up in the town hall meetings that he holds. But I would say that the majority of the questions, by far the majority of the questions, are on other subjects.

But you know who brings up the war in Iraq first?

It's John McCain. He always gives a speech at the top of his town hall meetings and the first thing he talks about is always Iraq.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: But it's long and it's hard and it's difficult. And I can't guarantee you that it's going to succeed but I believe it will. I believe it will. But I can guarantee you the consequences of failure. The consequences of failure are chaos, genocide, and, sooner or later we come back. And, most importantly, they'll follow us home.

(END VIDEO CLIP)

CROWLEY: Now, McCain says that he doesn't know whether his position on Iraq is hurting him in the polls, but he says if it is, so be it. He believes in his position and he's not about to back off -- Wolf.

BLITZER: He's also caused a little bit of a stir already with the use of the phrase "tar baby," which a lot of people recognize has count racist tendencies.

I want to play this little clip for you and our viewers, Candy.

(BEGIN VIDEO CLIP)

MCCAIN: But for me to stand here before all these people and say I'm going to declare divorce is invalid because someone feels that they weren't treated fairly in court, we are getting into a "tar baby" of enormous proportions.

(END VIDEO CLIP)

BLITZER: All right, did he explain? Did he later try to clarify why he used that phrase?

CROWLEY: Well, later he said, you know, obviously, he was trying to talk about something that if the federal government is drawn into, it just makes a sticky situation even stickier.

But as you mentioned, a lot of people see that term "tar baby" as a racist comment. Afterward, I asked him about his use of it. He said I hope nobody takes it as a racist comment. But he said I shouldn't have used that word, it was wrong to do it. So he took care of it very quickly.

BLITZER: Candy, thanks for that.

Candy is on the campaign trail watching all of this unfold.

Senator McCain, by the way, isn't the only presidential candidate on the campaign trail.

Out there today in New Hampshire, this weekend, for example, Senator Chris Dodd will be in the Granite State celebrating St. Patrick's Day with state Democrats.

Fellow Democratic Senator Barack Obama hits the trial in California, the latest state to move its primary up to Super Duper Tuesday in early February. Obama then heads to Colorado for a fundraiser in Denver.

Senator Hillary Clinton is in Texas tomorrow speaking with community leaders in Houston.

And Republican Senator Sam Brownback of Kansas spends his St. Paddy's Day in Iowa paying tribute to the Irish, trying to get some votes, as well.

By the way, CNN is a proud -- it's proud to announce that it's a co-sponsor of yet another presidential debate, this time in California. CNN and the "Los Angeles Times" will co-host the back to back debates next January. Republican candidates will answer questions on January 30th. The Democrats follow on the 31st. These debates come just days before the February 5th Super Duper Tuesday, as it's called.

As many as 24 states with more than half of the nation's registered voters hold their nominating contests that day.

CNN has also announced debates in other key primary states -- New Hampshire, Nevada and South Carolina.

There's going to be a lot of debates.

Still ahead in our Strategy Session, Washington's abuzz over the fate of Attorney General Alberto Gonzales and the presidential adviser, Karl Rove.

Does their baggage outweigh their work?

Paul Begala and J.C. Watts will weigh in.

And Donald Trump no fan of President Bush and he places the blame on the 2004 Democratic ticket.

Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: Well, I think Bush is probably the worst president in the history of the United States. And I just don't understand how they could have lost that election.

(END VIDEO CLIP)

BLITZER: But has he had a change of heart on John Edwards?

You'll find out.

The interview -- that's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring the wires. She's keeping an eye on all of the video feeds coming in from around the world.

Let's check in to see what's going on right now -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

It is still officially winter for a few more days, and that is very apparent throughout parts of the Northeast, which are being absolutely battered by snow. Snow and sleet have been pelting New York City just a day after the temperatures reached almost 70 degrees. The storm is causing problems from New Jersey all the way to Maine.

There have been hundreds of weather related traffic accidents. Because of the storm, hundreds of flights to and from the Northeast are canceled today. JetBlue has canceled more than 200 flights, trying to avoid a repeat of last month, when passengers were stranded in planes at Kennedy Airport for, you know, up to 10-and-a-half hours. Other airlines have also canceled flights, including Delta, American and Northwest. A coroner's inquest in Britain concludes that a friendly fire incident in Iraq involving U.S. forces was unlawful and criminal. In 2003, an A10 tank buster jet opened fire on what turned out to be a British convoy. A British soldier, Lance Corporal Matty Hall, was killed. The assistant deputy coroner says the incident was entirely avoidable. He citizens U.S. officials for not giving him all the information and evidence he asked for. The verdict is not legally binding.

Prices keep going up despite a slowing economy. The Labor Department's Consumer Price Index surged 4/10 of a percent last month. That's slightly more than expected. The figure reflects increased costs for gas and food, as the impact of bad weather on citrus crops begins to take hold. Excluding food and energy, the core CPI was up 2/10 of a percent, in line with forecasts.

Those are the latest headlines right now -- Wolf.

BLITZER: All right, Carol, thanks.

We'll see you back here in a few minutes.

Up next, listen to this...

(BEGIN VIDEO CLIP)

TRUMP: I think, by the way, I think I'd do a very good job. You wouldn't be in the mess that you're in right now.

(END VIDEO CLIP)

BLITZER: The art of the deal -- is it possible we could one day be calling "The Donald" Mr. President?

Would he consider running?

And later, going for broke. The country's accountant says it could happen if we don't tighten our belts. It's the doom theory. We'll explain.

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Happening now, a stare-down between Capitol Hill and the White House.

Will Karl Rove and other White House officials voluntarily tell Congress what they know about the hit list of federal prosecutors who got fired? Or will lawmakers try to force it out of them?

The White House may have a response coming up this hour or next. We're watching the White House very closely right now.

With more troops heading for Iraq, President Bush is finding less support at home, even among his fellow Republicans. Some eye-opening numbers are just out and we may be -- may be -- at a turning point.

And one minister says there may be a way to make sure unborn babies never grow up to be gay -- the womb. That's right, a woman's womb may become the newest battleground in the war between gays and the religious right.

It's 4:30 p.m. here in Washington.

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

You're fired. It appears that's what one billionaire businessman would say to the chief executive of the United States, if he could.

"The Donald" is blasting President Bush's job performance. And he's not too kind in his job reviews of some of the presidential candidates.

But might he become a political apprentice himself?

And joining us now, Donald Trump.

Donald Trump, thanks for coming in.

TRUMP: Thank you.

BLITZER: Actually, we should thank you for allowing us to come into your office.

TRUMP: Well, I'm a fan, Wolf, and it's my honor.

Thank you.

BLITZER: Thank you very much.

Let's talk politics, all right?

A lot of people are thinking about politics right now. I'm going to mention some names. Give me your thoughts right away.

Hillary Clinton.

TRUMP: Very talented, very smart. She's a friend of mine, so I'm a little bit prejudiced. She's a very, very capable person and I think she'll probably be the nominee. We'll see, but I think she'll probably be the nominee.

BLITZER: Is she ready to be commander-in-chief?

TRUMP: I think she is. I think she's a very, very brilliant person. And as a senator in New York, she has done a great job. Everybody loves her. She just won an election with a tremendous majority and she really -- she's become very, very popular in New York. And it wasn't easy.

BLITZER: Barack Obama.

TRUMP: Well, he's a star. I mean, he's really, really done an amazing job in a very short period of time.

The question is experience and do people want to have somebody get in that doesn't have the great experience?

But certainly he's made an impact.

BLITZER: What do you think? Is he qualified? Is he ready to be president?

TRUMP: I think he's young. I think he's probably -- it's a little bit soon. I think his time might come, but I think it's too soon.

BLITZER: John Edwards.

TRUMP: I don't know him. People like him. I know people that like him very much, but I really don't know him.

BLITZER: Even though he was the vice presidential nominee last time around.

TRUMP: Well, I think that's a huge negative, because that was a shame that that race was lost, because look what we have right now. It's a disaster. So, you know, I would probably be inclined not to like him on the basis that he lost an election that should have been won. That election should have been won.

BLITZER: Well, do you blame him or John Kerry?

TRUMP: Well, I guess you'd have to say it's a combination of both. Now, obviously, the second man on the ticket doesn't have too much of an impact as -- in comparison to the first. But -- and I like John Kerry a lot. He's a wonderful guy, he's somebody I know and I have -- he's a friend of mine. But I'm so upset that he blew it.

BLITZER: You're upset because you dislike the current president?

TRUMP: Well, I think Bush is probably the worst president in the history of the United States. And I just don't understand how they could have lost that election.

BLITZER: Let's get back to that in a moment.

Let's talk about Rudy Giuliani, the former mayor of New York.

TRUMP: Very, very talented. Smart, tough, very formidable in every way. And I think if it's him and Hillary, it's going to be a hell of a tough race.

BLITZER: Can he get the Republican nomination, given his views on some of the social issues like abortion rights for women?

TRUMP: Well, based on the polls, he's doing fantastically. I mean, I saw a poll today. He's up 25 percent. So, based on the polls, he's really doing fantastically well.

He's a very good guy. He's a very tough person, which I think the country needs. He's got a lot of fantastic qualities.

BLITZER: John McCain.

TRUMP: I don't know him well. I respect him. I like him.

He doesn't seem to have picked up like I would have assumed, because, if you would have asked me this question a year ago, it looked like he was going to walk into the nomination. And now Rudy is doing so well in the polls, that it's really amazing.

BLITZER: So, what happened to McCain?

TRUMP: I don't know what happened. I think probably the fact that he said: I want more troops going over to Iraq.

Anybody that wants more troops going over to Iraq, I think, can't win an election.

BLITZER: But Rudy Giuliani supports that position.

TRUMP: Well, he's supporting it, but he's supporting it in a much weaker way.

I mean, if you listen to both of them, Rudy is not supporting it with the same vigor that John is.

BLITZER: Mitt Romney.

TRUMP: I know him, I like him -- very attractive guy. I think he's probably, you know, up against two people that are way ahead. But he's certainly an attractive candidate. He's a very smart guy.

BLITZER: You have a lot of New Yorkers toying with this right now, and including maybe even the current mayor of New York, Michael Bloomberg. What do you think of the possibility that he could throw his hat in the ring?

TRUMP: Well, I think he's a fantastic person. He's somebody that I know and respect. He's been a wonderful mayor of this city; he's done a great job. And I think he would be formidable. And he can spend the money that it takes to get elected. I think he would be very formidable.

BLITZER: Let's talk about the New Yorkers for a second, because you know these people up close and personal.

TRUMP: I know every one of them well.

BLITZER: All right. So, if I had to press you, who is, in your mind right now, the most qualified, the most ready, the person you want to lead this country?

TRUMP: Well, I don't want to say, because I know Hillary and I have great respect. And I know Rudy, and I have great respect. And I know Michael Bloomberg -- now, he -- I don't think we have to talk about him, because he hasn't said he's going to do anything. And I have great respect.

So, you know, it's really interesting that, in a whole country, three of the very, very prominent people being mentioned -- and two of them are leading in the polls -- are from New York.

BLITZER: So, it sounds like, if the contest turned out to be Rudy Giuliani vs. Hillary Clinton, you, Donald Trump, would be torn.

TRUMP: I'd make a decision, because I believe in that. I don't believe in supporting two people. You know, I have friends, they support 15 different candidates for the same office. I don't believe in that. That's almost like prostitution.

And I just feel that there are two great candidates and I would make a decision. But I'm not going to make it now, because there's no reason to.

BLITZER: But is your instinct more attuned with the Republicans or the Democrats?

TRUMP: I'm very much independent in that way. I go for the person, not necessarily for the party. I mean, I vote for Republicans and I vote for Democrats.

Look, Hillary's a Democrat. Rudy's a Republican. I think they're both fantastic. I really am much more attuned to the people, as opposed to the party.

BLITZER: Last time we spoke in this room, you were thinking about running for the presidency. Remember that?

TRUMP: No, I was never thinking of running. I was -- I think -- by the way, I think I would do a very good job. You wouldn't be in the mess that you're in right now. But I was never thinking of running.

(CROSSTALK)

BLITZER: You were toying with the idea...

(CROSSTALK)

TRUMP: Years ago, they said I ran for president. I never ran for president.

BLITZER: You never ran, but you were considering it. Roger Stone was one of your...

TRUMP: People wanted me ...

BLITZER: ... political advisers, and he was floating that idea.

TRUMP: People wanted me very much to run. The Independent Party wanted me to run, and the Independent Party turned out to be a total catastrophe, in terms of they ended up with fistfights and fighting and everything else. But I was never seriously considering running. But, you know, it's something that people -- because I get good ratings on television, because your show now will get good ratings, because "The Apprentice" has always been so strong, et cetera, et cetera, people have always wanted me to run, and I just have always decided not to do it.

BLITZER: And are you ruling it out now?

TRUMP: Pretty much, yes. I mean, I -- I would -- would say this: It would certainly be fun. It would certainly be interesting. I think I could do a very good job. But the answer is, I'm just not interested in running.

I'm building buildings all over the world right now -- all over the world. I'm probably the largest real estate developer there is. And I'm having a lot of fun doing it.

So, I really and I'm loving it. I'm just loving it. So, I think I have to rule myself out.

(END VIDEOTAPE)

BLITZER: And we're going to have a lot more of this interview with Donald Trump. I was in New York earlier today, speaking with him extensively.

We will get more on his views on the war in Iraq. He also has some very choice words -- not very nice ones -- for the secretary of state, Condoleezza Rice. And we will get some more details on why he believes President Bush is the worst president in American history -- all that coming up here in THE SITUATION ROOM. So, stick around for that.

Also coming up: When does reality trump loyalty? Bill Schneider has a closer look at how much longer President Bush can stand by his old friend Alberto Gonzales.

Also, Jeff Greenfield on the impending doom presidential candidates -- that presidential candidates don't want to talk about on the campaign trail. We will explain what Jeff has in mind.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Here's a question: Is friendship stronger than political controversy? That may be what President Bush is thinking regarding his attorney general, as some call for Alberto Gonzales to step down.

Let's turn to our senior political analyst, Bill Schneider. He's got more on this -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, "It was worse than a crime; it was a blunder," a French politician once said. That may be true of the White House handling of the current controversy surrounding the attorney general.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): How long can President Bush hold out in defending his attorney general?

STEPHEN HESS, PRESIDENTIAL HISTORIAN, BROOKINGS INSTITUTION: What we're talking about is a person who has become a liability to the president, but the president cares about him deeply. So, that's the equation. Do you throw him overboard? The president has done it before with Harriet Miers.

SCHNEIDER: Like Miers, Gonzales is not a favorite of conservatives, who regard him as wobbly on abortion. But he's a personal friend of President Bush.

If President Bush's job rating were high, that might be enough to save Gonzales. But it's not. So, Republicans are asking: Is Gonzales becoming a political liability for us?

SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: Many Republican senators have expressed these concerns on the record. And, quite frankly, there are a lot of others that talk very frankly in private conversations.

SCHNEIDER: The president has the right to fire federal prosecutors. It's usually done after the president is reelected. So, what's the problem?

HESS: It's a scandal because it was handled so badly from the get-go, not because there's anything illegal about it.

SCHNEIDER: Had President Bush fired the attorneys when he began his second term, in 2005, with a Republican Congress, he might have avoided a scandal. But he did it at the worst possible time politically, just after the Democrats took over Congress.

HESS: It was out of sync. To propose this and then to do this, after another election in which they had lost control of the Congress, was, if not suicidal; it was amateurish.

SCHNEIDER: Now the Democrats have subpoena power, and they intend to look into whether there was improper political interference, and whether Justice Department officials deliberately misled Congress.

When will Republicans start clamoring openly for Gonzales to go? When they feel the scandal has become politically threatening to them.

(END VIDEOTAPE)

SCHNEIDER: Many Republicans have bad memories of the Donald Rumsfeld case. They defended the defense secretary, and paid a bitter political price for it, only to see the president get rid of him after the damage was done -- Wolf.

BLITZER: The day after the election, in fact, is when he stepped down.

These two Republican senators who have now called on Alberto Gonzales to step down or be fired, tell our viewers what they both have in common.

SCHNEIDER: Well, both John Sununu, whom we just saw, and Gordon Smith are up for reelection next year, in 2008. They're up for reelection, and they both represent pretty blue states, New Hampshire in Sununu's case, Oregon in the case of Gordon Smith.

There are others up for reelection from blue states, and they're all very nervous about this issue.

BLITZER: All right, thanks, Bill, for that.

There's an underlying issue that may not be on the voting public's front burner right now, but it certainly has the attention of the nation's top bean counter. He's waging a one-man campaign to make sure the candidates don't lose sight of what's fiscally at stake.

Let's turn to our senior analyst, Jeff Greenfield, for that -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Wolf, as long as this presidential campaign has begun months earlier than in times past, maybe the candidates could put some of this time to good use -- no, not by running from New York to sunny California, in search of campaign cash, and not with carefully managed Internet chats.

Maybe they could spend some of this time talking very clearly and specifically about their plans to keep America from going broke.

(BEGIN VIDEOTAPE)

GREENFIELD (voice-over): That's the goal of this man, David Walker, the comptroller general of the United States. That's the government's accountant in chief.

The last few years, he's been going around the country, telling anyone who will listen that we're headed for an economic train wreck of catastrophic proportions. It's a message millions of Americans heard a week or so ago on "60 Minutes," a message Walker is happy -- maybe happy is not quite the right word -- to deliver to us as well, that we're spending way more than we're taking in.

DAVID WALKER, U.S. COMPTROLLER GENERAL: Really tough choices are going to have to be made to reform Social Security, Medicare and Medicaid, to reform our tax system, and to reengineer spending.

GREENFIELD: The problem is you, if you're one of the 78 million baby boomers born between 1946 and 1964. The oldest of you will start hitting the Social Security rolls next year. By 2011, you will start being eligible for Medicare. And that's when the real trouble begins.

There just isn't enough money, Walker says, to cover what the government has promised to do. Now, back in the 1980s, Republican President Reagan and the Democratic House hammered out a fix on Social Security, at a time when that system was perilously close to disaster.

WALKER: We were within weeks of the checks not going out on time.

GREENFIELD: And now?

WALKER: Our long-range problem is much worse, and it's very close to becoming a reality, because boomers start retiring next year.

GREENFIELD: And that means some very tough choices, like trimming benefits, or having seniors pay more of their health costs, or raising taxes. But most Democrats want more benefits.

And, for most Republicans, tax cuts, not tax hikes, are the first, second, third and fourth commandments, which is why Walker is, in effect, campaigning, with experts from the left, right and center. His purpose?

WALKER: Try to make sure that any serious candidate for the president, and, most importantly, the two nominees for the major parties, that they make fiscal responsibility one of their top three priorities. If they don't, they don't deserve to be president. And, if they don't, we're in trouble.

(END VIDEOTAPE)

GREENFIELD: And what are the odds that a credible presidential candidate will face these tough choices head on? About the same odds that you will be seeing snow on this California landscape any time soon -- Wolf.

BLITZER: All right, Jeff, thanks very much. It's a very, very important subject.

Jeff Greenfield, Bill Schneider, they are both part of the best political team on television.

Up next: "Strategy Session" time. Is the clock ticking for the attorney general, Alberto Gonzales, and Karl Rove to set the record straight?

And the cheerleader in chief -- that would be the president -- making a bold prediction about the 2008 elections. But can he deliver? All that coming up. Paul Begala and J.C. Watts, they are standing by, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some White House e-mail messages are now raising new questions about Karl Rove's role in the firing of some federal prosecutors.

The e-mail are giving some Democrats new ammunition against President Bush's top political adviser.

Joining us in today's "Strategy Session": Democratic strategist Paul Begala and former Republican Congressman J.C. Watts.

The Republicans, the White House, they make the point the Clinton administration, President Clinton, came in, he fired all those federal prosecutors. So, what's the big deal? He -- he has the right to do it.

PAUL BEGALA, CNN POLITICAL ANALYST: He did. And, by the way, President Clinton fired all the Cabinet officers that George Bush had, his predecessor. Any president does that. Those are political appointees.

They serve at the pleasure of the president. The White House is right about this. But the investigation is showing us who has pleased the president, right? There was a study that was -- that was released that showed four out of five prosecutions of politicians were directed against Democrats, 79 percent against Democrats.

So, it turns out that perhaps -- and Democrats believe this -- the U.S. attorneys who were prosecuting Democrats were pleasing the president; they kept their job. The U.S. attorneys who were going after Republicans perhaps weren't pleasing the president so much.

And there's -- there's ample evidence already. What the Democrats think here is not just that this is a political problem. Hey, the Democrats are telling me that they believe that they have real concerns that the -- the justice system in America has been compromised by politics, that Democrats were targeted and Republicans were protected.

BLITZER: So, here's the question, J.C. Should the White House let it all out, if they have got nothing to hide, didn't do anything wrong, let Karl Rove and others, like Harriet Miers, the former counsel, go ahead and testify before Congress under oath?

J.C. WATTS, CNN POLITICAL ANALYST: Well, Wolf, I think, if you peel the onion in Republican and Democrat administrations, you will find these same type of things that -- that has happened.

Now, what the president did, or what the administration did, or the attorney general, is it illegal? No, it's not. I think, if you hire somebody in an administration, you can fire them. I think the real deal here, or the real issue is, it looks bad because of the timing.

I think the president, he fired U.S. attorneys because they were not his people. He wanted his people.

BEGALA: Of course, just like he fired the secretary of state. He fired everybody.

WATTS: But...

(CROSSTALK)

BEGALA: That's what a president does.

WATTS: My point is...

BEGALA: He got elected to bring in his team.

WATTS: ... you can -- we can say that was politics, but, nevertheless, he had the right to do that. But he did it at the outset of his administration. It did not look as political as in the middle of an administration.

BLITZER: Should he let them -- should he let them go testify?

WATTS: Wolf, that's a decision they are going to have to make. But, if he doesn't, it's going to, I think, give the Democrats even a bigger issue to...

BLITZER: It will look like they have something to hide?

WATTS: It looks like they have something...

(CROSSTALK)

BLITZER: All right.

The president has been upbeat yesterday. I want to play this clip, because, he's saying something that a lot of political analysts are not necessarily convinced is accurate. But listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: By pushing good ideas, and standing strong for what's right, I believe that we can retake the Senate and the House and hold the White House in 2008.

(END VIDEO CLIP)

BLITZER: Now, does he have to say that, or you think he really believes that?

BEGALA: I -- you know, I'm kind of frightened that he really believes it. I mean, he -- this is a guy, he's deeply out of touch, you know?

I mean, I know, thank God, he doesn't take alcohol, but the old joke is, I want a case of whatever it is he's drinking, because this guy is fundamentally out of step with what's happening in politics, I know.

I mean, his party just got waxed. He's about to drag his party down, and he has so discredited them that even his own Republicans are now running away from him, like the devil runs from holy water. And he stands up there, like the Andover cheerleader he was in prep school, and says rah, rah, sis boom bah. I don't think that's what Republicans want to hear.

BLITZER: But he's got to do that, though, doesn't he, J.C.?

WATTS: Well... (CROSSTALK)

BLITZER: He has got to be upbeat and optimistic.

WATTS: But that really is who George W. Bush is. He is upbeat. He is optimistic.

But, when you -- when you look at the facts, Wolf, I think, right now, there is a possibility, I think probably 55-45, that Republicans can retake the House. I think the Senate, there's a few more challenges. And who's to say who's going to win the presidency? I think Republicans have as good a shot as the Democrats do.

BLITZER: All right.

I want to play this little clip from my interview -- we're going to have a lot more coming up in the next hour -- with Donald Trump. I interviewed him earlier.

But listen to what he thinks about the secretary of state.

(BEGIN VIDEO CLIP)

TRUMP: ... Condoleezza Rice, who is a lovely woman but she never makes a deal. She doesn't make deals. She waves. She gets off the plane, she waves. She sits down with some dictator, 45 degree angle. They do the camera shot. She waves again. She gets back on the plane. She waves. No deal ever happens.

So, I mean...

(CROSSTALK)

BLITZER: You got to close the deal at some point?

TRUMP: You have got to make deals. The world is dying to make deals. And we don't have the right people doing it.

(END VIDEO CLIP)

BLITZER: I -- were you surprised at how critical he has been of virtually everyone in this administration?

BEGALA: Yes, I am.

I mean, he is -- I don't know him personally, but he is an American original. You know, he literally wrote the book "The Art of the Deal." It was a number-one bestseller. He's apparently one of the biggest real estate developers in the world. He does a TV show, it goes to number one.

Now he's going to do "WrestleMania." I'm a wrestling fan, so I kind of like that. You know, he's doing -- so, he's got his finger on the pulse of America. And it's astonishing. It seems to me, watching this interview -- and he's so dynamic -- if President Bush had a little imagination and creativity, he would tap Donald Trump to go and solve the problem of these soldiers in outpatient facilities being mistreated. He would build them a Trump Taj Mahal for half the price. I mean, I just think...

BLITZER: Well, you know, it's interesting...

BEGALA: ... get him into this. He could fix that problem.

(CROSSTALK)

BLITZER: ... because we spoke about -- he brings in once a week wounded warriors to his -- to his estate in Palm Beach in Mar-a-Lago.

(CROSSTALK)

BLITZER: And he speaks emotionally about it in the interview. I will -- I will -- that -- that's going to come up in the next hour.

But he also speaks about the wrestling issue, and why...

BEGALA: Oh, good. I love that.

BLITZER: ... why he challenged Vince McMahon of the World Wrestling Federation.

(LAUGHTER)

(CROSSTALK)

BLITZER: But what -- what do you think about Donald Trump and his blunt talk?

WATTS: Well, I have -- I have met Donald Trump a couple of times. And -- and I admire him as a business person. I mean, he's worth billions of dollars. Who wouldn't admire that?

But, Wolf, think about this. You were interviewing the Donald as a celebrity. You were -- you were in -- when -- when he goes and makes a deal, he is representing himself and his banker. You know, he's not representing the security of the nation. And it is much easier to make a deal over a piece of land than it is over the security of the nation.

So -- but -- but I -- I like Donald Trump. But, again, you know, you were asking him his opinion as a celebrity, not as -- as a Paul Begala political operative.

BLITZER: I -- I will say this, in fairness to Donald Trump. It's not that easy to make a billion dollars. I haven't made a billion.

(LAUGHTER)

BLITZER: Have you made a billion dollars?

BEGALA: I'm a couple bucks shy, yes.

(CROSSTALK)

BLITZER: J.C. has got...

(CROSSTALK)

WATTS: James Carville has.

(LAUGHTER)

BEGALA: He's the richest one of us all, yes.

BLITZER: All right, guys, thanks very much, Paul and J.C.

Still to come right here in THE SITUATION ROOM, we're going to have a lot more on what's going on -- the White House counsel, Fred Fielding, speaking to the House Judiciary Committee staff. And he told them on Wednesday what's going on -- all that.

Also: Testing the unborn to see if they will grow up gay, a leading evangelist -- evangelist says it might be possible, but gay rights groups are outraged. Find out what's going on, on that front.

Also: how the ever-changing World Wide Web may impact the 2008 election. Our political pros go looking for the next new thing.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: The White House meets its deadline. We're just getting word in from the White House counsel's office. We're going to bring you the latest on what is going on.

What's behind -- behind the firings of those federal prosecutors? Were they on to something that someone in the Bush administration didn't necessarily want them to find out? Why does the White House suddenly say that memories are getting hazy? We're watching this story.

Also, is there is a biological basis to homosexuality that could be reversed in the womb? A Christian conservative leader raising a new controversy.

And why would Donald Trump have nicer things to say about Saddam Hussein than President Bush? He's fired up on the Iraq war, and wants U.S. troops out.

(BEGIN VIDEO CLIP)

TRUMP: You know how they get out? They get out. That's how they get out. Declare victory, and leave.

(END VIDEO CLIP)

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

Whose idea was it to fire federal attorneys? Today, the White House is backtracking, even as Congress investigates a possible political payback.

CNN's Brian Todd is standing by.

Let's go over to the White House. Suzanne Malveaux, though, has got the latest from there.

This is just coming in, Suzanne. Tell our viewers what has happened.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I just spoke to Dana Perino. She's a White House spokeswoman who is giving us the very latest about negotiations between the White House counsel and lawmakers about whether or not White House officials are going to testify in that investigation about the firing of the U.S. attorneys.

I will read it to you verbatim here. She says that: "White House counsel Fred Fielding spoke to the House Judiciary Committee staff today around 2:30. He had told them on Wednesday, March 14, he would get back to them by close of business today with either

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