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British Troop To Be Released; Standoff With Iran; Snow's Cancer Battle; Democrats Push For Withdrawal

Aired March 28, 2007 - 10:00   ET

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


HEIDI COLLINS, CNN ANCHOR: Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris. You're in the NEWSROOM. Stay informed with us. Here's what's on the rundown.

Britain says satellite data proves its ship was not in Iranian waters. Iran claims it will free one of 15 British detainees it now holds captive.

COLLINS: Preschoolers on a bus with a hostage taker. Police say he claimed to have a gun and a grenade. The children go free after an eight hour ordeal.

HARRIS: The president's chief spokesman on sick leave. Tony Snow's absence comes at a critical time for the White House. What about the message? We'll ask one of Snow's predecessors.

It is Wednesday, March 28th and you are in the NEWSROOM.

And our top story this hour. New twists and turns in the heated standoff between Britain and Iran. There is new word that a female British sailor, one of 15 British troops being held by Iran, may be released in the next day or two. That as Britain steps up the pressure. To London now and CNN's Robin Oakley.

Robin, update our viewers on this unfolding drama, please.

ROBIN OAKLEY, CNN CORRESPONDENT: Well, Tony, several developments in the drama today. And, as you say, Manouchehr Mottaki, the Iranian foreign minister, has indicated that Faye Turney, the one woman among the 15 British sailors and marines being held by the Iranian authorities, may be released either today or tomorrow. Also, it does seem we're moving slowly towards the resolution of this crisis. Mr. Mottaki said that he did believe it could be solved. We've had a similar message from the Iranian ambassador in London who's talked in much more conciliatory terms, saying that he understands the anxieties of the families of the 15 being held and that they are being offered welfare and hospitality.

But apart from that, we had tougher noises from members of the British government. Margaret Beckett, the foreign secretary, telling lawmakers of her frustration.

(BEGIN VIDEO CLIP)

MARGARET BECKETT, BRITISH FOREIGN SECRETARY: The Iranians have assured us that all our personnel are being treated well. We will hold them to that commitment and continue to press for immediate release. They have also assured us that there is no linkage between this issue and other issues, bilateral, regional or international, which, of course, I welcome. But I regret to say that the Iranian authorities have so far failed to meet any of our demands or responded to our desire to resolve this issue quickly and quietly through behind the scenes diplomacy.

(END VIDEO CLIP)

OAKLEY: Unacceptable and wrongful says Tony Blair, the prime minister, as well. But he does seem, just slowly, there is some progress on the issue today.

Tony.

HARRIS: Also got word of more evidence today offered by the British government that supports its claim that the British ships were right where they were supposed to be.

OAKLEY: Indeed. The argument is all about whether they were in Iranian territorial waters or not. Now the British have been absolutely adamant from the beginning that they were 1.7 nautical miles within Iraqi waters where they operate and patrol under U.N. auspices.

The interesting thing is that the British have deliberately put out into the public domain today some of the exchanges that have been going on in private with the Iranian government. And they said that the Iranian government had produced its own two coordinates, saying where the incident took place. And the first of those coordinates, when the British checked, actually agreed that it was within Iraqi waters.

So they went back to the Iranians and said, hey, this is all a misunderstanding, isn't it. We can easily solve this. And then the Iranians came back and corrected the coordinates they were offering and put the incident in Iranian waters. What the British have got is GPS satellite evidence that they were exactly where they said they were when boarding a merchant vessel back on Friday.

Tony.

HARRIS: CNN's Robin Oakley for us following this story in London.

Robin, thank you.

COLLINS: For more on the British evidence now and what the Pentagon is saying about it, we turn to Pentagon correspondent Barbara Star.

Hi there, Barbara.

Why is the U.S. being so low-key about the incident? Is it simply because there are no U.S. military members involved? BARBARA STARR, CNN CORRESPONDENT: Well, that is one reason, Heidi. But, actually, they're also being very low-key about all of this because the British government has asked them to, of course, while this very delicate situation goes on. The major concern, of course, the welfare of those 15 British military personnel being held. So the U.S., especially the U.S. Navy, doesn't want to do anything to ratchet up tensions.

But I have to tell you, that evidence put out by the British ministry of defense this morning, that Robin Oakley was just speaking about, was very compelling to senior Pentagon officials here this morning. They have looked at those pictures. We have one of them.

Let's just hold that picture for one moment and explain to everybody what we're looking at. This is a British helicopter flying overhead, over the cargo vessel that was being inspected at the time this incident erupted. What you see there is a hand held GPS coordinates device being held by a British person on board that helicopter over the ship, which the British government says the GPS coordinates prove that ship was 1.7 nautical miles inside Iraqi waters.

That cargo ship had not moved from the time it was inspected. This is where the incident took place. The British overflew it, took the GPS coordinates and are now showing it to the world. They say, of course, proving that it was inside Iraqi waters.

This piece of intelligence evidence and other pieces of intelligence have been reviewed by the U.S. Navy, the U.S. intelligence community. The U.S. is very much on board with the British, saying that all of this proves the British were within Iraqi waters when all of this happened.

But I have to tell you, behind the scenes, Heidi, even with the discussion that the hostages may be released, especially the female hostage, there is growing concern here. One of the things behind the scenes is, of course, the U.S. is holding five Iranian Alcuds (ph) members inside Iraq for their activities inside Iraq. That is an issue that has escaped no one's attention, Heidi. Everyone is well aware of that. So the U.S. wants to make sure all of that doesn't become a pawn, if you will, in any discussions about the British.

Heidi.

COLLINS: Very interesting. So we may not just be splitting hairs here about longitude and latitude. There may be a little bit more going on.

Barbara, we know you'll stay on top of it for us. Thanks so much. Barbara Starr this morning.

HARRIS: And we want to bring you a story just in to CNN. Firefighters and fire teams are battling a chemical fire. This is in Humboldt, Tennessee. And that is in Gibson County. They are fighting a large chemical fire, we understand, at Helena Chemical. Officials have confirmed that homes and businesses in that immediate area have been evacuated. We are still working on getting you some pictures from the scene.

But this is the news just in to CNN, that crews are battling a chemical fire in Humboldt, Tennessee. We will continue to follow this story. There are evacuations associated with this fire and we will bring you an update and pictures as soon as we get them here in the NEWSROOM.

Word from south Florida this morning. About 100 apparently Haitian immigrants arrived in a rickety boat near Miami early today. They were suffering dehydration. And now the Associated Press reports at least one person has died. Police in Hallandale Beach say several people tried to swim to shore. When rescue teams arrived, many had already made their way to land.

COLLINS: A bizarre hostage situation in the Philippines is over. Dozens of preschool children and their teachers now free. The owner of their daycare center is in custody. Jun Ducat is accused of taking the hostages to call attention to education and housing issues in the Philippines. The drama began after the group boarded a bus for a field trip. Authorities say Ducat took over the bus and dismissed the driver. He was believed to be armed with grenades, an Uzi and a 45 caliber pistol. Crowds packed the streets as the drama unfolded. Many lit candles to support Ducat's cause. Police say he faces criminal charges.

Showdown in Washington. The future of Iraq at the crossroads. Senate Democrats are pushing ahead in setting a timetable for the withdrawal of U.S. troops. They resume debate today after narrowly beating back yesterday's challenge by Republicans. GOP lawmakers want to strip the deadline from the measure which funds the wars in Iraq and Afghanistan.

President Bush pushing back. He says he'll veto any measure that carries a timetable for withdrawal. He says tying the withdraw to the funding will not force his hand.

HARRIS: Progress in Iraq. One leading Republican says the so- called troop surge is already turning things around. Senator and presidential candidate John McCain says the new strategy is "succeeding as we speak." And on CNN he said there are promising signs, such as the improved security enjoyed by the U.S. commander in Iraq.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) ARIZONA: General Petraeus goes out there almost every day in an unarmed humvee. I think you ought to catch up. You see, you are giving the old line of three months ago. I understand it. We certainly don't get it through the filter of some of the media.

(END VIDEO CLIP)

HARRIS: We decided to put that claim to the test. We asked CNN's Michael Ware in Baghdad about the senator's claim that General Petraeus now moves about more freely in the Iraqi capital. (BEGIN VIDEO CLIP)

MICHAEL WARE, CNN CORRESPONDENT: It's unclear what part of neverland that Senator McCain is talking about where Americans can stroll the streets of the capital Baghdad. If al Qaeda doesn't get an American, if a Shia militia isn't tipped off, if the Sunni insurgents don't grab them, then a criminal gang will see dollar signs and take him immediately.

(END VIDEO CLIP)

HARRIS: McCain says while the war was badly mismanaged, "there are signs of progress everywhere in Iraq."

Revenge killings in Iraq to tell you about. Authorities in Tal Afar say gunmen went on a rampage today in a Sunni neighborhood. At least 30 people are dead. It's believed the killings are in retaliation for yesterday's bombings in two Shiite marketplaces. At least 55 people were killed in those attacks, more than 100 wounded.

And this morning in Falluja, Iraqi security forces are credited with repelling a major attack, two suicide truck bombs loaded with chlorine. The U.S. military says the Iraqis were able to stop both trucks before they reached their target, the city's government center. About 15 Iraqi and coalition forces were injured in the explosions. A number of soldiers and policemen were treated after they inhaled chlorine fumes.

COLLINS: Flooding rains, powerful wind. Part of the country dealing with some wild weather. This scene in the east Texas city of Marshall. Storms drenched the area with heavy rain. The result, flash floods. A daycare center was evacuated after the building got three feet of water.

And check out this scene in southern California. Fierce winds there pounded the region, ripping roofs off of buildings and capsizing boats, downing trees and power lines, too.

HARRIS: Catching us up on all of that, Chad Myers in the severe Weather Center for us this morning.

Chad, good morning.

(WEATHER REPORT)

HARRIS: He once handled the pressures from the press from the Oval Office. Ahead in the NEWSROOM, Ari Fleischer will be with us to talk about White House Press Secretary Tony Snow and his battle with cancer.

COLLINS: And isolated town. Its priest, a man with a secret addiction.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Your best estimate was that you had five sexual affairs while you were in Alaska?

UNIDENTIFIED MALE: Right.

UNIDENTIFIED MALE: Is that still your testimony today?

UNIDENTIFIED MALE: I would say maybe seven.

(END VIDEO CLIP)

COLLINS: The father, fathering children from his affairs. Hear from a victim coming up in the NEWSROOM.

HARRIS: Bag the plastic. San Francisco wants grocery stores to go green. We will tell you about the city's ban on plastic bags. That is coming up in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: You're in the NEWSROOM. I'm Heidi Collins.

Going to far to make a point. A Ukrainian coach scuffles with his swimmer daughter. Now he's in trouble. Details on this ahead in the NEWSROOM.

HARRIS: And good morning again, everyone. I'm Tony Harris.

Some people count sheep, one man collects them. And he can't pull the wool over anybody's eyes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: There's 75 to 60, 80 sheep in the backyard in a city? I don't think that's healthy.

(END VIDEO CLIP)

HARRIS: Crowded house coming up in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Tony Snow is eager to return as White House press secretary, if he can, following a recurrence of his cancer. That's according to Snow's deputy, Dana Perino, who will handle White House briefings for now. With me now from New York, someone who knows Tony Snow well and knows first-hand about the job, that's for sure, former White House Press Secretary Ari Fleischer.

Ari, great to see you.

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: Good morning, Tony.

HARRIS: Thanks for your time this morning.

Hey, I've got to ask you, based on your knowledge of the man, the way you know him as a buddy, as a friend, if he's able, do you really expect him to take that podium back again?

FLEISCHER: Well there is no question from Tony's point of view, and I talked to him on Saturday before he got the bad news, there's no question that's Tony's goal and desire. He is just motivated by optimism, by a sense of can do-ism, which is great for any patient. But, obviously, there's going to be medicine, there's going to be science and Tony's going to have to listen to that and put it all together. That's what Tony's job will be.

HARRIS: So, Ari, what is the motivation beyond that can do spirit, his desire to lick this thing again, as he said to Dana Perino. What is it about the job that would really be calling him to return? Is there something special about this job, the responsibilities that you have, being at the fingertip of world events 24/7?

FLEISCHER: There sure is, Tony. And I asked Tony Snow about that on Saturday. I said, are you still having fun? And he said, you bet. This is the funniest job I've ever had. And that's exactly right. That's a spirit you have to have to survive standing at that podium.

You know, every day your job is to assume the position of a human pinata and to love doing it. But you get to do it on behalf of the president, you get to do it on behalf of somebody that he and I both believe in. You sit in meetings, summit meetings with foreign leaders around the world. You travel on Air Force One. You are a firsthand witness to history. And it makes all the grind, all the pressure, all the punishment totally worthwhile.

HARRIS: Back to the pinata part for a second, Ari. You know that part of the job very well. Take a look at this and then let me follow up with a quick question for you.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: There are Iranians in Iraq. There's no question about that, correct?

ED HENRY, WHITE HOUSE CORRESPONDENT: Sure.

SNOW: All right. So where's the credibility problem in terms of -- are you saying . . .

HENRY: In terms of the Iranian government being behind it. That's not -- no body's disputing whether it's manufactured in Iran. That's what you keep changing what my question is.

SNOW: No, I'm trying to clarify your question because I think this is a . . .

HENRY: I don't need it clarified. What I'm trying to . . .

(END VIDEO CLIP)

HARRIS: All right. That's enough of that. That is enough of that. Here's the question, Ari. Who wants that? Who wants to deal with that? You know, this idea of being a pinata, taking the business end from Ed Henry and Suzanne Malveaux and all of these reporters, particularly when you have real health concerns.

FLEISCHER: Well, you just gave me the hebegibes (ph) watching that.

Well, the health concerns aside. But the fact of the matter is, Tony took that job and we talked at length about when he was going to take the job. It is still the most intellectually stimulating, exciting, wonderful job you can hold. And that comes with pressure and grind and long hours. But if your nature is to be in the arena, which Tony's is, if your nature is to try to make a difference in politics and government and if you support the president, it is the best job to hold. It will burn you out after a while, even in the best of times or the best of health. But, still, for the years that you're doing it, you will never find anything more fulfilling.

HARRIS: Hey, Ari, how difficult will it be for the White House to lose its principle mouthpiece, particularly at a time when some will say this administration is a bit under siege?

FLEISCHER: Well, number one, I hope the White House is not losing its mouthpiece. I hope this is temporary and that Tony will be coming back. That's what we all hope and pray for.

It's never easy, though, to go to any type of uncertainty or transition and I know my friends on the staff are feeling that now. On the other hand, though, is everybody's always ready to step up in any good organization. And Dana is an excellent briefer. She's very good at what she does. I worked with her when I first came to the White House. She knows her job and she's very strong.

HARRIS: Would you go back if asked just to help out for a while?

FLEISCHER: I would ask my one-year-old son Asa (ph) and my three-year-old daughter Liz and my wife and I'd get a vote of 4-0 because I'd throw myself in that mix, too.

No, I love what I do now in the private sector and I love being close with my family. As much as I support this president and believe in him and would love to still articulate for him, no. My job is now in the private sector.

HARRIS: Yes. Ari, thanks for your time this morning. Appreciate it. And thanks for talking to us about your good friend Tony Snow. We appreciate it.

FLEISCHER: You're welcome.

HARRIS: Thank you, sir.

COLLINS: A bus going nowhere, filled with tiny hostages. Preschoolers held at gun point. Their terrifying ordeal coming up in the NEWSROOM. No pushing at the pool. A rule this coach apparently forgot. Who's the swimmer? And why is he so mad? You'll find out coming up in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: All right, Heidi, let's get another check of the big board here. The Dow, as you can see, man, down 60 points. In the first hour of trading, so there's plenty of time for a rebound. The Nasdaq down 9 points as well. A lot of energy concerns this morning, concerns about the home mortgage market, sub-prime, sub-prime. Are you sick of hearing it? Sub-prime. What is driving the sell-off so far? We will check in with Susan Lisovicz in just a couple of minutes here in the NEWSROOM.

COLLINS: Want to go ahead and show you a friendly face here. You see that man speaking at the microphone. Lou Dobbs. CNN's Lou Dobbs. He is at a subcommittee hearing right now, Terrorism and Non- proliferation and Trade Subcommittee, talking about trade, foreign policy and the American worker. He's just now speaking about the trade debt rising faster than national debt, in fact. Let's go ahead and listen in.

LOU DOBBS: As I've already pointed out, free trade has been the most expensive trade policy this nation has ever pursued. There is absolutely nothing free about ever larger trade deficits, mounting trade debts, and the loss of millions of good paying American jobs.

Since the beginning of this new century, the United States has lost more than three million manufacturing jobs, three million more jobs have been lost to cheap overseas labor markets in the name of outsourcing as corporate America campaigns relentlessly for what it calls higher productivity, efficiency, and competitiveness. All three words have been revealed to mean nothing more than they are code words, code words for the cheapest possible labor in the world.

Corporate America and our country's political elites have combined to put this country's middle class working men and women into direct competition with the world's cheapest labor. Salaries and wages now represent the lowest share of our national income than at any time since 1929. Corporate profits now have the largest share of our national income than at any time since 1950.

The pursuit of so-called free trade has resulted in the opening of the world's richest consumer market to foreign competitors without negotiating a reciprocal opening of world markets for U.S. goods and services. That is not free trade by any definition. Whether that of classical economists like Adam Smith (ph) and David Ricardo (ph), or that of current propaganda ministers who use the almost Orwellian (ph) term of free trade to promote continuation of trade policies followed for the past three decades.

How important is it that we reverse the course of these short- sighted and destructive policies? More than six years ago the board of governors of the Federal Reserve had this to say about what happens when trade deficits exceed 5 percent of GDP. "We find that a typical current account reversal begins when the current account deficit is about 5 percent of GDP." Again, our current account deficit is now 6.5 percent of GDP. The authors of the study went on to say, "in general, these episodes involve a declining net international investment position that levels off but does not reverse a few years after the current account begins its recovery."

It is important to note, I believe, that no recovery is underway. And that most importantly, the United States last year suffered negative investment flows. The cumulative effect of more than three decades of trade deficits and mounting external debt has produced our first investment income deficit on record.

COLLINS: We've been listening to CNN's Lou Dobbs. He is actually testifying before a subcommittee hearing, Terrorism Non- proliferation and Trade, talking there a lot about the trade debt. You know his series that he's been doing for quite some time now on his program at 6:00 p.m. here on CNN called "The Exporting of America."

Also, I want to let you know about a special tonight. Not in the regular time slot. Instead it will be 8:00 p.m. Eastern Time. He will be airing the special called "Can We Win The War On Drugs." Looking at the 30-year battle and why addiction may actually be worse than ever. The war within coming up 8:00 p.m. tonight.

HARRIS: A showdown over Iraq. Senate Democrats plow ahead demanding a withdrawal of U.S. combat troops. President Bush refusing to back down. The president speaking on the topic this hour. CNN congressional correspondent Dana Bash has the latest from Capitol Hill.

Dana, good morning.

DANA BASH, CNN CORRESPONDENT: Good morning, Tony.

And we expect the president momentarily to really hit back at Democrats who, as you mentioned, at least in the Senate, just passed a timetable for withdrawing troops in Iraq. And that is part of a war funding bill. And what we expect the president to say momentarily is that he believes the Democrats are playing politics with funding of troops and he also is going to make clear, as he has done many times before, that when this comes to his desk, a deadline for withdrawing troop, he is going to veto it.

And so that is sort of the forceful message that the president is going to give just a day after the Senate did approve, or at least prevented Republicans from striking the Democrat's plan in the Senate, and that's to have U.S. combat troops come home from Iraq about a year from now. We already have in this fast-moving world that we live in Tony, a response from the spokesman to the Senate Majority Harry Reid and I'll read it to you. He says, the only one playing politics with this bill is the president. He needs to spend less time threatening to veto this legislation and more time working with Congress to try to get it passed as quickly as possible. So, we are already having a back and forth between the president and Democrats in Congress even though this isn't actually passed. It's nowhere near actually getting to his desk for him to veto, but he is already promising that he is going to veto it. Tony.

TONY HARRIS, CNN ANCHOR, NEWSROOM: Which leads to the question Dana, what is the next Congressional step for this legislation?

BASH: Well, you know, it's going to be interesting to watch. First of all, the House and Senate have both -- the chambers have both now spoken and both have passed deadlines for withdrawing troops on these war funding bills. They're going to have to reconcile them because they are a little bit different. But one of the things we're going to hear from the president today is a warning. He is going to say that if Democrats continue to push for this deadline on the war funding bill, he's going to say that the money for troops will run out or the Pentagon will be financially strapped at least, to pay for this war by mid April.

That's sort of where you're going to see the rhetorical political battle lines moving forward right now because the president is going to be warning that Democrats are playing politics with money and support for troops in Iraq. That has of course been political dynamite in the past and certainly still is now. We're going to hear Democrats argue that that's not really necessarily true. I talked to several Democrats this morning and they say in truth, the money for the war doesn't actually run out until mid May. And even then, there are ways for the Pentagon to transfer funds and Congress will supplement later. But the bottom line is the president is going to say the Democrats are threatening and endangering troops. Democrats are saying no, we're not.

HEIDI COLLINS, CNN ANCHOR, NEWSROOM: Want to go ahead and listen into President Bush right now as he is speaking to the National Cattle and Beef Association speaking now about Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must advance an ideology that stands in stark contrast to the ideology of the killers. The best way to security this homeland is to stay on the offense and in the meantime encourage the spread of liberty as an alternative to tyranny and it's hard work. But it is necessary work.

We went into Afghanistan and we did so to remove a vicious tyranny that had harbored terrorists who planned the 9/11 attacks on our country. Our message was, if you provide safe haven, if you provide comfort to an enemy you're just as guilty as the enemy. And so, along with allies we captured or killed hundreds of al Qaeda and Taliban fighters. We closed down their training camps. We helped the people of Afghanistan replace the Taliban regime with a democratic government. And it's in our nation's long-term interests that we help the people of Afghanistan survive the threats and onslaughts by people who want to reinstate tyranny.

And then we went into Iraq and we removed the dictator who was a threat to the United States and to the world. And now we're undertaking the difficult and dangerous work of helping the Iraqi people establish a functioning democracy that can protect their own people and serve as an ally in this global war against those who would do America harm. 2005 I want you to remember, in 2005, the Iraqi people held three national elections. It seems like a decade ago, doesn't it.

Yet, in the march of history, it's not all that long ago, that the Iraqi people showed up at the election box after having lived under the thumb of a brutal and murderous tyrant, to express their will about the future of their country. They chose a transitional government. They adopted the most progressive democratic constitution in the Arab world. And then they elected a government underneath that constitution. Despite the endless threats from killers, nearly 12 million Iraqi citizens came out to vote in a show of hope and solidarity that the United States should never forget. Thinking enemy (ph) watched all this. See, there are some who can't stand the thought of a free society emerging in their midst.

And this enemy escalated attacks. Al Qaeda is very active in Iraq. And they and other Sunni extremists blew up one of the most sacred places in Shia Islam, the golden mosque of Samara. Why did they do that? They did that to provoke retaliation. They did that to cause people to take up arms themselves, and they succeeded. Radical Shia elements, some of whom have received support from Iran, increased their support of death squads and then the situation began to escalate.

So I had a choice to make. Last fall I looked at the facts, consulted with a lot of folks in Congress and our military commanders. And my choice really boiled down to this. Do we withdraw our troops and let violence spiral out of control, let this young democracy fail or do I send reinforcements to help the Iraqi's quell the violence and secure their capital. We give them breathing space to get on the path of reconciliation so that this young democracy could survive.

Well, I weighed the options, and the military commanders and I concluded that the consequences of withdrawal would be disastrous for the United States of America and let me tell you why. If we were to step back from Baghdad before it was more secure, before the government could secure its own capital, it would leave a security vacuum. And into that vacuum could quickly come Sunni and Shia extremist extremists bolstered by outside forces. A contagion of violence could spill out across the country and in time, the violence of these emboldened extremists could affect the entire region. The terrorists could emerge from chaos. See, they benefit when the situation is chaotic -- with new safe havens to replace the one they had lost in Afghanistan.

There is no doubt in my mind that their intention is to try to strike us again. And they need the resources and the safe haven to do so. If we were to abandon this young democracy to chaos, it would embolden these extremists. It would enable them to be able to recruit more. It would give them new resources from which to plot and plan. I believe the consequences of failure in Iraq affect the security of the United States of America and that's why I made the decision I made.

(APPLAUSE)

So instead of retreating, we re-enforced. Troops led by a capable commander named General David Petraeus. The Iraqi government saw our firm support. And they are now beginning to carry out an aggressive plan to secure their nation's capital. And the plan is still in the beginning stages. I mean, General Petraeus had been on the ground just for about two months. Only half of the re- enforcements that he needs have arrived. And he says it's going to be early June before all of the troops that are dedicated to the operation are even in place. In other words, I've sent re- enforcements into Baghdad with the new commander, with a plan to help the Iraqis secure the capital, a plan that we believe will be successful. He's been there for about two months. Half the troops that he needs have arrived.

And look, I recognize it's going to require a sustained determined effort to succeed. I know that. And there's some early signs that are encouraging. For example, the Iraqi leaders appointed a commander for Baghdad who is working closely with our generals. The last of the nine Iraqi surge battalions arrived in the Iraqi capital. They said we're going to commit troops to this plan to secure the capital and they are delivering. The Iraqis are showing up.

Iraqi leaders have lifted restrictions that once prevented Iraqi and American forces from going into areas like Sadr City. You've been reading about Sadr City. Well, my attitude is, murderers are murderers and they ought to be brought to justice and so any political restrictions preventing our people are being lifted. Iraqis in the lead were helping. We're now setting up check points across Baghdad. When I say we that is the Iraqis with American help. They are hardening perimeters around markets and areas that have been targeted for these spectacular attacks, all aimed at shaking the confidence of the American people and shaking the confidence of the Iraqi people. We've got joint security stations throughout the Iraqi capital. In the past we would clear an area and then we'd go home. And the insurgents or killers would move back in.

Now we've got a strategy of clear, hold, that's what that means, then using money to help reconstruct Iraq. By the way, most of the money is coming from the Iraqis. They put out a $10 billion reconstruction budget. That's what we expect. A government of and by the people should be spending the people's money to help rebuild their country. American forces are now deployed 24 hours in these neighborhoods and guess what's happening.

The Iraqi people are beginning to gain confidence. Support from the Iraqi people can be measured by the tips our people get. People saying so and so is over here, a cache of weapons over there. And we're using the tips to aggressively pursue. We've launched successful operations against Shia extremists, captured hundreds of fighters that are spreading sectarian violence. We're after killers. We're after -- we don't say this religious group or this religious group. We're saying if you're trying to destabilize this young democracy, the Iraqis with coalition help are coming after you.

Last week we captured a Shia extremist leader and his associates who were implicated in the kidnapping and murder of five U.S. soldiers in Karbala. Last month, American and Iraqi forces uncovered more than 400 weapons caches. We're conducting dozens and dozens of operations on a daily basis throughout that country with the Iraqi forces. See, ultimately the Iraqis are going to have to defend themselves. Ultimately, it is their responsibility. That's what the 12 million people who voted want. We just need to give them some breathing space so they can gain their confidence and have the capabilities necessary to protect this country. We're destroying bomb factories. Just last week, we captured the head of the al Qaeda bomb network responsible for some of the most horrific bombings in Baghdad. (INAUDIBLE) I mentioned al Qaeda.

Al Qaeda wants us to fail in Iraq. This is what their leaders have clearly said. And they are willing to kill innocent women and children to achieve their objectives. The messages I described are only the opening salvos in what is going to be a sustained effort. Yet the Iraqi people are beginning to see positive changes.

I want to share with you how two Iraqi bloggers, they have bloggers in Baghdad just like we got here, displaced families are returning home. Marketplaces are seeing more activity. Stores that were long shuttered are now reopening. We feel safer about moving in the city now. Our people want to see this effort succeed. We hope the governments in Baghdad and America do not lose their resolve.

I want to read something that Army Sergeant Major Chris Mandel (ph) says. The guy is on his second tour in Iraq. He says, I'm not a Democrat or a Republican. I'm a soldier. The facts are the facts, things are getting better. We're picking up momentum. These are hopeful signs, and that's positive. Yet, at the very moment that General Petraeus' strategy is beginning to show signs of success, the Democrats in the House of Representatives have passed an emergency war spending bill that undercuts him and the troops under his command. This bill would damage our effort in Iraq three ways.

First, the House bill would impose restrictions on our commanders in Iraq as well as rigid conditions and arbitrary deadlines on the Iraqi government. It would mandate a precipitous withdrawal of American forces if every one of these conditions is not met by a date certain. Even if they are met, the bill would still require that most American forces begin retreating from Iraq by March 1 of next year regardless of conditions on the ground.

It's unclear what the military significance of this data is. What is clear is that the consequences of imposing such a specific and random date for withdrawal would be disastrous. If the House bill becomes law our enemies in Iraq would simply have to mark their calendars. They spend the months ahead picking how to use -- plotting how to use their new safe havens once we were to leave. It makes no sense for politicians in Washington, DC to be dictating arbitrary time lines for our military commanders in a war zone 6,000 miles away.

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I want to read to you what a major newspaper editorial page said. By the way, this editorial page, generally not singing my praises. Imagine if Dwight Eisenhower had been forced to adhere to a Congressional war plan in scheduling the Normandy landings. Or if an 1863, President Lincoln had been forced by Congress to conclude the civil war the following year. This is the worst kind of Congressional meddling in military strategy.

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Second the House bill also undermines the Iraqi government and contradicts the Democrats' claim that they simply want to help the Iraqis solve their own problems. For example, the House bill would cut funding for the Iraqi security forces if Iraqi leaders did not meet arbitrary deadlines. The Democrats cannot have it both ways. They can't say that the Iraqis must do more and then take away the funds that will help them do so. Iraq is a young democracy. It is fighting for its survival in a region that is vital to our security. The lesson of September the 11th must not be forgot. To cut off support for the security forces would put our own security at risk.

Third, the House bill would add billions of dollars in domestic spending that is completely unrelated to the war. For example, the bill includes $74 million for peanut storage, $25 million for spinach growers. These may be emergencies, they may be problems, but they can be addressed in the normal course of business. They don't need to be added on to a bill that's supporting our troops. There's $6.4 million for the House of Representative salaries and expenses account. I don't know what that is. But it is not related to the war and protecting the United States of America.

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This week the Senate is considering a version that is no better. The Senate bill sets an arbitrary date for withdrawal. It also undermines the Iraqi government's ability to take more responsibility for their own country by cutting funds for Iraqi reconstruction and law enforcement. And just like their colleagues in the House, Senate Democrats have loaded their bill with special interest spending. The bill includes $40 million for tree assistance. You know, all these matters may be important matters. They don't need to be loaded on to a bill that is an emergency spending bill for our troops. There's $3.5 million for visitors to tour the capital and see for themselves how Congress works. I'm not kidding you. Here's the bottom line. The House and Senate bills have too much pork, too many conditions on our commanders and an artificial time table for withdrawal.

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And I had made it clear for weeks, if either version comes to my desk I'm going to veto it.

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It is also clear from the strong opposition in both Houses that my veto would be sustained. Yet Congress continues to pursue these bills. And as they do the clock is ticking for our troops in the field. The funding for our forces in Iraq will begin to run out in mid April. Members of Congress need to stop making political statements and start providing battle funds for our troops. They need to get that bill to my desk so I can sign it into law. Now some of them believe that by delaying funding for our troops, they can force me to accept restrictions on our commanders that I believe would make withdrawal and defeat more likely. That's not going to happen. If Congress fails to pass a bill to fund our troops on the front lines, the American people will know who to hold responsible.

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Our troops in Iraq deserve the full support of the Congress and the full support of this nation.

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I know when you see somebody in a uniform you praise them and I thank you for that. We need to praise those military families, too, that are strong, standing by their loved one in this mighty struggle to defend this country. They risk their lives to fight a brutal and determined enemy, an enemy that has no respect for human life. We saw that brutality in a recent attack. Just two weeks ago terrorists in Baghdad put two children in the back of an explosive-laden car. And they used them to get the car past a security checkpoint. And once through, the terrorists fled the vehicle and detonated the car with the children inside. Some call this civil war, others call it emergency, I call it pure evil. And that evil that uses children in terrorist attack in Iraq is the same evil that inspired and rejoiced in the attacks of September 11, 2001. And that evil must be defeated overseas so we don't have to face them here again.

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If we cannot muster the resolve to defeat this evil in Iraq, America will have lost its moral purpose in the world and we will endanger our citizens. If we leave Iraq before the job is done, the enemy will follow us here. Prevailing in Iraq is not going to be easy. Four years after this war began the nature of the fight has changed, but this is a fight that can be won. We can have confidence in the outcome, because this nation has done this kind of work before.

You know, following World War II after we fought bitter enemies, lifted up the defeated nations of Japan and Germany and stood with them as they built their representative governments. We committed years and resources to this cause. And the effort has been repaid many times over in three generations of friendship and peace. After the Korean war, had you predicted that Korea would have been a major trading partner in the world or Japan would have been a major trading partner and vibrant economy, or China would be developing an open market, and the Far East would be relatively peaceful, they would have called you a hopeless idealist.

And yet because of American presence and influence, the Far East has emerged as I've described it. The stakes are high and the efforts we're undertaking in Iraq, it's part of a long ideological struggle against those who spread hatred and lack of hope and lack of opportunity. But I believe with patience and resolve we will succeed. The efforts we're undertaking today will affect a generation of Americans who are coming up in our society. You know, it's important for you to understand that the Iraqi people want to live in freedom and peace. I believe strongly in the universality of liberty. I believe people want to be free and if given a chance, they will take the risk necessary to be free.

And that's what's happened in Iraq. We see the desire for liberty in Iraqi soldiers who risk their lives every day. We see the desire in the shopkeepers and civic leaders who are working to reform their neighborhoods. We see it in the desire of Iraqi moms and dads who want the same thing for their children that we want for our children. If we stand by the Iraqi people today and help them develop their young Iraqi style democracy, they are going to be able to take responsibility for their own security. When that day comes, our forces can come home. And we will leave behind a stable country that can serve as an example for others and be an ally in this global struggle against those who would do us harm. It's tough work but it's necessary work, work the United States has done before and work the United States will complete now. God bless you.

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COLLINS: President Bush speaking before the National Cattlemen's Beef Association in Washington, taking the opportunity to talk not only about the economy at the top of that speech, but also about Iraq and the new Baghdad security plan, also General Petraeus and some progress reports as you imagine coming from the president and of course taking the time also to talk about the two supplemental spending bills that both the House and the Senate have passed. He said it again, folks. I will veto any sort of legislation coming to my desk. So there you have it, once again, the president before the National Cattlemen's Beef Association today.

HARRIS: Let's bring in our congressional correspondent Dana Bash. And Dana, you listened to the president there. You heard some of this, the consequences of timelines, disastrous, any timeline for withdrawing U.S. troops from Iraq, arbitrary. It sounds like the president wants Congress to cut the checks for the wars in Iraq and Afghanistan, cut the pork out of this, and that's it. That's all.

BASH: That's exactly what he wants and that's exactly what he said. You're right. And he also made the point that he understands what Democrats are trying to do here, which is to say that they want a deadline for troops to come home and they are putting that on the funding bill for the war. And what the president has said is I know that you want -- you think that perhaps I will sign this or accept what he considers restrictions on commanders on the ground to do their job if this is part of the war funding. But he said, that's not going to happen and he said that he is going to try to make it so that if it comes to this, that Congress will get the blame.

But Tony, we are hearing already from Democrats here that they understand that this is going to be the next rhetorical, political battle here which is when it comes down to it, they understand the president is going to veto this war funding bill with this deadline for withdrawal. And so the question is, will the troops in Iraq actually suffer as the president is saying, or will they actually get their money in the end. But this is the real question I would say for Democrats, because they understand that at the end of the day, they're going to be faced with a vetoed piece of legislation that they cannot override and they're going to have to decide what to do about the funding bill, whether they can just eventually send it to the president and just support the war financially or whether or not they are going to do what some in their party want to do which is to actually use the power that they have, money, to keep some of the money from this war in order to force at least an end or at least some troops to come home.

HARRIS: And there she is our Congressional correspond Dana Bash for us this morning. Dana, thank you.

BASH: Thank you.

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