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THE SITUATION ROOM

Talks Between Bush and Israeli Prime Minister Olmert. The Take Back America Conference.

Aired June 19, 2007 - 16:00   ET

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


JOHN KING, HOST: Happening now, they say Mahmoud Abbas is the only legitimate leader for Palestinians. President Bush and Prime Minister Ehud Olmert of Israel pledge to bolster the Palestinian president's new government, as their countries hope to isolate Hamas. I'll talk about the unfolding situation with former Middle East negotiator, George Mitchell.
Also, the conference is titled, Take Back America. Attending, some Democrats who hope to take over the White House. It's just one event today where some of the Democratic candidates appealed for support from some of their party's core activists.

And a problem over passports -- there's a jam in the approval process that many senators want fixed.

Might your summer travel plans be in jeopardy?

Wolf Blitzer is off today.

I'm John King.

You're in THE SITUATION ROOM.

Today, President Bush met with Israeli Prime Minister Ehud Olmert to discuss what they call their common vision for parts of the Middle East. The two leaders pledged to support Palestinian President Mahmoud Abbas and made clear they intend to pursue peace despite their weak political standings and the region's myriad problems.

Joining me now is White House correspondent, Ed Henry -- Ed, what did these two leaders say about the violence and, more importantly, what do they hope to do about it?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, John, they're joining forces to denounce that violence. But what's interesting is the president once again used this occasion to justify his policies elsewhere in the Mideast dealing with Iraq.

(BEGIN VIDEO TAPE)

HENRY (voice-over): President Bush and Israeli Prime Minister Ehud Olmert were united in their outrage at the violence in Gaza.

EHUD OLMERT, ISRAELI PRIME MINISTER: I'm sure that many people in the world were astounded by the brutality and the cruelty and the viciousness of the Hamas murders that killed so many Palestinians in such a way.

HENRY: United, too, in their support for a new round of Israeli/Palestinian peace talks, as well as efforts to prop up Palestinian President Mahmoud Abbas.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: He is the president of all the Palestinians. He is -- he has spoken out for moderation. He is a voice that is a reasonable voice amongst the extremists in your neighborhood.

HENRY: In 2003, the president promised the Iraq War would help stabilize the Mideast.

BUSH: Success in Iraq could also begin a new stage for Middle Eastern peace.

HENRY: But with critics charging the war has done the opposite, the president is now warning failure in Iraq could make the Mideast crisis worse.

BUSH: If we were to fail, then all of a sudden these extremists would have safe haven, extremists in the Middle East would be emboldened by the failure of those of us who live the nice, comfortable existences not to help those who are struggling for freedom.

HENRY: A president who has faced heat for not doing enough to win the hearts and minds of Iraqis says he has the solution to defeating extremists throughout the Mideast.

BUSH: We can only defeat them so much militarily. We have to also defeat them with a better idea. It's a better that's being practiced by our friend Israel. It's called democracy.

(END VIDEO TAPE)

HENRY: But Palestinians did hold elections last year. It's just that the U.S. did not like the results, because the terror group Hamas won.

The White House insists that Hamas has abdicated its right to govern by basically slaughtering its own people and that's why the U.S. is backing Abbas, which dissolved the government that had included the terror group Hamas.

But the broader point here is that democracy doesn't always solve everything. It's more complicated than that, obviously -- John.

KING: And, Ed, what about Iran?

President Ahmadinejad obviously has threat to wipe Israel off the map.

Did President Bush deliver any new message for Tehran today?

HENRY: Well, when he was asked today would he take the military option off the table, the president said no. That's not new. It's consistent with what the president has said before. But when it's repeated again in the current context of this Mideast crisis, it's a reminder that this thing could get a lot worse -- John.

KING: Ed Henry, a day of difficult diplomacy at the White House.

Ed, thank you.

Presidential candidates gathered in Washington for what's called the Take Back America conference.

CNN's senior political correspondent Candy Crowley is here -- tell us, Candy, Take Back America, what's this all about?

CANDY CROWLEY, CNN CORRESPONDENT: This is a group of liberal activists. About 3,000 shows up for this particular convention. They've held it for the past five years.

Basically, this is an umbrella group for the various sort of pup tents within the Democratic Party. So you have those who were active in the civil rights movement, you have labor organizers and you have the anti-war activists.

How powerful are they?

Powerful enough to bring all of the '08s to come, as one put it, to pay homage to us.

As you might imagine, today was mostly about out anti-warring each other.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: Even when it wasn't popular to say so, we knew back then this war was a mistake. We knew back then that it was a dangerous diversion from the struggle against terrorists who attacked us on September 11th.

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: For me, it's very simple and this is it -- no more pontificating. No more vacillating. No more triangulating. No more broken promises. No more pats on the head. No more we'll get around to it next time. No more taking half a loaf. No more tomorrow.

GOV. BILL RICHARDSON (D), PRESIDENTIAL CANDIDATE: Senators Clinton, Obama, Dodd and Biden -- they all voted for timeline legislation that had loopholes. Those loopholes allowed this president -- or any president -- to leave an undetermined number of troops in Iraq indefinitely.

(END VIDEO CLIP)

CROWLEY: A time for a bit of divided attention from the '08 candidates. As you know, there a union -- an AFSCME convention across town, so some of those who were not there today, in particular Hillary Clinton, will be going to Take Back America tomorrow. KING: Paying attention to the left of the party in terms of the Take Back America conference.

Any favorite -- crowd favorite in the room today?

CROWLEY: You know, it was very hard to tell, difficult to tell. And when you talk to people, they say -- they haven't found a sweetheart. It's very clear. And they find that pretty exciting, because they feel like, you know, here they are. They're all coming to talk to them.

And there were as many Barack Obama supporters there as there were John Edwards'. Richardson was received as well as Obama was. So it's hard to tell from the crowd. But when you talk to people, they say we haven't picked anybody yet. KING: Still a ways to go, I suspect.

CROWLEY: Yes.

KING: Not picking them allows them to keep putting pressure on them, too.

CROWLEY: Absolutely.

KING: OK.

Candy Crowley, thank you very much.

And Candy Crowley, as she obviously already knows, is part of the best political team on television.

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

In Iraq, many are fearful about the possibility of more sectarian violence. Today a massive truck bomb rocked a commercial district in Baghdad, damaging a historic Shiite mosque. At least 78 people are dead, over 200 hurt. Iraqi Prime Minister Nuri al-Maliki condemned the bombing and accused Sunni extremists of trying to stoke a fresh round of sectarian violence.

Meanwhile, in the Baquba area, U.S. and Iraqi troops conduct an operation to find and kill enemy fighters. Officials say the goal there is to "destroy the al Qaeda influences in the Diyala Province." The officials say the troops are off to a good start.

Coming up, much more on this offensive and that truck bombing.

Time now, though, for The Cafferty File.

Jack joins us from New York -- hi, Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Nice to see you, John.

Thank you. U.S. combat troops in Iraq are spending more time on the battlefield without a break than our troops did in either Vietnam or World War II, and the country's military is paying a heavy price.

Forty percent of soldiers, a third of Marines and half of the National Guard members report symptoms of Post-Traumatic Stress Disorder, anxiety, depression or other psychological problems. And about 75,000 troops returning from the war in Iraq who have filed for help from the Veteran Affairs Department are suffering mental disorders.

Meanwhile, Army mental health experts recommend that the troops receive a one month break for every three months they spend in combat. But "USA Today" reports that despite those Army recommendations, commanders in Iraq are trying to give troops only two or three days inside heavily fortified bases in Iraq after spending eight days in the field.

So here's our question this hour -- should U.S. combat troops in Iraq be given one month off for every three months they spend fighting?

E-mail your thoughts on that to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- John.

KING: More proof of the stress on the troops over there, Jack.

I'm going to guess you're going to get quite some interesting answers.

CAFFERTY: We'll see. I imagine we will.

KING: We'll be back with you, Jack.

Thanks so much.

And coming up, as the White House stalks about a two state solution for Israel and the Palestinian government, what's the real likelihood of that?

I'll ask former Middle East negotiator, George Mitchell, to weigh in.

Also, Barack Obama calls a Hillary Clinton attack memo from his campaign "sarcastic and cheap." Now some are asking if the presidential candidate is as above the fray as he hopes to be.

And there's a major problem in the passport approval process. Congress is involved. But might it affect your summer travel plans?

Stay right here.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK) KING: More now on our top story, the volatile situation unfolding right now in the Middle East, and President Bush and Prime Minister Ehud Olmert's intentions to pursue peace.

Joining me now is the former Middle East negotiator, Senator George Mitchell.

Senator Mitchell, let me just start with the basic premise. You have the president of the United States, the prime minister of Israel in the Oval Office today, both trying to put the best face forward, if you will, saying they are still committed to the two state solution -- ultimately, a Palestinian state living side by side with Israel.

But isn't it near -- forgive the use of the term -- near delusional to be talking about that right now?

How can you possibly think about that when there's no one really to negotiate with, no firm stable Palestinian government to negotiate with?

GEORGE MITCHELL, FORMER MIDDLE EAST NEGOTIATOR: Well, you have to keep the long range objective in mind and before you even as you deal with difficult short range steps. So I think it's correct to keep that as the vision.

The problem is that the U.S. and Israel have had two previous occasions in which they had the opportunity to help Mahmoud Abbas get established as the leader of the Palestinians and both did very little or really next to nothing. Now he's much weaker, we're in a much worse position. Both President Bush and Prime Minister Olmert are much weaker at home. So it's infinitely more difficult than it was in the previous opportunities.

But I still think that's the right course to take and I think they're moving in the right direction. I think they have to be very careful to support him while not being punitive towards the Palestinians left in Gaza. It's one thing to talk about Hamas, but remember, there are a million-and-a-half people living there in extremely difficult circumstances.

KING: Well, when the situation came up today, President Bush said there was no doubt in his mind who was to blame for the current situation.

I want you to listen to the president.

(BEGIN VIDEO CLIP)

BUSH: It was Hamas that attacked the unity government. They made a choice of violence. It was their decision that has caused there to be this current situation in the Middle East.

(END VIDEO CLIP)

KING: As you know, though, Senator, there are others who say that the president shares some of the blame. If we go back to late 2005 into early 2006, the Israelis were telling him don't put pressure on the Palestinians to hold elections because if you do, Hamas will win. President Abbas himself told the Bush White House I needed to delay these elections because if I hold them now, Hamas will win.

The Bush White House insisted, and put pressure on President Abbas to hold those elections.

Was that a fundamental mistake for which we are paying the price now?

MITCHELL: The president has given some truly eloquent speeches on democracy. But, unfortunately, they have created the impression, both here and abroad, that if you hold an election, you've got a democracy.

Reality tells us that elections are a part of democracy, but they don't guarantee an effectively functioning democracy. So the problem we now have in the Middle East is the president pushed and insisted on, as you said, this election, and then when it didn't turn out the way we wanted, has effectively rejected the results.

It creates a real problem in terms of the gap between our stated principles and our actions when things don't go as we want.

But I do think he's correct in suggesting that Hamas is a problem in the region. We just haven't taken the opportunity to -- to support Abbas until now. I hope we'll do so.

And let me just say, John, it's more than just economic aid. There has to be a way to balance Israel's need for security while enabling free movement of the Palestinian people in the West Bank. People ought to be able to go from their home to their job, from their home to a hospital, or for other things, and to try to alleviate the very difficult circumstances in which people are living.

In the end, that's what matters. People who can't get a job, who can't get across town, who can't care for their kids, speeches about democracy don't have really much effect on them. They work. They worry about coping day to day. Improving the lives of people in ordinary daily circumstances is the most effective thing that can be done right now.

KING: And you talked about the things the president needs to do right now. There's a huge risk in that, though, isn't there, in the sense that President Abbas certainly needs the support of the United States -- financial help from the United States and political pressure on Israel to do those things you just mentioned from the United States. And yet every time the United States takes sides in the Middle East right now, it seems to backfire, given the unpopularity of this president and this country in the region right now.

MITCHELL: Well, that's a real problem. There's no doubt that our standing in the world is the lowest it's been in our nation's entire history, and that's not just in the Middle East, it's around the world, but it's particularly so in the Muslim world and specifically in the Middle East. Nonetheless, I think in this case, the president has chosen the right side. The problem is that we haven't done anything to support him in the past when it really mattered and when, I think, he was in a much stronger position than he is now.

It's much more difficult. But I think we still have to do what the president and Prime Minister Olmert have suggested, while providing a good balance between not abandoning the million-and-a-half people in Gaza who live in extremely difficult and, I must say, degrading circumstances.

KING: Senator, I can't pass up the opportunity to ask you questions about your current big job in life. You are heading major league baseball's investigation into the possible use of steroids and other drugs and banned substances by its players. There are a number of indications that the New York Yankees slugger, Jason Giambi, is on the verge or has already agreed to cooperate with your panel, which has been quite frustrating, in not getting cooperation from players.

Is that true?

Do you have an agreement with Jason Giambi?

MITCHELL: There is no agreement yet. Discussions are underway. I'm hopeful that all of the athletes that want this cloud removed, more than anyone, really, will see their way through to cooperate.

One fact which hasn't gotten the publicity I think it should, John, is that the principle victims of the use of illegal performance enhancing substances in baseball are the players who don't use them. Their livelihoods are threatened. Their careers are threatened. They're faced with an unfair competition by those who do use them. And I hope that many will see that and help to lift this cloud off what is a really great national pastime.

KING: Well, Senator, the person most under that cloud at the moment would have to be Barry Bonds, who is seven home runs away from tying -- eight home runs away from breaking the amazing record of Henry Aaron, the home run record in baseball.

He was in a place this weekend you and I both hold very dear, Fenway Park. He was jeered by the fans, booed by the fans. There were all sort of signs with asterisks.

In your opinion, based on everything you know, when Barry Bonds breaks that record, does he deserve the adulation of the American people and a place in history or does he deserve an asterisk, sir?

MITCHELL: That will be a decision for the commissioner to make with respect to any formal sanctions.

The impression I have is that he enjoys both intense support from those who believe that he's a great athlete, and this hasn't had an effect on it, and intense opposition from those who believe that -- that much of what he's done has been fuelled by illegal performance enhancing substances. I don't think that's going to be settled one way or the other. It's sort of like politics, John. You've got a substantial amount of support on one side, a substantial amount of opposition on the other.

I'm not going to make any statement or opinion that would prejudge the situation until my investigation is complete and I make my report. And as I've said many times, my report, I hope, will speak for itself and deal with the issues that you've raised and many others have raised, as well.

KING: Ever and always the diplomat on matters Middle East and matters major league baseball.

Former Senator George Mitchell, thank you so much for your time today.

MITCHELL: Thank you, John.

KING: Take care, sir.

And still ahead, what does one famous American family have in common within an infamous one?

We'll tell you about the comparison Bill and Hillary Clinton are making to a family much more known for its ties to criminals.

And he says it was "sarcastic and cheap" -- that's Barack Obama commenting on a memo about Hillary Clinton from his own staff. We'll tell you why that's now raising many eyebrows.

(COMMERCIAL BREAK)

KING: Our Carol Costello is monitoring the wires and keeping an eye on all the video feeds coming into THE SITUATION ROOM from around the world.

She joins us now from here in Washington with a closer look at other stories making news -- hi, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, John.

Let's start in the city of Charleston, South Carolina. That is a community in mourning after nine firefighters died in a furniture warehouse fire. They rushed into the burning building to rescue two workers inside. The workers managed to get out, but part of the building collapsed on their rescuers. President and Mrs. Bush hailed the fallen firefighters as heroes. Charleston Fire Chief Rusty Thomas says they will never be forgotten. We will have a full report on the tragedy in our next hour, at 5:00 p.m. Eastern.

Attorneys for Lewis "Scooter" Libby have filed a motion to keep him out of prison while he awaits an appeal. Libby was convicted of federal perjury charges in March in connection with the CIA leak investigation. A federal judge last week ordered him to prepare to serve his 30 month sentence. Libby is the former chief of staff to Vice President Dick Cheney. In Buffalo, New York, militant abortion opponent James Kopp has received life in prison plus 10 years. Kopp was convicted of federal charges for murdering a doctor who performed abortions. The killing happened nine years ago. Kopp is serving 25 years on his state conviction for shooting Dr. Bernard Slepian in his kitchen of his suburban Buffalo home.

Rising mortgage rates and fallout from subprime lending are blamed for another dip in new home construction. The Commerce Department reports that housing starts dropped by just a tad over 2 percent last month. That is in line with expectations. The housing industry is in its largest downturn in 16 years. Experts expect to it continue in the coming months.

That's a look at the headlines right now -- John.

KING: Thank you, Carol.

See you a bit later.

And up next here, another shakeup in the White House. The president's budget director resigns. I'll speak with Rob Portman about his reasons and about his next move.

And will it affect your summer vacation plans?

Major problems in the government's passport processing system that many are worried about.

Stay right here.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: Happening now, the troubling discovery of some of Iraq's youngest casualties of war. We'll have the gut wrenching story of children left to fend for themselves in an abandoned orphanage.

From the papal office at the Vatican to the faithful behind the wheel -- the pope hands down the Ten Commandments of driving.

And would-be presidential contender Fred Thompson takes a trip across the pond. He's visiting former prime minister and Ronald Reagan ally Margaret Thatcher.

Wolf Blitzer is off tonight.

I'm John King.

You're in THE SITUATION ROOM.

The Bush administration and the State Department have tightened security for travelers across the Western Hemisphere, specifically, to and from Mexico, Canada, Bermuda and the Caribbean. But new requirements have caused all kinds of problems with the U.S. passport system.

CNN Congressional correspondent Andrea Koppel joins us with that.

Quite a storm on Capitol Hill today -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Yes, there was, John. There was a special hearing, as a matter of fact, just to discuss it. Senators are positively fuming. One of them, Bill Nelson of Florida, told me that his office alone has received upwards of 1,000 calls about this issue alone. They say that there are two million Americans who are currently waiting for their passports. They say that the time that you would wait to get a passport has more than doubled in the past year. It used to take about four to six weeks. It's now taking 10 to 12 weeks. And they say it is absolutely unacceptable.

(BEGIN VIDEO CLIP)

SEN. BEN NELSON (D), NEBRASKA: Madam Ambassador, you're going to find that there's going to be a good deal of frustration that will be expressed here because millions of Americans, in their frustration of not getting a passport, turn only where they know where to turn, and that is to their senator or to their congressman. And I can tell you that the offices are absolutely overwhelmed.

(END VIDEO CLIP)

KOPPEL: Now senators, including Bill Nelson, are pointing the finger of blame squarely at the State Department. They say that they had two years to prepare for this new travel requirement that you need a passport to go to other places in the Western Hemisphere, like Canada and Mexico, whereas before you only needed a driver's license. And they say that the State Department has dropped the ball, John.

And, in addition, Senator Nelson, who was questioning Laura Hardy, who is the top State Department official for passports and visas and other consular affairs, they say Americans have had to pay $60 to expedite their passports. And even then, they say, the passports sometimes don't arrive in time for their trip and they're demanding that the State Department refund this money immediately -- John.

KING: Andrea Koppel is tracking this story on Capitol Hill. And we will keep on top of it, as the summer vacation season gets under way.

Now, here's where Western Hemisphere Travel Initiative requirements stand today. As of January 2007, all Americans entering the United States from Mexico, Canada, Bermuda, and the Caribbean by air must produce valid passports.

But the new rules have caused such a backlog in passport applications, the federal government has lifted that requirement until September 30. For now, American air travelers need to show only a government-issued photo I.D. and official proof of an application for a passport. As for travel by land and sea, say, a cruise or a trip to Mexico or Canada, it is recommended that U.S. citizens carry government- issued I.D. Tighter land and sea requirements could kick in, though, as early as January 2008.

President Bush has already named the man he wants to be his next budget director. That would be Jim Nussle. He's the former White -- former House budget committee chairman, this after the current budget director announced he's resigning.

Rob Portman joins me now from the White House.

OK, mano a mano, you and mean, Portman.

You're leaving the Bush White House at a time everyone in the White House says they need you so much. The president's domestic initiative is in trouble, all of them in trouble, on Capitol Hill, big fights over the Iraq war budget, over other spending issues, a big fight, the Congress saying no to the president's request to make his tax cut permanent.

And many people around town are saying, why is Rob Portman leaving? He was brought in because he has such credibility on Capitol, a former Republican congressman, well liked by the Democrats.

Why now?

ROB PORTMAN, OMB DIRECTOR: Well, first, Jim Nussle will be a terrific replacement.

Jim, as you know, was chairman of the Budget Committee. I served with him on that Budget Committee. He's well respected across both sides of the aisle and both sides of the Capitol. He's got the experience. He's got the judgment. He's a guy of high integrity. So, the president will be very well served by Jim Nussle.

Plus, I'm staying on long enough to get Jim Nussle confirmed. So, there shouldn't be any gap at all in leadership, and we shouldn't miss a beat.

And, second, we have had a lot of progress in the last years I have been budget director. We have positioned the president well, I believe, to be able to be successful, including on some of these spending bills, where he has issued veto threats.

KING: There are many saying -- I have already touched base with some of your friends back home in Ohio, who say, Rob Portman is coming home because Rob Portman wants to run for governor. But that election isn't until 2010. It's still a ways down in the distance. And many are saying, well, you need to leave the Bush White House now to get some distance, if you will, from a very unpopular president.

I want to show you the latest Quinnipiac poll -- this was back in May -- Bush approval in Ohio. Thirty-five percent of the voters in Ohio approve of the president's job performance. Sixty-one percent, six in 10 residents of your home state, disapprove of the president. So, many, Rob Portman, are saying, he needs to get out now to build some distance between working in a very unpopular Bush White House.

True?

PORTMAN: It's an interesting theory, but it's false.

In fact, you know, I'm proud of my tenure here, proud of my tenure at the U.S. representatives office, and proud to have served in Congress for 12 years, and to have been supportive of many of the same agenda items that we're now promoting, in terms of fiscal discipline.

The reason I'm going home is to spend time with my family. And you understand that, having talked to you about this issue before and seeing you with -- with some of your own kids. I mean, it is tough in this job to be able to be a dad and a husband and a good son.

And, so for me, it's time to go home for a while, reconnect with my family, and then see what comes.

KING: Does home for a while, reconnect and see what comes mean you are thinking about running for governor? As you know, the Republican Party, back in your state, after a very impressive record, collapsed in the last election cycle.

And many are saying, you need a guy like Rob Portman to come home, and not only rebuild the Republican Party, but to take on Governor Strickland in the next election. Is that at least in the back of your mind, sir?

PORTMAN: Well, we will see. We will see. I have got a 12-year- old, a 15-year-old, and a 17-year-old. And that's what's foremost on my mind right now.

Again, this job is tough on the family. It's entailed a lot of sacrifice on behalf of my family. They live in Cincinnati. I do the commute every week back and forth. And it's time for me to go home for a while.

KING: Let me show the poll numbers for -- the election results, actually. When Ted Strickland became governor in the last election, he won 60 percent of the vote, only 37 percent of the vote for the Republican secretary of state, Ken Blackwell.

Getting in -- obviously a long time between now and 2010, but what happened to the Republican Party in the state of Ohio?

PORTMAN: I think a couple things happened. One, it was a tough year across the board for Republicans. Ethics was a bigger issue, by the way, than Iraq in Ohio, in terms of those independent voters, who normally would have voted for Republicans.

And the other issue that was very big in Ohio, and across the country, for that matter, was spending. People felt as though the Republican Congress, and, in particular, the Republicans in their state, were not as focused on wisely spending the taxpayers' dollar.

And that's something that this president has stood up for. Recently, as you know, we began to see this distinction of Democrats being for higher spending, the president insisting that we have a reasonable level of spending, but not beyond that.

And, then, on taxes, people also got concerned that maybe Republicans weren't focused enough on keeping taxes low to keep the economy growing.

So, I think those numbers will shift as you begin to see this distinction play out, as it does traditionally with Democrats and Republicans, as the Democrat majority begins to make more and more promises to spend more and more, and the president continues to stand firm.

KING: Let me ask, in closing, for your assessment of the current political climate here in Washington.

You know the president is at record low approval. You know the Democrats are thumping him about the war repeatedly, thumping him about many other things. Many say this is the worst climate in Washington they can remember.

You were known not as an ideologue, but as someone who wanted to get things done, in your 12 years in Congress. And that's one of the reasons people were watching you closely when you came into the White House.

Give me your assessment of the political climate here in Washington right now, and maybe one thing your still boss, and soon- to-be-former boss, the president of the United States, might do to reach out and make it better?

PORTMAN: Well, it takes two to reach out. And the president has done so on a number of occasion, including my area, in terms of the budget issues.

As you know, the president has talked about reforming Social Security, being sure it's sustainable for the future. He's also included in his budget presentations the same kinds of sensible reforms for the Medicare program and Medicaid program.

These are things where we should be able to reach a nonpartisan, not even bipartisan, consensus, because these programs are clearly unsustainable into the future.

I'm disappointed, frankly, in some of these areas, we haven't been able to make more progress. But I'm also hopeful that, you know, as the American people often do, they will eventually express their opinion. You see some of the approval ratings of Congress right now, as well as the president, being relatively low. In fact, the congressional approval ratings, I think, are lower than the numbers you talked about for the administration.

And I think both sides need to get the message, which is that, you know, citizens want problems solved, and they want people to work together, and they want us to find common ground. And the president will be eager to do that.

KING: Rob Portman, the Bush budget director, always good and decent to this correspondent, soon to be leaving. I suspect, though, after that family time will come a campaign in the future.

We will keep an eye on you. Thank you, sir.

PORTMAN: Thanks, John. Good to talk to you.

KING: Take care.

And coming up: Senator Barack Obama issues an apology. What does the Democratic presidential candidate have to be sorry about?

And later the Clintons get together for a little campaign fun. What are they up to?

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: It's not often that a presidential candidate apologizes for an attack on an opponent.

That's exactly what Democratic Senator Barack Obama is doing.

Our Mary Snow is in New York.

Mary, why is this apology raising eyebrows, if you will, about the senator?

MARY SNOW, CNN CORRESPONDENT: Well, John, it's getting noticed because questions were raised about whether it's in line with Senator Obama's taking-the-high-road approach.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Now, I don't mind a good fight.

SNOW (voice-over): He may not mind a good fight, but Democratic presidential hopeful Senator Barack Obama is backing away from a dustup with the Clinton campaign. Obama blamed his staff for what he called a dumb mistake.

Obama's staff members secretly circulated a memo targeting Senator Hillary Clinton's financial ties to India. The memo referred to her as a Democrat representing the Indian state of Punjab, and it wound up in the hands of the Clinton campaign, who made it available to news organizations.

DOUG HATTAWAY, DEMOCRATIC STRATEGIST: It's not any different from any other campaign. But he's a different kind of candidate with a different kind of appeal. And I think that's the -- the challenge for him.

SNOW: That's because Obama is promoting himself as a politician above the fray.

OBAMA: We're selling a new kind of politics.

(CHEERING AND APPLAUSE)

SNOW: But that promise for a new kind of politics, say some Indian-American groups, clashes with what they call hurtful stereotyping, especially on the issue of outsourcing.

Obama has apologized, and said he was unaware of the memo's contents. A reference to Clinton representing Punjab was taken from a comment the senator jokingly made in 2006 at an Indian-American fund- raiser.

JENNY BACKUS, DEMOCRATIC STRATEGIST: I think the Obama campaign would have been in a lot more trouble with this memo if the facts hadn't been accurate, if Senator Clinton hadn't said that she should have been -- she could have been elected the senator from Punjab.

SNOW: While Obama distanced himself and blamed his staff, some political observers say he needs to proceed with caution. In February, he also faulted his staff for a row with the Clinton camp over Hollywood fund raiser David Geffen.

HATTAWAY: You don't want to be in the position of having to continually apologize for things that the campaign is doing.

(END VIDEOTAPE)

SNOW: And Democratic strategist Doug Hattaway says, the challenge for Obama is not to give the impression that his organization is not reflecting the ideals he's talking about on the campaign trail -- John.

KING: Mary Snow. And, if it's testy now, you can only bet it will get a little more testy as the caucuses and primaries get a bit closer.

Mary Snow in New York -- Mary, thank you very much.

The next presidential debate to be featured here on CNN will be July 23. We're teaming up with YouTube. It will be the first debate where all of you can submit your questions to the candidates online.

Up next in the "Strategy Session": The Democrats who want to be president lined up to speak to a powerful union.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: We need a strong union movement. We need a strong economy. And we need a president who wants to be on the side of the American people again.

(END VIDEO CLIP)

KING: But could all this outreach to the party base hurt the Democrats in the general election?

And today's White House shakeup could have reverberations on the campaign for one presidential candidate in a key battleground state. We will explain how and what it means -- all that coming up with Paul Begala and Terry Jeffrey, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

KING: A busy day for the Democratic presidential candidates in Washington here, gathering, on the one hand, to court major liberal activists, especially anti-war activists, also attending events sponsored by a major government workers union.

But courting the left can be a tricky courtship for Democratic candidates.

Joining me for today's "Strategy Session," CNN political analyst and Democratic strategist Paul Begala, and Terry Jeffrey, the editor at large for the conservative "Human Events."

Gentlemen, thank you very much.

Let's start with the Take Back America Conference. This has been going on now for a few years now. And Hillary Clinton made a famous remark, or a soon-to-come-campaign-ad-near-you remark, probably, at last year's event. But let's focus on this year's event.

Anti-war is the theme, the energy, the juice of the left right now.

Let's listen to Senator Barack Obama.

(BEGIN VIDEO CLIP)

OBAMA: We will call them. We will knock on their doors. We will bring our troops home. It is time to bring this war to a close. It's time to recognize there's no military solution to the problems in Iraq. It is time to turn the page.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

KING: Time to turn the -- time to turn the page, Senator Barack Obama says.

Paul, any concerns at all on your part that all of this, bring the troops home now, bring the troops home now, turn the page, close the door on Iraq, can come back to haunt the party in a general election?

PAUL BEGALA, CNN POLITICAL ANALYST: Not right now, no, because what you look for is dissonance between where the base is and those centrist voters, you know, where Bill Clinton trained me to live and breathe and win, right?

And, right now, there's no dissonance. Democrats hate this war and want to end it. Independents, a lot of thoughtful Republicans, hate this war and want to it end. The dissonance is on the Republican side, where those poor guys have to run in a primary where that tiny slice of America left, 28 percent that still calls themselves Republicans, they love George Bush, and they love his war.

They have to run in a primary where they love that and in a general election where Americans hate that. That's the problem that the Republicans have. In years past, my party has had similar problems. But, right now, the Democrats are right in synch with Middle America.

What Barack Obama just said, you could run that in the middle of a general election, and he would do well.

KING: You agree with that, harder for the Republicans to get back to the center, if you will, if anybody tries, in the general election?

TERRY JEFFREY, EDITOR, "HUMAN EVENTS": Well, I think the political analysis of the war, Paul is correct. It's not a political problem for the Democrats that they are trying to one-up each other to the left on who is more anti-war.

But it's a problem for the country, John, because, if one of these Democrats emerges, having promised to withdrawal all U.S. troops from Iraq, if they are, in fact, inaugurated president in 2009, what we are going to have is a disaster in the Middle East that that Democratic president will be responsible for. In other words, they are trading maybe the Democratic nomination for a huge disaster for the United States in the Middle East come 2009.

KING: Let's -- let's focus on the other conference in town. And, again, all of the Democratic candidates are trying to get there.

This is hosted by AFSCME, which is one of the most politically active, if not the most politically active, union in the Democratic Party, a big source of financial support for Democrat -- the Democratic Party organization and its candidates.

Let's listen to Senator John Edwards at that event.

(BEGIN VIDEO CLIP)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: So, your cause is my cause. Your cause is about strengthening America. And don't you think it's about time to have a president of the United States who will actually walk out on the White House lawn and explain to the American people why unions matter in America?

(END VIDEO CLIP)

KING: You mentioned that guy you used to work for. Bill Clinton was the governor of Arkansas when he ran for president. He was also the chairman of the Democratic Leadership Council.

And his central theme was: Look, I like unions. I like liberals, but our party has drifted way too far to the left, and the only way to win is to get back to the middle.

Have the Democrats essentially ripped up the Clinton playbook and said it's OK to go left again?

BEGALA: Now I'm splitting hairs, but the...

(LAUGHTER)

BEGALA: ... big, major union that endorsed Bill Clinton early, even though he had...

(CROSSTALK)

KING: Was AFSCME.

BEGALA: ... was AFSCME. This is mostly government employees.

And, so, I think Edwards is in a pretty good place, particularly with unions. You know, they're going to drive a lot of this primary nominating process. Edwards has a good record on those things, and, probably even more importantly, good relationships.

He's built this over the years. And so, no, I don't think that -- again, that that's a problem. I don't think people see unions as a problem anymore, the way that they see, say, big oil companies, where there's going to be a big vote in the Senate on whether oil companies should get tax breaks. Democrats want to repeal those tax breaks. Republicans want to keep them.

It's when you have to cast votes like that, your base against swing voters, that you get in trouble. Right now, people don't hate unions in America.

JEFFREY: John, this was the party of the big government talking to itself.

This wasn't the United Auto Workers. This isn't the Teamsters. This isn't guys driving trucks or putting together automobiles, the type of rank-and-file labor union guys who came out and voted for Ronald Reagan back in the 1980s.

These are government workers. So, what John Edwards is saying there, "You elect a Democrat, you're electing someone who is favor of government; I'm going to create more jobs for people in your sector of the economy," which is a sector of the economy that takes money from working people all over this country, gives it to Congress, gives it to state governments, and hands it out to these union members, who are, in fact, the government.

KING: OK. Let's turn the page, because why talk about the people actually running for president, when we can talk about Bill Clinton for a minute? (LAUGHTER)

KING: The former president is about to go to Iowa...

BEGALA: Right.

KING: ... to help his wife, who happens to be running for president, and has had a bit of a turmoil in Iowa about, is she serious about the state; is she going to invest to win in the state?

She's put a new campaign team in place. Now she's taking her husband out there to campaign for a few days. He's obviously very popular with the base of the party.

Are you using your secret weapon, or not-so-secret weapon, too soon, in your view?

BEGALA: No.

I mean, she clearly is playing to win in Iowa. She's not winning in Iowa right now. She's trailing in most of the reliable polls -- John Edwards doing very well there, Barack Obama, from a neighboring state, doing very well.

And, so, I think this is impressive. A few weeks ago, there was a leaked memo from an adviser to Senator Clinton, suggested maybe this guy thought she shouldn't run at all in Iowa. She's clearly rejected that advice.

But there is no more popular person in the Democratic Party than Bill Clinton. I mean, look, if Al Gore, if -- if -- if my old pal Bob Shrum had used Al Gore -- had had Al Gore use Bill Clinton more, Al Gore would be finishing his second term, and Bob Shrum would not be on Mount Losemore as the biggest...

(LAUGHTER)

BEGALA: .,... loser in the history of my party.

So, Clinton could deliver. And he will deliver for his wife.

JEFFREY: I think we're at a pivotal moment in the Democratic campaign, John.

A couple -- a couple of months ago, it looked like the Democrats were going to have wide-open primary; John Edwards could get the nomination; Barack Obama could get the nomination.

Hillary Clinton now has a prohibitive lead in New Hampshire. She is actually starting to tick up the polls in Iowa. If she can take Iowa, I think it's all over. And the truth is, there's a very small number of people who go out and vote in Iowa caucuses, maybe 100,000, maybe 120,000 people. They are prime voters. The Democrats know exactly who they are. They're people that love Bill Clinton.

Her going out there with Bill Clinton is wonderful for her. If she starts -- if she keeps moving up in Iowa, she will become the prohibitive front-runner in the Democratic race.

KING: Quick question to you. We're almost out of time, but, quickly, in closing, Jim Nussle, former congressman from Iowa, was backing Rudy Giuliani in the state. There are already questions about whether Rudy Giuliani is going to play to win in Iowa. He's not going to the Ames straw poll this summer.

Jim Nussle now leaving to become the Bush budget director, does it matter to Rudy Giuliani?

JEFFREY: Well, I think it does, because, in the Republican primary, a different dynamic is setting up.

While Giuliani is leading in the national polls, and Fred Thompson looks like, on a national level, he's got a lot of momentum, in Iowa, Romney is leading. In New Hampshire, Romney is leading.

If Romney can maintain that position and actually pulls off victories in Iowa and New Hampshire, he will have the momentum going into that February 5 giant primary to take Rudy on, and maybe get the nomination.

KING: Big mo'.

You got five seconds.

BEGALA: Yes.

I -- no, I think this could be the beginning of the air going out of the Giuliani Hindenburg. You know, I mean, I just think this thing -- it -- I never thought he was plausible as a candidate in the Republican Party. And the fact that he loses his most important supporter in one of the most important states, not good news for Rudy.

KING: Paul Begala, Terry Jeffrey, thank you both. Always a pleasure.

And still to come here: what you're telling Jack Cafferty about time off for U.S. troops in Iraq.

Also ahead, find out how Hillary and Bill Clinton are serenading the infamous New Jersey couple. Just might be music to everyone's ears. We will explain.

And on the campaign trail with the Secret Service -- we have got an inside, exclusive look at what it takes to protect our country's next president.

(COMMERCIAL BREAK)

KING: It's not every day Bill and Hillary Clinton would want to be compared to the Sopranos, but that's exactly what they're doing today to promote Hillary Clinton's new campaign theme song.

Let's bring in our Internet reporter, Abbi Tatton.

Abbi, what's behind this online parody?

ABBI TATTON, CNN INTERNET REPORTER: John, it's the culmination of this month-long contest where Hillary Clinton asked Web users to weigh in on what her campaign theme song should be.

The campaign says today that over 200,000 people voted online. Some of them weighed in with their own online videos. And the winner is announced through another online video. And a warning behind this one -- if you happened to be under a rock during "The Sopranos" finale and missed it, this one could go right over your head.

(BEGIN VIDEO CLIP)

(MUSIC)

H. CLINTON: Where's Chelsea?

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Parallel parking.

B. CLINTON: How's the campaign going?

H. CLINTON: Well, like you always say, focus on the good times.

B. CLINTON: So, what's the winning song?

H. CLINTON: You will see.

B. CLINTON: My money's on Smash Mouth. Everybody in America wants to know how it's going to end.

H. CLINTON: Ready?

(END VIDEO CLIP)

TATTON: Cut to black.

In case you missed it, that was a cameo appearance by "The Sopranos"' Johnny Sack. But this cliffhanger has a conclusion. The winner is, of the campaign theme song competition, Celine Dion's "You and I," a former theme song for Air Canada, didn't you know?

The campaign Web site is already blasting it out, alongside a big red contribute button, the second-quarter fund-raising deadline looming large. The message here, John: You have had your fun. Now send us your money.

(LAUGHTER)

KING: Wouldn't you know it?

Abbi Tatton, thank you very much.

Fade to black. Send money.

(LAUGHTER)

KING: Abbi, thank you.

And Jack is in New York with "The Cafferty File."

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Did you watch the last episode of "The Sopranos"?

KING: You bet I did.

CAFFERTY: It was awful. Did you -- did you think it was -- I mean, wasn't it awful? I thought it was awful?

KING: It was less than expected, although I was pretty close in my prediction.

CAFFERTY: What was your prediction?

KING: That Tony would live a normal suburban life.

CAFFERTY: Is that -- I mean, I -- I didn't even -- I went to bed wondering what the hell was going on when that thing ended. They're all sitting in the coffee shop, and it went to black, and I didn't understand any of it.

KING: I just work here.

CAFFERTY: I -- I understand.

(LAUGHTER)

CAFFERTY: Our question has nothing to do with "Sopranos."

Should U.S. combat troops in Iraq be given one month off for every three months they spend fighting?

Heidi in Germany writes: "Absolutely. As a military spouse stationed overseas and dreading the long deployments that lie ahead, this is something that makes it doable. The soldiers need to be allowed to take as much time as needed, considering the things they will be subjected to. Being downrange on your second or third tour, with mental health drugs in your front pocket, is clearly not a combat-ready soldier."

Bill in Phoenix writes: "Jack, perhaps we need to reinstate the draft. We're putting too much pressure on too few troops. I definitely think they need a month rest after two months of combat."

Dave in Utah writes: "This may sound cruel and not P.C., but we have given our soldiers more technology, personnel benefits and consideration than any other soldiers in military history. It's the grunts armed with little more than the fire in their bellies who win in Iraq, Afghanistan, Gaza, Vietnam, and the Little Bighorn. Of course, because I love and respect our own people, I would like to give our soldiers a month off for every three months of fighting. But who really wins the wars, employees or warriors?"

Jeff in Nebraska writes: "I find it ironic, the National Guard fighting our foreign wars. There's nobody left at home guarding our borders. Is it really just me?"

And K.V., Jacksonville, North Carolina. Listen up, Democrats: "Hey, Jack. We wouldn't have to worry about trying to give our troops a month R&R time for every three months they spend in the battle zone if the Democrats would live up to their election lies and get us the heck out of there."

Tough words -- John.

KING: Very tough. Thank you, Jack.

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