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Senator Under Investigation; All-Clear for Chief Justice Roberts; Cheney Takes on Clinton

Aired July 31, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, the Alaska Republican senator Ted Stevens is involved in a corruption probe one day after federal agents raided the senator's home.
CNN caught up with him. Stand by for that.

Also, the chief justice, John Roberts, he's now out of the hospital after he suffered a mysterious seizure that caused a hard fall. Doctors are puzzled over just what caused it.

And the mother could make history, but the daughter could have her own chapter. Is Chelsea Clinton willing to give up her privacy to put a second Clinton in the White House?

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

Right now, a top Republican senator is caught up in a public corruption investigation that stretches from here in Washington to Alaska. There are questions about Ted Stevens' ties to a company whose executives have pled guilty to bribing some Alaska public officials.

Federal agents have raided the home of the senator, a home he owns in Alaska, seizing many unidentified objects.

Our congressional correspondent, Dana Bash, is up on Capitol Hill.

You caught up with the senator just a short while ago. Tell our viewers what he said. What's going on?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, what's going on is that Senator Stevens really has been hard to find today, Wolf. In fact, I want to set the scene for you.

Take a look at some pictures from outside of Senator Stevens' main office here on the Capitol complex. Reporters, cameramen, they've been hanging out waiting to find him and to talk to him all day long. They've never seen him.

In fact, Senator Stevens has been actively trying to avoid us all day long. He did attend the Republicans' weekly lunch in the Capitol, but he slipped in and out a back door, down a back stairway in the Capitol.

I found him at the bottom of those stares and really had to kind of run after him to get some questions to him. He was pretty angry. Take a listen.

(BEGIN AUDIO CLIP)

SEN. TED STEVENS (R), ALASKA: I put out a statement and I'm not saying anything to anybody beyond that statement.

BASH: Can you say, sir, why the federal agents went to your House or what they took?

STEVENS: Can you understand English? That's the only statement I'm going to make.

BASH: I do understand that sir, but obviously this is a very important issue, when federal agents and IRS agents come to the home of a U.S. senator.

STEVENS: I understand you're recording this, but I told you again I made the statement. It's issued, that's what my lawyers told me to say, and that's all I'm going to say.

(END AUDIO CLIP)

BASH: Now, the statement that Senator Stevens was referring to is one that he released last night, essentially saying that he wants to let this investigation play out. He understands that Alaskan constituents are perhaps impatient, but he asked for their patience.

Now, the one thing he also said, Wolf, is that in this lunch with Republican colleagues, he did say that he asked them to "Stay with me." And so far, Wolf, they are.

BLITZER: Tell our viewers, Dana, why he's under scrutiny right now, the reason behind this extraordinary raid on his home in Alaska.

BASH: Well, there's an Alaska oil executive who is a big financial contributor to Senator Stevens, who just a couple of months ago pleaded guilty to bribing state officials. And what the feds apparently are trying to figure out is whether that executive's company, called VECO, whether that -- that company at all improperly paid for some of the renovations, big renovations, on Senator Stevens' House outside of Anchorage. The one that the feds actually did raid yesterday.

It's unclear whether that is the case. And I should say that Senator Stevens has very carefully in the past said that he and his wife paid every bill that was presented to them -- Wolf.

BLITZER: Dana watching this story that's not going away on Capitol Hill.

Let's get a closer look at the company that Dana just mentioned in this scandal. It's called VECO. It's an Alaska-based oilfield services company with more than 4,000 employees.

It services pipelines, performs other services in Alaska, across the U.S., and beyond. And VECO has taken in tens of millions of dollars in federal contracts.

The chief justice of the United States, John Roberts, walks out of the hospital one day after suffering a mysterious seizure. A statement from the U.S. Supreme Court says doctors decided there's no cause for concern.

Our senior correspondent, Allan Chernoff, is in Rockport, Maine, with the latest.

The court says Roberts is continuing, Allan, his summer vacation up in Maine?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Yes, Wolf, and hopefully he can get some relaxation now after yesterday's scare, because this time yesterday, doctors at this hospital were scanning the chief executive's brain. Fortunately, those exams showed no apparent problem.

(BEGIN VIDEOTAPE)

CHERNOFF (voice over): Chief Justice John Roberts walked out of the hospital with a wave to cameras, 20 hours after arriving in this ambulance. Roberts had suffered a seizure yesterday afternoon on a dock near his island vacation home, just off the coast of Maine.

Emergency medical technician Mike Smith answered the 911 call.

MIKE SMITH, EMERGENCY MEDICAL TECHNICIAN: He has taken a fall. He fell going up the boat ramp. That's about all I'm at liberty to say.

CHERNOFF (on camera): So, how much of a fall was it? I mean, did he just fall back? Or what happened?

SMITH: He fell backwards about five feet.

CHERNOFF: Fell backwards. Just boom?

SMITH: Yes.

CHERNOFF: Bang his head?

SMITH: Yes.

CHERNOFF: How badly?

SMITH: He banged his head. That's -- I'm not at liberty to say.

CHERNOFF (voice over): Smith placed Roberts in a cervical collar and brought him back to the mainland on this boat.

SMITH: We put him right on that stretcher and brought him back and forth.

CHERNOFF (on camera): So, he was right on this stretcher up here? SMITH: Yes.

CHERNOFF: In the ambulance?

SMITH: Yes.

CHERNOFF: Was he conscious the whole time?

SMITH: Conscious and alert the whole time.

CHERNOFF (voice over): At Penobscot Bay Medical Center, neurologist Dr. Judd Jensen (ph) scanned the chief justice's brain.

CHRIS BURKE, PENOBSCOT BAY MEDICAL CENTER: He suffered what doctors described as a benign idiopathic seizure.

CHERNOFF: Idiopathic, meaning doctors found no cause, such as a tumor or blood clot. Still, as a precaution, Justice Roberts remained at the hospital overnight.

(END VIDEOTAPE)

CHERNOFF: After yesterday's medical exam, the Supreme Court put out a statement saying doctors believe there is no cause for concern. But we do know this is the second time that Roberts has had a seizure. He had one 14 years ago -- Wolf.

BLITZER: And that suggests why some are saying he's suffering from epilepsy.

Tell our viewers why.

CHERNOFF: It's certainly a possibility. A lot of medical experts say if you have two seizures, that is an indication that you do have epilepsy. But we should point out, you can also have seizures from other issues -- a rapidly rising temperature, rapid fever, high fever. Also if you get a certain infection like meningitis, or someone with diabetes, if they have low blood sugar.

To our knowledge, Justice Roberts does not have any of those conditions. So, it certainly is very possible that he does have epilepsy. But, Wolf, we should point out, doctors here and elsewhere, they're not commenting at all on the justice's condition.

Back to you.

BLITZER: And we're happy he could resume his vacation and wish him only, only the best.

Allan, thanks very much for that.

And I know I speak for Jack Cafferty when I utter those words as well.

Jack, he's the Supreme Court. He's the chief justice of the United States. And we have to wish him a very, very speedy recovery. JACK CAFFERTY, CNN ANCHOR: Oh, absolutely.

BLITZER: I hope it isn't serious, although the spokesman at the U.S. Supreme Court, they're quick to insist it's no big deal. But you know what? People have a seizure, that's a big deal.

CAFFERTY: You know what else may be a big deal? The fact that he had this other seizure that Allan talked about in 1993. And apparently, from what I was reading about -- and we're going to talk more about this later -- the Senate Judiciary Committee was aware of the first seizure that he had during his confirmation hearings, but according to Senator Arlen Specter, they saw no need to reveal that information.

And I'm just curious on -- on what basis they make that judgment, that we're not entitled to know -- we, being the public -- that the nominee to be chief justice of the United States is subject to seizures. As I said, we'll talk about...

BLITZER: It's a good question. And I'm going to have Arlen Specter here in THE SITUATION ROOM in the next hour.

CAFFERTY: Yes.

BLITZER: And I'm going to ask him that question.

CAFFERTY: Well, there's a good idea. See, that's why you're the Wolf man.

BLITZER: That's why you're Jack Cafferty.

CAFFERTY: Let me go on to this other thing because you won't have any time left.

No Child Left Behind is up for renewal. As it stands, the law requires annual math and reading tests in third through eighth grades, and then once while the student's in high school.

Schools where students don't perform well on these tests are penalized. They must offer tutoring and in some cases their principal is fired.

Critics say there's more to becoming an educated person than simply being able to pass a test. They say that No Child Left Behind puts too much emphasis on test scores.

The chairman of the House Education Committee says tests are important indicators but suggests that other barometers be used, things like graduation rates, test scores in subjects other than math and reading, or giving teachers merit pay based on student achievement. The ranking Republican on the committee, though, warns his party will oppose any changes to the bill that would weaken what he calls accountability, flexibility and parental choice.

President Bush pushed for No Child Left Behind in 2001. "The New York Times" reports the secretary of Education is hinting that the White House would rather see no bill at all than one that "rolls back the clock of school accountability."

So here's the question: Should No Child Left Behind be left behind?

E-mail your thoughts, caffertyfile@cnn.com, or go to cnn.com/caffertyfile -- Wolf.

BLITZER: Jack, thank you for that.

Coming up, Dick Cheney is not backing down. In an interview with our own Larry King, he takes on Hillary Clinton, among other subjects. You're going to hear what the vice President has to say.

And Larry himself is here in THE SITUATION ROOM. He'll be joining me live.

Also, the fight is not over in the war of words between Barack Obama and Hillary Clinton. Why is Obama keeping the feud alive online?

And a letter hopes to clarify the attorney general's testimony about the Terrorist Surveillance Program. It hopes to clear up any doubt over whether Alberto Gonzales was telling the truth.

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

(COMMERCIAL BREAK)

BLITZER: He says the embattled attorney general is a good man on a difficult assignment, and he even weighs in on Senator Hillary Clinton. All this as Vice President Dick Cheney sat down for a one- on-one interview with our own Larry King.

And Larry is here in THE SITUATION ROOM to give us a little bit of a preview.

Larry, thanks very much for coming in to THE SITUATION ROOM.

LARRY KING, HOST, "LARRY KING LIVE": I've always liked being in THE SITUATION ROOM.

BLITZER: Well, even when you're in Los Angeles...

KING: It's so much better. I like it better than up there.

BLITZER: ... and you're up there, you're in THE SITUATION ROOM.

KING: But I like being "in" in. This is "in" in.

BLITZER: Let's talk a little bit about the interview you had with the vice president.

KING: We taped it this morning at the ceremonial room at the vice president's mansion. Not mansion, at the...

BLITZER: The Old Executive Office Building. They used to call it the Old Executive Office...

KING: Now it's the Eisenhower.

BLITZER: Right. Right next door to the West Wing of the White House.

KING: And it will play at 9:00 tonight Eastern.

BLITZER: All right.

Let's talk a little bit about the exchange you had with the vice president on Hillary Clinton. And I'll give a little bit of background.

She asked as a member of the Armed Services Committee for some information about possible troop withdrawal plans from the Pentagon. As a member of the committee, she got a pretty tough response from the under secretary of defense, Eric Edelman, "Premature and public discussion of the withdrawal of U.S. forces from Iraq reinforces enemy propaganda that the United States will abandon its allies in Iraq."

She responded in outrage that she was being accused of aiding enemy propaganda. She then got a subsequent letter from the defense secretary, Bob Gates, saying, "I truly regret that this important decision went astray, and I also regret any misunderstanding of intention," seeming to back away a little bit from that Edelman letter.

But when you spoke about that with Cheney today, listen to what he said.

(BEGIN VIDEO CLIP)

KING: A member of the Department of Defense sent Hillary Clinton a letter saying she should not criticize, because it helps the enemy.

Do you agree with that letter?

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: It didn't say she should not criticize. She was demanding the plans for withdrawal from Iraq.

KING: Do you agree with that letter?

CHENEY: I agreed with the letter Eric Edelman wrote. I thought it was a good letter.

KING: So you should not call for the plans for withdrawal?

CHENEY: No. There's an important principle here, Larry. And that is, you know, debate over what our policy ought to be is perfectly legitimate. What we don't do is we don't get into the business of sharing operational plans. We never have with the Congress.

(END VIDEO CLIP) BLITZER: He was blunt there...

KING: Very.

BLITZER: ... in sending a pretty strong signal to the Democratic presidential front-runner.

KING: Very. And not only blunt to her, but seeming to say to Mr. Gates, you know, I'll take it from here. That was pretty strong stuff.

BLITZER: And Eric Edelman used to work for Cheney. So he knows this man very well, and he knows the background.

KING: Now, you know the game better than anyone. Will Hillary respond to him?

BLITZER: Oh, you better believe. As soon as they hear this, they're going to get another response from the Hillary Clinton campaign.

KING: Then it snowballs.

BLITZER: Yes. This is going to go on. And it's good for her to a certain degree, because anytime she's in a fight with the vice president, it will help her with the Democratic base. So, this is going to generate some reaction.

KING: Good point.

BLITZER: Let's get to another interesting exchange you had with the vice president on the whole issue of who came up with the idea to send the then White House counsel, Alberto Gonzales, and the chief of staff, Andy Card, to George Washington University Hospital, where the then attorney general, John Ashcroft, was recuperating. He was very, very sick.

We've got another exchange that you had. Listen to this.

(BEGIN VIDEO CLIP)

KING: "The New York Times," which, as you said, is not your favorite paper, reports that it was you who dispatched Gonzales and Andy Card to then attorney general John Ashcroft's hospital in 2004 to push Ashcroft to certify the president's intelligence-gathering program.

Was it you?

CHENEY: I don't recall the -- first of all, I haven't seen the story. And I don't recall that I gave instructions to that effect.

KING: That would be something you would recall.

CHENEY: I would think so. But certainly I was involved because I was a big advocate of the Terrorist Surveillance Program. (END VIDEO CLIP)

BLITZER: You know, Larry, those words "I don't recall," that's going to, I think, you know, subject him to some criticism, because, as you correctly point out, a major decision like that, someone would recall.

KING: I was surprised at the answer, because he hinted at it being involved and certainly being for the concept. I don't know why he didn't just say -- however, I'm not going to put words into his mouth. That was his answer, "I don't recall."

I think the one thing of the beauty of our job is, the audience then looks at this, takes it any way they wish.

BLITZER: And they can make up their own minds.

KING: That's right.

BLITZER: That's what we do.

KING: That's all we do, is put the plate out to the table.

BLITZER: Larry King's interview with the vice president airs tonight, 9:00 p.m. Eastern on "LARRY KING LIVE".

Larry, thanks for coming in to THE SITUATION ROOM.

KING: Great to be with you, Wolf.

BLITZER: Always a pleasure.

KING: Thanks.

BLITZER: Still ahead, Bill Clinton is speaking out about the war of words between his wife and Democratic presidential rival Barack Obama. You're going to want to hear what he has to say.

And Iraq's parliament is going on vacation in the midst of the insurgency. Is it the right move?

I'll ask a major supporter of the troop buildup. Senator Lindsey Graham is standing by live.

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

(COMMERCIAL BREAK)

BLITZER: Bill Clinton is now weighing in on what he's calling the spat between his wife, Senator Hillary Clinton, and Senator Barack Obama over the issue of diplomacy. Clinton spoke yesterday at the convention of the moderate Democratic Leadership Council.

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

What did Bill Clinton have to say, Abbi? ABBI TATTON, CNN INTERNET REPORTER: Wolf, in weighing in, Bill Clinton trying to stress the common ground.

(BEGIN VIDEO CLIP)

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: I don't want to get in the middle of that little spat Hillary and Senator Obama had, but there's more than one way to practice diplomacy. You can make up your own mind about that.

I think -- the point I want to make is that they and all of our other Democrats had a bigger disagreement on the big question, which is, should we have more diplomacy? The answer is yes.

(END VIDEO CLIP)

TATTON: Meanwhile, Barack Obama is continuing to stress the differences. He's taken the spat online to liberal blogs.

These campaign ads that you see here, all over them highlighting judgment and diplomacy in foreign policy. Not mentioning Hillary Clinton by name, but directing people to his Web site and a series of videos there that show Barack Obama opposing the Iraq war from the start.

The ads come right before Obama and Hillary Clinton and other Democrats appear at the YearlyKos Convention, a large gathering of the liberal anti-war blog community that's coming up at the end of this week.

Meanwhile, no Democratic candidate appeared at the DLC convention -- Wolf.

BLITZER: Thank you for that.

Abbi watching this story.

(NEWSBREAK)

BLITZER: Up next, CNN has obtained the letter that hopes to clear up any doubt over whether Attorney General Alberto Gonzales was telling the truth in some recent congressional testimony.

We're going to share it with you. That's coming up next.

And mother and daughter poised to make history. But is Chelsea Clinton ready to sacrifice her personal life to help her mother win?

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

(COMMERCIAL BREAK)

BLITZER: Happening now, President Bush's pick to head the Joint Chiefs of Staff says political reconciliation and economic growth are critical to a stable Iraq. At his Senate confirmation hearing today, Navy Admiral Michael Mullen said, "Without that" -- and I'm quoting now -- "no amount of troops will make much of a difference."

Secretary of State Condoleezza Rice and Defense Secretary Robert Gates make their pitch in the Middle East. They're meeting with Arab allies. They're in Saudi Arabia right now to try to shore up support for the war in Iraq and to counter Iran's growing influence throughout the region.

And the man convicted of trying to blow up an American Airlines jet with explosives hidden inside his shoe says he has no regrets. Richard Reid, who is serving 110 years at a Colorado prison, tells a British newspaper he believes Allah will set him free.

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

CNN has just obtained what's being described as a significant letter written by the Bush administration to Republican Senator Arlen Specter. It seeks to clarify recent testimony from the attorney general, Alberto Gonzales, concerning the Terrorist Surveillance Program.

Let's bring in our White House correspondent, Suzanne Malveaux. She's here.

This letter written by -- by Admiral McConnell, the director of National Intelligence. Give our viewers a sense why they see this as significant. What's going on?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Sure, Wolf.

What's important here is that Attorney General Alberto Gonzales says that there were no major disagreements when it came to the Terrorist Surveillance Program and that the disagreements he's referring to are other intelligence activities. So, a couple of points in this letter to try to clarify and essentially defend what he is saying.

The first one says, "A number of these intelligence activities were authorized in one order..." saying that there are other intelligence activities that he could be referring to.

Secondly, Gonzales says he was being very specific. He was referring to that secret wiretapping, eavesdropping program, the Terrorist Surveillance Program.

The key line in this letter says, "One particular aspect of these activities and nothing more was publicly acknowledged by the president and described in December of 2005." That is what Gonzales says was the Terrorist Surveillance Program.

So, what other program are they talking about? Again, they say it's classified. It's top secret, the third line in the letter that is key. This is the only aspect of the NSA activities that can be discussed publicly.

So, what they're saying is, everything else is secret, but -- but what he was talking about specifically was the program, the terrorist surveillance program.

BLITZER: The warrantless wiretap program.

MALVEAUX: Right.

BLITZER: Because there are other aspects that were authorized in the immediate aftermath of 9/11, authorized by Congress, extended by the president every 45 days or so, that have never been publicly discussed, even though "The New York Times" had a very long article about it over the weekend, other details of this classified program that the administration has never publicly discussed.

MALVEAUX: Right.

BLITZER: And, Wolf, as you know, we reported earlier in the week, it's called data mining, essentially. The controversy is not over the eavesdropping, but what do you do with all of that information, the e-mails, all of the -- the phone records, those type of things? What can the government do legally with all the data that it collects? And that's what they're talking about.

It's not what they specifically say in the letter, because they say it's classified. And the big question here is whether or not Senator Specter and some of the others are going to be satisfied with this explanation and whether or not they're going to go forward with those perjury charges.

BLITZER: And we are going to be speaking with Senator Specter. That's coming up.

We also want to apologize. We inadvertently put up a picture of Bob Gates, instead of Alberto Gonzales, up in one of your graphics. We want to make sure that we were referring to Alberto Gonzales, not the defense secretary.

Suzanne, thanks very much.

MALVEAUX: Thank you.

BLITZER: Senator Lindsey Graham has called some of Gonzales' testimony before Congress a stretch. That was back in April.

The South Carolina Republican is joining us now to discuss Gonzales and the situation in Iraq, among other things.

Senator Graham, thanks very much for coming in.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Glad to be with you. Thank you, Wolf.

BLITZER: Do you want to react first, on the limited information you probably have, from this letter that was just released to Arlen Specter trying to clarify whether or not the attorney general, Alberto Gonzales, committed perjury?

GRAHAM: Well, I think it would probably behoove me to talk to Senator Specter. You know, this whole idea of committing perjury and a special prosecutor I don't think is warranted based on the facts as I understand them.

And we will -- we will just see where this goes. But the attorney general has a credibility problem in general with the Congress, and I don't know if this helps or not with Senator Specter. I will leave that up to him.

BLITZER: You want him gone?

GRAHAM: Well, if the president chooses to keep him, I will work with him. But he's damaged himself up here. And I will leave that up to the president. But I will work with the attorney general where I can. But to say that he hasn't damaged himself would just -- would be denying the obvious.

BLITZER: And I just want to point out to our viewers, Lindsey Graham is a member of the Senate Judiciary Committee as well.

I want to raise this other issue, because it's an important issue, especially in South Carolina, where you're up for reelection. It involves immigration reform. As all of our viewers and all of the people in South Carolina remember, you supported McCain, Senator McCain, Senator Kennedy, and the president when they wanted comprehensive immigration reform, including steps that would lead eventually towards citizenship for some of the 12 million -- or at least many of the 12 million illegal immigrants in the United States right now.

That's caused you a lot of political grief back home, especially as you seek reelection. Now you're supporting legislation that narrowly focuses in on the borders, trying to strengthen the borders to keep illegal immigrants out.

Is -- what is -- what is going on, Senator? Because, earlier, you had suggested often this has to be part of a bigger package.

GRAHAM: Well, I think, eventually, it will be part of a bigger package. But the one thing we learned from this debate is that there's a lot of skepticism in the country about a comprehensive solution, because the whole point is, if we do what you say, why won't there be 12 million the next time around?

You know, Ronald Reagan had amnesty for three million, and here we are 20 years later, 20 years later, dealing with 12 million. I thought the comprehensive approach was the right approach. But the idea of border security first was part of the underlying bill.

Under the actual bill that we proposed, you could not have any legalization process until the border was certified as being secure. So, what we did with this amendment of mine is, we took out the border security provisions and put $3 billion funding behind them to secure the border as a first step.

But it's just a first step. There's much more to be done. We're not safe just by securing the border. If you want immigration reform, you're going to have to do a lot more than just that.

BLITZER: Because the critics of McCain/Kennedy, what the president wanted, were saying from day one, focus in on the border issues first, the security issues first. Then, the other stuff, the guest-worker program, the pathway towards citizenship, making the 12 million or so illegal immigrants legal residents of the United States, that has to wait. First, secure the border.

So, here's the question. Were they right?

GRAHAM: Well, the actual bill, the Isakson amendment, said that you could not have permanent legal status, much less citizenship, until the border was certified as being secure.

So, the bill adopted that approach. So, let's start with where we find agreement, securing our border. But why do people come? Why do we have 12 million people? Not just because the border is broken, because they come here to get jobs. If you want to stop people from coming across our border, overstaying their visas to get jobs, deal with how you hire people. Control the employment process. Have tamper-proof cards.

That's yet to be done. So, until you deal with the employment part, securing the borders is a first step, but that's not going to stop illegal immigration by itself. Forty percent of the people never came across the border that are here illegally. You have got to control the visa problem. That's yet to be done.

BLITZER: Senator Graham, let's switch to Iraq.

As you know, the Iraqi government has not yet done anything to come up with an oil-sharing agreement...

GRAHAM: Right.

BLITZER: ... has done nothing to disarm all the various militias, has done nothing to hold local elections, to revise their Constitution. They went on vacation today until early September. Are you outraged by this?

GRAHAM: Well, in a way, I think the politicians in Baghdad are going to go back to their local constituencies and -- and get an earful.

There is reconciliation going on in Iraq. It's going on at the local level. Anbar Province is a success story from the surge of where people turned on al Qaeda, joined forces with us, and they're joining the police, and they're beginning to reconcile themselves within that province. That's not embracing democracy, but it's rejecting al Qaeda.

When I was in Iraq last time, I heard from every local official there that the politicians in Baghdad were really letting us all down. So, I'm hopeful, when they go back to their constituencies, they will get an earful of a disappointed public, and that may motivate them more than any American politician. I can't vote for people, the Maliki government, but the people in Iraq who can vote are pretty upset. Maybe they will learn that when they go home.

BLITZER: You believe there can be political reconciliation in Iraq? The military effort...

GRAHAM: Yes.

BLITZER: ... seems to be making progress. At least, that's what the U.S. military insists on a daily basis. But what about the long- term ability of the Shiites, the Sunnis and the Kurds to actually live with each other on a day-to-day basis?

GRAHAM: I think there's some evidence from the surge at the local level that, at the local level, Sunnis and Shias are forming alliances in provinces, not at the -- the Baghdad level, to do exactly that.

The idea that local people have come together to reject al Qaeda and other extremist groups is probably one of the good-news stories of the surge. So, yes, I think that dynamic can repeat itself.

But let me say this as a supporter of the surge. I'm impressed tremendously with the success, militarily, against al Qaeda and other groups. It's exceeded my expectations. But the political part of this is stagnant. And I agree with you 100 percent and Admiral Mullen that all the military might in the world is not going to win in Iraq until the Iraqi political leaders reconcile their country.

But the gateway to reconciliation is security at the local level, and at the central government level. You got to have security to do political deals. You got to have security to have economic progress. And I think that's what was missing before.

BLITZER: Senator Graham, thanks for coming in to THE SITUATION ROOM.

GRAHAM: Thank you.

BLITZER: Vice President Dick Cheney says that Democrats are on a witch-hunt after Alberto Gonzales and Karl Rove. I will take a closer look at his claims. That's coming up in our "Strategy Session."

And the Chelsea factor -- Chelsea Clinton could become the first daughter for an historic second time. But what kind of impact will she have on the campaign trail?

Much more of our coverage on all that, and a lot more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

The entire family could have a special chapter in American history, possibly the first woman to become president, possibly the first former president to become first husband, and a daughter helping to put a parent in the White House for a second time. That daughter would be Chelsea Clinton.

CNN's Mary Snow is in New York.

Does it appear that Chelsea, a woman is now a grown woman, Chelsea Clinton, who is now a grown woman, is ready to sacrifice some of her privacy to help her mother become president of the United States?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, that remains to be seen.

But, you know, as of now, Chelsea Clinton is keeping a low profile and a limited role in the 2008 race.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Senator Hillary Clinton has called her daughter a great adviser and one of her biggest supporters. But, so far, Chelsea Clinton has been seen, but not heard in her mother's presidential campaign. Even in this "Sopranos"-spoofing campaign video, she remains in the background.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Where's Chelsea?

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

(END VIDEO CLIP)

M. SNOW: But Chelsea Clinton is so well known that curiosity about her potential role in her mother's presidential campaign made front-page news in "The New York Times" without her even uttering a word.

Now 27, she lives in New York and works for a hedge fund, a long way from the days when she was introduced to America at the 1992 Democratic Convention.

(BEGIN VIDEO CLIP, 1992)

CHELSEA CLINTON, DAUGHTER OF BILL AND HILLARY CLINTON: Sometimes, my dad, to make me laugh, makes like funny faces.

(END VIDEO CLIP)

M. SNOW: In the 2004 presidential election, saying the stakes were too high not to speak, she campaigned for Democrats John Kerry and John Edwards.

(BEGIN VIDEO CLIP, 2004) C. CLINTON: I'm not accustomed to public speaking, and this is my first political speech.

(CHEERING AND APPLAUSE)

C. CLINTON: Thankfully, I have a couple of experts in the family.

(LAUGHTER)

C. CLINTON: And I hope to do them proud.

(END VIDEO CLIP)

M. SNOW: The Clinton campaign isn't saying if Chelsea Clinton will have an official role. And the Clintons have been guarded.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

B. CLINTON: She cares a lot about the politics, and she wants her mom to win, but she's got a life to live. We don't want to interrupt that.

(END VIDEO CLIP)

M. SNOW: Chelsea Clinton did interrupt her life as a college student to campaign for her mother in the final months of her 2000 Senate race.

MICHAEL TOMASKY, AUTHOR, "HILLARY'S TURN": It added a little something, and I think the Clinton campaign knew that, that -- that Chelsea's presence would add a little bit of -- a little twist toward the end.

(END VIDEOTAPE)

M. SNOW: And, during the 2000 campaign, reporters say they hardly remember Chelsea Clinton speaking to them. That, of course, is expected to change if she took on a more active role in her mother's campaign -- Wolf.

BLITZER: What a story. Let's just hope Chelsea Clinton is happy. I remember covering her when she was a little girl when Bill Clinton first became president back in 1993. And, as all of the White House correspondents, in those days, we gave her a lot of space, a lot of privacy.

Mary, thanks very much.

Let's see what Chelsea Clinton winds up doing.

A political showdown is shaping up over the attorney general, Alberto Gonzales.

(BEGIN VIDEO CLIP) TONY SNOW, WHITE HOUSE PRESS SECRETARY: This was the kind of thing that is designed to -- to turn up the temperature, rather than to turn on the light.

(END VIDEO CLIP)

BLITZER: The vice president just announced his support for Gonzales, while another top Republican could be taking aim. The brewing political battle, that's coming up in our "Strategy Session."

And do you think the No Child Left Behind law should get left behind? Your e-mail to Jack Cafferty, that's coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Vice President Dick Cheney is weighing in on the controversy surrounding the embattled U.S. attorney general, Alberto Gonzales. He's calling it a witch-hunt by Democrats.

Let's get to our "Strategy Session" today, our CNN political analyst, the Democratic strategist Donna Brazile. And joining us as well is the former House Majority Leader Dick Armey.

Guys, thanks very much for coming in.

Here's what the vice president told Larry King earlier today about the Democrats' efforts to get information on the firing of those U.S. attorneys.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: With respect to the U.S. attorneys, there's been, I think, a bit of a witch-hunt on Capitol Hill, as they keep rolling over rocks hoping they can find something. But there really hasn't been anything come up that would suggest there was any wrongdoing of any kind.

(END VIDEO CLIP)

BLITZER: And he also didn't budge on the issue of Karl Rove being allowed to go testify before the Senate Judiciary Committee, except under the conditions they have already put forward, not in public, no transcript, and not under oath. Those are pretty stringent conditions.

So, what do you make of this?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, the Democrats are not planning to budge. The Democrats would like to get to the bottom line, get the facts. They want Karl Rove to testify. They want the administration to stop stonewalling, release the documents, and go ahead and tell the American -- the American people the truth.

BLITZER: When you were in Congress and you were a leader there, if the Clinton administration would have given you those conditions -- we will let John Podesta go testify, but no transcript, not public, not under oath -- would you have accepted that?

DICK ARMEY, FORMER REPUBLICAN HOUSE MAJORITY LEADER: I don't know. I don't know what would have been acceptable.

I find myself mostly amused by all this. I think the attorney general might be guilty of incompetence. But I think the Democrats have done what politicians do on both sides of the aisle. They seize the opportunity to make a mountain out of a molehill, make something bigger than life, feign moral outrage, scandalize, and tie the administration up, and try to embarrass them.

This is a political road show. And, for some, it's quite entertaining. But, for most of America, I think they're probably like I am. They are saying, you know, I really have really serious things I would like to see them addressing. I wish they would get beyond that and get to they things that I'm worried about.

And I think the Democrats risk running into the problem the Republicans did in the last election cycle, having an electorate that are just tired of seeing them entertaining themselves with things I don't care about.

BLITZER: Could this strategy backfire for the Democrats?

BRAZILE: I don't think so.

Look, the Republicans had six years to provide oversight. That's their congressional responsibility. They provided no oversight. And Mr. Gonzales, with all due respect, has starred in his own demise. He has given plenty of conflicting testimony. And even the Republicans believe -- you heard Senator Graham -- he has no credibility.

BLITZER: All right.

(CROSSTALK)

BLITZER: Go ahead. Make your final point...

(CROSSTALK)

ARMEY: But, again, the point still remains. For most of America, this isn't -- this is a lot of to-do about very little that's taking place and tying up resources that we wish would be put to the big issues of our time that touch our lives.

BLITZER: Yesterday, when Ken Pollack of the Brookings Institution was here -- he's just back from an eight-day visit to Iraq, and he said there is military progress that he saw in the Al Anbar province and elsewhere -- I asked him what advice he would have for Democrats, whether or not they should hold their fire in calling for an immediate troop withdrawal from Iraq.

And I said, would you urge them to hold their fire? This is what he said.

(BEGIN VIDEO CLIP) KENNETH POLLACK, SENIOR FELLOW IN FOREIGN POLICY STUDIES, BROOKINGS INSTITUTION: Yes, I would.

Look, the problem with getting out is that we don't know what comes after. And we could create as many problems, if not more problems, than we solve by leaving.

(END VIDEO CLIP)

BLITZER: What -- what do you think about that advice from Ken Pollack?

BRAZILE: Well, he can keep it to himself, because I don't think anybody is listening to Ken Pollack right now.

The Democrats have come to the conclusion that it's time to begin to withdraw our troops. And while the Democrats welcome good news on the military front, 73 soldiers died in July. That's great news.

BLITZER: That's not good news. I mean, 73...

BRAZILE: I mean, that -- it's only 73, and not over 100.

(CROSSTALK)

BRAZILE: We feel -- we don't want one troop.

BLITZER: It's better than 200 or 150.

BRAZILE: It's better than 200.

But the point is, is that it's time to get to the truth. And the truth is, is that we're not making much political progress. And the Iraqi government has taken a vacation for the next 30 days.

And General Petraeus may report some progress, but he's not going to report any political progress.

BLITZER: Good news would be when zero U.S. troops die in a month.

BRAZILE: Absolutely.

BLITZER: But go ahead.

ARMEY: Well, I agree. That would be good news. And I understand when -- the -- the important word that Donna was using was only.

BRAZILE: Yes.

ARMEY: Only 73.

BRAZILE: Well...

ARMEY: But the fact is, at this point in time, it seems to me the prudent thing for the Democrats would be, let the president set his plan. Let him play it out. Let's hope and pray for the best. But let's be prepared to take -- to raise our voices at a time that is appropriate.

I think, right now, they run a political risk by being too vocal about withdrawal in the middle of this -- of this surge. I think -- I think they got good advice. My best bet is, their left won't allow them to take that good advice, and they will do themselves harm. And that, of course, will make me feel terrible.

BRAZILE: It's -- it's not just the left. It's the American people have come to the conclusion that it's time to bring our troops home.

(CROSSTALK)

BLITZER: All right, guys, thanks very much, Donna and -- Donna Brazile, Dick Armey. Good to have both of you here in our "Strategy Session."

He's nominated to be the next chairman of the Joint Chiefs of Staff. But he says more U.S. troops are not the answer to Iraq's problems. Find out why Admiral Mike Mullen says -- what he says should happen.

And we have just been told -- we have been telling you about a new letter written by the director of national intelligence. The Republican Senator Arlen Specter hopes to clear up any doubt over whether the attorney general, Alberto Gonzales, was telling the truth in some recent testimony. I will speak with Senator Specter about that. I will ask him what he thinks -- all that coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Rudy Giuliani tops our "Political Radar" today.

The Republican presidential front-runner says he wants to give you more control over your health care. At a town hall meeting in New Hampshire, Giuliani unveiled his proposal. He plans to give people tax credits to buy private health insurance. And while the former New York City mayor couldn't say how much his plan would cost, he wasted no time slamming his Democratic rivals for their proposals to try to fix health care in the country.

(BEGIN VIDEO CLIP)

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: You have got to do it the American way. The American way is not single-payer, government-controlled anything. That's a -- that's a European way of doing something. That's a -- frankly, a socialist way of doing something. That's why, when you hear Democrats in particular talk about single-payer, mandated health care, universal health care, what they're talking about is socialized medicine.

(END VIDEO CLIP) BLITZER: Fred Thompson raised nearly $3.5 million last month for his likely presidential campaign. That number was released today by his -- quote -- "Testing The Waters Committee." It's less than $5 million than supporters had hoped for. Thompson's expected to formally announce his candidacy for president in September.

Democratic presidential candidate Joe Biden is out with a new book today. The memoir called "Promises to Keep" looks at his personal and political challenges.

I will speak with the chairman of the Senate Foreign Relations Committee right here in THE SITUATION ROOM on Thursday.

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

Let's go to Jack Cafferty in New York for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Thanks, Wolf.

Wolf, by the way, is part of the best political team on television. Did you know that?

(LAUGHTER)

BLITZER: Thank you for reminding our viewers.

(LAUGHTER)

CAFFERTY: That's right.

The question this hour is: Should No Child Left Behind be left behind? That law's due to expire, and it's up for debate in the Congress over whether or not it's going to be renewed.

M. in El Paso, Texas: "I teach high school, and this program, plus the Texas TAKS test that must be passed in order to get a diploma, take precious time away from covering the curriculum. Too many interruptions, teaching the test, practicing the test, taking the take, then more teaching and testing of test. All it does is damage the educational process."

Ted in San Marcos, California: "It certainly seems to be a failure, from everything I have read. We should redirect whatever we're spending on this boondoggle and use it to offset the costs of vouchers, so kids can go to private schools that actually work. Most of our public schools are a joke."

Joe in Illinois: "Absolutely not, Jack. We're finally holding the teachers responsible for the product they are producing by sampling that product. Keep it the way it is."

Pam in Mad River, California -- there's a town name -- "It's not working. In our school, all of 100 kids from preschool through high school, the kids are being put through whether they do the work or not. They're not being left behind. They're being put through without learning to read or write. And we all lose in the long run."

Jason in Arizona: "It's a useless program that does more harm than good. It should be scrapped, along with forcing teachers in the Southwest to learn Spanish, paid for with their own money. Teachers now teach to prepare a student for the AIMS test in Arizona, instead of actually teaching them something to use in life."

And Bob in Connecticut: "Jack, No Child Left Behind is the worst education policy ever devised since we climbed down from the trees. NCLB is so stupid, even a caveman can do it."

(LAUGHTER)

CAFFERTY: Wolf.

BLITZER: Going to get some reaction from those cavemen.

Thanks, Jack, very much.

Details coming up.

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

Happening now: More troops, more time won't make a difference in Iraq. That's the surprising statement from the man picked to head the Joint Chiefs of Staff -- details coming up.

He tried to blow up an airliner with explosives hidden in his sneakers and was sent away for life. Now the shoe bomber is sending messages from prison.

And is "Vanity Fair" unfair?

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