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The Situation Room

Huckabee Yanks Ad Attack; Mad Dash Across Iowa; Bhutto's Widower Speaks Out

Aired December 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, right here in the United States, Mike Huckabee says enough is enough. The Republican unveils a new ad attack on Mitt Romney and then does something really surprising.
I'll talk live with both Huckabee and Romney just three days before the Iowa caucuses. That's coming up.

Plus, two against one. Are Hillary Clinton and Barack Obama ganging up on John Edwards? We're tracking the Democrats and their 11th-hour brawl in Iowa.

And Benazir Bhutto's widower speaking out about his wife's assassination and whether the Pakistani government is to blame. Coming up, my exclusive interview with Asif Ali Zardari.

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

It's getting more unpredictable by the day in Iowa. Three days before the caucuses, Mike Huckabee seemed ready to go for Mitt Romney's jugular after Romney claimed the lead in some of the newest Iowa polls, but that's not the way it actually turned out.

CNN's Dana Bash is covering Huckabee out on the campaign trail in Iowa.

What did happen today? Because it was very dramatic, Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Very dramatic. And I have to tell you, I have been to -- I've covered my share of bizarre political stories before, Wolf. This is probably the most bizarre press conference I've ever been to.

We arrived at the area very early and we got -- we got a sense that there was going to be something big going on. There was a projector being tested there by a Huckabee staffer, there was a box of DVDs ready for us to take, a brand-new ad that they were going to run against Mitt Romney. And then Mike Huckabee came in and did something he said he knew would be greeted with skepticism, even cynicism, and it was.

(BEGIN VIDEOTAPE)

BASH (voice over): Enough is enough. It was a brand-new theme. New placards around the room hitting Mitt Romney's record and a new TV ad to be unveiled attacking him. Instead, Mike Huckabee said never mind.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: If I were to continue this strategy, which is really not what I personally deep in my heart feel like is the right thing to do, it's not really what I want to do, if you gain the whole world and lose your own soul, what has it profited you? And ultimately, that became just for me the issue, that it's not worth it.

BASH: Huckabee announced to the 50-plus reports and dozen cameras packed in to see his first negative TV ad that he had a change of heart and decided to pull the ad from Iowa TV stations already planning to run it.

But this was the kicker...

HUCKABEE: I know that some of you are saying that, well, did you really have an ad? I want to show you the ad. You'll get a chance to find out exactly what we're doing.

BASH: To that, an interruption of laughter from the press, all likely thinking the same thing -- Huckabee wanted credit for staying positive, but still makes sure the message against Romney got out.

HUCKABEE: I want you to see it. This is what we planned to do. And I think once you see it you'll realize this is not why we're going to run it.

BASH: But when he tried to play the ad, technical problems.

NARRATOR: Romney's government-mandated health plan provided...

BUSH: Huckabee admitted he's been going after Romney aggressively because Romney's attacks on him have hurt. And he's been taking advice from new hardball veteran advisers like Ed Rollins.

HUCKABEE: There's certain conflicts between all the advice that you get from people that tell you just have to answer this stuff back, you've got to push back hard, and then ultimately deciding, is it really worth it?

(END VIDEOTAPE)

BASH: Now, Huckabee said he met with his family this morning and announced to some of his staff just moments before the press conference that he decided to pull back on these ads.

He -- you know, this is supposed to be sort of the next step in what has been an increasingly negative strategy from Mike Huckabee. We've seen that over the weekend certainly on the stump, Wolf. But again, he made it very clear today, he said he was not comfortable with it.

He was asked point blank if he was going to fire any of these advisers. He laughed, he said it was a good question. He said the answer is no -- Wolf.

BLITZER: Thanks very much, Dana Bash.

Strange news conference, indeed. And just ahead, we'll talk about it with Mike Huckabee. He's standing by live.

We'll talk about his about-face on that negative ad. It's sparring with Mitt Romney, the state of play in Iowa, and some of the other issues in this campaign. That's coming up.

And in our 6:00 p.m. Eastern hour, I'll speak live with Mitt Romney. We'll get his response, we'll talk about the issues as well.

Huckabee, Romney, and seven other candidates are in a frantic mad dash across Iowa this New Year's Eve. All together, they'll stop in 29 cities across the state. Romney has the most jam-packed schedule, making stops in seven cities.

CNN's Jessica Yellin is in Boone, Iowa, with Barack Obama was at an event just a little while ago. She's traveling with the CNN Election Express, taking our campaign coverage all across Iowa and the nation.

Jessica, Obama and the Democrats are delivering what they're calling their closing arguments right now. Update our viewers.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Wolf.

Well, I'm inside an Obama event that's about to start any time now. You can see how crowded it is. All the seats are taken. There are folks along the sides.

Often his events fill up and overflow outside. And I have to say, that's true of most of the Democratic front-runners.

Tons of people turning out right now. High, high interest in seeing these candidates up close. And I can tell you, all the candidates continue to deliver their closing arguments on healthcare and the economy, and their argument that they can change America, but they're also beginning to really go after each other.

(BEGIN VIDEOTAPE)

YELLIN (voice over): But ask them and they say they're fighting back.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: You know, he hasn't been in Washington that long. And we haven't stewed him and seasoned him enough in Washington. We haven't boiled all the hope out of him so he sounds like all the other politicians in Washington.

YELLIN: As Democrats promise to change Washington, one of the major issues that's arisen -- who is tied to special interests?

OBAMA: We're seeing this last hurdle, the same old Washington tricks. Folks are pouring money in, undisclosed donors.

YELLIN: Edwards insist he's the cleanest. JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: But the difference between me and Senator Obama is I've been in public life for almost 10 years now, and every day that I've been in public life I have voluntarily rejected taking any money from Washington lobbyists, any money from special interest PACs.

YELLIN: But the Obama camp points out a special interest group is spending hundreds of thousands running ads for Edwards, though Edwards has said he would like them to stop. And now Senator Clinton is getting in on the act as well.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: You know, there's a lot of talk in this campaign about special interests. You know, who's going to be harder on special interests? And, you know, these are great applause lines and speeches, and people get, you know, really excited, but I submit to you there isn't anybody running who has taken on more special interests and gotten more done and survived the incoming fire than I have.

(END VIDEOTAPE)

YELLIN: And Wolf, what you also hear at all those events is arguments that each candidate should be a second choice. They say, if you're not my first choice, I would like -- I would like to be your second choice.

And at the last event, Barack Obama was asked by one undecided voter if he should go with Edwards as a second choice or you, Obama. And he asked Obama to make the case why "you should be my second choice." And Obama said look at Edwards' past votes on the Iraq war and No Child Left Behind.

He's apologized, he had to changes his mind on those issues. And Obama says he's had the consistency all along. These are the kind of arguments you hear at every one of these events because in Iowa you get many choices. And these folks know they can win by being someone's second choice -- Wolf.

BLITZER: Jessica Yellin in Boone, Iowa, right now covering the Obama campaign.

Thanks, Jessica.

No matter how you slice it, the Iowa caucuses are critical. But for two candidates, one Republican and one Democrat, Iowa may actually be make or break.

Let's bring in our senior political analyst, Bill Schneider. He's watching all of this unfold in Des Moines.

Why specifically, Bill, is Iowa so critical, so critical right now for two candidates, Mike Huckabee and John Edwards?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Because both of them have invested heavily in Iowa relative to other states. The expectations for the both of them are very high here, and they have limited resources. So if they don't gain momentum in Iowa, it's going to be hard for them to go on and compete with candidates with a lot more resources like Mitt Romney and Hillary Clinton and Barack Obama.

Iowa is also a populist state, and they're both running on populist themes -- economic populism for the Democrat, John Edwards, social populism for the Republican, Mike Huckabee. So it will be a test here in Iowa to see whether populist themes will resonate in 2008.

BLITZER: If either one of these guys lose in Iowa, Huckabee or Edwards, is there a state where they can actually then recover?

SCHNEIDER: Possibly in South Carolina. South Carolina has a lot of evangelical voters that are the base for Mike Huckabee, and it also has, of course -- it is the state where John Edwards won in 2004. It's his birthplace state.

But it may be difficult if they lose Iowa to come back in South Carolina. South Carolina is a state where the conservative base has always fought back, and Mike Huckabee is not a favorite of the conservative base. And it's a state where there are a lot of African- American voters who right now are split between Clinton and Obama. Edwards is running very poorly right now among African-American voters.

BLITZER: Bill Schneider in Des Moines for us.

Thank you, Bill.

And as all of our viewers know, Bill Schneider, Jessica Yellin, Dana Bash, they are part of the Emmy Award-winning best political team on television.

Remember, for the latest news any time, check out our political ticker at cnnpolitics.com.

Is Michael Bloomberg in or out? There's a new reason to wonder if the New York mayor will actually launch an Independent third-party bid for the White House. Coming up, Bloomberg's new move.

Plus, the Democrats play to some very specific groups of voters. We're going to tell you how each candidate is carving out a piece of the action in Iowa.

And will Benazir Bhutto's widower get the answers he wants about his wife's assassination? We'll give you a first taste of my exclusive interview with Asif Ali Zardari, the husband of Benazir Bhutto. And we'll get reaction from the White House.

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

(COMMERCIAL BREAK)

BLITZER: The widower of the slain opposition leader Benazir Bhutto calls the Pakistan's governments claims that she died of a fractured skull absurd. He says it's clear she was shot to death. He talked with me by phone in an exclusive interview just a little while ago.

(BEGIN VIDEO CLIP)

BLITZER: Asif Ali Zardari, what do you want the United States government to do right now?

ZARDARI: I want them to help me find out who killed my wife, the mother of my children.

BLITZER: And specifically, what would you like President Bush to do?

ZARDARI: I think President Bush should first of all assist us in getting the investigation going that we are demanding.

BLITZER: An international investigation. You want that to be under the auspices of the United Nations?

ZARDARI: Yes, we do.

BLITZER: Similar to the investigation into the assassination of the late Lebanese prime minister Rafik Hariri?

ZARDARI: Yes.

BLITZER: That's the kind of investigation you want, an international...

ZARDARI: That's the kind of investigation I want. It's not just that she was - because if you see the latest footage, it is very obvious Wolf, that first the assassin fires, and then the bomb goes off. That means the assassin dies in the bombing. So there's no proof of anybody or nobody.

So it's -- the question is who benefits, why did this happen, why wasn't all this precautions taken which she'd been asking, begging? I was running around the world begging people all around the world to help us in security. Why would they not give us assistance on that if they were so keen and if they're so fair, why were we denied all sorts of security equipment that we asked for?

(END VIDEO CLIP)

BLITZER: And you can see much more of my exclusive interview with Benazir Bhutto's widower, Asif Ali Zardari, right here in THE SITUATION ROOM. That's coming up in our 5:00 p.m. Eastern hour.

In the meantime, let's go right to our White House correspondent, Ed Henry. He's standing by in Crawford, Texas, to get some reaction.

What is the White House saying about an international investigation into the death of Benazir Bhutto, as her widower, as her husband is now calling on the president to support? ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, as you know, one of the president's top allies, British Prime Minister Gordon Brown, yesterday called Pervez Musharraf and urged the Pakistani president to bring in some international support for this investigation, something Musharraf had rejected but now says he's open to, he'll consider it. And on one hand, U.S. officials say privately say they understand that that could help restore credibility to this investigation because of the Pakistani government's differing accounts.

But on the other hand, U.S. officials, specifically at the White House, say they are worried though if it looks like the U.S. is meddling in Pakistani affairs. That could backfire.

White House spokesman Scott Stanzel today telling reporters, "Obviously they're a sovereign government and they will have to be conducting that investigation. We have offered to provide any guidance or assistance that is requested. At this time, as far as I'm aware, none has been requested of the United States, but that is a matter for the Pakistani government to move forward on; it's early in the investigation."

So, two things. First of all, clearly, the door is open to the U.S. helping if President Musharraf asks. And secondly, it's important to note this is very similar to the position the White House has taken on whether the Pakistani elections should move forward on January 8th. That they'd like to see them move forward, but ultimately that's the decision for the Pakistani government -- Wolf.

BLITZER: And the widower said that he has worked out an arrangement with Nawaz Sharif, another former Pakistani prime minister. They're calling for the elections to go forward on January 8th, as scheduled.

Ed Henry joining us from the Crawford ranch in Texas.

Once again, much more of that exclusive interview coming up in our next hour.

2007 will go down as the deadliest year yet for U.S. troops in Iraq, but is December signaling a very different trend? One that's much more positive for U.S. forces? We have the latest numbers.

And eyeing voters in Iowa. The White House contenders have their sights set on the Hawkeye State ahead of Thursday's caucuses, but they're going after very different voters. Coming up, I'll speak with Republicans Mike Huckabee and later with Mitt Romney.

Huckabee and Romney both live, here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Mike Huckabee pulling a punch, yanking a new attack ad on Mitt Romney. Up next I'll speak live with Mike Huckabee. You see him live right there. We'll talk about his latest strategy counting down to the Iowa caucuses on Thursday, and a lot more.

Plus, Republican-turned-Independent Michael Bloomberg is taking part in a summit. Is it seen setter for a possible presidential bid? We're going to tell you what insiders are now saying.

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

(COMMERCIAL BREAK)

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

Happening now, a U.S. Marine faces court-martial in the 2005 killings of 24 Iraqi men, women and children in Haditha. Staff Sergeant Frank Wuterich will stand trial on voluntary manslaughter, aggravated assault, dereliction of duty, and other charges. Another Marine also faces court-martial.

Dangerous skies. NASA releases interviews with thousands of pilots, and they're recounting scary near-collisions on equipment failures. Details ahead.

And history repeating itself in Pakistan. Benazir Bhutto's son takes on his slain mother's political mantle.

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

With the Iowa caucuses approaching fast, Republican White House hopeful Mike Huckabee has been blasting rival Mitt Romney and vice versa, calling Mitt Romney's campaign ads incredibly desperate and dishonest. But now he's saying going on the attack is "not worth it." That's a direct quote.

Mike Huckabee, the former Arkansas governor, is joining us now live from Des Moines.

Governor, thanks very much for coming in.

HUCKABEE: Well, thank you, Wolf. Always great to be with you.

BLITZER: All right. We saw Dana Bash's report earlier. Tell us why you decided to pull this attack ad on Mitt Romney, which clearly your campaign worked on very hard to get ready.

HUCKABEE: Well, we spent a lot of time and we spent a lot of money preparing the ad, and we thought, look, conventional political wisdom is that when you get attacked, you have got to fire back and defend your record and counter-punch, and we had a pretty good ad in the can, and it was scheduled to go at noon today. This morning, I just -- the more I thought about it, Wolf -- I mean, a lot of cynics are going to say, oh, it was all contrived and planned. I don't care what they say.

Here's the deal. I just said, look, politics in this country is out of control. It's gotten so nasty, so negative, everywhere I go people say they hate it, they seem to respond to it. But I decided, if we're going to change the discourse of politics and the civility of it, let it start now, let it start with me, let it start in Iowa.

If it costs me the caucus, it does, but I don't want to have to run an ad in which I feel like I have got to go take a shower after it's run. And I just thought that nobody can reduce my 10 and a half year record as governor in 30 seconds to attack it, and I can't fulfill all the aspects of it in 30 seconds to counter it.

BLITZER: The criticism -- you heard the reporters start laughing at the news conference when you then went ahead and played the ad for them, even though you were not going to allow it to be aired on commercial spots. What was the theory behind even showing it to the reporters?

HUCKABEE: Well, the point was that if he hadn't shown it, they would have said, oh, you don't even have one. So we wanted to say, no, this is what we had in the can, this is what we were prepared to show.

And, you know, sooner or later, somebody's going to pop it up on YouTube, because the TV stations have it. I'm sure it will get leaked out. So we wanted to say, this is what we had, this is what we were going to go with.

But we didn't give out DVDs, which we had prepared originally to give out, and we didn't give out the multipage dossier on the Romney record, which we were prepared to give out. We said, you know, we're just not doing it.

And so the only reason we showed it -- and by the way, they said the audio didn't work, so it's not going to be usable anyway -- was because we wanted to validate that in fact there was an ad, here's what it was, and we're just not going to run it.

BLITZER: All right. Let's talk about Mitt Romney, though, for a moment. Do you believe, as you've suggested in recent days, this is basically a dishonest man.

HUCKABEE: I've said his campaign and the ads are dishonest, and they are. They've said things that just simply are not true. And you're entitled to your own opinion. You're not entitled to your own set of facts. And over the weekend when he attacked Senator McCain, I just felt it had gone too far. While Senator McCain is a rival in one sense, but he's also a friend and I think he's a great American and a true hero. And it's just gotten where if we all wrap ourselves in the mantle of Ronald Reagan, then let's wrap ourselves in the spirit and tone of Ronald Reagan who said that shall not speak ill of another Republican. So either we're going to be Reagan-esque, or we're not. And I think it's a little silly for us to talk about how Reagan-esque we are and then we go out and do the very thing that he would have been appalled by, which is to savage another Republican in the presidential race.

BLITZER: I'm going to give you a chance to speak directly to Mitt Romney. He's going to be joining us later here in THE SITUATION ROOM. What would you like to say to him and convey, from whatever you want, that we'll let him know how you feel? HUCKABEE: Well, he's free to run his campaign any way he wishes and he can say whatever he wants to about his own record, and he can say whatever he wants to about ours.

We've made the decision that we're going to run a positive campaign throughout this, that's how we got here. We wouldn't be in the position to potentially win this thing and certainly to do better than anyone ever imagined had we been negative.

So we're going to stay with what we have come with. And frankly for me it just came down to that if a man gained the whole world and loses his own soul, what does it profit him? And that's what I had to decide. It doesn't profit you a lot. The presidency is important, but being able to put your head on the pillow at night saying I ran an honorable, decent race, that's even more important.

BLITZER: The crisis in Pakistan right now. I spoke just a little while ago with the widower of Benazir Bhutto. And he directly appealed to the United States to President Bush to support an international investigation into how his wife was assassinated and who may have been responsible. Would you support, if you were president, such an international perhaps U.N.-oriented investigation?

HUCKABEE: Well, because of the rather unusual circumstances and even the very serious questions around whether it was a gun or the explosion, I think that's, you know, something the president should seriously consider. Obviously he'll have better information on which to base that decision than I do right now. But I'm sure the president will consider it. I know he's very sensitive about the situation that has happened there, and I'm confident he will look at it.

BLITZER: Would you suspend the billions of dollars in military aid to Pakistan right now if you were president?

HUCKABEE: No, I wouldn't suspend it. I would certainly ask for a full accounting. But right now it is in our best interests for Pakistan to be as stable as possible. It's in our best interests to make sure that the government doesn't become more destabilized. And the last thing that we want to do is to create even greater tension within Pakistan.

So while, yes, we should know more about the $10 billion, was it actually used to fight terror? To simply say we're going to just pull away from all aid would be a little bit premature and perhaps not in our own best interests.

BLITZER: Finally, governor, should the January 8th parliamentary elections go forward, or should they be delayed?

HUCKABEE: Well, I know that the supporters of Sharif have said that it should be delayed, others feel it should go on. Ultimately it's a decision for the people of Pakistan. I think it is going to be very difficult to have a genuinely fair or at least certainly a legitimate election when one of the candidates is boycotting and one has been assassinated. BLITZER: Let me just update you, Nawaz Sharif has just issued a statement together with the widower of Benazir Bhutto. They both agreed that the elections should now go forward, both of their political parties should go forward on January 8th. Nawaz Sharif has changed his stance.

HUCKABEE: Well, if he's changed his position and the PPP party has also said that it should go forward, then that should be the decision that should go happen. If they believe they can have a good election, one that really represents the will of the people, then that's what they should do.

BLITZER: Mike Huckabee, the former governor of Arkansas, good luck on the campaign trail. I say that to all the candidates, because you guys have a lot of work ahead of you. Thanks very much.

HUCKABEE: Thank you, Wolf, appreciate it.

BLITZER: Appreciate your joining us.

You just heard what Mike Huckabee had to say. So what does Mitt Romney have to stay about all of that? Stay tuned Mitt Romney is going to be here live in THE SITUATION ROOM as well. You'll find out, the former Massachusetts governor and White House hopeful will be joining us live during our 6:00 p.m. Eastern hour.

Across Iowa right now, the democratic presidential candidates are in a final scramble for votes. And they're looking in some very specific places. Our senior political correspondent Candy Crowley is in Des Moines right now. You're watching these Democrats and they're trying to get their very strategies in place to bring out the vote, because it's critical, Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. And you know, there's sort of a double duty right now for these candidates. They of course have to go after those undecided, but they also have to go toward their base, the people who are most naturally inclined to vote for a specific candidate. And indeed that's what they've been doing.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): There is nothing all that subtle about the Clinton campaign.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I'm meeting women in their 90s across America, and one of them summed up for me what this is really all about. She said, I'm 95-years-old, I was born before women could vote, and I'm going to live long enough to see a woman in the White House.

CROWLEY: She banks on history, that the possibility of the first woman president will bring out the new and the reluctant on a cold, caucus evening. Her target is women over 50, including what one aide called a pretty big category of women between 90 and 110. The Obama campaign says their core caucus goers run the gamut. Still, his strength is in the under 45 voter and the campaign has made a considerable effort to get out the under 30 crowd. Audiences are noticeably younger in Obamaville, and the talk is about turning the page.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: There's a moment in the life of every generation, if they are to make their mark on history, where that sense of hope, that thing inside of each of us that says we can do better. When that thing, that spirit comes out into the open, it makes its way into our public lives. This is our moment.

CROWLEY: John Edwards' audience skews middle age and the campaign says they are more likely to have caucused before. It is a rural crowd focused on economic issues, which is to say his populist message hits a chord here.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Are we really going to let this corporate power and corporate greed destroy the middle class in this country?

CROWLEY: On down the line, there are three candidates. Richardson.

UNIDENTIFIED MALE: Bill Richardson is the only major candidate with a plan.

CROWLEY: Dodd.

CHRIS DODD (D), PRESIDENTIAL CANDIDATE: Because I'm the candidate that can win next November and I am ready to be president.

CROWLEY: And Biden.

SEN. JOE BIDEN (D-DE), PRESIDENTIAL CANDIDATE: You don't have to guess what I'll do as president. Just look at what I've done.

CROWLEY: With almost a century of public service between them, their audience is, as one campaign strategist put it, those willing to look past the rock star billing to the resume.

(END VIDEOTAPE)

BLITZER: Candy, as you look at all of this unfold out there where you are, and the strategy to get the voters out, it's very, very complex. It's by no means certain.

CROWLEY: Wolf, what these candidates have done noun, having really spent the better part of the year, sort of tamping down their core base, if you ask any of these campaigns tonight what they're going after now, they will tell you all of them, those undecided voters.

BLITZER: Candy, thanks very much. Candy watching this critical part of the strategy unfold. Remember tomorrow is the big game. That would be CNN's Ballot Bowl. It all starts right here at 9:00 a.m. Eastern. All day long you're going to be hearing from the presidential contenders on all the biggest issues. And if you're in Iowa, we want your campaign trail videos and pictures. You can share your experiences with us, your analysis all day long. Send us your i- Reports by visiting CNNpolitics.com.

The race for the White House just might lure another player. The New York City Mayor Michael Bloomberg is sparking talk that he's perhaps thinking about jumping in. We'll take a closer look at whether the billionaire businessman is about to become a third-party presidential candidate.

And in today's "Strategy Session," the bitter feud between Mike Huckabee and Mitt Romney. Will it end up helping their rivals instead?

And keeping them honest. It seems like more and more White House hopefuls are going on the attack. Howard Kurtz tells us if their latest political campaign ads can be trusted. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: For a politician who insists he's not running for president, Michael Bloomberg sure knows how to fuel speculation that he's likely perhaps to jump in. CNN's Jim Acosta is in New York. He's watching all of this unfold. All of this discussion coming right in the thick of things. What's going on?

JIM ACOSTA, CNN CORRESPONDENT: Well Wolf, while the nation is focused on Iowa and New Hampshire right now, the political landscape could be shaped by what happens in Sunday in Oklahoma, where all eyes will be on Michael Bloomberg.

(BEGIN VIDEOTAPE)

MICHAEL BLOOMBERG, MAYOR, NEW YORK: Well, good morning.

ACOSTA (voice-over): It may be time to start calling him potential Independent presidential candidate Michael Bloomberg. The billionaire businessman turned New York mayor insists he's not in the race, ignoring the question again this morning.

But Bloomberg is expected to headline what has all the makings of a political summit, featuring who's who of retired Washington moderates from both parties. Some of those expected participants are naming Bloomberg as a leading alternative to the current two-party slate of candidates vying for the White House.

JIM LEACH (R), FORMER U.S. CONGRESSMAN: It's a bit like people go to a store. They don't like to have the option of one or two or three things. They would like to have a greater number of options.

ACOSTA: Whether it's the vice president swearing at a U.S. senator or the Senate majority leader calling the president names --

SEN. HARRY REID (D-NV), MAJORITY LEADER: I apologize for the loser, I haven't for the liar. ACOSTA: What passes for political rhetoric may sound more like an episode of "The Jerry Springer Show." Some Washington veterans believe a so-called unity ticket featuring moderate candidates could turn down the temperature, break through the gridlock and solve problems.

SAM NUNN (D), FORMER U.S. SENATOR: We are frustrated with the political process. We think the two-party system is not working now for the best interests of the American people.

ACOSTA: One big question about a Bloomberg candidacy is who it would hurt more. Republican contender Mike Huckabee is already placing his bet.

HUCKABEE: It will probably do more to help the Republican than to help the Democrats. So I would welcome his entry into the race.

ACOSTA: But to do that, Bloomberg still has to take the plunge.

STEVE FORBES (R), FORMER PRESIDENTIAL CANDIDATE: I think it will be highly unlikely he wouldn't run. I think for a long time he's itching to do it.

(END VIDEOTAPE)

ACOSTA: Political observers in New York have said it is unlikely Bloomberg would run against his predecessor Rudy Giuliani, who backed the media mogul's bid for city hall. Wolf?

BLITZER: Jim Acosta, thanks very much.

Let's continue this conversation, former U.S. congressman, former U.S. senator, the former Defense Secretary William Cohen is here. He heads the global consulting firm The Cohen Group. You're going to be in Oklahoma next Sunday for this meeting, Bloomberg will be there, David Boren, a lot of moderate Democrats and Republicans. What's going on?

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Well, some are going to there to perhaps discuss candidacies. I'm going there to discuss issues. The reason who have been invited and the reason I was invited was to talk about issues that need to be addressed. We're seeing a crisis in confidence and credibility in this country. We're seeing problems go unaddressed from homeland security to international security, to Social Security to cyber security. All of the elements including environmental security, and a freedom from the dependence on foreign sources of energy. All of these issues need to be addressed and need to be addressed from the center of the political --

BLITZER: What would it take in your opinion for a third-party candidate like Michael Bloomberg, for example, to be viable and make it possibly to the White House?

COHEN: Well obviously he has the resources to become a viable candidate. He's very attractive in terms of his own record, his competence, et cetera. But what I want to do and what Senator Nunn wants to do is start the Cohen/Nunn dialogue so to speak for the next six months to talk now about candidates, not about a third party, but about the serious issues this country faces, from the polarization to the paralysis in Washington, to the partisanship which I think is tearing the shreds of this country really apart.

We need to have people coalesce around the center, to come to grips with compromise. And that's not a sign of weakness, but rather the art of government is compromise. And what Senator Nunn and I want to do is start that dialogue, not get involved in who is going to be a candidate for a third party.

BLITZER: Have you discussed any of this with Bloomberg?

COHEN: I have not. I met with Mayor Bloomberg last spring privately for a short period of time. At that point he indicated he was not planning to run and was simply interested in continuing to play a role in helping to shape discussion, so I take him at his word. But he could be a formidable candidate.

BLITZER: Chuck Hagel is going to be there, David Boren, former Senator Danforth, a lot of moderates. How worried are you that the Democratic Party and the Republican Party -- you're a Republican even though you served in a Democratic administration of Bill Clinton -- how worried are you that these parties are moving further and further apart?

COHEN: I think there's great concern for this right now. Ron Brownstein has written a book called "The Second Civil War: How Extreme Partisanship Has Paralyzed Washington and Polarized America." I think that sums up where we are today.

So what we want to do is to really start a dialogue and discussion with the American people, so that they can hopefully support those candidates, Republican, Democrat, or possibly Independent, who will then try to forge a program that will deal with the issues that are confronting us.

What we're doing is we're paving the future with false promises, with promises -- the road to the future with false promises. They're going to be broken. It is going to increase the cynicism in this country. What we want to do is say let's get realistic about what the burdens are. We talk about benefits, not burdens. We talk about rights, we don't talk about duties. That's where we want to start this dialogue about with the Cohen/Nunn dialogue.

BLITZER: Good luck with you.

COHEN: OK.

BLITZER: I'm sure we'll be talking a lot about it. William Cohen joining us here in THE SITUATION ROOM.

Mike Huckabee has some second thoughts about going negative.

(BEGIN VIDEO CLIP) HUCKABEE: We are now committed from now through the rest of the caucuses that we will run only the ads that talk about why I should be president and not why Mitt Romney should not.

(END VIDEO CLIP)

BLITZER: Is it good politics or is it simply a campaign ploy? Will it sell with Iowa's caucus goers?

And a prominent Hillary Clinton supporter speaking ill of the Iowa caucuses. Does he have a point? Donna Brazile and Leslie Sanchez. They are standing by right here for our "Strategy Session." We'll be right back.

(COMMERCIAL BREAK)

BLITZER: The White House hopeful Mike Huckabee may have yanked his attack ads targeting rival Mitt Romney, but will the feud between the two former governors spark a backlash with Iowa voters?

Joining us now to discuss that and more in our "Strategy Session," our CNN political analysts the Democratic strategist Donna Brazile and Republican strategist Leslie Sanchez. Guys, thanks very much for coming in.

You know something about two candidates attacking each other, creating an opening for a third or fourth candidate to come in and suck up the oxygen.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: But right now this is a two-person race on the Republican side, Mitt Romney and Mike Huckabee.

BLITZER: In Iowa.

BRAZILE: In Iowa. And they're locked in a very tight race. And Mitt Romney has the advantage because he has an organization, he has a good staff and he's been on the ground much longer. On the other hand, perhaps this gives an opening for Fred Thompson or John McCain to come up through the middle and to capture the Iowa caucuses.

BLITZER: And you know, Fred Thompson is trying to take advantage of this in Iowa. He has got a new 17-minute address that's he's given. It's getting a lot of play out there on the Internet and YouTube and elsewhere.

Let me play a little clip for you, Leslie, because I think he sees a strategic opening right now.

(BEGIN VIDEO CLIP)

FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: I wanted to take a few moments to talk quietly with you about the stakes in the election and the critical issues you will soon decide. Because there's no front-runner here in Iowa, and because yours will be the first vote cast in this crucial election year, your decision will be one the entire country closely watches and learns from. (END VIDEO CLIP)

BLITZER: Is that an opening for him and maybe for McCain, Giuliani, others if Huckabee and Romney keep going at it?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: It really is. And he has two important points in there. One, he said there are global issues. There are major, significant issues that are important. So he's saying gravitas, experience, something I can allude to in my own career.

And he's also praising Iowan voters as opposed to what the Clinton campaign was doing in the last couple of days. I think it's very important to note, negative campaign ads do work, but they don't tend to work in Iowa.

Even though Romney is going after Huckabee on taxes, immigration, his crime record and Huckabee is responding to that, there really is an opportunity for somebody like Fred Thompson, especially John McCain, who looks incredibly strong in light of the assassination of a global leader, came out incredibly powerful.

BLITZER: And historically four years ago Howard Dean and Richard Gephardt were going at it in Iowa. Neither one of them did well, but it created an opening for John Kerry and John Edwards to emerge from Iowa in a strong position.

BRAZILE: Well many people believe that they signed a mutual suicide pact by going after each other and it gave John Kerry an opportunity to be resurrected from his political death bed. But look, I still believe on the Republican side, turnout will be exceedingly important for someone like Mitt Romney who's put together a terrific organization. If he gets his voters out, perhaps he can slow down this Huckabee surge.

BLITZER: How worried should Hillary Clinton supporters be that one of their big supporters, Ted Strickland, the governor of Ohio, basically trashed the whole system and the Iowa caucuses, saying this is not necessarily a good idea? Is that smart?

SANCHEZ: It's really not smart politics a couple of days before the caucuses that you have somebody trashing the state in which the voters are about to vote.

But the bigger issue here is really it's a subtle effort to downplay expectations I think for Hillary Clinton. Nothing goes out of that campaign without her knowing about it, and she's really trying to say Iowa is not as important as it needed to be. Before there was a coronation effect if she was an unbeatable. And now it's really addressed differently.

BLITZER: Donna?

BRAZILE: First of all, let me just say that we had this debate inside the Democratic Party. We gave our New Hampshire those premiere slots, but we also gave two other states. Ohio did not apply. Ohio will hold their primary on March 4th. Governor Strickland is a surrogate, he wasn't speaking on behalf of Senator Clinton's campaign. She has the terrific staff, a terrific campaign. And don't forget, she has perhaps some of the most experienced people on the team to get out her vote. So I don't think this will hurt her in the long term.

SANCHEZ: You can't say you have the most experienced people on the campaign and that these types of gaffs don't happen. It was the same thing with the drug abuse record with Obama. It doesn't happen on accident.

BRAZILE: Chief executive, he was speaking on his own behalf.

SANCHEZ: They always that.

BRAZILE: I can tell you that Senator Clinton is in it to win it.

BLITZER: Donna and Leslie, thanks very much. Remember we're only three days away from the Iowa caucuses. Please join me along with the best political team on television Thursday night 8:00 p.m. Eastern. You'll see it live, unfolding here at the CNN Election Center.

Times Square is getting ready for the biggest party of the year. It's New Year's Eve. We're going to tell you how the White House candidates plan to ring in 2008 as they await their Iowa showdown.

Plus, much more ahead of my exclusive interview with Benazir Bhutto's widower. What he says about the Pakistani government's claims she died of a skull fracture and why he wants the country's elections to go forward.

And a pint-sized reporter chats up Chelsea Clinton. But was the former first daughter willing to open up about her mother's chances for election success? Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our political ticker this Monday, while many Americans watch the action at Times Square at midnight, most of the presidential candidates will usher in the New year along with the crowds of supporters back in Iowa or New Hampshire. Some exceptions, Democrat Joe Biden will have a low-key dinner with his family in Des Moines. Rudy Giuliani's campaign says that he will have a private celebration at an undisclosed location.

In Mississippi, a temporary replacement has been cast for retiring Republican Senator Trent Lott. Governor Haley Barbour made the announcement today. Conservative Congressman Roger Wicker will serve until a special election scheduled for November 4th. Wicker is expected to run in that election. Lott served one year of a six-year turn. That runs out in 2012.

Remember for the latest political news anyway, check out CNNpolitics.com.

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