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Extensive Damage From Flooding in Iowa; Taliban Escapees Seize Afghan Villages; Al Gore to Endorse Obama; Saudis Pumping More Oil

Aired June 16, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Record floodwaters on the move. And tens of thousands wait to go home. Thousands more have to flee.

We're going to take you live to the flood zone in Iowa.

Also, Afghan villages seized by escaped Taliban prisoners -- the latest in the series of setbacks raising very serious concerns about where this war in Afghanistan is moving.

And same-sex marriage becoming legal in California in only a matter of three hours, four years after it did in Massachusetts. You're going to find out what's changed and why the controversy may be cooling.

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

In Iowa right now, the Mississippi River is becoming the new focus for concerns about flooding. The flooding in Cedar Rapids and Iowa City is backing off at last. But areas downstream are bracing for the worst. To the south and east, sandbagging operations are underway where rivers spill into the Mississippi. At least six deaths in Iowa are blamed on the massive flooding. Twenty-nine counties have been named federal disaster areas. President Bush plans to visit the flood- ravaged state on Thursday.

On the ground, our CNN's Ed Lavandera in Cedar Rapids and Allan Chernoff in Iowa City.

Let's go to Allan first -- Allan, let's talk a little about the situation at the University of Iowa right now, because I understand it's awful.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, there is an incredible flood here. As you can see, 16 buildings here on the campus of the University of Iowa are flooded. And you can see the river far beyond me -- 300 yards beyond me, flowing very rapidly. That river, of course, does go into the Mississippi. We've had a beautiful sunny day here, but the water is receding. But nonetheless, you can see just how much water just has to move out.

We're talking about incredible damage here, in the billions of dollars, according to state officials. In fact, they're saying that the damage here will be worse than the awful floods of 1993. And back then, the damage was more than $2 billion.

The waters, as I said, have receded. And you can see right over here, this was the water line earlier today. We've pulled all the way back over here. So at least that's a little bit of an improvement -- Wolf.

BLITZER: You know, these are horrible floods in the Midwest. But it could affect people way beyond that area.

CHERNOFF: Oh, without a doubt. And that is really what's going to be happening on the farm. Fifteen percent of this state's farmland is under water right now. Consider that Iowa is the nation's number one producer of corn and soybeans, two of our most important crops. We are going to feel this eventually at the supermarket counter. There's no question prices are going to keep going up. They've been going up quite a bit already -- Wolf.

BLITZER: Allan, thank you.

Let's go to Ed Lavandera. He's in Cedar Rapids right now, where it's awful, as well.

And I take it the fuses of a lot of people are getting short.

ED LAVANDERA, CNN CORRESPONDENT: Well, they are. As the waters have been going down, tempers and frustrations on the way up.

Where I'm standing was under about 10 to 12 feet of water just a few days ago. So you can see that the water is quickly receding here in Cedar Rapids. But many people who were hoping to get into their neighborhoods and into their homes today have been turned away, as officials here and emergency crews are worried that the conditions of those homes might create treacherous situations for residents trying to get back inside.

We heard the story of one man who was near his home, had thought he was about to walk through a puddle and fell into six feet of water.

So, a lot of long lines and a lot of frustrations. In fact, one man was arrested today here in Cedar Rapids, Iowa, after police say he repeatedly tried to drive into a National Guardsman trying to get back into his neighborhood. He was arrested and charged with assault on a peace officer with a deadly weapon. And, all in all, many of these residents realize it's going to be months before all of this gets back to normal and they're trying to take it in stride.

BLITZER: Ed, thanks very much.

Ed's on the scene for us.

We'll stay in touch with you. Overseeing the response by state services to Iowa's disastrous flooding is the governor, Chet Culver. The governor is joining us now on the phone from Columbus Junction, where he's getting a firsthand look at this devastation.

Governor, tell us what you've seen. How bad is it? GOV. CHET CULVER (D), IOWA: Well, Wolf, it really -- it really breaks your heart, you know, to see the massive devastation and destruction to the State of Iowa that I love so much and to see so many people that have been hurt. It really does break your heart.

But it's not going to break our spirit. We are fighting as we speak. We are united. And we are going to be stronger as a people and as a state because of it. But it has really been certainly heart- wrenching, especially knowing that we have now lost 17 people in these two tornadoes and hundreds more between the tornadoes and the flooding -- more have been injured, as well.

So our thoughts and prayers continue to be with those victims, those that have been injured and the families affected. And public safety remains our top priority. We have evacuated 38,000 Iowans from 26 cities and townships. Unfortunately, these evacuations, especially in the southeast part of the state continue. And we are working in a coordinated way with local emergency responders and the National Guard to keep the people of Iowa safe and away from this raging water.

BLITZER: Governor, are you getting everything you need from FEMA and the federal government?

Governor can you hear me?

I think the governor has lost us.

We'll check back with him.

Chet Culver joining us on the phone, the governor of Iowa.

We wish all of those people, obviously, only the best.

Many homeowners hit by the Iowa flooding have no flood insurance and therefore no coverage. There are more than 5.5 million flood insurance policies in force in the United States. Of those, more than a third -- roughly two million -- are in Florida. Only 11,000 or so flood policies are held in Iowa. According to an Allstate agent, someone living in a moderate risk flood area in Cedar Rapids, for example, would pay about $350 a year for a $100,000 policy, the same as the national average. The annual premium for similar coverage in a high risk area would run about $1,000.

Hundreds of escaped Taliban prisoners are on the loose in Afghanistan right now, the latest in a series of major setbacks raising serious new questions about the U.S.-led mission there.

Let's go to our Pentagon correspondent, Barbara Starr. She's joining us now with the latest on this story.

How bad is this situation, because it's an outrage that, what, more than a thousand prisoners can escape and then start taking over villages?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Wolf, the NATO alliance is trying to get all of this under control very rapidly. But right now, NATO and coalition troop levels are at an all time high -- more than 60,000 in Afghanistan. And, still, it may not be enough.

(BEGIN VIDEOTAPE)

STARR (voice-over): In Kandahar, up to 900 Taliban fighters and criminals who made a dramatic prison break are reported to be taking over several villages. U.S. and Canadian troops now moving into the region.

NORINE MACDONALD, PRESIDENT, SENLIS COUNCIL: We've really seen that there are insufficient troops in the south to deal with this, to stabilize this situation.

STARR: Across Afghanistan, fighting is on the rise. For the first time, last month more coalition troops died in Afghanistan than in Iraq -- four Marines killed in Farah Province -- the worst single day loss for the U.S. this year. In Tarin Kowt, 100 militants attacked coalition forces -- the largest enemy concentration in months. As the British sent more dead home, Prime Minister Gordon Brown promised to send a few hundred more troops.

GORDON BROWN, BRITISH PRIME MINISTER: Today Britain will announce additional troops for Afghanistan, bringing our numbers in Afghanistan to the highest level.

STARR: But it won't help the major flash point -- the border with Pakistan. The U.S. wants Pakistan to crackdown. But Washington says it's just not happening.

ROBERT GATES, SECRETARY OF DEFENSE: There is no question that the area along the Afghan/Pakistan border is a real problem. Al Qaeda is there. The Taliban is there.

STARR: Afghan President Hamid Karzai now threatening to send his forces into Pakistan.

PRES. HAMID KARZAI, AFGHANISTAN: Afghanistan has the right of self-defense when they cross the territory from Pakistan to come and kill Afghans and to kill coalition troops, it exactly gives us the right to go back and do the same.

(END VIDEOTAPE)

STARR: Now President Bush, earlier today in London, weighed in on all of this, calling for more cooperation between Afghanistan and Pakistan. But it doesn't seem likely things are going to get better anytime soon -- Wolf.

BLITZER: Thanks very much, Barbara, for that story.

What a story it is.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: All right, Wolf, don't bet on John McCain being the next president of the United States. That is the message coming from several presidential scholars and historians.

Politico reports these historians paint a bleak picture for McCain. They also say Barack Obama has the best chance of any Democrat perhaps since Roosevelt beat Herbert Hoover in 1932. The historians say it should be an overwhelming Democratic victory, noting McCain is facing one of the worst political environments for the party in power since World War II.

There's also this -- only twice in the 20th century did the candidate from the same party as a two-term president go on to win the White House. The last time it happened, 1988, was when President Bush's dad replaced Ronald Reagan. But remember, Reagan was more than twice as popular as the current president is now.

McCain does have some advantages, including the fact that a lot of people don't see him as a traditional Republican.

Also, he could appeal more to moderates than Obama if the public would end up seeing the Democrat as far left. And McCain might benefit from leftover divisions in the Democratic Party from the long-running primary season.

Meanwhile, a new Gallup Poll suggests the American people agree with these historians. Fifty-two percent of those surveyed think Obama will win regardless of who they support. Forty-one percent say McCain.

And the world is weighing in, too. A Pew Poll -- 25,000 people in 24 countries -- found that in all but two nations, people put more faith in Barack Obama than in John McCain to do the right thing when it comes to world affairs. One of the two exceptions, that would be the United States.

Here's the question: Many historians doubt John McCain stands much of a chance come November. How can he change their minds?

Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.

BLITZER: Thank you, Jack, for that.

Barack Obama going after his rival, John McCain, by invoking President Bush repeatedly.

You're going to find out what Obama is now saying about McCain's tax plan. McCain supporter Mary Matalin, the Republican strategist, she's here to defend McCain, among other things.

Also, a new report raising new fears about nuclear secrets that may have been sold to Iran, North Korea and others by a rogue scientist.

And is it the end of the Bush White House dynasty?

Not necessarily, according to President Bush. We'll have details of what he's saying right here in THE SITUATION ROOM. Plus, this comes in from Customs and Border Patrol. Look at this -- a man clinging to a boat. We'll tell you what's going on. We have details.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Barack Obama is making new attempts to link John McCain to President Bush and his tax cuts at a time when the economy is the issue number one for so many voters out there.

Let's discuss this and more with Republican strategist Mary Matalin. She's joining us from our studios in Chicago.

Mary, thanks for coming in.

MARY MATALIN, REPUBLICAN STRATEGIST: Hey, Wolf.

BLITZER: I want to talk a little about Tim Russert later. But let's talk politics first right now.

Al Gore, he's going to make the big announcement. He's going to be in Michigan tonight endorsing Barack Obama.

What do you think? How much of a bonanza will this be in trying to unify that Democratic base?

MATALIN: Well, is this newsworthy?

I guess it's newsworthy. But it shouldn't be a surprise. And, of course, the Democrats are going to unify. You can see it already. The biggest boost he got -- the one he needed most -- was from Senator Clinton saying please support, let's unify and please support. That was way more important than Al Gore.

BLITZER: Al Gore, you know, your husband, James Carville, was here last week in THE SITUATION ROOM. He threw out the idea Al Gore should be the running mate for Barack Obama.

Do you agree with James?

MATALIN: I love it. Bring it on. That would be great. We need to have a real -- we need to have a healthy and real and substantive debate about energy policy. And if Al Gore is the face of the Democratic Party's energy policy, that's just not any...

BLITZER: But I've got to tell you, Mary...

MATALIN: ...that's nothing but good.

BLITZER: John McCain, he seems to agree with Al Gore on global warming, no drilling in Alaska -- in the Alaskan wildlife refuge. You know, John McCain doesn't necessarily completely go with that traditional Republican line.

MATALIN: We're just going to -- there's no two ways about this.

If we want to reduce the cost and we want to keep our quality of life, we have to increase production. And we have plenty of reserves to do that. And we'll just have to have a big debate on it.

BLITZER: And where do you stand on the whole Alaska business?

MATALIN: Well, I've been to ANWAR. I went to ANWAR in February. It was 76 degrees below zero. There is -- it is pristine in the terms the way they're able to extract from there. It's cleaner -- their drilling areas are cleaner than my kitchen. And my mother taught me how to scrub with a toothbrush. So they know how to do it environmentally safely. They know how to -- we know to use it safely. And we -- everybody in the world that has resources now are extracting fossil fuels...

BLITZER: So on this issue, the Alaskan National Wildlife Refuge, where President Bush opposes drilling there, John McCain -- I mean President Bush supports drilling there, John McCain opposes drilling there, you're with President Bush?

MATALIN: I'm for increasing domestic supply of fossil fuels offshore and in Anwar and in Montana and North Dakota, which has three times as much oil as Saudi Arabia. It's just -- this is just heresy. I don't know why Brazil and China's out drilling in the Gulf with the Cubans. And everybody in the world is extracting for their own uses and we're the only country in the world that is impeding our own resource use. It just doesn't make any sense. And it's time to have a big debate.

BLITZER: All right...

MATALIN: We haven't really had the debate yet.

BLITZER: President Bush, as you know, pretty unpopular according to the polls. The war in Iraq pretty unpopular, according to the polls right now. The economy not very good right now. Here's a constant theme that Barack Obama brings forth.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESUMPTIVE PRES. NOMINEE: We can't afford four more years of George Bush policies. We need to turn the page.

(END VIDEO CLIP)

BLITZER: All right. He says McCain would just be a third term of Bush. You seem to be smiling a little bit.

MATALIN: Well, because this is exactly what Barack Obama promised us he wouldn't do. This is just that empty old rhetoric. Of course, John McCain is not Bush three. There are certain and specific conservative views of government -- limiting government, growth, tax policies, market-based health care reform, all of which John McCain hold, all of which have shown throughout history to be -- to help the economy.

So if he wants to say that -- I travel all over the country, so do you. You talk to people. They're not -- people don't vote backwards. They vote forwards. When Poppy Bush ran in '88, he didn't run as Reagan three. He ran as kindler, gentler. It's a change. It's going to be a change. And McCain has long been -- one of his great assets is that he is a maverick. He is his own man. So I -- it's just -- I think it's a waste of their time. And it sounds like the kind of rhetoric that is what people wanted to stop.

BLITZER: Let's make the turn to our friend, Tim Russert, who had a heart attack, as we all know, unfortunately, on Friday and died. You were very close to Tim, his wife Maureen, their son Luke, you and James. And we saw you yesterday on "Meet The Press." And both of you were incredibly, incredibly powerful.

We also saw a picture in the papers today, an A.P. picture that's been circulating, Mary, showing the two of you breaking down on the set, off camera, on "Meet The Press."

Tell us, you know, how you're doing first of all, given the close friendship that you had with Tim.

MATALIN: As did you. You know, we all knew Tim before we knew each other. And we knew Tim before he was Tim and were all who we are. So, you know, we've all grown up together in birth, in death and weddings. And all I can think of yesterday and today -- and he's been so remarkable -- is Luke.

What a testament to what Tim wanted to leave as his legacy -- a good father. And Maureen is incredible. You know, they both -- after the show they stood up and gave little speeches to console all of us. It's just a remarkable family.

BLITZER: You know, it's a sad, sad moment. The funeral will be here in Washington on Friday. Of course, we'll be there for that.

Mary, thanks very much for coming in.

MATALIN: We'll see you there.

Thanks, Wolf.

BLITZER: All right.

Mary Matalin joining us from Chicago.

Top nuclear secrets and new fears that this man may have sold them to some of America's biggest foes. Disturbing new details emerging right now from a new report. We've obtained the report. You're going to hear what's in it. Brian Todd working this story.

And the little boy who sparked an international custody firestorm is not so little anymore and he's making a political statement. We're going to show you what Elian Gonzales is doing in Cuba right now.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now .

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Well, let's take a look at this picture, Wolf, because it's just an amazing picture. This is hundreds of miles off the coast of Jamaica and it's a go-fast boat, one of those high performance boats that go like 80 to 90 miles per hour.

Well, see that guy clinging there?

He was waiting to be rescued. He happened to be spotted in the air by a Marine Border Patrol aircraft flying by. They managed to get in touch with a nearby boat. The crew onboard that boat rescued the man and he told them that three others are missing. The U.S. Coast Guard is now involved and they're looking for the three missing men.

But can you imagine that?

He survived after clinging to the top of that boat for who knows how long. I'll try to get more information on this for you.

Also in the news tonight, the boy who triggered a U.S.-Cuban custody battle eight years ago has joined the Communist Party. Elian Gonzalez, now 14, joined Cuba's Young Communist Union in a ceremony over the weekend. When he was 6-years-old, he was rescued after a boat smuggling him and his mother to the United States capsized. He stayed with relatives in Florida until they were forced to return Elian to his father in Cuba.

And another princely milestone for the second in line to Britain's throne. Prince William today was formally invested in the Order of the Garter, becoming a Royal Knight companion. The ceremony took place at St. George's Chapel at Windsor Castle. The Order was established in 1348. The emblem is a blue ribbon or garter worn by women on their left arm and by men below the left knee -- back to you, Wolf.

BLITZER: Very nice.

COSTELLO: Yes.

BLITZER: Thanks, Carol.

Some say he's as dangerous as Osama bin Laden -- the nuclear scientist who once admitted selling secrets to rogue states. Now there's a troubling new report suggesting the damage may be worse than thought. Also, the first state-sanctioned same-sex marriages in California less than three hours away. You're going to find out why a huge election year issue in 2004 may not necessarily be so big in 2008.

And a second president hints at a third president -- that would be a third President Bush. Find out what he said that caught our ear. You'll see it and hear it right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, a follow-up to a CNN investigation that about $85 million in items meant for Katrina victims that never got there was supposed to go there.

What's going on in that story?

FEMA is now responding. We have the latest. Stand by for that.

Saudi Arabia says it will begin producing more oil to counter rising oil prices. The former defense secretary, William Cohen, joins us to consider the Saudi change of heart -- what does that mean?

And a father remembered -- Luke Russert, son of NBC's Tim Russert, shares special memories today.

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

A rogue scientist peddling nuclear secrets to America's foes. Now a new report suggests it might be even more damaging than first thought.

Let's turn to CNN's Brian Todd, who's working this story for us.

Brian, what's this all about?

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is about regimes considered enemies of the U.S. possibly getting their hands on nuclear technology that they weren't previously thought to have. The report centers around the network of one man who's already done a lot of damage to nuclear security.

(BEGIN VIDEOTAPE)

TODD: A.Q. Khan, considered the father of Pakistan's nuclear weapons program -- a man intelligence experts call as dangerous as Osama bin Laden. Khan has been under house arrest in Pakistan since he admitted in 2004 to smuggling nuclear technology to Iran and North Korea. He's since recanted that.

But a new report obtained by CNN raises the question of whether Khan's network sold blueprints for an advanced nuclear weapons to those regimes. Former U.N. weapons inspector David Albright, who wrote the report, told CNN of some chilling implications. DAVID ALBRIGHT, FORMER INST. FOR SCIENCE AND INTL. SECURITY: What it would do is give Iran a great short cut to making smaller nuclear weapons. These designs would have allowed it to make great advancements in its knowledge of nuclear weapons and then be able to build these smaller warheads.

TODD: Albright tells us this blueprint is for a nuclear device that could be fitted onto missiles these regimes already have, including Iran's Shahab-3 ballistic missile which can reach Israel.

Did Iran buy the technology? Albright's not sure. U.S. intelligence officials would not comment on his report. An Iranian official at the United Nations rejects the idea, repeating his government stand that its nuclear program is peaceful.

When we asked if terrorist groups like al Qaeda could get their hands on this technology, Albright said it's doubtful Khan would have sold it to them directly, but the terror network could possibly get it through regimes considered enemies of the U.S.

In a recent telephone interview, Khan hinted he's the fall guy for others in Pakistan.

Khan didn't name names but blames the Pakistani government for not keeping promises to him. Pakistani officials tell CNN they've investigated Khan's network thoroughly and don't have any evidence that he sold technology for this sophisticated device to Iran. But Albright says this can't end here.

ALBRIGHT: I think it's very important we start to put pressure on the governments involved in this to find a way to get to the bottom of it.

(END VIDEOTAPE)

TODD: Albright says that means the U.S. has to put more pressure on the Pakistanis to let them interview Khan. The Swiss government should be pressured for more access to three members of one Swiss family who have been held for almost four years since they were caught with those blueprints -- Wolf.

BLITZER: All right. What a story.

Brian, thanks very much for that.

Let's discuss the potential for the United States, this nuclear threat with the former defense secretary William Cohen. He's here in THE SITUATION ROOM.

How worried should we be?

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Very worried.

I think anytime this kind of information has the potential to be distributed and replicated over the Internet by way of example, then it poses a threat to all of us. So it's very damaging information. I think we do have to do more. And Dr. Khan has been protected by the Pakistani government.

BLITZER: Is there anything we can do to make sure the Pakistanis let our people go and question this guy and others from the IAEA?

COHEN: It's really a political decision on the part of the Pakistani government. He's a hero to the Pakistanis. Namely, he is the founder of their atom bomb, so to speak, to make them a nuclear state. If he has information that there are other people involved and not himself, that he is "the fall guy," one way to clear this up is to invite the people in to question me. I have information I can give you.

BLITZER: Because he knows the whole business. He can clear it up in a few hours of debriefs.

COHEN: But that I think the government doesn't want to do that. They're afraid this might certainly topple the government as such. It also I think represents the weakening of President Musharraf. He has, I think, been the one that has provided that kind of protection for fear of --

BLITZER: There's a new government now so maybe they'll have a change of heart.

COHEN: Or it might go the other way. They're talking about even releasing him from, quote, house arrest at this point. That would be a signal that would not necessarily be in our interest.

BLITZER: Let's talk about the Saudi decision to increase the supply of oil. What do you make of it?

COHEN: It's important. If they're going to go to 9.5 million barrels a day and increase that by another 500,000, take it to 10 million barrels a day, and with the prospect of going to 12 in the next year or so, that will be important.

BLITZER: Would it result in a lower price per gallon for Americans?

COHEN: Not necessarily.

BLITZER: Why?

COHEN: Because the supply will continue to escalate. The demand is escalating. China's growing at 10 percent to 12 percent. India is growing to 8 percent, 10 percent and even 11 percent. Other countries are consuming more and more. We continue to continue to consume a great deal. So it's not necessarily going to translate into lower prices. It might. I think they're trying to send a signal that they want the price to come down. Four or five years ago I was talking to their ambassador who said we'd like to see it about $28 to $32 a barrel. That's the range.

BLITZER: That sounds so quaint.

COHEN: Now it's $140 a barrel. They see this also as a potential that other countries, especially the United States, will develop alternative sources. So that's a concern to them. They may bee trying to ease the price somewhat. But I don't think we should expect any dramatic changes.

BLITZER: And as long as a dollar is so weak, it's going to cost a lot more for Americans to buy gas.

COHEN: Whatever happened to conservation? One of the first bills I ever introduced in 1973 --

BLITZER: When you were in the House.

COHEN: Brand-new fresh member of the House of Representatives, 1973, to introduce a measure to give tax incentives to conserve energy. The cheapest barrel of oil being the one we don't have to produce. Yet it didn't go very far then. It took five years before we had a conservation bill that passed.

BLITZER: Secretary Cohen, thanks for coming in.

COHEN: Pleasure to be with you.

BLITZER: The rings are ready and so is the California courthouse. In a matter of only a couple or so hours, the June wedding season will take on a whole new meaning as same-sex couples prepare to tie the knot.

Later, he dropped out of the GOP race but he's still going to be in Minneapolis at convention time; Ron Paul, the congressman. He's our guest in THE SITUATION ROOM. That's coming up as well.

(COMMERCIAL BREAK)

BLITZER: California is now only a couple of hours or so away from becoming the second state in the United States to grant full marriage rights to gay and lesbian couples. While there's still considerable opposition to same-sex marriage, the hot-button issue seems to be cooling a little bit.

Carol Costello is working this story for us.

What are you finding out, Carol?

COSTELLO: You know a lot of interesting questions raised by this issue. Gay marriage certainly isn't at the top of the list of what it comes to what concerns Americans the most but California could inspire some conservatives to put it back on the front burner.

(BEGIN VIDEOTAPE)

COSTELLO: On Monday night in California, their joy will be realized. That's when gay marriage will become legal in every sense of the word. Gays across the country have been doing a sort of victory dance. So is San Francisco's mayor who will perform the first legal same-sex marriage in California. GAVIN NEWSOM, MAYOR OF SAN FRANCISCO: The march of equality that needs to include everybody, equally and fairly, is here at least in California. But that I recognize does not exist in 48 other states. It means we have a lot of work to do.

COSTELLO: All of this outward joy may reignite passion in an issue that's cooled now that the American economy has tanked. The Family Research Council is now running these ads in California newspapers asserting since California has removed husband from marriage licenses, the next step will be to remove father from birth certificates.

CHARMAINE YOEST, FAMILY RESEARCH COUNCIL: Because we're in a presidential campaign right now, I think it's going to be a real flash point for the electorate to come together and say this really matters to us.

COSTELLO: Just like it did in election 2004 when some analysts believe George Bush beat John Kerry in the battleground state of Ohio because their stands on gay unions. Gay rights groups say times have changed.

ROBERTA SKLAR, NATIONAL GAY, LESBIAN TASK FORCE: The American people are fair. They believe in equality. And they don't like being manipulated in an electoral season. So even if it were to become an issue, it will be an issue that will fail.

COSTELLO: According to a new Pew Research Poll, 49 percent of Americans still oppose gay marriage. But that's down from 2004 when opposition to gay marriage ranged from 56 to 63 percent. Still, the Family Research Council says socially conservative voters like Latinos and working class white voters will reverse the trend, thanks to what's happening to traditional marriage in California.

(END VIDEOTAPE)

COSTELLO: Now, if you're wondering where the candidates stand on this issue, both John McCain and Barack Obama oppose gay marriage and a federal constitutional amendment banning it. Obama supports civil unions. McCain says it's up to individual states to decide, although he did support the Defensive Marriage Act back in the '90s.

BLITZER: Thanks very much, Carol, for that.

This political season certainly won't be the same without NBC's Tim Russert. Today his son Luke talked publicly about his dad.

Mary Snow is looking at this story for us.

Mary, update our viewers on what happened today because Luke was incredible on the "Today" show.

MARY SNOW, CNN CORRESPONDENT: He really was, Wolf.

And he shared many memories of his father. Not just as a dad, but as a journalist. Luke Russert is 22 years old. He just graduated from Boston College. And he remained composed during a lengthy interview this morning on NBC.

(BEGIN VIDEOTAPE)

SNOW: It was a tribute from someone who knew Tim Russert like no other. Luke, his only child, visited the set Sunday where his father broadcast "Meet the Press" for 17 years. He shared his thoughts on NBC's today show.

LUKE RUSSERT, TIM RUSSERT'S SON: I sort of saw his chair there with the little pad that he had because he lifted it up and he wanted to be more comfortable. I sort of said to myself, I want that pad to keep forever. And then I kind of went up there and the emotions just came over me. I just wanted to touch that chair.

SNOW: Luke said on NBC's "Today" show he'll forever keep that chair in honor the role his father played as a journalist.

RUSSERT: I really think he saw himself as the questionnaire for the American people. He obviously did the job for himself, for his network, for his family, but at his core I believe he had a higher calling, a responsibility to educate the American public about the candidates who seek the highest office in the land.

SNOW: In this historical election year, Tim Russert played a key role. Once of his competitors, CBS's Bob Schieffer told "The New York Times" it will take four or five people to replace him. In addition to hosting "Meet the Press," Russert was NBC's Washington bureau chief.

While Russert's legacy is honored, his love of family ranked above all else. Proof of that is "Big Russ and Me" about his father, now 84. Tim Russert once talked about the impression his book made on son Luke and how he first learned his son had secretly gotten a tattoo.

TIM RUSSERT, MSNBC ANCHOR: I said, lift your arms up. No. I said, lift your arms up! He lifted his left arm and there was this little tiny block letters TJR, which are my dad's initials, Timothy Joseph Russell, and my initials, Timothy John Russert. He said after I read your book, I knew I wanted grandpa and you on my side always.

(END VIDEOTAPE)

SNOW: And no surprise that Tim Russert's influence reaches far beyond his family. His books now top Amazon's most popular list. A wake will be held Tuesday in Washington, D.C. and funeral services are planned for Wednesday.

BLITZER: Mary, thank you.

We will miss Tim. There's no doubt about that.

Ron Paul is back in THE SITUATION ROOM to talk about the incredible support he still has. You're going to see this interview coming up. Plus, millions of dollars worth of household goods meant for victims of hurricane Katrina given away instead. CNN's special investigations unit uncovered it and the phone started ringing right after our story aired. What's being done now? There's new information. Stand by for that.

Another President Bush? The current one says, maybe. Hear for yourself what George W. Bush is saying. You'll hear it here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Millions of dollars worth of hurricane relief for Katrina victims, socked away, and then given away. Now to the people it was -- not to the people, I should say, it was intended for. Abbie Boudreau is the correspondent with CNN's special investigations unit who explored this story. Since it aired, there's been reaction that's been pouring in, including from FEMA itself.

Update our viewers, Abbie.

ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: All right. Wolf, ever since we aired this story, state and federal agencies have been hard at work putting their spin on it and now FEMA administrator David Paulison is saying his agency did nothing wrong, blaming all of this on the state of Louisiana. But as we uncovered, there's more to this story.

(BEGIN VIDEOTAPE)

BOUDREAU: $85 million worth of brand-new household supplies meant for Katrina victims. CNN uncovered all of this merchandise, just sitting, unused, in FEMA warehouses. For the last two years.

UNIDENTIFIED FEMALE: These are exactly the items that we are desperately seeking donations of right now.

BOUDREAU: While community groups like Unity of Greater New Orleans begged for donations unaware these items existed. But on yesterday's "Late Edition" with Wolf Blitzer, FEMA administrator David Paulison said the items were not all intended for Katrina victims.

DAVID PAULISON, FEMA ADMINISTRATOR: The supplies were received were not all done for Katrina. A lot of the stuff that we bought, FEMA bought. A lot of stuff was donated from other disasters around the country.

BLITZER: When everything was bought or donated, it was supposed to go to Katrina victims.

PAULISON: That's not accurate.

BOUDREAU: But listen to what his agency told CNN before our story aired. FEMA's acting press secretary James McIntyre told CNN that the supplies were purchased in response to Katrina and a separate e-mail from the General Services Administration, says the same thing. Stating these items were surplus from the Katrina and Rita disasters. But only in February of this year did FEMA offer federal agencies and all of the states, including Louisiana, a chance to screen the surplus items in Fort Worth, Texas.

PAULISON: We've been storing these things, things we don't normally store, refrigerators, stoves, coolers, diapers, things like that, and states have been asking for these things. We decided to open them up and give them to the people who could use them.

BOUDREAU: Again, that's a much different response than what FEMA told us before the story first aired. FEMA told CNN in another e-mail it was no longer cost effective to keep paying more than $1 million a year to keep storing the items in warehouses. McIntyre wrote, the agency needed to vacate the warehouses, because they were being torn down. And that's when they decided the items were excess to FEMA's needs.

PAULISON: We did offer to Louisiana, and they said, no, they didn't want them. So 16 states did step up. They said, yes, we need these supplies.

(END VIDEOTAPE)

BOUDREAU: But it's not that simple. FEMA's offer went to Louisiana's surplus agency, which turned it down. But another Louisiana agency, the one in charge of the recovery effort, was never notified. In fact, it says it never even knew the items existed.

(BEGIN VIDEO CLIP)

BOUDREAU: After our investigation, U.S. Senator Mary Landrieu wrote a letter to Secretary Michael Chertoff of the Department of Homeland Security demanding that this be investigated and the items be given back to the state of Louisiana.

SEN. MARY LANDRIEU, LOUISIANA: Just another example of the failings of a federal bureaucracy that was not set up appropriately. It was still in the process of trying to fix it. It's going to take a lot more work.

(END VIDEO CLIP)

BOUDREAU: Already the Louisiana Recovery Authority has made sweeping policy changes because of our investigation. It will now be the lead state agency working with FEMA when property becomes available that could help disaster victims. Wolf just in the last hour we spoke with a FEMA official about those e-mails in our story. Now FEMA is going back to what it originally told us, that those items were intended for Katrina victims. And we're still pushing FEMA for answers on whether it ever told anyone it was sitting on those supplies for the last two years.

BLITZER: Abbie, thanks very much.

We're going to invite David Paulison to come back to THE SITUATION ROOM and we'll get the latest. Obviously this is a story that is a top our agenda right now. Right now he's preoccupied with the flooding in Iowa and the mid west. But once that situation calms down, we'll bring him back here and discuss this story. Thank you, Abbie, for that.

Let's go back to Jack Cafferty right now. He's got "The Cafferty File."

CAFFERTY: Thanks, Wolf.

Presidential historians doubting that John McCain has much of a chance this November. How can he change their minds?

Jerry Rice writes from Roselle, Illinois: "As long as John McCain keeps showing up in photos standing next to Joe Lieberman, Obama has no problems."

Burt in Denver: "McCain needs to be himself. He's a survivor. He's built a career as a maverick. Now it's time for him to graciously say thank you to the GOP and be the maverick he really is. That's how he could win the centrist vote. A nice VP pick like Huckabee could sure up the conservatives."

Paul writes from Columbia, South Carolina: "Historians with crystal balls? Let's deal with events as they happen. This is just more liberal gibberish."

Marty in Florida: "Now that Gore has announced he'll endorse Obama at the rally tonight in Michigan, it's all over for McCain. Between the numbers of registered Democrats, the big name super delegates in Obama's corner and the huge grass roots technological machine behind Barack Obama, McCain doesn't stand a ghost of a chance of winning."

Barry writes: "By pointing out Obama's extreme liberal record, his extreme liberal positions, his total absence of any bipartisan work, his lack of any managerial experience, this is McCain's only path to victory barring a major mistake by Barack Obama."

Wesley in Fredericksburg, Virginia writes: "He has to make his appeal to the middle class and not to the corporations. He has shown that he will do little for us. He doesn't support government assistance for health care for children. He doesn't support Jim Webb's G.I. bill. He only seems to care about winning in Iraq. I cannot see him winning in the general election."

Dan in Pennsylvania says: "To change my mind, he'd have to support Dennis Kucinich in his drive to impeach George W. Bush."

And Linda in New Jersey: "Are these the same historians and pundits that predicted what would happen in New Hampshire?"

If you didn't see your e-mail here, go to my blog. You'll find it at CNN.com/CaffertyFile. Look for your e-mail there among hundreds of others --Wolf.

BLITZER: See you in a few moments, Jack. Thank you. Ron Paul, the congressman, quickly dropping out of the Republican race, vowing to remain a thorn in John McCain's side. Ron Paul is here in THE SITUATION ROOM. We'll talk. He'll explain.

Plus, President Bush hinting his family may not necessarily be done in the White House. You're going to find out what he's saying right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: January won't necessarily mark the end of the Bush White House dynasty. President Bush himself sounding a little wistful, hinting at a third Bush presidency. Listen to what he told Sky News.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What about the Bush family? We've had father and son in the White House. Is this the end?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, we've got another one out there who did a fabulous job as governor of Florida, and that's Jeb. You better ask him about thinking about running. He would be a great president.

(END VIDEO CLIP)

BLITZER: The first lady Laura Bush was also asked if there would be another Bush in the White House. Her answer, and I'm quoting now, we will see.

Crossing the border illegally. A new government undercover study shows it just may not be all that difficult. No great surprise to Lou Dobbs who's joining us.

What do you make of this study, Lou?

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": It's amazing how long it takes this government to figure out how to tell the truth -- 93 percent of those folks crossing the border get in without a problem, whether it's legally, through the ports of entry, or crossing the desert, or whatever it may be. 9 out of 10 folks get in. And that's a shame that this administration, all of the open borders advocates, they're winning because they're getting exactly what they want.

And the American people are getting screwed again. They're being lied to. Their tax money is being spent, to no avail because it's having no effect because this administration is playing a game just like this Congress and both political parties.

BLITZER: It's relatively easy to get a tourism visa. Americans want tourists to come here, spend euros, spend whatever money here, and if they want to stay, they can sort of slip in and stay, right?

DOBBS: Sure, absolutely, and the Supreme Court's going to give them a little boost along the way, too, because you know, you've got Congress selling out to illegal immigration and open borders. You've got the president sold out long ago. Now you've got the Supreme Court saying, hey, why not us? Throw the judiciary in there, too, because we don't really care what the American people think or want or deserve. This is all about elites running a government that is out of control.

BLITZER: Lou, see you in one hour.

DOBBS: You've got a deal.

BLITZER: Your show starts. Thanks very much.

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