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The Situation Room
Is New Orleans Ready for Returnees?; Tax Increases to Rebuild New Orleans?; Senators View Destruction
Aired September 16, 2005 - 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: Ali, we'll back with you. Thanks very much. It's 4:00 p.m. here in Washington. And you're in THE SITUATION ROOM, where news and information from around the world arrive at one place simultaneously.
Happening now, prayers and promises for the gulf coast. Now that President Bush has laid out a massive plan for rebuilding, how will America pay the bill? This hour, fresh analysis of the president's speech and the bottom line.
It's 3:00 p.m. Central Time in the Katrina disaster zone, where senators are getting an up close look at the devastation. Is New Orleans really ready to welcome back residents? And how many actually want to return.
Plus, an action figure's new role as underdog. It's 1:00 p.m. Pacific Time, in San Diego, that's where the governor, Arnold Schwarzenegger, announcing he's running for re-election. Can he turn his political fortunes around in the coming year?
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
President Bush says rebuilding the ravaged Gulf Coast will cost whatever it costs, and the federal government will foot a good deal of the bill, probably most of it, if not all of it. You heard him live in THE SITUATION ROOM just a short while ago during his news conference over at the White House with the Russian president, Vladimir Putin.
Today, White House officials refuse to estimate a final price tag for Hurricane Katrina relief, but they acknowledge the money will come from the American taxpayer, and will swell the federal deficit.
This morning the president said the Gulf Coast must be rebuilt with an eye toward wiping out persistent poverty and racial injustice. He spoke at a prayer service for Katrina victims over at the National Cathedral here in Washington.
Back in the disaster zone, the U.S. Coast Guard says it's working to contain 44 oil spills in southeast Louisiana, including four major spills. Hurricane-damaged pipelines and other facilities unleashed hundreds of thousands of gallons of oil.
On the latest storm front, Ophelia is on its way toward New England after lingering for days off North Carolina. Tropical storm warnings are now in effect for Massachusetts and Rhode Island. Ophelia was downgraded from hurricane status last night. President Bush is making another promise on this day after his prime time speech on rebuilding the Gulf Coast. He says the billions and billions and billions of dollars the federal government will spend will not necessarily be offset with tax hikes.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You bet this is going to cost money. And -- but I'm confident we can handle it and I'm confident we can handle our other priorities. It is going to mean we have to make sure we cut unnecessary spending. It's going to mean we don't do -- we have got to maintain economic growth, therefore we should not raise taxes.
(END VIDEO CLIP)
BLITZER: Let's bring in our chief national correspondent, John King. John, let's talk more about what the president just said. He thinks he can find some ways to offset the additional expenditures for rebuilding the Gulf Coast. Of course, that's a lot easier said than done, though.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And Wolf, many fiscal conservatives, even in the president's own party, simply don't trust him. The president said, yes, you have to look for spending cuts elsewhere, but he was not specific. Aides at the White House say they have no specific suggestions. Say cut this, cut that. Many fiscal conservatives do not like that.
And you said the president said not necessarily not raise taxes. The White House is saying adamantly he will not raise taxes. The president will not introduce a tax increase to pay for any of this. So where does the money come from?
The White House acknowledging the deficit will go up. The president suggesting, without being specific, we'll look elsewhere in the budget. Some fiscal conservatives are already saying, cut the pork out of that big highway bill the president just signed over their objections. Perhaps even delay the very expensive new prescription drug benefit for those in the Medicare program.
There's bipartisan agreement that the devastated area must be rebuilt. But Wolf, there will be a big fight, even with the president at odds with many in his own party over how to pay for it.
BLITZER: John, as you know, what the Republicans wanted at the Congress and White House was to extend the tax cuts that were imposed, that were approved during the first term of this administration -- for example, the elimination of estate tax and some of the other tax cuts -- that had a final deadline in the years to come. If the Congress doesn't do that, is that considered by the White House a tax increase?
KING: Well, it certainly would be considered in the long run a tax increase. The president's tax cut that went through in the first term was for 10 years, so certainly by the time the president leaves office, if those tax cuts are not made permanent, he would characterize them as future tax increases.
There is no hope -- very little hope, anyway -- at the White House that Congress will make permanent the broad package of the president's tax cuts this year. There's declining hope that even Congress will address Social Security and the broader tax reform debate that the president wanted to begin this year.
The big question now will be, will they go looking through the federal budget and say, if you're going to spend perhaps $200 billion or more rebuilding after Katrina, will you cut out this line, will you cut that program? Where will you squeeze?
The White House right now is saying, spend the money, then think about that. Many conservative fiscal Republicans are saying, no, do it at the same time.
BLITZER: And many Democrats are saying simply, remove the tax cuts for the wealthy that were approved over the first four years, and that would help save some money. John King, thank you very much for that.
U.S. senators from both parties are in the Gulf Coast today, a show of bipartisanship, even as some Democrats are giving the president's Katrina speech poor reviews.
Let's go to our congressional correspondent, Ed Henry, he's on the Hill. Ed?
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, that's right. In fact, Democratic leaders Harry Reid and Nancy Pelosi are basically saying that the president taking responsibility does not make up for the slow initial federal government response. They are also saying that they feel the president's plan is not ambitious enough to really rebuild the Gulf region in the right way. And a little earlier today a conservative Democrat, Congressman Gene Taylor of Mississippi, who actually lost his home in the Hurricane Katrina, is saying he believes the president came up short in not reassuring enough people in the region that the federal government is going to push back against these insurance companies who might not cover everyone's damages.
(BEGIN VIDEO CLIP)
REP. GENE TAYLOR, (D) MS: One of the things the president didn't talk about is for those people who could not have conceived of this 30-foot wall of water being pushed in by the wind. Their policy -- they have a wind policy but not a water policy. And I would think the president could have helped a heck of a lot of people feel a heck of a lot better about their future if he had said that we as a nation are going to somehow try to make you whole again.
(END VIDEO CLIP)
HENRY: Now, Wolf, John King just mentioned that soaring price tag. Congressman Taylor says he wants to see the Bush tax cuts rolled back in order to make sure that the Gulf region is made whole. That's how he wants to pay for it. And as you also heard, Republicans like John McCain are saying, cut about $25 billion out of the highway bill Congress just passed.
The problem, of course, is that Democrats and Republicans alike here on the Hill are up for re-election next year, in those mid-term elections, the president not facing the voters. There's a lot of pork barrel spending in the highway bill and incumbents to want make sure it's in there, Wolf.
BLITZER: A bipartisan Senate delegation has been visiting the Gulf region today. Is this really a bipartisan show of support or is there less there than meets the eye?
HENRY: I think there's a little less, because basically, they didn't want to make it look like they were punching each other in the eyes and going after each others' throats at a time when they're in the region. They don't want to look like babies.
But back on the Hill, in fact, there's been a lot of finger- pointing, a lot of the blame game, as you know, and even though there's some bipartisanship down in the Gulf region, when they come back next week there's still a lot of deep division, for one thing, how to investigate what went wrong. Republicans still saying, Congress should do it. Democrats say no way they're going to sweep that under the rug, that's going to be a whitewash, instead it should be an independent commission.
Wolf.
BLITZER: We saw Senator Frist, we saw Senator Lieberman, other senators there as well. Ed, thank you very much.
In New Orleans, it's just a day away from allowing business owners to return to the French Quarter and some of the other parts of the city -- the first phase of the mayor's plan to bring the city back to life.
Our Sean Callebs is on the scene for us in New Orleans. He's joining us now live. Sean, where are you?
SEAN CALLEBS, CNN CORRESPONDENT: Well, we're actually in the north part of the city, right on Lake Pontchartrain. You're looking at a marina where just scores of boats, somewhere between 150 and 200 boats were pushed up by the waves in the lake from the height the storm, and now salvage crews are doing what they can. The difference between this boat and some of the others, this mast has already been moved, this boat is ready to be righted and taken off if it's going to be repaired. But over here, the real work is going on. Marine recovery and salvage, they're going through with this crane, taking the masts of every single boat.
They've been out here since before 8:00 in the morning Central Time and it is going to take them throughout the day. You see the numbers, 05, 06, 08, they have between 150 and 200 boats to take care of. So it is going to be exhausting.
We had a chance to talk to a few of these guys. Some had a chance to watch the president's speech last night. They say they were very glad there's now a plan and the federal government is agreeing to bear the brunt of the cost for the repair of this region. But many said, give this area the money, but let the people there do the work. They're ready to roll up their sleeves and do what's necessary to rebuild Louisiana and the rest of this Gulf Coast area.
Wolf?
BLITZER: All right. Sean, thank you very much. Sean Callebs reporting for us from New Orleans.
New Orleans may be reopening doors, but a poll shows many hurricane evacuees in Houston don't plan on going home. Forty-three percent of the evacuees say they'll return to New Orleans, according to the survey published today in the "Washington Post." Forty-four percent say they're settle someplace else. Thirteen percent haven't decided yet.
The federal government's response to the Katrina disaster has been widely panned, but is there anyone on the federal level who deserves praise? We'll tell you about some heroes of the storm. That's coming up.
Plus, the president's big plans for rebuilding the Gulf Coast, how can taxpayers afford it? Our Ali Velshi will consider the "Bottom Line".
And later, more from Arnold Schwarzenegger, he's still speaking in San Diego. And as you saw in THE SITUATION ROOM, he's making it clear he's planning for running for re-election as California governor next year. But given the state of his popularity, can he win? We'll have detailed analysis.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: Unlike some Democrats, Bill Clinton has some good things to say about President Bush's primetime speech on the Katrina disaster. CNN's Larry King asked the former president about Mr. Bush's declaration that he's responsible when the federal government fails.
(BEGIN VIDEO CLIP)
WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Well, I think the president did the right thing in taking responsibility. Clearly, the FEMA response was slow. And there are lots of reasons that I think that happened. I believe that there should be some reorganization there.
LARRY KING, CNN HOST: Should FEMA not be part of national security?
CLINTON: Well, you know, I'm biased. I liked it the way it was. I think the most important thing is we probably should have some sort of requirement that anybody who has the job has prior experience in emergency management. It's a very serious, important job. (END VIDEO CLIP)
BLITZER: You can watch all of the interview with the former president tonight on LARRY KING LIVE. That airs 9:00 p.m. Eastern, 6:00 Pacific.
Words of praise sometimes have been in short supply in the aftermath of Hurricane Katrina. Our senior political analyst Bill Schneider, though, has been looking beyond the finger-pointing; Bill is joining us now live. Bill?
BILL SCHNEIDER, CNN ANALYST: Wolf, did the federal government get anything right? The answer is yes. That's not just surprising. It's also the "Play of the Week."
(BEGIN VIDEOTAPE)
BUSH: To the extent that the federal government didn't fully do its job right, I take responsibility.
SCHNEIDER (voice-over): This week the president took responsibility for everything the federal government did wrong. But we also began to hear about agencies that did things right -- two in particular. The National Hurricane Center sent out dire warnings days before Katrina struck.
MAX MAYFIELD, NATIONAL HURRICANE CENTER: Well, it's very serious, and it cannot only cause a lot of damage, but large loss of life.
SCHNEIDER: Mayfield personally called local officials to emphasize the dangers. He later said, I could never sleep if I felt like I didn't do everything that I could to impress upon people the gravity of the situation.
Hurricane forecasters warned of devastating damage to New Orleans.
ED RAPPAPORT, NATIONAL HURRICANE CENTER: And if the center goes close enough that they get a 20 or 25-foot storm surge in New Orleans, that will overtop the levees and flood the city.
SCHNEIDER: The National Hurricane Center got it right. But not enough people listened. One agency did listen -- the Coast Guard. The Coast Guard was there the minute the storm struck, sending out 100 chopper crews every day to perform difficult and valiant rescues.
GOV. HALEY BARBOUR, (R) MS: They've rescued 1,700 people in this city, and they were there Monday night when it was still awful.
SCHNEIDER: Overall, the Coast Guard said it saved nearly 24,000 lives. This week President Bush acknowledged the Guard's impressive performance.
BUSH: Those Coast Guard kids pulling people out of the floods did heroic work.
SCHNEIDER: At a time when most government failed, two government agencies did their jobs, and earned the "Play of the Week".
(END VIDEOTAPE)
SCHNEIDER (on camera): What did the National Hurricane Center and the Coast Guard have in common? They're small, nonpolitical, and non- bureaucratic organizations. In a story of failure, they worked.
Wolf?
BLITZER: They certainly did, Bill. Thank you very much.
Listen to this. Arnold Schwarzenegger, as you know, the governor of California is having a town hall meeting. We're expecting him to announce he's going to seek re-election. Let's listen in very briefly for a moment. I want your analysis.
GOV. ARNOLD SCHWARZENEGGER, (R) CA: If you think things are running perfectly well in Sacramento, then vote no on any of those things. But if you think we need changed, vote yes. Vote yes on 74, yes on 76, yes on 77, yes on 74, 76, 77. Yes on 74, 76, 77. Yes on 74 76, and 77. Yes on all of those initiatives.
BLITZER: All right, he's talking about all of those initiatives that he wants the voters of California to pass. These are serious, serious issues, but his job approval ratings are way, way down -- in the 30s right now. Bill, how does it look?
SCHNEIDER: It doesn't look terrific for Governor Schwarzenegger. He's an action hero, maybe he can turn it around. The records show he spent $26 million just in the first half of this year on his political committees. And what did he get for it? A dismal approval rating, and a majority of California voters who now say they're not inclined to re-elect him.
BLITZER: And the Democrats have a year, basically, to get their act together in the California. That's a lot of time to come up with a candidate. Some celebrities, like Rob Reiner or Warren Beatty, their names have been thrown out there. Is that realistic?
SCHNEIDER: Well, I'm not sure it's real realistic. But look, in the end it will be a referendum on Governor Schwarzenegger. And his fortunes have taken a tumble this year. It is one of the most remarkable political stories I've ever seen.
He was elected as a politician, but now he looks - rather, as a non-politician. And now he looks like a typical politician -- a Republican in a very Democratic state, a Bush supporter in a state where Bush is unpopular. He also was elected as a uniter, but he spent most of this year picking fights, too many fights with the wrong groups, like nurses, teachers and firefighters. And finally, he said he would be beholden to no one. But he spent an awful lot of time raising money from special interests.
For all of those reasons, his fortunes have taken a tumble.
BLITZER: All right. Bill Schneider giving us some good analysis. Thank you, Bill, very much. His press secretary, by the way, says that the governor will announce at some point during this town hall meeting today that he's going to be seeking re-election. He hasn't formally done that yet. We'll get that sound bite for you once it happens.
A White House thank you for some people doing some amazing work -- reuniting children separated during the hurricane from their parents. We'll have that story when we return.
Plus, more political fallout from Katrina. Has the storm washed out hopes for Social Security reform?
Stick around. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: First Lady Laura Bush is focusing today on some of the youngest victims of Hurricane Katrina, children separated from their parents by the storm. Mrs. Bush visited the National Center for Missing and Exploited Children. That's just outside Washington, in Northern Virginia. She says, even young kids should learn their full names, addresses, and their parents' names.
More than 2,000 children have been reported missing since Katrina struck. We'll go live to the Center for Missing and Exploited Children in our next hour here in THE SITUATION ROOM. Our Brian Todd is standing by.
And stay with CNN throughout this weekend for special reports on the plight of the children of the storm, and efforts to reunite them with their families.
On our "Political Radar" this Friday, Katrina fallout. Former and possibly future Democratic presidential candidate John Kerry has a harsh review of President Bush's speech on Katrina recovery. The Senate Democrat says Americans want to know their government will be there when it counts with leadership that keeps them safe, not speeches in the aftermath to explain away the inexcusable.
The head of the House Republican Campaign Committee is urging fellow GOP leaders to drop plans for Social Security legislation this year. Officials say Congressman Tom Reynolds made the pitch to House leaders this week. Those officials say Reynolds noted the public's attention has turned to Hurricane Katrina and he said focusing in on Social Security could hurt Republicans in next year's congressional election.
Looking ahead to the 2006 vote, a new Pew Poll asks Americans if they would like to see most members of Congress re-elected next year. Forty eight percent said no. That's the highest level of dissatisfaction in the Pew Poll in the last decade since Republicans won control of Congress in 1994. It's not yet clear of Hurricane Katrina is a factor in the discontent.
Up next, the money game. The president promises to spend billions and billions and billions of dollars to rebuild what Katrina destroyed. But where will the cash come from? We'll ask our Ali Velshi. He's digging into that story.
And later, Arnold Schwarzenegger says he's around for the long haul, but the California governor is way down in the polls. Can he turn things around in the coming year? I'll ask our own political analyst, Carlos Watson. He's standing by.
(COMMERCIAL BREAK)
BLITZER: You heard President Bush say it just a short while ago, if you were watching CNN, you saw it live. The federal government will spend what is needed to pay for Hurricane Katrina relief and recovery without raising taxes -- he says.
Let's bring in our Ali Velshi to talk about this -- the price tag of rebuilding. Where's the money going to come from, Ali?
ALI VELSHI, CNN CORRESPONDENT: Well it's exactly -- here's how it looks, $200 billion. We have a big economy. The economy can likely absorb $200 billion, but whatever the government puts out comes out from money that they collect from taxing people, and from taxing corporations.
So where does this money come from? Typically it would just add to the federal deficit, the deficit gets bigger. As the deficit gets bigger, the government pays more money to borrow and interest rates go up. When interest rates go up, everybody pays more, which means your home mortgage goes up, your loan payments go up. So it becomes a tax. They may not be raising taxes that you pay, but it becomes a tax on borrowing. That's one way to look at it. So the money can't come from nowhere.
Now, the flip side of that, Wolf, is that when the government spends this money, someone gets it. Typically companies are getting it to rebuild. There's a lot of stimulus in the economy, and what you might see, as this happens, the economy, particularly in that region, kicks up. And that money comes back, because companies become more profitable, they benefit from the rebuilding of New Orleans, tourists go flock in, and all of these people end up paying more taxes. As more jobs are created, the people who have been out of work create taxes.
So here is what you have. You have $200 billion that's going to be paid as a result of the hurricane. That's going out -- it will probably be regenerated over the course of the next year or so, but it doesn't get regenerated into the same place it came from, and that's the question right now.
How does the government, which is running a deficit, finance the expenditures they're going to be putting on you the on Katrina, on the relief of Katrina? That's not clear. The government has not made that clear. Right now they are saying they don't have to raise taxes. It may or may not have an impact on the deficit.
Now, Wolf, you know very well from all your time in Washington that it's more complicated than that. It's not that you take $200 out of the budget and it never goes back. The government has ways of making money and rebalancing things. But at the moment it is unclear where this money is coming from and who's going to benefit from it. That will be something to watch over the course of the next year because you can't just take $200 billion out of somewhere and not account for it, not know where it ...
BLITZER: They're going to borrow it. There's going to be notes. There's going to be loans. And certainly the Saudis, the Chinese, the Taiwanese, the Koreans, they're going to be buying a lot of these notes over the year. In effect, future generations are going to be paying the interest on all of this.
And the other point, there's $200 billion, let's say, on top of the $200 or $300 billion the U.S. is already spending on Iraq, a few billion dollars every week, $5 billion or whatever every month. In the end that's going to increase the budget deficit.
VELSHI: And, you know, these are not huge numbers in the context of our economy one at a time. But, you know, when you start think being a country that then is running a deficit on an ongoing basis, the cost of borrowing money becomes higher.
And that's why next week we're going to watch carefully for what the Federal Reserve has to say about interest rates, a continuing increase in interest rates, or do they have it pulled back a little. This affects every American. It affects the way you spend your money. It affects how you buy your houses.
BLITZER: They used to say it's like a hidden tax.
VELSHI: That's exactly right.
BLITZER: Every time the deficit goes up, interest rates will go up, and in effect, you're going to be taxed with the interest rates as opposed to a formal tax, shall we say ...
VELSHI: That's exactly right.
BLITZER: ... just like the cost of gasoline as well. Ali, we'll continue this conversation. Thank you very much.
The president in primetime -- that would have been last night. Did Mr. Bush make his case clear last night? We'll get some expert opinion. That's coming up in our Strategy Session.
And later, Ophelia drenching North Carolina. Will it make a repeat performance in New England this weekend? We're tracking the storm.
And you're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: CNN's Fredricka Whitfield is joining us now live from the CNN Center in Atlanta with a quick look at some other important stories making news. Hi, Fred.
FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, Wolf. In Iraq for a week that's been -- seen steady bursts of violence, there were more attacks today. At least 17 people are dead from separate attacks across Baghdad. In one incident gunmen opened fire on a Muslim cleric in Baghdad. In another, gunmen stormed the home of a district mayor, killing him and four of his bodyguards.
In Afghanistan, tight security from U.S. forces ahead of Sunday's elections for new provincial councils and members of the national parliament. Taliban rebels are telling Afghans to boycott the polls or face violence. Already today Taliban militants are suspected of killing one candidate. Election organizers are using donkeys and other means to deliver millions of ballots to the polls. Many hope the election will marginalize Afghan insurgents.
On the subject of expensive gas and diesel prices in Britain, some motorists are mad as ever. At times they're driving just 20 miles per hour causing traffic jams on a busy motorway in South Wales. Gas prices are selling for about $7 U.S. per gallon.
And in New York, kings and queens, presidents and prime ministers all brought together by one former U.S. president. It's day two of Bill Clinton's Global Initiative which hopes to address poverty, religious strife, climate change, and corruption. Find out more tonight on CNN's Larry King Live. President Bush will be the guest. That begins at 9:00 p.m. Eastern.
Wolf.
BLITZER: It would be President Clinton -- former President Clinton will be the guest, Fred, not President Bush. A slip of the tongue.
WHITFIELD: Oh, sorry about that.
BLITZER: But President Bush will be a guest I'm sure on Larry King Live sooner rather than later. So it was accurate, but not necessarily tonight. Fred, thank you very much.
WHITFIELD: OK.
BLITZER: We're going to take a quick break. Much more coming up. We're hearing the word from Arnold Schwarzenegger. Directly coming up, we'll tell you what he has to say about getting himself re-elected, at least trying to get himself re-elected.
Our "Strategy Session" coming up as well as. James Carville, Bay Buchanan, they're here in THE SITUATION ROOM with us. We've got a lot to talk about.
(COMMERCIAL BREAK)
BLITZER: This just in to CNN, California Governor Arnold Schwarzenegger is making it official. He's running for re-election next year. Schwarzenegger is in San Diego this hour promoting his agenda, his campaign, for a second term.
Let's listen to what he just said. (BEGIN VIDEO CLIP)
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I'm a follow-through guy. I have learned that from sports. In every sport you learn about following through, right? In golf about swinging through, in tennis with follow through, in skiing we finish the turn. It's all about follow through. I learned most of my lessons from sports, so of course, I'm going to follow through with this here. And I'm not in there for three years. I originally got into this, because to finish the job, I'm in there for seven years. Yes, I will run for governor next year. Yes.
(APPLAUSE)
SCHWARZENEGGER: Thank you.
BLITZER: Let's go to our political analyst, Carlos Watson. He's out in California. He's followed this guy for a long time. Carlos, why is he announcing so early -- he's not up for re-election until November of 2006?
CARLOS WATSON, CNN POLITICAL ANALYST: Right, Wolf. And, in fact, he has until March to announce formally whether he was going to run for re-election, so this is pretty early. The big reason is this fall campaign.
This November in California, you know, there's a big special elections. A number of ballot initiatives on the election, including dealing with teacher tenure, and the budget, and redistricting. And what Arnold was starting to see were two things. One, he couldn't raise enough money to really fight the kind of fight he wanted to, because a lot of big corporate donors were saying, if we don't know if you're going to be governor for another four years, we don't know if we want to risk backing these initiatives and then you're no longer there.
The other thing that was going on was there began to be talk in the media out here that if the special election went against Arnold in a major way, that that might cast a cloud over his re-election bid. He didn't want those two stories tied too closely together in the media, and that's why he announced early.
BLITZER: Last month there was a field poll, as you know, Carlos, in California among California registered voters -- are you inclined to re-elect Schwarzenegger in 2006? Thirty-six percent said they were inclined to do so. Fifty-six percent say they were not inclined to do so. And his job approval ratings are equally as bad. He's got an uphill struggle.
WATSON: He does, although he can take a little bit of comfort from looking at the last two governors. Both, Gray Davis, a year before he ran for re-election, and Pete Wilson, a year before he ran for re-election, both also had approval ratings in kind of the mid to high 30s. Both went on to win in pretty significant fashion, so that gives him a little bit of comfort. But make no mistake about it, Arnold, who once was at 65 percent approval ratings, is in much tougher shape.
And by the way, Wolf, we're seeing that around the country. We see that in places like Maryland, in Texas, in other places where incumbent Republican governors are facing, maybe, tougher than expected re-election campaigns.
BLITZER: You're there in California on the scene. Do you sense there's a new emerging strategy that the governor has?
WATSON: Yes. In fact, Wolf, there's three things to think about. The governor is clearly trying to change his team to some extent. Clearly, he's trying to, frankly, change his opponent. And also, in many ways, he's also trying to change the timeframe over which he works.
In terms of changing his teams, he's moved a couple of key members, his chief of staff, his main communications director, away from his gubernatorial team and over towards this ballot initiative and larger campaign effort.
In terms of trying to change his opponents, he had been seeming to focus on the unions, whether you're talking about teachers, police, firefighters, and others. And now there's a chance that he may redirect his efforts instead, and focus on a specific initiative that would redistrict congressional and state legislative boundaries. Therefore, who would his opponent be? His opponent would be incumbents. And he would say do nothing members of Congress or the state legislature are the problem.
And then, last but not least, in terms of time frame or really in terms of scope, instead of having him focus on three or four initiatives this November, you may really see him say, if I can just one through, I'll declare victory and go home early. So a major change in Arnold's strategy.
BLITZER: And briefly, Carlos, the Democrats. They're going to have to get their act together. Are they moving around, are they focusing in on one candidate who could significantly challenge him?
WATSON: Not yet. The good news for Democrats is that the two announced candidates, Phil Angelides and Steve Westly, both state elected officials, right now run roughly even with Governor Schwarzenegger in some of the polls. But the tough news, they have a tough primary fight of their own, and, frankly, they may not have the fight to themselves. You may have people like the actor Rob Reiner jump in. You could have one of the big mayors either from San Francisco or Los Angeles still jump in before the March deadline. So they have a tough race themselves. But right now they certainly feel better than they did a year ago, when Arnold seemed all but invincible.
BLITZER: Excellent political analysis from Carlos Watson, our man on the scene in California. Carlos, thank you very much.
When we come back, the president in prime time, did he make his case well last night? James Carville, Bay Buchanan in our "Strategy Session". We'll review the president. That's coming up next.
(COMMERCIAL BREAK)
BLITZER: Rebuilding after Katrina and the president's speech, the topic of today's "Strategy Session". Joining us here in THE SITUATION ROOM, Democratic strategist James Carville, Republican strategist Bay Buchanan, both CNN political analysts.
James, I'll start with you. How did the president do last night?
JAMES CARVILLE, CNN DEMOCRATIC STRATEGIST: Well, you know, I think he did fine. I think it was, as President Clinton said, it was good that he acknowledged responsibility for some of the federal failures here, same thing that Governor Blanco and Mayor Nagin have done.
But I think sometimes we have a kind of an all or nothing view of these speeches. How much this helps his political situation, which of course is what we focus on here in Washington. It's kind of doubtful. And, you know, now it's going to depend on the kind of long range of what happens. I certainly don't think that he hurt himself any last night. But I really doubt if he helped himself a lot, too. He probably -- the first step in a long journey.
BAY BUCHANAN, CNN REPUBLICAN STRATEGIST: I think he did extremely well. I think his speech was very, very good, and he hit all the right points, the right temperament, brought real emotion, really kind of, I think, inspired the nation to realize the spirit of the people is there, and we can do well.
I think he loses points -- 80 percent of communication, Wolf, as you know, is nonverbal. And I think he lost -- he looked like a FEMA worker. When he's making an address to the American people, the president, we want him to look like the president. I think he should have a suit and tie, and I think have been in the Oval Office. I think that backdrop did not work.
CARVILLE: That was risky. And it looked more like a casual Friday to me than a FEMA worker or a president. And he does -- I know I do a lot of public speaking myself. I always -- I have to have an audience. He seems to me to do better with an audience or sitting down at a desk. It was a very awkward place for the president to be. And the choice of clothes that they had him in, he didn't look like he was doing rescue work, or he didn't look like he was in a suit. He was like in a nice kind of blue shirt.
BLITZER: He probably would have felt uncomfortable in a suit and a tie in the midst of all rubble and the --
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CARVILLE: He could have been in boots and kind of -- I don't know. I'll tell you this. It did seem to be, I understand what they were doing, it just seemed to be an odd venue and one not particularly suited to him.
BUCHANAN: They made a mistake.
BLITZER: Looking into a camera and reading teleprompter is not that easy.
BUCHANAN: No, it's very difficult. And then to have kind of an eerie backdrop there, it just -- I don't think it worked. I think the advance men should've gone down there and realized, it's too hot. You can't have on a suit and tie. Exactly.
BLITZER: You can see what he looked like as he was reading his speech in that camera.
BUCHANAN: I think he lost the authority, and what he needed more than anything last night is to look like the commander in chief in charge. The words were all there. He showed that he had a real comfort with the problem and had some control over it.
BLITZER: So you think he should have done it from the Oval Office?
BUCHANAN: I think when they went down there and saw that it didn't work down there, they should have moved him right into the Oval Office and made it a presidential speech to the American people.
BLITZER: All right. Let's talk about some the -- let's talk about a substantive issue. Senator Jim DeMint, a Republican conservative, South Carolina, is quoted in the "New York Times" today as saying, "we know we need to help, but throwing more and more money without accountability at this is not going to solve the problem." Among your fellow conservative Republicans, Bay, there's a little revolt brewing. Where's all this money, $200 billion, going to come from?
BUCHANAN: It's as if the president wants to buy his way up in these polls. And we all know that you have got to spend money and serious money, and he's showing that he's going to do that. But we don't want the fraud that comes along with these huge sums of money. It's just as if we just picked these numbers, $200 billion. OK, that'll work.
We want to see where it's going, and why it's needed, and also where he's getting this money. There's not an unlimited supply here.
CARVILLE: Last night I was at the Michigan Chamber of Commerce which is a -- if you can imagine, an overwhelming Republican group. And you know, the $62 billion, but where is it going? And I think -- and I really think -- I can't believe that the White House is putting this out of the White House and putting Karl Rove in charge. That's not going to stand. The people are not going to stand for that.
Believe me, these Midwest, you know, Republican business interests, et cetera, et cetera, Jim DeMint and none of these guys are going to stand for this. I don't know what the White House is thinking or what the president was thinking, but there's great trepidation in the country, and from Democrats, too, not just -- not just Republicans, the Chamber of Commerce types, that if they go and they do the $62 billion and it gets messed up, that's going to add the conservative fuel to the fire. So you say the government can't do anything.
BUCHANAN: Absolutely.
BLITZER: Why do you think Karl Rove is going to be -- he's the deputy White House chief of staff. He's also the top political adviser to the president. I thought Michael Chertoff, the secretary of Homeland Security, would be in charge?
CARVILLE: Well, of the reconstruction I would submit to you both of them are probably equally unqualified. But I'll leave that out of the way to say I'm surprised that last night he didn't say some assurance that he was going to see this is going to be spent this way. I'm surprised they didn't form some public/private bond.
BUCHANAN: He started to. He has the auditors.
BLITZER: The inspectors general will be involved in auditing the whole process.
BUCHANAN: That's right, and watching everything. But my experience with auditors -- and that's my field of expertise, is accounting -- is they come in after the fact. You want a comptroller there. You want a big guy who knows numbers, who's going to watch every dime so that we don't have a scandal that takes place. Auditors is a good step, but I think he needs to take another step.
CARVILLE: And the Democrats are going to pound the table about Rove being in charge of $62 billion and everything, and I don't blame them. And if they don't then ...
BUCHANAN: I hope it stops at 62.
BLITZER: There was a poll -- you're from Louisiana originally. This is a disturbing poll, I think everyone will agree. The question is asked among evacuees if they're planning on going back to their homes in Louisiana, New Orleans. Forty-three percent said they want to return to New Orleans. Forty-four percent said -- of those evacuees say they want to settle somewhere else. What do you make of that?
CARVILLE: Well, first of all, to be fair, I think it was a poll that was taken in Houston, among the evacuees there. Secondly, people don't have a home. And so you say, well, you're going to go back to what? And I think if you told somebody, if your house is still standing, would you go back, they'd say yes.
I think we can over-interpret this. But the truth of the matter is, is somebody of -- some historian that's studied large-scale displacements would probably tell you it's a fairly common thing that a lot of people don't go back. And a lot of ...
BLITZER: If people live through -- Bay, if people live through a trauma like that, especially young kids, they don't necessarily wanted to go back.
BUCHANAN: They do not. And, you know, the parents have an obligation, and these families have an obligation to get some roots quickly, some stability in those families, put them in schools. You don't want to keep turning the situation over. And so they're looking and saying, look, I can get something going here in the next month, or two months, or three months. How long do I have to wait for New Orleans? My family can't wait.
CARVILLE: Bay's exactly right. And, you know, people -- like their kids change schools, they're completely traumatized by it.
BLITZER: We're got to leave it there, guys. James Carville and Bay Buchanan, thanks.
CARVILLE: Thank you, Wolf.
BLITZER: Coming up, bloggers bashing President Bush. Why am I not surprised? We'll go online to find out why some, including some conservatives, are unhappy with the president's ambitious rebuilding plans for the Gulf Coast.
And must the show go on? The producers of TV's Emmy Awards say the nation needs a laugh after Hurricane Katrina.
Stay with us.
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BLITZER: Last night in the zone of Hurricane Katrina's disaster, President Bush pledged federal dollars and federal support. Now in the long term, how is the online -- he says the U.S. is going to be in it, the federal government, in the long term. But how is the online community reacting?
Our Internet reporters, Jacki Schechner and Abbi Tatton, are here. They'll take us online to see what's going on. Guys, what is the reaction?
ABBI TATTON, CNN INTERNET CORRESPONDENT: Wolf, lots of discussion on the left and right in the blogging community of the speech last night. And amongst the conservative bloggers, some critics. In the least, there is some criticism out there of what was in the speech and the amount of federal spending that might be out there, not uniform by any stretch of the imagination.
Hughhewitt.com -- this is one conservative blogger, who said, "a good speech by a good man. Perfect pitch returned tonight," although he says that at some points he did sound a little bit like FDR.
At captainsquartersblog.com -- this is Ed Morrissey -- Captain Ed who belongs at this site says "better late than never." He liked the tone of the speech, what was being said by President Bush, but he thinks that this is something the president should have done last week or by the weekend at the very latest.
Another problem with the timing, one aspect of the speech at michellemalkin.com -- again, another conservative blogger -- what Michelle was saying was that it seemed too late. Almost three weeks had passed until this phone number was given out by President Bush so people could find their missing relatives. And what Michelle pointed out was the amount of people online who almost immediately were trying to reunite people, look for missing persons. She pointed to her blog post of August 30, right after the storm hit, trying to get people together and organize aid drives.
One theme we're seeing again and again on the right, though is this one from will La Shawn Barber, "Bush the sugar daddy, spend, spend, spend" is what she said.
JACKI SCHECHNER, CNN INTERNET CORRESPONDENT: Seeing that at redstate.org. This is from Erick. He opened a live blogging open thread during the speech. And he says "what I hear, nothing but dollar signs."
But as Jeralyn Merritt calls out at talkleft.com, she calls the conservatives complaining out about money hypocritical. She says "billions for Iraq, no questions asked." But "money for Americans to rebuild?" She says, "now we've got to ask questions. What is this one all about?"
A lot of people picking up on the substance of the president's speech, picking out certain phrases and certain words, saying that it's not about more federal expenditure, it's not about what more federal authority. It's about what they did wrong and getting it better. And, Wolf, really what we're seeing a lot of is, it's the devil in the details. It's not the words, it's going to be about the execution.
BLITZER: All right. Guys, thank you very much.
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