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House and Senate Compromise to extend Patriot Act; House Negotiators Closer to a Deal on McCain Torture Amendment; President's Rating Up in New Poll; Governor Schwarzenegger Heard Appeals from Williams' Lawyers; Senator Joe Lieberman at the Pentagon Sparks Questions about White House and Rumsfeld

Aired December 08, 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: And to our viewers, you're in THE SITUATION ROOM, where new pictures and information from around the world are arriving all the time.
Happening now, America's security under the microscope, a day after a deadly airline scare.

It's 4:00 p.m. here in Washington, where a controversial new deal has been cut to help protect the nation from terrorists.

It's 1:00 p.m. in Sacramento, California, where a death row inmate makes a final appeal to the governor, Arnold Schwarzenegger. Will the California governor spare Tookie Williams' life? A pivotal day in the case of a gang founder turned preacher of peace.

And some Christians say humbug to the first family's holiday card. 'Tis the season to debate whether Christmas has been forgotten.

I'm Wolf Blitzer. And you're in THE SITUATION ROOM.

This hour, we're on the "Security Watch" in THE SITUATION ROOM. The White House defending the two Federal Air Marshals involved in that fatal shooting of a threatening passenger. And the dead man's family is speaking out, as well.

Here in Washington, meanwhile, House and Senate negotiators have cut a compromise to extend the government's premiere anti-terrorism law. And now they appear close to a deal on a measure to ban torture of terror suspects.

Our correspondents Kathleen Koch and Ed Henry are standing by. Let's go to Capitol Hill and Ed Henry first. Ed?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, two congressional sources now tell CNN that House negotiators over this ban on torture have now told their Senate counterparts that they are willing to accept John McCain's ban on the torture of detainees by U.S. personnel -- a complete 180 from where the House negotiators started, and a blow to Vice President Cheney, who has lobbied vigorously against this.

These sources caution that the deal is not complete. McCain is still ironing out the final details with White House aide Stephen Hadley. But they say House negotiators are saying privately, they are willing to accept the McCain language, virtually word-for-word.

The lead House negotiator, House Armed Services Chairman Duncan Hunter, told me a short while ago that indeed, the McCain language will be -- quote -- "strongly manifested in his words in the final product, and it will be done in the next day or two." The international pressure on the administration has been intense, as you can see from when I caught up a little earlier today with the Defense Secretary Donald Rumsfeld in a Capitol hallway.

(BEGIN VIDEO CLIP)

HENRY: Mr. Secretary, Mr. Secretary, is the administration giving in on the McCain torture amendment? Are you going to accept the language?

DONALD RUMSFELD, SECRETARY OF DEFENSE: The White House has been doing all of this. You'll have to talk to...

HENRY: ... but you're the Defense secretary. Are you accepting the torture amendment, the McCain language? Presumably this is your area.

RUMSFELD: I've said to you that the White House is handling the negotiations on that. There's only one point of contact.

HENRY: Thank you, Mr. Secretary.

(END VIDEO CLIP)

HENRY: And Wolf, sources involved in the talks say that there could be House and Senate votes, floor votes as early as next week.

BLITZER: And what's the latest on the extension of the Patriot Act?

HENRY: Wolf, a controversial deal to extend a controversial law, as you know and now another controversy. At least two senators telling us that they may filibuster the deal. The bottom line is, as CNN first reported earlier today, the House and Senate negotiators now have a deal to extend 16 provisions in the USA Patriot Act that were set to expire at the end of December, stalled for months -- controversy over FBI access to library records, roving wiretaps, as well as the so- called lone wolf provision.

The deal is that the Senate negotiators, led by Arlen Specter, essentially won. They are going to limit the extension of these key provisions to four years, not seven or 10 years as the White House and House Republicans wanted. Not everyone's happy, but Arlen Specter said this is the best deal he could get.

BLITZER: All of this...

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (R-PA), CHAIRMAN, JUDICIARY COMMITTEE: The unique combination of the political forces on the right and the left and this country's governed from the center. And I think it's well balanced.

(END VIDEO CLIP) HENRY: I just got off the phone with the Republican senator, John Sununu. He says he will join a filibuster that's been threatened by Democratic Senator Russ Feingold of this deal. There will be a closer vote, probably next week. And Sununu says it's going to be very close. It's unclear whether the deal will go through.

Wolf.

BLITZER: Amidst all of this, there's movement on tax cuts. What's going on?

HENRY: That's right. House Republicans riding high. They feel the economy is humming along. They feel it's doing well. And they just, a short while ago, passed an extension of the Bush tax cuts on capital gains and dividends. They say these are the tax cuts that have helped that economy.

Democrats who were objecting say it's going to add more money to the deficit. And Republicans have another problem though. Even though they won in the House today, Senate Republicans have a much different version of these tax cuts. They've got to settle that next week, Wolf.

BLITZER: Ed Henry, with lots going on, on Capitol Hill. As usual, thank you, Ed, very much.

Let's go to the investigation now of that airline shooting incident in Miami -- many questions still being asked about the passenger who was killed and whether air marshals responded appropriately. Our Kathleen Koch is following the story that unfolded only yesterday -- much of it, right here live during THE SITUATION ROOM. Kathleen, what's the latest?

KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, no major breaks in the investigation yet. The coroner here in Miami was to perform an autopsy today on the body of the victim, the passenger, 44-year-old Rigoberto Alpizar. And then turn over that information to the Miami- Dade Police Department, which is conducting an investigation into whether or not the deadly use, the use of deadly force was indeed appropriate in this case.

Also, some new information coming out about the victim himself and his background. He was a resident of Maitland, Florida, that's a suburb of Orlando, northeast of Orlando. Worked in the local Home Depot store, where his co-workers described him as the nicest guy. They say they're shocked and stunned by these developments. And also, just a few hours ago, family members of Alpizar, his brother-in-law and sister-in-law came out and read a statement from the family.

(BEGIN VIDEO CLIP)

JEANNE JENTSCH, ALPIZAR'S SISTER-IN-LAW: Rigo Alpizar was a loving, gentle and caring husband, uncle, brother, son and friend. He was born in Costa Rica and became a proud American citizen several years ago. He will be sorely missed by all who knew him.

(END VIDEO CLIP) KOCH: And the two air marshals who were involved in the shooting are now on paid administrative leave, as the investigation into the shooting continues.

Wolf.

BLITZER: All right, Kathleen, thanks very much. And to our viewers, stay tuned to CNN day and night for the most reliable news about your security.

President Bush met with Republican congressional leaders today to talk about the war on terror and Iraq. It's another piece of his campaign to try to better sell his strategy, and it comes amid new signs that he may be making some headway.

Let's go over the White House. Our Dana Bash is standing by with more there. What's the latest developments, the latest sense on how this strategy is unfolding, Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, you know, the president's long-time adviser Mark McKinnon went out on a limb on CNN a few weeks ago saying about the president's approval, well, at least we bottomed out.

And I can tell you, that worried a lot of people here at the White House who said, well, what if we haven't?

Well, there is a new poll, just one poll though, that suggests maybe that was true. A CBS/"New York Times" poll says that the president's approval is now 40 percent. That is up five points from a month ago in this poll. It is interesting that it appears the reason for that is because people are feeling better about the economy.

Remember, the president started this week trying to talk up the economy under pressure from Republicans, Republican leaders on Capitol Hill who accused in a private meeting -- accused White House officials of not doing enough to talk up the economy.

But 40 percent, Wolf, it's also important to note is still well below other presidents who were at this point in their presidency. President Clinton was 18 points higher at this point in his second term.

But there is another small glimmer of hope for the president when it comes to Iraq -- how he personally is handling Iraq. That is now 36 percent, just up a little bit from again last month, 32 percent.

But check out this poll. As you well know, the president has given two speeches on Iraq. There are two left to go. And the White House is involved in a massive campaign to convince the American public he has a plan in Iraq.

This poll shows 68 percent say he does not. They don't think he has a poll -- excuse me, a plan in Iraq. And also, it said a majority say the administration did not tell the truth going into Iraq, and also that a majority said that they should set a timetable for withdrawal. As one Republican pollster I talked to today said, Wolf, it takes some time to turn around a tanker.

BLITZER: He met with these Republican congressional leaders. Is there any new strategy that seems to be unfolding, any new twists that you're discerning?

BASH: Well, this is a part of the big campaign. But this one was done in private. The White House had some House Republicans down for a private briefing. Donald Rumsfeld was here, as was the chairman of the Joint Chiefs. And from Iraq, on secure video link, the U.S. ambassador gave a briefing, as well as the leader, the general in charge of the multinational forces.

This is all part of the same kind of plan -- you remember a couple weeks ago when the president was in Asia, the Senate passed a resolution saying they wanted more information about what the plan is in Iraq. Well, this is part of that.

But it's also interesting to note they are going to have some Democrats also down here. The first constituency though, was House Republicans. As you know, they're all up for re-election next year, so they might be perhaps the most important tool to this White House politically, to make sure that they are on their side when it comes to Iraq.

BLITZER: All right, Dana Bash at the White House. Thank you, Dana, very much. Top Democrats still are trying to keep the heat on the president. Senator John Kerry today accused the administration of squandering its moral authority and public support for the war on terror. Kerry spoke to the same foreign relations group Mr. Bush addressed yesterday.

Meantime, Democratic Party Chairman Howard Dean tells CNN his party does have a plan for Iraq that members can unite behind. Dean underscored Democrats' differences over the war this week when he suggested it can't be won, but today he's downplaying those differences, calling them -- quote -- "mostly press gobbledygook."

Checking the U.S. mission and the violence in Iraq, let's move on to that. U.S. -- the Pentagon says two more U.S. troops have been killed in Iraq, one in Baghdad today and one in Ramadi yesterday. That brings the total number of American military deaths in Iraq to 2,133.

The Bush administration continues to weigh options for a future withdrawal, a Pentagon source saying a plan now is under review to pull out 30,000 troops after the Iraqi elections scheduled for next week, December 15. That's about 10,000 more troops than had been discussed previously.

Meanwhile, an Islamic insurgent group says it has killed an American security consultant held hostage in Iraq. It's the first time in more than a year that insurgents in Iraq have claimed to have killed a U.S. captive. The White House says it cannot confirm the death. Another bloody suicide attack in Baghdad today, a civilian bus hit in broad daylight. Thirty passengers were killed and 25 others wounded, including many children.

Let's move now to the life and death situation unfolding in California. The governor, Arnold Schwarzenegger, hearing appeals today to spare convicted murder Stanley Tookie Williams from execution. Williams' lawyers met with Schwarzenegger behind closed doors while death penalty opponents rallied outside the state capital.

CNN's Chris Lawrence is joining us now from Sacramento with more. Chris?

CHRIS LAWRENCE, CNN CORRESPONDENT: Wolf, right now, the media is finished and the decision is in the hands of Governor Arnold Schwarzenegger. We here are all just waiting for the email that he will send out when he finally does come to his decision.

Now, in a building behind me just a few hours ago, Governor Schwarzenegger met with prosecutors and defense attorneys for Tookie Williams and heard arguments on both sides of this idea of redemption and what it means, one side saying that it means a man who has written books urging children to get out of gangs and has turned his life around, the other side saying for a man convicted of four murders, doesn't he need to admit to these crimes and show some remorse?

(BEGIN VIDEO CLIP)

JOHN MONAGHAN, PROSECUTOR: You talk about redemption. This is not a situation where Mr. Williams admits he committed these crimes. In the face of overwhelming evidence, he denies he committed them because he knows if he admitted he committed them, he simply wouldn't have any chance at all.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PETER FLEMING, WILLIAMS' LAWYER: When I first met Stanley, I said, if you did this, you should confess to it because it will help. And he said if my innocence will cost me my life, so be it.

(END VIDEO CLIP)

LAWRENCE: Yet again, some say that it's not just Williams' life on the line but in some ways Schwarzenegger's legacy. He is getting incredible pressure from all sides. Law enforcement, Catholic groups, victims' rights advocates, the NAACP -- all of them making him very aware of how they will feel about his decision.

Williams is scheduled to be executed just after midnight on Tuesday, which means the latest the decision could come would be late Monday night. But what we're hearing from the governor's office is, don't expect any kind of Hollywood ending, meaning he will come to this decision much sooner than the deadline. Wolf. BLITZER: Chris Lawrence reporting for us from Sacramento. Chris, we'll stay in touch with you. Thank you very much.

Back here in Washington, there's movement now, new movement, in that CIA leak investigation. The special prosecutor, Patrick Fitzgerald today questioned "TIME" magazine reporter Viveca Novak under oath.

Let's bring in our national correspondent Bob Franken, who's covering this story. What does this mean now that Viveca Novak has been brought forward for this deposition?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, we can figure that the special prosecutor, Patrick Fitzgerald, has the information he needs to decide whether to indict Karl Rove, the president's deputy chief of staff and chief political adviser.

We are told by Fitzgerald that he was going to accept some new information from attorney Robert Luskin, who represents Rove, had caused -- had given him, to use his words, "pause." The new information was that conversations that Viveca Novak had with Luskin, Rove's attorney, not Rove, might have had some information in them which would cause the indictments to go away.

Well, earlier this week, Luskin -- in fact, it was last week. Luskin gave his sworn statement before the special prosecutor. And today the special prosecutor went to the lawyer's office of Viveca Novak, took her sworn statement. Wolf, she is expected on the "TIME" magazine Web site -- she works at "TIME" magazine as a reporter. She is expected in the next day or so to say what that deposition was about.

BLITZER: The special counsel, Patrick Fitzgerald, yesterday met with members of this new grand jury that he's empanelled. Why?

FRANKEN: Well, it's probably because it is a new grand jury and he needs to bring them up to speed. Not a legal term, but he had to give them a primer of where this case is. So now he can go back to the grand jury and say OK, now let's pick up where we left off and make some decisions.

BLITZER: Bob Franken with the latest on this development on this case. Thanks, Bob, very much.

Jack Cafferty has been off all of week. He'll be back Monday. But, coming up, white and wild. Is a snowstorm heading your way? We're tracking the winter weather.

Also ahead, taking sides on Iraq. How well is the president getting his message out? Can Democrats speak in one voice? Conflicts in our "Strategy Session."

And the administration's new best friend on Iraq. That would be the Democratic senator, Joe Lieberman. Is he gunning for Donald Rumsfeld's job? Pentagon politics here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Zain Verjee is off today. Fredricka Whitfield is joining us, once again, from the CNN Center in Atlanta with a closer look at other stories making news. Hi, Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, Wolf. The first major winter storm of the season is sweeping east across the U.S. The nation's midsection already has up to 10 inches of snow. From Illinois to Texas, schools are closed and traffic is snarled. Several people have even died in weather-related wrecks. Northeast cities are bracing for heavy snow and forecasters predict a major winter storm in the Southeast.

And along with the snow, this week's winter storm has brought record-setting, bone-chilling temperatures. It got down to 13 below zero in Denver yesterday, and dropped to a record 45 below in West Yellowstone, Montana. This morning, more than 30 new record lows were set across the central third of the country.

And fans of late musician John Lennon are holding a vigil in the section of New York's Central Park dubbed Strawberry Fields. It was 25 years ago today that the former Beatle was gunned down by a deranged fan outside his Manhattan apartment building. A similar gathering is being held in Liverpool, England, The Beatles' hometown.

A papal blessing sets the Olympic torch off on its journey to the winter games which begin February 10 in Torino, Italy. In Rome, runners carried the torch past the Spanish Steps and the Pantheon before arriving at the Vatican, where Pope Benedict blessed it in St. Peter's Square. The pope said the flame represents the values of peace and brotherhood. Let the games begin. Wolf.

BLITZER: Let them begin indeed. Thanks very much, Fred, for that. We'll get back with you shortly.

And Pope Benedict is a candidate for "TIME" magazine's person of the year. Each December, editors at "TIME" magazine choose the person they think, for better or worse, had the biggest impact on the year's events. Here's why Pope Benedict is a candidate.

(BEGIN VIDEO CLIP)

ROMESH RATNESAR, WORLD EDITOR, "TIME": I think Pope Benedict, partly because of the tremendous anticipation that surrounded his rise to the papacy and the fact that he is following someone who I think most people would call one of the real giants of the 20th century, makes him a great candidate for person of the year.

I think there's a tremendous amount of interest in him and the direction which he's taking the church at a time when the church is facing a lot of issues that are difficult for, I think, the Catholic Church to take on in the world. I think how this pope handles those challenges will be very central to not only the future of the Catholic Church and Catholics around the world, but also the way in which the world handles a lot of major problems. So, Pope Benedict, I think, is a very interesting character, an interesting thinker and represents an important voice in dealing with moral questions, and therefore, I think would be a candidate for person of the year.

(END VIDEO CLIP)

BLITZER: Our sister publication, "TIME" magazine, will announce its person of the year on December 18.

Still ahead, more depositions today in the CIA leak investigation. So is a political cloud still hanging over the White House? We'll find out in today's "Strategy Session."

And she's a top Republican adviser. She's married to a top Democratic strategist. Coming up, Mary Matalin joins us in THE SITUATION ROOM. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Today in our "Strategy Session," Democratic National Committee Chairman Howard Dean trying to clarify his comments on whether the U.S. can win in Iraq. Is his party struggling to find its voice? Is President Bush gaining any ground in convincing the American public that he has a plan for success?

Plus, the special counsel Patrick Fitzgerald questioning a "TIME" magazine reporter today in the CIA leak case. Is there a cloud still hanging over the White House?

Joining us now to talk about these questions and more, Democratic strategist and CNN political analyst Donna Brazile, and Republican strategist Rich Galen. Guys, thanks very much for joining us.

Let's start with Howard Dean. The other day in a radio interview, he suggested that the U.S. can't win in Iraq. Today on AMERICAN MORNING here on CNN, he sought to put it a little differently. Listen to this.

(BEGIN VIDEO CLIP)

HOWARD DEAN, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: We can only win the war -- which we have to win -- if we change our strategy dramatically. The Democrats are coalescing around a very different strategy. We hope the president will join us. This is a strategy of strategic redeployment.

(END VIDEO CLIP)

BLITZER: Is he conflicting himself? Is he making sense? What do you think? Is he good for the Democrats or bad for the Democrats?

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Well, first of all, I think what Chairman Dean tried to do this morning was to clarify the statements that were taken out of context in San Antonio. He never said that we don't believe that we can win. What he said today is what Democrats believe, is that we need a strategy for success. We want our troops to be successful and we want our troops to come home.

BLITZER: It sounded like he said that.

(CROSSTALK)

RICH GALEN, REPUBLICAN STRATEGIST: He didn't say that. He said we can't win.

BLITZER: When we played that sound bite the other day it sounded like it, but go ahead.

GALEN: No, he did say it. He said we can't win in Iraq. Those were the exact words he said.

BRAZILE: But that was not the context. There was a context around the current strategy, if we stay the course, we cannot win. That's what he was saying.

GALEN: That's the way he said it when he said it. It's the way he's saying it when you say it. The thing about that clip you just showed that I'm amazed at is you can't actually see the little string behind his head with smart Democrats like Donna Brazile saying, what are you nuts? You can't say that.

Here's the thing that we have had going for us, the Republicans have had going for us, Howard Dean. If they were -- and I don't want him to go anywhere. I want him to stay right where he was. My greatest fear is that the Democrats get smart and they elect somebody like Donna as their chairman. Then we're in big trouble.

BLITZER: This quote from Marshall Wittmann, senior fellow at the Democratic Leadership Council, a new Democratic -- moderate Democratic group. He's a former adviser to John McCain, as you know. "Karl Rove couldn't have choreographed it any better. This is the dilemma that the Democrats see. Their base is inflamed against the war. The war is unpopular, and yet if they call for a precipitous withdrawal, they only play into the hands of the Republican Party, which wants to depict them as the party of retreat."

BRAZILE: There's no question that all of these comments are sort of a distraction from the Republican plan, which was no plan as of last week. The president is struggling now to find his voice and to come up with a coherent message.

From day one, Democrats said this was a man of conscience. And what you see is strong feelings on the Democratic side where there's a need for debate and a need for people to express themselves. And that is what's happening.

BLITZER: The president's numbers may have gone up a slight tick in that "New York Times"/CBS poll, but they're still pretty dismal.

GALEN: Yes, but it's turned around. I mean, I wrote a column ...

BLITZER: Turned around is a -- I mean, that might be an exaggeration.

(CROSSTALK)

GALEN: No, it's not. It's like watching the tide. I mean, the tide doesn't go from, you know, high tide to low tide in a day.

BLITZER: But to go from a job approval number from 35 percent to 40 percent with a three-point margin of error, that doesn't necessarily mean turning around.

GALEN: But it is turning around. It's not going down. It's going up. And as we move through time -- here, look, I don't understand why the White House has been employing a rope-a-dope strategy. I'm not sure who is the roper and who is the ropee.

BLITZER: What does that mean?

GALEN: It means that they just stood there and let everybody take wax on them. It's left over. It's an old Mohammed Ali strategy that worked very well for him. Didn't work very well for this White House.

Finally -- and it may have something to do, frankly, with the whole CIA leak investigation, but finally the White House has got its feet under them, it's got their legs under them. They are aggressively pushing their message so that the average viewer -- not the people who watch us who are very sophisticated and take a lot of interest in this, but the average viewer and reader is now hearing a message other than a negative message, and that's why you're beginning to see the tide come back in for the president.

BRAZILE: Well, we're a long way from the American people coalescing behind the White House or the White House's recent statements. But I think after next week, after the election, the American people will clearly look at the results and say it's time that the Iraqi people step up to the plate and begin to take matters into their own hands, including their security.

(CROSSTALK)

BLITZER: Let me read to you another quote from -- that was in the "Washington Post" today, a former U.S. assistant attorney, Randall Eliason. He said, "the fact that Fitzgerald", Patrick Fitzgerald, the special counsel, "is going through the effort to re-present to a new grand jury, certainly a sign that the investigation into the CIA leak is active".

How much of a concern should this be to the White House right now, Rich?

GALEN: I don't know that it's much of a concern to the White House. I think the outside counsel might be acting partially out of embarrassment. When you miss Karl Rove, that's kind of a -- not Karl Rove, but Woodward. That's a big miss.

But as Bob Franken was saying earlier, he's got a new grand jury. He's got to bring them back up to speed. He has said that he might empanel the new grand jury to take a look at some of these things. We don't know. It may be he's looking at other journalists. We have no idea which way he's going. And this darned investigation doesn't leak like we love it to leak, so we can figure out what's going on.

BLITZER: What's your take?

BRAZILE: Well, there's a big buzz now again in Washington, D.C., in terms of who's next and when this investigation will be wrapped up. We thought it was wrapped up after Scooter Libby. We knew there were some loose ends. But now, you know, Mr. Fitzgerald is back at it, and who knows what will happen. Until it happens, I don't think we know much.

BLITZER: You're absolutely right. We'll leave it right there. Donna, Rich, thanks very much.

GALEN: Thank you.

BLITZER: And up next, it's the story all of Washington is talking about, or at least the political junkies out there. Is Joe Lieberman thinking of making a move from one branch of the government to another? We'll find out when we return.

Plus, the supreme battle over Samuel Alito. Will the high court nominee face tougher questioning than John Roberts did? All that coming up. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back to THE SITUATION ROOM. Look who stopped by the Pentagon today. That would be the Democratic Senator Joe Lieberman. His closer than ever relationship with the Bush White House has people speculating about his future and the future of the Defense secretary, Donald Rumsfeld.

Let's go up to Capitol Hill. Our Andrea Koppel is standing by with more on this story. Andrea?

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, this is not the first time that Senator Lieberman has bucked his caucus. But what has tongues wagging this week is that it comes at a time when Democrats are trying to ramp up their criticism of the Bush White House on Iraq.

(BEGIN VIDEOTAPE)

KOPPEL: On the same morning Joe Lieberman has a private breakfast with Defense Secretary Rumsfeld at the Pentagon, a newspaper headline declared the senator was rumored to be Rumsfeld's replacement. But Lieberman told CNN...

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: I don't know if you'd call it an urban myth or a Washington fantasy, but I'm very grateful to be a United States senator. I'm not seeking anything else. KOPPEL: The speculation was fueled by the vice president and President Bush, who just this week quoted Lieberman, a prominent Democrat, to bolster the administration's case on Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Here's what Senator Lieberman wrote about the Iraq he saw: "Progress is visible and practical."

KOPPEL: Lieberman himself has had tough words for fellow Democrats.

LIEBERMAN: It's time for Democrats who distrust President Bush to acknowledge that he will be the commander-in-chief for three more critical years, and that in matters of war, we undermine presidential credibility at our nation's peril.

KOPPEL: For a party struggling to present a united front on Iraq, Lieberman's criticism was unhelpful and prompted liberal party leaders to call Lieberman on the carpet.

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: Mr. Lieberman is entitled to his opinion. Disagreement in time of war is essential to a governing democracy. I completely disagree with him.

DEAN: The press wants to focus on the differences. The differences are pretty small, perhaps Senator Lieberman excepted (ph).

(END VIDEOTAPE)

KOPPEL: The Connecticut Democrat's independent streak is nothing new. Even three years ago, Wolf, he stood shoulder to shoulder with President Bush at the White House just on the eve of invasion of Iraq, a bipartisan show of support. And then in 1998, he bucked his party again and was among the first Democrats to criticize President Clinton regarding the Monica Lewinsky scandal.

But Democrats this week say that the grumbling -- really, they're not surprised by what Senator Lieberman has done and are grumbling about the fact that the timing of all of it. In fact, one Democratic aide telling CNN that Lieberman's comments, quote, "on Iraq could be a last grab at the national stage". Wolf?

BLITZER: Andrea Koppel up on Capitol Hill for us. Andrea, thank you very much. And we're just getting this in. The Bush administration saying today it supports a House plan for an extra $1 billion to help poor families pay heating bills this winter, an amount Democrats say isn't enough with fuel prices now at record highs.

The Energy secretary, Samuel Bodman, told reporters that the U.S. is facing -- and I'm quoting now -- "real energy challenges this winter." He spoke outside the White House on this very chilly day here in Washington. Bodman's comments coming on the same day that natural gas hit an all-time high. Let's go up to New York. Our Ali Velshi standing by with more on that. This has got to be bad news for a lot of consumers out there.

ALI VELSHI, CNN ANCHOR: Well, 60 percent of this country -- a lot of people don't realize this, 60 percent of this country heats their home with natural gas. Seventeen (ph) percent of all the electricity generated in this country comes from plants that are powered by natural gas. When natural gas is high, we all pay the price. Natural gas closing in at around $15 per thousand cubic feet, that's an all- time high. The post-closing numbers are yet higher than that, $15.45 per thousand cubic feet. Oil closing at above $60 now for the first time since November 4.

So gas prices and heating oil prices are creeping back up again. And for those people for whom energy costs are a big part of their budget, Wolf, this is going to be a big, big problem. This relief is overdue and will be very welcome.

BLITZER: All right, Ali. Thanks very much. And we're getting some live pictures in from Cincinnati, Ohio, right now, underscoring the nature of this frost, this cold weather, the snow that's gripping a big chunk of the country right now. Take a look at this. Cincinnati, Ohio. These are live pictures coming in. You see the drive something rather treacherous out there right now.

Coming up -- and it would be a match-up of two Hollywood heavyweights, the governor, Arnold Schwarzenegger, versus the director, Rob Reiner. But will it actually happen? Today, Reiner made his intentions clear.

And could it be Mel Gibson's next passion? The man behind the movie "Passion of the Christ" is said now to be taking on the Holocaust. Why is that a problem for some people? We'll explain. That's coming up, later tonight in our 7:00 p.m. Eastern hour of THE SITUATION ROOM. We'll be right back.

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BLITZER: On our "Political Radar" this Thursday, new opposition to Samuel Alito's nomination to the U.S. Supreme Court. The Congressional Black Caucus came out against Alito today, raising questions about his position on issues of concern to African Americans.

And the Senate Judiciary Committee chairman, Arlen Specter, tells the "Washington Post" Alito faces some real hurdles during his hearings next month. Specter says Alito likely will face more questions and longer sessions than the chief justice John Roberts did during his hearings.

Doctor-turned Senate Majority Leader Bill Frist says a severe bird flu pandemic could cost the United States $675 billion and throw the nation into recession. He's urging Congress to approve new spending to fight bird flu in the coming weeks. The Bush administration has called for $7 billion in emergency spending.

On the heels of legal and ethics charges against several Republicans, the House speaker Dennis Hastert has a new idea. He's reportedly proposing ethics training for lawmakers. The "New York Times" says Hastert broached the idea in a closed-door session with House Republicans.

And count actor-director Rob Reiner out. He says he won't run for California Governor Arnold Schwarzenegger's job next year. Many supporters of the long-time Democratic Party activist and former "All in the Family" star had been eager to see a meathead versus the terminator contest. Guess what, not going to happen.

Up next, what will it take to win in Iraq? Has the president laid out a clear strategy? Or are more details need? I'll ask a former counselor to the vice president, Dick Cheney. That would be our guest, Mary Matalin. She's standing by. She'll join us in THE SITUATION ROOM.

And first a disturbance, then a confrontation. Minutes later, an airline passenger is dead. A day after Federal Air Marshals shoot and kill a man at Miami's airport, new questions being raised over whether his death could have been prevented. Stay with us.

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BLITZER: Senator John Kerry is trying to keep the pressure on his 2004 presidential rival. In a speech today, Kerry came out swinging once again against President Bush's handling of the situation in Iraq and the war on terror. Among other things, Kerry suggests the administration can and should withdraw at least 100,000 troops from Iraq over the next year, but not on a fixed or automatic timetable. Joining us now, a close ally of the White House, the former Bush adviser, former counselor to the vice president Dick Cheney, Mary Matalin. Mary, thanks very much for joining us.

MARY MATALIN, REPUBLICAN STRATEGIST: Merry Christmas, Wolf. Thanks for having me.

BLITZER: Thank you. Good to have you on the program. You probably saw the latest "New York Times"/CBS Poll. They asked this question, has the Bush administration clearly explained its goals in Iraq? Thirty-five percent say yes, 61 percent say no. Do you think the Bush administration has clearly explained its goals in Iraq?

MATALIN: I think the White House, the president, the vice president, the secretary of Defense are clearly explaining the strategy that the president has had for a national security to defeat Islamo-fascism from the beginning now in great and glorious detail.

BLITZER: Let me interrupt you here for a second. They're doing it now but they haven't done it in the past? I'm listening carefully to the tense of your words because you're a very precise lady.

MATALIN: They have been doing it. But when are you laying out these long labyrinthine detailed speeches, as the president's been doing for three years, and coming up against a single message that the Democrats have been putting out that has no policy behind it whatsoever, you have to deliver the message in a different way. And what the president is saying very clearly -- and the numbers are moving very quickly as people hear him over the cacophony of the Democrats with no policy -- is there's progress on the three-pronged strategy in Iraq, on the political, the economic strategy, and most importantly on the security strategy. And as they get the information, they understand it better, and they're making a decision that is a more positive one about Iraq, but in a bigger picture, on a national security strategy to defeat Islamo-fascists.

BLITZER: Listen to the Republican senator, though, Chuck Hagel of Nebraska. After the president's first speech, the first strategy for victory in Iraq speech, he said, according to the "Omaha World Herald," "I'm not sure the president laid out a strategy for victory."

Senator Hagel's a smart guy, a respected guy on the Hill. Why is he not convinced -- as are so many other Americans -- that there is no clear strategy?

MATALIN: Of course, there's a -- I mean, Senator Joe Lieberman is a smart guy who's actually been there. I don't know how much Chuck Hagel has been the ground, and I don't know much he talks...

BLITZER: He's been there several times.

MATALIN: Well, the generals who are on the ground, and the soldiers who are on the ground, and the Iraqis on the ground who are fighting these Islamo-fascists every single day are quite confident in their ability to succeed, and they're seeing the progress every day.

Look, there's 10,000 of these barbarians and butchers on the ground there, 10,000 of them. And there's 27 million Iraqis, and there's 160,000 coalition forces. It's just -- we're going to win. But it takes time to stand up a sophisticated professional security force. It takes time to make economic progress in a country that's been devastated by the tyrant Saddam. And it takes time to put in place a functioning, self-determined political structure.

BLITZER: This is an argument that Joe Lieberman wrote in the "Wall Street Journal," the argument you just made. There are 10,000 terrorists in Iraq, if you will, insurgents, 27 million Iraqis who are with the U.S. Why can't the 27 million Iraqis beat 10,000 insurgents or terrorists?

MATALIN: This is not some conventional warfare where the terrorists are just standing up there fighting. They're disguising themselves, they're blowing themselves up, they're killing children, they're killing women. You know, it's very difficult to get at combatants who are willing to just blow up innocent civilians.

But they're making progress every day. They've cleared and held large expanses of ground in Iraq, including Najaf and Mosul, as the president said yesterday, and including huge swaths in Baghdad. Eighty percent of the country is peaceful and getting more prosperous. And their income is doubling. And it will grow to 17 percent, next year. I'm giving you statistics because you say, why don't people know? Because every time you try to give details and specifics -- I'm not saying to you, Wolf...

BLITZER: But every time you do that, we see 30 people killed in a bus bombing here, 60 people killed there. The pictures, the images we're getting, are pretty horrific, as you well know, as someone who understands this kind of stuff.

But listen to what Howard Dean said here on AMERICAN MORNING on CNN earlier today. Listen to this.

(BEGIN VIDEO CLIP)

DEAN: We believe that talking about the president's failed strategy in Iraq is not unpatriotic. It may undercut the president, but it does not undercut our troops. We're going to save their lives, and we're going to learn from the experience in Vietnam and not wait for five years with promises made for political reasons here at home.

(END VIDEO CLIP)

BLITZER: If anything, Howard Dean has been very consistent over the past few years, including when he was running for president.

MATALIN: Howard Dean is in some form of denial. Let me make a New Year's prediction for you, Wolf. The Democrats are going to have to dump him as a party chairman. He can't do the two things a party chairman is required to do, which is to raise money or get the message out.

When you look at a country that has gone from tyranny to sovereignty, to a transitional government, to a constitution, and next week is going to have the first self-determined elected government in the region, that is progress. He can be in denial, but who doesn't have a plan, doesn't have a policy, is the Democratic Party. And he's certainly not helping the Democratic Party, who are back-pedaling from their chairman faster than a (INAUDIBLE).

BLITZER: But Mary, you say that, in the most recent "TIME" magazine poll, a majority of Americans seem to agree with Howard Dean. Should the U.S. set a timetable for withdrawal of U.S. troops from Iraq? Fifty-eight say yes, 30 percent say no.

MATALIN: The Americans, as all of us of every party of any stripe, want to see our troops come home, but they want to see them come home victorious. The Democrats have an exit strategy with the express purpose of just exiting, no matter the conditions.

The president's exit strategy is one that will be predicated on victory. And victory is clearly defined by political progress, economic progress, and security progress, all of which is happening. All the generals on the ground, soldiers on the ground, Iraqis on the ground know it. Howard Dean does not know it. And Howard Dean will not be the party chairman of the Democratic Party by the midterm elections.

BLITZER: Mary Matalin predicting the Democrats will dump Howard Dean. We shall see, Mary. Thanks very much for joining us. MATALIN: Merry Christmas.

BLITZER: Thank you again. Mary Matalin, Merry Christmas to you, as well.

MATALIN: Thank you.

BLITZER: And still to come, in this season for holiday cards, who's sending what? President Bush is sending out holiday cards of his own. What might his brother, the Florida governor, Jeb Bush, be sending? We're going to tell you.

And in the push to save the life of death row inmate Stanley Tookie Williams, many of the supporters, including celebrities, took their arguments to the governor. I'll talk with one of them, Bianca Jagger among others, will be my guest in the 7:00 p.m. hour here in THE SITUATION ROOM.

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BLITZER: Terri Schiavo's husband Michael is opening a new chapter in the politics of her life and death. She, of course, is the brain- damaged woman whose feeding tube was removed at her husband's request.

First, there was a long and legal political battle, as most of you remember, that included action by the U.S. Congress. Now, Michael Schiavo has formed a political action committee called Terri PAC aimed at keeping government out of those kind of personal medical decisions.

Today, Michael Schiavo laid out his political action committee's plan online. And with it, came a hailstorm of criticism from conservative Web sites. Let's check in with our Internet reporter Jacki Schechner for more. Jacki?

JACKI SCHECHNER, CNN INTERNET CORRESPONDENT: Well, Wolf, of course, it's a hot-button topic. Let's start with his Michael Schiavo's political action committee called TerriPAC.com. The idea here is to raise money to educate voters about where their elected officials stood on the Terri Schiavo case. You have a link here where you can see how your local senator voted on the bill that was passed -- or was not passed, rather -- that would have given relief to her Terri Schiavo's parent.

The other thing that's interesting about this site is that you can download a living will -- this, of course, very interesting to people who were involved in this case. If she had had a living will, this would have clarified a lot of the issues.

On the other side of the debate, we take a look at blogs for Terri. This was the hub for the activity to keep Terri alive during the debate back in early spring and now, of course, are not happy with this new political action committee. And with Terri Schiavo's passing, they're continuing what they call the value of life fight.

Wolf? BLITZER: Jacki, thank you very much.

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