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The Situation Room
Key Republicans Want To Read Fine Print Of Ports Deal, But Appear Ready To Move On; After Defeat Of Ports Deal, Bush Must Now Deal With The World Stage; Lingering Connection For DP World?; Possible Fallout from Collapse of Dubai Ports Deal; Can President Bush Bounce Back?
Aired March 09, 2006 - 19:00 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 now in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you the day's top stories.
Happening now, it's 7:00 p.m. here in Washington. In a startling turnaround, an Arab company will now turn over control of American ports to an American firm. The Dubai deal defeated by a Republican mutiny on Capitol Hill. How big a defeat is it for the president?
Unlikely allies. Why is Hillary Rodham Clinton teaming up with yet another prominent conservative, this time Senator Trent Lott?
And day by day, bird flu spreading around the world despite desperate efforts to stop it. Now, there's a timetable for its potential arrival in this country.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Here in Washington tonight, a stunning and still developing story: The collapse of the Dubai port deal. It sank today under the weight of a Republican revolt against President Bush. Dubai Ports World now says it will turn over all its operations at U.S. ports to a still-to-be-determined American firm. Republican John Warner read the company's announcement on the Senate floor.
(BEGIN VIDEO CLIP)
SEN. JOHN WARNER (R), VIRGINIA: Because of the strong relationship between the United Arab Emirates and the United States, and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Ports North America to a United States entity.
(END VIDEO CLIP)
BLITZER: Earlier, GOP leaders went to the White House to tell the president in no uncertain terms that the deal was dead. Now, key Republican critics say they still want to read all the fine print of the DP World's revised deal, but they appear ready to move on for now.
(BEGIN VIDEO CLIP)
REP. PETER KING (R), NEW YORK: If the Dubai Ports is divesting itself of all the American aspects of the contract, this is over. We can all go forward. There's no acrimony. There's no more problem, there's no more division. We all stand together.
(END VIDEO CLIP)
BLITZER: Still, Republicans are insisting they're going to try to change the overall law to prevent this from ever happening again.
Democrats on Capitol Hill aren't prepared to let the White House off the hook. They are trying to keep the heat on the president and trying to take credit for the ports deal demise.
(BEGIN VIDEO CLIP)
SEN. CHARLES SCHUMER (D), NEW YORK: We cannot let our guard down four years after 9/11. And it was obvious that this deal, which was done in a cursory, casual and secret way, should never have gone forward to begin with.
We now smell the scent of victory.
(END VIDEO CLIP)
BLITZER: President Bush appeared today with some of the strongest critics of the port controversy as he signed into law renewal of the Patriot Act. He never mentioned the port deal publicly at all. The White House press secretary, Scott McClellan, though predicts the ports storm should go away now.
Our correspondents have been digging on the deal. They are watching all of this unfold. Andrea Koppel is with us, Dana Bash, John King.
John, let's start with you. Give us a little sense of how big a setback this is for the Bush administration right now?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Wolf, it's a major setback here at home, politically, and there also is a major question mark now on the world stage, not getting as much attention here in Washington but there are diplomatic ramifications of this.
I spoke to a diplomat tonight close to the UAE government who said that government is quote, "deeply hurt by this." General John Abizaid, the top U.S. commander in the region, said earlier today he's concerned about Muslim bashing here in the United States as part of this debate.
So the president has to try to recover in his relationship with Republicans here in town. He has to try to see if this is a one-time episode or if other administration initiatives will end up in fights with Republicans. But he also has a problem he has to deal with on the world stage, in of course a very critical part of the world as we go forward in the war on terror. BLITZER: Dana, are they acknowledging at the White House a huge miscalculation?
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Certainly, you know. Obviously, none of that is public, Wolf, but there's no question that from the very beginning, they were just surprised. This whole controversy, which has really been going on for more than two weeks now, snuck up on them to begin with, and that was, frankly, if you talk to Republicans on Capitol Hill, part of the problem, is that they weren't paying attention to what they should have been paying attention to, which is -- was a storm brewing around them, even with members of their own party.
So certainly they understand that this is something that was not necessarily handled well, and there are many people who very much like this president and like this White House. They consider themselves close allies, who even say politically they thought the fact that the president as soon as opposition from congressional leaders like Bill Frist and the Speaker Denny Hastert came out in public, the fact that the president answered that with a veto threat really put him in a box and made it so that he had no choice but to stick to this deal in public.
And quietly behind the scenes, have some of his top aides and some allies who are sort of acting as middlemen, trying to convince the company that they have to bend to political reality. It took a lot of different sways and curves throughout the past couple of weeks, but that's how they ended up where they got today.
BLITZER: Andrea, is this a totally clean break between DP World and these six ports in the United States, or will there be any lingering connection?
ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: That's a very good question, Wolf, and it's one to which we do not have an answer at this point, and quite honestly, according to the sources that I have spoken with that are close to DP World, they don't know the answer yet either.
One source I spoke with earlier today, close to the company, said that they were planning to have a press conference. They were going to be announcing several more concessions, that they thought additional national security measures that they hoped would allay the concerns of congressmen and senators.
And, boom, three hours later, Wolf, we're hearing that Senator Warner is going to be walking out reading a statement announcing that they are willing to transfer the ownership of those six ports to a U.S. entity. So imagine for DP World, their heads are swirling right now.
They're trying to figure something out. Obviously, they got signals from the White House that the president didn't have the votes, that he was being pressed on his veto, this was becoming a huge political liability for him. DP World not only bailed President bush out, but also realized that they might lose the deal, lose the money altogether, Wolf.
BLITZER: John, this controversy is by no means over, because a lot of Democrats and Republicans on the Hill now want legislation to prevent any foreign company, any foreign company from owning operating rights at U.S. infrastructure facilities, whether ports or anything else. The administration is going to be -- is going to be in a box trying to fight that now.
KING: It will be in a box trying to fight that, and those pushing those laws will be dealing with an unpleasant reality to them, which is the fact that the overwhelming majority of the ports in this country are already managed by foreign interests.
So what are they preparing to say in such legislation? A timetable to stop that? Some question of whether it's even constitutional. But there will be a domino effect of this debate, some going ahead saying no port in the United States should be run by a foreign entity, Arab or otherwise, and then there are the other questions again, can the president repair the political relationships in his own party.
You heard Peter King at the top of the show say no acrimony, let's move on, but that will be tested pretty quickly in debates over spending, in debates over immigration. Many Republicans made clear in this debate, Wolf, whether the issue be ports or otherwise, that they view the president as weak and they actually think sometimes it helps them to get in a fight with him.
BLITZER: John, Dana and Andrea, thanks very much for all of that. Zain Verjee is standing by at the CNN Center in Atlanta with some other stories making news right now -- Zain.
ZAIN VERJEE, CNN ANCHOR: Wolf, let's start by showing you some live pictures from Birmingham in Alabama. Strong storms are rolling into the South after pounding the Southern plains today. In southwestern Arkansas, an 83-year-old city councilman was killed when lightning started a fire at his house. High winds and hail the size of baseballs knocked out power to thousands of homes and businesses. Winds gusting to 80 miles an hour tossed mobile homes and ripped roofs off some buildings.
A new discovery is prompting some excited speculation about water and maybe even life in space. The Cassini space probe has spotted what looks like water geysers on one of Saturn's icy moons. Scientists think that ice and vapor may be coming from underground reservoirs of water. It's the most dramatic evidence yet that water could be present somewhere else besides Earth.
Another assault on abortion. This time, the Tennessee State Senate has approved a proposal to amend the state's constitution so that it does not guarantee the right to an abortion. Today's vote was 24-9. The measure still has to pass both the Tennessee Senate and the House several times over the next two years, and then go before voters before it would actually take effect. Just on Monday, South Dakota's governor signed legislation to ban nearly all abortions in his state. Former Washington, D.C. Mayor Marion Barry is on probation for the next three years. Today's sentence stems from charges that he failed to file income tax returns from 1999 to 2004. Barry pleaded guilty last October. He told the judge at today's hearing that he takes full responsibility. Barry owes about a quarter million dollars in outstanding taxes and penalties.
Back to you now, Wolf, in THE SITUATION ROOM, and Jackie.
BLITZER: Jackie. Jackie in New York, that would be Jack Cafferty. Are you standing by, Jack?
JACK CAFFERTY, CNN ANCHOR: Fine public servant, Marion Barry, don't you think? First the videotape, where he's with a hooker buying the drugs or whatever he was doing, and now he's -- and then he was reelected. He went to jail, then he was reelected when he got out. Now he owes the government a quarter of million dollars in back taxes. People vote for morons like this. That's why we have the problems we do.
Barring a national disaster, the party may be over. President Bush's approval ratings were already among the lowest of his presidency when he chose to back the idiotic sale of control of American port facilities to the United Arab Emirates. Who knows what his approval rating will look like next week.
A lot of Republicans are facing re-election in about eight months carrying five years of President Bush's decisions as baggage. The war, Katrina, the deficits, outsourcing, no health insurance, et cetera -- the public is not happy. The polls say about of half Americans think things are going badly in this country and they blame a lot of their unhappiness on President Bush.
The ports deal proved that members of his own party can defy President Bush and actually gain by doing so. So here's the question. Will the collapse of the port deal create a permanent rift between President Bush and members of his own party? E-mail us your thoughts at caffertyfile@cnn.com, or go to CNN.com/caffertyfile -- Wolf.
BLITZER: Jack, thanks very much.
Coming up, war of words. Find out which country Condoleezza Rice now says is the greatest challenge to the United States.
Plus, Democrat Hillary Clinton, a liberal, and Republican Trent Lott, a conservative -- unlikely allies teaming up for a cause. We're going to tell you what they want and why Senator Clinton is positioning herself -- at least trying to position herself -- as a centrist, new Democrat again.
And bird flu, some say it could hit the United States in a matter of months. Find out what health officials are doing to brace for it. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK) BLITZER: President Bush suffers a stinging defeat today in the Dubai Ports World port deal. The president, some are suggesting, already becoming a lame duck. Jeff Greenfield standing by. We'll get his assessment this hour, as well as David Gergen.
Iran, meanwhile, is sticking to its guns today, vowing not to compromise over its nuclear program. And there's new concern from the Bush administration which says Iran may soon pose a significant danger to the United States.
Our senior Pentagon correspondent, Jamie McIntyre, has the story -- Jamie.
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Iran, and the rhetoric is escalating, too.
(BEGIN VIDEOTAPE)
MCINTYRE (voice over): Testifying before the Senate Appropriations Committee, Secretary of State Condoleezza Rice said Iran seems intent on developing a nuclear weapon. And that makes it the single biggest threat facing the world.
RICE: We may face no greater challenge from a single country than from Iran, whose policies are directed at developing a Middle East that would be 180 degrees different than the Middle East that we would like to see developed.
MCINTYRE: Iran's hard-line president, Mahmoud Ahmadinejad, remains defiant, saying Iran has an inalienable right to develop peaceful nuclear energy, and insisting it would not buckle to international pressure.
MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT (through translator): Iranians are not used to bullying and will not also surrender to bullying.
MCINTYRE: Ahmadinejad was also quoted as saying the U.S. would suffer more, a day after another Iranian official threatened harm and pain in retaliation for the U.N. involvement. That was seen by some analysts as a veiled threat by Iran to cut oil production to boost prices, something Iran's oil minister denied.
Pressed by Senator Robert Byrd, Defense Secretary Donald Rumsfeld refused to say what contingency plans, if any, the Pentagon might have to strike Iranian nuclear facilities, insisting the U.S. remains on a diplomatic track.
DONALD RUMSFELD, SECRETARY OF DEFENSE: Senator Byrd, I know of no plans to attack Iran, if that's the thrust of the question.
(END VIDEOTAPE)
MCINTYRE: Rumsfeld's top military advisor, Joint Chiefs chairman General Peter Pace, also chimed in that there are no U.S. plans to attack Iran. He said, "with in its border" but he said Iranians that have been crossing over into Iraq to fight the U.S. and Iraqi forces will be treated as enemies -- Wolf.
BLITZER: Jamie, thanks very much.
The Iraqi government today announced the first executions of militants since Saddam Hussein was ousted. A cabinet announcement said 13 insurgents were hanged in Baghdad after separate trials. That hasn't stopped the violence in Iraq. CNN's Aneesh Raman is in Baghdad -- Aneesh.
ANEESH RAMAN, CNN CORRESPONDENT: Wolf, at least a dozen people killed in some four attacks in the capital today. This morning a roadside bomb detonating in western Baghdad, a predominantly Sunni neighborhood as an Iraqi army convoy was passing by. They, it seems, were the intended target but instead civilians bearing the brunt of casualties. Six civilians killed including a child, some seven others wounded.
Just a short tame later, a car bomb exploding in central Baghdad outside the Yarmuk (ph) hospital. That as an Iraqi police patrol was passing by. Again, civilians bearing the brunt. There two civilians were killed.
Also today, Iraq's Interior Ministry has launched an investigation into what took place yesterday when 25 armed men dressed as Iraqi police commandos stormed an office of an Iraqi private security firm and abducted up to 50 employees. The Interior Ministry is essentially baffled at how this took place.
There are reports that police who were on the scene didn't respond because they thought it was a legitimate operation being conducted by Iraq's Interior Ministry. They deny that, but no word tonight on the fate of those employees -- Wolf.
BLITZER: Aneesh Raman in Baghdad, thanks very much.
As violence grips Iraq there are fears the country is teetering on the brink of civil war. What happens to the 130,000 American troops if Iraq goes over the brink? That question was put to the defense secretary, Donald Rumsfeld, on Capitol Hill today.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Is there any plan to respond to a civil war in Iraq?
DONALD RUMSFELD, DEFENSE SECRETARY: The plan is to prevent a civil war and to the extent one were to occur, to have the -- from a security standpoint, have the Iraqi security forces deal with it to the extent they are able to.
(END VIDEO CLIP)
BLITZER: A notable change today in Iraq. A U.S. military spokesman there says 4,500 detainees from the notorious Abu Ghraib prison will be transferred to an expanded facility at Baghdad's airport within the next three months. A Pentagon official says there is no timetable yet. Abu Ghraib is where U.S. troops were taped -- they were photographed abusing detainees and they say that facility will now be handed over to the Iraqi government completely.
Still to come here in THE SITUATION ROOM, a stinging defeat for President Bush on the Dubai ports deal. After a series of setbacks, is he a lame duck? We're going to take a look at that with David Gergen. He's going to be joining us here in THE SITUATION ROOM.
Plus, Senators Hillary Clinton and Trent Lott teaming up. What's brought this political odd couple together? You'll find out. Stay with us.
(COMMERCIAL BREAK)
BLITZER: David Gergen and Jeff Greenfield about to join us on the collapse of the Dubai ports deal. That's coming up. First though, Zain's joining us once again with a quick look at some other stories making headlines around the world. Zain?
VERJEE: Wolf, British police say they have now recovered more than $34 million stolen in last month's huge cash heist. Authorities say they found nearly half of the money hidden in a garage. Earlier they found several million dollars stashed in a van. A gang posing as police officers have seized the manager of a cash depot and took him, his wife and son hostage in an armed raid. Five people have been charged in the case.
Millions of people in Kenya are facing starvation as a severe drought takes its toll. People are suffering from malnutrition, many of them are dying of thirst. The majority of Kenyans also rely on livestock for survival for milk and for meat, but the countryside is now littered with animal carcasses. Tens of thousands have died. Dozens of people are lining up at food distribution sites, but there's not enough food. The United Nations says that it basically needs more money to deliver more food. The U.N. also says that in total 11 million people are at risk not only in Kenya, but also in Somalia, Ethiopia, and Djibouti.
In western France, a former teacher surrendered after holding 21 high school students hostage for several hours today in a classroom. Police say he was armed with a fake gun made of plastic. Two teaching assistants were also held captive. Authorities say the man was taking medication and he was under the influence of alcohol. Authorities also say that he was depressed about losing his job at the vocational school. Fortunately though, no one was injured.
And it seems Bill Gates has got some company. "Forbes" magazine says that there are 102 more billionaires this year. It cites the growth of stock markets around the world in places like Russia and India, but Microsoft founder Gates is still the world's richest man, for the 12th straight year. Now his net worth is $50 billion. Investor Warren Buffett is No. 2 on "Forbes" list. His net worth is listed at $42 billion. And at No. 3, Wolf Blitzer.
BLITZER: Not yet, thanks, Zain.
Up ahead, GOP revolt, Republicans sink the port deal. Can President Bush pick up the pieces from attacks within his own party? David Gergen and Jeff Greenfield standing by.
Also, unlikely allies. Hillary Clinton and Trent Lott teaming up. Anderson Cooper joins us, he spoke with both of them earlier today.
And we'll have more, all of that coming up.
(COMMERCIAL BREAK)
BLITZER: Severe weather and tornado watches in the South disrupting air travel there and beyond. We're going to tell you what's going on. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: We're following a developing story right now. A line of severe weather moving across the country. It stretches from the Gulf Coast to the Great Lakes. Our new meteorologist Reynolds Wolf is joining us with a closer look at what's going on. Reynolds, how bad is it?
(WEATHER REPORT)
BLITZER: Reynolds, welcome to CNN, good to have you on our team, our newest meteorologist.
Moving back to our top story now, the collapse of the Dubai ports deal. Tapping into some strong popular sentiment, members of Congress set out to sink the deal and they have now succeeded. But what happens now? What this country is about to face is serious and the consequences could be significant. Let's turn to our CNN's Brian Todd for more on this part of the story. Brian?
BRIAN TODD, CNN CORRESPONDENT: Wolf, while some American politicians are celebrating, others believe America's relationship with the UAE in some very critical areas, may well change, and not for the better.
(BEGIN VIDEOTAPE)
TODD (voice-over): A warning of possible fallout from the port fight.
JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ADVISER: I think we've missed an opportunity.
TODD: CNN national security adviser John McLaughlin, a former deputy CIA director, says American politicians focused too much on the UAE's pre-9/11 terrorists ties and undervalued the Emirates role since September 11th in catching terrorists, cracking down on weapons trafficking and money laundering. Now... MCLAUGHLIN: ... I think the UAE will continue to be a good intelligence partner but there's a risk here, a chance that they will lose a lot of their enthusiasm for cooperating as closely with us as they have in the past.
GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: I'm very dismayed by the emotional responses that some people have put on the table here in the United States that really comes down to Arab and Muslim bashing. That was totally unnecessarily.
TODD: Militarily, U.S. officials consistently hit home one point. The Emirates, specifically their port facilities in Dubai, are critical to U.S. operations in Iraq and Afghanistan.
CAPT. THOMAS GOODWIN, U.S. NAVY: On a daily basis, there is at least one U.S. ship in a port in the UAE and often times, more than that.
GEN. PETER PACE, JOINT CHIEFS CHAIRMAN: The United Arab Emirates location and capacity will be critical to our ability to succeed.
TODD: Now, one former U.S. defense secretary tells CNN the ruling family may not kick American ships out of port but may in his words, "rethink their level of participation."
In business, the UAE is a huge American partner. Emirates airline has placed a multi billion dollar order for Boeing jets, but also buys planes from European-based Airbus.
Now...
RICHARD ABOULAFIA, TEAL GROUP: ... It's easy to see a scenario where this poisons commercial relations between the Emirates and the U.S. and that could directly impact Boeing's prospects to sell aircraft to the Emirates.
(END VIDEOTAPE)
TODD: A Boeing official tells CNN his company is getting no signals right now from the UAE that business will be affected by the ports development, but experts say what's critical are the signals going in the other direction, that in business the military and intelligence the U.S. needs to send a message that it has a critical partner in the Arab world, one that will be there through thick and think. That message, they fear, may at the very least, become diluted. Wolf?
BLITZER: All right, Brian, thank you very much. The collapse of the deal is a stinging defeat for President Bush. Some say the latest sign he's become a lame duck. David Gergen has advised presidents of both parties, he's joining us in THE SITUATION ROOM right now from Massachusetts.
David, you remember what the president said on February 21st when this became an issue, at least to the public. He said, "critics in Congress ought to listen to what I have to say about this. They ought to look at the facts and understand the consequences of what they're going to do. But if they pass a law, I'll deal with it," he said, "with a veto."
Strong words from the president that effectively now he has to eat.
DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: He sure does, Wolf. And it was surprising when he made that statement because he was throwing down the gauntlet and the Congress called him on it.
It was really a sweep of public opinion coming out from the heartland against this deal that gave the Congress the nerve to stand up against the president and now he has had this bad defeat.
And I think it's going to badly damage his presidency. About last December after the Libby indictment and after Katrina, I think a lot of us felt that it was still possible for the president at that time, to put his administration back together if he brought it in a new team, moved more to the middle, reached out to Democrats as Reagan did after Iran/Contra. You know, Reagan rebuilt from the 30s when he was in the polls up until 60s when he left.
They decided to go another way. They decided to stick with their base, don't change the team. You know, keep doing what they were doing. Don't admit anything is going wrong. And here they've had a series of defeats and I think now come March, some three months later, where they've never been able to get out of the hole, I think it's really late now. I think it's really hard now to get out of the hole at this point. It's just hard to see how you rebuild a presidency, anything like it was before.
BLITZER: A lot of people are wondering how the White House, this White House, which has been so politically astute, could have so badly miscalculated. Ari Fleischer, who served as press secretary during the first term the other day, he said the other day, he said "my sense is the people who are over there at the White House now are working with a very pronounced double-edged sword. They've been there from the beginning, they're experienced, knowledgeable and they know how things work and how to get things done, but they are tired." Is that a factor?
GERGEN: It is a factor. These are burnout jobs. Jim Baker when he was the most effective chief of staff in modern times, the first two years of Reagan -- of the first term of Reagan, always believed it's a chief-of-staff's job, for example, it's a two year job.
And it really is important. Remember Bill Clinton had three, or was it or four chiefs-of-staffs before he was done in two terms. It's not just Andy Card, who is a wonderful man and Karl Rove and all the rest. They've been there now for five years in the traces. They've had two national campaigns.
I don't know anybody who could do as grueling a job as they have done and be able to be as sharp at this time. So I have been surprised that they haven't voluntarily said, "You know, Mr. President, we need some fresh blood in here. We'll keep one or two of the people, the veterans, but let's get some fresh blood."
Look at how much more energy -- you know, Condi Rice is doing many of the same policies that Colin Powell was doing in the first term, but she's brought fresh energy to the State Department, put a new team in there that I think is -- they're clicking pretty well.
BLITZER: I remember when Bill Clinton was having a disaster as a result of the failed healthcare initiative. He needed new blood, he brought you in, he brought in Lee Ampaneta (ph). He shook things up over at the White House. Is it too late for this president to do that?
GERGEN: Well Bill Clinton probably made a mistake bringing me in, I'm sure. But nonetheless, I have to tell that you I still have a sense they're going to replace some people, but I think it's awfully late now.
Look, normally into a second term a president has about 18 months before the midterm elections when the window is open to get legislative -- big legislative initiatives done.
By the time they may get a little reorganized now, it's going to -- almost all of those 18 months will have elapsed. It will be very close to election day, midterms, and after that, you really do -- begin quacking like a lame duck.
He's lost his -- the Republican unity is shattered now. They are still going to try to work with him when it's in their interest back home. But they will depart from him when they don't think it's convenient for them back home. They are already now starting to look to their own re-elections and realizing they're facing, as Jack Cafferty said a little while ago, they're facing tough election landscape back home. So Republicans are going to be looking out for themselves, not after the president. And that's a big shift. I don't think he can get them back.
BLITZER: David Gergen, thanks for joining us.
GERGEN: Thank you.
BLITZER: Now to the Dubai ports deal is set for collapse, the Dubai Ports World is going to transfer its operations to a U.S. company. The question remains, who potentially will take over control of these six major ports in the United States? Let's go to our Internet reporter, Jacki Schechner, she's been digging on that.
JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, here's the press release where they used the term "United States entity." We wanted to try to figure what that could possibly be. We spoke to a company called AMA Capital Partners, it's a merchant banking firm that specializes in transportation.
There's not a lot of U.S. port operators out there or terminal operators. They helped identify two of them though. One is SSA Marine, they're on the West Coast. We spoke to them today. They were not aware of this development when we spoke to them, but wanted to make it clear they hadn't had any conversations up until this point.
Another one of the big ones in the United States is Maher Terminals, they're based out of Jersey. We put in a call. Have not spoken to them yet either. Halliburton, have not spoken to this company yet, we put in a call, have not heard back from. There's speculation they could get involved. They have no port experience, of course, but it's this kind of company that people are just considering. A lot of options out there at this point, Wolf, nothing confirmed.
BLITZER: All right, we'll watch that, Jacki, thanks very much. Up ahead in THE SITUATION ROOM, unlikely allies. Some would call it an odd couple. Hillary Clinton and Trent Lott teaming up, find out why.
Plus, bird flu. Is it heading this way? That would be towards the United States. Some say it is only a matter of a few months. Find out the impact it could have here in the United States if it does show up. Mary Snow working this story.
(COMMERCIAL BREAK)
BLITZER: Now back to our top story, the collapse of the Dubai port deal. It's a powerful defeat for President Bush, but as Attorney General Alberto Gonzales tells me, that in the end, the administration is most concerned with what's best for national security. I spoke to him here in THE SITUATION ROOM even as the deal was falling apart.
(BEGIN VIDEO CLIP)
BLITZER: As the point man in the law enforcement community of the U.S. government in fighting terrorism, are you comfortable -- were you comfortable that the United Arab Emirates, which owns this company, a country that had relations with the Taliban, two of the hijackers came from the UAE, they funneled about $180,000 through the UAE to Mohammed Atta and his hijacking associates. Were you comfortable with this deal?
ALBERTO GONZALES, U.S. ATTORNEY GENERAL: The UAE has been a terrific ally to the United States, Wolf. They have provided airspace. They've provided space at their ports. They've provided assets to the United States of America. And so they have been a really close ally.
You know, Richard Reid had ties, of course, to Great Britain. That doesn't mean that we're not going to do business with British companies. So in this particular case, we felt very, very comfortable. We did our work. We did an analysis of what, as a department, we were required to look at. And we had no objections to the transaction moving forward.
(END VIDEO CLIP)
BLITZER: Now that the deal is dead, Gonzales says he hopes the White House and the Congress can move forward themselves, get beyond this port controversy. From the ports deal to Hurricane Katrina. President Bush has been swamped by political setbacks, embarrassments and outright defeats. Now many people are wondering, has lame-duck syndrome set in? Our senior analyst Jeff Greenfield joining us -- Jeff.
JEFF GREENFIELD, CNN SR. ANALYST: Well, Wolf, with all of this lame-duck president chatter, we haven't heard so much talk about a wounded foul since the vice president's unfortunate hunting accident. But what's curious and telling about Mr. Bush's dilemmas is how much they are rooted in discontent within his own party.
(BEGIN VIDEOTAPE)
BUSH: I earned capital in the campaign, political capital. And now I intend to spend it.
GREENFIELD (voice-over): It sure seemed like Bush was in the captain seat after Election Day 2004. A reelected president, with gains for his party in the House and Senate, seemed ready to enact an ambitious second-term agenda.
"On a Roll," proclaimed the nonpartisan "National Journal." But since then, the roll has been almost all downhill.
UNIDENTIFIED MALE: The president of the United States.
GREENFIELD: The domestic centerpiece of the second term, Social Security reform, has vanished without a trace and with virtually no effort by congressional Republicans to fight for it. The disastrous response to the Katrina disaster brought a storm of criticism down on the federal government, with House Republicans leading the charge.
HARRIET MIERS, FORMER SUPREME COURT NOMINEE: Thank you, Mr. President. Thank you very much.
GREENFIELD: The stillborn nomination of Harriet Miers to the Supreme Court left some conservatives openly doubting Bush's conservative credentials. The president surrendered to Republican John McCain on the torture issue.
SEN. JOHN MCCAIN (R), ARIZONA: We sent a message to the world that the United States is not like the terrorists.
GREENFIELD: And now House Republicans promised to scuttle the Dubai ports deal, as Republicans fear they may lose their potent advantage on security issues in the fall midterms. It was that issue, remember, that helped Republicans take the Senate back four years ago.
(END VIDEOTAPE)
GREENFIELD: Now, a president who is strong in his own party can't always help that party prevail. Ronald Reagan was hugely popular among Republicans, but the GOP lost the Senate back in 1986.
But a second-term president is always in a sensitive position, since his party doesn't need to protect him in a presidential reelection bid. But a second-term president whose party sees him as a political liability as they approach the fall election, that president is not a lame duck; that president could be a dead duck -- Wolf.
BLITZER: Jeff Greenfield, thanks very much.
Tonight, another odd pairing for Senator Hillary Clinton. The New York Democrat has developed somewhat of a penchant for teaming up with Republican conservatives on issues where they find common ground. Her past partners include Senators John McCain and Lindsey Graham, even the former House Speaker Newt Gingrich. Now, many see it as part of Senator Clinton's effort to try to position herself in the center as she ponders a possible run for the White House.
Whatever the motive, she now joins forces with Republican Senator Trent Lott. CNN's Anderson Cooper spoke with both of them earlier today. He's joining us with a little bit of a preview. What did you learn, Anderson?
ANDERSON COOPER, CNN ANCHOR: Yes, Wolf, just seeing them together is fascinating. To say they are an odd couple, well, that would be an understatement. Hillary Clinton and Trent Lott. They are working together, as you said -- now, bear with me here -- the two are teaming up to try and remove FEMA from under the umbrella of the Homeland Security Department, saying that it failed miserably after Katrina. I spoke with them today in an exclusive interview.
(BEGIN VIDEO CLIP)
COOPER: Senator Lott, you proposed this legislation to take FEMA out of the Department of Homeland Security. Michael Chertoff, the current head of Homeland Security, says this is a bad idea, that basically it will be disruptive with less than 100 days to go before the hurricane season.
SEN. TRENT LOTT (R), MISSISSIPPI: I found that after Hurricane Katrina, that we really had serious problems with FEMA. Now, we had an overwhelming event, but we also had an agency that had sort of been neglected. It was undermanned, underfunded and bureaucratic. Huge problems.
COOPER: Senator Clinton, Republican Senator Susan Collins from Maine said, and I quote, "This was a failure of leadership. If you still have Michael Brown making bad decisions, it wouldn't matter of FEMA were in or out of the department."
SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Well, Anderson, the legislation that Senator Lott and I are proposing does three things. It does make FEMA independent again, and it does give the director of FEMA direct authority to report to the president. But it also puts in qualifications and credentials that the high level officials in FEMA have to meet.
(END VIDEO CLIP)
COOPER: We're going to bring you the rest of the interview and much more at 10:00 Eastern time tonight -- Wolf. BLITZER: Did they say anything, Anderson, about the collapse of the port deal?
COOPER: We did. We talked to them about the port deal, their reaction to it. Basically them saying that, you know, they need to study it more, that all the details weren't really out.
BLITZER: "ANDERSON COOPER 360" airs 10:00 p.m. Eastern. Thanks, Anderson, very much.
Up ahead here in THE SITUATION ROOM, bird flu expected to hit the United States in just a matter of months. Find out what impact it could have on all of us if it strikes. Stay with us.
(COMMERCIAL BREAK)
BLITZER: The bottom line on the financial markets today, the Dow, the NASDAQ, the S&P were all down today. Investors had a mix of things worrying them, including tomorrow's jobs report, rising oil prices, and the bond market.
A cautious warning from a top government official. The dreaded H5N1 bird flu virus is coming to America, and most likely sooner rather than later.
CNN's Mary Snow has been watching this story. She's joining us live from New York -- Mary.
MARY SNOW, CNN CORRESPONDENT: Wolf, with avian flu spreading from Asia to Europe to Africa, the question of the bird flu's arrival in the United States hasn't been if but when, and now some officials believe they've narrowed down a timetable.
(BEGIN VIDEOTAPE)
MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We should be prepared for the possibility that at some point in the next few months a wild fowl will come over the migratory pathway and will be infected with H5N1.
SNOW (voice-over): Officials stress the concern is about animal to animal transmission, primarily in poultry. The United Nations bird flu chief says infected birds could travel from West Africa to the Arctic, across Alaska and then, when it's time to migrate south, make their way into the Americas. Dr. David Nabarro expects that to happen within six to 12 months, maybe sooner.
DR. DAVID NABARRO, WORLD HEALTH ORGANIZATION: I just think that every country in the world now needs to have its veterinary services on high alert for H5N1.
SNOW: In Nigeria, thousands of birds have been incinerated. In the country of Georgia, animals are disposed of in this mass pit. In Germany, military members help clear out dead birds and there are fresh concerns as cats have been infected. In France, cleanup crews had to disinfect a turkey farm following an outbreak. But U.N. health officials say despite heightened concerns, the spread in poultry has so far been kept under control.
DR. SAMUEL JUTZI, U.N. FOOD & AGRICULTURE ORG.: The virus has so far only affected agricultural poultry in France where these turkeys have been destroyed.
SNOW: If H5N1 is detected in poultry in the United States, the U.S. Department of Agriculture plans to impose a quarantine on the area in question and destroy infected poultry. Officials say the USDA has the background needed to deal with any outbreak.
CHERTOFF: If we get a wild bird or even a domestic chicken that gets infected with avian flu, we're going to be able to deal with it because we have got a lot of experience with that.
(END VIDEOTAPE)
SNOW: Now, the USDA says it's constantly testing birds to protect the $23 billion poultry industry. It notes that it has successfully dealt with other strains of the avian flu in the past. One of the biggest in recent years was in 1983 and '84 when 17 million birds were destroyed in parts of Pennsylvania and Virginia -- Wolf.
BLITZER: What a story. Mary Snow, thanks very much.
Looks like a tornado has just touched down. Our meteorologist Reynolds Wolf joining us with more. What's going on, Reynolds?
(WEATHER REPORT)
BLITZER: Thanks, Reynolds, very much.
Let's go up to New York to see what Paula Zahn has got working coming up at the top of the hour -- Paula.
PAULA ZAHN, CNN ANCHOR: Hi, Wolf, thanks.
We are going to have the incredible story of a teenager who between eighth and ninth grade decided that she would become a he. How does a family live through something like that transition?
Plus what's the disturbing side effect of one of the most popular and widely-prescribed sleeping pills on the market? We'll have some hair-raising stories from people who went to sleep but didn't stay in bed. In fact, one guy was quite surprised to find out he was at the wheel of his car, Wolf, during an arrest.
BLITZER: All right, Paula.
ZAHN: Scary stuff.
BLITZER: Yes, very scary. Thanks very much. See you in a few moments.
Still ahead here in THE SITUATION ROOM, President Bush versus his own party. Republicans sink his ports deal. Jack Cafferty has your e-mail.
(COMMERCIAL BREAK)
BLITZER: Jack is in New York with "The Cafferty File" -- Jack.
CAFFERTY: Hey, Wolf. The question is, will the collapse of the ports deal create a permanent rift between President Bush and members of his own party?
Bruce in Fort Washington, Maryland writes, "We should be so lucky as to have anything create a rift between the president and his party. They have long since forgotten that they work for us and not the president. It took something of this magnitude to give them a backbone."
Dennis writes, "There is no honor among thieves. Time will tell that this was a contrived deal to bail out the Republicans in the '06 election cycle. After the fools in this country forgive and reelect the reformed Republicans, we'll be back to business as usual. God, are we stupid."
Ian writes, "The question itself suggests the person who framed it hasn't been paying attention" -- that would be me. "Since when have these rubber stamp Republicans put the national interest ahead of their party? History will judge this gang harshly"
Byron in Portage, Indiana: "Permanent? If you call a rift that ends after the November elections permanent, then yes. Once the election is over, it'll be back to politics and corruption as usual."
And Steve in Evansville, Indiana, my favorite letter of the day: "I love it when you're in this feeding mode, sitting there licking your chops over any bad news this president may receive. This Dubai deal will blow over like everything else, and you'll once again be disappointed. Objective-thinking Americans will always choose good over evil, and this president is good and you and your liberal-biased news are evil."
Guess I won't be going to Steve's Christmas.
BLITZER: Yes, Evansville, Indiana. I don't think you're going to be visiting Steve anytime soon. Give us a little sense, a little perspective, historic perspective. You and I, Jack, have been around for awhile. How big of a setback is this for the president?
CAFFERTY: Well, I don't know. In light of the fact that there are a whole lot of other issues that have been dragging down his popularity before this ports deal came along -- his approval ratings are down below 40 percent, the lowest of his presidency.
He's approaching lame duck status if he isn't already there. That happens to every president during his second term. So I guess, outside of the fact that this caused a convulsive reaction among the ordinary folks in this country, it's probably just another political battle that, at some point, will be forgotten because of other problems we're having. BLITZER: And we'll remember it tomorrow though, Jack. See you tomorrow. Thanks very much.
Let's go to Paula in New York -- Paula.
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