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The Situation Room

President Bush Discusses Setbacks in Iraq; Defense Secretary Meets with U.S. Military Commanders in Iraq; Powerful Snowstorm Pounds Denver

Aired December 20, 2006 - 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 are arriving all the time -- standing by, CNN reporters across the United States and around the world to bring you today's top stories.
Happening now: President Bush on setbacks and sacrifices in Iraq. Will he send in more troops to try to ease the killing and the chaos? We will have all the headlines from his year-end news conference and consider whether the president is trying to reinvent himself.

The president's new Pentagon chief is on the ground in Iraq right now. What is Robert Gates saying about the prospect of a surge in troop strength? We will get a report from our Jamie McIntyre. He's the only TV correspondent traveling with the new defense secretary.

And what is missing from the Republican presidential field? A new face in the crowd says he knows. And he's jumping in to fill the void.

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

President Bush says he's still deciding his next moves in Iraq, but he insists he's open to new ideas from every corridor, including from Democrats. The commander in chief held a news conference today near the close of a bloody year in Iraq and on the brink of a new political era here in Washington.

He faced reporters, even as his brand-new defense secretary, Robert Gates, was getting a firsthand look at the situation in Iraq.

Our CNN senior Pentagon correspondent, Jamie McIntyre, is in Baghdad. Our chief national correspondent, John King, is also standing by.

Let's go to the White House, our correspondent Suzanne Malveaux, with the latest on the president's news conference today -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, really, the final news conference is a chance for the president to press the reset button, to give his New Year's resolution, if you will -- the president vowing several times not only to work with Republicans, but Democrats as well, to come up with some sort of Iraq policy that is successful, but also one that the American people can get behind. Now, we heard the president earlier today saying, all options are still on the table, including sending more U.S. troops. That is an unpopular prospect among the Joint Chiefs of Staff. But, apparently, he is already laying the groundwork -- the president calling to expand the armed forces overall.

And that is a move -- very significant here -- that flies in the face of his departing secretary of defense, Donald Rumsfeld, who had advocated for a leaner fighting force.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm inclined to believe that we need to increase in -- the permanent size of both the United States Army and the United States Marines.

I have asked Secretary Gates to determine how such an increase could take place and report back to me as quickly as possible.

(END VIDEO CLIP)

MALVEAUX: And, Wolf, also significant, the president is no longer claiming that the U.S. has an absolute -- is absolutely winning in Iraq, as he had just done six weeks ago during the campaign -- the president, however, saying he does believe that victory is achievable. And he also believes that, ultimately, he did make the right decision in invading Iraq -- Wolf.

BLITZER: All right, Suzanne.

Suzanne is going to be back with us in the next hour.

Meantime, the top Senate Democrat is taking a new jab at President Bush on Iraq, despite his talk of bipartisanship during his news conference.

Incoming Senate Majority Leader Harry Reid issued a statement saying: "It's heartening to see that President Bush has reversed his position, rejected the failed Rumsfeld doctrine, and heeded Democratic calls to increase the size of the military." Reid goes on to say -- quote -- "Unfortunately, it is troubling to see that he still does not understand the need for urgent change in Iraq."

The president's new defense secretary, Robert Gates, isn't wasting any time getting the lay of the land in Iraq. He's there right now.

And our senior Pentagon correspondent, Jamie McIntyre, is the only TV correspondent traveling with him -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf, just three days on the job, and Robert Gates is here, as promised, to confer with American military commanders about how to turn around the deteriorating situation in Iraq.

(BEGIN VIDEO CLIP) ROBERT GATES, SECRETARY OF DEFENSE: Now, the trip is part of the overall assessment that the president has asked me to do.

As I indicated at the confirmation hearing, I have been participating in NSC meetings. I have been participating in a lot of briefings at the Department of Defense, after the Senate confirmed me. But this trip is really an important piece of that, in terms of getting a feel for what we in the agency used to call ground truth.

(END VIDEO CLIP)

MCINTYRE: During his confirmation hearings, Gates said he hoped commanders here might be more candid with him now, as defense secretary, than they were in September, when he met with them as a member of the Iraq Study Group.

As for which way he's leaning on the question of whether to surge or not to surge U.S. troops into Iraq, Gates gave no hint -- Wolf.

BLITZER: Jamie McIntyre is the only TV reporter traveling with the defense secretary in Iraq.

We will be hearing a lot more from him coming up in the next hour, right here in THE SITUATION ROOM.

Fresh from all the bloodshed in Baghdad today, even as Robert Gates began his visit there, at least 18 people were killed in two separate car bombings in the Iraqi capital. More than 40 people were wounded. Also today, new change in the command of the Iraq mission -- General John Abizaid now going ahead with his delayed retirement.

He's expected to leave his post as head of the U.S. military's Central Command in mid-March. Abizaid was supposed to retire last spring, but then Defense Secretary Donald Rumsfeld asked him to stay on.

General George Casey, by the way, the top U.S. military commander in Iraq, he is also scheduled to leave his post early next year. And the chairman of Joint Chiefs of Staff, General Peter Pace, he is scheduled to rotate out of his position later in the year as well -- lots of military changes right at the top of the command structure.

President Bush went to today's news conference under tremendous pressure to change his Iraq policy and perhaps his White House legacy.

Our chief national correspondent, John King, he is here with us with more on this part of the story -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Wolf, think back to after the 2004 election. The president closed out the year saying he had a lot of political capital, and he planned to spend it.

Now, after the 2006 elections, the drubbing of the midterm elections, the president closed out this year with many in Washington wondering if he has any political capital at all for the big decisions to come in 2007. (BEGIN VIDEOTAPE)

KING (voice-over): He doesn't like public introspection or legacy questions.

BUSH: Everybody's trying to write the history of this administration even before it's over. I'm reading about George Washington still. My attitude is, if they're still analyzing number one, 43 ought not to worry about it, and just do what he thinks is right.

KING: Year-end news conferences are tradition, this one perhaps more important than most, because this president is at both a policy and political crossroads.

BUSH: I'm speaking to the American people, of course. And I want them to know that I know how tough it is.

KING: Two-thirds of Americans oppose the war. And just 28 percent in the most recent CNN/Opinion Research Corporation poll approve of how the president is handling Iraq.

KEN DUBERSTEIN, REPUBLICAN CONSULTANT: There's bipartisan angst on the Iraq policy. Everybody is looking for a solution. Everybody knows we can't just walk out.

KING: One goal here was to insist he's learning lessons.

BUSH: It is important for us, to be successful going forward, is to analyze that which went wrong. And, clearly, one aspect of this war that has not gone right is the sectarian violence inside Baghdad.

KING: Translation: It would have helped to have had more troops to keep order in Baghdad when Saddam Hussein's regime fell.

Now a monumental question facing President Bush, whether rushing in more troops will turn things around, or whether it's too late.

KENNETH POLLACK, SENIOR FELLOW IN FOREIGN POLICY STUDIES, BROOKINGS INSTITUTION: Iraq is headed in a very dangerous direction. It's already in a state of civil war. And it's headed toward a Bosnia- or Lebanon- or Congo-like state of all-out civil war.

KING: With Democrats poised to take control of Congress, the president sounds more conciliatory and promises bipartisanship. But he rejects Democratic calls for a timeline to bring troops home. And, as he considers sending even more troops into Iraq, Mr. Bush seems mindful of the legacy debate.

BUSH: The true history of any administration is not going to be written until long after the person is gone. And it's just impossible for short-term history to accurately reflect what has taken place.

KING: Not so impossible, though, to reflect on this year.

BUSH: 2006 was a difficult year for our troops and the Iraqi people.

(END VIDEOTAPE)

KING: A difficult year for President Bush, as well, Wolf.

And one of the surprising things today was that you saw the Democratic statements after the news conference. The president is not ready to say yet what he's going to do in Iraq. And, so, until then, the Democrats are going to continue to say his policy is a failure, and that this president is not getting the message of the elections.

BLITZER: You know, we have both covered a lot of presidents in recent years.

Whenever they're in trouble, and the public seems to be against them, I have noticed, whether it's Bill Clinton or this president, George W., they start reading history books of earlier presidents, going back all the way back to George Washington.

It seemed like it's a source of comfort to them to know that other great presidents were ridiculed and abused, if you will, at least verbally, during their own times.

KING: It has become a standard line of anyone in this administration, starting with the president, but all the way down through his staff, that, if you go back through history, and look at wartime leaders, whether it's Winston Churchill in Great Britain, whether it's FDR and other presidents here in the United States, that history is never truly reflective on their performance until about 20 or 30 years down the road.

They are hoping -- hoping -- that Mr. Bush will be judged then a lot more favorably than he is being judged right now.

BLITZER: What we do is just the first draft of history. And then the historians can rewrite it many, many times.

John...

KING: Exactly right.

(LAUGHTER)

BLITZER: ... thanks very much.

Jack Cafferty is standing by in New York with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Well, here's something, Wolf, we can all take some comfort in.

The House Ethics Committee has a new leader. Incoming Speaker Nancy Pelosi has named Congresswoman Stephanie Tubbs-Jones as chairwoman. The Ohio Democrat says she hopes to restore the public's confidence in both the Ethics Committee and in Congress. Good luck with that. The director of Citizens for Responsibility and Ethics in Washington -- that's a citizen watchdog group -- doesn't think a new leader is going to make a whole lot of difference.

Melanie Sloan says -- quote -- "They didn't do their job last year, and I don't think they will do their job next year" -- unquote.

The reason is, members of Congress make and enforce their own ethics rules. Wait a minute. Let me rephrase that. They make, but seldom bother to enforce their own ethics rules.

Remember, last spring, they started investigations of several congressmen, including Bob Ney, William Jefferson? We haven't seen any public reports on any of that. And, most recently, the committee came up with that glorious whitewash on Congressman Mark Foley.

It's worth noting that more voters in the midterm election just passed said that corruption and ethics in government was extremely important to them, more than any other issue, including the war in Iraq.

So, here's the question: What's the first thing you would do if you were the head of the House Ethics Committee? E-mail your thoughts to CaffertyFile@CNN.com, or go to CNN.com/CaffertyFile -- Wolf.

BLITZER: I think our viewers are going to have a lot of thoughts on that.

(LAUGHTER)

BLITZER: Jack, thanks very much.

And, to our viewers, if you want a sneak preview of Jack's questions, plus an early read on the day's political news, what's ahead right here in THE SITUATION ROOM, sign up for our daily e-mail alert. Just go to CNN.com/SITUATIONROOM.

Coming up: A powerful snowstorm brings Denver to a standstill. Where is this monster storm heading next? Our forecast, that's coming up.

Also: Authorities call off the search for two missing climbers on Oregon's Mount Hood. Is weather behind this decision?

And much more on our top story: the president's news conference and the war in Iraq. James Carville and J.C. Watts, they don't necessarily see eye to eye. We will hear what they have to say in today's "Strategy Session."

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

(COMMERCIAL BREAK)

BLITZER: In and around Colorado, they're singing, let it snow, or, maybe, make it stop. It's piling up right now. That's for sure. Our meteorologist, Reynolds Wolf, is standing by at the CNN Weather Center. He's tracking -- this is a huge snowstorm in the Denver area, Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Oh, it truly is, Wolf.

And I know you're used to snow, growing up in Buffalo. You know what this can do, what it can mean to a lot of people. But you're right. Look at the sheer size of the storm system, on one side, scattered showers, strong thunderstorms. On the other side, we're talking about heavy snow, especially in the Denver area.

And, if you're curious as to how much snowfall they can expect, take a look at this computer model behind me. As I put it into motion, you can tell that the heavy snowfall expected to go right through Boulder and into downtown Denver, where they could get anywhere from one to two feet of snowfall, some places approaching up to three feet of snow. And that's going to last from now all the way through Friday morning. So, it's going to be a tremendous, tremendous problem for people.

And not only are we talking about the snowfall that is on the ground. We're talking about the strong wind that continues to sweep in from the north. At this time, up in Greeley, over to Denver Jeffco, even at Denver International, we have got strong wind coming in, around 30 miles per hour.

Some peak gusts out at the airport, Wolf, have been up to 50 miles per hour. Also, in terms of travel, we have two planes in the air at the airport at this time. It has been virtually shut down.

A couple of airports close by, at Buckley Field, outside Denver, shut down. Nothing is happening there. Also, parts of I-70 have been completely shut down. Parts of I-25, the north-south corridor, no movement there whatsoever. They're expecting the snow, as I mentioned, to last through Wednesday -- I'm sorry -- through Friday, before tapering off by Friday midday and into the weekend. But, until then, they're definitely going to be snowed in, in Denver -- back to you.

BLITZER: Well, let's hope it tapers off before Christmas. A lot of people going out to Colorado...

WOLF: Let's hope so.

BLITZER: ... want to go skiing and see some family and friends. Good luck to all of them.

Reynolds, thanks very much.

(CROSSTALK)

BLITZER: Let's check in with Carol Costello. She's in New York. She's following some other stories making news -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf. Hello to all of you.

No hope left -- the search on Oregon's Mount Hood is no longer a rescue effort. Instead, Hood River County Sheriff Joe Wampler says it is now a recovery effort.

(BEGIN VIDEO CLIP)

JOE WAMPLER, HOOD RIVER COUNTY, OREGON, SHERIFF: Right now, things are moving in from the west. And it's actually snowing at Timberline and Mount Hood Meadows right now. And, so, that window just slammed shut on us, for however long that lasts.

(END VIDEO CLIP)

COSTELLO: That window, that break in the weather he's talking about, gave him a chance to fly over Mount Hood for himself to follow a potential clue -- but no luck.

Climbers Brian Hall and Jerry "Nikko" Cooke have been missing for 12 days. The body of fellow climber Kelly James was found in a snow cave on Sunday.

We will have a live report from Mount Hood in the next hour of THE SITUATION ROOM.

Iran's interior minister says voters have sent a strong message to President Mahmoud Ahmadinejad. Partial results from last Friday's balloting suggests the president's allies failed to win control of key local councils, and that reformers may be making a comeback. The vote was widely considered the first test for the Iranian leader. Since his own election, his anti-Israel rhetoric and hard-line views have driven a deep wedge between those who voted him into power.

Some blunt, harsh words for Iran's government from the British prime minister, Tony Blair, today. During a speech in Dubai, Blair said the international community must recognize the challenge the Iranian leadership presents.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: There are elements of the government of Iran openly supporting terrorism in Iraq to stop a fledgling democratic process, trying to turn out a democratically elected government in Lebanon, flaunting the international community's desire for peace in Palestine, at the same time as denying the Holocaust and trying to acquire nuclear weapons capability.

And, yet, a huge part of world opinion is frankly almost indifferent. It would be bizarre, if it weren't so deadly serious.

(END VIDEO CLIP)

COSTELLO: Blair has repeated his message throughout his Middle East tour, which he wrapped up with today's speech. Al Qaeda's number-two man has issued a new videotape statement, siding with Hamas against early Palestinian elections. Ayman al- Zawahri is shown saying that holding elections will not lead to Palestine's liberation. Osama bin Laden's deputy also warned the U.S. of retaliation for its military actions in Muslim lands, saying, "As you bomb, you will be bombed."

The statement first aired on Al-Jazeera, and was confirmed by CNN Arabic experts.

A look at the headlines right now -- Wolf.

BLITZER: All right, he's coming on video all the time, it seems, nowadays. I wonder why they can't find this guy -- Carol Costello reporting for us.

We're just getting word now that we're standing by for a news conference from over at Mount Hood. There are some important developments that are occurring. They're effectively calling off the search right now, in part because of the bad weather.

We may also be hearing from some of the family members of those missing two climbers. We're going to bring that to you live as soon as it starts from Hood River Airport. That's coming up. We're standing by for that.

Also coming up: It has been more than six weeks now since Election Day, but the battle for one congressional seat still not over. We're going to tell you what's going on.

Plus: Hillary Clinton teams up with some other influential women -- these stories, much more, in today's "Political Radar."

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

(COMMERCIAL BREAK)

BLITZER: It has been a dramatic day out near Mount Hood -- the search-and-rescue operation -- the rescue part, at least -- effectively called off -- authorities announcing today no hope left for those two missing climbers.

We're standing by for a news conference. That's coming up. We're going to bring it to you live. We may actually also hear from some of the distraught family members of those two missing climbers. That's coming up here in THE SITUATION ROOM. Once that news conference starts over at Mount Hood, we will bring it to you live.

In the meantime, the road to the White House is on our "Political Radar" this Wednesday.

Senator Hillary Rodham Clinton played to her daytime audience and the all-female cast of "The View" today, suggesting it might be time for a mom to be president. But she refused to give an early notice that she will indeed run, preferring to talk about Christmas and her family. She did call fellow Senate Democratic and potential -- Democrat -- and potential 2008 rival Barack Obama -- and I'm quoting now -- "a terrific guy."

The mayor of Chicago is taking sides between Senators Obama and Clinton, and he's going with the man from his home state. "The Chicago Sun-Times" reports, Mayor Richard Daley is endorsing Obama, not only because he's from Illinois, but because he has taken the world by storm.

And this -- this is just the second time Daley has actually broken with his longstanding tradition of remaining neutral in Democratic primaries.

A new group called DraftObama.org is running ads featuring an upbeat speech by the senator. The spot now is airing in the main TV station in New Hampshire, as well as on local cable in the Granite State and here in Washington.

Some mixed news for voters behind the draft-Condoleezza Rice campaign -- our new poll shows, the secretary of state's job approval rating now stands at 57 percent. It's higher than any other top member of the Bush administration. But Rice's disapproval rating is now up to 35 percent, weighed down, perhaps, by an unpopular war in Iraq and an unpopular president.

The 2008 race for the White House could cost a whopping -- get this -- $1 billion. Yes, you heard it, $1 billion. That's the prediction from the chairman of the Federal Election Commission. Michael Toner told "The Washington Times" that the half-million (sic) dollars each party's candidate would need to compete will severely limit the field of contenders.

And six weeks after the midterm election, there is still a fight under way right now over a key House race in Florida. Democratic candidate Christine Jennings plans to ask Congress today for investigation and possibly a revote, if her legal challenge in Florida fails. State election officials have declared Republican Vern Buchanan the winner in the Florida's 13th Congressional District.

But Jennings contends some touch-screens in one county lost votes, costing her the election.

And, remember, for the latest political news at any time, check out our Political Ticker at CNN.com/ticker.

Coming up, that news conference -- we're standing by from Mount Hood. We're going to go there live once it happens -- the rescue operation over with for now. They're calling it a recovery operation, but bad weather clearly hampering everything. We will go to those microphones you see behind me as soon as that news conference starts.

Also: Can President Bush reach out and work with Democrats on such crucial issues as taxes, Social Security, immigration? We will find out. That's coming up next. And top Democrats react to the president's comments this morning on Iraq. The incoming Senate Armed Services Committee Chairman, Carl Levin, he joins us right here in THE SITUATION ROOM.

Stand by -- lots coming up.

(COMMERCIAL BREAK)

BLITZER: And, to our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.

Happening now: President Bush reviews a deadly year in Iraq and his options for the future. In a news conference, Mr. Bush acknowledged he's considering a short-term surge in troop levels in Iraq, if they have a specific mission. But he says, he hasn't made a final decision on that yet.

The president has a new set of eyes on the ground in Iraq right now. The defense secretary, Robert Gates, is there just three days after starting his job. He went straight into meetings with the top U.S. military commanders in Baghdad.

And authorities in Oregon have abandoned -- abandoned -- their search for those two missing climbers and any -- amid any hope of finding them alive -- that announcement as snow began to fall once again on Mount Hood.

We're standing by for a news conference from Mount Hood -- authorities expected to speak on the latest, the search continuing. It's a recovery operation now, officially described by the local sheriff. We may be hearing from family members of those three climbers as well.

Once that news conference starts, we will bring it to you live right here in THE SITUATION ROOM.

Also, moving east, blizzard warnings right now posted for most of eastern Colorado and sections of Kansas and Nebraska. We're following the severe weather that's going on as well.

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

President Bush offered an olive branch to Democrats today, as they prepare to take control of the U.S. Congress.

During his news conference, Mr. Bush said he supports a minimum wage hike, and he's open to compromise over Social Security and immigration reform.

(BEGIN VIDEO CLIP)

BUSH: My message is, we can work together, and here are some key areas where we have got to work together: reauthorization of No Child Left Behind, minimum wage. I hope we're able to work together on free trade agreements.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior analyst, Jeff Greenfield. He's watching all of this unfold, as he always is -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Well, Wolf, the president was at pains today to signal the message he heard from the midterms, not just on Iraq, but on how Washington ought to work.

But does that mean that the lion shall lay down with the lamb, or, to be more precise, that Republicans and Democrats will really start working together?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ladies and gentlemen, the president of the United States.

GREENFIELD (voice-over): If he said it once, he said it again and went. The new watchword is -- well, take a listen.

BUSH: As we work with Congress in the coming year to chart a new course in Iraq and strengthen our military, we must also work together to achieve important goals for the American people here at home.

To achieve these and other key goals, we need to put aside our partisan differences.

GREENFIELD: It's hardly a new theme in Washington. In fact, Bush's father struck the same note at his inaugural in 1989.

(BEGIN VIDEO CLIP)

GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES: A new breeze is blowing. And the old bipartisanship must be made new again. I'm putting out my hand to you, Mr. Speaker. The American people await action. They didn't send us here to bicker.

(END VIDEO CLIP)

GREENFIELD: Of course, the first George Bush didn't have much choice. Congress was solidly in Democratic hands for his entire four years. By contrast, Ronald Reagan had a Republican Senate for six years and enough conservative Democrats in the House to let him form an ideological majority.

This George Bush had Republican majorities, narrow though they were, for most of his first six years. So, on key bills, like the prescription drug plan, he prevailed because of strong party discipline. And, particularly in the House of Representatives, bipartisan cooperation was rarely a factor.

Now, there may be a lesson here from the Clinton years. Democrats held both houses in 1993, when Clinton's key budget and tax plans passed without a single Republican vote in either claimer.

UNIDENTIFIED MALE: A vote for NAFTA represents the best traditions of our past.

GREENFIELD: By contrast, the North American Free Trade Agreement was passed with many Republicans votes, and with many Democrats in strong opposition.

And, when Republicans took the Congress over, after 1994, things changed. Indeed, some of what happened in those years of divided government, welfare reform, for example, may well have happened because Republicans were in control. Their power let Clinton push more centrist ideas that the liberal Democrats in the House might have tried to block.

And, when Clinton needed those Democrats to save him during impeachment, much of the push toward more centrist ideas, say, on Social Security reform, faded.

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: Bringing this process to a conclusion.

(END VIDEO CLIP)

(END VIDEOTAPE)

GREENFIELD: So, what does this suggest for the future?

Well, the one obvious area -- Wolf, you have mentioned it -- where Bush and Democrats might find common ground is in immigration reform.

It was the House Republicans last year that demanded the enforcement-only approach. But, if this becomes the first case of bipartisanship, it could trigger a furious fight within the president's own party -- Wolf.

BLITZER: Don't you think there, though, Jeff, that, as important as immigration reform is and a lot of these other issues, what the American public wants to see is some progress on Iraq, and Iraq is going to dominate, presumably, the final two years of this president?

GREENFIELD: Absolutely.

And I think back to another example. After Richard Nixon became president in 1969, the Vietnam War, which had divided the Democratic Party -- still does to this day, in a way -- became a much more partisan issue.

And Democrats, as a whole, moved in sharp opposition to Vietnam, and it created a much more partisan atmosphere. Whether or not what's going on now in Iraq will produce some kind of answer that can unite Democrats and Republicans is, quite clearly, the toughest test of the president's next two years.

BLITZER: All right. We will be watching every step of the way, Jeff, together with you. Thank you very much for that. Another Republican has decided to test the presidential waters. Former Governor Jim Gilmore says he's forming an exploratory committee, because he says the race lacks what he calls a true conservative.

Our senior political analyst, Bill Schneider, is watching all of this, who is in, who is out, lots going on.

I guess I can't count even how many explorers are actually out there, Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, you know, former Virginia Governor Mark Warner is not running. Former -- or current Virginia Senator George Allen was defeated. And now a third Virginia candidate has come forward to say, yes, Virginia, there is a Santa Claus.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): About a dozen Republicans are exploring a presidential bid. They all call themselves conservatives. Now former Virginia Governor Jim Gilmore says he's exploring a presidential bid to fill what he calls a void in the Republican race.

JAMES GILMORE (R), FORMER VIRGINIA GOVERNOR: And I think there is a void. I think there's a need for a committed conservative who is able to put together a national campaign.

SCHNEIDER: A committed conservative? That's an implied criticism of well-known potential candidates whose conservative credentials are open to challenge, like Rudy Giuliani and John McCain and Mitt Romney.

GILMORE: I didn't pretend to be one thing one day and then another thing another day. I actually governed as a conservative.

SCHNEIDER: Gilmore can put together a national campaign. That's an implied criticism of potential conservative candidates who are relatively unknown, like Sam Brownback and Duncan Hunter and Mike Huckabee.

GILMORE: I'm an Army veteran, chairman of the RNC, chairman of the Republican Governors Association, head of the terrorism commission, head of the Internet tax commission. I have been around the block.

SCHNEIDER: But is this the direction Republicans want to go? Conventional wisdom says Republicans lost this year because they moved too far to the right. Gilmore believes the Republicans lost because the party betrayed conservative principles. On what?

GILMORE: I think on spending. I think that we have not become affirmative, strong advocates for the control of spending.

SCHNEIDER: The party's base was demoralized in 2006. Rally the base, conservatives say, and Republicans will win, just as they did in 2000 and '02 and '04. It's a strategy that goes back to the founding father of the modern Republican Party.

GILMORE: I think that the people of the United States are really looking for more Ronald Reagan, conservative type of leadership.

(END VIDEOTAPE)

SCHNEIDER: Rallying the base worked for Republicans when voters in the middle were split. But, this year, independents tilted decisively to the Democrats. Republicans in 2008 are going to face a very big choice: rally the base or try to reclaim the center -- Wolf.

BLITZER: Thanks very much, Bill Schneider, for that.

And, Bill, check this out. If the early presidential field is starting to look a little crowded to all of you, you are absolutely right. There are now 24 potential Republican, Democratic and independent candidates -- yes, 24, two dozen -- who either are already in the race for 2008 or seriously thinking about running. And we're watching all of this together with you all along the way. Fasten your seat belts.

Bill Schneider, Jeff Greenfield -- you saw earlier John King, Suzanne Malveaux -- they are all part of the best political team on television.

Also part of that team, James Carville and J.C. Watts. They're standing by to join us live right here in THE SITUATION ROOM -- on our agenda today, the president, the war on Iraq, and the next race for the White House. That's coming up.

And we will have much more on the search now being called off for those missing two climbers. We're standing by for a news conference at Mount Hood. We will go there live to these microphones -- you see this live picture coming in -- as soon as the authorities come out and speak. And there may be family members speaking as well.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: We just want to remind you, we're standing by for that news conference from Mount Hood. They have called off the rescue operation. They have acknowledged, authorities there, there is no hope left to find those two missing climbers.

The sheriff is going to be speaking to reporters, with other authorities, shortly. We may hear from some family members as well. We will go there live as soon as their remarks start.

In the meantime, it's the most -- it's the question most asked and question most dogged by the president: Will he be sending more U.S. troops to Iraq? It happened once again today at the president's traditional end-of-the-year White House news conference.

Joining us now for our "Strategy Session," Democratic strategist James Carville and Republican strategist J.C. Watts. Guys, thanks very much for coming in.

JAMES CARVILLE, CNN POLITICAL ANALYST: Thank you.

BLITZER: I want to play this little clip from what the president said over the White House earlier.

(BEGIN VIDEO CLIP)

BUSH: I reach out to a lot of the families. I spend time with them. I am always inspired by their spirit. They -- most people have asked me to do one thing, and that is to make sure that their child didn't die in vain. And I agree with that.

(END VIDEO CLIP)

BLITZER: You know, a lot of people out there are coming around to the conclusion, James, that a lot of those soldiers and Marines may have died in vain.

CARVILLE: Well, yes, I don't think that they have. I think that, you know, as the president says, history will judge us. And it's very difficult. I take him at his word.

I think the American people are very skeptical, as are the Joint Chiefs of Staff, about sending more troops in there. I really do. And, you know, if it is a mistake, as John Kerry said about Vietnam, how do you tell the last person to die for a mistake? And I think people are looking for some realistic -- realistic way out of this. And I don't know if the president is yet.

BLITZER: J.C.?

J.C. WATTS, CNN POLITICAL ANALYST: The last 24 hours, Wolf, I don't think the people have become -- the American people have become less skeptical.

And let me tell you why. Six weeks ago, it was stay the course before the election. Yesterday, today, it's, you know, we're not winning, more troops.

The president's got a tough sell. He's got a tough responsibility, a tall order here, because more troops, less troops, pull them out, don't pull them out -- you have got the Iraq Study Group saying, talk to Iran, Syria. Iran's involved with Hezbollah, Hamas, you know, Palestinian territories.

This is -- that -- the American people are confused.

BLITZER: It's complicated.

(CROSSTALK)

BLITZER: But the president is raising expectations.

(CROSSTALK) BLITZER: We're all bracing for this big speech he's supposed to deliver early in January with a new, in his words, way forward, a new strategy. Those expectations are sky-high right now.

CARVILLE: I cannot believe -- generally, this White House is pretty good about doing things. I can't believe that they let themselves out there saying that they're doing this reevaluation of the policy, and, you know, having the Joint Chiefs leak, and the neocons here, and the Iraqis there, and the Syrians there.

And they're just leaving themselves out. And, meanwhile, we, i.e., the press, we're sitting here speculating on what's going to happen. And they're just letting this thing build and build and build.

And I think, if it comes out, and they say, we're going to send another 30,000 troops, the public is going to be pretty let down. I mean, if you just look at -- the evolution of this, is, you know, in May of '03, we had won. In October of '06, we're winning. And now we have gone from the past tense to the present tense. And now, today, he says, well, we're going to win, to the future tense.

WATTS: Well, but I think -- Wolf, I said on Monday that I think the new secretary of defense going to Iraq -- being sworn in, going to Iraq, getting an honest and, I think, somewhat of a sobering assessment of what's actually going on, talking to the generals, I think this gives the president an opportunity to do an about-face, or to pivot in some way, if he needs to.

But I will tell you, it's a lot going on out there. There's a lot in -- you know, in the airwaves out there. But he's going to have to take an honest assessment and do what needs to be done. We must win this thing.

BLITZER: Here's how Nancy Pelosi, the incoming speaker, reacted today: "The president gave no indication in his press conference today that he is willing to make the changes needed to reverse the disastrous situation in Iraq. Unless there is a fundamental change in policy and in the mission of our troops in support of that policy, events in Iraq are unlikely to improve."

The Democrats have a tough challenge ahead of them right now, as they become the majority party in both chambers.

CARVILLE: Well, I do -- but I thought that was a pretty -- I thought the speaker make -- that was a pretty sober statement. It was not personal. It was -- and, so far, there's very little indication that the president is really willing to change course.

It looks like...

BLITZER: That's what I mean. If the president doesn't...

CARVILLE: Right.

BLITZER: ... do what the Democrats want, what are the Democratic options? We heard Dennis Kucinich say, cut the funding, effectively.

(CROSSTALK)

BLITZER: But a lot of Democrats are saying, they don't want to punish the troops.

CARVILLE: Right. Right.

I think what you're going to see is a lot of amendments to the spending bill, and, you know, some self-imposed timetables, some things that come back. How is the money being spent?

I suspect that they're not going to -- quote -- "defund the war." But I think the days of just these committees going through and appropriating the money, without some strings attached, without some things that trigger...

WATTS: Some benchmarks.

CARVILLE: ... benchmarks, is over.

(CROSSTALK)

CARVILLE: And I think that the administration is going to -- we're going to have a lot of benchmarks attacked -- attached to this spending. I seriously doubt that they're going to defund this war.

WATTS: Wolf, I think this is the challenge of the president.

There needs to be an adjustment. I think that's pretty clear. But do you adjust your policy to win, to get yourself on course to win, or do you adjust the policy to pull out and cut and run?

And I think that's the discussion. And I think there's enough Republicans, Democrats out there, the new secretary of defense, that will take a sobering look at what's going on in Iraq, along with the people on the ground, make that assessment. And I think that's the direction that the president will take.

BLITZER: What do you think of the former governor of Virginia, Jim Gilmore, saying there's not really a true conservative out there who is running, so, he's exploring the idea of running?

WATTS: Well, you're going to -- you're going to see a lot of folks that will probably take a look at this race that will say, I'm more pure than the next person, and this person isn't as pure as I am.

I think Duncan Hunter fits the mold of a conservative, Sam Brownback. I think John McCain does. John McCain just doesn't go to those issues that many conservatives like to talk about, in terms of marriage and life. John McCain has a good record on those issues, but they're not his go-to issues.

BLITZER: What do you...

WATTS: So, it's going to be interesting. BLITZER: What do you think?

CARVILLE: Well, I mean, I know Governor Gilmore. He is my neighbor in Old Town. He's -- obviously...

BLITZER: You live in Virginia?

(CROSSTALK)

CARVILLE: I live in Virginia, right.

And he lives in the same little community of Virginia I live in. I think he's obviously got a really tough, tough way to go. You're right. His resume is impressive. But I don't know how well-known he is.

There is lot of conservative dissatisfaction with the big three, with Giuliani, McCain, and, to some extent, with Romney. I think the biggest event is, if the president calls for 30,000 more troops, that really puts the pressure on McCain, because that's his idea. And it becomes his war, by and large.

You know, I think what presidential strategists are looking at right now is, what is going to be effect of an increase in troop size, or a surge, on the McCain campaign? And that's topic A.

BLITZER: Hold your fire, because we're out of time.

(CROSSTALK)

BLITZER: We have got to leave it right there, guys. Thanks very much, James and J.C..

CARVILLE: Thank you, Wolf.

BLITZER: Good discussion.

Remember, we're standing by for that news conference from Mount Hood. Authorities have called off the rescue operation. We will go there live once it starts.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty. He's got "The Cafferty File" -- Jack.

CAFFERTY: The incoming House speaker, Nancy Pelosi, has named Congresswoman Stephanie Tubbs-Jones as the new chairwoman of the Ethics Committee. The Ohio Democrat says she hopes to restore the public's confidence in both the Ethics Committee and in Congress.

The question is: What's the first thing you would do as the head of the House Ethics Committee? Ed wrote: "Simple. Cut out the root of corruption by eliminating the lobbyists. Take away the temptation to be lured by big business and big money, and put other incentives in place to make the Congress act on behalf middle-class Americans."

Yes, that will happen.

Bob in Florida writes: "I would propose that ethics offenders not be eligible for presidential pardons. That way, perhaps bought-and- paid-for corporate lackeys wouldn't populate most of our congressional seats."

Mel in Florida: "What happened to the investigation of Senator Frist on his insider-trading charges? Looks to me like he's above the law. But, hey, they got Martha Stewart."

Jane in Wisconsin: "The first thing the Ethics Committee needs to do is look into the many corrupt Democrats that have had no scrutiny given to them by the media. All we have had heard about in the mainstream press is how bad the Republicans have been."

Peggy writes: "The first thing I would do is form a group of council that is not a part of Congress. And they would deal with the investigations and prosecution of infractions, large and small, in all branches of government. This should have been done a long time ago. No agency or office should be investigating itself."

And Michael in Massachusetts: "Jack, the first thing they should do is ask for a shaman, a witch doctor, and a priest, and have an exorcism. That place is a mess" -- Wolf.

BLITZER: Thanks, Jack, for that.

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