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The Situation Room

Ahmadinejad Speaks at the U.N.; Interview With House Speaker Nancy Pelosi

Aired September 25, 2007 - 19:00   ET


WOLF BLITZER, CNN ANCHOR: Thank you very much, Kitty.
Happening now, Iran defiance loud and clear inside the United Nations, the president, Mahmoud Ahmadinejad, attacking what he calls arrogant powers and reinforcing his hatred of the United States. Tonight, is President Bush taking the bait?

Also this hour, the House speaker says Republicans in Congress now own the war in Iraq. In our exclusive interview Nancy Pelosi shares her anger and frustration with the war, the president and the Democrats' failures.

And even Donald Trump says that the housing market is, quote, "absolutely terrible", but in our one-on-one interview, the real estate mogul has some advice for you if you're struggling to hold on to your home.

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

It is payback time for Iran's president, Mahmoud Ahmadinejad, dishing it out at the United Nations today. He's just wrapped up a news conference in New York after taking the podium at the General Assembly to blast the United States as a violator of human rights and warning that the nuclear issue is now closed. Those are his words.

Let's go live to our State Department correspondent Zain Verjee. She's watching all of this unfold in New York -- some very tough talk from the Iranian leader today, Zain.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, that's exactly right. On the international stage and in the limelight, Iran's president really did not pull any punches. He really came out with guns blazing, blasting the Bush administration, first of all, for staying in Iraq. He said this.

No weapons of mass destruction were discovered. He said the occupation continues with different excuses and no day passes with the people being wounded, killed or displaced. He also criticized the United States for abusing human rights. Here's what he said.


PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): Issue of Iran is now closed and has turned into an ordinary agency matter.


VERJEE: That was what he said on the critical nuclear issue. Iran has always said that it's pursuing an energy program for peaceful purposes. The U.S. has said that Iran really wants to build a nuclear bomb. On human rights, though, what he said was that they were violated by certain powers, referring to the United States saying by those who pretend to be their exclusive guardians, secret prisons, trials and punishments, tapping of telephone conversations and intercepts of mail.

He actually never used, Wolf, throughout this entire speech the word United States. But it was pretty clear he was taking shots at certain powers. He called them big powers that were selfish, arrogant and incompetent. And interestingly, Wolf, there was no U.S. delegation sitting there and listening to President Ahmadinejad's speech, just one lone, low level aide just taking notes -- Wolf.

BLITZER: All right. Hold on one second, Zain. I want to play another clip of what Ahmadinejad said on the whole issue of human rights. Listen to this.


AHMADINEJAD (through translator): Unfortunately, human rights are being extensively violated by certain powers, especially by those who pretend to be their exclusive advocates. Setting up secret prisons, abducting persons, trials and secret punishments without any regard to due process, extensive tapping of telephone conversations, intercepting private mail and frequent summons to police and security centers have become commonplace and prevalent.


BLITZER: So I assume on lines like that, he's really trying to speak to his constituency whether in Iran the Arab world, the Muslim world, if you will, because that kind of attack against the United States does resonate.

VERJEE: Yeah. Experts that we have spoke to said that he is also directing much of what he's saying to his own constituency back home and really trying to position himself as a significant anti-U.S. player. He's playing to hard-liners, to people that are anti-U.S. and pro nuclear technology. Now, we spoke to State Department spokesman Sean McCormack who said that Secretary Rice did not actually watch this speech. And one senior State Department official also added that the only one who thinks the file on Iran's nuclear weapons program is closed is Ahmadinejad himself -- Wolf.

BLITZER: Zain in New York. Thanks very much.

Even before the Iranian leader indicated his country would ignore U.N. nuclear demands, the French president, Nicolas Sarkozy, was warning the General Assembly that allowing Iran to arm itself with nuclear weapons could lead to war. Mr. Sarkozy said a nuclear Iran would be, in his words, an unacceptable risk to stability. He warned there will be no peace in the world if the international community falters in the face of nuclear proliferation -- some very, very tough words from the new French leader.

In President Bush's remarks to the U.N. General Assembly today, he took pains to avoid saying very much about Iran at all. Let's go to our White House correspondent Suzanne Malveaux. She's traveling with the president. There was only a fleeting little reference to Iran in the president's address, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, you're right. I mean we were told that President Bush was enjoying some down time in his hotel when Ahmadinejad was speaking, that he in fact did not listen to the speech himself. And really, in a move, a strategy by the White House to kind of downplay his significance, really portray him as a bit player, one line for Iran saying that it was really part of a brutal regime that put down its own citizens.

But the president didn't even acknowledge -- did not even say Ahmadinejad's name in that speech. And that was very deliberate. I do want to say, however, they are paying attention, close attention, to what the Iranian leader had to say. I spoke with White House Press Secretary Dana Perino asking her to respond at least to the one item that seems to be making news. That is when Ahmadinejad said that the nuclear issue was closed, that this was simply an agency matter.

She sent an e-mail by Blackberry saying Iran knows what the international community is demanding regarding its enrichment and reprocessing programs and we're going to work with our allies to ensure that they do. We believe this can be solved diplomatically. So, Wolf, they are still stressing that, that this is a diplomatic thing. But they're going to have a tough time, as you know, because Iran has not cooperated. They don't believe that they've cooperated and they're still trying to push through a third U.N. Security Council resolution for further sanctions -- Wolf.

BLITZER: All right, Suzanne. Thanks very much -- Suzanne Malveaux in New York.

Cuba's foreign minister, by the way, walked out of the U.N. General Assembly in protest of President Bush's speech and his reference to Fidel Castro as a cruel dictator. The Cuban delegation later issued a statement saying the walkout was designed to demonstrate and I'm quoting now "profound rejection of the arrogant mediocre statement by President Bush".

The Iranian president drew laughs and jeers at a speech at Columbia University yesterday when he said there are no gays in Iran. Critics say not only are there gays in Iran but that Mr. Ahmadinejad's government persecutes, even executes them. Let's go to CNN's Brian Todd. He is looking into the story. Brian, what's the status of gays in Iran?

BRIAN TODD, CNN CORRESPONDENT: Well Wolf, we've spoken to gay activists from Iran who say that even going underground with your orientation there does not ensure your safety. Given that, they say they are not surprised at the Iranian president's remarks.

(BEGIN VIDEOTAPE) TODD (voice-over): Pressed on allegations that his government brutally punishes homosexuals, he goes further than a standard denial.

AHMADINEJAD (through translator): First of all, in Iran, we don't have homosexuals like in your country. In our country, this does not exist. It does not exist in my country.


TODD: An Iranian official later told CNN Ahmadinejad meant to say Iran simply doesn't have as many homosexuals as there are in the United States. But gay rights activists from Iran say either way it's virtually impossible to be openly gay there. People suspected of homosexuality they say are persecuted at work, sometimes forced to quit their jobs, expelled from schools. Their families are harassed even if they try to go underground...

HOSSEIN ALIZADEH, INTL GAY & LESBIAN HUMAN RIGHTS ORG: The government controls the Internet, controls your phone conversation, controls your mail and so if you are using a chat room to connect to other people, you are risking your life basically.

TODD: Risking your life because homosexuality is illegal and gay sex is a capital crime in Iran. In 2005, these two teenage boys were executed, accused by the government of raping another boy. Human rights groups say the real reason was homosexual behavior. But the State Department says it has been unable to get any concrete information on the case.

Activists and cultural observers say under Iranian law four men have to witness a homosexual act for it to be punishable by death. If there aren't enough witnesses, they say, lashes are a common punishment.

AZAR NAFISI, JOHNS HOPKINS UNIVERSITY: This is not so much a cultural problem but an ideological problem. I think that in Iran at least where you have what you call -- you can call it theocracy they have confiscated and interpreted religion in an ideological matter. As you know, not all Muslims believe in this sort of a thing.


TODD: Just a short time ago at the U.N., Mr. Ahmadinejad was asked to clarify his remarks about homosexuals. Take a listen to this.


UNIDENTIFIED FEMALE: You mention that there's no such phenomenon in Iran as homosexuality. Could you please elaborate on that? I know a few myself.


AHMADINEJAD (through translator): Seriously, I don't know of any. As for homosexuality, I don't know where. Give me an address so that we are also aware of what happens in Iran.


TODD: So clearly not backing off on his statement that he does not know of any homosexuals in Iran -- Wolf.

BLITZER: All right, Brian. Thanks very much -- Brian Todd reporting.

Let's check in with Jack Cafferty. He's got "The Cafferty File" in New York -- hi, Jack.

JACK CAFFERTY, CNN ANCHOR: Hi, Wolf. Democracy is on the decline in several countries around the world. An organization called Freedom House is out with its "Countries at the Crossroads" report, which is an annual survey of how democracy is working in 30 nations. It measures things like anti-corruption, transparency, rule of law, civil liberties and accountability and public voice.

This report finds that China has fundamental gaps in the way it governs and that only complicates other issues the country is facing such as environmental catastrophes, scandals with its exports and corruption. It also finds human rights and democratic governance have worsened in Russia and Iran saying corruption in Iran has now become a much bigger problem.

And here's what's perhaps most troubling. It shows some developing countries around the world are trying to follow the model of China and Russia by looking to modernize their economies while at the same time keeping a tight central grip on power. Countries like Libya, Tunisia, Algeria, working toward economic success while stepping up political repression.

And Egypt has probably the worst of both worlds, a politically repressive regime that's also been unsuccessful when it comes to its economy. Egypt, of course, is held up as a glowing example of democracy in the Middle East. This organization's report says it ain't working. Bangladesh, Thailand, pushes towards democracy have both been thwarted by coups in those countries.

So the question is this, this hour. Where are we going if a number -- growing number of countries are using China and Russia as their role models? E-mail your thoughts to or go to -- Wolf.

BLITZER: Thanks very much Jack. Good question.

Donald Trump is known for public feuds and he isn't shying away from another one.


UNIDENTIFIED MALE: I think he feels left out. I think he feels like a loser. But that's what he is.

(END VIDEO CLIP) BLITZER: You're going to find out who the real estate mogul is talking about in our candid one-on-one interview. That's coming up.

Also, when she became the House speaker, Nancy Pelosi made ending the war in Iraq a top priority, so how does she explain her failure to do that after nine months? My exclusive interview with the speaker, that's coming up.

And the verdict is in on polygamist leader Warren Jeffs and the charges he was an accomplice to rape. Stick around. You're in THE SITUATION ROOM.


BLITZER: More dismal news for the housing market today. Sales of existing homes dropped again last month. The National Association of Realtors says August sales were down more than four percent from July, pushing activity to the lowest level in five years. I spoke about the overall grim state of affairs with an expert, the real estate mogul, Donald Trump.


BLITZER: Let's talk a little bit about a subject you know quite well, which is real estate, the housing market. Greenspan, Alan Greenspan said this the other day. He said we do know that the housing market has a significant way to go on the downside. Is he right?

DONALD TRUMP, REAL ESTATE MOGUL: I think he's right. Yeah, I think the housing market, other than a place like Manhattan, which as you know from being here, has just hit an all-time high. Manhattan is doing unbelievably but it's very unique. It's a little island, there is no land on it, you know et cetera, et cetera. But outside of Manhattan and a couple of other places like Palm Beach, Florida, certain little places, the market is terrible, absolutely terrible.

BLITZER: Because when we spoke six months ago, you didn't think it was going to be as bad as it's actually turning out.

TRUMP: No, I told you I think we're going to have a housing problem. I've always said that.

BLITZER: Who's responsible for that, the sub prime mortgages and all that?

TRUMP: You know it is just one of those things that does happen. The builders get overly ambitious. They're doing great and all of a sudden they start building hundreds of thousands of houses many of which are not necessary, the lenders start giving out money too easily and frankly the borrower -- and the borrower gets -- you know almost in a way because of the lack of sophistication I least blame the borrower, although I do tell the borrower to go back to the banks and renegotiate your deal. The last thing they want is your house. You can make a good deal with the bank. Go back and renegotiate. They don't want your house. BLITZER: How is all this affecting your operation?

TRUMP: Well, I'm mostly in Manhattan but I'm also building all over the world and the stuff on a world basis is unbelievable. You know the world is doing very well.

BLITZER: You're building Trump buildings, where, in Dubai?

TRUMP: I'm building in Dubai. I'm in Korea. I'm in many different places, China. I'm all over the place...

BLITZER: Strong out there, but what about here?

TRUMP: Here it's not good. But I'm not doing that much here.

BLITZER: Because I know in Florida you've got some deals...

TRUMP: Florida, but it's all sold in Florida and I did a big one in Las Vegas, 68 stories, tallest building...

BLITZER: How is that doing...

TRUMP: Sold out, it has been a great success. But I sold the units two years ago.

BLITZER: If you were to sell now, it might not be...

TRUMP: I don't know. I mean I don't even want to think about it.

BLITZER: Alan Greenspan also suggests in his new book that the war in Iraq is all about oil. Do you think he's right about that?

TRUMP: Well, the world is about oil, it seems. I mean, we -- think of this, we lower our interest rates through the Federal Reserve last week and the first thing that happens is essentially the oil producing states increase oil. Now, why don't we have a president that says, fellows, if you do this, you're going to be in big, big trouble.

We lower the interest rates. Now there's a little margin and they raise oil. So that every time we lower, they raise oil and they're doing it, don't kid yourself. Between the oil companies and the oil-producing states, they are ripping off the world. But they're really ripping off the United States. We lower interest rates and immediately the oil price goes up.

BLITZER: 80 dollars a barrel, that's...

TRUMP: Nobody even talks about it anymore. You know they used to say at $50...


TRUMP: ... there's going to be war. Now it is $80 and people sort of take it routinely. BLITZER: Alan Greenspan suggested the Republicans deserved to lose last November, the majorities in the House and the Senate because of the fiscal irresponsibility, the spending, the budgets, the deficit. The vice president, Dick Cheney, took him on in an article in "The Wall Street Journal" last week. Who's right in this debate, Cheney versus Greenspan?

TRUMP: I think Greenspan is right. I think Cheney wants to keep taxes low, and I respect that, because I happen to like paying lower taxes. But I think Greenspan is right. We have a huge deficit. But a lot of the deficit is caused by the war and the problems that we have with this war. I mean, we're spending $400 billion. And now it's going to be -- I read the most recent report. It looks like it's going to be 950 billion so far in Iraq...


BLITZER: ... two to three billion a week...

TRUMP: ... and we can't rebuild from Katrina. We have bridges that are collapsing and we're spending just hundreds of billions of dollars in Iraq. It doesn't make sense.

BLITZER: Let me ask you about Dan Rather. He's suing CBS News, what, for $70 million because of the way things unfolded after he was let go. What do you think of that?

TRUMP: Well, I know Dan Rather very well. He did a very inaccurate piece on me on "60 Minutes" and I let him have it. I told him. I mean that was one of the more inaccurate pieces. Dan Rather is a loser. Dan Rather had low ratings for years. I used to say whoever represents Dan Rather does a great job because he always was in third place. He always had terrible ratings and they wouldn't fire him. Now finally they get smart and fire him and he sues them. Explain it to me. I don't get it.

BLITZER: You understand why he's doing this?

TRUMP: I think he feels left out. I think he feels like a loser, but that's what he is.

BLITZER: Donald Trump thanks very much.

TRUMP: Had a good time. Thank you.


BLITZER: Dan Rather's office, by the way, tells us he has no comment on Donald Trump's comments about him.

The House Speaker Nancy Pelosi and the war within...


BLITZER: You know your base is really frustrated, really angry.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I'm frustrated myself.

BLITZER: The war continues and they say you should be doing more.


BLITZER: We're going to hear what Nancy Pelosi has to say in our exclusive interview about the war in Iraq, the president and partisan fighting over that war.

And he's known for saying outrageous things, but did radio and TV commentator Bill O'Reilly cross the line with recent remarks about African Americans?

Stick around. You're in THE SITUATION ROOM.


BLITZER: Carol Costello is monitoring stories incoming into THE SITUATION ROOM right now. Carol, what do you have?

CAROL COSTELLO, CNN ANCHOR: Well Wolf, there's a verdict in the case of Warren Jeffs. The polygamist sect leader was found guilty by a Utah jury of two counts of accomplice to rape for ordering a 14- year-old follower to marry her 19-year-old cousin. Jeffs could get life in prison.

The Supreme Court will take up the controversy over lethal injection. Two Kentucky death row inmates are challenging the execution method which some say can cause excruciating pain violating the constitutional ban on cruel and unusual punishment. It is the first time the Court is considering the matter.

And a mystery at sea, a chartered fishing boat were found abandoned in the Florida Straits. The two men who hired it were rescued from a life boat nearby, but the crew of four is missing. Investigators think the rescued men know what happened. One of them is a fugitive. They're being questioned by police right now.

Back to you, Wolf.

BLITZER: A real mystery, all right, thanks very much, Carol, for that.

The Speaker of the House of Representatives lays blame for problems in Iraq.


PELOSI: The Republicans in the Senate have now taken ownership of the war in Iraq. It was President Bush's war. And now it is the Republicans in Congress war.


BLITZER: As Democrats fail to end the war, Nancy Pelosi reveals what her party might do next. And on another topic, the speaker says one thing will haunt President Bush -- and I'm quoting now -- "for as long as he is president".

And Bill O'Reilly is known for enraging some people, but some are wondering if there was racial intent in his recent comments about African Americans.

Stick around. You're in THE SITUATION ROOM.


BLITZER: American voters gave the Democrats control of Congress in large part to try to end the war in Iraq. That hasn't happened, so whose fault is it? My exclusive interview with the Speaker of the House, Nancy Pelosi.


BLITZER: Let's talk about the war in Iraq. When you became speaker, you said bringing the war to an end is my highest priority as speaker. Now, you've been speaker now for nine months. The war, if anything, is not only continuing but it's expanding. There are more troops now in Iraq than there were when you became the speaker. What are you going to do about that?

PELOSI: Well, what we did when we took office. We took the majority here. We changed the debate on the war. We put a bill on the president's desk that said that we wanted the redeployment of troops out of Iraq to begin in a timely fashion and to end within a year. The president vetoed that bill. He got quite a response to that veto and the Republicans in the Senate then decided that he was never going to get a bill on his desk again, so we have a barrier. And it's important for the American people to know that while I can bring a bill to the floor in the House, it cannot be brought up in the Senate unless there is a 60 vote.

BLITZER: But you could in the House of Representatives use your power of the purse, the money, just to stop funding the war if you really wanted to.

PELOSI: I wish the speaker had all the power you just described. I certainly could do that. That doesn't bar the minority from bringing up a funding resolution. They have their parliamentary prerogatives, as well.

So what we have done is to send bills that limit the mission, to limit the time there, to redeploy the troops, and last week, I believe, was a turning point in the Congressional debate on Iraq. I think we changed it going in by putting a bill on the president's desk.

Since May until now, we haven't been able to put something on the president's desk.

BLITZER: Because of the Senate. PELOSI: Because of the Senate, the 60 vote. But last week we were really optimistic that the Senate would at least support the readiness of our troops. The Webb resolution, the Webb amendment to the defense bill was a resolution that said the guidelines of the defense department, the same amount of time in the war, you have the same amount of time at home to regroup, to retrain, to recover, to be with your family. When they rejected that ...

BLITZER: It didn't have enough votes?

PELOSI: It had enough votes to pass, but it did not have enough votes to be heard, to be heard so that a majority, a bipartisan majority of the Senate could have sent this to the president's desk.

We have been trying to reach out as the American people want us to do in a bipartisan way to build a bipartisan consensus to redeploy the troops out of Iraq safely and soon.

BLITZER: You know your base is frustrated, really angry.

PELOSI: I'm frustrated myself.

BLITZER: The war continues and they say you should be doing more. And that's reflected in what former Senator John Edwards, the democratic presidential candidate, repeatedly says. He says this. He says, "Congress must stand up to President Bush and pass a funding bill with a time table for withdrawal. If the president vetoes that bill, Congress must send it back again and again, as many times as it takes for the president to finally get the message that he can't defy the American people." Why don't do you that?

PELOSI: I completely concur, but I just said to you, we did that. We sent it to the president. He vetoed it. Any further attempts to do that have been met by the 60-vote barrier in the United States Senate.

Now I'll be the last person to give you a civics lesson about what that means. But what it does mean is that the republicans in the Senate have now taken ownership of the war in Iraq. It's President Bush's war. And now it is the republicans in Congress' war. And that marks a big turning point for us because we had hoped to have bipartisanship in redeploying the troops out of Iraq, to do so in a timely fashion. Now we have a loss of life that continues, a loss of readiness to our military, which harms our ability to protect America wherever our interests are threatened. We have the loss of money.

BLITZER: So are you telling your angry base out there the Democratic Party that wants to see this war over with, wants to see the U.S. troops home that you as speaker, there is nothing you can do? You have to just throw your hands up and say ...

PELOSI: I didn't say that at all.

BLITZER: Given the legislative problems in the Senate and the president's stubborn refusal to back down, that there is nothing you could do? PELOSI: How could you ever have gotten that impression when I have said, for those who pay attention, is that we will hold this administration accountable, time and time again for the conduct of this war in Iraq.

I don't have to discuss how we went in on the false premise. That's well known to the American people.

What we do have to do is show them every step of the way how the president is taking us farther down a path from which is going to be harder to redeploy out of Iraq.

BLITZER: But when you hold the president accountable, I just want you to explain what does that mean, besides just complaining and holding hearings? Specifically, is there anything else you can do?

PELOSI: Holding hearings and the oversight that we have on the corruption and contracting in Iraq, the hearings that we're holding and the harm to the readiness of our troops that the president is causing with his abstinence in this war in Iraq.

The retired generals tell us that if we want to talk about the stability in region and that's what we're trying better. How do we have a vision of stability in the region? Democrats are saying our vision for stability in the region begins with the redeployment of troops out of Iraq and the generals say you cannot have stability in the region until you redeploy the troops out of Iraq.

So what we are saying is now with what happened in the past two weeks, with General Petraeus' presentation and with what happened on the Webb resolution in the Senate, that republicans are committed to a ten-year war in Iraq with the highest level of troops presence there with permanent bases.

The democrats are proposing a redeployment out of Iraq, a greatly diminished mission there out of the civil war, protect our diplomats and protect our troops who are there, fight the al Qaeda and if we have to train the troops, if we have to continue to train the Iraqi security forces, it doesn't have to be in country. And it doesn't have to be all American. That can be done out of country.

So we are talking about a greatly diminished force there and a redeployment when safe and responsible within the next year. The president is talking about ten years. And then after that, a Korea- like presence in perpetuity. That's the choice.

BLITZER: And I just want to be precise. Impeachment, that notion which some of the base clearly would like, that's off the table.

PELOSI: I've always said that impeachment is off the table. This is President Bush's war. It's Vice President Cheney's war and now it's become the war of the republicans in Congress.

BLITZER: The anger, this frustration, you feel it every day. The poll numbers. Since the democrats became the majority in the Senate and the House, Congressional approval has gone down since the republicans were in the majority. And now the job approval for Congress is even lower than the job approval for the president of the United States. How do you explain that?

PELOSI: Well, what I like to focus on is the fact that we're 20 points ahead of the republicans in almost every category that you can name in terms of trusting -- trust of the American people in dealing with education and health care, the economy, our national security, even fighting terrorism. We're ahead of them in the polls. So from the standpoint of democrats versus republicans, the American people know the difference.

BLITZER: In the Gallup poll, the last one, only 24 percent of the American public thinks Congress is doing a good job.

PELOSI: Well, to tell you the truth, I don't approve of the way Congress is ending the war in Iraq myself. And that's because of the 60-vote barrier in the United States Senate. But don't mistake, expert that you are -- your audience should not mistake the rating for Congress as the rating for the democrats. We're as high as we've ever been. We're up 53 percent to 30 something for the republicans in terms of favorability of a political party in the Congress.

BLITZER: The house speaker also in our interview going directly after President Bush on the issue of children's health care. Listen to this.

PELOSI: The president gives new meaning to the biblical term suffer little children.

BLITZER: Much more of my exclusive interview with Nancy Pelosi and the democrats' area accusation that the president is forsaking children. You're going to want to hear what she's saying.

Also, the radio and TV commentator Bill O'Reilly drawing new fire. Was he praising a restaurant or insulting African Americans?

Stay with us. We'll be right back.


BLITZER: Tonight the House Speaker Nancy Pelosi and fellow democrats are warning that health care for millions of American kids on the line right now. Any minute now the House of Representatives expected to pass a bill to double spending on a popular children's health care program, but not by a margin necessarily wide enough to overcome the president's expected veto. I spoke about that with the speaker, Nancy Pelosi, in our exclusive interview earlier today.

Let's talk about health insurance for children, the legislation that's now before the House and the Senate, that would expand, if you will, the children's health insurance program. It's called SCHIP. The president says, and I'm quoting now, "This would be an incremental step toward the goal of government-run health care for every American," and, as a result, he says he's going to veto what you and the Senate will be passing. PELOSI: With all due respect to the president, just because he says it doesn't make it so. The president's characterization is wrong. But when the president says he's going to veto the bill, what he is saying is, I forbid health care for 10 million American children. There are 10 million reasons why he should sign this bill. I hope he will have a change of heart and a change of mind.

BLITZER: Well, he says he wants to sign a bill that will continue what's been in effect now for the past ten years, legislation authorizing health care, health insurance for low income, for poor children, about 6.6 million children. What you want to do is expand that by an additional 4 million children, bringing it up to 10 million. But some of those children would be children of families making as much as $80,000 or $83,000 a year and he doesn't think that stands for low income or poor families.

PELOSI: The president is wrong when he characterizes the SCHIP program in the manner that he has. First of all, let's be clear about what the president wants to do. The president's proposal would lower the number of children who receive health insurance in our country.

BLITZER: Here is the problem you have. The Senate is likely to have enough votes to override a presidential veto, but it's problematic in the House of Representatives that you'll find enough republicans to join the democrats to get that two-thirds majority you need. You don't have the votes right now, do you?

PELOSI: Well, we do have the support of the American people. A poll that came out this morning had 2-1 republicans -- 2-1 of republican voters support the SCHIP reauthorization in the manner in which we are doing it, oppose the president's veto. What is happening now is the president is going to stand-alone on one side of the line and everybody else is on the other side saying, we want to ensure America's children.

BLITZER: If he holds firm and he vetoes and you don't have enough to override the veto, what happens to those 6 million or 10 million children who might need that health insurance right away?

PELOSI: Well, in our continuing resolution, we provide for the status quo. But again that is a diminished number of children. That's the president's standard, which is a very low one. But that is taken care of in our continuing resolution to give us time to send another bill to the president's desk. I said earlier today the president gives new meaning to the biblical term suffer little children. This is about as deep a value -- a deeply held value in America as you can have, care for our children.

BLITZER: And he's also made this accusation against you and the democrats that you're looking for a political wedge, a political issue to score points. You really don't care so much about the children. You really want to embarrass the president.

PELOSI: The president doesn't think I care about children? I have five children. I have six grandchildren. I took the gavel on behalf of America's children. This president will be haunted by legislation to support America's children for as long as he is president or as long as he resists giving health insurance to America's children.

Let me just say, though, the president's comments that we care more about politics than children is really beneath the dignity of his office. If he feels that way, he should have one of his political hacks say something like that, but not the president of the United States.

BLITZER: Nancy Pelosi speaking exclusively with me in her office on Capitol Hill earlier today.

Tonight, by the way, democratic presidential front-runner Hillary Clinton is widening her lead in the first primary battleground. We have a brand new CNN/WMUR New Hampshire presidential primary poll conducted by the University of New Hampshire. It shows Senator Clinton now 23 points ahead of Senator Barack Obama. She had a nine- point edge back in July. The survey shows Obama losing ground. John Edwards is a distant third with 12 percent, but that's up slightly from July. The other democrats trail in single digits.

Tomorrow I'll go one-on-one with the former vice president of the United States, Al Gore. We'll talk about climate change. My interview with Al Gore coming up here in THE SITUATION ROOM tomorrow. You'll want to see that.

Bill O'Reilly's restaurant surprise. We're going to have details on what the FOX host says he found so shocking when he dined at an African-American restaurant.

Plus, it's the remark that raised eyebrows around the world. Guess what, no gays in Iran. 60 million people, but there are no gays in Iran. That's what he says.

CNN's Jeanne Moos standing by. She'll take a most unusual look at what Mahmoud Ahmadinejad is saying.

Stick around. You're in THE SITUATION ROOM.


BLITZER: FOX's Bill O'Reilly is riling up people with a remark he made about his visit to a primarily African-American restaurant. Let's go right to CNN's Mary Snow. She's in New York following this controversy.

Mary, what's it all about?

MARY SNOW, CNN CORRESPONDENT: Well Wolf, the FOX news host went for dinner in Harlem recently with the Reverend Al Sharpton. It's his comments about that dinner that are generating criticism.

Here's what Bill O'Reilly had to say about his recent dinner at Sylvia's, a famous restaurant in Harlem.

BILL O'REILLY, FOX NEWS HOST: And I couldn't get over the fact that there was no difference between Sylvia's restaurant and any other restaurant in New York City. I mean, it was exactly the same, even though it's run by blacks, primarily black patronship. It was the same, and that's really what this society's all about now here in the U.S.A. There's no difference. There's no difference."

SNOW: Radio talk show host and CNN contributor Roland Martin says callers to his show see stereotypes in glaring neon lights.

ROLAND MARTIN, CNN CONTRIBUTOR: What bothered me is when he says that he was surprised that there was no difference between Sylvia and someone else. Well, why would you be surprised? Have you not gone to a black restaurant before?

SNOW: CNN's Rick Sanchez reached O'Reilly by phone yesterday.

RICK SANCHEZ, CNN CORRESPONDENT: He said, look, to be fair now, this is what he says. He said, this is totally -- it was a totally benign conversation. There was absolutely no racist intent.

SNOW: O'Reilly also went on to talk about stereotypes of rappers saying ...

O'REILLY: There wasn't one person in Sylvia's who was screaming 'M-Fer, I want more iced tea."


O'REILLY: You know, I mean, everybody was - it was like going into an Italian restaurant in an all-white suburb in the sense of people were sitting there, and they were ordering and having fun. And there wasn't any kind of craziness at all."

SNOW: O'Reilly's words were first brought to the media attention by the liberal-leaning media watchdog group, Media Matters. It's the same group that first noticed the controversial remarks made by Don Imus that cost him his job. FOX news' reaction, "This is nothing more than left wing outlets stirring up false racism accusation for ratings. It's sad."

Now, as for the restaurant that left such an impression on O'Reilly, a member of the family that owns Sylvia's restaurant tells us she feels O'Reilly's comments were, in her words, extremely insensitive and insulting to our race.


BLITZER: Mary Snow watching this story for us in New York. Mary, thanks very much.

Let's stay in New York. Jack Cafferty has got the Cafferty file.


JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is where are we headed as a country if a growing number of nations around the world are using China and Russia as their role models? Barbara in Pittsburgh, "We're tanking, are you surprised? All those things we fought against being for the last two centuries is now what we've become, liars, nation builders and habeas corpus, the cornerstone of our nation gone. Maybe we were never as good as we strove to be but we tried. Now we've allowed our government to be poster boy for all we fought against. Globalization means we're becoming just like China and Russia."

Ken in Vermont writes, "The world is headed into the 21st century. Go to Berkeley. Go to M.I.T. Go to Cal Tech. Go to the world's greatest science and technology universities. Go to the Indian Institute of Technology. Go to the places where the technological future of the world is being created and try to find your fellow Americans. We are about to find out that India, China and, to a much lesser extent, Russia are the future superpowers."

Mark in Illinois, "Into a role of less and less influence. Listening to Bush ask for help at the U.N. when he criticized them and marched off to war makes me feel we (the U.S.) are getting what we deserve. The phrase be careful what you ask for seems to have hit Bush right between the eyes, and he doesn't like it. How can countries look up to the U.S. when we look weak and impotent? I think we're in for a tough time ahead in the world."

John in New York writes, "2007 is a long way away from the years of Eisenhower and JFK when the world looked up to the United States. I'm old enough to remember the high level of prestige the U.S. had among the undeveloped nations of the world. We recaptured part of that great sense of global support with the rest of the world during the Ronald Reagan administration. But that leadership was easily lost when we elected George Bush as president."

And finally Bobby writes from Stockton, California, "Where? We're going to Wal-Mart. The Boston Red Sox are going all the way."

If you didn't see your e-mail here, you can go to We post more of them online along with video clips of the Cafferty file.


BLITZER: Thanks very much, Jack. I'll see you back here tomorrow.

During a speech over at the United Nations today, President Bush focused in on what he called the reign of fear in Myanmar formerly known as Burma. There are new developments in the peaceful protests that have been going on for eight straight days. Tens of thousands of people have been marching on the streets led by Buddhist monks but now the military government is cracking down, imposing a curfew in the country's two largest cities sending out riot police.

Let's go to our Internet reporter Abbi Tatton. She's monitoring some I-reports coming into CNN of the massive anti-government protest.

Abbi. ABBI TATTON, CNN INTERNET REPORTER: Wolf, we've been getting amazing pictures coming in over the last couple of days from the streets ever Yangon here.

We're not necessarily getting them immediately. This is a country with tight Internet controls. It makes it harder to get pictures like this out. The ones you're looking at right here are from a Dutch tourist, Benjamin Valk, who actually sent them to CNN after he left the country. He left Myanmar last night, flew to Japan and e-mailed these pictures to us from there. What Valk says is that for days he was hearing about smaller protests but by yesterday this was the scene. He said the protests were taking over life completely in Yangon led, he said, by the monks. And you can see, in his words, that the people were linking hands either side of the monks to make sure that nobody could get through. He said it was like they wanted people to -- they wanted to prevent people to get through, prevent people to get into the monks there. He said that everything was peaceful, everything was very controlled in yesterday's march here. All these pictures coming in, Wolf, to

BLITZER: Let's just hope it stays peaceful, Abbi. Thanks very much.

Right to Rick Sanchez to see what's coming up at the top of the hour.


SANCHEZ: Oh, boy, this Ahmadinejad story really stirring some heat here in New York, as you might imagine. We're going to be covering that story and then of course a story related to Bill O'Reilly, my conversation with Bill O'Reilly yesterday. Really, here's the question, Wolf. If someone doesn't intend to be racist, if someone doesn't even know that they are, should they get a pass? It's a very important question. It's part of a national conversation. We're going to bring it out in the open for you. We'll have it.

Back to you, Wolf.

BLITZER: All right, Rick. Thanks very much. We'll be watching.

It's probably not the kind of headline he was hoping to make. We'll tell you about his remark involving gays, the president of Iran.

Stick around. You're in THE SITUATION ROOM.


BLITZER: The Iranian president's big gay gaffe stole the show at Columbia University. CNN's Jeanne Moos takes a most unusual look.

JEANNE MOOS, CNN CORRESPONDENT: It's not often Iran's president gets top billing on gay blogs with names like Queerty but what do you expect after that queer comment he made, queer in the odd sense of the word. We had an expert in facial coding analyze it.

PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): In Iran, we don't have homosexuals like in your country.

DAN HILL, SENSORY LOGIC INC: The more they were cackling and hooting at him, he tried to paste a smile on, but actually an anger expression came up underneath that.

AHMADINEJAD (through translator): In Iran, we do not have this phenomenon. I don't know who has told you that we have it.

HILL: The face is the only place on the body where the muscles attach right to the skin. It does give stuff away. He tried to look composed and happy and able to handle the heat but actually he got rattled by it.

MOOS: Gay activists were rattled. Ryan Davis responded on You Tube referring to allegations by human rights groups that Iran executes some gays.

RYAN DAVIS: If you hang gay people, you're going to have less of them. I mean it's really just the way that it works.

MOOS: On the web site Mad for Ahmadinejad, Iran's president is routinely mocked. That's the place to go to find links for say an Ahmadinejad doggy chew toy.

At a U.N. press conference, the gay issue came up again.

UNIDENTIFIED FEMALE: And also you mentioned that there's no such phenomenon in Iran as homosexuality. Could you please elaborate on that? I know a few myself.

AHMADINEJAD (through translator): Seriously, I don't know of any.

MOOS: And then moments later, the president playfully returned to the subject.

AHMADINEJAD (through translator): As for homosexuality, I don't know where it is. Give me an address so that we are also aware of what happens in Iran.

MOOS: You can't give them an address but comedian Mo Rocca can give them a name. Rocca held a what would be a fun name for a gay bar in Tehran contest. Gayatollah's is in the lead.

Jeanne Moos, CNN, New York.

BLITZER: That's it for us. I'm Wolf Blitzer.

Up next, Rick Sanchez with "OUT IN THE OPEN."