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The Situation Room

Interview With John Edwards; President Bush Announces Deal to Freeze Interest Rates on Subprime Mortgages

Aired December 06, 2007 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, HOST: We're reading the fine print for you.
Also, will Iowa be the make or break state for Democratic presidential candidate John Edwards?

I'll ask him. He's standing by live. We'll talk about that and his new tone on the campaign trail. A one-on-one interview with Senator Edwards. That's coming up.

And a dramatic jailhouse confession by the man under arrest for that hostage crisis at a Hillary Clinton campaign office. He tells us why he did it.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Home foreclosures at an all time high. The number of Americans late on their mortgage payments up dramatically from last year. This crisis prompting President Bush today to take unprecedented action, announcing a deal to freeze interest rates on so-called subprime mortgages, set to spike in the coming months. Mr. Bush says homeowners deserve help right now, but not necessarily others.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: The government has a role to play, as well. We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could never afford.

(END VIDEO CLIP)

BLITZER: CNN's Ali Velshi is standing by live in New York.

He's watching all of this and knows a lot about the subject -- Ali, is this the right prescription for this mortgage meltdown, as it's being called?

ALI VELSHI, CNN CORRESPONDENT: Well, if you want to use the term prescription, Wolf, it's like getting a little bit of medicine. It's very small. In fact, the best numbers we can get -- despite the fact that the White House says it's going to help 1.2 million people -- the best numbers we can get is 240,000 people who are going to be helped by this. And, by the way, it's going to not be easy to fall into this category. Take a look at the rules.

(BEGIN VIDEO TAPE)

VELSHI (voice-over): To qualify, you need to have an income and you need to live in your home. You need to have been making your payments on time and be able to show that if your interest rate were to adjust higher, you wouldn't be able to afford it.

You also have to have taken your adjustable rate mortgage between January 1 of 2005 and July 31st of this year. And the rate has to be set to adjust between January 1 of 2008 and July 31 of 2010.

And that's not all. There are lots of rules. You won't qualify if you're not current on your loan or if you're able to afford an interest rate increase, if you don't have an income or if your home is worth less than the mortgage on it.

BUSH: My administration has moved forward in three key areas.

VELSHI: Banks don't love this idea, but it's probably a good business decision. This way they'll get some interest, rather than no interest, and they won't get stuck with close to a quarter of a million foreclosed homes.

Reactions to the plan are mixed. Some feel that it rewards bad decisions, saying that no one forced anyone to buy a house or take a mortgage. On the other side, it's clear now that some borrowers were misled about the possibility of interest rates going up and of home prices going down. And some property estimators may have been pushed by lenders into providing valuations that were, too, high.

(END VIDEO TAPE)

VELSHI: Hey, Wolf, between now and the end of 2008, we're looking at more than two million people who possibly could face foreclosure. Like I say, this might help 240,000 of them, 250,000 of them. There are still a lot of people who stand to lose their homes. That means a lot of people are saying that this plan is a little too little, a little too late -- Wolf.

BLITZER: An excellent explanation for us, Ali.

Thanks very much.

We'll continue to watch this story.

Other important news, though, we're following right now. President Bush is engaging in some very personal diplomacy by actually writing a letter to the leader of North Korea -- a country he once called part of an axis of evil.

State Department correspondent Zain Verjee is standing by watching this story for us. The president of the United States writing a letter to Kim Jong Il. That doesn't happen every day. I don't know if it's ever happened -- Zain, what is going on? ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: President Bush has never done that before, Wolf.

That letter was hand carried and delivered to the North Koreans. Now, the timing is important.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): Commander-in-chief and now, more and more, diplomat-in-chief. President Bush sends a rare personal letter to a member of what he called the axis of evil -- North Korea's Kim Jong Il.

TOM CASEY, STATE DEPARTMENT SPOKESMAN: This was deemed an appropriate moment for there to be a clear communication of the U.S. policy, again, from the highest levels of the government.

VERJEE: The goal -- hold Korea to a New Year's Eve deadline to tell (AUDIO GAP)...

(END VIDEO TAPE)

VERJEE: And, Wolf, our apologies for that.

Just a little more detail about the letter itself, Wolf.

It was addressed, "Dear Mr. Chairman," to Kim Jong Il. It was also signed "sincerely" by hand by President Bush. That letter was written on the first of December.

The president also wrote very similar letters to the other counterparts for the six party talks. He wrote one to the Chinese, the Russians, the Japanese, as well as the South Koreans.

And, really, what's happening here is that President Bush, by getting involved personally in diplomacy with North Korea, is giving it momentum. People here at the State Department are saying that really what the president wants to do and what the United States wants to do -- it wants to do is to maintain the significant momentum that they've had in dealing with North Korea -- Wolf.

BLITZER: So, Zain, if Kim Jong Il wanted some respect -- something to show for what he's doing, I assume this could be seen as a victory of sorts for him.

VERJEE: Yes. I mean the North Koreans have always said they want one thing from all experts that I talk to about North Korea. They say what the North Koreans are really looking for is respect from the United States. And they're also looking for some sort of reassurance from the president that, you know, he's really committed to this process. But, in some ways, yes, it is kind of a victory. It's a big deal for Kim Jong Il, "the dear leader," as they call him in North Korea -- the great leader -- has some degree of recognition by the president of the United States on a very personal level.

And for the North Koreans, this is a very big deal. And he may be thinking, well, I really haven't done that much, but I got a significant letter delivered to me by the president, by -- through an envoy and, you know, one of the issues here, though, people are raising questions is whether North Korea can really be trusted. And that remains to be seen, if they deliver that key declaration by the end of this year.

BLITZER: As we pointed out, the first time President Bush has done this -- write a personal letter to Kim Jung Il.

Zain, thanks very much.

Secretary of State Condoleezza Rice is in Brussels today, pressing for greater international pressure on Iran to halt uranium enrichment and to come clean on any past efforts to develop a nuclear weapons. The talks come on the heels of a new U.S. government intelligence report that Iran may have suspended its nuclear weapons program four years ago -- back in 2003.

Our special correspondent, Frank Sesno, is here in THE SITUATION ROOM.

He's watching all of this for us. He has this "what if" series that we've always been talking about, Frank, over the recent months.

Is there a recent history, though, of Washington and Tehran actually working together?

FRANK SESNO, CNN SPECIAL CORRESPONDENT: Yes. Speaking of the axis of evil, right, what if the United States and Iran put down all the demonizing and actually cooperated and worked together?

You know, it happened. It happened after 9/11. It showed that the countries could intersect. A very interesting thing.

I got the story from James Dobins. He was the Bush administration's special envoy to Afghanistan at the time, after 9/11. And it was a fascinating story. He was working directly with the Iranians.

(BEGIN VIDEOTAPE)

JAMES DOBINS, FORMER U.S. SPECIAL ENVOY FOR AFGHANISTAN: They were cooperating. Their objectives were largely the same as ours. They had, after all, had been fighting the Taliban long before we were.

SESNO: So the point is, you were doing business, real business with the Iranians?

DOBINS: Absolutely.

SESNO: Dobins remembers it all well. In the fall of 2001, during the U.S. military campaign in Afghanistan, Iran cooperated on the ground -- providing vital information and safe passage for humanitarian supplies. Afterward, it worked alongside the U.S. to establish a constitution and the government of Hamid Karzai. Along the way, an offer that really took Dobins by surprise. DOBINS: Iran was prepared to participate in a program to assist the creation of a new Afghan national army under U.S. leadership. But the fact that they proposed that their army and our army would collaborate under American leadership in a joint program to train the Afghan national army was a pretty breathtaking offer.

UNIDENTIFIED MALE: Hello. Hello, how are you?

SESNO: Here you are in Bonn having these conversations with the Iranians. The Iranians are cooperating. You thought there was a moment here.

DOBINS: Well, the Iranians clearly wanted to expand this dialogue to other issues.

SESNO: What did they say exactly?

What other issues, exactly?

DOBINS: They were ready to discuss the Middle East peace process, their role with the Palestinian Authority and with the Palestinians, support for terrorism.

SESNO: They told you this?

DOBINS: They said they were prepared to discuss the other issues on the U.S. agenda.

SESNO: What did you do with that information?

DOBINS: I passed it back to Washington.

SESNO: What response did you get to that memo?

DOBINS: None.

UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.

SESNO: Hardly surprising, because just days before Dobins sent his memo to Washington, President Bush had made it clear there would be no cooperation with Iran -- calling it part of an...

BUSH: Axis of evil, arming to threaten the peace of the world.

(END VIDEO TAPE)

SESNO: Wolf, a very dramatic story, because even as the tensions with Iran publicly -- through the president -- were intensifying, behind the scenes, the Iranians were working closely with the Americans on the ground in Afghanistan.

Now, there are a number of examples of the kinds of things that Dobins was talking about from the time. But those were very different times -- not least among the differences being that at the time they had a moderate president in Iran. Now it's Mahmoud Ahmadinejad. Things have gotten much more difficult. The situation in Iraq, for the United States, making it much more difficult.

But what this recent National Intelligence Estimate shows is thing do change -- sometimes very dramatically. A lot of folks say the next place to look for interests to overlap -- if you're going to find it any place -- is in Iraq.

BLITZER: Interesting. Good material.

SESNO: Sure.

BLITZER: Thanks very much.

A lot of people will be what if -- what if the situation would have been...

SESNO: The whole thing changes.

BLITZER: Yes. Amazing.

SESNO: The whole thing changes.

BLITZER: All right.

Frank Sesno, thanks very much.

Let's check back with Jack Cafferty.

He's got The Cafferty File in New York -- Jack.

CAFFERTY: You know, that's really depressing -- would have, could have, should have.

I mean it sounded like there was there was something there, right?

BLITZER: It absolutely does. And, you know, it's amazing now. The president, Jack, writing personal letters to Kim Jong Il. We're now told that there is no Iranian nuclear weapons program -- hasn't been one for four years.

CAFFERTY: Yes.

BLITZER: What's going on -- Jack.

CAFFERTY: Doing a heck of a job, Brownie.

Vice President Cheney is out with another upbeat assessment on the war in Iraq. This is interesting. In an interview with the "Politico," Cheney predicts that when he and President Bush leave office in a year it will be clear that, "We have, in fact, achieved our objective in terms of having a self-governing Iraq that's capable, for the most part, of defending themselves, a democracy in the heart of the Middle East -- a nation that will be a positive force in influencing the world around it in the future."

Before you start picking out your home site in Baghdad, however, remember, this is the same guy who before the war said the U.S. would be greeted as liberators. That didn't happen.

The fight would probably last weeks rather than months. It's been more than four years.

And in June of 2005, said the insurgency was in the last throes. That was two-and-a-half years ago and they're still at it.

In "The Politico" interview, Cheney says he's been surprised by the weakness of the Democratic Congress, particularly some of the senior leaders like Congressman John Dingell and John Murtha. Cheney says they, "March to the tune of House Speaker Nancy Pelosi to an extreme degree." When asked if these men have lost their spines, Cheney said -- quoting again: "They're not carrying the big sticks I would have expected."

Pelosi dismissed all these comments and called on the White House to spend its time compromising with Congress. Right, Madam Speaker. That will happen soon.

Here's the question -- is Vice President Cheney right to predict that when he and President Bush leave office in a year, a self- governing democracy will be firmly established in Iraq?

E-mail your thoughts to caffertyfile@CNN.com or go to CNN.com/caffertyfile -- Wolf.

BLITZER: We can only hope, Jack.

That would be nice.

CAFFERTY: Well, it would be terrific. But I mean that's not going happen. There are secular differences that go back thousands of years among the Shia and the Sunnis and the Kurds. And they're not going to all of a sudden, in a year, say well, that's it -- to hell with all of those old animosities, let's be friends and set up a democracy. It's just not going to happen.

BLITZER: Jack, stand by, because our viewers are going to weigh in on this, as well.

Secret CIA videotapes of interrogations destroyed -- we're working on a developing story right now. We'll update you on what we're learning.

Also, a one-on-one conversation with the man who held five people hostage at the Hillary Clinton campaign office in New Hampshire.

(BEGIN VIDEO CLIP)

LEELAND EISENBERG, ALLEGED HOSTAGE TAKER: I was actually disappointed and I was stunned because I thought for sure they would have blown my head off. And that's what I wanted.

(END VIDEO CLIP)

BLITZER: Amazing. Leeland Eisenberg explaining what pushed him over the edge and why he expected to die that day. This is a CNN exclusive. You're going to want to see it.

Plus, teen killer -- new details about the young man who went on a deadly rampage and closer look at what it would take to provide total security at your shopping center.

And presidential candidate John Edwards -- he's been tough on Hillary Clinton, but is he now softening his message?

I'll ask him.

He's standing by live right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're just learning now that videotapes of terror suspects undergoing harsh interrogation techniques were actually destroyed by the CIA.

Let's go to our justice correspondent, Kelli Arena.

She's working this story for us.

What are you learning -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, as you said, we just found out that there were actually videotapes of CIA interrogations of terrorism detainees. Now, those tapes were produced after the president said that harsher methods could be used. That would include waterboarding. That's the technique that simulates drowning that we've all heard so much about, Wolf.

Well, those tapes would be awfully helpful right now, right, in the debate over whether the CIA overstepped its bounds.

But, oops, the tapes were destroyed two years ago. A knowledgeable source says that there were two tapes -- one of senior al Qaeda operative Abu Zubaydah.

Now, in a letter to the CIA workforce, Director Michael Hayden says that the CIA began videotaping these interrogations as an internal check on those new interrogation techniques. Hayden says that Congress was informed about the videos and about their being destroyed. He said the CIA's in-house lawyer watched the tapes, concluded that everything was OK. The tapes were also reviewed by the agency's inspector general. We'll have to take their word for it, though, Wolf, because as I told, you there is no proof. The CIA says that those tapes were destroyed basically to protect the identities of the interrogators, who would be put in danger if those tapes were ever leaked -- Wolf.

BLITZER: So let me just get this straight, Kelli. They destroyed the videotapes of these interrogation techniques...

ARENA: Right.

BLITZER: ...to protect the identity -- to protect the CIA officers who were engaged in these techniques, is that right?

ARENA: That's right. That's at least what Michael Hayden said. He said that it would be very dangerous if those tapes were ever leaked, because then it would also be leaking the identity of those CIA interrogators -- putting them and their families in danger, because, obviously, they might be put on a hit list by Al Qaeda or any other terrorist organization.

BLITZER: Kelli.

Thanks very much.

ARENA: Sure.

BLITZER: This story is going to cause some controversy out there for sure.

Kelli Arena reporting.

We're also learning new details right now about the young man who killed eight people and himself at a shopping mall out in Omaha, Nebraska yesterday. You saw it unfold live here in THE SITUATION ROOM.

Happening now, Our national correspondent, Keith Oppenheim, is covering this story for us.

He's joining us now from Omaha with more.

So 24 hours after or so, what's the latest?

KEITH OPPENHEIM, CNN CORRESPONDENT: Well, in general, Wolf, we're learning about Robert Hawkins, that he had a troubled history, but not really a violent one.

First of all, we're learning that he was actually a ward of the state for about four years, until last year, that he was in foster care. At one point, he was in a group home getting some counseling. And actually while at the group home, in 2003, he filed a complaint -- a sexual assault complaint -- against another teen at the group home.

He did have a criminal history, you know, kind of small stuff involving drug possession and disorderly conduct, but no major violent crime.

His landlady has been talking to us, as well as other media. And she said that he had been living with her since August of last year and that he left a suicide note, which his biological mom had passed on to the police.

Earlier today, Omaha's police chief, Thomas Warren, spoke about that.

(BEGIN VIDEO CLIP)

CHIEF THOMAS WARREN, OMAHA POLICE DEPARTMENT: We have confiscated the notes. They do provide us with some indication that this incident was premeditated. Apparently, he had been experiencing some mental health problems, ideations of suicide.

(END VIDEO CLIP)

OPPENHEIM: We also have heard from the landlord, Wolf, that Robert Hawkins was fired -- just fired from his job at McDonald's and that he had also broken up with his girlfriend a couple of weeks ago. Police today said that they believe that he got the assault rifle from his stepfather -- that he took it from his stepfather's house.

Back to you -- Wolf.

BLITZER: All right, Keith.

Thanks very much.

The tragedy in Omaha yesterday was at least the fourth shooting at a U.S. mall or shopping center so far this year. In February, a gunman shot five people to death at a mall in Salt Lake City before he was killed. In April, a man gunned down two people in the parking lot of a shopping center out in Kansas City, Missouri. He also was shot to death. Last month, a security guard and robbery suspect were injured during an attempted armored car heist at a mall near Atlanta.

According to shoppertrak.com, on an average week, 168 million shoppers visit enclosed shopping malls in the United States. That breaks down to more than eight billion visits per year.

Chilling new details of a hostage crisis -- the man behind the standoff at the Hillary Clinton campaign office in New Hampshire now tells CNN why and how he did it.

Plus, John Edwards is taking on a different tone after a series of sharp attacks on his rivals. I'll ask him what's going on.

He's standing by live.

That and a lot more coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

What do you have -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things, Wolf.

The Agriculture Department is updating its Women, Infants and Children, or WIC Program, to include fruits, vegetables and whole grains. The popular nutrition program provides food vouchers to low income women and their children. Starting in February of 2008, it will also offer new alternatives like tofu and soy drinks and make reductions in milk, cheese, eggs and juice. Now, this is the first change to WIC food packages in 30 years.

You are looking at a shot of Lieutenant Commander John Thomas Lee being led under cover and in shackles into his court-martial in Quantico, Virginia. The HIV-positive Navy chaplain pleaded guilty today to sodomy and other charges. He admitted to forcing himself on a Naval Academy mid-shipman and having sex with an Air Force officer without disclosing his HIV infection. Lee, a Catholic priest, was sentenced to two years in prison.

In news affecting small business, a newly released survey by AT&T shows that a sizeable portion of small businesses, for all intents and purposes, don't worry about data threats. Researchers polled businesses by phone in 10 metropolitan areas and they found that most of the businesses secure their computer systems. But 24 percent of those surveyed indicated they still are unconcerned about data security. Ten percent say they have taken no steps at all to protect their data.

That's a look at the headlines right now, Wolf.

BLITZER: They should start getting concerned about that data.

Thanks very much, Carol, for that.

Coming up, inside the mind of a hostage taker.

(BEGIN VIDEO CLIP)

EISENBERG: I wanted to sacrifice myself for the sake of mental illness and the discussion in this country about mental illness. Had I walked into a Dunkin' Donuts, it wouldn't have gotten the kind of national discussion and precedent that it deserves.

(END VIDEO CLIP)

BLITZER: A jailhouse interview with the man who took hostages at Hillary Clinton's campaign office in New Hampshire. You're going to find out what he really wanted when he threatened to blow himself up and why he was actually trying to call me -- yes, me -- that day. This is a CNN exclusive.

That's coming up.

Also, presidential candidate John Edwards -- find out what, if anything, he would do to help save homeowners from the mortgage crisis if he were to win the White House. We'll ask him some of the tough questions on that, Iran, a lot more. That's coming up.

Plus, big time televangelists -- Congress wants their financial records to prove they're not using church money for personal gain. You're going to find out why two church leaders are refusing to cooperate.

Lots more coming up, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM. Happening now, a woman is dead after a bomb blast in central Paris. She died when she opened a package rigged with explosives. Police say it was addressed to a co-worker who was standing nearby. He was uninjured in the blast.

Space shuttle mission delayed. NASA engineers are trying to fix a problem with fuel sensors that caused them to scrub today's scheduled liftoff. The launch is rescheduled for 4:09 p.m. eastern tomorrow.

And showdown over energy; just hours ago, the House approved a bill that repeals tax break for oil companies, encourages use of renewable fuels and increases fuel efficiency standards for cars and trucks for the first time in three decades. Senate republicans say they'll move to block the legislation. The White House is threatening a veto.

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

The man who police say took hostages at Hillary Clinton's campaign office in New Hampshire last week now says he did so to help people. CNN's Jason Carroll spoke with him at the jail where he's being held. Jason is joining us now live to tell us what he was told by this individual. Jason, what is he saying?

JASON CARROLL, CNN CORRESPONDENT: Well we heard a lot from Leeland Eisenberg. This is a man who has a criminal record dating back to 1978 including a conviction for sexual assault. He says he's suffering from bipolar disorder and has been unable to get help. He said he took the hostages in order to draw attention to people suffering from mental illness and because he says, Wolf, he wanted to die.

(BEGIN VIDEOTAPE)

LEELAND EISENBERG, ALLEGED HOSTAGE TAKER: I wanted to sacrifice myself for the sake of mental illness and the discussion in this country about mental illness. Had I walked into a Dunkin' Donuts, it wouldn't have gotten the kind of national discussion and precedent that it deserves.

CARROLL: Take me through the process of what you did.

EISENBERG: It all took about an hour to prepare for it. It honestly did. I took a cab. I went and got the flares, the duct tape, the electrical tape. I took some wire. I made it look like a bomb. I strapped it to my waist or whatever you want to call it. I put a sweater on and someone asked me if they could help me and I lifted up my shirt and I said yeah. You can get off that phone. Everybody in the back room and get down and lay on the floor. I kept repeating that, look, I swear on my mother's grave, I'm not here to hurt you. I think I told one of them to call Hillary Clinton's campaign headquarters. I wanted to talk to Hillary Clinton. I kept getting the runaround. At that point, I think the Secret Service or somebody were diverting calls. That made me frustrated. Then I think I tried to call CNN. In fact, I think I asked to talk to Wolf Blitzer and I got somebody else on the phone and that made me mad. I tried calming the kids down.

CARROLL: Was it your conscience that was getting to you and that was the reason that you were letting the hostages go?

EISENBERG: I just couldn't see them suffering the way they were. It pained me to see that what I was doing was affecting them to the degree it was. They were young kids.

CARROLL: You must have known that was going to happen.

EISENBERG: You don't think that way. When you're doing something like that, you're not thinking like that. You know what I mean? My whole thing is wanted the police to kill me.

CARROLL: I also want to make sure that we talk about what happened when you walked outside. Again, you thought at this point it was going to be suicide by cop. Then it would be over.

EISENBERG: That's what I wanted. I was convinced of it. I see it right in the window where he was in camouflage and he had the rifle pointed right at me. It was a sniper rifle and as soon as the last hostage made it clear of the door and I came through the door, I thought that was it. I honestly thought that was it and I stood there. I was dumb struck. I'm, like, I couldn't believe it. I was actually disappointed, and I was stunned because I thought for sure they would have blown my head off and that's what I wanted.

CARROLL: I'm told you are on a suicide watch here.

EISENBERG: If that's what you want to call it, yeah.

CARROLL: What would you call it?

EISENBERG: I don't want to make my situation worse by telling the truth.

CARROLL: At some point, don't you have to take responsibility in some ways for your own actions?

EISENBERG: I'm not looking for sympathy. I'm not looking as an excuse to say oh, because I'm mentally ill this is why I did that so don't hurt me. Don't punish me. That's not what I'm saying. I'm saying this is not about me.

(END VIDEOTAPE)

CARROLL: A judge has ordered that Eisenberg undergo a psychiatric evaluation. As of last night, Eisenberg told me that has not yet happened. He is receiving medication, but Wolf, he feels as though he's not going to receive the type of mental health help that he needs while he's in prison. Wolf?

BLITZER: He is taking medication right now, is that right?

CARROLL: That is correct. Yes. BLITZER: You know he did call the Washington bureau of CNN right in the middle of the hostage crisis. Until your interview, I didn't know that he actually wanted to speak with me. He did speak to one of the producers here in the Washington bureau, but obviously I was on the air when all of this was unfolding. How did that come up? What did he say to you?

CARROLL: Well, I asked him, I'd heard he called CNN and asked him why he wanted to speak to the network. He said he felt this was one of the networks that he could get the attention that he wanted and get his word out and he said that he asked to speak with you. You were the man he wanted to speak to and obviously you heard there from the interview he became upset when he wasn't able to speak with you.

I also asked him if he was watching the coverage as it was unfolding while he was holding the hostages there. He said he was not, in fact, watching the television. He was doing what he could to try to keep the hostages calm. Wolf?

BLITZER: Jason, thanks very much. Jason Carroll doing some good reporting for us. Thank you.

His wife says no candidate can afford to come in third in the Iowa caucuses. So what will John Edwards do if he does? I'll ask him that question and a lot more. My one-on-one interview with the senator coming up. He's standing by live.

Also, republican candidate Mitt Romney tries to lay to rest concerns about his Mormon faith in a very closely-watched speech. Did it work? We'll get reaction to that and a lot more right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Democratic presidential candidate John Edwards seems to be taking a little bit of a new tone on the campaign trail. After a series of sharp attacks, he's now minimizing criticism of his opponents. What are we missing? Let's ask John Edwards. He's joining us from Charleston, South Carolina.

Senator, thanks very much for coming in. Are we seeing a new strategy, what, less than a month before the Iowa caucuses?

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: No, you're seeing me be me. I think we're a little less than 30 days before the Iowa caucus and closer to the New Hampshire primary and I think what caucus goers and voters want to see from me and from the other candidates is they want to hear what your vision is for the country. So I want them to see exactly what I would do as president of the United States and visualize me in that role.

BLITZER: Because a lot of us remember, Senator, four years ago when Gephardt and Howard Dean, they were battling each other and you came across as Mr. Nice Guy and you wound up doing really well in Iowa, four years ago and some are suggesting now that Hillary Clinton and Barack Obama are really battling, you're taking the high road. EDWARDS: Well, I think it's what my responsibility is as a presidential candidate, Wolf. I want to make it clear to people what I want to do, what my positive message and what my positive agenda will be as president of the United States. It's just that simple. That's exactly what I intend to focus here at the end.

BLITZER: What about this new intelligence estimate on Iran, that it actually stopped working on a nuclear weapons program four years ago? In terms of the political fallout on the democratic campaign race, what does it mean from your perspective?

EDWARDS: It means that the people like me who spoke up very strongly against Bush and Cheney on their saber rattling about Iran and it gets this important resolution that the senate voted on to the Iranian revolutionary guard. It means that we were right and it's now been verified that they needed to be stopped and there was no factual basis for them to continue this march to war.

BLITZER: Because I'm giving you an opening to criticize Hillary Clinton, but I see you're not taking that opening.

EDWARDS: No. Listen, I've made it very clear that Senator Clinton -- that Senator Clinton voted for the resolution. I differ with her about that. We have a very different view. I think it's really important on this issue to stand up to Bush and Cheney and the neocons and I made it clear at the time. I stand by that. I haven't changed at all, but I want people to see what I would do as president of the United States. I've just told you. I think on this issue we have to stop Bush and Cheney.

BLITZER: What about Mitt Romney's speech today? I don't know if you had a chance to watch it or get a report on it. He spoke about his issue of faith. Should that be an issue at all in the United States this year that a candidate has to go out and speak about his personal religious faith?

EDWARDS: Well, I know we've had a history of this, you know with John Kennedy and other presidential candidates. I think that from my perspective, my faith is usually important to me. I also see an enormous responsibility as president to maintain separation between church and state. I mean, it's not my job even though my faith is very important and personal to me every day of my life. It is not my job to impose my faith on America, and I assume that Governor Romney thought this was something he needed to speak about.

BLITZER: Well, on that issue of separation of church and state, John F. Kennedy back in 1960 said there must be a wall there, but Mitt Romney was suggesting there shouldn't necessarily be such a wall. Listen to this little clip from his speech.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Religion is seen as merely a private affair with no place in public life. It's as if they're intent on establishing a new religion in America, the religion of secularism. They are wrong. (END VIDEO CLIP)

BLITZER: You want to comment on that?

EDWARDS: Well, I -- listen. I grew up in the south and I was baptized as a southern Baptist. I believe that issues that go across the lines between one faith and another by doing something about poverty in America and doing something about 200,000 veterans who go to sleep on bridges and on grates every night, 35 million people who went hungry in America last year. I think those are the kind of issues that can unite us on moral grounds across some of the faith differences that we have in this country, but when you're president of the United States, Wolf, you're president for all of the American people and that means president for those with different faith beliefs and president for those who have no faith beliefs. I believe that is my responsibility as president.

BLITZER: Your wife told me last week that if you or any of the other democratic candidates comes in third in Iowa, it could be the end of the presidential campaign. Is she right?

EDWARDS: There goes Elizabeth again. No, here's what I think. I think it depends on exactly what happens. I mean I think it's unpredictable. Iowa is, I mean for example, if we're all bunched up together, that's one thing. If there's separation between us, that's something different. I think that what we know is we're in a deadlock in Iowa. Right now we're very much in a dead heat and I think somebody will emerge and whoever emerges will have enormous momentum, and I think what people are looking for in Iowa. I mean I know these people, Wolf. I think the caucus goers in Iowa are looking for somebody who's strong, who understands working people. This is where I come from. They know that and they're looking for somebody who's got some backbone that will fight for them and that's exactly what I'll do.

BLITZER: Senator Edwards. Thanks for coming in.

EDWARDS: Thanks, Wolf. Thanks for having me.

BLITZER: Coming up, some popular television preachers snub a senator's financial probe. One preacher issues a defiant challenge. We'll tell you what it is.

And Jack Cafferty is asking, is Vice President Cheney right to predict that when he and President Bush leave office, a self-governing democracy will be firmly established in Iran? Jack and your e-mail and a lot more coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: They preach prosperity, but one lawmaker thinks they may be practicing too much of what they preach. A leading senator wants financial details from leading television evangelists, but some are refusing. Carol Costello is here. She is following this story for us.

So, what's going on now, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well, we've been telling people this. You know last month, Senator Grassley set a deadline for six televangelists to provide detailed reports of how they're spending billions of dollars in donations. That deadline is today. Five of the six televangelists are cooperating, but one is not.

(BEGIN VIDEOTAPE)

COSTELLO: World Changes Churches' minister Creflo Dollar just said no. No, he will not hand over any more of his church's financial documents to the U.S. senate. Lawmaker Chuck Grassley, who is heading the senate's watchdog arm on non-profits, is surprised. He's rarely been told no.

SEN. CHARLES GRASSLEY (R), IOWA: If he sticks to his guns, he would be the first non-profit organization that I know or can remember that hasn't cooperated with us.

COSTELLO: Dollar told us back in November, he already turned in some documents. According to the Atlanta Journal Constitution, Creflo says his church collected $69 million in 2006, but now Dollar's hired an attorney, who told Grassley, if you want more, get a subpoena.

CREFLO DOLLAR, DOLLAR MINISTRIES: We've always said in the very beginning that we have no problems if it's a valid request and, you know, we comply with the IRS.

COSTELLO: But Grassley wants to see for himself. Since these mega churches are tax-exempt, he wants to make sure millions of dollars in donations are going to charitable causes and not to pay for Dollar and the others to live lavish lifestyles that include swanky cars, magnificent mansions and private jets. Since these ministries are organized as churches, normally they cannot divert contributions for personal use.

DOLLAR: Well first of all, it's a miscalculated assumption that those things were purchased with the church's money.

COSTELLO: But Rusty Leonard, who runs the citizen's watchdog group Ministerwatch.com, says if that's true, then Dollar and the rest should readily comply with Senator Grassley's request, unless they have something to hide.

RUSTY LEONARD, MINISTRYWATCH.COM: You're looking at from their perspective is they could potentially go into Grassley's confessional and end up walking out in handcuffs so I think they have to be very careful about what they release.

(END VIDEOTAPE)

COSTELLO: Well, we reached out to Dollar and his lawyer today. We did not hear back. I did ask Senator Grassley if he'd subpoena Dollar. He very diplomat likely said he doesn't think it will come to that, but then Senator Grassley said he has used the subpoena power before and quite effectively. BLITZER: That's a lot of money, $69 million that they raised. That's a lot of money. All right. Thanks very much. I know you'll stay on top of this story for us.

COSTELLO: I will.

BLITZER: Let's go back to Jack Cafferty. He's got the Cafferty file in New York. Jack.

JACK CAFFERTY, CNN CORRESPONDENT: The question, is Vice President Cheney right when he says that he and President Bush will leave office and at that time there will be a self-governing democracy firmly established in Iraq? You might be surprised to learn there is a certain amount of skepticism with that prediction.

Tom in Michigan, "Cheney and Bush have not been right about anything regarding this war. Why would he be right now? You, me, Congress, Cheney, Bush and most of the world know there's not now, nor will there ever be an established self-governing democracy, let alone by 2009."

Laura writes, "No, that won't happen by January '09, just like there were no WMD and now there are no nukes in Iran and gas has almost tripled since 9/11, but Cheney's statements will certainly distract people from this embarrassing revelation about Iran's nuclear ambition." Good point.

Bill in Texas, "Jack, you silly boy. Of course, Cheney is right. You seem to have forgotten that this administration will change the definition of what anything means to suit their needs. They'll simply redefine what they meant, pat themselves on the back and then award themselves medals of freedom for doing such a good job."

David in Nacogdoches, Texas, "What Bush/Cheney will leave when they leave office is a mess that will take a couple of generations to overcome and clean up, if it's even possible. This is the worst administration I've seen in my 64 years."

Ryan in West Palm Beach, Florida, "No matter how much money, no matter how many surging troops, no matter how much the right wing hopes and praise, the moment all U.S. and coalition troops, leave Iraq will fractionalize and fall to pieces."

Phil in Oregon writes, "Jack, whatever Cheney smoked for lunch came through our open border with Mexico."

And Christine in Natchez, Mississippi says, "I'm not sure, but does it say anywhere in his crystal ball if we'll have a democracy in Washington when he and Bush leave office." Wolf?

BLITZER: See you in a few moments, Jack. We're also going to be talking about this and other subjects with the best political team on television.

Mitt Romney confronts questions of faith head-on. Was his closely-watched speech, the make or break moment some were anticipating? We're going to show you.

And new questions about what President Bush knew about Iran's nuclear weapons program and when he knew it. The White House now explaining.

And President Bush getting ready to light up the Christmas tree over at the White House. We'll take you there. You'll watch it live right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: An emotional time over at the White House right now. The president getting ready to light the national Christmas tree. He's speaking briefly. Let's listen in and watch this annual event.

PRES. GEORGE W. BUSH, UNITED STATES: That in Bethlehem of Judea a savior was born and we rejoice in the Christmas promise of peace to men of good will.

We also reflect on the mystery of Christmas. The story of the almighty who entered history in the most vulnerable form possible, hidden in the weakness of a newborn child, and we reflect on the call of our creator, who by taking this form, reminds us of our duty to protect and care for the weak and the vulnerable among us.

During this Christmas season, millions of Americans will answer this call by reaching out a compassionate hand, to help brothers and sisters in need. We are thankful to these good souls who show the good heart of our nation.

We're also thankful for the thousands of Americans who answered the call by serving our nation in uniform. Many will spend this Christmas stationed in distant and dangerous lands, far from homes and from the families they love. They are never far from our thoughts and they're always in our prayers. America honors their sacrifice and that of their families, who also serve our nation. We are grateful for all they do to ensure that we live in the freedom our creator intended for every man, woman and child on the face of this earth.

And now, as an expression of our hope for peace in this Christmas season, we're going to light the national Christmas tree. And we have asked two young Americans to join us. Breanna Kinder helped others through her participation in the Montgomery County Police Activity Leagues Kids Care Club. And Demarcus Thomas gives his time to the Discovery Creek Children's Museum Service Learning Program and now if Breanna and Demarcus will join Laura and if you will join me in a countdown, five, four, three, two, one!

BLITZER: To all our viewers, a very Merry Christmas, Happy Hanukah as well, a lovely sight every year at this time of year.

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