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CNN Wolf Blitzer Reports

O'Neill Becomes Target of Investigation; Interview With Asa Hutchinson; Insight Into First Family

Aired January 12, 2004 - 17:00   ET

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

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


WOLF BLITZER, HOST: Happening now. He was making stunning accusations against the president. Now former Treasury Secretary Paul O'Neill has become the target of an investigation.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Shadow over the summit. A cabinet controversy follows the president to Mexico.

Passenger profiles.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) of all American citizens attempting to fly could be flagged red or yellow.

BLITZER: What the government wants to know about you.

The perfect wife. A new book on Laura Bush, new insight into the first family.

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, January 12, 2004.

(END VIDEOTAPE)

BLITZER: Is it payback for bashing President Bush, or did a former high-level cabinet member break the law? At this hour, startling developments a day before the release of a tell-all book an ex-insider's view of the Bush White House.

The president joins his top aides in reacting to the allegations by the former Treasury Secretary Paul O'Neill. And the Treasury Department asks for an investigation as to how a possibly classified document appeared in a televised interview. We'll go live to CNN White House correspondent Dana Bash with the president at the Summit of the Americas in Mexico and to CNN's Allan Chernoff on the call for an investigation.

But first, the story the White House can't seem to shake.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): An important day in Mexico. President Bush at the Summit of the Americas. The White House wants to highlight security issues, trade immigration, but the president finds himself deflecting questions about an ex-cabinet member with a story to tell.

QUESTION: Is it true as your former Treasury Secretary Paul O'Neill says, that you started planning for the invasion of Iraq within days of your inauguration?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The stated policy of my administration towards Saddam Hussein was very clear. Like the previous administration, we were for regime change.

BLITZER: The new cycle, still dominated by former Treasury Secretary Paul O'Neill, whose revelations about early administration cabinet meetings are causing a political stir.

White House Press Secretary Scott McClellan says this appears to be an effort by O'Neill to justify his personal views and opinions. O'Neill, forced out of his job late in 2002 is the main source in journalist Ron Suskind's new book "The Price of Loyalty" focusing on firsthand accounts of Bush cabinet meetings during President Bush's first two years in office.

O'Neill spoke with "TIME" magazine and CBS's "60 minutes." In the TV interview, O'Neill said it wasn't September 11 that changed the administration's strategic thinking on Iraq.

PAUL O'NEILL, FORMER TREASURY SECRETARY: From the very beginning there was a conviction that Saddam Hussein was a bad person and that he needed to go.

BLITZER: In the book, O'Neill is quoted on the issue of removing Saddam. "It was all about finding a way to do it. That was the tone of it. The president saying, fine, go find me a way to do this."

O'Neill told "TIME" that as a member of the national security team he never saw anything he'd characterize as evidence of weapons of mass destruction in Iraq.

A senior administration official tells CNN, based on the level of information given to different members of that team, quote, "Rumsfeld and Tenet would know more than O'Neill."

Various accounts from O'Neill depict the president disengaged in cabinet meetings, not asking key questions or clarifying his positions.

O'Neill recalls a meeting where he pressed Mr. Bush for a cabinet-level debate on fixing Social Security, quote, "but he just sat back in his chair, his attitude was, I said this during the campaign, and whatever I said in the campaign must be right." Current cabinet officials say this isn't the boss they know.

DONALD EVANS, COMMERCE SECRETARY: He is -- drives the meetings, tough questions, he likes dissent. He likes to see debate. He thinks it's very healthy, very constructive for the process. BLITZER: O'Neill says of the Bush team, quote, "these people are nasty and they have a long memory." But he also says, "I'm an old guy and I'm rich, and there's nothing they can do to hurt me."

(END VIDEOTAPE)

BLITZER: Will the cabinet controversy cast a shadow over the very important Summit of the Americas underway right now? CNN White House correspondent Dana Bash is with the president in Monterey, Mexico -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, as you know, President Bush was hoping to come down here to have the headlines read he has a new beginning with his old friend, Vicente Fox, the president of Mexico.

But as you mentioned, the president was asked about this issue, was asked about Paul O'Neill's comments and the information that he gave. But the White House is really trying not to feed the news cycle as much as they can. To say as little as possible on this publicly.

That's why the president was careful not to answer the question as to whether or not he was betrayed. But he did -- and he was careful not to show he was angry.

(BEGIN VIDEO CLIP)

BUSH: I appreciate former Secretary O'Neill's service to our country. We worked together during some difficult times. We worked together when the country was in recession. And now we're coming out of recession, which is positive news. We worked together when America was attacked on September the 11th, which changed -- changed how I viewed the world.

(END VIDEO CLIP)

BASH: Now, the president did elaborate a little on the whole allegation that the war with Iraq started really from day one of the administration. He went into the fact that there were issues with Iraq from the beginning, went into the fact that the policy of regime change was in place when he took office. And again said that after September 11, that the is when his world view changed, and later on, of course, they decided to go to war with Iraq.

So this is really publicly as much as we're hearing from the White House, Wolf. Behind the scenes, as you can imagine, they are clearly not happy at all. White House officials saying that O'Neill was somebody who had a political tin ear even when he was in the White House talking about the fact he had a rocky tenure all along. So privately, their words are a lot more biting than they are publicly because they want to try to end this story as soon as possible -- Wolf.

BLITZER: CNN's Dana Bash at the Summit of the Americas in Monterey. The story, though, not going away. The Treasury Department is now looking into how a seemingly classified government document made its way into that television appearance last night by the former treasury secretary. Let's go live to CNN's Allan Chernoff in New York. What's happening on that front, Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: The department that Paul O'Neill used to run is talking about investigating him. A treasury spokesperson this afternoon said, based on the "60 Minutes" segment aired Sunday evening, there was a document that was shown that appeared to be classified.

It was referred to the U.S. Inspector General's office. Now during the segment, CBS did show a document that appeared to come from the National Security Council. It said NSC secret plan for post- Saddam Iraq.

But CBS says, "We did not show any secret document. We do not have secret documents, we showed the cover sheet that alluded to such documents." And the author of the book about O'Neill, Ron Suskind, told CNN moments ago that he had no secret documents, only the cover sheet.

Suskind also points out all the documents Mr. O'Neill received that were used for the book were given to O'Neill by lawyers at the Treasury Department after Mr. O'Neill made an official request for them -- Wolf.

BLITZER: Allan Chernoff with this part of the story, looks like it's going to continue for some time. Allan, thank you very much for that report.

To our viewers, here's your chance to weigh in on this important story, our web question of the day is this. "Do you believe Paul O'Neill when he says President Bush had pre-9/11 plans to go to war with Iraq. You can vote right now, go to CNN.com/wolf. We'll have the results later in this broadcast.

While you're there, I'd love to hear directly from you. Send us your comments any time, I'll try to read some of them on the air each day at the end of this program, that's also where you can read my daily online column, CNN.com/wolf.

And this note, Ron Suskind, the author of "The Price of Loyalty, George W. Bush, the White House and the Education of Paul O'Neill" will be my guests tomorrow this time on WOLF BLITZER REPORTS.

Taking on the president and he's putting up literally millions, millions of his own dollars to try and remove President Bush from the White House. We'll have a rare interview with the billionaire George Soros.

Controversial screening, a new computerized system to look into the background of all passengers boarding flights in the United States. Inside the White House and the life of its current first lady, Laura Bush, we'll have some insight into her life and choices. All of that coming up.

First though, today's news quiz. "Who was the youngest first lady?" Francis Cleveland, Mamie Eisenhower, Jacqueline Kennedy, Edith Wilson. The answer later in the show.

(COMMERCIAL BREAK)

BLITZER: Air travelers may soon have to give up some of their privacy if they hope to board their planes. Let's turn now to CNN's Jennifer Coggiola on the latest aviation security plans. Jennifer is over at Reagan National Airport, just outside Washington -- Jennifer.

JENNIFER COGGIOLA, CNN CORRESPONDENT: Hi, Wolf. Well, the TSA is expected to begin testing this CAPPS 2 screening system over the next couple of months and then rolling it out this summer, and it will include gathering some additional personal information from passengers. Now, that could mean safer flying, also some speedier security checkpoints, but is it an invasion of our privacy?

(BEGIN VIDEOTAPE)

DAVID STEMPLER, AIR TRAVELERS ASSOCIATION: It's a necessity that we really need to know who's getting on our airplanes, in terms of terrorists or hijackers.

COGGIOLA (voice-over): Under CAPPS 2, or Trusted Traveler, as it's also known, passengers be asked for their full name, home address, telephone number and date of birth.

That information will be verified against government and commercial databases, and a risk assessment will take place to confirm your ID and conduct additional screening, like a criminal background check for possible terrorist ties.

Finally, each passenger will be assigned his or her own threat level, using a color code system to rank your perceived threat to that flight. Red, you can't board. Yellow, you'll receive additional scrutiny at checkpoint. Green, you'll have a standard trip through security.

STEMPLER: The TSA tells us that it's going to decrease the number of people that are pulled aside for further checking, from 15 percent down to 5 percent. That's a real benefit.

COGGIOLA: The TSA says for most passengers, the information will be discarded within a few days, and only a few people will be inconvenienced.

JAMES CARAFANO, HERITAGE FOUNDATION: CAPPS 2 will be based on real world data. And so, my guess is that the number of people that will be actually looked at more closely will be actually much smaller, and will actually be people who might more legitimately represent a risk. COGGIOLA: But opponents argue the new system might help terrorists.

BILL SCANNELL, DONTSPYONUS.COM: CAPPS 2 will make flying less safer. It creates a system that will allow bad people to game the system and get access to our aircraft.

COGGIOLA: Others argue it's discriminatory and unconstitutional.

BARRY STEINHARDT, ACLU: It's going to be an incredibly invasive system. It's going to collect all sorts of information about us, which then is going to be used for purposes that go well beyond airline security.

COGGIOLA: Some airlines experimented with CAPPS 2 late last year, and based on their experience might be reluctant to participate again. Delta, the first airline to test the system, backed out after some groups boycotted the airlines citing privacy violations.

A year and a half ago, JetBlue Airlines was sued in several states after they admitted they turned over passenger information to the government.

But supporters argue once it's administered across the board, passengers will be grateful.

STEMPLER: Believe me, it's much more frightening when these people get on the airplane where they can wreck much more havoc than some of the restrictions we might experience in the pre-boarding and pre-screening process.

(END VIDEOTAPE)

COGGIOLA: Another initiative possibly being introduced is that frequent flyers could submit their personal information to the TSA ahead of time and get a special ID card that they could present when they travel. In return guaranteeing a speedier security checkpoint and also possibly getting their own separate entrance -- Wolf.

BLITZER: CNN's Jennifer Coggiola over at Reagan National Airport here in Washington. Thanks, Jennifer, very much.

Let's get some perspective on all of this. Joining us now is Asa Hutchinson of the Department of Homeland Security, he's undersecretary for border and transportation security. Mr. Secretary, welcome back. Thanks very much for joining us.

Let's get to some of the concerns. First of all, you heard the representative from the ACLU say this inevitably is going to be discriminatory. How do you respond to that?

ASA HUTCHINSON, UNDERSECRETARY FOR BORDER AND TRANSPORTATION SECURITY, HOMELAND SECURITY DEPARTMENT: Well, it's not going to be discriminatory, because it's going to be a system in which we try to identify people that ought to have a secondary inspection. Right now, it is random, it's based upon faulty assumptions, and it's not an effective tool in trying to determine who might pose a risk. This improves that system, reduces the number that might have secondary inspection, and so I do not see any discriminatory impact.

BLITZER: Let me interrupt you for a second, because some of the critics have suggested that if, for example, you have an Arabic name, you're automatically going to be getting a lot extra treatment, even if you're an American citizen, but if your name sounds like an Arabic name, if your name is Mohammed or Ahmed, you're going to be discriminated?

HUTCHINSON: Absolutely not. That is absolutely not the case. Rather than having a broad net, where we confusingly go through there and decide who's going to have a secondary screening, we're going to have a much more scientific-based system that relies upon identity, trying to confirm someone's identity, and look at other scenarios as to whether they would pose a risk or not, using commercial databases to look at that identity. None of this information will be retained. That is an important part of the privacy protection.

BLITZER: But you say you are going to hold onto it for how long?

HUTCHINSON: We will not hold onto it. It will be instantaneously, you know, deleted, once that -- from the government database -- once that decision is made as to whether they should have a secondary screening or not.

BLITZER: What about the fear that we just heard expressed in Jennifer's piece that a terrorist could get all the right credentials, get on that green, go right through security, but still trick the Transportation Security Administration?

HUTCHINSON: Well, that's what we're trying to do, is to develop a more sophisticated means of trying to determine who should have a secondary screening.

We're not going to broadcast exactly what the rules are for determining that, but we will be flexible, first of all, so that we can adjust our basis here to, what we believe, would be the particular threats that we're looking at.

Right now, they're able to game in the system. This improves that, and also minimizes the inconvenience to the traveler.

BLITZER: What do you say to those people who show up at the airport and someone at the counter says, we need your phone number, your home address, and they don't want to necessarily give that information out?

HUTCHINSON: Well, that is really information they've already given to the airlines, their name and address. This adds the date of birth. Is really the only information that's added. And I think most passengers would say, that's terrific, it helps facilitate my travel through and safety as well.

BLITZER: When people visit the White House, for example, they also have to make available their Social Security number. Why did you stop short and not ask for Social Security number as well?

HUTCHINSON: Wasn't necessary. And that's something that also should be used for Social Security purposes and not designed for the identification purposes. So it is not necessary and not appropriate to do that.

BLITZER: Are you expecting a court challenge right now to all of this?

HUTCHINSON: Well, first, let me emphasize that we're not even to the testing phase. This is a prototype in which we want to test to see how it works. If it meets our expectation and is a benefit to the passenger, as we expect, then we hope that we'll be able to proceed. We'll work with the privacy groups. We believe we will be fully compliant with all the privacy laws.

BLITZER: And bottom line, is this just one step in many steps you're using to try to protect the nation's aviation?

HUTCHINSON: That's the goal of it, is safety and convenience of the passengers.

BLITZER: Mr. Secretary, as usual, thank you very much.

HUTCHINSON: Thank you.

BLITZER: Good luck to you, good luck to all the people of the Department of Homeland Security.

The Bush administration will be allowed to keep secret the names of hundreds of people rounded up in the weeks after the 9/11 attacks. The Supreme Court today refused to hear an appeal by civil liberties groups, which challenged the secret arrests on constitutional grounds. More than 700 people, mostly Muslims or Arabs, were detained by federal authorities and investigated for possible terrorism connections. Almost all were eventually released, although many were deported for immigration violations.

An explosion in downtown Baghdad -- hours after an American soldier is killed by a homemade bomb. The latest on the violence plaguing Iraq.

And meet the man who's pledged millions, literally millions of dollars to defeating President Bush. We'll ask him why.

And he walked into the jaws of a lion, and he says he did it for a reason. We'll tell you all about it. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Central Baghdad was rocked by a large explosion just a short while ago. Witnesses say at least one rocket or mortar round was fired at the Palestine hotel which, of course, as all of our viewers know by now is very popular among international journalists. The hotel was not hit and there are no reports of casualties. Earlier, a roadside bomb exploded in the capital, killing one more American soldier and wounding two others. CNN's Satinder Bindra is in Baghdad with more.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT: The soldier was killed in a roadside explosion here in central Baghdad, at about 10:00 a.m. Also injured in this incident, two other U.S. soldiers. Meanwhile today, the U.S. administrator in Iraq, Mr. Paul Bremer, met with the visiting Spanish foreign minister, all this on a day when a powerful Shiite cleric Ayatollah Ali al-Sistani continues to oppose a U.S. plan to hold indirect or caucus-style elections.

Mr. Sistani who's the spiritual head of some 16 million Shiites here says he prefers direct elections. The United States says it's too late to hold direct elections. Despite these differences, though, the U.S. administrator here saying negotiations are continuing with Ayatollah Sistani.

PAUL BREMER, U.S. CIVILIAN ADMINISTRATOR: The governing council is in discussions with the Grand Ayatollah for whom we have the greatest respect and I think it's probably best if I leave those discussions between the governing council and the Ayatollah.

BINDRA: Also today U.S. forces confirming there was an incident near Samarra near the northern part of Iraq. They're saying U.S. forces ran into about 30 or 40 people who were trying to steal oil from a pipeline. U.S. forces asked them to surrender, when they didn't and opened fire, U.S. forces responded, killing seven Iraqi people. Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: In Afghanistan, dozens of suspected Taliban fighters today attacked a police checkpoint, killing at least four Afghan policemen. The assault was carried out in the southwestern part of the country. Suspected al Qaeda fugitives and Taliban fighters are believed to be hiding in the area. The Taliban, overthrown by the U.S. invasion in 2001, have regrouped and stepped up attacks against Afghan police and troops working with American forces.

A man with a mission. The mission, trying to oust President Bush from the White House. We'll have a rare interview with one of the Democrats' top donors George Soros. He'll join me live.

Plus, a young surfer competes, for the first time, since her almost deadly encounter with a shark.

And the woman behind the most powerful man in the world. Who is Laura Bush? We'll get to all of that. First, though, the answer to today's news quiz.

Earlier we asked, "who was the youngest first lady?" The answer: Francis Cleveland. In 1886, at just 21 years old, Francis Cleveland became the youngest first lady in history when she married President Cleveland. They're the only couple to be married in the White House.

(COMMERCIAL BREAK) BLITZER: Welcome back to CNN. Spilling secrets or spreading lies. Former Treasury Secretary Paul O'Neill's controversial comments, and now an investigation. First, a quick check of the latest headlines.

Rush Limbaugh is getting some support from an unaccustomed source, the American Civil Liberties Union. The ACLU is a longtime target of conservative criticism, but its Florida chapter filed court papers today supporting Limbaugh's right to keep his medical records secret. Prosecutors seized those records as part of the investigation into the Limbaugh's use of prescription painkillers.

A judge's decision to move Scott Peterson's murder trial out of Modesto, California is under fire. The decision was based in part on a survey suggesting many potential jurors in Modesto are biased. The "Modesto Bee" reports six of the college students who compiled the report now admit making up the results to save time, or because they couldn't afford long distance telephone interviews.

The former Roman Catholic bishop of Phoenix is on trial for a fatal hit and run. Thomas O'Brien who resigned after his arrest could get up to four years in prison. Jury selection started today. Opening statements could come late this week.

And Roger Clemens is postponing retirement. The six-time Cy Young award winner has agreed to a one-year, $5 million contract with his hometown Houston Astros. Clemens planned to leave baseball after pitching last season for the New York Yankees.

As we enter the 2004 election year, there's been a lot of talk about President Bush's very successful fund-raising efforts but the Democrats have big financial supporters as well. The financier, George Soros is determined to drive President Bush out of the White House, and he's donated millions of dollars on behalf of that goal. He's also the author of a new book, "The Bubble of American Supremacy, Correcting the Misuse of Power."

George Soros joins us now live. Mr. Soros, thanks very much, welcome to our program. Why are you so angry at President Bush?

GEORGE SOROS, THE SOROS FOUNDATION: I'm not particularly angry at President Bush. I'm very disturbed about the -- particularly the foreign policy of the United States. I consider it very dangerous for us and for the world.

BLITZER: But you've already given millions of dollars -- how many millions have you given away recently to try to get President Bush out of the White House?

SOROS: I have committed $10 million to one organization, Americans Coming Together, that's a grassroots organization to bring out the vote and $2.5 million to Moveon.org to -- which is sort of (UNINTELLIGIBLE) organization.

BLITZER: It's an organization that's been in the news lately, because, you know, of that controversial contest they had for ads, 30- second ads, designed to hurt, undermine President Bush, one of those ads in particular.

SOROS: Yes.

BLITZER: I want to play that, because it's a very sensitive issue, an ad that was on their Web site for about 10 days, which didn't win the contest, but made the comparison, an ugly comparison, between the president and Adolf Hitler.

Listen to this.

Now, Mr. Soros, I know you're a Holocaust survivor. How did that feel to see that kind of comparison, an organization having it on the Web site and making that kind of comparison?

SOROS: I absolutely condemn that kind of comparison. And it was one of 1,500 submissions. And I think they were not diligent enough not to put it on the Web site.

(CROSSTALK)

BLITZER: What did you tell MoveOn.org? You've given them $2.5 million.

SOROS: Right. And they themselves have repudiated it. And I repudiated it. So this is not the kind of comparison

(CROSSTALK)

BLITZER: Did they give you any indication that their hatred, if you will, of President Bush would stop at certain limits, because this seems to have gone way beyond any acceptable norm?

SOROS: Well, definitely.

And I think that they should not have been even accepted as a submission. But they certainly didn't choose that ad. So it's -- they have repudiated it, and I repudiate it. And it's been blown out of proportion, because, as I say, it's in a MoveOn ad. It's one of -- it's an open competition. Anybody can submit anything. The mistake was actually to accept this submission.

BLITZER: But the bottom line was that that was way over.

SOROS: Absolutely.

BLITZER: In your mind, as much as you're critical of President Bush, that goes way beyond any acceptable norm.

SOROS: Yes, yes.

But, you know, I have also been accused of comparing Bush to a Nazi. And I did not do it. I would not do it, exactly because I have lived under a Nazi regime. So I know the difference. But how come that I'm accused of that?

BLITZER: Who accused you of that? SOROS: The Republican national commission, or whatever, and a number of newspaper articles. And I -- you know, I think I really -- I'm upset about being accused of that. And I'm upset that I have to defend myself against this kind of accusation.

BLITZER: The -- I think what -- the articles that I read suggested, because of your having lived through the Nazi era, you have a special responsibility to educate people who didn't live through that. And I think the suggestion -- at one point, you had made some sort of allusion to your own personal background in explaining why you were so critical of the president.

SOROS: That's exactly right.

And then that has been distorted that I'm comparing the president to a Nazi. I mean, that is absolutely out of

(CROSSTALK)

BLITZER: Are there any of the Democratic candidates now that you are actively supporting?

SOROS: There are a number of them whom I would find very acceptable. I would say that -- that Dean, Wesley Clark, John Kerry, they all are pretty close to the positions that I would take.

BLITZER: That you feel comfortable with.

Now, this book, "The Bubble of American Supremacy: Correcting the Misuse of American Power," we don't have a lot of time, but what is the bottom-line criticism that you have? Is it the preemptive strike policy?

SOROS: Yes. It's the Bush doctrine, which I think is a dangerous doctrine and we have to repudiate it in the next election.

BLITZER: But if someone comes to kill you, isn't it your responsibility, if you're the president of the United States, to kill them first?

SOROS: Absolutely. And, in certain circumstances, you may be obliged to take preemptive action.

However, it should be done as a last resort. And the Bush doctrine has basically two pillars, because the first pillar is that we will not tolerate any strategic rival, either globally or regionally. And, secondly, we have the right for preemptive action. And that really means that, you know, we are something special. We are not obliged by international law and regulations, but everybody else is subject to our preemptive action.

BLITZER: All right, Mr. Soros, we, unfortunately, have to leave it there. You've spent $12.5 million. How many more millions are you going to spend?

SOROS: When I do, if I make a decision, I will be as open about it as I have been about this.

BLITZER: And in the "Washington Post" article, you were very open about it.

SOROS: Yes.

BLITZER: Thanks very much, Mr. Soros, for joining us.

The name of the book, "The Bubble of American Supremacy" -- there it is -- "Correcting the Misuse of American Power."

Appreciate it.

SOROS: Thank you.

BLITZER: Cheers and jeers for his tell-all book on the Bush administration. Is Paul O'Neill a hero or just a disgruntled former employee?

All eyes on Iowa, or not. We're on the trail with the candidates.

And she seems to be the perfect wife. Is there more to the first lady? We'll talk with the author of a new biography of the first lady.

We'll get to all of that. A quick look at the other news making headlines around the world first.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Sharon's promise. Israeli Prime Minister Ariel Sharon today promised to seek parliamentary approval before any unilateral troop withdrawals. Mr. Sharon has raised the possibility of a unilateral withdrawal from parts of the West Bank and Gaza if negotiations with the Palestinians fall through. The proposal has enraged many Israeli settlers in those areas. Tens of thousands of Israelis showed up for a protest demonstration yesterday.

Wrong turn. An Israeli cab driver is charged with driving a Palestinian suicide bomber to the site of a deadly attack near Tel Aviv last month. He's the first Israeli Jew to be accused under a law against helping Palestinians enter Israel without permits. The cab driver says he had no idea his passenger would turn out to be a suicide bomber.

Philippines fire. More than 20,000 people are homeless after a huge fire in Manila. Blamed on a gas tank explosion, the blaze destroyed thousands of shanties in a crowded slum area, but no deaths are reported.

Man vs. lion. A 22-year-old man who jumped into the lion pit at an Argentina Zoo is being treated for minor injuries and psychological problems. The man says voices from God told him to taunt the lion. The lion responded by pouncing on the man and biting him repeatedly. Gunshots from a police officer finally scared the lion away. Day for a queen. The world's largest ocean liner is beginning its maiden voyage. The Queen Mary 2 is beginning a 14-day cruise from Southampton, England, to Fort Lauderdale, Florida.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: More now on our top story, the former Treasury Secretary Paul O'Neill's controversial comments about President Bush.

Joining us, two guests, GOP pollster Kellyanne Conway, and, in Seattle, former speechwriter for President Clinton, Eric Liu.

Thanks to both of you for joining us.

What do you make, Kellyanne, of this Treasury Department investigation now into perhaps a classified document being shown on "60 Minutes"?

KELLYANNE CONWAY, REPUBLICAN POLLSTER: I'm glad that they're having that investigation, because it should strike everyone, regardless of their political affiliation, as very risky and very unseemly to have any former Cabinet secretary or someone in such a high level in government to try to disclose facts or evidence or even opinion that could put the national security at risk.

BLITZER: Eric?

ERIC LIU, FORMER CLINTON SPEECHWRITER: Well, you know, of course, you don't want classified information floating around.

I think it will be interesting to see whether this investigation is as vigorous in this investigation as they appear not to have been in investigating the leak of the information that was meant to punish the former diplomat who was critical of the war effort. That whole leak in which the administration basically outed a secret CIA agent seems to have disappeared. And the administration hasn't really followed up on it.

CONWAY: That's not true. The Department of Justice is investigating that. In fact, Attorney General Ashcroft has removed himself from those proceedings. That happened two weeks ago. I don't know if you were off on holiday break, but that's a very serious matter that is being investigated as we speak.

LIU: I certainly wasn't off on holiday break.

I think the ones who might have been are the people who are actually pressing this investigation. It's great that John Ashcroft is out of loop, but that doesn't ensure anything.

CONWAY: Not out of loop. He recused himself and in fact appointed people who can responsibly investigate it without assumed conflict of interest.

BLITZER: All right, let's not get off on a tangent.

Kellyanne, what do you make, though, of the inevitable cries of political payback, this Treasury Department probe of the former treasury secretary, Paul O'Neill, because of the very stinging comments he said about the president?

CONWAY: Those who would allege any kind of negative motive for an investigation of a classified document really should get past the politics.

Look, this is the president. He's not a pundit. And if national security details are being disclosed on national TV, that should trouble everyone. Apart from that, you have got to ask Paul O'Neill the following question. If put under oath, would you make the same claims?

And, No. 2, if your book is called "The Price of Loyalty," where exactly is yours? For example, if he heard of this in a Cabinet meeting in January 2001, why in the world did he stick around for two more years?

BLITZER: All right, Eric, what about that?

LIU: Well, look, I think that the problem that Paul O'Neill faced is that he made a colossal error in judgment.

When he signed on to work for this president, he expected the president to be engaged. He expected the president to be tolerant of dissent. He expected the president to be forthright with the American people on issues of life and death. And it turns out he was wrong on all three counts. I think he tried during his time there to make the best of it. And, as it turns out, he wasn't able to change the tenor of things in this administration.

CONWAY: Well, Eric, since when are you such a supporter of Paul O'Neill? Did you have nice things to say about the Bush-O'Neill tax package at the time?

LIU: I am no fan -- I don't know Paul O'Neill. I've never met the man. I'm not a particular fan of him.

I think the issue here isn't whether Paul O'Neill is a disgruntled employee or a hero. In my book, he's neither. The fact of the matter is, though, right now, he's told a story that the White House isn't really disputing. He's told a story about a president who was dead set from the beginning of finding any means necessary to go to war against Iraq. That story hasn't been disputed. He's told a story about

(CROSSTALK)

BLITZER: Well, let me interrupt, Eric, for a second. Let me interrupt. During the Clinton administration, an administration you worked in, wasn't it the policy of the Clinton administration, backed by Congress, to support regime change? And wasn't it $100 million funded by Congress, supported by the Clinton administration, to do precisely that in the late '90s?

LIU: You bet.

But the issue here isn't whether a war against Iraq was the right thing to do as a policy matter. We can have a different debate on that. The issue here is whether the president, President Bush, was going to act in good faith in trying to make a case to the people about that war. And he didn't. He trumped up a case about weapons of mass destruction.

CONWAY: Yes, he did.

LIU: He trumped up a case about the imminence of the threat.

(CROSSTALK)

LIU: And that, to me, says that he doesn't have the faith in the American people that he ought to have.

BLITZER: Go ahead, Kellyanne.

CONWAY: Well, the public actually disagrees with Eric and actually disagrees with Paul O'Neill's assessment, because we all know, and the CNN polling proves it, that the country still supports the president on his effort to win the war on terror. They're very supportive of that.

That aside, I presume that Paul O'Neill can neither be called a hero or disgruntled employee, so much as a guy who is trying to sell books. Why in the world would anybody buy a book

(CROSSTALK)

BLITZER: Wait a minute. Wait a minute.

Kellyanne, he's not getting a penny for this book. Ron Suskind is the author. He's collecting the royalties. Paul O'Neill is not getting any money for this book.

CONWAY: Well, not yet. But wait for the made-for-TV...

LIU: Paul O'Neill is a former CEO of Alcoa. He doesn't need the extra royalties that are going to be flowing in from this book to another person to do anything for him.

(CROSSTALK)

LIU: The idea that we ought to impugn Paul O'Neill's motives and do a smear campaign is exactly what this administration is being accused of.

CONWAY: I'm not.

(CROSSTALK)

CONWAY: I feel sorry for him. I actually feel sorry for Secretary O'Neill, because it takes a very, let's just say, weak person to turn against a former boss and a former set of principles and colleagues who you did fight in the trenches.

And I would say the same, Eric, about those former Clinton people who turned out writing books, Robert Reich, "Locked in the Cabinet," whatever that was about. I wasn't happy about that either. I think all these people have a free-market right to write books or to contribute books that they like. But they ought to be man enough to stand up to the repercussions if people who formerly trusted them then feel like they can't play ball. And is Paul O'Neill the first corporate titan that you've ever actually said something nice about?

(CROSSTALK)

LIU: The issue isn't whether Paul O'Neill is a good person or a bad person, whether he's a loyal person or not. The question is, did he tell the truth about this administration's efforts to hide the truth? And the answer seems to be yes.

CONWAY: Put him under oath and ask him.

BLITZER: Unfortunately, guys, we're going to have to leave it right there. This debate clearly not going away.

Kellyanne Conway, thanks for joining us here in Washington, Eric Liu in Seattle.

One week and counting, the COUNTDOWN to the Iowa caucuses clearly under way. Just ahead, the latest on this exercise in democracy.

And we'll catch up with the CNN Election Express that's rolling across the Hawkeye State. Our Bob Franken is standing by. We'll go there live.

(COMMERCIAL BREAK)

BLITZER: The first contest of this presidential election year is one week from today. Iowa holds its caucuses next Monday night. Right now, the contest is way too close to call, with Howard Dean and Dick Gephardt, though, leading the polls.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): When the stakes are this high, the blows can come low.

UNIDENTIFIED MALE: Howard Dean!

BLITZER: No one knows this better than front-runner Howard Dean. Campaigning nonstop in Iowa today, Dean continues dusting off criticism and attacks from rival camps. HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: They want to say that they're all against the establishment. They are the establishment.

BLITZER: With polls showing him in a statistical tie there with Dean, Richard Gephardt rallies with supporters in the Hawkeye State today, knowing every vote can make a difference.

REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: This is a jobless recovery, and there's a reason for it. His economic program stinks.

BLITZER: On the stump for a second-or-better showing in the caucus a week from today, John Kerry rallied with legislators on the steps of the Iowa state Capitol today. His message, stay tuned.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If you stay tuned over the course of next week, you're going to see a great roller-coaster ride here in the state of Iowa.

BLITZER: With the endorsement of "The Des Moines Register" this weekend and ever-growing poll numbers, John Edwards is out today to show he's a force to be reckoned with in the Hawkeye State.

Pie chart or no pie chart, Dennis Kucinich wants to rid himself of the fringe-candidate label. He's courting the young vote today, meeting with Iowa high school students.

Forget about Iowa. Wesley Clark is aiming for a New Hampshire win. And with just two weeks to go, recent polls show he's shooting ever closer to Dean. He's campaigning there today, before heading to Texas later this evening.

Joe Lieberman's jumping ahead, too. He's in Oklahoma and Arizona today, where he hopes to score late primary wins in February.

And that's our look at the 2004 presidential candidates on the trail.

(END VIDEOTAPE)

BLITZER: The CNN Election Express will be rolling across Iowa this week. Today's stop, Des Moines.

Our national correspondent Bob Franken is in the Iowa capital. His focus today, the polls and how the candidates are playing them -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, one of the things, Wolf, that has always been so puzzling is how the candidates can spend millions on polls and they can spend so much effort on endorsements and then pretend they don't care about them.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): The verbal choreography of any campaign has a certain sameness to it. Note how the candidate who is not leading the polls puts down the polls.

KERRY: Listen, folks, if we ran this campaign by polls, there wouldn't be a campaign. This is about people. This is about the people of Iowa who make up their minds, many of them in this last week. I am very, very confident about the momentum of my campaign.

FRANKEN: So, what does the candidate who doesn't have tangible evidence of momentum talk about? He finds intangibles in a silver lining.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: Well, the voters are seeing it, though. There's been a dramatic upsurge here in my campaign. And we go to these events now. Instead of being 50 people, which is what we expect, there are 200, 300, 400, 500, in some cases. And we've seen an enormous amount of energy.

FRANKEN: Newspaper endorsements probably matter. So do those from various political notables. The candidate who gets them embraces them. The others, well, they don't embrace them.

GEPHARDT: Endorsements are great, and you want all of them. But we've got a few newspaper endorsements. But what you really want is the endorsement of the Iowa caucus-goer. And that's what gets decided next Monday night.

(END VIDEOTAPE)

FRANKEN: So welcome to the expectation game. We can expect that the winner, of course, will claim victory at caucus. And we can expect that all the other candidates will say they did better than expected -- Wolf.

BLITZER: Bob Franken on the election campaign for us -- thanks, Bob, very much.

She's the woman behind the most powerful man on Earth. But as you probably imagine, there is much more to Laura Bush than what most of us see. "The Perfect Wife: The Life and Choices of Laura Bush" has some intriguing insight into the first lady.

The author, Ann Gerhart, joins me live here in Washington.

Ann, thanks very much for joining us. Congratulations on the book.

In all your research of Laura Bush, what's the most surprising thing you learned?

ANN GERHART, AUTHOR, "THE PERFECT WIFE": The most surprising thing I learned is, almost all of her really close friends are Democrats. So...

BLITZER: And why is that so surprising, because she's the wife of a Republican president?

GERHART: That's right. I think that she comes out of Texas, and she's a quiet reserved, modest woman. I think that the impression is just that she'll fall in line behind him. She certainly is always backing him up every step of the way. But I think there's a possibility she might be in a mixed marriage. He's more conservative, she's more liberal, which, of course, mirrors many marriages of many Americans.

BLITZER: It's not unusual, as all of us know.

GERHART: Right.

BLITZER: Let's talk a little bit about the Laura Bush that we all see on television, that we've come to know these past few years. She does seem almost perfect.

GERHART: Well, she certainly is the perfect wife for him.

He always said back in Texas, I have the perfect wife for the line of work I'm in. She doesn't try to steal the limelight. And I think that's what she does. She supports him wholeheartedly. She never makes herself part of the story. I think that, in a nation trying to recover from Hillary fatigue, as some call it, she's the antidote for that.

BLITZER: But when she does speak out on education, for example, reading, she comes across as so sincere, so committed. Is there another side that we're missing for some reason?

GERHART: No. I think that she is quite sincere about what she wants to do.

I think one of the things that makes it hard for people to feel they know her is, she's an incredibly modest person. In this kind of celebrity culture, finding someone who really has no interest in getting attention for herself is quite unusual.

BLITZER: But isn't that so good, to find a really modest person who doesn't necessarily believe all the press clips?

GERHART: Well, sure. I think that that's one of the reasons she's enormously popular, and across the board.

A lot of polls suggest that even among people who don't support her husband's policies, they like her a great deal.

BLITZER: There's one quote from the book. Let me put it up on the screen: "Even after Jenna was busted for underage drinking twice in four weeks, Laura's feeling was that her girls were just behaving like ordinary teenagers. The twins were just singled out for unfair attention because of who they were, she believed."

Isn't she right? If they were just normal kids, with not the president and the first lady, who would care if they had a fake I.D. or anything along those lines?

GERHART: Well, I think, certainly, with that first arrest, that's the case. The second time, it's a little bit more troublesome, only because I think you can't say, well, I want to just be like all ordinary teenagers and get busted twice in a month if I want to, because you do have a certain responsibility to uphold a certain appearance.

BLITZER: I think, on the surface, when all is said and done, the way she's handled these twins is pretty impressive.

GERHART: Yes. I think she's worked very hard to have a family night that is normal for both the girls and for him.

She has created a haven for them in Crawford and certainly at Camp David. And she takes care to make sure he's stable. And no matter what side of the partisan divide you're on, I'm sure we can all be happy we have somebody who's got a good marriage behind him.

BLITZER: One daughter at Yale, one daughter at the University of Texas, you really can't complain about that.

Ann Gerhart, the book, "The Perfect Wife: The Life and Choices of Laura Bush." Thanks very much for joining us.

GERHART: Thanks for having me.

BLITZER: Back on the board. Ten weeks after a shark took her arm, a youngster competes again -- that and the results of our "Web Question of the Day." That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing in on our "Web Question of the Day." Take a look at this, remembering, though, it's not a scientific poll.

This note, we just got an e-mail moments ago from the Republican National Committee in response to my interview with George Soros. The RNC wants to clarify, it did not in any way suggest Mr. Soros compared the president to a Nazi, as assertions to the contrary are completely false. That's what the RNC just told us.

Let's hear from some of you, some of the e-mail we're getting.

Milton asks this: "Do you think that Paul O'Neill was a disgruntled fired employee or a true American patriot?"

Lewis writes: "Paul O'Neill has enjoyed for many years a superb and universal reputation in Washington for honestly, integrity, exemplary motives, patriotism, and blunt fearlessness in expressing his views. I'll take his word, especially his word backed by 19,000 pages of documents, over almost anyone else in this town."

Wilson, however, sends this: "Mr. Bush would have been remiss if he had not been discussing the ouster of Saddam Hussein, since our Congress declared it to be the U.S. official position in 1998."

In our picture of the day, a courageous decision by a shark attack victim. Look at this. Teenage surfer Bethany Hamilton was back in the surf over the weekend, just 10 weeks after she lost her arm in a shark attack.

That's it for us. "LOU DOBBS TONIGHT" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Asa Hutchinson; Insight Into First Family>


Aired January 12, 2004 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now. He was making stunning accusations against the president. Now former Treasury Secretary Paul O'Neill has become the target of an investigation.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Shadow over the summit. A cabinet controversy follows the president to Mexico.

Passenger profiles.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) of all American citizens attempting to fly could be flagged red or yellow.

BLITZER: What the government wants to know about you.

The perfect wife. A new book on Laura Bush, new insight into the first family.

ANNOUNCER: This is WOLF BLITZER REPORTS for Monday, January 12, 2004.

(END VIDEOTAPE)

BLITZER: Is it payback for bashing President Bush, or did a former high-level cabinet member break the law? At this hour, startling developments a day before the release of a tell-all book an ex-insider's view of the Bush White House.

The president joins his top aides in reacting to the allegations by the former Treasury Secretary Paul O'Neill. And the Treasury Department asks for an investigation as to how a possibly classified document appeared in a televised interview. We'll go live to CNN White House correspondent Dana Bash with the president at the Summit of the Americas in Mexico and to CNN's Allan Chernoff on the call for an investigation.

But first, the story the White House can't seem to shake.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): An important day in Mexico. President Bush at the Summit of the Americas. The White House wants to highlight security issues, trade immigration, but the president finds himself deflecting questions about an ex-cabinet member with a story to tell.

QUESTION: Is it true as your former Treasury Secretary Paul O'Neill says, that you started planning for the invasion of Iraq within days of your inauguration?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The stated policy of my administration towards Saddam Hussein was very clear. Like the previous administration, we were for regime change.

BLITZER: The new cycle, still dominated by former Treasury Secretary Paul O'Neill, whose revelations about early administration cabinet meetings are causing a political stir.

White House Press Secretary Scott McClellan says this appears to be an effort by O'Neill to justify his personal views and opinions. O'Neill, forced out of his job late in 2002 is the main source in journalist Ron Suskind's new book "The Price of Loyalty" focusing on firsthand accounts of Bush cabinet meetings during President Bush's first two years in office.

O'Neill spoke with "TIME" magazine and CBS's "60 minutes." In the TV interview, O'Neill said it wasn't September 11 that changed the administration's strategic thinking on Iraq.

PAUL O'NEILL, FORMER TREASURY SECRETARY: From the very beginning there was a conviction that Saddam Hussein was a bad person and that he needed to go.

BLITZER: In the book, O'Neill is quoted on the issue of removing Saddam. "It was all about finding a way to do it. That was the tone of it. The president saying, fine, go find me a way to do this."

O'Neill told "TIME" that as a member of the national security team he never saw anything he'd characterize as evidence of weapons of mass destruction in Iraq.

A senior administration official tells CNN, based on the level of information given to different members of that team, quote, "Rumsfeld and Tenet would know more than O'Neill."

Various accounts from O'Neill depict the president disengaged in cabinet meetings, not asking key questions or clarifying his positions.

O'Neill recalls a meeting where he pressed Mr. Bush for a cabinet-level debate on fixing Social Security, quote, "but he just sat back in his chair, his attitude was, I said this during the campaign, and whatever I said in the campaign must be right." Current cabinet officials say this isn't the boss they know.

DONALD EVANS, COMMERCE SECRETARY: He is -- drives the meetings, tough questions, he likes dissent. He likes to see debate. He thinks it's very healthy, very constructive for the process. BLITZER: O'Neill says of the Bush team, quote, "these people are nasty and they have a long memory." But he also says, "I'm an old guy and I'm rich, and there's nothing they can do to hurt me."

(END VIDEOTAPE)

BLITZER: Will the cabinet controversy cast a shadow over the very important Summit of the Americas underway right now? CNN White House correspondent Dana Bash is with the president in Monterey, Mexico -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, as you know, President Bush was hoping to come down here to have the headlines read he has a new beginning with his old friend, Vicente Fox, the president of Mexico.

But as you mentioned, the president was asked about this issue, was asked about Paul O'Neill's comments and the information that he gave. But the White House is really trying not to feed the news cycle as much as they can. To say as little as possible on this publicly.

That's why the president was careful not to answer the question as to whether or not he was betrayed. But he did -- and he was careful not to show he was angry.

(BEGIN VIDEO CLIP)

BUSH: I appreciate former Secretary O'Neill's service to our country. We worked together during some difficult times. We worked together when the country was in recession. And now we're coming out of recession, which is positive news. We worked together when America was attacked on September the 11th, which changed -- changed how I viewed the world.

(END VIDEO CLIP)

BASH: Now, the president did elaborate a little on the whole allegation that the war with Iraq started really from day one of the administration. He went into the fact that there were issues with Iraq from the beginning, went into the fact that the policy of regime change was in place when he took office. And again said that after September 11, that the is when his world view changed, and later on, of course, they decided to go to war with Iraq.

So this is really publicly as much as we're hearing from the White House, Wolf. Behind the scenes, as you can imagine, they are clearly not happy at all. White House officials saying that O'Neill was somebody who had a political tin ear even when he was in the White House talking about the fact he had a rocky tenure all along. So privately, their words are a lot more biting than they are publicly because they want to try to end this story as soon as possible -- Wolf.

BLITZER: CNN's Dana Bash at the Summit of the Americas in Monterey. The story, though, not going away. The Treasury Department is now looking into how a seemingly classified government document made its way into that television appearance last night by the former treasury secretary. Let's go live to CNN's Allan Chernoff in New York. What's happening on that front, Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: The department that Paul O'Neill used to run is talking about investigating him. A treasury spokesperson this afternoon said, based on the "60 Minutes" segment aired Sunday evening, there was a document that was shown that appeared to be classified.

It was referred to the U.S. Inspector General's office. Now during the segment, CBS did show a document that appeared to come from the National Security Council. It said NSC secret plan for post- Saddam Iraq.

But CBS says, "We did not show any secret document. We do not have secret documents, we showed the cover sheet that alluded to such documents." And the author of the book about O'Neill, Ron Suskind, told CNN moments ago that he had no secret documents, only the cover sheet.

Suskind also points out all the documents Mr. O'Neill received that were used for the book were given to O'Neill by lawyers at the Treasury Department after Mr. O'Neill made an official request for them -- Wolf.

BLITZER: Allan Chernoff with this part of the story, looks like it's going to continue for some time. Allan, thank you very much for that report.

To our viewers, here's your chance to weigh in on this important story, our web question of the day is this. "Do you believe Paul O'Neill when he says President Bush had pre-9/11 plans to go to war with Iraq. You can vote right now, go to CNN.com/wolf. We'll have the results later in this broadcast.

While you're there, I'd love to hear directly from you. Send us your comments any time, I'll try to read some of them on the air each day at the end of this program, that's also where you can read my daily online column, CNN.com/wolf.

And this note, Ron Suskind, the author of "The Price of Loyalty, George W. Bush, the White House and the Education of Paul O'Neill" will be my guests tomorrow this time on WOLF BLITZER REPORTS.

Taking on the president and he's putting up literally millions, millions of his own dollars to try and remove President Bush from the White House. We'll have a rare interview with the billionaire George Soros.

Controversial screening, a new computerized system to look into the background of all passengers boarding flights in the United States. Inside the White House and the life of its current first lady, Laura Bush, we'll have some insight into her life and choices. All of that coming up.

First though, today's news quiz. "Who was the youngest first lady?" Francis Cleveland, Mamie Eisenhower, Jacqueline Kennedy, Edith Wilson. The answer later in the show.

(COMMERCIAL BREAK)

BLITZER: Air travelers may soon have to give up some of their privacy if they hope to board their planes. Let's turn now to CNN's Jennifer Coggiola on the latest aviation security plans. Jennifer is over at Reagan National Airport, just outside Washington -- Jennifer.

JENNIFER COGGIOLA, CNN CORRESPONDENT: Hi, Wolf. Well, the TSA is expected to begin testing this CAPPS 2 screening system over the next couple of months and then rolling it out this summer, and it will include gathering some additional personal information from passengers. Now, that could mean safer flying, also some speedier security checkpoints, but is it an invasion of our privacy?

(BEGIN VIDEOTAPE)

DAVID STEMPLER, AIR TRAVELERS ASSOCIATION: It's a necessity that we really need to know who's getting on our airplanes, in terms of terrorists or hijackers.

COGGIOLA (voice-over): Under CAPPS 2, or Trusted Traveler, as it's also known, passengers be asked for their full name, home address, telephone number and date of birth.

That information will be verified against government and commercial databases, and a risk assessment will take place to confirm your ID and conduct additional screening, like a criminal background check for possible terrorist ties.

Finally, each passenger will be assigned his or her own threat level, using a color code system to rank your perceived threat to that flight. Red, you can't board. Yellow, you'll receive additional scrutiny at checkpoint. Green, you'll have a standard trip through security.

STEMPLER: The TSA tells us that it's going to decrease the number of people that are pulled aside for further checking, from 15 percent down to 5 percent. That's a real benefit.

COGGIOLA: The TSA says for most passengers, the information will be discarded within a few days, and only a few people will be inconvenienced.

JAMES CARAFANO, HERITAGE FOUNDATION: CAPPS 2 will be based on real world data. And so, my guess is that the number of people that will be actually looked at more closely will be actually much smaller, and will actually be people who might more legitimately represent a risk. COGGIOLA: But opponents argue the new system might help terrorists.

BILL SCANNELL, DONTSPYONUS.COM: CAPPS 2 will make flying less safer. It creates a system that will allow bad people to game the system and get access to our aircraft.

COGGIOLA: Others argue it's discriminatory and unconstitutional.

BARRY STEINHARDT, ACLU: It's going to be an incredibly invasive system. It's going to collect all sorts of information about us, which then is going to be used for purposes that go well beyond airline security.

COGGIOLA: Some airlines experimented with CAPPS 2 late last year, and based on their experience might be reluctant to participate again. Delta, the first airline to test the system, backed out after some groups boycotted the airlines citing privacy violations.

A year and a half ago, JetBlue Airlines was sued in several states after they admitted they turned over passenger information to the government.

But supporters argue once it's administered across the board, passengers will be grateful.

STEMPLER: Believe me, it's much more frightening when these people get on the airplane where they can wreck much more havoc than some of the restrictions we might experience in the pre-boarding and pre-screening process.

(END VIDEOTAPE)

COGGIOLA: Another initiative possibly being introduced is that frequent flyers could submit their personal information to the TSA ahead of time and get a special ID card that they could present when they travel. In return guaranteeing a speedier security checkpoint and also possibly getting their own separate entrance -- Wolf.

BLITZER: CNN's Jennifer Coggiola over at Reagan National Airport here in Washington. Thanks, Jennifer, very much.

Let's get some perspective on all of this. Joining us now is Asa Hutchinson of the Department of Homeland Security, he's undersecretary for border and transportation security. Mr. Secretary, welcome back. Thanks very much for joining us.

Let's get to some of the concerns. First of all, you heard the representative from the ACLU say this inevitably is going to be discriminatory. How do you respond to that?

ASA HUTCHINSON, UNDERSECRETARY FOR BORDER AND TRANSPORTATION SECURITY, HOMELAND SECURITY DEPARTMENT: Well, it's not going to be discriminatory, because it's going to be a system in which we try to identify people that ought to have a secondary inspection. Right now, it is random, it's based upon faulty assumptions, and it's not an effective tool in trying to determine who might pose a risk. This improves that system, reduces the number that might have secondary inspection, and so I do not see any discriminatory impact.

BLITZER: Let me interrupt you for a second, because some of the critics have suggested that if, for example, you have an Arabic name, you're automatically going to be getting a lot extra treatment, even if you're an American citizen, but if your name sounds like an Arabic name, if your name is Mohammed or Ahmed, you're going to be discriminated?

HUTCHINSON: Absolutely not. That is absolutely not the case. Rather than having a broad net, where we confusingly go through there and decide who's going to have a secondary screening, we're going to have a much more scientific-based system that relies upon identity, trying to confirm someone's identity, and look at other scenarios as to whether they would pose a risk or not, using commercial databases to look at that identity. None of this information will be retained. That is an important part of the privacy protection.

BLITZER: But you say you are going to hold onto it for how long?

HUTCHINSON: We will not hold onto it. It will be instantaneously, you know, deleted, once that -- from the government database -- once that decision is made as to whether they should have a secondary screening or not.

BLITZER: What about the fear that we just heard expressed in Jennifer's piece that a terrorist could get all the right credentials, get on that green, go right through security, but still trick the Transportation Security Administration?

HUTCHINSON: Well, that's what we're trying to do, is to develop a more sophisticated means of trying to determine who should have a secondary screening.

We're not going to broadcast exactly what the rules are for determining that, but we will be flexible, first of all, so that we can adjust our basis here to, what we believe, would be the particular threats that we're looking at.

Right now, they're able to game in the system. This improves that, and also minimizes the inconvenience to the traveler.

BLITZER: What do you say to those people who show up at the airport and someone at the counter says, we need your phone number, your home address, and they don't want to necessarily give that information out?

HUTCHINSON: Well, that is really information they've already given to the airlines, their name and address. This adds the date of birth. Is really the only information that's added. And I think most passengers would say, that's terrific, it helps facilitate my travel through and safety as well.

BLITZER: When people visit the White House, for example, they also have to make available their Social Security number. Why did you stop short and not ask for Social Security number as well?

HUTCHINSON: Wasn't necessary. And that's something that also should be used for Social Security purposes and not designed for the identification purposes. So it is not necessary and not appropriate to do that.

BLITZER: Are you expecting a court challenge right now to all of this?

HUTCHINSON: Well, first, let me emphasize that we're not even to the testing phase. This is a prototype in which we want to test to see how it works. If it meets our expectation and is a benefit to the passenger, as we expect, then we hope that we'll be able to proceed. We'll work with the privacy groups. We believe we will be fully compliant with all the privacy laws.

BLITZER: And bottom line, is this just one step in many steps you're using to try to protect the nation's aviation?

HUTCHINSON: That's the goal of it, is safety and convenience of the passengers.

BLITZER: Mr. Secretary, as usual, thank you very much.

HUTCHINSON: Thank you.

BLITZER: Good luck to you, good luck to all the people of the Department of Homeland Security.

The Bush administration will be allowed to keep secret the names of hundreds of people rounded up in the weeks after the 9/11 attacks. The Supreme Court today refused to hear an appeal by civil liberties groups, which challenged the secret arrests on constitutional grounds. More than 700 people, mostly Muslims or Arabs, were detained by federal authorities and investigated for possible terrorism connections. Almost all were eventually released, although many were deported for immigration violations.

An explosion in downtown Baghdad -- hours after an American soldier is killed by a homemade bomb. The latest on the violence plaguing Iraq.

And meet the man who's pledged millions, literally millions of dollars to defeating President Bush. We'll ask him why.

And he walked into the jaws of a lion, and he says he did it for a reason. We'll tell you all about it. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Central Baghdad was rocked by a large explosion just a short while ago. Witnesses say at least one rocket or mortar round was fired at the Palestine hotel which, of course, as all of our viewers know by now is very popular among international journalists. The hotel was not hit and there are no reports of casualties. Earlier, a roadside bomb exploded in the capital, killing one more American soldier and wounding two others. CNN's Satinder Bindra is in Baghdad with more.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT: The soldier was killed in a roadside explosion here in central Baghdad, at about 10:00 a.m. Also injured in this incident, two other U.S. soldiers. Meanwhile today, the U.S. administrator in Iraq, Mr. Paul Bremer, met with the visiting Spanish foreign minister, all this on a day when a powerful Shiite cleric Ayatollah Ali al-Sistani continues to oppose a U.S. plan to hold indirect or caucus-style elections.

Mr. Sistani who's the spiritual head of some 16 million Shiites here says he prefers direct elections. The United States says it's too late to hold direct elections. Despite these differences, though, the U.S. administrator here saying negotiations are continuing with Ayatollah Sistani.

PAUL BREMER, U.S. CIVILIAN ADMINISTRATOR: The governing council is in discussions with the Grand Ayatollah for whom we have the greatest respect and I think it's probably best if I leave those discussions between the governing council and the Ayatollah.

BINDRA: Also today U.S. forces confirming there was an incident near Samarra near the northern part of Iraq. They're saying U.S. forces ran into about 30 or 40 people who were trying to steal oil from a pipeline. U.S. forces asked them to surrender, when they didn't and opened fire, U.S. forces responded, killing seven Iraqi people. Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

BLITZER: In Afghanistan, dozens of suspected Taliban fighters today attacked a police checkpoint, killing at least four Afghan policemen. The assault was carried out in the southwestern part of the country. Suspected al Qaeda fugitives and Taliban fighters are believed to be hiding in the area. The Taliban, overthrown by the U.S. invasion in 2001, have regrouped and stepped up attacks against Afghan police and troops working with American forces.

A man with a mission. The mission, trying to oust President Bush from the White House. We'll have a rare interview with one of the Democrats' top donors George Soros. He'll join me live.

Plus, a young surfer competes, for the first time, since her almost deadly encounter with a shark.

And the woman behind the most powerful man in the world. Who is Laura Bush? We'll get to all of that. First, though, the answer to today's news quiz.

Earlier we asked, "who was the youngest first lady?" The answer: Francis Cleveland. In 1886, at just 21 years old, Francis Cleveland became the youngest first lady in history when she married President Cleveland. They're the only couple to be married in the White House.

(COMMERCIAL BREAK) BLITZER: Welcome back to CNN. Spilling secrets or spreading lies. Former Treasury Secretary Paul O'Neill's controversial comments, and now an investigation. First, a quick check of the latest headlines.

Rush Limbaugh is getting some support from an unaccustomed source, the American Civil Liberties Union. The ACLU is a longtime target of conservative criticism, but its Florida chapter filed court papers today supporting Limbaugh's right to keep his medical records secret. Prosecutors seized those records as part of the investigation into the Limbaugh's use of prescription painkillers.

A judge's decision to move Scott Peterson's murder trial out of Modesto, California is under fire. The decision was based in part on a survey suggesting many potential jurors in Modesto are biased. The "Modesto Bee" reports six of the college students who compiled the report now admit making up the results to save time, or because they couldn't afford long distance telephone interviews.

The former Roman Catholic bishop of Phoenix is on trial for a fatal hit and run. Thomas O'Brien who resigned after his arrest could get up to four years in prison. Jury selection started today. Opening statements could come late this week.

And Roger Clemens is postponing retirement. The six-time Cy Young award winner has agreed to a one-year, $5 million contract with his hometown Houston Astros. Clemens planned to leave baseball after pitching last season for the New York Yankees.

As we enter the 2004 election year, there's been a lot of talk about President Bush's very successful fund-raising efforts but the Democrats have big financial supporters as well. The financier, George Soros is determined to drive President Bush out of the White House, and he's donated millions of dollars on behalf of that goal. He's also the author of a new book, "The Bubble of American Supremacy, Correcting the Misuse of Power."

George Soros joins us now live. Mr. Soros, thanks very much, welcome to our program. Why are you so angry at President Bush?

GEORGE SOROS, THE SOROS FOUNDATION: I'm not particularly angry at President Bush. I'm very disturbed about the -- particularly the foreign policy of the United States. I consider it very dangerous for us and for the world.

BLITZER: But you've already given millions of dollars -- how many millions have you given away recently to try to get President Bush out of the White House?

SOROS: I have committed $10 million to one organization, Americans Coming Together, that's a grassroots organization to bring out the vote and $2.5 million to Moveon.org to -- which is sort of (UNINTELLIGIBLE) organization.

BLITZER: It's an organization that's been in the news lately, because, you know, of that controversial contest they had for ads, 30- second ads, designed to hurt, undermine President Bush, one of those ads in particular.

SOROS: Yes.

BLITZER: I want to play that, because it's a very sensitive issue, an ad that was on their Web site for about 10 days, which didn't win the contest, but made the comparison, an ugly comparison, between the president and Adolf Hitler.

Listen to this.

Now, Mr. Soros, I know you're a Holocaust survivor. How did that feel to see that kind of comparison, an organization having it on the Web site and making that kind of comparison?

SOROS: I absolutely condemn that kind of comparison. And it was one of 1,500 submissions. And I think they were not diligent enough not to put it on the Web site.

(CROSSTALK)

BLITZER: What did you tell MoveOn.org? You've given them $2.5 million.

SOROS: Right. And they themselves have repudiated it. And I repudiated it. So this is not the kind of comparison

(CROSSTALK)

BLITZER: Did they give you any indication that their hatred, if you will, of President Bush would stop at certain limits, because this seems to have gone way beyond any acceptable norm?

SOROS: Well, definitely.

And I think that they should not have been even accepted as a submission. But they certainly didn't choose that ad. So it's -- they have repudiated it, and I repudiate it. And it's been blown out of proportion, because, as I say, it's in a MoveOn ad. It's one of -- it's an open competition. Anybody can submit anything. The mistake was actually to accept this submission.

BLITZER: But the bottom line was that that was way over.

SOROS: Absolutely.

BLITZER: In your mind, as much as you're critical of President Bush, that goes way beyond any acceptable norm.

SOROS: Yes, yes.

But, you know, I have also been accused of comparing Bush to a Nazi. And I did not do it. I would not do it, exactly because I have lived under a Nazi regime. So I know the difference. But how come that I'm accused of that?

BLITZER: Who accused you of that? SOROS: The Republican national commission, or whatever, and a number of newspaper articles. And I -- you know, I think I really -- I'm upset about being accused of that. And I'm upset that I have to defend myself against this kind of accusation.

BLITZER: The -- I think what -- the articles that I read suggested, because of your having lived through the Nazi era, you have a special responsibility to educate people who didn't live through that. And I think the suggestion -- at one point, you had made some sort of allusion to your own personal background in explaining why you were so critical of the president.

SOROS: That's exactly right.

And then that has been distorted that I'm comparing the president to a Nazi. I mean, that is absolutely out of

(CROSSTALK)

BLITZER: Are there any of the Democratic candidates now that you are actively supporting?

SOROS: There are a number of them whom I would find very acceptable. I would say that -- that Dean, Wesley Clark, John Kerry, they all are pretty close to the positions that I would take.

BLITZER: That you feel comfortable with.

Now, this book, "The Bubble of American Supremacy: Correcting the Misuse of American Power," we don't have a lot of time, but what is the bottom-line criticism that you have? Is it the preemptive strike policy?

SOROS: Yes. It's the Bush doctrine, which I think is a dangerous doctrine and we have to repudiate it in the next election.

BLITZER: But if someone comes to kill you, isn't it your responsibility, if you're the president of the United States, to kill them first?

SOROS: Absolutely. And, in certain circumstances, you may be obliged to take preemptive action.

However, it should be done as a last resort. And the Bush doctrine has basically two pillars, because the first pillar is that we will not tolerate any strategic rival, either globally or regionally. And, secondly, we have the right for preemptive action. And that really means that, you know, we are something special. We are not obliged by international law and regulations, but everybody else is subject to our preemptive action.

BLITZER: All right, Mr. Soros, we, unfortunately, have to leave it there. You've spent $12.5 million. How many more millions are you going to spend?

SOROS: When I do, if I make a decision, I will be as open about it as I have been about this.

BLITZER: And in the "Washington Post" article, you were very open about it.

SOROS: Yes.

BLITZER: Thanks very much, Mr. Soros, for joining us.

The name of the book, "The Bubble of American Supremacy" -- there it is -- "Correcting the Misuse of American Power."

Appreciate it.

SOROS: Thank you.

BLITZER: Cheers and jeers for his tell-all book on the Bush administration. Is Paul O'Neill a hero or just a disgruntled former employee?

All eyes on Iowa, or not. We're on the trail with the candidates.

And she seems to be the perfect wife. Is there more to the first lady? We'll talk with the author of a new biography of the first lady.

We'll get to all of that. A quick look at the other news making headlines around the world first.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Sharon's promise. Israeli Prime Minister Ariel Sharon today promised to seek parliamentary approval before any unilateral troop withdrawals. Mr. Sharon has raised the possibility of a unilateral withdrawal from parts of the West Bank and Gaza if negotiations with the Palestinians fall through. The proposal has enraged many Israeli settlers in those areas. Tens of thousands of Israelis showed up for a protest demonstration yesterday.

Wrong turn. An Israeli cab driver is charged with driving a Palestinian suicide bomber to the site of a deadly attack near Tel Aviv last month. He's the first Israeli Jew to be accused under a law against helping Palestinians enter Israel without permits. The cab driver says he had no idea his passenger would turn out to be a suicide bomber.

Philippines fire. More than 20,000 people are homeless after a huge fire in Manila. Blamed on a gas tank explosion, the blaze destroyed thousands of shanties in a crowded slum area, but no deaths are reported.

Man vs. lion. A 22-year-old man who jumped into the lion pit at an Argentina Zoo is being treated for minor injuries and psychological problems. The man says voices from God told him to taunt the lion. The lion responded by pouncing on the man and biting him repeatedly. Gunshots from a police officer finally scared the lion away. Day for a queen. The world's largest ocean liner is beginning its maiden voyage. The Queen Mary 2 is beginning a 14-day cruise from Southampton, England, to Fort Lauderdale, Florida.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: More now on our top story, the former Treasury Secretary Paul O'Neill's controversial comments about President Bush.

Joining us, two guests, GOP pollster Kellyanne Conway, and, in Seattle, former speechwriter for President Clinton, Eric Liu.

Thanks to both of you for joining us.

What do you make, Kellyanne, of this Treasury Department investigation now into perhaps a classified document being shown on "60 Minutes"?

KELLYANNE CONWAY, REPUBLICAN POLLSTER: I'm glad that they're having that investigation, because it should strike everyone, regardless of their political affiliation, as very risky and very unseemly to have any former Cabinet secretary or someone in such a high level in government to try to disclose facts or evidence or even opinion that could put the national security at risk.

BLITZER: Eric?

ERIC LIU, FORMER CLINTON SPEECHWRITER: Well, you know, of course, you don't want classified information floating around.

I think it will be interesting to see whether this investigation is as vigorous in this investigation as they appear not to have been in investigating the leak of the information that was meant to punish the former diplomat who was critical of the war effort. That whole leak in which the administration basically outed a secret CIA agent seems to have disappeared. And the administration hasn't really followed up on it.

CONWAY: That's not true. The Department of Justice is investigating that. In fact, Attorney General Ashcroft has removed himself from those proceedings. That happened two weeks ago. I don't know if you were off on holiday break, but that's a very serious matter that is being investigated as we speak.

LIU: I certainly wasn't off on holiday break.

I think the ones who might have been are the people who are actually pressing this investigation. It's great that John Ashcroft is out of loop, but that doesn't ensure anything.

CONWAY: Not out of loop. He recused himself and in fact appointed people who can responsibly investigate it without assumed conflict of interest.

BLITZER: All right, let's not get off on a tangent.

Kellyanne, what do you make, though, of the inevitable cries of political payback, this Treasury Department probe of the former treasury secretary, Paul O'Neill, because of the very stinging comments he said about the president?

CONWAY: Those who would allege any kind of negative motive for an investigation of a classified document really should get past the politics.

Look, this is the president. He's not a pundit. And if national security details are being disclosed on national TV, that should trouble everyone. Apart from that, you have got to ask Paul O'Neill the following question. If put under oath, would you make the same claims?

And, No. 2, if your book is called "The Price of Loyalty," where exactly is yours? For example, if he heard of this in a Cabinet meeting in January 2001, why in the world did he stick around for two more years?

BLITZER: All right, Eric, what about that?

LIU: Well, look, I think that the problem that Paul O'Neill faced is that he made a colossal error in judgment.

When he signed on to work for this president, he expected the president to be engaged. He expected the president to be tolerant of dissent. He expected the president to be forthright with the American people on issues of life and death. And it turns out he was wrong on all three counts. I think he tried during his time there to make the best of it. And, as it turns out, he wasn't able to change the tenor of things in this administration.

CONWAY: Well, Eric, since when are you such a supporter of Paul O'Neill? Did you have nice things to say about the Bush-O'Neill tax package at the time?

LIU: I am no fan -- I don't know Paul O'Neill. I've never met the man. I'm not a particular fan of him.

I think the issue here isn't whether Paul O'Neill is a disgruntled employee or a hero. In my book, he's neither. The fact of the matter is, though, right now, he's told a story that the White House isn't really disputing. He's told a story about a president who was dead set from the beginning of finding any means necessary to go to war against Iraq. That story hasn't been disputed. He's told a story about

(CROSSTALK)

BLITZER: Well, let me interrupt, Eric, for a second. Let me interrupt. During the Clinton administration, an administration you worked in, wasn't it the policy of the Clinton administration, backed by Congress, to support regime change? And wasn't it $100 million funded by Congress, supported by the Clinton administration, to do precisely that in the late '90s?

LIU: You bet.

But the issue here isn't whether a war against Iraq was the right thing to do as a policy matter. We can have a different debate on that. The issue here is whether the president, President Bush, was going to act in good faith in trying to make a case to the people about that war. And he didn't. He trumped up a case about weapons of mass destruction.

CONWAY: Yes, he did.

LIU: He trumped up a case about the imminence of the threat.

(CROSSTALK)

LIU: And that, to me, says that he doesn't have the faith in the American people that he ought to have.

BLITZER: Go ahead, Kellyanne.

CONWAY: Well, the public actually disagrees with Eric and actually disagrees with Paul O'Neill's assessment, because we all know, and the CNN polling proves it, that the country still supports the president on his effort to win the war on terror. They're very supportive of that.

That aside, I presume that Paul O'Neill can neither be called a hero or disgruntled employee, so much as a guy who is trying to sell books. Why in the world would anybody buy a book

(CROSSTALK)

BLITZER: Wait a minute. Wait a minute.

Kellyanne, he's not getting a penny for this book. Ron Suskind is the author. He's collecting the royalties. Paul O'Neill is not getting any money for this book.

CONWAY: Well, not yet. But wait for the made-for-TV...

LIU: Paul O'Neill is a former CEO of Alcoa. He doesn't need the extra royalties that are going to be flowing in from this book to another person to do anything for him.

(CROSSTALK)

LIU: The idea that we ought to impugn Paul O'Neill's motives and do a smear campaign is exactly what this administration is being accused of.

CONWAY: I'm not.

(CROSSTALK)

CONWAY: I feel sorry for him. I actually feel sorry for Secretary O'Neill, because it takes a very, let's just say, weak person to turn against a former boss and a former set of principles and colleagues who you did fight in the trenches.

And I would say the same, Eric, about those former Clinton people who turned out writing books, Robert Reich, "Locked in the Cabinet," whatever that was about. I wasn't happy about that either. I think all these people have a free-market right to write books or to contribute books that they like. But they ought to be man enough to stand up to the repercussions if people who formerly trusted them then feel like they can't play ball. And is Paul O'Neill the first corporate titan that you've ever actually said something nice about?

(CROSSTALK)

LIU: The issue isn't whether Paul O'Neill is a good person or a bad person, whether he's a loyal person or not. The question is, did he tell the truth about this administration's efforts to hide the truth? And the answer seems to be yes.

CONWAY: Put him under oath and ask him.

BLITZER: Unfortunately, guys, we're going to have to leave it right there. This debate clearly not going away.

Kellyanne Conway, thanks for joining us here in Washington, Eric Liu in Seattle.

One week and counting, the COUNTDOWN to the Iowa caucuses clearly under way. Just ahead, the latest on this exercise in democracy.

And we'll catch up with the CNN Election Express that's rolling across the Hawkeye State. Our Bob Franken is standing by. We'll go there live.

(COMMERCIAL BREAK)

BLITZER: The first contest of this presidential election year is one week from today. Iowa holds its caucuses next Monday night. Right now, the contest is way too close to call, with Howard Dean and Dick Gephardt, though, leading the polls.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): When the stakes are this high, the blows can come low.

UNIDENTIFIED MALE: Howard Dean!

BLITZER: No one knows this better than front-runner Howard Dean. Campaigning nonstop in Iowa today, Dean continues dusting off criticism and attacks from rival camps. HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: They want to say that they're all against the establishment. They are the establishment.

BLITZER: With polls showing him in a statistical tie there with Dean, Richard Gephardt rallies with supporters in the Hawkeye State today, knowing every vote can make a difference.

REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: This is a jobless recovery, and there's a reason for it. His economic program stinks.

BLITZER: On the stump for a second-or-better showing in the caucus a week from today, John Kerry rallied with legislators on the steps of the Iowa state Capitol today. His message, stay tuned.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If you stay tuned over the course of next week, you're going to see a great roller-coaster ride here in the state of Iowa.

BLITZER: With the endorsement of "The Des Moines Register" this weekend and ever-growing poll numbers, John Edwards is out today to show he's a force to be reckoned with in the Hawkeye State.

Pie chart or no pie chart, Dennis Kucinich wants to rid himself of the fringe-candidate label. He's courting the young vote today, meeting with Iowa high school students.

Forget about Iowa. Wesley Clark is aiming for a New Hampshire win. And with just two weeks to go, recent polls show he's shooting ever closer to Dean. He's campaigning there today, before heading to Texas later this evening.

Joe Lieberman's jumping ahead, too. He's in Oklahoma and Arizona today, where he hopes to score late primary wins in February.

And that's our look at the 2004 presidential candidates on the trail.

(END VIDEOTAPE)

BLITZER: The CNN Election Express will be rolling across Iowa this week. Today's stop, Des Moines.

Our national correspondent Bob Franken is in the Iowa capital. His focus today, the polls and how the candidates are playing them -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, one of the things, Wolf, that has always been so puzzling is how the candidates can spend millions on polls and they can spend so much effort on endorsements and then pretend they don't care about them.

(BEGIN VIDEOTAPE)

FRANKEN (voice-over): The verbal choreography of any campaign has a certain sameness to it. Note how the candidate who is not leading the polls puts down the polls.

KERRY: Listen, folks, if we ran this campaign by polls, there wouldn't be a campaign. This is about people. This is about the people of Iowa who make up their minds, many of them in this last week. I am very, very confident about the momentum of my campaign.

FRANKEN: So, what does the candidate who doesn't have tangible evidence of momentum talk about? He finds intangibles in a silver lining.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: Well, the voters are seeing it, though. There's been a dramatic upsurge here in my campaign. And we go to these events now. Instead of being 50 people, which is what we expect, there are 200, 300, 400, 500, in some cases. And we've seen an enormous amount of energy.

FRANKEN: Newspaper endorsements probably matter. So do those from various political notables. The candidate who gets them embraces them. The others, well, they don't embrace them.

GEPHARDT: Endorsements are great, and you want all of them. But we've got a few newspaper endorsements. But what you really want is the endorsement of the Iowa caucus-goer. And that's what gets decided next Monday night.

(END VIDEOTAPE)

FRANKEN: So welcome to the expectation game. We can expect that the winner, of course, will claim victory at caucus. And we can expect that all the other candidates will say they did better than expected -- Wolf.

BLITZER: Bob Franken on the election campaign for us -- thanks, Bob, very much.

She's the woman behind the most powerful man on Earth. But as you probably imagine, there is much more to Laura Bush than what most of us see. "The Perfect Wife: The Life and Choices of Laura Bush" has some intriguing insight into the first lady.

The author, Ann Gerhart, joins me live here in Washington.

Ann, thanks very much for joining us. Congratulations on the book.

In all your research of Laura Bush, what's the most surprising thing you learned?

ANN GERHART, AUTHOR, "THE PERFECT WIFE": The most surprising thing I learned is, almost all of her really close friends are Democrats. So...

BLITZER: And why is that so surprising, because she's the wife of a Republican president?

GERHART: That's right. I think that she comes out of Texas, and she's a quiet reserved, modest woman. I think that the impression is just that she'll fall in line behind him. She certainly is always backing him up every step of the way. But I think there's a possibility she might be in a mixed marriage. He's more conservative, she's more liberal, which, of course, mirrors many marriages of many Americans.

BLITZER: It's not unusual, as all of us know.

GERHART: Right.

BLITZER: Let's talk a little bit about the Laura Bush that we all see on television, that we've come to know these past few years. She does seem almost perfect.

GERHART: Well, she certainly is the perfect wife for him.

He always said back in Texas, I have the perfect wife for the line of work I'm in. She doesn't try to steal the limelight. And I think that's what she does. She supports him wholeheartedly. She never makes herself part of the story. I think that, in a nation trying to recover from Hillary fatigue, as some call it, she's the antidote for that.

BLITZER: But when she does speak out on education, for example, reading, she comes across as so sincere, so committed. Is there another side that we're missing for some reason?

GERHART: No. I think that she is quite sincere about what she wants to do.

I think one of the things that makes it hard for people to feel they know her is, she's an incredibly modest person. In this kind of celebrity culture, finding someone who really has no interest in getting attention for herself is quite unusual.

BLITZER: But isn't that so good, to find a really modest person who doesn't necessarily believe all the press clips?

GERHART: Well, sure. I think that that's one of the reasons she's enormously popular, and across the board.

A lot of polls suggest that even among people who don't support her husband's policies, they like her a great deal.

BLITZER: There's one quote from the book. Let me put it up on the screen: "Even after Jenna was busted for underage drinking twice in four weeks, Laura's feeling was that her girls were just behaving like ordinary teenagers. The twins were just singled out for unfair attention because of who they were, she believed."

Isn't she right? If they were just normal kids, with not the president and the first lady, who would care if they had a fake I.D. or anything along those lines?

GERHART: Well, I think, certainly, with that first arrest, that's the case. The second time, it's a little bit more troublesome, only because I think you can't say, well, I want to just be like all ordinary teenagers and get busted twice in a month if I want to, because you do have a certain responsibility to uphold a certain appearance.

BLITZER: I think, on the surface, when all is said and done, the way she's handled these twins is pretty impressive.

GERHART: Yes. I think she's worked very hard to have a family night that is normal for both the girls and for him.

She has created a haven for them in Crawford and certainly at Camp David. And she takes care to make sure he's stable. And no matter what side of the partisan divide you're on, I'm sure we can all be happy we have somebody who's got a good marriage behind him.

BLITZER: One daughter at Yale, one daughter at the University of Texas, you really can't complain about that.

Ann Gerhart, the book, "The Perfect Wife: The Life and Choices of Laura Bush." Thanks very much for joining us.

GERHART: Thanks for having me.

BLITZER: Back on the board. Ten weeks after a shark took her arm, a youngster competes again -- that and the results of our "Web Question of the Day." That's coming up next.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing in on our "Web Question of the Day." Take a look at this, remembering, though, it's not a scientific poll.

This note, we just got an e-mail moments ago from the Republican National Committee in response to my interview with George Soros. The RNC wants to clarify, it did not in any way suggest Mr. Soros compared the president to a Nazi, as assertions to the contrary are completely false. That's what the RNC just told us.

Let's hear from some of you, some of the e-mail we're getting.

Milton asks this: "Do you think that Paul O'Neill was a disgruntled fired employee or a true American patriot?"

Lewis writes: "Paul O'Neill has enjoyed for many years a superb and universal reputation in Washington for honestly, integrity, exemplary motives, patriotism, and blunt fearlessness in expressing his views. I'll take his word, especially his word backed by 19,000 pages of documents, over almost anyone else in this town."

Wilson, however, sends this: "Mr. Bush would have been remiss if he had not been discussing the ouster of Saddam Hussein, since our Congress declared it to be the U.S. official position in 1998."

In our picture of the day, a courageous decision by a shark attack victim. Look at this. Teenage surfer Bethany Hamilton was back in the surf over the weekend, just 10 weeks after she lost her arm in a shark attack.

That's it for us. "LOU DOBBS TONIGHT" starts right now.

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Asa Hutchinson; Insight Into First Family>