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THE SITUATION ROOM

Momentous day On Capitol Hill; Some Things May Get Lost In Shuffle Next Week On Capitol Hill; Jim Webb Interview; House Administration Committee Investigating Contested Florida House Race

Aired January 4, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time. Standing by, CNN reporters across the United States and around the world to bring you today's top stories.
Happening now, the power shift in Congress is complete. The anticipation for action grows.

Will the new Democratic leaders make good on their promises or will they fall into the old ways of stalemate and sniping?

This hour, we'll bring you all the historic images of this day on Capitol Hill.

And we'll read between the lines of the Democrats' jam packed agenda.

Is there something missing from their to-do list in the first 100 hours?

The White House isn't letting Democrats grab, necessarily, all the attention. Some striking new developments happening today involving the comings and goings of two top officials and the war in Iraq.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

For the first time in a dozen years, Democrats now control both the House and the Senate. And for the first time ever, a woman is speaker of the House.

The gavel passed to Nancy Pelosi a couple of hours ago. She is now second in line of succession to the presidency after the vice president, Dick Cheney.

Now that they've been sworn in, members of the 110th Congress have their work cut out for them.

Their first order of business in the House?

Reforming ethics rules. On Tuesday, House Democrats launched their first 100 hours agenda, pushing ahead with many more of their legislative priorities. In the typically slower moving Senate, Democrat Harry Reid now is the majority leader. He now holds the distinction of being the highest ranking Mormon in the U.S. government.

Reid tried to open this momentous day on a bipartisan note. He invited senators of both parties to a rare closed door conference in the old Senate chamber.

Our Congressional correspondent, Dana Bash, has been following all of the action on Capitol Hill.

She's joining us now live with more -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, at this hour, both the House and the Senate have sort of settled into their regular order of business. But the air is still crackling with the electricity of the day's events.

Of course, the main event was in the U.S. House of Representatives. Nancy Pelosi getting the speaker's gavel and with it the power for the Democrats, as you said, for the first time in 12 years.

And before she did anything, she took a moment to relish in her own history.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER ELECT: It's an historic moment for the women of America. It is a moment -- it is a moment for which we have waited over 200 years, for our daughters and our granddaughters. Today we have broken the marble ceiling.

(END VIDEO CLIP)

BASH: And Nancy Pelosi made a point, after she took the gavel, to say that she did it in the spirit of partnership and not partisanship. But she also wasted no time in hitting the president on the issue that she has said many times really brought her and her fellow Democrats into power.

(BEGIN VIDEO CLIP)

PELOSI: The election of 2006 was a call to change, not merely to change the control of Congress, but for a new direction for our country. Nowhere were the American people more clear about the need for a new direction than in the war in Iraq.

(END VIDEO CLIP)

BASH: But Democrats in the House will not start using their new power, at least on the floor of the House, dealing with Iraq at all. Instead, they are going to turn to the domestic agenda that they promised to deal with during the campaign, first and foremost, today they're starting with changing some of the rules governing their own ethics and how they deal with lobbying and things like that. Now, next week, they are going to start the clock ticking on 100 hours of legislative business dealing with everything from a hike in the minimum wage to lifting the ban -- or lifting the limits, I should say, on embryonic stem cell research -- Wolf.

BLITZER: Dana, on the Senate side, lots of talk of bipartisanship, though -- does it seem that that's going to hold?

BASH: You know, it's -- that's a -- that's the $64,000 question, for sure. But it was interesting the way the Senate started the day, Wolf. Usually what we see here every week is senators on the Republican side and the Democrat side meeting, but doing so in separate rooms.

Well, intentionally, Harry Reid, the new Senate majority leader, called all of the senators -- Republicans and Democrats -- together. They met in the old Senate chamber in the Capitol to privately discuss what senators coming out told us was ways to actually achieve what they've been talking about -- bipartisanship.

And then we actually saw another picture which we had not see here in a long time -- the majority leader, Harry Reid, and the new minority leader, Mitch McConnell, coming out and talking to reporters side-by-side and then going to the floor saying that they have to work together.

For Harry Reid, Wolf, it is really a necessity, unlike the House, where they can make rules that they can really stick by and help pass their agenda. The Senate it's nothing like that and it is, of course, razor thin. They have a majority by just one vote. So Harry Reid needs to actually stick by the words he's talking about, which is trying to work with the Republicans -- Wolf.

BLITZER: Two very different legislative bodies, indeed, with lots of different rules.

Dana, thanks very much.

And as Dana mentioned, the House Democrats' first 100 hours, as they're calling it, begins next week. It includes the hours they're in session working on legislation. So it actually will last around two weeks or so.

Here's what they hope to accomplish during these first 100 hours.

On Tuesday, January 9th, Democrats want to implement the 9/11 Commission recommendations fully.

The goal for Wednesday, increase the federal minimum wage.

On Thursday, Democrats want to tackle another issue many voters care about -- expanding stem cell research.

On the agenda for Friday, January 12th, legislation to allow the government to negotiate lower prescription drug prices for Medicare recipients. On Wednesday, January 17th, Democrats hope to cut interest rates on student loans.

The next day, they'll try to push through legislation to end subsidies for big oil and to invest in renewable energy.

An ambitious agenda for the first 100 days.

In the whirlwind of activity on Capitol Hill next week, some things may get lost in the shuffle.

Let's turn to our senior political analyst, Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, it's not what politicians are talking about, but what they are not talking about, that's most important.

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): There are a lot of things on the House Democrats' agenda.

PELOSI: Passing the 9/11 Commission recommendations; raising the minimum wage; making college more affordable; advocating stem cell research.

SCHNEIDER: What about the Bush administration's two signature policies -- tax cuts and the war in Iraq?

You can argue Iraq was the issue that brought Democrats to power.

Don't they have a mandate to do something about it?

SEN. HARRY REID (D-NV), MAJORITY LEADER: Iraq is where it is. The country is where it is. Iraq is an issue that we all need to work on and we will work on that.

SCHNEIDER: The problem is there's not a lot Congress can do about an ongoing military policy.

SEN. CARL LEVIN (D-MI), INTELLIGENCE COMMITTEE: No one is going to cut off funding to the troops that I know of.

SCHNEIDER: But they can make sure the cost of the war is evident. Democrats say they will no longer treat military spending in Iraq as emergency spending outside the regular budget.

Senate Democratic committee chairmen will hold hearings to look into what went wrong in Iraq and what to do next.

LEVIN: We have to examine whatever the president is going to propose.

SCHNEIDER: President Bush is daring Democrats to challenge his tax cuts. GEORGE BUSH, PRESIDENT OF THE UNITED STATES: We kept taxes low.

SCHNEIDER: You want to roll back my tax cuts, President Bush is saying?

Go ahead, make my day.

House Democrats are dealing with taxes obliquely, by proposing a new so-called pay-go rule. That means new spending must be paid for by cutting spending on other programs or by raising taxes.

PELOSI: No new deficit spending. That will be part of the rules of the House.

SCHNEIDER: Republicans may not fall for it.

THOMAS MANN, BROOKINGS INSTITUTION: Most Republicans still believe in tax cuts and they want to exempt tax cutting from any so- called pay-go rule, only apply it to spending.

(END VIDEO TAPE)

SCHNEIDER: Some other big ticket items Democrats are not talking about right now -- health care reform, Social Security reform, Medicare reform, immigration reform.

Why not?

Too big, too difficult, too controversial. They want to concentrate on things they can actually get done -- Wolf.

BLITZER: We'll see what they get done in those first 100 hours.

Thanks very much, Bill Schneider, for that.

The Democrats' big day here in Washington is proving to be surprisingly busy over at the White House, as well.

Major personnel changes and the situation in Iraq very much on the president's agenda.

Let's turn to our White House correspondent, Ed Henry -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, all kinds of shuffling here. The White House will not officially confirm it yet, but a senior U.S. official says the president will nominate Zalmay Khalilzad. He'll be nominated at the U.S. ambassador to the United Nations. He'll be replaced by Ryan Crocker. He's been the U.S. ambassador to Pakistan. Now he'll go over and be U.S. ambassador to Iraq.

What the White House will confirm is that John Negroponte will be leaving as director of National Intelligence. He's moving over to be number two at the State Department, to Secretary Condoleezza Rice. Already, that being met with some static. He's going to be replaced by the Retired Vice Admiral Mike McConnell. Democratic Senator Jay Rockefeller, the Intelligence chairman, up on Capitol Hill, is complaining that the is a void of leadership in the intelligence community, noting that Negroponte's former deputy, General Michael Hayden, has not been replaced since months ago. He became CIA director.

Now, the White House is pushing back there and saying they think Negroponte is uniquely qualified to be the number two at the State Department. He'll be helping to shape and implement the president's new Iraq policy. That expected, of course, to be unveiled next week.

We're now hearing the president will give a prime time address. It's likely to be Wednesday or even slip back to Thursday, not earlier in the week, as we had originally heard. What aides here are saying is the president is likely to call for a surge of U.S. troops. One official saying it will be on the lower end of the 20,000 to 30,000 U.S. troops surge into Iraq.

It's a new political reality for the president, though, that he will be trying to sell this to a very skeptical Democratic Congress. But top White House officials like Rob Portman, the White House budget director, insist they think the president will still be driving the agenda and can find compromises with Democrats.

(BEGIN VIDEO CLIP)

ROB PORTMAN, WHITE HOUSE BUDGET DIRECTOR: The president is more on offense than on defense. He has strong views of his own. He wants to be proactive. He wants to be involved, not just on the international issues -- clearly, the war in Iraq and the war against terrorism -- but also on the domestic front.

So you'll continue to see a president who's very engaged.

(END VIDEO CLIP)

HENRY: Now, that engagement today included a secure videoconference between the president and the Iraqi prime minister, Nouri Al-Maliki. We're told it was supposed to last only an hour, but it lasted an hour and 45 minutes, an idea it gives you, of just how much of a heavy agenda the president has on Iraq.

And next hour he's going to be meeting here at the White House with the German chancellor, Angela Merkel -- Wolf.

BLITZER: And there's another major personnel change at the White House that's happening. The president losing his counsel.

HENRY: That's right, Harriet Miers. Not unexpected. It was expected she would leave after, of course, a disappointment that she felt conservatives blocking her from being elevated to the Supreme Court. And, also, White House aides note publicly that she's been on board for six years. She's tired, like a lot of other officials. It would make sense for her to leave.

But I'm told by other officials privately that there is another big reason for her to leave, and that's because she's mild-mannered and the White House now is looking for a very suggestive White House counsel. That's because the counsel is on the receiving end of those subpoenas likely to come from new Democratic chairmen like John Dingle, Henry Waxman.

As you know, they're going to launch all kinds of investigations on Iraq and other issues. Bill Clinton, for example, went through four or five White House counsels as he dealt with all those various investigations on the Hill -- Wolf.

BLITZER: And a lot of our viewers remember she was nominated by the president to be a Supreme Court justice, but that nomination withdrawn amid some controversy.

Thanks very much for that.

Ed Henry reporting.

Ed, Bill Schneider, Dana Bash, they are all part of the best political team on television.

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

Jack Cafferty also part of that excellent political team.

He's joining us with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Thank you, Wolf.

Well, another day, another outrage. President Bush is now claiming that he can open our mail without a warrant. We'll have more on that in the next hour.

Next week, he's expected to announce an escalation of the war in Iraq. Tens of thousands of additional U.S. troops being sent into harm's way.

The administration says it needs another $170 billion this fiscal year to continue to fund the wars in Iraq and Afghanistan.

But the Democrats are focused on raising the minimum wage. That's fine, I guess. They've already said they won't impeach President Bush. They've already said they won't cut funding for the war. And several Democrats are heading on the issue of independent ethics oversight of Congress.

Gee, we don't need that, do we?

Senator Barack Obama suggests in an op-ed piece in the "Washington Post" today -- and he's absolutely right -- that if you don't have someone to enforce ethics reform -- enforce it -- nothing is going to change.

The voters want something meaningful done. It's one thing to talk the talk leading up to the elections. But now that they've won, it's time for the Democrats to walk the walk and there are some early signs they may be coming down with leg cramps.

This country is being ripped apart by an ill-advised war that's failing and an executive branch that's run amok. If the Democratic Party refuses to confront this administration in a meaningful way on the issues that are threatening the very survival of our nation, then they're no better than the people committing these crimes.

So here's the question -- how much faith do you have that the Democrats can stop the war and reign in President Bush?

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

BLITZER: Jack will be back with your e-mail later this hour.

Jack, thanks very much.

Coming up, he's one of the new freshmen that healed the Democrats retake the Senate. We'll be speaking live with Senator Jim Webb of Virginia. He'll join us to talk about his new positions in the U.S. Senate and what he thinks should be done right now about the war in Iraq.

Plus, Nancy Pelosi wasn't the only one making history today on Capitol Hill. I'll tell you about a religious first in the Congress.

And later, he didn't make it to the Senate, but he's making it into our Strategy Session -- outgoing Maryland Lieutenant Governor Michael Steele. He's standing by to join us right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

For a second straight day, the anti-war activist Cindy Sheehan tried to get out her message by upstaging Democrats on Capitol Hill. She showed up at a House office building earlier today and unfurled a banner. She was given a choice to leave the premises or be arrested. She opted to leave and was escorted away.

Iraq was the signature issue in Senator Jim Webb's campaign. The newly sworn in Democrat from Virginia sealed his party's control of the Senate when he defeated Republican incumbent Senator George Allen in November.

Senator Jim Webb is joining us now live from Capitol Hill.

Senator, thanks very much for coming in.

SEN. JIM WEBB (D), VIRGINIA: Well, thank you for having me, Wolf.

BLITZER: Is it fair to say Iraq was the major issue that divided you from George Allen? WEBB: No, not really. The issues of national security, including Iraq, were one. But I think an equally important issue for us were the issues of economic fairness, with what has happened in the -- the great migration of wealth toward the top 1 percent in this country and outsourcing and all of those issues. I think we had an enormous amount of support from people who are concerned about that, as well.

BLITZER: You're referring to tax cuts, among other issues.

Let me go to Iraq, because I really want to get your sense on this debate that's unfolding right now on this so-called surge, an escalation, more U.S. troops being sent to the region.

You're going to be on both the Senate Foreign Relations Committee, as well as the Senate Armed Services Committee now that you're a member of the Senate.

The chairman of the Armed Services Committee, Carl Levin, is quoted in the "New York Times" today as saying this about this military increase: "If it's truly conditional upon the Iraqis actually meeting milestones and if it's part of an overall program of troop reduction that would begin in the next four to six months, it's something that would be worth considering."

Contrast that to the chairman of the Foreign Relations Committee, Joe Biden, who says simply about a surge: "I just think a troop surge is the absolute wrong strategy."

Where do you stand in this debate?

WEBB: Well, actually, I -- what I see, as much as anything, is that this is a tactical issue, a political issue, rather than a strategic issue. I was saying all the way from early 2002 that one of my great concerns was that this administration had not articulated a clear strategy with respect to what we should be doing in Iraq and when we would know that we were done.

And that's one of the focuses that I would like to have on this.

In terms of the troop surge itself, if that's what is going to occur, as you know, over the past several years, the numbers have oscillated. They've gone up and down depending on holding units in place and bringing units in a little early and those sorts of things.

And it's a commander-in-chief prerogative given the authority that was given to the administration through the legislative act of 2002.

So I would like to hear from the administration what the strategy is for what they call success in Iraq.

BLITZER: So it sounds to me like you're closer to Carl Levin and, at least right now, you have an open mind. You want to hear what the president has to say and if it makes sense, you'll go along with it? WEBB: Well, what I really would like to -- to focus on in the part that I am able to play in these hearings is the articulation of a clear set of goals with an end point. I mean u don't h a strategy if you cannot clearly articulate the end point of your strategy. That's been the frustration all along.

And so we find ourselves in these arrangements about whether putting 20,000 or 30,000 more troops in and holding them longer is going to affect the overall solution in Iraq.

We do know one thing, and that is that they're going to -- if this is what occurs -- they're going to affect the strain on the ground forces in the Army and the Marine Corps, and possibly some of the troop rotations. We know that.

But what I want to be able to focus on is trying to get a clear statement of what we're going to do and how we're going to end it. And in that respect, I'm probably closer to what Senator Levin was quoted as saying than Senator Biden, but we want to really have a good discussion. And we're getting a little ahead of ourselves, I think.

BLITZER: If the president disappoints you, could you envisioning yourself moving closer to someone like Democratic Congressman Dennis Kucinich of Ohio, who says it's time to use the power of the purse and stop the funding for the war, if necessary, to bring the troops home?

WEBB: I -- you know, I lived through Vietnam. I lived through it as a Marine and I know that those sorts of approaches, while they seem attractive on one level are really not that realistic.

What we want to do -- and I was talking with a number of senators today -- is to try to get some of these so-called emergency legislation packages back into the committee process so that the committees can actually play.

BLITZER: Well, what about the execution of Saddam Hussein?

We all saw that cell phone video. It was not the way these executions are supposed to unfold.

What does this say about the situation in Iraq, from your perspective?

WEBB: Well, I -- I'm a little disappointed that we did not exert more influence on the Iraqi government with respect to the execution of Saddam Hussein. We've got a lot of people at risk inside Iraq and in terms of accentuating the emotions that are in play there.

But in a larger sense, what we really need to do is to get into the arena where we can talk about a strategy, talk about the pluses and the minuses of the Baker-Hamilton Commission and work toward a solution that, on the one hand, will allow us to remove our combat troops, but on the other, will increase the stability of the region, allow us to continue to fight against international terrorism and allow us, as a nation, to address our strategic interests around the world. And this is -- this is one of the drawbacks that we've had with so many troops having been put into this constant rotational basis inside one country when we have a war against international terrorism that's global.

BLITZER: Jim Webb, the new senator from Virginia, the Democratic Senator from Virginia.

Congratulations, Senator.

WEBB: Thank you very much.

BLITZER: Thanks very much for coming in.

We hope you'll be a frequent guest here in THE SITUATION ROOM.

WEBB: great to be with you.

Thank you.

BLITZER: Thank you, Senator.

And snapshots from today's power shift in Congress. Minnesota Democrat Keith Ellison now is the first Muslim to ever serve in the Congress. In a move drawing some controversy, Ellison was sworn in on a Koran. That particular copy of the Muslim holy book was once owned by Thomas Jefferson.

We'll have a full report on that historic moment. That's coming up in our 7:00 p.m. Eastern hour.

Senator Trent Lott of Mississippi officially made his come back today in the Republican leadership. Four years after he was ousted as Senate majority leader, Lott is now the new Senate minority whip, the number two Republican in the U.S. Senate.

Absent from today's ceremonies, Democratic Senator Tim Johnson of South Dakota. He's still recovering from brain surgery in a Washington hospital. His office says a new test shows Johnson's blood vessels no longer are tangled, the condition that sent him to the hospital. But his doctors believe he'll be laid up for several more months. We wish him a speedy recovery.

Coming up, he was sworn in today as a member of the United States Congress. But his victory still isn't secure. Up next, we'll take a closer look at one race from the November election that's still up in the air.

Plus, a new Congress with some old challenges.

Will the Democrats succeed where Republicans couldn't?

I'll ask Donna Brazile and Michael Steele. They're both standing by for today's Strategy Session.

We'll be right back. (COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time. Happening now, Washington as we've known it for the past 12 years has been turned upside down. Democrats Nancy Pelosi and Harry Reid now are in charge of the House and the Senate. The first woman to serve as House speaker is already trying to push through some top priorities, including a change in ethics rules.

Administration officials say National Intelligence Director John Negroponte will resign his post to become deputy secretary of defense. The president reportedly reached out to Negroponte to make the job switch to boost diplomatic efforts in Iraq.

Retired U.S. Admiral Mike McConnell is expected to be nominated to replace Negroponte.

Other personnel changes -- Harriet Miers has resigned as the White House counsel. She once was the president's choice for a seat on the U.S. Supreme Court, but she pulled her name amid some controversy.

And the U.S. ambassador to Iraq, Zalmay Khalilzad, is expected to be nominated as the next U.S. ambassador to the United Nations, replacing John Bolton.

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

Now the power shift on Capitol Hill by the numbers -- in the old Senate, Republicans held 55 seats. Democrats controlled 45 seats. In the new Senate, Democrats control 51 seats, giving them a one-seat majority over Republicans, who hold 49 seats.

In the old House, Republicans held 232 seats, for the Democrats, 203. In the new House, the Democratic majority controls 233 seats. The Republicans hold 202 seats in the new House of Representatives.

Republican Vern Buchanan is among the Congress members who were sworn in today. That's even though his Democratic opponent in Sarasota County still is contesting Buchanan's victory. Democrat Christine Jennings wants the election results thrown out because some 18,000 ballots cast on touch-screen voting machines failed to record a vote.

Our national correspondent, Susan Candiotti, has been following this story, and joins us with more -- Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Wolf, the House Administration Committee is investigating the contested race. And, if there is evidence of a machine malfunction, there could be a revote. So, even though Vern Buchanan has been sworn in, the election remains under scrutiny by Congress, in the courts, and by voters back home.

(BEGIN VIDEOTAPE)

JOYCE BRYANT, VOTER: We are voting people. So, my vote -- I take my vote very serious, very.

CANDIOTTI (voice-over): Floridian Joyce Bryant remains skeptical her vote and others might not have been counted, let alone taken seriously. Only 369 votes separated GOP winner Vern Buchanan from Democrat Christine Jennings in the race to replace Republican Katherine Harris.

Bryant is one of many voters who suspect Florida's ES&S touch- screen machines did not register her vote for Democrat Jennings until Bryant caught the error in time. She wonders whether others, especially older voters, were as observant as she was.

BRYANT: When I got to the review page, it wasn't there. I corrected it. Was counted for. But look at all the other people that did not get that far. And you have a lot of people that are very afraid of machines.

CANDIOTTI: Republican Vern Buchanan is the newly sworn certified winner, but Jennings is not giving up. After failing a state-run recount, Jennings is appealing last week's Florida court ruling rejecting her touch-screen machine challenge -- at issue, why 18,000 electronic ballots in Sarasota County did not record a vote in that race.

CHRISTINE JENNINGS, DEMOCRATIC CHALLENGER: I believe the Congress will deal with this. I believe they have to deal with this. Voter confidence is one of the most important things in this country.

CANDIOTTI: Congressman Buchanan says it's time for Jennings to move on.

REP. VERN BUCHANAN (R), FLORIDA: I plan on going to work for the people. And I think the machines work, and we won the vote, and it's sour grapes.

(END VIDEOTAPE)

CANDIOTTI: Sour grapes or not, next election, things should be different in Sarasota County. In November, voters there decided to get rid of those electronic touch-screen machines, in favor of optical scanners, where you fill in a ballot by hand -- Wolf.

BLITZER: Susan Candiotti with that story, an important story we will continue to watch here in THE SITUATION ROOM.

Fredricka Whitfield is joining us now from the CNN Center with a closer look at some other important stories making news.

Hi, Fred.

FREDRICKA WHITFIELD, CNN ANCHOR: Hello to you, Wolf.

Well, this information, we are just learning from the Associated Press, saying that the energy secretary Samuel Bodman, is announcing the dismissal of the head of the U.S. nuclear weapons program, because of security breakdowns at weapon facilities, including Los Alamos Laboratory in the state of New Mexico.

Linton Brooks was to submit his resignation as chief of the National Nuclear Security Administration within the month. The energy secretary, Bodman, says that the agency, under Brooks' leadership, who is a former ambassador and arms control negotiator, had failed to adequately correct the security problems that had existed.

Meantime, marketers of four weight-control pills will pay a total of at least $25 million to settle allegations of deceptive marketing. Xenadrine EFX, CortiSlim, TrimSpa, and One-A-Day WeightSmart will use the money for refunds. The Federal Trade Commission says the weight- loss and weight-control claims by the company are not supported by evidence.

In Baghdad today, at least 13 people were killed and 22 wounded when a pair of car bombs ripped through a crowd of people waiting in line to buy heating oil. Seven other people were killed, and nearly a dozen more wounded in mortar and bomb attacks around the city.

Separately, police say they found 47 bodies, mostly showing signs of torture, dumped around Baghdad.

And, just hours ago, four Palestinians were killed by Israeli troops in Ramallah. One Israeli official says the troops were involved in a botched raid and encountered more resistance than expected. He says, a wanted Palestinian who was the target of the operation was not captured. The Israeli military says four wanted Palestinians were captured and that a fifth got away. Palestinian officials condemned the raid.

And the leaders of Israel and Egypt held talks on the stalled peace process today, but no breakthroughs are being reported. Israeli Prime Minister Ehud Olmert and Egyptian President Hosni Mubarak held a joint news conference just a short time ago. Mubarak urged Israel to hold talks with Syria and to pursue peace with the Palestinians, despite the rise of the militant Hamas. Olmert says Israel is willing to meet with some Palestinian leaders, but rejected any dealings with Hamas -- Wolf.

BLITZER: Thanks, Fred. Been quite a while since Olmert and Mubarak have met. At least they are meeting. At least they are talking.

Thanks very much for that.

Up ahead: The new Senate majority leader, Harry Reid, he is promising to reach across the aisle to Republicans. But will the 110th Congress see unity or party-line division? Democratic strategist Donna Brazile and the outgoing Maryland lieutenant governor, Michael Steele, they are standing by live to join us in today's "Strategy Session."

And now that the Democrats are in the majority, what do they plan to do about the war in Iraq? I will speak with Pennsylvania Congressman John Murtha. All that is coming up, right here in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Welcome back.

The 110th Congress is just four-and-a-half-hours old, and Democrats and Republicans are pledging bipartisanship. But how long will this honeymoon last?

Joining us in today's "Strategy Session," CNN political analyst and Democratic strategist Donna Brazile, and Michael Steele, the outgoing lieutenant governor of Maryland. He was the former Republican candidate for the U.S. Senate from Maryland, came in second in that race.

LT. GOV. MICHAEL STEELE (R), MARYLAND: Came in second, yes, a close second.

(CROSSTALK)

BLITZER: Not good enough.

(LAUGHTER)

BLITZER: We will get you to in a moment.

You just gave me this little -- I don't know if we can get a tight shot of this. I will hold it up here like this. But it basically says: "A woman's place is in the House, as speaker." And there, we see Nancy Pelosi, I guess, showing off her muscles.

(CROSSTALK)

BLITZER: What do you make, first of all, of this development, as a woman? Because this is the first time a woman has served as speaker of the House.

DONNA BRAZILE, CNN POLITICAL ANALYST: Wolf, this is a very historic moment, not just for our country, but the new Congress.

I have known Nancy Pelosi for over 20 years. She is intelligent. She is smart. She has also managed to unify the Democratic Party over the last two months. She has honed in on the Democrats having a real message, 100 hours. We have laid out a very ambitious agenda.

But today is a day of celebration, a historic moment. Clearly, as a woman, she shattered the glass ceiling. She is now in line for the presidency. And we're very excited.

BLITZER: And we saw Nancy Pelosi today. And we all know her. She's tough. She's a good politician. But there was a softer side we also saw. She's a mother, a grandmother. We saw all of her little grandchildren there. She was holding her newest grandchild, a little boy, Paul -- a softer side of Nancy Pelosi as well.

STEELE: Yes. And that is a good thing. I mean, it -- it shows, I think, the multifaceted nature of today's politics, particularly as women take more prominent roles, that they can do it all, and they should be allowed to do it all.

And I'm very -- my hat is off to the Democrat leadership, and certainly to the Congress, for this wonderful kickoff. We were talking earlier about how long this honeymoon is going to last. I give it 101 hours...

(LAUGHTER)

STEELE: .. because the reality of America sets in.

And the hard heavy-lifting of not just talking the rhetoric, but doing the actual job of putting in place the policies from the administration, and getting those implemented through the Congress, is going to be a real challenge for both parties, not just the Democrats. But the Republicans now have to step up and show that they learned the lesson of the last 12 years of missed opportunities and what America is really all about and what it wants.

BLITZER: Is it wise for the Democrats in the House to do to the Republicans now, at least in these first 100 hours of the new Congress, what the Republicans did to them, namely, push legislation through, without really giving the Republicans a chance to deliberate, to get involved, hold committee hearings? What do you make of that?

BRAZILE: Well, first of all, the Democrats have told the Republicans for the past two months about the agenda that we're going to lay out.

I believe that the Democrats will work with the Republicans. Over in the Senate, there was a rare joint caucus today. Harry Reid convened it, Mitch McConnell. It was an opportunity for Democrats and Republicans to talk.

BLITZER: The Senate is a different legislative body than the House of Representatives.

BRAZILE: I understand.

(LAUGHTER)

BRAZILE: But the spirit -- the bipartisan spirit is there. And I don't think it's going to be a brief honeymoon. It's going to be a lasting partnership. Republicans understand, as a minority, they must work with the majority to insure that this legislation is able to get through the process.

STEELE: Well, the Democrats have a 40-year history, prior to the recent 12, of laying down the markers and making very clear who controls the House of Representatives, as they did for 40 years before 1994.

So, the challenge is going to be there not to revert to old ways, but to take this new mind-set, this new opportunity for both parties to create a new dynamic, because America is watching.

(CROSSTALK) BLITZER: And they are watching, especially, Donna, on the issue of Iraq right now, because we're all bracing. Next week, the president is going to make his major Iraq war strategy address, presumably going to announce he is sending mare troops over to Iraq, although a lot of Americans would like to see the troops start coming home.

The Democrats themselves could be divided on this.

BRAZILE: I don't think so.

I think the Republicans will have a hard time supporting an escalation of the troops, without a real strategy to bring our troops home. Look. Democrats have said from day one, since the election, they will hold the Republicans accountable. They will hold this president accountable. He cannot just lay out his strategy without involving Democrats, to get their insights and analysis.

STEELE: But they themselves, the Democrats, are now also being held accountable, because they have the leadership controls and reins of power. And how they use that, how they hold committee hearings, how they hold the administration's foot to the fire, how themselves, under the leadership of Nancy Pelosi, puts a plan out there and makes...

BLITZER: But the real power they have -- the real power they have is the power of the purse...

STEELE: Absolutely.

BLITZER: ... which they say they are not going to use to withhold funding for U.S. troops in Iraq.

STEELE: And that is going to be a moment of division within the Democratic caucus, because there are some Democrats, certainly outside of the caucus, that will put pressure on those members to do just that. And it will be interesting to see how they make out.

BLITZER: And there are some within the caucus. Dennis Kucinich is running for president right now...

STEELE: Right.

BLITZER: ... the congressman from Cleveland, Ohio, who says, you know, what -- there is a way to start bringing these troops home. Just don't appropriate more funds for that whole operation.

BRAZILE: But the president is the architect of this war strategy up to this moment.

And it's important that he come up with a strategy, and give Democrats an opportunity to look at the strategy. Look, the days of just, you know, ramrodding issues, you know, down the throats...

STEELE: Well...

BRAZILE: ... of Congress is over.

(CROSSTALK)

BRAZILE: And I think the -- the president must bring Pelosi, bring Reid over, bring Ike Skelton, the new incoming chair of Armed Services, Carl Levin, and many others, bring them over. Otherwise, you know, Democrats will hold hearings and keep this president accountable.

BLITZER: Very quickly, wrap it up.

STEELE: I was just to say, the reality of it is, both have to come to the table. But, ultimately, it's going to come down to a vote, whether you're going to put the dollars on the table or not. And that is going to be an interesting challenge, beginning with the president's speech in about a week.

BLITZER: And most of the pressure right now is on the president himself...

STEELE: That's right.

BLITZER: ... to come up with a strategy.

BRAZILE: Absolutely.

BLITZER: We will see what he does in the coming days.

Guys, thanks very much, Donna Brazile, Michael Steele. Good discussion.

BRAZILE: Enjoy your button.

STEELE: Yes.

(LAUGHTER)

BLITZER: Thank you.

STEELE: I got one.

(LAUGHTER)

BRAZILE: Amen.

(LAUGHTER)

BLITZER: Up next: an unmistakable trio on the Senate floor. That would be Bill and Hillary Clinton and Dick Cheney. It's all part of an incredible, an historic day, here in Washington.

History also being made outside the nation's capital -- I will explain in today's "Political Radar."

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

(COMMERCIAL BREAK)

BLITZER: On our "Political Radar," check out this picture. It's worth 1,000 words.

Senator and Democratic presidential prospect Hillary Rodham Clinton got sworn in for a second term by the vice president, Dick Cheney -- at her side, her husband, the former President Bill Clinton.

Hillary Clinton's would-be White House rival, Democratic Senator Barack Obama, enjoyed a first-time honor in the Senate today. He made his debut presiding over the Senate, a recognition, perhaps, of his growing influence and star power. Barack Obama continues to mull a possible -- possible -- presidential bid.

A noteworthy salute today to a congressman under investigation in a corruption probe -- Democrat William Jefferson of Louisiana was given a standing ovation by the Congressional Black Caucus. The new House speaker, Nancy Pelosi, led a charge to remove Jefferson from the powerful House Ways and Means Committee to make a statement about the Democrats' commitment to ethics reform.

Another vivid sign of the power shift in the Congress, the new chairman of the Ways and Means Committee, Congressman Charlie Rangel of New York, now has a piece of prime real estate, a Capitol Hill office previously used by Vice President Dick Cheney.

And some stars came out on Capitol Hill today to see Nancy Pelosi take the helm in the House. Singers Tony Bennett and Carole King and the actor Richard Gere were spotted in the audience. They are taking part in a big party and concert here in Washington tonight honoring Nancy Pelosi.

Also today, a power shift in Massachusetts -- the inauguration of the state's first African-American governor, the Democrat Deval Patrick. He's only the second African-American elected governor in U.S. history. Patrick replaces Republican Mitt Romney, who is taking the first steps toward running for president.

Remember, for all the latest political news at any time, check out our Political Ticker. Simply go to CNN.com/ticker.

Up next, Jack Cafferty is talking faith. He wants to know if you have got faith the Democratic-led Congress will trigger changes in Iraq -- your e-mail and Jack when we come back.

(COMMERCIAL BREAK)

BLITZER: Here is the videotape of Senator Barack Obama presiding over the U.S. Senate earlier today. There he is, in the middle of your screen, sitting there, a rare honor, a good honor, for the junior senator from Illinois, possible -- possible -- presidential contender.

Jack Cafferty is joining us now with "The Cafferty File" -- Jack.

CAFFERTY: Second time is a charm. Thanks, Wolf.

The question this hour is: How much faith do you have the Democrats can stop the war and rein in President Bush?

The president has now decided it's OK if he reads my mail and yours without a warrant. We will have more on that in the next hour.

Here is the e-mail we got on the question, though.

Josh in Ohio writes: "I believe the Democrats can rein in President Bush, because we voted them in to do just that. The Democrats have to end the madness that George W. Bush has created, and bring this war in Iraq to a speedy conclusion. They should use every option available, including impeachment."

Ron in San Francisco: "Unless the investigations they have talked about show it to be more screwed up than reported, I just don't see it. It takes a spine to stop something this repugnant. And I don't think they have one -- this from someone who voted solidly Democratic."

Sharon in Chicago: "Jack, I have written all my congressmen, putting them on notice that whether or not they earn my vote the next time they are up for election depends solely on whether they vote to stop funding the war in Iraq. If all Americans who are against the war will do the same, I have faith that they will stop funding the war."

Carol in Oneonta, Alabama: "Gee whiz, Jack, the Dems were sworn in an hour ago. Could we give them a week or two before we start speculating about their failure?"

Carol in Pensacola writes: "I don't know who will save us from the actions of this tyrant and his cronies, but I believe it's very unlikely it will be the Democratic Party who will come to our rescue. Perhaps when jellyfish become vertebrates, so, then, will the Democrats."

And Dennis wrote from Bloomington, Indiana: "Hey, Jack, they changed my meds, and I'm back. Happy new year."

(LAUGHTER)

CAFFERTY: Glad Dennis is feeling better.

(LAUGHTER)

CAFFERTY: Wolf.

BLITZER: I didn't know there was an Oneonta in Florida. I knew there was one in New York. That's good to know. I learn a lot of geography from our e-mailers out there, Jack.

CAFFERTY: That's why we do it. It's to....

(LAUGHTER)

BLITZER: Thank you very much.

(LAUGHTER)

CAFFERTY: ... enlighten you on the geographical issues.

(CROSSTALK)

BLITZER: Jack Cafferty with "The Cafferty File."

Coming up: They are not the majority party on Capitol Hill anymore, so, how do the Republicans plan to keep their agenda in the forefront? I will speak live with Arizona Senator Jon Kyl. He's the new chairman of the Senate Republican Conference.

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

(COMMERCIAL BREAK)

BLITZER: Today may be a new beginning for Democrats on Capitol Hill. But it could also mean a fresh start for Republicans online. Some in the GOP say they have lost ground to Democrats when it comes to Internet outreach. And now they're working to try to catch up.

Let's check in with our Internet reporter, Jacki Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, this here is David All. He is the former communications director for Georgia Republican Congressman Jack Kingston.

He helped his former boss set up a popular blog. And now he's leaving the Hill to help other Republicans harness the power of the Internet. He says, if Republicans were more Internet savvy and knew how to use sites like YouTube and MySpace, they would have a better chance of reaching constituents.

He uses George Allen's campaign as an example, saying, if they had a better sense of how the Internet worked, they would have had better damage control.

Senator Mitch McConnell agrees with the idea of the new media push. He is the Senate Republican leader. And his office has hired a well-known blogger named Jon Henke from the blog QandO.net, which is a conservative blog, to lead up a new media outreach.

Now, a spokesperson for McConnell says that Republicans in the Senate need to do a better job of not only using the Internet, but responding to the Internet, meaning that they don't treat bloggers like the press, and they should. Jim DeMint, another senator, also agrees, having hired a blogger.

Former House Majority Leader Tom DeLay set up his own blog and grassroots effort last month at TomDelay.com.

And we're seeing potential presidential candidates set up exploratory committee Web sites, making fund-raising, Wolf, just a click way.

BLITZER: Jacki, thanks for that.

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