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THE SITUATION ROOM

White House Making News With Changes Announced Among Top Administration Officials; John Murtha Interview; Double Bombing in Iraqi Capital; Jon Kyl Interview; Documents About William Rehnquist's Made Public; Virtual Capitol Hill

Aired January 4, 2007 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Today may be a new beginning for Democrats on Capitol Hill, but could also mean a fresh start for Republicans online. Some of the GOP say they've 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. Here's 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'd 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. Senator Jim Dement, 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 fundraising, Wolf, just a click away.

BLITZER: Jacki, thanks for that.

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, it's changed more than 200 years of history. Democrat Nancy Pelosi accepts the gavel and with that, the power and the praise of becoming the first female ever to become speaker of the House.

It comes as Democrats take over Congress for the first time in a dozen years.

Public frustration with the war in Iraq helped hoist Democrats to power. And in Iraq, the death and the devastation are not letting up.

Might more U.S. troops need to go in to try to help restore order?

I'll ask Republican Senator John Kyl of Arizona and Democratic Congressman John Murtha of Pennsylvania.

And the pursuit of peace is shattered with death -- in the West Bank, some Palestinians are dead after an operation that one Israeli official says was "messed up."

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

It happened today, but took more than 200 years to come. Never before in U.S. history has a female been speaker of the House of Representatives. But that changed after a gavel heavy with history and tradition was placed in Nancy Pelosi's hands.

By a vote of 233-202, Pelosi broke what she called the marble ceiling.

this comes as Pelosi's party also took control of the Senate. Democrats now control Congress for the first time in 12 years.

The new majority leader, Senator Harry Reid, says the American people expect results, not political rancor. Reid's elevation happened at the hands of others, specifically, the right hands of the newly elected and reelected Democrats. They were sworn in today, along with new and reelected Republican senators.

Meanwhile, the White House is also making news with some changes announced among top administration officials.

We're following all of these developments on this important day for our nation.

Our Ed Henry is standing by at the White House.

But let's begin with Andrea Koppel.

She's been watching all of this from Capitol Hill -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Wolf, it was truly a day for the history books. Surrounded by her children and grandchildren, with former politicos in the audience and with celebrities looking down on her, Nancy Pelosi walked into the history books, becoming the highest ranking elected woman in U.S. history. And she wasted no time putting President Bush on notice on Iraq.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER ELECT: It is the responsibility of the president to articulate a new plan for Iraq that makes it clear to the Iraqis that they must defend their own streets and their own security; a plan that makes -- promotes stability in the region and a plan that allows us to responsibly redeploy our troops.

(END VIDEO CLIP)

KOPPEL: Meanwhile, over in the Senate, the new Senate majority leader, Nevada's Harry Reid, also made clear that Democrats expected President Bush's new plan on Iraq to spell out and bring U.S. troops home. But he didn't say exactly when.

With her new 31-seat majority over in the House, Ms. Pelosi also made clear that she's going to be requiring and pushing Republicans and President Bush for more fiscal responsibility, what's known as pay as you go. No more deficit. And in a conference call with President Bush at the same time, she said that she looked forward to working with Mr. Bush.

And, Wolf, she also wasted no time in getting down to work. No sooner had the pomp and circumstance wrapped up than she gaveled the House to order and they have launched into, for the next two days, at least, pushing through another top Democratic priority that was promised out on the campaign trail, and that was to end what they called the culture of corruption and to try to push through immediately changes to House rules that would make it illegal for House members to accept any kind of gifts or any corporate travel. It also is going to look, probably tomorrow, Wolf, at getting the more transparency on earmarks or pet favors -- Wolf.

BLITZER: Thanks very much.

Andrea Koppel on the Hill.

And just -- we're just getting in that videotape of Nancy Pelosi, together with other Congressional leaders on a conference call with the president.

I want to play the tape right now.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Madam Speaker.

PELOSI: Mr. President.

BUSH: Congratulations on an historic day.

PELOSI: Thank you very much, Mr. President.

I'm here with leader Hoyer and leader Boehner and we're calling to give you the good news that this Congress is now fully sworn in and ready to work with you.

BUSH: Well, I'm ready to work with you all. I know it's a tremendous moment for -- for you personally and I congratulate you. And I congratulate leader Hoyer. And I'm looking forward to working with both of you all as I continue to work with leader Boehner.

PELOSI: Thank you very much, Mr. President.

We'll look forward to that.

(END VIDEO CLIP)

BLITZER: On this historic day, everyone, everyone saying the right thing about working together here in Washington. We'll see how long that lasts.

Meanwhile, there's also some changes unfolding in the Bush administration. It concerns one man who was supposed to bring order to the nation's intelligence community and a woman whose reputation was battered by a bruising nomination battle.

Here to help fill us in, our White House correspondent, Ed Henry -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Wolf, it was supposed to be a quiet day at the White House, but instead all kinds of shuffling. As you noted, Harriet Miers now officially resigning as White House counsel.

Also, the White House will not confirm it, but several officials saying that Zalmay Khalilzad is expected to be nominated as the U.S. ambassador to the United Nations. He would be replaced as the U.S. ambassador to Iraq by Ryan Crocker, now in the same post for U.S. to Pakistan.

Now, White House officials will confirm, though, that on Friday the president will officially nominate Retired Vice Admiral Mike McConnell to replace John Negroponte as the director of National Intelligence. Negroponte now shifting over to the number two job at the State Department.

That already getting some static from some of those new Democrats running Capitol Hill. The Senate Intelligence chairmen, Jay Rockefeller, saying he believes there's too much of a leadership vacuum in the intelligence community right now.

Negroponte's former deputy, General Michael Hayden, now the CIA director. He still has not been replaced months later. Officials here at the White House insist Negroponte, though, is uniquely positioned to take over the number two job at State. A former diplomat, he'll be helping to implement the president's new Iraq policy that will be unveiled next week. We're now hearing from various officials here this speech, a prime time address to the nation, is likely to be next Wednesday, possibly even slipping to next Thursday, instead of earlier in the week, as we had heard.

And, finally, on the Harriet Miers move that I noted at the top, not really unexpected. Ever since her elevation to the Supreme Court was blocked by conservative opposition, it was expected she would leave at some point.

What's interesting, though, is officials here are privately saying one reason she's leaving now, the timing of it, is the fact that they feel she's mild-mannered. Everyone knows that. And they need a more aggressive White House counsel now in this job.

With Democrats taking over the Hill, there are likely people like John Dingle and Henry Waxman, who will launch all kinds of investigations and subpoenas. They need a very aggressive White House lawyer who can push back -- Wolf.

BLITZER: Before he made that brief phone call to Nancy Pelosi to congratulate her, the president was on the phone for a long time with the prime minister of Iraq, Nouri Al-Maliki.

Update our viewers on what we know about that conversation.

HENRY: Well, you're right. Very interesting, it was supposed to be -- they budgeted an hour of the president's time for that secure videoconference with Nouri Al-Maliki. Instead, the meeting -- the videoconference with the prime minister went on for an hour and 45 minutes. It gives you an idea of the depth of the back and forth.

We're, in fact, told that at one point the president basically ushered everyone else out of the room here at the White House and it became just the two principals, the president and the prime minister, as well as their translators.

One possibility there, of course, is that this could be a final round of consultation with the Iraqi prime minister, perhaps the president giving him a heads up about exactly what he's likely to do next week.

Officials here still maintain it's likely the president next week will call for a surge of U.S. troops somewhere in a 20,000 to 30,000 troops. One official telling me today he thinks it's going to likely be on the lower end of that, somewhere in the neighborhood of 20,000 U.S. troops -- Wolf.

BLITZER: We'll watch it together with you, Ed.

Thanks very much.

And as Ed mentioned, Mike McConnell, the possible -- the likely replacement for John Negroponte, to head the U.S. intelligence community, held the rank of vice admiral while he served in the U.S. Navy. He retired several years ago. Vice Admiral corresponds to that of a three star general.

Michael Hayden, the current CIA director, who would report to Admiral McConnell, is a four star general. Many of our viewers might remember Mike McConnell during the first Gulf War. He was the intelligence guy over at the joint chiefs of staff. He worked for Defense Secretary Cheney at the time, who was then the defense secretary, now the vice president; also for General Colin Powell, who was the chairman of the joint chiefs.

He then went on to become the director of the National Security Administration before leaving government service.

As a Congressional minority, there was little Democrats could do except complain about the Bush administration's policies and the actions to which they objected. But now that they're in charge of Congress, Democrats have the power to hold hearings and we're expecting quite a few of those hearings.

Let's turn to CNN's Brian Todd.

He's got some details -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, a top aide to new House Speaker Nancy Pelosi told me that right now she's focused on her first 100 hours agenda, on domestic and foreign policy. But it's Pelosi's committee chairmen and some in the Senate who observers say are about to unleash years of pent-up frustration at this White House.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: From California...

TODD (voice-over): On Capitol Hill, they smile, shake hands, swear the oath. Down the street, they may just be swearing. It's payback time in Washington. Newly empowered Democrats, after years of frustration over Iraq, prewar intelligence, the wiretapping controversy are poised to launch an onslaught of subpoenas that might drive an already embattled White House to distraction.

NORMAN ORNSTEIN, COAUTHOR, "THE BROKEN BRANCH": There's no question we're going to see a huge number of investigations taking place.

TODD: Experts say Henry Waxman is likely to lead the charge. As the new Democratic chairman of the House Government Reform Committee, Waxman has the power to look into Halliburton contracts or energy deals by Bush allies. A Waxman aide says he won't conduct witch hunts. Congress watchers agree.

But Waxman has been a relentless Bush critic and will likely be a formidable force.

STUART ROTHENBERG, "ROTHENBERG POLITICAL REPORT": He's tenacious. He's regarded as an attack dog. He's a good interrogator. And he apparently likes to do it. TODD: Waxman's colleague, John Conyers, isn't just a Bush critic. He's previously looked into grounds to impeach the president. Conyers takes over the House Judiciary Committee. Experts say his efforts, combined with those of his fellow Democrat on Senate Judiciary, Patrick Leahy, should make some people in the Justice Department nervous over the domestic surveillance and detainee programs.

ORNSTEIN: The House and Senate Judiciary Committees are going to pounce all over Attorney General Alberto Gonzales with questions about how he is protecting or not protecting basic civil liberties in the country.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER ELECT: I accept this gavel in the spirit of partnership, not partisanship.

TODD: Democratic leaders Nancy Pelosi and Harry Reid will be crucial to this equation. House Speaker Pelosi has said subpoenas of White House officials will be a last resort. Political observers say for the Democrats' own sake, they'd better be.

KEN RUDIN, NATIONAL PUBLIC RADIO: If the Democrats are involved in some kind of a payback when the Democratic Congress comes up for renewal before the voters again, voters may say they over reached.

(END VIDEO TAPE)

TODD: The challenge to reign in their committee chairmen may present itself to Pelosi and Reid sooner rather than later. We're told by Congressional aides there are at least six hearings on Iraq and the war on terror on the schedule this month alone -- Wolf.

BLITZER: We'll be watching all of those hearings.

Thanks so very much, Brian, for that.

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

JACK CAFFERTY, CNN ANCHOR: President Bush is now claiming he has the power to open Americans' mail without a warrant. The "New York Daily News," in an exclusive report this morning, says that late last month, Mr. Bush issued a signing statement declaring his right to open people's mail under emergency conditions.

According to the president, that includes the need to "protect human life and safety against hazardous materials" and "the need for physical searches for foreign intelligence collection."

The president's signing statement contradicted a postal reform bill that he had just signed, which protects first class mail from searches without a warrant. Experts say the government could easily abuse this power and open up large amounts of mail.

Really?

Nah, they'd never do that, would they? One senior official says: "It takes executive branch authority beyond anything we've ever known."

But the White House tells the "Daily News" the president wasn't claiming any new power. They say that in certain circumstances, the constitution does not require warrants for reasonable searches. And, of course, we can all trust the decider to decide what constitutes a reasonable search, can't we?

Here's the question -- should President Bush be able to open your mail without a warrant?

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

BLITZER: See you in a few minutes, Jack.

Thank you.

Up ahead, now that they're in charge of Congress, what do Democrats intend to do about the war in Iraq?

I'll talk about it with Democratic Congressman John Murtha, a decorated veteran and an outspoken war critic.

Also, deadly new attacks in Iraq and dozens of tortured bodies found in the capital. We'll tell you to Baghdad fatally on the unrelenting violence.

Plus, we'll have details of some shocking revelations about the late Supreme Court justice, William Rehnquist and personal demons he battled for more than a decade.

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

(COMMERCIAL BREAK)

BLITZER: Welcome back.

When Nancy Pelosi became the speaker of the House today, making history, she used strong words to describe what contributed to the power shift. Pelosi said Americans voted for change in the war in Iraq and they also "rejected an open-ended obligation to a war without end."

Joining us now to talk about where the Democrats go from here is a congressman who has become a very vocal critic of the Bush administration's strategy in Iraq.

That would be John Murtha of Pennsylvania.

Congressman, Happy New Year.

Thanks very much for coming in and congratulations on being a member of the majority once again. REP. JOHN MURTHA (D), PENNSYLVANIA: It's better in the majority for 12 years than the minority. It's better to be in the majority, Wolf.

BLITZER: You've been in both and you like being in the majority. That's what I hear you saying.

MURTHA: Yes, I like it.

BLITZER: Nancy Pelosi was very firm. She -- she referred to the situation in Iraq -- in fact, let me play this little clip of what she said in her remarks.

(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)

BLITZER: Hi, Congressman.

I assume you were among those standing and applauding, as well.

So as a Democrat, what do you do now? What can you do to change the direction in Iraq, because the president's on the verge of announcing he's going to be sending more troops into Iraq?

MURTHA: Well, I hope that's not true, Wolf. I met with Steve Hadley, the national security adviser, about a month ago. And the vice president came to the meeting and we spent about 45 minutes. The president stopped in. And he says we have an honest disagreement, but hopefully we can work things out.

Well, I hope we can work things out, too. But we can't work things out if they propose something without consultation. Now, consultation, to me, is meeting with the people that have responsibility in the Congress -- for instance, the defense subcommittee, the Armed Services Committee, Foreign Affairs, Foreign Operations -- and then asking them what they think, asking for suggestions before they make a speech, not just making a speech and then expecting it to get bipartisan support.

They know well my views. I was very firm in what I had to say and I would hope we can work with them. This is an historic opportunity. The people have spoken. They were very clear. He fired the secretary of defense. Now he needs to take the next step, and that's to give the Iraqis the incentive by redeploying our troops and let them take over.

BLITZER: Well, what if he announces he's going to deploy another 20,000 or 30,000 U.S. troops together with a strategy that he says will result in victory? MURTHA: Well, of course, that's been one of the biggest problems. Even the troops themselves, Wolf, have lost confidence in this president. The latest poll that I just saw showed that the majority of the troops disapprove of what the president is doing in Iraq, don't understand the mission. And we have never had an achievable military mission. And that's been part of the problem.

Now, let's talk the surge. If you are going to surge, you're going to have to keep people there in Iraq -- in other words, extend them. You're going to have to stop loss, which means you won't let people get out. And then you're going to have to send people back that have less than a year in country with their families.

So this would be a phenomenal hardship on the families.

But it's not going to prove anything because we sent another 15,000 troops into Baghdad and it's gotten worse. So I haven't seen anything yet that showed me they have an achievable plan -- achievable ability of the military to achieve victory in this campaign in Baghdad.

BLITZER: Your Democratic colleague, Dennis Kucinich, from Ohio, who is running for president, he says, you know what? There's about $70 billion in the pipeline already for the military. Use that but simply don't appropriate additional funds for U.S. military operations in Iraq. And that's one sure way to get the troops back home.

Is he onto something?

MURTHA: Well, he may be onto something. He's going to bring his plan over to -- in the next couple of days -- for me to take a look at. But what we're going to do, Wolf, is have hearings on the supplemental. Now, normally supplementals, before this administration, were a couple billion dollars a year.

We have a $97 or $99.7 billion supplemental. We're going to go through this. And I asked the national security adviser to get it over to us, because we want to have two months of hearings to verify why they need the money.

This money should be in the base bill. They know how much it's costing to run this war. There's no reason for it to be in a supplemental. They just want to hide the facts and figures and the cost of the war, not only the human cost, but the cost monetarily to the Congress and to the people of the United States.

BLITZER: They say it's costing about $2 billion a week -- $2 billion a week -- to the American taxpayers.

Now, let's talk briefly, Congressman, about Saddam Hussein and the execution. Some analysts are suggesting the way it was botched with that cell phone video showing up could further endanger American troops in Iraq.

Do you believe that? MURTHA: Well, I think there's a lot of things that can endanger the troops, and that's certainly something that the Sunnis are going to use to incite their people.

Part of the problem has been our occupation of Iraq -- and that's what the Sunnis believe, we have occupied -- and many of the Shias believe. Most of the people in Iraq believe they would better off, it would be more stable, if we were to get out of Iraq. And I believe that myself.

I've come to the conclusion that the only answer is you set a table for redeployment, you tell the Iraqis you're going to redeploy, they're going to have to take over.

Our troops, for instance, in the green zone, now they have all the amenities they need. They eat the food that they want. While right around them are the Iraqis, and this is very similar to when Saddam Hussein was there, living in the same condition.

Now, of course, we don't have the same -- the same type of treatment of the people, but on the other hand that's the way they perceive it.

So there's a lot of things that are endangering our troops and that's just part of it.

BLITZER: John Murtha, Democratic congressman from Pennsylvania.

Congressman, thanks very much.

Once again, congratulations.

MURTHA: Thanks, Wolf.

Nice to talk to you.

BLITZER: Thank you.

And coming up right here in THE SITUATION ROOM, we have some new details of William Rehnquist's addiction to painkillers. We're learning it was much more serious than people realized and that he even suffered from hallucinations.

Also, after more than a decade in power, Republicans are now the minority on Capitol Hill. We'll talk about it with Senator John Kyl. He's standing by to join us right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're getting word of a story involving the former president of the United States, George Herbert Walker Bush.

Let's turn to CNN's Fredericka Whitfield.

She's joining us with details -- Fred. FREDRICKA WHITFIELD, CNN ANCHOR: Well, Wolf, we are learning that the 82-year-old former president has just undergone right hip replacement surgery. According to an aid who tells our Suzanne Malveaux, this is the second hip replacement surgery that's he's had. This procedure taking place just one day after you recall, just as in these pictures, he eulogized the former president, Gerald R. Ford in D.C. at the National Cathedral.

The former president, Bush, underwent the surgery yesterday and is said to be resting comfortably. The Mayo Clinic, where this procedure took place, in Rochester, Minnesota, will not provide any other details. But the aide telling our Suzanne Malveaux that his stay in Minnesota will be short -- Wolf.

BLITZER: We wish him a speedy recovery, as well. We know that kind of surgery can be painful, the recovery process difficult. We certainly wish him all the best.

Thanks, Fred, for that.

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

Happening now, Democrats officially taking control of both houses of Congress. And Nancy Pelosi making history as the first woman speaker of the House. She says she accepts the gavel -- and I'm quoting now -- "in the spirit of partnership, not partisanship."

Also, Israel's prime minister meeting with Egypt's president, hoping to try to revive the peace process. But their efforts are overshadowed by deadly developments in the West Bank. We're going to show you what happened.

And shocking revelations about William Rehnquist. Newly revealed documents show the late Supreme Court chief justice suffered a serious, long time addiction to painkillers.

Did it impact his work?

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

As the White House ponders what it calls a way forward in Iraq, President Bush today spoke with the Iraqi prime minister, Nouri Al- Maliki, for nearly two hours. The White House says Mr. Bush did not reveal any forthcoming changes in war strategy.

Meanwhile, the fate of five security contractors hangs in the balance. The four Americans and one Austrian were kidnapped in Iraq in November and recently shown in a videotape. Today, the father of one of the American captives says he's heartened his son appeared to have no injuries on the tape.

Also in Iraq, the chaos continues. Attacks in and near Baghdad have left 20 more people dead.

CNN's Ryan Chilcote is in Baghdad with the latest -- Ryan. RYAN CHILCOTE, CNN CORRESPONDENT: Wolf, a double bombing in the Iraqi capital today. Two car bombs going off in short succession. The second car bomb as emergency workers rushed to the scene. Thirteen Iraqis killed, 22 wounded at a gas station as people were lining up to buy heating fuel.

Then a mortar attack, two of them actually, the more lethal here in the Iraqi capital. Mortars hitting a mostly Shiite neighborhood. The police say that they believe it was a sectarian attack. At least five civilians killed in that attack. Very difficult to verify the nature or the goal of that attack, but it will most certainly be perceived as a sectarian attack by the people living in that neighborhood, and could likely provoke some kind of retaliation on a Sunni neighborhood.

And finally, the Iraqi police are telling us that they wound 47 bullet-ridden bodies around the Iraqi capital. Four of those bodies decapitated. Almost certainly victims of Iraq's sectarian death squads. Yet another sign of the sectarian violence here in Iraq -- Wolf.

BLITZER: Ryan, thank you for that.

Ryan Chilcote reporting from Baghdad.

Coming up, Israel's prime minister heads to Egypt in an effort to try to revive the peace process, but a deadly raid in the West Bank now complicating the already complex situation.

Plus, how will congressional Republicans keep their agenda in the spotlight now that Democrats are in charge? We'll speak live with Arizona senator Jon Kyl. He's standing by to join us right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

U.S. forces now playing a role in the fighting in Somalia between government forces backed by Ethiopia and Islamic fighters.

Our Pentagon correspondent, Barbara Starr, is in Ethiopia and she has the latest -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, senior State Department and military officials came here to meet with the Ethiopian prime minister in the wake of Ethiopia's two-week war that has driven the Islamic militia from power in Somalia. But now there are many questions here in east Africa about how much support the Bush administration will give to the new relatively weak government in Somalia.

Of course, the memories of "Black Hawk Down," the incident 13 years ago that left a number of Army Rangers dead and led to the pullout of the U.S. military from Somalia, memories of that day are very long. So there are a lot of questions about whether the U.S. will publicly express its support for the new government in Mogadishu.

Still, there are now two, at least two U.S. Navy warships off the coast of Somalia. U.S. intelligence is keeping a very close eye on the situation because there is great concern that members of al Qaeda that were in Somalia are now on the run. And there is a very close eye out, watching for them. If they are found, the U.S. will try to take them into custody -- Wolf.

BLITZER: Barbara Starr on the scene for us in Ethiopia. A very dangerous situation in the Horn of Africa unfolding right now. We'll stay on top of it here in THE SITUATION ROOM.

Can a virtual Capitol Hill in cyberspace help House Democrats advance their agenda? The first online meeting wrapped up just a few hours ago.

Let's turn to our Internet reporter, Abbi Tatton. She was in attendance and she has the story -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, a virtual press conference populated by characters with names lick "Savage Dumont" (ph) and "Tofu Sticks Chaplain" (ph) and Congressman George, Miller, a California Democrat and chairman of the Democratic Policy Committee.

That's Miller at the podium -- or his avatar, at least. And that's him leaving.

This is the virtual Congress and the online community's second life. This is where users operate virtual versions of themselves.

Congressman Miller was there earlier today talking about Democratic Party initiatives for the new Congress, reaching out to a growing online constituency. As Miller put it, "the next frontier in interaction."

Second Life says on its site that it has more than two million members. There are about 20,000 of them online right now.

Today's event was only open to invited guests, members of the news media and the like. They ask their questions.

One small group appeared to be playing cards. One attendee's hair was on fire. But there was virtual security available at all times.

From tomorrow, the virtual Congress will be available to anyone in Second Life. There will be special areas dedicated to the new Democratic initiatives.

Congressman Miller says that there have been some blank stares from his colleagues, but he does hope that other members of Congress will join -- Wolf.

BLITZER: Abbi, thank you for that.

Abbi Tatton reporting. Up next, for Democratic lawmakers on Capitol Hill, it's been a day of smiles, cheers and applause. But how are their fellow Republicans reacting to their new minority status?

I'll speak live with Senator Jon Kyl of Arizona.

Plus, stunning new revelations about the late chief justice William Rehnquist. There are details that are only coming out right now about his addiction to a powerful painkiller decades ago. We're going to tell you what has prompted these sudden new disclosures.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: For the first time in 12 years, Republicans are now the minority on Capitol Hill. So how will they keep their agenda in the spotlight in the new Democratic-controlled Congress?

Joining us now to talk about that, Senator Jon Kyl of Arizona. He's the new chairman of the Senate Republican Conference.

I'm sure you would prefer being in the majority. You're now in the minority. So it's a whole new ball game, albeit in the Senate a little bit less so than in the House given the different rules. You still have a little power in the Senate.

Let's talk, first of all, about this apparent split that's developing on the eve of the president's major address on Iraq within the Republican camp itself. We hear Chuck Hagel and Gordon Smith, among other Republicans, beginning to question the need for a so- called surge in troops, saying, you know what, they don't necessarily think it's a good idea.

What do you think?

SEN. JON KYL (R), ARIZONA: Well, first of all, you've got five- star generals on both sides of the issue. You've got retired generals and colonels on both sides of the issue.

Clearly, this is a subject about which reasonable people can differ. And so it's no surprise that political experts such as my colleagues would be in some disagreement.

I happen to agree with my colleague John McCain that there are probably several missions in which more troops would actually be a big help, particularly when it comes to securing unsecured areas. If that is the president's decision -- and I know we're being a bit premature here -- I think we ought to give it a chance to try to help the president and see if that can work.

BLITZER: Because some of the critics are saying it's simply, you know, doubling down on a policy, throwing good after completely bad. And that it's not necessarily going to make a difference, 15,000, 20,000, 30,000 more troops, simply more potential casualties for the United States. KYL: That's one of the arguments against it. And the president has heard those arguments. He's heard arguments from others who say if we can surge some troops and put them against specific targets, specific requirements that we have, where we don't quite have enough to get the job done today, we can change the momentum in Iraq. And that's what's got to happen in order for the Iraqis ultimately to be able to take control of their country.

You can make the arguments either way. But until you try it, you're not going to know for sure whether it works.

BLITZER: How much responsibility does President Bush have himself for the fact that you, a Republican, are now in the minority, as opposed to being in the majority, specifically as a result of his Iraq war strategy?

KYL: I don't blame the president. I do believe that the administration and Republicans, and especially in the Congress, failed to follow our principles and govern as we did initially when we gained control of the Congress. And the American public properly held us accountable for that.

We need to get back to the things that they elected us for in the first place. And I think we'll be fine after that.

Clearly, the concern about Iraq is one of the factors that played into the election. But I don't think that you can say that in every single race it was one factor and not another. Or I wouldn't be standing before you as a newly elected Republican senator who supported the president and what he's trying to do in Iraq.

BLITZER: You were just re-elected. Congratulations on that.

KYL: Thank you.

BLITZER: The Saddam Hussein execution, we all saw the videotape on television. It was not the most dignified way to execute the former dictator, the former leader of Iraq.

How much damage has this caused the overall -- overall support for the war in Iraq?

KYL: I don't know. I suppose you have to take public opinion surveys to know exactly. It certainly hasn't helped. And it's not the way we would have done it, obviously. But again, you can't have it both ways.

You can't argue on the one hand that we need to turn it over to the Iraqis and let them do it their way, and then criticize them when they do it their way. We can hold them accountable as long as we still have something to say about it, to try to be as appropriate in the way they handle things as we would be, or at least as possible under the circumstances that exist over there. But at a certain point, if we turn it over to them, we can expect that they're not going to do things exactly as we would.

BLITZER: It was -- obviously, it's causing a lot of fallout, as we all know.

KYL: Wolf, can I say just one other thing?

BLITZER: Of course.

KYL: Excuse me. Of course, we need to distinguish between what the official policy of the government of Iraq was in this case and what apparently some people did in an unauthorized way. So I think we should be clear that it isn't the Iraqi government that we're criticizing here, so much as allowing some rogue actors to do something that they should have done. Excuse me.

BLITZER: But how worried are you that this Iraqi government -- it's a Shiite-led Iraqi government of Prime Minister Nuri al-Maliki -- that they're increasingly improving their own relations with a government, for example, like in Iran, where the president, Mahmoud Ahmadinejad, has made his views against the United States very well known?

KYL: This of great concern. I am frankly of the view that Iraq can stand on its own and have good relationships with Iran without supporting its terrorist objectives. That's what two states living side by side will need to do.

I don't think we're going to have a situation where Iran, in effect, takes over the policy of Iraq. But clearly, with Iran being the biggest state sponsor of terror in the world, we've got to make sure that Iran does not have too much influence in Iraq.

BLITZER: Senator, thanks very much for coming in.

Senator Jon Kyl.

Once again, congratulations on getting re-elected. And since I didn't have a chance earlier, Happy New Year.

KYL: Thank you very much. You, too.

BLITZER: And up ahead, Jack Cafferty probably wouldn't be opening your mail, but should President Bush be able to open your mail without a warrant? We'll tell you what you're telling Jack in your e- mail. "The Cafferty File" coming up.

And stunning secrets about William Rehnquist aren't so secret anymore. What they reveal about the late chief justice. It's all part of newly-opened FBI files.

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

(COMMERCIAL BREAK)

BLITZER: Lou is getting ready for his program that begins right at the top of the hour. And he's going to tell us what he's working on.

Hi, Lou. LOU DOBBS, CNN ANCHOR: Hi, Wolf. Thank you.

Coming up at 6:00 p.m. Eastern, Democrats take control of the U.S. Congress, but will Democrats stand up for working men and women in this country? Will they roll back the awesome power of corporate America and special interests on Capitol Hill?

We'll have that special report.

Also tonight, Democrats say new immigration legislation is one of their top 10 priorities. Critics say the Democrats are bent on giving amnesty to millions of illegal aliens and leaving our broken borders wide open. One of those critics, Congressman Brian Bilbray, is among our guests here tonight.

And the federal government stopping U.S. companies from doing business with Iran, a leading sponsor of radical Islamist terrorism. But our government is allowing a Chinese company to break U.S. laws, invest billions of dollars in Iran, and enjoy all the benefits of U.S. capital markets.

We'll have that special report and a great deal more. The rest of the day's news at the top of the hour right here on CNN.

Please join us.

Wolf, back to you.

BLITZER: All right, Lou. Thanks very much. We'll be watching in a few minutes.

According to documents just made public, the late chief justice William Rehnquist's Senate confirmation battles were more political than we thought at the time. The FBI documents suggest the Nixon and Reagan administrations enlisted the help of the FBI to blunt criticism of Rehnquist.

CNN justice correspondent, Kelli Arena, standing by with more -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the FBI file has been kept secret and was only made public when reporters filed legal requests to have it made public. And it shows that two Republican administrations instructed the FBI to question or to do background checks on Rehnquist's critics. But that political drama just pales in comparison, Wolf, to the other information in this report.

(BEGIN VIDEOTAPE)

ARENA (voice-over): More than a year after his death, shocking details of the life of former chief justice William Rehnquist were revealed.

UNIDENTIFIED MALE: To not have the American public know about this, even during a confirmation process where this kind of thing is supposed to come out, is pretty shocking. ARENA: In 1991, it became public that Rehnquist was addicted to a powerful and dangerous painkiller, Placidyl. The extent of that addiction has been kept secret until now.

UNIDENTIFIED MALE: There's testimony that's contained in the FBI files indicating that Rehnquist was filling three months' prescriptions every month. Meaning he was taking three times the dosage of this very strong sedative or painkiller. And you just have to wonder, was this impairing his functioning as a justice?

ARENA: During a 1991 hospital stay, Rehnquist suffered withdrawal symptoms. The doctor who treated him told FBI agents, "He imagined there was a CIA plot against him," according to the documents. The doctor also said, "He had gone to the hospital lobby in his pajamas in order to try to escape."

Rehnquist had been taking the drug for over a decade, from 1970 to 1982. They argued more than a dozen cases before Rehnquist, and he said he never questioned his competency.

UNIDENTIFIED MALE: I didn't see any side-effects, outrageous behavior, or anything of that sort.

ARENA: But the fact that Rehnquist was using such a powerful drug for so long raises concerns.

UNIDENTIFIED MALE: I think it really does raise the question of, when a justice is impaired, or could be impaired, there's no way to find that out.

(END VIDEOTAPE)

ARENA: You know, there may be even more to the story than we'll ever know. More than 200 pages of this report were not released, Wolf. And the FBI says that an entire section on Rehnquist couldn't be found.

BLITZER: All right, Kelli. Thanks very much. Fascinating historical information there.

Let's check back with Fredricka Whitfield for a closer look at some other important stories.

(NEWSBREAK)

BLITZER: Up next, Jack Cafferty wants to know, should President Bush be able to open your mail without a warrant? Jack is standing by with the "The Cafferty File."

And you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Jack Cafferty for "The Cafferty File" -- Jack. CAFFERTY: "The New York Daily News" reporting an exclusive this morning. President Bush claiming the power to open American's mail without a warrant. The paper said Mr. Bush signed a signing statement last month declaring his right to do just that under emergency conditions. The White House denies any change in policy.

The question we asked is: Should the president be able to open our mail without a warrant? Most of you don't think he ought to be able to do that.

Sara in Conover, North Carolina, "Sure, if he wants to pay all my bills. That's about all the mail I ever get anyway. Seriously, though, I don't think the government has the right to open anyone's mail. Don't we have any privacy left anymore?"

Kay, in Naples, Florida, "Jack, I'd be upset if my husband opened my mail without a warrant or with one. Enough of this insanity. I treasure my freedoms and rights, and no one, including the president, should think of messing with them."

Kay, I think they already have.

Linda in Brisbee, Arizona, "Of course the president should be able to open the mail of anyone he construes as being a threat. We need to be protected, don't we? George W. Bush is all about protecting us from our enemies who want to murder us all and destroy our freedoms and our democratic way of life. Bush thinks it's better we should destroy them ourselves first, and he's working hard to do that. So what's the problem?"

Dave in Natchez, Mississippi, "I know the post office does a sorry job of delivering the mail, but if it ends up at the White House, President Bush can go ahead and open it. And if I get any addressed to him, well, I'll open it."

Chet in San Antonio, Texas, "Hello no, he can't open my mail without a warrant. Everyone ought to send the president all our junk mail to give him something to do in lieu of sending more troops into peril."

And Frank in Vestal, New York, "No, they definitely should not open the mail without a warrant. The pages of my last three 'Playboy' magazines have been wrinkled."

If you didn't see your e-mail here, you can go to CNN.com/CaffertyFile and read some more of these online -- Wolf.

BLITZER: I take it our viewers did not think that was necessarily a good idea, Jack.

CAFFERTY: No, they don't, nor I guess should they.

BLITZER: Jack, thanks very much for that.

Jack Cafferty.

We'll see you back here in an hour in THE SITUATION ROOM.

Remember, we're in THE SITUATION ROOM weekday afternoons from 4:00 to 6:00 p.m. Eastern, back at 7:00 p.m. Eastern. That's an hour from now.

Until then, thanks very much. for watching. I'm Wolf Blitzer in Washington.

"LOU DOBBS TONIGHT" starts right now.

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