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THE SITUATION ROOM

President Bush Prepares for State of the Union; Al Gore Gets Oscar Nod for Movie; Could Gore Run for President?

Aired January 23, 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, an unpopular president prepares to address a skeptical nation and a Democratic-controlled Congress.

Can Mr. Bush pull his agenda and his presidency out from under the shadow of the war in Iraq?

This hour, new details of what he'll say in his State of the Union Address later tonight.

And look for Democrats to push back hard on Iraq and plans for a troop build-up. We'll take you to a Marine base where troops are anxious and even eager about the prospect of returning to the war zone.

Also, Al Gore and the big announcement -- his movie about global warming gets an Oscar nod.

Once he walks down the red carpet, could another run for the White House be far behind?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

When President Bush walks into the House chamber tonight, he may find fewer supportive faces than ever on both sides of the aisle. This will be Mr. Bush's first State of the Union speech before a Congress entirely run by Democrats. And it comes at a time when many of his fellow Republicans are also trying to get as far away from his Iraq war policy as possible.

Americans watching his speech at home may also be hard to please. Take a look at these numbers right behind me. It shows President Bush's approval rating at a time of each of the his State of the Union Addresses. It's gone down year after year, from a high of 84 percent in 2002, it's down to 34 percent right now.

Our Bill Schneider is standing by with some brand new poll numbers.

Dana Bash is on the Hill with the action up there. Let's go to the White House first with a preview of what we can expect to hear from the president tonight.

Ed Henry on the scene -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, senior aides here say that the president will begin tonight's big speech with congratulations to the Democrats. He'll greet the new madam speaker behind him, an olive branch, if you will, but also a nod to the fact that the political ground has shifted dramatically under his feet.

(BEGIN VIDEO TAPE)

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

HENRY (voice-over): The differences between then and now could not be any starker.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: As we make progress on the ground and Iraqi forces increasingly take the lead, we should be able to further decrease our troop levels.

HENRY: Now, the president is increasing the number of troops in Iraq and even his former speechwriter notes the audience at this year's State of the Union will be far more hostile.

MICHAEL GERSON, FORMER BUSH SPEECHWRITER: There is some drama in this moment, the drama of a new Democratic congress, the drama of a fairly unpopular surge policy that the president has announced.

HENRY: At the same time last year, 41 percent of Americans said the U.S. was winning the war on terror. In the latest CNN/Opinion Research Corporation poll, it slipped 13 points, to just 28 percent.

JACK QUINN, DEMOCRATIC STRATEGIST: Lyndon Johnson, who was in a similar sort of position as this President Bush because of his Vietnam experience, at least had things like civil rights, Medicare, the Great Society programs.

This president has no sense of accomplishment -- has no accomplishment.

HENRY: That may explain why the president will focus on big ideas he hopes to find common ground with Democrats, like 2010 -- a call for cutting gasoline consumption by 20 percent over the next 10 years, reminiscent of what then President Bill Clinton did, by sometimes cutting legislative deals with the opposition after Republicans won the 1994 election.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: The president is relevant here.

HENRY: But reaching out to Democrats on issues like immigration can further complicate the political calculation for Mr. Bush by angering his own base. GERSON: I think conservatives don't want to feel like he's triangulating off them or playing off them. But I think it is a genuine opportunity. He has a leadership of Congress now that is more favorable to his immigration ideas than the previous one.

HENRY: And in the long run, Democrats say the opportunity for major compromise will be limited for a lame duck president.

QUINN: He has the bully pulpit. He has the megaphone. That said, the overwhelming part of the American public disapproves of the way he's handling the presidency. His back is to the wall.

(END VIDEO TAPE)

HENRY: Now, on another big idea, the president wanting to make health benefits a standard tax deduction. Democrats openly hostile to that already, saying it will be a tax hike for many Americans. Republican leaders on the Hill, like Jon Kyl, insisting Democrats should cool down, saying this is a tremendous opportunity on health care for bipartisan teamwork.

But I can tell you, even a top administration official admitted to me today the White House has to do a much better job of selling this health plan. It's very complicated and so far they haven't done a good job of selling it, according to some of their own people -- Wolf.

BLITZER: What are you hearing, Ed, about whether or not the president will refer to Katrina and its aftermath in this speech tonight?

HENRY: We're told by senior aides the president will not refer to Katrina recovery, that he also will not refer to stem cell research.

We'll have to see the final, final draft. But they say that's because this president does not want it to be a laundry list like previous years. He wants it to be thematic. This is one of his last State of the Unions, obviously. He's going to leave a lot of issues out, just focus on a handful of big issues.

But, obviously, that's going to open him up to some criticism. You can bet Democrats are going to say a year-and-a-half after Katrina, things have still not been fixed. That should be a top priority. They're going to hit him on stem cells, other issues like that -- Wolf.

BLITZER: All right, Ed, stand by.

I want to go up to Capitol Hill.

Dana Bash is standing by.

You're gearing up for a Democratic response, a hard-hitting response on both Iraq, as well as some of these domestic issues -- Dana. DANA BASH, CNN CORRESPONDENT: We're already hearing that response in the prebuttals, if you will, that we're getting from Democrats. We have been, really, since Friday. You know, Ed alluded to this. One of the major differences in how things will look and feel tonight is that the House speaker, Nancy Pelosi, will be sitting behind the president for the very first time as he gives his State of the Union Address.

And the speaker said today that she'll know pretty quickly when she hears the president speak whether he's ready to work cooperatively or say I'm the decider.

Now, that's what the speaker said. But the formal response to the president is going to be given by a senator who's been in office just 18 days. That's Jim Webb. He is a former Republican, a Vietnam veteran, somebody who ran and won on a lot of issues that Democrats say really propelled them and will propel them forward in the majority.

Now, what Jim Webb has said about the president's Iraq plan is that he doesn't think he has a plan or a strategy at all.

We talked to the senator about what he's going to say in this speech. He said that he does have an idea of what the president should do, and it's diplomacy, something that Mr. Bush has not yet done, and that's talk to countries like Syria and Iran.

(BEGIN VIDEO CLIP)

SEN. JAMES WEBB (D), VIRGINIA: It's only going to be resolved with strong diplomatic participation and overt ownership among other countries in that region that have relations with the sects that are involved inside Iraq. And it doesn't make a lot of sense in the -- in the type of sectarian violence that's going on to simply put American troops in the middle of it.

(END VIDEO CLIP)

BASH: Now, even as Democrats pound the president on Iraq, it should be noted that they don't necessarily all agree on a plan either. For example, Senator Jim Webb, who we just saw, who will be giving the formal response tonight, doesn't agree, or at least hasn't signed onto the plan that Democrats worked very hard to coalesce around, and that's the idea of pulling troops back from Iraq in four to six months.

But there is something that Democrats and an increasing number of Republicans are agreeing on here on Capitol Hill, Wolf, and that is the opposition to the president's plan to send more troops to Iraq. It certainly could be a telling thing in terms of the mood that the president will face here that all of the talk in the hallway today, Wolf, was about how many senators will be on record in a resolution voting against the president when it comes to his plan on that.

And that will actually -- the first test of that will be tomorrow in a commitment, in the Senate Foreign Relations Committee. We're already going to see the first real opposition put to a vote in that committee tomorrow.

BLITZER: And we're told by authoritative sources the president fully expects one of those resolutions, at least one, will be passed.

Dana, we're going to have you standing by, as well.

Dana and Ed Henry -- they're both going to be working late into the night tonight.

Just hours before the president's State of the Union Address, the top Republican in the House is putting even more pressure on the president over Iraq.

The minority leader, John Boehner, telling our Andrea Koppel he expects to know whether this new influx of U.S. troops into Iraq is making a difference over the course of the next 60 to 90 days. This, a day after House Republicans put the president on notice they want a progress report on Iraq every 30 days.

Now, the president's other audience, the one that, in many ways, matters the most -- that would be you, the American people -- who will be watching and listening closely to Mr. Bush tonight.

We have some interesting new CNN Opinion Research Corporation poll numbers that are just coming out.

For that, let's turn to our senior political analyst, Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, a tough crowd -- that's what President Bush may be thinking when he speaks to the American people tonight.

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): President Bush will be addressing a skeptical audience, not just the new Democratic Congress, but also the American people. Most Americans now call the Bush presidency a failure. Two thirds say President Bush has done something to make them angry.

(VIDEO CLIP FROM ANTI-WAR PROTEST)

SCHNEIDER: Most likely that's Iraq.

BUSH: Well, I've committed more than 20,000 additional American troops to Iraq.

SCHNEIDER: More than 60 percent of Americans oppose doing that. Congress would like to stop the president.

Most Democrats?

SEN. CHRIS DODD (D), CONNECTICUT: It is time that we accept our obligations and offer meaningful action to stop this proposal.

SCHNEIDER: And growing numbers of Republicans.

SEN. CHUCK HAGEL (R), NEBRASKA: I will do everything I can to stop the president's policy, as he outlined it on Wednesday night.

SCHNEIDER: More than 60 percent want Congress to oppose the troop increase. Anger over Iraq is spilling over to other issues. Only 28 percent believe the United States and its allies are winning the war on terror, the lowest number ever.

George W. Bush was elected because he had the image of good character.

BUSH: I will swear to uphold the honor and dignity of the office to which I have been elected, so help me god.

SCHNEIDER: How low is President Bush's credibility?

Most Americans now say they trust President Bush less than they trusted previous presidents.

Remember the issue that brought down Bush's father?

Then it was the economy, stupid. Not now.

BUSH: Tax cuts have led to a strong and growing economy.

SCHNEIDER: The public agrees. Sixty-three percent say the economy is in good shape, the highest number since before 9/11.

(END VIDEO TAPE)

SCHNEIDER: Now, take Americans who believe the economy is in good shape, but oppose sending more troops to Iraq. Eighty-three percent of them disapprove of the way President Bush is handling his job.

It's Iraq, stupid -- no offense, Wolf.

BLITZER: I think it's -- all the indicators are pointing to that as overriding issue hovering over these final two years of this Bush presidency.

SCHNEIDER: Yes. Right.

BLITZER: Bill Schneider, Dana Bash, Ed Henry -- they are part of the best political team on television. Also part of that team, Paula Zahn. She joins me for a special two hour edition of THE SITUATION ROOM leading up to the president's State of the Union Address. We start our coverage 7:00 p.m. Eastern tonight.

And tomorrow, I'll sit down with the vice president of the United States, Dick Cheney. You're going to want to see this interview. We'll air parts of that interview at 4:00, 5:00 and 7:00 p.m. Eastern tomorrow.

Remember, also, for the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Let's go to New York and Jack Cafferty for The Cafferty File.

Lots of excitement here in Washington -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Yes, the air is thick with anticipation, as they say.

The 2008 run for the White House may mark the end of public financing for presidential campaigns. Senator Hillary Clinton entered the race and became the first candidate since the program started in the '70s to opt out of public financing.

Public financing was set up right after Watergate as a way to clean up the system. So much for that idea.

Senator Clinton thinks she can raise more money than the $150 million that she'd get from public financing. In fact -- get a load of these numbers -- there are experts who say the final two contenders for the White House in '08 will raise more than $500 million each.

The head of the Federal Election Commission says serious candidates will need $100 million just by the end of this year if they want to be in the game.

Now that Clinton is opting out, it's likely that other candidates, Democrats and Republicans, will follow suit. Even Senator John McCain may follow in Clinton's footsteps. He's been a long time supporter of campaign finance reform. That was then. McCain's spokesman says the senator thinks the current system "is not fulfilling its original goal" -- you know, the best government money can buy.

Here's the question -- what does it mean if public financing of presidential campaigns becomes a thing of the past?

E-mail us at caffertyfile@cnn.com or go to cnn.com/caffertyfile.

Now, if you need $500 million to get elected president, Wolf, and you've got to go out and raise that kind of money, don't you expect there'll be some chits coming due to the winner shortly after inauguration day?

BLITZER: There will be a lot of receptions and dinners, all sorts of things going on, and who knows what -- this is uncharted water right now. This is a whole new strategy for these presidential wannabes.

CAFFERTY: It's a little scary for the country, too, to have that kind of IOU out there on inauguration day.

BLITZER: Money talks, as they say -- Jack.

CAFFERTY: Yes.

BLITZER: Thanks very much. Jack will be back later this hour.

Coming up, he's facing an opposition Congress and many members of his own party are now abandoning him, as well.

But can President Bush be called a lame duck?

We're going to take a closer look at this.

Also, as the war in Iraq drags on, there are more signs of stress for so many military families on the home front.

Coming up next, our John King. He's live at the military community in North Carolina.

And opening statements now underway in the trial of Louis "Scooter" Libby.

Will top White House officials be forced to testify in the CIA leak case?

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

(COMMERCIAL BREAK)

BLITZER: Whatever President Bush says about the war in Iraq in his State of the Union Address tonight, his words will compete in many people's minds with the images so prevalent, the images of violence.

At least seven more people were killed, 25 were wounded in a string of bombings across Baghdad today. And five civilians were killed when a private security company helicopter went down over Baghdad today, as well.

Senior U.S. officials say the victims have gunshot wounds, but they say it's not clear if that's why they died or exactly why this aircraft went down.

A senior Iraqi defense official tells the Associated Press the chopper was shot down. If that's the case, it's the second U.S. helicopter to go down in recent days.

The U.S. military reports today that four people have been detained in connection with a weekend attack that killed five American soldiers in Karbala. Authorities say about 30 gunmen penetrated a secure compound by pretending to be American military officers.

Here in Washington, the president's choice to be the commander in Iraq, the senior commander, that is, warned that plans for a troop build-up in Iraq won't ease the chaos and the killing, at least not right away.

Lieutenant General David Petraeus appeared before the Senate Armed Services Committee earlier in the day.

(BEGIN VIDEO CLIP) LT. GEN. DAVID PETRAEUS, U.S. ARMY: The situation in Iraq is dire. The stakes are high. There are no easy choices. The way ahead will be very hard. Progress will require determination and difficult U.S. and Iraqi actions, especially the latter, as ultimately the outcome will be determined by the Iraqis.

But hard is not hopeless.

(END VIDEO CLIP)

BLITZER: We're going to have full reports from the Pentagon and from Iraq in our next hour, right here in THE SITUATION ROOM.

Many American troops have mixed emotions about President Bush's plan to send reinforcements -- that's a word he'll use tonight -- to Iraq, especially among those being sent back into the line of fire.

Our chief national correspondent, John King, is joining us now from New Bern, North Carolina. That's right outside Camp Lejeune, is that right, John?

JOHN KING, CHIEF NATIONAL CORRESPONDENT: Just up the road about 30 miles, Wolf.

BLITZER: All right, so you've been talking to these military families. We've been saying there's mixed emotions there. Give us a little flavor of what they're saying only hours before the president addresses the nation once again.

KING: There's no question they will do their job and do their duty when they are deployed. But you get an increasing sense of frustration in these military communities. Camp Lejeune is near here. The Army's Fort Bragg is a few hours away; the Seymour Johnson Air Force Base. North Carolina is scattered with military installations.

And for many of the families, they are facing second, third, in some cases, even fourth deployments overseas since 9/11 and three or four since the beginning of the Iraq War almost four years ago.

So there's a sense of sacrifice, a sense now of unfairness, many saying why is this taking so long?

And it's much more open now, Wolf, than when I came here, say, even just two years ago during the presidential campaign, of people saying there have been mistakes made by this president, mistakes made by the former secretary of defense, Donald Rumsfeld, that have resulted in these extra deployments -- not enough troops in the beginning; the equipment is in bad shape, many of the troops say.

So you have a much more open sense of skepticism and frustration.

Now, make no mistake about it, at the same time, they all say they are committed to doing their job. But the open criticism of the president, especially in these communities where you have so many retired military people and where they have such a deep tradition and a deep pride in that tradition, is quite extraordinary and striking. And it reflects, of course, the deep skepticism we see all across the country. But to have it so open in these military communities is quite striking.

BLITZER: When General Petraeus was testifying today before the Senate Armed Services Committee, his confirmation hearings -- and he's widely expected to be confirmed rather easily -- he did something extraordinary, John. He went through blunder after blunder after blunder that was made by the U.S. military, the civilian leadership, off the coast of the past three and-a-half years.

Is there a sense there among these military families, who's to blame? what are they saying to you when they take a look -- this was not supposed to turn out as complicated, as dangerous, as difficult as it clearly has.

KING: Active duty personnel, Wolf, are very careful, as you know, when you ask those questions. They try to stay out of politics because they are active duty and they will be deployed. Whether it's tomorrow or months from now or a year from now, they know they will be deployed and the president is their commander-in-chief. And they have the highest respect for that position.

Among all the retired military people here, there is just open loathing of Donald Rumsfeld, the former defense secretary. But more and more direct criticism of the president, saying he is the one who signed onto these plans, he is the one who didn't send more troops at the beginning, he is the one who has had these adjustments and has been way too late, in the eyes of many of these former military officers, to admit the mistakes and to make adjustments.

There's a bit more optimism now that there is a change in leadership at the Pentagon, there is a change in leadership in the command on the ground.

You mentioned General Petraeus. But they say the price is that, in one case, we spoke to a father on this trip whose daughter came back from Iraq, was honorably discharged from the Army, just a few weeks away from being free of her obligation and then called back. The Pentagon invoked its powers to bring her back and sent her back to Iraq.

Other families going back for second or third deployments.

So you have some members of the Marines and the armies who have 3- and 4-year-old children they barely know.

So what they say in these communities is that is the personal price that they are paying for what many concede and many believe were major strategic blunders at the beginning of this war, at the Pentagon and at the White House.

BLITZER: And General Petraeus very blunt in that testimony today.

John, we're going to have you back. Stand by.

John is going to be with us throughout our coverage leading up to the president's State of the Union Address later tonight.

The American people are sending a very clear message to President Bush and members of Congress that they want them to do something about this war. Iraq tops the list of issues Americans care about in our new CNN/Opinion Research Corporation poll. Fifty-nine percent say the war is extremely important. Terrorism is a close second, with 54 percent saying it's extremely important for the president and the Congress to address.

Coming up, it's a high profile case with enormous political consequences. Up next, a report from the courthouse where Louis "Scooter" Libby's CIA leak trial is now underway.

Plus, it's President Bush's first State of the Union Address in front of an opposition Congress.

But what have past presidents done in similar situations?

We'll take a look back to predict what could happen tonight.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time. Happening now, just what is the state of America's union?

President Bush is preparing to tell the nation tonight. In his sixth State of the Union Address he is expected to discuss, among other things, health care, energy, the environment and the issue on virtually everyone's mind right now -- Iraq.

How might a Congress entirely now controlled by the Democrats receive him?

As the president prepares, Iraq flares with violence and death again. Today, 17 unidentified, apparently tortured bodies, were found in Baghdad and a helicopter carrying private security employees crashes in the capital, killing five more people. Their bodies had gunshot wounds, but it's not yet clear if they died in the crash or were killed by gunfire afterward.

And is America ready for the first female president?

Senator Hillary Clinton talks about the challenges.

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

The lawyer for Vice President Cheney's former top aide made a powerful charge in court today. He says Louis "Scooter" Libby was set up by the White House in the CIA leak controversy -- get this -- to protect Karl Rove, a top adviser to the president.

Our justice correspondent, Kelli Arena, has more on opening statements in Libby's perjury and obstruction of justice trial -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the government came out swinging right from the start today, alleging that Louis "Scooter" Libby lied about conversations he had about former covert CIA operative Valerie Plame.

Prosecutor Patrick Fitzgerald told jurors the defendant knowingly and intentionally lied to the FBI. He says this is not a case of bad memory and not a case of forgetfulness.

In fact, Fitzgerald even played an audiotape of Libby's testimony before the grand jury. That is a very unusual move. Of course, he says this is going to help prove his case.

Libby's defense, of course, arguing the exact opposite. Ted Wells, who is Libby's lawyer, told jurors that Libby was asked about conversations he had about Valerie Plame Wilson months after the fact, that he's known for having a notoriously bad memory. Wells told jurors that the case is a weak paper thin, circumstantial he said/she said type of case. Wells argued that Libby had absolutely no motive to lie, and, in fact, he suggests that Libby was being used as a scapegoat to protect someone who was far more essential to the White House, namely Karl Rove.

And so, Wolf, the airing of the dirty laundry begins. The trial is going to last to at least a month, Wolf. And this is just day one -- back to you.

BLITZER: All right, Kelli, at the courthouse.

Thank you for that.

Whoa, what a bombshell that is.

We're going to stay on top of this trial and watch it for you every day and update you on what is going on.

Tonight, the president will do something he has not had to do during his presidency -- actually stand before a Congress in which both houses are controlled by Democrats.

Let's get more from our senior analyst, Jeff Greenfield -- Jeff.

JEFF GREENFIELD, CNN SENIOR ANALYST: Wolf, suppose you're the president who has to describe the State of the Union to a Congress controlled by the other party? What do you do? Well, most post-war presidents have found themselves in this position. And here is what some of them did.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP) HARRY TRUMAN, PRESIDENT OF THE UNITED STATES: Mr. President, Mr. Speaker, members of the Congress of the United States...

(END VIDEO CLIP)

GREENFIELD (voice-over): Well, you can start off on a light note, as Harry Truman did in 1947, speaking to a less than enthralled Republican majority.

(BEGIN VIDEO CLIP)

TRUMAN: It looks like a good many of you have moved over to the left since I was here last.

(LAUGHTER)

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

(APPLAUSE)

(END VIDEO CLIP)

GREENFIELD: Or as Bill Clinton did in 1995.

(BEGIN VIDEO CLIP)

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: If we agree on nothing else tonight, we must agree that the American people certainly voted for change in 1992 and in 1994.

(APPLAUSE)

W. CLINTON: As I look out at you, I know how some of you must have felt in 1992.

(LAUGHTER)

(END VIDEO CLIP)

GREENFIELD: If you're in trouble over a burgeoning crisis, as Ronald Reagan was in 1987 over Iran-Contra, just after the Senate went Democratic, you can offer a forthright apology.

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: I have one major regret. I took a risk with regard to our action in Iran. It did not work. And, for that, I assume full responsibility.

(END VIDEO CLIP)

GREENFIELD: Or you can ask the Congress to move on, as Richard Nixon tried to do in 1974, when the Watergate waters were rising.

(BEGIN VIDEO CLIP)

RICHARD NIXON, PRESIDENT OF THE UNITED STATES: I believe the time has come to bring that investigation and the other investigations of this matter to an end. One year of Watergate is enough.

(APPLAUSE)

(END VIDEO CLIP)

GREENFIELD: Reagan survived. Nixon didn't.

You can also take a major theme of your opposition and try to make it your own. Here is Clinton in 1996, as the reelection year began, talking to a conservative-controlled Congress.

(BEGIN VIDEO CLIP)

W. CLINTON: The era of big government is over.

(END VIDEO CLIP)

GREENFIELD: And you can also try to change or avoid an unpleasant subject. Here is Bill Clinton in 1998, just as the Monica Lewinsky story was exploding, as he turned to a favorite Democratic theme.

(BEGIN VIDEO CLIP)

W. CLINTON: What should we do with this projected surplus? I have a simple four-word answer. Save Social Security first.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

(END VIDEOTAPE)

GREENFIELD: But how do you change an overarching subject like Iraq, where not just the public, but powerful members of your own party, have turned so strongly against your policies? It's what makes this speech to an opposition Congress one of the tougher ones in memory -- Wolf.

BLITZER: All right, Jeff, thank you -- Jeff Greenfield, our senior analyst.

Up next: He could be considered the loneliest man in this town. Is President Bush running out of friends and allies? Our Candy Crowley is standing by to take a closer look.

And, in the next hour or two, very different takes on the State of the Union. The Democratic Party chairman, Howard Dean, and the House Republican whip, the number-two Republican in the House -- that would be Roy Blunt -- both will join us, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: So much work, so little time.

Tonight, when President Bush tells Americans the state of the union, he will outline an ambitious agenda regarding pressing problems abroad, as well as obstacles to overcome right here at home.

But does he have the time and the political clout to take all of these issues on?

Our senior political correspondent, Candy Crowley, is here in THE SITUATION ROOM with more -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Wolf, all the conversation today and up until the speech tonight has been about what the president wants. After that, it's going to be about what he can get.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): It is the worst of times. It is the worst of circumstances.

ROBERT DALLEK, PRESIDENTIAL HISTORIAN: There's an old saying in American history, that war kills reform, or, more generally, undermines the president's ability to get anything done in domestic affairs.

CROWLEY: George Bush is in the twilight of his presidential years, at the dawn of the next presidential cycle. This evening's State of the Union address finds him weaker and his critics stronger than at any other point. It is time for the lame-duck question: Is he or isn't he? Watch for members of his own party to answer.

DALLEK: More and more, you're going to see him on the margins of influence, because you have 21 Republicans -- or Republican seats up for grabs, and only 12 Democratic seats up for grabs in the U.S. Senate.

CROWLEY: You can tell in the nuances of even the most loyal Bush supporters that the pulling -away has begun.

(on camera): Do you consider yourself a Bush Republican? Or are you going to need to distance yourself from the president?

SEN. SAM BROWNBACK (R), KANSAS: I have supported the president on a number of issues, but I think we have got to go further, and I think we have got to get more bipartisan.

CROWLEY (voice over): Social Security, immigration, energy, health care, the list of things in need of fixing is lengthy and difficult, maybe impossible for a lame duck -- or maybe not.

LANNY DAVIS, FORMER WHITE HOUSE COUNSEL: I remember, President Clinton, in 1998, had so many ideas for the last two years of the Clinton administration. He was almost a liberated human being, because you're not running for reelection. You're running for history.

CROWLEY: And, even if Republicans leave him in droves, there are some politicians with a vested interest in seeing that the next two years are as productive as possible...

SEN. HARRY REID (D-NV), MAJORITY LEADER: There will be a vote Tuesday at noon.

CROWLEY: ... remembering how politics makes for strange bedfellows.

MARY MATALIN, FORMER ASSISTANT TO PRESIDENT BUSH: The Democrats can't afford to do nothing for two years. This last midterm election was not about being in a freefall or a stall for two years.

(END VIDEOTAPE)

CROWLEY: If the president is running out of clout, Wolf, he is definitely running out of time. Most political observers look at the calendar and say he has got maybe nine months to get something done, before that presidential kicks in, in full.

BLITZER: You mean it hasn't kicked in yet?

(LAUGHTER)

(CROSSTALK)

BLITZER: It looks like it's kicked in already. All right.

Candy is going to be with us throughout the night in our coverage leading up to the president's State of the Union address.

Candy, thanks for that.

And still to come: more on what President Bush needs to say, what he needs to do tonight to get his political punch back. I will ask Paul Begala and Bay Buchanan. They're standing by live in today's "Strategy Session."

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

(COMMERCIAL BREAK)

BLITZER: In today's "Strategy Session," we will have more on our top story, actually, the State of the Union. President Bush is preparing to talk about what is right with the nation and what could be better.

Here to talk about that are two CNN political analysts. Paul Begala is a Democratic strategist. Bay Buchanan is president of American Cause.

I was over at the White House, had a briefing today, with other reporters. The president will lay out, Paul, the consequences of failure in Iraq, what that means for the United States. He's not necessarily going to challenge the Democrats to come up with a better strategy. But he will lay out the consequences of failure, speak directly to the American people about that.

PAUL BEGALA, CNN POLITICAL ANALYST: Well, and good for him. That's part of what a leader ought to do.

But I don't think anybody in America is unaware of the consequences of failure. I think they believe the president is unaware of the fact that he has failed.

I think most Americans -- certainly, Bill Schneider showed in our latest CNN poll -- most Americans believe that the president is failing us, particularly in this war. So, the more he talks about how bad things will be for America if we lose, the more voters look at him and say, dude, you're losing. You lost this thing. You screwed it up.

And, so, that doesn't get him out of the hole he is in at all, I don't think. I think it just reminds us...

(CROSSTALK)

BLITZER: If you were advising him, Bay -- and you're obviously not -- how would -- what would you tell him to say tonight that might restore his credibility and help him deal with this crisis in Iraq?

BAY BUCHANAN, CNN POLITICAL ANALYST: I think he's coming from it from a correct perspective, point one being that he has to explain to the American people the -- the urgency of this matter, that he to stay with it.

And then he has to give them some feeling that the plan he has now in place will turn things around, and it really will give the good people of Iraq a chance and an opportunity. He's got to get their confidence back.

And you do that two ways. I disagree with -- with Paul. I think they want us to succeed. The American people want us to succeed. He has got to say: Look, we have to succeed. Here is why. So, I need your support to do it. And I have a plan in place.

BLITZER: On his domestic agenda, he has three issues that he is going to lay out that I suspect Democrats are going to be receptive to, not necessarily all of them, certainly not all Republicans.

Immigration reform, he clearly wants to deal with that issue over the next year, year-and-a-half. Health care, he's got a major new initiative to try to ease the health care crisis in the country. And, on global warming, he will speak about that tonight. And a lot of environmentalists and Democrats, and Republicans, for that matter, will be anxious to hear what he to say.

BEGALA: That will be, perhaps, the acid test.

I -- I -- one of my sources in the Bush camp -- and I do have some -- suggest that this could be, as he put it, a "Nixon goes to China" moment. Well, that is setting the bar awfully high.

You know, I went back and looked. Every single State of the Union address, the president has mentioned that we're too dependent on foreign oil. And, yet, when he took office, we imported 58 percent of our oil. Today, we import 70 percent.

So, every year, he says something about it, but, every year, the problem gets worse.

BLITZER: He has got a detailed plan to try to lower that dependence on imported oil.

BEGALA: Well, that's what he says. And, yet, it's never -- he has never come forward with anything that would actually do that, in the eyes of many Democrats.

The environmentalists will look for this. Are there enforceable mandatory caps on carbon dioxide production, something Governor Bush endorsed in 2000, when he ran for the presidency? I don't actually believe he will do it, but, if he were to do it, the environmental community in America would stand up and cheer to cap those greenhouse gases that cause global warming, which -- by the way, on the day that Al Gore was nominated for an Oscar for his film about global warming.

BLITZER: We are going to more on that coming up.

BEGALA: He should have Al Gore in the -- in the -- in the box with Laura.

BEGALA: That's right, exactly what he needs.

(CROSSTALK)

BUCHANAN: But we're worried he might be doing that next.

(CROSSTALK)

(LAUGHTER)

BLITZER: What do you think about these domestic items on his agenda?

BUCHANAN: Well, Wolf, what concerns conservatives across the country -- and you have to remember. What is he at, 34, 35 percent now? Who are those people? That is his base. That's the last guy standing with him.

And what is he going to do? He is going to make proposals that offend them. He's going to talk amnesty. The American people are not for that. And, certainly, Republicans are not. And he's going to talk -- there is one proposal on the health care that is going to increase taxes. This goes exactly against those people who are still standing with him, in order to appease those who are on the other side. This is no way to move ahead.

BLITZER: Is this triangulation? BEGALA: Well, let's wait and see. I think, actually, Bay has a good point about his health care proposal.

What has been leaked so far looks dreadful to me, as a Democrat, and apparently to you, as a conservative Republican.

(CROSSTALK)

BLITZER: "The Washington Post" liked it today.

(CROSSTALK)

BEGALA: Yes. "The Washington Post" is wrong about everything.

BUCHANAN: Exactly.

BEGALA: Yes. They're off.

(LAUGHTER)

BEGALA: They're the worst editorial page in America. I'm sorry. They banged the drum for this war every day, and look how that turned out. So, liberals don't trust "The Washington Post" any more, I think, than conservatives do.

(CROSSTALK)

BUCHANAN: We certainly have never put our eggs in that basket.

BEGALA: Here's the problem. Bay is right.

Bush's proposal, if the leaks are accurate -- and I suspect they are -- would raise taxes on 30 million Americans who have health benefits now. Now, they're not all wealthy Americans. They're union members. They're older. They tend to get sicker. And it's a terrible deal for the middle class. And Democrats, I suspect, will oppose it.

BLITZER: We have got a lot more details coming up in THE SITUATION ROOM. So, guys, stand by.

Paul Begala and Bay Buchanan, and, as you saw earlier, Candy Crowley, Jeff Greenfield, John King, you know they are part of the best political team on television.

Hillary Clinton tops our "Political Radar" on this day. The senator from New York and presidential hopeful says that, if elected, her husband, the former President Bill Clinton, will be a tremendous asset. But the senator says that, if elected, she would be the decider.

And, on CNN's "AMERICAN MORNING," she brushed aside suggestions the country might not be ready for a woman president.

(BEGIN VIDEO CLIP, "AMERICAN MORNING") SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I'm willing to, you know, try to overcome the skeptics. I heard a lot of the same concerns when I started running in New York.

And I think every woman has faced some doubts about whether she could do what she felt she was capable of doing. And we don't make progress unless there are those of us willing to get out there and see whether we can do it.

(END VIDEO CLIP)

BLITZER: Hillary Clinton speaking with our Soledad O'Brien earlier today.

Senator Clinton, by the way, also says she is embarking on a conversation with America. Our Internet team is going to show us just how far she is willing to take it.

Also: earth-shattering charges against Israel's president. Did he use his position of power to force himself on women who worked for him? The latest details -- a crisis in Israel on this issue.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring the wires. She's keeping an eye on all the video feeds coming in from around the world, checking in with our reporters and our producers.

Let's check in with her for a closer look at some other important stories making news -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things to tell you, Wolf. If the United States wants a bigger Army, it will have to pay dearly. About $70 billion, that is what the Army's deputy chief of staff said today. Given that estimate, Lieutenant General Stephen Speakes says the government must consider its priorities.

And, amid wars in Iraq and Afghanistan, Speakes says that, if the United States should enter another conflict before force levels can be beefed up, it would take longer to fight and likely cost more American lives than normal.

And, in Israel, scandalous tales of sex and lies -- the president of Israel is facing charges of rape and other sex crimes. Israel's attorney general has decided there is enough evidence to charge President Moshe Katsav.

Now, Katsav will have a chance to refute the charges in a hearing before any indictments. Four of Katsav's former female employees are making these claims. The Israeli president has denied any wrongdoing. And his lawyer says he is the victim of blackmail.

That's it for now -- Wolf.

BLITZER: All right, we will get back to you very soon, Carol. Thanks for that.

Let's get back to the race for the White House right now. Among the 2008 presidential hopefuls, Senator Hillary Rodham Clinton's online campaign already ranks among the most sophisticated.

Now she is taking yet another, more aggressive step, advertising her presidential bid on -- get this -- conservative Web sites.

Our Internet reporter, Abbi Tatton, has the story -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, when you're on a conservative blog like this one, Captain's Quarters, it's not unusual to see an advertisement or blog ad, like this one for Republican Rudy Giuliani.

What is unusual is the one directly underneath it, this one for Hillary Clinton, directing people to her Web site, where there is a series of Webcasts this week, where people are invited to send in their questions online.

Now, the adverts are all over the place on Web sites, blogs on the left, in the middle, on the right. But it's those placed on the right that are getting the attention -- a writer at the conservative Town Hall Web site suggesting that it's wasteful, saying none of their readers there are going to be supporting Hillary Clinton.

We spoke to the Internet director at the Hillary Clinton camp. And they said that the blog ad buy was big and it was diverse. They wanted to reach out as widely as possible. It's about starting a conversation with people that might agree and with people that might disagree.

The founder of Blogads -- that's the site that distributes these banner ads online -- says it's the first time he has seen a major candidate advertise on the other side's Web sites -- Wolf.

BLITZER: All right, Abbi -- Abbi staying on top of this story for us.

Meanwhile, the former vice president, Al Gore, is getting another chance at being a winner. "An Inconvenient Truth" -- that is the documentary that Al Gore made -- has now picked up two Academy Award nominations.

All the Hollywood buzz surrounding Al Gore is leading to -- get this -- a familiar line of political speculation. That's what we do.

And we turn to our Mary Snow in New York with a little bit more of that -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, Al Gore is stepping into the spotlight in Hollywood, but could it lead to a sequel of his 2000 presidential run?

(BEGIN VIDEOTAPE)

SNOW (voice-over): From policy wonk want to Hollywood's A-list?

(BEGIN VIDEO CLIP, "AN INCONVENIENT TRUTH")

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: The Arctic is experiencing faster melting. If this were to go, sea level worldwide would go up 20 feet.

(END VIDEO CLIP)

SNOW: Al Gore's movie, "An Inconvenient Truth," was nominated for two Oscars, for best documentary feature and best song.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Al Gore is a movie star. Who would have thunk it? Supposedly, the most boring man in the world, and he's up for two Oscars.

SNOW: Al Gore isn't technically named, but says he is thrilled for everyone involved. And expect to see Gore and wife, Tipper, amid the movie stars on Oscar night.

GORE: Domo arigato.

SNOW: The former vice president has been getting plenty of practice on red carpets. Last week, it was Japan. And while he is there raising awareness of global warming, the question that won't go away is whether he will run in 2008.

GORE: I don't have plans to be a candidate again.

SNOW: But can an Oscar moment change all that?

SCHNEIDER: If he were to win the Oscar, I think he would have to think real hard about whether it might be have a bigger meaning about people wanting to make a political statement about his message.

SNOW: Even though other Democrats are, so far, stealing the spotlight in the 2008 race, never count out a plot twist.

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: I think it's still possible that Al Gore will get in the race, because he has the resources and name I.D. to be very formidable.

(END VIDEOTAPE)

SNOW: And, if Al Gore did seek the Democratic nomination, he would be the favorite in what senior political analyst Bill Schneider likes to call the Hollywood primary. That's the support of rich liberals -- Wolf.

BLITZER: I suspect he is going to have some competition for that this time, at least on the Democratic side.

Thanks very much, Mary, reporting from New York.

Still to come: "The Cafferty File." What does it mean if public financing of presidential campaigns becomes a thing of the past? Jack Cafferty with your e-mail -- right after this.

(COMMERCIAL BREAK)

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

CAFFERTY: The question this hour is: What does it mean if public financing of presidential campaigns becomes a thing of the past, which it looks like it will in the upcoming 2008 race?

Cynthia writes in Garland, Texas: "It means the obvious becomes even more so. The person elected to the office of president can no longer be a representative of the people, of the average wage-earner, who is the backbone of both the economy and the nation. One must have a huge war chest to run for office. There are many ordinary people with the ethics and judgment capable of running this country. However, they can't afford to get in the race. Pity."

Caroline, Elk Grove, California: "What the end of public financing really means is that, in the not-too-distant future, we will have the Pfizer White House, the same way big companies have renamed football stadiums and bowl games."

Ron in Florida: "That's one of the best ideas I have heard in a long time. If they want the job, let them beg for the dough, and leave the taxpayers out of it. In fact, why not force the media to give -- yeah, give -- each candidate an equal amount of time to make their pitch, and then get on with their regular programming?"

Louise in Gore, Georgia: "One way or the other, the public pays the bill, whether it's over the table or under it. I think the result of public financing would benefit the public, since they would hold the purse strings, and not 1 percent of the people owning all of the candidates."

Wendy in San Rafael, California: "I have had a bumper sticker for a few years that says it all: We don't have a democracy. We have an auction. This country will continue to belong to the highest bidder, and not to Americans who have don't have the big bucks to buy representation."

And Tony in Wilton, Maine, writes: "It's a good idea that went nowhere. Government of the wealthy, by the wealthy, and for the wealthy shall not perish from Washington until Americans realize that NASCAR and 'American Idol' are the real WMD" -- Wolf.

BLITZER: Jack will be back in a few moments.

Thank you.

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