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THE SITUATION ROOM

War Spending Bill Passes House; Congressman Murtha Responds to President Bush

Aired March 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, HOST: Happening now, an order to President Bush -- a House war funding bill tells the president to bring U.S. combat troops home from Iraq by the end of next summer. But the president says that bill has no chance -- he says no chance -- of becoming law.
A search then a seizure -- 15 British Marines are in Iranian hands. Iranian forces are holding them, claiming the Marines were in a place they should not have been. Britain demands their release and a full explanation. At the White House says it's watching this potential international standoff regarding its Iraq War ally.

And is the third marriage the charm?

We're learning that Republican presidential candidate Rudy Giuliani's wife had been married more than most knew.

But does it really matter in this presidential campaign? Will it matter to Christian conservatives?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Happening now, the House defies President Bush. It's passed a war spending bill that orders the president to get U.S. combat troops out of Iraq by the end of next summer.

The president is fighting back. More from him in just a moment.

But first, let's go to our Congressional correspondent, Andrea Koppel.

She's been watching all of this -- tell us what the bill says, Andrea, and what it means.

ANDREA KOPPEL, CNN CORRESPONDENT: Wolf, from start to finish, Democrats were deeply divided. The emotions were raw. But in the end, they were able to muster the votes to pass the bill.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: And this is the best we can do given the tools we have and I make absolutely no apology for it.

UNIDENTIFIED MALE: For too long, the American people have been craving leadership. Let's give that to them today. REP. JOHN MURTHA (D), PENNSYLVANIA: We're going to make a difference with this bill. We're going to bring those troops home. We're going to start changing the direction of this great country.

KOPPEL (voice-over): For Speaker Nancy Pelosi, whose prestige was on the line, the narrow victory was sweet.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I stand here with great pride on this historic day this new Congress voted to bring an end to the war in Iraq.

KOPPEL: But 14 Democrats -- conservatives and liberals -- defied their speaker and sided with Republicans to oppose the bill's September 2008 deadline for combat troops to leave Iraq. Among them, anti-war presidential candidate, Ohio's Dennis Kucinich, who is against spending more money on the war and wants troops out now.

REP. DENNIS KUCINICH (D), PRESIDENTIAL CANDIDATE: I believe you cannot say you are for peace and vote to keep this war going.

KOPPEL: Two Republicans crossed the aisle to support the bill, but most argued against it, some accusing Democrats of trying to micromanage the war.

UNIDENTIFIED MALE: Our troops march to the order of one commander-in-chief, not 535.

(END VIDEO TAPE)

KOPPEL: Now, from here, the attention turns to the Senate. As you remember, Wolf, just yesterday, the House Appropriations Committee passed a similar bill out of committee, which means that that bill could end up on the floor of the Senate next week ready for debate -- Wolf.

BLITZER: The Senate Appropriations Committee -- Andrea, what's the major difference between the Senate version that the Democrats are pushing there, as opposed to what has now passed the House?

KOPPEL: Well, in the House bill, there was $124 billion in there. The Senate version is closer to what the president wanted -- $121 billion. In addition, the deadlines are slightly different. In the House bill, the deadline would be at the end of August of next year. But in the Senate bill, they set it as a goal to be March 31st of next year -- Wolf.

BLITZER: Andrea on the Hill for us.

The Indiana Republican congressman, Mike Pence, says this is not a war funding bill, but, in his words, a salad bar at Denny's. That's because the bill includes money for things like spinach, shrimp and peanuts, specifically -- check this out -- $120 million for the shrimp industry, $74 million for peanut storage, $25 million for spinach farmers and $252 million for the milk industry.

Pork is what President Bush says the House bill is loaded with and he says it has no chance -- repeat, no chance of becoming law, because he says it has no chance of surviving his veto pen.

Listen to this.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Democrats in the House, in an act of political theater, voted to substitute their judgment for that of our military commanders on the ground in Iraq.

(END VIDEO CLIP)

BLITZER: My next guest is House Democrat, an outspoken critic of the administration's handling of the war, that would be Pennsylvania Congressman John Murtha.

He's joining us from Capitol Hill.

First, your reaction, Congressman Murtha, to the president, who says what you have done today is, in his words, "political theater."

MURTHA: I want to tell you something, this really is disturbing, that a president has overspent by $100 billion the original budget that he had affected to him. He's asking us for money and he's saying this is theater.

Let me tell you, we had quite a number of veterans who were elected. All of us believe the same thing -- you take care of the troops.

He has forced, this president has forced his -- his commanders to send troops back before they're ready, without the training they need, without the equipment they need. He's forced the troops not to spend a year at home. He's forced the troops to be -- he's forced the commanders to extend the troops in order to follow his policy.

This is not Petraeus' policy. This is not Casey's policy. This is administration policy.

He's overspent and now he wants us to get him out of the hole. he's trying to blame us for his problems. This is the president's problem. He needs the money and he's going to have to deal with us.

BLITZER: He says you've abdicated your responsibility because you know he's going to veto this and so why go forward the this when you know, in the end, it's not going to go anywhere in any case?

MURTHA: I'll tell you something, Wolf, he may he's going to veto this, he's the one that's overspent. He's the one that spent too much money. He's the one that needs the money. This president is always blaming somebody else. First he blamed Saddam Hussein, then he blames the Iraqis, then he blames the Democrats, then he blames me.

This is a bill we feel very strongly about. What he's done is forced this country to make sacrifices, meaning the troops make sacrifices -- these troops are doing everything they can do. He said mission accomplished. He's said so many things during this whole thing it's hard to know when -- when you believe what's going on.

For instance, he said mission -- mission accomplished. The mission hasn't been accomplished. And he needs the money. So he's going to have to deal with us on this issue.

BLITZER: So...

MURTHA: He's going to have to find a way to have benchmarks.

We want the Iraqis to take over this war.

Let me tell you, my great grandfather, Wolf, served in the Civil War. I've got his hat in my office. And we fought our own Civil War. You can't -- we're -- our troops are caught in a civil war.

BLITZER: And practically speaking, Congressman, the secretary of defense, Robert Gates, other administration officials say if you do have this money passed, this spending bill, $120 billion or so, passed by mid-April, he's going to have -- he's going to have no choice, he says, but to keep U.S. troops deployed in Iraq even longer, because he won't have the funds to train new ones.

MURTHA: Wolf, he's the guy that's put -- the president's the person that's put us in this spot. He's the one -- now he's trying to insist that we pass this legislation?

I mean, look, we -- we're willing to take care of the troops. We put more than the money that he requested in this supplemental. We put $4 billion more.

But he can't have it all his way. He gets out there and he says OK, we're going to veto this bill.

Well, I'm going to tell you, he has to deal with us. It's not that easy. And we're going to come up with a bill that we can live with and that he can live with. And we're going to take care of the troops.

But it's not going to happen on his terms.

BLITZER: What do you say to the president who spoke about what he called your pet spending projects -- money that has nothing to do with the war in Iraq or Afghanistan, but for fishermen, peanut storage, spinach farmers, the milk industry -- that you've attached all this -- this other funding into this legislation, which has nothing do with the emergency spending needed for the war?

MURTHA: This was all left over from the last Congress, the Republican-controlled Congress. This was all left over -- the Katrina spending, the brach (ph) spending. All these things were left over. And he's trying to blame the Democratic Congress from funding things that needed to be spending in an emergency fashion.

Let me tell you something, this -- this -- these political speeches don't solve the problem. We have to work together. But he can't spend more money than he's been authorized and appropriated and then he expects us to just turn around, without any accountability.

He's going to be accountable for every cent. I was falling all over contractors when I was in Iraq the last time. We took 5 -- 5 percent, which is $800 million, out of contractors. We want to know how many contractors. We want to know how they're spending this money. We want to make darned sure he's accountable to the American public.

That's our job under the constitution.

BLITZER: Where is the compromise on this?

Because obviously at the end you're going to have to fund the troops?

Where do you -- in the Senate, you're going to have to reconcile your language with the Senate language. Then it will go to the president. He's threatening a veto.

Where do you see this ending?

MURTHA: Well, I'll tell you, he needs the money. He has to have the money. He's the one that puts the troops over there. He's the one that overspent the amount of money that he had coming to him. So he's the one that's going to have to decide what the compromise is.

We're willing to compromise. But I'll tell you this, we're not going to compromise on his terms.

BLITZER: Well, what happens in this scenario?

He vetoes the legislation. The troops suffer.

Are Democrats nervously going to...

MURTHA: Wolf...

BLITZER: ... await the...

MURTHA: Wolf, wait a minute.

BLITZER: ... reaction?

MURTHA: Wait a minute, Wolf.

He's the one who put us in this position. He's the one that overspent. He's the one whose policy has forced the commanders to break the very rules that -- guidelines that they have set forward. For instance, the troops have a guideline of being home for a year, being turned and equipped before they go. They're going to send troops into combat that aren't turned and equipped. That's unacceptable to Congress and the public.

Eighty percent of the public supports what we're trying to do in the Congress. And we'll -- we'll go to -- go to -- face this in conference. I'm looking forward to a good, solid political conference.

BLITZER: We'll see what the Senate comes up with. They have their own problems on the other side of Capitol Hill.

Congressman Murtha, always good to have you here in THE SITUATION ROOM.

MURTHA: Good talking to you, Wolf.

BLITZER: Thanks very much for joining us.

An historic day here in Washington.

Let's check in with Jack Cafferty.

He's watching all of this unfold in New York -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, if he had asked around, Iran's president, Mahmoud Ahmadinejad, probably could have found somebody in his government who would have advised against it. On the eve of the United Nations Security Council considering new sanctions on Iran, the Iranian Navy -- yes, Virginia, they do have a Navy -- went out and seized 15 British Royal Marines on patrol in the Persian Gulf.

The British say it happened while the Marines were inspecting a merchant vessel in Iraqi waters. But the Iranians claim the British had entered their territorial waters so they grabbed the Brits and took them to Iran.

The British government is not happy. They are working furiously at this hour to get the Marines back.

As I mentioned, all of this comes as the United Nations Security Council gets ready to consider new sanctions on Iran because it refuses to stop enriching uranium.

Ahmadinejad had wanted to address the Security Council tomorrow in person before it votes on the sanctions, but we've just learned now that he's no longer coming.

Here's the question -- how will seizing British Marines affect Iran's reception at the U.N. tomorrow?

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

BLITZER: All right, Jack, thanks very much.

We want to update our viewers on that -- the scare involving pet food and the deaths of about a dozen or so pets here as a result of some concerns involving Menu Foods.

The CEO of this company, Paul Henderson, has just spoken out.

We want to play you a little clip of what he said. (BEGIN VIDEO CLIP)

PAUL HENDERSON, CEO, MENU FOODS: We are happy and relieved that the experts from the New York State Department of Agriculture and Cornell University have discovered the root of the issues that have harmed North American cats and dogs.

This important discovery caps an unprecedented search by top experts. Dedicated and knowledgeable researchers at universities, independent laboratories and our own veterinarian consultants worked tirelessly to defend and protect our cats and dogs.

(END VIDEO CLIP)

BLITZER: The state officials in New York State have suggested -- have said -- they've concluded, in fact, that rat poison was found in the pet food suspected of causing the kidney failure in these cats and dogs.

We'll stay on top of this story and get you more information as it comes in.

Coming up here in THE SITUATION ROOM, he says the White House hopefuls will no longer take advantage of his state.

Listen to this.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Candidates only came here to California to cash in. They went from fundraiser to fundraiser, made millions and millions of dollars.

(END VIDEO CLIP)

BLITZER: Arnold Schwarzenegger fires away at presidential candidates. You're going to want to hear what else he had to say.

Tony Snow is battling cancer. He's battled cancer before. Now, the president's press secretary getting ready for another possible round. We're going to go live to the White House for the latest.

And he apparently played a crucial role in the firing of those eight federal prosecutors.

Now, will Kyle Sampson be forced to take the hot seat and testify in Congress?

We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's get right to Capitol Hill.

There's some news coming in regarding the attorney general, Alberto Gonzales, questions over the firings of those eight U.S. attorneys -- Dana, what are we learning?

DANA BASH, CNN CORRESPONDENT: Well, we're learning that the attorney general's former chief of staff, Kyle Sampson, has agreed to testify before the Senate Judiciary Committee next week, next Thursday. He just sent this letter, that we got by way of our producer, Kevin Bond. His attorney sent the letter, saying that he looks forward to answering the committee's questions.

Now, Kyle Sampson, you remember, resigned a couple of weeks ago in the wake of this controversy. And the attorney general said recently that Kyle Sampson was the driving force for the firings of these prosecutors.

Now, what he says in this testimony, Wolf, will be very important in terms of what we learn about who at the Justice Department and who at the top levels of the White House was involved -- or anybody who was involved in all of these firings and the sort of machinations that went on behind the scenes.

It could be very interesting in terms of this controversy and where it leads next. The dynamic could change with this.

BLITZER: Now, he's a former official now. He's resigned.

BASH: Right.

BLITZER: I assume this will be an open session, there will be a transcript and he will between sworn in under oath?

BASH: That's correct.

And he's coming voluntarily. There was a threat to subpoena Kyle Sampson if he wasn't going to come voluntarily. But this letter from his -- from his attorney says that he is going to come and testify voluntarily, Wolf, which is quite different, as you were just alluding to there, from the controversy that is still going on, the standoff between Congress and the White House over top White House officials, current and former, about them coming to talk to Congress.

BLITZER: All right, we'll stay on top of this story with Dana.

Dana Bash on the Hill.

One day after John Edwards' wife, Elizabeth Edwards, announced her cancer is back, another political figure announces disturbing news about his health. It involves the White House press secretary, Tony Snow.

Let's go to our White House correspondent, Suzanne Malveaux.

She's watching this story for us -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, I talked to Tony Snow earlier today. And kind of in his irreverent Tony Snow way said it is what it is, and it is a scare, of course. You know that he's a cancer survivor. Two years ago, he had colon cancer. You may recall the first briefing that he had here at the White House, he was brought to tears when he was talking about his struggle. His mom, when he was just 17 years old, died of the same disease.

But he beat it with six months of chemotherapy. His colon was removed. It was very much a concern of whether or not he was even going to take this job, his own health status.

But today Tony Snow delivering a little bit of sobering news.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: In re -- a recent series of C.T. scans and P.T. scans and MRIs, we have found a small growth in my lower abdomen. Blood tests are negative. P.T. scans are negative. But out of an aggressive sense of caution, I'm going to go in for surgery on Monday and have it removed.

(END VIDEO CLIP)

MALVEAUX: And, again, Wolf, Tony says he -- he doesn't know what it is, exactly, this growth, or whether or not it is cancerous, but it's going to be removed. He is doing this out of an abundance of caution. Every three months he has C.T. scans and blood tests.

He wants to make sure that he gets this taken care of. In the meantime, Deputy Press Secretary Dana Perino is going to be taking his place.

But, of course, we all wish him the very best -- Wolf.

BLITZER: We, of course, wish him the very best.

He's going to be out recuperating for, what, about three or four weeks?

MALVEAUX: Three or four weeks is what he says. And, of course, he said Monday he will know, he will find out what this growth is. But he wanted to make sure to remove it as quickly as possible.

BLITZER: Well, let's hope it's nothing.

Thank you for that.

We, of course, wish Tony only, only the best.

Coming up, we knew he's been married three times.

But what about his wife?

Will new revelations about Judith Giuliani hurt her husband's presidential ambitions?

Plus, it's March madness -- no, not on the basketball courts, but out on the campaign trail. Bill Schneider -- he's keeping score.

Stick around. You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: Fredericka Whitfield is joining us.

She's keeping an eye on the wires, all the news coming into THE SITUATION ROOM.

What's crossing the wires now -- Fred.

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

An Iraqi deputy prime minister is in the hospital after being wounded in a suicide bombing attack. It happened today inside his compound. There are conflicting reports about his condition. At least nine people were killed in the attack. A CNN reporter says the suicide bomber's vest was stuffed with ball bearings to produce the maximum amount of damage and casualties.

And it should soon be easier for pilots to tell whether they're on the right or wrong runway. The Federal Aviation Administration says it's speeding approval of new technology. It will give pilots a moving map display on their laptops in the cockpit that will show precisely where their plane is on the airport's surface. The technology could help prevent deadly accidents. It is expected to be available to airlines by the end of the year.

And German media are calling him Canut. The Berlin Zoo's cuddly baby polar bear made his public debut today. Canut was born December 5th. He is 15 weeks old and weighs nearly 19 pounds. He is already a star because of a video pod cast and a TV series. One 10-year-old boy says the polar bear cub looks even better and sweeter in real life than he does on TV. No doubt about that -- Wolf.

BLITZER: Fred, thanks very much.

Coming up here in THE SITUATION ROOM, he's moved up the date of the state's primary and he's hoping that will put all the presidential candidates in their place.

Up next, Arnold Schwarzenegger firing away at White House hopefuls.

The Giulianis get a marital secret out in the open.

But will new word of a never before revealed marriage hurt the presidential candidate's White House run?

Stick around. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Happening now, a controversial trip canceled. The Iranian president, Mahmoud Ahmadinejad, now saying he won't be coming to New York tomorrow for those meetings at the United Nations because the U.S. visas for his entourage were issued, he says, too late. Iran's Foreign Ministry may -- foreign minister, that is -- may fill in for Ahmadinejad at the United Nations.

Also, a Chicago firefighter killed, three others injured, in an accident with a school bus. The fire truck was responding to a call with lights and sirens on when it was rear-ended and flipped over. No students were on the bus.

And he's off -- a 23-year-old pilot leaves Florida on what he hopes will be a record making voyage. Barrington Irving hopes to become the youngest person and first African-American to fly around the world solo. Good luck to you.

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

Arnold Schwarzenegger lets loose. The California governor sounding off on his fellow Republicans and on Washington.

CNN's Sumi Das is following all of this for us from Los Angeles -- Sumi, what's the latest?

SUMI DAS, CNN CORRESPONDENT: Wolf, California's governor, Arnold Schwarzenegger, is putting GOP presidential hopefuls on notice.

(BEGIN VIDEO TAPE)

DAS (voice-over): Governor Schwarzenegger wants his state to have a starring role in the 2008 elections and is telling candidates they must address issues key to Californians.

SCHWARZENEGGER: We don't want to hear the rhetoric, the regular rhetoric, which is, you know, we should be firm but compassionate. That's a great line, but what does it really mean?

DAS: Talking points won't cut it. As promises are made on the campaign trail, Schwarzenegger wants in on the action. That includes getting more bang for California's big bucks.

SCHWARZENEGGER: For every dollar that we send to Washington and federal tax, we get $.79 back. We know that in the '90s, we got $.95 back on the dollar.

Why is it only $.79? what would they do? Do they believe that California gets -- should get more money?

let them say that. Let them commit to that, yes, I believe California should get $.85 or $.90 on the dollar.

DAS: With an earlier state primary set, Schwarzenegger says Republicans eying his state's prized 55 electoral votes need to court voters in a state the GOP hasn't won in nearly 20 years.

SCHWARZENEGGER: Immigration reform, health care reform, education, climate change, infrastructure, Social Security, water, energy, and, of course, how do we get more independent of fossil fuel, these are very important issues to California.

DAS: At times, the actor-turned-politician was unapologetically harsh in his criticism of Washington.

SCHWARZENEGGER: The federal government hasn't shown any leadership in health care. I mean, they have talked since 1912. Since Teddy Roosevelt, he has talked about universal health care. And where's the action?

(END VIDEOTAPE)

DAS: It remains to be seen whether Governor Schwarzenegger's squeaky-wheel tactics will be effective in getting GOP action. The last time California voters voted for a Republican president was in 1988 for Bush 41 -- Wolf.

BLITZER: Sumi, I take it the political pundits out there think all of this, when all is said and done, will mean California will be a lot more important in selecting the next president of the United States.

DAS: Actually, political analysts are expressing doubts.

You know, presidential primaries, for the most part, cater to the party faithful, the loyalists. And Schwarzenegger's success so far has been built on his ability to cross over to the center and appeal to both parties. His fellow Republicans elsewhere in the country may not follow suit -- Wolf.

BLITZER: And Schwarzenegger, he's really getting -- he's -- he's throwing his weight around, though, because he did win decisively his reelection. So, I assume that...

DAS: He did.

BLITZER: ... he -- he believes he's a lot more influential right now.

DAS: Yes. He might feel that he's been given somewhat of a mandate.

But it remains to be seen whether or not that will actually carry out in the elections. You know, he has been successful. He got his wish. The presidential primary has been moved up. But whether or not these candidates will come and really make these campaign promises that he's looking for, it remains to be seen.

BLITZER: All right, Arnold Schwarzenegger making his -- making his -- making his voice very much heard.

Thanks very much for that, Sumi Das, out in Los Angeles.

Coming up: The presidential candidates, they are getting ready for March madness, not only basketball players, but presidential candidates themselves. What's going on? Bill Schneider, he's standing by for that.

Stick around. We will be right back.

(COMMERCIAL BREAK)

BLITZER: There are new developments regarding another Republican right now. And it involves presidential candidate Rudy Giuliani and a surprising revelation involving his wife.

Fredricka Whitfield is at the CNN Center. She's watching this story for us -- Fred.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again, Wolf.

Well, new word of an old marriage -- but how will the news affect the race to the White House?

(BEGIN VIDEOTAPE)

WHITFIELD (voice-over): Front-page headlines in the New York tabloids: Rudy Giuliani's wife, Judith, reveals publicly for the first time that she first married in Nevada when she was not quite 20.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

RUDOLPH GIULIANI (R), FORMER MAYOR OF NEW YORK: I'm a human being. You know, I made mistakes. I'm not perfect.

(END VIDEO CLIP)

WHITFIELD: Giuliani's stormy marital history is well known: three marriages and two divorces, the most recent incredibly bitter and public.

(BEGIN VIDEO CLIP)

GIULIANI: In many ways, we have grown -- grown to live independent and separate lives. And we should probably strive toward formalizing that.

(END VIDEO CLIP)

WHITFIELD: Now we find out that Judith Giuliani has also been married three times. That first one lasted five years. Months after divorcing, she said "I do" for the second time. That union lasted 12 years. She exchanged wedding vows with Giuliani in 2003.

Campaign aides say the former New York City mayor, his close friends and family, had long been aware of Judith Giuliani's first marriage.

Giuliani isn't the only Republican presidential contender with marital baggage.

(BEGIN AUDIO CLIP, "FOCUS ON THE FAMILY")

DR. JAMES DOBSON, FOUNDER & CHAIRMAN, FOCUS ON THE FAMILY: I asked you if the rumors were true that you were in an affair with a woman obviously who wasn't your wife.

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: Well, the fact is the that the honest answer is yes.

(END AUDIO CLIP)

WHITFIELD: That's possible candidate and former House Speaker Newt Gingrich confessing in a radio interview with Dr. James Dobson, a leader among social conservatives.

Gingrich, like Giuliani, is on his third wife.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Let me say that I am responsible for the breakup of my first marriage.

(END VIDEO CLIP)

WHITFIELD: Senator John McCain spoke out about his divorce during his first run for the White House.

Of course, once divorced Ronald Reagan was twice elected president. So, when it comes to Giuliani, whose moderate social views may turn off crucial conservative voters, is getting it out in the open early in the campaign season the right strategy?

MARK PRESTON, CNN POLITICAL EDITOR: By acknowledging this information on their own terms, the Giuliani campaign helps lessen any sense of scandal that might be associated with it, had a news organization or an opponent revealed it first.

(END VIDEOTAPE)

WHITFIELD: So, will this revelation have legs, and will it hurt Giuliani's standing in the minds of social conservative voters, voters crucial to his bid for the Republican presidential nomination? We will just have to see -- Wolf.

BLITZER: All right, Fred, thank you -- Fredricka Whitfield reporting.

There's a mad dash for campaign cash right now, as the presidential hopefuls face a key deadline.

Let's turn to our senior political analyst, Bill Schneider. He's joining us now.

Bill, tell our viewers what this is all about.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Wolf, this year is called the invisible primary. But it's about to become more visible, as candidates prepare to show us the money.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's March madness. Basketball? Well, that, too.

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: This is truly the March madness of campaign funding.

SCHNEIDER: Presidential candidates are racing around the country, trying to raise huge sums before the deadline.

(BEGIN VIDEO CLIP, HILLARYCLINTON.COM AD)

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I hope you will send in a contribution and support her campaign. And, please, do it by the March 31 deadline.

(END VIDEO CLIP)

SCHNEIDER: That's when the first quarter ends and fund-raising totals come out, the campaign's first official scorecard. In the first quarter of 1999, George W. Bush's $7.5 million beat all the expectations. This year, Hillary Clinton hopes to do the same thing.

THOMAS MANN, SENIOR FELLOW IN GOVERNANCE STUDIES, BROOKINGS INSTITUTION: This is her opportunity to demonstrate this awesome, formidable political machine's ability to put her ahead of the pack.

SCHNEIDER: Barack Obama has been raising a lot of money online.

KRUMHOLZ: We will see whether that adds up to enough to topple the big fund-raising that...

SCHNEIDER: John Edwards?

KRUMHOLZ: Senator Edwards has to prove he's of the same level of fund-raising as Senators Clinton and Obama.

SCHNEIDER: On the Republican side, John McCain faces the highest expectations.

MANN: John McCain will reestablish himself as the -- at least the fund-raising front-runner. If he doesn't, it's another blow to his candidacy.

SCHNEIDER: Rudy Giuliani?

KRUMHOLZ: We will see if -- if he can prove a good showing with this first-quarter report. That will tell us a lot, as far as his strength and attraction.

SCHNEIDER: And Mitt Romney?

MANN: He is a formidable fund-raiser and could well challenge McCain.

(END VIDEOTAPE)

SCHNEIDER: Campaign spokespersons try to lowball expectations: Oh, we don't expect to do very well. We got a late start, yadda, yadda.

Then, when the figures come out, they say: Hey, we raised a lot more money than we expected -- Wolf.

BLITZER: Bill, thank you.

John and Elizabeth Edwards top our look at where the candidates are on the campaign trail. One day after their emotional announcement of the return of her cancer, the two are in Los Angeles. The presidential hopeful and his wife attend a fund-raising -- a fund- raiser later today.

Edwards joins rivals Hillary Clinton, Barack Obama, Bill Richardson, and Chris Dodd at a culinary workers union rally in Las Vegas tonight. Nevada is seeing a lot of campaigning by the Democratic presidential hopefuls, since it's moved up the date of its caucuses to mid-January, just after the Iowa caucuses.

The Republican presidential hopeful Rudy Giuliani is swinging through California today and tomorrow. The Golden State is also seeing a lot of campaign traffic, now that it's moved its primary up to February 5.

John McCain, by the way, is back on his Straight Talk Express this weekend. He's meeting with voters tomorrow in New Hampshire, which holds the nation's first primary.

And Senator Clinton picks up crucial support in Iowa on Monday -- sources telling CNN that former two-term Democratic Governor Tom Vilsack will endorse Senator Clinton. Vilsack himself was a presidential candidate, before dropping out of the race last month.

Let's get to a story now we have been following here in THE SITUATION ROOM: Just how close to Barack Obama, to his campaign, was the man behind that "1984" anti-Hillary video that was all over the Web?

Our Internet reporter, Jacki Schechner, has some surprising new detail -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: That's right, Wolf. There's one more twist.

This is video of when Barack Obama declared he was running for president in Springfield, Illinois. That was on February 10. That same day, Philip de Vellis, the man who has now been exposed as having created the "1984" anti-Clinton ad, sent an e-mail to friends announcing that the Barack Obama Web site had gone live, and saying that he personally had designed part of that Web site. He said that he designed this right here, and that he had designed this.

Now, if you remember that when de Vellis was exposed, the company that he worked for, Blue State Digital, and the Obama campaign both say that he had no involvement in the Obama account.

Well, we spoke to Blue State Digital again today and asked them about this e-mail. And they say that de Vellis did design generic networking tools, or part of them, that the company then licenses out to several candidates, including Barack Obama -- several companies, rather, Barack Obama's campaign being one of them, the Democratic Party being another. You can see a variation of the tool right here. They still stand by the fact that he didn't do any direct work on Obama's account -- Wolf.

BLITZER: What's the Obama campaign saying about this new development?

SCHECHNER: Well, Wolf, we did speak to them again today. And they stand by the company Blue State Digital, saying they are very happy with the way that they handled this whole situation. They let de Vellis go. They say that they are ready now to move on to other issues -- Wolf.

BLITZER: Jacki, thank you.

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

Up next: One House Democrat is raging mad about the situation in Iraq.

Listen to this.

(BEGIN VIDEO CLIP)

REP. JOHN MURTHA (D), PENNSYLVANIA: I am the person that found the 44,000 shortage of body armor in the initial invasion of Iraq. We had troops in danger because they didn't have the equipment they needed. We cannot send troops back into combat without equipment and fully being trained!

(END VIDEO CLIP)

BLITZER: Congressman John Murtha, we will talk about what he's saying and today's House vote on war funds. That's coming up in our "Strategy Session."

And the latest developments regarding a potential standoff between Britain and Iran -- 15 British Marines are being held. We're going to have details.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It's being called Congress' boldest challenge yet to the Bush administration's war in Iraq. The House voted today to order President Bush to bring combat troops home from Iraq next year.

The president accused those who voted for the bill of abdicating their responsibility.

Joining us now in our "Strategy Session," Democratic strategist Donna Brazile and former Republican congressman J.C. Watts.

Donna, listen to President Bush, because, coming right after this narrow Democratic victory in the House, he was very forceful. Listen to this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today, a narrow majority in the House of Representatives abdicated its responsibility by passing a war spending bill that has no chance of becoming law and brings us no closer to getting our troops the resources they need to do their job.

(END VIDEO CLIP)

BLITZER: How dangerous, politically, for the Democrats is this, if the troops don't get the resources they need, as the president says, to continue the mission, that they are not fully funded over the next several months?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, Bush, what is -- I mean, what is the president going to veto? Is he going to veto the money that he has requested for the troops?

General Petraeus and the other commanders will have the money they need to fight this war. Will he veto the benchmarks that he set for the Iraqi government? Or will he veto the money that is in the budget for military health care and for those returning veterans?

So, the president needs to be very careful in just drawing a line in the sand. Instead, he should work with Democrats. The only thing that he does not like is the timetable that they put in that bill.

BLITZER: What do you -- that's a big -- that's a big condition, obviously, from the president's perspective. What's the response?

J.C. WATTS, CNN POLITICAL ANALYST: Well, I think, Wolf, what we have seen in this bill today is that what I have said all along. There's not a whole lot of difference in the way the Republican leadership will operate and the way the Democrat leadership will operate.

If this was a funding bill for the troops, it should have been a funding bill for the troops and all the equipment and all the ammunition that they needed. And it looked as though the Democrat leadership was paying people to vote for the bill.

Now, Republicans, you know what? They did the same thing when they were in the majority. This is the same old, same old. I think it should have been...

(CROSSTALK)

BLITZER: He's referring, Donna...

(CROSSTALK)

WATTS: It should have been a supplemental bill, which is what it was designed to be, without any limits, because you limit the troops when you do that. BLITZER: He's referring to the -- the milk industry, the shrimp industry, the peanut storage industry. They all got some what they used to call pork, as a result of this legislation.

(CROSSTALK)

WATTS: What's the difference?

BRAZILE: And let me -- and, with full disclosure, there's also $1.3 billion to finish up the levee repair in the city of New Orleans. So, I'm excited that there's a little bit of levee repair, some money for some real levees.

(CROSSTALK)

WATTS: And, you know, but -- Donna, I agree with that, but it shouldn't have been in a defense supplemental.

(CROSSTALK)

BLITZER: Hold on a second.

(CROSSTALK)

WATTS: I think that should have been...

BLITZER: John Murtha just was on this show a little bit earlier. He said, if -- all of that stuff should have been in legislation that was supposed to pass last year, Republican legislation.

BRAZILE: Absolutely.

BLITZER: Didn't make it. So, this was the vehicle -- and you are a former congressman -- the vehicle they had to get this funding going.

WATTS: Well, but, if you are in the majority, why not design a bill for that? Why not go to the appropriate committee and say, we want a bill to come out of this committee that has levee -- to build our levees, to take care of milk producers, spinach growers, those types of things?

BRAZILE: Well...

(CROSSTALK)

WATTS: Why put it on this bill?

(CROSSTALK)

WATTS: If you are in the majority, you can do those things.

BRAZILE: Congressman, you -- you know better than I do, because you were there negotiating and drafting many of these bills, that this is part of how people operate on Capitol Hill, supplemental coming down the path... WATTS: Exactly.

BRAZILE: ... must -- this is a must-pass bill. Of course they will add some national priorities on this bill.

And, again, I think the Democrats, 94 percent of Democrats embraced this bill. Speaker Pelosi deserves a lot of credit for her leadership in bringing all of the factions together.

(CROSSTALK)

BLITZER: All right, listen to -- I want you to listen...

(CROSSTALK)

WATTS: ... only point is, what is the difference in the Democrat leadership and the Republican leadership?

(CROSSTALK)

BLITZER: It's business as usual in Washington. That is what he's saying.

WATTS: It's business as usual. That's my point.

BLITZER: All right, listen to Speaker Pelosi. This was -- this was her message today.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I think the message is -- there's many audiences for this message. I hope the first message goes to the American people, that we know that they have lost confidence and faith in the president's conduct of the war.

(END VIDEO CLIP)

BLITZER: What a lot of Democrats are saying is that this vote mirrors public attitudes right now. Americans are really quickly losing their support for this war.

WATTS: Well, Wolf, I think -- I think Americans are losing confidence in the way the war is being executed.

I have said before I think it was the right cause. I think there has been poor execution on many fronts. You know, I -- but I don't believe the American people are saying, we want to give up. I think the American people understand the consequences of us bailing out of Iraq, putting a timeline on it, which I think strengthens the terrorists. It strengthens the enemy. And I think we have to be careful in doing that.

BRAZILE: Well, hopefully, this will give the Iraqi government a backbone to stand up to the terrorists and to stand up to the militias, and to begin to do what they should do in order for us to win this war militarily. General Petraeus said that we cannot win this just with a military solution. And you said this was business as usual. This is a break, because, for the first time, this Congress has went on record, first time in four years since the war, saying that they are no longer giving the president a blank check. That's the difference. That's a huge difference.

BLITZER: Well, there is an argument -- I have even heard it from administration officials -- that this stance the Congress is taking does send a powerful message to the government in Baghdad, the prime minister, Nouri al-Maliki; he sees what's happening in Washington, and it puts pressure on him, automatically, to do more to take charge of the security environment.

WATTS: But, Donna and Wolf, I think the president has done that with the shift in strategy about 45, 60 days ago that says, we are going to have benchmarks.

I think we have seen some progress. We are going to change strategies. We're going to surge our troops. We're going to put some benchmarks down. We're going to say to the Iraqi government, you have got to meet these benchmarks.

And that's what -- what are we, 45 days into that? And now we're taking an additional step. Again, I just -- at the end of the day, I don't think Republicans or Democrats win or lose on this. I think the troops lose.

(CROSSTALK)

WATTS: And that's where I think we have to...

(CROSSTALK)

BRAZILE: I disagree. The troops have what they need.

(CROSSTALK)

WATTS: I do -- I do think the...

BRAZILE: The mission will change.

WATTS: No, they don't. That's why we got the supplemental, because they don't have what they need.

BRAZILE: This is about transitioning their mission from just a military mission to one of logistical support, still hunting down al Qaeda.

But there's nothing in the bill that says our troops will not have what they need to fight and win this war.

(CROSSTALK)

WATTS: But, Donna, that's the point. It's a supplemental for defense. Why do we have something for spinach growers and for peanut growers and for milk producers?

(CROSSTALK)

BRAZILE: And why did we have that in the last supplemental? And there was also money for different national emergencies.

WATTS: You make my point exactly.

(CROSSTALK)

BRAZILE: But that's not a reason to veto the bill.

(CROSSTALK)

WATTS: What's different?

BRAZILE: That's not a reason to veto.

WATTS: And let me give you another point.

BRAZILE: What's different is the benchmarks and the timeline.

(CROSSTALK)

BLITZER: I don't think the president is going to veto the bill, if he does veto it, because of the -- all those extraneous issues.

BRAZILE: The spinach.

BLITZER: He's going to veto it if -- if there's -- if it ties his hands, in terms of a deadline, in terms of benchmarks.

But let's continue this on another occasion.

WATTS: And didn't the Senate deal with this two weeks ago?

BLITZER: Well, the Senate has got its own problems.

(LAUGHTER)

(CROSSTALK)

BLITZER: This is the House of Representatives.

BRAZILE: We're not going to talk about the love life of Rudy Giuliani and the marriage, J.C.?

BLITZER: Another -- another time.

WATTS: The marriage?

BRAZILE: The marriage.

BLITZER: Guys, stand by. Thanks very much.

Still to come: the showdown between Congress and the White House. (BEGIN VIDEO CLIP)

REP. TOM TANCREDO (R-CO), PRESIDENTIAL CANDIDATE: This is -- is just for show. That's all it is. It's not really to gather information for the sake of letting the people know where we are on this issue.

(END VIDEO CLIP)

BLITZER: So, does Congressman Tom Tancredo still want the U.S. attorney general fired?

And regarding the seizure of those 15 British Marines by Iranian forces, how might that affect Iran's reception at the United Nations tomorrow? Jack Cafferty will be back with your thoughts.

And we will be right back.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question is: How will seizing British Marines in the Persian Gulf today affect Iran's reception at the U.N. here in New York tomorrow?

Ted in Sacramento, California: "The Iranians should be seated at the kiddie table. They are babies trying to act tough. However, there is so much nonsense going on over at the U.N. that these clowns will probably get a standing ovation. President Bush is right about Iran, but it will take a while for the world to see their truly evil agenda."

Ben in Dallas writes: "One thing most people in the West don't realize is that the Iranian regime is composed of multiple power centers and often have competing interests and infighting. My suspicion is, a competing faction exercised its influence within the Revolutionary Guard Corps to cause an embarrassment for Ahmadinejad on the eve of his trip to New York, which has now been canceled."

John in New Hampshire: "The Iranians have again shown their propensity to escalate some kind of action against coalition forces in the Gulf. Without addressing these blatantly warlike postures through the U.N. Security Council, the world's oil consumers will continue to be held hostage by two-bit thugs."

David in Washington: "Iran couldn't have made its position any worse today. They will not be taken seriously at the U.N. after this. If Iran doesn't release these British Marines immediately, their position with the U.N. will be damaged for a long time to come."

And Phil in Jacksonville, Florida, writes: "This will have no effect on the U.N. vote. Do we really believe this weak, ineffective and corrupt organization, the U.N., can take any kind of action that will hold this country to account for its flagrant of previous U.N. resolutions? The U.N. is a joke, at best, and a hindrance to peace, at the worst" -- Wolf.

BLITZER: Jack, thanks very much.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: We're going to have a lot more on this incident at sea, British Marines grabbed by Iran's Revolutionary Guard. With nuclear tensions already high, why is Iran right now raising the stakes?

Donald Trump says America needs someone who can do more than simply wave. As Condoleezza Rice starts a new Middle Eastern mission, can she close a deal?

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