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THE SITUATION ROOM

Compromise on the Iraq War Funding Bill. Latest White House Strategy for the Iraq War. Green Taxis in NYC.

Aired May 22, 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, Democrats drop their demand for an Iraq pullout time line. We're going to tell you who gets what in a new war funding compromise, including a sweetener for anti-war liberals.
Also this hour, a first test of an immigration reform deal. Opponents in the Senate are trying to rip the bill apart. I'll ask the deputy White House chief of staff, Joel Kaplan, if President Bush will get what he wants on immigration or the funding in the war in Iraq.

And a first of its kind poll of young Muslims in the United States.

Are they content?

Are they angry?

And do they think suicide bombings are ever justified?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Top Democrats in Congress insist they're still holding President Bush's feet to the fire on Iraq even though they're now dropping the demand for a pullout timetable.

Democrats appear to be blinking on this issue, but what about the White House?

Our White House correspondent, Ed Henry, is standing by.

But let's begin our coverage this hour with our Congressional correspondent, Andrea Koppel.

Fill in the blanks on the compromise that appears to be in the works right now -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Wolf, just a few weeks ago, Democrats were dug in, refusing to budge on that time line. Now they say they're ready to compromise.

(BEGIN VIDEO TAPE)

KOPPEL (voice-over): Sensitive to criticism Democrats caved, Majority Leader Harry Reid said President Bush won't be getting everything he wants either.

SEN. HARRY REID (D-NV), MAJORITY LEADER: We don't know what the language will be on this for sure. But it's for certain it will be the first supplemental that he has that he hasn't been given a blank check.

KOPPEL: As part of a compromise the two sides have mostly hammered out, the new war funding bill would likely include political and economic benchmarks the Iraqi government would have to meet. if not, the U.S. would withhold much need Iraqi reconstruction aid.

But Democratic leadership aides tell CNN the bill may also include a presidential waiver, which Mr. Bush could sign if he felt the aid was essential.

In addition, the bill would require the president to make at least 18 different reports to Congress on Iraqi progress before August.

Without a time line for U.S. troop withdrawal, Speaker Pelosi risks losing support from dozens of anti-war Democrats, like New York's Jerrold Nadler.

QUESTION: If it doesn't include a time line, is there any way that you could support?

No way?

REP. JERRY NADLER (D), NEW YORK: I don't think so. I don't think so.

KOPPEL: To make up the votes, a Democratic leadership aide tells CNN Democrats are confident they will get enough support from House Republicans to pass the bill, a sentiment echoed by Republicans in the Senate.

SEN. TRENT LOTT (R-MS), MINORITY WHIP: The president has indicating he thinks benchmarks can be beneficial. and to -- for Congress to get reports about what's happening, shouldn't we be getting that anyway?

And I think we will.

(END VIDEO TAPE)

KOPPEL: Now the deal, if both sides agree, would also include a boost to the federal minimum wage for the first time in more than a decade, as well as an untold amount in domestic spending.

Now before the Ts are crossed and Is are dotted, Speaker Pelosi plans to meet with her caucus later this afternoon, Wolf, to go over the fine print -- Wolf.

BLITZER: So they're going to drop the time line for now, but they're already thinking down the road of trying to revive such a time line or a deadline, is that right, Andrea? KOPPEL: Absolutely, Wolf. They are looking, as soon as next month, in June, when are there are two defense spending bills that will come up in Congress. They say they're going to work on including language -- a time line in both of those bills -- Wolf.

BLITZER: Andrea Koppel watching all of this on Capitol Hill.

When and if the current battle over war funding is settled, the Bush administration still faces plenty of hurdles ahead in Iraq. The clock clearly ticking, and even many Republicans are demanding proof of the troop build up is working.

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

How does the administration plan on taking these future steps now that the war funding issue may -- repeat -- may be resolved?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, as you know, in an interview with Reuters, the president said that it will be an important moment in September -- of course, that's when get a progress report from General Petraeus about how this increase of U.S. troops on the ground in Iraq is doing -- get a progress report.

And senior officials here tell us that the White House right now is engaged in high level planning about what to do next, about the next critical step turning the corner in what the White House likes to term a post-surge Iraq.

That would include a training more Iraqi security forces; also, protecting U.S. forces as they transition out of combat, and, also, zero in on what the U.S. thinks are the two biggest impediments to stability on the ground right now -- Al Qaeda, as well as sectarian militias that, of course, the U.S. has been charging are backed by Iran.

Now, there has also been speculation that the White House may try to put in a second round of more U.S. troops as part of all this planning.

But today, Tony Snow shot that part down.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: So far, the indications are that things are moving forward in a positive direction. It seems to me that it's highly premature to be asking what happens if it fails when you've got success in Anbar, when you do have continued efforts to build greater capability going after bad actors, whoever they may be, within Baghdad.

(END VIDEO CLIP)

HENRY: Now, very interesting when you hear that -- that pause there from Tony Snow. The White House is being very carefully now. They've been burned so many times, being charged with rosy scenarios. He was careful about -- in that pause -- about how he couched the progress on the ground.

And, finally, as well, Democrats, it's important to note, are pouncing on the fact that when you look at this playing that's going on at the White House, a lot of these elements, when you also throw in the new diplomatic initiatives to Iran and Syria, it sounds a lot like the Baker-Hamilton report that the White House largely rejected back in December -- Wolf.

BLITZER: Ed Henry watching all of this at the White House.

Ed, thanks very much.

Ed, Andrea Koppel -- they're both part of the best political team on television.

And remember, for the latest political news at any time you can check out our political ticker at cnn.com-ticker.

Let's get to the presidential race right now and one of the big named prospects thought to be waiting in the wings. That would be New York's Republican mayor, Michael Bloomberg.

He says flatly he's not necessarily considering a run for the presidency, but he left the door open when I asked if a third party candidate should jump into the race.

Listen to this.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (R) NEW YORK: It depends if the public comes up with candidates that they find acceptable from two parties, no. And if they don't find them acceptable, three or four parties. There's nothing magical about two. The public wants to have people that have experience and that clearly state what they're going to do and then are willing to have themselves held accountable after they get elected for delivering what they promised.

(END VIDEO CLIP)

BLITZER: The full interview with Mayor Bloomberg -- that's coming up in the next hour here in THE SITUATION ROOM, including his major new initiative to try to ease air pollution, global warming, on the streets of New York City.

Jack Cafferty is in New York City right now.

He's got a pretty interesting plan to get all those cabs -- 13,000 cabs -- Jack, and make sure that they're hybrids.

JACK CAFFERTY, CNN CORRESPONDENT: Right.

And how soon are we planning to do that?

BLITZER: Over the next five years he says.

CAFFERTY: OK.

So much for that break through immigration reform bill -- at least for now. The Senate has decided that consideration of this bill should not be rushed ahead of the Memorial Day recess. So the senators began painfully picking apart the bill today, adding their own thoughts. This is not unlike vultures visiting the carcass of a wildebeest.

Senator Byron Dorgan, the Democrat from North Dakota, wants to get rid of or at least change the temporary worker program.

Fellow Democrat Senator Jeff Bingaman, from New Mexico, wants to cut in half the number of people allowed to work under the program.

Republicans also have some thoughts. Senator Lindsey Graham, South Carolina, wants a mandatory prison sentence added for any foreigner caught crossing the border illegally.

And Oklahoma Senator Jeff Inhofe says he wants to make English the official language of the United States. He wants to prevent entry of anyone who can't pass an English proficiency test.

The future all of this, needless to say, is uncertain at best.

Any way, here's the question -- if you had the Senate floor, what amendment would you like to make to the immigration bill?

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

It doesn't look like this thing is going anywhere any time soon -- Wolf.

BLITZER: They originally wanted to get it passed by Memorial Day, at least in the Senate.

CAFFERTY: Yes.

BLITZER: Well, that's clearly not going to happen.

CAFFERTY: Maybe next Memorial Day.

BLITZER: (LAUGHTER)

All right, we'll see.

CAFFERTY: Yes.

BLITZER: Jack, thank you.

Coming up, talk of varmints and flip-flops -- can the back and forth between Republican president candidate John McCain and Mitt Romney get any uglier?

We're going to tell you who's saying what today.

Plus, is the Bush White House confident the Iraq War funding battle is nearing an end?

I'll ask the deputy White House chief of staff, Joel Kaplan, what happens next.

And final good-byes to Jerry Falwell. He was a pivotal figure to Christian conservatives. But who came to the funeral to pay their respects?

We'll go there.

All that coming up right here in THE SITUATION ROOM.

COMMERCIAL

BLITZER: A new shot today in the heated war of words between Republican presidential candidates Mitt Romney and John McCain. The Senate's new immigration reform deal continues to fuel the fire. McCain helped negotiate it. Romney rejects it, calling it amnesty.

That triggered this jab at Romney by McCain and today's counter- attack by Romney.

Listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: As I mentioned, maybe he can get out that varmint gun of his and chase those Guatemalans off his lawn.

(END VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I have respect for Senator McCain and I guess it just shows that even when he's wrong, he's amusing. and I think I'm best off to describe my own positions. and my positions, I think I've just described for you -- secure the border, employment verification and no special pathway to citizenship. I feel that's the course we ought to take.

(END VIDEO CLIP)

BLITZER: Let's bring in our senior political correspondent, Candy Crowley.

She's here -- so, Candy, what's going on with these two frontrunners, shall we call them?

CANDY CROWLEY, CNN CORRESPONDENT: Well, what had been sort of tension between the two camps is now tension between the two candidates.

But, look, immigration is a great issue for Mitt Romney to begin to chip away at John McCain's conservative roots. You saw him in the debate talking about McCain-Kennedy. You saw him talking about McCain- Feingold. He knows that this is a vulnerable spot for John McCain, because John McCain is not always trusted by conservatives. So he went after him on immigration because it's a very important issue within the Republican Party and within conservatives of the Republican Party.

Is this about future strategy?

Most of the campaigns will say to you listen, you know, when we're engaged, we're going to engage right back, and that's what this is about, rather than any let's take down Romney or let's take down McCain...

BLITZER: But isn't Romney vulnerable on this issue, as well?

Because it underlines how he flip-flops -- which the critics say, on various issues, it wasn't that long ago he supported this kind of immigration reform and now he says it's amnesty. And it reminds people that he's had different positions on abortion rights, on gay rights -- now on this -- on gun control.

CROWLEY: Absolutely.

BLITZER: It sort of underscores a problem for him, as well.

CROWLEY: Absolutely.

I mean what it does, really, is it cuts both ways for both these men. I mean it's a very important issue. but you have Mitt Romney -- and you saw in that attack by John McCain, when he said well, I'll just wait until next week to see how he feels. That's directly at the flip-flop issues.

So they both sense vulnerabilities and they both go at it.

BLITZER: Let's flip over to the Democratic side and talk about John Edwards. There's getting a little commotion out there, he took some $55,000 for a speech. He spoke about poverty. He's getting hammered by his critics on that.

But give us the perspective.

CROWLEY: Well, the perspective is that -- certainly over at Camp Edwards they say wait a second. First of all, this was a -- yes, it was a paid speech, but there were tickets for it -- somewhere between $17.50 for students; about $40 for adults. So it paid for itself.

The center itself, which I talked to, said this is -- this is sort of the going rate here.

But beyond that, what sort of gets them over at Camp Edwards is do you have to be poor to speak for the poor?

They stress his roots and say listen, this is a man that came, really, essentially, from nothing and built, you know, himself into a multimillionaire through his legal practice. So, you know, what he wants is for opportunities to be open to those and they're very sensitive to this, because we had the $400 haircuts. We had the fact he was working for a hedge fund. All of these things are perception problems.

They don't think they're reality problems.

BLITZER: And Rudy Giuliani went and made $10 million giving speeches.

CROWLEY: Absolutely.

BLITZER: Bill Clinton makes $10 million or so giving speeches. So $55,000 is not necessarily a big deal when seen in that perspective.

CROWLEY: And what both the Giuliani Camps -- I mean he made 11 point something or other in these speeches last year -- and the Edwards Camp point out is that they both made huge charitable, you know, a pretty penny in charitable contributions -- John Edwards about $390,000, we're told by...

BLITZER: $390,000.

CROWLEY: ... $390,000. and we're talking about Rudy Giuliani just under about half a million. So, you know, we're talking about some sizable contributions to charity and they like to point that out in their disclosure.

BLITZER: A good perspective.

Thank you, Candy.

CROWLEY: Thanks.

BLITZER: And don't forget, we're gearing up for our own big debates in New Hampshire. CNN, WMUR and the "New Hampshire Union- Leader" are sponsoring back to back debates early next month.

The Democratic candidates square off Sunday night, June 3. The Republicans go head to head Tuesday night, June 5. You're going to want to see both -- both of these debates.

Paying respects to the Reverend Jerry Falwell. Today in Virginia, thousands of mourners turned out for the funeral of the Evangelist who died last week.

Our Brianna Keilar is in Lynchburg -- Brianna who came to the funeral today?

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, the big names were from the Evangelical Christian community. Pat Robertson was here. Franklin Graham actually spoke during the service. and we also saw of Ralph Reid, former head of the Christian Coalition, as well as Rick Warren, who's best known as author of "The Purpose-Driven Life."

But perhaps the biggest political heavyweight was actually former Virginia Senator George Allen, who, of course, lost his seat to Democrat Jim Webb in November -- Wolf. BLITZER: Who among the presidential -- the Republican presidential candidates or White House officials, who represented them at this funeral?

In other words, were there some notably absent figures?

KEILAR: Yes, the notably absent figures were generally politicians. Reverend Jerry Falwell was both loved and criticized for injecting the Evangelical Christian agenda into American politics. And when you looked for Republican presidential candidates, there were no none. There were also no big names from the White House. The only presence from the White House was actually a special assistant to President Bush, Tim Goeglein. He read a statement during the service. But I understand from a representative of the Falwell family, that was actually such a late add, that he didn't get in the printed program -- Wolf.

BLITZER: All right, Brianna is there at the funeral.

Brianna Keilar reporting from Lynchburg.

Still ahead, can a fragile immigration reform deal stand up to major tests on Capitol Hill?

We'll tell you about the challenges happening right now and which parts of the controversial plan may suffer.

And extraordinary new insights into Ronald Reagan's personality and what it's like to sit in the Oval Office. New Reagan diary entries now revealed.

All that coming up right here in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Our Carol Costello is monitoring the wires. She's keeping an eye on all the video feeds coming in from around the world.

She's joining us from New York with a closer look at some other stories making news -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: A terrible story to start out with -- Wolf.

People splattered with blood, bodies carried on stretchers and body parts strewn in the streets. That was the scene today in the Turkish capital after a blast ripped through a shopping district filled with people and tourists. Five are dead, more than 60 hurt. Police think the rush hour blast was most likely caused by a bomb. Officials say they found traces of explosives.

Round two of trade talks between the United States and China today in Washington. And it appears officials were not holding their tongues. U.S. Treasury Secretary Henry Paulson made it very clear the U.S. wants results on many economic issues and says Americans are impatient by nature. But China's vice premier had some frank words, apparently for Congress. She says any attempts to politicize economic relations between the U.S. and China would be absolutely unacceptable.

A new birth control pill that can stop a woman's period indefinitely -- it is expected to win FDA approval. It's called Lybrel and it's the first bill designed to be taken continuously. It has the lowest dose of two hormones commonly used in birth control pills. And taking this new drug would allow women to suppress their period indefinitely. No period ever.

But officials say unexpected bleeding could still occur.

And attention airline passengers -- want to fly for just 10 bucks?

Better call Skybus. The new airline made its maiden flight today from Columbus, Ohio to Burbank, California, and at least 10 passengers paid 10 bucks, not including taxes and fees. Skybus says every one of its flights will feature at least 10 tickets for $10. but if you want to check your bags, well, the no frills carrier says you'll just have to pay for that luxury.

Back to you -- Wolf.

BLITZER: That's not too bad, 10 bucks to fly from Ohio to California.

COSTELLO: No.

BLITZER: You can't beat that. Ten lucky people out there.

Thanks, Carol.

Twenty six million people in the United States receive food stamps from the federal government. Several members of the U.S. Congress just finished what they're calling a week long food stamp challenge. They lived off the average benefit of just $3 a day.

Let's go to our Internet reporter, Jacki Schechner -- Jacki, how did they do?

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, we had a cheater. Congressman Tim Ryan of Ohio had a pork chop on Friday night and a bag of peanuts yesterday. But he fessed up to it online on his blog.

As for the other three, they managed to do all right. Here is Congressman Jim McGovern on the House floor.

Take a listen.

(BEGIN VIDEO CLIP)

REP. JIM MCGOVERN (D), MASSACHUSETTS: And although we may be less energetic and perhaps crankier than when we started the challenge nearly a week ago, each of us has learned a great deal. (END VIDEO CLIP)

SCHECHNER: McGovern goes on to talk about some of the tradeoffs that people have to make, not only whether or not to pay the bills or to buy food, but also that eating healthy is not easy on a budget, and sometimes people just have to buy what keeps them full.

As for the other participants, Congressman Jo Ann Emerson's office says that she knew how to cook, and that's what helped her stretch her budget.

Also, Jan Schakowsky -- Congresswoman Jan Schakowsky's office says that she bought some chicken halfway through the week, managed to turn that into soup, and that definitely helps.

Now, all four of the Congressmen and women who participated in this challenge know that this was just a week long challenge and they do have the luxury of going back to the regular schedules and eating habits. But they hope that this whole thing draws attention to the problem and that they need to somehow improve the nation's food stamp program -- Wolf.

BLITZER: Let me get it straight, Jacki -- $3 a day, $21 a week?

That's what they had in order to feed themselves?

SCHECHNER: Yes, it came out, basically, to about a dollar a meal. So, they all managed to do it pretty well. They all were very hungry. A lot of them were very cranky, but they did manage to do it, all with the exception of Congressman Ryan, who slipped up and had a pork chop on Friday night -- Wolf.

BLITZER: There are a lot of restaurants here in Washington and you can't even get an appetizer for $21.

SCHECHNER: Not even close. No.

BLITZER: That's amazing.

All right, thanks very much, Jacki, for that.

SCHECHNER: Sure.

BLITZER: Up ahead, is the Bush White House satisfied now that Democrats are dropping their demand for an Iraq pullout time line?

I'll ask the deputy White House chief of staff, Joel Kaplan. He's standing by live.

And later, New York Mayor Michael Bloomberg on a bold new drive for cleaner air.

The target?

New York City taxis.

Stay with us.

You're in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Happening now in Iraq, U.S. military officials believe they're getting closer to finding those three missing American soldiers. They're conducting several missions right now, combing through a multitude of leads. We'll have an update in our next hour.

Also, a very urgent appeal -- as Lebanese troops battle militants, Lebanon asking the Bush administration to help beef up its armed forces. CNN has just learned what that request includes. We're going to go to Barbara Starr shortly at the Pentagon.

And a drama that's caused international intrigue may now cause an international standoff. In the case of that poisoned former Russian spy, British officials believe they know who caused his slow, horrible death. But Russia right now refusing to hand the man over.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

In the U.S. Senate right now, a controversial new immigration reform deal is facing its first series of critical tests and it's not clear if the plan will emerge looking anything like it does right now.

Let's go to our Congressional correspondent, Dana Bash.

She's standing by.

Which part of the plan is under fire -- Dana, right now?

DANA BASH, CNN CORRESPONDENT: Well, Wolf, you would think that it may be the most frequent and familiar criticism that we hear about this immigration plan, that it is amnesty for illegal immigrants. But if you want evidence of how much opposition there is from all sides of the political spectrum, just check out the Senate floor right now. They are debating a Democratic measure to strike a major part of this fragile compromise.

(BEGIN VIDEOTAPE)

BASH (voice-over): The first direct assault on a bipartisan immigration proposal is being launched from the left -- Democrats trying to torpedo a temporary-worker program.

SEN. BARBARA BOXER (D), CALIFORNIA: I believe this guest-worker program is to keep a supply of desperate low-wage workers, and keep the wages and benefits for our workers under control.

BASH: At issue, a plan to allow between 400,000 and 600,000 guest workers into the U.S. per year for two-year terms to mostly work low-skill jobs, like service industries, everything from restaurants to landscaping. Many labor unions are pressing lawmakers to oppose it, saying it would create a permanent working underclass in the U.S. Immigrant advocates say it's wrong to bring non-U.S. citizens into the country to work temporarily, with little chance to put down roots. Democrats against the program call it a ploy by big business to avoid increasing Americans' wages.

SEN. BYRON DORGAN (D), NORTH DAKOTA: Even as we see all too often the export of American jobs in search of cheap labor in China and the rest of Asia, the same enterprises, in many cases, wish to bring in cheap labor through the back door.

BASH: The U.S. Chamber of Commerce has been lobbying hard for a temporary-worker program for years, and insist it will help businesses fill jobs Americans won't do, not suppress Americans' pay.

RANDY JOHNSON, VICE PRESIDENT OF LABOR, IMMIGRATION AND EMPLOYEE BENEFITS, U.S. CHAMBER OF COMMERCE: We're not saying you use immigrant workers just haphazardly. It's only after you go through a very rigorous test of the U.S. labor market, and you pay the same wages, or more, to immigrant workers that you're paying U.S. workers.

(END VIDEOTAPE)

BASH: Now, outright striking or killing this guest-worker program, which they are debating on the Senate floor right now, is not likely to pass.

But another measure to cut the program in half just may. Now, a Republican negotiator said that, if that happens, it would likely knock the compromise off kilter, but not off track.

But, Wolf, as you know, there are many, many more challenges to this delicate compromise coming in the days and weeks ahead.

BLITZER: People critical on the left and the right.

Thanks, Dana, for that.

Two of the president's top priorities, the war in Iraq, comprehensive immigration reform, clearly on the line right now in the U.S. Congress.

Joining us from the White House, the deputy chief of staff, Joel Kaplan.

Thanks very much, Mr. Kaplan, for coming in.

Let me ask you quickly about what Dana just said, this guest- worker, this temporary-worker program, is the president open to cutting it in half, from 400,000 to 200,000, as a lot of the union leaders would like?

JOEL KAPLAN, DEPUTY WHITE HOUSE CHIEF OF STAFF FOR POLICY: Well, first of all, Wolf, it's good to be with you. Thanks for having me. The temporary-worker program is a critical part of a comprehensive solution to the problem that we face, both in terms of making our economy -- making our economy stronger, and making our borders more secure.

What we learned from the 1986 act is that you have got to remove the magnet for illegal immigration. And to do that, you have to have a legal way for workers to come into this country and fill jobs that Americans aren't doing. That's the important aspect of the temporary- worker program.

BLITZER: So -- but would you be willing to go down from 400,000, if that is what -- that emerges in the Congress?

KAPLAN: Well, Wolf, we think that the bill that the bipartisan group of senators agreed on sets the right number at 400,000, and provides an adjuster that will -- that, in the future, will put the number up or take the number down, depending on what the market requires.

We think it's the right approach. Obviously, other senators will have a chance to offer their amendments. But we think this bill hangs together very nicely the way it is. It's a good product. And I think, when the senators have a chance to debate it, they will agree on that.

BLITZER: You know that there's -- there may be a lot of criticism from the left, but there's a ton of criticism from the right. It's really splitting the Republican Party, you could say, down the middle, almost in half.

How worried are you that the president's support of this comprehensive immigration reform, including a pathway towards citizenship, what -- what the critics call amnesty, how worried are you that your party, the Republican Party, is going to be so badly split?

KAPLAN: Wolf, immigration is -- it's an emotional issue. It's a difficult issue. The president is very much aware of that, and has been for years.

Again, this is a group of bipartisan senators across the ideological spectrum that took a good, hard look at this problem over a span of many weeks and months, and came up with a comprehensive solution.

Let's look at what the bill does. This is not amnesty. It requires -- it requires the current undocumented workers to pay a -- to pay a fine, to learn English, to have a background check, to keep a clean criminal record, to stay employed.

And, then, eight years down the road, if they want to become -- if they want to apply for a green card, they have to pay an additional fine. They have to leave the country...

BLITZER: All right. KAPLAN: ... go to their home country to apply.

This is a good, strong bill.

BLITZER: You think...

KAPLAN: And I think -- I think Republicans and Democrats will see that as they have a chance to debate it.

BLITZER: In your head count, you think can get a majority of Republicans in the House or Senate to support it?

KAPLAN: Well, we're optimistic, Wolf.

Again, it's going to take time to debate it. They had the first vote last night on a procedural motion, and it received 69 votes in the Senate, with bipartisan majorities -- majorities in each party.

So, we're optimistic. Again, they are going to want to look at it and study it. The president invites the -- the senators to do that. And I think they will decide this bill is worthy of their support.

BLITZER: Let's talk about funding for the war in Iraq.

You're still hoping, I assume, to get this deal done by Memorial Day, by this weekend; is that right?

KAPLAN: Well, we think it's important for our troops in the field that it -- that it gets done by that time. The Democratic leaders in Congress has -- have committed that it will.

So, yes, we're optimistic that the funding will get to our troops by Memorial Day.

BLITZER: Will you accept an increase in the minimum wage, if that's part of the package deal?

KAPLAN: Well, Wolf, there are a lot of things that are in play on the Hill right now. The president has been very focused on making sure that we get the funding to the troops that they need, without restrictions that will hamstring our commanders in the field, and without artificial timelines that would be bad, send a bad message to our troops, to our friends, and to the enemy.

BLITZER: But on the...

KAPLAN: So, that's been the real focus...

(CROSSTALK)

BLITZER: What about -- what about the minimum wage, because it's passed the House? If it's attached now in this funding bill, will the president sign it into law?

KAPLAN: I think the president is going to be focused on the main issues in the bill, which are getting the funds to the troops that they need without hamstringing our commanders in the field.

Then I -- that's going to be the real test of this bill. And -- and we're optimistic we will get what we need by Memorial Day.

BLITZER: But I don't hear you answering the question. What about a minimum wage? If that's part of the deal, is it acceptable?

KAPLAN: Well, I think it will be, Wolf, if it gives the troops what they need in the field.

BLITZER: What about the -- the punishment for the Iraqis if they fail to meet these so-called benchmarks? There -- there seem to be some pretty stiff penalties, in terms of U.S. aid, if they don't go ahead and do what they are supposed to do. Is that acceptable to you?

KAPLAN: Well, Wolf, the president has been in favor of benchmarks for a long time.

There was a -- there was a provision in the Senate that got a majority of support, bipartisan support, sponsored by Senator Warner that had benchmarks and had some funding consequences.

And we think that's a reasonable approach. And we're hopeful that the -- the Democrats in Congress will accept it, and send it to the president by Memorial Day.

BLITZER: Joel Kaplan is the deputy chief of staff at the White House. You have got a tough job over there. Thanks for joining us.

KAPLAN: Thanks for having me, Wolf.

BLITZER: And still to come here in THE SITUATION ROOM: a startling new poll of Muslims living in the United States. Are they happy? Are there signs that they support some forms of violence? We're going to watch this poll very, very closely. It's going to be controversial.

Also, a global look at suicide bombings and whether Muslims around the world condone them.

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

(COMMERCIAL BREAK)

BLITZER: What is on the minds of Muslims here in the United States?

A fresh survey just out asked that question, and, in one case, found a disturbing number of young Muslims who believe suicide bombings are justified in some cases to defend their religion.

Joining us now, our senior political analyst, Bill Schneider. He's been reviewing these numbers.

What's the overall message of the poll of Muslims living in the United States, Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, I would say it's generally reassuring. The overwhelming majority of American Muslims are in the mainstream of American society.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): According to a new Pew Research Center study, American Muslims are mainstream, they're middle class, and they are better integrated into society than Muslim minorities in European countries.

ARSALAN IFTIKHAR, LEGAL DIRECTOR, COUNCIL ON AMERICAN-ISLAMIC RELATIONS: American Muslims are well integrated, socioeconomically empowered, and civically engaged members of the American community, more so than we have seen in our Western European counterparts.

SCHNEIDER: Thirty-two percent of all Americans say they are satisfied with the way things are going in the country right now. Among American Muslims, satisfaction is a bit higher, 38 percent. It's higher still among foreign-born Muslims.

Satisfaction is conspicuously lower among black Muslims. Their discontent may be as much racial as religious.

SALAAM AL MARAYATI, MUSLIM PUBLIC AFFAIRS COUNCIL: I think those who have come here by choice, as opposed to those who came to America by force, have a different perspective on American pluralism and American politics in general.

SCHNEIDER: The study also finds discontent among younger Muslims in the U.S. Muslims under 30 tend to be more religious and a little more radical. Among American Muslims under 30, 15 percent believe suicide bombings are often or sometimes justified.

AL MARAYATI: There is no ability for Muslim students to express their political views in a healthy environment. And, as a result, their views do tend to be more radicalized.

SCHNEIDER: Despite President Bush's overtures to the Muslim community, American Muslims are very disaffected from the Bush administration. They are less likely to support the war in Iraq. They are less likely to support the war in Afghanistan, and they are less likely to support President Bush.

IFTIKHAR: When you look at the war in Iraq, the war in Afghanistan, Abu Ghraib, Guantanamo Bay -- the list goes on and on in terms of the disparate impact that our foreign policy is having in the Islamic world -- I think it comes as no surprise that there's only a 15 percent approval rating of President Bush.

(END VIDEOTAPE)

SCHNEIDER: Muslim American voters have become more Democratic. But are there enough of them to make a difference? Well, yes, there are in a few large swing states, like Michigan and Ohio -- Wolf. BLITZER: Bill Schneider looking at those numbers.

U.S. Muslims, by the way, appear to be far less accepting of suicide attacks than Muslims in some other nations. Take a look at this. In surveys from the Pew Research Center Project last year, 29 percent of Muslims in Jordan supported suicide bombing often or sometimes. But that's down from 57 percent a year before. In Pakistan, 14 percent of Muslims felt the same, down from 25 percent in 2005.

In Lebanon, the same survey showed that, from -- in 2005, 39 percent of Muslims supported suicide bombings, like the one that destroyed a U.S. Marine operation center in Beirut, back in 1983. That 2005 number was down from 73 percent in the summer of 2002.

Up next: Rudy Giuliani's trump card.

(BEGIN VIDEO CLIP)

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: We have to be on offense against terrorism. We cannot put our head downs and retreat and be defeated.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: Will the Republican's anti-terrorism message play in Iowa? Donna Brazile and Dick Armey, they are standing by. They will consider Giuliani's prospects in the leadoff caucus state.

Also in our "Strategy Session": Al Gore by the book. Every time he does something high-profile, does it mean he might run for president again?

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

(COMMERCIAL BREAK)

BLITZER: There's a disturbing story coming in from Lynchburg, Virginia, where the funeral of the Reverend Jerry Falwell has been taking place today.

Let's go back to Brianna Keilar on the scene for us.

Brianna, tell our viewers what is going on.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Wolf, we have just learned from the sheriff's department here in Kimball (ph) County that a first-year Liberty University student, a 19-year-old Mark David Yule (ph) of Amissville, Virginia, has been arrested.

He was arrested on a road here in Kimball (ph) County, that according to the sheriff's department. And he was arrested for allegedly manufacturing explosive devices -- police here saying that he had six devices in the vehicle or on his person. They wouldn't say exactly what type. But we do understand from the sheriff's department that this young man's family alerted authorities about these explosives -- Wolf.

BLITZER: A very disturbing story, indeed. Stay on top of it, Brianna. And we will come back to you for an update. Thank you.

Let's move on to our "Strategy Session": swirling questions over whether or not presidential candidate Rudy Giuliani will simply skip the Iowa caucuses.

Joining us now, our CNN political analyst, the Democratic strategist Donna Brazile, and Dick Armey, a former Republican House majority leader.

Guys, thanks very much for coming in.

There was this "Des Moines Register" poll that came out a few days ago. It had Mitt Romney atop among Republican caucus participants, likely ones, 30 percent, John McCain 18 percent, Giuliani 17 percent. And that's fuelling some speculation. Would it be smart for him to simply skip Iowa and devote his attention to New Hampshire and other states, Nevada -- excuse me -- not Nevada, but some of the big states like Florida, California, New York, which are going to be moving up their primaries as well?

Is it -- in other words, is it smart to skip Iowa?

DONNA BRAZILE, CNN POLITICAL ANALYST: No, it's not.

I mean, when Ronald Reagan skipped the Iowa caucuses back in 1980, he had to redouble his efforts to win the nomination. I think the mayor should compete in the Iowa caucuses. Look, he is behind in putting together an organization. In order to win, he not only has to address those issues, but he also has to put together a good, credible organization on the ground.

BLITZER: Congressman, what do you think?

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: Well, I agree.

I think he -- he needs to show he's willing and able to meet the competition in whatever venue and within whatever ground rules you have in this state or that state. There's -- there are others that have skipped it in the past. Ronald Reagan recovered, but, for example, McCain did not.

I don't -- I think the -- the message he sends is that there's either something about the process or the substance that he doesn't want to face in Iowa.

BLITZER: McCain skipped it in 2000. He's not skipping it this time.

What do you make of this feud that's going on right now between McCain and Romney -- McCain basically accusing Romney of flip- flopping, and Romney accusing McCain of making deals with Ted Kennedy on immigration reform?

ARMEY: Well, I -- it's hard to tell.

I suppose it's one of the things. Somebody starts it. I mean, I was a teacher. I have heard this before. He started it. She started it.

Once it gets going, there -- that does give the sense that they perceive each other as the principal competition. I'm sure Rudy feels a little left out of that. And so do some of the others.

BLITZER: Maybe some of the Democrats feel left out.

When Democrats see Republican presidential candidates fighting amongst themselves, what is -- what is the reaction?

BRAZILE: Well, look, if they want to break Ronald Reagan's 11th commandment, go right ahead.

I think the Democrats, they are concentrating right now on -- on talking to voters, and, of course, trying to raise money and compete in all those early states.

BLITZER: You think there's room for another Republican out there, or two, who might want to throw their hats in the presidential ring?

ARMEY: Well, you know, my own view is that -- probably true on both sides, but I study on the Republican -- what there is room for is somebody that says, let's talk about the policies that we need to address for America, and let's have the courage to step up to the big ideas.

BLITZER: Is that Newt Gingrich?

ARMEY: Well, it could be. Newt has always been a big-idea guy. And he's always had a national perspective. And, in -- in the case of this field before us now, Newt has more so than any of them.

But, whoever says to the American people, we respect you enough to talk about something other than personalities, but really substantive issues that affect your life and your children's future, I think that person is going to start emerging.

BLITZER: Al Gore has got a new book that's just out. There it is, "The assault on Reason."

Have you read it? Have you underlined it? Have you gone through it all yet?

BRAZILE: Well, no. I'm still on "The Politics of Fear."

And this is a great book. First of all, it's a manifesto for citizens to retake their democracy, to really go back out there, and learn the facts, and to put civility back in public conversation. He talks about the Senate floor and -- and -- and the fact that people don't debate the great issues anymore.

It's a great book. I highly recommend it.

(CROSSTALK)

BLITZER: And, you know -- and Donna speaks, Congressman, as a former campaign manager for Al Gore, when he was...

(CROSSTALK)

BRAZILE: I'm very biased.

BLITZER: ... when he was running for...

BRAZILE: I'm very biased.

BLITZER: ... when he was running for president.

But this is the question that keeps coming up time after time after time: Is this going to set the stage for Al Gore once again becoming a presidential candidate?

BRAZILE: Well, right now, as you well know, he has kept the door ajar. But there's -- I don't see any signs that he intends to run.

But, if Al Gore decides to run, I think he's the most qualified candidate on either side of the political divide. I think that this book should give voters and citizens an opportunity to see just how good and strong his mind -- and of course, there's a lot of good ideas in...

(CROSSTALK)

BRAZILE: ... book.

BLITZER: Well, like him or hate him, he is a big-idea kind of guy, when you're talking about Al Gore, Dick Armey.

ARMEY: Well, he is on one half of the ideas.

Let me say just, first of all, when he decides to run, Donna will be the first to know. And she won't tell us.

(LAUGHTER)

BLITZER: She will tell -- she better tell me.

(LAUGHTER)

(CROSSTALK)

ARMEY: You know, I'm watching him.

First of all, from what I have read in the reviews of this, some of the early reviews, to a lot of people in America, maybe the majority of Americans, it's going to sound like an angry tirade from a fellow who is still mad about an election loss.

To the base, though, in the Democrat Party, it's going to sound like we have finally got somebody who understands what is wrong with the other side. And they are going to rejoice in it.

So, I think it could be a good political thing, in terms of the entry format into a primary. But, when you get down to the big issues, sooner or later, we're going to have to start talking about the way the market allocates resources, and how the free market economy works better in energy than government regulation.

When the voters of America begin to realize that they may be facing the choice of Hillary running health care and government allocation, rationing of health care, or Al Gore running the energy of this country...

BLITZER: All right.

ARMEY: ... and government rationing, they are going to be pretty disillusioned with both choices.

BLITZER: We're going to -- we're going to have to leave it right there. But I suspect that Dick Armey and Al Gore, that could be a good debate. Maybe we will have it here one of these days.

BRAZILE: Absolutely.

BLITZER: Guys, thanks very much, Donna and Dick Armey, for joining us.

And this important note to our viewers: The former vice president will sit down tonight with Larry King, a rare interview -- "LARRY KING" light -- "LARRY KING LIVE" tonight, 9:00 p.m. Eastern, only here on CNN.

And still to come here in THE SITUATION ROOM: The mayor, Michael Bloomberg, tinkers with New York traditions involving taxis. We're going to tell you what is going on.

Plus: a new development in the search for those three missing U.S. soldiers in Iraq.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Republican presidential hopeful Mike Huckabee tops our "Political Radar" today. The former Arkansas governor will skip a religious conference next January organized by former President Jimmy Carter -- this after Carter called the Bush administration the worst in history on international relations.

George H.W. Bush and Bill Clinton will join forces again. The two former presidents, as well as former President Carter, will help dedicate the new Billy Graham Library in Charlotte, North Carolina.

Jack Cafferty is joining us once again in New York for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: So, Jimmy Carter is going hang out with George W.'s dad, after saying that his son had the worst foreign policy in American history. I wonder how that will work out.

BLITZER: Yes, but he did back away a little bit from it.

CAFFERTY: Well, yeah, but he said it.

BLITZER: Yes.

CAFFERTY: The question this hour is: If you had the Senate floor, what amendment would you make to the immigration bill?

Bert writes from Oak View, California: "The first thing I would do is remove the word 'knowingly' from any wording referencing employers who hire illegals. If that word stays in, the new law is unenforceable, no matter what the final version looks like. I don't think the judge cares if I'm knowingly speeding or not, only that I was speeding."

Ed in Phoenix: "There's really only one amendment we need: not one guest worker, not one green card, until the citizens of this country agree to the new immigration law by a two-thirds majority. The only people not represented in these discussions are our citizens."

Sonny writes: "I wouldn't do anything. I would mirror the European Union, do a better job reinforcing social programs, worker rights, and wage rules, in order to soften the push-pull effect of Mexican immigrants to the United States."

Alex in Madison, Wisconsin: "Which amendment? I would throw the whole damn bill out and pass the Sensenbrenner border security bill."

Steve in Seattle: "Top of the list: no more anchor babies."

Jay in Charleston, West Virginia: "Very simple. Put language in the bill that calls these people who want to enter the United States unlawfully what they are: invaders. Then, give the authority to the Border Patrol to shoot to kill any invader that wants to cross the border illegally. That will put a quick stop to the flood of invaders coming from Mexico."

And Tom in Austin: "Illegal immigrants who want citizenship must show proof of employment in the U.S. for at least five years. If they can't provide this documentation, it will demonstrate they have no valid reason for living here. They can return to their country and be a burden there" -- Wolf.

BLITZER: Thank you, Jack, for that. See you in a few moments.

To our viewers, you're in THE SITUATION ROOM.

Happening now: unrelenting violence raging from Iraq, to Lebanon, to Gaza, and U.S. officials growing increasingly concerned the entire Middle East could be on the verge of a serious meltdown.

Also, New York's mayor ordering the city's taxi fleet to go green

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