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THE SITUATION ROOM

Compromise Over Iraq War Funding; Profile of Monica Goodling

Aired May 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, Democrats battling one another over Iraq. Some are irate about a new compromise with the White House. I'll ask presidential candidate John Edwards to judge the deal and judge his fellow Democrats in the process.
Also this hour, President Bush tries to bolster his Iraq War defense by pointing at Osama bin Laden. We'll see if there's anything new in his warnings about the al Qaeda threat.

And a former aide to the attorney general finally testifies about the firing of those federal prosecutors.

Did Monica Goodling say anything to incriminate her former boss, Alberto Gonzales?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

First up this hour, an identity crisis for Democrats. The party that won control of Congress by taking a firm stance against the war in Iraq now embroiled in a new internal conflict.

At issue, a decision by majority leaders to drop a demand for a pullout timetable. Some Democrats believe the compromise with the White House is putting their party in a compromising position, and they're fighting back.

Let's go to our Congressional correspondent Dana Bash.

She's standing by -- Dana, Democrats are having a tough time with this, aren't they?

DANA BASH, CNN CORRESPONDENT: They definitely are, Wolf.

I have not talked to a single Democrat who hasn't used words today like "wrenching" or "tough" to describe this vote they're going to have to take tomorrow. But it is especially hard for a group of Senators who really desperately need support from the staunchly anti- war Democratic base.

That group are candidates for president.

(BEGIN VIDEO TAPE)

BASH (voice-over): It was straightforward -- will she vote to fund the war without a plan to bring troops home? She ducked it.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Today we're talking about this very important immigration issue. There will be time to talk about that later.

(END VIDEO CLIP)

BASH: When pressed later by CNN, she snapped, "If I have something to say, I will say it."

The Democratic presidential contender has good reason to be cautious. Powerful anti-war groups are up in arms about Democratic leaders' decision to relent, send the president a war spending bill with no timeline for troop withdrawal.

ELI PARISER, MOVEON.ORG: There's a price to be paid for Democrats and Republicans who endorse the president's failed strategy here, and I think, you know, that's what you're doing if you vote for this bill.

BASH: Moveon.org alerted its 3.2 million members to contact their representatives, and they're delivering this flier -- "Congress, show some backbone on Iraq."

Leading 2008 presidential candidates like Hillary Clinton and Barack Obama have added pressure to vote no. Other contenders are hammering them from the left.

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: Any compromise that funds the war through the end of the fiscal year is not a compromise at all. It's a capitulation. Every member of Congress should -- every member of Congress should stand their ground on this issue.

BASH: But it is a wrenching decision, especially for Democratic '08 candidates who have made two conflicting promises -- do whatever it takes to bring troops home, but do nothing to put them in harm's way, like cut their funding.

SEN. BARACK OBAMA (D), ILLINOIS: I meet with a mother whose son or daughter is in Iraq and they're concerned not only about getting them home, but also concerned about getting them home safely.

(END VIDEO TAPE)

BASH: Now Senator Obama told our Congressional producer, Ted Barrett, earlier today that he has not seen the final product of this bill and won't decide how he is going to vote until he reads it -- Wolf.

BLITZER: So Senators Clinton and Obama, they're not saying how they're going to vote yet.

What about the other Democratic senators who have to make a major decision?

BASH: Well, we just got answers from the other two. Senator Chris Dodd, who is, as you know, has been positioning himself more and more to the left, he just came out ask said he'll vote no on this bill to fund the war without a plan to bring troops home. However, Senator Joe Biden, who, perhaps, you can call more conservative on national security issues, he'll vote yes -- Wolf.

BLITZER: And I'm sure the other Democratic candidate, Dennis Kucinich, on the House side, he's going to vote no. he always votes no on these kind of matters.

BASH: That's for sure.

BLITZER: Dana, thank you.

We're going to be speaking with Senator John Edwards later this hour. He's very, very upset that any Democratic Senators might -- might support this kind of legislation without a firm troop deadline. We'll be speaking with Senator Edwards. That's coming up.

Elsewhere on Capitol Hill today, the woman many have been wanting to hear from finally speaks. She's Monica Goodling, the former senior counsel to attorney general, Alberto Gonzales.

Goodling is a key figure in the scandal over those eight fired U.S. attorneys. Testifying today before a House committee, she denied having a major role in choosing which attorneys were to be fired, denied she was having -- she was a primary White House contact during creation of the entire plan and says she's certain she never spoke with the former White House counsel, Harriet Miers, or Karl Rove about those attorney firings while at the Justice Department.

But Goodling did admit one thing. She says she screened applicants for career jobs at the Justice Department based on political affiliation.

It's an admission Goodling was grilled about.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is it against the law to take political -- those political considerations into account?

You've got civil service laws. You've got obstruction of justice.

Were there any laws that you could have broken by taking political considerations into account "on some occasions?"

MONICA GOODLING, FORMER JUSTICE DEPARTMENT AIDE: The best I can say is that I know I took political considerations into account on some occasions.

UNIDENTIFIED MALE: Was that legal?

GOODLING: Sir, I'm not able to answer that question. I know I crossed the line.

UNIDENTIFIED MALE: What line?

Legal?

GOODLING: I crossed the line of the civil service rules.

(END VIDEO CLIP)

BLITZER: Let's go to CNN's Brian Todd

He's joining us now with a closer look at exactly who this woman is -- Brian, I know you've been looking into her background.

BRIAN TODD, CNN CORRESPONDENT: That's right, Wolf.

Monica Goodling had certainly been a mysterious figure after resigning from the Justice Department and invoking her fifth amendment privilege. But today we heard directly from Ms. Goodling, not only about this role in this scandal, but also about her motivations.

(BEGIN VIDEO TAPE)

GOODLING: At heart, I'm a fairly quiet person. I try to do the right thing and I try to treat people kindly along the way.

TODD (voice-over): But today, she was facing questions about the U.S. attorneys' dismissal scandal.

So who is Monica Goodling?

GOODLING: I went to public schools growing up, but I chose Christian universities, in part, because of the value that they place on service.

TODD: Classmates at Messiah College in Pennsylvania describe her as relentlessly hardworking, driven, a loner. She then attended Regent University Law School, founded by Evangelist Pat Robertson.

GOODLING: I enjoyed being surrounded by people that had the same belief system.

TODD: From there, a meteoric rise at the Justice Department, becoming the attorney general's White House liaison.

Facing Congress, she was poised. But as the scandal was breaking in March, a top official has told investigators she proceeded about 30 to 45 minutes to bawl her eyes out and say, "All I ever wanted to do was serve this president and this administration and this department."

But no one outworked Monica Goodling, says a former colleague. And one supervisor said she would be diligently Blackberrying as late as 2:00 a.m. Still, other former colleagues describe a woman who was abrupt and ruffled feathers of U.S. attorneys and others. A close friend at Justice says that's because Goodling was unfailingly honest and sometimes might have been too direct. GOODLING: I've seen in my life what violent crime can do it its victims and I knew that at some point I wanted to do my part to seek justice on their behalf.

(END VIDEO TAPE)

TODD: Goodling said when making recommendations or hiring an applicant or firing an attorney, she never considered the person's faith to be a factor -- Wolf.

BLITZER: Let's not forget, the only reason she testified today is because she was granted immunity. She had earlier decided she was going to plead the Fifth.

Brian, thanks very much.

Brian Todd and Dana Bash are both part of the best political team on television.

So is Jack Cafferty.

Let's go to Jack in New York -- hi, Jack.

JACK CAFFERTY, CNN CORRESPONDENT: How are you doing?

Reminiscent of Fawn Hall.

Remember Fawn Hall?

BLITZER: I remember that.

CAFFERTY: Some things, Wolf, better left unsaid. And we in the news media constantly wrestle with what to divulge and what to hold back. And sometimes there just aren't any easy answers to that conundrum.

For example, ABC News is reporting that President Bush has secretly approved a covert CIA operation aimed at destabilizing the government of Iran. Covert -- that means nobody's supposed to know about it.

But now that ABC has reported it, well, everybody knows about it, including probably anyone that matters in Tehran.

The goal of the operation is to get President Mahmoud Ahmadinejad to abandon Iran's nuclear enrichment program -- the one that the IAEA today said that Iran continues to build up in defiance of the United Nations.

This top secret effort by the CIA includes a campaign of propaganda, economic pressure and manipulation of Iran's currency. But it may not work out so well now that the black box, if you will, has been opened.

Here's the question -- is it right for ABC News to report on secret U.S. efforts to destabilize the government of Iran? E-mail your thoughts on that to caffertyfile@cnn.com, go to cnn.com/caffertyfile -- Wolf.

BLITZER: You're going to get a lot of different e-mails on this sensitive subject.

CAFFERTY: Probably.

BLITZER: Jack, thanks very much.

Coming up, Senator John Edwards takes President Bush and his Democratic rivals to task over Iraq. I'll ask the presidential candidate if it's easy for him to criticize now that he's no longer in the Senate.

Plus, getting intense about Iraq -- is there any issue that fuels voters' passions more?

We have some brand new poll numbers coming out at this hour.

And Vice President Dick Cheney's big news -- will it revive a culture wars' controversy?

Stay with us.

You're in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Top Democratic leaders in the Congress are calling it a compromise, but some members of their own party are calling it a sellout. A decision to drop a timetable for withdrawal from Iraq is a new dividing line between Democrats on Capitol Hill and on the presidential campaign trail, as well.

BLITZER: And joining us now from New York, at the Council on Foreign Relations, Senator John Edwards, the Democratic presidential candidate.

Senator, thanks very much for coming in.

JOHN EDWARDS, (D) PRESIDENTIAL CANDIDATE: Thanks for having me, Wolf.

BLITZER: I know you're very upset that the Democrats in Congress blinked on this issue of a troop withdrawal, but they simply don't have the votes to override a presidential veto.

What are they supposed to do if they want to keep funding the troops but at the same time make their point?

EDWARDS: What they should do is continue to submit funding bills supporting the troops to the president with a timetable for withdrawal. And if the president of the United States, George Bush, continues to veto those bills, it's the president who's deciding he's not going to fund the troops. And ultimately that would actually require George Bush to start withdrawing troops from Iraq.

And my basic view about this, Wolf, is not complicated. I think that the American people want a different course in Iraq. They made that clear in the last election. and what I am asking is for the Congress to stand its ground, to do what it needs to do for America. This is not about politics. It's about life and death.

BLITZER: But your critics say it's easy for you to say that, you're not in the Congress right now. You're not a member of the Senate. They have to vote yea or nay on an issue like funding troops and keep troops fully protected with the funds that they need.

So it's easy for you to criticize from the outside. That's what your critics are suggesting.

EDWARDS: Can I just say, respectfully, that I would disagree with that?

First of all, I've been in that position. I have, in the past, voted against the funding bill, $87 billion, when I knew that George Bush was on the wrong course in Iraq. And, secondly, and I think more importantly, I'm running for president of the United States. All of us running for president will be held accountable, ultimately to voters, for the positions that we've taken.

BLITZER: So what are you...

EDWARDS: Every one of my positions, including this one will be evaluated by the voters, as it should.

BLITZER: All right.

So the sitting members, like Senator Clinton, Senator Obama, Senator Biden, Senator Dodd, Congressman Kucinich, what do you expect they're going to do?

EDWARDS: What I expect them to do is stand their ground, to continue to support bills that have a timetable for withdrawal and to use whatever tools are available to them to prevent a bill going to the president that does not have a timetable for withdrawal.

It's not complicated. That's what the American people want and I think that's what they should do.

BLITZER: Some of the Democratic leaders say they're going to find other opportunities in the next few months to attach that kind of troop withdrawal deadline to other legislation that the president wants. So while they're not -- we're not going to get everything they want right now, they're still going to have that opportunity down the road.

EDWARDS: This president is not going to negotiate about this, Wolf.

How clear could anything be?

He will not negotiate. He will not compromise. He does not think he's capable of doing anything wrong. He has to be stopped.

And the power that the Congress has is its constitutional power to fund. And they need to use that power to force this president down a different course. It's that simple.

BLITZER: The president spoke out today at the U.S. Coast Guard commencement and he said the threat right now from al Qaeda in Iraq is enormous. And he made the comparison to Vietnam.

Listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, U.S. PRESIDENT: The enemy in Vietnam had neither the intent nor the capability to strike our homeland. The enemy in Iraq does.

(END VIDEO CLIP)

BLITZER: All right, what do you say to the president, Senator?

EDWARDS: I say the president has used this term that he uses over and over -- global war on terror -- as a political slogan. He uses it to justify everything he does -- Guantanamo, the ongoing presence in Iraq, spying on Americans. He uses it to bludgeon people who disagree with him, who dissent and speak out in this democracy against it.

And he doesn't deal with the fact that he's completely devastated our military, both men and women and equipment, during the course of this war in Iraq, made us more vulnerable.

And on top of that, he's done incredible damage to the America's moral authority in the world. And it's that strength and moral authority that's required in order for America to lead. That's what the president of the United States has to focus on.

BLITZER: The president has just declassified intelligence, though, suggesting that Osama bin Laden instructed al Qaeda in Iraq to plot attacks against the United States from their sanctuary, from within Iraq.

We're going to be speaking later with Fran Townsend, the president's homeland security director.

Don't they have a point when they say al Qaeda in Iraq potentially could represent a huge threat against U.S. interests outside of Iraq?

EDWARDS: Yes, but they created this mess in the Iraq War.

And what is Osama bin Laden doing still at large?

I mean, this is all the responsibility of the president of the United States and this administration. The reason there are terrorists actively engaged in what's happening in Iraq right now is because of the mess that George Bush and his administration have created there, completely ignoring the advice of military leadership -- uniformed military leadership.

So to now use a mess that they created to justify their ongoing so-called global war on terror makes absolutely no sense.

And this is like - basically what they're doing is they're saying to America, trust us, trust us. We told you the war was over. We told you things were getting better. We told you "mission accomplished." We told you this is all -- trust us. Follow our lead on this.

BLITZER: Let me ask you this, Senator.

Before the U.S. leaves Iraq, shouldn't the U.S. try to destroy al Qaeda in Iraq so that they don't represent a threat down the road?

EDWARDS: Wolf, we have a responsibility -- and the president of the United States has a responsibility -- to identify al Qaeda everywhere it's operating. And not just al Qaeda -- any terrorist group -- anywhere that it's operated. And use every tool available to us to stop them before they can do us harm. And that means military intelligence, our diplomatic tools, our alliances. All those things are an immediate responsibility of the president of the United States.

But what's missing from this administration is any kind of long- term plan to undermine the forces that create terrorism, the forces that create moral authority for America to lead, education, health care, fighting global poverty, fighting the spread of disease.

I mean those are the things that undermine the forces of terrorism, and we're doing nothing about any of those things.

BLITZER: One point, some Democrats are saying that they're opposed to the elimination of the troop withdrawal deadline, but they're happy that they have inserted in this legislation an increase in the minimum wage, which is long overdue.

Is that good enough?

EDWARDS: No.

Lord knows I'm for raising the minimum wage. Anyway we can get that done is a good thing. But it shouldn't be tied to what's happening in Iraq. What we should be doing in Iraq is standing our ground, stopping what this president is doing, forcing his hand and forcing him to withdraw troops from Iraq.

BLITZER: One final question.

How is Mrs. Edwards doing?

EDWARDS: Oh, very nice of you to ask.

You always ask.

Thank you, Wolf. She is doing - she is actually doing very well.

BLITZER: Please give her our best and let's -- let's hope for the best.

Senator Edwards, thanks very much for coming in.

EDWARDS: Thanks for having me, Wolf.

BLITZER: And coming up here in THE SITUATION ROOM, today's long awaited testimony in the fired prosecutor flap.

Did Monica Goodling do her former boss, Alberto Gonzales, justice?

J.C. Watts and Paul Begala are standing by for a Strategy Session.

And can the pain at the pump get much worse?

You bet. The numbers you may not want to hear.

All that coming up.

We'll be right back.

COMMERCIAL

BLITZER: Our Carol Costello is monitoring the wires, keeping an eye on all the video keeps coming into THE SITUATION ROOM from around the world.

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

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

Officials in Lebanon say a bomb went off in a town east of Beirut today. Five people reportedly hurt. It happened near a shopping center and caused damage to nearby shops and buildings. One source telling Reuters that the area was largely empty.

The White House said he was the right man to protect you, the consumer, but some were not so sure. Now Michael Baroody is withdrawing his nomination as President Bush's pick to head the Consumer Product Safety Commission. Some Senate Democrats strongly opposed him, saying that as a lobbyist for the National Association of Manufacturers, he is not the right person to fight for consumers. But the Bush administration says Baroody has an impressive record of doing just that.

It's not exactly Free Willy, but some in California are still hoping to free these whales from potentially dangerous waters of the Sacramento River. People banging on pipes have managed to herd the mother and her calf back towards the Pacific Ocean. But their progress has stalled, perhaps because of traffic noise coming from a nearby bridge. Scientists are concerned because the health of the two whales has apparently worsened.

And if it seems like gas prices go up just about every time you fill up, well, you aren't that far off the mark. Today, we are seeing the eleventh straight day of record high prices. AAA says a gallon of regular hit just over $3.20 a gallon. But yesterday the average was around $3.20. and experts expect prices to go even higher for this summer.

That's a look at what's happening right now -- Wolf.

BLITZER: Carol, we'll touch base with you shortly.

Still ahead, President Bush on an Al Qaeda terror plot thwarted.

Why is he declassifying the information now?

We'll have a report from the White House.

And later, I'll ask the president's homeland security adviser, Fran Townsend, if Mr. Bush is trying to change the subject away from Iraq.

Stay with us.

You're in THE SITUATION ROOM.

COMMERCIAL

BLITZER: Happening now, new developments in the search for those three missing American soldiers in Iraq. One of their bodies may -- repeat may have been found. We'll get an update.

Also, burning a clothing iron onto a victim's skin or squeezing a victim's head in a vise -- those graphic tactics are said to be among Al Qaeda's torture methods. We have some newly revealed information and images. We're going to share them with you.

And the smallest victims perhaps are suffering the most. UNICEF says Iraq's children struggling right now to survive without access to even the most basic necessities. But the agency says the children can still be helped.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

President Bush today is portraying the Iraq War as a battle between the United States and Al Qaeda, with Osama bin Laden still in the mix.

In a commencement address at the U.S. Coast Guard Academy, Mr. Bush listed a number of alleged terrorist plots against the U.S. he says were thwarted. Let's bring in our White House correspondent, Ed Henry.

He's joining us right now.

Among other things, he cited alleged post-9/11 plots -- Ed -- to fly airplanes into targets on the East and West Coasts.

What is new about all of this?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Those are not really new, Wolf. it's just some new intelligence about some Al Qaeda officials.

But those plots -- the president has previously touted stopping those plots. So this is really all about the president scrambling to find justification to keep U.S. troops in Iraq.

(BEGIN VIDEO TAPE)

HENRY (voice-over): Delivering the commencement at the Coast Guard Academy, President Bush tried to push back at critics who say Iraq is a Vietnam style quagmire.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: The enemy in Vietnam had neither the intent nor the capability to strike our homeland. The enemy in Iraq does.

(END VIDEO CLIP)

HENRY: Trying to bolster his case Al Qaeda is the chief enemy in Baghdad, the president declassified intelligence showing in 2005 Osama bin Laden was trying to set up a unit in Iraq to launch terror attacks against America.

(BEGIN VIDEO CLIP)

BUSH: There are many destructive forces in Iraq trying to stop this strategy from succeeding. The most destructive is al Qaeda.

(END VIDEO CLIP)

HENRY: But detailing al Qaeda activity in Iraq in 2005, long after the war started, is fuel for Democratic presidential candidates, who charge, the war actually increased the terror threat.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: The worst thing about the global-war-on-terror approach is that it's backfired. Our military has been strained to the breaking point, and the threat from terrorism has grown, not lessened. We need a post-Bush, post-9/11, post-Iraq American military.

HENRY: With weak public support for the Iraq war, declassifying intelligence about terror plots enabled the president to fall back on a strategy that worked in the 2004 and 2006 campaigns: the fear card. BUSH: Here in America, we're living in the eye of a storm. All around us, dangerous winds are swirling, and these winds could reach our shores at any moment.

HENRY: But the president's decision to highlight bin Laden's ability to communicate with his top lieutenants raises questions about Mr. Bush's previous claims that the U.S. has disrupted the al Qaeda leader's activities.

(END VIDEOTAPE)

HENRY: Now, the president's homeland security adviser, Fran Townsend, explained that the U.S. has not stopped bin Laden from communicating. They have merely disrupted his activities. Obviously, more than five years after the president said he would get him dead or alive, bin Laden is still at large -- Wolf.

BLITZER: What did she say about the whereabouts of Osama bin Laden, Ed?

HENRY: Now, she would not go there, but what she did say is that the U.S. believes that, wherever bin Laden is, he's not comfortable. She also vowed that the U.S. is still pressing to either kill or capture bin Laden -- Wolf.

BLITZER: We are going to be speaking with Fran Townsend here in THE SITUATION ROOM in the next hour, the president's homeland security adviser -- Ed Henry over at the White House.

In presidential politics, some are asking, who has got the big mo'? It appears one party may be energizing its voters a little bit more.

Joining us now is our senior political analyst, Bill Schneider.

Bill, what looks different about this presidential campaign?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, in this campaign, we're seeing more energy and intensity on the Democratic side.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: ... style of government in Washington.

SCHNEIDER (voice-over): Democrats are angry.

OBAMA: We have had a government that defies reason and defies the facts.

SCHNEIDER: Look at fund-raising. During the first four months of this year, Democratic presidential candidates outraised Republican candidates by more than $25 million. Look at the level of interest in the issues. The CNN/Opinion Research Corporation poll asked people how important they consider each of 17 issues. A majority of Democrats considered five issues extremely important.

At the top of the Democrats' agenda, Iraq, 60 percent.

SEN. CHRISTOPHER DODD (D-CT), PRESIDENTIAL CANDIDATE: Asking American soldiers and our military to win a civil war in someone else's country is unrealistic and wrong.

SCHNEIDER: Followed by four domestic issues: education, Social Security, gas prices, and health care.

EDWARDS: We bring down health care costs for everybody, because health care costs are completely out of control.

SCHNEIDER: Republican voters show noticeably less concern about all five issues. What are Republicans' top concerns? Terrorism tops the list, followed by Iraq. Republicans see Iraq as part of the terrorist threat.

BUSH: The enemy in Vietnam had neither the intent, nor the capability to strike our homeland. The enemy in Iraq does.

SCHNEIDER: Most of the Republicans' top issues relate to national security. Even so, Democrats are just as concerned about terrorism, and more concerned about Iraq, Iran, and corruption -- the only issue Republicans are more concerned about, immigration.

REP. JOHNNY ISAKSON (R), GEORGIA: We have had an immigration policy that, for the better part of 21 years, has to been to look the other way as people float across our southern border, to calibrate on a low-basis legal immigration, to say we're doing something about it, while millions come into this country. It's got to come to an end.

(END VIDEOTAPE)

SCHNEIDER: Republicans want 2008 to be just like 2004, when the top issue was terrorism. Democrats want 2008 to be just like 2006, when the top issue was Iraq. Each party is trying to replicate its most recent success -- Wolf.

BLITZER: Bill Schneider, some serious analysis for us -- thank you, Bill.

Bill Schneider and Ed henry, by the way, as you know, are part of the best political team on television.

And, remember, for the latest political news that at any time, you can always check out our Political Ticker. Go to CNN.com/ticker.

Also, don't forget, we're gearing up for our 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 are going to want to see both of those debates. Coming up: The vice president and his family are celebrating a major occasion. And the homeland security adviser, Fran Townsend, she is standing by to join us live from the White House. We will talk about that new intelligence that has just been declassified about Osama bin Laden.

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

(COMMERCIAL BREAK)

BLITZER: On Capitol Hill right now, Democrats preparing to tackle another priority, lobbying reform, but opponents charge, they're falling short of their campaign promises.

Our congressional correspondent Andrea Koppel looks at what may and may not be accomplished -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Wolf, out on the campaign trail last year, Democrats pledged over and over again that, if they controlled Congress, they would break the link between lobbyists and lawmaker.

Well, come tomorrow, they say they are going to be taking a big step towards making good on that pledge. What's on the table? Well, there are going to be votes on a couple lobbying-related measures, which would include things like creating a public data base on lobbyists, requiring lobbyists to disclose exactly how they're spending money on lobbying lawmakers.

They would restrict members' spouses from lobbying their husband or wife's staff, increasing the penalties for any violations. And, then, they would have to disclose what's known as bundling, whereby lobbyists collect a lot of smaller donations, bundle them together. Anything over $20,000 a year would have to be disclosed.

But Republicans point out that Democrats have also backed off another pledge to double the amount of cooling-off time that lawmakers or senior staff would have to make before they could lobby Congress. Currently, they have to wait a year.

And, finally, Democratic leaders backed off another pledge to create an independent ethics panel to police Congress -- Wolf.

BLITZER: Andrea Koppel on Capitol Hill.

Critics of a Senate immigration reform deal made some progress today in altering the bill. The senators voted 74-24 to cut back on the number of eligible guest workers per year from 400,000 to 200,000. This is the second Democratic amendment to the bill considered by the Senate. The first would have eliminated the guest-worker program entirely. That amendment was rejected yesterday.

A new addition to Vice President Dick Cheney's family -- the White House today announced that Cheney's daughter Mary and her partner, Heather Poe, now are parents of a baby boy. Mary Cheney delivered Samuel David Cheney this morning at a Washington, D.C., hospital.

Cheney has said he would -- the vice president said he would welcome his sixth grandchild, despite some criticism from the right wing, who oppose gay couples having children.

Chris Dodd is in today's "Political Radar." He's not getting a lot of attention in the news media, so, Democratic presidential hopeful Dodd is out with his second campaign commercial. In the ad, the senator from Connecticut claims his White House rivals are following him when it comes to the war in Iraq. The new commercials are running in Iowa and New Hampshire.

The Democratic National Convention is not until August of 2008, but, this August, top Democratic presidential candidates are headed to another convention focused on liberal blogs.

Let's go to our Internet reporter, Jacki Schechner -- Jacki is standing by.

Jacki, tell us about this latest development.

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, Wolf, Elizabeth Edwards blogs that YearlyKos Convention is an opportunity for real political dialogue, an unparalleled opportunity.

And that's why she says her husband, John Edwards, is going to be there. So is Senator Barack Obama and Governor Bill Richardson, who attended the YearlyKos Convention in Vegas last year.

Convention organizers say they're still waiting for confirmation from other candidates as to whether or not they will attend. Now, the ones who do go will take part in a presidential leadership forum, where they will take questions from those in attendance and questions submitted by blog readers and bloggers in advance.

Now, last year's convention drew about 1,200 attendees. And the buzz at the time was, who's going to run for president? The big names on the list were General Wesley Clark and former Virginia Governor Mark Warner.

This is named for Daily Kos, the top liberal blog. And it's become a spot online where some of the big-name Democratic candidates go to reach out to the online community -- Wolf.

BLITZER: Jacki, thanks very much.

Up next here in THE SITUATION ROOM: the attorney general's former aide in the hot seat.

(BEGIN VIDEO CLIP)

MONICA GOODLING, FORMER JUSTICE DEPARTMENT WHITE HOUSE LIAISON: I have never attended a meeting of the White House Judicial Selection Committee. The attorney general and Kyle Sampson attended those meetings.

(END VIDEO CLIP)

BLITZER: Did Monica Goodling say anything today to help push Alberto Gonzales out of the Justice Department? Paul Begala and J.C. Watts, they're both standing by.

Also in our "Strategy Session": Democrats taking aim at one another over Iraq. Will a new compromise over war funding help or hurt presidential contenders?

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In today's "Strategy Session": A decision by Democratic majority leaders to drop a demand for a pullout timetable from Iraq, now that has got some other Democrats very angry.

Joining us now to discuss that and more, two CNN political analysts. Paul Begala is a Democratic strategist. J.C. Watts is a former Republican congressman from Oklahoma.

Guys, thanks very much for coming in.

The -- the rap is, the Democrats blinked.

PAUL BEGALA, CNN POLITICAL ANALYST: They did. They did. This is a victory for President Bush.

Yes, there's progress. The Democrats can cite some progress. There's 18 benchmarks, two reports. But, at the end of the day, this is a -- a win for President Bush and for people who believe in an endless war.

Now, I would caution you, this is a Pyrrhic victory. You remember King Pyrrhus of Epirus defeated the Romans at Heraclea, and, then, the next year, defeated them again at Asculum. And, after the second victory, he lost so many troops, he said, if I have one more victory like this, I'm through.

Well, I think, if Mr. Bush has many more victories like this, he's through, because, at the end of the day, people don't want an endless war in Iraq. And that's what Mr. Bush has won here.

BLITZER: What do you think?

J.C. WATTS, CNN POLITICAL ANALYST: Well, Wolf, I wouldn't frame it as the Democrats having blinked.

I would frame it as -- or I wouldn't frame it as President Bush having won. I think the American people won. I -- I don't -- I will take the Democrats at their word. It was the right thing to do. And I will give them credit for doing the right thing.

There should not -- there shouldn't have been timetables in the bill. There should be benchmarks in the bill. So, therefore, it's a good -- it's a good strategy, a good way to try to move forward in Iraq.

BLITZER: We don't yet know how Senators Clinton and Obama will vote on the final legislation. We do know Chris Dodd will vote against it, one of the presidential candidates.

Senator Biden, listen to what he said. He's the chairman of the Foreign Relations Committee and himself a presidential candidate.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE: As long as we have troops on the front line, we're going to have to protect them. We're going to have to fund them.

(END VIDEO CLIP)

BLITZER: All right, what do you think? How is this going to play out among the Democrats, the presidential candidates? You heard Senator Edwards in the interview with me. He thinks they should have just held their position, and reject, reject, reject, and let the president change his position.

BEGALA: It's easier for John Edwards -- although he's doing quite well in the polls.

But it's easier for John Edwards, because he doesn't have to vote. OK? Senator Biden has to vote. Senator Dodd has to vote. Senator Obama, Senator Clinton, they all have to vote on this. Congressman Kucinich over in the House, they all have to vote on this.

BLITZER: So, if you were a strategist for either Hillary Clinton or Barack Obama, what would you advise them?

BEGALA: If I were a strategist for them, I would advise them to vote no, vote against this endless war, although there are many principled Democrats who are going to be for this.

But I would -- on both sides, I would remind them to tell Democrats that this is the beginning of the end of the Bush war in Iraq. It's not the end. This is -- this is just a small battle. The bigger battle will come in a couple weeks, when we have the Defense Department authorization bill. And then the Armageddon will come in September, when we are going to reevaluate whether the Bush escalation has worked in Iraq.

So, Democrats lose this battle, but I still think they win the war.

BLITZER: What do you think?

WATTS: Well, Wolf, it's easy for anybody that is a strategist for Republicans or Democrats. I would say vote for the bill. Don't -- don't deny the troops on the ground, or those generals that are trying to execute this war, don't deny them the funding. It's that simple.

Let's talk about Monica Goodling's testimony today before the House of Representatives, the Judiciary Committee there.

You had a chance to watch her do a little Q&A between the members and her. What do you think?

BEGALA: I think it's embarrassing that I live in a country that has a woman like this at the top of the Justice Department.

I mean, come on. There are so many talented, able, principled conservatives. And she went up there, and she -- she admitted that she may well have violated the law. She admitted that she took partisan political interests into account when making hiring decisions for career prosecutors.

Now, that's against the law. She also, then, essentially accused the deputy attorney general of being a liar. She threw Paul McNulty, who is still in office, by the way -- he's still serving as deputy attorney general. He has announced his resignation, but it hasn't come to fruition yet. So, she now -- she accused him of being a liar.

And, so, we have this completely, you know, like, an ethics-free zone and a competence-free zone at the Justice Department, and, frankly, across the whole Bush administration. How can President Bush watch that and countenance it is beyond me.

BLITZER: And she testified only because she was granted immunity from prosecution by the -- by the committee, because she had wanted to plead the Fifth, so she wouldn't have to testify.

WATTS: Well, I have -- I have heard nothing, Wolf -- I heard nothing today that would encourage me to believe that, you know, she should have pled the Fifth or that she needed...

(CROSSTALK)

BLITZER: Well, she did acknowledge, as Paul said, that she may have violated the law when she decided that she was going to ask career civil servant types political questions: Who do you like? Who do you don't?

That's -- that's a no-no.

WATTS: But you know what, Wolf? This administration -- this is not a unique situation to this administration.

President Clinton did it. Jimmy Carter did it. Ronald Reagan did it.

(CROSSTALK)

WATTS: H.W. Bush did it. To -- to think that these people are not going to take into consideration someone's political background...

BLITZER: For career civil servant jobs?

WATTS: For -- yes.

(CROSSTALK)

BLITZER: It's one thing for political appointees, but it's another thing for career civil servants.

(CROSSTALK)

WATTS: You still -- if you're going to make that appointment, I guarantee you, the person making that appointment, they're going to take into consideration, as wrong as it is, they are going to take into consideration...

BLITZER: All right.

WATTS: ... if they're Republican or Democrat, based on the administration.

BLITZER: You served -- you served in the -- in the Clinton administration.

(CROSSTALK)

WATTS: But one other thing: In 1990 -- in 1992, when President Clinton was elected, he fired 93 U.S. attorneys. Two of them were investigating him. Now, there was no...

BEGALA: That's not true either, J.C. That's not true.

(CROSSTALK)

WATTS: There was no issue about this.

Now, the point -- the point is this.

BEGALA: Certainly.

WATTS: It was wrong for President Clinton to hire for political reasons. It's wrong for the Bush administration to hire for political reasons. It's wrong for both administrations.

BLITZER: We're almost out of time, but go ahead and respond.

(CROSSTALK)

BEGALA: I feel like a mosquito in a nudist colony. I don't know where to start. Every place is fertile territory, Wolf.

President Clinton fired political appointees, U.S. attorneys. He has the right to do that.

WATTS: Ninety-three.

BEGALA: And he did not do it because of any investigations that were ongoing.

There was an investigation ongoing of Dan Rostenkowski, not of Bill Clinton. And that wound up -- Eric Holder took that job, and wound up putting Danny Rostenkowski in prison.

Second, that's a real smear.

(CROSSTALK)

BEGALA: That's a real smear on Presidents Carter...

BLITZER: Very quickly.

BEGALA: ... and Bush and Reagan and Clinton, who...

(CROSSTALK)

BEGALA: There's no evidence that they violated the law.

(CROSSTALK)

WATTS: They made political decisions every single day.

(CROSSTALK)

BEGALA: That's not what we're talking about, man.

BLITZER: All right, we have got to leave it...

(CROSSTALK)

BEGALA: You're saying...

WATTS: That is what we're talking about.

BEGALA: No. You're accusing good...

WATTS: That's what we're talking about.

BEGALA: Let me talk.

BLITZER: Go ahead.

BEGALA: You're accusing good people, honorable people, like Jimmy Carter and George Bush Sr. and my boss, Bill Clinton, of doing something for which there is no evidence, putting political hacks in as career civil servants. That's not what they did.

(CROSSTALK)

BEGALA: And there's no evidence that ever did do it. Now there is evidence that Mr. Bush did it through Monica Lewinsky...

(LAUGHTER)

(CROSSTALK)

BEGALA: Monica Goodling's own testimony today.

WATTS: If party affiliation doesn't matter, why would a Republican president fire U.S. attorneys, when...

(CROSSTALK)

BEGALA: They're political appointees, J.C.

WATTS: No, but I'm saying, why -- but, if they're there to defend the law, what does it matter? It's not Republican law or Democratic law.

(CROSSTALK)

BLITZER: No, no, no, but we have got to end it right there.

(CROSSTALK)

BLITZER: But there's a different standard for political appointees and a different standard for career civil servants.

WATTS: All -- and all I'm saying...

BLITZER: And, for political appointees, you can ask all the political questions you want.

WATTS: And -- and...

BLITZER: But, when you hire a civil servant, you're not supposed to ask about the political backgrounds of the individuals.

WATTS: And all I'm saying is, Wolf, we're all naive if we think that somebody doesn't know Paul Begala's political affiliation, if I'm a Republican, and I'm going to hire him...

BLITZER: All right.

WATTS: ... or if I'm a Democrat, and I'm going to hire him.

(CROSSTALK)

BEGALA: ... political appointee. I was a political appointee.

BLITZER: You guys will take this discussion into the green room, as they say.

(CROSSTALK)

(LAUGHTER)

BLITZER: Guys, thanks very much.

BEGALA: Thank you.

(CROSSTALK)

BLITZER: Still to come: Which Democratic presidential candidate likes Ray Charles? And who likes the Four Seasons? Who likes U2? We found out, and we are going to tell you. And it reportedly involves secret plans to get Iran's president to abandon Iran's nuclear enrichment program. But, if it's a secret U.S. effort, is it right for one news outlet to reveal it? That's Jack's question. He's standing by with your e-mail -- right after this.

(COMMERCIAL BREAK)

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

JACK CAFFERTY, CNN ANCHOR: Wolf, the question this hour: Is it right for ABC News to report on secret U.S. efforts to destabilize the government of Iran?

Before I get to the e-mails, I want to read you a statement. We got a call from ABC. And they gave us this statement -- quoting now -- "In the six days since we first contacted the CIA and the White House, at no time did they indicate broadcasting this report would jeopardize lives or operations on the ground. ABC News management gave them the repeated opportunity to make whatever objection they wanted to regarding our report, and they chose not to. This piece was very carefully reported. And it puts solid facts on the table concerning a crucial foreign policy challenge facing the United States and the world."

That's from ABC.

Here's the stuff that came from you. This is better.

Jennifer writes: "No, it is never OK to report on secret government practices that are trying to protect us, especially from lunatics like Ahmadinejad. ABC should get a fine so big, it shuts them down. No one will miss their programming anyway."

(LAUGHTER)

CAFFERTY: Tom in Georgia: "Yes, yes, yes. Somebody desperately needs to keep check on the Bush administration and all future administrations. When was it decided the U.S. government had any right to dictate to the rest of the world? What would be the fallout if Sweden, just for example, decided to attempt to manipulate the U.S. government?"

(LAUGHTER)

CAFFERTY: I say, bring it on.

Jason, Scottsdale, Arizona: "Jack, give me a break. If you found about this before ABC, you would be the first one to cluck about it. You are just simply jealous that somebody else got the scoop."

Alicia in Florida: "I think you have the wrong question here, Jack. The real question should be, are we, as Americans, ready to accept the fact our president is a criminal? We, as a country, are numb to this administration's lack of accountability, and have learned to live with it and accept it as a way of life. Don't blame ABC for being the messenger. Blame Bush for being the criminal."

Jim in Malibu may have part of this right: "Part of Bush's war on Iran is to scare the Tehran government. The CIA purposely leaked this information to ABC in order to scare Iran into doing something stupid, like attacking a U.S. outpost or Navy ship. Bush is trying to provoke Iran into attacking the United States."

Michael in Virginia writes: "No, Jack, it's not right for ABC News or any other news organization to spend its time and energy digging up Bush administration plans to overthrow the government of Iran. I would rather have them spend their time digging up Bush administration plans to overthrow the democracy of the United States. Had they and the rest of their brethren done -- done that in January of 2003, the U.S., Iraq, and much of the world might be in less of a mess than it is now."

And, finally, Phillip in Denver: "ABC's revealing of the covert CIA operation is unpatriotic and detrimental to our national security. They should be ashamed of themselves" -- Wolf.

BLITZER: And the White House has been saying, Jack, that it will not comment, will neither confirm, nor deny the ABC report, saying they never discuss covert activities, or allegations of covert activities, to be precise.

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