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THE SITUATION ROOM

Koppel describes President Bush's defeat on immigration reform; Henry examines the meaning of the defeat.

Aired June 28, 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: Thanks very much, guys.
A powerful blow to President Bush. A top priority, immigration reform, dead. This hour the Senate vote that's helping to seal his status as a lame duck.

Also today, a landmark Supreme Court ruling. A divided court rejects race as a factor in assigning students to public schools. We'll take closer look at the impact on Mr. Bush's legacy and on the presidential race.

And would Hillary Clinton be ready to serve in the Oval Office on day one?

We are about to continue our series of reports on the presidential candidates and what they do if they win.

And best-selling author Carl Bernstein standing by to join us live on the Bill Clinton factor.

I'm Wolf Blitzer

You're in THE SITUATION ROOM.

But we begin with President Bush. He's calling today Senate's vote that effectively killed his dream of comprehensive immigration reform a disappointment. That may be an understatement.

The bill likely was his last best chance to accomplish something big in his presidency. Opponents who blasted the compromise as amnesty now are claiming a victory for the American people.

We're tracking all of the fallout at the White House, in Congress, in the presidential race, especially among the American people.

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

She's going to update us on what happened today.

A pretty important day -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Absolutely, Wolf.

It was make or break, and by the time the vote had ended on the Senate floor, immigration reform was shattered.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: The motion is not agreed to.

KOPPEL: The vote fell 14 short of the 60 needed to clear a key procedural hurdle. And even the bill's biggest supporters are now predicting immigration reform, at least in this Congress, is dead.

SEN. MEL MARTINEZ (R), FLORIDA, REPUBLICAN PARTY CHAIRMAN: I've been the sunny optimistic from the Sunshine State, as many of you who cover this know. But today is the time to be a realist. I don't see where the political will is there for this issue to be -- to be dealt with.

KOPPEL: The defeat is a big blow to President Bush and a bipartisan group of senators who made passing sweeping immigration reform a top domestic priority.

SEN. JON KYL (R), ARIZONA:

This is an issue that is -- crosses party lines, is not susceptible to a great deal of lobbying by the president or anybody else. We come to our positions-based upon what we think will best serve our constituents.

KOPPEL: And for many of the 37 Republicans who split with their president to oppose the bill, it came down to guaranteeing that more illegal immigrants won't slip into the country.

SEN. DAVID VITTER (R), LOUISIANA: The message is crystal clear that the American people want us to start with enforcement, both at the border and at the workplace.

KOPPEL: But 15 Democrats also opposed the bill. Even New Jersey's Robert Menendez, who supported today's vote, said the bill failed to give enough support to family ties.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: And it says to many that they are good enough to work here and give their human capital and slave, but never good enough to stay here.

UNIDENTIFIED FEMALE: Senator Lott's office.

KOPPEL: Rarely has an issue so consumed the Capitol. Calls mostly from those opposed to laying out a path to citizenship for an estimated 12 million illegal immigrants jammed switchboards and even shut down Senate phone lines for a time today.

(END VIDEO TAPE)

KOPPEL: Now, among those who was affected by the call shutdown was Senator Johnny Isakson of Georgia who told me, Wolf, that just last week alone, within five days, his office had received 8,000 phone calls. He says in his 30 years in politics, there's only one other issue that trumped this one.... Wolf. BLITZER: Andrea Koppel, thanks very much.

Andrea watching that for us.

By the way, Andrea, did he say what that other issue was?

KOPPEL: He said it was -- it was when he was at the head of the Georgia Board of Education and there was an issue, I guess, back many years ago that got people really fired up.

BLITZER: All right, thanks, Andrea, very much.

The Senate showdown over immigration reform was widely viewed as a critical test of President Bush's power in his remaining months in office.

And joining us now from the Naval War College in Newport, Rhode Island, where the president delivered a speech earlier today, our White House correspondent, Ed Henry -- a lot of people suggesting, Ed, that the president had invested so much of his personal influence and prestige and power in trying to get this immigration bill through, a complete collapse today.

What does it say about his ability to influence events on Capitol Hill and elsewhere over the next year-and-a-half?

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: What it means is if it walks like a duck, talks like a duck, he's inching closer and closer to be a lame duck. And the fact -- and the clearest sign of that is when people in your own party are no longer afraid to take you on, on issue after issue.

On the immigration reform bill, the president made that personal appeal, a dramatic effort on Capitol Hill, face to face with Senate Republicans. And yet, in the end, only 12 Senate Republicans voted with him. So the vast majority went against him.

If you look on Iraq, the issue he was talking about today, you now have stalwart Republicans from red states, like Dick Lugar, standing up against the president, saying we can't wait until September. You need to change the policy now, because the increase in troops is not working.

And then you look at the subpoena issue. That's not really about it's own -- his own party. It's about the Democrats. And you look at the subpoenas that are arriving at the White House day after day on issue after issue. This president is moving closer and closer to lame duck -- Wolf.

BLITZER: Well, on that subpoena issue, the Senate Judiciary Committee, what, they voted 12-3 in favor of issuing these subpoenas to get some documents and testimony from White House officials. It looks like there's going to be a constitutional showdown over this issue.

HENRY: Absolutely. It's very likely headed to the courts. That could be part of the White House strategy -- drag this out -- because by the time there's a resolution, it's very possible that President Bush will be out of office -- Wolf.

BLITZER: Ed Henry reporting for us from Newport, Rhode Island.

Ed, thanks very much.

As Ed mentioned, the president spoke about Iraq today, defending his war strategy. In the process, he got choked up talking about a soldier killed in Iraq earlier this month.

Listen to this.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: I think of a fellow named Cory Endlich. Cory was an Ohio boy. He wanted to join the Army so badly that his dad let him start training his senior year of high school. He was deployed to Iraq.

It tells you something about his character that when his mom asked him if he needed anything, he said the only things he asked for -- she said the only thing he asked for were coloring books, crayons and candy for the Iraqi children he had befriended.

Earlier this month, he was killed. Here's what his dad said: "He felt the war was justified and wanted to be there."

That's what his dad said.

"I am proud of him and the job he is doing."

And so am I.

(END VIDEO CLIP)

BLITZER: The president was speaking at the Naval War College in Newport, Rhode Island.

The possible bright spot for the president today, the U.S. Supreme Court he's helped shaped issued a major ruling. It struck down public school choice plans that use race as a factor for assigning students. The sharply worded 5-4 decision reflects the deep legal and social divide over the issues of race in education. The ruling on plans in Seattle and Louisville could endanger similar race-based programs in schools across the country. We're going to take a much closer look at how this may influence the presidential race. That's coming up later here in THE SITUATION ROOM.

In another pivotal ruling, the high court blocked the execution of a Texas inmate. Scott Panetti killed his estranged wife's parents back in 1992. In a 5-4 decision, the justices found he was so mentally ill that he does not comprehend why he is being put to death. Panetti has been diagnosed as a schizophrenic.

Let's go to Jack Cafferty for the Cafferty File -- Jack. JACK CAFFERTY, THE CAFFERTY FILE: Wolf, it may not be exactly what President Bush had in mind when he talked about bringing democracy to Iraq. But some Iraqis are definitely getting the idea of how democracy works in Washington.

"USA Today" reports the number of lobbyists hired by Iraqis to influence policy here in the U.S. has more than tripled since the invasion. A total of 18 lobbyists and firms have registered to represent Iraqi clients and interests since March of 2003. In total, these clients have paid more than $16.7 million through January for their representation.

And it's not just lobbyists. The Iraqis are busy hiring lawyers and advertising agencies and public relations people.

They're getting it.

The biggest spenders the Iraqi government, of course. They paid more than $13.4 million in the last four years to law firms working on negotiations to reduce Iraq's foreign debt and investigations into the Oil For Food program. There are also seven separate politicians or factions within the Iraqi government that have hired lobbyists, including the Kurdish regional government, the former interim prime minister, Ayad Allawi, and a Sunni Muslim coalition.

It sounds like a lot of Iraqis are figuring out how to make their voices heard on this side of the water.

Here's the question -- what does it mean if Iraqis are hiring more Washington lobbyists?

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

BLITZER: It means that they're beginning to understand how Washington works, Jack, I guess.

CAFFERTY: You bet.

BLITZER: All right, Jack...

CAFFERTY: They're getting it.

BLITZER: ... thanks very much.

Coming up, you can bet the presidential candidates will be talking about race and affirmative action tonight. On the heels of the Supreme Court ruling announced today, the Democrats are returning to the debate stage here in Washington. We'll have a preview.

Also coming up, who's suffering most from the collapse of the immigration reform bill?

I'll speak about it with Senator John Cornyn of Texas. He's usually a strong presidential ally. But this time he strongly opposed the president.

And we'll look at the fallout for a leading supporter of immigration reform.

Can John McCain overcome yet another setback for his presidential campaign?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Vice President Dick Cheney is under political fire on several fronts. It's no secret Colin Powell had serious disagreements with Cheney while Powell was secretary of state. "The Washington Post" reported in recent days that Cheney kept Powell and then national security adviser, Condoleezza Rice, out of the loop for two years on a memo outlining the administration's definition of torture.

CNN's Larry King asked Secretary Powell today about Cheney and the way he conducts political business.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE," 9:00 P.M. 6/28/07)

COLIN POWELL, FORMER SECRETARY OF STATE: Mr. Cheney has strong views on issues and, as you would expect, he presses those strong views. We all had strong views and we pressed those views. Sometimes he went directly to the president and the rest of us weren't aware of -- of what advice he was giving. And sometimes I would do that, as well.

It was not a system where we routinely exposed all points of view.

But the bottom line is that the president is the one who decides what advice he wishes to accept and act on and what advice he doesn't feel he should act on.

LARRY KING, HOST: So this was not personal?

POWELL: With me, it's not personal. It was business. And sometimes I agreed with all of my colleagues -- Secretary Rumsfeld, Vice President Cheney, Dr. Rice. We all were uniformly agreed on an issue. But there was a number of issues where we had serious disagreements.

(END VIDEO CLIP)

BLITZER: And you can see all of Secretary Powell's interview on "LARRY KING LIVE" tonight.

It airs 9:00 p.m. Eastern, 6:00 Pacific, only here on CNN.

Hillary Clinton cites her eight years in the White House as first lady as solid experience that helps qualify her to become president of the United States. Our special correspondent, Frank Sesno, has been looking at the top White House contenders and what they do as commander-in-chief. He has looked at Giuliani, at Barack Obama.

Today he zeroes in on Senator Clinton -- Frank.

FRANK SESNO, SPECIAL CORRESPONDENT: Wolf, it's really kind of surreal. She grew up in Illinois, went to college in Massachusetts, was first lady of Arkansas, became a senator from New York. Her marriage mystifies, her husband was impeached and she's a conservative that most love to hate.

But for now, she's leading the Democratic pack for president.

(BEGIN VIDEO TAPE)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: Hello, everybody.

How are you?

SESNO (voice-over): What if Hillary Clinton makes it to the White House?

What if she becomes the first woman, first first lady president, first with a spouse who's been there, done that, scandals, scars and all?

It'll be a boon and a nightmare for conservative talk radio, that's for sure, as historic as it is amazing.

And if she wins, what will he do?

A global diplomat in residence, she's hinted. Maybe he'll go for a Mideast peace, associates say. He's tried that before.

They're quite a pair. We know that. Though their Internet video roles as soprano politicians was not, shall we say, their strong suit.

(VIDEO CLIP FROM CLINTON CAMPAIGN AD)

SESNO: Still, she may try to be the first Internet president. After all, she announced her candidacy online.

CLINTON: And I'm forming a presidential exploratory committee.

SESNO: She's campaigned online, even held a campaign song contest online...

CLINTON: Ready?

SESNO: ... on her site HillaryTV and HillCast. Maybe she'll just do her state of the union on YouTube. Won't ever have to leave the Oval Office.

What if she gets to hire a staff and cabinet?

Expect more women and diversity, friends say, but also new faces, to assert her new identity.

She got burned on that big stab at health care reform years ago, so confidantes predict she'll be incremental, cautious, calculating. But the big test will be Iraq. If she wins, she'll have to get out, strategists say. That will be the political reality for any Democrat.

What if she wins?

She changes gender politics completely. It's what she wanted since Wellesley. And this place suddenly becomes ultra exclusive real estate -- in the hands of just two families -- the Bushes and the Clintons -- for more than two decades -- 1600 Pennsylvania Avenue, a gated community.

(END VIDEO TAPE)

SESNO: But here's a question -- would Hillary Clinton be as undisciplined and as much of a micromanager as her husband?

No way, say several who have worked with her. It takes a village, she might say -- Wolf.

BLITZER: All right, thank you very much, Frank Sesno.

Next week, he'll take a close look at John McCain.

Let's get a closer look now at our top story, the Senate vote today effectively killing immigration reform. Even some of the president's most reliable allies decided the bill was so flawed they couldn't back Mr. Bush this time around. One of them is Senator John Cornyn, Republican of Texas.

He's joining us from Capitol Hill.

Senator, thanks very much for coming in.

SEN. JOHN CORNYN (R), TEXAS: Thanks, Wolf.

BLITZER: The president, in his remarks after that crushing defeat today, trying to put his best foot forward. But he clearly seemed crestfallen and really heartbroken, if you will.

I want to play you a little clip of what the president said.

(BEGIN VIDEO CLIP)

BUSH: I'm sorry the Senate was unable to reach agreement on the bill this morning. Legal immigration is one of the top concerns of the American people and Congress' failure to act to act on it is a disappointment.

(END VIDEO CLIP)

BLITZER: Now, correct me if I'm wrong, Senator. Originally when he brought this up, you were inclined to go along with him.

What happened that you became one of the fierce opponents of what the president had in mind?

CORNYN: Well, Wolf, this was a no confidence vote in the federal government based on a history of promising a lot and delivering very little when it came to actually enforcing our immigration laws. I think this bill was just so big and so complicated, so complex, with so many different moving parts, that people really questioned, can it work?

And there were a lot of reasons why this bill, constructed as it was, behind closed doors by a small group of senators, I think a lot of reason to question whether it would work. And ultimately people concluded it probably couldn't.

BLITZER: It wasn't just some senators. It was the White House, as well, Carlos Gutierrez, the commerce secretary; the homeland security secretary, Michael Chertoff; and the president himself -- they worked very closely with Senator McCain, Senator Kennedy, Senator Lindsey Graham, among others, to try get something comprehensive through.

But it clearly -- it clearly failed.

So here's the question -- what does it say about the president's political clout right now?

He's got a year-and-a-half, almost, left in the White House.

CORNYN: I don't think this is so much a commentary on the president's political clout as it was members of the Senate listening to their constituents. Our phones were ringing off the hooks -- e- mails, faxes, town hall meetings overwhelmingly negative to this big and, I would say, almost impossible to enforce -- bill.

They couldn't understand, and I can't either, why they would have to be held hostage -- the border security would be held hostage to a path to legalization for 12 million people, why we couldn't secure the borders, why we couldn't actually enforce the laws and regain some of that lost confidence. And then maybe we can do some of the rest of the things that this bill tried to do.

BLITZER: This was a case, clearly, where the president couldn't bring his own party loyalists along, including John Cornyn, one of his best friends, a fellow Texan. Kay Bailey Hutchinson, another former Texan, wasn't inclined to go along with the president either. And now we're seeing another situation unfold involving Iraq. Some important Republicans in the Senate -- Richard Lugar; George Voinovich, another member of the Foreign Relations Committee -- beginning to distance themselves in a major way from the president. They -- the president wanted them to wait until September to give this new strategy a chance to succeed. They're saying that's too long, they can't wait any longer.

I wonder if you agree with Lugar and Voinovich?

CORNYN: Well, I've been listening with interest at what Senator Lugar and Senator Voinovich have been proposing, you know? But under our constitution, the role of commander-in-chief is that of the president of the United States. He's hired a new commander, General David Petraeus. He's got a new plan that's starting to show some early signs of some success, although this surge has just finally been deployed, just last week.

You know, I think we need to give it a little bit of time to see if it will work. But we're all trying to struggle with a very complicated situation and trying to do our best to keep America safe. And, you know, I respect and admire some of the people you've -- whose names you mentioned and, you know, we're going to work through this together.

BLITZER: How worried should the president, the White House, be about a potential constitutional showdown now that the Senate's subpoenaing the White House, the Bush administration, for documents involving the firing of those eight federal prosecutors, other documents involving the warrantless wiretap program?

It looks like that this is going to be another showdown where the White House -- things not necessarily falling in the president's way.

CORNYN: Well, Wolf, the -- the new majority in Congress is at a 10 year low in terms of public opinion because it hadn't produced much of anything to show for its six months in the majority. These kind of investigations are -- I think most people recognize that there's a lot of political overtones associated with it.

My advice would be let's get this out of the Senate and into the courts, which are ultimately going to decide this power struggle between the Congress and the executive branch over the scope and application of executive privileges.

BLITZER: Well, you're a member of the Judiciary Committee.

Should the Judiciary Committee, under the chairman, Patrick Leahy -- does he have the authority to seek these documents -- subpoena these documents from the White House?

CORNYN: Well, I think he's clearly got the authority to ask for them. But whether he's entitled to them is really a matter of constitutional law that can only be decided by the federal courts.

My suggestion is let's go ahead and have the court decide it and we will honor whatever they decide.

BLITZER: John Cornyn, Republican of Texas.

Senator, thanks for coming in.

CORNYN: Thanks, Wolf.

BLITZER: Major decisions today from the U.S. Supreme Court.

But do voters think about the court when they cast their ballots on election day? Bill Schneider standing by with the answer.

And it's the question hanging over Hillary Clinton's presidential campaign -- what would Bill Clinton do if she wins the White House?

The best-selling journalist and author, Carl Bernstein, he'll be joining us here in THE SITUATION ROOM with his take. He has a new book, as you know, on Senator Clinton.

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

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

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Wolf.

Hello to all of you.

President Bush has formally nominated Navy Admiral Michael Mullen to replace Peter Pace as the chairman of the Joint Chiefs of staff. Pace's term officially ends on September 30th. His reappointment would have led to contentious confirmation hearings. Many lawmakers blame Pace for failures in Iraq.

The president also nominated General James Cartwright to replace the retiring Joint Chiefs vice chairman.

The Federal Reserve has kept a key short-term interest rate unchanged. That means the bank's prime lending rate will remain unchanged at 8.25 percent. The Fed said it was still concerned about inflation, but it dropped a description in previous statements that inflation was elevated. Instead, it expressed optimism, saying readings on core inflation have improved modestly in recent months.

The Fed's decision came after new Commerce Department figures showed the U.S. economy expanded at its slowest rate in four years in the first quarter of 2007. Gross domestic product grew at 0.7 percent in the first quarter. That's actually up from the 0.6 percent estimated a month ago, but it's still below what analysts were expecting. Consumer spending remains strong, though, and a key inflation measure was revised up.

And nearly 20,000 people in the Northeast are still without power. Severe thunderstorms knocked out electricity to some 385,000 people in New York, Philadelphia, New Jersey and in parts of Connecticut. Utility companies say they're working to restore power by tomorrow at the latest.

And it's really hot here again -- Wolf -- 90 degrees and very humid.

BLITZER: Here in Washington, too.

Carol, thanks very much.

COSTELLO: Sure.

BLITZER: Up ahead, Senator John McCain -- he went out on a limb to support comprehensive immigration reform.

Will the death of the bill now leave his presidential campaign badly wounded?

And the Democratic presidential candidates -- they're all set tonight for another debate showdown.

Will they go after one another or use today's Supreme Court ruling on race to hammer Republicans?

Stick around.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now: unending carnage in Iraq, brutal beheadings, and more bombings. Is the new U.S. strategy on the ground having any effect at all? From Baghdad, our Michael Ware standing by to assess the situation.

Toxic imports -- the FDA blocks seafood imports from China. How concerned should we be about consumer products made in the People's Republic?

And diagnosing "Sicko." Is Michael Moore's film of the Cuban health system accurate? We will have a report from Havana. That's coming up.

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

The U.S. Supreme Court is throwing a new twist into the presidential campaign -- at issue, today's ruling against using race as a factor in assigning students to public schools.

Let's turn to our senior political analyst, Bill Schneider. He's watching this story for us.

Does the Supreme Court, Bill, follow election returns? I guess that's a key question today.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Now, Wolf, more than ever.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Back in 1900, Finley Peter Dunne quoted Mr. Dooley, his fictional Irish bartender, as saying, "The Supreme Court follows the election returns."

That's certainly the case with President Bush.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The Roberts court is a different court because George Bush won the last election and John Kerry didn't.

SCHNEIDER: In several significant cases this year, a 5-4 conservative majority on the new court has overturned rulings made by a 5-4 liberal majority on the old court. The new court has reversed itself on late-term abortions, and campaign finance reform, and the use of race in student admissions.

When presidents nominated justices in the past, etiology was one consideration among many.

TOOBIN: Presidents didn't use to run for office making promises about the kind of justices they would appoint. But President George W. Bush did, and he has delivered on those promises by transforming the court in a short period of time.

SCHNEIDER: Was the court an issue to voters? In 2004, a "Newsweek" poll asked Americans how important each of 11 different issues would be in their vote for president. The results, in order of importance, were, the economy, health care, education, Iraq, terrorism, Social Security, taxes, the deficit, foreign policy, the environment, and, at the bottom of the list, the Supreme Court.

In 2008, the court could be a bigger issue.

TOM GOLDSTEIN, ATTORNEY: The stakes in the next presidential election are actually huge, because the only likely retirees at the Supreme Court are on the left.

(END VIDEOTAPE)

SCHNEIDER: So, yes, the Supreme Court did follow the election returns. After all, you could argue that, in 2000, the election returns followed the Supreme Court -- Wolf.

BLITZER: Bill Schneider, thanks very much.

Race is likely to be a major topic of discussion when the Democratic presidential candidates return to the debate stage later tonight. All eight candidates will face off at Howard University, a predominantly black college here in Washington. A brand-new poll underscores the Democrats' complicated fight for support of African- American voters.

Check this out: When Democrats of all races are surveyed, 41 percent support Hillary Clinton, 24 percent support Barack Obama, 14 percent back John Edwards. The other candidates get single-digit support.

But here's the breakdown of black Democrats. Forty-three percent black Clinton. Obama's support climbs to 42 percent. And Edwards falls to 6 percent. And, when asked who would do a better job representing black interests, 24 percent of those surveyed said Clinton. Fifty-seven percent said Obama.

Check this out, though. Black voters are more equally divided on who would serve -- who would better serve their community. Thirty- nine percent say Clinton. Forty-three percent say Obama.

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

She's watching all of this, getting ready for the debate tonight.

How important is the African-American vote for Barack Obama, first of all?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, not just for Barack Obama, but for anybody in this race. I mean, the African-American community is one of the most stable, sure blocs within the Democratic Party.

It is very difficult to win unless you get a substantial part of the black vote, particularly when you go into states like South Carolina, which is now an early primary state, as you know. So, it's not just Barack Obama. It's all Democrats. This is a very, very important constituency.

BLITZER: They have been very, very loyal to the Democratic Party for all of these years.

Let's talk about an issue that's likely to come up at Howard University tonight. And that would be the U.S. Supreme Court decision today on race and public schools. How do you think that's going to fall out?

CROWLEY: You know, what's -- what's interesting here is that, usually, it's been the Republicans who have used the Supreme Court as something to get out their voters. It's something that really excites the base: If you nominate me, I will appoint strict constructionists.

Hasn't been so much with the left-hand side of the Democratic Party, the base of the Democratic Party, because no one saw, for instance, no one thought that Roe was really going to get overturned. Now we have a very hot-button issue -- and that is integration in the schools -- that the court has now said you cannot do by -- you cannot use race when you decide who goes to what school.

So, it's going to be very interesting tonight to listen to these candidates, who, I will tell you, will all agree that the court was wrong in this decision, and who will, probably, most of them, bring up the importance of Supreme Court nominees for the next president.

BLITZER: And they have been issuing statements already.

CROWLEY: Yes.

BLITZER: I saw Chris Dodd already did, Joe Biden did, expressing a deep disappointment in the Supreme Court decision today. Candy's going to be heading over to Howard University shortly, not a far drive from where we are.

Thanks, Candy.

CROWLEY: Sure.

BLITZER: The race for campaign cash is approaching the finish line. This Saturday is the second-quarter deadline, and top Democrats are starting to count their numbers. Senator Barack Obama is doing his part online.

Let's turn on our Internet reporter, Abbi Tatton.

Abbi, what is Obama's Web site tracking?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, this live tally at Barack Obama's Web site has been rising all day, tracking not the money, but the amount of people behind it, donating it.

Since he got into the race, that number is at 247,000 donors, and counting. Roughly 100,000 of those donors came in through the first quarter, bringing in $25 million, another 140,000 donors, therefore, so far this quarter.

The importance of these numbers? A large donor pool, all giving small amounts, means that the campaign can go back to them, hit them up again, via e-mail or however, asking them for more, because they haven't reached campaign limits.

And fund-raising e-mails from the Barack Obama campaign reflect that, this one just asking for $5 or all you can give.

Now, Barack Obama hasn't said, through this Web site or elsewhere, at this point how much these donors this quarter have given, though he is expected to match his first-quarter number.

But the Hillary Clinton campaign says, they have an idea at a post today on the Hillary Clinton Web site predicting that Barack Obama will outraise Hillary Clinton this quarter, while estimating or predicting their own number at $27 million -- all playing the expectations game, Wolf, ahead of Saturday's deadline.

BLITZER: Well, we will know soon enough.

Thanks very much. Whatever it is, a lot of money out there.

Abbi Tatton, Candy Crowley, Bill Schneider, as you know, they are all part of the best political team on television.

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

Coming up: If she wins, what will he do? The Hillary and Bill Clinton question that a lot of people are asking. The veteran journalist Carl Bernstein, he's standing by to join us. He will jump into this debate. He will be here in THE SITUATION ROOM.

Also, the death of immigration reform, is it effectively the death of President Bush's hopes to accomplish anything big in his final months in the White House? Paul Begala and Rich Galen, they're standing by for our "Strategy Session."

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Let's get back to our top story here in Washington today, the defeat of the Senate immigration reform bill.

Senator John McCain was a major supporter of that legislation.

Tom Foreman has been covering the story from day one.

So, what is Senator McCain saying right now, Tom? And how, I guess the key question for him, how is all of this going to affect his presidential campaign?

TOM FOREMAN, CNN CORRESPONDENT: Well, obviously, he's trying to put the best face on it.

We have the first statement out from him in reaction to all of this. He has said: "I am hopeful that we will have another chance to address this critical national security issue that affects people throughout our country. In the meantime, we must keep working to secure our borders, while we continue fighting to reform our unenforceable immigration laws," like I said, trying to put the best face on this. And he better, because he's got a lot at stake.

(BEGIN VIDEOTAPE)

SEN. DAVID VITTER (R), LOUISIANA: I don't think the message could be any clearer than this dramatic vote.

FOREMAN (voice-over): The immigration reform bill goes down in flames.

UNIDENTIFIED MALE: The motion is not agreed to.

FOREMAN: And aftershocks are being felt out on the campaign trail. John McCain seems to be the candidate most impacted. The senator from Arizona co-authored last year's original bill, alongside Democrat Ted Kennedy, and he was a major supporter of this year's version.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We need to act, my friends. And, if someone else has a better idea, I would love to have them pursue -- give it to us.

UNIDENTIFIED MALE: Thank you...

(CROSSTALK)

FOREMAN: Immigration is an issue that motivates Republicans.

KEATING HOLLAND, CNN POLLING DIRECTOR: Two-thirds of Republicans say that illegal immigration is extremely or very important to their vote for president next year.

FOREMAN: And the Senate bill was never a hit with Republicans. Fifty-two percent of those we polled over the weekend said they opposed it. Most of McCain's opponents got the message and have spoken out against the bill.

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: The problem with this immigration plan is, it has no real unifying purpose. It's a typical Washington mess.

FOREMAN: McCain's strong support for this bill many in his party did not like appears to be hurting him, both at the polls and in raising campaign cash. But now that the bill is dead, immigration should fade from the headlines, which could give McCain some breathing room.

MARK PRESTON, CNN POLITICAL EDITOR: Conservative Republicans who oppose this bill are not going to forget John McCain's role in this immigration fight. For his sake, at least for now, at least it's not dominating the news every day.

(END VIDEOTAPE)

FOREMAN: As we mentioned, most of the other Republican presidential hopefuls were against the bill, but none more so than Colorado Congressman Tom Tancredo. Illegal immigration is arguably the only issue he's running on, and the death today of this bill may slightly help his long-shot bid for some attention in this presidential race.

BLITZER: Tom Foreman, thanks very much. We will watch the fallout together with you.

The next presidential debate, by the way, that will be featured on CNN will take place on July 23. We're teaming up with YouTube. It will be the first debate where all of you can submit your questions to the candidates online.

Up next: the autopsy on the death of immigration reform.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: A lot of us worked hard to see if we couldn't find common ground. It -- it didn't work.

SEN. JIM DEMINT (R), SOUTH CAROLINA: This immigration bill has become a war between the American people and their government.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We have listened to those voices of fear that say absolutely not.

(END VIDEO CLIP)

BLITZER: Is the Senate vote today a final nail in the coffin of the president's already diminished clout?

Paul Begala and Rich Galen, they are standing by live. They will also consider how the border wars may affect the Hispanic vote in this 2008 presidential debate campaign season.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It was a key goal of his second term in office, but now immigration reform is dead, and, along with it, a much-hoped-for domestic legacy.

Here with us in our "Strategy Session" to discuss the impact of today's vote, Democratic strategist Paul Begala and Republican strategist Rich Galen.

Thanks very much for coming in.

You have got to give President Bush a lot of credit. He knew this was not very popular, especially with his conservative Republican base, but he felt very strongly, and he worked very hard to get it through. But it collapsed today.

PAUL BEGALA, CNN POLITICAL ANALYST: It did. And it -- it -- I think it's not even a debate anymore if he's a lame duck. He's a dead duck.

The Republican leader in the Senate, the man's point man on legislation in the U.S. Senate, Mitch McConnell...

BLITZER: Mitch McConnell.

BEGALA: ... Mitch McConnell from Kentucky, voted against the president on this bill.

And I know presidents get second-term blues, but come on. President Reagan had tax reform, an immigration bill of his own. He had Reykjavik in his second term, Ronald Reagan, working with the Democratic Congress. Bill Clinton, with a Republican Congress, had a balanced budget, the student -- the child health care initiative. He doubled the funding for the National Institutes of Health. He expanded parkland more than anybody since Teddy Roosevelt.

You can get things done, if you aren't the worst president in American history. And that's what Bush is.

RICH GALEN, REPUBLICAN STRATEGIST: He also had an impeachment and some other things going on.

BEGALA: And he survived that, too. And, yet, he got all that done for America. Bush should get something, anything...

GALEN: Only because he had -- because he had Newt Gingrich driving the train for him.

BEGALA: He worked with Newt, though. That's right.

(CROSSTALK)

BEGALA: And Bush should work with Pelosi and Reid.

GALEN: Anyway, and let me just make one point about this vote today.

I counted -- I went to the Senate Web page and I counted who voted for what. Fifteen Democrats, by my count -- I might have missed it by one, but I think I got it right -- 15 Democrats voted to kill this bill. Forty-six -- it got 46 total votes. Forty-six and 15 is what? Sixty-one. If the Democrats -- if your guy, Harry Reid, could have held his troops together...

(LAUGHTER)

GALEN: ... then the Democrats could have pushed this through.

BEGALA: Right. Right.

GALEN: So, the Democrats had it in their power to roll over the Republicans. And they -- and they couldn't get it done. Dead ducks.

(LAUGHTER)

BEGALA: The president's own party killed his chief domestic initiative.

GALEN: Democrats...

BEGALA: By the way, his chief foreign initiative, Iraq, is a disaster of historic proportions.

(CROSSTALK)

BEGALA: And leading Republicans are jumping off ship on that as well.

(CROSSTALK)

BLITZER: But there's no doubt that the motivating factor for so much of the opposition was on the conservative side, on the Republican side. And propelling that was talk radio. I think you will agree on that point.

GALEN: Well, I will agree that talk radio has certainly driven this, although I -- if you're getting to the point that we need a fairness doctrine, I absolutely disagree with that.

BLITZER: I mean, when Rush Limbaugh said, on day one, when the president came out, and Ted Kennedy and John McCain, they all came out...

GALEN: Right.

BLITZER: ... and he predicted, we're going to do to this what we did with Dubai Ports World, kill it, a lot of people were thinking, well, Mayor Bloomberg, you know...

(CROSSTALK)

BEGALA: That was just the Viagra talking, the OxyContin, or whatever he...

(CROSSTALK)

GALEN: If the Democrats were as interested in good policy as they are in playing a "Three Stooges, whoop, whoop, finger in your eye" politics, this thing could have stayed alive. Would it have passed all the way? I don't know.

(CROSSTALK)

GALEN: But it wouldn't do it.

BEGALA: No, you can't say...

GALEN: Yes, I can.

(CROSSTALK)

GALEN: Fifteen Democrats voted against it.

BEGALA: You can say anything you want. It doesn't make it so.

GALEN: It does make it so.

BEGALA: The Republicans killed this bill.

GALEN: No, they didn't. The Democrats...

(CROSSTALK)

BEGALA: The Republican president's chief initiative is dead, and the murder weapon is in the hands of Republicans in Congress. It shows the president is that ineffectual. This is what happens when you drive yourself to 26 percent.

(CROSSTALK)

GALEN: The AFL-CIO was opposed to this bill. They lost a vote on Monday. Democrats had to give them something today. So, Democrats who might have been wavering said, OK, I have got to do something...

(CROSSTALK)

BEGALA: As you said, Bill Clinton passed things with a Republican Congress. Bush can't pass things in a Democratic Congress.

(CROSSTALK) BLITZER: We know that, in recent years, the Republican National Committee, Republicans in general, the president, they have tried to reach out to the Hispanic, the Latino community to get their support.

What is your assessment? How will this defeat of comprehensive immigration reform right now play out on Election Day next year?

BEGALA: I think this is what has Republican strategists most concerned, not even whether President Bush -- you know, God love him, but he will be gone in 570 days.

Republican strategists thinking about the long term are very worried that this debate will do to them, in a lot of key states, what Prop 187 in 1994 did for Republicans in California, which is drive Hispanics into the welcoming arms of the Democratic Party.

Prop 187, back in '94, reelected Pete Wilson. It was a tactical victory, being very anti-immigrant. It helped for a very brief time. But, strategically, it killed the Republican Party in California. And the only Republican who can win there is Arnold Schwarzenegger, who is about as much a Democrat as he is a Republican.

BLITZER: What do you think, though...

GALEN: Well...

(CROSSTALK)

BLITZER: ... the political fallout, because the Hispanic community obviously increasingly influential community on Election Day?

GALEN: Well, increasingly influential, but it depends on where you're looking.

Going back to the poll you were talking about earlier about black voters, the fact is that there are not very many black voters in the early states. There are more in New Hampshire, but certainly not very many in Iowa, certainly not many in New Hampshire.

So, when you -- when you talk about interest groups like -- or especially ethnicity in the early voting states, that -- that becomes part of the calculation. Moving down the road, I'm not so sure about that. I think, unlike blacks -- unlike blacks, who tend to vote overwhelmingly as a bloc, there is a difference between the way Cuban immigrants and Dominican immigrants and -- and people from Mexico vote.

It's a much more diverse organization. And I think both sides are going to pick up their share.

BLITZER: Final thought?

BEGALA: I think the Republican share is going to be much, much smaller in the years to come, again, not today. But, long term, this -- this country -- you know, the number one condiment sold in America is not ketchup. It's picante sauce.

(CROSSTALK)

BEGALA: Picante.

GALEN: Oh.

BEGALA: Picante.

The Latino vote is going to be huge in America.

(CROSSTALK)

BLITZER: This is a Texan. He knows this kind of stuff.

BEGALA: I love picante...

(CROSSTALK)

BEGALA: Me gusto mucho.

(CROSSTALK)

GALEN: It's made in New York City.

(LAUGHTER)

BLITZER: Paul Begala and Rich Galen, thanks very much.

Still to come, the Jack Cafferty, Jack with your e-mail -- that's coming up.

Also, what will Bill Clinton do if his wife makes it to the White House? We will talk about it with a Pulitzer Prize-winning journalist and Hillary Clinton biographer, Carl Bernstein. He's standing by live to join us.

Also ahead: the FDA's catch of the day, contamination fears about another Chinese import.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Senate defeat of the immigration bill tops our "Political Radar" today.

The vote puts Sam Brownback in a bind. The senator from Kansas and Republican presidential hopeful voted yes on allowing the bill to live. Then, 15 minutes later, he voted no. Brownback had supported the bill, but his campaign said he changed his vote because the senator was not convinced the bill would fix the country's illegal immigration problem.

All eight Democratic presidential contenders face off tonight at a debate here in Washington. And we're now learning that they will also meet up in a virtual town hall on July 7. The liberal political activist group MoveOn.org announced today their town hall forum will focus in on global warming. It's even scheduled to coincide with Al Gore's Live Earth concerts, which are being held that same day.

Remember, for the latest political news at any time, you can always check out our Political Ticker at CNN.com/ticker.

Let's go back to Jack in New York for "The Cafferty File" -- Jack.

CAFFERTY: I always check that out.

BLITZER: How many times?

CAFFERTY: Several times a day.

BLITZER: Several.

CAFFERTY: Yes.

BLITZER: I was going to make sure.

CAFFERTY: A lot. Yes, I'm on it all day long.

BLITZER: Me, too.

CAFFERTY: The question is: What do it mean if Iraqis are hiring more Washington lobbyists? This is a true story, the number of lobbyists hired by the Iraqi government skyrocketing since the invasion.

Bonnie writes from Florida: "It just means it will show for all to see that they now own several of our senators and congressmen's votes."

Sheldon writes: "No surprise the Iraqis are hiring more lobbyists, as it's simply indicative of D.C.'s willingness to sell it soul to the devil for the best possible price. Where will the line be drawn? For the right price, al Qaeda might be able to hire someone to lobby for lower tariffs on weapons exports. At least we know that $13.4 million of our billions wasted in Iraq have been reinvested at home."

David in Florida: "Let me see if I have this right. These are the same people who can't get their own democracy going, can't stand up for themselves on the battlefield, but they already know how to game our system for their own benefit. If that isn't a slap in the face, I don't know what it is. It is way past time to get the hell out of there."

Bruce in Indiana: "It means the Iraqi puppets are desperate. We used to have the best government money can buy. But after six years..."

(LAUGHTER) CAFFERTY: "... of the Bush administration, we now have the worst government money can buy. If Americans are ready to give up on the Iraq civil war, then the puppets' only hope is to throw money to the lobbyists."

Dale writes from Anadarko, Oklahoma: "Jack, sounds like the Iraqi government has read that book 'Free Government Money, Without Working.'" And then he adds: "We're getting so much rain here, I'm fishing from my patio. Caught three catfish and a spoonbill so far."

And Jaycie writes this: "It means that the Iraqis are using our money to lobby our Congress to get even more of our money. Is this a great country, or what?" -- Wolf.

BLITZER: Jack, thank you.

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

Happening now: The Senate drives a stake through the immigration reform bill. It's a major blow to one of President Bush's biggest legislative wishes. Does it signal the deepening of a lame-duck presidency? We're watching the story.

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