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Oil Hits $100 a Barrel; Musharraf Calls in British Police to Help With Investigation Into Bhutto's Assassination

Aired January 2, 2008 - 17:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, HOST: And happening now, $100 a barrel -- the price of oil hits a new high.
How hard will that hit you in the pocketbook?

Under fire after the assassination of his chief political rival, Pakistan's president, Pervez Musharraf, says Benazir Bhutto was "martyred by terrorists" and he calls in Scotland Yard to help investigate.

And he's got a lot of campaign cash and a lot of enthusiastic supporters. But Ron Paul is still way back in the pack in Iowa.

Can he turn things around?

I'll ask him.

I'm Wolf Blitzer at CNN Election Center in New York and you're in THE SITUATION ROOM.

A stunning benchmark with huge implications for all of us. The price of oil hits a level hard to imagine only a few years ago -- $100 a barrel. The cost of crude went up 60 percent in 2007.

CNN's Ali Velshi is here.

He's watching all of this unfold.

What's pushing the price of oil so dramatically -- Ali?

ALI VELSHI, CNN CORRESPONDENT: That was quite a jump today, closing a little bit shy of $100, at $99.62, Wolf. But the issue here is the same that it's been for several weeks. There's some weather in Mexico that closed some of the oil flow out of that country, some tensions in Nigeria that closed some of the oil flow out of that country. But we are so tight -- we're running so tight to the amount of oil between what we manufacture and what we use, that we've seen that 60 percent increase. So even though we closed a little shy of $100 today, we hit that point. And for most Americans, that means higher gas prices. When you think back to 2007, the economic issues facing most Americans were lower home prices and higher oil prices. And it looks like on the first trading day of the year, that's exactly where we're headed. We'll probably see oil hit that $100 again overnight or tomorrow again. And we'll stay on that story.

BLITZER: It's almost like a hidden tax on the American consumer...

VELSHI: That's right.

BLITZER: ...with this money going to either the big oil companies or the oil exporting nations, whether Saudi Arabia or a Venezuela or Russia, for that matter. And -- but it is almost like an across the board tax on all of us.

VELSHI: Sure. Because you are paying 60 percent more than you were a year ago for exactly the same product. You're not getting more of it. And that's the problem. We're used to paying more for things, but you should get a little bit more. When it comes to oil prices, we keep paying more money for the same amount of product.

So the only solution here is using less of it or finding alternative ways to get our energy, because right now, that hits you directly. That works its say into gasoline prices. We have gasoline prices higher than $3.00 a gallon, on average, across the nation. And you can expect that to go higher.

BLITZER: What do we think about this year, 2008?

Any relief in sight or is it simply going to go up and up and up?

VELSHI: For now, we are looking at these kind of prices, for a little while. Long-term, oil shouldn't be as high as it is. But the bottom line, Wolf, you know it's a market. So if people are prepared to pay this kind of money for oil, it's going to get passed on to us. The traders are deciding it's worth paying $100 for a barrel of oil. So you're going to pay that in your home heating oil if you're in the Northeast of the United States and you're going to pay it in your gasoline. It's going to filter through. Don't expect any relief for a few months.

BLITZER: Great news for the oil exporting companies and for big oil...

VELSHI: Yes.

BLITZER: ...not necessarily for consumers.

VELSHI: Not for the consumer, yes.

BLITZER: Ali, thanks very much.

The Justice Department today announced a criminal investigation into the destruction of those CIA interrogation videotapes. The attorney general, Michael Mukasey, named an outside prosecutor to oversee the case. The CIA last month acknowledged that it destroyed those videos, showing some very tough interrogation methods being used against two al Qaeda suspects. That triggered a Congressional investigation and a preliminary probe by the Justice Department. The attorney general says that probe shows a criminal investigation is, in fact, now warranted. Prosecutors and FBI agents will try to determine if any laws were broken. The CIA, in a statement, says it will cooperate. Secretary of State Condoleezza Rice today personally urged rival political leaders to end the slaughter that has gripped Kenya after a disputed presidential election. Hundreds have died, including many burned alive when they sought refuge in a church. And there has been absolutely no letup today.

ITN's Neil Connery reports.

(BEGIN VIDEOTAPE)

NEIL CONNERY, ITN CORRESPONDENT (voice-over): It should have been a sanctuary. The church in Eldoret was full of people -- many women and children fleeing violent mobs. But they were hunted down. Their place of worship was set alight. They stood no chance, as Kenya's spiral of violence claimed its latest victims.

One aid worker spoke of the fear now enveloping the community.

ELLEN PETRY LEANSE, AID WORKER: We leave with hope. We leave them in fear. The word I hear more than any other word in the town of Eregi is Rwanda. They feel that fear of tribe turning against tribe.

CONNERY: The local bishop expressed his horror at what had happened in Eldoret.

UNIDENTIFIED MALE: The situation at the moment, it's basically destruction of the property, abandoning of the houses and losing of life. So we -- we have not reached that stage of genocide, even though a number of people have been killed.

CONNERY: In the town of Kisumu, people are desperate to get out by whatever means they can after dozens were killed in the unrest there. In Natalia, on the outskirts of Nairobi, a third day of disturbances. The police using live rounds to control looters. With international condemnation of the presidential ballot growing, the opposition leader told me Kenya faces one of its toughest challenges.

RAILA ODINGA, OPPOSITION LEADER: This country is at the crossroads (INAUDIBLE). We must find lasting solutions, otherwise the people will lose confidence in the ballot. And that's going to be a recipe for disaster in our country.

CONNERY: Brittons Pat and Chris Drew have lived here for 18 years and are fearful of what may happen next.

PAT DREW, BRITTON LIVING IN KENYA: I'm aware I could be caught -- we could be caught in the crossfire. Our daughters are at the coast. I'm concerned about their return here, which is in a couple of days.

CHRIS DREW, BRITTON LIVING IN KENYA: We've got friends that farm up in Kitale, which is one of the hot areas. And they, there, I mean they were saying that this morning, you know, looking from their farm, they were seeing thousands of people coming across the hills moving cattle and belongings.

CONNERY: All eyes are now on a planned opposition rally tomorrow which the police have banned. The stage is set then for bloodshed on an even greater scale.

Neil Connery, ITV News, Nairobi.

(END VIDEO TAPE)

BLITZER: China's massive military is going high tech.

But is it being aided by sensitive U.S. technology?

Critics right now deeply concerned about the Bush administration's easing of some export restrictions.

Let's turn to CNN's Brian Todd.

He's looking into this sensitive story.

What are you learning -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the relaxing of those export controls would clearly benefit some U.S. companies and the Chinese firms that they sell technology to. But we've learned that at least two of those Chinese companies have links with that country's military.

(BEGIN VIDEOTAPE)

TODD (voice-over): China's high-powered military machine rapidly upgrading its command and control, intelligence, computer systems.

Is the U.S. unwittingly helping?

GARY MILHOLLIN, WISCONSIN PROJECT: The risk is that we're making it easier for China to modernize its military.

TODD: In trying to make American technology companies more competitive, the Commerce Department recently relaxed export controls on U.S. technology sales to five Chinese corporations. A new report from the Wisconsin Project, a respected watchdog group trying to stop the spread of nuclear weapons, says two of those conglomerates have links to the Chinese military, parent companies or subsidiaries that produce equipment and weapons.

MILHOLLIN: The result will be that if we ever go to war with China, our pilots are going to be flying planes that are much better because of our technology.

TODD: Gary Milhollin, author of the report, says he's got no evidence that any U.S. firms have yet sold technology to those two Chinese companies. But he says under the new rules, items like semi- conductors will be more easily available -- technology that can be put to civilian use, but also used to make weapons.

The report, obtained by CNN, says at least one of the corporations has a company that's been punished by the State Department for dealing with Iran or Syria. Mario Mancuso, head of the Commerce Department arm that approved the new rules, says the Chinese companies were thoroughly vetted by four government departments plus U.S. intelligence. He says while the new rules do relax some export controls, they also make sure the Chinese companies fully disclose what they're using the technology for and call for on site U.S. government inspections.

MARIO MANCUSO, UNDER SECRETARY OF COMMERCE: By applying enhanced controls on an additional set of items, we're actually better hedging against China's military modernization. Net-net, we think this is good for security -- U.S. national security. We actually also think it's good for U.S. commerce.

(END VIDEO TAPE)

TODD: Still, Gary Milhollin is calling for the new rules to be suspended pending a review by the Government Accountability Office. Mario Mancuso says they won't suspend those rules, but if they get what he calls derogatory information about how these Chinese companies are using the technology, they will revisit the process -- Wolf.

BLITZER: A very sensitive story, indeed.

All right, Brian, thanks very much.

Jack Cafferty is here with us.

He's got The Cafferty File -- Jack.

CAFFERTY: John Edwards says that as president, there would be no more than 5,000 U.S. troops left in Iraq within 10 months. Edwards told the "Times" -- "The New York Times" -- the withdrawal would include forces who are training the Iraqi Army and the Iraqi police. He says extending the American training effort into the next presidency would require the deployment of tens of thousands of our troops, which he calls a continuation of the occupation of Iraq. Edwards' plan calls for the immediate withdrawal of 40,000 to 50,000 troops -- and within nine to 10 months, all of the rest of them, except 3,500 to 5,000, who would remain behind to protect the U.S. embassy and possibly do some humanitarian work.

Edwards suggested that he would allow for the training of some Iraqi forces outside Iraq. But he says he decided on an almost total withdrawal because of the political failure of the Iraqi government. His plan is at odds with the strategy of U.S. military commanders, who say the situation in Iraq is still too fragile to set a timetable for withdrawal of American forces.

Edwards wants a more rapid and complete troop withdrawal than either Hillary Clinton or Barack Obama, who have suggested that they're open to keep U.S. troops there as trainers and counterterrorism units inside Iraq.

So here's our question -- John Edwards wants no more than 5,000 U.S. troops to remain in Iraq within 10 months.

Is that a good idea?

Go to CNN.com/caffertyfile. Post a comment on my blog -- Wolf.

BLITZER: Jack, thanks very much.

Jack Cafferty with The Cafferty File.

He's got the funds -- millions and millions of dollars. He's got the enthusiastic fans.

So why is Republican presidential candidate Ron Paul lagging so far behind, at least in the polls, on this, a day before the Iowa caucuses?

My one-on-one interview with Ron Paul. That's coming up next. Also, a prisoner breaks free after using a gun at a hospital. We'll update you on the deadly shootout that followed.

And what set off that deadly tiger attack at the San Francisco Zoo?

There are new developments in the investigation.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: This campaign certainly has raised a lot of cash -- $20 million alone over the last three months and he's feeling a lot of love from very enthusiastic reporters. Polls, however, show that Congressman Ron Paul is still way back in the pack among Republican candidates in Iowa.

Can he come up with a caucus day surprise?

Ron Paul is joining us now from Des Moines.

I'm going to tease that question. We'll get back to it later.

But let's go through some of the issues, congressman, first, and then we'll come back to politics.

If you were elected president, on the first day that you're in the Oval Office, what would you do with the hundreds of thousands of U.S. troops who are deployed around the world?

RON PAUL (R), PRESIDENTIAL CANDIDATE: I would announce that they would be starting to come home. I would immediately turn the Navy around from the shores of Iran, announce that we have no intention on bombing Iran if we are not provoked. And there's no reason why we should have an option on the table to literally start another war. We're already in two countries. We're nation building. And the announcement would be as soon as practical and safely, we're going to bring our troops home and start saving some money. BLITZER: I saw -- I just want to be precise. I want to be precise. All the troops in Iraq, all the troops in Afghanistan, in Germany, Japan, elsewhere where they're deployed around the world -- all of them come back to the Continental United States?

PAUL: Yes. They do not serve our interests. We're going broke. We're in -- we've been in Korea since World War II, almost. And we've been in Japan and Germany. And, you know, the dollar is reflecting our condition in this country. The dollar is going down because we can't maintain 700 bases overseas and we're going to have to come home eventually. That's what usually happens to an empire. An empire goes broke and the currency is what goes bad. And that's what's happening to us right now. So the sooner we wake up, the better.

BLITZER: What would be your number one domestic priority on that first day in the White House?

What would you immediately do domestically?

PAUL: Well, there's not a whole lot you can do without a Congress. On one day, you can't change domestic policy. I think it's the announcement of being able to work -- to try to work with Congress to realize that if you cut the spending overseas, that you don't have to put anybody out on the streets here. So people shouldn't be fearful that they're going to lose the benefits, that maybe someday we won't need to give so many people. But that's what we have to do. We have to work in that direction.

But I also would direct the Justice Department to be dealing with people in a different way. I mean how much -- how much energy and money do we have to spend in order to enforce -- to override state laws in California to arrest people who take marijuana for -- because they have cancer -- for medicinal reasons?

I mean that type of activity is so unnecessary. So there's a lot of things in personal liberties you could change. I would respect, you know, the privacy of all Americans. I would never abuse the right to invade and spy on people. I would never torch -- I would order the CIA not to torture and I would close down these secret prisons and I would certainly respect habeas corpus.

BLITZER: What about your longstanding position of abolishing the IRS, the Internal Revenue Service?

You really want to do away with the federal income tax.

Where would the federal government get money for badly needed services, let's say, for example, another Hurricane Katrina or another 9/11 type of attack?

Where would the money come from if would be no taxes?

PAUL: Well, there would be taxes. If you got rid of the income tax now, you'd have the same revenues as we had 10 years ago. So that's not all that bad. And we did run our country up until 1913 without an income tax. So the government wouldn't disappear. There are import taxes, tariffs and other user fees. There would still be plenty of revenue...

BLITZER: Would that be...

PAUL: But you couldn't do it...

BLITZER: Would that be enough revenue to keep the federal government going?

PAUL: Not at the current level, no. You couldn't -- you couldn't maintain the welfare state. You couldn't run all these departments -- the Department of Energy and the Department of Education and all these things. No. You'd have to cut back. So you don't -- one president can't get rid of the income tax by himself...

BLITZER: So, would Social...

PAUL: ...because...

BLITZER: Would Social Security, Medicare, those kinds of services, be abolished?

PAUL: No. But we -- I would certainly like to see the day that young people would opt out. And you'd have to do that over a generation. Let the young people get out, because they're not going to get anything out of it anyway and they know it. But the only way you can take of the elderly, like I said, don't put anybody on the street. You can't do that, you can't get people out of Social Security and take care of the ones who are dependent unless you cut these billions -- hundreds of billions of dollars overseas. That's where our foolish spending is occurring. We don't have to punish ourselves. We need to take care of our people here at home.

BLITZER: You're doing incredibly well in fundraising, as I said, $20 million you've raised in the past three months -- $20 million in the last three months alone.

Is that the final number, by the way?

PAUL: Yes. And, no, it's not final because they're adding up, you know, what comes in through the mail on the computer. You know, through the Internet, it was $19.5 million. But it will be very close to $20 million.

BLITZER: And you've got enthusiastic supporters.

How do you think you're going to do tomorrow in the Iowa caucuses?

PAUL: You know, the truth is, is I don't know. But if this enthusiasm is translated into votes, believe me, there are going to be some surprises. It may even be a big surprise for me. But everything has been a surprise.

Who would have ever predicted that we could raise $20 million in three months and get the support that we're having and the enthusiasm, because I'm not promising things like what I'm going to give you. All I want to do is give people their freedom back and get the government out of their lives, bring our troops home and have a sound dollar once again.

And yet the support just keeps growing by leaps and bounds.

BLITZER: I've spoken to...

PAUL: So I am impressed and I'm very pleased.

BLITZER: I've spoken with experts who think you probably will do surprisingly well in New Hampshire, where there are a lot of Independents who might come to your -- to your cause.

How do you think you'll do in New Hampshire next Tuesday?

PAUL: Well, I think, once again, I don't know exactly. But I think we're going to do better than the polls show, which always shows me at the very bottom. You know, they're even saying that I am so low that I do not even qualify to get in the debates anymore.

BLITZER: Well, let me ask you...

PAUL: But I think we're going to show...

BLITZER: Let me ask you that question. ABC has a Republican presidential debate and a Democratic presidential debate Saturday night.

Have you been told you'll be allowed to participate in that debate?

PAUL: Yes. I'm under the assumption that I will be there Saturday, but not on Sunday on the Fox debate.

BLITZER: Sunday there's a Fox -- there's a Fox forum Sunday night.

PAUL: Yes.

BLITZER: They told you, you won't be allowed to participate in that one?

PAUL: That is right. We've called and called and called and we've never received the invitation. And the party up there said that they were going to withdraw support of the function if they didn't allow me to be in the forum. So we haven't heard the final answer yet. But it'll be interesting to see what would happen if we do well tomorrow and they allow somebody into that -- into that forum that I might be able to beat tomorrow. So I think -- I think they're sort of putting themselves in a box.

BLITZER: We'll watch together with you.

Congressman Ron Paul, thanks very much for coming in.

Good luck. PAUL: Thank you very much.

BLITZER: And if you'd like to watch any of the candidates today in their final push for votes, just go to www.CNN.com/live to watch their rallies and their events. That is streamed live. You can see it all here at CNN. The candidates are making their final pleas to Iowa voters. We're going to hear from White House hopefuls on both sides in their own words. That's coming up.

Plus, a prisoner's bold escape ends in a deadly shootout. We'll tell you what happened today.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now -- Carol, what do you have?

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things, Wolf.

A prisoner who escaped from a Maryland hospital this morning is dead after a confrontation with police. Calvin Poke was shot this afternoon at Lincoln Memorial Cemetery outside of Washington, D.C. . A spokesman for the Prince George's County Police Department in Maryland says Poke fired on the officers first. Police say Poke overpowered five hospital security guards this morning, took their weapons, shot a driver and stole several cars. The driver who was shot was not seriously injured.

Alcohol poisoning is suspected in the deaths of two U.S. Navy sailors in Ghana. That's what a Navy official is telling CNN. The official says there are no signs of foul play. The sailors were found dead yesterday. They had been stationed aboard the USS Fort McHenry, which is on a seven month mission to train local law enforcement officials on maritime security. The Navy is awaiting results of toxicology tests.

People are on alert in Southern Chile, where a volcano has erupted. The volcano is about 420 miles south of Santiago. At least 150 people evacuated the area last night after that volcano erupted, sending a plume of stock market into the air. No one was hurt. The volcano is one of the most active in Chile. Authorities are now reviewing emergency plans.

And being in a hospital doesn't necessarily mean you'll quickly get treated if your heart stops beating. A new study finds that about a third of patients do not get a potentially life-saving shot within the recommended two minutes. The study shows that those who don't get prompt defibrillation are more likely to die or end up brain damaged or disabled. The study is published in tomorrow's "New England Journal of Medicine".

That's a look at the headlines right now -- Wolf.

BLITZER: Thanks very much, Carol, for that.

Coming up, the Iowa caucus is now only a day away. The presidential candidates have one last chance to win over supporters. We're crisscrossing the state with them. You're going to hear what they have to say in their own words.

Also, potentially major new developments as police probe that deadly tiger attack. We'll take you live to the San Francisco Zoo.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now, California suing the Environmental Protection Agency. The states wants to put its own limits on vehicle emissions, but the Bush administration says that's federal business. More than a dozen other states are expected to join in the lawsuit.

Also, the ravages of a fire in London. It destroys a big chunk of London's top cancer facility. Dozens of patients are evacuated as flames ripped through the Royal Marsden Hospital, destroying all of its operating rooms. No one was hurt. There's no word yet on what sparked the fire.

And winter weather is closing schools, making for dangerous driving from the Ohio Valley all the way to Maine. Parts of New England are seeing record snowfall, with some areas bracing for up to 18 inches before the storm passes.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Time is running out for the presidential hopefuls imploring Iowans to stand for them at tomorrow night's caucuses. For some candidates, everything is at risk. And the races on both sides are at a tossup right now. With that in mind, the campaigns are making their final pushes across the state. We are going to hear what the republican candidates are saying in just a moment, but first, the democrats.

(BEGIN VIDEOTAPE)

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Everybody in Washington thinks all the knowledge and wisdom resides there.

(laughter)

EDWARDS: That is the correct response. It does not. And what I want to do is set up a million man and woman citizens congress all around the country that convenes every year for the purpose of providing input to the congress and to the president about what their concerns are, what their ideas are. I mean, it can be a source of great creative thinking, to use your terminology. It could be on education, it could be on energy, it could be on anything.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Experience is important. But you can have the wrong experience and the right experience. My experience is rooted in the real lives of real people. And it will bring real results if we have the courage to change. And by the way, I believe in those words deeply but they're not my own words. A guy named Bill Clinton said them in 1992 when Washington said he wasn't ready that he needed more Washington experience. This is what Washington does every time they are confronting change.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I am not running for president to put Band-Aids on our problem. I'm running for president to try to solve our problems with your help and with the American people committed to making a difference again. And we need a new beginning when it comes to the economy. The economy is not working for most Americans. It is working for the already wealthy and well connected.

(END VIDEOTAPE)

BLITZER: For more on the democrats, we're joined now by our White House correspondent Suzanne Malveaux. She's just back from the campaign trail out in Iowa.

We saw you doing an excellent job yesterday. A little chilly out there but that's another matter. What you saw over these past few days, are these democratic candidates basically sticking to their major points? Are they tweaking, finding some new areas to pounce?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, I think for the most part, you find they are very consistent.

John Edwards has always been talking about the fight, taking the fight for the people, fighting special interest. He has gotten more and more aggressive with his message.

What you hear from Senator Hillary Clinton is really interesting here because what she is doing is she's kind of she's tweaking her message saying experience is important, change is important but you need experience to bring about change. She is directly responding to Senator Barack Obama.

What I have seen in Barack Obama has really been an extraordinary evolution, if you will. It is more in the tone of his message. It is still about change, but it is also the way he is delivering it. You may recall people would complain and say he was too academic. That in some ways he was boring his audiences. Now it is snappy. It's punchy. It's repetitive. If you believe, I'm the guy for change.

BLITZER: One of the key things is to get the vote out. We're not talking about huge numbers of people, maybe 100,000, 150,000. That would be a huge number of actual caucus goers on the democratic side. They are working feverishly to get those people to these caucuses. What are they doing? MALVEAUX: Absolutely and it's really kind of amazing what they're doing. Some of the things we see are very traditional.

Senator John Edwards is bringing out a lot of his union support. Those guys with the trucks, with the gear, with the cars to make sure they get to those precinct stations.

What we are seeing from Hillary Clinton very much reflective of the people she really needs to bring and that's the elderly women. So they bought 600 snow shovels to make sure that if there was snow or ice, they would literally dig them out and make sure that they get to the sites.

Barack Obama, a little bit different. We see his group is 45 and under, largely male in terms of new voters. They are trying to provide babysitting services for those folks. 90 minutes, don't drop your kids off for two days, 90 minutes and they'll be able to go ahead and vote.

BLITZER: What is fascinating, there could be first-time caucus goers, a significant number, and there is no way to predict what they are going to do.

MALVEAUX: Absolutely and mostly what you are seeing that is from the Clinton camp and the Obama camp. The Edwards' folks believe that they have the people who are really loyal to him, the last go round, they are very faithful but you're going to see they are going to depend on the women when it comes to Clinton and these younger men when it comes to Obama and the independents, obviously those they are still desperately fighting for in this last heat.

BLITZER: Suzanne, thanks very much. We'll be watching together with you.

MALVEAUX: Thank you.

BLITZER: If you would like to watch any of the candidates today in their final push for votes, once again, you can go to www.CNN.com/live to watch their rallies and events. That is streamed live for those of you who want more.

All eyes are on Iowa but should they be? Some critics are dissing the caucuses saying they don't deserve the emphasis they get. Carol Costello is joining us now with more. Carol, what is their beef with Iowa?

CAROL COSTELLO, CNN CORRESPONDENT: Well Wolf, it is really simple. They say Iowa just doesn't represent most of America. Some critics call this state greedy for moving up its caucus and refusing to release its steely grip on its first in the nation status.

(BEGIN VIDEOTAPE)

COSTELLO: Iowa is feeling the love, the admiration especially from those who would be president.

OBAMA: Iowa, you have vindicated my faith in the American people.

COSTELLO: Those who would be president have spent $40 million to advertise in the Hawkeye state. That's roughly $200 per caucus-goer. But for pundits watching who would be president, the whole Iowa scene ...

LARRY SABATO, UNIVERSITY OF VIRGINIA'S CENTER FOR POLITICS: It just seems absurd.

COSTELLO: Candidates exhausting themselves, spending lavishly on a tiny state that doesn't exactly scream we typify America. Iowa's total population is 2.9 million. The population of Texas is 23 million plus. Iowa is overwhelmingly white, 95 percent and 38 percent of Iowans live in rural areas, but it's only 21 percent nationwide. The nation as a whole is nearly 25 percent black and Hispanic. Add this to the timing of Iowa's caucus and critics positively swoon with worry. One calling Iowa a little greedy by pushing its caucus date up to January 3rd to maintain its first state status forcing the candidates at the peak of their campaigns to win over voters during Christmas.

SABATO: This is ridiculous. If another country ran its democracy this way, the U.S. would be the very first to point fingers and laugh.

COSTELLO: Iowans take offense at all the sniping saying Iowa's caucus goers are passionate about politics, know the issues and can help the rest of us make informed decisions.

CLINT ALBERTSON, IOWA CAUCUS-GOER: The world is watching. You want to make sure that you think about the issues and you make the right decision because we know Iowa does have such an impact on which candidate might get the nomination.

COSTELLO: Still with the critics' voices getting louder and other bigger states moving up the date of their primaries, you have to wonder how much longer will Iowa's first in the nation status last.

(END VIDEOTAPE)

COSTELLO: It is a good question many say. Sabato says it is time for a change. The answer is not moving up when the caucus hits. In fact, that is another negative. This run for president will be the longest ever. That means more negativity, more money and needless exhaustion for everyone involved. Wolf.

BLITZER: Carol, thanks very much. Carol Costello.

Iowa right now though at the center of the political universe but not necessarily for Rudy Giuliani. We're going to tell you why he is not there today and where he is focusing his energies instead.

Plus, new clues about what happened in the moments before a tiger killed a man at the San Francisco Zoo.

Stay with us. You are in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: The Iowa caucuses are almost here and with everything at risk, the White House hopefuls are making a final, final push for support. Earlier we heard from some of the democratic candidates. Now let's hear from some of the republicans.

(BEGIN VIDEOTAPE)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: People are looking for some consistency when it comes to the support of the second amendment. They are not going to find that I once supported some gun control measure and changed my mind because the polls say I should or because the playbook says I should. I do it because it is a conviction. I think that that is a constitutional right. It is not about hunting. It is about our freedom. It is about protecting ourselves, our families and our future. We don't have the second amendment, we lose the first as well.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We republicans presided over the largest increase in the size of government since the great society. I'm going to fix it. I will fix it. I will stop this wasteful and pork barrel spending which bread corruption. I don't use the word corruption lightly. We now have former members of congress residing in federal prison. It is this whole earmarking thing and pork barrel spending which is your money.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I understand Senator McCain is back in Iowa. Welcome to Iowa, Senator and happy to talk about a fine person as you hear me talking about the other folks in this race. I will point out they are fine and honorable people. I just happen to disagree with them on some issues. And with regards to Senator McCain, I think he was just wrong to vote against the Bush tax cuts twice. He continues to defend that vote. He continues to believe it was the right thing to vote no on the Bush tax cuts despite the fact that Bush tax cuts helped working families, helped people meet their obligations. It also helped rebuild our economy at a time we had gone into an economic tail spin. In my view those choices, those tax cuts were needed and essential and positive and he disagrees.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: We should double the number of our troops who are American-led combat troops in Afghanistan. We need to bring a surge to Afghanistan and make it effective right now. I believe acting now will help us in the effort to find Bin Laden. It will help us in the effort to make sure that we solidify the gains we made in 2001 and 2002 in routing al Qaeda and routing the Taliban. And I believe it will act as a way to assist in stabilizing the entire region.

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BLITZER: One of the top tier candidates in the presidential contest, as we just saw, is nowhere to be found in the Hawkeye state. We just heard from Rudy Giuliani. He is busy campaigning right now in New Hampshire and elsewhere. Dan Lothian is in New Hampshire. He's watching all of this unfold.

Dan, what about this latest poll showing Giuliani has lost some considerable support in New Hampshire?

DAN LOTHIAN, CNN CORRESPONDENT: That's right, Wolf. He has lost some ground here in New Hampshire in the most recent CNN/WMUR poll showing him down 7 percent. That is down to 12 percent from 19 percent. He is behind Romney and McCain who are each at 29 percent. But today, Giuliani said that he feels very good about his campaign here in New Hampshire. He pointed out that this is a marathon, not a sprint, even as he refocuses his campaign on security.

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LOTHIAN: His national poll numbers slipping and support in New Hampshire even weaker. Former New York Mayor Rudy Giuliani turned his focus again to fighting terrorism by rolling out a plan that he says will increase the chances of capturing Osama Bin Laden.

GIULIANI: We need to bring a surge to Afghanistan and make it effective right now.

LOTHIAN: Using a World War II museum in Wolfeboro, New Hampshire as his backdrop, Giuliani said immediately doubling the number of U.S. troops on the ground in Afghanistan and beefing up intelligence gathering will help America win the war on terrorism.

GIULIANI: The assassination last week of Benazir Bhutto was a reminder. It reminds us that this war is not over and it reminds us why I refer to it as the terrorist war on us because it is a war against us. And we're on offense because that is the best way to deal with it.

LOTHIAN: The Giuliani campaign is hoping this message will resonate with voters like those who came to hear him at this New Hampshire restaurant.

GIULIANI: The way to keep ourselves safe is to be proactive.

LOTHIAN: Despite his poll numbers, the Giuliani campaign appears unconcerned, an aide telling CNN that while Iowa and New Hampshire may be a make-or-break test for other candidates, Giuliani is running a national campaign, a strategy that has them focused on Florida and the Super Tuesday contests on February 5.

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LOTHIAN: The big question is will this work or will it backfire. By the way, Giuliani just arrived here at the American Legion Post not far from Manchester, New Hampshire. He will be holding a town hall meeting tonight and then tomorrow, Wolf, he heads to Florida, not Iowa. Wolf?

BLITZER: Dan Lothian, thanks very much. We will be speaking with Rudy Giuliani tomorrow as well.

Was a zoo tiger taunted before a deadly attack? Investigators are looking at new clues that may provide the answer. We're going to take you live to the San Francisco Zoo.

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

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BLITZER: A rock and a tree branch; could they be what was used to try to provoke that deadly Christmas day tiger attack over at the San Francisco Zoo? CNN's David Mattingly is joining us now live with new developments in this investigation. David, what are you learning?

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, officials at the San Francisco Zoo in full damage control right now. The message out of a news conference just a short time ago is that the zoo is safe. That is something they want everyone in San Francisco to hear because tomorrow these gates behind me will open to the public for the first time since Christmas day when a Siberian tiger leaped out of its enclosure and mauled three young men, killing one of them. Officials here at the zoo are sticking their belief that something unusual happened that day, something had to happen to provoke that tiger to leap out of its enclosure.

We are hearing also a source close to the investigation is telling us that they found a large rock, a tree limb and some pinecones in the tiger enclosure. These were items that were not near the enclosure to begin with and that were not seen there prior to the attack. They say that the police are looking at this as part of their investigation to determine if somehow the tigers may have been provoked. An attorney for the two young survivors, however, both of them brothers, saying there was no taunting going on and that a new charge from that group saying that there was a full 30 minutes went by before zoo officials called police to come in after the tiger had escaped but the zoo director today defending his staff.

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MANUEL MOLLINEDO, DIRECTOR, SAN FRANCISCO ZOO: It is my feelings that our staff took the report extremely seriously. We contacted the fire department. We contacted the police department and all these agencies, including zoo staff, responded to this tragedy.

(END VIDEO CLIP)

MATTINGLY: When the public goes back in, the big cats will not be on public display. There is construction going on that enclosure. The 12 1/2 foot safety wall that was there is being worked on. That will be replaced by a 19-foot wall. Wolf?

BLITZER: David Mattingly watching this story for us. David, thanks.

Let's get back to Jack. He's got the Cafferty file here in New York. Jack? JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is John Edwards says he wants no more than 5,000 U.S. troops in Iraq within ten months. We want to know if you think it is a good idea.

George in Florida writes, "It seems like a noble plan for John Edwards to make such a promise. He is standing up for what the Democratic Congress is afraid to do. Seventy percent of Americans wants U.S. forces out of Iraq. The fact is that we are in a war we cannot win."

Allen writes, "A really bad idea. Although I'm against the war, his plan is arbitrary and would leave Iraq in chaos which could lead to a bloodbath."

Greg writes, "You have to be willing to continue the loss of American lives if you want to leave the troops there. I'm not."

Larry in Missouri writes, "It would be a worse decision than the decision to start the war. From all reports, we are doing much better in Iraq in securing the country. We have to finish the job."

Karl writes from Coldwater, Kansas, "Cutting troop levels to 5,000 in a year or less would do no good in Iraq but talking like that may well get Edwards some more votes and that is the reason he is saying all that. Win those votes at all costs and then hope you can back down graciously."

Phil writes, "I completely agree with Senator Edwards. By January 2009, it will be long enough. Enough money spent on a mistake and more importantly, nearly 4,000 dead, brave Americans. Enough is enough."

Elaine writes, "Frankly, I thought that's what the American people voted for in 2006 when we voted in a Democratic majority, one that acts more and more like Republican "lite" all the time. Is it a good idea? You bet, and long overdue."

And Larry writes from Watsonville, California, "It is nice to see at least one Democrat endorse Ron Paul's Iraq policy. Could an Edwards/Paul ticket be out of the question?"

Yeah. Yeah.

BLITZER: Probably right. All right. Jack, thanks very much.

Hundreds of people are dead in the violence and chaos that is gripping Kenya after a disputed presidential election. Let's go to our Internet reporter, Abbi Tatton. She's been looking at the images, the video that's being sent in to us from our I-reporters in Kenya. Abbi, what do the pictures show?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, people across all corners of Kenya are saying to us and telling us, sending in their stories and saying we can't believe it is happening here. These pictures are from Mombassa. This is Hussein Dasi, took these pictures as he was leaving for the airport. He had to do so with a convoy of armed police. He said it was pandemonium as they made this journey. They were being pelted with rocks from the crowds as they were going through this area with flocks of other tourists who were trying to get to the airport.

In Nairobi, the capital, this is the scene today, pictures sent in by Daniel Pollack who said it is quiet there now but people are saying that tomorrow will be a different story, a political rally planned and he says that people are ready to riot.

Another I-reporter who didn't want his name used sent these pictures in of the police lined up in that city. He says Nairobi is a no-go zone. All these sent into CNN.com/ireport. Wolf?

BLITZER: What a sad story unfolding in Kenya. All right. Abbi, thanks very much.

Lou Dobbs is back for the New Year and an unfiltered look at the 2008 presidential campaign. We'll speak with Lou in a moment.

Plus, a criminal probe into those videotapes destroyed by the CIA, we're going to have details of a major new development with huge implications.

Stick around. You're in THE SITUATION ROOM.

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BLITZER: Checking in with Lou Dobbs. He is back with a few days off. Welcome back, Lou. Happy New Year.

LOU DOBBS, CNN ANCHOR: Good to be with you.

BLITZER: It is going to be a sprint between tomorrow night in Iowa and February 5th, Super Duper Tuesday. Presumably we'll know, at least that's what the experts are predicting, who the republican and democratic nominees are going to be.

DOBBS: Where are these experts?

BLITZER: What do you think?

DOBBS: I think that we are going to see a fascinating caucus tomorrow in Iowa. I think it's going to be interesting. What I love is everyone, seemingly every pundit savant in the country is now criticizing the Iowa caucus process as if this was a new development.

BLITZER: We hear this every four years.

DOBBS: Exactly. It is silly beyond belief. What's fun is to see what these candidates who have emerged from various quarters of our society who look very much the same, whether the republican, the democrat, whether they are a senator, a former governor, whatever they may be, these are supposedly the very best candidates from a nation of 300 million people and tomorrow we're going to see an early test.

BLITZER: There are differences from the democrats and the republicans on a lot of the most important issues.

DOBBS: Sure there are. Well, you know, you may say that and some people may agree with you. I have to tell you I don't see much difference in these folks at all.

BLITZER: On taxes, on the environment, on foreign policy issues?

DOBBS: No. These people are members of an orthodoxy that has produced them. The reality is they are arguing the margin whether it's energy policy. Have you heard one single candidate say about what they are going to do about the extant $300 a barrel oil today? No. They're talking about energy policy some distance in the future. Have you heard a single candidate talk about what they are going to do for our crisis in public education? They've all got programs and nonsense, but they're not dealing with the realities. I have to tell you, no matter how that 6 percent of the folks in Iowa decide to caucus and vote, the American people have had a belly full of more cookie cutter candidates playing out some sort of kabuki dance. This is an opportunity for one of these candidates or perhaps someone who is not yet in this race, an independent perhaps, to come in and say this is the reality we face. This is what we must do. This is the way we have to deal with these orthodoxies and the challenges that are our time.

BLITZER: Lou's going to have a lot more on this coming up in one hour on "LOU DOBBS TONIGHT." He is rested. His batteries are charged.

DOBBS: I'm ready to go.

BLITZER: He's ready to go. All right, Lou.

DOBBS: Happy New Year.

BLITZER: Happy New Year to you. See you in one hour.

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