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THE SITUATION ROOM

"American Dream Crisis: Clinton's Housing Plan; Richardson's Warning to Dems: "Stop the Bloodletting"; Voter Fury in Florida

Aired March 24, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM.
Happening now, the housing crisis this is the very heart of the American dream. So Hillary Clinton is putting it at the center of her new economic plan, announced today.

But is it really her plan?

He's already lost to Hillary Clinton in several of the biggest states.

Can Barack Obama beat John McCain in the general election?

I'll speak with a key Obama supporter the former U.S. senator, Gary Hart.

Detroit's mayor and his former chief of staff charged with felony counts tied to the alleged cover-up of a sex scandal.

All that happening today.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Hillary Clinton focusing in on the number one issue facing voters today -- the U.S. economy. As she plots strategy today in the crucial big state battleground of Pennsylvania, Clinton is taking direct aim at the mortgage mess.

But can she take the credit for her clean-up plan?

Let's go live to CNN's Dan Lothian.

He's following this story for us in Philadelphia.

What's this all about -- Dan?

DAN LOTHIAN, CNN CORRESPONDENT: Well, first of all, Wolf, you know that Philadelphia is a very -- Pennsylvania, rather -- a very important state for the Democrats -- 158 delegates up for grabs in the primary, which comes up on April 22nd. So that is why there is so much talk about the economy here.

And today, Senator Clinton was talking about the economy and pointing out to voters here and, for that matter, voters across the country, that when it comes to fixing the economy, she's the one to get the job done.

She laid out what she calls sort of a four-step plan to repairing not only the economy, but also the mortgage crisis.

One of the issues on that list she pointed out was this emergency working group, which she wanted to get President Bush to get together some of the top financial experts, like Alan Greenspan, to sit down, review all of the possible options in order to repair the financial crisis. She also brought up something that she laid out there on the campaign trail last weekend. That is laying out $30 billion to help states and local communities to keep a lot of those folks who are in the midst of foreclosure from losing their homes.

What Senator Clinton also pointed out is that a lot of Americans -- a lot of voters have lost confidence in the economy.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), PRESIDENTIAL CANDIDATE: Our housing crisis is, at heart, an American dream crisis. Your home isn't just your greatest asset, your greatest source of wealth, it's your greatest source of security. It's what anchors you to your neighborhood and your community. It's the center of your family.

For the past seven years, we've had a president who stands up for the special interests, for the insurance companies and the mortgage companies and Wall Street. Now it's time for a president who stands up for American families.

(END VIDEO CLIP)

LOTHIAN: Now the Obaman -- Obama campaign, rather, points out that a lot of what Senator Clinton laid out today has been said before. In fact, they say that they have said a lot of this before. And they point out, as for like this working group that she's talking about, well, they say a year ago they asked the Federal Reserve to look into something quite similar. So, essentially, they're saying nothing new here today -- Wolf.

BLITZER: All right, Dan.

Thank you.

He's a friend of the Clintons turned Obama supporter and he's warning both sides to cut it out. New Mexico Governor Bill Richardson says part of the reason he decided to endorse Barack Obama was to try to do something about the rising bitterness in the Democratic campaign.

He told CNN how he broke the news to Hillary Clinton.

(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON (D), NEW MEXICO: It was heated. She was very gracious. She said she was disappointed. She asked me my reasons. I mentioned the race speech. I mentioned that Obama is somebody that's very good at bring people together and this is what the country needs, that it was a very tough decision. My worry now is this enormous fight between both of them, the divisiveness, the heated rhetoric is going to hurt us. And we need to stop this bloodletting before we get to the Democratic convention. And, unfortunately, I see no end in sight.

(END VIDEO CLIP)

BLITZER: Senator Clinton certainly is fighting on. But there are some who say it's destined to be a losing battle for her.

Let's turn to CNN's Carol Costello.

She's here in THE SITUATION ROOM watching this story for us.

So why do some people feel that she simply can't win the Democratic nomination?

CAROL COSTELLO, CNN CORRESPONDENT: Well, to put it simply, Wolf, the math. I mean there are those who say it would be a stunning turnaround if Hillary Clinton takes the lead in the popular vote and in pledged delegates and gets the nomination. Just don't tell that to the Clintons.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Hillary Clinton keeps on fighting. She's in Pennsylvania, her husband in Indiana.

It's an exciting scrappy fight, but for what?

More than one political observer is saying hello, Hillary -- barring a miracle, it's over.

JOHN HARRIS, POLITICO.COM: We're in the seventh or eighth inning of a baseball game. And if you were listening to the radio, you might think this game is 5-4. But I think, actually, the reality is it's probably more like 10 to two.

COSTELLO: Before you dismiss this Clinton fans, let's look at something that doesn't lie -- the numbers. Right now, Clinton is losing to Obama in the popular vote, 47 percent to Obama's 49 percent. Eight states, Guam and Puerto Rico have yet to hold primaries and caucuses. For Clinton to bridge the gap, she must win 56 percent of the popular vote in every state.

Clinton is also losing in delegates, including super-delegates. She's behind by 137. In those places yet to vote, 566 delegates are up for grabs. If -- and this would be unusual -- if Clinton manages to win 60 percent of the vote in every state left, she would have a net gain of 114 delegates. Good, but not great, since even after that amazing feat, Obama would still lead by 23 delegates.

But keep in mind, Obama still would not have enough delegates to lock up the nomination before the convention. On to just the super-delegates, who can vote either way, no matter how people vote. Of the super-delegates who've made their choice known, Clinton leads by 34. The big question is if despite lagging in the popular vote and in pledged delegates, can Clinton convince super-delegates to put her over the top?

(END VIDEO TAPE)

COSTELLO: I know your head is spinning, isn't it?

Now the Clinton camp says if Senator Clinton can prove she can continue to win the big states, like she did Ohio and Texas, and win Pennsylvania and Indiana, and convince the super-delegates she is more electable than is Barack Obama, then the super-delegates could put her over the top and she'd win the nomination.

BLITZER: Here's the bottom line. We have to wait and see what happens, because neither of these candidates is throwing in the towel -- not yet. There's a lot more to go on.

Carol, thanks very much for that.

COSTELLO: Sure.

BLITZER: And that's certainly the argument that was made here only a little while ago by a key Clinton supporter, the Democratic strategist James Carville.

(BEGIN VIDEO CLIP)

JAMES CARVILLE, CLINTON SUPPORTER: Let's run this thing out in Pennsylvania, North Carolina, Indiana, I think Oregon, West Virginia, Kentucky and Puerto Rico. And let's let these Democrats -- you know, it's not up to Politico.com to determine who the Democratic nominee is. It's up to Democratic voters. And, at the end of this process, if it's clear that Senator Obama has got the nomination -- again, this is one corporal who will sew his Chevrons back on, salute and fall in line. But I'm not going to substitute my judgment for these Democrats. And I think it is a terrible mistake for this party to play a game only 36 and 30 -- 36 minutes and 30 seconds of a 40 minute game here.

(END VIDEO CLIP)

BLITZER: For the latest political news any time, you can check out our Political Ticker, by the way, at CNNPolitics.com. The Ticker is now the number one political news blog on the Web. And if you go to The Ticker, you can read my latest blog post, as well. CNNPolitics.com.

Let's check back with Jack Cafferty.

He's got The Cafferty File -- Jack.

CAFFERTY: You know, in Texas, they have that two step system -- the primaries and the caucuses. And when it was all said and done, she didn't win Texas. He did. BLITZER: Well, she won the primary, he won the caucuses.

CAFFERTY: He came out of that Texas experience with more delegates in the Lone Star State than she did. I don't know how you say, you know, who the winner is, but he got more delegates than she did.

The race between Hillary Clinton and Barack Obama getting nastier the farther behind Senator Clinton falls. Bill Richard, the New Mexico governor, who endorsed Obama on Friday, being compared to the traitor Judas. Clinton supporter CNN political analyst James Carville said Richardson's backing of Obama "came right around the anniversary of the day when Judas sold out for 30 pieces of silver."

Richardson served in President Bill Clinton's administration. He's now endorsing his wife's rival.

Richardson says he's still the Clintons' friend, refuses to "get in the gutter," like some Clinton people are doing. Richardson says that many in Clinton's camp think they have a sense of entitlement to the presidency.

Meanwhile, Pennsylvania Governor Ed Rendell says Obama is trying to have it both ways -- accusing his campaign of complaining about negativity while frequently going after Hillary Clinton unfairly. Rendell, who is a Clinton supporter, points to remarks by an Obama surrogate, General Tony McPeak, who compared Bill Clinton to Joe McCarthy -- the famous communist witch hunter of the 1950s. McPeak was reacting to remarks by former President Clinton questioning Obama's patriotism.

On Friday, Clinton said: "I think it would be a great thing if we had an election year where you had two people who loved this country," suggesting that would be a match-up between his wife Hillary and John McCain.

With more than four weeks to go until the Pennsylvania primary, the Democratic Party continues along the path of self-destruction -- giving John McCain extra time to read up on the economy and learn the difference between Sunnis and Shia.

Here's the question -- which of the two Democratic campaigns, Clinton's or Obama's, occupies the moral high ground?

Go to CNN.com/caffertyfile and you can post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

See you in a few moments.

A key Clinton supporter touching off a political inferno by likening the latest endorsement of Barack Obama to a Judas-like sellout of Hillary Clinton.

Has the bickering reached a new low? I'll ask a key Obama supporter, the former senator, Gary Hart. He's standing by live.

It's looking more and more as if their votes won't count when all is said and done. Many Florida Democrats are furious at their punishment for holding an early primary.

Will it come to haunt the party in November?

And Detroit's mayor, Kwame Kilpatrick, now facing felony charges for allegedly lying in a court about a romantic affair. We'll hear his response and a lot more, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The Clinton supporter and CNN contributor, James Carville, has sparked a furor. He's suggesting that the New Mexico governor, Bill Richardson's endorsement of Barack Obama amounts to a Judas-like betrayal of Hillary Clinton.

Let's discuss that and more right now with the former Democratic presidential candidate and U.S. senator, Gary Hart.

He's backing Barack Obama.

Senator, thanks for coming in.

GARY HART (D), FORMER PRESIDENTIAL CANDIDATE, FORMER U.S. SENATOR: A great pleasure.

BLITZER: He did not back off at all, just in the -- a little while ago here in THE SITUATION ROOM, Senator, James Carville saying he meant it, he thought it was an appropriate metaphor -- Bill Richardson/Judas -- because of the "betrayal" of Hillary Clinton.

I want to get your reaction.

HART: Well, the last thing in the world I want to do is quarrel with James Carville, who is much cleverer and talks much faster than I do. But I think that breaks one of the unwritten rules in politics. There are a number of people that have been friends of mine who have supported opponents of mine and they didn't merit that kind of accusation and I think Governor Richardson's response, by saying this is exactly why he supported Obama, hit the nail on the head.

BLITZER: His point, I take it, was that because he served in the Clinton cabinet as an energy secretary, as a U.N. ambassador and because he actually invited Bill Clinton to come down and watch the Super Bowl much more recently, after he dropped out of the presidential race, he thought that it was sort of a stab in the back.

HART: Well, I'm sure he would. He's on that side. But those of us on Senator Obama's side thinks it's a stab in the back for the former president to say his wife is patriotic and by implication that Senator Obama is not. But I think the Demo... BLITZER: He denies -- he denies that was his implication. He simply says it would be good to have two candidates in the eventual contest who loved their country. He didn't say who those two candidates necessarily were.

HART: Well, I've known President Clinton for over a third of a century and I think we both would agree he rarely says anything by accident.

BLITZER: Well, but -- so you agree with General McPeak that this was a deliberate attack against Barack Obama, questioning his patriotism?

Is that what you're saying?

HART: No. I think the implication speaks for itself. But, on the other hand, you said earlier about the Democrats destroying themselves, I think it's not helpful for any of us to get into these kind of quarrels. And I'm very hopeful Senator Obama and those of us around him will rise above it.

BLITZER: What do you say to those Clinton supporters who make the point, yes, Barack Obama wins a lot of states -- Utah and Wyoming, and the Dakotas, let's say, states that the Democrats have virtually no chance of winning in the general election -- but he can't win in New York or California or New Jersey or Ohio -- states the Democrats desperately will need in November. And that's why the super-delegates should go with Hillary Clinton as opposed to Barack Obama.

HART: Well, if they're actually saying that -- I haven't heard that. But if they're actually saying he can't carry those strong Democratic states, that's just crazy. The fact of the matter is he will run just as well in those states in the general election as Senator Clinton and have the opportunity of picking up the so-called purple states, such as Colorado and others, that he has done quite well in.

You have to get Democratic votes. And he will get those. I think it's clear that he will.

BLITZER: BLITZER: What about Ohio...

HART: But he also...

BLITZER: What about Ohio, which could go either way?

And she won in Ohio.

HART: Well, I think he will win in Ohio and I think he'll win in New York and California and New Jersey. And I think he'll also win in a general election in Pennsylvania. The question isn't whether you can win the Democratic base, the question is whether you can attract Independents and defecting Republicans. And he has demonstrated a much better ability to do that than Senator Clinton.

BLITZER: How much damage do you believe he's suffered as a result of the Jeremiah Wright controversy that's been out there now for some time?

HART: Oh, I think by next November it will be totally inconsequential.

BLITZER: You don't think the Republicans will keep raising that and raising it between now and November, assuming he's the nominee?

HART: Of course. Of course, we've learned about swift-boating. I would hope the American electorate has learned a lot about swift- boating, also.

BLITZER: But you acknowledge those "independent groups," they could make this an issue for as long as they want.

HART: Oh and I've also had a longtime friendship with Senator McCain. Like all the rest of us, he is capable of making mistakes. And I would be mightily surprised if between now and November Senator McCain doesn't make some big mistakes.

BLITZER: But even if he doesn't want this campaign to go in that direction, these independent groups, they can do whatever they want.

HART: They can, indeed. And I, as I say, have much more confidence in the American voters, including the Independents, than to fall for that line more than once.

BLITZER: How worried are you that this Democratic infighting right now between the Hillary Clinton campaign and the Barack Obama campaign is going to do irrevocable damage to the party come November?

HART: Very, very little, frankly. A lot will depend on what happens after the convention here in Denver. You may recall in '84, when I did not succeed as the runner-up, I spent the entire fall campaigning for my opponent, Vice President Mondale, and tried very hard to get the Independent voters and swing voters that I had attracted in 25 or 26 states. I wasn't successful at that, but at least I made the effort and I think no one could complain that the party was deeply divided.

BLITZER: But the damage had already been done. And Mondale -- what did he lose 49 states, in the process, to Ronald Reagan. I think he probably would have lost in any case, but he lost so dramatically.

HART: What damage was done I don't think I did.

BLITZER: No, no, no, not necessarily you personally.

But do you think the infighting that led up to the eventual nomination further hurt him, because when all was said and done, Reagan at the time, was a pretty popular incumbent?

HART: Well, it's very difficult to defeat any incumbent, as you would recognize, and I think most people would. We don't have that situation now and the incumbent isn't Ronald Reagan. The challenger is John McCain. And I think age and a lot of different values are going to be at play. And I think Barack Obama wins that contest. HART: Governor -- excuse me, Senator Hart, thanks very much for coming in.

HART: A great pleasure.

BLITZER: Senator Gary Hart the former senator from Colorado.

Sports and politics colliding, causing a new embarrassment for China.

Will the U.S. bow to growing pressure to boycott the Beijing Olympics?

Plus, out of prison and into Congress?

The man known as Dr. Death announcing plans for a new career.

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's going on?

CAROL COSTELLO, CNN CORRESPONDENT: A sad story, Wolf. FBI officials telling CNN that the bodies of two U.S. contractors have been found in Iraq. Ronald Withrow worked for an American technology company. He was kidnapped back in January of 2007. John Roy Young worked for a U.S. security firm. He was abducted in November of 2006. The FBI says families of both men have been notified.

The Supreme Court is turning down a request for a fast track appeal from a group that wants to anonymously promote a movie critical of Hillary Clinton. Citizens United doesn't want to disclose its name or political donors in the ad. A federal court says that violates campaign finance laws. The Supreme Court says a challenge to that ruling needs to go to a federal appeals court first.

The Coast Guard is searching for a crew member from a fishing boat that sank off Alaska's Aleutian Islands. The Alaska Ranger lost control of its rudder and started taking on water as it headed toward Seattle yesterday. Three people, including the captain, died. But 42 crew members were rescued -- more than a dozen plucked from the frigid waters.

On Wall Street, the Dow Jones Industrial Average surged more than 187 points. Investors welcomed news that JPMorgan is increasing its offer for Bear Stearns from $2 a share to $10.

Also fueling the rally, news that existing home sales were up in February and Justice Department approval of the merger between Sirius Satellite Radio and rival XM.

Back to you -- Wolf.

BLITZER: Talk about a roller coaster on Wall Street, Carol.

COSTELLO: Yes. A good one this time.

BLITZER: Yes, every single day it goes up 200 or down 300, up 400.

BLITZER: All right, Carol.

Thanks very much.

All the talk of a primary do-over is outraging a lot of Florida voters. We're going to show you why they're so angry right now and the drastic action some are threatening to take.

Our man on the scene, John Zarrella, is standing by.

Also, a big city mayor indicted on felony charges that could send him to prison for a year. As he's making his case to the news media, you're going to hear exactly what he has to say.

Plus, an infamous murder parolee announcing his plans to run for Congress.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, the Justice Department clearing the way for a satellite radio mega merger. It's approved a $5 billion deal between Sirius and its rival, XM Satellite Radio.

Also, some good news about the housing market for a change. Sales of existing homes were up almost 3 percent in February. That's the biggest jump in a year.

And Pakistan's incoming prime minister is ordering the release of dozens of judges ordered detained last year by the president, Pervez Musharraf, including the former chief justice, under house arrest for five months.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

As of right now, their votes simply will not count. They're punished for holding an early primary. Many Florida Democrats are furious, to put it mildly.

Let's go to our man on the scene, John Zarrella. He's joining us. He took the pulse of one small town. There's a lot of fear out there, John and you know it better than anyone, that this whole uproar over Florida and the primaries could come back to bite the Democrats, no matter who the nominee is.

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, and we did hear some of that, too, when went up to the small town of Pahokee. And Pahokee is one of many small towns across Florida where the people will tell you they're simply too busy working, too busy trying to make ends meet to worry about or talk much about politics. But when you press them, they will tell you they're simply disgusted with the mess they say the Democratic Party has created in Florida.

(BEGIN VIDEOTAPE)

ZARRELLA (voice-over): Pahokee, Florida, population 5,600. It's a one water tower town, sitting on the edge of what native Americans called "The Big Water, Lake Okeechobee.

Pahokee is tied unbreakably to agriculture. March means corn.

Eddy McCall (ph) calls it a seasonal town.

EDDY MCCALL: The corn then the cane, then the corn again and the cane again, you know?

ZARRELLA: Making ends meet in Pahokee is tough. The movie theater closed down after the hurricanes of '04. It's boarded up now. The cost of a gallon of gas stings.

When there's talk of spending millions of dollars on a new primary or voting by mail...

MILLY WASDEN: They didn't even get the cream on the crop, baby (ph).

ZARRELLA: ...Milly Wasden's (ph) blood boils. She runs a fruit stand on Main Street.

UNIDENTIFIED FEMALE: There are a lot more important problems. Let them come out here and look around. It wouldn't take them too long to find some problems that they could spend some of that money on, and me working seven days a week, 10, 11 hours a day trying to make a living.

ZARRELLA: Just across the street outside the thrift shop, we caught up with Bobby Kennedy. Kennedy is angry that the Democrats and the candidates can't get together on a compromise to let his vote count.

BOBBY KENNEDY: We have that privilege. And why we're being penalized because of moving of a date, I don't think that's fair.

ZARRELLA: At Papa Jimmie's, the lunch crowd doesn't talk much politics, but just as recent polls are showing, there's an undercurrent that Democrats may register their displeasure come November.

UNIDENTIFIED MALE: I just talked to my sister last night in Ocala. She says, we were just talking at work about why should we bother to go and vote if it's not going to count.

UNIDENTIFIED MALE: It's making me lose faith in the system. It's messed up, that's just the bottom line, it's messed up.

ZARRELLA: The sentiment among people here, count the vote from the January primary and move on. Enough, they say, of the silliness.

(END VIDEOTAPE)

ZARRELLA: You know, Wolf, what really irks these people, the Democrats, they say, 1.75 million Democrats went out and they voted, they did nothing wrong, and now their vote doesn't count. That really has them bothered, and also the fact that they are struggling in a lot of these places to make ends meet, to put food on the table, to find jobs, and here's the Democratic Party arguing over something that they believe, the people believe, they ought to just resolve and move on. Because as you heard in that piece, the woman saying, there are a lot more important things that we need to worry about. Why can't they just put this behind them and move on.

BLITZER: A lot of understandable outrage, I've got to say. All right, John, thanks very much. John Zarrella doing excellent reporting for us.

Let's take a closer look, by the way, where the delegate count stands right now. Barack Obama leads with an estimated 1,622 delegates, including 209 superdelegates. The unpledged VIPs, such as members of congress, governors, party leaders. Hillary Clinton has 1,485 delegates, including 243 superdelegates, 2,024 delegates needed for the nomination.

There's an important related story coming into THE SITUATION ROOM right now. Let's get the details from Carol Costello.

The details include Puerto Rico, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Puerto Rico and delegates. The Democratic National Committee just approved this a short time ago. Puerto Rico will now hold a Democratic primary on June 1st.

Now, originally, Puerto Rico was going to hold caucuses, but changed its mind because it says a primary will be easier for voters to understand and, of course, now the primary really matters.

Puerto Rico, 55 delegates up for grabs and the odd thing about this, Wolf, is even though they can vote in the primary in Puerto Rico, they can't vote in the general election. But June 1st, they'll hold that primary. 55 delegates up for grabs.

Back to you.

BLITZER: And the important news for Hillary Clinton is that she always does better in these primaries than she does in the caucuses. The caucuses are really a strong point for Barack Obama, so the fact that they're going to hold a primary on June 1st in Puerto Rico is presumably very good news for Hillary Clinton. She could use a lot of those delegates as we've been saying.

Thanks very much, Carol, for that.

4,000 dead.; as the American toll in Iraq hits another grim milestone, President Bush offers a mixture of sympathy and determination.

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES: One day people will look back at this moment in history and say, thank god there were courageous people willing to serve, because they laid the foundations for peace for generations to come. That I have vowed in the past and I will vow so long as I'm president to make sure that those lives were not lost in vain, that in fact, there is an outcome that will merit the sacrifice.

(END VIDEO CLIP)

BLITZER: Let's go to our pentagon correspondent, Barbara Starr. She's watching this story for us.

The president's vow, how does that fit into the hope for continued draw down for U.S. troops in Iraq, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well you know Wolf, what a lot of people are watching right now, difficult as this day is, is the politics of the situation.

(BEGIN VIDEOTAPE)

STARR: These are some of the 4,000 Americans who have died in Iraq, bringing the human face of the war to the forefront on the campaign trail and at the white house.

General David Petraeus briefed President Bush via teleconference on his long-awaited recommendations about when more U.S. troops can return home. Petraeus wants a pause until he can assure Mr. Bush that security gains are solid. It's no surprise the president agrees.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: He wants to make sure that the gains that we have secured over this past year are cemented.

STARR: No argument from the Republicans.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: It is at least very clear to most objective observers that the surge has succeed.

STARR: But when Petraeus takes his troop plan to Capitol Hill in April, he may run head long into Democratic politics.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: As General Petraeus has himself acknowledged, the Iraqis are not achieving the political process needed to end their civil war.

STARR: Senator Obama wants to bring troops home at the rate of up to 10,000 a month. Senator Clinton says she wants a plan to withdraw troops 60 days after taking office.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: As president, I intend to honor their extraordinary service and the sacrifice of them and their families by ending this war and bringing them home as quickly and responsibly as possible.

STARR: It all poses a problem for a military that officially stays out of politics. Petraeus and other commanders are against time lines.

GEN. DAVID PETRAEUS, CMDR. U.S. FORCES IN IRAQ: Conditions based reductions are from the point of view of the commander on the ground, the logical way to go.

ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: I'm very firmly in a position that decisions my recommendations will be made based on conditions on the ground.

(END VIDEOTAPE)

STARR: Pardon me but here's one of the real lingering political questions. If a Democrat wins and begins an accelerated withdrawal from Iraq, will the top commanders switch gears and go along, or will they consider resignation?

Wolf?

BLITZER: Thanks very much, Barbara, for that; Barbara Starr at the Pentagon.

Sexy text messages leading to felony charges against a big city mayor. Now he's speaking out about the case that could send him to prison for years.

And James Carville here in THE SITUATION ROOM to explain his comments, the comments he made about Governor Bill Richardson that have sparked an uproar. Does he stand by those comments?

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

(COMMERCIAL BREAK)

BLITZER: He could face years in prison, but the Detroit Mayor Kwame Kilpatrick today defiantly declared his innocence after he was charged with perjury and other counts related to lying in court. Kilpatrick and his former chief of staff both denied under oath that they had a romantic relationship, but those denials were contradicted by a series of explicit text messages.

(BEGIN VIDEO CLIP)

KYM WORTHY, WAYNE COUNTY PROSECUTOR: Some have suggested that the issues in this investigation are personal or private. Our investigation has clearly shown that public dollars were used, peoples' lives were ruined, the justice system was severely mocked and the public trust trampled on.

If they do not turn themselves in, we will go out and arrest them. If they turn themselves in, I would expect them to be booked, fingerprinted, arrested and then arraigned. And then I expect an exam date to be set.

Let me just be very clear, we are ready to go. Any delay on this case at all will not be from the Wayne County prosecutor's office. We're ready to roll.

MAYOR KWAME KILPATRICK, DETROIT: I approach this process with the faith that I have in the system, what I've been taught about this country, and this legal process, and the constitutional rights of all Americans since I was born. I believe in it and I believe that there will be a full airing of all the facts in this case that will result in my full and complete vindication of all that has been laid before you.

(END VIDEO CLIP)

BLITZER: The charges, by the way, stem from testimony in a lawsuit filed by two police officers who said they were fired for investigating misconduct in the mayor's security unit.

He earned the name Dr. Death by helping terminally ill people commit suicide, crimes that sent him to prison for eight years. Now Jack Kevorkian says he's running for congress.

Let's go to CNN's Susan Roesgen. She's watching this story for us.

Is this really serious, or is it not so serious, Susan?

SUSAN ROESGEN, CNN CORRESPONDENT: It is absolutely serious. According to the former Dr. Kevorkian, stripped of his medical license, now he says he does want to be Congressman Kevorkian.

(BEGIN VIDEOTAPE)

ROESGEN: After eight years in prison, Jack Kevorkian still believes in the right to help people kill themselves, but he'll have to fight for that right as a politician, not a physician.

In the 1990s, Kevorkian claimed to have been the physician assisting more than 100 suicides of terminally ill patients. It opened a national debate on euthanasia, but Kevorkian was sent to prison for second-degree murder, and today, only the state of Oregon allows physician-assisted suicides.

By running for congress, Kevorkian says he wants to somehow force the U.S. Supreme Court to give Americans more rights of every kind.

JACK KEVORKIAN (I), MICHIGAN CONG. CANDIDATE: That's the only way to do it. And that's why I'm running, one of the big reasons I'm running. Because if I get into the house, it's not going to be a docile place.

ROESGEN: Kevorkian is 79 years old, but he is as passionate in his beliefs as a teenager, and some would say as politically naive. He says he plans no campaign advertising, he's not asking for campaign donations, and he doesn't have a campaign platform of issues. What he does have is name recognition.

What do you think of the nickname Dr. Death?

KEVORKIAN: It never bothered me.

ROESGEN: Never?

KEVORKIAN: No.

ROESGEN: OK.

The two other candidates in this congressional race have another name for Kevorkian, spoiler. They worry he'll take votes away there them to promote his own agenda.

(END VIDEOTAPE)

ROESGEN: And Wolf, he needs 3,000 signatures to get on the ballot here in Detroit by July he needs those signatures. And he says if he does win, if he does go to the congress, he'll only stay in for two years, because he doesn't want to make a career out of it.

BLITZER: Susan Roesgen, thanks very much.

So how can a convicted felony list for congress? The constitution lists only three requirements. The candidate must be at least 25 years old, a U.S. citizen for at least seven years, and reside in the state he or she hopes to represent. There's no mention of any criminal record, although in some states, convicted felonies aren't, of course, even allowed to vote.

The Olympic torch is lit and it starts its long journey to Beijing, but it's also igniting protests over China's human rights record. Why one U.S. city is keeping quiet about the root and the timing of the torch relay.

And as Democrats trade insults, the attacks reaching new lows, including comparisons to McCarthyism and the biblical Judas.

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

(COMMERCIAL BREAK)

BLITZER: The Olympic torch is now lit and slowly making its way to Beijing, but that Olympic flame has also kindled protest aimed at China's record on human rights.

Let's go to our State Department correspondent Zain Verjee. She's watching the story for us.

I assume these protests are going to follow this torch all the way to Beijing. What's going on, Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, that's what China's worried about, Wolf.

You know the Olympic torch is really a symbol of international unity and goodwill, but it's fueling a lot of division.

(BEGIN VIDEOTAPE)

VERJEE: An embarrassing moment for China on the grounds of ancient Greece. Protesters busting past security, flashing banners, boycott the Beijing Olympic, as a Chinese official spoke during the symbolic lighting of the Olympic torch. The five Olympic rings shown as handcuffs. The host of the summer games, the target of world condemnation for its crackdown in Tibet, its investment in Sudan amid the violence in Darfur, and its lack of human rights at home.

DAVID WALLECHINSKY, AUTHOR & OLYMPIC HISTORIAN: They should never have given the Olympics to a country that's run by a dictatorship.

VERJEE: Politics has invaded Olympics past. President Carter ordered a boycott of the 1980 Moscow Olympics after the Soviets invaded Afghanistan. The Soviets retaliated by not showing up to the 1984 games in Los Angeles.

President Bush is promising to attend the games in Beijing, saying it's not about politics but about sport.

PERINO: This president certainly hopes that our athletes who are training very hard have the best possible experience at the Olympics.

VERJEE: The U.S. needs China to help sanction Iran and get North Korea to give up its nukes, so the U.S. is being careful not to freeze out China, even as it pressures its leaders over Tibet.

CONDOLEEZZA RICE, SECRETARY OF STATE: There needs to be restraint in which violence is not acceptable.

VERJEE: If the violence in Tibet gets worse, it may be hard for the U.S. to resist pressure for an Olympic boycott, and harder for the Olympic torch to make the 85,000 mile trek to Beijing.

Already the city of San Francisco is keeping the run route secret, fearing protesters will stop the flames, like this Tibetan woman who tried to stop a torch runner in Greece, lying on the road, covered in red paint.

(END VIDEOTAPE)

VERJEE: Wolf, the State Department is warning all U.S. citizens that are planning to go to Beijing for the summer Olympics to watch out because offices and their hotel rooms could be bugged and China could be listening to what they're saying. China, though, Wolf, is saying that the state department's warning is irresponsible and that all foreign visitors will be okay.

Wolf?

BLITZER: All right, Zain, thanks very much; Zain Verjee at the State Department.

Let's get back to Jack with the Cafferty file.

Jack?

JACK CAFFERTY, CNN CORRESPONDENT: Help me out with something here.

BLITZER: Yeah.

CAFFERTY: The idea of putting the Olympic torch on tour and traveling what is it you said 85,000 miles is so people can go out and see it. But if you don't tell them the route, how are they going to do that?

BLITZER: That's in San Francisco. They're very nervous about the protesters coming out.

CAFFERTY: My impression was they were going to keep all of the route secret.

BLITZER: Yeah.

CAFFERTY: Was it just in San Francisco?

BLITZER: I thought it was just in San Francisco.

CAFFERTY: Oh, OK. Well, that's better.

The question this hour is which of the two Democratic campaigns, Clinton's or Obama's, occupies the moral high ground? In case you haven't noticed, it's been getting very ugly out there.

B.J. writes from Seminole, Florida, "There's one candidate trying very hard to change the way politics are conducted. There is another candidate trying her level best to undermine all he is trying to do. You tell me."

Alexander writes, "Obama shows us something we haven't seen in a long time from a member of public office: integrity. How anyone can look at the Clinton campaign and say that they're running similar campaigns, I have no idea. When it came down to the two of them I knew I had a tough decision ahead. The decision is no longer tough thanks to Hillary Clinton. She is her own worst enemy here."

Donna writes, "It's amazing that no one seems to have noticed while Obama is spinning his wheels, Clinton is actually coming up with plans to help the American people. Where is Obama? On vacation! Sounds like the Bush presidency. When the going gets tough, go on vacation. I want a president who doesn't duck for cover when things get thought but who fights to overcome the hurdles and that person in Senator Clinton."

Ryan in Champaign, Illinois, says, "Jack, morality is in the heart and it cannot be adorned or shed for political reasons. That said, Obama has shown hymn himself to possess a high standard in this realm while Hillary is more than willing to trample him, her party, and her country to win. If she cared for any of these things, morality included, she'd put an end to this mess, but she doesn't."

Emily in Georgia writes, "They're both politicians so they want to say so they'll both do and say what they think will make them look good and make the other person look bad. This is what politicians do and this is where the American people expect." This is also what the American people are sick of, that's my add to this. "If you're honest, you know what you're doing is correct, so why the question? Except to get how many e-mails you'll get to see how many responses you'll get associated with Hillary Clinton and put them on the air."

William in Los Banos, California says, "No Clinton has the moral high ground except maybe Chelsea. I see where James Carville compared Bill Richardson to Judas. By implication, he must be comparing Bill Clinton to Jesus. As a religious person, I can say this, I know Jesus, he's a very good friend of mine. Bill Clinton is no Jesus."

Wolf?

BLITZER: Very clever. Thanks, Jack, see you in a few moments.

In news around the world, thousands of Cubans put their lives on the line each year trying to reach the United States. The total is way up since Fidel Castro became ill year and a half ago. Now that his brother Raul is officially in charge, will there be an easing of this exodus?

Our Havana bureau chief, Morgan Neill reports.

(BEGIN VIDEOTAPE)

MORGAN NEILL, CNN HAVANA BUREAU CHIEF: Luis Guzman says nothing's going to stop him from seeing his wife and sons in Florida.

LUIS GUZMAN (through translator): I've tried 28 times, he says, I'll try 28 more. I'll see my family or I'll die trying.

NEILL: This New Year's eve, he came close to both. Luis says he was among some 30 Cubans who boarded a speedboat that dropped them off within site of the Florida coast, but a deep channel and a strong current stood between them and the shore. Luis was able to swim to land, but what he heard from those left behind made him stop and turn around.

GUZMAN (through translator): He's drowning, he's drowning, they screamed, pointing to a boy in the water.

NEILL: When Luis swam back to help, he was picked up by the coast guard and returned to Cuba.

Evan Gonzalez's sister and brother-in-law weren't so lucky. Their boat left Cuba around November 22nd with some 40 people aboard and disappeared. It's difficult, very difficult, he says. We don't know anything.

Many of those aboard came from a town east of Havana. In the main plaza, everyone seems to know their story. This is a little town, says Antonio Garcia, I knew almost all of them. It's rattled the town and residents say fewer people are now leaving. But that's not the case elsewhere.

Unlike other migrants, Cubans who touch U.S. soil are generally allowed to stay. Even though more Cubans now enter the United States through Mexico, Coast Guard interceptions in the Florida straits are at their highest level since 1994.

Luis Guzman says Fidel Castro's retirement won't change that. Things are going to stay the way they are, he says. We're going to keep going along the same path. There's no way to improve this.

Would-be migrants says it's not politics that drives them to risk the seas, they've had enough of politics. It's the idea that something better lies just there, across the water.

Morgan Neill, CNN, Havana.

(END VIDEOTAPE)

BLITZER: Detroit's mayor facing felony charges. Should he resign? Lou Dobbs standing by to tell us what he thinks.

James Carville joins us to talk about his comparison of Bill Richardson to Judas. Can Carville calm the uproar he caused?

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

(COMMERCIAL BREAK)

BLITZER: Let's check in with Lou.

Lou, what do you make of these charges being filed against the Detroit mayor?

LOU DOBBS, CNN ANCHOR: Well, 12 counts including perjury and obstruction of justice, it's remarkable and the shame of this case is that this mayor apparently really pursued the careers of two policemen investigating it and that is to me the most serious and damming charge in all of this. Kwame Kilpatrick is a terrific young mayor. He had everything in the world to look forward to and to throw it all away, if indeed that is what transpires here, it is such a shame for him, for the city of Detroit. It's a tragedy.

BLITZER: And I know you're going to have a lot more on this story and a lot of other stories coming up. Lou, thanks very much. Lou Dobbs getting ready for his show that begins at 7:00 p.m. eastern. To our viewers you're in THE SITUATION ROOM.

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