President Bush Names Rumsfeld's Successor; Interview with Nancy Pelosi; Virginia Senate Race Still Too Close To Call
WOLF BLITZER, CNN ANCHOR: Thanks very much and we're bringing you our program today from Capitol Hill. To our viewers, you're in THE SITUATION ROOM, where news and information are coming in, new pictures all the time and the latest information. Standing by, CNN reporters across the United States and around the world bringing you today's top stories. And they're happening right now. A post-election bombshell. Defense Secretary Donald Rumsfeld steps down after voters register their anger about the Iraq war. President Bush says the time is right for new leadership at the Pentagon. We're going to tell you who he's tapped to take the helm and what this all means for the war and for Washington. Plus, the woman poised to be the next speaker of the House of Representatives, Nancy Pelosi tells us about her plans for the new Democratic run House. Does she feel vindicated by Rumsfeld's resignation? I spoke with her earlier today. And the final battles for control of the Senate in Virginia and Montana. One we say has now been settled, the other still undecided. The 2006 election isn't entirely over yet. I'm Wolf Blitzer on Capitol Hill. And you're in THE SITUATION ROOM. Up first, we begin with politics -- important politics, a political earthquake here in the nation's capital. First came the election night bombshell on Capitol Hill. Today, an almost equally powerful aftershock. After months of saying Donald Rumsfeld was here to stay, President Bush now says it is time for him to go. Today Mr. Bush announced Rumsfeld's resignation as defense secretary. He says he'll nominate former CIA director Robert Gates to succeed him. The three men in the Oval Office just a short time ago. At a news conference earlier today, the president acknowledged that voters across the nation vented their concerns about the war. And he said he shares a large part of the responsibility for Republicans losing control of the House. Today Mr. Bush is promising to work with Democrats and the woman in line to become the speaker of the House, Nancy Pelosi. She too, is talking about partnership after a very bitter election. My one on one interview with Nancy Pelosi, that's coming up. In the battle for the Senate, the Democrats appear to have picked up a seat in Montana. CNN now projects that Democrat Jon Tester will win the Montana Senate race, defeating incumbent Republican Conrad Burns. As it stands right now, CNN projects the Democrats will win 50 Senate seats, the Republicans will win 49. The Virginia Senate contest still too close to call. It now appears Virginia will be the state that decides which party controls the United States Senate. The best political team on television standing by to bring us all the latest developments. Let's go to the White House first. Kathleen Koch with late breaking developments there.</s>KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, a very emotional appearance in the Oval Office just 30 minutes ago. President Bush introducing his selection as his next secretary of defense, Robert Gates, now, the president of Texas A&M.; And saying farewell to a man who he has stood by since the start of the Iraq war and who he earlier this afternoon described as a trusted adviser and friend. And speaking about Robert Gates, former CIA director, President Bush said he's a patriot with a wealth of experience who would not only be able to well handle the wars in Iraq and Afghanistan, but also lead the Department of Defense and reach out to both parties in Congress.</s>GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He knows that the challenge of protecting our country is larger than any political party. And he has a record of working with leaders on both sides of the aisle to strengthen our national security. He has my confidence and my trust. And he will be an outstanding secretary of defense. Bob follows in footsteps of one of America's most skilled and capable national security leaders, Donald Rumsfeld. Don is the longest serving member in my cabinet. And next month, he will reach another milestone when he becomes the longest serving secretary of defense in the history of our nation. I appreciate his willingness to continue serving until his successor is in place. Because in a time of war, our nation cannot be without a strong and steady hand leading our Department of Defense.</s>KOCH: Now, Donald Rumsfeld thanked President Bush for the opportunity to serve as a defense secretary for the second time in his career. He said it has been quite a time and quoting another leader during a time of war, Winston Churchill.</s>DONALD RUMSFELD, DEFENSE SECRETARY: I have benefited greatly from criticism, and at no time have I suffered a lack thereof. The great respect that I have for your leadership, Mr. President, in this little understood, unfamiliar war, the first war of the 21st century. It is not well known, it was not well understood. It is complex for people to comprehend. And I know with certainty that over time the contributions you've made will be recorded by history.</s>KOCH: An emotional Rumsfeld concluded praising the patriotism and the dedication of the young men and women in the U.S. military, saying that they have his respect and that they have been his constant inspiration. Wolf?</s>BLITZER: Kathleen Koch at the White House for us. Thanks very much. Here on Capitol Hill, the ramifications are enormous, especially for the woman who would be the next speaker of the House of Representatives. Dana Bash standing by with more on that. Dana?</s>DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: The Capitol today for the first time as presumptive speaker of the House. She certainly had her talking points down. One of them was to keep pounding away at the White House for new leadership at the Pentagon. Well, little did she know she was about to get her wish.</s>BASH (voice-over): Democrats called their election night sweep a mandate for change in Iraq.</s>REP. NANCY PELOSI (D), CALIFORNIA: Nowhere was the call for a new direction more clear from the American people than in the war in Iraq.</s>BASH: They didn't have to wait long to see the spoils of their victories. Just as Democratic leaders sat down for a celebratory photo op, they got the news, Donald Rumsfeld was fired.</s>PELOSI: I think it will give a fresh start to finding a solution to Iraq rather than staying the course.</s>SEN. HARRY REID (D) NEVADA: If the vote of last night, from all over America, didn't accomplish anything but this, it was a good night.</s>BASH: But beyond the Rumsfeld bombshell, Democrats all but acknowledged even with control of the House and maybe the Senate, there is only so much they can do to change Iraq policy.</s>PELOSI: The president is the president of the United States. I hope that he will listen to the voices of the people and that again putting aside partisanship and looking to a partnership to end this war.</s>BASH: That's part of this double-barreled approach set by the presumptive House speaker -- a pledge for bipartisanship along with a firm promise to push for new policies. Beyond Iraq, Nancy Pelosi has an ambitious agenda. In the first 100 hours, she wants to raise the minimum wage to $7.25 an hour, enact recommendations from the 9/11 Commission, cut interest rates for student loans, try to lower prescription drug prices under you Medicare and more. Democrats also promise new strict oversight of the Bush White House. But the woman whose new caucus will be made up of many conservative Democrats from red districts also tried to allay concerns about her liberal route.</s>BASH: Now Republicans are also sifting through the wreckage of their losses. Today the current House Speaker Dennis Hastert formally announced that he would not longer be a part of the Republican leadership. And already angry members of the Republican rank and file are saying that Republicans simply got what they deserved because the party had lost their way and many of them are already throwing their hats into the ring to be a new crop of Republican leaders. For example, conservative Congressman Mike Pence announced formally that he would run for the top slot, what will be minority leader of the House. And he's going to have to run against John Boehner, who currently is the majority leader -- Wolf?</s>BLITZER: All right Dana, thanks very much. And earlier today, I had a chance to sit down with the new speaker, the incoming speaker of the House of Representatives, Nancy Pelosi. We spoke about the elections, we spoke about what's going on in Washington. And we also spoke about Donald Rumsfeld's resignation.</s>BLITZER: Let's talk about the news of the day, lots of news. But we'll start with Donald Rumsfeld. Bombshell announcement, only a few days ago the president said he was doing a fantastic job, together with the Vice President Dick Cheney. Is this what you wanted, Rumsfeld to step down?</s>PELOSI: Yes, well, there were two major interventions since the president's last reaffirmation of his support for Secretary Rumsfeld. One was, of course, the vote and voice of the American people yesterday, rejecting the stay the course policy of the president in Iraq. And just before that, the voice of the military in the Army, Navy, Air Force and Marine Corps Times, saying that "Rumsfeld must go," to use their words. The president got the message, thank heavens, and I think it signals a new change, I hope, for the better in Iraq.</s>BLITZER: What do you think of his designated successor, the former CIA Director Robert Gates?</s>PELOSI: Well, this is a matter for the Senate to deliberate on. And the president has proposed they will confirm. And I very much look forward to the hearings on that nomination.</s>BLITZER: But fundamentally, do you think there will be a real change in U.S. policy toward Iraq? Or this is simply changing the cast of characters? Will the president, in other words, do what you want him to do?</s>PELOSI: Well, first of all, the president is the commander-in- chief. Donald Rumsfeld and whoever the president appoints or is confirmed, Mr. Gates in this case, is an employee of the president. So the policy is the president's. The implementation of the policy is Mr. Rumsfeld. And that's why I think it was important for him to go.</s>BLITZER: If the president pursues the current policy, as you call it, stay the course -- which he no longer uses, that phrase -- one option would be, in the House of Representatives, the power of the first, to cut funding for the war in Iraq. Is that on the table?</s>PELOSI: Not really. We would never...</s>BLITZER: Why isn't it on the table?</s>PELOSI: Well, because our troops are in harm's way. They have been sent there, whether you agree with the policy or not. And I certainly did not agree with the resolution to go to war. We would not withhold our funding for the troops there.</s>BLITZER: We'll have a lot more of our interview with Nancy Pelosi. That's coming up in the next hour, right here in the SITUATION ROOM. But for now I want to bring in our chief national correspondent John King and our senior political correspondent Candy Crowley. Candy, first, to you. Between the notion of the Democrats taking over the House of Representatives and poised, potentially, to take over the majority in the United States Senate, and now Donald Rumsfeld resigning as defense secretary on this, the day after the elections, these are hugely dramatic developments. Give us some context.</s>CANDY CROWLEY, SENIOR POLITICAL CORRESPONDENT: Well, they are. And you couldn't have one without the other. It was interesting to learn that the president was thinking about this, and probably has been thinking about this for a lot longer than a week. The context of it is that it became sort of unsustainable once the election results began to come in. It -- all of the talk was about Mr. President, the American people have spoken, you have to change your policy in Iraq. All of the House leaders -- the Democratic House leaders that came out did that. It seems to me that for the president to sort of seize back that commander-in-chief role that Nancy Pelosi was just talking about, he needed to do something dramatic to sort of quiet the crowd. Certainly, accomplished that in the resignation of Donald Rumsfeld.</s>BLITZER: And John, as you look at this, and you know, you've covered this story for so long, what goes through your mind, as far as the shake-up that we're witnessing right now in the nation's capitol?</s>JOHN KING, CHIEF NATIONAL CORRESPONDENT: Well, Wolf, the president has two years left in his term, and he was rebuked very sharply in the election yesterday. He has a woman coming to office as the new Speaker of the House with whom he has sparred repeatedly, using some quite personal language over the years. What you saw today was a politician who knew that he needs new beginning and he has only two years before the end. And so he had to give them what they wanted. Both Democrats and Republicans wanted Donald Rumsfeld, well, today they got Donald Rumsfeld. And then the president's trying to pivot: hey, we can do business on the minimum wage, we can do business on immigration, we can maybe do business on a few other issues. Iraq will still be the issue because he's not budging. And even as Nancy Pelosi says, let's start to bring the troops home, John McCain came out of the box and said, we need to fix Iraq, we need to win Iraq, we might need more troops. So this drama is in a new chapter, but it's a pretty packed, exciting chapter to go. But the president is trying to say, let's start over, I'm going to reach out to the Democrats, something the Democrats would say has been sorely missing for six years.</s>BLITZER: And Candy, only within the past few minutes we heard from the junior senator from New York, Hillary Rodham Clinton, who herself was reelected yesterday. She's weighing in on Rumsfeld's resignation as well. Listen to this.</s>SEN. HILLARY RODHAM CLINTON, (D-NY): The president made the right decision today. I wish he'd made it earlier. But now we can have a new beginning, a new face, at the Pentagon who doesn't carry the baggage that Secretary Rumsfeld carried.</s>BLITZER: So is the campaign for the White House 2008, Candy, already underway?</s>CROWLEY: Yes. It continues, actually. A part of what Senator Clinton needed to do over this past year or so is, first of all, show her defense and military creds. She needed to be both tough and muscular in her language about the use of force. On the other hand, increasingly on the left wing of her party for the past two years has come this, you know, very loud anti-war "get out now" crowd. So she had to balance -- and I think has done a pretty good job of balancing those two needs when you want to begin to shape your resume. She in fact called for Donald Rumsfeld's resignation a little while back, but a number of others had already done it. And when it seemed that she wasn't being sort of tough enough on the administration, that's when she called during a hearing for his resignation, to kind of up that half of her resume.</s>BLITZER: John, how shaken is the White House by what has happened over the past 24 hours?</s>KING: Well, clearly they knew it was coming. They said all along they were confident, they were optimistic, they were going to hold their majorities. But you had the meeting with Secretary Rumsfeld and Mr. Gates taking place before the election, so they knew they were going to have to pivot after the election. They knew at a minimum they were going to lose seats and, truth be told, they were pretty sure they were going to lose the House majority and were holding out hope for the Senate. So it is not a surprise to them, but it is a slap at them. And one of the big challenges here is, can George W. Bush go back to being the guy who came to Washington as the Texas governor, who had a history of dealing with the Democrats, who said he thought Washington was this partisan, awful town, and he wanted to change the tone. The Democrats would say -- and most people in the White House would concede -- he has, since being president, run a clearly conservative base -- conservative base driven strategy and pretty much ignored the Democrats on just about every issue. There was the education deal with Ted Kennedy early on, the Medicare prescription drug deal early on, but he has not, especially on issues of national security, which is now the big -- here's the cliche again -- elephant in the room, Iraq, he has not consulted the Democrats enough. He said he would today. He laid it out there today. We'll see how this all plays out. And boy, does Mr. Gates have a tough job.</s>BLITZER: And John, I know you covered this president for a long time. When he said last week in that interview with wire service reporters that the vice president and Donald Rumsfeld were doing, in his words, a fantastic job. And he said that both of them would stay until he left office, January 20th, 2009. He sort of acknowledged today, you know, he knew that was not necessarily going to be the case. But how is he playing that? Because I couldn't have the -- I couldn't but have the impression that when he said that to the wire service reporters last week, he knew it wasn't necessarily true.</s>KING: He did know it wasn't true. And that's one of those moments, I guess, where you don't want to be president. And welcome to the presidency. He said that he didn't want to leak then news, didn't want the news to come out before the election because it would be viewed in a political context. So essentially, he didn't tell the whole truth. Did he lie to the wire service reporters? Did he just withhold information? You know, we can have a semantics debate to the end. But the president conceded the fact. He was not ready to make the announcement. He thought if he gave them any hints or clues, it would throw a whole new dicey bombshell into the political climate before the election. So he fudged.</s>BLITZER: He fudged indeed, and he had to acknowledge that today. John King, thanks very much. Candy Crowley, thanks to you. John and Candy, Dana, Kathleen Koch: they are all part of the best political team on television. And remember, for all the political news, at any time, you can always go to our CNN political ticker, CNN.com/ticker. Also part of the best political team on television, Jack Cafferty. He's standing by with the "Cafferty File". Hi, Jack.</s>JACK CAFFERTY, CNN ANCHOR: Wolf, now that the Democrats are the new majority in the House and maybe the Senate, the question immediately arises, where do they go from here? Iraq's at the top of the list. Another 21 U.S. military deaths there so far this month. Maybe it ought to be number one. Senator Harry Reid sent President Bush a letter asking for a summit with Congressional leaders on Iraq. The Democrat who is set to become chairman of the House Armed Services Committee, that would be Congressman Ike Skelton, says they will re-examine U.S. policy in Iraq and institute better oversight of the Pentagon. That's not all, not by a longshot. Nancy Pelosi, expected to be the new Speaker, says in the first 100 hours of the new session, she will push for implementing all of the 9/11 Commission recommendations, raise the minimum wage, get rid of corporate subsidies for oil companies and impose new restrictions on lobbyists. It's a very tall order. Here's the question, what shall the Democrats' priorities be in the new Congress? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- Wolf.</s>BLITZER: And Jack, as you know, the Democrats will be, for sure, the majority in the House of Representatives, and they are poised, potentially, to be the majority in the U.S. Senate as well, if that vote count in Virginia goes their way. Right now the Democratic candidate, Jim Webb, slightly ahead of George Allen. I can't stress to you and our viewers how significant that would be, if the Democrats are the majority not only in the House, but in the Senate as well. This is really going to put a damper on these last two years of the Bush administration.</s>CAFFERTY: It also points out the significance of everyone's vote and how few votes may wind up at the end of the day tipping the balance of power in the most powerful nation in the world.</s>BLITZER: Jack, we'll see you soon. Thanks very much. Coming up, we're going to have much more on the breaking news. We're covering the resignation of Donald Rumsfeld as defense secretary. I'll speak with Paul Begala and Bay Buchanan. They're standing by for today's "Strategy Session". What does it mean? Plus, more on the battle for control of the Senate. It's all come down right now to Virginia and we're going to go live to Richmond where the voters are still, the votes that is, are still being counted. And a Big-Sky victory for the Democrats in Montana. We're live on the campaign trail from Billings, Montana. And, I'm live on Capitol Hill. And you're in the SITUATION ROOM.