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The Situation: Wednesday, October 26

Editor's Note: The Situation Report is a running log of dispatches, quotes, links and behind-the-scenes notes filed by the correspondents and producers of CNN's Washington Bureau. Watch "The Situation Room" with Wolf Blitzer on CNN 3 p.m. ET to 6 p.m. ET weekdays.

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_{Posted: 9:20 a.m. ET
From Mark Preston, CNN Political Unit}

Will the leak drown the White House?

Indictments against two senior White House officials could be handed down as early as today for their alleged roles in the public disclosure of a CIA agent's identity in 2003.

Special Prosecutor Patrick J. Fitzgerald is in the closing days of his investigation into the unmasking of CIA agent Valerie Plame's identity and Republicans are nervously waiting to see if Deputy White House Chief of Staff Karl Rove and Vice President Cheney's Chief of Staff I. Lewis "Scooter" Libby are charged in the leak.

CNN's Dana Bash reports that Fitzgerald continued to gather information Tuesday, as the investigation is nearing an apex with the grand jury set to expire on Friday. Citing a source familiar with the conversation, Bash said that Fitzgerald's team talked to a former White House official to try and ascertain more about Rove's role in the matter. There is also speculation that an announcement of indictments might not occur until later in the week.

Once Fitzgerald makes his findings public, Democrats and Republicans will immediately activate competing political messaging efforts to try and shape public opinion on the matter.

Several Republicans, though, insist that Fitzgerald will not be criticized by Republicans should he seek charges against Rove or Libby.

"It is a very serious matter, and he hasn't approached this in a partisan way," a senior Republican aide told the Grind this morning. "I think you will see everyone in the party handle it in a very professional respectful manner."

Indictments against Rove or Libby could force a White House already under fire for its nomination of Harriet Miers to the U.S. Supreme Court, and a growing public distaste for the Iraq War, to spend precious time dealing with the political fallout as Congress heads into a mid term election. If Rove is indicted, President Bush is likely to lose his top political and policy adviser -- a crushing blow to Bush who relies on a small circle of trusted aides. Multiple Democratic and Republican strategists said they expect Rove and Libby to immediately resign if either are charged with revealing Plame's identity. Plame is the wife of former diplomat Joseph Wilson, who accuses the White House of manipulating intelligence to bolster its case to topple Iraqi President Saddam Hussein.

As Republicans prepare for Fitzgerald's announcement, Sen. John Kerry (D-Massachusetts) will deliver what is being billed by his office as a "major policy speech on Iraq" today at Georgetown University. Kerry, the Democratic presidential nominee in 2004, is expected to address the Plame leak case in his remarks but won't single out any one person in particular.

"We don't yet know whether this will be an indictable offense in a court of law," Kerry is expected to say according to an early draft of his speech provided to the Grind. "But for misleading a nation into war, they will be indicted in the high court of history."

But Kerry will put forth a plan for the eventual withdrawal of U.S. troops from Iraq, arguing for a middle ground that places him in-between the hawks and doves of his own party. Should elections be successful in December, Kerry will call for 20,000 troops to be removed from the country. It will be one of several "benchmarks" the Massachusetts Democrat will unveil today, which he will claim is an appropriate exit strategy for the U.S.

On Capitol Hill, Miers is fighting to save her nomination, but by all accounts her efforts are weak at best. Republican Senators continue to express doubts about her qualifications and there is a growing sense from some corners of the Republican Party that she will not make it through the nomination process. Despite reservations by some of his political allies, Bush remains solidly behind his choice to replace retiring Supreme Court Justice Sandra Day O'Connor. The Senate Judiciary Committee is waiting today for Miers to return her updated questionnaire as well provide additional information about her service to Bush in the White House. Senators criticized Miers for being too vague in her first round of answers and it is unclear what type of documentation the White House will actually provide the Senate about Miers private dealings with Bush. Word this morning is that the questionnaire will be sent to committee early this evening.

A Republican leadership aide said there remains a strong feeling among influential Senators that Miers still has "a shot" of making it through the nomination process. And the aide noted that not all conservatives believe that Miers will be a liberal addition to the court.

"As long as Bush is president, she is going to vote with the conservative wing of the party," said the aide, who spoke on the condition of anonymity. "There is no question she will pair up with [Justice Clarence] Thomas and [Justice Antonin] Scalia.

Stay tuned to CNN today for developments in both of these important stories.

Political Hot Topics

_{Posted: 9:20 a.m. ET
From Stephen Bach, CNN Washington Bureau}

IS TODAY THE DAY? Indictments in the CIA leak investigation case are expected to be handed down by a grand jury on Wednesday, bringing to a head a criminal inquiry that threatens to disrupt seriously President George W. Bush's second term. On Tuesday night, news reports, supported by a source close to the lawyers involved in the case, said that target letters to those facing indictment were being issued, with sealed indictments to be filed on Wednesday and released by the end of the week. Those in legal jeopardy may include Lewis "Scooter" Libby, vice-president Dick Cheney's chief of staff, and Karl Rove, Mr Bush's chief political strategist. Mr Cheney himself has also been linked to the inquiry into the leaking of the name of an undercover CIA operative, according to a story in Tuesday's New York Times. Financial Times: CIA leak charges set to be handed out

TALKING TO THE NEIGHBORS: In a possible sign that Fitzgerald may seek to charge one or more officials with illegally disclosing Valerie Plame's CIA affiliation, FBI agents as recently as Monday night interviewed at least two people in her D.C. neighborhood. The agents were attempting to determine whether the neighbors knew that Plame worked for the CIA before she was unmasked with the help of senior Bush administration officials. Two neighbors said they told the FBI they had been surprised to learn she was a CIA operative. The FBI interviews suggested the prosecutor wanted to show that Plame's status was covert, and that there was damage from the revelation that she worked at the CIA. Washington Post: Bush Aides Brace for Charges

ONLY 1 IN 10 DOUBT SOME WRONGDOING: Only one in 10 Americans said they believe Bush administration officials did nothing illegal or unethical in connection with the leaking of a CIA operative's identity, according to a national poll released Tuesday. Thirty-nine percent said some administration officials acted illegally in the matter, in which the identity of Valerie Plame, a CIA operative, was revealed. The same percentage of respondents in the CNN/USA Today/Gallup poll said administration officials acted unethically, but did nothing illegal. CNN.com: Poll: Few doubt wrongdoing in CIA leak

DEATH TOLL IN IRAQ HITS 2,000: With the U.S. death toll in Iraq now at 2,000, President Bush on Tuesday told a luncheon crowd of 500 spouses of military officers that U.S. troops and their Iraqi allies are making progress in the war, but that more casualties, more fighting and more hardship lie ahead. Without making note of the actual number of troops killed, Bush acknowledged their deaths and called the loss of each life "heartbreaking." He said the best way to honor those fallen troops is to ignore calls for retreat and complete the mission in Iraq. "Sacrifice is essential to winning war," he said, "and this war will require more sacrifice, more time, and more resolve." USA Today: Bush: More risks lie ahead for U.S. forces in Iraq

CONCERNED ABOUT HARRIET: The drumbeat of doubt from Republican senators over the Supreme Court nomination of Harriet E. Miers grew louder Tuesday as several lawmakers, including a pivotal conservative on the Judiciary Committee, joined those expressing concerns about her selection. "I am uneasy about where we are," said Senator Jeff Sessions, an Alabama Republican on the Judiciary Committee who had so far expressed only support for the president's choice. "Some conservative people are concerned. That is pretty obvious." Senator John Thune, Republican of South Dakota, called Republican sentiment toward Ms. Miers's nomination "a question mark." "There is an awful lot of Republican senators who are saying we are going to wait and see," he said. New York Times: Senators in G.O.P. Voice New Doubt on Court Choice

BOXER'S NEW BOOK HAS EERILY SIMILAR PLOT: It may come as a surprise to many of her constituents, but for seven years California Sen. Barbara Boxer has been moonlighting from what she calls her "day job" -- as an elected official from the state that boasts the free world's fifth or sixth largest economy -- to write a novel. "A Time to Run" is a for-whom-the-bell-tolls story of a liberal blue-state senator who braves the political mud wrestling in Washington for the sake of her ideals. It is, of course, co-written, with San Francisco author Mary-Rose Hayes. In Boxer's fictional world, a liberal California senator with views very much like hers goes to bat to defeat the Supreme Court nomination of a woman whose most conspicuous qualification for the job seems to be her conservative credentials -- a plot twist Boxer said she added a year and a half ago. Los Angeles Times: A debut novel straight out of the blue (state)

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