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THE SITUATION ROOM

Bush Mulls North Korean Options, Calls Other Heads of State; Calderon Declared Winner of Mexican Presidential Election; Michael Gerson Interview

Aired July 6, 2006 - 16:00   ET

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


JOHN KING, CNN ANCHOR: To our viewers, you are in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you today's top stories.

Happening now, new threats by North Korea, and new debate about sanctions.

It is 4:00 p.m. here in Washington, where President Bush is reaching out to his allies in the missile crisis. Can he convince weary nations to take a tougher line?

Also this hour, new defeats for advocates of same-sex marriage. It is 4:00 p.m. in New York State and in Georgia, where the courts are making big statements about gay rights and the culture wars.

And a roll of the dice may be paying off in New Jersey. It's 4:00 p.m. in Trenton, where a budget showdown that shut down casinos and state government may be ending. We will tell you where the deal- making stands right now.

Wolf Blitzer is off. I'm John King, you are in THE SITUATION ROOM.

At this moment, U.S. officials are keeping close watch on North Korea to see if there's any chance the rogue regime will make good on a threat to fire more missiles. Those officials tell CNN that so far they don't see any signs another test launch is imminent.

The U.N. Security Council is moving forward today with a resolution condemning North Korea for the seven missiles it did launch this week. But Russian and China are balking about proposed sanctions. President Bush today is urging allied nations to speak in one voice in response to North Korea's defiance and he is cautioning that diplomacy takes time.

Our White House correspondent Ed Henry is following that story at the White House -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, this president celebrating his 60th birthday today, and as if hitting the big 6-0 is not a difficult enough milestone, he had to spend most of the day dealing with more questions about the continued threat from North Korea. This president, who has been singed by allegations he did not give diplomacy enough of a chance before the war in Iraq, seems determined here to show that this case is different. So he's been burning up the phone lines, up late last night, calling his counterparts in South Korea and Japan, not surprisingly since they are strong allies.

They seem to be expressing strong support for tough U.N. sanctions against North Korea. But the president's calls this morning to the heads of China and Russia did not quite go as well. He is not getting the same support.

In fact, Russia, for example, saying that they would only support a United Nations non-binding statement urging North Korea to come back to those six-party talks. Something we have already heard about.

And that's why at a joint press availability today with the Canadian prime minister, Stephen Harper, the president seemed to be downplaying expectations.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Diplomacy takes a while, particularly when you are dealing with a variety of partners. And so we're spending type diplomatically making sure that voice is unified. I was pleased from the responses I got from the leaders. They, like me, are concerned, concerned about a person who doesn't seem to really care about what others say.

(END VIDEO CLIP)

HENRY: The president there at the end, of course, referring to North Korean dictator Kim Jong-Il. Mr. Bush declaring the dictator has further isolated himself by firing off these seven missiles in recent days.

And White House spokesman Tony Snow insisting the president is at least succeeding, in his eyes, in the early stages by getting China and Russia to at least say that it's time for North Korea to come back to the six-party talks. But Democrats ratcheting up their pressure on the president by saying they think these six-party talks in recent years have really been ineffectual.

This afternoon Congressman Ed Markey releasing a statement saying, quote: "After six years of the White House's policy of paralysis has failed, it has left the United States facing an even greater menace." So the White House still facing more pressure to finally sit down directly with North Korea -- John.

J. KING: And are they feeling that pressure, Ed? Any hint at all the White House could change its stance and at least have one direct contact with the North Korean regime?

HENRY: Definitely not in the short term. Tony Snow, the White House press secretary, again, saying they believe that taking such a step in the short term would really reward bad behavior by Kim Jong-Il by giving him a direct audience.

But it was interesting, Snow seemed to be leaving the door open maybe down the road by saying at one point, quote: "All options are still alive and we are going to have to see which option the five- party and six-party talks believe are going to be effective." Down the road that seemed to leave open the possibility, but certainly not now.

They say this would reward bad behavior by Kim Jong-Il -- John.

J. KING: Always good to leave a little wiggle room. Ed Henry for us, live at the White House. Ed, thank you very much.

And CNN's Larry King just interviewed President Bush on North Korea and other topics. We expect to be able to bring you a portion of that interview quite soon, and remember, you can see the entire exclusive interview tonight on CNN's "LARRY KING LIVE," that's at 9:00 p.m. Eastern, 6:00 Pacific.

This hour there are still questions about what a final United Nations Security Council resolution against North Korea might look like. Members voted 13-2 in favor of preparing a resolution and making a strong statement of condemnation. Russia and China though are raising concerns about imposing sanctions on North Korea, despite phone calls today from President Bush.

The U.S. ambassador to the United Nations, John Bolton, says no country has threatened a veto.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMBASSADOR TO U.N.: There may be a disagreement at the moment over the vehicle that we use here in the council, but no one speaks in favor of North Korea. No one takes the North Korean line. Nobody says it was a good thing that North Korea launched these missiles. And I think if North Korea continues to do it, it will simply underline the views that all countries on the Security Council have already taken.

(END VIDEO CLIP)

J. KING: Amid all this diplomatic wrangling over North Korea, Pentagon officials say a U.S. aircraft carrier on patrol south of Iraq is being moved into the Pacific several weeks early. The USS Enterprise now is heading to waters off of Hawaii for Naval exercises. Pentagon officials say the ship movement is coincidental to the timing of North Korea's missile test-firings.

We will have much more on the North Korea situation ahead. I will talk with the Reverend Franklin Graham about his travels through that country and get his take on the current standoff.

This "Just In" to CNN. Back here in the United States, the State of New Jersey may soon be back in business along with popular casinos and beaches in Atlantic City. After a five-day government shutdown, there is new word just in about a deal between the governor and state lawmakers. There on the scene for us, Mary Snow is in Trenton -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, John, the governor's office confirmed to us that there is a budget deal. And at 4:30 this afternoon, Governor Jon Corzine will make that announcement. This comes on the sixth day of a government shutdown that has made 45,000 state workers -- they have been furloughed, this has closed down state offices, and yesterday as we saw, casinos in New Jersey, 12 in Atlantic City, all have been shut down.

Now, the big question is, how will this all play out in terms of getting the government up and running again? Because the governor has said that he needs a bill to sign. And talking with some lawmakers, they are not quite sure in the details of on how long that could play out or whether the governor could let workers go back to work immediately. So that still remains a question mark. I'm sure we will have the details.

And in terms of what this compromise was, there had been a stalemate over a sales tax increase that the governor wanted. The assembly Democrats here did not want that, but we hear that this compromise plan does include the sales tax increase and property tax relief for New Jersey homeowners. So, again, we are expecting a deal at 4:30 this afternoon to get more details of New Jersey and the end of its government shutdown.

J. KING: But, Mary, from what you know so far, you say there will be that sales tax increase. So it appears at least from what we know at this moment, Governor Corzine won and the legislature blinked?

SNOW: Well, in talking to a couple of lawmakers, they are putting this as both sides wining, because the assembly Democrats wanted some sort of relief for homeowners in terms of property taxes. And they -- it appears that that has been included in the compromise bill. So it does seem that -- at first glance that, perhaps, both sides got a bit of what they wanted.

J. KING: And you can bet both sides will claim victory. Mary Snow, for us in Trenton, we will check back in as we get more developments. Thank you very much, Mary, on that developing story. The New Jersey State budget crisis appearing to be near a resolution.

Now the situation in Iraq. U.S. officials are going to new lengths today to express their concern about the alleged killing of four Iraqi civilians by an former Army private. Shortly after meeting with President Bush today, the U.S. ambassador to Iraq, Zalmay Khalilzad, put out a joint statement with the top commander in Iraq, General George Casey.

They called the March killings, quote, "absolutely inexcusable and unacceptable." Former Army Private Steven Green is charged with murder and rape in that incident. He has been in custody in North Carolina, but today officials tell CNN he is being relocated to Kentucky.

In Iraq, Prime Minister Nouri al-Maliki says he wants U.S. military officials to stop what he calls, "crimes that stink." Maliki says he is about to start talks with coalition authorities about preventing violence by U.S. forces against Iraqi civilians.

Also in Iraq today, at least 12 people were killed in various insurgent attacks across the country. Most of them died in a car bombing in the southern town of Kufa.

Our Zain Verjee joins us now with a closer look at other stories making news around the globe.

Hi, Zain.

ZAIN VERJEE, CNN ANCHOR: Hi, John.

The Hamas-led Palestinian government is calling for all Palestinian security forces to join the fight against Israeli troops moving into Gaza. Intense fighting is being reported and as many as 16 Palestinians have been killed. Israel says one soldier has died. Palestinian sources say 10 of the dead were killed in Israeli air strikes. An Israeli spokesman says the incursion is aimed at stopping missiles from being launched from Gaza into Israel. He says Israel has no intention of re-occupying Gaza.

Iran's top nuclear negotiator says his country is serious about talks on its nuclear program and expects formal discussions with the European Union next week. The comment comes just hours after Russia's president ratcheted up the pressure on Tehran. Vladimir Putin said the international community would not, in his words, wait endlessly to a response to an incentive proposal offered to Iran. But he added that any talk of sanctions is premature.

Prior to a suicide attack on the London subway last year, one of the bombers made a video promising more violence. The tape was aired just a short while ago on Al-Jazeera television. And on it, the bomber the attacks are, in his words, only the beginning. The video is stamped with a logo of al Qaeda's public relations arm.

The final votes are being tallied in Mexico with the ruling party candidate headed for a razor-thin victory. At last report, conservative Felipe Calderon leads by about a half of 1 percent, with 99.99 percent of votes counted. Official results are expected to be announced within moments. Leftist candidate Andres Manuel Lopez Obrador is alleging widespread fraud and says that he will challenge the results in court. He is calling for supporters to rally on Saturday. Mexico's electoral tribunal has until the 6th of September to certify a winner -- John.

J. KING: Zain, thank you very much. I am guessing there will be some protests there. Zain, thank you.

And coming up, two crucial court rulings today on banning gay marriage. The decisions and the consequences next in our culture wars.

Plus, it may be the hottest Senate race in a scorching election year. We are on the campaign trail in Pennsylvania where Republican incumbent Rick Santorum is in deep political trouble. Will the immigration issue help him beat back a powerful Democratic challenger?

And he stepped down from Congress, but a judge tells Tom DeLay, not so fast, you are still on the ballot. We will tell you why.

(COMMERCIAL BREAK)

J. KING: A developing story, Mexico declaring a winner in its presidential election, a tight contest sure to be contested. Let's get the latest now from our Zain Verjee -- Zain.

VERJEE: John, we've been able to confirm that Felipe Calderon has won Mexico's presidential election. It's been a razor-thin victory and said to be the closest presidential race in history, winning by about a percentage point, only a difference between about 140,000 candidates (ph). His leftist opponent, Andres Manuel Lopez, has alleged widespread fraud. He said he would challenge the results in court.

Both sides had asked their supporters to refrain from any violence. We will bring you more information and details when we get it, but we are able to confirm that Felipe Calderon has won Mexico's presidential election -- John.

J. KING: And that close margin, as you noted, sure to generate some protests. Zain Verjee, thank you very much. And we will bring you more as we get it in here at CNN.

Moving on, though. Proponents of gay marriage are reeling today from a one-two legal punch. Courts in Georgia and in New York State issued new rulings now having an impact on the culture wars. CNN's Allan Chernoff has more from New York.

Hi, Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Hi, John.

This was the very first time that New York's highest court had heard a case on the issue of same-sex marriage. And in fact, what ended up happening here is that gay rights advocates were really disappointed because they had such high hopes they had actually won at the trial level. But of course, the high court did end up upholding the status quo.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We lost.

CHERNOFF (voice-over): The call from their lawyers this morning came as a blow to Daniel Hernandez (ph) and his partner Nevin Cohen (ph). New York's Court of Appeals had rejected the couple's effort to overturn state law so that they can get married.

UNIDENTIFIED MALE: This is incredibly disappointing and kind of overwhelming. You know, you sort of live your life thinking that somehow the constitution is supposed to provide the promises that it does for everyone. CHERNOFF: The couple's lawyer had argued New York's law dictating marriage be between a man and woman violates their right to due process and equal protection under the state constitution. In a 4-2 decision, the court of appeals ruled the law is constitutional and that the state may reserve the right of marriage for couples of the opposite sex who can bear and raise children.

ROBERTA KAPLAN, LAWYER FOR PLAINTIFFS: The scientific evidence that is out there is absolutely uniform and consistent that there is no difference to children between being raised in a family with a mother and a father.

CHERNOFF: In its opinion, the court wrote: "It is not for us to say whether same-sex marriage is right or wrong, it's up to the legislature to make any changes in law," the court said.

Leading politicians in New York differ on the issue.

GOV. GEORGE PATAKI (R), NEW YORK: I think the court of appeals made the right decision. Marriage between a man and a woman has been the law of New York State since the beginning of this state.

MAYOR MICHAEL BLOOMBERG (R), NEW YORK CITY: I have always thought that it is not something that the state should get involved in, that it's not the state's business who you can marry.

CHERNOFF: Gay rights advocates today also suffered a defeat before Georgia's Supreme Court. It ruled in favor of a ban on same- sex marriage that three-quarters of voters had approved as a constitutional amendment.

GOV. SONNY PERDUE (R), GEORGIA: The benefits of marriage as affirmed by the people of Georgia are accorded to a man and a woman. That's what the whole issue was about. I don't think it demeans gay Georgians in any other way to that. They are free to work and to live their lives, they are just not free to marry in Georgia.

(END VIDEOTAPE)

CHERNOFF: Of course, gay rights advocates are going to continue the legal battle. In fact, they have four cases pending in four separate states. Those would be California, Washington, Iowa, and also New Jersey. But Massachusetts right now remains the only state in the Union that actually does permit same-sex marriage -- John.

J. KING: Allan Chernoff, Allan, thank you. Allan, joining us from New York. And seven states this November will have ballot questions trying to impose state bans on same-sex marriage.

And next up, he's not running for reelection but his name is still on the ballot. The latest in the Tom DeLay saga and what it means when we return.

Plus, it may be the most important race in the battle for the Senate. We'll get the take from the front lines in the bruising campaign between Republican Rick Santorum and Democrat Bob Casey. (COMMERCIAL BREAK)

J. KING: In Texas today a federal judge ruled former Congressman Tom DeLay's name must stay on the November ballot even though he quit Congress and ended his reelection campaign. Republican Party leaders wanted to replace DeLay on the ballot in hopes of bolstering their chances of holding onto his seat in a race against Democratic candidate Nick Lampson.

Republicans argued that state law should allow that because DeLay has moved out of Texas to Virginia. Democrats sued to prevent that and the judge today sided with them. The Texas Republican Party says it will appeal.

Now to Pennsylvania and what may be the hottest Senate race in a scorching election year. Republican incumbent Rick Santorum is waging a tough and bitter fight to hold onto his seat.

Our congressional correspondent Dana Bash got a firsthand look at why Santorum is in such trouble -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, John, you know, we spent the beginning of the week in Pennsylvania. And one of the most interesting and maybe the most telling things about the dynamic there is this piece of literature from Rick Santorum. He's been in the Senate for 12 years, representing the people of Pennsylvania, and this is what he's handing out. "Fifty Things You May not Know about Rick Santorum."

Things like, he says that he supports the Global AIDS Fund. Number 19 is -- he talks about a measure that he sponsored cracking down on puppy mills. All things he says not necessarily trying to say that he's backing down from tough stands we know about him, like gay marriage, like against abortion, but he says this is to round out the view that voters have of him.

(BEGIN VIDEOTAPE)

BASH (voice-over): To walk a rain-drenched July 4th parade with Senator Rick Santorum is to witness a Republican known for a brash style and conservative positions. Trying to show there's more to him than that, introducing himself as a father and a husband. But walk a bit more, and you see why image repair is a campaign must.

SEN. RICK SANTORUM (R), PENNSYLVANIA: I go through this every election. People say, why are you always behind in the elections? Because people don't hear much good about me between the elections.

BASH: He is far behind, by double digits in several polls, trailing a challenger with a famous political name in Pennsylvania.

BOB CASEY (D), PENNSYLVANIA SENATE CANDIDATE: Bob Casey, nice to meet you. I'm running for the U.S. Senate.

BASH: Bob Casey Jr., son of the state's long-time Democratic governor. Like Santorum, Casey is antiabortion and pro-gun rights, but he opposes Bush policies like tax cuts, and campaigns on a simple slogan, "new direction."

CASEY: And then you have a senator like Rick Santorum who rubber stamps the president's policy all the time. And that has consequences for this state.

BASH: Santorum's response, seize on an issue he's proud to disagree with the president on, immigration. His first TV ad.

SANTORUM: Unfortunately today, some enter our country with more sinister intentions.

BASH: And campaigns forums like this, pushing his new border security bill, and highlighting opposition to a Senate measure that Santorum labels amnesty for lawbreakers.

SANTORUM: We have been promised border security for 20 years and it hasn't been delivered.

BASH: Pennsylvania is some 1,500 miles from the Mexican border, illegal immigration is much less a problem here than many other states, but Santorum aides say this is a no-brainer. He's appealing to his conservative base plus it sets him apart from both an unpopular president and his Democratic opponent.

SANTORUM: I don't know of an issue that I have gotten more feedback on in the short amount of time then this issue.

BASH: Casey calls Santorum Johnny-come-lately on immigration, pointing to votes against border security funding.

BASH: So if he wants to be dishonest about an issue he's got a bad record on, he's free to do that, but I think he's going to pay a price for it.

BASH: Democrats suggest Santorum is trying to change the subject away from more damaging issues like accusations he abandoned his state by moving his family from this Pennsylvania home to suburban Washington.

SANTORUM: I work my butt off. And if people want to -- if people are concerned about, you know, where my family spends time. They spend time where I am.

BASH: Where Santorum is these days, is in trouble. And though he voices confidence he can mount a comeback, asking families for help even in the rain shows he knows this time is going to be tougher.

(END VIDEOTAPE)

J. KING: Dana, as you well know, the magic of the Casey name in Pennsylvania is that, as you noted, he's antiabortion, he is pro-gun rights, it gets you the conservative Democrats usually, and there are many of them in that state. They have been key to Rick Santorum in the past. Are they for Bob Casey now?

BASH: Not necessarily, John, you know, he certainly has a lot of support as you said because of his name. In the last election, he ran statewide, in 2004, he got more votes that anybody ever in the history of the state.

But I was with him at this fair you saw, a conservative Democrat walked up to him and said, I have voted Republican for the past 10 years, why should I vote against Rick Santorum and vote for you? He said, well, because of the deficit, maybe because of health care? And he wasn't -- this particular voter wasn't convinced.

Other voters came up to him and said, I'll do anything I can to vote against Rick Santorum and for you. And that definitely is, aside from the fact that they know in the Casey camp that they have a lot of work to do to explain what he is for, that definitely is their strategy. No doubt about it, that there is an anti-Washington fervor and anti-Santorum fervor, perhaps, in Pennsylvania. And that is what they're banking to get Casey across the finish line.

J. KING: It's striking, though, to see a guy who has been in the Senate for 12 years essentially saying, hey, get to know me. Fascinating campaign. I suspect you will be going back once or twice, three, four, five, six times...

BASH: Let's hope so.

J. KING: ... between now and November. Thank you very much, Dana Bash.

And as you saw earlier, Ed Henry and Mary Snow, part of the best political team on television, CNN, America's campaign headquarters.

Up next, so how much of an impact will immigration have on the battle for Congress? I will ask two political pros, James Carville and Bay Buchanan in today's "Strategy Session. And next hour, I will talk to the Reverent Franklin Graham about his travels through North Korea, and get his take on that country's missile defiance.

(COMMERCIAL BREAK)

J. KING: You are in THE SITUATION ROOM. Wolf Blitzer is off today. I'm John King.

In our "Strategy Session," as you just heard, a leading Republican voice in the culture wars, Senator Rick Santorum, is facing a very tight race back home in Pennsylvania, and two courts today pressing a hot button in the culture wars, dealing a setback to advocates of gay marriage.

To discuss that and other issues, we are joined by our CNN political analysts, Democrat James Carville and Bay Buchanan, president of American Cause.

Let's start with immigration, Rick Santorum one of the many Republican incumbents in trouble in this election year, down double digits, decides to change the dynamic of his campaign by having a sign above him that says put border security first. He's putting immigration -- trying to put immigration first in the race. I want you to listen to something else he said in an interview with our Dana Bash, when she was just up there looking at that race. Listen to the senator.

(BEGIN VIDEO CLIP)

SEN. RICK SANTORUM (R), PENNSYLVANIA: You know, put the horse before the cart, which is border security first. I have been saying that for a year, once this issue really became hot. And, unfortunately, the -- you know, the administration decided to go in the different direction. My colleagues in the Senate decided to go in a different direction.

And my opponent has decided to join them in that different direction. I just -- it is a contrast between the two of us.

(END VIDEO CLIP)

J. KING: Is this a bonanza, Bay, for a Republican incumbent? He can pick a fight with the president, who is not very popular in the state, and he can say his opponent is for amnesty?

BAY BUCHANAN, CNN CONTRIBUTOR: It's a win-win.

The real key here was what Casey said. Casey is the treasurer of a state. He didn't have to say one thing about the Senate bill. He did not have to take a position on it. He could have made his own -- cut out his own little area, and say border security; everybody is for border security.

Instead, he came out and said, I would have voted for it, just turning over to Santorum enormous numbers of issues that he can raise related to illegal immigration in this country. It's a win-win completely. I think you will see those polls close dramatically.

J. KING: You know this state well. You worked for his father, then Governor Bob Casey, the late Governor Bob Casey.

(CROSSTALK)

J. KING: That going to work there?

JAMES CARVILLE, CNN POLITICAL ANALYST: First of all, Santorum voted against border security. He's voted against them as far as sanctions.

They couldn't win a Republican primary in Utah with this thing. If they think they are going to win a Senate race in Pennsylvania, they are sadly mistaken.

And Arlen Specter, who is another senator from Pennsylvania who supported Santorum, and soon Santorum -- is saying -- and Santorum supported him -- is the author of the Senate bill. I mean, let's get real about this entire thing.

And Santorum is not going anywhere. The guy is against birth control. He says that two -- that we have two parents, when both parents work, that they are selfish. So, he's telling every mother that works in Pennsylvania that you're selfish.

He's telling them he wants to outlaw birth control pills. This guy is a -- he's not just -- he's a cultist. He's not even -- he's so far out of the mainstream, it's unbelievable. So, then they're going to come in. He has voted against the minimum wage 13 times. He's taken 13 pay raises, and he's going to go to Pennsylvania and win on this? I mean, give me a break.

BUCHANAN: I will tell you what immigration does.

J. KING: I want to move on to other issues.

(CROSSTALK)

J. KING: But quickly...

CARVILLE: Are you against birth control pills?

(LAUGHTER)

J. KING: The senator disputes this image.

BUCHANAN: I don't believe he is.

J. KING: The senator disputes this image.

CARVILLE: Yes, he is.

J. KING: But he conceded, in his interview with Dana, that it sticks, because people don't hear good things about him between the elections. He has a six-year term. Is that his fault that this image sticks?

BUCHANAN: No. No.

He -- it's his job to get his image across. I mean, he should work the state. I don't -- I'm not going to tell you that, indeed -- of course, he has a problem with the media. The media is not going to like him. And the media tends to be far more left than Santorum, certainly.

But he has talk radio, et cetera, that he can get his message out. The key here, though, is, what does immigration do for him? It excites his base. The reason he's having so much trouble is because the conservatives are so teed off that he supported Specter over Toomey a couple years back.

And, so, they walked from him. He has to get them back. He gets them back on immigration. They become very excited. And, then, in addition to that, you start bringing over those Democrats one at a time. I'm telling you, I have been out there. I have been Pennsylvania. This is a good, solid issue across this country.

J. KING: Let's move on to another issue. Time out. (LAUGHTER)

J. KING: Let's move on to another issue that some...

(CROSSTALK)

CARVILLE: ... about birth control?

(LAUGHTER)

J. KING: ... some think would help motivate...

(LAUGHTER)

J. KING: Some people would help -- think -- motivate the Republican base, which is, you had these court rulings today...

BUCHANAN: Sure.

J. KING: ... in New York, the state Supreme Court saying the legislature can, if it wants -- it's up to the legislature to define marriage and to pass legislation. And the Georgia Supreme Court upheld that state's ban on same-sex marriage.

I want to read you something from the New York Court of Appeals decision. They said: "The legislature could additionally decide that, for the welfare of children, it is more important to promote stability and to avoid instability in opposite-sex, than in same-sex relationships."

So, it is a victory for opponents of same-sex marriage...

BUCHANAN: That would be correct.

J. KING: Politically, republicans like to campaign against activist judges. Do you almost wish, from a political standpoint, these decisions went the other way?

BUCHANAN: No, I don't, because I believe in the issue. And I would like to see that banned everywhere we can. All 50 states, same- sex marriage should be banned.

But I tell you where it will became political issue. I don't necessarily agree with the White House that they are going to be able to nationalize elections on this issue, especially with judges ruling in our direction.

However, as you pointed out a little bit earlier, it is, on balance, in, what, six, a half-dozen or more states. And those issues -- in those states, conservatives will come out in large numbers, just as they have in the past. And that will help our candidate.

CARVILLE: What they are looking for is, like, a gay -- you know, a gay Mexican immigrant burning a flag.

(LAUGHTER) CARVILLE: And if they could, like, just find that guy somewhere, they can win the election.

(LAUGHTER)

CARVILLE: So, if you have got any gay Mexican immigrant that is burning a flag out there, you are the hope for the Republican Party.

(LAUGHTER)

BUCHANAN: If Democrats can just grasp a hold of amnesty, hang on to it as long as you can, we will be just thrilled.

J. KING: Well, let's more to the foreign policy issue. We discussed this a bit. And I want to talk more about the politics of it.

But the president right now is in this standoff with a higher volume, you might say now, with North Korea, now that it's launched its missiles. The Iraq war is unpopular in the country. The Iran debate is going before the U.N. Security Council, a nuclear standoff there.

So, it seems, with four months to go to Election Day, that there will be bubbling foreign policy issues on the minds of voters as they go to elect members of the House and the Senate. How do we think this plays out come Election Day?

And before you answer, I want to show you this poll. And this is a June poll by the ABC/"Washington Post." Which party do you trust to do a better job handling terrorism? If you look at the June numbers, the Democrats, 39 percent, Republicans, 46 percent. The Democrats actually had an advantage in May. Those numbers have bounced back to what we have seen since 9/11, although the Democrats are closer than they were way back at 9/11.

Does it make any difference, when you're voting for the House or the Senate in a midterm, that the -- what the president is doing about North Korea or Iran?

CARVILLE: First of all, those numbers were like 20 points for a long time. Even with the reversal, the Democrats are down six, seven. So, it's actually, historically, a pretty good number for Democrats.

Look, when you look around the world, as we talked yesterday, forget the -- if you -- Iraq, you look, where even Bill Kristol says we are making no progress in Iraq -- Afghanistan. You look at Iran, you look at North Korea, Somalia, Palestine, you are looking around the world, nothing is working right now for these guys.

And I can't imagine that, come November, that the Democrats won't be in very competitive, maybe better shape on these issues, because it -- I don't see -- if -- when Bill Kristol says we are making no progress in Iraq, you can book one thing. We are making no progress in Iraq.

(LAUGHTER)

J. KING: But, Bay, when -- but, when voters go to the polls to pick a congressman and a senator, does this stuff matter?

BUCHANAN: Exactly.

Certainly, the congressman, very little. I don't see that this will play. They may be happy or unhappy with the president. I don't think the Congress -- the congressman will be hurt by that, unless, again, the Democrats, John, can nationalize this issue of -- that the president is taking the country in the wrong direction with respect to foreign policy.

Then the vote will help Democrats. But I think, when you have a Korea mess like this, the president is going to look with leadership. It's going to be on the front page of the paper. It shows he's in control; he's on top of things; he's talking to other countries to solve this. I think it will help the president. And, again, that spread is going to continue.

(CROSSTALK)

CARVILLE: I can't believe that we're -- the people that went to war in Iraq alone, and were cheering them on, and making fun of the French, are now bragging of the fact we have the French. We can't the -- the...

(CROSSTALK)

J. KING: I'm going to be a unilateralist here and cut off the conversation.

(LAUGHTER)

CARVILLE: OK.

J. KING: I'm going to be a unilateralist. We need to cut it off there for time.

James Carville and Bay Buchanan, part of the best political team on television -- again, CNN, America's campaign headquarters.

And coming up: Shuttle astronauts show off with a backflip, as they meet up with the space station -- our Zain Verjee standing by with all the action from up in orbit.

And is the right satisfied with the way the president is handling the North Korea missile crisis? I will ask conservative talk show host Bill Bennett next hour, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

J. KING: Our Zain Verjee joins us now with a closer look at other stories making news.

Hi, Zain. VERJEE: Hi, John.

A chilling new glimpse into the minds of the Columbine killers -- just hours ago, Colorado police released more than 900 pages of diary entries and other personal documents Eric Harris and Dylan Klebold.

On April the 20th, 1999, the two killed 12 students and a teacher, before taking their own lives -- among the documents, a calendar with a series of notations apparently related to preparations for the attack.

The USS Ronald Reagan came home to San Diego today. The aircraft carrier and nearly 5,000 sailors on board were returning after a six- month deployment in the Persian Gulf and the Western Pacific. Since January, the Reagan launched almost 3,000 flights in support of ground operations in Iraq.

And success in space -- Discovery flawlessly docked with the International Space Station earlier today, while soaring at more than 17,000 miles per hour. When the hatches opened, Discovery's crew were greeted by the two current residents of the station. One Discovery astronaut plans to stay behind with them.

And Discovery is going to deliver more than 5,000 pounds of equipment and supplies. Crew members will also go on space walks to repair part of the station -- quite a delicate dance there in space today, John.

J. KING: It looks like a lot of fun.

VERJEE: Yes.

They seem to be having fun. The captain said that there's not one person who is having a sad moment.

(LAUGHTER)

J. KING: Thank you very much, Zain Verjee.

Now, get this. A former government contractor is pleading guilty to hacking into the FBI's classified computer system, uncovering secret passwords for every single active FBI agent. The government also says the system contained sensitive information on the witness protection program.

So, how did he do it?

Our Internet reporter, Abbi Tatton, has the details -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: John, the passwords of 38,000 FBI employees, including that of the FBI director, that's what contractor Joseph Colon was able to access while he was working for the FBI on their massive computer upgrade program known as Trilogy.

In court documents, you can see that Colon has pled guilty to four counts of exceeding his authorized access while he was working in the Illinois field office of the FBI in 2004.

Court documents also show that this hack wasn't particularly hard to do. The contractor, Colon, used two pieces of software that are widely available on the Internet. We searched for them and found them in a matter of seconds.

In court documents, Colon says that he was trying to do this for the good of the FBI. He was trying to speed up the Trilogy project he was working on, which had been criticized for being inefficient.

The sentencing is set for next week. The FBI -- an FBI spokesman wouldn't comment specifically on this case, but said that the FBI has strengthened information security -- John.

J. KING: One would hope so, Abbi Tatton.

(LAUGHTER)

J. KING: Abbi, thank you very much.

Up next: He's the man behind some of President Bush's most famous phrases. I will speak with Michael Gerson, outgoing chief White House speechwriter and a close confidant of George W. Bush.

And a new development in the drive to help America kick its oil habit -- I will show you a prototype car that is like nothing you have ever seen before. And it's a story you will only see here on CNN. It's coming up here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

J. KING: Governor Jon Corzine in New Jersey right now, announcing details of the plan to end the state budget crisis that had shut down state government, including casinos, beaches, other critical services.

Our Mary Snow has been on the scene for days tracking this.

Mary, what is the latest?

SNOW: Well, John, Governor Jon Corzine outlining the compromise plan, saying, though, that it's no time for celebration, that far too many lives have been disrupted.

We're still waiting for the details on exactly the time frame for government employees to go back to work. But, in terms of private businesses, he said that they could get up and running between 24 and 36 hours -- no exact details on how that will play out, but, presumably, he's referring to the 12 casinos in Atlantic City that were shut down yesterday.

Part of this compromise plan, he said no one got what they really wanted. That sales tax increase that he was holding on to was included, but half of it is going to be going to property tax relief. And while this is over, many New Jersey state employees who were furloughed say they will not forget this. Hundreds turned out at the state capitol today to turn up pressure on lawmakers, saying that they have been hurt. And, come November, they say, they will not forget this showdown that disrupted their lives and took their paychecks.

J. KING: Mary Snow for us live on the scene -- Mary, thank you very much.

And we will continue to follow this, but it looks like New Jersey is back in business. State government will back in business. And, as we have been reporting, those casinos can back in business as well.

Mary Snow for us in Trenton -- Mary, thank you very much.

And, as we told you earlier, our own Larry King spent some time at the White House today, an exclusive interview with President Bush and first lady Laura Bush -- among the topics, of course, the current standoff with North Korea over its missile launches, a provocation, in the words of the White House. That is among the subjects Larry King raised with President Bush in his exclusive interview.

Let's listen to a bit.

(BEGIN VIDEO CLIP)

LARRY KING, HOST: ... one would think to talk to somebody. Would you meet with Kim Jong?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Oh, I think that's -- I think he would love to have the United States sit down at the table alone with Kim Jong-Il.

The problem is, we tried that, and it didn't work. I think the best way to solve this problem diplomatically is for there to be a -- other nations around the table with us, so that, when he looks out, when he -- when he looks at the table or he looks at the world, he hears -- he hears China and the United States speak in one voice, or China, the United States, Russia, Japan and South Korea speaking with one voice.

I am into solving problems. And I am convinced the strategy we have got is the best way to solve this problem.

L. KING: But, also, Mr. President, you are in to taking the lead on things. Iraq was an example. And you took the lead on Iraq. The United Nations went along.

BUSH: Right.

L. KING: You got other countries to go along. Why not take the lead here?

BUSH: We have. The reason why there's six-party talks is because we took the lead.

And I -- look, I have looked long and hard at this issue. And I'm confident the best way to solve the problem is to have the Chinese and South Koreans and the Japanese and Russians sitting side by side with us, saying to Kim Jong-Il: It's not in your interests to isolate yourself from the world. It's not in your interests to -- to keep defying the demands, reasonable demands, of the world. And there's a better way for you to move forward.

(END VIDEO CLIP)

J. KING: The president speaking there on North Korea to our Larry King, an exclusive interview -- a little bit more of it tonight on THE SITUATION ROOM at 7:00, when Larry will join us to describe the president and the first lady's mood today, as he interviewed them in the Blue Room -- Blue Room, excuse me -- of the White House.

And you can see that entire interview, again, Larry King with the president and the first lady, on "LARRY KING LIVE" tonight. That is 9:00 Eastern, 6:00 p.m. on the West Coast -- Larry King exclusively talking to the president and the first lady.

Another White House-related story -- the president's favorite wordsmith has left the White House. Longtime speechwriter Michael Gerson has moved on, after years of helping put words in President Bush's mouth.

I recently spoke with the man who has been so critical in crafting the president's message.

(BEGIN VIDEOTAPE)

J. KING: Let me begin with what is probably an unfair question.

MICHAEL GERSON, FORMER WHITE HOUSE SPEECHWRITER: Sure.

J. KING: You have been at this for a long time.

GERSON: Right.

J. KING: Favorite line? Favorite phrase?

GERSON: You know, in the aftermath of September 11, it was really clear that, sometimes, in certain historical circumstances, the words really matter. And -- and, so, that means the National Cathedral speech.

(BEGIN VIDEO CLIP, SEPTEMBER 14, 2001)

BUSH: It is said that adversity introduces us to ourselves. This is true of a nation as well.

(END VIDEO CLIP)

GERSON: That means the September 20 speech...

(BEGIN VIDEO CLIP, SEPTEMBER 20, 2001)

BUSH: Americans are asking, what is expected of us? I ask you to live your lives and hug your children.

(END VIDEO CLIP)

GERSON: ... where we had the comfort, and we had to inspire, and we had to inform, all at the same time.

(BEGIN VIDEO CLIP)

BUSH: Freedom and fear, justice and cruelty have always been at war, and we know that God is not neutral between them.

(END VIDEO CLIP)

GERSON: And, so, you know, it would have hurt the country if those speeches had gone poorly. And that's a satisfying thing.

J. KING: Let me ask you the flip side of that question. Ever a moment that stands out where you had something that you thought would work, and, after the president delivered it, you think, well, got that one wrong?

GERSON: You know, I guess I would answer that in a little more substantive way.

In the aftermath of Katrina, you know, we gave out a lot of money, and we, you know, are rebuilding various things. But America really needed a dialogue on race and poverty.

(BEGIN VIDEO CLIP, SEPTEMBER 15, 2005)

BUSH: We have a duty to confront this poverty with bold action. So, let us restore all that we have cherished from yesterday, and let us rise above the legacy of inequality.

(END VIDEO CLIP)

GERSON: We did the right media things. But there are long-term things that needs to be done in America on this issue, and a long-term discussion that needs to take place.

J. KING: You have been described by friends and by people who don't think much of this administration's policies as the most influential presidential wordsmith since Theodore Sorensen.

GERSON: Well, that's high praise...

(CROSSTALK)

GERSON: ... from -- because of my respect for Sorensen, which is boundless. So...

J. KING: Do you agree with it?

GERSON: No.

(LAUGHTER)

J. KING: Why not?

GERSON: I guess it's -- this is a case where the -- the president and I did have some common ground, in a certain way: approach to politics, a belief that politics was about big things, about moral things.

(BEGIN VIDEO CLIP, JUNE 12, 1999)

BUSH: Prosperity must have a greater purpose. The success of America has never been proven by cities of gold, but by citizens of character.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP, JANUARY 29, 2002)

BUSH: States like these and their terrorist allies constitute an axis of evil, arming to threaten the peace of the world.

(END VIDEO CLIP)

GERSON: And a comfort with language that, you know, he wanted to use.

So, we had a lot of common ground. And I have been at it seven years with him, two years down in Austin and five years here. So, we have gotten close over the years. But I'm sure -- sure that's true of other administrations. And -- but it's been a great experience.

J. KING: You mentioned the common ground. As you know, there are some who applaud, and there are some who are taken aback by the use of morality, the use of religion in the president's words.

(BEGIN VIDEO CLIP, FEBRUARY 6, 2003)

BUSH: Behind all of life and all of history, there's a dedication and purpose set by the hand of a just and faithful God. And that hope will never be shaken.

(END VIDEO CLIP)

J. KING: You are behind many of those words. What do you make of that debate?

GERSON: Well, it's an important debate. There are problems that you have to avoid in religious language.

We attempt to be pluralistic. We don't want to favor one religion above other religions. You don't want to argue -- for example, I don't believe that there's a Christian view on tax policy or on missile defense. Those things are prudential matters that have to be debated and discussed on their merits.

But, then, if you really were to scrub that religious influence from American life, it would be a sad thing. It would get rid of, for example, the primary motivation of the abolition movement, or the civil rights movements, or many of the great reform movements of America, where those people had a vision of justice, rooted in faith, a belief that everyone shares God's image.

And that is something, I think, that is deeply rooted in the American experiment and deeply rooted in faith.

J. KING: Is there a risk in writing lofty, grand speeches, talking about ending tyranny, talking -- you noted the Katrina disappointments -- talking about trying to deal with things like race and poverty in our society? Sometimes, you need those -- the high bar, if you will, of lofty words to inspire people.

GERSON: Right.

J. KING: But, if you can't meet them, does that leave you disappointed?

GERSON: Well, to some extent, when you set out American ideals, you never really meet them.

You know, when you set out matters of race, or when you set out the spread of liberty, these are long-term goals rooted in the American experiment. But I think it would be an impoverished discourse if we didn't set out the goals, if we gave up on the ideals, because they are difficult.

History is messy. And events are difficult, but that doesn't mean you don't set out the ideal.

(BEGIN VIDEO CLIP, JANUARY 20, 2005)

BUSH: The great objective of ending tyranny is the concentrated work of generations. The difficulty of the task is no excuse for avoiding it.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

J. KING: You have, in your reinvention here as a policy person, not just a speechwriter, but as a policy person, spent some time on Sudan and AIDS. Talk more about that and -- and how the -- how the president came to view those things. And, in the case of Darfur in Sudan, some people say, why isn't the United States screaming more about it?

GERSON: Right. Well, you mentioned two topics. AIDS is an interesting one. It's one where I have seen the extraordinary power of government to do good.

Sometimes, conservatives are confused on this point. This is a case where I sat in the Oval Office in -- late in 2002, and watched the president make a decision to begin a massive public health program in Africa, $15 billion, the largest in our -- public health program in our history.

(BEGIN VIDEO CLIP, JULY 11, 2003)

BUSH: You know, it's one thing to hear about the ravages of AIDS or to read about them. It's another thing to see them firsthand.

(END VIDEO CLIP)

GERSON: I do think there's a message here. And I am not sure that all Republicans get the -- the importance and centrality of this message.

And I am not sure they understand that, if the Republican Party doesn't have a message of social justice, doesn't offer something to the poor and suffering in our country and abroad, it's going to be handicapped, physically -- handicapped in -- politically and morally, as we move forward into the new political season. So, these things are very important.

(END VIDEOTAPE)

J. KING: Michael Gerson, a key architect of what the president likes to call compassionate conservatism, left the White House just last week.

Still to come here in THE SITUATION ROOM: Is Arnold Schwarzenegger making a campaign comeback? We will have the latest word on the California governor's reelection bid.

(COMMERCIAL BREAK)

J. KING: On our "Political Radar" this Thursday: A new poll in California suggests Governor Arnold Schwarzenegger is continuing to gain momentum in his reelection campaign.

The Survey and Policy Research Institute shows Schwarzenegger now has a seven-point lead over his Democratic challenger, State Treasurer Phil Angelides. That same poll had Schwarzenegger ahead by just three points back in March.

Today is a big day for President Bush. It's his 60th birthday. He celebrated with his family two days ago. But, today, after a news conference with the Canadian prime minister, he asked others born on July 6 to join him up near the podium.

Our Jacki Schechner has more on the president's big day -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Well, John, conservative bloggers are using their blogs to say happy birthday to the president.

And many of them are linking to the official birthday card from the Republican National Committee. They're fund-raising, and they're asking people to send their well-wishes. They're collecting thousands of them. They're going to send them via C.D. over to the White House.

Other fund-raising happening against President Bush -- there is the abortion rights group NARAL. They're asking people to send in $60 to help elect a pro-choice Senate -- John.

J. KING: Jacki, thank you.

SCHECHNER: Sure.

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