[Wolf Blitzer, Cnn Anchor:] Thanks, Ali. To our viewers, you are now in THE SITUATION ROOM, where new pictures and information from around the world are arriving all of the time. Happening now, a showdown maybe brewing over port security. President Bush now threatening what would be his first veto. It's 4:00 p.m. here in Washington, where even the Senate Republican leadership is pressuring Mr. Bush to block an Arab firm from operating six U.S. ports. What is going on at the White House? In addition to that rare veto threat, Mr. Bush has an equally rare on the plane chat with reporters. We'll investigate the politics of port security. We'll also hear from the president himself. He just spoke out a moment or so ago. And new reasons to question the president's push to kick the oil habit. It's 2:00 p.m. in Colorado, where Mr. Bush today admitted sending mixed signals. We'll examine that and past comments that don't necessarily square with what the White House is saying right now. I'm Wolf Blitzer and you're in THE SITUATION ROOM. We begin this hour on CNN's "Security Watch," and a surprise announcement from President Bush. Just a short while ago, he vowed to veto any attempt by the U.S. Congress to block a state-owned Arab company from running six major U.S. ports. Even the Senate's top Republican leader, Bill Frist, today sided against the president and criticized the deal. It would affect ports in Baltimore, New York, Philadelphia, New Jersey, Miami and New Orleans. We have correspondents standing by, but first the president speaking on the White House lawn only moments ago. Here's what he had to say.
[George W. Bush, President Of The United States:] I've just come back from a really good trip to the Midwest and West, talking about our need to change how we used energy. Very encouraged by the technology that I saw and I was inspired by the scientists and engineers that are working on these new technologies. I also want to address another issue I just talked to the press about on Air Force One, and that is this issue of a company out of the UAE purchasing the right to manage some ports in the United States from a British company. First of all, this is a private transaction. But according to law, the government is required to make sure this transaction does not in any way jeopardize the security of the country, and so people responsible in our government have reviewed this transaction. The transaction should go forward in my judgment. If there was any chance that this transaction would jeopardize the security of the United States it would not go forward. The company has been cooperative with the United States government. The company will not manage port security. The security of our ports will continue to be managed by the Coast Guard and the Customs. The company is from a country that has been cooperative in the war on terror, been an ally in the war on terror. The company operates in the ports in different countries around the world, ports from which cargo has been sent to the United States on a regular basis. I think it sends a terrible signal to friends around the world that it's OK for a company from one country to manage the port, but not a country that plays by the rules and has got a good track record from another part of the world can't manage the port. And so, look, I can understand why some in Congress have raised questions about whether or not our country will be less secure as a result of this transaction. But they need to know that our government has looked at this issue, and looked at it carefully. Again, I'll repeat. It's a if there is any question as to whether or not this country would be less safe as a result of the transaction, it wouldn't go forward. But I also want to repeat something again. And that is this is a company that has played by the rules, that has been cooperative with the United States, from a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through. I want to thank you for your interest in the subject. Thank you.
[Blitzer:] The president of the United States only moments ago returning to the White House on the South Lawn of the White House, not only defending this deal that allows this Dubai-based company to operate six major parts in the United States, but threatening he would veto any legislation in the U.S. Congress that would try to block it. Let's go to the White House. Our correspondent Dana Bash is watching all of this unfold. Pretty startling news that the president himself twice now on Air Force One returning to the White House calling in reporters a rare move and now volunteering to stop and speak to reporters as he returns to the White House, putting his marker down, saying this is a good deal and I will try to stop anyone in Congress from blocking it.
[Dana Bash, Cnn White House Correspondent:] Wolf, it's definitely fair to say that this White House was not expecting what, at this point, is a tsunami of opposition, even form the Republican leadership the top Republican leadership in Congress to this deal, and extraordinary so when you think about it, because it is on the issue of security where Republicans really have been lockstep. But what you just said is very true. I think what we just saw from this president is lessons learned from what they have done. They admit wrong in a whole host of things, most recently last week with the vice president and his shooting, that they realize that when they have a big political problem which they admit that this has become very, very quickly, need to get out front and that's what you saw by the president coming out there. And it was extraordinary to hear him really take on his leadership, take on Republicans, take on Democrats and really plant his heels in the ground and say that this deal should go forward. He didn't necessarily say it here but he did in talking to reporters on Air Force One indicate that if legislation did come to him to block or at least put this deal on hold, that he would veto it, something he has not done in his five plus years in office. And also the idea that he's saying that this is sending a mixed message. You didn't hear him say specifically that perhaps there is profiling going on here or other things that some have suggested, but he sort of perhaps went down that path by saying that other companies, other countries, have been operating ports, operating other important areas of this country foreign governments and nobody raised objections. Why are objections being raised here? He did say that he's concerned that this is sending a mixed message. So this is a move, Wolf, to remember, not only the president coming out and talking to reporters on the plane which I can tell you, I've been on the plane a handful of times maybe that he's done that. But the fact that this president and this White House felt that that was necessary and the fact that he's doing it, not against Democrats, but against the leadership in his own party is fascinating.
[Blitzer:] Very quickly, Dana, the president can go ahead and veto any legislation passed in the Senate and the House if it comes down to that, but then Congress can override a veto if they pass legislation with a two-thirds majority. I assume they have done some headcounting at the White House whether or not Congress is going to override a presidential veto, or you think it's premature at this point to even start speculating about that?
[Bash:] It might be premature. Ed Henry, who I know you're going to talk to momentarily, can tell you better than I. I mean, the kind of opposition to this that has come out today has been extraordinary. It might well be more than the 67 votes, for example, in the Senate that the president needs to hold onto his veto, or they could override the veto. They may have that much support for what Senate Majority Leader Bill Frist is saying that there needs to be legislation to put this on hold and put it on ice until they can get more information about it. But that's something that certainly the White House is probably thinking about. I can tell you that, just very quickly, the evolution of the way this went down earlier today the White House of course, the president was on the road. He was in Colorado. The folks here at the White House were just trying to get as much information out as they possibly could about how this process works. I think, as we speak, there's a press conference going on with the Department of Homeland Security, the Treasury Department. We saw briefly from the defense secretary and the attorney general, them trying to explain a little bit. But it's very clear that they decided and, again, maybe learning lessons from some other political problems that they've had in recent past that the way to deal with this is to decide how you're going to go forward and obviously they decided to dig in and have the president himself do it in a way that really sends a message. That's what they did.
[Blitzer:] A major battle unfolding here in Washington. Dana, thanks very much. We'll get more on this coming up this hour. We'll speak to the Dan Bartlett, the White House counselor. He'll explain what the president is thinking. Let's go up to Capitol Hill right now. Our Congressional correspondent Ed Henry is watching all of this unfold. Ed, first of all, update our viewers on the enormous bipartisanship that this opposition is attracting.
[Ed Henry, Cnn Congressional Correspondent:] Yes, Wolf, even as the president was digging in, as you heard Dana reporting, and insisting this port deal must go through, just in the last half-hour the Republican speaker of the House, Dennis Hastert, came out swinging, firing off a letter to the president saying this deal must be halted. He wants further review of it before it moves forward. This dovetails with some very strong comments earlier today by the Senate majority leader, Bill Frist. All of this, if you put it together, are a sure sign that the president is headed for a major political clash with some of his best friends on Capitol Hill.
[Henry:] A stunning broadside from Senate Majority Leader Bill Frist, one of the president's strongest Republican allies, demanding the White House halt the port deal. Raising questions about the security of U.S. ports and griping about the lack of Congressional consultation on these matters, Frist declared the transaction must be put on hold until the administration conducts a more extensive review. Frist warned, "If the administration cannot delay the process, I plan on introducing legislation to ensure that the deal is placed on hold until this decision gets a more thorough review." The Republican Chairman of the House Homeland Security Committee, Peter King, joined forces with Democrat Chuck Schumer. The bipartisan New York tandem revealing they also have emergency legislation to stop the port deal next week.
[Rep. Peter King,  Homeland Security Chairman:] My office today has received more phone calls on this than any issue in the 14 years I've been in the United States Congress, and every one of them is in support of what Senator Schumer and I are doing.
[Henry:] Frist and King moved as the chorus of criticism from rank and file Republicans up and down the East Coast grew louder. In Florida, Republican Mark Foley was joined by New York Republican, Vito Fossella, at the port of Miami to denounce the deal.
[Rep. Vito Fossella,  New York:] I say we should put the brakes on it.
[Henry:] That criticism also spread to the West Coast in Los Angeles where Democratic Congresswoman Jane Harman was joined by Republican Senator Susan Collins, she is the chair of the Senate Homeland Security Committee, they say they will introduce a joint resolution in Congress, a resolution of disapproval on this port deal. Another shot at the president. Democratic Senator Schumer today said that when his legislation comes up next week, he thinks it will move through Congress like a hot knife through butter. So to answer your question, Wolf, in terms of whether a veto could be overridden by this Congress, they are expecting wide bipartisan majorities and the president could be in jeopardy of having that veto overridden.
[Blitzer:] He hasn't not used that veto yet. Certainly if he vetoes and it is overridden, that would be a huge, huge development. Is anybody doing any head counting at this point or is that premature?
[Henry:] Premature, just because the veto threat came in just in the last half-hour or so by the president. But I can tell you, a lot of times you'll see this from presidents in either party as you know better than any one, a veto threat. But once they start doing the math if they think it is going to overridden, you'll see that veto threat come down. We will have to see how it plays out, Wolf.
[Blitzer:] Ed Henry, thanks very much. Joining us now in THE SITUATION ROOM, our newest edition here to CNN, John Roberts joining us, our senior national correspondent. First of all, John, welcome to
[Cnn. John Roberts, Cnn Senior National Correspondent:] Good to be here.
[Blitzer:] You have covered this guy for a long time. I watched him unfold. You were a CBS News chief White House correspondent. Give us your thoughts as you see these dramatic developments unfold today.
[Roberts:] It wasn't unprecedented that the president came to the back of Air Force One today to talk with the press corps as they were flying back from his western swing, but certainly it hasn't happened in a long, long time. He has brought people up front to the forward cabin to give them a background debrief. The last time I think he appeared on camera was either February or March of 2001, but for the most part he hasn't come to the back of the airplane. So obviously he knows that he's got some problems on this. He needs to try to get his side of the story out there. The fact that he's now arrayed against Bill Frist against Dennis Hastert, against Chuck Grassley, Peter King in the House and Senator Susan Collins has now come out and says this whole thing needs to be rethought. So he has an awful lot of very powerful Republicans who are saying to him this isn't such a good idea. And this veto threat, we have seen it many times in the past, that's his way of dealing with Congress to say you have to toe the line. You have to give me what I want. But as Ed Henry just said it looks like Congress is prepared to go head to head with the president on this and he's either going to have to try to make good on that veto threat, facing the fact that it could be overridden, or back down. If he backs down that won't look good for a White House that's already some in political trouble.
[Blitzer:] I haven't seen Democrats and Republicans on the hill this united over anything in a long, long time.
[Roberts:] Since the education bill.
[Blitzer:] On this issue they seem to be united and the president is drawing the line.
[Roberts:] Absolutely. National security is a pre-eminent issue in this midterm election campaign. Everybody is trying to gain advantage on this. I think Republicans know what's being said across America that, wait a minute, the control of our ports in terms of the operations will go not only to an overseas country but a country that has some indeterminate links to 911. They are obviously hearing about this. This is a huge concern. They know that this election battle will be fought to a large degree on national security. They want to make sure that they are on the right side of that issue.
[Blitzer:] One more question before I let you go. If you listen carefully to what the president was saying, he had one audience, the American public in mind; he had another audience in the Arab and Muslim world in mind saying, why would it be OK for a British firm to run these ports but now an Arab firm can't do it. It seemed to be connected to a bigger battle the United States now has in the Middle East, in the Muslim and Arab world, especially since the invasion of Iraq.
[Roberts:] Absolutely, this White House has to be very sensitive to Arab concerns and concerns in the broader Middle East. He is trying to forge equality among nations and if he has Congress saying we can't give this contract to an Arab country, how is that going to make the White House look when it goes to these Arab nations and seeks cooperation in the war one terror, broader trade and in the further democratization of the Middle East. It will look like the president does not speak from a position of strength. I think that's why he's digging in his heels so much to say The United Arab Emirates has been a very good ally of the United States, and while people may question that, that's what the White House line is. And he is saying how can we slap them in the face like this if we expect them to be an ally of ours.
[Blitzer:] John Roberts, our senior national correspondent, good to have you here in THE SITUATION ROOM. You'll be here a lot.
[Roberts:] Good to be with you. I hope so.
[Blitzer:] And welcome to CNN. Let's go to New York. Jack Cafferty is standing by with "The Cafferty File." Jack?
[Jack Cafferty, Cnn Anchor:] Wolf, this may be the straw that finally breaks the camel's back. This deal to sell control of six U.S. ports to a company controlled by the United Arab Emirates. There are now actually senators and congressman and governors and mayors telling the White House, you are not going to do this. It's about time. No one has said no to this administration on anything that matters in a very long time. Well, this matters. It matters a lot. If this deal is allowed to go through, we deserve whatever we get. A country with ties to terrorists will have a presence at six critical doorways to our country. If anyone thinks that terrorists in time won't figure out how to exploit that than we're all done. Nothing has happened yet, mind you, but if our elected representatives don't do everything in their power to stop this thing, each of us should vow to work tirelessly to see that they are removed from public office. We're at a crossroads. Which way will we choose? Here's the question. What should be done to stop a deal that would allow an Arab company with ties to terrorism to run U.S. ports? Email us at caffertyfile@cnn.com or go to CNN.comcaffertyfile.
[Blitzer:] Jack Cafferty, thank you very much. This story not going away. To our viewers, stay tuned to CNN day and night for the most reliable news about your security. Coming up, a top Republican critic of the deal to outsource control of six critical U.S. ports. I'll speak live with the Vice Chairman of the House Homeland Security Committee, Congressman Curt Weldon of Pennsylvania. Also ahead, the president's energy pitch. Is it being drowned out by disappearing pink slips and by the administration's past statements about oil dependency? And the secretary of state in the Middle East right now. Is she saying anything new about the peace process, the Palestinians, the Hamas takeover? All of that coming up. Plus, Dan Bartlett, the White House counsel here in THE SITUATION ROOM.