SUZANNE MALVEAUX*, CNN WHITE HOUSE CORRESPONDENT: Democratic presidential candidates are facing a dilemma over the war in Iraq. While most are calling for a drawdown of U.S. forces, they're finding it hard to support cutting funding for the war.

Joining us now to talk about other issues, that, as well, Party Chairman Howard Dean joins us live here from DNC headquarters here in Washington.

Chairman Dean, thanks so much for being with us here in THE SITUATION ROOM.

HOWARD DEAN, DEMOCRATIC PARTY CHAIRMAN: Thanks for having me on.

MALVEAUX: I want to first start off about Senator Reid's proposal here to cut off most of the fundraising for the troops by early next year.

If -- if the president vetoes the current legislation, how is that going to help your Democratic candidates? Who can possibly vote for that and win in 2008?

DEAN: Well, I think that the American people have made it very clear in the last election that they believe we should not be in Iraq. Seventy-one percent of Americans think we ought to leave Iraq.

The president has been incredibly uncooperative in doing what the American people asked us to do.

What we have proposed is a bill that will gradually remove our troops, most of our troops, from Iraq, leave some Special Operations forces in the area to combat terrorism, but get us out of the middle of the civil war.

The president said he's going to veto that bill, along with $4 billion extra to help our troops recover from the terrible wounds they have recovered over there, $2 billion for port security and some body armor.

MALVEAUX: But, clearly...

DEAN: So we are...

MALVEAUX: ... the Republicans...

DEAN: We are left...

MALVEAUX: ... are going to use this to -- to set up the Democratic candidates as being weak on national security.

How do you prevent that from happening, falling into that same political trap?

DEAN: I think it's going to be almost impossible for the Republicans to make the case that they are -- have done anything for our national security. They haven't won the war. They -- they're in the middle of a civil war. They haven't properly taken care of the troops when they've gotten home. They haven't paid attention to the areas that really need paying attention to -- Iran is about to develop nuclear weapons.

I think it's going to be very hard for the Republicans to explain why we should trust them without your defense.

You need to use your brains as well as your brawn to defend America. And what I can promise the American people is that we're going to be tough and smart, not just talk tough.

MALVEAUX: Well, President Bush also has the bully pulpit.

So let's take a quick listen to how he is framing this debate.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Democrat leaders in Congress seem more interested in fighting political battles in Washington than providing our troops what they need to fight the battles in Iraq. Democrat leaders in Congress are bent on making a political statement.

(END VIDEO CLIP)

MALVEAUX: So this all seems to be a P.R. battle at the moment here, a perception battle.

Ultimately, what is the winning strategy here?

There's going to be a lot of back and forth, but there's going to be a time when the U.S. troops are going to suffer and the Democrats are going to have to come up with legislation that this president is going to have to sign.

DEAN: U.S. troops are suffering right now because they have a president who hasn't taken care of them when they get home to the Walter Reed Hospital with terrible wounds, much more so than we've seen in any other previous war. You asked...

MALVEAUX: But what do the...

DEAN: You...

MALVEAUX: ... Democrats do?

DEAN: Well, we...

MALVEAUX: What do the Democrats do?

DEAN: What we do is bring the troops home. The best way we can respect our troops and support them is, one, bring them home. Two, put adequate funding in the veterans -- into the Veterans Association -- into the Veterans Administration, which this president and his Republicans have cut for five consecutive years. MALVEAUX: Chairman, how do you do that?

DEAN: We will stand up for the troops. We will stand up for our armed forces. The best way to stand up for the armed forces is to get them out of the middle of a civil war in Iraq. Our position is very, very clear. We've laid it out. It's in the bill. We want them home by 2008. We're willing to fund them until then. We need some cooperation from the Republicans. We need some respect shown by the president of the United States to the American people, who voted overwhelmingly to leave Iraq.

MALVEAUX: So that it doesn't look like there is any wiggle room here?

DEAN: We are going to -- we got elected because we said that we thought Iraq was the wrong thing to do. We have offered the president every possible compromise. We did not cut off funding from Iraq -- for the war in Iraq, contrary to what the president has said. We do not propose cutting off funding.

What we do propose is exactly what the American people want -- we want the troops home by the middle of 2008 and when the wounded troops get home, we want them taken care of and we -- they deserve much better than what the Republicans and President Bush have given them, and we intend to see that our troops get what they deserve.

MALVEAUX: Let's change topics here.

We saw a surprising announcement here from Barack Obama's campaign, some $25 million raised.

Now, this is a very exciting race, as you're seeing. You ran -- you basically ran a grassroots campaign. You were frontrunner. Ultimately that -- that eventually fizzled.

I mean how would you advise Barack Obama, Hillary Clinton, at this time? Who is going to be the winner?

DEAN: Well, I wouldn't advise anybody. I'm the referee. And if they want advice, I'm happy to give it, but it'll be in private, not on CNN, much as I love you.

But, you know, there's -- we've got some fantastic people in this race, not just Senator Clinton and Senator Obama, but there are others, as well.

I do believe our field is very strong, much stronger than the Republicans. I believe we represent what the American people want in terms of our values, fairness and toughness and diversity, where everybody is included. I think whoever we nominate is most likely to win.

MALVEAUX: Do you think that a...

DEAN: But I'm not going to give individual advice to individual candidates. I'm going to try to keep the peace among them.

MALVEAUX: Fair enough.

The last question here.

Do you think that all this fundraising, however, really changes the nature of the campaign, that we could actually see candidates dropping out before the first primary?

DEAN: You know, that did happen -- that's already happened.

MALVEAUX: Right, it has.

DEAN: And I think it may happen again.

I -- as you know, I personally believe we ought to have public financing of campaigns. That's not going to happen in the near future, although voters have voted to do it in Arizona and Maine, and I encourage that movement elsewhere.

But for the time being with this schedule, money does matter. But it's not the only thing that matters and there are some very good candidates who have not gotten in headlines by what they've raised and I think we'll be hearing a lot from them in the future.

MALVEAUX: Chairman Howard Dean, thank you so much.

DEAN: Thank you.

Originally from CNN Transcripts