CNN Transcript:

GOV. KATHLEEN BLANCO, LOUISIANA: Well, in the heat of battle a lot of things happen. And we feel like we're in the heat of battle. That having been said, we had a great day together. The president came in and we believe that he solidly is behind our efforts, without a doubt.

O'BRIEN: Solidly behind your efforts, although there's been much written about kind of a power tussle between the two of you. Specifically, the mayor was telling us about a flight on Air Force One. And he said that you and he and the president were all in a room and finally you and the president went separately to have a meeting.

Listen to what the mayor told us, ma'am, if you will.

MAYOR RAY NAGIN, NEW ORLEANS: He called me in that office after that and he said, Mr. Mayor, I offered two options to the governor. I said -- and I don't remember exactly what -- two options. I was ready to move today, but the governor said she needed 24 hours to make a decision.

O'BRIEN: Twenty-four hours, is that right? Was that what came out of that meeting on the tarmac with the president?

BLANCO: Soledad, the mayor was not in my meeting. And it was -- I'll tell you, it was a meeting that did not affect what was going on out in the field. They were talking about paper organizations, nothing else, nothing more, and they gave me a very complicated proposition to look at. It didn't help our effort in that instant moment. I needed a little time to understand exactly what it meant. We went forward, all of us, all of the resources were there, nothing stopped. We ended up coming to terms and agreement, and I think that the effort is going great.

O'BRIEN: Coming to terms, meaning that you rejected, after that 24-hour window, that you didn't have any interest in federalizing the troops or turning power over to the president. Why not hand it over, Madam Governor, when the first five days, and I think that meeting was on Friday, so the first several days of the recovery were clearly disastrous?

BLANCO: The first five days of the recovery were heroic. We were the people who took control. The National Guard took control of the city, brought order out of chaos, because we have law enforcement authority. The federal troops do not. I was very concerned about giving up law enforcement authority.

O'BRIEN: Heroic, but by a very small number of people who were on the ground. In fact, I believe it was Friday morning when I was talking to the FEMA director who had only just seen that there were tens of thousands of people at the convention center. So at least by Thursday, let's say the first four days, those people at the convention center were actually not getting anything. If it was not well coordinated...