CBS News senior White House correspondent Bill Plante reported that prosecutor Patrick Fitzgerald is expected to announce as early as Monday that they are targets of his probe into who leaked the identity of CIA employee Valerie Plame.
And, Plante said, lawyers in this case think it's likely there'll be some indictments before the end of the week.
Fitzgerald has focused on two of the administration's most trusted political advisers, Karl Rove and I. Lewis "Scooter" Libby.
Plante said both talked to reporters about the Plame case.
Libby is the vice-president's chief of staff and his national security adviser, a little-known but key analyst and confidante. A major proponent of the war in Iraq, Libby was reportedly enraged by criticism of the war from Plame's husband, Joseph Wilson. His testimony to the grand jury about what he said, and when, may be at odds with that of some reporters.
Rove, the president's chief political adviser, is his most influential staffer, Plante said. Fifteen years ago in Austin, Texas, Rove plotted the planning for Mr. Bush's gubernatorial race and said, "I can make him president of the United States."
Rove and Libby aren't the only administration officials who face possible legal trouble, Plante said, but they're the ones who, if indicted, would be most missed at a time of deepening political problems for the president.
Republicans are already on the offensive, downplaying what could happen, Plante said. But there's already a consensus that if any of the president's senior aides are indicted then they'll have to step down.
The timing is about as bad as it could be for Mr. Bush, according to Amy Walter, senior editor of "The Cook Report," a non-partisan political newsletter.
She told The Early Show co-anchor Harry Smith Monday that the possible indictments are "the talk of Washington. … Folks don't seem to have an idea about exactly what this is gonna look like.
"I think the bigger story … is that this could not come at a worse time for the president. Here's the president struggling at the lowest approval ratings of his presidency, working so hard to get some traction back after a pretty disastrous September between (Hurricane) Katrina, (Supreme Court nominee) Harriet Miers, the economy, continuing frustration about Iraq, a very pessimistic public.
"He needs something to be able to get himself out of these political doldrums. This certainly is not going to help."
Smith pointed out that any indictments wouldn't necessarily have to involve Plame's outing. They could center on alleged obstruction of justice or perjury during the investigation into the outing.
Republicans, Smith said, are already saying Fitzgerald is splitting legal hairs. But those arguments probably won't cut it with the public, Walter said.
"This is where I think it becomes very difficult territory for Republicans to start making Fitzgerald the story," she said. "This is a prosecutor who is very well respected, who was appointed by a Republican White House. … So this is not somebody who is coming in with his own political agenda. That's going to be very difficult, No. 1.
"No. 2, the actual specifics of the case, I think, become less important than the overall big picture, which is the sense that this White House has lost its focus, that there is a continuing raft of problems that seem to be enveloping this White House.
"This is not taking place in a vacuum, but at the same time we see other Republicans, including House Majority Leader Tom Delay, in his own ethical and legal woes."
The mess around Miers doesn't help Mr. Bush either, Walter said.
"Look, here is a president who, I think, went and put Harriet Miers forward thinking he was going to avoid a fight, that she did not come with a whole lot of baggage and history that Democrats and other groups cud go and attack," she said. "At the same time, her biggest problem is she doesn't come with a whole lot. She doesn't come with a track record. That has then inspired a fight, so to speak."
But Walters doesn't think the Miers nomination will be withdrawn, in part, due to the larger political picture her nod is helping to make more serious.
"I think," Walter said, "that for the president, he really needs something to go right here. He really needs to be able to get his traction back. I don't think it's going to do Republicans very much good to make their president not look good."