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THE SITUATION ROOM

Fight Between John Kerry And Top Republicans Seems To Carry Over Bitterness From 2004 Campaign; Dead Heat In Missouri Senate Race; Names Of Dead People Potentially Being Used In Elections; Cheney And Rangel Go Head To Head; Charles Rangel Interview; Eric Cantor Interview; North Korea Returns To Talks

Aired October 31, 2006 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're 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, from botched joke to bare knuckles brawl -- John Kerry comes out swinging after the White House and fellow Vietnam vet John McCain criticized his warning to students about getting stuck in Iraq.

It's getting nastier by the hour and election day is still a week away.

It's also getting tighter. Control of the U.S. Senate could be decided in just a few states. Our latest polls will show you who's ahead and where in some of the key battlegrounds.

And one for Halloween -- almost everyone's worried about possible tampering with electronic ballots this year.

But what about the old-fashioned kind of fraud? How many dead people might actually end up voting?

I'm Wolf Blitzer at CNN election headquarters in New York and you're in THE SITUATION ROOM.

With just a week to go before America votes, pre-election tensions are raising tempers on both sides. When he warned students against getting "stuck in Iraq," Democratic Senator John Kerry touched off a verbal brawl with the White House.

Kerry's fellow Vietnam veteran, Republican Senator John McCain, also jumping into the fray.

And now President Bush is due to speak at any moment with some choice comments reserved for Senator Kerry.

How nasty can it get?

Our White House correspondent, Elaine Quijano, is standing by. She's covering the president in Georgia.

But let's begin our coverage this hour with CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this fur has been flying for several hours now. And this fight between John Kerry and top Republicans seems to carry over a lot of the bitterness from the 2004 campaign. But it may very well affect this one.

(BEGIN VIDEOTAPE)

TODD (voice-over): Not even running for office this year, John Kerry pulls a late October surprise.

SEN. JOHN KERRY (D), MASSACHUSETTS: If you make the most of it and you study hard and you do your homework and you make an effort to be smart, you -- you can do well. If you don't, you get stuck in Iraq.

TODD: Those comments at a California campaign event Monday set off a chain reaction that could only be this hot days before an election.

Republican Senator John McCain calls it an insult to Americans in combat, calls for Kerry to apologize.

At the White House...

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Senator Kerry not only owes an apology to those who are serving, but also the families of those who have given their lives in this. This is an absolute insult.

TODD: Kerry's office issues an extraordinary statement, saying: "I'm not going to be lecture by a stuffed suit White House mouthpiece standing behind a podium."

All this about a comment Kerry's camp says he didn't even mean. A Kerry aide tells CNN: "He really meant students should learn their history or they might end up, like President Bush, getting their country stuck in a place like Iraq."

In a news conference nearly 24 hours later, Kerry calls his remarks "a botched joke."

KERRY: As if anybody thinks that a veteran would somehow criticize more than 140,000 troops serving in Iraq and not the president and his people who put them there, they're crazy.

TODD: But could the Democrats' 2004 presidential torch bearer have hurt his party's momentum heading into next week?

Analyst Stuart Rothenberg says he doesn't think so generally, but...

STU ROTHENBERG, "ROTHENBERG POLITICAL REPORT": From the Democratic point of view, they want everything to be about George Bush and the situation on the ground in Iraq. And anything that draws attention away from that can't be ideal.

(END VIDEOTAPE)

TODD: Also not ideal, according to analysts, Kerry's chances for the presidency in 2008, if he decides to run-again. That's an eternity in politics. But some analysts believe the fact that this got so nasty so quickly, with some of the more slashing remarks coming from Kerry's camp, doesn't make him look thoughtful or presidential -- Wolf.

BLITZER: Brian Todd, thanks very much.

Brian, stand by.

Elaine Quijano is covering the president down in Perry, Georgia. There's a rally -- we clearly see it behind you -- going on right now. We expect, Elaine, the president to be speaking momentarily and he's going to go right after John Kerry.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: That's exactly right, Wolf.

President Bush is here in Georgia's 8th Congressional District to campaign for former Republican Congressman Mac Collins. He's in a tight race against the Democratic incumbent, Jim Marshall. Marshall, a Vietnam veteran. But it's not Marshall the president will be going after. It is Senator John Kerry's comments.

The White House anxious to shine the spotlight on the latest edition, really, to President Bush's stump speech, the White House taking the unusual step of releasing excerpts before the president's remarks, including remarks that say: "The senator's suggestion that the men and women of our military are somehow uneducated is insulting and shameful." The statement going on to say: "Senator Kerry owes them an apology."

So, Wolf, the White House clearly seizing on what they see as a political opportunity here, another rallying cry for members of the conservative base, not only taxes, terrorism -- and lately we've heard the president talk about gay marriage -- but now this attack line, attacking Senator Kerry. We expect President Bush to be speaking here in Perry, Georgia any moment -- Wolf.

BLITZER: Thanks very much, Elaine.

We'll watch and pay attention to see what the president actually says. We do have his prepared remarks, but he may deviate somewhat from those remarks.

Elaine, thank you very much.

We should note that while John Kerry suggested President Bush is not smart, intellectually lazy, didn't study, a look at their Yale University records has -- shows clearly that both men had almost the same grade average. Kerry has previously acknowledged, by the way, that he himself earned four D grades during his freshman year.

Voters in just a handful of states will decide who controls the U.S. Senate. New CNN polls show where the races stand in Virginia, New Jersey, Ohio, Tennessee and Missouri.

The bottom line right now?

Democrats lead in three of those states. A Republican is ahead in one. And the other state shows both candidates dead even right now.

That dead heat is in Missouri, where Republican Senator Jim Talent is trying to hang on against a strong Democratic challenger, Claire McCaskill.

Our senior political correspondent, Candy Crowley, joining us now live from St. Louis -- Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Wolf, despite all the advertising, all the speeches, all the meet and greets that these candidates have gone to, they are about where they were last year -- a dead heat, 49-49.

What's a candidate to do?

Well, right now, you go out and find more of your voters that will go to the polls than the other guy.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): In St. Louis at the Goody-Goody Diner, Democrat Claire McCaskill is running for the U.S. Senate, courting her base.

CLAIRE MCCASKILL (D-MO), SENATORIAL CANDIDATE: Nice to see you.

Thank you.

CROWLEY: These are urban voters, reliably Democratic, but there are not enough of them to win an election.

MCCASKILL: We've invested a lot of time in rural Missouri. You know, Democrats in the state for too long have thought that, well, don't go to the country because you get on defense and there's no point and we can do enough in the cities to make up for the margins in the country.

CROWLEY: Small towns and rural areas have not been friendly turf for most Democrats. Rural voters gave George Bush a 19-point edge over John Kerry. Springfield, Missouri, out-state as they call it, is strong Republican country.

David Lutz voted twice for George Bush.

DAVID LUTZ, MISSOURI VOTER: But if the Democrats went so far to the left, then we started -- or I started to vote much more Republican and so on. And now it's just, to me, the pendulum has kind of swung past me, gone the other way. So it's -- I'm trying to just get in the middle.

CROWLEY: Lutz plans to vote for McCaskill, the Democrat. And so will his Republican wife.

ELLEN MCLEAN, MISSOURI VOTER: They're not representing me and they keep moving further right. And there's simply nowhere to go. I don't know where a moderate is supposed to go.

CROWLEY: This is an uh-oh for Republican Senator Jim Talent, who needs to keep his base intact and get them to the polls.

SEN. JIM TALENT (R), MISSOURI: I believe in the dignity and value of life at all stages. I strongly supported the ban on partial birth abortions. My opponent opposed it.

CROWLEY: A stem cell research initiative on the ballot complicates Talent's task. It might bring out his conservative Christian voters. But it might prompt his business community voters, more moderate and pro-stem cell, to pull the lever for McCaskill.

Talent splits the difference, saying he opposes the initiative but others should make up their own minds. But basically he avoids the topic, turning to more tried and true subjects.

TALENT: Marriage, I think, is a relationship between a man and a woman.

CROWLEY: In five stops through southeastern Missouri, Talent mentions same-sex marriage and abortion in most of them, reaching out to the base with what he calls common sense Missouri values.

(END VIDEOTAPE)

CROWLEY: Both candidates will be in the southern part of Missouri in these final days. Jim Talent is bringing in some reinforcement. George Bush is coming at the end of the week. They expect to go campaign down in the southwestern part of the state -- Wolf.

BLITZER: Switching gears, Candy, what about this latest flap involving these controversial comments from Senator Kerry?

CROWLEY: Well, as John reported earlier, Democrats are not very happy about this. Understand that the Democrats now see themselves in the position they feel like they've been in before, where it looks like they're going to win and they're worried about that sort of inner defeatist.

Then along comes this flap, which takes them off what they want to be talking about in their individual districts. It takes national attention.

I talked to a one time Democratic strategist who said, you know, Kerry lost us one election. He needs to shut up until this one is over.

So they are not happy. They do believe that the Republicans are exploiting what Kerry said. Nonetheless, they really think that this is not helpful by distracting what they want to do, which is a steady march to majority leadership.

BLITZER: Candy, thank you.

Candy in St. Louis.

And as we head into the crucial mid-term elections, stay up to date with the CNN Political Ticker. The daily news service on CNN.com gives you an inside view of the day's political stories. Check it out -- CNN.com/ticker.

Let's check in with Jack Cafferty.

He's here with "The Cafferty File."

JACK CAFFERTY, CNN ANCHOR: Indeed, I am.

Thanks, Wolf.

Border Patrol agents didn't arrest as many illegal aliens trying to enter our country last year. A new government report shows those arrests actually declined by about 8 percent from the previous year. It was the first decrease since 2003.

Homeland Security Secretary Michael Chertoff says they've seen fewer illegals crossing the border and he credited the administration's strategy of rapidly deporting almost all -- I can...

BLITZER: Oh, we're -- we're trying to fix your mike.

CAFFERTY: The microphone's off.

BLITZER: Can you...

CAFFERTY: Can we get it?

BLITZER: Can our viewers hear you now?

CAFFERTY: Is that better now?

Can you hear me?

BLITZER: Much better.

CAFFERTY: All right.

Good.

BLITZER: Much.

But do you want to start it again from the beginning?

CAFFERTY: I don't know.

Do they want me to start again from the beginning?

BLITZER: Why don't you start from the beginning so that -- to make sure it's precise and clear and our viewers know exactly what you have on your mind.

CAFFERTY: It's a four hour show. We have time to do these things over, right?

BLITZER: We've got time.

We've got time.

We've got time.

CAFFERTY: Border Patrol agents didn't arrest as many illegal aliens trying to enter the country last year. A new government report shows the arrests actually declined 8 percent from the previous year, the first decrease since 2003.

Homeland Security Secretary Michael Chertoff says there have been fewer illegals crossing the border and he credited the administration's strategy of rapidly deporting almost all non-Mexican border crossers. Chertoff says the Department added almost 2,000 Border Patrol agents in the last year, as well as fencing and electronic sensors.

Now, when you consider roughly a million illegal aliens enter this country every year, a reduction of 8 percent means only about 920,000 of them got through. Not exactly a home run, I wouldn't say.

Critics say that Chertoff's announcement is just part of the administration's effort to please its conservative base going into these elections.

So here's the question -- what does it mean that Border Patrol agents arrested 8 percent fewer illegal aliens trying to enter the U.S. last year?

You can e-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile.

BLITZER: Here's my question for you this hour.

CAFFERTY: Yes?

BLITZER: What does it mean that a week before the election, John Kerry's controversial comments all of a sudden becoming an issue?

CAFFERTY: Why is John Kerry speaking anywhere about anything?

What does he symbolize when it comes to the Democratic Party?

Failure. He lost the election in 2004. John Dean should have said John...

BLITZER: Kerry.

CAFFERTY: Howard Dean -- John Kerry. Howard Dean, the guy who runs the -- presumably -- runs it, said go get on your boat, go fish. Go play soccer. Go out and commune with nature. Sit in the woods until the election is over. Please don't talk. Please don't have your picture taken. Just go away.

He symbolizes failure. You know, watching the Democrats trying to snatch from the jaws of victory is a spectator sport in this country, and here they go flirting with it again. I mean it's mind -- why is he talking to anybody?

BLITZER: He's a United States senator.

CAFFERTY: But, fine. Wait until the election is over.

BLITZER: Jack.

CAFFERTY: It's not helping.

BLITZER: Thank you.

CAFFERTY: You're welcome.

BLITZER: Up ahead, a veteran Democratic congressman in a verbal smack down with the vice president of the United States. Congressman Charlie Rangel standing by to join us live right here in THE SITUATION ROOM to talk about his war of words with Dick Cheney.

Also, the frights won't end tonight. Both Republicans and Democrats are using scare tactics to try to win votes. Our political analyst, Bill Schneider, standing by to take a closer look.

Plus, dead man voting -- thousands of deceased New Yorkers -- guess what -- still registered to vote.

Will they haunt the mid-term election, now only a week away?

We're live from CNN election headquarters in New York and you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Key to American democracy is the notion of one person, one vote.

But what if that person can't make it to the polls because he or she is dead?

Apparently, death won't stop some from being buried on one state's voter database.

Mary Snow is here in New York in THE SITUATION ROOM to tell you what's going on.

What is going on?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, perhaps it's fitting on Halloween that we're talking about ghost voting. And it's not a new election worry.

What is new, though, is a voter database here in New York. The state has lagged behind the rest of the country and its voter registration list is coming under the microscope.

(BEGIN VIDEOTAPE)

M. SNOW (voice-over): It's a suspicion that's haunted elections past.

But could the names of dead people potentially be used in present elections?

That's a question posed by the "Poughkeepsie Journal" of New York. It did its own analysis of the state's new database of 11 million plus registered voters.

JOHN FERRO, "POUGHKEEPSIE JOURNAL": We found that in New York State, in its voter registration database, there were as many as 77,000 people who were deceased but were still registered to vote.

M. SNOW: Reporter John Ferro says make no mistake -- the analysis is not an exact science. And he says he did not find any fraud, but says his investigation points to the possibility of it.

FERRO: Our report quantifies, if you will, or gives an estimate, for the first time, of the potential for fraud involving deceased registered voters in this brand new database.

M. SNOW: That database is only three months old.

A spokesman for the Board of Elections was unable to appear on camera for an interview, but told us that he was concerned by the paper's results. He added that the board will complete its own analysis by May of 2007.

Doug Chapin, of the non-partisan group Electionline.org, says he's not all that surprised by the findings.

DOUG CHAPIN, DIRECTOR, ELECTIONLINE.ORG: It's worth looking carefully at, but I don't think all 77,000 of those people are going to rise from the dead and descend on the polls on election day.

M. SNOW: Chapin says suspicions about dead people voting are nothing new and swirled in Chicago following the election of John F. Kennedy. Chapin says more often than not, it's more fiction than fact.

CHAPIN: You hear stories about, perhaps, in the 1960 election, whether or not there were some dead voters who turned out to vote on election day. Rarely proven, often repeated.

M. SNOW: And it's being repeated again in an election year with so many tight races where everything is coming under scrutiny. To illustrate the point that every vote counts, analysts look to the 2004 governor's race in Washington State that had two recounts.

Democrat Christine Gregoire was ultimately named the winner, with a 133-vote victory.

(END VIDEOTAPE)

M. SNOW: Now, the voting expert we spoke with says it can take anywhere from a few months to a few years to remove the name of someone who died from voting rolls, stressing the importance of modernized voting systems to update those lists -- Wolf.

BLITZER: Mary, what a story.

Thanks very much.

Mary Snow reporting.

Here, when Americans step inside the voting booth next Tuesday, many will be encountering voting machines unlike any they've ever seen before. That challenge, paired with new laws requiring voter identification may actually complicate matters in some of the close races across the country.

A new report says a number of states remain vulnerable to such voting problems.

Let's go to our Internet reporter, Abbi Tatton.

She's standing by -- Abbi.

ABBI TATTON, CNN INTERNET REPORTER: Wolf, that report from the non-partisan Web site Electionline.org -- this was established after those infamous voting problems in 2000.

This site lists the various voting systems used around the country. And you can see the wide variations -- punch cards, the popular optical scan ballots and the new electronic voting systems that some voters may never have seen before.

Now, this site has links -- official links -- to each of the states so you can see what to expect before heading to the polls. And some of those states, like Ohio here, they have walkthroughs of how to use their new systems here. Thus, you can practice before you head here. This is the touch screen voting from Ohio. But they're not all touch screen. Depending on the state, you're going to see different technology.

There's a scroll wheel being used in some of them. I can demonstrate how it's used here. You can scroll through the entire ballot to navigate like this. This might be a little bit of challenge if you want to write in a candidate. Look at how that works. You have to select each letter as you go along.

Now, this is being used in the Texas 22nd Congressional District. One election administrator there tells CNN over 60 percent of the voters heading to the polls may never have seen this before. This is also the seat being vacated by Tom DeLay, where Democrat Nick Lampson is leading Republican write-in candidate Shelley Sekula-Gibbs, who has been mounting a campaign trying to educate people as to how to use the technology -- Wolf.

BLITZER: Abbi, thank you.

Abbi Tatton watching this important story for us. And we're going to stay on top of this throughout our coverage over the next week.

The president of the United States, by the way, right now speaking in Perry, Georgia at a campaign rally. We're watching what he's saying and we're monitoring his words. We expect him to lash out at Senator John Kerry over some of his earlier remarks. We'll bring you that once we get it.

Still to come, though, with a week to go until the mid-term election, partisan sniping reaching new levels. We'll speak about it with Democratic Congressman Charles Rangel. He's in an increasingly bitter war of words with the vice president, Dick Cheney.

Plus, some of the most frightening things you'll see this week have nothing to do with Halloween. We're going to show you some of the scare tactics both parties are using.

We're live from the CNN election headquarters in New York and you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You're in THE SITUATION ROOM, where new pictures and information are arriving all the time.

Happening now, a senator who was once Swift-Boated is once again under political attack. But this time Senator John Kerry says he won't back down. Kerry says his recent comments about Iraq were meant as a swipe at the Bush administration, not as an insult to American troops. And Kerry says Republicans interpreting them that way are simply, in his words, "crazy."

Former Democratic Senator Max Cleland of Georgia defending his fellow Vietnam War veteran. In a statement, Cleland says anyone who thinks a veteran would criticize American troops is really trying to exercise a "partisan political agenda."

Meanwhile, President Bush set to call Senator Kerry's comments shameful. He's speaking right now while campaigning in Georgia. He released earlier some transcripts, some excerpts, of his -- of the speech. The president says he will call on Senator Kerry to apologize to the American troops.

I'm Wolf Blitzer and you're in THE SITUATION ROOM.

Neither has been known to back down from a political fight. Indeed, both seem to enjoy that kind of thing. But now they're going head to head once again -- the vice president, Dick Cheney, and Democratic Congressman Charlie Rangel.

CNN's Deborah Feyerick is here talk to you soon what's going on -- Deb. DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, Congressman Rangel's camp says Republicans are trying to scare the country by lying about what might happen to current tax cuts. But the vice president's people say they're simply talking about a tax policy which has helped the economy, one that could be threatened if the Democrats win.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): They are two Washington veterans -- one staunchly conservative, the other staunchly liberal. And both are determined to sway voters with their differing views on the future of the economy.

Making the TV rounds yesterday on CNBC's "Kudlow & Company," Vice President Dick Cheney warned that Democrats would reduce taxes and that Congressman Charles Rangel, as head of the powerful House Ways and Means Committee, would destroy the economy.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: He doesn't believe there's a single one of the Bush tax cuts that ought to be extended, and I think that would be bad for the economy. I don't know if the stock market would like it. I don't think they would.

FEYERICK: The vice president has repeatedly accused Rangel of not understanding Wall Street. It appears the congressman reached his limit yesterday, calling Mr. Cheney an "SOB" and suggesting the vice president get psychiatric help for "whatever personality deficit he may have suffered."

Stronger words than he has publicly used before.

REP. CHARLES RANGEL (D-NY), CHAIRMAN, WAYS AND MEANS COMMITTEE: Once again, the vice president hasn't the slightest clue about what he's talking about. He's never talked with me -- and neither has anyone in the administration -- about taxes.

FEYERICK: Rangel's spokespeople did not deny the comment, which first appeared in a New York paper. When CNN asked about the strong language, the White House said this.

T. SNOW: I asked the vice president about it today and he had a big hearty laugh. I mean he knows Charlie.

FEYERICK: Congress will have to decide whether to continue President Bush's current tax cuts, which expire in 2011. Congressman Rangel has said any decision would have to be bipartisan.

(END VIDEOTAPE)

FEYERICK: Now, the vice president's spokeswoman would not comment specifically on Rangel's strong language, saying they were talking about tax policy and what is a substantive issue -- Wolf.

BLITZER: Deb, thanks very much.

Deborah Feyerick reporting.

So what do we make of this high powered feud over the economy? And what happens if the Democrats do take over the House of Representatives?

Joining us now, two key members of the House Ways and Means Committee.

The New York Congressman, Charlie Rangel, who would likely become the chairman if the Democrats take over, and Republican Congressman Eric Cantor of Virginia. He's in the Republican leadership in the House of Representatives.

Congressmen, thanks very much for coming in.

And let me start off with you, Charlie Rangel.

What do you make of the latest comments that the vice president is making and your quotes in the "New York Post" today, in which you lashed right back?

RANGEL: Listen, Dick and I are old friends and I'm certain that he's not offended by that language. Remember, not too long ago he asked one of my colleagues in the Senate to commit a sexual act upon himself.

But I was really surprised he would single me out as one that could destroy the economy.

But I know one thing, that after the election, Democrats and Republicans are going to have to sit down and work these things out. It's good for the Congress. It's good for the country. But all of this is campaign rhetoric.

BLITZER: Well, let's listen to this other quote from the vice president directly going after you, Congressman.

I want to play it for our viewers.

(BEGIN VIDEO CLIP)

CHENEY: If Charlie Rangel were chairman of the Ways and Means Committee, Charlie said there's not a single one of the Bush tax cuts he thinks should be extended and he could achieve that objective just by simply not acting. I think Charlie doesn't -- doesn't understand how the economy works.

(END VIDEO CLIP)

BLITZER: All right, strong accusation. You don't understand how the economy works. And American's taxes are going to go up if you are chairman of the Ways and Means Committee which is responsible for taxes in the Congress.

RANGEL: That's absolutely ridiculous. As a matter of fact, the one thing that I have been advocating and hoping we can reach some bipartisan agreement is to remove this heavy tax, or the alternative minimum tax that's on middle income people.

What he is talking about is taxes that's going to expire in 2010. Well if the president wants to simplify the tax system, and I think the members of the committee in the Congress would want to do it, everything has to be on the table. He knows that, and all the members of the committee know it.

BLITZER: Does Congressman Rangel, Congressman Cantor understand how the U.S. economy works? Does he understand tax policy?

REP. ERIC CANTOR (R), VIRGINIA: Well, you know, good to be on, Wolf, and with my friend Charlie. I think that certainly he is a veteran on the Ways and Means Committee. But I would tell you I love to hear the bipartisan talk from Charlie Rangel today. Because you know, it is my understanding, Charlie that you haven't committed one way or the other on renewing any of the Bush tax cuts.

And given that and given the fact that you and your colleagues on the other side of the aisle refuse to help in any way to pass the Bush tax cuts, would have been largely responsible for the prosperity that we have seen across the board, including middle America here. Our question really where you are, too, Charlie?

RANGEL: Eric, you know as well as I do that these tax cuts do not expire until 2010. And we have so many and the alternative minimum tax, that's on the taxpayers now. So don't you really think it makes good economic sense to see what the economy looks like before we get to 2010? I think it's irresponsible to say that you are going to have tax cuts in 2010 without dealing with the problems that we have today.

CANTOR: Well surely, everything was on the table prior when you worked with Chairman Thomas to try and craft a tax package that would be to the benefit of Middle America. And in fact, Middle America, the average American family actually does receive a benefit on these tax cuts. And there are about 15 million Americans that will receive a $2100 tax increase if we don't act affirmatively to extend these tax cuts Charlie, you know that.

RANGEL: But this is not the time -- you are talking about 2010. We've got problems that we have to take care of perhaps before then. We have the social security system. The Medicare system, the tax reform system. And so I'm 76 years old. You're a young man, you can talk about 2010 and 2020. But what we should be talking about in this election is how we've got to work together with a common agenda.

CANTOR: Well listen, I'm all about that kind of talk from you, Charlie. I mean look, we've had a lot of discussion on all of these issues. And frankly, your side of the aisle has been absent. When we talk about entitlement reform, we talk about social security reform, we talk about tax reform, there's been absolutely no willingness nor any record to point to by you and your colleagues.

RANGEL: This may shock you because you and I have always gotten along, but listen carefully, Chairman Bill Thomas has never discussed with me any tax policy or any trade policy. That does not mean that these things can't change when he leaves. But take my word for it, no one discussed with Democrats these policies.

BLITZER: I want both of you to stand by for a moment. I just want to dip in very, very quickly. President's speaking at a campaign rally in Georgia right now. He is speaking about Iraq and I want to continue this conversation on Iraq. Let's listen in briefly right now to hear what the president is saying.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The enemy changes, we change. We got a lot of good things going for us in Iraq, starting with one of the finest United States militaries ever.

(APPLAUSE)

BUSH: In the midst of a heated campaign season, there are some things we should all be able to agree on. And one of the most important is that every one of our troops deserves our respect and our gratitude.

(APPLAUSE)

BUSH: Yesterday, my opponent in 2004 presidential race, Senator Kerry, was speaking to a group of young people in California.

(BOOING)

BUSH: I want you to listen to what he said. He said, you know, "Education: If you make the most of it, you study hard, you do your homework, and you make an effort to be smart, you can do well; if you don't, you get stuck in Iraq."

(BOOING)

BUSH: The senator's suggestion that the men and women of our military are somehow uneducated is insulting and it is shameful.

(APPLAUSE)

BUSH: The members of the United States military are plenty smart. And they are plenty brave. And the senator from Massachusetts owes them an apology.

(APPLAUSE)

BUSH: Whatever party you're in, in America, our troops deserve the full support of our government.

(APPLAUSE)

BUSH: And I don't have any doubt that Mac Collins will stand strong for the men and women who wear the uniform of the United States.

BLITZER: All right, the president of the United States as advertised going after Senator John Kerry for comments he made yesterday. John Kerry insisting he botched a joke about the president and his policies on Iraq. And the president like John McCain, like Tony Snow earlier at the White House, saying that John Kerry owes the men and women of the U.S. military an apology.

Charlie Rangel, you served with distinction in the U.S. military during the Korean War. What do you say about this latest uproar that's now taking place only a week before the election involving Senator Kerry's comments?

RANGEL: It's an uproar only because the administration can't find anything substantiative to defend the disaster that they created in Iraq. Senator Kerry is a decorated war hero and those of us who have served have nothing but respect for those people, those brave men and women that are in Iraq. The only thing they are trying to do is to look for an issue to bail them out of the falling polls that surround the Republican Party.

BLITZER: All of the polls show Congressman Cantor, that this issue of Iraq is badly hurting Republicans across the country. Americans are not happy with the way this war is unfolding right now. And I want you to respond to that charge that the White House now trying to simply go ahead and score some political points, knowing that the focus on Iraq is hurting Republican candidates.

CANTOR: You know, Wolf, I couldn't disagree with my friend Charlie any more. I think that Senator Kerry's statements were a new low. You know, unfortunately there really isn't any vision coming out of the Democratic Party as far as Iraq. There is a uni-dimensional strategy that is withdraw now. And that in fact would end up giving Iraq to the terrorists. And we cannot allow that oil-rich state to become a terrorist state.

But I think that if you listen to Senator Kerry's statement, it is not only an attack on our troops' patriotism, but it is their intelligence. I mean come on, there are thousands if not more of Americans that have benefited from the GI bill having served our country that have gone on to higher education and developed careers in this country. Senator Kerry owes our troops an apology.

BLITZER: All right. We are almost out of time. Congressman Rangel, I'll give you the last word. Go ahead.

RANGEL: Well, I really think the apology should be owed to those men and women over there by the administration. They don't know what victory is. They have no clear reason why they're there in the first place. But Eric, you did mention oil a couple of times, and maybe that's the key to the whole thing. But we should get our troops out of there and let those people in the region settle their own problems in their own way.

BLITZER: Charlie Rangel and Eric Cantor, thanks to both of you for coming in with one week to go before Election Day. Appreciate it very much.

CANTOR: Thank you.

BLITZER: And still to come, Osama bin Laden and the threat of terror in commercials. Are they ads meant to scare you into voting one way or another? Our senior political analyst Bill Schneider reports of some very scary politics. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back. They are not conjuring up ghosts and goblins but the candidates and the campaign managers are trying to put a spell on you with some very frightening images. Let's get some details from our senior political analyst Bill Schneider. Bill?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, it's getting pretty scary out there. And not just because it's Halloween.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Be afraid, be very afraid. That's the big political message this Halloween. One ad produced by the Republican National Committee features the scariest figure of all. The Democrats' message -- don't be scared.

BUSH: Bin laden. Bin laden. Bin laden.

SCHNEIDER: Let us scare you, say Democrats.

UNIDENTIFIED MALE: George Bush says he's going to try to privatize social security again next year.

SCHNEIDER: Republicans are trying to get their supporter's juices flowing by creating fear of Democrats.

UNIDENTIFIED MALE: This election isn't about Nancy Pelosi or Hillary --

UNIDENTIFIED FEMALE: Sorry Brad, that's exactly what it's about. If Ellsworth is elected, he could put liberal Democrats in charge of Congress.

SCHNEIDER: Now here's something we can all be afraid of this Halloween. The election could come down to one or two seats. With all those new voting machines, we could have disputed results, challenges, recounts. And scariest of all --

DEB MARKOWITZ, VERMONT SECRETARY OF STATE: In the targeted areas where there's targeted races, the political parties are getting teams of lawyers ready to go in.

SCHNEIDER: Lawyers.

(END VIDEOTAPE)

SCHNEIDER: They say every election presents a choice between fear of the unknown, and fear of the known. Pretty scary, huh boys and girls. Wolf?

BLITZER: That's pretty frightening with all those lawyers getting ready to move into ...

SCHNEIDER: My goodness. BLITZER: Thank you, Bill, very much. Still to come, major new developments in the North Korean nuclear crisis. We're going to have details of what North Korea says it's now willing to do. Plus, Jack Cafferty is standing by. He wants to know what does it mean that border patrol agents arrested eight percent fewer illegal immigrants trying to enter the United States last year. Jack, with "The Cafferty File." We're live from New York, CNN election headquarters. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Lou Dobbs getting ready for his program that begins right at the top of the hour. He's here to give us a preview.

LOU DOBBS, CNN ANCHOR: Wolf, thank you very much, good to see you. Coming up at 6:00 p.m. tonight here on CNN, we'll be reporting on shocking new concerns about e-voting, one week before Election Day. E-voting machines that could actually give your vote to the wrong candidate and the wrong party. Other than that, they are doing fine. We'll have that special report.

And the illegal alien amnesty lobby and the ACLU launching a last-minute effort to stop a community from taking action against illegal alien employers and landlords. That lawsuit could have implications for communities all across the country, angry about the federal government's refusal to deal with illegal immigration and our lack of border security. We'll have that story for you.

And Senator John Kerry, well, he's done it, sparking outrage after saying students who don't work hard could get stuck in Iraq. Has Senator Kerry seriously damaged the Democratic Party's prospects in these midterm elections? Is he an elitist? Three of the country's brightest political minds join us to assess the impact. We hope you'll be with us at the top of the hour right here on CNN. Wolf?

BLITZER: Is this a little story or a big story, what's going to be the impact?

DOBBS: I've got to believe that the Democratic Party right now is wondering why they unleashed their defeated presidential candidate. This is one of the most arrogant, and in my opinion one of the most elitist statements that could have been made. And I have news for Senator Kerry, there a lot of E-4s and E-5s out there who are a lot smarter than he is.

BLITZER: Thanks very much, we'll be watching.

DOBBS: Thank you Wolf.

BLITZER: Lou, coming up at the top of the hour. Up ahead, border patrol agents arrested eight percent fewer illegal immigrants trying to enter the United States last year. Jack Cafferty wants to know, what does it mean? He's standing by with The Cafferty File.

Plus, all eyes on the White House, or at least all eyeballs. CNN's Jeanne Moos has details of a Halloween prank that's coming up in our 7:00 p.m. eastern hour. We're live from CNN election headquarters here in New York and you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Just a week before the midterm election there's a major new development in the crisis sparked by North Korea's nuclear test this month. The country now says it will return to the so-called six- party talks on its nuclear program that it abandoned almost a year ago. Let's turn to CNN's Zain Verjee, she's watching the story for us. Zain?

ZAIN VERJEE, CNN ANCHOR: Wolf, even enemies have to hold their noses and talk. Sometimes when that happens, there are results.

(BEGIN VIDEOTAPE)

VERJEE (voice-over): The U.S. and North Korea, talking at the table with China as their chaperone. After seven hours, they strike a deal and agree to return to stalled six-party talks. A breakthrough in the nuclear stand-off, but Washington's still cautious.

CHRISTOPHER HILL, ASST. SECRETARY OF STATE: As someone who has been involved in this, I have not broken out the cigars and champagne quite yet, believe me.

VERJEE: U.S. envoy Chris Hill says there are no conditions to coming to the talks, which he hopes will take place in Beijing by the end of the year. But for now, the U.S. says it will push ahead on enforcing the U.N. Security Council resolution that punishes North Korea for testing a nuclear device.

BUSH: We'll be sending teams to the region to work with our partners. To make sure that the current United Nations Security Council resolution is enforced. But also, to make sure that the talks are effective.

VERJEE: Talks in September of 2005 produced a declaration seen as a diplomatic breakthrough. North Korea had committed to end its nuclear program in return for a package of economic and security guarantees. But it never happened because financial sanctions and other issues got in the way. Still, that agreement will serve as a basis for the next round of talks. But experts warn there needs to be a clear way forward when the parties get to the table.

BONNIE GLASER, CTR. FOR STRATEGIC & INTL. STUDIES: Chris Hill I think has to have in his pocket a road map for implementation.

VERJEE: And experts say, something meaningful. North Korea wants to talk about lifting financial sanctions. The U.S. says it's willing to address that issue, but offered no guarantees.

MIKE CHINOY, PACIFIC COUNCIL ON INTL. POLICY: The U.S. administration given the events of the last few months, the missile test, the nuclear test, is in no mood to be seen to be rewarding what it views as North Korean bad behavior.

(END VIDEOTAPE) VERJEE: Many regional analysts say that North Korea after missile tests in July, after its recent nuclear test is in a much stronger bargaining position than it was before. Wolf?

BLITZER: Zain Verjee, thank you. Up next, Jack Cafferty is back with your e-mail on illegal immigration and what U.S. border patrol agents are trying to do about it. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Check back with Jack Cafferty. Hopefully his microphone is working right now.

CAFFERTY: If it isn't, it won't be any big loss Wolf. Don't worry about a thing. The question this hour is what does it mean that border patrol agents arrested eight percent fewer illegal aliens trying to enter the U.S. last year. Gina writes from Naples, Florida.

BLITZER: Hold on, Jack.

CAFFERTY: This mic's not working?

BLITZER: Put this on your tie. Just put it on.

CAFFERTY: You know, I started in Reno, Nevada and they had a better technical operation than this. I'm nervous to be standing this close to you.

BLITZER: Go ahead.

CAFFERTY: Gina writes from Naples, Florida, "I can't believe this. The border patrol has probably apprehended eight percent fewer illegals this year because they are as sick as the rest of us of the revolving door through which illegals enter and exit the so-called system almost simultaneously. Undoubtedly the prison sentences just imposed on two of their fellow guards simply for trying to do their jobs must also have dampened their enthusiasm."

Robert in Texas writes, "It means nothing, it's an empty statistic, it only has meaning if one knows the number that attempted to get through and the number that actually got through, both of which are unknowable. It's true once more, that meaningless statistics are up 98 percent and the Bush administration is the reason why."

Tony in Canyon Lake, Texas, "Jack, you ought to know by now this or any administration can put out any statistic they want! How could we, us peons out here in never-never land ever say that they are wrong! I myself highly doubt that they did what they are claiming to have done!"

Diane in Houston, "It means the border patrol is catching fewer illegal aliens. We haven't noticed any fewer illegal aliens here in Houston."

And Pete in Stockbridge, Georgia, "Whatever it means, don't ask John Kerry. He's what we in the south call an educated idiot. Unable to speak clearly and plainly, he once again sticks one foot in his mouth, shoots himself in the other and torpedoes his party. Way to go John!"

If you didn't see your e-mail here you can go to CNN.com/CaffertyFile where you can read some more of these online.

BLITZER: A lovely microphone. Thank you, I'm going to walk back here. Put this right there. Button my jacket and say good-bye to our viewers.

CAFFERTY: This is working real well, isn't it?

BLITZER: We're going to be back for an expanded two-hour edition of THE SITUATION ROOM, 7:00 p.m. eastern, 7:00 to 9:00 p.m. eastern. Paula Zahn will be here with us. Until then, thanks very much for joining us, I'm Wolf Blitzer in THE SITUATION ROOM. Let's go to "LOU DOBBS TONIGHT", Lou is standing by right now -- Lou.

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