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CNN LIVE EVENT/SPECIAL

Clinton-Obama War Escalates; Interview With Former Massachusetts Governor Mitt Romney

Aired January 14, 2008 - 20:00   ET

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


JOHN ROBERTS, CNN ANCHOR: And welcome to the CNN ELECTION CENTER.
For the next three weeks, the best political team on television devotes this hour to the presidential race. Why three weeks? Because we're that close to Super Tuesday, when nearly half the states in the nation hold primaries or caucuses.

We're also counting down to some crucial contests before there, starting right here in Michigan, where the polls open in just under 11 hours.

This is the program where you will hear more from the candidates, so you can make smart decisions on Election Day.

Tonight, I will ask Mitt Romney how he would jump-start Detroit's auto industry and keep America's economy from heading down the road to recession.

And, in New York, my colleague Anderson Cooper is holding down the fort at the Election Center there -- Anderson.

ANDERSON COOPER, CNN ANCHOR: John, thanks.

Also in this hour, John McCain and Huckabee weigh in on jobs and your money.

As for the Democrats, the Clinton/Obama fight over race is getting louder and nastier. We're also zeroing in on the new voters and a vital bloc of Michigan voters, Arab Americans. We have a team of correspondents in the key states and the best political analysts on television working overtime.

A lot to get to in the hour ahead, so let's get started with John in Michigan -- John.

ROBERTS: Anderson, thanks very much.

I'm at the Pampa Lanes bowling alley on Van Dyke Street in Warren, Michigan. It's just outside Detroit, just on the north side. It's a favorite hangout for auto workers. You will Ford, Chrysler, and General Motors plants just down the road.

But drive a little bit further, and you will also find rusted, padlocked factories and abandoned foreclosed homes. It's emblematic of Michigan, but it's a concern for the entire country as well as we pick the next president.

CNN personal finance editor Gerri Willis is here with me now.

So, you have had a chance to look around for a couple of days now, talk to some folks.

Just how bad is Michigan's economy?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Michigan's economy is suffering. Unemployment is at 7.5 percent, compared to 5 percent for the nation. There's a lot of trouble here, a lot of problems.

Keep in mind that, over the last decade, Michigan has lost 150,000 auto jobs. That's 60 percent of the total. That is a lot of jobs. It's really affecting the economy and even housing here. In Detroit, the median price for a house there, John, is $39,000, compared to $210,000 in the nation as a whole, lots of problems here.

The worst thing, more people are moving out than moving in. One economist I talked to said, this is a lost decade for Michigan.

ROBERTS: Do you get the sense, Gerri, that, if more people had the opportunity, they would move out as well?

WILLIS: I think that's exactly -- you put your finger on it. People can't sell their houses because they can't get out of their mortgage loans because the value of the homes have decreased so much.

I spoke to one woman who helps people relocate and she said they're doing as much as they can to negotiate with mortgage companies here.

ROBERTS: So, the big question on voters' minds is, is there anything that can be done and anything that a presidential candidate in particular can do to try to turn things around?

WILLIS: Well, Michigan has already been walking the walk of economic development.

If you go to downtown Detroit today, it looks completely different than it did say 10 years ago. There are casinos, hotels, a total renovation there. They're trying to retrain workers. Those are all the right steps.

But they're also, John, steps that take years and years and years to play out, a very long time. Now, the national economy, which is also suffering, it's only the housing recession that is causing problems. It will work off more quickly, probably, than what's going on here in Michigan.

ROBERTS: And so much of this state, particularly in this area, resolves around the auto industry as well, which has fallen on hard times.

WILLIS: Exactly. Exactly. You see this retrenchment in jobs. As I said, we have lost 150,000 jobs over the last decade. And you have to understand that they're not going to come back. You have to look to new industries to replace those jobs. That's exactly what Michigan is doing.

But, understand, that's a competitive game. Every state in the union is trying to get the really hot-growth jobs, whether that's life sciences, any kind of medical care. Everybody fights for the same employers.

ROBERTS: Difficult times here.

Gerri Willis, our personal finance editor -- Gerri, good to see you. Thanks.

WILLIS: My pleasure.

ROBERTS: Earlier today, Mitt Romney told the Detroit Economic Club that if he is elected president -- quote -- "I will not rest until Michigan has come back."

Romney was born and raised here in this state. His late father, George Romney, was governor of Michigan for three terms, as well as an auto industry executive. He ran American Motors in the 50s and 60s.

This afternoon, Mitt Romney took one of his sons to the Detroit Auto Show, saying his father did the same thing with him 50 years ago.

He also sat down with me to talk about the struggling auto industry and the Michigan and U.S. economies.

(BEGIN VIDEOTAPE)

ROBERTS: Governor, you gave a big speech to the Detroit Economic Club in which you said that Michigan is in your DNA. What does that mean for you personally and for the campaign?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Well, personally, of course, I was born here, raised here. My mom and dad served here.

I still have family that lives here. And I care very deeply about the industries that are here. And I'm concerned about the fact that Michigan is undergoing a one-state recession.

ROBERTS: You said in your speech that the new fuel efficiency standards that President Bush recently signed into law are an anvil...

ROMNEY: Yes.

ROBERTS: ... on the auto industry. President Bush called it a major step forward when he signed the legislation. Was he wrong?

ROMNEY: Well, it certainly adds to better fuel efficiency, which is terrific, and reduces dependence on foreign oil. That's good.

But to the automaker, it's an anvil, because it's a new mandate coming from Washington saying, here's the new number you have to hit. All the vehicles you're making now are outmoded. You are going to have to build new engines, new transmissions, new axles. All these things have to be changed, at the cost of tens of billions of dollars. Good luck.

ROBERTS: Now, you have said that, in your 100 hundred days as president, you would put together some sort of a conference or meeting to try to rebuild the auto industry. You have ruled out a bailout. So, what would you do?

ROMNEY: Well, I ruled out a bailout, but I didn't rule out a workout, which means, let's sit down together and see what kinds of supports we can help provide to the auto industry in the U.S. so it can survive and thrive and during this new changing time, it can come out as a successful enterprise.

And one thing I proposed, for instance, was taking our investment in energy research, in fuel technologies, automotive technologies from roughly $4 billion a year to $20 billion a year. That's a huge investment. It will help move us towards energy independence. It will also help us create the products in the automotive sector that can rekindle the strength of Michigan, Detroit, and a major part of our national economy.

ROBERTS: But, if you want to talk about an anvil on the auto industry, it's these legacy costs that add -- it used to be as much as $4,000 -- now I think it's down to about $1,700 -- to the price of a vehicle over what an imported manufacturer would charge.

How do you deal with that as president?

ROMNEY: Yes, and you're right. And that's something which the most recent contracts have been worked out between the UAW and the companies have actually taken some steps to help alleviate some of that legacy cost. That doesn't all kick in until 2010.

But there are ways that the federal government can help in that regard. One is to finally get a grip on the extraordinary increase in the cost of health care. That's one of the big legacy cost features. I went after that in Massachusetts, was able to put in place a plan that helped get health insurance premiums down, and gets all of our citizens insured.

If we can do that nationally, we help not only Michigan and the auto industry, but the entire nation.

ROBERTS: Got to ask you one semi horse race question here. You like to say you got have two silvers and a gold so far in the primary season.

Michigan is a very important state to you. You were born here. Your father was the governor. If you don't win this state, can your campaign recover from that?

ROMNEY: Oh, sure. If I lost among Republicans, that would tell me one thing. If, on the other hand, the same thing happened as happened in 2000, where Democrats gave the nomination to John McCain, well, why, that might be another.

ROBERTS: It was a combination of Democrats and independents.

ROMNEY: So, I look at each race and make the assessment. But, look, I'm not going to let four states, only four states, decide for 50 states who our nominee ought to be.

ROBERTS: Are you committing to staying in beyond Super Tuesday?

ROMNEY: Oh, I will make all those decisions one by one. But I'm certainly going all the way through February 5 and probably a lot longer.

ROBERTS: Because this is starting to cost you a lot of money.

(LAUGHTER)

ROMNEY: You know, I have raised more money than any other Republican running for president.

ROBERTS: You have put a lot of your own in.

ROMNEY: And I have put a lot of my own in.

And I don't think it would be fair for me to ask my friends to raise money for me, take time off to do it, and not contribute myself. And we have the means to do that. And I don't think there's anything more important I can do with my funds than to try and help America at a critical time.

ROBERTS: Governor Romney, it's always good to see you.

ROMNEY: Thanks, John. Good to see you.

ROBERTS: Thanks very much. Good to sit down with you, sir.

ROMNEY: Thank you.

(END VIDEOTAPE)

ROBERTS: So, there you go. Many people say do or die for Mitt Romney tomorrow in Michigan. But he's committed to stay in until at least Super Tuesday, if not beyond, he says.

Mitt Romney's top opponents here in Michigan are former Arkansas Governor Mike Huckabee, who is running a distant third in the latest polls, and Senator John McCain of Arizona, who has opened up a slim lead.

When I had a chance to talk to Huckabee on CNN's "AMERICA MORNING" today, I asked him about those polls, as well as whether he would consider tapping into America's Strategic Petroleum Reserve to bring down the price of oil and gasoline.

(BEGIN VIDEO CLIP, "AMERICAN MORNING")

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: If you possibly look into using some the oil reserves just as a temporary. But the main thing we have got to do is accelerate our energy independence.

We have literally fooled around for 35 years in this country talking about energy independence. We have not done. And it's high time, and that's why I say, as president, within 10 years we will make this country energy independent with domestically produced energy sources that provide us the capacity to be free.

We have got to restart manufacturing in this country, enforce both sides of our trade agreement. The reason Michigan is hurting so badly is because they're trying to compete against countries that don't necessarily play by the rules.

A third-place finish shows that we're very much contending in this race. But we would like to do even better than that. I recognize John McCain won here eight years ago. Mitt Romney is from here. If people vote for me, they're doing it because they're truly committed to the message that we really need to reset the Republican Party.

We have lost our soul. It's time that we regain it, remind ourselves what made a us a strong party, strong national defense, conservative fiscal policies. But it's also a commitment to those issues of the family and the working-class people of this country, who are the bread and butter every day of this nation's economy.

(END VIDEO CLIP)

ROBERTS: Well, at his campaign stops here in Michigan today, Senator John McCain is telling voters that he has the greatest optimism about the future of this state.

He spoke with CNN's Dana Bash.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Senator, first question is, if there's a voter out there who is voting on the economy here in Michigan and sees Mitt Romney as somebody who says he's Mr. Fix-it, he is a CEO, he gets how to deal with the economy, what is your argument to that voter about why they should vote for you and not Mitt Romney?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: For many years, I have been on the Commerce Committee. I was the chairman of the committee. I had a very close working relationship with the automotive industry. I have worked for R&D tax credits, to make them permanent. I have worked for invasions and advances in technology for the automotive industry.

I'm totally optimistic about their ability to lead the world. I will continue my efforts that have -- that have been to help the automotive industry and make sure that they have a level playing field. I am optimistic about the ability to create jobs. And I know they can do it. And I can have that long record of support of them.

BASH: Do you feel now, on the eve of the Michigan primary, the way you felt on the eve of New Hampshire, when you won?

MCCAIN: No, I -- it's -- the crowds are very big. And they're very enthusiastic. So, I'm encouraged by that.

But I think this is going to be a very close election. I think it's going to be closer than it was in New Hampshire. But I think, here in Michigan, the negative attacks by Governor Romney didn't work in New Hampshire against me, didn't work in Iowa against Huckabee. And I don't think it's going to work here in Michigan or in South Carolina, wherever he continues the negative attacks.

(END VIDEOTAPE)

ROBERTS: Dana Bash on the bus with Senator John McCain today.

And Dana joins me now live from Kalamazoo, Michigan.

And, Dana, if you look at the way that the polls are breaking down, it seems that people in Michigan almost equally appreciate the arguments being made by Senator McCain and former Governor Romney.

BASH: It's really amazing, isn't it? And they really are different arguments. It's sort an extension of what we started to hear in New Hampshire.

It's whether or not you want to go with somebody like John McCain, who is obviously is, because he's a senator, a creature of Washington, who has done things vis-a-vis Washington, vis-a-vis, as he was talking about, his Senate committee, or do you want to go with somebody like Mitt Romney, who more and more and more is pushing the idea that he's an outsider, that he is somebody who gets it from the state perspective and gets it from the business perspective?

And it is incredibly tight. And to see who is going to prevail in that is going to be absolutely fascinating, especially given the fact that Democrats and obviously independents could play a really critical role in tomorrow's primary, John.

ROBERTS: And the two differing messages here on the future of jobs in the auto industry, former Governor Romney saying he believes that he can bring a good many of them back, Senator John McCain saying it would be foolish to think that they can bring those jobs back. He believes that more effort needs to go into retraining people for different jobs.

BASH: That's right.

John McCain likes to call it his straight talk. And he insists he's not being pessimistic; he's being realistic. But, again, that is a main difference between the two of them and the two of their pitches here to voters.

And, as you said, John McCain is saying: Look, I want to say that jobs are going to come back to the automotive industry, but I really don't necessarily believe that's going to be the case. So, let's be realistic. Let's get community colleges involved. And let's get some especially older workers some new jobs.

And Mitt Romney is saying: No, I think we need to find a way to get the automotive industry back up and running.

ROBERTS: Well, a very short time from now, we will find out whose argument wins out.

Dana Bash for us tonight in Kalamazoo -- Dana, thanks.

Now that we have heard from the candidates, it is the voters' turn to weigh in. Some auto workers are champing at the bit to tell us what they really think ails their industry.

The Democratic race keep on getting uglier. Is Barack Obama really guilty of 80 personal attacks against Hillary Clinton? Bill Clinton says he has been keeping a list.

And why are Michigan's Democrats pretty much on the sidelines for this primary? I will ask the state's Democratic governor, who isn't at all happy about the situation.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the CNN ELECTION CENTER, the program where you will hear more from the candidates, so you can make smart choices on election day.

Tonight, we're in Warren, Michigan, with only hours to go before Michigan voters go to the polls. Republicans like Mitt Romney and Mike Huckabee stopped by the Detroit Auto Show, while John McCain attended town meetings today.

We're at an auto workers' hangout tonight. It's the Pampa Lanes bowling lanes here in Warren, just north of Detroit.

Joining me now is Mark Knutson. He's a former auto worker, and Toby Newsom-Perkins, who works for Chrysler, manages a parts plant there.

So, Toby, what's the general mood among you and your peers at the auto industry these days?

TONY NEWSOM-PERKINS, MANAGER, CHRYSLER PARTS DIVISION: Well, it's hard to keep morale high because of all of the rumors circling the auto industry and some of the tough times that we actually have gone through. So, it's kind of hard right now to keep morale up.

ROBERTS: So, people are always hearing footsteps, are they?

NEWSOM-PERKINS: Oh, yes. ROBERTS: Yes?

NEWSOM-PERKINS: Not knowing anything definite.

ROBERTS: So, Mark, what about you? You got involved in the auto industry at the age of 22, I guess not right out of high school, but you tried to get in right out of high school.

MARK KNUTSON, FORMER AUTO WORKER: Yes, I tried real hard.

(CROSSTALK)

ROBERTS: And what drove you to the auto industry?

KNUTSON: Just family. My family came here in 1950. My grandparents came, started Cadillacs from Kentucky. And it's just -- it's the way of life out here in Michigan. That's how we do it.

ROBERTS: Do you think it would have been a job for life?

KNUTSON: Yes. I found for sure, but...

ROBERTS: And what happened?

KNUTSON: Just, at that time, that's when everything was starting to just slow down. And it was time. I had tried to get in twice, did 90 days in and out. I was quitting jobs. I finally just never got a call back.

ROBERTS: You got laid off in 2004?

KNUTSON: Got laid off in 2004. Then I went to another company, which is a supplier to them, was there for a few years, UAW job also, was laid off from that one.

ROBERTS: And then you got out of the auto industry altogether?

KNUTSON: Yes. I was lucky enough to fall into a program with the state.

ROBERTS: So, tell me, a lot of thoughts from people, a lot of analysis. Tell us from the inside what went wrong with the auto industry here in the United States.

NEWSOM-PERKINS: My own personal opinion, I think that we, in years, have focused so much that larger vehicles were better, instead of streamlining and actually taking into consideration fuel costs.

I don't think it's just one particular thing. I think it's just several thinks, whereas the Asian market has focused on -- in those areas for many years, and we have not. So, I think that's part of it.

ROBERTS: Yes, not necessarily labor costs, because a lot of those cars are built here in the United States. But those ancillary legacy costs of health care, retirement...

NEWSOM-PERKINS: Correct.

ROBERTS: ... they drive up the price of the car when it's built by GM, Chrysler, or Ford.

NEWSOM-PERKINS: Correct.

ROBERTS: Mark, what are you looking for from the next president?

KNUTSON: I'm looking for a true interest in our state. Set up some kind of program to help our -- help Lansing out. Help the big three, like they did back when they -- they jumped in and they helped Chrysler. They come in and they really turned Chrysler around.

ROBERTS: So, you're looking for a bailout?

KNUTSON: Not a bailout, just a helping hand. We obviously need something to turn around...

(CROSSTALK)

ROBERTS: Toby, without a helping hand, what's the future for the auto industry here?

NEWSOM-PERKINS: It's hard to say right now.

I think the auto industry, they're taking a look at making a lot of changes. They are streamlining things right now. But I think it's going to take a lot of hard work to get to the point where they want to be.

ROBERTS: So, who do you think, Toby, is the best candidate to address the situation?

NEWSOM-PERKINS: I'm not going to say who the best candidate is, because I'm not sure.

ROBERTS: Who you looking at?

NEWSOM-PERKINS: Democratic, kind of uncommitted right now. I think several of the candidates are good. But...

ROBERTS: Mark, what about you?

KNUTSON: I'm looking at Mitt Romney. He's hometown. He has shown interest. He has definitely shown some interest. And I know he knows the auto industry. His daddy did well here. And I think he's going to probably do pretty well.

ROBERTS: So, you're going to vote in the Republican primary tomorrow?

KNUTSON: Yes.

ROBERTS: Now, the Democratic primary doesn't really count, so what will you do?

NEWSOM-PERKINS: I'm voting. I'm committed.

ROBERTS: To still vote? Really only one person you can vote for, though, if you want to vote for the top three.

(LAUGHTER)

ROBERTS: Mark Knutson, Toby Newsom-Perkins, thanks for being with us.

KNUTSON: Thank you.

NEWSOM-PERKINS: Thank you.

ROBERTS: Now let's head back up to New Hampshire and here's Anderson -- Anderson.

COOPER: Well, John, Michigan goes, as you said, to the polls tomorrow. But in just three weeks on Super Tuesday they are going to be 44 contests.

In California, the state with the most delegates, a CNN/"Los Angeles Times/"Politico" by Opinion Research Corporation indicates the Republican race is a lot tighter than the Democratic one.

Joining me, part of the best political team on television, senior political analyst Bill Schneider and CNN political strategist Amy Holmes.

Thanks for being with us.

Let's talk about the Michigan primary, important because it is an open primary.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: It is an open primary. That's how John McCain won it last time with a lot of support from Democrats and independents.

They have no party registration in Michigan. And I should point out, Mitt Romney just laid down an important marker. He said he might lose the Michigan primary, but he's going to regard the test whether he wins among Republican voters. He says, if he wins among Republican voters, he will regard that as a validation...

(CROSSTALK)

COOPER: It is, though, a very tight race, though, in Michigan, as both candidates know. And the economy really is front and center. They both come at it from different perspectives.

Explain that, Amy.

AMY HOLMES, CNN POLITICAL ANALYST: They do.

And it's more than an issue of tone. People have been focusing on, will the voters like McCain's Straight Talk Express, his tough love, vs. Romney's sort of pragmatic optimism? (CROSSTALK)

COOPER: Right, because McCain has said, look, some jobs aren't coming back. We have got to retrain. Romney says that he's being negative.

HOLMES: Right, and that there's a real distinction there, that Romney is saying that we can bring those jobs back to this country. And he's talking about Michigan. And I think he's doing it in a very clever way of tying it to America's economic woes more generally when it comes to outsourcing and jobs being moved overseas. And he's saying that Michigan is the canary in the coal mine.

While I would add here is that while we're focusing on tone and messaging, there's a real substantive policy here. When McCain says that displaced workers programs have not worked and that what he proposes are job programs, job training, a lot of conservatives, they don't believe that those job training programs work. And Romney's message is one is that far more economically conservative of entrepreneurship and growing jobs.

COOPER: They don't want government-run job training programs?

HOLMES: Exactly.

COOPER: So, in terms of the voters, who is leading -- who gets the better marks on the economy?

SCHNEIDER: Well, Romney does because he has the business experience. He was a former corporate executive.

McCain, economics has never been his strong suit. But he has acknowledged that. But, look, all of these guys are Republicans. There's no real Democratic contest. And they are all relying on the same formula that Republicans have relied on for a long time: tax cuts. They're all proposing tax cuts. And the Democrats are all promoting stimulus plans.

The voters wonder, are these going to work again? They want to hear some new answers.

COOPER: It's interesting, Amy. Mitt Romney is really sticking to this selling point, which he basically developed in the wake of Iowa, which he really developed in New Hampshire, that Washington is broken, that he's not part of the Washington machine, that he's an outsider with a business background who is all about change.

HOLMES: Well, Anderson, I think you could say he's actually returning to that message.

When this campaign first launched and he was up on that stage against all of these other candidates, he did talk about being an outsider, about Washington being fixed and about being a CEO.

But tomorrow night in Michigan is really when rubber hits the road so to speak and whether or not this message works. We know that with Iowa that his social conservatism outreach didn't work when he was up against Huckabee. When he was in New Hampshire, independents went for McCain. So, tomorrow night, where he's really honed his message as an economic fixer, as the guy who can really hold that torch for economic conservatism, this is really make-or-break time.

COOPER: And, if Romney wins tomorrow night, it just makes the race more confusing.

SCHNEIDER: Yes, it certainly does. He becomes, what, the third comeback kid, after Clinton and McCain. If he wins, then you have got three different winners, three different races. Rudy Giuliani is very happy, because he says, hey, there's still room for me.

If McCain wins in Michigan and then perhaps in South Carolina or Nevada, then he's really on a roll.

COOPER: Bill Schneider, Amy Holmes, thanks very much.

For everything you need to know about the candidates and their positions, the polls and more, you can go to CNN's ELECTION CENTER Web site, CNN.com/politics.

Well, they had never voted before, but, this time, they cannot wait. Some first-time voters tell us why they are getting involved and why they say you should, too.

(COMMERCIAL BREAK)

COOPER: Welcome back to the CNN "Election Center." Race has jumped back into the headlines on the Democratic side. In this race, it is a flare-up of racial rhetoric between Hillary Clinton and Barack Obama over the roles of Martin Luther King and President Lyndon Johnson in the passage of the Civil Rights Act more than 40 years ago. Now, critics say it is another case of Democrats fighting Democrats instead of fighting Republicans. CNN senior political correspondent Candy Crowley joins me now from Las Vegas. Candy?

CANDY CROWLEY, SENIOR POLICITAL CORRESPONDENT: Anderson, I can tell you from talking to people all day long, there was some real worry inside the Democratic Party that this back and forth about race not just between the two candidates, but between their campaigns and largely between their surrogates was doing some real damage that might not be able to heal by the time the general election rolled around. It seems as though the candidates may have gotten that message because both of them today seemed to call for a truce.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I may disagree with Senator Clinton or Senator Edwards on how to get there, but we share the same goals. We're all Democrats. We all believe in civil rights. We all believe in equal rights. We all believe that regardless of race or gender that people should have equal opportunity.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: We may differ on minor matters, but when it comes to what is really important, we are family.

(END VIDEO CLIP)

CROWLEY: That last was Hillary Clinton at a Martin Luther King birthday celebration in New York. All of this, Anderson, of course, comes as the Democratic Party begins to turn its attention towards South Carolina, where for the first time a big hunk of the voters are African-Americans -- Anderson.

COOPER: Candy, what was the concern that you were hearing earlier today? That this argument would alienate Democrats just sort of turn them out, turn them off from the process? Or was it independents and Republicans who might be willing to cross over to the Democratic side?

CROWLEY: No, it was within, you know, the Democratic threshold, within that group, where they really thought that this was pitting blacks against whites. And obviously, African-Americans are a huge part of the Democratic Party base. And a lot of people thought that this was trying to pit, you know, an African-American against a woman who has a long legacy through her husband and herself with the African-American community.

So they thought it was dividing up that community and dividing up blacks and whites within the Democratic party. They just thought it had gotten awfully bitter, particularly behind the scenes and really wanted it to stop. Not to mention that both campaigns at this point really would like to be talking about the economy, which they think was a winning issue coming out of New Hampshire. So it may be that both of them not only heard the fears within their own party, but they also looked at the road ahead and thought maybe they weren't being helped -- Anderson.

COOPER: All right. Candy Crowley, appreciate it. Thanks. Candy from Las Vegas. Now, let's go back to John now in Michigan.

ROBERTS: Anderson, thanks. Michigan's governor says her state's voters are mad as hell. I'll ask her why. This is an interview that you don't want to miss.

This year's presidential race is attracting record numbers of first-time voters. We'll ask some why they're getting involved.

(COMMERCIAL BREAK)

ROBERTS: Back now live at the Tampa Bowling Lanes in Warren, Michigan, just north of Detroit as we continue with our "Election Center" tonight.

Democrats and undeclared voters can participate in Michigan's Republican primary tomorrow, but the Democratic primary is essentially meaningless. No convention delegates are at stake because the national party penalized the state for scheduling its primary so early. The top three candidates didn't campaign here. Barack Obama and John Edwards aren't even on the ballot. So what's a Michigan Democrat like Governor Jennifer Granholm to do about it? She joins me now from Lansing, Michigan.

Governor, good to talk to you. Thanks for joining us tonight. I want to ask you about the primary in just a minute, but you've been listening to the program this evening. Let me ask you what ails Michigan voters in 2008?

GOV. JENNIFER GRANHOLM, (D), MICHIGAN: People are mad here because we have unenforced trade agreements and seen unfair trade that has seen our jobs go to Mexico, to China, to India. I'd like to hear any of these candidates talk about what they're going to do to ensure that we don't enter into any more trade agreements that have shipped our jobs away. That's what those Republican candidates need to be talking about.

And that's unfortunately, I'm sad to see that we don't have the full spate of Democratic candidates here because every one of those Democratic candidates would be talking about how they would enforce trade agreements and only enter into trade agreements that are fair and that don't give away the store.

ROBERTS: Has the state Democratic Party, Governor Granholm, done itself a disservice by moving this primary up earlier than February 5th, which was the cut off date that the national party said, if you go before that we're going to penalize you?

GRANHOLM: Well, we're here. We're talking about the economy. We're talking about the things that matter to Michigan citizens. I think that's a good thing. The whole reason why we moved up was so that these issues would be on the front burner, not just of Michigan but of America. We've been -- you know, the Bush administration and the Republicans in Washington have turned a blind eye to Michigan now, since the year 2000.

I'm so glad that people are here talking about it. I don't think we would be talking about it nationally if it weren't for the fact that Michigan is now on January 15th. You didn't hear this emphasis on the economy in Iowa. You didn't hear it in New Hampshire, but you're hearing it now because we moved the agenda forward.

But you know what? It's not just Michigan. This is happening across the country in other industrial states. That's why we need an industrial policy in this nation that will keep jobs here and that will reinvest, and that will retrain people, and that will invest in alternative energies. Not just one, two, or three, but all of them are part of the solution.

ROBERTS: Do you really think that the new president can do all that?

GRANHOLM: You bet. And that's what the Democrats are talking about. I personally, I have endorsed Hillary Clinton because as co- chair of the manufacturing caucus in the Senate, she has a very robust manufacturing policy. Other countries are partnering with their manufacturers to provide health care, to provide pensions, to invest in research and development. This country has not done that. That makes our manufacturers uncompetitive. You know what? There are more cars being built in Ontario this year than in Michigan. And they're not going to Ontario because of taxes. They're going there because Ontario, Canada, provides health care. We need the health care solution to make our manufacturers competitive with other countries.

That's why we need, we need this attention. We have the most challenged economy in the nation. Michigan does. I'm glad that we moved up. I'm glad that this discussion is occurring. I wish that Obama and Edwards had not proactively removed their names from the ballot. They didn't have to do that. But at least two candidates are still on, and I hope that people vote for Hillary Clinton, frankly.

ROBERTS: Governor Jennifer Granholm joining us tonight from Lansing. Governor, thanks very much for being with us.

There are lots of new candidates in this -- there are lots of new candidates in this election. No one who has been president or vice president is running in the primaries. That's the first time that that's happened since 1928, and that is a lot of choices for voters going to the polling station for the first time.

CNN's Dan Lothian checked with first-time voters for the issues that are important to them.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I really like this color.

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): We found 19-year- old Jasmine Manciao (ph), who is 5 months pregnant, picking out paint for her baby's room. A first-time voter with the war in Iraq on her mind, she pulled out her cell phone to show us why. Heywood (ph), her husband, is serving in the army in Iraq.

JASMINE MANCIAO (ph), FIRST-TIME VOTER: Yes. I want him to come home as soon as possible. All of them. Not just my husband, but other people who are missing their fathers and brothers and uncles and cousins. It's just unnecessary. These things -- I always -- all they're doing is promoting more violence. It's not helping.

LOTHIAN: She wants her next president to make ending the war a priority, and is well aware of the power of her vote.

MANCIAO (ph): If I don't vote, then it don't count what I say. I don't have an opinion if I don't vote.

LOTHIAN: 22-year-old student Krishna Patel, a student at Wayne State University in Detroit is also voting for the very first time. She says the economy is her top concern.

KRISHNA PATEL, COLLEGE STUDENT: My mom got laid off since like last two years. It's really bad right now.

LOTHIAN: Patel, a senior, says she and her brother shifted majors to enhance their prospects of employment after graduation. He's going into nursing. She hopes to go into biochemistry.

PATEL: We need to improve our economy.

LOTHIAN: 20-year-old Stephen Forton is working and going to school. He hopes to eventually become a building engineer and says staying on the sidelines was not an option, considering what's at stake.

STEPHEN FORTON, COLLEGE STUDENT: I think education is a huge issue. We do have a choice, and I don't -- I think that a lot of people have an opinion. But unless you act on it or, you know, you do something about it, you know, that doesn't mean anything.

LOTHIAN: It's unclear how influential first-time voters, young or old, could be in Tuesday's primary. What is known is that they're all frustrated with Washington and want their votes to count for change.

(END VIDEOTAPE)

LOTHIAN: The two women that we spoke with said they have already made up their minds. But, John, the one gentleman you saw there in the piece said that he is still undecided. He said he's watching a lot of newscasts. He's reading a lot of newspaper articles because he really wants to make sure that he makes the right choice.

ROBERTS: A lot of undecideds as we saw in New Hampshire. Thirty-eight percent of voters made up their minds in the last three days.

LOTHIAN: That's a big difference.

ROBERTS: Yes. Amazing. Dan Lothian for us tonight. Dan, thanks.

CNN equals politics. And coming up at the top of the hour, presidential candidate Mitt Romney pays a primary visit to "LARRY KING LIVE." But there's much more ahead for the CNN "Election Center."

KEITH OPPENHEIM, CNN ANCHOR: Dearborn, Michigan, considered one of the largest Arab communities outside the Middle East. And in this primary season, experts tell us the mood is shifting. What's happening? I'm Keith Oppenheim. That story is coming up.

(COMMERCIAL BREAK)

ROBERTS: We're back at the "Election Center" from the Tampa Bowling Lanes in Warren, Michigan. Michigan has another block of voters that many Americans may not know too much about. The state is home to hundreds of thousands of Muslims and Arab-Americans. Many of them say they are uneasy with the rhetoric that some Republican candidates are using in campaign advertisements. CNN's Keith Oppenheim reports some Arab-Americans in Michigan are ready to change the way they vote.

(BEGIN VIDEOTAPE) OPPENHEIM (voice-over): Dearborn, Michigan, where every day women in traditional black coverings buy bread on Warren Avenue. This is the heart of Michigan's Arab-American community, some 350,000 strong, one of the largest concentrations outside the Middle East. It's a socially conservative group that largely supported George W. Bush for president eight years ago. That changed dramatically in 2004 after 9/11. And some here say the shift away from Republicans may go even further this time.

OSAMA SIBLANI, ARAB AMERICAN NEWS: If you want Arab-American, the Muslims to vote for a Republican, you have to put a gun to their head and take them to the voting booth and tell them to vote for a Republican.

OPPENHEIM: Osama Siblani is the publisher of the "Arab-American News" in Dearborn. He say the turn off is partly a result of recent Republican ads that he argues link Muslims with terrorism. From John McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The transcendent issue of the 21st century is a struggle against radical Islamic extremism.

(END VIDEO CLIP)

OPPENHEIM: From Rudy Giuliani.

(BEGIN VIDEO CLIP)

ANNOUNCER: A people perverted. A religion betrayed.

(END VIDEO CLIP)

SIBLANI: It's disgusting the community because they are beating on them in order to get the vote.

OPPENHEIM: Siblani's paper is endorsing Dennis Kucinich and Ron Paul, arguing they have reached out to Arab-Americans.

Fatme Nemir says she's picking Kucinich.

FATME NEMIR, VOTER: He's been here in the community. He's been very up close and personal with the people.

OPPENHEIM: For some of these voters the key issue is the war in Iraq, that it's gone on for too long. But not for everyone. Alex Al Shawaly is a construction worker unemployed on and off for two years. He voted for George Bush in the last two elections but now says he'll vote for Hillary Clinton. For him, it's all about the economy.

ALEX AL SHAWALY, VOTER: I'm sorry. Excuse my language. I've been living like hell last eight years ago. Nothing changed.

OPPENHEIM: And you want to get the Clinton years back? AL SHAWALY: Yes, sir.

OPPENHEIM: Keep in mind, Arab-Americans here are a mix of Muslims and Christians. And many still feel more comfortable with Republican candidates who share their conservative values on issues like abortion and gay marriage.

Ali Jawad says he's voting for Romney, at least for now.

ALI JAWAD, VOTER: And now in the primary, I will vote Republican. That is if you come back and ask me in the general election, I don't know which way I'm going to vote.

(END VIDEOTAPE)

ROBERTS: Keith Oppenheim joins us now live. Keith, I was on the campaign trail with Al Gore back in 2000 when he and then Gov. George Bush were actively courting Muslims and Arab-Americans in Dearborn. How much of an impact does this community have when it comes to the vote?

OPPENHEIM: Well, potentially, big. We're talking about 350,000 to 400,000 people. That's right. Those candidates really did speak to the community. But now I think they're feeling more disenfranchised. They are socially conservative in some ways but feeling less enthusiastic about this war. And I think less enthusiastic about the choice of candidates they have on both sides, Republican and Democrat.

ROBERTS: Keith Oppenheim for us tonight. Interesting inside in your report. Keith, thanks. "LARRY KING LIVE" is coming up in just a few minutes at the top of the hour. Larry, who's with you tonight?

LARRY KING, HOST, "LARRY KING LIVE": John, we got a triple bill for you tonight. Republican presidential candidate Mitt Romney will be here. He's fighting for his political life, as you know, in tomorrow's primary.

We'll have the latest on that worldwide manhunt for a wanted marine, the prime suspect in two grisly murders. And then Britney Spears. She's lost visitation rights. We'll get into all of that. All coming up on "LARRY KING LIVE." Let's bowl a frame for me, John.

ROBERTS: All right, thanks, Larry. You're running the gamut. We'll bowl a few frames here. See you in a few minutes.

Michigan's economic worries mirror problems across the nation. We're looking into what that could mean for both parties on Super Tuesday and in November. You're watching "CNN Election Center."

(COMMERCIAL BREAK)

COOPER: Michigan has been called a one-state recession. But the rest of the country seems to be headed that way as well. And CNN's latest nationwide polls now put the economy as issue number one for voters. Joining me now to look at the impact of the stand in the economy on voters and the campaign, Lynnette Khalfani, who's known as the money coach. Financial journalist, Beth Kobliner, and CNN senior political analyst, Bill Schneider. Good to have all of you with us. It is, Bill, now the number one issue.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Yes, it is. So the more issue and more important than that, 61 percent of Americans think the economy is now in recession.

COOPER: And for young people, Beth, it poses pretty big problems.

BETH KOBLINER, FINANCIAL JOURNALIST: Well, absolutely. You know, we are wondering why are all these people running out to vote. This is the first time we're seeing a lot of young people really get active in the process. And one of the main reasons is the economic challenges they face.

They're graduating with college debt of $20,000 in student loan. They're leaving school with thousands of dollars in credit card debt. So they're facing a really, really difficult situation right now, and that's going to enter into all of their decisions in terms of who they're going to vote for.

COOPER: And the debt level, Lynnette, affects everyone.

LYNNETTE KHALFANI, FINANCIAL JOURNALIST: Absolutely. When you look at it, we've heard a lot about the mortgage crisis. Right? People can't afford to save their homes. We're seeing foreclosure rates skyrocketing. Still, credit card debt also a big problem not just for young people but also for, you know, the 50 plus crowd as well.

The typical U.S. family has about $10,000 in credit card debt, so that's hurting people at every level. Even people who are taking out automobile loans are paying $25,000 or more. So I think that's very much on the minds of voters these days.

KOBLINER: And I think you're seeing the consumer spending slowdown. You know, the consumer spending has been the thing that economists for years have been saying when is this going to slow down? You know, is it when gas prices are $40 a gallon? Is it $80 now? It's a $100 a gallon, and we're starting to see. Perhaps they are going to start slowing down.

COOPER: And Bill, in past elections, I mean, when economy has been the issue, that's usually hurt the incumbent.

SCHNEIDER: Majority of the incumbent. Americans believe the president is commander in chief of the economy. He's not. Nobody is commander in chief of this economy. It's too immense. Even the government doesn't control the economy. But Americans vote as if the president does and if the government controls the economy and that often produces really decisive decisions about how elections are done. COOPER: We talked earlier about how Mitt Romney and John McCain are talking about the economy on that. How about the Democrats? I mean, Hillary Clinton and Barack Obama, how do their policies sort of differ?

KHALFANI: Sure. I mean, in a lot of ways their policies what they've talked about recently, in fact, have mirrored each other frankly. You know, Hillary came out on Friday with a $70 billion economic stimulus package. She's concentrating a lot, and she's talking about this a lot, in Nevada in particular, where foreclosures are at record levels. She's talking a lot about saving people's homes.

This is hitting home for a lot of people, you know, when you talk about losing the very thing that you fought so hard to get. Home ownership is an American dream. Barack Obama, likewise, came out with more details. Last fall, we talked about he had a general plan and more specifics on Sunday. A $75 billion economic stimulus package, a $250 tax credit for workers, $250 also for Social Security recipients. Also, $10 billion to help people who are facing foreclosure.

And then he's saying, listen, if we go into recession I'll give you a little more money. Remains to be seen. But I think it's catching voters' eyes.

COOPER: It will be interesting to see in this exit polls in Michigan and also, obviously in South Carolina where the economy stands. You think it will still be number one?

SCHNEIDER: I think it will be number one. And it puts the Democrats in an awkward position because everything that you just described, everything Lynnette was talking about, costs money. And the Democrats for the past 10 years since Bill Clinton, have said that they're now the party of fiscal responsibility and suddenly, they're going to have to bust the budget to pay for these programs, just as the Republicans did to pay for the war.

COOPER: Lynnette Khalfani, thanks so much. Beth Kobliner, Bill Schneider, thanks very much. I appreciate it. You can find more on the Michigan primary tomorrow on the race for president on our CNN "Election Center" Web site. Just go to CNN.com/politics.

Now, Mitt Romney says he has Michigan in his DNA. That's where he was born. Will he have it in his winner's column? Check out pre- election mood when Romney stops by "LARRY KING LIVE" at the top of this hour.

(COMMERCIAL BREAK)

ROBERTS: You get the most news in the morning and the most politics in the morning beginning at 6:00 a.m. Eastern on CNN's "AMERICAN MORNING." We'll be coming to you live from the National Coney Island diner in Warren, Michigan, down the street from the bowling lanes here. And special coverage of the results from Michigan beginning at 7:00 p.m. Eastern tomorrow here in CNN.

That's all for tonight. Join Anderson, "AC 360" tonight at 10. I'm John Roberts. "LARRY KING LIVE"

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