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CNN LIVE EVENT/SPECIAL

Bill Clinton Blasts Obama Campaign, Media; Interview With Presidential Candidate John Edwards

Aired January 23, 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: Good evening, and welcome. Thanks for joining us here at the CNN ELECTION CENTER, where the best political team on television brings you more from the candidates, so you can make smart decisions on your Election Day.
Thirteen days now and counting until Super Tuesday, when almost half of the country will go to the polls. For Republicans, the hottest political real estate today is Florida. Primary voters go to the polls there next Tuesday. McCain, Romney, Huckabee and Giuliani all in Florida. The economy now the number-one issue with the stock market taking such a wild ride.

It's critical to know who has the best plan for your financial well-being. So, we will bring you the information from the Republican side tonight.

First, though, to my colleague Soledad O'Brien with a look at what is coming up in the rest of the show.

Hi, Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: John, good evening to you.

Good evening, everybody.

Former President Bill Clinton turned up the heat, way up, today in the battle between his wife and Barack Obama. He let loose when he spoke to our own Jessica Yellin today. And Barack Obama accused Mrs. Clinton of using double-talk on economic issues. He's holding a rally this hour. We're going to bring that to you live in a just a little bit.

John is also talking to John Edwards tonight, right?

ROBERTS: Yes. There's an outbreak of slash and burn politics in South Carolina. Edwards has plenty to say about the mud fest between his rivals. Plus, I will ask about a critical issue the candidates don't seem to be talking about enough for some people's liking.

But the craziness on Wall Street today did move the economy to the top of the agenda for Republican candidates in Florida.

Here's what they're saying.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And the key to it is, is less spending, lower taxes, and making sure that we incentivize businesses and corporations to invest and to hire.

I think we're going to come up with a package that may not be everything that I want, but it's part of the process. And I think that that will if we can enact it fairly soon will be good for American.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: There's concern that somehow we're going to go into a global recession of some kind. So, this is a worry. There's right now an anxiety that you find as you go across the country.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Obviously the field is narrowing. We're still in it and will be. And that's good news for us. I think Fred's getting out was unfortunately about a week late for us. It would have been helpful if he had done this before. Now, if the rest of them will drop out, we will really be happy.

(LAUGHTER)

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: Our campaign is now in high gear. I think the issues that we're hitting on are the ones that are the key ones for the people of Florida. And the most important is proven leadership, which the people of Florida want. And I think they want someone who understands how to turn around an economy, which I have done before.

(END VIDEO CLIP)

ROBERTS: The candidates tonight in their own words.

Dana Bash and John King are covering the Republican race in Florida. And they report two Republican candidates, Rudy Giuliani and Mike Huckabee, are in trouble and scrambling for supporters of Fred Thompson, who dropped out of the race.

Dana is in Plantation tonight, John in Fort Lauderdale.

John, the big question tonight, where do the so-called Fred-heads go? Do they go to Romney? Do they go to Huckabee or somewhere else?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's a fascinating question, John. And the beeping behind me is the drawbridge coming down here in Fort Lauderdale.

That's one of the big questions. And it might be a bigger question when we move on to the other Southern contests, Mississippi, Alabama, Arkansas. Here in Florida, Thompson's support would be in the northern part of the state, from Jacksonville across to Pensacola, very conservative, borders Georgia and Alabama. Christian conservative voters should be Huckabee territory, but he just set foot here, John.

He's having an event as we speak tonight. It's only his third visit to Florida since South Carolina. He's very short on money. So, few believe he can capitalize, at least immediately, on Thompson's departure.

ROBERTS: Dana Bash, Rudy Giuliani not looking so good in the polls lately. After calling Florida his firewall, what kind of shape is he in?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Not very good shape.

In fact, people here in Florida are going to wake up tomorrow morning and see their "Miami Herald" to see that he is going to actually be tied for third place with Mike Huckabee, who has barely even stepped foot in the state of Florida.

And that just shows you what kind of shape Rudy Giuliani is in, because he has been here in Florida. He has had the stage to himself for weeks and weeks and weeks. As you said, he has made it his firewall.

I actually asked him today, John, why he thinks that the longer he's been here, the more his poll numbers and support for him have declined. He didn't really have much of an answer, except for the fact that he says he's going to continue to push his issues, issues -- even local issues, like talking about a catastrophic fund for people who have lost their insurance or have high insurance premiums.

He's really trying to hone in on the things that Floridians really, really cares about. It's not going to be easy considering the fact that he should know what they care about because he's been here more than any other candidate by far.

ROBERTS: And he is saying to voters down there, hey, if you want economic security, look at what I did in the city of New York. I'm good on the economy.

BASH: Absolutely. And it's been interesting to watch him shift just like all the other candidates have on the Republican side, the Democratic side as well, John, to the economy. You know, he has this placard behind him that says tested. That used to mean about security. That used to mean, remember me, I'm the guy from 9/11.

Now the first thing he says on the stump is, I'm the guy who can turn around a big city like New York. I'm the guy who is going to give you the biggest tax cut, more than anybody else. So, just like the other guys, he's focusing big time on the economy.

ROBERTS: John King, what about John McCain? Certainly, he gets high points on national security, but his credentials on the economy somewhat in question.

Harold Meyerson in "The Washington Post" did an op-ed today, wrote about McCain -- quote -- "As the economy continues to deflate, the prospects for a McCain presidency are deflating as well." Meyerson said that McCain is probably the strongest candidate, but he's worried about whether or not he can pay off on the economy and turn that into votes. KING: Well, certainly, if you cover John McCain in Washington, he's not known for his stance, his involvement, his activism on economic issues. And he understands the problem, John.

If you go to any speech he has here, he's trying to stress that he will cut taxes, he would vote to make the Bush tax cuts permanent, even though he voted against them back in 2001. And what he tries to do is appeal to fiscal conservatives by emphasizing spending, saying he would take the veto pen given to him long ago by Ronald Reagan and use it with relish to wipe out pork-barrel spending.

He's trying to appeal to fiscal conservatives more on the spending side, trying to appease them a bit on the tax side. But he does understand this is a credibility question for him on the fiscal conservative wing of the party. We have seen him with Jack Kemp in recent days, Phil Gramm in recent days, names not necessarily known to most people across America or remembered by most people across America, but they are well-known to people who are involved in fiscal conservatism.

So, he's trying. He understands that's a weakness. And he's emphasizing it quite a bit.

ROBERTS: Florida, a very important state. Could be make or break for at least a couple of candidates.

Dana Bash, John King, thanks -- Soledad.

O'BRIEN: Thanks, John.

Former President Bill Clinton took center stage for the Clinton campaign in South Carolina, while his wife was campaigning in New Jersey.

And talking to Jessica Yellin about the racial back and forth with the Obama campaign, President Clinton hit back.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Long before South Carolina was in play, when we were in Iowa months ago, I never uttered a word of public complaint when Mr. Obama said Hillary was not truthful, enough character, was poll-driven, when he had more pollsters than she did, when he put out a hit job on me.

At the same time, he called her the senator from Punjab. I never said a word. And I don't care about it today. I'm not upset about it.

The only thing I pointed out was that there was substantially no difference in her record than his on Iraq and that he had said, in 2004, there was no difference between his position and President Bush. And he said that was somehow dishonest, but he never answers how it is not accurate.

So, this is crazy. This rhetoric is getting a little carried away here.

They are feeding you this because they know this is what you want to cover. This is what you live for. But this hurts the people of South Carolina, because the people of South Carolina are coming to these meetings and asking questions about what they care about.

And what they care about is not going to be in the news coverage tonight, because you don't care about it. What you care about is this, and the Obama people know that.

So they just spin you up on this and you happily go along. The people don't care about this. They never ask about it. And you are determined to take this election away from them. And that's not right.

(END VIDEO CLIP)

O'BRIEN: Wow. Well, there's a lot to talk about with Jessica Yellin.

He was angry, Jessica. He was really, really angry. We're only playing a tiny portion of what he went to go on and on and on to say. What did you make of his comments?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Look, I think the Clinton campaign wants to win. They don't just want to win nationally; they want to win South Carolina.

And the Obama campaign has been on the offensive this week, really going at Clintons for what they're calling dirty tactics, for playing the race card, for dividing the Democratic Party. That's what Tom Daschle accused the Clintons of doing. And so this is the Clinton campaign's way of hitting back and saying, no, we're not doing it. It's the media.

O'BRIEN: Yes. It was an interesting and kind of long rant against the media. He blamed you, and I think he meant you specifically, in addition to you the media. He went on to say shame on you later on. You're determined to take the election away from the people.

What do you make of remarks like that when really every day we have a back and forth that involves the two candidates and not really the media?

YELLIN: Right. One of the ironies of this race is you see all the candidates out in front of the cameras saying all these positive things, talking about uplift and unity.

And behind the scenes, their campaigns are spinning us with these conference calls and endless e-mails about what the other candidates and the campaigns are doing that's wrong and dirty, a lot of complaints going back and forth. So the public face of the campaigns is totally different in tone from what we're seeing of them.

But I will also say what he's doing it's a classic crisis P.R. tactic, which is, when you're asked about something that you don't want to have to deal with, that makes you uncomfortable, you attack or intimidate the questioner, because that should shame them into silence.

And I think that's part of what's going on here. We all know that race is part of this campaign now. You did a whole special on it yourself. It's out there and it's worth discussing in a thoughtful, substantive way, Friday. But we're not going to avoid it. And so for the president to sort of put it on the media, it's a little too cute by half. But, you know, one understands he's a very smart politician, why he's doing it.

O'BRIEN: Jessica Yellin for us tonight -- thanks, Jessica.

Let's get right to our panel to break it down tonight. Democratic strategist Julie Roginsky is joining us. "Washington Post" columnist Chris Cillizza is joining us. He writes "The Fix." And Robert Gates is the editorial page editor for "The New York Post."

Gentlemen and lady, thank you very much for talking with us.

First, we have got to start with you, Robert, because you were laughing through a lot of what you were listening to as we played that clip of President Clinton. What did you make of that, first and foremost?

ROBERT GEORGE, ASSOCIATE EDITORIAL PAGE EDITOR, "THE NEW YORK POST": Well, you know, in the media -- the media actually, we're uniters, not dividers, because everybody likes to blame us for what the politicians themselves are actually doing.

I mean, this is a classic Clinton campaign operation, where, I mean, it was it was Hillary Clinton who during the debate was making people remember about Barack Obama's -- a fund-raiser for Barack Obama who was involved in a number of hidden deals.

O'BRIEN: Tony Rezko, the slumlord. We will talk about him more in a moment.

(CROSSTALK)

GEORGE: So, it certainly wasn't the media that decided to bring...

(CROSSTALK)

O'BRIEN: Yes, that was a little bit of a bombshell, wasn't it, all of a sudden?

GEORGE: Yes. And, so, of course, President Clinton, of course, is putting the focus on the media, saying, oh, you just love all this kind of stuff, when he...

(CROSSTALK)

O'BRIEN: Jessica called it too cute by half. And I think that was sort of appropriate there.

Let me ask a Chris a quick question.

Do you think it helps, President Clinton, when you have this back and forth? I mean, there are people who in various op-ed columns have said and other people who are high-ranking Democrats have said it's unpresidential. It's inappropriate. It makes them uncomfortable. It makes John Edwards look like the only grownup in the room during the debate. Do you think those are all fair?

CHRIS CILLIZZA, "THE WASHINGTON POST": Well, Soledad, it's fair, but I think what the Clinton campaign is depending on is that there's a difference between what they would classify as sort of the intellectual elites and elected officials think of how Bill Clinton is acting and how rank and file Democrats think of what Bill Clinton is acting.

I think, frankly, they believe that Bill Clinton carries significant credibility still with the rank and file of this party. We forget it sometimes. This is a two-term president of the United States, wildly popular in the Democratic Party.

O'BRIEN: Yes, he's no neophyte. I get that.

CILLIZZA: And I think what they're depending on it, sure, Ted Kennedy is saying he should back off, and Rahm Emanuel is saying he should back off, but the average voter still listens to what Bill Clinton has to say very carefully and the Clinton campaign believes and probably hopes that when he says negative things about Barack Obama, it gives those voters pause that they might not have otherwise.

O'BRIEN: Some of it sticks.

Let me ask Julie a question.

But before you answer the question, I want you to listen to this little chunk of the debate. And the debate was, you know, great TV, right? But there was a lot of this back and forth that you couldn't even make out what people were saying. Listen to a little chunk of that.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: No. Hillary, you just spoke.

H. CLINTON: I did not say anything about Ronald Reagan.

OBAMA: You just spoke for two minutes.

H. CLINTON: You said two things.

OBAMA: You just...

H. CLINTON: You talked about admiring Ronald Reagan and you talked about the ideas... OBAMA: Hillary, I'm sorry. You just...

BLITZER: Senator...

H. CLINTON: I didn't talk about Reagan.

OBAMA: Hillary, we just had the tape.

(END VIDEO CLIP)

O'BRIEN: The net takeaway was, I don't know what anybody is talking about there. They're talking over here each. Ronald Reagan, God rest his soul. He's been dead for a little while.

And there are people who said to me, hello, let's talk about health care. Hello, how am I going to pay for my children's education? Why are they trying to determine who had the nicer thing to say about the now fairly long dead president? Is this going to backfire? Could it backfire?

JULIE ROGINSKY, DEMOCRATIC STRATEGIST: No. This is brilliant on a variety of fronts for the Clintons.

One, it takes Barack Obama off his pedestal. He's no longer this uniter. Now he's down in the mud with Bill Clinton, allowing Hillary Clinton to be in New Jersey today in the New York media market talking a positive message with Super Tuesday around the corner.

O'BRIEN: Good cop, bad cop.

ROGINSKY: Right.

Secondly, and I think very importantly is the fact that what have we learned about this debate through all the media fulcrum? We have learned that Ronald Reagan is somebody that Barack Obama liked, whether rightly or wrongly. And we have learned that Barack Obama somehow is beholden to a slumlord.

Whether that's true or not -- and both of those, by the way, are not true -- that's what the media is getting out there. That's what people are learning about Barack Obama. And meanwhile Hillary Clinton is above the fray. She's talking a positive message. And Bill Clinton, who is still, as Chris said, wildly popular, still very much sort of acting as the attack dog in a primary where he's very popular among the base.

GEORGE: And keep in mind that we're talking at this point about the Democratic primary, and particularly focusing on black voters in South Carolina, where Ronald Reagan is not popular.

(CROSSTALK)

GEORGE: Yes, in the Republican Party obviously, Ronald Reagan is a God figure, but, incredibly, incredibly unpopular amongst the black community. And that is one of the reasons why they're to use this as a divisive wedge between Obama and the black support he's getting. O'BRIEN: We only have a few seconds. And, Chris, I'm going to throw you the last question. And it's is a question that deserves a really long answer and I don't have a lot of time, but here is the question.

This Tony Rezko thing, because Hillary Clinton, who has her own Norman Hsu, right? He is out there. She had to return $850,000. But because she's been the focus of so much scrutiny before, does she kind of get a pass on this? I mean, people roll their eyes when they hear Whitewater. Everybody knows about the $850,000. But you hear slumlord and, suddenly, it's Barack Obama under the microscope. Big problem?

CILLIZZA: Yes. I mean, I don't think she gets a pass, but I do think that what the Clintons will do if all that stuff comes up again is say this has all been litigated in the past. We have dealt with this. Hillary Clinton has been in the spotlight for more than two decades. This is all old news.

The smart thing I think frankly from a purely political point of view that Hillary Clinton did in that debate is she mentioned the name Tony Rezko. And what did that do? If you look at most of the major newspapers in this country today and we're here talking about it right now, Tony Rezko's name got out there.

And I think the reality is that most people do not operate -- they don't look for all the information that exists about Tony Rezko. They think, oh, this seems odd. It's a real estate developer and he has this relationship with Obama and he's a donor and that's probably as far as many people go.

I think that's a smart tactic by the Clintons. If they can't get people to cover Tony Rezko, well, she's just going to say it and force people to cover him. And I think you're going to see that more after South Carolina. Between South Carolina and February 5, it's going to...

(CROSSTALK)

O'BRIEN: Oh, it's not going to end? Is that what you're saying? It's not going to end?

CILLIZZA: Well, as a political reporter, I'm in favor of it not ending.

(LAUGHTER)

O'BRIEN: Oh, yes, I fully understand.

Chris Cillizza, thanks for being with us, Julie Roginsky, also.

And, Robert Gates, thanks, you guys.

ROGINSKY: Thank you.

O'BRIEN: Appreciate your joining our panel tonight. Barack Obama is counting on Saturday's South Carolina primary. That in fact is where he's campaigning tonight. He's getting set for a rally. It's going to begin in just a few minutes. We're going to bring that to you live as it happens -- John.

ROBERTS: Plus, John Edwards, can he pull off a surprise in the state where he was born? I will be speaking with him live coming up.

Also, the Republican candidates turn their attention to issue number one with voters, the economy.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, "THE TYRA BANKS SHOW")

TYRA BANKS, HOST, "THE TYRA BANKS SHOW": But then you're like the underdog now because you're white and a man.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Yes.

BANKS: Who would have ever thought?

EDWARDS: Yes. Well, it's hard to get heard.

BANKS: Yes.

EDWARDS: We have got a couple of candidates who are good candidates, but they get an enormous amount of attention and publicity, and they have got enormous amounts of money.

BANKS: Yes.

EDWARDS: And, so, the result is, I have to really work to be heard.

When I'm heard, which is what you discovered, when I'm heard, people understand that I have this personal energy and passion for what it is I'm trying to do, whether it's health care, creating jobs, doing the things that need to be done for the country.

BANKS: Yes. But what does that feel like, to be a minority and to be a white male?

EDWARDS: It feels like you have to fight for everything you get.

BANKS: Extra hard. Give it to me because I'm a black woman.

(LAUGHTER)

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

ROBERTS: Well, underdog Senator John Edwards is running third in the national polls for the Democratic presidential nomination, behind Hillary Clinton and Barack Obama. Edwards is pinning his presidential hopes on Saturday's upcoming primary in South Carolina, the state where he was born.

John Edwards joins us now from Gaffney, South Carolina.

Senator, good to be with you.

EDWARDS: Hi, John.

ROBERTS: As you were saying there, when you get your message out, people respond. By many accounts, you won the debate that we held there in South Carolina in Myrtle Beach on Monday night hands down. I'm wondering, though, why is that not translating into popular support? You're hovering around 15 percent in the polls there.

EDWARDS: Well, I think, first of all, I was proud to be the grownup on the stage Monday night. And I think that was one of the reasons that we had such an extraordinarily positive response to the debate.

When some of the petty bickering was going on and I kept shifting the thing away from the personalities and the personal bickering to the things that really affect people's lives, like the war and health care, et cetera, people appreciated that. I think it's what they wanted to see.

And you can do that in a tough way. But it must be done. That's what they expect in their president. They want a grownup. And what I have seen happen across the state, John, is everywhere I go, we get bigger and bigger crowds. People are coming to my events and saying, I was for so-and-so or I was for so-and-so and now I'm for you because I watched the debate.

So, I think things are actually moving. We just have to see what happens between now and Saturday. But I'm optimistic.

ROBERTS: A lot of ground to make up between now and Saturday.

You just said that you were the grownup on stage. People expect their president to behave like a grownup. Are you suggesting that Hillary Clinton and Barack Obama are not comporting themselves in a fashion that you would want your president or your presidential nominee to be comporting themselves?

EDWARDS: I think that, first of all, people can make their own judgment about it. I was on the stage myself, so I saw it.

I think there were moments when the debate got into petty and personal, as opposed to -- there's nothing wrong with making distinctions on issues. That's perfectly legitimate. And we all do that. But when it becomes personal and petty, we're not moving things forward and we're not talking about the things that affect people's lives. That's what I mean when I say I was the grownup.

ROBERTS: Well, here's something that affects a lot of people's lives. And I hear from some people who work in this field, and they say they're hearing about the economy, they're hearing about Iraq, but the thing that they're not hearing enough from the presidential candidates on is education.

So, what would you do as president to solve the education problem in this country?

EDWARDS: I would dramatically change No Child Left Behind, so that we evaluate each individual student's progress, with the teachers central to that evaluation, as opposed to what we're doing today, which is using cheap standardized tests to measure one group of kids against another.

I would get help to the schools that are struggling, send in education SWAT teams with the money and expertise to turn the schools around. We have done that, for example, in North Carolina. It's been very successful.

We need universal pre-K, so that every 4-year-old in America starts off on the right track. We ought to go earlier than that to get kids on the right track with nutrition, health care, child care. And then we need second-chance schools.

(CROSSTALK)

EDWARDS: And we're going to give bonuses to teachers who are teaching in the most difficult places, so we can get them there.

ROBERTS: So, you said you have had some success in South Carolina with improving the situation with schools. But there's a school that we're going to visit later on tonight in Dillon, in that so-called Corridor of Shame, that's falling about.

EDWARDS: Yes.

ROBERTS: I think about 50 percent of the students are reading two or three grades below level. There's a dropout rate of 50 percent. What would you do for them?

EDWARDS: Yes.

Well, the first thing you have to do is you have to get -- one of the things that happens, John, with these students is they have gotten so far behind by the time they get to high school that you can't make up the difference. So, you start by getting kids on the right track and keeping them on the right track.

Second, into these schools, you have to get your most talented teachers. So, we ought to have a national teaching university where we give state-of-the-art education to educators, and send those teachers out to the places like Dillon that you were describing.

We also need to give additional incentive and bonus pay, which I just mentioned a moment ago, to teachers who are going to the most difficult places to teach. And then, finally, we need second-chance schools, because in the environment we're in today -- it's exactly what you were just describing -- some kids are dropping out of school. They probably started dropping out when they were in second or third grade. But we have got to have a chance for them to get back in school and finish.

ROBERTS: All right, Senator John Edwards, it's good to talk to you. Good luck on Saturday. Maybe we will check in with you one more time before then.

EDWARDS: I hope so. Thank you, John.

ROBERTS: Appreciate it.

Tonight, Senator Barack Obama is wrapping up a long day of campaigning in South Carolina. He is holding a rally right now in Dillon in that school system we were just talking about. We're going to take you there live. And we will tell you why the site of that rally has become a focal point for the candidates, an area with the unfortunate nickname the Corridor of Shame.

Stay with us.

(COMMERCIAL BREAK)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Forty-seven million people without health care. And if you've got health care --

O'BRIEN: Democratic presidential candidate Barack Obama in South Carolina speaking tonight. Let's listen in to a little bit.

OBAMA: Despite the slogans, millions of children are being left behind because our school systems aren't adequately funded and our teachers aren't adequately paid. And so -- and now as we see a recession potentially on the horizon and we see the subprime lending crisis, so that millions of people are at risk of losing their homes. We understand that unless we right the ship, unless we do something soon, unless we do something now, then we may be the first generation in a long time to pass on an America that's not as prosperous, not as full of potential as the one we inherited from our parents.

O'BRIEN: Barack Obama at a rally today. It just started a few minutes ago. He is talking in Dillon, South Carolina, in the so- called "Corridor of Shame." It's a poverty-stricken area along I-95 there. You look at some of the stats of the school, which he has visited before. August, being the last time.

Middle schoolers, a third are reading three grades below their grade level. Ten percent of the seventh and eighth graders cannot identify all the letters in the alphabet. Huge problems there. That's why education and poverty are such big issues among African- American voters.

That's why Clinton and Obama are actually trying to reach out to people for whom those issues are important. He also, there a moment ago, talked about financial problems. That brings us right to Ali Velshi because, of course, there was a stunning turnaround on Wall Street today. The Dow gaining close to 300 points. It failed, though, to end fears of a possible recession and it's keeping the economy at the top of the political agenda today, again.

CNN senior business correspondent Ali Velshi traveling the country in the CNN Election Express bus. More on the intersection of the stock market, the economy and politics. Hey, Ali, good evening.

ALI VELSHI, CNN CORRESPONDENT: Hey, Soledad. Good to see you. We are traveling across the country. We started in South Carolina on Tuesday. We're headed to California, 2,800 miles, 2,600 miles. We parked for the night here in Little Rock. And what we're doing is we're going out because whether the market is up or it's down, what about the economy is on the minds of Americans. We're asking them.

We stopped to fill this ride up with fuel a few hours ago at a gas station, and right next door there was a Sonic Burger restaurant. The woman who owns that franchise came out to talk to us. She had a lot on her mind, and it put it very clearly into perspective what's worrying her about the economy. Listen to this.

(BEGIN VIDEO CLIP)

VELSHI (on camera): Do you get a chance to your customers? I know it's --

(CROSSTALK)

CHRISTINE BANGEANT, OWNER OF SONIC: Every day. Every day.

VELSHI: So you know what they're saying about the economy.

BANGEANT: Right. Because they're not spending as much money. If they're not spending money, then we're not making money. We're seeing a lot of tax refund money. Right now, that's what we're seeing. The kids that are spending money, the younger people that are spending money, are spending their tax refund money already. So --

VELSHI: Which tells you what?

BANGEANT: They're struggling. They're struggling.

(END VIDEO CLIP)

VELSHI: They're struggling. And this is the message for the candidates that we talked to. They know the economy is the number concern right now of voters. But what about the economy? It's jobs, it's gasoline, it's mortgages, it's interest rates, it's colleges. It's all of those things that affect the way they live their lives.

What people have been telling me is that things are costing them more. Goods at the grocery store are costing them more. Gas is costing them more. They're not making more. They want specific proposals from the candidates about what they do, and they want specific action from the White House that's going to put more money into the pockets of Americans, Soledad.

O'BRIEN: Ali Velshi has parked the bus for the night in Little Rock. Thanks, Ali, appreciate it.

We're going to dig a little bit deeper in the economy, the issue of the economy, with some of the top advisers from the major Republican candidates. Right now, take a look at two of the GOP candidates' tax plans, and we'll have much more right after this short break.

(COMMERCIAL BREAK)

ROBERTS: That's where they stand on the economy. Definitely, voters number one concern now. So joining us tonight are the economic advisers of top Republican candidates. Bill Simon is the director of policy for the Giuliani campaign. Douglas Holtz-Eakin is the senior economic adviser for the McCain campaign. Barbara Comstock is Mitt Romney's senior adviser, and French Hill is finance chairman for the Huckabee campaign. Welcome, all.

Bill Simon, let's start with you. President Bush announces his stimulus plan. The markets tank. Ben Bernanke comes along and cuts the interest rate by three quarters of a percentage point. The markets recover. Is that an indication that it doesn't matter what you do at the White House in terms of short-term stimulus? The Fed is the one that's driving the economy?

BILL SIMON, DIR. OF POLICY, GIULIANI CAMPAIGN: Oh, no, not at all, John. I think what it indicates is this. There's a broad number of fiscal and monetary measures that need to be taken in order to stimulate the economy. The Fed is certainly a very important component of that picture.

President Bush's tax plan, the stimulus plan, is also a very important component. But there are other important components, too, and that's why Mayor Giuliani last week rolled out the largest tax cut proposal in American history, and it was introduced on the floor of the House and Senate today in an extraordinary show of support for the mayor's tax cut proposal.

ROBERTS: But the mayor is not proposing any kind of short-term stimulus. He's relying on long-term growth?

SIMON: Oh, no, not at all. He's relying on both short-term and intermediate term and longer-term measures, too, John. You know, he would say that immediately, the AMT should be indexed, you know, to inflation.

ROBERTS: Yes.

SIMON: He is voting for, you know, immediate cuts in a broad variety of taxes across the board. Simplification of individual rates to three rates from the present six. Reduction in corporate tax rate by 10 percent from 35 to 25. Reduction in capital gains rates. Boy oh boy, eliminate the death tax. Give the death tax the death penalty.

ROBERTS: All right. Bill, let me move on to Barbara Comstock because Mitt Romney is the only candidate so far who's proposing a rebate. This will be in the form of an advance on a reduction in the first tax bracket from 10 percent to 7.5 percent. But he's not proposing giving any kind of a break to people who do not pay income taxes whereas the Democratic candidates would. If you don't give those people, who many people say are the most likely to spend money in their pocket, are you really helping to stimulate the economy?

BARBARA COMSTOCK, SENIOR ADVISER, ROMNEY CAMPAIGN: Well, the rebate that you mentioned is you take the lowest bracket...

ROBERTS: Yes.

COMSTOCK: ... 10 percent, and lower that down to 7.5 percent. So that does give and it's retroactive so it immediately gives, you know, for people who have already paid their taxes in 2007. But another factor that he has in there is to not to eliminate altogether savings for anybody who makes under 200,000. But anyone who is saving their money we're no longer going to be taxing savings. We want to reward savings.

You know, you get less of what you tax. You get more of what you reward. We also, in this uncertain economy, given you have many seniors going back to work, his immediate stimulus plan also talks about eliminating altogether the payroll tax for both the individual and for the employer so that seniors who are forced to maybe go back and get a part-time job, even though they've worked their entire life, they've earned their Social Security, they're not going to have to pay their Social Security again.

ROBERTS: Yes.

COMSTOCK: And they will get the money that they are earning without that owner's payroll tax, which is often. Particularly for lower income people, they often pay a higher payroll tax than they do income tax.

ROBERTS: Let me move on to Doug, if I could. John McCain, sterling credentials on national security. How well he does on the economy is somewhat in question. The "Washington Post" today Harold Meyerson had an op-ed in which he said, quote, "As the economy continues to deflate, the prospects for a McCain presidency continues to deflate as well." Doug, does Senator McCain have a problem when it comes to the economy?

DOUG HOLTZ-EAKIN, SR. ECONOMIC ADVISER, MCCAIN CAMPAIGN: Well, the Democrats have a problem with Senator McCain. That's why he was declared the winner of their debate the other night. Obviously, the election in November, there are great stakes. Is it going to be big government Democrats or control on spending from John McCain? Low taxes that -- a cut for middle class families. Pro-growth tax policies that incentivizes investment and creates jobs. A cut in the corporate tax rates for competitiveness.

You combine that with fiscal discipline, you get the recipe of Ronald Reagan. It's an endorsement that Jack Kemp. It's a plan that Jack Kemp has endorsed. And the Democrats are beginning to, you know, bring liberal criticism because they know what's at stake and they don't want to run against John McCain.

ROBERTS: Yes. French Hill, Hillary Clinton is suggesting that she would have the government play a quote, "more active role" in the economy. Here's what she said. Quote, "I want to give back to the appropriate balance between government and the market." Is more regulation the answer to fixing our economic problems?

FRENCH HILL, FINANCE CHRMN., HUCKABEE CAMPAIGN: No. I think Governor Huckabee would think that would be absolutely the wrong approach. As governor, the first executive order that he signed in 1996 when he became the chief executive of Arkansas, was to create a commission to streamline state government, to reduce regulatory burden, and to come up with ways to deliver government more cheaply, more effectively and to involve the private sector as much as possible.

ROBERTS: Well, let me ask you this question to finish off here because we are beginning to run out of time. Is the economy going to hurt any Republican nominee for president because traditionally in a bad economic year it favors the out party?

HILL: I understand that, but I think the president and the Congress are moving quickly to evaluate what's the appropriate fiscal stimulus in a bipartisan way. They both get it.

ROBERTS: Yes.

HILL: People in this country are hurting. Governor Huckabee has heard that wherever he travels, that people are hurting. They want action by the government. The governor supported the Fed's action. It's an excellent step in monetary policy to get money flowing where it belongs. But the long-term, I think, these candidates need to talk about the long-term. And Governor Huckabee's view is that we ought to quit tweaking with the tax system, as you've just heard my colleagues talk, about and do away with it.

ROBERTS: Yes.

HILL: Abolish the IRS and go to a consumption-based fair tax, which would not penalize savings and investment.

ROBERTS: Yes.

HILL: Would do away with the tax on death, on capital gains tax and would spur American exports, and produce a real positive effect for GDP growth.

ROBERTS: Well, the voters in Florida will have a chance to bring it on who they trust most in the economy coming up on Tuesday. Bill Simon, Doug Holtz-Eakin, French Hill and Barbara Comstock, thanks, all. Tomorrow night, it's the Democrats turn. We're going to run through their economic proposals with their top economic advisers.

"Raw Politics" on our minds tonight, including a brand new report about 935 so-called false statements by the Bush administration. And we go back to South Carolina to the area known as the "Corridor of Shame" because of desperate poverty and crumbling schools. What are people there hoping for from the next president? We'll tell you.

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O'BRIEN: And Larry King is coming up in just a few minutes. Hey, Larry. Good evening. Who's your guest tonight?

LARRY KING, HOST, "LARRY KING LIVE": Hey, Soledad. The tributes for Heath Ledger are pouring in from all around the world. Some of those who knew him are here tonight. And also, Steven Cojocaru. He will talk about his two kidney transplants and, of course, fashion. He's a survivor, by the way, with a great sense of humor. Starting off -- Rudy Giuliani campaigning for his political life. See you at the top of the hour, dear.

O'BRIEN: All right, Larry. We'll see you then. Thanks.

From a study detailing what the Bush administration said about Iraq leading up to the war, to David Letterman fooling around with the hair of a well-coiffed presidential candidate. Tom Foreman has it all in tonight's edition of "Raw Politics."

TOM FOREMAN, CNN CORRESPONDENT: More fuel for the let's change express. The Democrats are crowing. The Republicans are cringing at a new report on the run-up to war.

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FOREMAN (voice-over): Two non-profit journalism groups say the president and company made more than 900 false statements to set up the invasion of Iraq. About weapons of mass destruction, Al Qaeda, the White House has always said we thought it was true at the time.

It is voting time in many of the tsunami Tuesday states. Sure, their primaries are February 5th, but they're already accepting early votes. Campaigns are scrambling. In some places, a quarter of the ballots will likely be mailed in.

The federal deficit has been going down, but the stumbling economy now has it growing again. Now, the bad news. You get to pay for it. Watch both parties get into the blame game fast. And don't touch the hair.

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DAVID LETTERMAN, HOST: Could I just mess your hair up a little bit?

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: You want to? Go ahead.

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FOREMAN: Letterman messed up John Edwards do, which has been ridiculed ever since reports that he spent hundreds of dollars on a wash cut and style.

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FOREMAN: Edwards jokes about it now and that's good because Obama and Clinton are scooping up so many votes, the race is getting hairy for him now. That's "Raw Politics."

O'BRIEN: All right. Tom, thanks.

One particular stretch of rural South Carolina has become a focal point for the campaign. It's an area where the schools are so run- down and so poor, it's become known as the "Corridor of Shame."

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AMANDA BURNETTE, PRINCIPAL: Based on the no child left behind guidelines, we're at the bottom.

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O'BRIEN: What are they hoping for from the next president? We're about to find out. Stay with us.

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ROBERTS: John McCain won the Republican primary in South Carolina. In three days, it's the Democrats' turn. A little bit earlier we showed you a live Obama campaign rally in South Carolina's so-called "Corridor of Shame." It's an area along Interstate 95, mostly poor rural counties with crumbling schools. At least four other presidential candidates have also toured the area. And I recently visited one school that now finds itself in the political spotlight of poverty and dismal education.

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AMANDA BURNETTE, PRINCIPAL: He was standing right over there.

ROBERTS (voice-over): It was a moment of hope for Principal Amanda Burnette. Today, presidential candidate Barack Obama showed up in her school's gymnasium.

J.V. Martin Middle School was the centerpiece of the 2005 documentary "Corridor of Shame,' which unveiled dismal conditions in South Carolina's rural schools, failing and falling apart from a lack of state funding. Students consistently scored 50 to 75 percent lower than the state average in math and reading.

BURNETTE: Based on the no child left behind guidelines, we're at the bottom.

ROBERTS: Burnette is the latest in the long line of principals here. She started last June.

ROBERTS (on camera): How were the students? What was the mood among the students? How were they when you first got here?

BURNETTE: I will say that the students were very beaten down. The faculty and staff were beaten, too.

ROBERTS (voice-over): History teacher, James Moultrie, says students felt abandoned.

JAMES MOULTRIE, TEACHER: They said when they would go off and talk to kids from other schools, it just made them feel bad. They got the impression that we, the people in Dillon County, didn't care that much about them.

ROBERTS: The school is a mish-mash of buildings, the oldest from 1896. They leak when it rains. Plaster peels off the walls.

ROBERTS (on camera): It is a real pungent odor of mold in here.

BURNETTE: Yes, absolutely.

ROBERTS (voice-over): One classroom had to close recently because of mold. Since the documentary, the Dillon school board has made some improvements. Thanks to a petty sales tax in the county. And Burnette has managed to improve reading skills among many students. But there's a long way yet to go. Superintendent Ray Rogers has dreams of finally building a new middle school.

RAY ROGERS, SUPT. DILLON 2 SCHOOL DISTRICT: In 1991, we had new plans up here. This was what we wanted to do, and they had turned yellow from the lack of funding.

ROBERTS (on camera): Are you confident, Ray, that these will not turn yellow from neglect? That these will actually come to fruition?

ROGERS: I'm 100 percent sure now that we're going to make a difference. We're going to have a new middle school.

ROBERTS (voice-over): Since Senator Obama's visit in August, he has talked about Dillon in campaign speeches.

OBAMA: That the hopes of the little girl who goes to a crumbling school in Dillon are the same as the dreams of the boy who learns on the streets of L.A.

ROBERTS: And tonight, he is making a return visit. This time to the Dillon High School.

ROBERTS (on camera): What do you want to hear from the candidates?

BURNETTE: I want to hear that the inequities in funding in education are not right.

ROBERTS: Are you thinking inside when these presidential candidates come through? Please don't let it be just words?

ROGERS: I got to feel like that it will make a difference. How many times in the history of our county has anyone ever come to see us? This got to be a start.

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ROBERTS: Another moment in the national political spotlight for the J.V. Martin Middle School. The open question tonight, is it the first sign of progress?

Republican Rudy Giuliani is betting the farm on Florida in Super Tuesday. Hear what we has to say about his all or nothing strategy. Minutes from now "LARRY KING LIVE."

MIKE ROSELLI, CNN PRODUCER: I'm Mike Roselli with the Clinton campaign in New Jersey, the key February 5th primary state. Earlier in Pennsylvania, Clinton picked up the all-important endorsement of Governor Ed Rendell. He said Clinton is quote, "The best person to lead the Democrats in the fall and the best person to lead the nation next January." On Thursday, the Clinton campaign is in Greenville, South Carolina, where she will give a major economic speech.

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ROBERTS: Well, that's all for tonight. Join me tomorrow for "AMERICAN MORNING." John McCain riding high. Fresh off of a victory in South Carolina, now running neck in neck with Mitt Romney in Florida. Tomorrow, we'll talk to the senator abut his strategy to try to capture Florida and beyond. That's on "AMERICAN MORNING," 6:00 a.m. Eastern tomorrow. And Soledad, I'll see you tomorrow night from Charleston, South Carolina.

O'BRIEN: That's right. I'll be here, you'll be there. Thanks to all of you for joining us. We will see you back here tomorrow night and the night after that and after that as well. "LARRY KING LIVE" begins right now. Tonight, his guest is presidential candidate Rudy Giuliani. Has quite a road to hoe, as they say.

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