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Energy Department Suspending Shipment to Strategic Petroleum Reserve; Obama Fires Back at 'Appeaser' Label; China Quake Death Toll Mounts

Aired May 16, 2008 - 14:00   ET

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


BRIANNA KEILAR, CNN ANCHOR: Well, who says America can't cut back on oil? This summer, the U.S. government plans to stop buying 76,000 barrels a day. Economic reality hits the Strategic Petroleum Reserve.
DON LEMON, CNN ANCHOR: And politics collides with foreign policy, and Barack Obama says it's appalling. The Democratic presidential front-runner takes offense at President Bush's "appeasement" remarks in Israel.

Hello, everyone. I'm Don Lemon, live here at the CNN World Headquarters in Atlanta.

KEILAR: And I'm Brianna Keilar.

You are in the CNN NEWSROOM.

This is our developing news today in the CNN NEWSROOM. The U.S. Energy Department is suspending oil shipments to the government's strategic reserves beginning in July.

And our Senior Business Correspondent Ali Velshi is here to explain why and to -- Ali, when we first saw you in the 1:00 hour, this was just breaking. And we have some more pertinent information.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes. Let me give you some context on this.

President Bush is in Saudi Arabia. He asked the Saudis to increase their output of oil in order to bring it down form the record prices that we are seeing today. Oil passing $127 for the first time in history.

The Saudis said they're not interested in doing that right now. Shortly thereafter, the Department of Energy announced that it is halting these shipments, 76,000 barrels of oil a day which are purchased in the market and then deposited into the Strategic Petroleum Reserve, which are four reserves in Texas and Louisiana, holding -- which can hold about 700 million barrels of oil for emergency use. It's the government's oil, which they will give to -- during Katrina, for instance, they gave it to refineries to keep on producing gasoline.

Well, what happened is, just a few days ago, Congress passed a bill asking the president -- or instructing the president -- to stop shipments of oil to the Strategic Petroleum Reserve, saying that those 76,000 barrels would be better served in the market, bringing the price of oil down. The president said he did not agree with that idea. However, the Department of Energy has to agree to six-month contracts to get that reserve filled up.

It's 96 percent full now. The Department of Energy's contract ends in June, and they have announced they will not renew it for July. So, pending what the president says about this bill, they are honoring Congress' wishes and not filling up the Strategic Petroleum Reserve.

I should tell you, Don, there's been no particular response in the oil market. Like a lot of critics have said, this won't -- there's so little oil involved in this that, while it may be useful not to put it into these big vats, these storage vats, the bottom line is it's not enough to actually shake the price of oil, and that's -- for now that's what we're seeing.

LEMON: Oh boy. OK.

Our senior business correspondent, Ali Velshi. And Ali talked about how it's affecting the markets, and we're going to check in with Susan Lisovicz in just a little bit.

Thanks, Ali.

VELSHI: OK.

KEILAR: Barack Obama is taking on President Bush and presumptive Republican nominee John McCain. Minutes ago in a speech that you may have seen here on CNN, Obama's blasted Mr. Bush for using the word "appeasers" in yesterday's speech to the Israeli parliament.

He also ripped into McCain for, in Obama's words, "... suggesting that I wasn't fit to protect this nation that I love." The president used the word "appeasers" to describe leaders who would be willing to meet with leaders of countries such as Iran.

It was widely interpreted to be an attack on Obama. And today Obama said the president's comments delivered in a foreign capital were out of line.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: On a day when we were supposed to be celebrating the anniversary of Israel's independence, he accused me and other Democrats of wanting to negotiate with terrorists and said we were appeasers no different from people who appeased Adolf Hitler. That's what George Bush said in front of the Israeli parliament.

Now, that's exactly the kind of appalling attack that's divided our country and that alienates us from the world.

(END VIDEO CLIP)

KEILAR: Let's bring in CNN's Dan Lothian now. He's in Frankfort, Kentucky, with the CNN Election Express.

Let's talk, Dan, about what effect this is having out there on the campaign trail. Fuel, obviously, for Barack Obama.

DAN LOTHIAN, CNN CORRESPONDENT: It certainly is fuel for Barack Obama, and it gives him a chance to show that he can be strong on national security. Those are some of the things that I think he was able to do in that speech today, because he's been criticized not only by those others, but certainly his opponent, Senator Clinton, who says she is the best candidate in terms of national security. She's the one who can best protect this country.

And Obama sort of challenged President Bush and also John McCain for their remarks, and saying that he can best protect this country. And he says he can win it -- if he had a debate, he could win that debate.

(BEGIN VIDEO CLIP)

OBAMA: They're trying to fool you and trying to scare you. And they're not telling the truth. And the reason is because they can't win a foreign policy debate on the merits. But it's not going to work. And it's not going to work this time. And it's not going to work this year.

(END VIDEO CLIP)

LOTHIAN: Now, as Senator McCain has been critical of Obama, he came under fire as well for remarks that he supposedly made two years ago about having negotiations with Hamas. This came in an opinion piece in "The Washington Post" today. Jamie Rubin, who is a supporter of Senator Clinton, also was in former President Clinton's administration as well, and he accused McCain of flip-flopping. But the McCain campaign says that's simply not true.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He has always said that there are three specific conditions. One, that they must renounce violence. Two, that they must abandon their goal of eradicating Israel. And three, that they must accept a two-state solution.

So we have been incredibly clear. And he has given -- almost unfettered access to the media. So this is ridiculous.

(END VIDEO CLIP)

LOTHIAN: And Brianna, I should point out, while we're focusing on this controversy, there is a primary that's coming up next week here in the state of Kentucky. Senator Clinton is leading in the polls here, but one Democratic official told me that he believes that Senator Obama can do much better than we're seeing in the polls right now because of that endorsement from John Edwards, because Edwards did appeal to those working-class voters.

And those working class voters here in the state of Kentucky are very concerned about the economy. They're concerned about the high gas prices. They're concerned about job losses. And so they could potentially come out and vote for Barack Obama. He's not saying that he could win here, but he thinks that he can do much better than the polls indicate.

KEILAR: All right. We will certainly be watching on Tuesday.

Dan Lothian for us in Frankfort, Kentucky.

Thanks.

LEMON: All right. Let's talk more politics now and what Dan and Brianna were talking about in today's Political Ticker.

Barack Obama's Democratic rival comes to his defense. Hillary Clinton is criticizing President Bush's comments about appeasers in the fight against terrorism.

Clinton says any comparison of Democrats to Nazi appeasers is offensive and outrageous. In a speech in Israel, Mr. Bush didn't mention names, but his remarks have been seen as an attack on Obama's stated willingness to hold talks with Iran.

KEILAR: Changes today in the Democratic delegate race. Eight delegates pledged to John Edwards have now switched to Barack Obama. This follows, of course, Edwards' endorsement of Obama. That happened Wednesday night.

And now by CNN's count, Obama has 1,899 delegates. Hillary Clinton, 1,719. Obama is 127 short of the total needed to win the nomination -- 189 pledged delegates and 232 superdelegates, they are still up for grabs.

LEMON: Well, John Edwards says he was happy to endorse Barack Obama this week, but there's no way he wants to make another run for vice president. Did I hear that right?

He said he doesn't want to make another run for vice president. Edwards tells NBC he's not interested in joining the ticket with Obama. Edwards, of course, was John Kerry's running mate in 2004.

All the latest campaign news is at your fingertips. Just go to CNNPolitics.com. We also have analysis from the best political team on television. It's all there, CNNPolitics.com.

KEILAR: Four and a half days into China's deadliest disaster in decades, and the images from the earthquake zone are heartbreaking.

Well, this is footage that we brought in from a Chinese television news program. You can see rescue crews here. They're pulling apart piles of rubble. They're doing it literally brick by brick.

And what they do is shout, and then they listen for any response that may come from someone who is trapped in the rubble. Amazingly, they have found some survivors. But as expected, they're certainly finding more bodies.

The government's death toll rose again today to 22,000. That is expected to more than double.

LEMON: Yes. Unbelievable pictures, but disturbing to some. We want to warn you. And CNN's John Vause is in the heart of the quake zone, where rescuers face a double challenge -- mountains of rubble and a ticking clock.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: Well, this rescue operation here has really picked up the pace in the past 24 hours. There's as many as 10,000 soldiers and volunteers and search and rescue teams operating in this one county alone.

This is the collapsed middle school. This was once a five-story building. Beneath this rubble and concrete are students.

Now, they're moving the rubble piece by piece. At times with their bare hands. They're using picks and shovels.

There is also heavy earth-moving equipment. Now, that's needed, because they're also trying to move these huge pieces of twisted concrete. This is all part of this building which came crashing down when this earthquake rolled through here on Monday.

(END VIDEOTAPE)

KEILAR: Well, you have seen the faces of the -- you've seen the faces of the victims. You know the odds that they're facing, the rescuers, and now you may be looking for ways to help. You can do that by going to CNN.com/impact, where you can find links to aid groups. These are reputable aid groups. This is a chance for you to impact your world.

LEMON: All right. Saving gas, burning calories. More Americans are discovering the benefits of ditching the car and riding a bicycle to work.

KEILAR: A teenage girl says she was raped. Getting no satisfaction from the courts, she takes her case to YouTube.

(COMMERCIAL BREAK)

LEMON: All right. Barack Obama, Watertown, South Dakota, of course responding to President Bush's comments earlier today about appeasers. Now he's taking questions.

Let's listen in.

(JOINED IN PROGRESS)

OBAMA: Our military power and dealing with problems in the region is wrong. And for Senator McCain, then, to compound it by somehow suggesting that I couldn't protect the safety of the United States when it is George Bush's policies, supported by John McCain, that have empowered Iran -- and that's undisputed. There's not an observer of Middle East politics that would not say that the single biggest contributor to Iran's expanding power in the Middle East is George Bush's policies and our invasion of Iraq. And for them to somehow suggest that they are the ones who have been keeping Iran at bay is ridiculous.

One last point.

You know, Senator McCain has really enjoyed over the last several weeks repeating this comment about, oh, you know, Hamas supports Obama, implying or suggesting that I would talk to Hamas, despite the fact that I've been crystal clear time and time again that until Hamas renounced violence, recognized Israel, and abided by previous agreements, we should not deal with Hamas. Then we find out on the very same day that he's making the sorts of statements he made yesterday, that in a previous interview he suggested, well, maybe we're going to have to deal with Hamas.

So not only was he not truthful about my policies, but it turns out that he is much -- is on record suggesting a much more friendly policy towards Hamas than I have. And that's the kind of, I think, distortions that people are tired of. And they certainly contradict the kind of civility that John McCain suggested in the morning that he wanted to pursue.

QUESTION: The McCain campaign said that you were just trying to distance yourself from the comment that you made last year about meeting with the leaders of rogue nations without preconditions.

OBAMA: I haven't distanced myself at all. I say that in every town hall meeting that we have, and every rally. What I've said is that I will meet with not just our allies and our friends, but I will initiate tough diplomacy with our enemies. And that includes Syria, Iran, North Korea, Venezuela.

I would meet with them. And I would meet with them without preconditions, although with preparation. And I would present to them very clearly what my expectations would be in terms of them changing their behavior.

If it was in the case of Iran, stop threatening Israel. Stand down on nuclear weapons development. Stop funding Hamas and Hezbollah. And stop stirring up problems inside of Iraq.

If they are willing to change behavior, then we would offer inducements and benefits diplomatically. And if they don't, then we will continue to ratchet sanctions and isolation on Iran.

That's been a consistent policy that I've presented throughout. There's no contradictions whatsoever. So I have no idea where it is that they're suggesting that somehow there's been a change in policy.

As I said, the real shift in policy is John McCain, who has been attacking me for -- and implying that somehow I wanted to negotiate with Hamas when it turns out that he's quoted saying we have to deal with them. Somebody who up until yesterday was insisting that you couldn't lay out a timetable for starting to bring down our troops and then suddenly apparently had a vision in which he now believes that all our troops are going to be out by 2013, although can't spell out any concrete steps in terms of how we're going to achieve it.

It strikes me he's the one who's been s inconsistent.

Yes?

QUESTION: (OFF-MIC) what would change? How would...

OBAMA: I would engage in direct talks. They haven't been said. That is not true.

We have not had -- we have not had direct talks with Iran. This administration has been very specific about rebuffing direct talks with Iran. And that is a different, it's a different philosophy.

The approach that I'm suggesting, the tough, but engaged diplomacy that I'm suggesting, is the kind that was carried out by John Kennedy, it was carried out by Richard Nixon, it was carried out by Ronald Reagan. There is a strong bipartisan tradition of engaging in that kind of diplomacy.

You mirror military strength with aggressive, effective, tough diplomacy. That's what's been lacking.

And ironically, the one area where the administration started making some progress in dealing with rogue nations was when it figured out that not talking to North Korea had resulted in them developing numerous nuclear weapons that they had tested and realizing, maybe we actually should be involved in talks. And those six-party talks, although imperfect, have at least yielded some progress and some commitment from North Korea to stand down.

So we have an example of where they've tried something and it didn't work, and changed positions in the direction that I'm suggesting our foreign policy should go, where we've actually seen some progress. But that's not what this is about.

The speech yesterday wasn't about an actual policy argument, it was about politics. It was about trying to scare the American people.

And that's what will not work in this election, because the American people can look back at the track record of George Bush, supported by John McCain, and say to themselves, let's see, we were told that there were weapons of mass destruction in Iraq. There were none.

We were told we would be there relatively briefly. We've been there for over five years.

We were told that this would cost maybe $50 billion, $60 billion? We're now on $600 billion.

We were told that this would make us safer and that this would be a model of democracy in the Middle East. It hasn't turned out this way.

We were told this would not serve as a distraction to Afghanistan, and you've got bin Laden sending out videotapes today. And our own intelligence estimates say that al Qaeda is stronger now in Afghanistan and the foothills of Pakistan than anytime since 2001. And Iran is stronger now than before we invaded.

So the American people are going to look at the evidence and they're going to say to themselves, you know, we don't get a sense that this has been a wise foreign policy or a tough foreign policy or a smart foreign policy. This has been a policy that oftentimes has been -- revolved around a lot of bluster and big talk, but very little performance. And what the American people want right now is some performance.

Yes?

QUESTION: (INAUDIBLE) yesterday and even today continues to suggest that the comments yesterday were not (INAUDIBLE).

OBAMA: I'm not even taking them -- I'm not even taking them personally. But for them to suggest that somehow they weren't aimed -- who is this some that they were talking about? Was this some amorphous some? Was this just a straw man that they were setting up? And if so, the -- what was the purpose of the remarks?

Now, that's being disingenuous. I mean, I'm less concerned about whether the remarks were directed against me personally, because frankly, there is no evidence out there that I've ever suggested we should engage terrorists. So obviously it didn't apply to me.

But the implication -- and this White House is very media savvy and knows what it's doing. The implication was that if you object to George Bush's policies of non-engagement, then, you know, you are being soft.

And as I said, the White House may be making those claims. I think it'd be hard for John McCain to make those claims since he was on a bus and definitely talking about me.

QUESTION: It sounds as if this stance you're taking, you've decided that in 2008 it's better to have this position of risking -- the bid that Republicans already have argued that you're inexperienced, that you're naive. You seem to believe that those arguments will no longer work with the public as they did in 2004 against Kerry, saying that he is too soft, that he's an anti-war candidate and the public broke in Bush's favor?

(CROSSTALK)

OBAMA: OK. You know, I guess -- you know, look, I don't know how the politics of this plays out. But I know that what we've done over the last eight years does not work. And as a candidate for president, my job is to present my vision about what I think will work to make the American people safe, to put us in a position where our strategic interests in the Middle East and around the world are properly served.

I've presented my vision. I am happy to have a debate with John McCain and George Bush about foreign policy. If John McCain wants to meet me anywhere, anytime to have a debate about our respective policies in Iraq, Iran, the Middle East or around the world, that is a conversation I'm happy to have, because I believe that there is no separation between John McCain and George Bush when it comes to our Middle East policy, and I think their policy has failed.

And I will make that case as strongly as I can to the American people. And I trust the American people to trust their own eyes and to see what the results have been. Again, it is -- it is hard for me to fathom how John McCain can suggest that I'm being soft on Iran when he supported the very policies that every objective observer says has strengthened Iran over the last eight years.

Iraq used to be a counterweight to Iran. We eliminated that. That's why they have influence in Iraq, is because of our invasion.

I wasn't the one who suggested that we have elections in the Palestinian territories, even though this administration was warned by the Israelis that Hamas would do well. The administration pushed them forward, and apparently were surprised when Hamas did well.

That's what strengthened their hand in Gaza. That's what strengthened their hand in the Palestinian territories. Those were this administration's policies, supported by John McCain. And so it boggles the mind for them to somehow suggest that critics of their policies are what are strengthening Iran.

Yes?

QUESTION: Senator, I'd like to get a little more clarification on the notion of direct presidential diplomacy as it flows out of the YouTube debate remarks that you made.

When you say that you -- that you would be involved, "I," do you mean from the get-go, the president of the United States, or do you mean an Obama administration administration, through the National Security Council...

(CROSSTALK)

OBAMA: The latter. I mean, understand what the question was. The question was a very specific question -- would you meet without preconditions?

Preconditions, as applies to a country like Iran, for example, was a term of art, because this administration has been very clear that it will not have direct negotiations with Iran until Iran has met preconditions that are essentially what Iran views and many other observers would view as the subject of the negotiations. For example, their nuclear program.

The point is, is that I would not refuse to meet until they agreed to every position that we want, but that doesn't mean that we would not have preparation. And the preparation would involve starting with lower-level diplomatic contacts, having our diplomat core work through with Iranian counterparts an agenda.

But what I have said is that at some point I would be willing to meet. And that is a position -- I mean, what's puzzling is that we view this as in any way controversial when this has been the history of U.S. diplomacy until very recently.

This whole notion of not talking to people, it didn't hold in the '60s, it didn't hold in the '70s, it didn't hold in the '80s, it didn't hold in the '90s against much more powerful adversaries, much more dangerous adversaries. I mean, when Kennedy met with Khrushchev, we were on the brink of nuclear war. When Nixon met with Mao, that was with the knowledge that Mao had exterminated millions of people.

And yet we understood that we could advance our national security interests by at least opening up lines of communication. And this was bipartisan. And it's a signal of how badly our foreign policy has drifted over the last eight years, how much it has been skewed by the rhetoric of the Bush administration, that this should even be a controversial proposition.

Yes?

QUESTION: (OFF-MIC)

Are you saying that's been a bad thing for the Palestinians?

OBAMA: What I am saying is that this administration has not operated in a consistent, thoughtful manner when it comes to a whole host of problems around the region. And when it came to elections in the Palestinian Authority, this administration was warned repeatedly that given the problems with Fatah, given the corruption, given the lack of grassroots support, that initiating elections could end up resulting in big wins for Hamas.

And this administration went ahead because this administration's policy has been a combination of extraordinary naivete, the notion that we'll be greeted as liberators, flowers will be thrown at us in Iraq, we'll be creating a Jeffersonian democracy, that it's a model, that same rhetoric carried over when it came to elections in the Palestinian territories. And yet, when you end up seeing Hamas winning, you've got rhetoric coming out of the administration saying, of course we'd never deal with them.

That tells me they didn't think through their policies. And that, I think, is what has weakened us.

It's not the notion for democracy per se, or elections per se, it's the lack of understanding that in this regional world and in regions all across -- or in the Middle East and in areas all across the world that democracy is not just going to the ballot box, it's how are we strengthening our civil institutions? What are we doing with the press? What are we doing with the judiciary? Are there economic structures in place that are helping to build the middle class? Is there rule of law? A host of issues that this administration typically neglected in the runup to some of these elections.

OK.

QUESTION: If you can talk about the (INAUDIBLE) the faith initiative, what you're trying to accomplish with that, and are you worried at all that the strong religious imagery we've seen in Kentucky, South Carolina and some other states might offend some voters moving into the general electino?

OBAMA: This isn't actually new. I guess it was written up as new in --

QUESTION: We printed it today.

QUESTION: Jeremiah Wright?

QUESTION: I'm sorry -- Joshua -- your --

OBAMA: I didn't know he was my faith director.

QUESTION: Josh -- your --

OBAMA: Josh Busby.

QUESTION: Yes.

OBAMA: Yes. This is -- I guess my point is what we've been building, we've had a faith outreach program since the beginning of this campaign. And I don't think it should offend anybody. I've been a long-time believer that there are people of faith in the evangelical community, in the Catholic Church in a whole host of areas that Democrats haven't reached out to and as a consequence we haven't been able to make our case about why many of our ideas are consistent with those in the faith community. And so my theory is you show up, you go to an AIDS forum hosted by Rick Warren, you go to various church events.

Now, whenever we do this outreach, we make sure that it's consistent with the concepts of separation of church and state. And I'm very clear and unequivocal about the belief that that separation strengthens our religious life and church, as well as ensuring that the state doesn't become captives to a particular set of religious beliefs. But I think the idea that people of faith should be involved in the public square in the debate is something that I've talked about for a long time.

I gave a speech two years ago in Washington on this precise topic. There's a whole chapter in my book, "The Audacity of Hope," about it and it's something that we're trying to apply in this campaign.

So all right, last one, Bonnie (ph).

QUESTION: I heard that you agreed (INAUDIBLE) that there would be a town hall (INAUDIBLE) to the Second Amendment. I heard there's an NRA commission going on right now. Mitch McConnell referenced your "bitter" remarks. Karl Rove said that you do not recognize (ph) the Second Amendment, but your record shows otherwise. John McCain is about to start talking (INAUDIBLE) about the Second Amendment (INAUDIBLE).

Are you worried that they're going to -- the Republicans are going to (INAUDIBLE) and if so, how do you plan on getting around the issue?

OBAMA: What do you think, Bonnie?

Of course they're going to -- they'll try, of course. They've had the same playbook every election. And guns is going to be one of those issues. And I -- I understand that it's been effective for them in the past. All I can do is describe to the voters what I believe and what I think.

And what I believe is that there is a Second Amendment right. I think it is an individual right. I think people have the right to lawfully bear arms. I do believe that there's nothing inconsistent with also saying that we can institute some common sense gun laws so that we don't have kids being shot on the streets of cities like Chicago, that we can institute strong background checks, that we can trace guns back to -- potential unscrupulous gun dealers who have peddled them to people who shouldn't be getting them.

Those are laws that I think the majority of Americans believe in. And, now, the NRA has a different position. Their basic view is any law related to gun ownership is a potential camel's nose under the tent and that if we allow even the smallest concession that somehow guns are going to be taken away from everybody. If you subscribe to that view, then you're, you know, then you're not going to agree with me.

If, on the other hand, you're a gun owner here in South Dakota who uses your gun to hunt or to protect your family, and does so in a lawful way, then you have nothing to worry about from me. And they can try to stir up as much fear as they want. But I ask the voters, listen to what I'm saying. And there's nothing in my record that would contradict those positions.

All right. Thank you, guys.

LEMON: All right. Senator and presidential hopeful Barack Obama in South Dakota -- Watertown, South Dakota. Clearly politics and foreign policy colliding here. We're going to discuss this a little bit more, exactly what he said. So I don't want to break it down for you, because I have a political panel waiting for you on the other side of the break, who is going to talk about exactly what this means for Barack Obama, this moment, how he's turned it around, and used it to talk about foreign policy.

Also, I want to tell you that Mitt Romney and John Edwards both will be on "THE SITUATION ROOM," 4:00 p.m. Eastern, right here on CNN. Our political panel, who will analyze this for us, after the break.

(COMMERCIAL BREAK) LEMON: OK. All right. Well, President Bush set off a political storm with a speech to the Israeli parliament. The White House says he wasn't talking about Barack Obama specifically, but targeted various Democrats, including Barack Obama.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Some seem to believe that we should negotiate with the terrorists and radicals as if some ingenious argument will persuade them they have been wrong all along. We've heard this foolish delusion before. We have the obligation to call this what it is, the false comfort of appeasement, which has been repeatedly discredited by history.

(END VIDEO CLIP)

LEMON: OK. With me now to talk about this is Charlie Mahtesian from politico.com.

Thank you, Charlie, for joining us.

And Chris Cillizza of the washingtonpost.com. Both join us.

You heard the president there. Should the president have anticipated this response, and maybe should he have not said that, Chris? I'll start with you.

CHRIS CILLIZZA, WASHINGTONPOST.COM: Well, you know, Don, I think the president in his eighth year in office now is well aware of the megaphone that he still carries. I think one interesting part of this story is a reminder that, we all talk about the lame duck presidency, but look, the president of the United States still, if he wants to make news, can make it.

So, my guess is this was a purposeful use of phrase and decision for the president to address this. Yes, he wasn't talking directly about Barack Obama, but look, the president and his advisers are smart people. They understand that the -- the insinuation certainly would be about Barack Obama. It's clearly a place where Republicans believe they have the advantage when we talk about it politically coming up on November.

LEMON: OK. Charlie, and it appears -- not it appears, he has -- Barack Obama's campaign has taken this and made it an opportunity. He's garnered much of the press attention today. He's been on all the national news networks. I looked up, and he was on every single channel. He is talking about this and using it as a way to tout his experience and knowledge on foreign policy.

CHARLIE MAHTESIAN, POLITICO.COM: Right. The president's remarks were not some kind of gaffe. This was a premeditated, aggressive foray into the presidential arena, and the Democrats understand that Democrats, like Senator Obama and senior Democrats on Capitol Hill, they understand that they have to come back equally as aggressively and that is what explains the strong reaction you're hearing from the Obama campaign, from congressional leaders, even from Hillary Clinton. LEMON: OK.

Barack Obama says that we should have known from this -- at least that we should open up the lines of communication. That's what history has shown us, that we should open up the line of communication and we should not be an alienated nation here.

I'm wondering what the folks on the other side are saying about that. Because Barack Obama is saying in his speech, as you heard and in his questioning here, that we should not do that. We should be hope and we should talk about it.

Smart foreign policy decision, Charlie? Not a smart foreign policy decision?

MAHTESIAN: Well, it depends on who the audience is and who you expect to consume that message. I think it's very important for Democrats to project that notion of strength. It's very important for Barack Obama to be able to refute the accusations that are going to come at him from the right about being inexperienced in a dangerous world. And he really can't afford to take many chances.

He's in this unique place where, almost for the first time in the 9/11 era, the Republicans no longer have the commanding heights on national security issues. So he has a little more leeway than say John Kerry or maybe some other Democrats might have had in other election cycles. But the bottom line is, it's a very delicate balance that he needs to maintain.

LEMON: All right.

Chris, let's talk about John McCain here, because Barack Obama also used this to sort of lump John McCain in with the president. And as he's been saying, this is going to be four more years of Bush if John McCain is elected.

Did you notice in this that he called for, he said, I will debate John McCain about foreign policy and strategic policy anywhere. He's calling him out, asking him to debate it.

CILLIZZA: You know, Don, I though that was a really important point. I think that there is some, privately, some concern among Democratic strategists, all of whom basically believe Barack Obama is going to be the nominee, whether or not he can win an election that is fought on foreign policy/national security grounds.

Obviously, they feel pretty comfortable with him on the economy, health care, those sorts of domestic concerns. But he is experienced enough, can he stand up to the long resume John McCain has? What we saw today was Barack Obama saying, essentially, I hate to use these words, but I will use them, bring it on. Saying, look, I'm more than comfortable debating the last eight years of Republican foreign policy against my vision.

LEMON: OK. This whole notion of talking to people, he said -- and I don't have time to play the whole sound bite -- this whole notion of talking to people didn't work, we saw that in the '70s, the '80s, and '90s. He brought up Khruschev, he brought up Chairman Mao, all of those things.

But let's get this back now to John McCain. I want you to listen to this 2006, an interview with Jamie Rubin.

(BEGIN VIDEO CLIP)

JAMIE RUBIN, "THE HUFFINGTON POST": Do you think American diplomats should be operating the way they have in the past in working with the Palestinian government if Hamas is now in charge?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: They're the government and sooner or later we're going to have to deal with them in one way or another. And I understand why this administration and previous administrations had such antipathy towards Hamas, just because of their dedication to violence and the things they not only espouse, but practice. So -- but it's a new reality in the Middle East.

(END VIDEO CLIP)

LEMON: Now, he has said that he thinks Barack Obama is naive in thinking that he can negotiate with places like Iran and what have you, and Hamas. And then this -- 2006, some people are calling it a flip-flop and I need you to answer very quickly. Both of you will get a chance.

Chris, I'll start with you.

CILLIZZA: I think the context is always important. McCain was speaking at a point in time in which he thought that was the right thing. Positions change, the way in which the world works changes. I think we should be more open to giving politicians, Democrats and Republicans, more of a chance to adapt their positions.

LEMON: OK. All right.

Real quick, Charlie.

MAHTESIAN: Well, certainly it's a problem if it fits into a pattern of situations that appear to be like hypocrisy. As a single day, single news cycle event, it probably doesn't affect the race very much at all.

LEMON: All right.

Charlie Mahtesian and Chris Cillizza, thank you very much for joining us today.

MAHTESIAN: Thank you.

LEMON: And the news keeps coming. We'll keep bringing it to you right here in the CNN NEWSROOM.

We want to remind you as well -- (COMMERCIAL BREAK)

KEILAR: A very pregnant Angelina Jolie -- happened overnight, right? Well, it seems like it did.

She met with reporters at the Cannes Film Festival in France. But Cannes isn't just about films and stars. It's also about the dollars.

CNN entertainment correspondent, Brooke Anderson, has the latest.

(BEGIN VIDEOTAPE)

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (on-camera): Here at the Cannes Film Festival, Angelina Jolie is, at this point, the center of attention. She revealed here that she is considering delivering her twins here in France.

Now we watched Angelina and Brad ease up the red carpet last night for premiere of "Kung Fu Panda," the animated comedy in which she stars with Jack Black. And she assured everybody earlier in the day that she is feeling fine and that her pregnancy is going smoothly.

Now the Cannes Film Festival is known not only for glitz and glamour, but also the film market. The frenzied buying and selling could benefit both Hollywood and a shaky U.S. economy.

Take a look.

SHANNON BANAL, SENIOR V.P., BLEIBERG ENT.: This is Roman (ph), he's our V.P. of sales and right now he's in the middle of a meeting selling our films.

ANDERSON (voice-over): The team from Los Angeles based Bleiberg Entertainment is on a mission in Cannes, to sell its films to the world market.

BANAL: When you're always makes deals, a lot of the deals will be made on the beach. It's just the way it goes.

ANDERSON: They are among the Hollywood wheelers and dealers at the Marche Du Film, the largest and most prestigious film market in the world, which runs parallel to, but separate from, the Cannes Film Festival.

PAUL DERGARABEDIAN, PRESIDENT, MEDIA BY NUMBERS: You think of the New York Stock Exchange and the bidding wars over commodities and that kind of thing, that's what it is sort of like. And certainly there's a lot of money at stake.

ANDERSON (on-camera): Transactions here at the Marche Du Film in France can translate into dollars and cents. Not just for Hollywood, but the struggling U.S. economy -- in the form of jobs.

DAN GLICKMAN, CEO, MOTION PICTURE ASSN. OF AMERICA: The film industry adds jobs, a big chunk of jobs, as well as economic power to the American economy. I think the latest number was 1.3 million jobs directly and indirectly in the American film and related industries.

ANDERSON (voice-over): The American movie business is one of a shrinking number of U.S. industries that enjoys a trade surplus, with other countries. Its success abroad is putting a dent in the U.S. trade deficit which topped $700 billion last year.

GLICKMAN: We obviously export way more movies to the world than we import. We bring in $9.5 billion, $10 billion from our balance (ph) of payments surplus. That's a big boost, particularly at a time when the economy in this country is in murky times.

ANDERSON: Worldwide exposure is crucial to Hollywood. The top ten American movies overseas last year earned more than $4 billion at the international box office, far exceeding their take in the U.S. alone.

DERGARABEDIAN: American films in particular earn over 50 percent of their box office from the foreign marketplace. There are often films that would not make money, but for the fact of the overseas grosses.

ANDERSON: The horror flick "Dance of the Dead" is among the films Bleiberg is trying to sell.

BANAL: It's integral for your film to be here, it's integral so that it will sell here. There's nothing like Cannes.

ANDERSON (on-camera): The American films here at the market could potentially benefit from the weak dollar because now those movies are more affordable for international distributors.

Reporting from the 61st Cannes Film Festival, Brooke Anderson, CNN, Cannes.

(END VIDEOTAPE)

LEMON: OK. So you hear about planes being stacked up at the airport, but not like this. Thankfully, the story doesn't have a tragic ending.

(COMMERCIAL BREAK)

LEMON: Here's something you don't see everyday, and thank goodness you don't see it everyday. Two small planes tangled up on the runway. This happened at the airport in Roanoke, Texas. Apparently one plane was waiting to take off while the other was landing. The plane in the air didn't see the one on the ground.

And check out the results. Fortunately, no one was hurt. Not physically, anyway. The FAA will be looking at the case. It is fortunate that no one was hurt.

KEILAR: The conductor of the future takes the stage and gets bofo (ph) reviews. Listen as the Detroit Symphony performs under the direction of a robot. You recognize that, perhaps. It's the "Impossible Dream" from the "Man of La Mancha." And this is actually a walking robot that was designed by Honda. It can't actually respond to the musicians, but it does mimic a human conductor who was videotaped before the concert.

LEMON: I could use him in the yard.

KEILAR: Right.

LEMON: He come help out around the house.

Well, Barack Obama takes the stage and takes on President Bush over his use of the word "appeasers."

Is that a dirty word now?

We'll have more on the back and forth over campaign tactics and who can protect the country.

KEILAR: The Earth shook, thousands died and China actually is still quaking as the hunt for victims enters the most desperate phrase. We'll have a report from the disaster zone.

LEMON: A teenage girl says she was raped. Getting no satisfaction from the courts, she takes her case to YouTube.

(COMMERCIAL BREAK)

LEMON: Saudi Arabia pumps more oil, the U.S. decides to hoard less, yet the price barely budges. We'll look at the market forces and political dynamics this hour.

KEILAR: Who are you calling appeaser? Barack Obama takes offense at Republican suggestions that he'd be soft on terrorists and tyrants.

Hi there. I'm Brianna Keilar at CNN Center in Atlanta.

LEMON: And I'm Don Lemon.

You are in the CNN NEWSROOM.

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