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Obama's Electoral Strategy; Gas Tops $4 a Gallon; Tensions Over U.S. Troops in Iraq

Aired June 9, 2008 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, You're in THE SITUATION ROOM.
Happening now, millions of voters who backed Hillary Clinton now up for grabs,, many of them women. We're going to show you how they made history and where they go from here. Also, Iraq's prime minister in Iran meeting with the country's leaders.

What does that mean for the United States?

I'll ask CNN's Michael Ware. He's standing by live in Baghdad. He has new information for us, as well.

Plus, twice as fast, half the price -- Apple unveils a new improved iPhone. But not everyone is sold. You're going to find out why some critics aren't ready to answer the call.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now we're in the first full week of what promises to be an exciting and heated campaign contest between Barack Obama and John McCain. Obama's kicking it off with a two week tour, focusing in on the U.S. economy, beginning with a speech today in Raleigh, North Carolina. He called for an additional $50 billion in economic stimulus, blamed the Bush administration for current conditions and took this swipe at his opponent.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: When it comes to the economy, John McCain and I have a fundamentally different vision of where to take the country. Because for all of his talk about independence, the centerpiece of John McCain's economic plan amounts to a full-throated endorsement of George Bush's policies.

(END VIDEO CLIP)

BLITZER: McCain fired right back, slamming Obama's pledge to repeal President Bush's tax cuts for the wealthiest Americans. He said raising taxes on anyone will make the economy worse. He also renewed his call for a summer gas tax holiday.

McCain made one brief appearance today in Richmond, Virginia, where he was attending a fundraiser.

The dust is settling in on Hillary Clinton's campaign, which she laid to rest on Saturday. But its achievements live on, as will the votes of her core backers -- women.

Our senior political correspondent, Candy Crowley, is joining us now live. She's watching this story for us.

All right, Candy, let's look back a little bit, look ahead a little bit. The Clinton campaign, it's being seen in hindsight right now. What are you seeing?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, absolutely, Wolf. I think we saw some of that in her speech over the weekend, when she reached out to those almost 18 million voters who voted for her, especially the women, who remain, for reasons both past, present and future, very attached to this campaign.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): History crystallizes in moments, but it's formed by the decades.

SEN. HILLARY RODHAM CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: And to all those women in their 80s and their 90s...

(APPLAUSE)

CLINTON: ...born before women could vote who cast their votes for our campaign...

CROWLEY: Those around her say it was important to Hillary Clinton that she write the final graph of a campaign invested in by almost 18 million voters, many of them women.

CLINTON: You can be so proud that from now on it will be unremarkable for a woman to win primary state victories, unremarkable to have a woman in a close race to be our nominee, unremarkable to think that a woman can be the president of the United States. And that is truly remarkable, my friends.

CROWLEY: There were questionable columns and over the top punditry. And no male candidate was asked whether he had the wherewithal to take on Osama bin Laden.

CLINTON: And in the gentlemen's words, we face a lot of evil men. You know, people like Osama bin Laden comes to mind.

And what in my background equips me to deal with evil and bad men?

(LAUGHTER)

CROWLEY: She never came out and said sexism was at play, but she was nearly there as she closed the doors on her campaign.

CLINTON: Like millions of women, I know there are still barriers and biases out there.

CROWLEY: History did not crystallize for Hillary Clinton, but she believes she and her supporters have a place in the decades that have shaped what surely will come.

CLINTON: Although weren't able to shatter that highest, hardest glass ceiling this time, thanks to you, it's got about 18 million cracks in it.

CROWLEY: History is usually written by the victors. Sometimes there are exceptions.

(END VIDEOTAPE)

CROWLEY: Hillary Clinton is off on vacation now. When she comes back, she has promised she will do whatever she can to move her supporters from her campaign to that of Barack Obama. But everyone agrees the person whose responsibility that really is, is Barack Obama -- Wolf.

BLITZER: A well-deserved vacation for her. Let her enjoy, for at least a few days.

Candy, thanks very much.

Barack Obama is setting his sights on some traditionally red states, hoping to route John McCain by redrawing the electoral map.

Our chief national correspondent, John King, is here. He's looking at Obama's strategy.

We've got a map up there -- John, both of these guys are looking at some of the other states that were traditionally seen as out of reach.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: There are both potentially map changers, Barack Obama and John McCain, because of their personal attributes, because of their policy positions, because of the year we are in. They could redefine the electoral map, to a degree.

So, but let's start with Barack Obama. What you start -- he would hope, love -- tomorrow he'll be in North Carolina for this economic tour. You know, that's the kind of thing -- you want to take away a red state.

But you have to start, Wolf, in any campaign by locking in your foundation. And for Barack Obama, the Democratic foundation, 10 states plus the District of Columbia, about 153 electoral votes there. You need 270 to win the White House.

BLITZER: You see them right there.

KING: And you see them there. Ten states and the District of Columbia gets you 153. And then there are four more states that we say at this point in time are leaning Democratic, another 37 electoral votes there. So you're up to about 190 electoral votes as your foundation. If you're Barack Obama, first and foremost in any campaign, lock those states in. Get the right staff, try to move the poll numbers your way to make sure you don't need to be spending a lot of time and a lot of resources in places that should be yours.

BLITZER: Two hundred and seventy is the magic number.

KING: Two hundred and seventy the magic number. So that's Barack Obama's foundation.

If you're John McCain, let's flip the coin a little bit. There are 16 states that we would consider at this point in time safe Republican states based on their past voting, based on the polling as we know it today. Those 16 states get you 125 electoral votes. Another eight states, we would say, are leaning Republican at this point in time. Most of those we think will eventually be Republican, but there are some interesting states in that mix. Another 69 votes there.

Guess what?

That gives John McCain, if he holds that foundation, 194. So today -- and it's early -- about 194 either leaning or safe Republican, 190 leaning or safe Democrat.

BLITZER: That's about as close as it gets right now.

KING: About as close as you can get, which brings you to the big prize.

BLITZER: Go ahead. And so let's talk a little bit about those states that they have to desperately win if they're going to reach 270.

KING: A dozen states that we at CNN right now would consider toss-up states. And it's an interesting mix of states. Some are them are states that are always toss-up states -- Florida we would put in that right now.

BLITZER: There they are right there.

KING: That is a state that...

BLITZER: These yellow states.

KING: Florida has decided before. Look at two very key states to look at early on.

If you're Barack Obama, we have Pennsylvania and Michigan right now listed as toss-ups. Those have been Democratic states, reliably Democratic states. But those are states where he had problems with white, blue collar, working class voters.

John McCain will be in Pennsylvania tomorrow.

If he could take Pennsylvania and Michigan off the Democratic map, that would change the state of the game. So that's (INAUDIBLE)...

BLITZER: So that's a game changer right now?

KING: Those are two huge states to watch in terms of the toss-up states, to see if they can go over.

And then you see the State of New Hampshire. Remember, John McCain, he's the Independent. He won the primary up there. That state has been trending Democratic. It should be a state for Barack Obama. But that's a toss-up you want to watch, as well.

And you see as you come off over into Colorado is a state that Barack Obama very much wants to take out of the Republican map. And right now we would call it a toss-up state. So these dozen states right here are the toss-up states, the most important states at the moment as you look at the competitor, the State of Virginia, again, used to be a red state. Barack Obama has a good chance down there. Florida always is. Ohio always a toss-up state.

Those are the dozen states right now that we see are critical. But very early. We're laying down this marker now for these states and we will watch them as the polling comes in and other anecdotal evidence in the weeks ahead.

BLITZER: So what I hear you saying is that these two candidates, they're going to be spending, in the next weeks, a lot of time in Michigan, Ohio, Pennsylvania and Florida. And those four states right there, they've got a lot of electoral votes in those four states alone.

KING: Absolutely. And we're in a critical feeling of the campaign right now where each candidate is trying to poach -- to go into the traditional Republican territory, if you're Barack Obama, see if you can take away a state, or at least force the Republicans to spend time and desperately needed resources there. John McCain, the same thing. Pennsylvania tomorrow. You'll see him in Michigan and other states, trying to see is this real, is this just the hangover of the Democratic primaries or can I actually go in and compete for blue collar, Democratic, Reagan Democrat votes in Pennsylvania and Michigan.

So there will be a feeling out period right now to see where, in the end, you want to spend the time and especially the TV ad money.

But right now, you're trying to poach -- take something out of the other guy's basket.

BLITZER: And we're going to continuously update all of this map, looking at which states may or may not be in play based on polls, other information that we're getting, is that right?

KING: Everything we can get -- anecdotes from the campaign, evidence from the campaign, public polling, our own polling, talking to key strategists in the states. And so this map will change -- sometimes on a day to day basis, more often on a week to week basis, as we go through between now and November.

BLITZER: And CNNPolitics.com will continuously update the maps for us, as well, John.

Thanks very much. KING: OK.

BLITZER: Jack Cafferty is joining us, once again, with "The Cafferty File."

It's pretty amazing what's going on. We're going to have a lot of fun and exciting times, Jack -- you and me and all of us, the best political team on television.

I'm pumped.

JACK CAFFERTY, CNN ANCHOR: Well, listen. Your eyes simply light up with this stuff. And it gives us all a warm fuzzy feeling -- Wolf.

BLITZER: I feel excited.

CAFFERTY: No, I know you do. I've never seen anybody who enjoys politics anymore than you do.

The economy seems to weaken with each passing day. But it sounds a lot like John McCain might not have heard the news.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I have a fundamental belief that the -- I have a great belief that the fundamentals of our economy are very strong, very strong.

(END VIDEO CLIP)

CAFFERTY: Really, Senator McCain?

Well, that's not what millions of Americans are saying. A new CNN/Opinion Research Corporation poll shows 78 percent of those surveyed rate the economy as poor. Only 22 percent say good.

Here are some of the reasons why. Our economy lost another 49,000 jobs last month. That means 324,000 jobs have been lost since the first of this year. The unemployment rate has jumped to 5.5 percent -- the biggest increase in the unemployment rate in 22 years. More and more Americans are losing their homes. A million homes are now in foreclosure. The equity Americans have in those homes, their biggest asset, has declined to the lowest level since the end of World War II. Americans' net worth has declined by a staggering $1.7 trillion dollars.

Then there are the rising costs of energy. For the first time in our history, gasoline now above four bucks a gallon. It's headed higher. Oil traded at $139 a barrel on Friday. Predictions of a buck- and-a-half by the Fourth of July and $200 within two years -- a prediction by Goldman Sacks. The peak summer driving season is just getting underway and these gasoline prices impact the cost of virtually everything else we use.

The nation's on the brink of recession, the stock market taking a hit -- down 400 points last Friday alone. The U.S. dollar weakens against almost all foreign currencies. It has declined 15 percent against the euro in the last year. We are $9 trillion in debt thanks to the wars in Iraq and Afghanistan and the irresponsible fiscal policies of the Bush administration. And we continue to run huge trade deficits with China.

It looks pretty good, right?

Here's the question: Is John McCain right when he says the fundamentals of our economy are very strong?

Go to CNN.com/caffertyfile and can post a comment on my blog.

I have a hunch, Wolf, this comment will join the ranks of being in Iraq for 100 years. It's that far out there.

BLITZER: We'll see what the reaction -- you know, he did say that there are a lot of people who are suffering right now, that they're in pain and there needs to be a lot of work, even though he pointed out that the fundamentals, as you played in that clip, the fundamentals are strong.

CAFFERTY: Well, he said what he said in the clip that we showed and he's wrong.

BLITZER: Good. We'll hear what our viewers think, as well.

But you may be right about that clip, in terms of the political campaign.

Jack, thanks very much.

A meeting with huge implications for the U.S. and the tens of thousands of American troops in Iraq. You're going to find out why that country's prime minister -- the Iraqi prime minister -- is in Iran. CNN's Michael Ware is standing by live in Baghdad. We're going there.

Also, he was a controversial presence in his wife's campaign.

So what role will former President Bill Clinton take when it comes to getting Barack Obama elected?

We're watching this story and we're getting new information for you.

And it's the moment cell phone fanatics have been waiting for -- the new iPhone unveiled. We're going to show you what's improved and why some say it's still not enough.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A sobering new high for the price of gas in the United States. It's now topping $4 a gallon, on average, across the country. In many parts of the country, it's a lot higher than that already. Some places in the country it's approaching $5 a gallon.

And as the shock waves rattle world economies, Saudi Arabia is now calling for an emergency oil summit.

Let's go to our senior business correspondent, Ali Velshi. He's joining us now.

All right, Ali, what's going on?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: That's a good question, Wolf.

Less than a month ago, President Bush arrived in Riyadh, cap in hand, to ask the Saudis to put more oil onto the market to help bring oil prices down. He got mostly a no and a comment from the Saudi oil minister that when it comes to oil -- and this is a quote -- supply and demand are in balance."

Well, something has changed, Wolf, because today the Saudis came out and said that today's oil prices are "unjustified." The Saudis now want to convene a meeting with what they call consumer nations -- I imagine the U.S. would be invited to that meeting -- and say that they stand ready to meet any increase in demand around the world.

Now, here's the interesting thing. The Saudis say that the current price of oil is not justified by demand, it shouldn't be this high -- which means something other than demand is causing the run-up that we've been seeing in oil prices, something maybe like excessive speculation. And when we say speculation, we're talking about people who trade in oil who don't use the end product. They just trade in it to make money.

Now, earlier, I spoke with Treasury Secretary Henry Paulson.

I asked him whether speculators are driving this oil market up.

Here's what he told me.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: I don't believe financial investors are responsible for -- to any significant degree to this price movement. This is supply and demand. Financial investors are on both sides of the market. They're long and they're short. They don't set trends. They follow the trends.

(END VIDEO CLIP)

VELSHI: So, Wolf, in effect, Treasury Secretary Paulson is saying that oil prices are high because of supply and demand -- the opposite of what the Saudis are saying. They're saying it's not supply and demand.

So maybe they can have this meeting and they can all meet and work it out -- Wolf.

BLITZER: Interesting what he says. He's a former chairman of Goldman Sachs.

VELSHI: That's right.

BLITZER: So he understands these market issues, these trading long and short, as he says.

All right, Ali, stand by. We're going to be staying on top of this story with you.

Amidst all of this and perhaps fueling some of those price increases, the growing tensions between the U.S. and Iraq over the long-term role of U.S. forces in Iraq. Iraq reportedly wants U.S. forces confined to bases. Iran, meanwhile, is pressuring its neighbor, Iraq, to send all foreign troops, including all U.S. troops, out of the country.

CNN's Michael Ware is joining us now live from Baghdad with more on what's going on.

We see the Iraqi prime minister, Nuri Al Maliki. He shows up once again in Tehran -- hugs and kisses for the president, Mahmoud Ahmadinejad.

What is going on as far as U.S. long-term military bases, troop levels in Iraq, are concerned?

MICHAEL WARE, CNN CORRESPONDENT: Well, Wolf, what's happening right now is that the clock is ticking down on the U.N. mandate for the troop presence here in Iraq. Essentially, Washington's got until the end of December to come up with an agreement between Washington and Baghdad that will set the framework for any ongoing U.S. troop presence -- the levels, what they can and cannot do.

Now, Tehran is dead against this. They've long stated that their policy is the occupation is not justified, it should have ended, it's long overdue for Americans to leave.

What's at stake here, Wolf, is almost the entire U.S. mission. In many ways, the way this agreement eventually shakes out between Baghdad and Washington is going to be a barometer of whether America is winning or losing the true war in Iraq -- and that's the one of influence with Tehran -- Wolf.

BLITZER: Several members of the Senate Foreign Relations Committee, Democrats and Republicans, they're concerned about this deal because they want to know more about it. They want to have a say in its negotiation.

How concerned should Senator Obama and Senator McCain be about what the outgoing Bush administration might be doing as far as tying their hands down the road?

WARE: Well, on one level, they should be waking up in the middle of the night screaming at the mere thought of it. But on another level, they haven't got much choice. This agreement needs to be struck. From the time that the U.N. mandate expires to the inauguration of the U.S. president in January, would effectively amount to an illegal occupation of the sovereign nation of Iraq. Now perhaps there can be some sort of bridging agreement made, if it came to that. But the situation now is so unsettled, simply because the negotiations are underway and because they're in such difficult territory, that if you drag it out waiting for the next administration, you could almost kiss Iraq goodbye -- Wolf.

BLITZER: Michael Ware in Baghdad for us.

Michael, thank you.

A very controversial figure out on the campaign trail.

So what role, if any, will Bill Clinton play in helping get Barack Obama elected?

We're watching this story. Stand by.

Plus, take a look at this -- homes washed away by floodwaters. We have much more of this amazing video that's coming into THE SITUATION ROOM right now.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: Oh, Wolf, just a weather disaster in the Midwest. Just take a look at this home. You're going to see it in just a minute crashing into floodwaters in Wisconsin's Lake Delton region. Now, this has to be one of the most depressing sights ever -- your brand new home, everything associated with it falling apart and just floating away. Disaster areas have been declared in dozens of rain-soaked counties in Wisconsin, Indiana and Iowa. Residents are being evacuated in several towns. At least 10 deaths are blamed on this round of storms. Officials say the floodwaters washed away at least four homes in Wisconsin. Unbelievable. More pictures from the Lake Delton area.

Officials in Indiana, in the meantime, say streams are flooding to record levels. Wolf, even more rain is in the forecast for this region. So it isn't over yet.

Senator Edward Kennedy is back at his home on Cape Cod after a week recuperating from brain surgery at Duke University Medical Center. Within hours, he went out sailing with his wife, Vicky. Surgeons kept him awake to remove as much of the brain tumor as possible without harming any key areas of his brain. They called the operation a success. Of course, chemotherapy and radiation are next.

That's a look at the headlines right now -- Wolf.

BLITZER: Carol, thanks very much.

We wish him, of course, a speedy, speedy recovery, Senator Kennedy.

Politics turned upside down.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Clearly in this election cycle, it appears that the Democrats have gotten religion, while the Republicans have turned agnostic in a runoff for the church organs. I mean they don't have, really, anything to do with religion in this election cycle.

(END VIDEO CLIP)

BLITZER: And it promises to make for a wild election ride. We're going to show you why everything we know about Evangelical voters could change this year.

Also, a potentially deadly food poisoning scare prompts McDonald's to take drastic action. We're going to show you what they're doing.

You like tomatoes? Stand by.

Plus, he got a lot of bad press campaigning for his wife.

So what will Bill Clinton do for Barack Obama? Will he do anything? What's going on?

Brian Todd working this story.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, You're in THE SITUATION ROOM.

Happening now, the defense secretary, Robert Gates, making another major move with the U.S. Air Force less than a week after he fired the top bosses.

The FBI's background check process comes in for some major criticism. The Justice Department issuing a scathing report about just what happens when people try to enter the country.

And Huckabee to the rescue. A heroic move by former presidential candidate, Mike Huckabee. He actually saved a life. You're going to find out what happened.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

They're a cornerstone of the Republican Party. But this election year, some Evangelicals may be up for grabs. Carol Costello is working this story for us. She's watching what's going on.

What are John McCain and Barack Obama doing now to seek these votes?

COSTELLO: Well, they have very specific strategies. And, you know, it does sound strange, though, Barack Obama going after Evangelical voters. But if you look at the numbers, you'll think maybe he has a chance.

Take a look. In the Iowa caucus, only 10 percent of the Evangelical voters supported McCain. In the Ohio primary, he did better, but he still lost to Mike Huckabee. And in Missouri, only 24 percent voted for McCain.

Why, you ask?

Well, some say he isn't talking the talk.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Election 2008 is different in so many ways. It's also the year many conservatives say the Democratic Party found God. And the Republican Party forgot about him.

TONY PERKINS, FAMILY RESEARCH COUNCIL: Clearly in this election cycle it appears that the Democrats have gotten religion while the Republicans have turned agnostic and runoff with the church organist. They don't have anything to do with the religion in this election cycle.

COSTELLO: Perkins says evangelical voters see no passion this John McCain for the issues they care about and wonder whether they should switch to Obama who seems to speak their language.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: Democrats need to get in church, reach out to evangelicals, link faith with the work that we do.

COSTELLO: Camp Obama plans to organize faith and politics house parties across the country in a grass roots effort to attract evangelical voters who care about issues like global warming, poverty and AIDS. McCain's camp is wooing evangelicals too, sending e-mail messages to conservative voters, reaching out to evangelical preachers, although Perkins says he shouldn't expect many endorsements. Not after he accepted, then rejected Pastor John Hagee's endorsement because of a sermon in which Hagee said Nazism was God's will.

JOHN HAGEE, EVANGELICAL PASTOR: This nation is going to go through a blood bath.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: I would reject the endorsement of the expression of those views.

COSTELLO: Tat only reminded conservative voters what he said about Pat Robertson and Jerry Falwell back in 2000.

MCCAIN: Neither party should be defined by pandering to the outer reaches of American politics and the agents of intolerance.

COSTELLO: McCain and Falwell became friends again in 2006 but Robertson endorsed Giuliani. Still some conservatives say when it comes right down to it, they will eventually vote Republican.

PHIL BURRESS, CITIZENS FOR COMMUNITY VALUES: Even though John McCain is not doing anything right now to help himself, I believe that when people understand who Barack Obama is, we're going to find a lot of people coming out to vote against a candidate rather than for someone.

(END VIDEOTAPE)

COSTELLO (on camera): But John McCain is aggressively reaching out to evangelical voters. And his camp told me his record, his strong faith will win them over. He is strongly anti-abortion, he is pro-family. And his camp says he's running against one of the most pro-abortion rights liberal candidates to ever run. They are sure on Election Day conservative voters will be in McCain's corner.

BLITZER: We'll see.

COSTELLO: We'll see.

BLITZER: Thanks very much, Carol. Good report.

He wasn't a candidate himself but certainly got almost as many headlines as he campaigned for his wife. And not all of those headlines, as you know, were very flattering. The question now, what role will the former President Bill Clinton take on to help Barack Obama become the next president of the united states? Brian Todd is working this story for us. What are you hearing, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Democratic Party is full of talk about unity but Bill Clinton's role is now an uncertain one thanks to the bumps and bruises of the primary season.

(BEGIN VIDEOTAPE)

TODD (voice-over): Just two days after his wife gave up the bid he campaigned so hard for Bill Clinton is at the United Nations for a meeting on stopping the spread of AIDS.

BILL CLINTON, FORMER PRESIDENT: Secretary general, it's good to be back at the UN.

TODD: But will there be a roll for him in the rest of the presidential campaign? For months he spoke to thousands of Democrats campaigning vigorously for his wife.

B. CLINTON: You will never have a chance to vote for someone who cares more, who has done more and who will do more as president. TODD: Sometimes bruising feelings of Barack Obama's supporters along with way like when he said Obama's early opposition to the war was being exaggerated.

B. CLINTON: Give me a break. This whole thing is the biggest fairy tale I have ever seen.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: He will need to say some things along the way that show that he appreciates that in his ardor and his enthusiasm for his wife he may have gone over the line a few times and he regrets that. That's going to help a lot.

TODD: His admirers say he's a skilled campaigner, foreign policy heavyweight and reminder of good economic times. But he can also veer off message.

UNIDENTIFIED MALE: There may be places he can help Obama like Arkansas, for example. But I would expect that given his tendency to pop off Clinton now is not a very safe bet.

TODD: Al Gore kept him at arm's length during the 2000 race. So far kind words from Barack Obama.

OBAMA: I think Bill Clinton is an enormous talent. And I would welcome him campaigning for me.

(END VIDEOTAPE)

TODD (on camera): Now one indication to watch out for might come closer to the democratic convention. We'll see whether Bill Clinton is awarded a prime speaking slot when the Democrats gather in Denver starting August 25th, Wolf.

BLITZER: I suspect he will. There are plenty of segments of the population out there, especially within the Democrat base, who love Bill Clinton. And they're going to want to hear from him as this campaign moves on.

TODD: That's right. Now one analyst points out that he really hit home this season with lower income white Americans who benefited from his years as president. Those are also areas, of course, where Barack Obama needs some shoring up. Mr. Clinton could really help him there. So it certainly bears watching. Mr. Obama might be under some pressure to tap him.

BLITZER: I'm sure he will be. Thanks very much, Brian Todd. We're going to stay on top of this story and we're going to see how far Bill Clinton is willing to go to try to get Barack Obama elected president of the United States.

New leadership for the U.S. Air Force and also a morale boosting move by the secretary of defense, Robert Gates, as he continues a sweeping shakeup of the Air Force over that nuclear-related blunder.

And one year to run a name check? That's what a highly critical report by the Justice Department says about the FBI's background check process. We have new information for you right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A big problem for FBI background checks. The Justice Department report just out says many names of immigrants are taking as long as one year to check out. Kelli Arena is watching this story for us. Kelli, so tell us what's going on.

KELLI ARENA, CNN CORRESPONDENT: Wolf, making sure that terrorists don't get into the United States has been a huge priority since September 11th. So you'd think by now the FBI would have a solid system in place for screening foreigners. But according to the Justice Department's own inspectors, that system is anything but solid.

(BEGIN VIDEOTAPE)

ARENA (voice-over): The FBI screens everyone applying for citizenship or the right to live here through a database to make sure there are no threats. Of all the things the FBI needs to do, those background checks would seem relatively simple. They're not.

CLAYTON GRIGG, FBI: There are ways that this could be approved to make it a better name matching process.

ARENA: According to the Justice Department's inspector journal the name check processes are inefficient, rely on outdated technology and offer little assurance the right information is being passed along to other government agencies.

REP. ZOE LOFGREN, (D) JUDICIARY COMMITTEE: We have offered resources. We have offered advice. And they don't have a plan and they don't have a clue.

ARENA: Many of the 4 million or so name check requests from immigration officials each year involve legal U.S. residents who want to take the next step and become U.S. citizens. People like Mohammad Shahbazi. He fled Iran when he was just 17. He's been in the United States for nearly three decades, but he's been waiting for more than three years for clearance.

MOHAMMAD SHAHBAZI, CITIZENSHIP APPLICANT: I live in the same neighborhood for the past 20-some years. I work in the same place for the past 20 years. It can't get easier than that.

ARENA: He's growing especially frustrated because he wants to vote in the upcoming presidential election. And time is running out. The FBI blames the backlog on a lack of manpower and money. And says it's already addressing many of the problems highlighted in the report.

GRIGG: We believe applying the right technology at the right time against this data can really enable it to be more successful.

(END VIDEOTAPE) GRIGG (on camera): But, Wolf, those improvements won't be instant. The FBI said it expects to still have a backlog of about 44,000 come November.

BLITZER: Kelli Arena, thanks very much.

Meanwhile, there's been a major change over at the pentagon where Defense Secretary Robert Gates now is saying he's going to stop planned cuts in the size of the Air Force. Our senior Pentagon correspondent Jamie McIntyre filed this report only moments ago.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): Defense Secretary Gates said hefts going to visit the three most important Air Force bases personally to explain his decision to remove the top Air Force leadership and replace them almost as quickly.

His first stop? Here at Langley Air Force Base in Virginia where he told airmen that he knew his decision might not be popular with some of them, or perhaps with all of them. But Gates said he felt it was important to make it clear that it was the findings of a report into the handling of nuclear weapons that showed systemic problems and weaknesses that forced him to make the change.

ROBERT GATES, DEFENSE SECRETARY: I concluded that decisive action was required because, one, the focus of the Air Force leadership has drifted with respect to perhaps its most sensitive mission. Two, performance standards in that sensitive area were allowed to degrade. Three, the Air Force's stewardship and oversight of this vital mission did not identify these problems for correction. And, four, the Air Force's investigation into what went wrong did not get to root causes requiring my personal intervention.

MCINTYRE: He announced he would be replacing the air force secretary with Michael Donnelly, a trusted administrator who served in the air force before and the new air force chief of staff General Norton Schwartz, again, someone he had great confidence in. In order to boost morale he made a surprise announcement. That he intends immediately to stop reductions in Air Force personnel. The immediate halt would save at least 6,000 jobs in the Air Force, something that would be a big boost to morale. From here Gates goes on to two more Air Force bases where he'll make a similar case face to face. He also took time to answer questions in private from the airmen. At that point the press was ushered out of the room.

Jamie McIntyre, CNN, Langley Air Force Base, Virginia.

(END VIDEOTAPE)

BLITZER: Sixteen states and there could be more. McDonald's taking steps to avoid more problems with a growing food poisoning scare. We're going to have details of what's going on.

It's one of the hottest gadgets out there on the market. Today Apple announced there's a new version of the iPhone. You're going to find out what's changed. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: McDonald's and other fast food chains stopped serving sliced tomatoes as a salmonella outbreak spreads to 16 states. They're taking the action as a precaution while the FDA tries to pinpoint the source of the outbreak. Let's go to Carol Costello. She is watching this story for us. If you love tomatoes, as I do, you've got to be concerned.

COSTELLO: I know, it's frightening. And it is frustrating. Because at this time of the year you expect to enjoy tomatoes. But today you have to be very careful. Not only McDonald's but Taco Bell, Chipotle, Winn-Dixie and Giant Eagle and all pulling tomatoes. That's because according to the FDA people have gotten sick after eating some kinds of tomatoes in 16 states.

They are Arizona, California, Colorado, Connecticut, Indiana, Illinois, Kansas, New Mexico, Oklahoma, Oregon, Texas, Utah, Virginia and Washington state. If you live in these states or buy tomatoes grown in most of these states avoid raw red roma tomatoes, plum tomatoes and red round tomatoes, the kind you slice, the kind McDonald's uses. These kinds are OK, grape tomatoes, cherry tomatoes and tomatoes still attached to the vine or the ones you grow at home. All those tomatoes are safe to eat. The FDA is trying to figure out where the problem started. If you eat a tomato and you experience nausea, diarrhea, or get a stomach ache after eating tomatoes, safe bet, see your doctor, Wolf.

BLITZER: Let's hope they fix the problem soon. Carol, thanks very much.

Let's check in with Jack.

He's got the "Cafferty File." Jack?

JACK CAFFERTY, CNN ANCHOR: Question this hour, is John McCain right when he says the fundamentals of our economy are very strong? William writes, "Oh, really? Our gas was $1.46. He and his Congress invaded Iraq after 9/11. Now 4,000 plus Americans dead, thousands more with their limbs blown off. Iraqis are keeping their oil profits and our economy and lives are going down the tube. Pretty hard to think there's an economic problem when your wife's worth a few hundred million. What a guy. Hero, yes, in touch. Not even close. And this is from a Republican. I was going to vote for him until this today."

Nancy in Florida says, "Does John McCain live in the same United States of America the rest of us do? While my family can weather the current situation a lot of families cannot. The sharp rise in unemployment should be enough to get anyone's attention. Rising prices and no jobs does not exactly equal strong."

Eric in Flinton, Texas, McCain is correct in saying the fundamentals of the economy are strong. "Unemployment at 5.5 percent, gasoline at $4.00 a gallon would be such good economic news in France there would be dancing in the streets." Beverly in New York writes, "Mr. McCain resides in a bubble. Happily insulated by his wife's money. He should try living like an ordinary American for a month on Social Security. I think his perspective on the economy would change."

Russ in St. Paul writes this. "The economy isn't on the rise but it's not that bad. All you need to prove that is to look at the weekend box office. "Kung Fu Panda" earned $60 million. No offense to jack black and Angelina Jolie but that proves some people have too much money."

And Tiffany in Richmond, Virginia, "His economy's in good shape. His wife is rich."

If you didn't see your e-mail here, go to my blog at cnn.com/caffertyfile. Look for yours there among hundreds of others. Were you one of those that saw "Kung Fu Panda" this weekend, Wolf?

BLITZER: Missed it, not going to see it.

CAFFERTY: Me too.

BLITZER: OK, Jack. Thanks very much.

Senator Barack Obama's harsh words for Republicans when it comes to the economy. What the presumptive Democratic nominee has to say about John McCain and the ailing economy, that's coming up.

Also, Mike Huckabee the hero. The former presidential candidate puts a life saving squeeze on another politician. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Twice as fast. Half the price. New features. Apple is unveiling its upgraded iPhone. Let's get details from our Internet reporter Abbi Tatton. She's following this story online. A lot of people are going to be interested in what's going on, Abbi.

ABBI TATTON, CNN CORRESPONDENT: Right, Wolf, it's got global positioning, a whole host of new applications. But the real headline out of San Francisco today about the new iPhone is that its Internet speed is faster using third generation wireless net works and the price tag is cheaper, 199 bucks for the 8 gigabyte model. That's half the current price and a third of the original price.

The announcement was made in San Francisco at a conference today by Apple CEO Steve Jobs. There's been a great amount of online buzz about it. You can see photos of people cueing up around the block waiting to see the announcement. Liveblogs following every word of what was going on and spotting high profile attendees there in the audience. Al Gore thrown up on the big screen.

Jobs said they learned a lot from the old iPhone which had been criticized as too slow, too expensive. Whether consumers are going to be happy with the new model, we'll have to wait and see. It goes on sale July 11th.

BLITZER: I'm sure a lot of people will want that. Thanks very much. You know what? There'll probably be another one coming out in a few months after this.

In our political ticker, Mike Huckabee being called a hero at least by one man who credits the former Republican presidential candidate with actually saving his life. Huckabee was speaking at a luncheon in North Carolina when a state senator started choking. Huckabee who had emergency medicine training while in college performed the Heimlich maneuver on the man and even called him later to make sure he was OK. Good work by Mike Huckabee. Thanks for doing that.

Let's check in with Lou Dobbs to see what's coming up. I know you got a big show coming up in an hour. One of the subjects you're going to be talking about, Lou, involves this new executive order requiring contractors to do what?

LOU DOBBS, CNN HOST: Well, can you believe this? President Bush, seven and a half years into his administration, he's refused to secure the borders. He's refused to enforce U.S. immigration law. And then last week it was revealed today by the White House, he signed an executive order that requires all contractors to the federal government to make certain and to verify that their employees are in this country legally. How about that?

BLITZER: It's better late than never. Is that what you want to say?

DOBBS: It might be what you're saying. I would like to have seen it a lot earlier because we would have a lot less of a crisis in this country. But it is at least a beginning. What the motivation is here, I don't know. But it's something that hopefully symbolically will set the stage for a number of things. One, a discussion between Senator McCain and Senator Obama on the issue of amnesty, open borders and enforcement of U.S. immigration law and, most importantly, perhaps set off a round of considered efforts at enforcing existing law. How about that, Wolf?

BLITZER: Never a dull moment. Let me make a quick turn. I want to get your quick reaction. We've just confirmed up on capitol hill that Scott McClellan, the former White House press secretary, has now agreed to testify next week on June 20th before the House Judiciary Committee on the whole CIA leak story, the Valerie Plame story, the information that he passed along to the American public through the muse media which was wrong involving Karl Rove and Scooter Libby. Now he's going to actually go and testify before the committee. What do you think?

DOBBS: I think a couple things. One is we've already done the independent counsel thing on this story. We have seen that result. Libby basically -- he was charged, investigated, and found guilty and pardoned. But the reality here is this is just more partisan nonsense. And the second part is, what in the world does this man know about anything? And if he knew anything of substance why was he just a press secretary?

So I think it's just -- this is really sort of nonsense. As you know, no one's been a bigger critic of this administration than I've been. But this is just silly nonsense on the part of the Democratically led Congress and a Republican functionary at the White House. Come on. It's even bad political theater.

BLITZER: It's going to get a lot of buzz, I'm sure.

DOBBS: It'll get a lot of buzz on the cable news networks.

BLITZER: There are going to be a lot of TV news cameras in there ...

DOBBS: Sure.

BLITZER: ... when he's asked by the committee members ...

DOBBS: I didn't say anybody couldn't have fun with it. I just said it's pure nonsense.

BLITZER: It's a serious issue when there's a leak involving sensitive national security information and then the White House press secretary, he obviously had his life changed as a result of getting bad information and then going out and passing bad information to the American public. It clearly changed Scott McClellan.

DOBBS: Scott McClellan, what do I say about Scott McClellan. I have no opinion one way or the other on the man. What has important is what the administration did, the investigation that resulted, and the fact that Scott McClellan, no matter what the consequences were to him doesn't know anything about the motivation or what surrounded it. What would be interesting is to get an investigation on those who were feeding Scott McClellan. That might be kind of interesting if you want to have an investigation. Personally I'd rather be getting to the bottom of $4.00 a gallon gasoline, free trade policies that are costing millions of American jobs and find out why in the heck neither political party seems to have a clue about how to deal with energy policy, health care policy or anything else nor their candidates for the next presidency.

BLITZER: He wants substance. That's Lou Dobbs.

DOBBS: You'd better believe it.

BLITZER: His show coming up in one hour. Lou, thanks very much.

DOBBS: Thank you.

BLITZER: And to our viewers, you're in THE SITUATION ROOM.

Happening now, Barack Obama goes after john McCain on the economy, and he apparently can't say President Bush's name enough. This hour, the presidential candidates go full steam ahead into the general election campaign. Plus, McCain's strategy for beating Obama. An aide says the Republicans face one of the worst political climates in history. Can McCain win anyway?

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