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Campbell Brown
Energy Politics; Congress Stalls as Homeowners Struggle; Suspected Serial Killer Captured; Scandal Scars the Kilpatrick Family
Aired July 01, 2008 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: In the ELECTION CENTER tonight: issue number one. It's all anyone is talking about, the economy and the price of oil.
Tonight, we have some late details. First, oil prices set another all-time high today, closing at nearly $141 a barrel. Gas prices set another all-time high today, too. The national average is just under $4.09 a gallon. Auto sales went off the cliff in June. Buyers turned away from those gas-guzzling SUVs and pickups. Car- makers had their worst June in 16 years.
The head of the International Energy Agency says the world is going through an oil shock, just like back in the 1970s. The king of Saudi Arabia, a U.S. ally, says, simply, consumers should get used to those high oil prices.
And when the presidential candidates try to talk about any other issue, they're bombarded with questions about our economy and ending our dependence on foreign oil.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I intend to make this a kind of Manhattan Project, Apollo project, a kind of man to the moon project.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We can embark on a national mission, and we can eliminate over time our dependence on foreign oil, and we will get America and our economy going again. I guarantee you that.
(END VIDEO CLIP)
O'BRIEN: The bad news economically goes way beyond the gas pump, though -- 324,000 Americans have lost their job since the first of the year. The mortgage and credit crisis have crushed consumer confidence.
Starbucks says it's closing 600 stores because fewer people are shelling out those five buck a coffee kind of things. And nobody has been spared. The Dow Jones industrials, S&P 500 just suffered their worst June since the Great Depression.
And Ali Velshi joins me now.
Ali, the stock market has lost $2.1 trillion, which is a number that's so enormous I think it's really hard to even fathom what that number might look like. So, before we talk about a little more about the losses, what's up with the dominoes?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: You're absolutely right. These numbers are impossible to fathom.
The $2.1 trillion is the amount of shareholder value that is not there. Their stocks have gone down. They're worth less. And I want to give you some sense of what that means.
Now, I have got 210 dominoes here. Each one of these dominoes is worth $10 billion. That's not even a number you can really fathom. But I'm going to give you some sense of how much money has been lost since the beginning of this year.
O'BRIEN: Wow.
VELSHI: That was 210 -- 210 dominoes, $2.1 trillion in money that's been lost. That's why you don't want to sell your shares right now, because you become part of that party if you sell and lock in your loss.
O'BRIEN: Here, have $10 billion from me.
VELSHI: Yes, thank you, $10 billion.
O'BRIEN: Let me ask you a question. Is there anybody who is not affected? Obviously, if you're not in the market at all, you're not affected.
VELSHI: You're not affected.
O'BRIEN: But, realistically, who are the people who are not affected?
VELSHI: Again, if you don't share your shares, you're not affected by that. Now, if you have got a lot of years, 10 years or more before retirement, you can weather this storm. It's OK.
Over history, the stock market returns more than 10 percent a year if you're fairly well diversified. So, if you're far enough away from retirement or you're not invested, and you don't sell your stock, you're OK.
O'BRIEN: You sound almost optimistic. And yet when you hear numbers like the market being 20 percent off from October, that sounds very dire.
(CROSSTALK)
VELSHI: Yes. You have really got to pull back and take a bigger view of the stock market, yes, there are some headwinds here. If these energy prices continue to go up, if housing prices don't start to come back, if this credit crisis continues
And, Soledad, we're just a couple days away from the monthly jobless report. If more jobs are lost, those are all things that can affect the economy. But, assuming none of that goes wrong, we should be OK.
O'BRIEN: That might be a very big assumption.
VELSHI: It is a big assumption.
O'BRIEN: So, what do you do right now? I mean, right now, what do you do? Let's say you're not going to sell, which you're saying is sort of a big plus there. What else can you do?
(CROSSTALK)
VELSHI: Well, there are two things that the smart money does, professional investors do at times like this.
One is they get in and they say, well, you know what? People have really sold out. This is my opportunity to buy some of these stocks at a bargain. The other thing they do is they keep some money aside, thinking it could get worse, and when the market starts to go up again, you will know that, it doesn't happen overnight, you then start to invest.
And, so, fundamentally, for most people, if it's not your job to be an investor, stay diversified and invest in mutual funds.
O'BRIEN: Stay in it.
VELSHI: And stay in it. Don't panic.
O'BRIEN: In it to win it, right? That's what they say.
VELSHI: That's right.
O'BRIEN: All right, Ali Velshi, thanks.
Neat trick with the dominoes, by the way. It worked.
VELSHI: Thank you. It did work. I'm glad.
O'BRIEN: A little bit earlier, we heard both presidential candidates promising all-out crash programs to end our dependence on oil and get the economy moving again. But how?
Well, here are some specific details on how each of them would solve our economic mess.
As always, we give the facts, no bias, no bull, just the real story.
So, here's our senior political correspondent, Candy Crowley.
Hey, Candy.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Hey, Soledad. You know, all those things that Ali was just talking about, they talk about them on the campaign trail, too, and there the focus is the gas pump and the grocery store.
(BEGIN VIDEOTAPE)
CROWLEY (voice-over): In the end, the presidency may come down to this. Which one will fix the things that ails the economy? Who hears the high anxiety?
OBAMA: I have talked to families who are having to make different choices about the food they buy because they're out an extra $100 or $150 or even $200 a month that used to go groceries now goes to the gas tank.
CROWLEY: Which one feels the pressing nature of an economy gone sour?
MCCAIN: Who's suffering the most? Who is bearing the brunt of this? Well, the low-income worker on fixed income that drives the oldest cars. Those are the largest gas consumption cars. We know that. The brunt of this incredible increase in the cost of a gallon of oil is being borne by the lowest-income Americans.
CROWLEY: The economy now dominates the campaign trail as it dominates American households. In the latest CNN/Opinion Research Corporation poll, 58 percent of registered voters said the economy was extremely important to their vote, eight points higher than Iraq, the largest gap since the war began.
The campaign trail, once separated by who was for and who was against the war, is now littered with 10-point plans and long-term proposals.
MCCAIN: American's dependence on foreign oil was a troubling situation 35 years ago. It was an alarming situation 20 years ago. It's a dangerous situation today.
CROWLEY: John McCain wants a huge step-up on the production side of the energy equation. That includes more nuclear power plants and offshore oil drilling. In the short term, he favors temporarily lifting the federal gas tax.
Barack Obama's plan leans more heavily on alternative energy, calling for a $150 billion infusion for research and development. He envisions an 80 percent reduction in carbon emissions by 2015, and he opposes the gas tax holiday and offshore drilling.
OBAMA: I want to provide tax breaks to working families, so a $1,000 tax break per family, so that 95 percent of voters will see their tax bill go down in an Obama administration.
CROWLEY: For a long-term boost to the economy, Barack Obama would extend the Bush tax cuts for those making $250,000 a year or less. He promises to restore fairness to the tax code and give an immediate stimulus to the economy with tax relief for middle-income families.
John McCain proposes making all the Bush tax cuts permanent, reducing the corporate tax rate, and doubling the exemption for dependents. Both favor a plan to help homeowners whose mortgage is larger than the value of their home. It is an awesome set of challenges. But as detailed as 10-point plans may be, they're political documents designed to win votes. The question is which man will actually deliver when it comes to policy.
(END VIDEOTAPE)
CROWLEY: There are two main variables to see whether what is promised on the campaign trail turns out to be policy when one of these candidates hits the White House. And that is, what sort of Congress will the new president have to work with and what will the economy look like in January? -- Soledad.
O'BRIEN: Both very, very big and important questions.
All right, Candy, thank you.
So, which candidates' economic plans are best for you?
To help spell out some of the contrasts, so you can decide, we have Democratic strategist Nancy Skinner joining us from Southfield, Michigan, tonight. She's an Obama supporter, even though she ran against him back in the 2004 U.S. Senate primary in Illinois. In Washington is "Wall Street Journal" senior economics writer Stephen Moore. He's a member of "The Journal"'s editorial board and the founder and former president of the Club for Growth, which raises money for candidates who favor free market economic policies.
Good evening to both of you and thanks for being with us.
(CROSSTALK)
O'BRIEN: Nancy, let's begin with you and let's begin in fact with gas. You heard Candy talking about McCain's economic solution for looking toward gas. And he says expand the drilling, nuclear power plants and basically get more energy in the system.
If you take a look at the poll numbers, Americans support that. They support -- when gas is $4.33 a gallon here in New York, they support offshore drilling. Why not do all those things when we're really in a dire situation now?
NANCY SKINNER, DEMOCRATIC STRATEGIST: Right.
Well, great distinction here on this issue between Senator Obama and McCain. Senator Obama is saying, let's do what's right. Let's not just do what is polling well, which is what the gas tax holiday is about and offshore drilling.
The reality is, Soledad, that we only have 3 percent of proven oil reserves here in the United States. The Persian Gulf has 66 percent. And so Senator Obama has said we are going to -- he's going to take $150 billion and invest in alternative energy, like solar, wind, geothermal.
(CROSSTALK)
BROWN: We both know, when you do things like invest, it takes a long time to start reaping some of those benefits. That is not a plan for now.
SKINNER: Well, nor is offshore drilling.
"The New York Times" reported last week that the rigs that are used to drill offshore, even if we did lift the moratorium, they are booked solid for five years. We don't start drilling. The oil gets costlier to get to. Senator McCain keeps saying we have to reduce our foreign oil. There's only so much oil. There's big questions about whether we're at peak oil right now, whether the Saudi oil fields are drained. They're pumping them with water.
We as Americans from a national security standpoint have to invest. These technologies exist, renewable technologies. These are good jobs, green jobs here. And they can begin immediately. There couldn't be a bigger difference between these two candidates.
O'BRIEN: Stephen, let me ask you a question. Do you see this quote? This is from the Saudi oil minister.
And said this today to CNN. He's troubled by the high prices. Well, here's his quote: "We have nothing to do with the prices being where they are today."
How is that possible, that they have nothing to do with the prices being where they are today, nothing at all?
STEPHEN MOORE, "THE WALL STREET JOURNAL": Well, I don't think the Saudis are too troubled by high prices. They're making a lot of money.
This is why Barack Obama's position on oil is so preposterous. We actually have very large reserves. In fact, offshore, by some estimates, we have as much oil offshore as Saudi Arabia has oil. So, we have vast storehouses. We have a huge amount of oil in Alaska that Barack Obama just recently voted against.
I mean, this is not just an issue of oil security, but it's also an issue of jobs. We could be -- that's about 20 to 30 million dollars a day that we wouldn't have to be importing. And I think John McCain really has to press the advantage on this, because Barack Obama -- they were talking about solar and wind power. We only get about 2 or 3 percent of our energy from solar and wind.
(CROSSTALK)
O'BRIEN: Well, now, but isn't the theory that, if you focus on conservation and you can focus long term, you actually wouldn't find yourself in the same position that we're -- it was McCain's sound bite -- 35 years ago, 20 years ago. Today, it's urgent. MOORE: Well, let me just say this. That's the very same argument that people like me have been making for 25 years about why we should be drilling in Alaska and offshore.
And every time we bring it up and say we should do this, people say, well, if we do it, it's going to be five years. We would have that oil by now if we had done this five years ago. But Barack Obama keeps voting against it.
(CROSSTALK)
SKINNER: The fact we don't -- haven't invested, we could harvest enough energy -- look, McCain wants nuclear power. Nuclear power is the most expensive there is, 12 cents a kilowatt hour. You are not going to build one for 10 years.
(CROSSTALK)
MOORE: Nancy, if that's the case, if nuclear power doesn't work, then why is China building 40 nuclear power plants? Why is -- today, France gets 80 percent of its electricity from nuclear power.
(CROSSTALK)
O'BRIEN: We have 30 seconds left. And here is my question for you both, briefly. What do you do now -- now -- for people who are paying, like me, $4.33 a gallon for my giant SUV? What do I do now?
SKINNER: OK. I know what you do. I am in Detroit right now. Detroit is getting killed. So, what they're doing is they're stopping production of big SUVs. The federal government needs to, as the senator said he would, help them make a transition to a whole new generation of fuel-efficient vehicles. We need to invest in new jobs here, green jobs. And we need to...
(CROSSTALK)
O'BRIEN: Stephen, I am going to give you the final word.
(CROSSTALK)
O'BRIEN: And, again, now was the word.
MOORE: Who is going to do the investing? We don't want the government to do it. They are the ones who wasted all the money over the last 20 years.
SKINNER: They're investing in oil campaign.
(CROSSTALK)
MOORE: Americans need to conserve. And we also -- if we would declare that we're going to start drilling, I think that would have an immediate impact on the futures price of oil.
(CROSSTALK) O'BRIEN: That's going to be the final word for this moment. We have got to take a short break. You guys are going to stick around for us. We will be back in a moment to talk about taxes, your taxes. Both candidates are promising tax cuts. We're doing the math and we will show you how your tax bill could change.
Then a little bit later, no matter who is elected in November, why isn't Washington helping with the housing crisis now?
But, first, one more look at the stock market's losses so far this year, 2.1 trillion -- that's trillion with a T. -- dollars in lost value. Remember, each domino there represents $10 billion. That's a lot of dough.
(COMMERCIAL BREAK)
O'BRIEN: The obvious way to handle higher food and gas prices is put money in your pocket, more money in your pocket.
So, let's take a look now at Obama and McCain's tax plans, first McCain. If you make over $2.9 million a year, his plan will save you $269,000. Now, for the folks who make $112,000 to $161,000, McCain would save you about $2,600.
And for people who make between $38,000 a year and $66,000 a year, they would save about 300 bucks.
Now, Obama's plan, his tax plan would raise taxes for folks who earn over $2.9 million a year. They would pay about $700,000 more each year. For people who are in the $112,000 to $161,000, his plan would save them about $2,200, about $400 less than McCain's plan.
But for people who are in the $38,000 to $66,000 income bracket, they would save $1,000, more than triple the amount that McCain's plan would save them.
So, back to our panel now, Democratic strategist Nancy Skinner, and Stephen Moore from "The Wall Street Journal."
Let's begin with you, Stephen, this time around. If you look at the McCain's plan closely, he's really giving more money back to the richest Americans. And if you think about it, these are not people who are struggling to pay the lighting bill and these are not the people who are trying to figure out how much money can they trim from their budget so that they can buy groceries at all. So, why should they get that break?
MOORE: Well, first of all, those numbers are wrong because they're including making the current tax codes a permanent part of the law. And I would regard moving the higher rates raising the tax rate, not cutting them.
But here's the point. There are about 100 million Americans today who are members of what I call investor class. They're Americans who own stock. And those are the people that John McCain really has to appeal to, and say, look, we have got to keep the capital gains tax, the dividend tax low. We can't let Barack Obama raise those. Those are things that are going to depress the value of your investments.
Other than your home, your stocks are your most important investment. The other point to make is, look, this is a competitiveness issue. Today, all around the world, countries are cutting tax rates. If Barack Obama's plan came into being, the United States would be the only country in the world that is raising tax rates, when the rest of the world is cutting them. That's going to mean less jobs for all Americans.
O'BRIEN: And, Nancy, if you look at the richest Americans who are paying the most tax, rich Americans pay a lot of money in taxes already. Don't they deserve a break for all the reasons that Stephen just pointed out?
(CROSSTALK)
SKINNER: Well, no less than Alan Greenspan is saying that income inequality in this country is causing a major economic crisis.
And so just like when Bill Clinton raised the top 1 percent when he took office, what happens? The bond market realized that they were serious about deficit reduction. The economy -- we had the strongest economy in a generation.
So, this is what -- Senator Obama, to be very clear, his tax cut is going to be for working families, $1,000 per family. And it will cover 95 percent of Americans. President Bush -- what John McCain wants to do, to extend these tax cuts, make them permanent for the richest, that's $3 trillion. Then he wants to give corporations two more trillion dollars.
Corporate tax cuts are not what we need right now. We need consumer spending.
(CROSSTALK)
MOORE: Nancy, let me ask you a question about this. Here's the problem with what I have with Barack Obama's plan. You talk about giving tax breaks to businesses and corporations. Let's face it. Those are the people who employ Americans. And you can't have jobs if you don't have employers.
When Barack Obama talks about raising the tax rates, what he is saying is that he's going to raise taxes on the two-thirds of Americans who create the jobs, the small-business men. So, my question is, how are you going to create jobs if you're raising taxes on the very people who create the jobs?
SKINNER: It's the same old trickle-down stuff that we have heard. It didn't work for Bush. He's talking about raising taxes on only those people that make over $250,000 a year.
(CROSSTALK)
MOORE: Those are the small-business men, though.
(CROSSTALK)
SKINNER: No, those aren't the small-business men. That's a tiny fraction of people.
You know what? The other argument is, you have got to have a job. We all just can't work at Wal-Mart. And manufacturing -- here's another thing -- now, Senator McCain is all out. Now he's going to Mexico. He was in Canada, saying how great this is.
Look, we know that these failed trade policies have cost us. I'm in Michigan. We lost 300,000 manufacturing jobs. We have got to make stuff here. We can't just be all working at Wal-Mart. And the senator's policies, economic plan -- and he admits that this economy, that he doesn't know much about it and that we have had great progress. That's what he says.
Well, if this is his idea of great progress, I think...
(CROSSTALK)
O'BRIEN: And that this is final word to our panel that just can't let me get a word in edgewise this evening.
(CROSSTALK)
MOORE: Exactly what you said. It's why we have got to cut the corporate tax.
O'BRIEN: Nancy Skinner and also Stephen Moore joining us this evening, thank, guys. I appreciate it.
MOORE: Thank you.
O'BRIEN: We're getting this news right into CNN now, the CIA confirming the capture of a suspected serial killer -- 28-year-old Nicholas Troy Sheley is suspected of violently taking eight lives in the span of a few days, six in Illinois, two in Missouri. The victims apparently died from blunt-force trauma to the head. Again, the suspect is now reported to be under arrest.
Coming up next, homes and mortgages. Get out your book of favorite political excuses. You are going to need it. We're going to tackle why Congress isn't doing anything about the foreclosure crisis.
Then, later, a political excuse we bet you never heard before. A powerful congresswoman has a real reelection problem. The problem is her son, the mayor, who got caught in a sex scandal. We will have the details when we come back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This unethical, illegal lynch mob mentality has to stop.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
O'BRIEN: So, the stock market is tanking, your 401(k) is shrinking. You cringe when you go to the gas station. But when it comes to your biggest investment, your home, for many people, it's just plain scary.
Foreclosures were up nearly 50 percent in the month of May compared with a year ago. So, clearly, the problem is not going to fix itself.
As for a rescue mission from Washington, well, your members of Congress took a break. They left town while a bill that could help thousands of homeowners sits paralyzed on their desks on Capitol Hill. If you're outraged about that, you're not alone. In just a minute, we're going to talk with some folks who have a lot to say about it.
First, though, here's Ed Henry to lay out the facts for us, so you can decide.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Soledad, the fact of the matter is that vacationing lawmakers have really gotten hit with a blistering editorial in "The New York Times" today pointing out that, between now and Monday, when Congress is supposed to get back to work, it's likely that up to 55,000 more people will lose their homes.
(BEGIN VIDEOTAPE)
HENRY (voice-over): This is the sound of silence. Tour buses are rolling up to Capitol Hill to see their government at work. But the Democratic-controlled Congress is not here, gone for a weeklong July 4 vacation. They left before they passed a long-awaited bill to rescue homeowners trapped in the mortgage crisis.
GERALD CONNOLLY, FAIRFAX COUNTY BOARD OF SUPERVISORS: As they're dithering at the federal level, thousands of homeowners have lost their homes. It is critical that the government step in and try to stabilize this situation.
HENRY: Just about 20 miles from the capital, in Fairfax, Virginia, grass grows wildly on foreclosed and now abandoned homes. Gerald Connolly, a Democrat and chairman of the county board of supervisors, says, in January a year ago, there were just 74 foreclosures here. A year later, this January, there were 1,400.
CONNOLLY: The situation is going to get worse before it gets better. People are hurting. People got stretched.
HENRY: So, what's Washington doing? Not much. After months of delay, Senate Democrats finally got a bill to the Senate floor last week. It would have given struggling homeowners new mortgages backed by the government, if lenders would also make concessions. Then, a Republican, Senate John Ensign, stalled the bill by insisting it includes unrelated renewable energy tax credits. And then came the siren song of a July 4 vacation back home during an election year, as well as the predictable lashing from President Bush.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I think we can get us a bill, but it is going to require less politics and more focus on keeping our minds on who we need to help. And that's the homeowner.
(END VIDEOTAPE)
HENRY: Now, the president did not mention that it was a Republican who is blocking that bill. And he also did not mention that he himself has vowed to veto the final product unless Congress does the Federal Housing Administration reforms that he wants. And, in other words, a lot of finger-pointing going on, but not a lot of action so far -- Soledad.
O'BRIEN: There's not a lot of reflection in the mirror for those folks.
Ed Henry for us tonight live at the White House -- thanks, Ed.
HENRY: Thank you.
O'BRIEN: Thousands of taxpayers losing their homes, Congress doing nothing. Stay with us tonight. We're going to have much more on that.
Then, later, a shocking story of death in a psych ward. Nobody tried to help the patient -- the whole thing caught on tape. We have got it all just ahead. Stay with us.
(COMMERCIAL BREAK)
O'BRIEN: Now, let's take you back to the story that everybody's talking about tonight, the economy. It's gone from bad to worse and what's got Americans all riled up tonight is the housing meltdown plus the do-nothing Congress.
Here to talk about that, two of the feistiest guys in talk radio, Lars Larson from Westwood One Radio, and Joe Madison, from station WOL in Washington, D.C.
Nice to see you both. Lars, I'm going to start with you. I'm working, you're working. I look at gas prices, $4.38 a gallon. I look at the number of foreclosures, 461,000 for the month of May which they just calculated. And my Congress is taking a holiday. You got to imagine that is angering a lot of voters, especially since that person is going back home.
LARS LARSON, RADIO TALK SHOW HOST: Yes, it's going to anger people but I tell you something. On the housing meltdown, I'm not as sympathetic. I've looked at an awful lot of these and an awful lot of them were people who went out and got themselves in over their heads. And I'm less than sympathetic about having the Congress bail them out.
O'BRIEN: Yes, but they --
LARSON: Well, they --
JOE MADISON, RADIO TALK SHOW HOST: Oh, God. Oh, here we go. Here we go.
O'BRIEN: In all fairness, they indicted 400 some people, right? These are people who were indicted because they were lenders, not regular citizens. So regardless of where you stand on that, my question for you is, shouldn't the Congress be doing something? What if they get -- you know, the do-nothing Congress is a name that's sticking this time around, too.
MADISON: Well, but it's sticking because there's this magic number, that I think it's like 200 plus votes that are needed. So you've got, as you just reported, Republicans who are obstructionists, and you also have some Democrats, who, by the way, just simply don't want to get on board.
But, Lars, give me a break. They bailed out Wall Street. There are these people, yes, who got over their head.
(CROSSTALK)
LARSON: I wasn't in favor of that either, Joe.
MADISON: But nobody is really willing to bail out the little person. And I hope they catch hell between now and Monday for going on vacation, both Republicans and Democrats, because they should have stayed and Bush ought to quit playing politics, too.
LARSON: You know what? Joe is the kind of guy who will go all the way to Sudan and he deserves credit for that. But I didn't want to bail out Wall Street and I don't want to bail out people who took on mortgages they should not have taken on.
O'BRIEN: But there are plenty -- there's plenty of interest though in having the government. The people we employ do something. And if you look at the approval rating for Congress, I did a story last year when it was at an all-time low, we're doing it again. Now, 19 percent approval rating. That is the lowest ever measured by Gallup. What can they do?
LARSON: How about this? How about having the private marketplace do it? If there's value in those homes, then let's have the lenders step in and say, let's offer a deal. But let's have it done by the private market.
O'BRIEN: That's going to get the approval rating back up for Congress? I don't think so.
(CROSSTALK)
LARSON: I don't care about the approval rating of Congress.
MADISON: Who cares about the approval rating? Oh, well, you got to -- of course, you do care.
LARSON: No, I don't.
MADISON: You would care if the Republicans were in charge? Of course, you would.
LARSON: No. Because if they deserve the heat, they get the heat. They deserve it.
MADISON: Oh, well, I'm glad to hear that. The bottom line is that it's a mixture of both. And the fact is that they didn't do a good job as watchdogs. This is the problem.
(CROSSTALK)
LARSON: Oh, come on. Oh, Joe. This people are --
MADISON: That's why it happened in the government.
LARSON: Joe --
MADISON: They didn't watch these crooks on Wall Street.
LARSON: Joe, if you're over 21, you can read --
Joe, if you're over 21, can read, write and count and you walk in to sign the mortgage and say, you're borrowing this much money, why shouldn't you be responsible?
MADISON: Oh, excuse me, I am over 21. I'm getting ready to buy a house. I've got to hire a lawyer to read damn near 100 pages.
LARSON: No, but the top end of that is very clear. It tells you how much you're going to rent, what's the mortgage rate.
MADISON: When's the last you had a mortgage contract?
LARSON: All you got to read --
MADISON: When's the last time you read a mortgage contract? Come on!
LARSON: About six months ago, Joe.
MADISON: And you read all hundred pages?
LARSON: No, you don't need to.
MADISON: That's what I thought.
(CROSSTALK)
LARSON: The part you need to know is --
MADISON: You were duped.
LARSON: Wait a minute.
MADISON: You don't need to read the whole contract?
LARSON: No, you don't, and I'll tell you why. At the top of that mortgage, it says how much it can adjust and how soon.
MADISON: Well, let me tell you, my lawyer would tell you, you would need somebody to read that for you.
LARSON: No, you don't.
MADISON: And that's why people get in trouble.
LARSON: No, you don't. If you read it and it said this can adjust in two years and go up by two percent a year or 4 percent a year, and you don't pay attention to that, that's your problem.
(CROSSTALK)
O'BRIEN: There is a question, Joe.
MADISON: And if you have an unscrupulous mortgage --
O'BRIEN: When people talk about -- you know, when you sign an ARM (ph), what do you think the ARM part of that stands for, right? I mean --
LARSON: Well, Joe wants you to forget that it's -- he said --
O'BRIEN: But let me ask you a final question before we run out of time. We keep talking about the housing crisis. You know, people coin the term, it's the economy, stupid, because they want to remind elected officials at the end of the day, it comes back to how we're feeling in our pocketbooks.
MADISON: That's what it is.
O'BRIEN: Do what degree does the economy, what's happening now and the lack of action really tarnish President Bush's legacy, do you think?
MADISON: Oh, it's his economy and it's his legacy. And he's going to live with it. Of course, he is. It's just like it was Clinton's, it is the economy, stupid. And that's exactly what his legacy is going to be.
LARSON: Joe, it's Bush's fault that the Democrats blocked drilling for oil on our own land to get oil bleeding into our economy again?
MADISON: No, it's the Republicans fault that they're obstructionists.
LARSON: You're a good guy, Joe.
MADISON: Yes, you too, Lars.
O'BRIEN: It always terrifies me when my interviews end with my guests saying, you're a good guy. I'm not sure he means that.
LARSON: He's wrong.
MADISON: I'm not.
O'BRIEN: He's wrong but I love him. Lars and Joe, we're going to have you hang in and we'll come back to you in just a little bit.
Some breaking news we want to get to first, though.
A suspected serial killer has been captured. We're getting some details. We're going to have that up next for you.
And then one of the steamiest stories in politics, the mayor, the other woman, their racy text messages. Now, his mom is getting mixed up in all the mess. We've got that story when we return.
(COMMERCIAL BREAK)
O'BRIEN: Still ahead this hour, Barack Obama's repositioning and reinventing himself on the campaign trail. I'll show you what he's doing and why.
First, though, Ted Rowlands has tonight's "Briefing."
TED ROWLANDS, CNN CORRESPONDENT: Soledad, we begin with more on this hour's breaking story. The FBI has confirmed the capture of a suspected multiple killer. 28-year-old Nicholas Troy Sheley is suspected of taking eight lives in the past few days, six in Illinois and two in Missouri. The FBI tells CNN that Sheley was arrested this evening in Granite City, Illinois, just east of St. Louis.
Now, a disturbing scene caught on camera inside a Brooklyn New York psychiatric hospital. It shows a 49-year-old patient in the back of the waiting room, falling from her chair, writhing on the floor and slowly dying. Investigators say it took the staff an hour to react. The woman had waited for more than 24 hours for a bed. Administrators fired six staff members and promised changes.
The latest CNN/Opinion Research poll shows Barack Obama with a narrow lead over John McCain. Fifty percent of the voters we interviewed said they'd vote for Obama. Forty-five percent chose McCain.
And the mothers at the heart of the west Texas polygamy case are now selling their modest handmade clothing for children online. The women belong to a fundamentalist Mormon sect, whose 400 children were seized in April then returned. Now available, their pastel colored dresses, overalls and ankle to wrist underwear, just in time for summer -- Soledad.
O'BRIEN: Right, Ted. Thanks.
We want to give you a heads up tonight about a political race that is too good to miss. A Michigan congresswoman might be in trouble this year, not because of anything she has done. It's because her son, the mayor of Detroit, and for the fallacious things that he might have done. You're going to want to stick around for that one because that's story is up next.
(COMMERCIAL BREAK)
O'BRIEN: Sons have been giving their mothers headaches since the beginning of time. And tonight, we have kind of a unique example. It's a story of a political mom whose political son's legal trouble could bring both of their careers to an end.
Here's CNN's Joe Johns.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT (voice-over): What's a mother to do? This is the mother, Representative Carolyn Cheeks Kilpatrick. She's a fighter. She's well respected, the chairwoman of the Congressional Black Caucus. She's up for reelection but she has a unique problem.
REP. CAROLYN CHEEKS KILPATRICK (D), MICHIGAN: I've done polling and yes, it has impacted. I am ahead and we're going out.
JOHNS: And this is, well, her problem. Son and Mayor of Detroit, Kwame Kilpatrick.
MAYOR KWAME KILPATRICK, DETROIT: I look forward to complete exoneration once all the facts surrounding this matter have been brought forth.
JOHNS: If you have missed the headlines about his case, here's the thumbnail. He's going to court in September accused of conspiracy, obstructing justice and lying to a jury. The case is partly about the firing of a police officer, who was investigating alleged misconduct by the mayor and his bodyguard.
But Kwame Kilpatrick is also charged with lying about an alleged extramarital relationship with his chief of staff. In January, he made a public apology to his wife and spoke of his profound embarrassment. That after the "Detroit Free Press" newspaper published text messages between the mayor and the staffer.
In this one, the mayor allegedly wrote, "I've been dreaming all day about having you to myself for three days, relaxing, laughing, talking, sleeping, making love."
And if that's not enough, Mayor Kilpatrick's State of the City Address took it to a whole new level.
K. KILPATRICK: I've been called a (EXPLETIVE DELETED) more than any time in my entire life. I've heard these words before, but I've never heard people say them about my wife and children.
JOHNS: So that's the son's story. As for the mother, in her last election, the Detroit congresswoman didn't even have an opponent in the primary. This time around, she's in a nasty fight. Ex state Representative Mary Waters, one of her rivals, ran this ad using a three-year old clip of Congressman Kilpatrick defending her son, the mayor.
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL)
C. KILPATRICK: You all sent him up in here. Don't let nobody talk about your boy. Too many people died for us!
NARRATOR: Sorry, congresswoman, but we deserve much better than yaw's boy.
(END VIDEO CLIP)
JOHNS (on camera): The current consensus in Washington is that the mother will survive the troubles of the son, but one seasoned observer of African-American politics agrees there is potential for blowback.
PROF. RON WALTERS, UNIVERSITY OF MARYLAND: Well, I see some because she's a mother and she's been very close to her son, both as a mother and the mayor of the city of Detroit. But on the other hand, she has such a solid record in the House of Representatives and so beloved in her constituency, that I wouldn't think that all of his problems would naturally devolve to her.
JOHNS (voice-over): Time is on her side, too. The primary in the heavily Democratic district comes the first week of August, well before the start of her son's trial.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
O'BRIEN: Joe Johns, thanks.
Coming up, Obama's move to the middle, what it takes to reposition the candidate. You're watching ELECTION CENTER.
(COMMERCIAL BREAK)
LARRY KING, HOST, "LARRY KING LIVE": It's the subject you haven't heard much about until now. Murderers, burglars, addicts, all of them women in prison. Go with us to a correctional facility in Maryland for their incredible stories. They'll tell you what they did on the outside that put them inside.
"Women Behind Bars" at the top of the hour on "LARRY KING LIVE."
(COMMERCIAL BREAK)
O'BRIEN: One of President Bush's signature issues is empowering religious groups to take care of social problems in place of government agencies. Today, one presidential candidate promised to expand faith-based programs even more. And surprise, it might not be the candidate you think.
Here's Jessica Yellin.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Barack Obama is fighting to bolster what was one of his great assets, his ability to connect with people of faith.
OBAMA: We know that faith and values can be a source of strength in our own lives. That's what it's been to me.
YELLIN: This year, somewhere between Pastor Jeremiah Wright's rantings and the false Obama is a Muslim whisper campaign, the candidate's faith message got drowned out. Now, he's trying to bring it back, with an aggressive new campaign, one part damage control, one part outreach.
OBAMA: The fact is leaders in both parties have recognized the value of a partnership between the White House and faith-based groups.
YELLIN: Today, Obama ripped a page from the Bush playbook, a pledge to dramatically expand the president's partnership with religions organizations and at the same time, under the radar --
UNIDENTIFIED FEMALE: Do you have work? Please be with us here tonight.
YELLIN: Obama's campaign is holding so-called values parties wooing undecided religious voters at small gatherings, like this one in Cincinnati.
UNIDENTIFIED FEMALE: My kids can look at him and say, you know, it's good to be Catholic. It's good to be Christian. It's good to be open about what you are, and it doesn't -- yes.
YELLIN: The message? Obama's Democratic Party welcomes believers and Republicans don't have a monopoly on God.
UNIDENTIFIED FEMALE: People love God in the blue states and they love God in the red states.
YELLIN: Joshua Dubois directs Obama's faith outreach.
JOSHUA DUBOIS, DIR. OF RELIGIOUS AFFAIRS, OBAMA CAMPAIGN: Too often Democrats have seeded the language of faith and morality to other folks. And what we're here to say is that Senator Obama is a committed Christian and he believes that people of all faith and backgrounds have a role in public life.
YELLIN: Did you catch that? Obama is a committed Christian. Another big theme of these meetings are reminders like this video, that the candidate is no Muslim.
(BEGIN VIDEO CLIP, OBAMA CAMPAIGN VIDEO)
OBAMA: I've never been ashamed to talk about my Christian faith.
(END VIDEO CLIP)
YELLIN: Winning over religious voters has been an uphill climb for Democrats, and Obama thinks he can break the mold.
JOHN GREEN, PEW SR. FELLOW, RELIGION & POLITICS: And one of the areas in which Senator Obama might be able to get that extra margin of voters would be in some of these religious communities, Catholics, evangelical Protestants, white mainline Protestants, that in the past have tended to vote more Republicans.
YELLIN (on camera): Religious conservatives aren't going to make it easy. Obama's talk only goes so far, they say, and they're highlighting his pro-choice views in a new ad campaign.
(BEGIN VIDEO CLIP, POLITICAL AD, FAMILY RESEARCH COUNCIL ACTION)
UNIDENTIFIED MALE: Senator, I have a question for you. If as you say, fatherhood begins at conception, when does life begin?
(END VIDEO CLIP)
YELLIN (voice-over): But Obama is betting on a new politics and the hope that religious voters are willing to take a leap of faith.
Jessica Yellin, CNN, Washington.
(END VIDEOTAPE)
O'BRIEN: Barack Obama making faith a centerpiece of his campaign. The question is, is that going to work for him and will it work with the voters?
Back with me this evening, talk radio host Lars Larson and Joe Madison. Gentlemen, let's begin with Lars this time around.
So you heard from Jessica, Obama wants to expand really what President Bush started. So that's a program that conservatives love. You must be utterly thrilled tonight with this news?
LARSON: Oh, less than thrilled, Soledad. I guess he's trying to convince some Democrat -- the Democrat Party, it's not just for secular progressives after all. I don't think so.
Number one, he wants us to forget about Jeremiah Wright and his black liberation theology, which is about as disturbing as it gets. Number two, if you read Obama's plan, he says that he wants to have faith-based groups, churches and such, teach people how to use government programs. That wasn't the original idea.
Faith-based groups do a great job. Government programs do a poor job. Having faith-based groups teach people how to sign up for government programs like welfare and food stamps. That's not what I called faith-based initiative.
MADISON: Well, first of all, job corps does a great job. It is a government program and there are a lot of government programs that do a lot of good work. As a matter of fact, some of you Republicans have learned to use it, particularly in big business very effectively.
Number two, churches do an amazing amount of work. And I don't have a problem with the faith-based program as long as the churches get the money that they are promised, and as long as they don't discriminate. If a person is a Baptist and decides to go to work for Catholic charities, they should be allowed to without being discriminated against.
As far as Jeremiah Wright is concerned and black liberation theology, you ought to leave that to somebody who's been in the black church, who goes to church on Sunday. And finally, let me say, Obama can put all this to rest about him being a Muslim. All he has to do is say, I believe in God, I believe in Jesus Christ, I believe in the resurrection. And that should be enough for every Christian in America.
O'BRIEN: We're out of time. You guys ended on time for me. I thank you very much.
I will ask you to stick around though for after this short break...
LARSON: All right.
MADISON: Thank you.
O'BRIEN: Because we're talking about the gun lobby. You know, they're spending millions of dollars to keep Senator Obama out of the White House. What's he going to do about that? We'll look at that question straight ahead. Stay with us.
(COMMERCIAL BREAK)
O'BRIEN: In the middle of all this talk today about faith, Barack Obama was asked if he is remaking himself into a more voter friendly centrist candidate.
(BEGIN VIDEO CLIP)
OBAMA: What happens is, I get tagged as being on the left, and when I simply describe what have been my positions consistently, then suddenly, people act surprised. But there hasn't been substantial shifts there.
(END VIDEO CLIP)
O'BRIEN: National Rifle Association launching a multimillion dollar campaign against Senator Obama. Let's get back to Lars Larson in Portland, Oregon, tonight. Joe Madison in Washington.
You're shaking your head Lars. I can almost hear that from here. You're shaking your head. He says, no, I'm not changing my position at all. You guys are just getting me. That's what that sounded like to me.
The NRA isn't pretty clear. They say Obama is an anti-Second Amendment candidate Democrat. Obama has been pushing back on that.
LARSON: He's a gun grabber. You know he's a gun grabber.
MADISON: Come on.
LARSON: Look at his legislative record in Illinois. He likes the idea of taking guns away from American citizens until the Supreme Court came down with Heller. He said the D.C. ban was constitutional.
MADISON: Yes, but he's against a lot. You know what? The NI (ph) might as well save their money because here's the issue. What good is it to have a gun to protect a home if you don't have a house because you've been foreclosed.
LARSON: Oh --
MADISON: The issue is not -- the issue is not going to be guns. It's going to be whether people can stay in their homes. It's the economy, man. It's the economy.
LARSON: Hey, listen.
O'BRIEN: So Joe, are you --
LARSON: If somebody comes along and steals your pickup truck that you drive to work in everyday and you can't get to work, that's an economic issue as well.
MADISON: And the people who usually talk like that -- you know what, man, I'm not opposed to folks having guns but, my God it's something --
LARSON: Barack is.
MADISON: No, he's not.
LARSON: Yes, he is.
MADISON: He said it himself. So you're calling him a liar?
LARSON: He's a gun grabber.
MADISON: He says he supports the Second Amendment. Is he telling the truth?
O'BRIEN: You know, Joe, there are people who would say he's moved to the center on a number of issues, not just guns, wiretapping.
MADISON: Guess what? Every --
O'BRIEN: Let me finish my list. Let me finish my list.
MADISON: All right.
O'BRIEN: Warrantless wiretapping, the death penalty, welfare reform. MADISON: And so has McCain. He used to be the extremist of the Republican Party. Now, he's what? In the center.
That's the only way you get elected in America because there's more people in the Senate than there are like Lars and myself.
(CROSSTALK)
LARSON: Hold on. Soledad, how does an extremist get labeled, a guy who has done deals with Lieberman and Kennedy and that and Feingold and that bunch --
(CROSSTALK)
MADISON: Well, McCain did a deal with Kennedy.
LARSON: When has Barack ever done a deal with anybody on the right?
MADISON: Excuse me. You forgot about No Child Left Behind. McCain did a deal with Kennedy on immigration.
LARSON: When has Barack ever done a deal with anybody slightly to the right?
MADISON: You're out of your mind, man.
O'BRIEN: Lars, if you look at -- if you look at all the elections that have been lost on these wedge issues, doesn't it make sense to say, listen, the voters have spoken, and if I'm going to represent the voters, then maybe I need to move a little bit.
LARSON: Changing your values is not the way to win elections.
MADISON: Wedge issues aren't going to play like it did four years ago and eight years ago because people who have wedges, it's the gas pump that's driving the wedge.
LARSON: Hey, Soledad, Barack is coming for your guns.
MADISON: Oh.
LARSON: I'll leave it there, gentlemen. How about that? I've got so much to say and I'm not going to say it.
Lars Larson joining us from Portland, Oregon, tonight.
LARSON: Thanks, Soledad.
O'BRIEN: Joe Madison in Washington, D.C.
MADISON: Thank you. God bless.
O'BRIEN: Gentlemen, I thank you very much.
MADISON: God bless. O'BRIEN: And that's it for me in the ELECTION CENTER. Campbell Brown will be back tomorrow.
Larry King starts right now.
