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McCain & Black Voters; Talking Nukes With Iran; Inside the Economy; Economy, War and the '08 Race; Dealing With Motion Sickness; Exchange Between Enemies

Aired July 16, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: And good morning again, everyone. You're informed with CNN.
I'm Tony Harris.

HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.

Developments keep coming into the CNN NEWSROOM on this Wednesday, July 16th.

Here's what's on the rundown.

John McCain making his case this hour. The candidate engages the NAACP on education.

HARRIS: Having a hard time keeping up with this economy? New numbers just in. What they mean for your bottom line.

COLLINS: And former prisoners now back in Lebanon, swapped for Israeli soldiers' remains. Tears on both sides -- in the NEWSROOM.

HARRIS: So this hour, what do you say we start with a bit of good news unfolding right now? Oil prices have plunged several dollars a barrel. This, after a government report shows a surprise surge in supplies of gasoline and crude oil.

There, some good news. But also this morning, new measures of our joint misery.

Retail prices surged, the highest one-month spike in 26 years. The Consumer Price Index jumped 1.1 percent last month. And when you look at the past year, that increase, the highest in 17 years. Inflation now running at five percent.

Are investors worried on Wall Street this morning? Look at this. I bet this is on the drop in the price of oil.

We've got a nice little rally going, the Dow up 108 points. Just about 90 minutes or so into the trading day.

Also this morning, a view of the economy from one of its biggest policymakers. Federal Reserve chairman Ben Bernanke in his second day of testimony on Capitol Hill.

CNN's Kate Bolduan will join us in a few minutes with the highlights and the politics of money.

Some top Democrats are calling for another stimulus package. President Bush says it is too early to gauge the success of the last round of tax rebates.

COLLINS: John McCain reaching out to African-American voters. He speaks before the nation's oldest civil rights organization this hour.

Dana Bash, live from the NAACP convention in Cincinnati now, with a look ahead.

So what kind of reception is he likely to get there, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, I think we can maybe answer that by looking at the history of how Republicans have done within the African-American community on Election Day. And, you know, President Bush is a good example.

He only got 11 percent of the black vote in the last election running against John Kerry. So, you might wonder why John McCain, running against Barack Obama, would even bother coming here to court NAACP members to try to get them to vote for him for his presidential campaign, but McCain advisors insist there is opportunity.

(BEGIN VIDEOTAPE)

BASH (voice over): Alveda King looks forward to voting for a black presidential candidate, but it won't be Barack Obama.

ALVEDA KING, CONSERVATIVE ACTIVIST: I simply cannot vote for Senator Obama because he's not pro-life.

BASH: Saying no to Obama is especially hard since King is a niece of Martin Luther King. But she says her opposition to abortion trumps all.

KING: Because I really do have a dream, and it's in my genes. And as I say, if Senator Obama becomes pro-life, then I would consider giving him my vote. It's just that simple.

BASH: King is part of a small but increasingly vocal group of conservative black activists who call Obama too liberal. It's one reason John McCain decided to speak to one of the largest black audiences of the campaign season, the NAACP Conference.

CNN is told several prominent black Republicans, including former congressman J.C. Watts and former gubernatorial candidate Michael Steele, met privately with McCain last week and urged him to fight for the black vote despite the odds. And they are steep. One recent poll shows 90 percent of African-Americans plan to vote for Obama, only four percent say McCain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I know I have to compete hard for the African-American vote. I have no illusions about that. BASH: McCain's relationship with the black community has been rocky. He initially voted against the Martin Luther King holiday and was booed in Memphis this spring when he tried to apologize.

MCCAIN: I was wrong. I was wrong.

BASH: But he was the first Republican candidate to visit the site of the famous civil rights march in Selma, Alabama. Aides say that, like addressing the NAACP, is part of McCain's broader, different kind of Republican pitch.

(END VIDEOTAPE)

BASH: And Senator McCain will address NAACP members here in about a half an hour. And Heidi, I've been speaking to several of the members as they come into this room prepared to listen to Senator McCain speak. And I haven't found anybody yet who said that they are willing to vote for Senator McCain. Most say that they're pretty much decided on voting for Barack Obama.

One I found said that she was undecided. But to a person, they all said that they think it is a pretty good thing that Senator McCain is coming here and at least trying to reach out to them. They say that that says a lot about the kind of campaigner he is, the kind of candidate he is, the kind of person he is, and they said that kind of goodwill they hope will go a long way, regardless of how the black vote turns out for him in November.

COLLINS: Yes. I was going to say, well, why are they coming then if, you know, they've already deciding on their voting? Obviously, this is something where they just want to hear what he has to say, which could be very positive as well.

BASH: That's exactly what they say. Exactly.

COLLINS: All right. Thanks so much, Dana.

CNN's Dana Bash, live for us from Cincinnati this morning.

HARRIS: Barack Obama says he will listen to military commanders about Iraq and Afghanistan. But if he's elected president, the buck stops with him. On CNN's "LARRY KING LIVE," Obama said the current Iraq strategy is hurting efforts in Afghanistan.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The situation where the central front against terrorism should be taking place in Afghanistan, the situation has deteriorated. And we had this brazen attack on a U.S. base where nine servicemen were killed, and we've got to recognize that perpetuating the strategy that we have in Iraq is costing us elsewhere.

(END VIDEO CLIP)

HARRIS: Obama also talked about the government's response to the turmoil surrounding mortgage giants Fannie Mae and Freddie Mac.

(BEGIN VIDEO CLIP)

OBAMA: I think some of the ideas that were offered with respect to Fannie Mae and Freddie Mac are good ones. I just want to make sure that we're not bailing out shareholders and CEOs, but that we're focused on maintaining a liquidity in the housing market.

(END VIDEO CLIP)

HARRIS: The Fed and the Treasury Department have proposed a financial lifeline for those companies.

COLLINS: Talking nukes with Iran. The White House sending a senior diplomat to Switzerland to meet with Iran's chief nuclear negotiator. Some would say it's a big shift in Bush administration policy.

Live now to White House Correspondent Elaine Quijano.

Elaine, good morning to you.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Good morning to you, Heidi.

Well, President Bush has signed off on this decision to send the undersecretary of state, William Burns, to Geneva, Switzerland, this weekend, where he will attend a meeting with Iran's top nuclear negotiator and the foreign policy chief of the European Union. Now, the Bush administration insists this is not giving into Iran, they say, even though officials have insisted time and time again that the U.S. would not engage in direct nuclear talks with Iran unless Iran suspended its uranium enrichment program.

Now, officials say Mr. Burns will only be there to listen to the Iranians about a package of incentives that the Europeans delivered weeks ago. He'll also reiterate the U.S.' position. But what happens if this top Iranian official, a man by the name of Saeed Jalili, decides to try to pull aside Mr. Burns at this meeting? Here is how a spokesman at the State Department responded to that question a short time ago.

(BEGIN VIDEO CLIP)

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: William Burns is one of our most experienced diplomats, and I'm sure that, should the event occur that you've described, wherein Mr. Jalili tries to engage him, I think Bill will make a strong point of highlighting to him, Mr. Jalili, if you want negotiations, you know what to do. You can advise your government to suspend its enrichment-related activities. Then you'll see the secretary of state at the table.

(END VIDEO CLIP)

QUIJANO: Now, officials insist that Iran's testing last week of ballistic missiles did not have anything to do with the timing of this decision to send Ambassador Burns to Geneva, Switzerland, to attend this meeting. They say this merely has to do with a package of incentives to try to get Iran to understand that the U.S. is serious about pursuing a diplomatic path and also send messages to the European partners on this issue that the U.S. is committed to diplomacy first -- Heidi.

COLLINS: All right. Very good. Understood. Thanks so much.

CNN's Elaine Quijano this morning.

Thanks, Elaine.

HARRIS: A news conference of federal officials that we've been waiting for is now under way. The NTSB is expected to announce new safety standards for airline fuel tanks.

Almost 12 years ago, TWA Flight 800 burst into flames near Long Island. Officials say gases in the nearly empty center fuel tank built up and caught fire. The new rule will require airlines to retrofit most planes with a system to flush out those gases. They have up to 10 years to comply.

More turbulence for the airline industry to tell you about. This morning, we learned that Delta Airlines lost a billion dollars last quarter, and in a sign of the troubled times, that essentially adds up to good news. Delta's operating income was much better than expected. It was special one-time charges that put all that red ink on the bottom line.

American Airlines is slashing 200 pilots from its payroll. It's part of the carrier's plan to cut eight percent of its workforce. The plan includes incentives for senior pilots to leave voluntarily. American, like almost all U.S. airlines, is struggling to survive amid soaring fuel costs.

COLLINS: Inside the economy, the view of a man who's shaping it. Federal Reserve chairman Ben Bernanke facing more lawmakers' questions today. Will he offer more sobering answers?

CNN's Kate Bolduan is in our Washington bureau on this story for us this morning.

Good morning once again, Kate.

KATE BOLDUAN, CNN CORRESPONDENT: Good morning, Heidi.

The short answer is yes, unfortunately. Ben Bernanke is offering another gloomy forecast today. Part two of his semiannual report on the state of the economy to Congress. Bernanke says hard times due to the struggling housing finance market and record energy costs will likely continue through the end of the year.

On top of many lawmakers' minds? You guessed it -- gas prices, the housing crisis, and its impact on consumer household budgets. And most recently, the financial troubles of IndyMac Federal Bank.

(BEGIN VIDEO CLIP)

REP. LUIS GUTIERREZ (D), ILLINOIS: There's word that there might be another 90 banks. Some people say they're small. Nobody's ever going to really tell us that are in trouble.

So, recession? Well, when gasoline pops up to $4.50 in Chicago, and your real earnings haven't increased, it seems like a recession to them.

(END VIDEO CLIP)

BOLDUAN: Another topic today, inflation, following more troubling news from the Labor Department. Consumer prices made the biggest annual jump since 1991.

Now, the government's proposal to bolster the mortgage giants Fannie Mae and Freddie Mac is also taking center stage today in the hearing. Many House Democrats have signed onto the plan to restore confidence in Fannie Mae and Freddie Mac. But while many House Republicans agree that some action is needed to stabilize the mortgage lenders, conservative members, and even House Republican leaders, are concerned over the cost to taxpayers and are now calling on hearings on the plan before moving forward.

And Heidi, while it's unclear if there's enough opposition to actually stop this proposal from passing, Republican push back seems to have already delayed passage of this proposal, at least until next week.

COLLINS: All right. More details on that to come.

BOLDUAN: Yes.

COLLINS: CNN's Kate Bolduan.

Thank you, Kate.

BOLDUAN: Thanks, Heidi.

HARRIS: A growing concern over the economy, but the presidential candidates are talking about war. What gives? We'll ask a political expert.

(COMMERCIAL BREAK)

HARRIS: You know, a sign of recovery after all those devastating days of flooding in Iowa, residents are removing millions of sandbags stacked last month near the Iowa River. The bags were meant to protect areas from flooding. Last week, the river finally fell below the flood stage. And most of the sandbags will be used as landfill cover.

(WEATHER REPORT)

COLLINS: Meanwhile, want to let you know that Senator John McCain is coming up. He's going to be talking before the NAACP in about 15 minutes or so.

We will carry those comments for you live. You see them getting ready there at the podium. And again, once the senator comes to that microphone, we will bring it to you live, right here in the CNN NEWSROOM.

So, the economy, of course, in the headlines every day, and it's issue #1 for most voters. But the presidential candidates are focusing more attention on the wars in Iraq and Afghanistan. So what's the strategy?

Jim Vandehei is executive editor of Politico.com. He's with us now this morning from Arlington, Virginia.

So, I wonder, is it really a strategy or is this just kind of happening?

JIM VANDEHEI, EXEC. EDITOR, POLITICO.COM: Well, Heidi, you know, candidates are always sort of captive to circumstance. And right now you have Obama, who's about to go on this international tour, his first trip overseas as the presumed Democratic nominee.

COLLINS: Yes.

VANDEHEI: So he feels like he's got to be talking about these issues. And at the same time, you have an uptick in violence in Afghanistan, so they feel drawn to at least weigh in on, what are their plans for Afghanistan, at the same time while talking about Iraq. But there's something bigger at play here.

You know, as a candidate, John McCain is trying to play to his strength, which is national security. You look at those polling numbers, people like him as commander in chief. So he's very comfortable. It's his comfort zone talking about national security. For Obama, he knows that he has to overcome perceptions of Democratic weakness on national security, so he feels compelled to talk more and more about national security to show people that he's as strong and smart on the international stage as McCain is.

COLLINS: Yes. In fact, let's go ahead and put some of those polls up on the screen, if we can.

VANDEHEI: Good.

COLLINS: Just in case people have not seen them.

The first one talks about who may be more trustworthy, if you will, in handling the economy. I'm sure you've seen this. Obama's got 54 percent, McCain's got 35.

Is Senator Barack Obama really more qualified? Is there anything in his resume that points to more experience on this issue?

VANDEHEI: I don't think so. I think that people in general, voters in general, feel much more comfortable with Democrats right now on the economy because Republicans have been in rule and they feel like the economy is in the tank. They're paying more for gas, they're paying more for...

COLLINS: Yes, but we have a Democratically-controlled Congress.

VANDEHEI: For the last two years. But you've had -- remember, Bush is now in his -- it will be eight years of service, and Republicans had control of Congress before that. So I still think there's a perception of voters that this is the result of Republican rule, whether it's real or not.

A lot of the economy has very little to do with politics. It as to do with cycles and psychology and things that are outside the control of politics. But I think that's what you're picking up in the polling data, that people are tired of Republican policies and partly blame them.

This is a huge, huge challenge for McCain, because I do not think this is McCain's strong suit. He's admitted as much. He's not a powerful thinker when it comes to economics, and I think that's what's really going to dominate this campaign. When people are paying high gas prices and worried about whether or not their bank is going to have enough money, they want to know what a politician is going to do to help them.

COLLINS: It's so fascinating to me, because we even had it in a story a little bit earlier today, saying exactly what you said about, regardless of who is control of Congress, the voters always blame the guy who's in the White House when it comes to the economy. And it is such an emotional-type issue, it seems, for people.

So you wonder, you know, what really is going to happen when it comes time for people to go to the voting booths.

VANDEHEI: Right. And it's very difficult, you know, and this is like a time where I think voters should be concerned.

Whenever you have the members of Congress and the president rushing towards solutions like you're talking about right now, and whether to bail out Freddie and Fannie and the big lenders, you have got to be a little bit nervous, because it's really hard to make these big macro decisions in a short time period about whether it's actually good for the country overall when you're taking on this huge burden for the federal government. And I think one of the reasons that you have both McCain and Obama being a little bit skeptical about getting too involved on the economic issues right now is, they have no clue what they're going to be delivered if they win the presidency.

COLLINS: Yes.

VANDEHEI: And they have no idea what even a month is going to look like right now. No one knows where oil prices are going to be, or where the stock market is going to go...

COLLINS: Right.

VANDEHEI: ... or whether unemployment shoots up even higher. So they have to be a little bit careful because they know their words are going to be used against them.

COLLINS: Well, it would be interesting then to look at this other poll that's out there. Again, I'm sure you've seen that. You already made reference to it. A good commander in chief, when we put the two together, you see Senator McCain getting 72 percent and Obama getting 48 percent.

Is this something that could turn around for Senator Barack Obama, or is it something that could end up really making a difference come November?

VANDEHEI: That poll would be fabulous news for John McCain if this was 2004 or maybe even 2000. I think the economy is so much more powerful of a motivator right now for voters than it was in those last two elections, so I don't think that the strong commander in chief portfolio is as powerful of a political issue as it was before.

Clearly, I think the hurdle that Obama is going to have to clear in the minds of a lot of Independent voters in particular is, does he really understand the world stage, and can he be a competent leader on foreign policy? I think that's why they spent so much time talking about this and putting the emphasis on Afghanistan, and putting him on this overseas trip to show that he can -- that he understands the world and he understands the complexities of it.

COLLINS: Yes.

VANDEHEI: That is going to be the bread and butter of the John McCain campaign. It's what he cares about most passionately, and he knows that's what voters like most about him.

COLLINS: Right.

VANDEHEI: The question is, does foreign policy, even when you have an active war, two active wars going on, does it resonate powerfully enough to actually give him an edge when the Republican brand is in the tanks?

COLLINS: Well, it's a very interesting and important question that you raise at the end there.

We sure do appreciate your time.

Jim Vandehei of Politico.com.

Thanks so much, out of Virginia this morning.

VANDEHEI: Enjoyed it.

COLLINS: Thanks.

HARRIS: Oil dropping, inflation rising. Lots of business news.

Take a look at this. The Dow up 107 points. So many numbers Wall Street feeding on today.

We're going to check in with Stephanie Elam in just a couple of minutes right here in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Canal tragedy in California. At least five people are dead after a truck and SUV crashed on the road, then careened into an irrigation canal. It happened in California's Central Valley. Authorities say the SUV was carrying farm workers home from an orchard.

HARRIS: Summertime, and we are hitting the road. Some of us are also hitting the Pepto-Bismol bottle for motion sickness, a subject near and dear to the heart of our chief medical correspondent, Dr. Sanjay Gupta.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Everybody can fall victim to motion sickness at one time or another. The most common culprit? The car.

You see, car sickness is simply caused by your sensory system getting confused. There's all sorts of signals being transmitted, but they aren't all matching up. So here's how it works.

Say you're in your car reading a book. Your inner ear, which is sort of the control center for balance, knows you're moving because the ear canals have fluid moving through them. But your eyes, another key source of information, only see the page of the book.

And guess what? It's not moving. Therefore, you have a conflicting message, and that's when motion sickness starts to set in.

I, for one, get the most sick when actually riding in the back. So here, when you're looking straight ahead at the headrest, your brain starts to get a little confused. Your visual system can't keep up with all the twists and turns the car is making, so you start to get motion sick. You get a little sweaty, feel a little nauseated. Your heart starts to race.

(END VIDEOTAPE)

HARRIS: Boy, you can catch more of Sanjay's health tips on how to survive a road trip, must-have information, online. Just go to CNN.com/road trips.

COLLINS: From "axis of evil" to partner at the table? The U.S. agrees to sit down with Iran's top nuclear negotiator.

(COMMERCIAL BREAK)

HARRIS: Bottom of the hour. Welcome back, everyone, to the CNN NEWSROOM.

I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins. Just a quick reminder that we are waiting for Senator John McCain to come to the microphones at the 99th annual NAACP convention. It's happening in Cincinnati, Ohio. You see a live shot there.

Again, we will bring that to you just as soon as he begins speaking.

HARRIS: Sorrow and celebration in the Mideast. The group Hezbollah welcoming home several imprisoned fighters, while Israel prepares to bury two of its soldiers.

CNN's Cal Perry in Beirut, following today's dramatic exchange.

And Cal, we saw some of the pictures from the Israeli/Lebanon border last hour with Anthony Mills. "Dramatic" may be a bit of an understatement.

CAL PERRY, CNN CORRESPONDENT: Absolutely, Tony. This is definitely a historic exchange between Hezbollah and the Israelis. Those two soldiers that were abducted a few years ago prompting that bloody 34-day war, their remains have now been returned to Israel. The families waiting over two years to learn their fate.

Then on the other side in Lebanon, Israel is returning five prisoners, one who is infamous. That is Samir Kuntar. He murdered four Israelis, Tony, including a 4-year-old girl. Obviously, a very, very bitter pill for Israel to swallow, releasing Samir Kuntar, a cause that has been embraced by the group Hezbollah.

Hassan Nasrallah had been pledging for his release now for over two years. He is the longest-serving Lebanese prisoner inside Israel. He has crossed over the border, there in the southern town of Nakora (ph). From there, he will travel to Beirut to be greeted by government officials and leaders in Hezbollah. And a few hours from now, we're expecting huge celebrations in the Hezbollah stronghold here in southern Beirut -- Tony.

HARRIS: All right.

Cal Perry for us in Beirut.

Cal, thank you.

COLLINS: Talking nukes with Iran, a big shift in White House policy, some would say. Washington sending Under Secretary of State William Burns to Switzerland this weekend to sit in on a previously scheduled meeting between the European Union and Iran's chief nuclear negotiator. Officials say Burns will listen in an reiterate the U.S. position that Iran must suspend its nuclear enrichment -- uranium enrichment -- before talks can proceed.

HARRIS: Only on CNN, a rare glimpse of life inside Cyclone- devastated Myanmar. Farmers barely scraping by after their once- fertile farmland was decimated by the storm. Our Betty Nguyen made her way into Myanmar despite a government ban on journalists. She has more from Bangkok, Thailand, this morning. (BEGIN VIDEOTAPE)

BETTY NGUYEN, CNN CORRESPONDENT: Myanmar used to be the seventh largest exporter of rice, but Cyclone Nargis killed thousands of farmers and ruined their crops. Survivors are getting some aid, but even that is posing a challenge.

(voice over): The Irrawaddy Delta is Myanmar's rice belt. Before the storm, farmers here grew enough to feed the country and exported the rest...

(END VIDEOTAPE)

COLLINS: Want to go ahead and get you now directly to Senator John McCain. As we told you, he is speaking to the NAACP in Cincinnati.

Let's listen.

(JOINED IN PROGRESS)

MCCAIN: ... and Rosalynd Brock (ph), I thank all of you. I appreciate your kind invitation and this warm welcome to the NAACP. And by the way, this is your second invitation to me during my presidential campaign, and I hope you'll excuse me for passing on the opportunity at your convention last year and not being here.

As you might recall, I was a bit distracted at the time dealing with what reporters uncharitably described as an implosion in my campaign. But I'm very glad that you invited me again.

(APPLAUSE)

Let me begin, if I may, with a few words about my opponent. Don't tell him I said this, but he's an impressive fellow in many ways.

(APPLAUSE)

He's inspired a great many Americans, some of whom have wrongly believed that a political campaign could hold no purpose or meaning for them. This success should make Americans, all Americans, proud. Of course, I would prefer his success not to continue quite as long as he hopes, but it does make you and me proud to know the country I've loved and served all my life, still a work in progress and always improving.

(APPLAUSE)

Senator Obama talks about making history, and he's made quite a bit of it already. And the way was prepared by this venerable organization and others like it.

A few years before the NAACP was founded, President Theodore Roosevelt's invitation of Booker T. Washington to dine at the White House was taken as an outrage and an insult in many quarters. America today is a world away from the cruel and prideful bigotry of that time. There's no better evidence of this than the nomination of an African-American to be the presidential nominee of his party.

(APPLAUSE)

So whatever the outcome in November, Senator Obama has achieved a great thing for himself and his country, and I thank him for it.

As our country has changed these past few decades, so have many of your debates within the NAACP and within other civil rights organizations. In the days of separate lunch counters, bull horns and fire hoses, the mission was hard and dangerous, but it was easily defined.

The advancement of African-Americans meant equal protection under law in a country where the law had simply codified injustice. That cause required the enormous courage and commitment of generations and a determination to hold this nation to its own creed.

You know better than I do, far better than I do, how different the challenges are today for those who championed the cause of equal opportunity in America. Equal access to public education has been gained. But what is the value, what is the value of access to a failing school?

(APPLAUSE)

Equal employment opportunity is set firmly down in law, but with jobs becoming scarcer and 400,000 Americans thrown out of work just this year, that can amount to an equal share of diminished opportunity.

For years, business ownership by African-Americans has been growing rapidly. This is all to the good. But that hopeful trend is threatened in a struggling economy when the cost of energy, health care and just about everything else rising sharply.

As another challenge as African-American have met and overcome, these problems require clarity of purpose. They require the solidarity of groups like the NAACP. And at times, they also require a willingness to break from conventional thinking.

(APPLAUSE)

Nowhere are the limitations of conventional thinking any more apparent than in education policy. Education reform has long been a priority of the NAACP, and for good reason. For all the best efforts of teachers and administrators, the worst problems of our public school system are often found in black communities.

(APPLAUSE)

Black and Latino students are among the most likely to drop out of high school. I don't have to tell you that. African-Americans are also among the least likely to go onto college. After decades of hearing the same big promises from the public education establishment and seeing the same poor results, it is surely time to shake off old ways and to demand new reforms.

(APPLAUSE)

That isn't just my opinion. It's the conviction of parents in poor neighborhoods across this nation who want better lives for their children.

In Washington, D.C., the Opportunity Scholarship Program serves more than 1,900 boys and girls from families with an average income of $23,000 a year. And more than 7,000 more families have applied for that program.

What they all have in common is the desire to get their kids into a better school. Democrats in Congress, including my opponent, opposed the D.C. Opportunity Scholarship Program. In remarks to the American Federation of Teachers last weekend, Senator Obama dismissed public support for private school vouchers for low-income Americans as "tired rhetoric" about vouchers and school choice. All that went over well with the teachers union, but where does it leave families and their children who are stuck in failing schools?

Over the years, Americans have heard a lot of tired rhetoric about education. We've heard it in the endless excuses of people who seem more concerned about their own position than about our children.

(APPLAUSE)

We've heard it from politicians who accept the status quo rather than stand up for real change in our public schools. Parents ask only for schools that are safe, teachers who are competent, and diplomas that open the doors of opportunity.

When a public system fails repeatedly to meet these minimal objectives, parents ask only for a choice in the education of their children. Some parents -- some parents may choose a better public school. Some may choose a private school. Many will choose a charter school. No entrenched bureaucracy or union should deny parents that choice and children that opportunity.

(APPLAUSE)

We should also offer more choices to those who wish to become teachers. Many thousands of highly qualified men and women have great knowledge, wisdom and experience to offer public school students. But a monopoly on teacher certification prevents them from getting that chance.

(APPLAUSE)

My friends, you can be a Nobel laureate and not qualify to teach in most public schools today. Why is that?

They don't have all the proper credits in educational theory or methodology. All they have is the learning and the desire and the ability to share it. If we're putting the interests of student first, then those qualifications should be enough. If I'm elected president, school choice for all who want it, and expansion of opportunity scholarships and alternative certification for teachers, will be part of a serious agenda of education reform.

(APPLAUSE)

I will target funding to recruit teachers who graduate in the top 25 percent of their class or who participate in an alternative teacher recruitment program such as Teach for America, the American Board for Teacher Excellence and the New Teacher Project. We will pay bonuses to teachers who take on the challenge of working in our most troubled schools, because we need their fine minds and good hearts to help turn those schools around.

We will award bonuses as well to our highest achieving teachers, and no longer will we measure teacher achievement by conformity to process. We will measure it by the success of their students.

(APPLAUSE)

Moreover, the funds for these bonuses will not be controlled by faraway officials in Washington, a state capitol, or even in a district office. Under my reforms, we will entrust both the funds and the responsibilities where they belong -- in the office of the school principal.

(APPLAUSE)

One reason -- one reason that charter schools are so successful and so sought after by parents is that principals have spending discretion. And I intend to give that same discretion to public school principals. No longer will money be spent in service to rigid and often meaningless formulas. Relying on the good judgment and firsthand knowledge of school principals, education money will be spent in service to public school students.

We can also help more children and young adults to study outside of school by expanding support for virtual learning. So I've proposed to direct $500 million in current federal funds to build new virtual schools and to support the development of online courses for students.

(APPLAUSE)

Through competitive grants, we will allocate another $250 million to support state programs expanding online education opportunities, including the creation of new public virtual charter schools. States can use these funds to build virtual math and science academies to help expand the availability of advanced placement math, science and computer science courses, online tutoring, and foreign language courses. Under my reforms, moreover, parents will exercise the freedom of choice in obtaining extra help for children who are falling behind.

As it is, federal aid to parents for tutoring for their children has to go through another bureaucracy. They can't purchase the tutoring directly without having to deal with the same education establishment that failed their children in the first place.

(APPLAUSE)

These needless restrictions must be removed. Under my reforms, if a student needs extra help, parents will be able to sign them up to get it with direct public support.

My friends, over the years the NAACP has brought enormous good into the life of our country, in part by broadening the reach of economic opportunity. There was a time when economists took little, if any, notice at all of the poverty of black communities. Even in times of general economic growth, many lived in a perpetual recession, and the jobs available didn't promise much upward mobility.

Our country still has a lot of progress to make on this score, but with 1.2 million businesses today owned and operated by African- Americans, more and more are no longer just spectators on the prosperity of our country. They are stakeholders.

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As much as anyone else, they count on their government to help create conditions of economic growth. And as president, I intend to.

Senator Obama and I have fundamental differences on economic policy. But when he describes my plan, I'm not always sure his heart is in it. So let me have a go at it myself.

I believe that in a troubled economy, when folks are struggling to afford the necessities of life, higher taxes are the last thing we need. The economy isn't hurting because workers and businesses are under taxed. Raising taxes eliminates jobs, hurts small businesses and delays economic recovery.

Under my plan, we will preserve the current low rates as they are so businesses, large and small, can hire more people. We will double the personal exemption from $3,500 to $7,000 for every dependent in every family in America.

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We will offer every individual and family a large tax credit to buy their health care so that their health insurance is theirs to keep, even when they move or change jobs. And we'll lower the business tax rate so American companies open new plants and create more jobs in this country instead of going overseas.

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Instead of going overseas to plea the second highest tax rate in the world.

My opponent and I have honest differences as well about the growth of government, and it may be that many of you share his view. But even allowing for disagreement, surely there's common ground in the principle that government cannot go on forever spending recklessly and incurring debt.

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Government has grown by 60 percent in the last eight years because the Congress and this administration have failed to meet their responsibilities.

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And next year, just next year, total federal expenditures are predicted to reach over $3 trillion. That's an awful lot. That's an awful lot for us to be spending when this nation is already more than $9 trillion in debt, or more than $30,000 in debt for every man, woman and child in America.

That's a debt -- that's a debt our government plans to leave for your children and mine to bear. And that's a failure not only of financial foresight, but of moral obligation.

There'll come a time, there'll come a day when the road reaches a dead end, and it won't be today's politicians who suffer the consequences, it will be American workers and their children who were left with worthless promises and trillion-dollar debts. We cannot let that happen.

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As president, I'll work with every member of Congress, Republican, Democrat, Independent, who shares my commitment to reforming government and controlling spending. I'll order a top-to- bottom review of every federal program, department and agency.

We're going to demand accountability. The American people deserve it. We're going to make sure...

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We're going to make sure failed programs are not rewarded and that discretionary spending is going where it belongs, to essential priorities like job training, the security of our citizens, the care of our brave veterans.

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To get our economy running at full strength again, we must also get a handle on the costs of energy. Under my plan, we will produce more of America's own energy, we will expand domestic oil production, which is why I've called on Congress to lift its ban on offshore drilling. Something Congress has so far refused to do.

We'll build at least 45 nuclear plants that will create over 700,000 good jobs to construct and operate them. We'll develop clean coal technology, which alone will create tens of thousands of jobs in some of America's most hard-pressed areas.

We will accelerate the development of wind and solar power and other renewable technologies. And we'll help automakers design and sell cars that don't depend on gasoline.

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Production of hybrid, flex fuel and electric cars will bring America closer to energy independence, and it will bring jobs to auto plants, parts manufacturers, and the companies and the communities that support them.

I don't have to tell anyone in this room our country is passing through a very, very tough time. But Americans have been through worse and beaten longer odds.

The men and women of the NAACP know more than most about facing long odds and overcoming adversity. Many of you are veterans of the great civil rights struggle of a generation and more ago.

Like my friend John Lewis, some of you have seen enough years to have known Martin Luther King, Jr., and even marched at his side or not far behind in Birmingham, Montgomery, or elsewhere. For all of this, like Dr. King, you were called agitators, troublemakers, malcontents, and disturbers of the peace. These are often the terms applied to men and women of conscience who will not endure cruelty nor abide injustice.

Perhaps with more clarity and charity than was always deserved, it was Dr. King who often reminded us there was no moral badness, and there was moral blindness. And moral badness and moral blindness were not the same. It was this spirit that turned hatred into forgiveness, anger into conviction, and a bitter life into a great one.

He loved and honored his country even when the feeling was unreturned, and counseled others to do the same. He gave his countrymen the benefit of the doubt, believing, as he wrote, that returning hate for hate multiplies hate, adding deep a darkness to a night already devoid of stars. Darkness cannot drive out darkness. Only light can do that.

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I remember first learning what had happened in Memphis on the 4th of April, 1968, feeling just as everyone else did back home. Only perhaps even more uncertain and alarmed for my country in the darkness that was then enclosed around me and my fellow prisoners of war.

In our circumstances at the time, good news from America was hard to come by. The bad news was a different matter. And each new report of violence, rioting and other tribulations in America was delivered to us without delay.

The enemy had correctly calculated that the news of Dr. King's death would deeply wound morale and leave us worried and afraid for our country. Doubtless, it boosted our captors' morale, confirming their belief that America was a lost cause and that the future belonged to them.

Yet how differently it all turned out. And if they had been the more reflective kind, our enemies would have understood, but the cause of Dr. King was bigger than any one man and could not be stopped by force of violence.

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Struggle is rewarded in God's own time. Wrongs are set right, and evil is overcome. We know this to be true, because it's the story of your cause and the story of our country.

As much as any other group in America, the NAACP has been at the center of that great and honorable cause. I'm here today as an admirer and a fellow American, an association that means more to me than any other.

I am a candidate for president who seeks your vote and hopes to earn it. But whether or not I win your support, I need your good will and your counsel.

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And should I succeed, I'll need it all the more.

I've always believed in this country, in a good America, a great America. But I've always known we can build a better America where no place or person is left without hope or opportunity by the sins of injustice or indifference. It would be among the great privileges of my life to work with you in that cause.

Thank you all very much.

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COLLINS: Senator John McCain speaking before the 99th annual NAACP convention in Cincinnati, Ohio. A very warm reception for him. Lots of applause coming from that speech.

Also want to let you know that Senator Barack Obama coming up at 1:00 p.m., any minute now because of the time change, in West Lafayette, Indiana. You see a picture of him there, a town hall meeting. You will see that coming up very shortly.

But for now, that's all for us in the CNN NEWSROOM.

Thanks for joining us, everybody.

HARRIS: "ISSUE #1" with Ali Velshi and Gerri Willis starts right now.