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Obama's Reversal on Energy; McCain Dares Obama, Congress on Energy; Punishment Looms Over Iran Nukes

Aired August 04, 2008 - 16:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama puts new energy into fighting high gas prices and John McCain. He's accusing the Republican of being in big oil's pocket.
We'll break down Obama's plan and why he's being accused of flip- flopping right now.

McCain is hitting back on the energy front, and he's hitting back hard. He's daring Obama and other members of Congress to do something to bring down fuel costs, and to do it right now.

And Bill Clinton declares he's not a racist. The former president shares his regrets about his wife's failed run for the White House. You'll hear it here.

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

In these dog days of summer, high gas prices are hitting the homes for all voters of all political stripes. And Barack Obama doesn't want to lose any momentum to John McCain on this very red-hot issue. So today, the Democrat is out with a new energy plan that includes some changes in his past positions.

Let's bring in Jessica Yellin. She's working this story for us.

Jessica, tell us what Obama is now proposing, because there's been a shift.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. Obama, first of all, is out with a tough attack on John McCain, accusing the Republican of favoring oil and gas interests. And he has an ambitious energy agenda he unveiled today.

(BEGIN VIDEOTAPE)

YELLIN (voice over): Barack Obama on the offensive...

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you, Lansing.

YELLIN: ... accusing John McCain of having a do-nothing track record on energy.

OBAMA: I could not agree more with the explanation that Senator McCain offered a few weeks ago. He said, and I quote, "Our dangerous dependence on foreign oil has been 30 years in the making and was caused by the failures of politicians in Washington to think long term about the future of the country." What Senator McCain neglected to mention was, during those 30 years, he was in Washington for 26 of them.

(APPLAUSE)

OBAMA: And in all that time he did little to reduce our dependence on foreign oil.

YELLIN: He charges McCain supports more offshore drilling because he's putting big oil ahead of American consumers. It's a line of attack Obama highlights in a new ad out today.

NARRATOR: Now big oil is filling John McCain's campaign with $2 million in contributions.

YELLIN: But the McCain campaign points out Obama has received more than $300,000 from oil and gas company employees this year.

Obama outlined his energy proposals, including giving consumers an energy rebate up to $1,000 per family paid for with oil company profits. And to put one million plug-in hybrids on the roads within six years, in part by giving American automakers $4 billion to develop the cars and giving consumers a $7,000 tax credit to buy them.

His 10-year goal?

OBAMA: In 10 years, we will eliminate the need for oil from the entire Middle East and Venezuela.

(END VIDEOTAPE)

YELLIN: Again, a very aggressive and ambitious agenda. Today, Obama also announced he now supports releasing oil from the nation's emergency stockpile to help bring down gas prices. He previously opposed that idea, but the campaign says he's changed his position because he knows people are suffering and the need is urgent.

BLITZER: Both of these candidates are changing their positions as the need obviously increases.

Jessica, stand by. Thanks very much.

A little more now about the Strategic Petroleum Reserve. It's the largest government-owned emergency stockpile of crude oil in the world. It's stored in giant manmade caverns underground along the Texas and Louisiana coasts, and can hold up to 727 million barrels. About 700 million barrels are in the reserve right now.

It was created back in 1975 in response to the Arab oil embargo. It's been used any twice, when the United States faced an economically-threatening disruption of oil supplies. The first time back in 1991, at the start of the first Persian Gulf War. The second time back in 2005, when Hurricane Katrina affected oil industries along the Louisiana and Mississippi coasts. Now to John McCain. He's pushing back against Senator Obama on energy. He's daring Democrats in Congress to stop talking about high gas prices and to start taking action.

Ed Henry is working this story for us.

Ed, McCain sees this as a winning issue for himself.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, he clearly believes that his support for offshore oil and gas drilling is starting to catch fire with the American people, so on a day when Obama tried to get the headlines, McCain went on offense, too.

(BEGIN VIDEOTAPE)

HENRY (voice over): Campaigning in Pennsylvania, John McCain demanded Barack Obama get his fellow Democrats to end Congress' five- week vacation and deal with high gas prices immediately.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Congress should come back into session, and I'm willing to come off the campaign trail. I call on Senator Obama to call on Congress to come back into town and come back to work.

HENRY: Of course, McCain himself has hardly been around Capitol Hill this year, missing at least 150 Senate floor votes. But the McCain campaign believes it's gaining traction on the issue. The latest CNN poll showing 69 percent of Americans back more offshore oil and gas drilling.

OBAMA: Thank you!

HENRY: After once calling such drilling a gimmick, Obama has now hedged, saying he might support it as part of a larger compromise. That uncertainty from the Democrats sparked this new mantra from McCain...

MCCAIN: You have to drill here and drill now. Not wait and see whether there's areas to explore, not wait and see whether there's a package that needs to be put together, but drill here, and drill now.

HENRY: The McCain camp is also pushing back aggressively against a new Obama ad charging he's in the pocket of big oil.

NARRATOR: McCain wants to give them another $4 billion in tax breaks.

HENRY: False, said the McCain campaign, noting the senator wants to boost the overall economy with a 10 percent tax cut for all American corporations, not oil companies in particular. And back in 2005, McCain voted against President Bush's energy bill full of oil and gas tax breaks, while Obama actually voted for the bill.

MITT ROMNEY (R), FMR. PRESIDENTIAL CANDIDATE: I didn't know that Barack Obama had stooped to dishonesty. You know, pointing out weaknesses in other people's campaigns or positions is also fair game, but that's dishonest.

(END VIDEOTAPE)

HENRY: Now, McCain advisers today handed out tire gauges to try and mock Obama's call last week for inflating tires as a way of saving gas mileage. You can see right there, they also hand the tire gauges out in Michigan, where Obama was giving this speech.

But the Obama camp may have had the last laugh. They point out that various Republicans, including Governor Schwarzenegger, and even the Web site of NASCAR, the very popular Web site of NASCAR, calls for Americans to inflate their tires more as a way of saving energy.

And obviously Mrs. McCain, Cindy McCain, is a big fan of NASCAR. She attended a NASCAR race just this weekend. She probably knows that as well -- Wolf.

BLITZER: But just to be precise, Ed, when the Obama people say that McCain's proposal to cut corporate taxes across the board would be a bonanza for the big oil companies like ExxonMobil, they have a point, because they would benefit if there was a cut overall in all corporate tax rates.

HENRY: Sure, oil and gas companies would benefit. Companies all across the board. There would be thousands of companies. But the point is that the ad is making it seem as if it's only oil and gas companies that are getting a targeted tax break.

What the McCain camp is trying to point out is that this is a broad corporate tax break. Of course, oil and gas would be affected, but it's not specifically helping them -- Wolf.

BLITZER: All right. Ed reporting this story for us.

Thank you.

Moving on to another important story that's developing today, dealing with Iran. It's certainly a weight to whoever becomes president of the United States.

Today, Tehran announced it's tested a new threat, a weapon that could sink ships almost 200 miles away. And Iran reiterates a very serious vow: If it's attacked, it says it will close the waterway that passes up to 40 percent of the world's oil. That would surely send already oil high prices skyrocketing.

All of this two days after Iran missed an important deadline over its nuclear program.

Let's go to our State Department correspondent, Zain Verjee. She has the latest for us.

What's going on, Zain?

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: Well, Wolf, it's the end of a two-week deadline for Iran. The State Department says Iran is going to face more sanctions if it does not respond positively to an offer that's on the table. World powers have basically told Iran to suspend nuclear enrichment -- to suspend enriching uranium, which is key in building a nuclear bomb. And they would give Iran economic incentives.

Now, Iran hasn't responded. Officials are telling us, European diplomats are saying, that they expect a response tomorrow -- Wolf.

BLITZER: Do officials at the State Department, do they think Iran is really serious about even the possibility of halting its nuclear -- its enrichment program, if you will?

VERJEE: Well, senior State Department officials, Wolf, as well as European diplomats, have said that Iran is saying it really just wants to talk about having talks. And they haven't really received a clear signal that Iran is serious. Many analysts that we've spoken to, Wolf, have said that, look, Iran's game here is really to just try and run out the clock and wait for the next administration.

BLITZER: Zain is working the story at the State Department.

Thanks, Zain.

Let's check in with Jack. He's got "The Cafferty File" on this Monday -- Jack.

JACK CAFFERTY, CNN ANCHOR: When it comes to Hillary Clinton, not so fast. Some Democrats worrying that Barack Obama is not farther ahead in the polls at this point, especially when you consider the unpopularity of President Bush, the often unfocused campaign being run by John McCain, and Obama's hugely successful trip overseas. Suddenly, some are wondering whether Obama should reconsider putting Hillary Clinton on the ticket.

CNN Senior Political Analyst David Gergen points out that the major tests for...

What are we listening to? Thank you.

The major tests for a vice presidential pick are whether the person is qualified to be president, and if that person will give you a better chance of winning. Clinton predicted that during the primaries, the Republican attack machine would be going full blast against Obama. One columnist writing, reacting to some of McCain's recent ads, "The Swift Boats have sailed," a reference to the Republican smear campaign that destroyed John Kerry's chances.

Gergen insists, or suggests, that no one better than Hillary and Bill Clinton to fight off such attacks from the Republicans. Clinton supporter Lanny Davis points to a recent poll that shows Barack Obama holding a one-point lead over McCain. But when voters were asked to choose between Obama/Clinton and McCain/Romney, the Democrat's lead suddenly jumps up to nine points.

This strongly suggests that, even though Clinton might drive away some voters, she has the potential to bring in even more. Davis suggests Obama could not lose with Hillary Clinton on the ticket, as she would shore up key voting blocs.

Meanwhile, there are indications from some former Clinton supporters, particularly those in the women's movement, that if Obama picks anybody but Hillary Clinton, the divisions from the primary seasons simply will not heal. They are adamant that Obama cannot assume Clinton supporters will back him regardless of whom he picks as vice president.

So, here's the question: Should Barack Obama be seriously considering Hillary Clinton for vice president? Go to CNN.com/caffertyfile, post a comment on my blog.

BLITZER: There are some very hard feelings on this question. You're going to get a lot of e-mail, Jack. I'll be very interested to hear what our viewers think.

Thanks very much.

CAFFERTY: Sure.

BLITZER: We got a taste earlier, but Barack Obama and John McCain had a lot more to say today about America's oil addiction and the high fuel prices. Stand by. You're going to be hearing from both of these candidates. They're explaining their energy plans in their own words.

And warnings ignored over and over again, the startling lead-up to a collision and oil spill all caught on tape.

(COMMERCIAL BREAK)

BLITZER: The conservative columnist Robert Novak is announcing his immediate retirement. The 77-year-old former CNN political contributor, the long-time co-host of "CROSSFIRE," was recently diagnosed with a brain tumor.

"The Chicago Sun-Times" reports now on its Web site that Novak's prognosis is, in its word, "dire." The Times says Novak's doctors still are working on details of his treatment, but the tentative plan is for him to begin radiation and chemotherapy.

We wish him only, of course, the best.

Senator Ted Kennedy, meanwhile, is making sure he'll have a presence at the Democratic National Convention, even if he can't make it to Denver because of his own battle against a cancerous brain tumor. A spokeswoman says Kennedy taped a five-minute video over the weekend slated to be shown during the convention later this month in Denver.

Kennedy underwent surgery and recently completed a six-week course of chemotherapy and radiation with a brain tumor that was discovered in May.

We wish him, of course, only the best as well. The man Senator Kennedy hopes will be the next president of the United States hopes to do something to save you money. And as we just reported, Senator Obama's unveiling an ambitious energy plan.

And as part of our new effort to help you better understand the presidential candidates, we're bringing you more of what they're saying in their own words.

Here's Senator Obama today in Lansing, Michigan.

(BEGIN VIDEO CLIP)

OBAMA: Now, last week, Washington finally made some progress on this. A group of Democrat and Republican senators came down and came up with a compromise on energy that includes many of the proposals that I've worked on as a senator and many of the steps I have been calling on during the course of this campaign. It's a plan that would invest in renewable fuels and batteries for fuel efficient cars, help automakers retool and make a real investment in renewable sources of energy.

(APPLAUSE)

Now, like all compromises, this one has its drawbacks.

It does include a limited amount of new offshore drilling. And while I still don't believe that's a particularly meaningful short- term or long-term solution, what I have said is I'm willing to consider it if it's necessary to actually pass a comprehensive plan.

I'm not interested in making the perfect the enemy of the good, particularly since there's so much good in this compromise that would actually reduce our dependence on foreign oil. And yet, while the compromise is a good first step and a good-faith effort, I believe that we have to go even further, and here is why.

Breaking our oil addiction is one of the greatest challenges our generation will ever face. It is going to take nothing less than the complete transformation of our economy. The transformation is going to be costly, and given the fiscal disaster we will inherit from the next -- the last administration, it will likely require us to defer some other priorities. It's also a transformation that will require more than just a few government programs.

Energy independence will require an all-hands-on-deck effort from America, efforts from scientists and entrepreneurs, from businesses and from every American citizen. Factories will have to retool and redesign. Businesses will need to find ways to emit less carbon dioxide. All of us will need to buy more fuel-efficient cars built by this state of Michigan.

(APPLAUSE)

All of us will need to find new ways to improve efficiency and save energy in our own homes and businesses, and none of this is going to be easy. It's not going to happen overnight. If anyone tries to tell you otherwise, they are either fooling themselves or they're trying to fool you. But I know we can do this.

We can do this because we're Americans. We always do the improbable. We always beat great odds. We always rally together, whatever challenge stands in our way.

That's what we've always done, and that's what we must do now. For the sake of our economy, our security, and the future of our planet, we must end the age of oil in our time.

(END VIDEO CLIP)

BLITZER: And later this hour, we'll hear from Senator John McCain in his own words as well. He's speaking about energy today, as did Senator Obama.

Bill Clinton says there are things he wishes he didn't say while his wife was running for president. He's not mincing words about his regrets and allegations that he played the race card.

Stand by to hear what he's now saying.

And Olympic tickets sold online. What's being done to stop the scams?

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

(COMMERCIAL BREAK)

(NEWSBREAK)

BLITZER: Bill Clinton is putting it rather bluntly. He says he is not a racist. The former president is opening up about criticism during his wife's run for the White House.

Plus, a collision and an oil spill, the warnings that were repeatedly ignored. You'll hear it for yourself. We have the tape.

And new concerns about Russia's ties with Cuba and the frightening nuclear possibilities.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, bizarre twists and turns in the investigation involving the 2001 deadly anthrax attacks. There are strange new details on the man who killed himself and who is said to be the main suspect.

Stand by for that.

Why did someone firebomb two university scientists in California? The FBI is now looking into what it calls a violent case of domestic terrorism. And the United Nations is turning up the heat on global warming awareness by literally turning up the heat over at the United Nations. Our Richard Roth standing by to explain.

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

All that coming up. But first, a stunningly new look into a recent collision on the Mississippi River that left a 400,000-gallon oil spill in its wake. Audiotapes have now been released that showed repeated warnings about the disaster that was about to happen, but those warnings were ignored.

Brian Todd, he was there in New Orleans working this story.

This is quite a dramatic turn of events.

BRIAN TODD, CNN CORRESPONDENT: It is, Wolf. That barge is still capsized in the Mississippi. Hundreds of thousands of gallons have spilled. And the Coast Guard tells us they're trying to pump fuel from that barge into another barge at this point. Now we've got dramatic new audiotape taking us through that collision.

(BEGIN VIDEOTAPE)

TODD (voice over): The Coast Guard now tells CNN the captain of the towboat moving this barge was not on board when the barge collided with a tanker just a few feet from the banks of New Orleans on July 23rd. The Coast Guard says an apprentice not authorized to operate the vessel without the captain was at the helm of the towboat. And dramatic newly-released audio recordings from the Coast Guard of radio traffic that early morning show the apprentice was completely nonresponsive to warnings.

First, the tanker pilots heard spotting the tow Mel Oliver and the barge approaching his bow.

UNIDENTIFIED MALE: This tow looks like he's crossing the river right in front of me here at Harvey, just above the Harvey Locks.

TODD: Someone on the radio then jokes, "Don't you hate when that happens?" Less than a minute later, no one's joking.

A Coast Guard official warns the tow that a tanker is headed right toward him. Then the tanker pilot gets angry.

UNIDENTIFIED MALE: Come in now, Oliver. Back on (EXPLETIVE DELETED). I'm going to run right over the tow -- Cap.

TODD: The two red blips on the radar screen get closer. Another warning from the Coast Guard, and the tanker pilot seems to think a collision is unavoidable.

UNIDENTIFIED MALE: This ain't good, man.

TODD: Thirty-two seconds later, the two red blips become one. The tanker pilot is surprisingly calm as he tells the Coast Guard what's happening.

UNIDENTIFIED MALE: We just took his tow out. The boat with the barge is right in front of us. And we're running it over.

TODD: The Coast Guard calls for any vessels in the area to assist. Four minutes after the collision, the tanker pilot says the barge is still wedged on his bow. At no time on the tape does anyone from the towboat responds.

(END VIDEOTAPE)

TODD: Now, all of this happened at about 1:30 in the morning local time in New Orleans. Despite the darkness at that time, the Coast Guard officer and the tanker pilot on that radio call immediately realized there was fuel from the barge spilling into the Mississippi River.

The Coast Guard estimates some 400,000 gallons of fuel will have spilled into the river by the time they get all of this contained, which they have not done yet. The tow operator and the tanker pilot have been summoned to a hearing next week, Wolf. We should have some more answers by then.

BLITZER: So, they're blaming the -- the Coast Guard is largely blaming the towboat operator? Is that it?

TODD: Every indication at this point looks like it is the towboat operator that is going to get the bulk of the blame. They told us today they found no -- quote -- "competency issues" with the tanker pilot or the tanker crew. It's very one-sided at this point.

BLITZER: All right, Brian, thanks very much -- Brian Todd working that story.

Let's return to some political news right now, important news involving the former president of the United States. Bill Clinton is finally coming out to talk about the contentious race he and his wife fought during the Democratic primary.

What he's saying is raising some eyebrows.

Mary Snow's working this story for us. She has the details.

And he spoke out in a television interview, Mary.

MARY SNOW, CNN CORRESPONDENT: He did, Wolf.

You know, former President Clinton gave some of the most extensive comments to date to the press since his wife dropped out of the race for the White House. And that included a broadcast interview with ABC.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Far from the campaign trail, former President Bill Clinton spoke out about politics during a trip to Africa. He was asked by ABC's "Good Morning America" if he has any personal regrets.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Yes, but not the ones you say. And it would be counterproductive for me to talk about it. There are things that I wish I had urged her to do, things I wish I hadn't said -- things I wish I hadn't said. But I am not a racist. I never made a racist comment. And I didn't attack him personally.

SNOW: President Clinton is referring to the anger sparked when critics accused him of belittling the significance of Obama's win in the South Carolina primary.

B. CLINTON: Jesse Jackson won South Carolina twice, in '84 and '88. And he ran a good campaign. And Senator Obama has run a good campaign here.

SNOW: Hillary Clinton offered an apology. It was one of several times during the campaign when Bill Clinton crew the spotlight to himself. The former president has turned his attention to the Clinton Foundation, with its focus on the fight against AIDS. But he let it be known during the ABC interview he has more to say down the line.

B. CLINTON: I have bragged on Senator Obama hundreds of times. Now, I will be glad as soon as this election is over in January to have this conversation with you and everybody else. I have very strong feelings about it.

SNOW: But asked if he was angry.

B. CLINTON: I'm not. And I never was mad at Senator Obama.

SNOW: He called Obama a superbly gifted candidate with a great operation in the race against his wife, and compared politics to a contact sport.

B. CLINTON: He hit her hard a couple of times. And they hit us a few times, and weeks before she ever responded in kind.

SNOW: Asked for a response, the Obama camp said, "After a hard- fought primary, we're happy to have the support of Senator Clinton and President Clinton."

One political observer says, Bill Clinton's help comes with risks.

JOE KLEIN, COLUMNIST, "TIME": At this point, given the way -- the kind of mixed emotions he's been showing, if I'm Barack Obama, or the Obama campaign, I don't know if I want to take a chance on him.

(END VIDEOTAPE)

SNOW: Now, what is still being worked out is the former president's role at the Democratic National Convention. We did speak with Iowa Governor Tom Vilsack today. He's with Bill Clinton in Mexican City for an international AIDS conference. He told us that, several times during the trip, Bill Clinton expressed how important it was for Barack Obama to be elected -- Wolf.

BLITZER: Bill Clinton also told "The Washington Post" he himself doesn't know what role, if any, he will have at that Democratic Convention. He's standing by to hear. We do know that Hillary Clinton will be speaking with other women Democratic senators that Tuesday night of the convention in Denver.

Mary, thanks very much for that.

BLITZER: President Bush on his way to the Olympics, and he's meeting with the Chinese. How are Americans feeling about the tense relationship? That's coming up.

And the battle over Florida and Michigan, you remember that battle. Well, guess what? It's coming up again. We will talk to superdelegate Donna Brazile as part of our "Strategy Session." There's news.

Plus, terror at 28,000 feet. What really happened on top of the world's second tallest mountain. We are going to show you why K2 is especially dangerous.

(COMMERCIAL BREAK)

BLITZER: President Bush is on board Air Force One right now setting out for a week-long trip to Asia. He will make a refueling stop in Alaska tonight and use the time to speak to U.S. troops stationed there. Then it's on to South Korea, where the U.S. nuclear disarmament deal with North Korea is likely to be a huge topic of discussion.

From there, Mr. Bush goes to Thailand to deliver what is being called a major speech on Asian policy. He's expected to denounce the military regime in neighboring Myanmar, also known as Burma, for its human rights abuses. The president's final stop, China, and his appearance at the Beijing Olympics. We will be covering all of that.

With only days to go before the start of the Olympic Games, the American people are making judgments about China, the Summer Games, and the president's visit.

Let's turn to our senior political analyst, Bill Schneider. He's got some new numbers for us.

Bill, are Americans worried about the competition that's ongoing with China?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, yes, they are, but not at the Olympic Games.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): In February, President Bush made this announcement.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have made it very clear I'm going to the Olympics because it's a sporting event.

SCHNEIDER: The decision met with criticism from other politicians.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I said the other day that the president should not attend the opening ceremonies of the Olympics in Beijing unless the Chinese government...

(CHEERING AND APPLAUSE)

H. CLINTON: I have somebody from China here who doesn't like this. But that's OK. We have free speech here, unlike China.

(END VIDEO CLIP)

SCHNEIDER: And from Chinese dissidents.

ASIA T. KUMAR, FORMER CHINESE POLITICAL PRISONER: But we did not hear even a single word from President Bush about human rights abuses in China. That's why we are here, to tell him to speak up on human rights.

SCHNEIDER: President Bush says he will.

BUSH: But that will not preclude me from meeting with the Chinese president, expressing my deep concerns about a variety of issues.

SCHNEIDER: Do Americans approve of President Bush attending the American ceremonies of the Olympic Games? Yes, 63 percent to 35 percent. Both Democrats and Republicans support his decision to go.

But there is evidence of growing concern about China. The public is divided over whether China is a military threat to the United States. But 70 percent see China as an economic threat. According to a new study by the Chicago Council on Global Affairs, a growing number of Americans believes China's economy will one day be larger than that of the United States and that China will become America's chief competitor for power.

On human rights issues, Americans are critical of China. An overwhelming majority of Americans believes Tibet should be an independent country.

(END VIDEOTAPE)

SCHNEIDER: The public is increasingly critical of China and worried about China's growing economic power. But Americans don't want outright hostility, especially at the Olympic Games, which are not supposed to be political -- Wolf.

BLITZER: They want to see a lot of great athletes in a great competition. All right, thanks very much, Bill, for that. The International Olympic Committee, by the way, is asking a federal judge to shut down Web sites they say are duping customers trying to buy tickets to the Beijing Olympics.

Let's go to our Internet reporter, Abbi Tatton. She's working the story for us.

So, what are these Web sites, Abbi?

ABBI TATTON, CNN INTERNET REPORTER: Well, here's one of them right here. And it certainly looks authentic. It's got an official- looking logo in the corner. It's got the promise of safe and secure transactions.

But the International Olympic Committee says this site is a scam. And it's filed a lawsuit against this one and others like it. Take a look at what it's been offering, this one, Beijingticketing.com, tickets to the basketball finals for around $1,000, tickets for the open ceremony at more than $2,000.

And there have been reports from all around the world, from here in the U.S., to Norway, New Zealand, of people handing over their money, handing over their passport details, their credit card details, and getting nothing in return.

This Web site is now down, Beijingticketing.com. The International Olympic Committee has been urging people to go to the official online vendors for tickets. That's CoSport and Jet Set Sports -- Wolf.

BLITZER: Amazing -- it's amazing how sophisticated these Web sites are, to dupe people out of their hard-earned money.

TATTON: Right.

BLITZER: Abbi, thanks very much.

John McCain wants to do something for the sake of the nation and for your sake. He's also touting his energy proposals. He toured a company today in Lafayette Hills, Pennsylvania.

(BEGIN VIDEO CLIP)

MCCAIN: We're going to solve the energy crisis that's affecting businesses like National Label Company, and we need an all-of-the- above approach. We need to aggressively develop alternative energies, like wind, solar, tide, biofuels, and geothermal. But we also need to expand our use of existing energy resources here at home.

That means we need more nuclear power. It means we need clean coal technology. And that means we need to offshore drill for oil and natural gas. We need to drill here and we need to drill now. And anybody who says that we can achieve energy independence without using and increasing these existing energy resources either doesn't have the experience to understand the challenge we face, or isn't giving the American people some straight talk. Unfortunately, Senator Obama continues to oppose offshore drilling. He continues to oppose the use of nuclear power. These misguided policies would result in higher energy costs to American families and businesses and increased dependence on foreign oil. We're not going to achieve energy independence by inflating our tires.

I'm going to lead our nation to energy independence and I'm going to do it with a realistic and comprehensive all of the above approach that uses every resource available to finally solve this crisis.

(END VIDEO CLIP)

BLITZER: And we're going to have more of what Senator McCain is proposing coming up in our next hour, in his own words.

It's coming. John McCain and Barack Obama will soon be naming who they want to be vice president. And the timing of that announcement will be significant.

Obama could need Florida and Michigan to win the White House. So, wait until you hear what he's now saying about those earlier primary battles in those states.

(COMMERCIAL BREAK)

BLITZER: A lot of people say it's the most important decision they will make as presidential candidates. But the actual timing for when Barack Obama and John McCain name their running mates could also be very important.

Let's discuss in our "Strategy Session."

Joining us, our CNN political contributor Donna Brazile, a Democratic strategist, and conservative commentator Terry Jeffrey. He's editor in chief of the Cybercast News Service.

Guys, thanks very much for coming in. A couple of names that came out over the weekend, the speaker, Nancy Pelosi, she's pushing -- pushing hard, if you saw her interview on ABC yesterday -- for Chet Edwards, who is not exactly a household name. He's a Democratic congressman from Texas. She says, he would be terrific.

DONNA BRAZILE, CNN POLITICAL ANALYST: He is from Crawford, Texas. He's known for the expertise on the military, on veteran issues. He's widely respected as a Blue Dog Democrat. Even liberal Democrats like myself like Chet Edwards.

Look, I think his name should be on the short list. I don't know if it will make the short-short list. But, clearly, he's talented and he's someone that should be reviewed.

BLITZER: And it was released over the weekend that another relatively unknown Republican congressman, Eric Cantor of Virginia, that, all of a sudden, we learn he's being vetted as well for possibly being on McCain's ticket.

TERRY JEFFREY, EDITOR IN CHIEF, CYBERCAST NEWS SERVICE: Yes, this would be an exciting choice for John McCain, Wolf.

This is a guy, he's young. He's conservative. He's articulate. He is someone who would help John McCain reach out to the Jewish community. He's the only Jewish person in the House of Representatives who is a Republican. He also, I think, because he's an aggressive campaigner, could be an attack dog against Barack Obama. He could be very effective in drawing attention to Obama's vulnerability on national security and foreign policy issues.

BLITZER: When will McCain make his announcement?

JEFFREY: I don't think it makes any sense for John McCain to make an announcement before the convention. Obviously...

BLITZER: Before the Republican Convention?

JEFFREY: Before the Republican Convention. We have got the Olympics coming up.

BLITZER: He's got to do it before the Olympic Convention, but you have got to say like a few days before it.

JEFFREY: Well, the problem with that is, the Democratic Convention is the week before the Republican Convention.

BLITZER: So, you want the Democrats to finish their convention and then let him announce it?

JEFFREY: Yes. You want -- you want to get maximum impact from the story. And I don't think he can get that until -- unless he waits until the actual convention.

BLITZER: What about on the Democratic side? When would be the maximum impact for Senator Obama to make his announcement?

BRAZILE: Well, I think the Wednesday or Thursday before the convention. That will give him an opportunity to go to the home state of the V.P.

BLITZER: Even though the Olympic Games will still be under way?

BRAZILE: Well, we will just have to mute the Olympics for a couple of days and see this exciting selection. And Senator Obama will have an opportunity to crisscross the country perhaps before the convention with his nominee.

BLITZER: You're our favorite superdelegate at...

BRAZILE: Well, I appreciate that.

BLITZER: ... that Democratic Convention.

All of a sudden, remember -- and all of us do -- how much of a commotion there was over Florida and Michigan, which violated the rules. They would be punished. But, all of a sudden, right now, Senator Obama is suggesting, you know what, never mind. They should have their full rights, the full seating at the convention.

What's going on?

BRAZILE: Well, the rules committee has made its recommendation. Now the credentials committee will take this up. Senator Obama has sent a letter to the credentials committee. They're selected from all over the country. And he has suggested that they restore 100 percent of the voting rights...

(CROSSTALK)

BLITZER: Because, right now, only half of them are supposed to be seated.

BRAZILE: No, no, no, all of them will be seated with a half-a- vote.

(CROSSTALK)

BLITZER: Yes, but that's what I meant.

BRAZILE: One hundred percent will be seated with 100 percent -- this is -- this is about reconciliation, unifying the party, bringing the party together. But the rules are always the rules. I -- I still back the rules as is. But, of course, Senator Obama made this decision, and I support Senator Obama's decision.

JEFFREY: Well, Wolf, earlier this year, it was not in Senator Obama's interest to have Michigan and Florida seated. That would have helped Hillary Clinton. Now it is in his interest to let these delegates who are going there have a full vote.

But I tell you, it is not in the interest of the nominating process to have big states that are expensive states for presidential campaigns, like Michigan and Florida, jumping ahead of earlier states, or jumping too close to smaller states like Iowa and New Hampshire.

People talk about vested interests having too much power in Washington, D.C. The candidates who will do best in those big states are the ones who can raise big money early, because they can reach into the pockets of big business and get the big contributions quickly.

So, actually, in the long term, it's not a good...

(CROSSTALK)

BLITZER: But you can't overestimate how important Michigan and Florida are to both Senator McCain and Senator Obama.

BRAZILE: Absolutely.

Look, in an effort to win those states in the general election, Senator Obama is doing what's important to winning those states. The voters did not make a mistake. The officials in those states, as Terry said, they wanted to jump ahead. And there's a bill right now in the Senate, a bipartisan bill, Senate Bill 1905, which would give us regional rotating primaries in 2012. I don't know where the Republicans stand on this issue, but we really need to...

(CROSSTALK)

JEFFREY: Wolf, Democrats need to hold Michigan in their Electoral College bloc. That's one of the reasons that John McCain is looking at Mitt Romney, who grew up in Michigan, who is strong in Michigan.

And it's a place where Obama could be weak, because Michigan is the homeland of the Reagan Democrats. We saw at the end of the Democratic nominating process that Hillary Clinton was winning the Reagan Democrats in the primary, not Barack Obama. So, that's going to be a very important state for Obama.

BLITZER: He was there in Michigan today, in Lansing, Michigan, delivering his energy speech.

BRAZILE: Absolutely. Michigan voters would like to have relief from the Bush/Cheney economic record. And they're not going to go back and support John McCain, whose record will perhaps give us more of the same. So, I think this is going to be an exciting election...

(CROSSTALK)

JEFFREY: I think they're those small-town, bitter people clinging to guns and religion may not want to vote for Barack Obama.

BRAZILE: You know, I was bringing some folding chairs for the Michigan and Florida delegation. Now I can keep my chairs at home.

BLITZER: Good work, Donna. Thanks very much.

Terry, thanks to you as well.

The mayor of Detroit, by the way, has been battling to keep his job. But Kwame Kilpatrick's troubles could cost his mother her career. We have the story coming up.

And Russia's prime minister once again eying Cuba. Will a freshened alliance mean a new threat to the United States?

And, later, it's good for the environment, but it's making thousands of people really cranky. A new thermostat setting at the United Nations is heating things up in New York.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends over at the Associated Press, pictures likely to be in your newspapers tomorrow.

In Michigan, a car burns outside the Lansing center as a result of equipment problems.

In Bolivia, a supporter of the president, Evo Morales, hangs the indigenous flag in preparation for a political rally.

In China, Becky Hammon, a U.S. citizen, playing for Russia's Olympic basketball team, holds her hand over her heart during "The Star-Spangled Banner."

And, in Afghanistan, a boy drinks tea as he waits for customers to sell bread at his shop -- this hour's "Hot Shots," pictures often worth 1,000 words.

On our "Political Ticker": Happy birthday, Senator Obama. The Democrats' nominee in waiting turns 47 today. In Boston later today, he will celebrate, as any presidential candidate would, with a fund- raiser.

In Detroit, a political scandal -- the son's problems could hurt the mother. Mayor Kwame Kilpatrick is not running in tomorrow's congressional primary, but his mother, Representative Carolyn Cheeks Kilpatrick, is. It's a stiff three-way challenge for her seat. She could suffer fallout from the scandal involving her son. The mayor and his former top aide are accused in a scandal involving perjury, obstruction of justice, some racy text messages that they apparently sent each other.

Remember, for the latest political news any time, check out CNN.com/situationroom. That's also where you can download our new political screen saver.

Let's go back to Jack. He's Jack's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is, should Barack Obama be seriously considering -- or perhaps reconsidering -- Hillary Clinton for his vice presidential spot on the ticket?

Joe writes in Saint Louis: "On this matter, there is no leeway. The Clintons are old-school, dirty politicians. He promises change and hope. I hope he does not change my opinion of him"

Gerri in Mead, Oklahoma, writes: "In order to have a really interesting four-year period, filled with suspense and intrigue, I think Obama should choose the Clintons for his V.P. It will be like watching the entertainment channel. And let's face it, Jack. With the downturn in the economy, which is bound to get worse before it gets better, the American people could use a few laughs while they watch the news."

Karen in Nashville writes: "He has already considered a large number of qualified people, and she didn't make the cut. They are, simply put, incompatible. Hillary Clinton is incapable of working with anyone who is not part of her carefully chosen inner circle of sycophants. And Barack Obama is not a desperate man."

D.J. in Detroit: "Barack and Billary, the three-headed Republican machine-destroying monster. I think I like it."

(LAUGHTER)

CAFFERTY: Bob in Kentucky: "Obama needs Hillary to get elected. She would guarantee him the majority of the female vote and would help him win Pennsylvania, Ohio, Michigan, Indiana, Florida, and California. None of the other names being thrown around bring half as much to the table as she does."

Carrie in North Carolina writes: "Absolutely not. I don't dislike Hillary Clinton, but I resent the strong-arm tactics being used by her supporters to force him to select someone as his V.P. who I don't believe will be 100 percent in his corner. Besides, capitulating to your former competitor's supporters is not the way to begin the presidency."

Patrick writes: "Of course he should not only consider her. He ought to pick her as his running mate. If I was in a fight, I would want her on my side."

(LAUGHTER)

CAFFERTY: And Sven writes:, "As a Republican, I can only hope he does."

If you didn't see your e-mail here, you can go to my blog at CNN.com/caffertyfile. There are already thousands of e-mails on that blog. We have posted hundreds of them in response to this question. This is one that it's still a very kind of hot-button issue with our viewers. When you talk about Clinton being on the ticket, they get right into it.

BLITZER: It doesn't get hotter than that.

All right, Jack, thank you.

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