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Iraq's Oil Profits; Will V.P. Picks Make a Difference?; What the Candidates Are Saying on the Campaign Trail; The Candidates' Surrogates Staying on Message

Aired August 6, 2008 - 20:00   ET


CAMPBELL BROWN, CNN ANCHOR: Hi there, everybody.
We have got a story to tell you about tonight that has a lot of people pretty outraged. And we're going to start with what we all already know, that the American economy is tanking. And that's in large part because of oil prices. They are so high right now.

In fact, in a recent CNN poll, nearly half of you, 48 percent, said the economy is the single most important issue you're going to vote on this November.

So, get this. According to a new audit from the GAO, the Government Accountability Office, the Iraqi government expects to have a budget surplus of $79 billion by the end of this year, courtesy of oil.

Meanwhile, the U.S. is spending your tax dollars, $48 billion, in fact, to rebuild projects in Iraq. So, what's wrong with this picture? If Iraq has billions sitting in the bank, should the U.S. still be paying for its reconstruction?

We're going to follow the money tonight and talk about that.

And, then, a little bit later, what we're calling our no-bull test. Every night until Election Day, we're going to do a reality check on what Barack Obama and John McCain are saying on the campaign trail. Today, they were talking about the energy crisis and the economy. We will tell you if their plans pass our test.

Then, Michelle Obama on message. Find out how the campaign's counting on her to make the pitch to female voters. We have got all that tonight in the ELECTION CENTER, no bias, no bull.

But, first, the story that everybody's talking about today, the Iraq oil outrage. The Iraqis are raking in so much money from their oil exports, they have got a multibillion-dollar budget surplus. So, why are your tax dollars paying for projects that Iraq can afford to pay for itself?

Senior political correspondent Joe Johns has some answers for us tonight -- Joe.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Campbell, even before the war, the Defense Department was saying that Iraq's oil was going to pay for both the military expenses and the cost of Iraq's reconstruction. But now oil revenues are making Iraq very rich, while you, the taxpayer, are paying a fortune for reconstruction in Iraq.

The issue hit the presidential campaign trail today, after the Government Accountability Office released a new audit.

Here's how Senator Barack Obama teed it up.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: You know, if you need one more example of what's wrong with our energy policy or George Bush's policies in general, there's a new report today some of you may have read in the newspaper. Iraq has been getting a windfall because of rising oil prices. They have a $79 billion budget surplus.

At a time when we're spending $10 billion a month in Iraq, they have got almost $80 billion that's not being invested in services for suffering Iraqis or reconstruction.


JOHNS: So, here's what that new audit says. Iraq has gotten so much money, it literally can't get rid of it all. Iraq generated $96 billion in revenues in just two years, from 2005 to 2007. And, this year, Iraq's oil revenues could be as high as $86 billion.

And that means Iraq's budget surplus could hit $50 billion. But Iraq will only spend about $35 billion -- Campbell.

BROWN: So, Joe, is there any way to compare how much of its own money Iraq has been spending on reconstruction, compared to how much the U.S. is spending?

JOHNS: About 10 percent. The GAO pretty much did that. And, now, get this. Over the last two years, Iraq only spent $947 million to pay for maintenance of roads, bridges, vehicle, buildings, water, and electricity installations, and weapons.

Meanwhile, the U.S. was throwing money at the problem, your money. The GAO said that, since 2003, Congress has appropriated $48 billion for so-called stabilization and reconstruction projects, rebuilding Iraq's security forces, helping them set up a government, rebuilding the oil, electricity, and water sectors. And, so, why -- why isn't Iraq paying for more of this stuff?

BROWN: Well, that is the obvious question here. Why aren't they spending more of their own money?

JOHNS: Well, the official reason is that Iraq has a shortage of trained staff. Their procurement and budgeting systems are weak.

But some people are just not buying that. Senator Carl Levin of Michigan, where the cars are built said it doesn't make any sense to think that people don't know how to write checks. Basically, if you know how to deposit, you should know how to withdraw.

And there is a final note, maybe a final insult. You decide. But four miles away from where you are, Campbell, in our Manhattan studios, Iraq has $10 billion on deposit at the Federal Reserve Bank of New York. And so far, it's earned $435 million in interest. And that's just until the end of last year.

BROWN: Wow. Joe Johns for us tonight.

This is an interesting development here. So, just to review for everybody, Iraq now sitting on a multibillion-dollar surplus, while billions of your tax dollars still going to pay for its reconstruction. You just heard what Barack Obama said about that.

And, needless to say, John McCain also weighed in from the campaign trail today.

Here to talk about all that, we have got "New York Observer" columnist Steve Kornacki, Tara Wall, CNN contributor and deputy editorial page editor of "The Washington Times," and CNN senior political analyst Gloria Borger.

So, Gloria, Barack Obama jumped on this right away today.


BROWN: We just heard his take, that the American taxpayers paying for the reconstruction, while Iraq sacks away billions. Does this help him make his case that it's time for us to leave?

BORGER: Yes, absolutely. This is a perfect storm.

Americans saw the other week that there's a projected $482 billion deficit in this country. We're not paying for our roads, our bridges. And they're also paying over $4 a gallon for gas at the pump.

And, meantime, we're funding the war. And, meantime, the Iraqis have got deposits in that bank down the street from you, Campbell. And they're going to be pretty outraged about this. And, so, this is a perfect storm for Barack Obama, saying, we ought to pull out. The Iraqis can now afford to fund their own security. So, it's time for us to leave.

BROWN: But let's look at the McCain campaign's spin on this, Steve.

The campaign, McCain campaign, late today did put out a statement. They gave it to CNN, in which they said this is all actually good news for both Iraq and America. In their statement, the campaign saying, "The economic success of Iraq is a result of the surge strategy that John McCain supported and Senator Obama opposed." What do you think?

STEVE KORNACKI, COLUMNIST, "THE NEW YORK OBSERVER": Well, I think anytime there's good news or any news that there's progress in Iraq, the McCain campaign is going to attribute that to the surge.

But there's another issue here. And that's about the distinction between McCain and Obama in terms of setting a timetable for withdrawal. And I think you can tie this in with the other big piece of news coming out of Iraq today, and you could make a strong case for the timeline for withdrawal.

The other piece of news today is that the parliament just adjourned for the rest of the summer without setting a provincial election law. The provincial elections are seen as a huge step in terms of reconciling the parties. Now, if you set a timetable for withdraw and you said, hey, look, Iraq, you have got this money, you're not using it, we're leaving on this date and this time, to start using that money to fend for yourselves, I think you would see a different action, for instance, today from the parliament. They would think twice before adjourning without an election law in place, because they would know the gravy train is coming to an end.

BROWN: Tara, there are a lot of people out there who are going to say, wait a minute here. I don't think the point of the surge was for the Iraqis to stockpile $80 billion in cash. Doesn't this make it harder for McCain to make his case for staying longer?

TARA WALL, DEPUTY EDITORIAL PAGE EDITOR, "THE WASHINGTON TIMES": No, I think, actually, the opposite is true.

I mean, it's political folder, quite frankly, for both of the candidates. I think, though, that McCain does make a stronger case. There is evidence, obviously, that Iraq is showing that it's moving towards more independence. But, at the same time, this pullout strategy, remember, it's a strategy that Barack Obama had from the very beginning without acknowledging or accepting the surge at all.

There's some weight to the fact that the surge -- because the surge took place, we have seen reductions in violence. We have seen the government take more and more control in Iraq. This is, hopefully, encouraging them. And we will encourage them to spend more of their money.

But look at their system again. It took their military system this long to rebuild. If their procurement systems and their budgeting systems aren't up to par, our own government has problems with government -- with contractors.

BROWN: But do you think anybody buys that?


WALL: Well, look, I think there's some legitimacy to the claim, when we see how long it took for their military alone to come up to par. If they don't have the infrastructure in place to be able to spend and...

BORGER: Campbell...


WALL: ... and work with these contractors, it is...

KORNACKI: You talk about...

WALL: Listen, it's called government red tape. And just like the next person, I'm all about government accountability and transparency, but it's called government red tape for a reason.


BROWN: OK, Steve, go ahead.

WALL: And I'm sure they have problems with it.

KORNACKI: You talk about from the very beginning on this.

Let's go to the very beginning, because this is yet another one of the promises that was made at the outset of this war that has proven to be completely invalid. We were told we would be greeted like liberators. We were told it would pay for itself in a matter of years.

So, if you want to talk about vindicating John McCain on the surge, you really have to talk about how this news is just a further indictment for how misguided and foolish this adventure was from the very beginning. Nothing has panned out.


WALL: It was a bipartisan effort.

KORNACKI: Not by Barack Obama, it wasn't.


BROWN: Guys, I got to get to a commercial. Everybody, hold that thought. You're all sticking around. And we have got a lot more to talk about.

Consider this. We want to mention this as well. In a new poll, twice as many of you said the vice presidential picks are a factor in how you vote, twice as many of you as compared to eight years ago. It's getting a lot of buzz. A lot of people are talking about it. So, why suddenly is a V.P. so important in this campaign? We're going to look at some answers when we come back.

And a new feature here in the ELECTION CENTER, our no-bull test. We are going to hear what the candidates said today and then put them to a reality check when we come back.


BROWN: For the first time in a very long time, the vice presidential picks could make a big difference in this election. And we are really getting down to the wire now.

Here to talk about what this means is Candy Crowley, who is live with us from Chicago. And, Candy, I know you schlepped all the way to Indiana for a picture today of Evan Bayh and Barack Obama, a picture we're going to show people in just a second, a lot of people out there with you. It was quite a sight. Why all the buzz?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, interesting. Let me first just tell you that I wasn't the only one who schlepped out here.

There was a Obama ad team crew out here filming, not just Obama, because they do that a lot, but they were taking separate shots of Evan Bayh, so we thought that was fairly interesting.

But, look, Evan Bayh has been the buzz. It was Tim Kaine last week. It's Evan Bayh here. He was out in Indiana. He gave a fulsome introduction to Barack Obama. And this is the time when we begin to look at these people together and say, is that the ticket?

BROWN: Definitely a crazy time, Candy, for the media, because so much talk about potential V.P.s. But the truth of the matter is, we don't actually know that much, do we? What do we know?

CROWLEY: We don't. We really don't. We really don't. Never have so many talked about so little information at this point.


CROWLEY: These campaigns have been really very good at keeping the inner workings of what's going on.

We know a couple of things. We know some people are being vetted. We know Bayh is being vetted. We know Kaine is being vetted. Mostly, this sort of information comes from outsiders, rather than from inside the camp. Others are just good guesses.

We think Mitt Romney has to be on McCain's list. Tim Pawlenty out of Minnesota has to be on McCain's list. We know those sorts of things. But in terms of where these candidates are going and what's going on in the inner sanctum, what their discussions are, what they see as the pluses and minuses, nada, nothing from either of these candidates.

BROWN: And one thing a lot of people are also speculating about is the timing. What are you hearing if anything on a timetable as to when Obama might make his pick known?

CROWLEY: Well, this is sort of the process of elimination.

We know Barack Obama is headed off for a vacation. So, he's not going to do it this week. He's not going to do it next week because he's on vacation. That doesn't leave much time before the Democratic Convention. So, we would be looking at two weeks from last Monday or yesterday before we would expect to see an Obama pick.

John McCain is a little more difficult, I think, to figure out at this point. There had been talk that he would wait until after the Democratic Convention and right before the Republican Convention, kind of slow the momentum of Barack Obama's convention.

But then they seem to have kind of backed off that a little bit and are talking about doing it. And there's some chess going on here, too. Like, who wants to go first? Does the other one then try to overwhelm them with their pick? So there's some of that going on as well.

BROWN: Candy Crowley for us tonight with all the scoop -- Candy, thank you.

Clearly, the pressure is on for McCain and Obama to choose their running mates.

And back with me now to talk about that, Steve Kornacki, Tara Wall and Gloria Borger once again.

And, Gloria, one of the interesting things that we found interesting is this CBS new poll. And it asked voters this go-round if the candidates' V.P. choices would greatly influence who they would vote for -- 30 percent said it would. Might not sound like a lot, but that is twice as much as back in 2000. Why do you think this jump in interest? What does it tell you?

BORGER: Yes, I think it's really interesting.

First of all, I think people understand that the job of vice president ain't what it used to be. It's a lot more important than it used to be, not only the Dick Cheney model, but also the Al Gore model, going back to Fritz Mondale, in fact. You know, vice presidents actually have important jobs these days. It's not just going to funerals, like it used to be.

Secondly, I think, Campbell, that people think there are deficits in their two major candidates. Maybe they think one of the fellows is too old and the other one is too young. And so they might be looking for some kind of balance in this ticket, looking for some reassurance that when they cast their vote, they're going to feel it's not a risk, that they feel secure about it. So, it's interesting.

BROWN: Steve, I want to throw up another poll number. This is our own CNN/Opinion Research poll -- 31 percent of voters -- this is getting into the nitty-gritty of what Gloria talked about -- 31 percent of voters call Obama a very risky choice.

So, how much does that impact his choice for V.P.? To what extent does he need to play it safe? Does he need to pick a more experienced candidate?

KORNACKI: In my view, it should affect it dramatically.

In terms of the leaks that we have been seeing from the Obama operation and from some of the people being considered, I'm not sure that it is. And that ought to be concerning to the Obama campaign. When you hear a name like Tim Kaine, when you hear a name like Kathleen Sebelius, these are good complements to a candidate who doesn't have any reassuring to do with the public, somebody with impeccable national security credentials.


BROWN: But they're up-and-comers. They're not...

KORNACKI: That's a good -- and the problem is conventional wisdom on this -- I usually pride myself on trying to avoid conventional wisdom, but I think the conventional wisdom on this is absolutely right. This election is a referendum on Barack Obama. His poll numbers are the ones that are fluctuating, not John McCain's.

People like Barack Obama genuinely and they're inclined to vote Democratic this year. They're not sure he's the commander in chief guy yet. They're not sure he's properly seasoned. You need to give them a reassuring running mate, so that when they're in that booth on Election Day, they don't have that doubt creep in at the last minute.


BROWN: Go ahead, Gloria.

BORGER: But, if you give him a reassuring running mate -- I was talking to somebody in the campaign about this today -- if you give him a reassuring running mate, aren't you essentially then saying, well, never mind all of our talk about how experience doesn't matter, but judgment is really want what counts?

KORNACKI: No, but we have seen -- we have played this game before. In 2000, George W. -- and I know this is a bad example, the way it turned out historically, but let's look at the election.

In 2000, George W. Bush was the inexperienced candidate, the lightweight from Texas. He picked Dick Cheney. It got praised to the heavens in the media, because Dick Cheney was the man with gravitas. It was a brilliant political pick. It's the same political situation.


BORGER: There are two sides to that argument.

BROWN: All right, hold on.

Tara -- I want to bring in Tara before we run out of time.

And, Tara, 21 percent of voters in our same poll called McCain a very risky choice, a lower number here. But he has to watch out, too. What needs to be his top consideration in pick a running made, in your view?

WALL: Well, with uncertainty comes risk. And I think that the campaign will say it's things like, you know, someone that work well with him, that he knows very well, that he gets along with, that has similar policy pronouncements as he does, that agrees with him on some of these policy initiatives.

But -- and the second tier would be conservative, someone that, you know, is going to draw in those disparities. I think both candidates do have those disparities that were brought up. And I think that that is what is driving a lot of this. That's why you have some of these undecided voters, and some of them quite frankly are looking to see who the V.P. pick will be. And, quite frankly, there are lot of different personalities out there to pick from this cycle.

BROWN: Right.

WALL: You have a lot of women to consider. You have young, old. I don't think the old factor is as much of an issue for McCain. It's a small issue. I think he has other issues like economics. That's why Carly Fiorina is so popular, because that's where his biggest...


BROWN: All right. We have got to go.

To Steve, Tara, and Gloria, stick around, everybody, lots more to talk about, including our tanking economy. We're going to get to that. Americans are mad about it. And it looks like they're not going to take it anymore. And that could change everything in this election. We will explain what we mean.

Also, John McCain calls for an economic surge. Barack Obama says he will create five million clean-energy jobs. We will do a reality check on both of their plans.



BROWN: The latest CNN/Opinion Research poll out tonight shows that, far and away, the economy is issue number one with American voters. That much, you know.

But winning a presidential election still comes down to winning individual states and their electoral votes, which means the presidential candidates need to carefully choose where to take and where to target that economic message.

Senior business correspondent Ali Velshi is over at the wall to show us which states are up for grabs and why.

And, Ali, I'm supposed to ask you about all the color that you have up on the wall, but I just don't see it there it. So -- there it is.


BROWN: Ali, tell me about all the color up on the wall. Why are the states all those many different colors?

VELSHI: Let me tell you. You're going to have to concentrate on this one.

Three months to go before the election and it's getting tougher. The economy is becoming a bigger concern for people. Now, this is how it looks right now. All of those red states are what we call red states. The ones that are pink are the ones that are leaning toward John McCain. The blue are blue or Democratic states. And the ones in the lighter blue are those that are leaning toward Barack Obama.

Well, here's the thing we have to worry about. Look at all those yellow states. That's where those candidates need those tossup states to come into their column, so that they can win the election. And, right now, repeatedly, we're hearing month after month that the economy is issue number one by a greater margin each month. It's increasing now -- 48 percent of people think that the economy is the number-one issue, and it's being battled out in those tossup states -- Campbell.

BROWN: And, Ali, looking at the yellow states, these are, you know, Ohio, Michigan, Wisconsin, these battleground states, the economy is very huge there. But they have very specific concerns in those states that they're looking for these candidates to address.

VELSHI: And today we saw Barack Obama in Indiana. We saw John McCain in Ohio, because some of those Midwestern states have particular issues.

Let me tell you about Ohio and Michigan, for instance. Those are two that sort of have every problem in the book. They're both manufacturing states. They're both places where there were big manufacturing job losses, auto job losses. They're worried about free trade there. They want to see the auto sector come back.

Remember that the housing crisis created the situation we're in. But you have got housing losses there not because there was speculation, but because people had lost their jobs, couldn't pay for their houses, couldn't sell their houses, because factories were closing down and entire towns were being mothballed.

So, when you see candidates campaigning in those states, it's because they can attract all of the issues all in one, housing, mortgage, credit, gasoline, energy, all of those things.

BROWN: All right, Ali, looking at this map, bottom-line it for us in terms the numbers. You need 270 electoral votes to win. How do things look right now?

VELSHI: And when you calculate, when you put the leaning and decided, leaning and safe in one category for of the candidates, no one's got anywhere near the 270 right now. You have got Barack Obama who's hanging around 220 or so, and John McCain coming out -- you need 270 to win -- Barack Obama's got about 270 (sic) if you don't count those yellow states. John McCain has about 189 is where we're at right now.

So, they need a lot of those swing states, those tossup states, in order to make it work. And that's why you are going to see a lot of those economic discussions going on for the next three months -- Campbell.

BROWN: Ali Velshi for us tonight. Ali, we like the goatee, too.

VELSHI: Thank you.

BROWN: Are you going to keep it?

VELSHI: I don't know.

BROWN: We will talk about it later.

OK, more tonight from tonight's political panel, Steve Kornacki, Tara Wall, and Gloria Borger.

And, Steve, you have got traditional swing states that Ali was talking about, Pennsylvania, Ohio. They're always up for grabs. But Obama in particular targeting states that you wouldn't see a Democrat target in the recent past certainly.

He's in Indiana today, Virginia, going after it hard. Why do they think they have a shot at these states?

KORNACKI: Well, the polls tell them they do. The polls have these races dead even in Virginia, Obama even ahead a little bit, same thing in Indiana.

I think the most alarming thing if you're John McCain if you look at this map is simple. If you're working off the 2004 map for John McCain, that means you start with 286 electoral votes, with 270 needed to win. Now, already, I see you have Iowa up there. That is listed as a tossup state.

But the news out of Iowa for McCain has been grim. You lose Iowa, are down to 279. Then you start looking at some of these other ones. You look at like a New Mexico or a Nevada, maybe an Ohio, maybe in the right circumstances Florida. These are all states that are Republican states from '04 where Obama is threatening.

Then you go another level beyond that and that's where you really get in trouble when you're McCain. You have got North Carolina, Virginia, Indiana, and Colorado. These are four solidly Republican states that weren't really even in play in 2004. All of them right now are dead even or Obama ahead. And McCain can't lose any of those, because you look at that map, what is he going to pick off? Maybe Michigan. That's the only one.

BROWN: Well, let me ask Tara that question, because this does show, Tara, how bad the political climate is for Republicans, more generally, doesn't it? Are there blue states that you think McCain has a real shot at in November?

WALL: Well, in some way, it is bad for folks. Others, there are not.

I mean, there's 128 electoral votes up for grab. Many would say, if you look at the polling, Barack Obama should be further ahead. When you look at the map, yes, there are challenges for John McCain, Ohio, Florida, Michigan. Glad he picked out Michigan and Ohio. I was born in Ohio and grew up in Michigan.

But, listen, there's a Democrat governor in Michigan there, where the economy is horrible, as was mentioned. And I think that, look, that's up for grabs. It's a tossup. John McCain won that to Bush back in 2000. He also, though, is focusing in on Ohio, because he has to. He needs to. Yes, it is up for grabs. He should be doing better there. He should be doing better in Florida.

But I think there are some big strengths he brings. He does well among white working-class voters, among men, among seniors. So, I think that he has some strength. And Barack Obama should be still doing better than he is. He's within the margin of error...


BROWN: I have got to go to Gloria.

WALL: Yes.

BROWN: In 2004, Gloria, Ohio was the state that put George W. Bush over the top. And, as Tara mentioned, McCain spent all day in Ohio today. He's there again tomorrow. Is this election going to come down to Ohio yet again?

BORGER: Well, it's a must-win for the Republicans. I would say McCain's not going to win the presidency if he can't win Ohio. I think it's really important.

But I also agree with Steve that we're looking at a new map here. I would say Colorado, Nevada, New Mexico, these are going to be states that are going to be in play. And it could really come down to those states.

And, moreover, on the demographic front, I honestly think this election is going to come down to whether young voters vote in greater numbers than seniors, because the problem that Obama has right now is senior voters. That's a real problem for him in the state of Florida.

But if he gets those young voters out in these states in the West to go vote for him, he could -- he could win because of young voters. But watch those seniors in the Rust Belt states, and in Ohio, Pennsylvania, Florida. Could be a problem.


BROWN: Sorry, Tara, we're out of time. Got to end it there.

WALL: Sure.

BROWN: But our next stop is the campaign trail, where Barack Obama is telling crowds he can eliminate U.S. oil imports from the Middle East and Venezuela in 10 years. We will hear the senator's words. And then our Tom Foreman will put his claim to our no-bull test.

That's right here in the ELECTION CENTER. (COMMERCIAL BREAK)

BROWN: It's time to listen to what they are saying on the campaign trail. And then our Tom Foreman is going to put the candidate's claims to our "No Bull" test.

Barack Obama who says his energy plan can eliminate our need to import oil from the Middle East and Venezuela is first. And here's what he told the town hall meeting today in Elkhart, Indiana.


OBAMA: If we're going to be serious about this problem, we need an "all hands on deck" approach. An effort from scientists and engineers, businesses, homeowners, all of us are going to have to get behind a new approach to energy.


We know this is a challenge that we can meet. That's one of the reasons I voted for an energy bill in the Senate that was far from perfect but doubled our use of alternative energy. We've got to develop them. That's why as president I will put the full resources of the federal government and the full energy of the private sector behind a single overarching goal.

In ten years, we're going to eliminate the need for oil from the entire Middle East and Venezuela. All of it.


Now, to do this, we're going to invest $150 billion over the next decade. And leverage billions of dollars more in private capital to harness American energy and create five million jobs in the process, jobs that cannot be outsourced, good-paying jobs that will be created right here in Indiana and all across the United States of America.



BROWN: Now, we noticed a couple of claims in that statement -- creating five million new jobs and cutting out oil imports from the Middle East and Venezuela.

Tom Foreman is here to put that to our "No Bull" test. What about that oil, Tom?

TOM FOREMAN, CNN CORRESPONDENT: Campbell, big claims, aren't they? Eliminating all the oil we use from the Middle East and Venezuela, that's a lot. But the numbers suggest he has some relatively crude ideas here that might also need some refining.


FOREMAN (voice-over): The American Petroleum Institute says only about 20 percent of all the oil we burn is from those places. We get a lot more from Canada, Mexico, Nigeria. So we would still be depending heavily on foreign oil.

Part of Obama's new energy plan is investing $150 billion in green technology. And much of the green for that would come from a windfall profits tax on oil companies. Problem is, the Tax Foundation, a nonpartisan, nonprofit group, points out we've tried that before.

In the 1980s, a windfall profits tax on oil companies produced less than a quarter of the money that was expected. Worse, big surprise, when the oil companies were taxed more and their profits went down, you know what they did? They produced less oil. And that made us even more dependent on foreign oil.


FOREMAN: And what about those five million new, clean energy jobs Obama is promising? It certainly sounds nice. But industry and economic analysts say they may come at a cost of just as many jobs lost by Americans who work in the old energy sector with coal and oil right now -- Campbell.

BROWN: All right, Tom. Stay there because it's John McCain's turn next. He is telling reporters that Barack Obama's tax plans will cost people jobs. We're going to hear what McCain says and put that to our "No Bull" test when we come back.


BROWN: Tonight in the ELECTION CENTER, we are listening to what they're saying on the campaign trail then putting it to our "No Bull" test.

John McCain has a brand-new line today. He says we need an economic surge. He is also hitting Barack Obama pretty hard on taxes. Here's what McCain told reporters after visiting a Jackson, Ohio, plant where they make kitchen cabinets.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: America has the second highest business rate in the entire world. It's any wonder that jobs are moving overseas and we're taxing them out of the country.

Unfortunately, Senator Obama's plans would raise taxes on businesses even more. He's promised tax increases on income, tax increases on investment, tax increases on small businesses. That's exactly, exactly, the wrong strategy. Raising taxes in a bad economy is about the worst thing you can do because it will kill even more jobs and what we need are policies that create jobs.

What we need today is an economic surge. Our surge has succeeded in Iraq militarily. Now we need an economic surge to keep jobs here at home and create new ones. We need to reduce the tax burden on businesses that choose to make their home in the United States of America.

We need to open new markets to U.S. products, and we need to reduce the cost of health care. And we need to end the out-of-control spending in Washington that's putting our debt on the backs of our children. Now's the time for action. And when I'm president, we are going to get it done.


BROWN: So what exactly is an economic surge? How would it work? Who would be involved? McCain didn't say. So while we wait for the details, let's talk taxes with Tom Foreman -- Tom.

FOREMAN: Campbell, let's go back to the first thing he said because on that first point, he is right. If you're a big corporation doing business in America, you better be pulling in big bucks because you're going to get a big tax bill.


FOREMAN (voice-over): The United States has the second highest tax rate on corporate profits in the world, behind only Japan. And that should matter to regular voters because tax analysts have been saying for years now this is a significant reason that we are losing jobs to other countries. Beyond that, however, they suggest McCain may be stretching things a bit.

Obama has proposed tax increases on some individuals, some income and some businesses, but certainly not all. And although the nonpartisan Tax Foundation says in the long run in, say, five or 10 years, Obama's increases may indeed hurt investments and economic expansion, probably not so much in the short run.


FOREMAN: And that really is a bit of a problem for both of these candidates right now. When they're talking about the immediate economic problems we're facing today, there's a general consensus among economists that neither candidate's plans will solve anything fast. But, of course, that's not a great message to be selling out on the stump -- Campbell.

BROWN: All right, Tom Foreman. Tom, thanks.

Still ahead, John McCain's CEO surrogate, Carly Fiorina, has been working hard for McCain. She has given him a few headaches too. We're going to talk about her and find out how that Viagra became a campaign issue.


BROWN: A look now at the latest headlines. Ted Rowlands has "The Briefing" tonight -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Campbell, the government insists Army scientist Bruce Ivins was the only person responsible for the 2001 anthrax attacks. Ivins killed himself last week before any charges could be filed. Today, the Justice Department revealed Ivins had sole possession of the specific type of anthrax that was used to poison five people to death.

A Guantanamo jury today convicted Osama bin Laden's former driver. Salim Hamdan was found guilty on five counts of supporting terrorism, but was cleared of two conspiracy charges. He's still could get a life sentence -- Campbell.

BROWN: All right, Ted, thanks.

In just a few minutes, "LARRY KING LIVE" has an exclusive and a chance for you to be part of the conversation. Larry, tell us more.

LARRY KING, CNN ANCHOR: That's right, Campbell. JetBlue's CEO is in the hot seat tonight. He's going to tell us why passengers have to pay for pillows and blankets. And no topic is off limits so we'll be discussing a number of issues facing the airline industry.

And, of course, Paris Hilton in a mock political ad that proposes a solution to the energy crisis. Might she be on to something? We'll find out next on "LARRY KING LIVE," Campbell.

BROWN: All right. Thanks, Larry. Appreciate it.

Coming up in just a moment, we're going to go out on the road with one of John McCain's top female supporters, former CEO Carly Fiorina. We're also checking with one of Barack Obama's, his wife, Michelle.


BROWN: It can be a challenge for campaign handlers to try to keep the candidate on message. But what happens when you're dealing with the candidate's spouse?

Well, CNN's Jessica Yellin has been following Michelle Obama and her message. And, Jessica, you know, Michelle Obama has gotten some criticism earlier in the campaign for some of her off-the-cuff remarks. Do you think that she is now taking on a different tone? Is that something that you've noticed?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Yes. And the big difference is that she's far more on message, Campbell. She used to appear to ad-lib. She was very free-wheeling when she was speaking. And now, she's clearly reading from notes and she seems to be very careful, even restrained, sometimes tentative.

We know she's had coaching. Her team has helped her hone a message so she's consistent. But, you know, we should say that she's still got her very off-the-cuff moments. Like this today, she was speaking to military families in Virginia. Let's listen.


MICHELLE OBAMA, BARACK OBAMA'S WIFE: You all become everything in your households. You are mom and dad. You're managing the checkbook. You are handing out the discipline. Trying to get the homework done, trying to keep yourselves together, looking good, in shape, hair done, nails polished. I know we all try.


YELLIN: So top aides, Campbell, say that it's important to her that she still act herself, and that they believe in the campaign that it's actually her strong suit. She sort of connects as a real person and they want to keep that. But you could see there, she wasn't saying anything that gives the opposition red meat to go after her with.

BROWN: We've also seen her do events, do TV appearance, which sort of highlight her mom side, a softer side, if you will, than her sort of out speaking about the issues. Do you think that was a strategic decision from the campaign?

YELLIN: Well, look, they insist it wasn't. And, you know, what they say is that they really needed to give her a real purpose, a focus. And what she's doing now is talking with a particular purpose to working mothers, working women and military families. And her job is now to talk about her husband, sell him. But, again, we do see a much more restrained Michelle Obama.

BROWN: Jessica Yellin for us. Jessica, thanks. We're going to see you back with us in a few minutes and talk a little more about this.

But now, to another woman who is speaking out in the campaign trail. Carly Fiorina wants women to vote for John McCain. And as CNN's Dana Bash reports, Fiorina had her own trouble staying on message.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): It's barely 8:00 a.m.

CARLY FIORINA, MCCAIN ADVISER: Good morning, ladies.

BASH: Carly Fiorina has already flown in to Georgia. She's in a hurry.

FIORINA: Keep up, ladies.

UNIDENTIFIED FEMALE: We're not talking fast enough, are we?

FIORINA: Sorry, I walk really fast.

BASH: Eighteen months ago, John McCain asked her to advise him on economics. But her urgent task this day, selling McCain to women voters, a role tailor made for Fiorina. She was the first female CEO of a high-tech company, Hewlett-Packard. She has lots of female fans.

UNIDENTIFIED FEMALE: That was nice to have you in that position when you were there in Hewlett-Packard.

FIORINA: Oh, thank you.

UNIDENTIFIED FEMALE: Being a woman in technology, I went, yes.


FIORINA: Here, let's get --


FIORINA: What's your name?

BASH: Fiorina is using her star power to draw women to listen about McCain.

FIORINA: I have known him since 2000. In his Senate office, women have both higher positions and are higher paid on average than the men in his office.

BASH: She talks about women's issues you don't hear much elsewhere.

FIORINA: He was a co-sponsor of the Women's Equal Opportunity Act.

And I was in Nashville on Monday and Michigan on Tuesday --

BASH: She is a newcomer to politics. Mistakes happen.

(on camera): You know I have to ask you the Viagra question.

BASH (voice-over): She recently told reporters that women ask her why doesn't health insurance cover birth control if it covers Viagra? It caught McCain by surprise.

MCCAIN: I certainly do not want to discuss that issue.

BASH: Fiorina insists her point, that women want a say about choices in health coverage, is valid. In fact, she was asked about it again when we were there.

UNIDENTIFIED FEMALE: What would Senator McCain do to ensure coverage of birth control?

FIORINA: One woman told me in Ohio recently she said, you know, I really would like a health insurance plan that covers alternative treatments like massage therapy or meditation therapy as opposed to simply Valium.

BASH (on camera): Looking back, do you think maybe it would have been better, given what happened, to talk about meditation and Valium as opposed to the use of "Viagra" word --

FIORINA: Well, you know, I -- in some ways, I'm quite surprised it caused such a flap. I mean, all you have to do is watch your network, CNN, and see endless ad after ad after ad for what we are euphemistically calling, you know, male enhancement. But I understand that it perhaps was too memorable an example.

BASH (voice-over): But it's not just the Viagra dustup. In Ohio recently, Fiorina said McCain has never signed on to efforts to overturn Roe v. Wade. But the fact is McCain calls for Roe's reversal right on his Web site.

(on camera): Your critics say, well, you're doing that to try to lure women voters, even though it doesn't really represent Senator McCain's position.

FIORINA: The reality is, we have had seven years of a Republican Congress and a Republican president, and Roe v. Wade is still the law of the land.

We got a really tight connection here.

BASH (voice-over): En route back to the airport, Fiorina tells us about searching for Hillary Clinton voters, skeptical of Barack Obama. She recently met some.

FIORINA: They sent me a message on my Web site one day and they said, we really want to talk to you.

BASH: But if this former CEO knows anything, it's data. And polls show women are breaking for Obama, not McCain. Still, she's off to hunt for McCain voters and avoid controversy.

Dana Bash, CNN, Atlanta.


BROWN: When we return, our political panel weighs in on the two women, Carly Fiorina and Michelle Obama, carrying the message for their candidates.



BROWN: Michelle Obama was out on the campaign trail today, speaking to military families in the toss-up state of Virginia.


MICHELLE OBAMA, BARACK OBAMA'S WIFE: I'm honored to be here with all of you all. And we are grateful, Barack and I, for all that you do for this country, for what you do for your families, for your sacrifices to this country.


BROWN: She has been a controversial figure in this campaign and today, she was very much on message. But will controversy follow her no matter where she goes? We want to ask CNN's Jessica Yellin about that, along with Steve Kornacki and Tara Wall.

And, Steve, Jessica was reporting earlier that the campaign is trying to reintroduce Michelle Obama and you actually think that that's something they need to do.

KORNACKI: Yes, I'm not saying it's -- I wish it wasn't this way but unfortunately it is. If you look at 2004, what happened with Teresa Heinz Kerry, she became a real liability because she was maybe it's fair that Ivankovitch (ph) was caricatured or something.

The caricaturing began very early on the right against Michelle Obama, trying to make her out to be through sort of a rumored campaign, through sort of innuendo, trying to make her out to be some kind of, you know, anti-American, almost a black militant figure.

I got to say, the McCain campaign even got into this a little bit because if you remember when Michelle Obama had that statement about being proud of her country...


KORNACKI: ... even Laura Bush gave her the benefit of the doubt on that. But on the campaign trail, Cindy McCain, who almost never speaks up, went out of her way when that happened to speak up and say...


KORNACKI: ... I would just like it known that I've always been proud of my country. They were trying to send the deliberate cultural message. So they are right to be very careful on how they handle Michelle Obama.

BROWN: OK. Tara, Michelle Obama may have been outspoken at times but let's be honest here, I mean, Laura Bush has certainly been outspoken at times. And while Michelle Obama may regret saying "for the first time in my adult life I'm proud of my country," do you really think this is a woman who needs an image makeover or is it being, you know, the fire being stoked a little bit here?

WALL: Well, I don't believe that she's this angry woman, whoever has portrayed her that way. I would take issue with who actually portrayed her that way.

I would say that Americans in general did not like the comment. Her negatives were pretty high after that, and I think she had to retool herself somewhat. I think she's really come around though. Certainly she's more polished. She is going to more scripted messages. And I think, quite frankly, both of these candidates are -- both these women do great for both of these candidates. They're great surrogates for them.

BROWN: Right.

WALL: And I think she'll continue to do that.

BROWN: And, Jessica, you know, the Obama campaign, we talked about this. They are putting her in a softer light, some of these interviews like "Access Hollywood," the cover of "People" magazine. Is that something we're going to see a lot more of?

YELLIN: Yes. You know, the campaign took some blowback from the National Press which said, you know, why are you going with the soft outlets? But the campaign, one aide said to me, they feel that this outlet allowed them to come off as a typical average American family which they are.

So they wanted to let Americans relate to them as individuals and they think that these kinds of "People" magazine, "Us" lets them do that. And so, we might not get much access to the candidate and his wife.

BROWN: Right.

YELLIN: But these outlets are getting it.

BROWN: Are going to.

WALL: Very strategically.

BROWN: I want to shift gears and just ask you very quickly about Carly Fiorina. She's trying to help McCain win over women. He's got a ways to go, though. Recent "Time" magazine polls show him trailing Obama by 10 points among women.

WALL: Gallup has them at 52-48 percent. They've got it a little bit closer this week. I do think -- yes, absolutely Obama does lead with women. But I think that quite frankly McCain has led in appointing women in senior positions in his campaign, and quite frankly with one of the most number one issues to America and women who carry the purse strings, that's economics.

BROWN: Right.

WALL: And quite frankly, Carly Fiorina articulates his message very well on that.


BROWN: We got to end it there. Jessica, Steve, Tara, thanks so much. Out of time. We're going to be back right after a quick break.


BROWN: Live from the ELECTION CENTER, here's an update of the hour's headlines.

The U.S. government says the 2001 anthrax poisoning case has been solved. The FBI today declared Army biological researcher Bruce Ivins was the only culprit. He committed suicide last week without being charged. And "The Associated Press" reports federal prosecutors have dropped the investigation into how Heath Ledger obtained two painkillers that contributed to his death from a drug overdose.

That's it from us in the ELECTION CENTER tonight. Thanks for joining us.

"LARRY KING LIVE" starts right now.