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New McCain Attack Ad; New Poll Out Showing The Race Between Obama and McCain Changed Significantly; Hillary Clinton Decided to Release Her Delegates to Barack Obama; Madonna Slammed John McCain Comparing Him to Hitler; Plane Crash Rescue on Tape; Two Tornadoes Ripping in Colorado; Fair Tax Debate
Aired August 24, 2008 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: The Obamas head for Denver and CNN is there with John King, Candy Crowley, Roland Martin, Alex Castellanos and Paul Begala. Tonight, a new poll out. Who's ahead? And is there a Biden bounce? Can you say divide and conquer?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: She won millions of votes. But isn't on his ticket. Why? For speaking the truth.
(END VIDEO CLIP)
SANCHEZ: The new wedge issue. Hillary. By the way, when did Hillary find out she wasn't "it"? We now know.
Madonna, live in concert, rips into John McCain.
Amazing video -- a plane crash moments after it happened. It's all recorded. We'll let it play out.
And how would you like to keep your entire paycheck, every penny, and pay no income tax? A special LOFTV report on what Americans are jazzed about. A fair tax. For one and all. Only here, where the news starts now.
And hello again, everybody. I'm Rick Sanchez. All right. New things done a little differently here. It's convention time. There's a new McCain/Obama poll. There are new attack ads. And more than 1,000 people here on Facebook and twitter.com. In fact, go ahead and show them on the big screen we've got for them tonight, Roger.
That's what it's going to look like. See one of the first entries coming in right now. It says "awesome" about that giant twitter. What he's referring to is the fact that we're going to be talking to you while you are talking to us and watching this newscast as it happens. Revolutionary, perhaps. They're going to be sharing their thoughts. We're going to be sharing our analysts' thoughts.
Then, tonight, as we were getting ready to put all this together, boom, leave it to Mother Nature to suddenly steal our political thunder. Rub your eyes and get a look at this monster. This thing is only 20 miles from the Democratic National Convention site. It's an enormous tornado. We sat and watched this thing. It slammed the ground south of Denver. It's Parker, Colorado.
Those two, three-story houses, too close for comfort. Incredible images as we watched from affiliate WUSA. You see the houses in the foreground, some in the background. Amazingly, from last we checked, no one had been seriously hurt by this. It's a twister that struck the area as we follow it.
Now, let's go on to politics. The Democratic National Convention in Denver.
Denver, Denver, Denver. That's where we go now. That's the story tonight. Here's what we're going to be doing for you. New developments. There is a new poll out showing that the race between Obama and McCain has changed significantly. That's coming up.
Also, we learned tonight that Hillary Clinton has decided to release her delegates to Barack Obama. That is the bulk of our show.
But then in the second half, how would you like to never have to pay a payroll tax? Keep every penny in your check. Or ever have to pay income tax. We have a special report that you need to see on a plan to revolutionize our tax system. This has so many Americans absolutely jazzed.
We begin tonight, though, with two of the best in the business, from the convention in Denver. CNN senior political correspondent Candy Crowley is joining us, and our chief national correspondent John King.
Candy, let's begin with you. How big is this announcement by Hillary Clinton to release her delegates Wednesday?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Listen, it's very big symbolically. Let's face it, those delegates are free to do whatever they want, including ignore Hillary Clinton and go ahead and vote for Hillary.
So -- but what they're trying to do here, and I judge what they will succeed in doing, is trying to bring the party together. Hillary Clinton and the people around Clinton said -- listen, she really is trying to do the right thing here. She really does believe that Barack Obama should be elected president.
So, they have been trying in varying ways. She's been out campaigning for him. And still, there is this group that is never going to go ahead and vote for Barack Obama. They remain bitter that Hillary Clinton is not going to be the nominee. They think that she should be the nominee; that the party rules worked against her, et cetera, et cetera.
So, it is significant, and as another attempt by Hillary Clinton to say -- you know what, if you want to win, if you believe in me on the issues, you should believe in him, too.
SANCHEZ: John, one of the biggest stories in this news cycle over the last 24 hours is this John McCain attack ad, as it's being called. It seems to be trying to put a rift between Hillary Clinton supporters, about Hillary Clinton herself and Barack Obama. Does this move by either of Obama or Clinton take the wind out of the sails of that argument?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, the McCain campaign certainly hopes that. We'll watch this play out in Denver. This is the major subplot, if you will, in the convention hall. The major drama is the Obama-Biden ticket.
But it is a subplot and the McCain campaign is trying to exploit this division in the Democratic family, because they know if they can get just a decent percentage, doesn't have to be a huge percentage, just a decent percentage of the Clinton voters in southeast Ohio, then the Republicans will hold Ohio.
If they can get a decent to significant percentage in Pennsylvania, perhaps they can take that state out of the Democratic basket. And we could go through battleground state after battleground state, where the Clinton voters, those blue collar but largely white lunch bucket Democrats could potentially be the swing voters. Many of them, I would remind you, Rick, are Catholic voters as well. They tend to be swing voters in close elections.
So, the McCain camp is trying to exploit this division and part of the Denver challenge for the Democrats is to bring family unity.
SANCHEZ: Hey, guys, let me ask you this question. Curious. As I look at this convention and I think back to past conventions, there was a famous speeches, there were the showstoppers, there was the young Bill Clinton, there was the Obama speech, there was the Zell Miller speech, Cuomo speech, Buchanan the toughie.
Do you see as you look at the rostrum at this point of any one moment or any one speaker who's going to be breaking out and people are going to be talking about him for days as a result of what he or she says? Either one of you.
CROWLEY: Listen, I think it's going to be Barack Obama. It's going to be really hard to outshine that speech. We all know he can give a great speech. And you know, Rick, there were also conventions when the losers gave the best speech, the most memorable speech. Teddy Kennedy, when he conceded to Jimmy Carter -- the "Dream Never Dies" speech. There were just powerful speeches.
It doesn't have to be an unknown. Sometimes, there's someone that's already known that kind of turns the corner in a career, in the party. But I think this time around, with the setting that Barack Obama has chosen, it's going to be awfully hard to have somebody bubble up and outshine that.
SANCHEZ: John, can you think of anybody out there that you think might be able to make a statement this time around?
KING: I'll give you two. And I agree 1,000 percent with Candy, that the first and foremost, it's up to Barack Obama. But Michelle Obama has a very important role. Because a lot of Americans out there aren't sure the Obamas share their values. When she speaks, she needs to say, "Our family is very much like yours. The pressures -- we understand the pressures on your life."
And the emotional moment, I think there will be a videotaped presentation by Ted Kennedy. Candy just mentioned his past performance. There was some talk he would actually come here. I'm told tonight he's not up to making the trip. Some had hoped he would make it here.
But there will be a video presentation that Ted Kennedy has recorded for this convention and I believe you will hear a call for party unity from him as well. And he's a legend in the party, Rick. I think that will be a very emotional, stirring moment.
SANCHEZ: You guys are great. So glad to have you. We appreciate it. John King and Candy Crowley. We'll catch up with you later.
Let's talk about the ad wars themselves. You heard some mention of them just a while ago. This is how Senators Obama and McCain will take shots at each other on your television sets in your living room. The McCain campaign taking big swing at Barack Obama today. And take a look at who does most of the talking in this John McCain ad.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: She won millions of votes. But isn't on his ticket. Why? For speaking the truth -- on his plans.
SEN. HILLARY CLINTON (D), PRESIDENTTAL CANDIDATE: You never hear the specifics.
UNIDENTIFIED FEMALE: On the Rezko scandal.
CLINTON: We still don't know a lot of answers about Senator Obama.
UNIDENTIFIED FEMALE: On his attacks.
CLINTON: Senator Obama's campaign has become increasingly negative.
UNIDENTIFIED FEMALE: The truth hurt. And Obama didn't like it.
(END VIDEO CLIP)
SANCHEZ: Some people say that is exactly how the game is played. Let's get right into this discussion. It's been the one that people have been talking about in politics. Some of the best and the brightest political minds around are joining us, and oh, yes, I'm going to be talking about it as well.
Paul Begala, Democratic strategist, former adviser to President Clinton. Republican consultant Alex Castellanos, whereas my mother would say, Alejandro Castellanos. CNN political analyst, radio talk show host and syndicated columnist, Roland Martin. He's going to join us as well. And by the way, he's got some hot news he's going to be bringing us in a little bit.
Alex, I want to start with you though. Can there really be a rift between Barack Obama and Hillary Clinton if Hillary Clinton says there is no rift between us?
ALEX CASTELLANOS, REPUBLICAN STRATEGIST: Well, there certainly is, because her voters seem to see one. The Hillary Clinton voters say that they're not supporting Barack Obama en masse. As a matter of fact, 20, 27 percent of them are saying that they now may vote for John McCain. That's a big whole lot of the Democratic Party.
SANCHEZ: But the question is, you know, when you look at something like this, you're left wondering, they're speaking, Republicans have been on the air putting ads that speak for her, and she's saying not only do I not have a rift with him, in fact, I'm giving him all of my delegates as of Wednesday.
CASTELLANOS: Yes, but, you know, the rift in the voting population got worse as the election -- as the primaries went on.
SANCHEZ: So, you're saying --
CASTELLANOS: Hillary Clinton increasingly -- her voters increasingly said, we're not going to go for Barack Obama in the general. And that isn't just a choice between the two candidates. These are working-class voters who didn't see Barack Obama representing them.
SANCHEZ: So you're saying despite whatever it is she says, her voters are still going to be feeling somewhat dissatisfied.
Paul Begala, give that a shot.
PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, (INAUDIBLE) used to say that the good Lord gave us family so we wouldn't have to fight with strangers, right. And the Democrats had a big family fight. All the way from January to June.
But what unites a family, or any other organization that is divided? An external threat. I think McCain's ad was too cute by half. I think that it gives Democrats the external threat they need to unite.
In other words, we may say anything about each other within the family. But when somebody from the other side starts weighing in on our family fight, we close ranks. And I think that's what's happening here --
SANCHEZ: Interesting. So you think -- what I hear you saying is that this is going to backfire on McCain, perhaps.
Roland Martin, pick up the argument. And I also can't help but wonder, has Barack Obama flubbed this in a way? Because here we're going to the convention and look what we're talking about. Should he have somehow made this thing stop months ago? ROLAND MARTIN, CNN CONTRIBUTOR: First of all, there's no way that Obama could have done to make this thing stop. Keep in mind, we have not seen this kind of close primary in -- I don't know how many years. You had two historic candidates. You had people on both sides who were absolutely passionate about their candidate. So we should not be surprised or shocked by it.
I think what's going to happen is, Democrats are going to look their own constituents in the eye and say, what are the issues that you care about. Do you want to see a conservative Supreme Court majority? Do you want to see Roe v. Wade overturned? Do you want to see the Bush tax cuts continue? Do you want to see our troops stay in Iraq?
They're going to hit the people on the issues and say, at some point you're going to make a decision. And look, I've seen some of the e-mails and I must say the same thing about the Democrats as I said about the conservatives in the primaries, who said that John McCain was not conservative enough. If you vote for the other person because you don't like the other person, you've got to shut up for the next four years.
SANCHEZ: All right. Roland Martin, Alex Castellanos and Paul Begala, you guys are good. Different perspectives. All well set out. We're going to be coming back to you in just a little bit as we continue.
The big story tonight, though, at least happening in the last couple of hours, if you haven't heard, with Joe Biden on the ticket, what happens now to the poll between Barack Obama and John McCain as a result of Joe Biden's presence.
Well, we know what it was yesterday. Where is it tonight? We've got brand-new numbers. We're going to share them with you as soon as we come back.
(COMMERCIAL BREAK)
SANCHEZ: All right. Welcome back. Just a couple of hours ago, we got a hold of the first national poll that was conducted after Barack Obama tapped Joe Biden as his running mate. The CNN Opinion Research Corporation survey is out. It looks like Obama may have actually taken a bit of a step back in the numbers. Yet, other polls do indicate that voters like Biden.
So, what happened with this thing? How can they like Biden so much and still haven't go the other way? Bill Schneider is joining us now. He's the best in the business, certainly when it comes to crunching the numbers.
First of all, tell the viewers where we are now with this very latest CNN poll, on the horse race itself.
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Deadlock.
SANCHEZ: Deadlock? SCHNEIDER: Deadlock. Deadlock. You know, that's where the presidential race stands as we go into the two conventions. 47 percent for Barack Obama, 47 percent for John McCain. And, you know, Rick, you can't get any closer than that.
A month ago, Obama had a seven-point lead. Now, why is the race tightened up? Partly because of Clinton supporters. More than a third of Democrats say they rather see the party nominate Hillary Clinton than Barack Obama. And those Democrats, 27 percent of them say, they're going to vote for John McCain.
In June, just 16 percent said that they would vote for John McCain. What happened? Obama didn't put Hillary on the ticket. And some Clinton supporters felt that he treated her disrespectfully. And McCain is actively trying to exploit those resentments, so that by our calculation, half of Obama's decline in the polls over the past month is attributable to those angry Clinton supporters. How about that?
SANCHEZ: But wait. This poll that you're talking about also took into account the fact that Biden was now on the ticket. And I looked at some of the data on there, and it seemed to indicate that most of Obama's supporters, if not most Americans, seemed to love Joe Biden. Loved the fact that he's there, think he's a real good guy, think he's a real good leader. How can he have good numbers and yet Obama's numbers drop?
SCHNEIDER: That's a very interesting question. Let's take a look at those data. A majority of voters say Biden was a pretty good choice. In fact, 73 percent of Democrats say it was a good choice.
And how about this. 59 percent of Clinton Democrats, those who want Clinton to be the nominee, say Biden was a good choice. They don't have a problem with Biden himself. Their problem is different. Their problem is Obama didn't choose Clinton. 38 percent of Democrats wanted Obama to choose Clinton. And those are the ones who are taking it out on Senator Obama, Rick.
SANCHEZ: You know I'm doing this thing where every night I talk to people on, you know, on Facebook and MySpace, and something called Twitter. In fact, put this up real quick, if you can here.
SCHNEIDER: OK.
SANCHEZ: I want to go to a question I just saw a little while ago, where it talks about the fact that this doesn't really count because many people on the Internet believe -- there you go. I'll read it to you. It's from MorgaineSwann. "You know those polls don't mean anything, right? A large chunk of Obama's supporters only have cell phones, so they go uncounted."
This is a constant argument on the Internet. Are they right?
SCHNEIDER: Right. Well, they have a point, but we know about that. We realize that there are an increasing number of voters out there, increase every year, who don't even have land lines, who only have cell phones. Very difficult to interview them because, of course, it costs them money and they don't want to do it over the phone.
We have done a lot of research. The Opinion Research Corporation, our polling partner, has done research into this. Who are we missing? We know the kinds of people we're missing. They're mostly young voters, and we know how to wait to take into account the voters that we are missing.
So right now, it doesn't amount to a serious problem. It's a problem that we're aware of and we're trying to compensate for it. But in about 10 years, when a huge chunk of voters can't be reached, then it's going to be a real big problem.
SANCHEZ: So we can say in some way they're being factored in at this point.
SCHNEIDER: Very definitely.
SANCHEZ: Hey, Bill Schneider, you're the best. Thanks so much for joining us tonight. Interesting insight into all of this. And by the way, if you want to join us on Twitter, it's twitter.com/ricksanchezcnn. There's the big screen. We're debuting this tonight, by the way. It's the first time we've ever played with that right there -- that big screen that you see. And all of your questions are going to be sent there. So people can see it at home as well. And comments, I should say.
All right. Cleaning house. That's what John McCain is trying to do now after losing track of how many homes he owns. We're going to show what he said specifically.
(COMMERCIAL BREAK)
SANCHEZ: Seemed like a simple enough question at the time, but when John McCain couldn't answer how many homes he actually owns, the Democrats, as might be expected, pounced on it. Today, John McCain says he was ready with an answer. Here's the one he gave to CBS.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Let me say that I am grateful for the fact that I have a wonderful life. I spent some years without a kitchen table, without a chair, and I know what it's like to be blessed by the opportunities of this great nation.
Cindy's father barely finished high school, went off and distinguished himself in World War II in a B-17 and he came back with practically nothing and realized the American dream. And I am proud and grateful for that. And I think he is a role model to many young Americans who serve in the military and come back and succeed.
So the fact is, that we have homes, and I'm grateful for it. We spend our time primarily in Washington, D.C., where I have a condominium in Crystal City; here in this beautiful Sedona that I'm blessed every moment I can spend here. Our condominium in Phoenix, Arizona, and a place over in San Diego. The others are also for investment purposes. So all I can say is, I am blessed to have the opportunity to continue to be part of a country where you can succeed and do well.
(END VIDEO CLIP)
SANCHEZ: As you know, McCain's wife, Cindy, is worth an estimated, I should say, $100 million. It's been a campaign in which we've seen both candidates' spouses playing a pronounced role.
Tomorrow night, Michelle Obama will be giving a keynote speech at the convention. You heard John King say that may be the most important speech of the convention. Tonight, though, she was talking to our own Roland Martin and he joins us, along with our other guests, that we've been talking to tonight -- Paul Begala, Alex Castellanos.
All right, Roland, what do you have to say? You're making some news tonight?
MARTIN: Well, first of all, we -- I talked to her on Tuesday for TV1 Cable Network where I also serve as a commentator. It's a lifestyle entertainment network for African-Americans. And we really talked about this whole issue of family and values, this whole campaign. And one of the things that she really talked a lot about was the relationship in this campaign between Obamas and their children.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, SEN. BARACK OBAMA'S WIFE: Our stories are the quintessential American stories. You know, what my father worked for, his desires, you know. He was never asking for a handout. He was willing to work. But he just wanted a little fairness, and an opportunity to know that his efforts could lead to something better for his kids.
(END VIDEO CLIP)
SANCHEZ: Roland, why --
MARTIN: Rick, what --
SANCHEZ: Go ahead, go ahead.
MARTIN: Here's the deal. I think -- and first, I've heard Michelle Obama give a number of different speeches. What you just heard right there is a precursor of what you're going to hear tomorrow, and that is her laying out, look, this is my family, this is my history. Because what happens, a lot of people out there only think about her going to Princeton and Harvard. But she says, wait a minute, you know, there was a different lifestyle where she grew up in. But she also touched on the whole issue of being a role model here in America.
(BEGIN VIDEO CLIP)
M. OBAMA: At the very heart of my motivation for supporting Barack is my girls and the kind of world that I want to hand over to them and the kind of people that I want to lead the world. And when I think about that in broader scheme, I think there's nobody in this world that I would want, nobody with the kind of character, the intellect, the capacity than Barack.
(END VIDEO CLIP)
SANCHEZ: Roland, I'm wondering, why are her numbers, as we say sometimes in Spanish, not so good?
MARTIN: It's how you're framed. And that is, if you look at the kind of coverage -- I mean, you had more coverage about Michelle Obama in her comments than you had about the history of Cindy McCain. Obviously, Michelle Obama has been out there on the stump, speaking for her husband, doing fundraisers. But you haven't had the same level of coverage when it comes to Cindy McCain.
I mean, if you ask people about the history of Cindy McCain, we saw the story that came up previously in terms of the whole issue of prescription drugs, and things along those lines, people will probably say, huh? I never heard that kind of stuff.
There's an imbalance, I think, when you look at the coverage here that explains it. She has been more defined by the critics in terms of Michelle Obama than Cindy McCain has been defined. The left has not gone after McCain like the right has gone after Michelle Obama.
SANCHEZ: Alex Castellanos, quick question. Do you expect that the right will in fact use Michelle Obama as a target throughout this campaign?
CASTELLANOS: Oh, I don't think so. I think, you know, the American people ultimately don't even think this election is so much about the candidates, even their wives, they think it's about them and their future. And that's what they look to see these candidates. And I don't think that, frankly --
(CROSSTALK)
SANCHEZ: So you're on the record here saying that you do not expect to see her in any of these attack ads like we saw the one for Hillary Clinton earlier tonight?
CASTELLANOS: Certainly none from the Republican Party and the McCain campaign. I think they would backfire and I think very few campaigns, I think would be amateurish enough to do that. But you know the job of this convention for the Democrats is --
SANCHEZ: Down in ten seconds.
CASTELLANOS: Yes. Is to really define the Republicans and McCain, not to rehabilitate Obama.
SANCHEZ: Paul Begala, five seconds. Do you agree with him that they won't go after her?
BEGALA: Of course they will. It's reprehensible. It would be reprehensible if the left went after Cindy McCain as well. They better not, or I'll call them on it as well. But it's been disgraceful how they've attacked Michelle Obama. And I think tomorrow night America is going to fall in love with her when she gets up there and speaks and they see the real Michelle Obama.
SANCHEZ: All right. We'll leave it at that, gentleman. Thanks so much.
Madonna! Madonna in the news. She's not just striking a pose this time. She's making a statement. I'm going to tell you how the, quote, "material girl" has slammed John McCain, comparing him to Hitler. We'll be back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. I've got some of the social networking sites that I've been checking over here. We've got them also there on the big screen. There is a couple of them that have been coming through right now. Let me take you to the top. All right, two of the things that we were just talking about.
First of all, Michelle Obama. Eric writes, "I don't know Cindy McCain, but Michelle Obama just angers me for her, quote, "hatred of America." Don't trust her or Obama. Then, on the other side, we have somebody writing in to let us know about the Hillary Clinton so-called rift. They say, "I say vote Obama or consider yourself excommunicated from the party." There you go. Two of the comments that just came in less than seconds ago, as you communicate with us about the stories that we are bringing to you.
Also, it is rarely boring when politics and pop culture cross swords. It happened last night in the United Kingdom. Maybe doing no favors for Barack Obama. Check out these pictures. We don't have the video of Madonna's concert yet. Maybe a little too expensive to grab. But this was Madonna's world tour kickoff in Cardiff, Wales.
She sang, she dance, but she also took a swipe at Republican Senator John McCain in a very strident way. At one point during the show, a bunch of images flashed on the screen, pictures of global destruction, and Hitler, and Zimbabwe's Robert Mugabe. And then, John McCain.
It was during a song that's called "Get Stupid." Hey, Madonna, this is what they have been saying so far. It's a story that we will continue to follow for you. By the way, she went on to speak of Barack Obama in very pleasant terms.
Will swipes like that really affect the race for the White House? Let's take it to our panel. Republican consultant Alex Castellanos, Democratic strategist Paul Begala and CNN's political analyst Roland Martin joining us once again.
I don't know, Alex, but it looks to me like she's handing one right to you like a big fat fastball right down the middle, isn't it?
CASTELLANOS: Yes. We're sorry we lost Madonna's vote on that one. But, of course, since she's in England now, I think its citizen over there. I don't think that counts anyway. Look, Barack Obama already has problems being defined as an elitist, out of touch with mainstream, working-class Americans. I think more celebrity endorsements, the Paris-Britney type of ticket is not going to help.
SANCHEZ: Do you guys, agree? Paul, this is not a helper for Barack Obama, anything that ties the Democrats to, you know, holly- weird as some call them, ain't good, right?
PAUL BEGALA, DEMOCRATIC STRATEGIST: Well, first off, Rick, it doesn't tie the Democrats to anything. Second off, she's an artist. And I'm not an art critic or a cultural critic. She ought to have a full right to say whatever in the world she wants to say.
You know, I'm a big Johnny Cash fan. He had a song where he sang about I shot a man in Reno just to watch him die. That doesn't mean he's pro-murder. It's just art. And I think people ought to step back here before we all start becoming a cultural commissars of what artists say out there. We need artists out there. And I don't like people trying to censure anybody.
SANCHEZ: All right. Roland Martin, your turn.
ROLAND MARTIN, CNN CONTRIBUTOR: Well, first of all, I'm with Paul on this one. Not only that, I mean, look, you have people -- look, Republicans who love the Corsi Book. It was absolutely a piece of crap. And so they criticized that. You're going to have people who say different things, it's going to tick somebody off.
But I tell you what, though, Alex, I know you keep throwing out there in terms of this whole notion of being an elitist, but you know what, the guy wears 500-buck pair of shoes. I wonder which house he left it in with John McCain. You can keep throwing it out there and that means nothing in the campaign. Madonna means nothing. (INAUDIBLE), elitist means nothing. People care about how you're going to affect their life, their kids going to college, saving a job. Madonna is irrelevant to this convention, to this political campaign.
SANCHEZ: Most Americans would wish that you were absolutely correct. But I can almost guarantee you that tomorrow it is one of the stories that many people will be talking about at the dinner table, unfortunately and now.
MARTIN: Oh, yes. But Rick, but Rick, they also talk about the photos of Angelina Jolie and Brad Pitt.
(CROSSTALK)
UNIDENTIFIED MALE: Roland --
SANCHEZ: Take us out there, Mr. Castellanos. You've got five seconds.
ALEX CASTELLANOS, REPUBLICAN CONSULTANT: You know, most Americans, lunch bucket Americans see all this glitz and glamour. People so out of touch with their values, and again, those values then are identified with Barack Obama. The question was, does it help Barack politically. It does not. SANCHEZ: Yes. And most people would think you're right.
Roland --
(CROSSTALK)
MARTIN: Glitz and glamour, seven houses, that's a lot of glitz and glamour.
CASTELLANOS: They could all fit in John Kerry's house, by the way.
SANCHEZ: Thanks so much. Who's got more money? Who's the richer? All right. I'll tell you. Paul Begala, Alex Castellanos and Roland Martin, thanks gentleman for being with us tonight.
UNIDENTIFIED MALE: Thank you.
SANCHEZ: A plane crashes into a baseball field. Just missing a group of kids. Take a look at this. Someone happened to have a camera and came up on the scene. And we're going to let you see it as it plays out for yourself. Really incredible stuff.
(COMMERCIAL BREAK)
SANCHEZ: All right. There you have it. Truly unbelievable video out of central Texas. By the way, we're going to be getting your reaction to some of the stories that we'll have coming up, including the one about the fair tax. A special tonight on what it means to Americans.
But now, let's go to the video. This is somebody who comes up on, suddenly, a plane that has come down in a baseball field. You can hear some of the reaction yourself. It's a Cessna. There are two people onboard, and suddenly they try to get them out. I'm going to shut up and let you listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Are you ready? One, two, three.
(INAUDIBLE)
UNIDENTIFIED MALE: I will in a second, OK? Listen, I'm going to get you out of here.
UNIDENTIFIED MALE: Would somebody cut the wires there?
UNIDENTIFIED MALE: Hang on, hang on, hang on.
UNIDENTIFIED MALE: I'm going to cut the strap.
UNIDENTIFIED MALE: Hang on. Hold on. Hang on.
UNIDENTIFIED MALE: I'm going to cut the strap. So hold on.
UNIDENTIFIED MALE: Don't drop it. You don't want to lose it.
UNIDENTIFIED MALE: (INAUDIBLE). We've got two persons injured. Two persons.
UNIDENTIFIED MALE: I need everybody out. Everybody else get back, OK? I know you all want to help, but --
UNIDENTIFIED MALE: We got it. We got it.
(END VIDEO CLIP)
SANCHEZ: And there they cut the seat belt and they're able to get the second person out. Imagine being a police officer, off duty, that happened to be close by and being able to get to the scene and get two people out of the plane right after it crash lands in a baseball field. Both men were rescued, by the way, important to point out.
All right. Two tornadoes ripping 20 minutes away from the very place where we have been bringing you our news tonight. We watched this tonight with amazement in the NEWSROOM as it ripped through houses and communities. And yet, no one was injured. You'll see it for yourself when we come back.
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SANCHEZ: We were amazed watching this. We thought you might be, too. Let's bring in Jacqui Jeras to help explain what this thing is. By the way, 20 minutes from where we were just talking to our reporters there in Colorado. Look at those homes. Look at this twister, Jacqui.
JACQUI JERAS, CNN METEOROLOGIST: It is just amazing me, Rick. And this tornado got so close to these huge ranches, and believe it or not, no injuries, no damage. I saw a couple of trees uprooted and that was about it. We saw this form on television. A funnel cloud and then it came down. It's a large and violent tornado. And just missed these houses. Unbelievably.
You mentioned it was about 20 miles away from Denver. If you know the Denver area, you know Castle Rock. And it was very near Castle Rock, kind of between there and Parker. It was a fairly isolated cell. The storms rolled on through and they dissipated almost as quickly as they started. Things look good across parts of Colorado now tonight. And really, the severe weather threat is over.
SANCHEZ: Fantastic. Thanks so much, Jacqui. Glad that nobody was hit. But it was --
(CROSSTALK)
JERAS: It was amazing.
SANCHEZ: Yes. Hit-and-miss there for a while.
Don't go to bed yet because there's something really important that we're going to talk about. Something that Americans are captivated by. They reached out to me, so I went and talked to hear their story. It's about changing our entire tax system in this country. Never again having to pay a payroll tax. Never again having to pay income tax. Instead, every time you buy something, that's when you pay. 23 percent. Can it work? The fair tax, consumption tax when we come back.
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SANCHEZ: I started sharing this conversation this morning when I got up with people on Facebook and MySpace and on twitter.com. These are some of the responses. I'll share some of these with you as we go. But we want to begin another part of the segment now on this newscast where we talk about something that's somewhat revolutionary. And people are excited about it. Death and taxes, one's inevitable and does the other have to be.
Grassroots groups across the United States say we desperately need to not just change our tax system, but to revolutionize it. No more payroll taxes. Keep every penny you make. No more income tax also. Just something that's called a consumption tax.
Tonight, in the League of First-Time Voters, we feature some fired-up Americans, including a congressman, a very famous radio personality, Neal Boortz, most of you know him. He reaches 5 million people and a nationally syndicated newspaper man who's against it.
(BEGIN VIDEO CLIP)
REP. JOHN LINDER (R), GEORGIA: The current system is broken and can't be fixed. We have a GAO study that says that in 32 years, the entire federal revenue strain will be insufficient to pay the interest on the debt unless we have more growth in the economy. We may not have the perfect system. We may not even have the best system. But it's a better system than what we have.
SANCHEZ: Is it a better system than what we have?
HAYDEN KEPNER, FAIR TAX CRITIC: Our system has got full of problems. But the problem with the fair tax is that the rate would need to be far too high in order to do what they want to do.
SANCHEZ: Well, hold on. They're saying they can do this at 23 percent. And then at 23 percent, it would pretty much equate whatever it is that the government is getting now.
UNIDENTIFIED MALE: That's fine.
KEPNER: Every single independent study over the last ten years has found the exact opposite.
NEAL BOORTZ, SYNDICATED TALK RADIO HOST: You see, every one of those independent studies that I've looked at, and I challenge you to show me one that doesn't, creates exceptions. Well, they can't tax this. They can't tax that. They're not going to be able to put a tax, so they're going to have to take this out of the tax base. They're going to have to take that out of the tax base. And of course, every time you create an exception, it starts throwing the radar.
LINDER: No one who scores this as the bill is written came up with 42 percent.
ALLEN BUCKLEY, LIBERTARIAN GA, SENATE CANDIDATE: And here's your thousand -- the joint committee on taxation an arm of Congress studied HR-2525 which is the predecessor, virtually identical, OK? They said in the first five years, the revenue mutual rate was 59.5 percent. Which means if something cost $1 without any tax, it would cost $1.60 with tax.
LINDER: You're getting two things wrong. First of all you're substituting your view of exclusive tax versus an inclusive tax so the numbers are considerably different. But secondly, they did not score the bill that's written.
BOORTZ: What the opponents to the fair tax do, in order to boost the rate and make it appear to be less palatable, is they'll continue to quote the income tax, which we have on an inclusive basis and then quote the fair tax on an exclusive basis.
JAY BOOKMAN, SYNDICATED COLUMNIST: Fair tax is a national sales tax, in essence. So, when you quote people, the percentage that they're going to pay on that sales tax, they will automatically assume that if you say that it's like a state sales tax -- if you say it's a 23 percent sales tax, it's $1.23 on that purchase. It is not. It's $1.30.
BOORTZ: The assumption is wrong.
SANCHEZ: One of the first things people would say is it's a regressive tax. How can the poor guy who is at the poverty level, how is he going to be able to pay 23 percent on everything that he needs, including the diapers for his child and all the money that he's got to pay --
BOORTZ: He's paying 22 percent right now.
LINDER: The vetted cost of the IRS is 22 percent of what you spend.
SANCHEZ: OK.
LINDER: The fact of the matter is the prebate makes this a very progressive tax probably more progressive than the current tax system.
SANCHEZ: And a prebate is a way of getting money back to those people even before they spend it?
LINDER: Yes.
SANCHEZ: Can you explain that to me.
LINDER: Hey, everybody based on the size of the household is going to get a cash distribution at the beginning of every month sufficient to totally untax them up to poverty level spending.
BOORTZ: You spend up to the poverty level and you have already been reimbursed ahead of time for the fair tax up to that poverty level.
SANCHEZ: A single mother living at home with two children trying to do the best she can but doesn't make a lot of money, that's going to be a wonderful thing for her. We all agree?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: Yes.
SANCHEZ: I mean, she's getting money so she can spend it and take care of her --
BOORTZ: She ought to be out demonstrating for the fair tax right now.
BOOKMAN: That's why a lot of conservatives oppose this bill, because every month, every household in America will be getting a check from the government. They're going to make the whole country dependent on checks coming from the federal government.
SANCHEZ: So, we're expanding to bureaucracy and make an addicting people to government checks.
LINDER: Everybody that I know who pays income taxes can't wait until the check comes on April 15th. And they judge their lives about that, how they can spend that money. But we're dependent on it now. It was the one thing that I didn't like about it, having that check on everyone. But I can't think of a better way to equalize it so it's not punitive on the poor.
(END VIDEO CLIP)
SANCHEZ: There you go. I know it's a complicated issue. But already people have been responding. Go ahead and go to the board if you would, Roger. This one's coming in from Grand Rapids, Michigan. You see it right there. "That will not be a good idea," he says.
All right. Let's go to this one right here. I'm going to highlight it in blue. I think it's an excellent idea no matter how rich or how poor. You pay for your consumption and everyone pays into the system. Two separate ideas.
Again, it's complicated so we try and break it down for you. As Bill Maher told Larry King before we went on the air tonight, we've got to get smarter, America. Let's pay attention. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: All right. Let's get right back into this. The fair tax. A lot of people say the problem with the present system is that most of the money, billions and billions of dollars isn't collected. Money that isn't taxed whatsoever. So Congressman John Linder is part of our debate, as well as Jay Bookman from the Atlanta Journal- Constitution. Let's listen in.
(BEGIN VIDEO CLIP)
LINDER: We're doing something that's never been done in the history of taxation in America. We're taxing wealth instead of wages. Every tax you pay is based on your wages. And people who live on their wages are the ones who hurt the most. The very first thing wealthy people do is get off wages. Teresa Heinz Kerry had $5. 1 million in income in 2003. She paid a 12 percent tax rate and she paid nothing into social security or Medicare because she had no wages. We're going to start taxing that money when it's spent.
BOORTZ: Great (INAUDIBLE). Warren Buffet when he started saying, my secretary has a higher tax rate than I do. This is unfair. That's because, Warren, old buddy, you're paying capital gains taxes, your secretary is paying income taxes. OK? And the capital gains tax rate is lower than the income tax rate. Those inequities go away also. You spend money, you pay the tax. You don't spend money, you don't.
SANCHEZ: It's an important point.
BOOKMAN: It's not a tax on wealth. It's a tax on consumption.
LINDER: It's a tax on accumulated wealth when it's spent. Ultimately money is spent.
SANCHEZ: Will people consume less if there's a consumption tax?
BOOKMAN: And there is concern of political and economic theory that if you want less of something, you tax it. It costs more. If you tax something, you get less of it. If you tax consumption, you're going to get less of it. It is standard economic theory. Standard conservative economic theory.
LINDER: You spend more money when you have more money in your pocket. The average income earner under the fair tax is going to have a 50 percent increase in take-home pay. Now, here's what I think is going to happen. Six months before it becomes effective --
UNIDENTIFIED MALE: Explain that. Explain that. 50 percent increase, exactly.
LINDER: OK. Right now, they earn $1, they get to spend 67 cents and they give the government 33 cents. You give that 33 cents back to them. That's a 50 percent of 60 cents --
(CROSSTALK)
KEPNER: And then what happens to the price of goods? How do you vetted the invented taxes...
UNIDENTIFIED MALE: They decline.
(CROSSTALK)
KEPNER: ...if the employee keeps his entire paycheck?
LINDER: There will be a decline in the price of goods, commensurate with the distance between the cost right now, the imbedded cost, and the difference that goes to the employee.
KEPNER: Every economist who studies this said the prices are going to go up. And they're not going to go up by 30 percent, they're going to go up by 40 percent or 50 percent.
LINDER: No.
(CROSSTALK)
LINDER: Can you show a study.
KEPNER: I will because (INAUDIBLE).
(CROSSTALK)
SANCHEZ: Things will only be taxed on the first go-around of them, right?
LINDER: You can't tax anything more than once.
SANCHEZ: If I buy a car, I'm being taxed. If I sell that car to my neighbor --
LINDER: That's already included in it.
SANCHEZ: Or barter it with my neighbor, it's not being taxed?
LINDER: No. It's not being taxed.
SANCHEZ: So why would anyone ever want to go out and buy a new car?
LINDER: Because the price of cars will go down relative to the previous costs.
BOORTZ: This is simply wrong. This is something that is completely missing in this -- this isn't catching on somewhere. The price of consumer goods remains essentially the same. OK? You have the embedded tax now. It is replaced by the fair tax.
BUCKLEY: The problem with the current fair tax is if you install it with the correct revenue neutral rate, OK, which no one really knows what the exact rate is. It is substantially higher than the 30 percent tax exclusive or 23 tax inclusive, whatever you want to call it. And everybody agrees with that. If you put in the right rate, OK, you crucify retirees tax wise from their current, what they pay currently and you hit the middle class extremely hard.
LINDER: The bill actually raises social security benefits to the amount of the tax increase and gives them a prebate.
BUCKLEY: It doesn't raise social security benefits. UNIDENTIFIED MALE: Yes, it does.
BUCKLEY: No it doesn't. I've got the bill right here.
MARK DARROW, BUSINESS OWNER: What I've heard here is a lot of quotes on percentages. And I've read the book. And I've lived under the thing we live under now. I have yet to hear anybody say that I love what we've got. But what I do hear is criticisms of a potential to change it for something that's much simpler and fairer to us 300 million Americans.
(END VIDEO CLIP)
SANCHEZ: It's like the foundation of this country, people sitting around trying to figure something out without the government having to lead their hand through it. That was at a coffee shop in Peach Tree City, Georgia. I was amaze. When I showed up, there were people in the parking lot, people with caps on, people outside who had heard that CNN was going to have a conversation about the fair tax. They wanted in. They wanted to be a part of it. Representative democracy. We'll be right back with your comments from Twitter, MySpace and Facebook. There it is. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: Unbelievable. See this number right here? Let me put it in blue right there. See that 1200 -- no, sorry. This one, 1,687 people now following us while we are on the air talking. People who are a part of this show and engaging in the conversation. We'll do it again next weekend, Saturday, Sunday. I'm Rick Sanchez. Have a great week folks and enjoy the CNN coverage of the convention.
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