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American Morning

Remembering 9/11; Hurricane Ike Gains Strength; What Voters in Battleground State Michigan Want; A Look at the Candidates' Health Plan and How it Will Affect You; Obama and Bill Clinton to Do Lunch; What Obama Needs to Do to Gain Lost Momentum

Aired September 11, 2008 - 07:00   ET

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


KIRAN CHETRY, CNN ANCHOR: And it is just crossing the hour, 7:00 here on the East Coast. The top story this morning, thousands on the run as Hurricane Ike now a monster storm gaining strength in the gulf and heading right for the Texas coast. In just one hour, they're ordering a mandatory evacuation of Galveston Island's low-lying west end. A million people are in the storm's projected path and Ike could swell to a major Category three or four storm by the time it makes landfall tomorrow or Saturday.
And remembering 9/11 seven years later. Both presidential candidates will appear together for ceremonies this morning at Ground Zero. A memorial to the 184 people killed at the Pentagon opens today. It's right outside of the Pentagon's West Wall where American Airlines Flight 77 crashed. Defense Secretary Robert Gates will speak at that dedication.

But first, this morning's top story and that's 54 days to go until Election Day, and the race has never been tighter. New polling from four key battleground states shows a statistical tie. Any one of them could be this year's Florida or Ohio.

They are Missouri, New Hampshire, Virginia and Michigan where there's no greater challenge than fixing the economy. Only four points separate the candidates in Michigan.

Here's CNN's John King.

JOHN KING, CHIEF NATIONAL CORRESPONDENT: Kiran and John, with 17 electoral votes, Michigan is one of the big prizes in presidential politics and at the moment, still a toss up.

(BEGIN VIDEOTAPE)

KING (voice-over): Signs of struggle dominate battleground Michigan. A giant but shuttered Ford plant in Wixom. A few miles away in Pontiac, a barren lot once home to a GM truck assembly plant with jobs around the clock. The unemployment rate is 8.5 percent and the housing slump adds insult to injury.

RAY GARDELLA, HOME BUILDER: I come in and build houses, somebody else takes care of the land.

KING: Home builder Ray Gardella wants help from the next president and isn't sold on Barack Obama's promise of change. GARDELLA: Talk but, yes, we need more than that, especially in the economy we have. Certainly a strong candidate, very easy to listen to candidate, but I don't think he has the substance we need.

KING: The combination of a struggling economy and an unpopular Republican president should be a huge Democratic advantage. But new CNN battleground state polling suggests the race for the White House is as competitive as ever.

Here in Michigan perhaps a tiny Obama edge, 49 percent to 45 percent. Likewise in New Hampshire, where the CNN time polling gives Obama a 51 percent to 45 percent lead.

But in Missouri, it's advantage McCain, 50 percent to 45 percent. And in Virginia, McCain leads 50 percent to 46 percent.

The results are all within the margin of error, so all four states stay as toss ups in the CNN electoral map. But there are trouble signs for Obama. McCain's pick of Alaska Governor Sarah Palin is boosting the GOP ticket among white voters, men and women, including a 14-point McCain edge among whites here in Michigan.

Gardella started his business here 35 years ago. Back then, he was a McGovern democrat, but he leans Republican now and like many in his generation here, shrugs off Obama's talk that John McCain has been in Washington too long to change it.

GARDELLA: I think he's more of a man of action. He wants to. He's been waiting for 30 years to become a man of action. I think he wants to do in the executive office.

KING: Some local Democrats complain Obama isn't taking their advice on how to connect with blue collar voters, and they say he could have locked up the state if he had chosen Hillary Clinton as his running mate.

DENNIS COWAN, OAKLAND COUNTY GOP CHAIRMAN: We did fear the Obama- Clinton ticket. He kind of made the safe choice for VP. John McCain made a bold choice for VP which has gotten everybody's attention.

KING: Oakland County Republican Chairman Dennis Cowan says McCain's VP pick has knocked the Democrats off stride.

COWAN: That's definitely happened. There's no question that we, in essence, stolen the change aspect of Obama/Biden candidacy, but primarily it's because we are emphasizing reform in government as opposed to just change.

KING: Oakland County is considered the swing battleground within the battleground. It's a diverse mix of more than a million people, a fairly even mix of Democrats, Republicans and independents, and a blend too of sobering economic blight and more upscale developments where home values are sagging because of the mortgage mess.

(END VIDEOTAPE) KING: The McCain campaign says the fact that Michigan is so close is a sign of strength. The last time this state went Republican for president was 20 years ago, back in 1988 -- John and Kiran.

ROBERTS: John King for us this morning. John, thanks so much.

Governor Sarah Palin getting a warm welcome back home in Alaska, a week after she exploded on to the national stage. She held her first solo campaign rally in front of 3,000 people and promised to make Alaska proud.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: So since Senator McCain first introduced me as his running mate, Americans have gotten to know a lot more about Alaska. And they know that up here, it's a snow machine not a snow mobile. And we know that in Alaska like that old bumper sticker says, "Alaska: Where Men are Men and Women Win the Iditarod."

(END VIDEO CLIP)

ROBERTS: Palin called John McCain a senate maverick riding to the White House. She was again off limits to reporters on her flight home but will sit down for her first television interview today.

Senator Joe Biden second guessing the decision to pick Senator Joe Biden as the running mate? No. He was only defending Hillary Clinton but it has people talking today. Here's what he said in Nashville, New Hampshire.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: She is qualified to be president of the United States of America. She's easily qualified to be vice president of the United States of America. And quite frankly, it might have been a better pick than me but she's first rate.

(END VIDEO CLIP)

ROBERTS: Biden was responding to a voter who said he was glad that Obama picked the Delaware senator over Clinton. Earlier in the day, Biden said he declined to endorse Obama during the primary season because of his close relationship with Senator Clinton.

Well, can you see it in the polls and in the size of John McCain's crowds, Barack Obama's campaign has hit a bit of a rough patch. And now, there's a lot of second guessing going on.

CNN's Suzanne Malveaux is covering the Obama campaign. She's here with us in New York this morning.

Good to see you. So, obviously, they want to try to recapture the magic here. What do they need to do, and what kind of shape are they in right now? SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Oh, sure. Well, Obama actually addressed these poll numbers yesterday. As expected, he said he's not worried about the poll numbers because when he looked at the polls last year at summer time, it was about 20 points below. But the reality here is there are 54 days before the election. And so, he does need to make sure that he doesn't slip.

A lot of attention is on the Republican VP pick Sarah Palin, and the strategy for Obama now is to stay on message, to keep hammering home these issues that he says that voters care about. Talking about gas prices, jobs, health care, the war, and he's doing it in places where we've seen. This is kind of rural southwest Virginia, Ohio, Pennsylvania, places where we've been on the campaign trail, John. These are the kinds of issues that people are talking about, but not really paying a heck of a lot of attention to, you know, some of these distractions. And that is what the Obama camp is counting on.

ROBERTS: Yes, but the McCain campaign is hoping that people will pay attention to these distractions and certainly kind of the echo chamber around the McCain campaign is amplified.

MALVEAUX: And certainly in the last two days they have been very successful in doing that. One of the things that works for Obama, though, is that 18 months he's been hammering this message of change. So he's been very consistent.

The way it doesn't work for him is that really people already know. I mean, Palin is something that's new, that's fresh, exciting. So she's getting a lot of the attention now taking it away from him.

ROBERTS: OK. And, of course, today is supposed to be a day for nonpartisanship, but he will be meeting with Bill Clinton. So we'll find out the results of that later on today.

Suzanne, thanks so much. Good to see you.

MALVEAUX: Sure.

CHETRY: Issue number one, the candidates on health care. Ali Velshi looks at what their plan would mean to you and your family.

You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Welcome back into AMERICAN MORNING. We're just all sitting here chatting. Ali Velshi with us right now, and you've been taking a look at issue number one as it relates to the political race. And today, we're talking health care.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes. Health care is going to be one that I think a lot of people are going to want to make a decision about it. Of the differences in the candidates, this is a key one. They really have different philosophies about health care.

Let's start with Barack Obama. One of the things that he wants to do is mandate paid insurance for children. In other words, parents are going to have to buy health insurance coverage for their children. He is going to offer subsidies for those insurance premiums, but he's also going to require employers over a certain size to offer health insurance to their employees. The aim is to try and bring that number of uninsured Americans, more than 50 million of them, down a little bit.

There's something that's like universal health care out of that. The idea that there's going to be a mandate that at least all children are insured.

John McCain feels that that shouldn't be the case. There should be no mandates about insurance but that it should be made easier for businesses to provide insurance through competition. He wants to improve health care through competition by issuing tax credits to people, $2,500 a person or $5,000 for a family. Those tax credits, the money that you get for that tax credit can be used to pay for insurance premiums. And if there is money in addition to that because you can choose your insurance premiums, if there's money left over, he'd like to encourage those health savings accounts where you can use tax-free money to pay for health services.

So, John McCain's system very clearly is to, over the long term, make health care more affordable using the market to determine health care costs. Barack Obama suggests that mandates are the way to get more people insured. Some key differences in the way that they look at health insurance and health care.

ROBERTS: Ali, thanks so much for that.

CHETRY: And also tomorrow, we're going to be taking a look at where the candidates stand when it comes to helping promote jobs. Ali is going to take a look at that.

McCain wants to keep corporate taxes low in the minimum wage at $7.25 to protect small business owners. Barack Obama wants to create jobs through public infrastructure and to raise the minimum wage to protect workers. So which one would work better for you?

We're going to take a look. Ali is going to have details for us on that tomorrow.

Boarding up and clearing out. A million people in the path of Hurricane Ike, and we've got new information on where the storm might hit hardest.

You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Welcome back to the "Most News in the Morning." Hurricane Ike now forecast to take a more direct turn toward Texas. Right now, mandatory evacuations are underway. About a million people along the coast lie square in the path of the storm, also the nation's biggest oil refinery and NASA's Johnson Space Center. ROBERTS: Rob Marciano is tracking the storm and where it's going to go. And, Rob, once it gets ashore or just prior to getting ashore, I guess they don't quite have that nailed down. It may take a sharp right turn which could take it toward a very heavily populated area.

ROB MARCIANO, AMS METEOROLOGIST: Yes. That's what it's looking like now and we were afraid of that yesterday. When we knew that right turn if it comes early, then a whole lot of people are going to be in trouble.

This thing has expanded, though. This is going to affect millions. Already, we got tropical storm warnings posted for the coast of Louisiana and through parts of Alabama. So this thing has expanded dramatically. It is taking up about half of the Gulf of Mexico.

Hurricane force winds extend over 100 miles from the center. That is really, really big. Cat two right now with winds of 100 miles an hour, expected to get to Cat three.

Let's talk track. We go just to the west of Galveston, but the cone extends all the way to the Louisiana border, almost all the way to Corpus Christi. And you notice that line, the centerline, if that were to verify, that would go just to the west of Houston. That would not bode well.

This is a look at maximum sustained winds. The red would be Category three right on shore. But note the orange, still a Cat two when it passes through Houston. So we're talking about damaging winds. If it takes this track, that will go right over the Houston metropolitan area.

This would equate to big time money losses. This estimation here, $77 billion, potentially. If it were to take this track with this strength, John, that's a scary proposition. We'll try to ease it down a little bit as we go through the next day and a half. Back to you.

ROBERTS: Anything that you can possibly do to help them would be very much appreciated. But I don't know what you can do as good as you are.

Rob, thanks so much.

MARCIANO: All right.

ROBERTS: Seventeen minutes now after the hour.

Money in your pocket.

(BEGIN VIDEO CLIP)

NANCY PELOSI (D-CA), HOUSE SPEAKER: And we must take immediate action.

(END VIDEO CLIP)

ROBERTS: Democrats look to send you a second stimulus check right before the election.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Taxpayers should really reach for the wallet and hold on to it with both hands.

(END VIDEO CLIP)

ROBERTS: You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: At 19 minutes past the hour now, we fast forward to the events that will be making news later today.

At about an hour and a half, the 9/11 remembrance ceremony at Ground Zero in New York will begin. A few minutes later, we'll all observe a moment of silence. At 8:46 Eastern time, that's when the first plane struck the North tower.

Later in the afternoon, presidential candidates Barack Obama and John McCain will make a joint visit to Ground Zero. CNN and CNN.com will carry the event live on air and online. And also this evening, the tribute in light, twin beams of light coming from the World Trade Center site aimed high in the sky to remember those lost that day. The lights will stay on until tomorrow morning's sunrise.

And for continuous live coverage of all of the day's 9/11 related events, head to our Web site, CNN.com -- John.

ROBERTS: Eight weeks now until Election Day. We want to help you decide who to vote for by letting you hear from the candidates. Here's John McCain at a campaign stop in Fairfax, Virginia, promising to clean up Washington.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: My friends, this is while you're struggling to buy groceries, fill your gas tank and make your mortgage payment, I've stood up. I've stood up and I guarantee you the first thing that we will do, I got an old ink pen, my friends, and the first pork barrel-laden earmark big spending bill that comes across my desk, I will veto it. You will know their names. I'll make them famous, and we will stop this corruption. We will stop this corruption.

You heard Governor Palin mention that my opponent who talks about change in the short period of time in the United States Senate he's asked for $932 million in earmark pork barrel projects. Is that change? While the governor has vetoed a half a billion worth of pork barrel earmark projects.

My friend, that's about, as I figure it, about a billion and a half swing. Now that's a lot of money any place in America. And we're going to stop it and we're going to reform it. And, my friends -- and my friends, we can do it. Americans together can do it. Our best days are ahead of us.

(END VIDEOTAPE)

ROBERTS: John McCain there talking about how he and Governor Palin would be the agents of change, a message that is seemingly knocking the Obama campaign off its track. After the break, our political panel weighs in on what Obama needs to do to try to regain momentum.

(COMMERCIAL BREAK)

ROBERTS: Barack Obama coming to New York today to appear at a presidential forum with John McCain. While he's in town, Obama will also have lunch with former President Bill Clinton. And later this month, Obama and Clinton are going to hit the campaign trail together. So, are Obama and the Clintons burying the hatchet?

Joining me now, Republican strategist Kevin Madden, and Democratic strategist Kiki McLean. Both of them in Washington this morning.

Folks, it's good to see you. Kiki, let me start with you. Barack Obama and Bill Clinton on the campaign trail. How much of an impact do you think the former president can be?

KIKI MCLEAN, OBAMA SUPPORTER: Well, I think the former president is loved by millions of Democrats and millions of other Americans. So I think they will have a very successful outing together.

I think what's really interesting about where Barack Obama and Bill Clinton are now is they're part of a unique group of Americans who have achieved the level of being the nominee for president of the United States. That gives them a lot in common. I think you heard President Clinton at our convention in Denver, talk about why he believes Barack Obama is the best choice for president for the country. And I think he'll be out around the country telling Americans about that.

ROBERTS: Kevin Madden, no question that senator -- that former President Clinton got a tremendous response at the Democratic Convention, but do you think he's going to be much of a factor out on the stump?

KEVIN MADDEN, FMR. NATL. PRESS SECY. FOR GOV. MITT ROMNEY: Well, he is a very, very powerful surrogate to have out there in a lot of these battleground states. I remember when I was working on the president's reelection campaign in 2004, and seeing the crowds that were generated with Bill Clinton in areas like Philadelphia and the colored (ph) counties around Philadelphia, which are going to be very, very important for any turnout model that the Democrats put together in order to win that state. So we have to remember that the Clintons still have a power structure within the Democratic Party and that they are always a force to be reckoned with.

ROBERTS: Kiki, all the attention at present appears to be on John McCain's running mate Sarah Palin which works very well for John McCain because as our John King has said, any time the attention is off of John McCain he does quite well. Does the Obama campaign need to refocus attention back on the top of the ticket, back on John McCain?

MCLEAN: Well, let me tell you one thing I think the Obama campaign has done right. And that is they've been staying on their message. This week, education. Today, obviously, a non-political day honoring the 9/11 anniversary.

And so, while we're here nationally talking about this, don't forget that there's a lot of local media out there covering what's happening at the events in Fairfax, Virginia, what's going to happen in Ohio next week.

Look, it's no surprise that Governor Palin would get some attention. She's the newest person on the scene. But I think you'll begin to see some of that even out now as we move forward in the campaign because the reality is, what you've heard from the McCain campaign hasn't really been about their agenda because, I think, they're unsure of how well their agenda will play out. I don't think it's going to be that popular.

And you've seen the Obama campaign continue to focus on his message about the economy, like I said the last two days, education, and then moving into some other key states to talk about the economy and other issues.

ROBERTS: Hey, Kevin, Governor Palin giving her first big interview today. It will be with Charlie Gibson of ABC. We hope to hear some of that later on tonight.

During that interview, do you think she'll put to rest lingering questions about her qualifications?

MADDEN: Well, I think that Governor -- I think that Governor Palin is going to use that interview as an opportunity to do exactly that -- to reach out to the American public, to take that audience and show them what it is that she's accomplished as governor. She's going to talk about her executive experience and contrast that with the Democrats, both, neither of whom have executive experience. Talk about the issues of reform and how she's taken on the establishment in her state to actually achieve that.

So, again, the contrast that Sarah Palin is going to look to achieve is executive experience and accomplishment versus no executive experience and very little accomplishment.

ROBERTS: I don't expect that she'll point out that she has more executive experience than John McCain, though. Would she comment?

MADDEN: Probably not. But she'll look to compliment John McCain's experience and judgment. That's for sure.

ROBERTS: Kiki, I want to look at something or talk about something that Joe Biden said yesterday. Somebody in the crowd at Nashville, New Hampshire, said that he was glad that Joe Biden was picked as the running mate instead of Hillary Clinton. He launched a spirited defense of Hillary Clinton which he said, she might have been a better pick for vice president than me, which raises a question some people have been talking about that if the goal, the ultimate goal of a campaign is to win, would Senator Obama have been better to pick Hillary Clinton as his running mate?

MCLEAN: Listen, I think Senator Obama made a great pick in Joe Biden. And Joe Biden and Hillary Clinton are friends. I think he's absolutely right she's qualified to be president. She's qualified to be a vice president and so is Joe Biden. And Senator Obama made a good pick for this ticket not only for a campaign...

ROBERTS: Right.

MCLEAN: ... but really -- but really.

ROBERTS: But would Hillary Clinton have been a better pick?

MCLEAN: But you know what? This is not an either/or kind of situation. Monday morning quarterbacking isn't what this is all about. It's not only, by the way, John, for the campaign, but it's also about for governing. And I think he was being a gracious good friend who was honest about a colleague's set of skills and talent.

I do think what's interesting to note, though, as we move forward with a pick like Sarah Palin, listen, she's going to do fine in these interviews. She's not a novice at that. She knows how to get through an interview. But she is going to begin to have to answer questions and doubts that have come up about her record.

You know, all the issues that my friend, Kevin, just raised are all questions she's going to have to answer. The fact that she, in fact, went and took the money for the bridge to nowhere and spent it on other things. Those are going to be things she'll have to deal with.

ROBERTS: All right. We'll hear what she has to say about it tonight.

Kiki McLean, Kevin Madden, good to hear from you.

CHETRY: And it is 7:30 Eastern time. Some of the top stories this morning.

Thousands on the run as Hurricane Ike regroups in the Gulf heading now for Texas. And evacuation of Galveston Island's low-lying west end will become mandatory just a half hour from now. A million people are in the killer storm's projected path. Ike could swell to a major category 3, even category 4 status by the time it makes landfall tomorrow or Saturday.

Gas prices getting a little higher despite oil's recent slide. AAA says regular unleaded a fraction of a cent higher than it was yesterday. Now standing at $3.67 a gallon.

And after exploding on the national stage a week ago, Governor Sarah Palin is back home in Alaska this morning. She had her first solo campaign rally late last night. Jessica Yellin joins us now from Fairbanks, Alaska with more on the governor's home coming. Hi, Jessica. JESSICA YELLIN, CNN CORRESPONDENT: Good morning, Kiran. An excited crowd of several thousand chanted Sarah as the governor's plane touched down to the soundtrack from the movie "Top Gun." Palin gave the standard stump speech we've heard her give for the last week but with a few tweaks including this, when she was talking about the amount of money the U.S. spends on foreign oil.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, VICE PRESIDENTIAL CANDIDATE: We could be investing that $700 billion back into America and our economy here. And that, of course, is going to create the good jobs. It's going to allow the stability, the reliable energy sources that - I feel like I'm preaching to the choir because you guys already know this.

(END VIDEO CLIP)

YELLIN: Palin also skipped her lines boasting that she killed that bridge to nowhere. A topic that stirred some controversy around the nation and specially here in Alaska. And folks we talked to who were there to support her say they like her because they think she's down to earth, that she's a fighter. They think she took on the oil companies on behalf of the little guy. Protesters outside, though, were carrying signs that say Sarah is a good old boy and folks in Alaska know Sarah is not qualified to be VP.. So there's even some tension in Alaska over Palin's selection to be John McCain's running mate.

Palin is in town to see her son attend a deployment ceremony today. He will ship off to Iraq in the next few weeks as part of the first striker brigade. All we can say about what he can do there is he will serve in northern Iraq. Kiran.

CHETRY: Well, all right. Jessica Yellin for us this morning in Fairbanks. Thank you.

Well, there hasn't been as much buzz on the other side of the ticket but supporters say Sarah Palin can't stack up against Senator Joe Biden when it comes to experience. CNN's Jason Carroll is taking a look at Biden's work in foreign affairs this morning.

JASON CARROLL, CNN CORRESPONDENT: Kiran, John, arguably one of the leading reasons why Senator Barack Obama chose Senator Biden as his running mate is because of Biden's foreign policy background. Some of Biden's critics say he's got the background all right but they question if he has the judgment?

(BEGIN VIDEOTAPE)

SEN. JOE BIDEN, VICE PRESIDENTIAL CANDIDATE: We need to change this world.

CARROLL (voice-over): Ask a Democrat about Senator Joe Biden's experience -

UNIDENTIFIED MALE: Joe Biden's experience, foreign policy - CARROLL: And it's likely to come up.

REP. ANNCY PELOSI (D), HOUSE SPEAKER: As chair of the foreign relations committee, he knows about national security.

CARROLL: When it comes to foreign policy experience Biden's supporters say his record is tough to match. Member of the Senate foreign relations committee since 1975. Committee chair from June 2001 to 2003. Again in 2007. Extensive international travel and meetings with world leaders.

SEN. BOB KERREY (D), FMR. ARKANSAS SENATOR: I rate him very high.

CARROLL: Former Senator Bob Kerrey says Biden's inside knowledge of foreign policy helped him during his early years in Washington.

KERREY: I find myself in a situation where I had to ask myself the question who do I trust? Who can I turn to? And Joe Biden is one of the guys I can turn to.

CARROLL: During an interview with CNN's Special Investigations Unit, Biden talked about his talked about his global goals.

BIDEN: I'm talking about reestablishing our respect in the world so that we can lead the world again. There's very little respect about our judgment around the world.

CARROLL: But Biden's critics question his ability to make the right decisions. He approved the war in Iraq, later saying his decision was wrong. He also spoke out against the surge.

BIDEN: I believe it's a tragic mistake.

CARROLL: A surge that now appears to be working.

BAY BUCHANAN, FMR. SR. ADVISER, MITT ROMNEY: There's no question he's an expert when it comes to foreign policy. However, one has to question his judgment.

CARROLL: Despite critics, the Counsel on Foreign Relations, a non- partisan think tank gives Biden high marks.

DAN MARKEY, COUNCIL ON FOREIGN RELATIONS: Biden has been one of the few characters on the Hill who has been out front and has raised some difficult issues and explored them in depth and then not too afraid to go on record. In many ways that separates him from his colleagues.

(END VIDEOTAPE)

CARROLL: Kiran, John.

CHETRY: Jason Carroll for us. Thanks. And also don't miss the special documentary, "Sarah Palin Revealed" and "Joe Biden Revealed," that begins 9:00 p.m. Eastern this Saturday on CNN. John.

JOHN ROBERTS, CNN, ANCHOR: History being made on both sides of the campaign. But sensitivities are also sky-high. Whether it's a issue of race or as Barack Obama just found out sexism. Here's CNN's Ed Henry with that.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice over): The truth is both presidential candidates have uttered plenty of things to make any woman cringe. At the famous Sturgis biker rally in South Dakota last month, John McCain joked about getting his wife involved in a raunchy topless beauty contest.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: So, I encourage Cindy to compete. I told her with a little luck she could be the only woman ever to serve as both the First Lady and Miss Buffalo Chip.

HENRY: Ten years ago at a political fundraiser McCain told a crude joke. Why is Chelsea Clinton so ugly? Because Janet Reno is her father. He later apologized.

HENRY (on-camera): The big comment was not Obama's first brush with charges of sexism. In April he called a female factory worker sweetie. And then during a visit to the battleground state of Michigan, he uttered it again to a female reporter.

UNIDENTIFIED FEMALE: Senator, how are you going to help the American automobile industry.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Hold on a second, sweetie.

HENRY: He realized how he came across and later left this voicemail to the reporter.

OBAMA: That's a bad habit of mine. I do it sometimes with all kinds of people. I mean to disrespect and so I'm duly chastened on that front.

HENRY: In the run up to the South Carolina primary, McCain raised eyebrows when a republican voter shouted this insult to Senator Hillary Clinton.

UNIDENTIFIED FEMALE: How do we beat the bitch?

HENRY: Of course, it's not McCain fault that she said it but he nearly laughed it off instead of slamming it for being demeaning.

MCCAIN: All right. May I get the translation?

(LAUGHTER)

HENRY: Clinton was at the center of another bad gender moment for Obama. During a New Hampshire debate a moderator asked Clinton about why some voters seem to like Obama more.

SEN. HILLARY CLINTON (D), FMR. PRESIDENTIAL CANDIDATE: Well that hurts my feelings. UNIDENTIFIED MALE: I'm sorry, senator. I'm sorry.

CLINTON: But I'll try to go on. He's very likeable. I agree with that. I don't think I'm that bad.

OBAMA: You're likeable enough.

HENRY: Sexist? Not really. But condescending? Big time. Ed Henry, CNN, Washington.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

ROBERTS: Rebuilding ground zero. New York Mayor Michael Bloomberg live on what's holding up construction and what he wants to do about it. You're watching the most news in the morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROBERTS: 20 minutes to the top of the hour on the most news in the morning. Lots of talk on the campaign trail about "Issue number one," the economy. The Democrats want you to get another government check in the mail to try to help boost the economy. Republicans are cool to the idea. And critics say it's a gimmick to play the voters. As our Christine Romans reports, no one is saying where that money would come from.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT: John, Kiran, remember those checks Americans got this summer? We haven't even paid for those yet and now there's talk of a second stimulus package.

ROMANS (voice-over): The Democrats want a second stimulus to boost the economy. Everything from food stamps to more unemployment benefits to big spending on infrastructure.

REP. NANCY PELOSI (D), HOUSE SPEAKER: We must take immediate action to strengthen our economy.

ROMANS: Senator Barack Obama on the stump this week agreed.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: So that people have a little more money in their pockets.

ROMANS: John McCain won't rule it out but worries lawmakers will stuff any bill with extra unnecessary provisions. And the White House is cool to the idea.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: We're not even talking about a second stimulus.

ROMANS: With less than two months to the election you'd be forgiven for a little cynicism about the timing.

JOHN GEER, VANDERBILT UNIVERSITY: Well, it's an effort in fact to get some votes. Just like the idea, you know, of more drilling by the Republicans. That's an idea to get votes and it's not necessarily the best public policy.

ROMANS: A second stimulus would reinforce the idea that the economy has suffered under republicans. It plays to the democrats strength with your money.

RAE HDDERMAN, THE HERITAGE FOUNDATION: Any time you start looking at a stimulus bill this close to the election, the taxpayer should really reach for the wallet and hold on to it with both hands.

ROMANS (on-camera): The idea of another stimulus surfaced even before the first check was in the mail. A spokesman for Speaker Nancy Pelosi said Republicans "just don't get it," adding the democratic leadership is committed and likely to bring a proposal to the floor as early as next week but they have to move fast to get it done before the election. And there's no indication the president would sign it. John. Kiran.

(END VIDEOTAPE)

CHETRY: Christine Romans, thanks.

While fixing your aching knees, is surgery really the answer? We're "Paging Dr. Gupta." But first, we have Rob Marciano with the latest forecast for Hurricane Ike. It doesn't look good for Houston and other parts of Texas this morning. Hi there, Rob.

ROB MARCIANO, CNN, METEOROLOGIST: Hi, Kiran. Yes, this thing looks like it's heading to a heavily populated area. And the impact is going to be big. We'll talk about track and its intensity when "the most news in the morning" comes right back.

(COMMERCIAL BREAK)

CHETRY: All right. There is a look right now at the humongous storm that is Hurricane Ike churning through the gulf picking up strength. It's been picking up strength as it was able to get away from Cuba get into the warm open waters and just start building. Rob Marciano has been tracking it for us. Looks like Texas right there in the bull's eye and they're trying to evacuate people this morning.

MARCIANO: Yes, that's probably wise. We're talking about these hurricane hunter aircraft that goes through these storms. This one came out of Kessler Airport Base, doing its alpha pattern and it measured 946 millibar low. That's about what it was last night, maybe a millibar off. But it has measured winds that have expanded in the radius, over 110 miles per hour from the center. We have hurricane force winds that's larger than Rita, that's larger than Katrina although not a cat 4 or 5 yet. It's going to affect a lot of people. We already have tropical storm warnings for a good chunk of the northern Gulf Coast. Cat 2 right now with a 100 mile an hour winds. That is probably going to remain unchanged for the next hour or two. It's going over maybe a little cold current right now to keep it in check. But after the next few hours, we'll get it into warmer waters and then later on tomorrow afternoon cat 3. It's forecast to come on shore, strong cat 3. At one point they had it at cat 4. That's still possible. But the track is what's most concerning.

Just to the west of Houston, just to the west of Galveston, these are very heavily populated areas. And if it comes on shore at that intensity it will remain a strong hurricane, potentially still a cat 2 going through a major metropolitan area. And that doesn't sound too good. We could see damages in the tens of billions of dollars if this track does verify.

CHETRY: You're right. It's not just how strong the storm is but where it hits that really makes a difference.

MARCIANO: Exactly.

CHETRY: Wow. All right. Rob, thank you.

MARCIANO: OK.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): Rebuilding ground zero. New York mayor Michael Bloomberg live on what's holding up construction and what he wants to do about it. You're watching "the most news in the morning".

(COMMERCIAL BREAK)

ROBERTS: Welcome back to "the most news in the morning." Almost one in five people in this country have some form of arthritis somewhere. Many choose surgery, especially for the knees. But a new study finds that may not be the best answer. Joining us this morning from the CNN Center in Atlanta, our chief medical correspondent, Dr. Sanjay Gupta.

Sanjay, I'm starting to feel it already when I cycle a run, that pain in the right knee. How does this change options that people might have when they're thinking about treating arthritis?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, to have surgery or not to have surgery is the question that a lot of patients ask themselves and a lot of researchers have been focusing on as well. What this new study shows is that arthroscopic knee surgery is no better than more conservative treatment when it comes to treating knee pain due to arthritis alone.

Now, first of all take a step back, John, and look at what it means to this whole concept of osteoarthritis. That is sort of a loss of cartilage within the knee. If you take that knee and sort of zoom it around, that ligament you're looking at there, is the ligament right in front of your knee cap. What happens is that the cartilage in between the bone starts to wear and tear. And the bones look, it just looks painful, and they start to get a little bit brittle and painful which may be what's happening to your right knee as well, John.

There had been different options as you mentioned. There is surgery. There is rehab. There are medications. What the study looked at is surgery and rehab versus medications and rehab. In the first three months, those patients with surgery did a little bit better. But in the longer term which is what most people care about, there really didn't seem to be much of a difference.

One caveat I should point out here. After really looking at this study is a lot of people who have arthritis in the knee may also have another problem with their knee that does require surgery. So you don't want to ignore the surgical option it if you have several different problems going on in your knee. Arthritis alone, conservative therapy may be a good bet.

ROBERTS: Let's say, other than surgery or anti-inflammatories and extensive rehab, what else can people do?

GUPTA: You know, there's a couple of things. One is that the overall way of dealing with pain in any joint, there are lots of different options, conservative options. And arthritis.org is a website that outlines some of those things for you. There are some self-help programs, for example. Weight control, simply losing 10 to 15 pounds can make a significant difference in pain.

Also, here's a myth. People think that you need to sort of rest the knee a lot. Staying active is probably the good answer, really getting that knee moving as you do, John, biking, running, whatever that you do could actually be better. Probably biking more so than running because running does put a lot of load on that knee but staying active I think is the point.

ROBERTS: Funny, it's strange with me when I cycle, it hurts on the inside of the knee, when I run, it hurts on the outside of the knee. I'm not sure what's going on.

GUPTA: I'm not going to diagnose you via satellite -

ROBERTS: Come on, take a shot. All right. Sanjay, thanks so much.

GUPTA: All right.

ROBERTS: Appreciate it.

(BEGIN VIDEOTAPE)

CHETRY (voice-over): Second guess.

SEN. JOE BIDEN, VICE PRESIDENTIAL CANDIDATE: It might have been a better pick than me put she's first rate.

CHETRY: Why Hillary Clinton might still be the wildcard.

And rebuilding ground zero, Mayor Michael Bloomberg on why the rising is taking so long.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CHETRY: Seven years after 9/11, concerns about another terror attack on U.S. soil are at a record low, according to a new CNN opinion research poll. Right now, just 30 percent say that a terror attack is likely in the next several weeks. And in an all-out hunt for terrorists, experts are warning the U.S. must focus beyond the Afghanistan-Pakistan border to Africa. Here's CNN's Kelly Arena.

(BEGIN VIDEOTAPE)

KELLY ARENA, CNN CORRESPONDENT: For years, we've been hearing terrorists are hiding out on that forest border between Afghanistan and Pakistan.

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: These extremists are increasingly using Pakistan as a base.

ARENA: But what you may not know is that's not the only safe haven being used by Al Qaeda. Last year, powerful explosions leveled the U.N. headquarters in Algiers. The work of Al Qaeda operating out of north Africa.

CRAIG WHITLOCK, "WASHINGTON POST" FOREIGN CORRESPONDENT: The area is remote. It's desert or mountainous. And it's very easy for these Al Qaeda sympathizers or Al Qaeda cells to train, meet, regroup in these territories.

ARENA: Algeria is part of the region known as the Magrev, a swat of Muslim north Africa stretching from Mauritania to Libya. This terrorist safe haven is particularly worrisome to U.S. officials. Europe is a boat ride across the Mediterranean, get to Europe, and the door to America is wide open.

UNIDENTIFIED FEMALE: Then a six-hour plane ride, and in many of the visa waiver countries you don't even need documentation to get on that plane. And we know what happens when bad guys get on planes.

ARENA: In places where government is weak or poor or struggling to control remote areas, Al Qaeda is finding refuge and striking new alliances. Take Yemen, it was there that journalist Craig Whitlock snapped these photos Jabar Al Banna, one of the world's most wanted terror suspects walking right past disinterested policeman.

WHITLOCK: This weak central government, it's an easy area, comparatively for Islamic extremists to re-base themselves, to conduct secret operations.

ARENA: By expanding its footprints, and joining forces with local extremists, Al Qaeda is upping the number of jihadists who have adopted it mission of targeting the west.

ARENA (on-camera): The war on terror is more like a global game of whack-a-mo. As long as Al Qaeda keeps expanding, America's hammer has no choice but to follow. Kelly Arena, CNN, Washington. (END VIDEOTAPE)

CHETRY: Kelly, thanks. And today marks seven years since the September 11th attacks. Joining me now from lower Manhattan is New York City Mayor Michael Bloomberg. Thanks for being with us this morning, Mr. Mayor.

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: Thank you for having me.

CHETRY: So, seven years after the 9/11 attacks, how much closer are we to having the World Trade Center site rebuilt and up and running?

BLOOMBERG: Well, it's certainly going on, the construction, the rebuilding. The biggest story is the building that's been done in the rest of lower Manhattan, but if you look at the site behind me, the Freedom Tower which will top off at 1,776 feet is going up. The steel is already above ground level. The World Trade Center Memorial at the other end, we raised the $350 million privately that we need. Steel is actually starting to go up there as well. and between those two iconic things. Sights, edifices, there are private buildings going up. The digging for buildings three and four is finished. The digging for building two is almost complete. And it is becoming more and more construction site.

I think this is the last year that the families will be able to walk down the ramp and pay their respects at ground level because the memorial construction will take over where the ramp is now.

CHETRY: You know, in a "Wall Street Journal" article yesterday, you talked about the progress there and also expressed frustration with the delays. You wrote "in 2006, the city undertook an independent study of the project's finances and determined that there were serious financial impediments that would prevent Silverstein Properties from fulfilling its construction commitments."

Now, 2006 is still five years after the initial attacks, why hasn't more progress been made?

BLOOMBERT: Well, it's because there's so many different levels of government - the federal, state and city. There's agencies. There's private developers. There are insurance companies. There's also the complexity of building at a site while there's an active subway line - two active subway lines actually running through the site. You're doing it in the middle of the streets of Manhattan that already have a lot of traffic. The engineering is very difficult. And, remember, our biggest priority is not speed, which you focus on.

Our number one priority is doing this job safely. We've already had one terrible tragic accident where two of our firefighters gave their lives back in the Deutsche Bank Building. And we don't want that that to happen again. And then we have to make sure that what we build is the right thing that 100 years from now, people will look back and say, they built it well and they built the right thing. And nobody's going to remember whether it's five years or ten years. I'd like it to go faster. I recommended we reduce the number of levels of bureaucracies, but that is not out number one priority. CHETRY: Let me ask you about 9/11 on the campaign trail because it's still being invoked, people still talk about it. And in fact, at the GOP convention, President Bush said about John McCain, "we need a president who understands the lessons of September 11 that to protect America we need to stay on the offense." Do you think that America would be safer under one candidate than the other?

BLOOMBERG: I don't think that's the case. But I think America would be safer if Congress stop reducing the amount of money that we're spending on Homeland Security. And did what we're doing here in the city. We keep increasing it every year because the world continues to be dangerous. And they learn new things. And we have to have new technologies to make sure that our citizens are protected. And if, god forbid, something happens, we can respond appropriately. I don't think it's a political thing. I think it's just people get on to other things, they get other priorities. But if we forget the lessons of what happened behind me, we forget why it happened and how it happened and what we could have done to prevent it, then we're doomed to, unfortunately, have it occur again. Some place else, I hope.

But we have to open the borders of this country and get more people from around the world to help us. We have more Arab language speakers in the New York City Police Department that exist in the FBI and the CIA put together. They can't read the intelligence and understand it. We have more different cultures here. You can't understand what was so troublesome to the people that caused this so that you can prevent that again, unless you have people from around the world as part of your society. We're sadly making the same mistakes, I think.

CHETRY: Mayor Michael Bloomberg, thanks for being with us this morning.