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Threat of Deep Recession, Financial Markets Collapsing; Mahmoud Ahmadinejad Speaks at U.N.

Aired September 23, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, financial shock and awe. The president's economic general is warning Congress, approve a $700 billion bailout or face dire consequences. But many lawmakers are worried about rushing and getting it wrong.
Plus, John McCain, Barack Obama and the bailout bottom line. The candidates reveal more about their must-have lists, requirements for backing the rescue plan.

And tension at the United Nations. We're standing by for what will likely be a fiery speech by one of America's most vocal and potentially threatening adversaries. The Iranian president, Mahmoud Ahmadinejad, we're only moments away from hearing from him.

I'm Wolf Blitzer in New York, and you're in THE SITUATION ROOM.

And at the United Nations this hour, the Iranian president known for taunting the United States with his provocative words and his controversial nuclear program. The world right now waiting to hear what Mahmoud Ahmadinejad will say when he steps up to the podium before the U.N. General Assembly.

Earlier today, President Bush warned the U.N. to stand firmly against Iran's nuclear threats and the man he's calling a "tyrant."

We're standing by once again to bring you Ahmadinejad's remarks live. That's coming up in a few moments.

But right now the ticking time bomb here in the United States, the threat of deep recession and financial markets collapsing. Top members of President Bush's economic team painted a rather blunt and disturbing picture for members of Congress today. They urged speedy approval of the biggest government bailout since the Depression, but there's growing concern about saddling taxpayers with a monstrous bill and a plan that might not even work.

Let's go to CNN's Brianna Keilar. She's up on Capitol Hill watching all of this. There was often heated testimony today, Brianna. Tell our viewers what happened.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Wolf, there are growing questions. Nobody is happy. And the Senate Banking Committee chairman, Christopher Dodd, is calling the Bush administration's bailout proposal unacceptable.

(BEGIN VIDEOTAPE) KEILAR (voice-over): Dire warnings from the two top moneymen in America if Congress doesn't come to Wall Street's rescue.

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract. That the economy will just not be able to recover in a normal, healthy way, no matter what other policies are taken.

KEILAR: Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill selling their $700 billion bailout. But senators aren't ready to buy it.

SEN. JIM BUNNING (R), KENTUCKY: This massive bailout is not a solution. It is a financial socialism. And it's un-American.

KEILAR: Two GOP members, including the Banking Committee's top Republican, condemned the plan.

SEN. RICHARD SHELBY (R), ALABAMA: What do you say to people that ask us, or at least ask me and I'm sure others, how do you rationalize or justify a bailing out of banks and so forth that cause -- are the root cause of a lot of this problem?

HENRY PAULSON, U.S. TREASURY SECRETARY: It may make you angry and it makes me angry when you ask about the taxpayers being on the hook. Guess what? They're already on the hook. They got put on the hook by the system we have. If this system is not stabilized, they're going to bear the costs.

KEILAR: The Democratic chairman of the committee worried about rushing a bill to the president.

SEN. CHRISTOPHER DODD (D), BANKING CHAIRMAN: I understand speed is important. But I'm far more interested in whether or not we get this right. There is no second act to this. There is no alternative idea out there with the resources available if this does not work.

(END VIDEOTAPE)

KEILAR: Secretary Paulson told Congress today they need to push a bill through by the end of the week or delay their recess, which is planned after this week. As well, the White House is saying it would be unthinkable if Congress doesn't finish up work on this by the end of the week. And on the House side, Democratic leaders want major changes to the Bush proposal and they are demanding that the Bush administration get more Republicans on board -- Wolf.

BLITZER: All right. Thanks very much. Brianna is up on the Hill watching this. A very, very critical moment right now in these negotiations.

Remember, we're standing by to go to the United Nations. We'll go there live once we see the Iranian leader, Mahmoud Ahmadinejad. He's getting ready to speak. Right now they're hearing from the president of Lithuania. Once Ahmadinejad comes before the world body, we'll go there live. Stand by for that.

President Bush is trying today to reassure the world that the United States economy will bounce back and again be a positive influence on global markets. He addressed the General Assembly earlier today. He also spoke of the nation's economic straits during this period. This was his final speech before the United Nations General Assembly as president.

Listen to this excerpt.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economies are more closely connected than ever before. And I know that many of you here are watching how the United States government will address the problems in our financial system.

In recent weeks we have taken bold steps to prevent a severe disruption of the American economy which would have a devastating effect on other economies around the world. I can assure you that my administration and our Congress are working together to quickly pass legislation approving this strategy. And I'm confident we will act in the urgent time frame required.

(END VIDEO CLIP)

BLITZER: The men vying for the president's job are fleshing out their own views on rescuing the U.S. economy. Both Barack Obama and John McCain going before the cameras today to lay down some markers for what the $700 billion bailout should look like.

Dana Bash is covering the McCain campaign. We'll go there in a moment.

First to our Senior Political Correspondent Candy Crowley. She's with Senator Obama in Florida.

Give us your read, Candy, on Obama's main message -- he met with reporters today -- why he felt he had to speak out so directly.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, his campaign says that he's been talking more with his economic advisers and he wanted to be pretty clear about the things that he wants in this bailout package. Anyone that's been listening to his speech is familiar with most of them.

He is, in turn, also getting more populist in his approach to this. His four specifics that he laid out today, Wolf, is that, A, he wants to make sure that CEOs of these failing companies that the government is about to bail out do not walk away with millions of dollars as buyout pay.

He also wants to make sure that that $700 billion that's going to be given to Secretary Paulson, that there is some oversight and accountability, some sort of committee that watches over Paulson. He also said if the government makes a profit from buying up all these bad debts and later reselling them, that every penny ought to go back to the taxpayer.

And fourth, he says that he would not -- that he would not want to have this bailout bill unless there was something to help homeowners who are facing foreclosure. The question is, would he go ahead and vote for a plan that didn't have all four of these principles that he's outlined? And that appears to be an open question.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If the plan that emerges does not address the principles that I've discussed, then I will strongly recommend to Secretary Paulson that we go back to the drawing board and find an approach that does address them. But it strikes me that these are basic principles that would make sense to all Americans -- Republican, Independent, or Democrat. And, you know, I think that there's got to be a spirit on the part of the administration that says, let's work together to try to get this right.

(END VIDEO CLIP)

CROWLEY: In this news conference, Wolf, Obama was particularly hard on corporate executives. He said we're thinking about not going along with this bailout unless they got their big buyouts. He called them selfish and greedy -- Wolf.

BLITZER: Candy, what about Obama's plans for health care? He's got very ambitious plans that are going to cost some money. With this current financial crisis, if, in fact, it requires $700 billion, what will that do to -- what will that do to Obama's plans?

CROWLEY: Well, it certainly calls them into question. And he himself has done that.

He talked this morning about maybe he'd have to dial back some of these plans he's talked about. But he said in his news conference, listen, my priorities are that tax cut, education, and health care.

When pressed further, "Does that mean that you're going to go ahead with these plans, your priorities, if you should make it to the White House in January?" he said, "Well, I would be foolish to say that I wouldn't take into account the circumstances." So very much there's a question there, Wolf, I assume for both candidates.

BLITZER: Candy Crowley is watching this for us.

We'll get back to the race for the White House shortly. But I want to listen in to something that's extraordinary. You don't hear the president of Iran speaking in the United States every day. It happens only once a year.

Here he is, the Iranian president, Mahmoud Ahmadinejad, addressing the United Nations General Assembly.

(JOINED IN PROGRESS) MAHMOUD AHMADINEJAD, IRANIAN PRESIDENT (through translator): All phrase be to Allah, the lord of the universe, and peace and blessing be upon our master and prophet, Mohammed, and his pure household and his noble companions.

Oh, God, hasten the arrival of Imam al-Mati (ph) and grant him good health and victory, and make his followers and those who attest to his rightfulness.

Mr. President, Excellencies, I am grateful to the almighty for granting me another opportunity to be present in this world's assembly. In the last three years, I have talked to you about great hopes in the bright future of human society and some solutions for achieving sustainable peace and expanding love, compassion and cooperation.

I have also talked about unjust systems governing the world, pressures exerted by some powers seeking to trample the rights of other nations; oppression imposed on the majority of the global community, especially on the people of Iraq, Palestine, Lebanon, Africa, Latin America and Asia; about challenges we are faced with such as efforts to shatter the sankty of families, destroy cultures, humiliate lofty values, neglect commitments, expand the shadow of threats, as well as about the arms race and the unfairness and the inability of the systems governing world affairs and reforming the status quo.

With the occurrence of various new developments, the debility of existing mechanisms has been revealed even more. However, at the same time, an encouraging trend which has originated in thoughts and beliefs of peoples has blossomed and become stronger. Posed against the despairs caused by the new developments, this trend has ignited the ray of hope for a brilliant, desirable, and beautiful future in the hearts of men.

Ladies and Gentlemen, Dear Colleagues, today I would like to talk to you about the main reasons behind the conditions ruling the world and the means to tackle them. Of course, you're already aware of what I am talking about. But I think it is necessary to remind ourselves.

It seems that the roots of problems line the way one views and perceives the world and humankind, as well as in the important issues of freedom, obeisance to God and justice. The world, humankind, freedom, and obeisance to God, and justice have been the utmost important to humans throughout history.

One, the world.

God Almighty purposely created the world. This world is the bedrock for the evolution and growth of a creature called man, and the laws governing the world and all other creatures are the service of man's quest for loftiness.

The world should provide the needed opportunities for the fulfillment of the purpose behind man's creation. No phenomenon, creature, or indeed anything has been created in vain. Together they all pave the ground for the flourishing of mankind in a complex and purposeful system. And they are each one of the signs of God Almighty.

All are his creations, and he is the sole creator and ruler of the world. All existence, including power, knowledge and wealth come from him.

Two, human kind.

God created the world for humans and humans for himself. He created humans from mud and in the soil, but he did not want them to remain in the soil and with animal instincts. He kindled the light of guidance in their souls and asked them to rise from the soil to the heavens, and to him with the help of wisdom, profits and perfect men.

The world will ultimately disappear, but God has created man for eternity and has made them a manifestation of himself. Creativity, mercifulness, kindness, knowledge, wisdom, zeal, concealment of sins, splendor, justice, bounteousness, generosity, greatness, love, glory, dignity, forgiveness, insight, kingship, and all other goodness and beauty are attributes of God.

God has not created humans for aggression, bloodshed, ranker, selfishness and destruction. He made humans his (INAUDIBLE) on earth and has asked them to, on the one hand, make earth prosper by using their God-given potentials, and to prepare the ground for the growth of divine attributes in all humans, and to provide all with a life of beauty, amity, freedom, justice, and goodness. And on the other hand, in pursuance of this path, to prepare for a prosperous, everlasting life endowed by God's mercy.

God has obligated humans to live divinely and socially, for it is only through social life and interactions with others that divine attributes may emerge.

Three, obedience to God.

God Almighty as tied their perfection and true freedom of humans to their devotion and obedience to himself. True freedom and obedience to God are in balance, and, in fact, are two sides of the same coin.

Obeisance to God means confessing to monotheism and obeying his commands, and to be free from ungodly worship. Obeisance to God means the acceptance of the absolute truth, the absolute light, and the absolute beauty. Obeisance to God means abandoning selfishness and animal instincts, power seeking and aggression, surrendering to righteousness, justice, love, and perfection.

And in this way, humans can achieve their true freedom and flourish. They can grow and manifest divine attributes, have affection for others, stand up for justice, and fear no power or threat. And defend the oppressed.

In such an environment, one's freedom will not impinge on any other's. Contention and conflict are characteristic of materialistic freedom and animal instinct. The essence of all divine religions and obeisance to God and true freedom is disassociating from oppressors and instead obeying and worshipping God.

Four, God is omniscient and knows all that is revealed or kept secret. And he is kind and merciful. All creatures are humbled before him and resign to his will.

God is alive and is the creator of the universe and all life. God loves his creatures and desires nothing but goodness, blessings, and perfection for them, and is against bullying, injustice, selfishness, and domination.

Four, justice.

Justice is the foundation of the creation of humankind and the whole universe. Justice is tantamount to placing every phenomenon in its own place and providing humans with opportunities to actualize all their divine capabilities. Without it, the order of the universe will collapse and the opportunity for perfection will fade away.

Without justice, it would be impossible for human society to taste real peace, beauty, joy, and happiness. Justice is the main pillar of social life, and without it, social life cannot continue or grow.

Humans need to know God in order to realize a prosperous society in this world, as well as to strive for a beautiful, eternal life. And to this end, they first have to know themselves and strive for loftiness in themselves and their societies.

However, as long as the world is construed as closed, limited, and aimless, as long as eternal life is considered imaginary and illusory, and afterlife on judgment day, as well as reward and punishment, our thought as fictional and unreal, as long as morals and commitment to them are called backwardness and immorality, lies, deceit, and selfishness are considered desirable, and humans are limited to a materialistic life in this world, as long as attempts are made to replace obedience to God and following his prophets and true freedom with servitude to materialistic tendencies and animal instincts, and servitude to oppressing human beings, and contention reaches its pinnacle, as long as the aggressors, because of their financial, political, and propaganda powers not only escape punishment, but even claim righteousness, and as long as wars are started and nations are enslaved in order to win votes in elections, not only will the problems of the global community remain unsolved, but they will be increasingly exacerbated.

Friends and colleagues, let's look at the situation of the world today.

Iraq was attacked under the false pretext of uncovering weapons of mass destruction and overthrowing a dictator. The dictator is toppled and WMDs are not uncovered. A democratic government is established by the votes of the people, but after six years, the occupiers are still there. They insist on opposing colonial agreements on the people of Iraq by keeping them under Chapter 7 of the U.N. Charter.

Millions of people have been killed or displaced, and the occupiers, without a sense of shame, are still seeking to solidify their position in the political geography of the region and to dominate oil resources. They have no respect for the people of Iraq and disregard any dignity, rights, or status for them.

The U.N. is not capable enough to solve the problems and to remove aggression, occupation, and imposition. In Palestine, 60 years of carnage and invasion is still ongoing at the hands of some criminal and occupying Zionists. They have forged a regime through collecting people from various parts of the world and bringing them to other people's land by displacing, detaining, and killing the true owners of that land. With advanced notice, they invade, assassinate, and maintain food and medicine blockades while some hegemonic and bullying powers support them.

The Security Council cannot do anything, and sometimes under pressure from a few bullying powers, even paves the way for supporting these Zionist murderers. It is natural that some U.N. resolutions that have addressed the plight of the Palestinian people have been relegated to the archives unnoticed.

In Afghanistan, production of narcotics is multiplied since the presence of NATO forces. Domestic conflicts continue. Terrorism is spreading. And innocent people are bombarded on a daily basis in streets, markets, schools, and wedding ceremonies.

The people of Afghanistan are the victims of the willingness of NATO member states to dominate the region surrounding India, China, and South Asia. The Security Council cannot do anything about it because some of these NATO members also happen to be the major decision-makers in the Security Council.

In Africa, efforts are made to reestablish the relationships of the colonial era. By starting civil wars in large countries, including Sudan, disintegration of those countries is planned in order to serve the interests of some corrupt powers. In case there is a national resistance, the leaders of that resistance are put under pressure by legal mechanisms created by the very same powers.

In Latin America, people find their security, national interests, and culturists to be seriously endangered by the menacing shadow of alien, domineering governments, and even by the embassies of some empires.

The lives, properties, and rights of the people of Georgia and Ossetia and Abkhazia are victims of the tendencies and provocations of NATO and certain western powers, and the underhanded actions of the Zionists. The never-ending arms race and the proliferation and stockpiling of nuclear and other weapons of mass destruction, and the threats to use them, and the establishment of a missile defense system, have made the situation unstable.

With regard to Iran's peaceful nuclear program, despite the inalienable right of all nations, including the Iranian nation, in producing nuclear fuel for peaceful purposes, and despite such facts as the transparency of all Iranian activities and our country's full cooperation with the inspectors of the IAEA, and the agency's repeated confirmation of the fact that Iran's activities are peaceful, a few bullying powers have sought to put hurdles in the way of the peaceful nuclear activities of the Iranian nation by exerting political and economic pressures against Iran, and also threatening and pressuring the IAEA.

These are the same powers that produce new generations of lethal nuclear arms and possess stockpiles of nuclear weapons that no international organization is monitoring. And the tragedies of Hiroshima and Nagasaki were perpetrated by one of them.

Indeed, they are not against weapons. But they oppose other nations' progress and tend to monopolize technologies, and to use those monopolies in order to impose their will on other nations.

But it is very natural that the great Iranian people, with their trust in God and with determination and steadfastness, and with the support of its friends, will resist the bullying and has defended and will continue to defend its rights. The Iranian nation is for dialogue, but it has not accepted and will not accept illegal demands.

The time has come for the IAEA to present a clear report to the international community on its monitoring of the disarmament of these nuclear powers and their nuclear activities, and for a disarmament committee to be established by independent states to monitor the disarmament of these nuclear powers. The theories of development that are in line with the hegemonic system and not in accordance with the true needs of humankind and human societies have turned into repetitive and bland tools for assimilation of economies, expanding hegemonic domination, destroying the environment, and destroying the social solidarity of nations.

There is no end in sight to this. Poverty, hunger, and depravation are hurting more than one billion of the world's population and have dashed their hopes for a decent life.

The dignity, integrity, and rights of the American and European people are being played with by a small but deceitful number of people called Zionists. Although they are a minuscule minority, they have been dominating an important portion of the financial and monetary centers, as well as the political decision-making centers of some European countries and the U.S. in a deceitful, complex, and furtive manner.

It is deeply disastrous to witness that some presidential or premier nominees in some big countries have to visit these people, take part in their gatherings, swear their allegiance and a commitment to their interests, in order to attain financial or media support. This means that the great people of America and various nations of Europe need to obey the demands and wishes of a small number of acquisitive and invasive people. These nations are spending their dignity and resources on the crimes and occupations and the threats of the Zionist network against their will. Friends and colleagues, all these are due to the manner in which the immoral and the powerful view the world, humankind, freedom, obeisance to God, and justice, the thoughts and deeds of those who think they are superior to others and consider others a second class and inferior, who intend to remain out of the divine circle, to be the absent slaves of their materialistic and selfish desires, who intend to expand their aggressive and domineering natures constitute the roots of today's problems in human societies.

They are hindrances to the actualization of material and spiritual prosperity and security, peace, and brotherhood among nations. I explicitly state that the Iranian people and the overwhelming majority of the peoples and governments are against those deeds and perspectives of the world-domineering powers.

Establishment of justice requires people who have achieved moderation and justice inside themselves and have restrained their domineering attitudes and actualized their attributes of self- sacrifice and are at the service of humanity.

The complete and full-scale manifestation of such characteristics can happen only under the rule of the righteous and the perfect human being, who is obedient to God and who is promised by the divine prophets.

Dear colleagues, of course with the grace of God almighty, a hopeful trend is flourishing in the heart and soul of human societies. The universal eagerness for justice, purity, and love for others, monotheism, and the quest for perfection is clearly and increasingly on the rise.

A universal resistance against the acquisitiveness, aggression, and selfishness of the bullying powers is being formed. Today, the bullying powers' thoughts, practices and strategies are rejected by nations and governments. And all are seeking to establish new human relations based on justice, with a view to obtain prosperity, perfection, security, and sustainable welfare.

This is the very auspicious phenomenon that all the traditions of creation and the ruling laws of the universe emphasize and support. Today, the Zionist regime is on a definite slope to collapse. And there is no way for it to get out of the cesspool created by itself and its supporters.

The Islamic Republican of Iran, while fully respecting the resistance of the oppressed people of Palestine and expressing its all-out support for it, submits -- submits its humane solution based on a free referendum in Palestine for determining and establishing the type of state in the entire Palestinian lands to the distinguished secretary-general of the U.N.

American empire in the world is reaching the end of its road. And its next rulers must limit their interference to their own borders. Today, the thought of hegemony quickly becomes a demerit.

And now a few words with the expansionist governments ruling global relations. Be aware that living with obedience to God and carrying out his orders, compassion for people, and striving for the fulfillment of justice is to your advantage, too.

I invite you to return to the path of God, the prophets, and to the path of the people of the world, and to the truth and justice. The only route to salvation is a divine, straight path. Otherwise, God's hands of power will emerge from the sleeve of the oppressed nations and will make your life difficult, and will put an end to your hegemony.

Let's love the people of the world and respect their rights, rectify past behavior. This will benefit you and the human community. The Iranian people are prepared, along with other nations, to help you be rescued from your current situation and to establish peace and prosperity.

My friends, fortuitously, opportunities are accessible. With the grace of God almighty, the existing pillars of the oppressive system are crumbling. Great developments in favor of humankind, as well as its true and real rights, are on the way. A golden and brilliant future is awaiting mankind. A global community filled with justice, friendship, brotherhood and welfare is at hand. And, as I have elaborated, a community which will tread the path of beauty and love, under the rule of the righteous and the perfect human being, the one promise by all divine prophets, and the one who is the true lover of humanity, a community that will be devoid of any fear, despair, and privation, such a community will soon be ours.

The community promised by the great divine prophets Noah, Abraham, Moses, Jesus Christ, and Mohammed, peace be upon him, is about to materialize.

Let us, hand in hand, expand the thought of resistance against evil and the minority of those who are ill-wishers. Let's support goodness and the majority of people who are good and the embodiment of absolute good, that is, the imam of time, the promised one who will come accompanied by Jesus Christ and accordingly design and implement the just and humanistic mechanisms for regulating the constructive relationships between nations and governments.

Oh, great almighty, deliver the savior of nations and put an end to the sufferings of mankind, and bring forth justice, beauty and love.

Friends, let's have a proper share in the establishment of that illuminated and promised divine age.

I thank you all very much.

(APPLAUSE)

BLITZER: The president of Iran, Mahmoud Ahmadinejad, speaking for more than a half-an-hour at the United Nations General Assembly.

We're going to digest what we heard, lots of condemnations of both the United States and Israel. But I want to go to Michigan right now. Senator John McCain is answering reporters' question -- questions, this the first time in six weeks he's done so. The questioning has already started.

(JOINED IN PROGRESS)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I'm proud of her record. And, so, I -- I -- I want everybody to know that Carly Fiorina is a person that I admire and respect.

Yes. Beth.

QUESTION: (OFF-MIKE)

MCCAIN: Pardon me?

QUESTION: How much time do you think Congress has to act on this bailout?

MCCAIN: I think time is very short.

And I'm pleased to see that Congress is planning on acting rather rapidly. We also have to balance that with full scrutiny of the written legislation.

In other words, too often, I have seen in Washington we have outlined a proposal, and we -- we have to trust, but verify here. And, so, we need for everybody to see what's written in the legislation. But it -- we cannot afford inaction, as I have said.

Beth.

QUESTION: Thanks, Senator.

Just to follow up on something Ed asked also in the beginning, which of these five provisions that you just laid out would be a deal- breaker and cause you to vote against the legislation?

MCCAIN: I can't say that at this time, because I think the emphasis should be on the adoption of these principles. And that's the important thing.

And I think it is directly related to the American people. The American people have a lot of questions now. We're hearing a lot. How good is this? How much is this going to cost me? Can you promise me that this sacrifice, $10,000 for every -- every household in America, that it's going to work?

We have got to get it right this time. So, I'm confident. I'm confident that these principles will be made part of a legislation. And I look forward to -- to personally being involved with my colleagues, and because I'm getting -- I'm getting the feedback from them that these are sound and fundamental principles, the people that I have had the conversations with.

QUESTION: Senator, would you support the -- the Democratic proposals for an economic stimulus package as part of this? And, secondly, Senator, given the amount of money that you're discussing, $10,000 per family, where in the budget proposals that you're looking forward that you would enact as president would you see it necessary to cut in the federal government to pay for that $700 billion? Thank you.

MCCAIN: Well, number one, I don't think anything should be added to this legislation. This legislation should stand on its own.

Second of all, the way out of this is to grow our economy, cut spending, keep taxes low, make sure that there are incentives in place for jobs and businesses to grow and flourish.

For example, Ireland now has an 11 percent business tax. The United States of America has a 35 percent business tax. Where are businesses going to go? We know where they're going to go, and we know where they're going to create jobs.

So, it is essential for our economy to stimulate growth and grow this government -- excuse me -- grow this...

(LAUGHTER)

MCCAIN: ... grow this economy, not grow the economy -- I mean the government. We need to grow the economy.

And we can grow the economy, I believe, by keeping people's taxes low and stimulating business and economic growth and, at the same time, restrain the growth of spending, which I have fought for, for years, and have been successful in some areas.

I will be far more successful as president of the United States. Senator Obama has never been involved in any of that.

I thank you all very much. Thank you.

BLITZER: And so he is -- there he is, Senator McCain, the Republican presidential nominee, for the first time in some six weeks answering reporters' questions out in Freeland, Michigan.

Earlier, he outlined five steps that have to be included as part of any bailout plan that's being considered in Washington right now, greater accountability. He said there must be a bipartisan panel to oversee what's going on. He said there must also be a path for the taxpayers to try to get some of this, recover some of this money, $700 billion, being sought.

He says there must be complete transparency in the review of the legislation, that it must be open to the public. He said, no Wall Street executives should be making more than the highest-paid government officials if their firms are being bailed out by the U.S. government.

And he also said it would be totally unacceptable if there were any earmarks, pork barrel spending attached to this pending legislation. We're going to digest what we just heard from him. We will also digest what we heard a little while ago from the Iranian president, Mahmoud Ahmadinejad.

That's coming up.

Also, Sarah Palin, she's doing something she's never done before. She's meeting right now with foreign leaders here in New York. Why does the McCain campaign want the governor to be seen, but mostly not heard in these meetings?

We're watching this and a lot more -- lots of news happening right here in THE SITUATION ROOM.

We will take a quick break. We will be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're following two developing stories this hour here in THE SITUATION ROOM.

You just heard from Senator McCain, outlining his conditions, what needs to be done in order to get his support for the $700 billion bailout package that the Bush administration is pushing, trying to push through Congress. We will get back to that. We will assess what we heard from Senator McCain earlier in the past couple hours. We also heard conditions put forward by Senator Barack Obama. Much more on the race for the White House, that's coming up.

Also this hour, you heard from the Iranian president, Mahmoud Ahmadinejad, delivering his speech about a half-hour speech, before the United Nations General Assembly, railing against both the United States and the Zionists, as he calls Israel, refusing to utter Israel's name. The Zionists, he kept referring to Israel in that nature, as he always does.

Christiane Amanpour is over at the United Nations. Zain Verjee, she is here in THE SITUATION ROOM with us in New York.

Christiane, let me go to you first. I know you're getting ready to go back inside. He's going to have a news conference with reporters. And he's going to be answering questions.

If you listened to the fiery nature of his rant today against the West, against the U.S., and his prediction that the U.S. empire, in his words, was about to see its final days, it's a lot different, I think, than what he -- what he has been telling our own Larry King.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: That's right.

President Ahmadinejad has come to the United States, as he has now for the fourth year in a row as president, and he's done a whole load of interviews, most particularly with Larry King. And you will see it on CNN at 9:00 p.m. tonight.

But his interview is much less confrontational than his, what I would call a traditional stump speech, which he gives every year. I would say, though, having listened to this carefully, and having listened to the previous three, that this was less fiery than usual. It was much less confrontational and belligerent.

He did, as usual, start with the religious fundamentalist beliefs that he has, and he ended with that as well, a little of the end days philosophy that he has that the world is going to end and needs justice. But he also talked about the U.S. as occupiers in Iraq, as he has many time, and wants them out of Iraq.

He talked about, as you said, the Zionist regime. But, this time, you didn't hear him say wiped off the face of the map, as you have heard in the past. He simply talked about illegal occupation and oppression of Palestinians.

It seems that he's trying to actually pull back from some of that very fiery rhetoric that he's directed towards Israel. Just this week in Iran, he actually said that Iran is friendly to the people of Israel and insisted that Iran has nothing against the Jewish people. He was backing one of his own ministers who had said that.

He also was talking about the nuclear program that Iran has. Now, he insists that this is a peaceful program and that the IAEA has signed off on it. In fact, the IAEA has not signed off on it, because, just recently, the head of the IAEA said that they could not say whether or not Iran was conducting any work in secret, because Iran has not yet given the full accounting and full access that the IAEA has been demanding.

But listen to what he said to Larry King in his interview which will be broadcast at 9:00 p.m. When asked about relations with the United States, President Ahmadinejad says, it's time to end the last 30 years of hostility and enmity.

(BEGIN VIDEO CLIP)

LARRY KING, CNN ANCHOR: Senator Obama has said -- Senator McCain has not -- but he is open to diplomacy. Does that encourage you?

AHMADINEJAD (through translator): We are interested in having relations that are friendly and respectful. We prefer that and propose that.

But it is for the American government to decide what choice it wants to make. And, whatever choice they make, we will also -- will take measures and organize our efforts accordingly. But we think that a relationship based on justice and respect will benefit all sides. And that's our preference.

(END VIDEO CLIP)

AMANPOUR: So, there you have a hand outstretched to the United States.

It's -- it's thought that, with a new president, once he's elected here in the United States, and a new administration, there may be some new opportunities between Iran and the United States.

And, just this past weekend, in the forum that we hosted with the five former secretaries of state on advice to the next U.S. president, they all said that Iran should be engaged and negotiations should start without any preconditions -- back to you, Wolf.

BLITZER: All right. Christiane, thank you. Stand by.

Zain Verjee covers the State Department for us. She's here in New York covering the General Assembly meetings this week.

I noticed that at the -- the U.S. mission, the U.S. delegation, was absence -- absent from this speech by Ahmadinejad, except for a low-level diplomatic note taker, some low-level official. That's what was the case last year. When President Bush spoke earlier today, Ahmadinejad was present at the General Assembly.

But this is a clear snub by the Bush administration against this leader that President Bush calls a tyrant.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: A direct snub against President Mahmoud Ahmadinejad. As you mentioned, it's happened before.

While he stands in New York here in the United States at the United Nations General Assembly, Secretary Rice is busy trying to shore up her allies in the Security Council to hit Iran with new sanctions. She's really going to have to slog, because she's running into some difficulties with countries, like Russia, like China, who don't really want to come on board with that.

The other thing to point out, too, here is that it's not just Senators Obama and McCain campaigning here for a presidential election. Mahmoud Ahmadinejad is as well. So, the audience is not just for us here in the U.S. He's also sending a message back home.

His economy is down the drain. People are unhappy with him. And a lot of the people in Iran want to have a dialogue with the United States. They want to have some kind of door that -- that they can open. And he may be playing with that to some of the things that we heard in Larry King's interview and some of the reasons that Christiane brought up.

BLITZER: Yes, but Larry king's interview is not going to be played back in Iran. The speech at the United Nations General Assembly will. And I certainly got the impression he was speaking mostly for his domestic Iranian audience, as opposed to an international community.

He is going to be holding a news conference in the next hour, answering reporters' questions. And we will see what he says then. Zain Verjee, stand by for that. Christiane is going to be standing by. She's going to be at that news conference as well.

We will take another quick break. When we come back, we will assess what we just heard from the Iranian leader and the fallout on the presidential contest, also what the two presidential candidates are saying about the $700 billion bailout package.

One Democratic -- Democratic activist put it this way: "The sleeping giant has finally woken up."

In Colorado, there's one group Democrats hope will be their secret weapon to winning that state. We're watching that story.

And President Bush, as we have been reporting, he was once defiant when he used to address the United Nations. Now he's dramatically changed his tune. You're going to hear what the president told the General Assembly today about a partnership the U.N. and the world community and about his administration's efforts to stop the roiling financial crisis.

Stay with us, lots of news happening today -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Barack Obama and John McCain differ sharply in how to deal with Iran. Whose strategy would be better for America? We just heard from the Iranian president only moments ago.

Let's assess what's going on, the political fallout.

Joining us, the Democratic strategist Paul Begala and the Republican strategist Leslie Sanchez. They're both CNN contributors.

How will this play out, Paul, what we're hearing now from Ahmadinejad and its impact going into this first debate Friday night, which is going to be on foreign policy? And I assume Iran will be a hot-button issue.

PAUL BEGALA, CNN POLITICAL ANALYST: I suspect it will be, Wolf. I think Senator McCain will likely want to pounce on what I think most people think was a mistake early on in the primaries in a debate, a CNN/YouTube debate, remember, when Senator Obama said he would meet with Ahmadinejad and others without preconditions.

Now, Obama very sensibly has walked that back now, and says, no, no, I will have presidential summits only with proper preparation. Can McCain rewind the tape and attack him for that?

On Obama's side, I think he will want to go after McCain and ask the fundamental question: Is Iran stronger or weaker after the Bush war in Iraq? I think, clearly, Iran is stronger and more of a threat to America than it was before John McCain and George Bush took us to war in Iraq.

BLITZER: All right.

BEGALA: So, each of them has their axe to grind on the Iranians. And Ahmadinejad will be a foil, I think, for each of these two.

BLITZER: Leslie, what do you think? LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: I think a lot of people believe, after that CNN/YouTube debate, that -- that Senator Obama was backing into his foreign policy. After that, he was trying to explain, you know, a lot of what he called for.

But no American president should be sitting down with Ahmadinejad until he repudiates, you know, that he wants to eliminate the state of Israel. And it's really going to see if -- who looks most presidential and who has the best command of the issue.

BLITZER: On the domestic economic front, Paul, they're both laying out conditions right now, McCain and Obama, for this $700 billion bailout package. And they both are -- supposedly have to vote on it, including Senator Biden, at some point in the next few days as well. They have to, A, make a decision whether to actually come back to Washington to participate in the roll call, and, B, they have to make a decision do they vote yea or nay.

It's not going to be necessarily easy, in the midst of this presidential campaign.

BEGALA: Yes. And I think each of them has sort of played to type. McCain has been -- I think even his supporters might say he has been a bit all over the map, right? He's sort of a ready, fire, aim guy. He called for the firing of Chris Cox, the SEC chair. And then he called him the FEC chair, the Federal Elections Commission, seem to not really be engaged too much in what was going on there.

And, with Obama, he's been much more careful, cautious, thoughtful, which, I think, as a Democrat, we're happy to see. You know, it's been a while since we had somebody in the White House who we could see as thoughtful.

I would worry, I think, actually, for both these guys that the P.R. and the politics are starting to go against this package. As you may know, and I used to do, I did some P.R. advising for Freddie Mac, before they -- they went under. But you don't have to be a P.R. expert to know that this thing look like it's starting to go south on the politics.

BLITZER: All right.

SANCHEZ: I think he's trying to put blooms back on a rose when you are talking about how Barack Obama responded there. I think many people that he was caught flat-footed. He hit the snooze alarm on the 3:00 a.m. kind of wakeup call.

And I think it's yet to be determined. These candidates must take a vote on this package. I mean, there's a certain amount of moral outrage. Paul is exactly right. But it's critical that we see where they want to lead this country, if they believe in this bailout and securing our markets.

BLITZER: And if they don't show up, Paul, here to vote, even if it's a lopsided vote, it really doesn't look good, although they both have to get ready for Friday night's debate. And that vote, presumably, could happen maybe Friday. It could happen Saturday. It's a sensitive issue, showing up to vote, even though they both lost -- they have both of them, over these many months, have avoided coming to Washington for a lot of these sensitive votes.

BEGALA: I understand. That's right. And they have a big debate, of course, Friday night, but they each need to be here. And if I was working for either one of them, I would say, you know, they have got all kinds of planes that land in Washington, D.C. You have to be there for the vote.

And I think Senator Obama, frankly, is in a stronger position, because he will make the case, and I think fairly -- and the record bears this out -- that, throughout John McCain's time in Washington, he has been for deregulation. And, in fact, he hates regulation so much, he intervened with regulators to help the criminal Charles Keating in the S&L disaster in the -- in the 1980s. He was sanctioned, a very modest punishment, by the Senate for that, said that they -- he educated -- he showed, rather, bad judgment in that.

(CROSSTALK)

BLITZER: All right. Let me let Leslie...

(CROSSTALK)

BLITZER: Very quickly, Leslie, go ahead.

(CROSSTALK)

SANCHEZ: Wolf, real quickly, you know, Republicans are going to come back and say, look at the ties to Rezko. Look at the ties to Frank Raines. Look at the ties to Jim Johnson. I mean, I forget the name, drawing -- Thompson.

You know, there's so many times all the way around in this. And don't forget that John McCain was talking about regulating and looking at -- with more scrutiny...

BLITZER: All right.

SANCHEZ: ... scrutiny at Fannie and Freddie. So, we can't let that point get lost.

BLITZER: Guys, we have got to leave it right there. We will speak to you in the next few days. Thank you.

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

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