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CNN ELECTION CENTER

McCain Suspends Campaign, Focuses on Economy

Aired September 24, 2008 - 20:00   ET

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


CAMPBELL BROWN, CNN ANCHOR: In a word, everybody, wow. The October surprise arrived a little early with a game-changing jolt to the White House race, which is why we begin again with breaking news tonight.
On the night President Bush addresses the nation about the financial tsunami we're all facing -- and we will bring you that speech live in about an hour -- his thunder was stolen, as the presidential campaign was upended by a shift, sudden and perfectly timed bit of stagecraft by Senator John McCain.

Call it a masterstroke or a desperate Hail Mary pass. McCain announced he would suspend his campaign and asked for this Friday's debate to be postponed, so he can return to Washington to focus on the economic crisis. And McCain called on Senator Barack Obama to do the same.

Now, clearly, McCain is trying to act like a leader here. That was all his idea, right? But was it? Let's look at how this day unfolded.

At around 8:30 this morning, Obama called McCain and left a message saying that the two should make a joint statement on the economy and work together on this crisis. Obama suggested that they both head to D.C. for negotiations.

At 2:30 this afternoon, McCain returned Obama's call and the two spoke directly. McCain said he agreed in principle on releasing a joint statement and that their staffs should iron it all out. McCain also told Obama he was thinking about suspending the campaign to return to Washington.

Well, shortly after the call ended, McCain made the decision to halt his campaign altogether, to request a delay in Friday's debate. He then went before the cameras. And here's what he said.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We are running out of time.

Tomorrow morning, I will suspend my campaign and return to Washington after speaking at the Clinton Global Initiative. I have spoken to Senator Obama and informed him of my decision, and I have asked him to join me.

(END VIDEO CLIP)

BROWN: Now, at 4:39 p.m., Obama told reporters that he reached out to McCain first and that he believes this Friday's debate should precede. Listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We have been working around the clock. And, you know, presidents are going to have to deal with more than one thing at a time. It's not necessary for us to think that we can only do one thing and suspend everything else.

(END VIDEO CLIP)

BROWN: Late this afternoon, the Commission on Presidential Debates said this Friday's debate at the University of Mississippi will go on as scheduled.

There may be another reason behind McCain's nifty stagecraft here, and it's not exactly subtle. New poll CNN/"TIME"/Opinion Research polls show Obama surging in key battleground states like Pennsylvania, where he is now up by nine points among likely voters. We will have all of the late-breaking details for you on that ahead, and, of course, the best political team on television on hand to make sense of this very wild day. We are going to hear from all of them coming up in a moment as well.

Obama wasn't the only one who phoned McCain today. So did Harry Reid. And according to Politico.com, the Senate majority leader told McCain it wouldn't be helpful for him to return to Washington.

What a day it has been.

CNN's Dana Bash, Candy Crowley, Jessica Yellin, they have all been talking to their sources since this news broke this afternoon. Let's get the very latest from them now. I have got Dana Bash sitting here with me in the studio. Dana, you have been working the phones all day. Take us behind the scenes to this decision. How did this play out? what happened?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, I'm told that, first of all, McCain has been talking to economic advisers and experts over the past 24, 48 hours really intensely.

And what he was told particularly this morning was that things are incredibly dire. In fact, one senior adviser put it this way. They said that it could be an economic calamity the likes of which has not been seen since potentially the Great Depression. He was warned about people potentially -- more losing their homes, et cetera, et cetera, if things don't get done on -- by Monday.

At the same time, he was on the phone with his colleagues in Washington. He understand what we have been reporting, which is that things are just going nowhere with regard to the votes to actually get this done. So, that's why he decided in his hotel room here in New York where he was trying to do debate prep and do this at the same time, that he was going to suspend his campaign and go back to Washington.

He mentioned the fact that he and Obama spoke. He did get the call from Obama this morning. They didn't actually speak until the afternoon. At that point, when they spoke, he had already made his decision. So, when Obama called him, he said a joint statement is fine and good, but I think we should go back to Washington.

While he said that to Obama, the press corps was waiting outside for him to make that announcement.

BROWN: So, what exactly is he going to do? He gets back to Washington. Let's be honest, they're not deeply involved in these negotiations, either McCain or Obama. So, he's going to go back to do what, exactly?

BASH: Not at all.

What his campaign is saying is that what he did today was, he called President Bush and he said, look, let's get together. Let's have a bipartisan meeting with myself, with Obama, with you, or anybody in your administration, the key players on Capitol Hill, sit in a room for 100 hours, however long it takes, and work this out.

It's, look, the kind of thing, politically, we know, Campbell, that he's not on the campaign trail, but he's a candidate for president, just like Obama is. Wherever he is, he's campaigning. Whatever he's doing, he's doing it to make a political point.

And the political point he's trying to make here, not unlike what happened during the Republican Convention, when they suspended or canceled the first day of the convention to say, country first, the hurricane is coming, let's hold off, it's a very similar tactic that they're using here, because they think that this is a time of crisis and they want to show leadership.

I will tell you, he had brief conversations with the Democratic leaders in the House and the Senate, and the reception was I think cool, to say the least. Harry Reid actually read him his public statement, which basically said, you know what, I think it's better off for you to stay back.

BROWN: Keep the politics out of this as much as we can. All right, Dana Bash for us tonight.

I want to turn now to Candy Crowley and get the reaction from the Obama campaign. I know you have been talking to everybody there, Candy. What is their plan going forward?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, their plan going forward is not to go back to Washington, not to postpone these debates.

And, you know, as Dana said, they let it be known early on, look, Obama put this call into John McCain at 8:30 this morning, did not leave a message, apparently, other than call me back. So, they, too, are interested in this whole issue of leadership. That is, after all, exactly what this entire campaign is about, who is best to lead. And as you watch John McCain's numbers fall as far as the economy is concerned and Barack Obama's numbers go up, they understand that's what's at issue here, and that's why they were so quick to put out it was Obama who called, who said, let's have the joint statement, where upon McCain added to that.

So, they were taken by surprise when they saw John McCain on TV. They said -- Obama said today, well, I didn't really know that he actually had planned to go back to Washington. I just thought he was mulling that over.

So, they quickly put together that news conference to say, A, I am talking, says Barack Obama, to Secretary Paulson and to the Democratic leadership. I have told them, if they need be back there, I will go. And, B, the debate, it's a perfect time for the debate, when the country is looking for leadership and want to see the two of us side-by-side.

So, it was a flat no from here, except for on the bipartisanship. And although he took some subtle swipes at McCain, Barack Obama kind of stayed above that. He left that to his surrogates. Dick Durbin, a longtime friend and senator from Illinois, said that this looks like a Gallup poll, rather than an economic crisis.

BROWN: And, quickly, Candy, what about the debate? What is he going to do? McCain said he's not going to show up at the debate if there's no deal.

CROWLEY: Well, as plans are now, Barack Obama intends to show up. Sometimes -- it wouldn't be the first time that a candidate showed up at a debate knowing the other one wasn't going to come.

Whether there will be that kind of theatrics, I don't know. But, at this point, they're planning to head to Mississippi Friday, and he's here preparing for those debates.

BROWN: All right, Candy Crowley for us.

Let me turn now to Jessica Yellin, who is covering Capitol Hill for us.

And, Jessica, Senate Majority Leader Harry Reid, a Democrat, came out just a few minutes ago, had strong pretty words from John McCain this week, as we referenced earlier.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: With all due respect to my friend John McCain, we're doing just fine. This should we should not have presidential politics enter what we're doing here.

There's enough going on with presidential politics, that we don't need that. The debate should go forward. I said that to him. I believe that. It appears to me that John McCain is trying to divert attention to his failing campaign.

(END VIDEO CLIP)

BROWN: All right, so, he is clearly not very happy about all this.

But, Jessica, what is the general reaction from Democrats and Republicans on the Hill?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, what Reid said really does reflect what I'm hearing from Democrats in general. They're calling this a Hail Mary pass, an desperate attempt to regain ground on this issue for McCain.

Their frustration is that they feel he's been missing action on this deal, even opposing a bailout deal at first. What all of a sudden caused him to think there's such a crisis at this moment that he needs to run back just in time to skip a debate?

That's what we're hearing from the Democrats. Now, Republicans are being good soldiers, saying that they're glad that McCain is coming here and taking a lead on this and that he's drawing attention to it. The big concern on both sides is that frankly this could in fact distract from getting a deal done on the terms that would really be best for the taxpayers, because it is a tricky situation that needs to be carefully negotiated.

And now everyone on both sides is going to be acting as a proxy for their presidential candidate, which could lead to a lot more complications that there might have been otherwise.

BROWN: And your sense of where the negotiations stands as we wait for the president's big speech tonight?

YELLIN: Well, it really depends who you talk to, but what I hear right now is that both Senator Dodd and Barney Frank, Representative Barney Frank, who are the two lead Democrats in Finance, are going to meet all night, as they say, if necessary, to come to an agreement on exactly where the Democrats want to be. They will present it to the Republicans in the morning and hope to hammer something out by the end of the night tomorrow or by Friday morning.

They feel they do have sign on from the administration to a lot of those major issues that were sticking points to begin with. So, there's a sense here that they're on the road to progress, but there could be a lot of stops and starts along the way.

BROWN: All right, Jessica Yellin, along with Dana and Candy as well, thanks, guys. Appreciate it.

We got a very big response to my comments last night about how the McCain campaign has been keeping Sarah Palin from talking to reporters. Tonight, we're going to cut through the bull once again, but on a different subject, this financial crisis and the elephant in the room about the people who got us into this mess happening to be the same people promising to get us out of it. Where is the accountability here?

We will talk about that when we come back.

(COMMERCIAL BREAK)

BROWN: We have this that is just in now, the Associated Press just now reporting that President Bush is inviting Senators Barack Obama, John McCain, and congressional leaders to the White House to talk about the bailout bill.

The president addresses the nation, of course, at the top of the hour, as we have been reporting all night. We're going to talk about this now with our country's top political experts.

Let's bring in Tony Blankley, former press secretary for Newt Gingrich. He's also a visiting senior fellow at the Heritage Foundation and co-host of "Left, Right, and Center." Donna Brazile, Democratic strategist and CNN political contributor, she was Al Gore's 2000 presidential campaign manager. And CNN senior political analyst Gloria Borger, who has been working her sources and reporting new developments for us all day today.

OK, guys, I want to go around the table here.

John McCain's big move today, a Hail Mary pass, responsible leadership, stroke of genius, politically, strategically, what do you think?

Let me start with you, Tony.

TONY BLANKLEY, FORMER NEWT GINGRICH SPOKESMAN: Yes, I don't have a clue whether it's good politics or bad. I don't think anybody does.

You have got an issue that is without precedent, this financial crisis, and also without precedent, a candidate for president withdrawing from a debate. So, we will have to wait several days to see whether it's good politics or not.

Now, obviously, politics is involved in Washington in this, but it's not just politics. If you look at the headlines in "The Washington Post" this morning, it's bipartisan outrage, lawmakers bolt. Clearly, there was no certainty at all that this bill was going to pass.

Now, I have some experience when I worked for Newt. How does a leader help get a bill passed? And, today, Obama and McCain are the leaders of their parties, by virtue of their nominations. And you do have to be there. You have to try to sell the members. You have got to be in and out of the room.

BROWN: Right.

BLANKLEY: You can't phone it in. And this is serious business.

Are there political calculations? Sure. But we also need to get this thing passed.

BROWN: Donna, do you agree with that? Should Obama be going back to Washington now?

DONNA BRAZILE, CNN POLITICAL ANALYST: What special expertise is John McCain going to bring to this -- the policy discussions right now? He's not a member of the Finance Committee. He hasn't participated in two days of hearings that the Senate Budget Committee and today the House Budget Committee.

So, this is a distraction. Look, Campbell, I'm a former Hill employee as well. And there are many times when you need members to come back. But, normally, they come back because they're part of the leadership, they're on the committee.

Yes, he should come back and vote. He missed a vote on the stimulus package earlier this year. But this is a time for leadership. It's a time to debate these issues. So, if he doesn't want to debate foreign policy, I agree. Talk about the economy, but don't cancel debates. Let's have a full discussion on this bailout proposal.

BROWN: Gloria?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Look, I think that John McCain is telling you the truth when he says this should be above politics and he's all about leadership.

But I will also say to you that this is a tactical move on the part of the McCain campaign to change the momentum. Here, they have been losing the momentum in the economic debate. They want to shift the debate away from the economic per se, but back to where McCain does well, which is bipartisanship, he knows how to lead in a bipartisan way, and also coming back to Washington to fix it, which is exactly what he says he wants to do with this bailout plan. He's going to fix it.

So, it's a political move for him.

(CROSSTALK)

BROWN: Let me go back to Tony on this, because, Tony, you have got Harry Reid, the Senate majority leader, out there saying he doesn't want McCain there, that it only makes things more complicated; it inject politics into the process. And what exactly would you have McCain do as part of the negotiations?

BLANKLEY: Yes.

Yesterday, Harry Reid said that without McCain's involvement and support for the legislation, it was going to fail. Today, he says, stay out of Washington.

So, I think there's a little bit of politics going on, on the other side of the aisle.

BORGER: I'm shocked.

(CROSSTALK)

BLANKLEY: No, what I think McCain needs to do and Obama is to be actively persuading their members on both sides of the aisle that, once they have got a bill that they think is serviceable, to support it, because the politics is not obvious on this.

My sense is that most members of Congress probably are afraid to vote for it. They may be afraid to vote against it, too. There's a lot of confusion out there. But this -- giving away $700 billion to Wall Street is not most congressmen's idea of a safe vote.

BORGER: But, Tony, isn't that what the president of the United States should be doing?

BRAZILE: Absolutely.

BORGER: Why should the presidential candidates have to do this?

BLANKLEY: Well, because, honestly, President Bush has largely played out his hand. He doesn't have a lot of stick left. Right now, McCain is the leader of the Republican Party. Obama is the leader of the Democratic Party. And they both needs to be engaged in getting this thing done.

BORGER: So, why is the president going on TV?

BLANKLEY: He's trying, but we will find out in a little while.

My guess is that, like all of us here have been saying for a while, that he's a very, very lame duck. And I don't think he's going to have impact. I think members will pay more attention to what their new leaders, not what their old leader, is saying.

(CROSSTALK)

BRAZILE: Speaker Pelosi and Mr. Boehner, the House minority leader, issue a joint press statement today saying, they're making progress. So, they're making progress.

They're making progress on making us feel more accountable. They're making progress on making sure the taxpayers are protected. They're working around the clock to make this a perfect bill. And I think we should give them an opportunity to continue the bipartisan work that they're doing.

BLANKLEY: With respect, John Boehner, and I know him and I like him, he's not the titular leader of the party. And, in fact, you always say we're making progress, whether you are or not.

BROWN: All right.

BLANKLEY: But the front pages of "The Washington Post" tell us another story. BROWN: Guys, we're going to see how much of a lame duck President Bush is. He is taking to the airwaves tonight. So, stand by. You're coming back in a few minutes. We have got a lot more to talk about.

It's about a half-hour until President Bush's big speech on the financial crisis. We have got our correspondents on the phones out reporting the very latest details. I will have all of that for you when we come back.

Plus, we're going to cut through the bull on who exactly got us into this mess.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HENRY PAULSON, U.S. TREASURY SECRETARY: I have great, great confidence in our capital markets and in our financial institutions. Our financial institutions, banks and investment banks are strong. Our capital markets are resilient. They're efficient. They're flexible.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our policy in this administration is, laws shouldn't bail out lenders. Laws shouldn't help speculators.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: But our economy has continued growing, consumers are spending, businesses are investing, exports continue increasing, and American productivity remains strong. We can have confidence in the long-term foundation of our economy.

I think the system basically is sound. I truly do.

(END VIDEO CLIP)

BROWN: That was our treasury secretary, Hank Paulson, and our president, George Bush, just a few months ago.

Today, of course, they have been proven completely wrong. They're now telling us that we're in a dire crisis and that we must hand over hundreds of billions of dollars, so that they can lead us out of this mess.

What is amazing to me is that the administration seems a little bit surprised that Congress and the American people are not marching in lockstep with them on this, fully appreciating the urgency. Well, here is why, one word: accountability. This administration missed the boat on this crisis. They didn't see it coming. So, when President Bush takes over this TV in a few minutes, he's going have a very wary audience.

And Secretary Paulson, frankly, you did not help the situation with your initial imperious request to Congress that you be handed this money and that your decisions on what to do with it -- your language here -- "may not be reviewed by any court of law or any administrative agency."

Seriously, what were you thinking?

And Democrats, you are, by no means, blameless in all of this either. At the center of this crisis, Fannie Mae and Freddie Mac, and, though, of course, they did not intend to encourage this spiraling chain reaction, it was leading Democrats in Congress, Senate Banking Chair Chris Dodd and his counterpart in the House, Barney Frank, who supported legislation that ultimately led to more and more of these bad loans that we're all now stuck with. And the people that you claim you were trying to help, they are now in even worse shape financially.

Now, I know everybody is screaming about how urgent this crisis is, that action has to be taken immediately. But I love and live by former Supreme Court Justice Brandeis' great quote, "Sunshine is the best disinfectant."

What we need is scrutiny and debate. If it has to happen quickly, then do it fast, but without grandstanding or political posturing, serious scrutiny and debate. That should happen whether we're talking about a giant piece of legislation that is going to affect all of our lives or whether we're talking about our presidential and vice presidential candidates.

So, with that, let's bring in White House correspondent Ed Henry and senior business correspondent Ali Velshi, who can disagree with me all they want.

(LAUGHTER)

BROWN: Anyway, Ed, first, let's talk about the president, because I know you have been working your sources at the White House a lot.

Tell us what's going on, what we're going to hear from him tonight.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Well, bottom line is, the president just, first of all, has inviting the congressional leaders to the White House tomorrow. They're going to be there at 3:15 tomorrow afternoon. This includes Barack Obama and John McCain. They have both accepted, as well as Barney Frank, Chris Dodd, the others you have mentioned, all this coming to a head tomorrow and tonight. Why now? Basically, a senior White House aide told me the president has been thinking about giving this speech for weeks at various bumps in the road, as the economy has been getting worse and worse, but he finally decided to pull the trigger tonight, because, as this one official told me very seriously, you only get to use the bullet once.

He knows the markets are watching this closely. He has to get it right tonight if he wants to, A, put pressure on Congress to pass the bailout, and, B, reassure the public. But that's a tough balancing act, because in order to pressure Congress to get this done quickly, as you were just walking about, he's going to have to get a little bit into the politics of fear, that, if you don't pass this legislation, all kinds of bad things are going to happen. On the other thing, he's got to tell the American people, calm down. We're going to make it through.

That's a tough balancing act.

BROWN: But, Ali, I know you're of the mind-set that, if this doesn't get done quickly, a lot of bad things are going to happen.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, bad things are going to happen.

Look, for one minute, I just want to reframe this discussion for our audience. That sunshine is the best disinfectant, the only thing sunshine is going to do is burn the heads of the more and more people who are standing in unemployment lines.

Just look behind you. Forget all the politics. Look at this -- 600,000 jobs have been lost since the beginning of this year, from January to June. I don't know much. I know I'm going to have to pay my taxes and the sun is going to come out tomorrow. I also know more people I'm America will be out of work.

Yesterday, Caterpillar, one of the biggest companies in America, a safe company, a stable company, paid double, paid 7 percent to borrow money, more than $1 billion, double the interest that they would have paid a week ago. Do you care about the executives of Caterpillar? No. But they employ people.

Like so many other major American corporations, when they can't borrow money, they can't pay their bills. Those bills could be your salaries. This is bad news if a deal doesn't get made.

Is this a good deal or a bad deal? Maybe it needs to be fixed, but it does have to be done. The credit markets are freezing. And we can't see that when we look at the Dow. We can't see it in those conversations that we hear in Washington. This is something that goes on behind closed doors. People make deals to borrow money. The money is drying up.

BROWN: OK. Now, we heard Ed also talking about compromises. Bush is very willing to give on this because they want it done so badly and so quickly. Just walk us through some of what they're talking about, because executive salary caps I know is one of the areas where they're willing to give.

VELSHI: Yes. And as I have said continually, it's a bid of a red herring, because you add up all the gross salaries that executives make in this country, it doesn't add up to anywhere near the money we're talking about.

But let's get that off the table. If the White House has to make a deal on that just to get moving, let's do that, because we have to deal with who is in control of this money and what happens to Main Street America as a result of this bill. Those are the two matters of concern.

BROWN: OK, Ed and Ali, thanks very much. Stand by. I know you're not going anywhere either.

This is a matter of trust for the president and his top moneymen. And they want you to have faith in them. But, after years of saying the economy is just fine, can you believe their promises now? Our panel is going to weigh in on that when we come back.

(COMMERCIAL BREAK)

BROWN: Tomorrow makes one week since the bailout deal was first announced. So why is it taking so long to work out the details and how much longer can we wait?

Three of the savviest money people around are with me now. Eamon Javers, a financial correspondent for "Politico", Roben Farzad, a senior writer and columnist for "Businessweek," and our senior business correspondent, Ali Velshi, back with me now.

And, let me start with you two, Roben and Ali. Just to follow up on the urgency question that we have been driving home so much. I mean, give me the difference of what it means if we get this done in a few more days versus two weeks from now? Roben, your take.

ROBEN FARZAD, "BUSIENSSWEEK": Time is really money. Ali led with that caterpillar example.

Look, this is not just the fat cats on Wall Street. People need credit to make their payrolls. People are getting choked off from the credit market. It's very much the life blood, the oxygen of this economy. So if you wait, if something cataclysmic happens over the weekend, it's that much harder to dig us out of a collapse.

BROWN: And I know you --

VELSHI: Yes. Let's just remember, this is not technical and it's not scientific. Markets in America exist on confidence, the confidence of people to loan other people money and get that money back. That confidence is not there. But not only that, there's this thing overhanging us that there might be a deal. So if I'm going to make a loan to somebody today, I'm going to wait... BROWN: I'm going to wait.

VELSHI: ... to see what the deal really is. So -- that there is a deal that might happen is making the credit markets worse.

BROWN: Even worse.

VELSHI: Yes.

BROWN: Eamon, Congressman Joe Barton of Texas, though, I'm going to counter this, said, "That just because God created the world in seven days doesn't mean we have to pass this bill in seven days." I mean, shouldn't Congress be scrutinizing this and asking tough questions?

EAMON JAVERS, "POLITICO": Well, yes. I mean, you're talking about $700 billion. It's an enormous amount of money and to write it as a blank check over to Wall Street is really causing heart palpitations here in Washington, D.C.

The original plan that the administration put forward had almost no oversight role for Congress and just called for Congress to be briefed on this twice a year going forward from here on out. That made people on Capitol Hill go nuts. They just hate that lack of control, lack of accountability and lack of scrutiny.

So even though it is true that the credit markets are jamming up, you know, there's one scenario where the markets will sort of price in an expectation that a deal is getting done, and you could take several more days or a week without having a financial calamity, as long as the news out of Washington was positive and it looks like a deal is coming down the pipe.

BROWN: To that point, Roben, I know you have likened this process to a confidence game. And you said it a million times, Ali, too, that it's so psychological. People need to know that the government is going to back this up, is going to back up the economy. But right now, they don't seem very convinced.

What does the government need to do? What's sort of message can they send via President Bush tonight or in this meeting tomorrow that will convey that to people?

FARZAD: Yes. I predict Bush will come out and unite the country, or try to unite the country by terrifying the country. I mean, literally the economy...

BROWN: The second part seems to say that. Everyone seems to be saying the message is fear.

FARZAD: The economy and the market -- the economy and the market have how it's served to the head of Congress right now. And by the way, it's all circular.

Congress didn't up for an ounce of prevention four of five years ago. VELSHI: Right.

FARZAD: If I showed up and said that you really have to regulate the housing market, I'd look like a buzz kill, you know, a kill joy. And that just wouldn't have flown four, five years ago. We're talking about the last bubble. And now in a period of recriminations, no one is going to say, well, the homeowner is at fault. It's much easier to vilify Wall Street.

BROWN: Well, that's the problem I'm having, and I think a lot of people are having, Eamon, is that...

JAVERS: Yes.

BROWN: ... these are the guys who got us into this mess and they're the guys who are now saying we're going to get you out of it.

JAVERS: Well, right. And, in fact, in the details of this plan buried in the fine print is one provision that allows the government to hire private advisers to help them decide how to spend the $700 billion and exactly what these assets are going to be worth. There's the question right now of how much you pay for each one of these loans that's gone bad.

Well, who would those advisers be? Wall Street folks. And so, you've got, in some cases, what looks like the fox guarding the hen house here that's causing some concern on Capitol Hill, too. And the concern tonight, I think, for the president is that this has been known all week as the Paulson plan. And Hank Paulson has got a lot of credibility on Capitol Hill. The president doesn't have as much.

BROWN: All right, guys. We have to end it there. But Eamon, Roben, Ali, of course, as always, thanks, guys. Appreciate it.

One of the biggest hurdles to this rescue plan is something that makes most Americans furious. Next, the sound and the fury about bailing out companies where CEOs and executives who wrecked them are making millions of dollars. We'll talk about that when we come back.

(COMMERCIAL BREAK)

BROWN: Tonight, there is anger from coast to coast at the notion that Washington is bailing out companies whose top executives make more in a month than the ordinary Americans earn in a lifetime. And the presidential candidates had jumped on the get-tough on executives bandwagon. Let's listen to what they're saying and put it now to our "No Bias, No Bull" test.

(BEGIN VIDEO CLIP)

MCCAIN: No Wall Street executive should profit from taxpayers' dollars. It's wrong to ask teachers, farmers, small business owners to fill the gas tanks of the helicopters of Wall Street tycoons. The senior leaders of any firm that is bailed out should not be making more than the highest paid government official. OBAMA: The plan must include protections to insure that taxpayer dollars are not used to further reward the bad behavior of irresponsible CEOs on Wall Street. There's been some talk that some CEOs may refuse to cooperate with this plan if they have to forego multimillion dollar salaries. I cannot imagine a position that's more selfish and more greedy at a time of national crisis.

(END VIDEO CLIP)

BROWN: John McCain and Barack Obama sounding pretty much on the same page for once. But does the whole idea of cracking down on those exorbitant salaries pass our "No Bias, No Bull" test.

Tom Foreman is in Washington tonight with more -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Well, Campbell, maybe I'm old fashioned, but I grew up working on the Schuman (ph) Brothers farm where you didn't do the job, you didn't get paid. You certainly didn't get overpaid. But that's not the way it is on Wall Street.

Many lawmakers here are clearly terrified that they're going to commit this astonishing sum of tax money to fixing the economy and six months from now we'll be running stories about how some CEO pocketed $50 million of it. They know the fallout from voters would be nuclear, and they're absolutely wild-eyed to avoid it.

(BEGIN VIDEO CLIP)

FOREMAN (voice-over): Why should the very people who caused this problem benefit from the bailout? Lawmakers have asked. And Treasury Secretary Henry Paulson's response --

PAULSON: Let me just say one more time, I am as frustrated as you are about compensation.

FOREMAN: Federal Reserve Chairman Ben Bernanke chimed in, too, admitting that many CEOs may have jumped into risky deals looking for quick bucks to justify their paychecks.

(END VIDEO CLIP)

FOREMAN: But the question raised by the candidates really is, can Congress do something about this? And the answer is yes.

In this specific deal, where the government is offering to help companies that really need the money, it appears that restrictions can be put into place. Ideas are being floated about limiting CEO pay to possibly as little as a few hundred thousand dollars, but much less than these big bosses are used to making no matter how you slice it. And for those who say corporate greed is out of control, the root of this whole problem, that just makes sense.

(BEGIN VIDEO CLIP)

SARAH ANDERSON, INSTITUTE FOR POLICY STUDIES: The system of executive pay in this country was a fundamental factor in getting us into this crisis. And if they don't use the leverage of this bailout to change that system, they're going to make a very big mistake and have a lot of angry taxpayers on their hands.

FOREMAN (voice-over): Lobbyists for the financial industry, as you might guess, disagree, arguing the best and most aggressive business leaders cost a lot. And Secretary Paulson says if too many strings are attached, some companies may back away and doom the whole bailout plan.

PAULSON: We must find a way to address this in the legislation but without undermining the effectiveness of this program.

(END VIDEO CLIP)

FOREMAN: But here's the thing. Secretary Paulson was himself a highly paid CEO at Goldman Sachs and built a personal fortune estimated to be in the hundreds of millions of dollars. Critics suggest that makes him an experienced, but hardly unbiased judge.

So, Campbell, "No Bias, No Bull," the candidates are on to something here but they're also up against stiff resistance from some factions -- Campbell.

BROWN: Absolutely. Tom Foreman for us tonight. As always, Tom, thanks.

We have more breaking news to tell you about right now. Senators Barack Obama, John McCain have now issued a joint statement on the economy. They have been talking about doing it all day. Well, here it is, or at least part of it.

It says, "Now is a time to come together. Democrats and Republicans in the spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail."

That, again, a joint statement issued by Senators Barack Obama and John McCain on the economy.

Coming up tonight, the latest exclusive poll numbers from some key toss-up states to give you a little more insight into what the campaigns are thinking right now. And, of course, we are waiting President Bush's address to the nation tonight. The stakes couldn't be higher.

You're watching the ELECTION CENTER.

(COMMERCIAL BREAK)

LARRY KING, CNN ANCHOR: I'm Larry King.

Right after the president's speech at 9:00 Eastern, 6:00 Pacific, discussing his plan to fix the financial crisis, we're going to have a very candid conversation with Bill Clinton. He's got strong opinions about this money mess and about Obama versus McCain, and about what he will and won't do on the campaign trail.

Plus, wait until you hear his take on Sarah Palin. Might surprise you. All coming up on "LARRY KING LIVE."

(COMMERCIAL BREAK)

BROWN: We are waiting right now for President Bush to talk to the nation about the financial crisis. But first, Erica Hill joining me now with "The Briefing" -- Erica.

ERICA HILL, CNN CORRESPONDENT: Campbell, the House Ethics Committee voting today to investigate Representative Charles Rangel. The powerful New York Democrat, who also chairs the House Ways and Means Committee, has admitted he did not pay taxes on his vacation home in the Dominican Republic. Rangel rejects the Republican calls effort to give up his chairmanship.

And in New York, Governor Sarah Palin says her meetings at the U.N. are going great, but that is about all she said to reporters. At a series of photo ops with world leaders, at one of them, Pakistan's president called Palin "gorgeous."

(INAUDIBLE) that comment.

BROWN: Things are going well, aren't they?

HILL: Great, actually.

BROWN: Erica Hill, thanks.

Barack Obama is in great position tonight. New numbers have him taking a wider lead in some pivotal battleground states. We're going to break down all the numbers for you when we come back. Stay with us.

(COMMERCIAL BREAK)

BROWN: The latest CNN poll of polls based on eight national surveys has Barack Obama leading John McCain by five points, 49 to 44 percent. And that is for the entire country. But what about the key battleground states where this election will ultimately be decided?

We have got brand new CNN/"Time"/Opinion Research poll numbers from five of those states. Our chief national correspondent John King has the numbers for us. We've also got "Time" magazine senior political analyst, Mark Halperin, here with me now to discus the implications as well.

John, let's start with you and go through some of the numbers. You're reporting for us from Montana today. What's happening out west? What do the numbers tell us from Colorado and Montana?

JOHN KING, CHIEF NATIONAL CORRESPONDENT: Very interesting out here in the west. Much more competitive than it has been in the past, Campbell. Let's look first at Colorado, a key battleground state. It has not gone Democratic for president since 1992 when Ross Perot helped Bill Clinton quite a good deal. Right now, Colorado at 51 for Barack Obama, 51 percent, 47 percent for John McCain. So, good news for the Obama campaign in a state they are trying to take away from the Republicans. Still close, but advantage Obama.

And right here in Montana, this is a state Obama hopes to take away as well. Small, only three electoral votes. Right now, though, 54 percent for McCain, and are polling 43 percent for Barack Obama. I will tell you, though, Campbell, even though you see advantage McCain there in Montana, I spent some time with the Democratic governor here today. He says their internal polls are a bit closer, but he acknowledges McCain is ahead.

BROWN: And, John, talk about the Rust Belt states, places that frankly are feeling the economic pinch in a big way -- Pennsylvania, Michigan, West Virginia.

J. KING: Feeling the economic pinch in a big way, as you say, and we're beginning to see some evidence that Barack Obama is benefiting as the campaign turns back to the economy. In the state of Michigan, which has been Democratic for quite some time, 51 percent for Barack Obama, 46 percent for John McCain, who has not performing as well in the key Detroit suburbs, Oakland County and Macomb County, as he would need to to win that state.

Again, 51-46, Obama at the moment. Pennsylvania, another blue state McCain has been trying very hard to take away. Fifty-three percent now for Barack Obama, 44 percent for John McCain. Again, this is among likely voters. That's very encouraging news to the Obama campaign although McCain aides tell us their own polling has that race a bit closer. Still, Obama ahead they say.

And in West Virginia, this was the big state. This was why George Bush became president. It had been Democratic for years. George W. Bush made West Virginia red in 2000, again, in 2004. John McCain is 50 percent right now in West Virginia.

BROWN: Right.

J. KING: Barack Obama at 46 percent. So, competitive in West Virginia, but that state appears to be trending Republican yet again -- Campbell.

BROWN: So, Mark, give me your overall take. Where are things headed?

MARK HALPERIN, "TIME" MAGAZINE: Well, I think the overall trend in those polls compared to other polls we've done and others have done is towards Obama. I think it's always hard to say why are things moving? It's clear that they are moving at least in this range for Obama.

I think there are four things going on simultaneously. One is this economic news, which is bad news for Republicans no matter how they handle it. It certainly hits them harder. Second, until the last few days, McCain, I think, was passive and kind of flailing around. Obama looked stronger. I think that could be having an impact.

Two other things, though, separate from the economic news and I think also show up in these state polls, as well as the national polls. One is Obama has gone on television with more advertising. The reason they raised all that money mostly is to pay for television advertising.

BROWN: And they're spending it now.

HALPERIN: And they're spending it but Obama has been spending more. He has ramped up his spending in a lot of places.

And then, finally, that big bounce. The choice of Sarah Palin, the successful Republican convention gave McCain a bounce. Bounces tend to go up...

BROWN: Right.

HALPERIN: ... and then they come down. And I think you're seeing some of the effect of that as well. In these state polls, if those results held up, Barack Obama would be the next president of the United States.

BROWN: And quickly, Mark, is what happened today, with John McCain suspending his campaign, a game changer in any way do you think, or no? Are we going to see a difference a week from now?

HALPERIN: It's influx. I think what McCain was doing was trying to prove his argument overall, saying, I work for compromise. I do bipartisan things. When we see a statement, though, from the two of them just a few moments ago saying they're both working for it, I think it takes a bit of the edge off McCain's effort.

BROWN: All right. Mark Halperin and John King for us. Guys, appreciate it. You're going to stick around, though. We have a lot to talk about as we are just now minutes away from the president's speech to the nation.

Can he convince Americans that his bailout plan is the right solution for this crisis? Our experts weigh in in just a moment.

(COMMERCIAL BREAK)

BROWN: We're just minutes away now from the president's address to the nation. A big challenge for an embattled White House and a pivotal moment frankly for the Bush presidency.

We want to bring back out our political experts Tony Blankley, Gloria Borger, John King and Mark Halperin, all with us.

Tony, President Bush has to try to rally the country tonight, demand support and sacrifice from the American people, but this is a deeply unpopular president. Does he have any political capital left? BLANKLEY: Yes. Look, I wish the president well. This is a serious moment. I hope the country gives him a fair listen. But we have 70 percent of the country having lost the confidence in the president.

It's going to have to be facts. It's not going to be him that will be persuasive if anything is going to be. So if he can make a case that's persuasive, then he may succeed. But it's going to be very hard because the country really -- for the exception of the core 30 percent...

BROWN: Right.

BLANKLEY: ... just don't have confidence in him anymore.

BROWN: And, John King, you're out in Montana right now. Members of Congress are getting an earful from their constituents. They are not happy, are they?

J. KING: Campbell, we're getting an earful in our time here, too. No bailout, no bailout, no bailout, no bailout. You get it?

People are calling up. It's not just the president they don't like and don't trust. They don't trust any of the politicians. They see the powerful politicians handing out tens of billions of dollars to the rich and wealthy people on Wall Street in speculation. They say, wait a minute. They get bailouts. I get a foreclosure notice. What is going on in Washington?

BROWN: And, Gloria, we're a little more than a week into this crisis now. His leadership has been questioned, obviously. Politically, is this speech something the president had to do?

BORGER: I think he had to do it because his own Republicans said you have to do it because you have to talk to our constituents for us. I think originally the White House was actually backing away from doing this, Campbell, because they didn't really want to panic the American public. It's a fine line between explaining what the stakes are and panicking the American public, and he's going to try and walk that line tonight.

BROWN: And, Mark, finally, this big powwow we're hearing about tomorrow. He's invited Obama, McCain, all the congressional leadership there to the White House. What does he expect them to do? What does he want them to do?

HALPERIN: If there was any doubt it's a lame-duck presidency, that's been removed. He needs these two guys.

The first step, the audience tonight. The main audience is not the American people. There's no time to change public opinion to get this done. It's those House Republicans. They must come together in a big enough number to get enough House Democrats to get that first step through. I think he needs cover from Obama and from McCain at that meeting to come out and say, House Republicans, House Democrats, we must join in a bipartisan way to pass this. BROWN: Who's the more important player in this, McCain or Obama?

HALPERIN: McCain right now, because if McCain comes out for whatever is struck as a deal, he'll get the House Republicans. They're worried that they vote for it at the president's request, McCain doesn't endorse it. And he's out on the campaign trail attacking it, they don't want that.

So, McCain is a bigger player. That's why he has made this move, say, cancel the debate. Let's go to Washington because the onus is on him to put up and show that he can do what his campaign is now based on saying, I can bring about bipartisan compromise. Obama can't.

BROWN: Mark Halperin and to the rest of our panel, to Gloria, to John and to Tony, thanks very much, guys.

President Bush addresses the nation now in less than two minutes.

We want to hand things over to "LARRY KING LIVE" -- Larry.

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