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Vice Presidential Debate Moderator Under Fire; Senate Leaders Urge Bailout Passage

Aired October 01, 2008 - 15:00   ET

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

(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN ANCHOR (voice-over): Coming at you right now: The Senate, not the House, is now trying to rescue the rescue.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The question is not how we got here, but how we get out and to get our economy back on its feet.

SANCHEZ: But, as more Americans revolt, can it get down? Will more House members say this?

UNIDENTIFIED MALE: I'm not going to try to convince people that elect me that I am smarter than they are. They don't like this. And they want me to stand up for them.

SANCHEZ: Uh-oh. Then, there's these guys, small business people around the country worried they won't be able to pay their workers.

UNIDENTIFIED MALE: My sole existence is dependent on the banks.

SANCHEZ: And how is this affecting the map? Yes, that map. How are the swing states swinging?

And Gwen Ifill, vice presidential debate moderator, now in the spotlight because of her book on Obama's political impact. Is she compromised?

Your comments unfiltered on Twitter, Facebook and more. Like nowhere else, your newscast begins now.

(END VIDEOTAPE)

SANCHEZ: And hello again, everybody. I'm Rick Sanchez.

And here we go. Expect news during this hour, this time not from congressmen or Congress folks, but from senators, who are going to be going -- in fact, Roger, put up that shot if you can. This is the Ohio Corridor. That is what it is called. You are going to see it right there. That is the Ohio corridor in the Senate building, and we expect that senators are going to be coming forward to rescue the rescue, so to speak.

How did we get in this situation?

Roger, let's go to the Telestrator and let's try and show or illustrate how this thing happened. I am going to get over here and I'm going to try and show you. All right. There is the Capitol Dome, as we call it, right? Look at this kind of as a triangle, and I will draw it out.

Here is the House, right? And here is the Senate. And up here is the White House. Well, we know what happened here when they tried discussing the bill. Essentially, they said we not going to accept it.

But then what happened is, now we have got it going over here. Let's put the triangle up again. Now everything is over here in the Senate. They expect to have something passed today by 8:30, they say, maybe a little later.

Well, then, where does that go? It goes to the House. If the House approves it as is, then it comes back to them. They do a final version and they send it to the White House. It is essentially a triangle. Of course, this can change, folks. If the Senate's version which they will have tonight goes to the House and the House doesn't like it or denies or rejects it again, then they have to come up with their own version, and this may not be done by the end of the week as we are being told the plan is.

All right. As we do everything else and as we continue to follow this, there is something else I need to tell you. As the senators continue talking, and, as I just showed you, it is in their hands now, it's not the Senate, things have changed. They will be coming to that podium that we showed you moments ago, and they are going to be explaining what it is that they are trying to do and how they are doing it and talking about what I just explained to you.

They don't speak for the House. They will only try and encourage the House to pass this.

Let's go now the very latest sound. This is Harry Reid moments ago explaining what he is doing and what the Senate's perspective is. Take it, Rog.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: My job is not to get things passed in the House. My job is to get things passed in the Senate. And I have done what I thought was the best way to get something passed in the Senate and do it quickly.

(END VIDEO CLIP)

SANCHEZ: All right.

Let's go to Mitch McConnell's sound now from the other side, the Republican side. Keep in mind, these guys have been extremely collegial today, no bickering, as we saw in the House. In fact, they are making it a point to let you know that.

Here now, Mitch McConnell.

(BEGIN VIDEO CLIP)

MCCONNELL: I think you are going to see on display tonight the Senate at its best, rising above partisan differences, working together to solve -- to begin to solve a major national problem, further underscored by the fact that the two presidential candidates, who also happen to be a member of this body, are coming back to support the package as well.

(END VIDEO CLIP)

SANCHEZ: All right.

What we want to do for you now is try and be as transparent as we often try and be on this newscast from 3:00 to 4:00 everyday, be fluid and be transparent.

So, we have asked the undersecretary of the Treasury -- this is one of Henry Paulson's guys -- some would say he's the number-two guy -- he may argument with that -- to explain this to us, to try and make Americans -- most Americans, Mr. Undersecretary, still don't get this thing.

So, what I'm going to do, with your permission, is kind of turn this over to my online audience. I asked them today to send questions to you that you can explain to them, in as pithy a way as you can.

Let's go to it, our Twitter board. We're going to open it up right there, with the undersecretary waiting.

First question. PunditMom wants to know -- she sent this to me about an hour ago: "Without a recovery package," she wants to know from you, "how many more banks will fail and how much will unemployment go up?"

Can you try and give her a sense of that as quick as you can, so we can go on to the next question?

DAVID MCCORMICK, TREASURY UNDERSECRETARY FOR INTERNATIONAL AFFAIRS: Yes.

Well, I think the -- the bottom line is, it is a very challenging economic situation and a challenging time in our financial markets. If we don't move forward on this, it will certainly have a negative impact on the economy, the ability of small businesses to take loans, the ability of consumer credit to be had by normal consumers.

So, it is difficult to give specific numbers. But there's no doubt that, if we don't move forward with this he package, it will affect everyday Americans.

SANCHEZ: Here's another question for you. This one is also about your situation: "Does the government have enough money to back this new FDIC insurance increase to $250,000?" She says she is hearing it is not enough.

MCCORMICK: Well, the FDIC program is really -- what is being proposed in the Senate is really a way of giving further reassurance to depositors that their accounts will be protected in the event that their bank would struggle and go through -- ultimately go through default.

And we are very confident that the FDIC program has performed wonderfully over many years and will continue to do so in the future.

SANCHEZ: I'm going to ask you this question, because I will tell you, if there is one question that has come in a couple thousand times, this is the one. People want to know why you didn't do this from the bottom up, why you are doing it from the top down.

Let's go to the question, Twitter board. Josh Buckner says, what would happen, Mr. Undersecretary, if $700 billion were used instead to assist low to middle-class homeowners struggling to pay their mortgages?

You know what he is getting at here. Why are we giving it to the banks and the financiers rather than taking that money and giving it to the little guy?

MCCORMICK: Well, that is a great question, because it is really important to understand that what we are doing in the proposed plan is purchasing these mortgage-related assets, and the government will own those going forward.

That will have a whole series benefits that will affect everyday Americans, because it will allow banks that now are very uncertain about the value of those assets to lend. And that lending has huge advantages for everyday Americans, that ability to lend and the ability to have access to credit. It helps our economy to grow. That is the key point.

SANCHEZ: Let me ask you this question that a lot of people have also been referring to. And this kind of puts a little bit of heat on you. I hope you don't mind. Some of these are pretty pointed.

Let's go to CraftyGagal. She: "Look, I want to know why something was not done way back when all kinds of people were warning about something like this? Did you guys miss this?"

MCCORMICK: Well, over the last 12 months, we have taken a number of actions. Most notably, the Congress and the president came together with a $150 billion stimulus package that went into the pockets of everyday Americans and into businesses, which helped to ensure that the economy would not be affected by the challenges we have seen.

We have also taken a number of actions with programs to help avoid foreclosures. But the fact remains that we are at a very difficult time, a very challenging time. And, despite all those actions, it is clear that we need even more extensive, more comprehensive actions to avoid having a real impact on the U.S. economy and everyday Americans.

And that is no place, not a place that anybody wanted to be, but it is unfortunately where we are.

SANCHEZ: Let me ask you another question that may make you a little bit uncomfortable, but I have seen a lot of this on a Web.

MCCORMICK: OK.

SANCHEZ: So let's just go right -- look, these are tough times, so I am going to give you some tough questions.

MCCORMICK: OK.

SANCHEZ: People are upset about Henry Paulson and his relationship with Goldman Sachs.

"Is it odd Paulson worked for Goldman Sachs, and now they are switching to a trading holding bank, so they can get bailout money, and there is also talk that he has had some meetings with some of the folks from Goldman Sachs?"

Is that appropriate or is he somewhat compromised?

MCCORMICK: Well, what is very clear is that today's capital markets are incredibly complex and really do have an impact and consequences for Americans throughout our country.

And to have somebody of his caliber that understands these markets, understands the implications of different policy actions, is absolutely critical for these times. I am -- I think we should be blessed -- feel blessed to have him here now, when an understanding of these markets is so important.

SANCHEZ: I would also like to know -- here is a question.

By the way, we may be interrupting you in a minute. We understand the president is going to come out with a statement in just a moment.

MCCORMICK: OK.

SANCHEZ: We want to be able to turn that around, one of your bosses, I suppose.

Let me share with you one this question. A lot of people want to know, is there a plan B? "I would like to know what plan B is. What if Congress can't pass this bailout?" Then what do you do?

MCCORMICK: Yes.

Well, we have got a number of authorities that Secretary Paulson and the Federal Reserve and other regulators have used over the last...

SANCHEZ: I want to interrupt you real quick, and we're going to come back to you in just a minute.

Here now is the president. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... giving me a briefing on Afghanistan.

Before I talk about our visit, I do want to say this. I appreciate Senator Harry Reid's leadership in the United States Senate when it comes to the financial rescue plan. I also appreciate Mitch McConnell's leadership, as well.

The Senate will be voting on a very important measure tonight. The rescue plan, the bill has been improved by raising -- by, other things, raising -- temporarily raising the cap up on FDIC insurance.

The -- it's very important for members to take this bill very seriously. It is important to get credit flowing again so that small businesses in our communities will be able to finance their operations, so that local municipalities will be able to get the money they need to take care of the needs of local citizens, so that states will be able to meet their needs.

It's very important for us to pass this piece of legislation so as to stabilize the situation, so that it doesn't get worse and that our fellow citizens lose wealth and work.

The Senate's going to take this bill up tonight. Hopefully they'll pass it, and then the House will have a chance to vote on it Friday morning.

As I say, the bill is different. It's been improved. And I'm confident it will pass.

Now, General, thank you for coming. I appreciate your service to the country.

General McKiernan is briefing me on the situation in Afghanistan, what he's going to need to make sure that we continue helping this young democracy succeed. Obviously, this is a situation where there's been progress and there are difficulties.

There's been progress when you consider the fact that millions of young girls go to school that didn't have a chance to go to school before in Afghanistan. That's incredible progress.

There's progress when you realize that health care needs are being met for the first time around Afghanistan.

(END VIDEO CLIP)

SANCHEZ: All right, there you go. The president of the United States seems to be indicating that he is confident that this thing is going to pass.

Unfortunately, he said the same thing before he went on the House -- before this debate was taken up in the House, and it didn't work there. Once again, we are joined by Undersecretary for Treasury for International Affairs David McCormick, who has been good enough and patient enough to take some of your questions. And he understands that not all of you are very happy about what is going on.

The last question we were talking about is if there's a plan B, whether, if Congress goes back and says, look, we are not going to pass this thing -- and, by the way, the reason a lot of people are saying, Mr. Undersecretary, that they're not going to pass this thing is because they feel that, if someone fails, if someone fails, why should the government come in and pick them up?

Isn't that part of what we have? Isn't part of our system, our capitalistic system, if you have a business and you're not good enough to make it work, then you should go out and the next guy, who is better than you, should be the one who could make that thing work. Americans are perplexed about this. How would you explain that to them?

MCCORMICK: Well, I think it is really clear to understand what is being proposed, because the proposal is that the government would have the ability to go buy these assets from the financial institutions that have them. Those assets are going to be bought at a price that is much lower than what was initially paid for them, so the institutions involved clearly lose money.

And by taking those assets into government, into the government's hands, we will bring a lot of certainty to the market. And that certainty to the market allows banks around the country to lend. And that helps everyday Americans. And those assets that we purchased are owned by everyday Americans, because they are taxpayer dollars. And, in the long run, we believe that the cost to the taxpayer will be very low.

SANCHEZ: So, it is a boost, so to speak, to get us back on track. It sounds like that what you are saying, right?

MCCORMICK: It is a boost to get us back on track. And it is a boost that really we have sought with the help of Congress to minimize the impact on taxpayer dollars and really protect the taxpayer. And that is a really critical part of this program.

SANCHEZ: This is a great interview. David McCormick, thanks so much for taking the time to answer America's questions.

MCCORMICK: Thank you.

SANCHEZ: These folks are getting online. They knew you were coming and they really wanted you to answer some of those questions, and we appreciate you being so candid about this.

MCCORMICK: I am happy to be here. Thank you.

SANCHEZ: All right. David McCormick, U.S. undersecretary of the treasury. Another story that we're going to be following for you now, Gwen Ifill, she has written a book about the political impact of Barack Obama's candidacy. But now some are saying that, by doing so, she has compromised herself; she should not be the one who is hosting this debate on Thursday between the vice presidential candidates.

Also, why is it that American businesses are not able to make it without government help? It is a fundamental question that we are going to be taking up with two different economists, both coming from different sides of this question. There they are. They are joining us in just a little bit.

Stay with us.

And, obviously, the next senator that goes to the podium, we will let you know what they have to say live. We're coming back right. I'm Rick Sanchez.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back. I'm Rick Sanchez here in the headquarters of CNN in Atlanta.

I want to thank you all for being connected to us online while we're doing this newscast. I can't tell you how grateful we are to have your input and a sense of what Americans are thinking while we are doing this newscast. That instantaneous, immediate input is really a difference. And we want to let you know how grateful we are about that.

All right. Let's do this now. I want to bring in two experts, as promised. First, Jordan Goodman, he is America's money answers man, and he is going to be taking us through -- his position, by the way, is that we should do this $700 billion deal. Also with us is professor Jeffrey Miron. He is a Harvard economist. He thinks differently. He is saying this is not a good idea and it is not in keeping with economic principles.

Gentlemen, I want to first get your reaction to what you heard from the undersecretary of the treasury, David McCormick.

Professor, if you would start us off. Did he say -- did he make sense? Did he answer those questions cogently and correctly?

JEFFREY MIRON, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: I think he attempted to give some good answers, but I don't he overall convinced us that the bailout makes sense.

In particular, he did not tell us why we should really expect that doing is going to fundamentally change the situation on Wall Street, because nothing guarantees that, A, the government is going to be able to buy the illiquid, but valuable assets. It may get stuck with all the lousy assets. That's, of course, what the investment banks are going to try to do.

And, secondly, we don't know what they are going to do with the new funds that are going to be provided. Are they going to make really good investments or are they going to continue the same silly things that they were doing up until now?

SANCHEZ: Jerry -- I mean, Jordan, let me bring you into this and ask you this question.

JORDAN GOODMAN, AUTHOR, "EVERYONE'S MONEY BOOK": Sure.

SANCHEZ: And it's one I keep -- because I was born in a communist country. And I always think of what Ronald Reagan said about communism. The problem with communism is, it takes away your right to fail? Isn't that what we are doing right now? We're taking away these companies' right to fail. And if you can't fail, you ain't going to work as hard.

(CROSSTALK)

GOODMAN: We're not doing that.

These companies are failing. Look at what has happened in the last two months, Rick. We have had AIG taken over by the government. And the stockholders pretty much got wiped out. Bear Stearns, they got wiped out. Lehman Brothers, they got wiped out. Washington Mutual, they got wiped out.

Yes, companies are failing, but we have a fire in the kitchen, you know. And we have to put the fire out is what is happening right here. You can see just today alone, General Motors -- Ford sales were down 33 percent, Toyota sales down 30 percent. Average Americans can't get credit. That is the fire in the kitchen.

(CROSSTALK)

SANCHEZ: But in a pure Adam Smith way -- I'm not saying this as a man -- I'm saying this as a person asking you the question -- so be it. They can't figure out how to sell cars because they were not smart enough to figure out that they need to come up with fuel- efficient automobiles. Let them go under and let the next guy come in who would have figured that out and is now able to sell it.

Isn't that how our system is supposed to work? Instead, we subsidize cars, we subsidize corn, we subsidize banks, we subsidize everything, it seems, these days. Have at it, both of you.

(CROSSTALK)

GOODMAN: But the problem is that people can't get financing for those cars. The cars are perfectly good. Because of the credit crunch, people cannot -- it is nice to be on all these high moral principles about moral hazard and we should save -- completely restructure the system.

Right here, on the ground, OK, people are really getting hurt. They are going to be losing jobs. The banks are going under. That is what we have -- again, there's a fire in the kitchen have to solve right now. SANCHEZ: The question to Professor Miron, can the market self- correct or does it need our tax money to come in correct it for them?

MIRON: I think it self-corrects far better than the government will correct it.

Mr. Goodman is absolutely right. There have been some failures so far. That is entirely appropriate, because the size of the financial sector was too big. And as you were emphasizing, it needed to shrink when they weren't doing the right things. More importantly, the government has put in place over the last 15 years policies which pressured Fannie and for Freddie and then by implication the private sector to engage in this silly, risky, excessive subprime lending.

And that has already been done, and somebody has to pay. And the best way to pay for it is let the people who made those risky bets pay for their bets.

SANCHEZ: Two different opinion. Jeffrey Miron, professor, Harvard economist, Jordan Goodman, always great to have you on our show. We thank you for being there for us as well. And we will continue this discussion.

And so do many Americans, by the way, not only here, but on the Internet and all the other sites that we are checking.

"The View," if you caught it today, you saw what happened when the conversation turned to Sarah Palin. It was a heated, smart discussion. We followed it. We're going to share it with you.

Also, Gwen Ifill, is she being compromised because of a book that she had written on the politics and Barack Obama? We will have that for you and your responses. Stay with us. We will be right back.

(COMMERCIAL BREAK)

SANCHEZ: And, boy, is our Internet audience speaking, tens of thousands of people who have been sending direct messages right to us.

In fact, here is one that maybe puts a punctuation on this. Let's go to the board. This is on Facebook, came in just moments ago.

Patrick Davis says, after watching this conversation: "I am tired of people saying that Americans don't understand why we need a bailout, and they try to explain to us. We do understand what it is," he says, "and still don't want it."

I know that it is tough for you guys to see, but there it is, just as it came out a little while ago.

All right, switching the subject now and going to the subject of Gwen Ifill. She is scheduled to be the moderator in the vice presidential debates. That is coming up on Thursday. There she is. That is what she looks like, showing her pearly whites.

I want you to see her in action, because this would not be the first time that Gwen Ifill does this. The controversy, by the way, is about her writing a book on Obama and politics. But how much is it about Obama? This is a question we're going to get into in just a moment.

First, take a look at Gwen Ifill actually doing the moderating in past debates.

(BEGIN VIDEO CLIP)

GWEN IFILL, MODERATOR: Vice President Cheney, there have been new developments in Iraq, especially having to do with the administration's handling.

New question to you, and you have two minutes to respond. Part of what you have said and Senator Kerry has said...

JOHN EDWARDS (D), FORMER PRESIDENTIAL CANDIDATE: They would continue to get their money.

IFILL: Mr. Vice President?

RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: I can respond, Gwen, but it's going to take more than 30 seconds.

IFILL: Well, that is all you have got, because I want to circle back to a question which I am not certain we got an answer to, but I will direct it to you first, Senator Edwards. And if Vice President Cheney ordered it, do you think that, in the future, that your administration or the Bush administration, does that make your effort or your plan to internationalize this effort seem kind of naive?

(END VIDEO CLIP)

SANCHEZ: All right, it is a question that we put out there when we started the newscast. And already we're getting people responding to it.

As a matter of fact, let's go ahead and go the board on this one, before we go to Howard Kurtz, who we are going to be bringing in, in just a moment.

"I love Gwen," says newsjunkie65, "but, yes, I think the Republicans will see this as a bias."

Let me show you something else. Come back to me, Roger, if you possibly can. This is from "The National Review Online," albeit a conservative publication, but here is what they say.

They say: "Someone who wrote a positive biography about McCain being chosen to moderate a debate is analogous to having Gwen Ifill go on and do this debate."

Howie Kurtz follows this. He is the media critic for "The Washington Post."

"National Review" is saying, you know what, this would be akin to having John McCain being hosted in or moderated in a debate by someone who wrote a biography about him. Is that fair? Is that right?

HOWARD KURTZ, CNN CONTRIBUTOR: You know what I have got here, Rick? I have got a "Washington Post" article of a month ago by me about Gwen Ifill that talks about this book. This is not new information. It is not a biography of Barack Obama. It is a look at four different African-American politicians of the post-civil rights generation, one of whom is Barack Obama.

And this has all started because a conservative Web site called WorldNetDaily made a story about this. And this is a site that, for $4.95, if you act now, is peddling a book called "Audacity of Deceit: Obama's War on American Values." So, I don't know think there's a lot new here.

SANCHEZ: I guess we need to talk about exactly what the book is going to be and whether there's -- here is a question that comes up, Howie. Whether we look at this in terms of something that she is trying to promulgate, Barack Obama's candidacy or not, some would argue that she stands to gain financially by his winning. Thereby, she may want to try and skew it, so he wins, so she can make money on her book, because her book will sell more if he wins. That is an argument that is out there.

KURTZ: Here is what Gwen Ifill told me a month ago.

She said of Obama: "I still don't know if he will be a good president. I am still capable of looking at the pros and cons in a political sense." And she said, "No one has ever assumed that a white reporter can't cover a white candidate." And that I think is the subtext here, Rick.

She is an African-American journalist who has worked at "The New York Times" and NBC News and "The Washington Post" and PBS. Suddenly, we're going to call into question her (INAUDIBLE) because she has written a book about African-American politicians that no one has read yet, because she hasn't finished it.

SANCHEZ: The book is entitled "Breakthrough: Politics and Race in the age of Obama." Anything about the title that tells us anything?

KURTZ: Well, it tells us that she is looking at people like Deval Patrick, the governor of Massachusetts, and other African- American politicians who are not part of the Jesse Jackson/Al Sharpton civil rights movement generation, but are the generation that followed them.

Now, maybe this will be a book that is very favorable to Senator Obama. I don't know, but I think that I would like to see from her critics concrete examples from any of her writing, from anything of what she says on TV, or from the last debate that she moderated four years ago. That makes her fair game. We're certainly free to scrutinize her record as the moderator of this debate.

But, to try to hang her for a book that has not even been published yet strikes me as a bit of a stretch and politically timed. SANCHEZ: Yes, all we have a title at this point. We don't have any excerpts from the book where she says, "I am going to vote for Barack Obama" or anything of that ilk.

You know, what is interesting about this, though, is the reaction that it's getting so far. So, will that reaction and all this publicity -- we are only two days before this thing happens -- do you expect or do you know if she will mention it at some point and say, "I want to know this is on the record; yes, I am writing a book; it has nothing to do with what I'm doing"?

Will it affect her performance in any way?

KURTZ: I don't know whether she'll mention it. I don't know whether this is all bothering her. Certainly it has hit the echo chamber, Drudge Report had a big headline and Rush Limbaugh has talked about it.

This strikes me as an effort to kind of spin away in advance the results of the debate in which Governor Sarah Palin may or may not do well, and certainly her supporters hope she does well, better than she did with Katie Couric. I think after the debate I and everybody else will be free Gwen Ifill apart if we think that she hasn't been fair. But again, to gin up this level of controversy on the basis of a book title strikes me as a stretch.

SANCHEZ: And one final thing. You mentioned timing a little while ago. What is the point you are trying to make about the timing of this?

KURTZ: That this is a book has been listed on Amazon for months, that I wrote about a month ago. In other words, this is not a new shocking revelation. This is something that was tossed into the chamber one day before this vice presidential debate obviously in an effort to raise questions about Ifill's impartiality.

SANCHEZ: And Machiavellianism (ph) maybe in the middle of a debate from one side or the other? Not that that would happen, of course. Don't answer that. Howie, thanks so much. I appreciate you being on.

Interesting subject and it certainly is getting a lot of ink.

All right. When we come back, we are going to talk to Chuck Schumer, the senator from New York telling us what the Senate is doing on this $700 billion bailout plan, I know that bailout is a tricky word and he will probably tell me not to use that word and I will ask him, why not? Stay with us, and we will be right back.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back, I'm Rick Sanchez and now about 33 minutes after the hour. We expect the market as you know closing at 4:00 p.m., and obviously we will be watching that for you as it gets right down to the little tick there. That is where the market is right now. Down 34, thanks so much, Roger, in my ear. And not exactly a good day or bad day, just kind of flat.

We have got some sound that is coming in right now that is coming in from Joe Biden. This came in moments ago. This is in Delaware. He is making his way now to Washington, we understand, of course, for this Senate vote tonight. Which, in case you have not heard because you have gotten home from work a little bit late and are joining us late, it is supposed to happen at 8:30 tonight and expected to pass by the way. Although you may have heard that before from us. Let's go to the sound.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN, (D) PRESIDENTIAL CANDIDATE: I have not read the package yet, but my anticipation is that I am going to vote yes and I want to see and that is why I am going home to get the details and I will be down to the train to Washington tonight. Thanks, guys.

(END VIDEO CLIP)

SANCHEZ: Let's bring in another senator now. Senator Chuck Schumer of the State of New York is joining us in a state of I imagine somewhat happiness given the fact that the Senate has come together and they are going to pull this thing off. Is that the case? Or am I speaking for you?

SEN. CHUCK SCHUMER, (D) NY: Yeah, Rick, I would not call it happiness. Look, when the president presented his package, $700 billion bailout, no strings attached, that was an awful package. Over the weekend, we modified it, put in protections, real tough protection for the taxpayers, some real oversight, some help for homeowners to see that the prices maybe went back up a little bit and so it got better.

Now the new additions mainline things right into the middle-class without going through Wall Street. The alternative minimum tax which affects people even making $50 or $75 or $125, that is going to be reduced. Money for regular businesses and not financial businesses to grow and expand and giving them tax incentives to do that, so that the plea of America, we know that something has to be done, but help main street as well as Wall Street.

SANCHEZ: Well, you know, that is interesting that you say that, because I want you the listen to something. This is the report rather than show you a slick CNN report with great-looking graphics and all that, we found a report that was filed by one of the affiliates and this is in middle Tennessee, and in this report, what you are going to see is exactly how people are affecting their congressmen, maybe not so much their senators, but their congressmen and affecting them to the point where the congressmen are saying, look, I cannot do this. I am not comfortable doing this.

Watch this with us, you and our viewers, this is WDEF, the reporter is Amy Katcher, the congressman on this report is Congressman Zach Wamp and listen to what he says, senator, and you and I will talk about it on the other side.

(BEGIN VIDEOTAPE)

AMY KATCHER, WDEF CORRESPONDENT (voice-over): As part of the 228 no-voters Congressman Zach Wamp sent a clear message to the nation's financial markets Monday.

REP. ZACH WAMP, (R) TN: Wall Street over the taxpayers and yeah, that is just a very sour taste in my mouth from the very start.

KATCHER: Jim Place of Evergreen Management agrees it's a bill many constituents were against.

JIM PLACE, EVERGREEN MANAGEMENT: We obviously have a package here for the most part the American public is absolutely against.

KATCHER: Reporter: he called the defeat an Economic Stabilization Act a distasteful intervention of the public sector into the private sector.

WAMP: There is no guarantee that this program was going to work and so I understand the urgency and I understand the criticality and it was painful to watch the stock market yesterday and to see fear in people's faces. It does not mean it was the right thing to do.

KATCHER: Wamp says that bailing out Wall Street is not the answer.

WAMP: Get the government behind the regular guy and turn this instead of a top-down approach, how about bottom-up approach and let's put the money into the mortgages.

KATCHER: Wamp also proposes raising the FDIC insured threshold deposit level above $100,000. He says that the first priority needs to be getting the money moving again.

WAMP: Sometimes you have to go through a little pain to grow, and I think that we have to go through a little bit of a shakeout right now, because everybody continued to operate on this flawed notion that you can just keep borrowing and keep borrowing.

KATCHER: Wamp says by Friday night he expects Congress to agree on a deal that's a better solution. Amy Katcher, WDEF, News 12.

(END VIDEOTAPE)

SANCHEZ: There you go, senator. We know what you have been saying, but in small Middle America, that is what people are saying to the congressmen, and that congressman is going to go back to feel maybe more emboldened now to vote against this thing, and what do you do about that?

SCHUMER: Well, one of the things he recommended is in the new bill, raising the FDIC limit to $250,000 and he said going to Main Street, there are new things that are put in this bill. But I don't think it is that different in Middle Tennessee and in New York. Not everyone is Wall Street on New York. Upstate and Long Island and the Outer Boroughs, and what people are saying don't do nothing, they are saying do something, but do it a lot better than what the president proposed. At one point the Congressman Wamp said maybe we should do nothing and well, the last person who said that was Herbert Hoover and we had a financial crisis, but it wasn't an economic crisis in 1930. Hoover said I am not going to do a thing and as a result, we got into the Great Depression as people started running on the banks and the banks stopped lending and the whole economy froze up.

We could get into a situation that is perilous if we do nothing. So the job is not to just say no, and I don't think the public wants us to say no, but to make it better. That is what we have been trying to do in a very slow, painstaking step by step process.

Chuck Schumer, we thank you, senator, for taking the time for joining us and for taking us through this. As you have.

SCHUMER: Thank you. Nice to talk to you, Rick.

SANCHEZ: Likewise, senator. Here is what we are going to do, more reaction has been coming in on the Gwen Ifill question. Apparently that has perked a lot of interest out there in the online audience.

And there is also the question of the new swing states, does this economic situation that America is embroiled in right now have a political states that used to be going one way or another? We answer it when we come back. Stay with us.

(COMMERCIAL BREAK) SANCHEZ: And we welcome you back. I'm Rick Sanchez and we have got some breaking news coming in and I want to be able to put it up here so you can actually see it. I want to be able to make it as big as we possibly can. I am going to go over and put it on a Word page. Follow along with me here while I work this for you. OK. Can we see it now? Come in over the shoulder if you can.

All right, this is the information coming in now on the investigation and several people have been subpoenaed and remember that the question on this accident that happened out in L.A. with trains colliding happened with had to do with whether or not the engineer was texting at the time. Here we go. I am going the read to you now as you can read along.

"On the day of the accident the Metrolink engineer was on duty for two periods of time. The engineer was responsible for the operation of the train from 6:44 a.m. until 8:53 a.m. During this period of time the engineer's cell phone received 21 text messages and sent 24 text message," so obviously, it is coming down to brass tacks as to whether or not the engineer may have actually texting at the time that the accident happened. Something we will continue to look into. That investigation and more when we come back. Stay with us.

(COMMERCIAL BREAK) SANCHEZ: We welcome you back. Continuing our discussion, David Sirota is a best selling author and a nationally syndicated writer as well, columnist.

He is good enough to join us now to give us perspective on what he is writing about. I have been reading what you have been writing for a couple of weeks and you have been consistent in your point that this is something that we should not rush to go ahead to pass. Why are you making that point so consistently?

DAVID SIROTA, AUTHOR, "THE UPRISING": Well, because most of the major economists tell us that passing this in such a quick way and dumping $700 billion on to Wall Street is not a way to necessarily solve this crisis and in fact, maybe a way to make the crisis worse. I heard your interview with Senator Schumer and we should not be surprised that the senator from Wall Street is endorsing a plan to dump $700 billion on to wall street.

The provisions that he said were added into the bill to supposedly make it better, the Treasury Department was conducting a conference with Wall Street traders saying most of them are unenforceable and written to be unenforceable. This is a rip-off that will not make our country or our economy better.

SANCHEZ: Are you on the side with those who say, look, we should listen to the advice of people like Ronald Reagan and Adam Smith and stay to the side and let the economy and let these business sectors heal or fix or correct themselves?

SIROTA: No. I am not. I have two things to say about that. One s that the FDIC and the Treasury Department and the Federal Reserve has a lot of power it is not using and it could nationalize failing banks and it is refusing to do that because they wants to create this scare narrative to give away $700 billion to Wall Street.

But I would say if they pass anything, we've got to take cues from our own history. When Franklin Delano Roosevelt faced the Great Depression, he passed the New Deal which dealt with social spending, which dealt with re-regulating Wall Street, which dealt with creating institutions to stabilize our economy and we are not doing any of that.

SANCHEZ: That's interesting. Again, it's that difference of top-down and bottom up, and you suggest somewhere between the middle and the bottom and not all of the way at the top as it is being done now. Interesting perspective. David Sirota, always good to have you, we'll keep getting you back. Appreciate your smart commentary on this.

All right, when we come back. What is this doing to the swing states, you know, the industrial belt in Florida, Pennsylvania, Michigan, Ohio? Let's talk about those and see if the swing has swung in a different direction. Stay with us. We will be right back.

(COMMERCIAL BREAK) SANCHEZ: And we welcome you back. One thing we want to check on now, because we do it on this newscast consistently is not just what is going is not just what's going on in other parts of the world but what is going on in our own neighborhood in, Latin America in particular. And for that we go to Glenda Umana who joins us from CNN en Espanol. Fun to say. You guys to do a good job with this.

GLENDA UMANA, CNN EN ESPANOL: (Spanish)

SANCHEZ: (Spanish)

Let me ask you this. This is an interesting question. A lot of Americans have been complaining about illegal immigration in the United States for quite some time. A lot of people on the radio have been making these points. Now there's a new statistic out which seems to show there are fewer of them in the United States or at least certainly much less money going back across the border, right?

UMANA: That is one of our main stories today. A lot less money, Rick, has been sent by Mexicans in the United States to their families back home. According to Mexican Central Bank, this year, almost, Rick, 300 million dollars less than last year. The reason? Lots of Mexicans used to work in construction and now there is less money to build houses. It's causing Mexicans to return to their country. There has been an increased numbers of raids and deportations.

SANCHEZ: It's interesting the economy is actually doing what many other factors haven't been able to do, we'll leave it at that. Glenda Umana. (Spanish)

UMANA: (Spanish)

SANCHEZ: Thank you very much for that report. Let's go over to Bill Schneider now. This is a conversation what's going on politically as a result of what's going on economically.

Now we play be able to measure some of this. Let's put up that map if we can. The CNN electoral map, I don't know if you've got that. There's Bill Schneider, one of the best. There is the map. Move it over if we can a little bit. You're going to see some of the areas we really want too talk about. Go, go, go, keep going, keep going, keep going. Good. You see places there like Michigan and Ohio and Pennsylvania and Florida. These are places where the economy may soon have an effect on some of these swing states. There's one in particular, Pennsylvania that Bill wants to tell us about. Bill, what you got?

BILL SCHNEIDER, CNN CORRESPONDENT: Well, what we're seeing in the polls right now is a slight movement in favor of Obama in the national polls. Our latest national, that is nationwide poll of polls shows Obama leading McCain by six points. It's a little wider than it was a few days ago where he led by five points. And that lead has been gradually growing since the conventions ended about a month ago.

But let's focus on the battleground states where we're seeing even more movement for Obama. Pennsylvania, that was supposed to be a big battleground state. It has a lot of white working class voters with whom Obama was supposed to have problems. He lost Pennsylvania big-time to Hillary Clinton in the Democratic primaries. But take a look at the two latest polls in Pennsylvania. CNN's poll of polls shows Obama leading McCain by a solid 10 points in Pennsylvania. And a new Quinnipiac University poll shows Obama leading McCain by eight points in Pennsylvania. So this battleground state may not be such a battleground. It looks like it's tilting pretty decisively to Obama and what's driving that? It's pretty clear. The bad economy and the demand for change.

SANCHEZ: Bill Schneider reporting to us from St. Louis. We thank you, sir, and should let you know that at 4:00 in THE SITUATION ROOM, more battleground state results directly from CNN. What happened today on "The View"? Wait till you see it. We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: We welcome you back. I'm Rick Sanchez. Candidate Sarah Palin jokes about Joe Biden's age but then she goes on with Katie Couric and kind of denies that she was joking in any way. Watch the reaction that's going to happen later on. First, let's just watch that clip by itself.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL CANDIDATE: I've been hearing about his Senate speeches since I was in like second grade.

KATIE COURIC, CBS NEWS ANCHOR: When you have 72-year-old running mate, is that kind of a risky thing to say, insinuating Joe Biden's been around an while.

PALIN: Oh no, it's nothing negative at all. He's got a lot of experience and just stating the facts there that we've been hearing his speeches all these years. He's got a tremendous amount of experience and I'm the new energy, the new face, the new ideas and he's got the experience.

(END VIDEO CLIP)

SANCHEZ: That set them off this morning on "The View" on ABC. Watch.

(BEGIN VIDEO CLIP)

JOY BEHAR, "THE VIEW": When I say that George Bush writes with crayons, I don't then say what I'm saying is he's a great artist. What I really meant is the guy was a great artist.

ELIZABETH HASSELBECK, "THE VIEW": She meant the joke.

BEHAR: Wait a minute. The fact that she's so dumb as to say ...

HASSELBECK: Oh.

BEHAR: Wait a second. Politically not as statute. Let's put it that way.

HASSELBECK: Because she didn't go to an Ivy League school.

BEHAR: I'm not saying that. Politically, un-astute enough to make a joke about age when she is running with the oldest man that's ever run before. That's what I mean.

HASSELBECK: You know what's interesting, first of all, I love how just shook up in your boots you get up over Sarah Palin. I just like it.

BARBARA WALTERS, "THE VIEW": And you have to defend her every single time.

WHOOPI GOLDBERG, "THE VIEW": The same boots you're wearing.

HASSELBECK: I don't think she's afraid to address certain things.

GOLDBERG: He made a mistake and she got caught. She made a mistake. She made a joke and forgot.

(END VIDEO CLIP)

SANCHEZ: Ding, ding, ding. The closing bell when we come back.

(COMMERCIAL BREAK)

SANCHEZ: Let's go over to Susan Lisovicz and find out what's going on with the closing bell today. Man, one day way down. One day way up. And now black?

SUSAN LISOVICZ, CNN CORRESPONDENT: Exactly because the vote is coming after the bell. So yes. And you know what? It's a welcome respite. We do have lots of other news. But once again, the focus is on Washington and whether this bill will pass. There's the close. Kind of quiet for a change, Rick. We'll take it, see you tomorrow.

SANCHEZ: It's almost like a nothing day in the market. Like they could have stayed in bed.

Let's go over to John Roberts now, SITUATION ROOM time. John, over to you.