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AMERICAN MORNING

Dissecting Last Night's V.P. Debate; Wells Fargo Buying Wachovia for $15.1 Billion in Stock; Ralph Nader on the Vice Presidential Debate

Aired October 3, 2008 - 08:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Coming up now with a minute to the top of the hour and breaking this morning. Wells Fargo is buying troubled bank Wachovia for $15.1 billion in stock. On Friday, Citigroup agreed to purchase Wachovia with government funds, but Wells Fargo made a higher bid with no federal funding needed. The deal, if approved, would give the company retail banks in the East Coast.
Some House supporters of the first bailout bill are indicating that they may not support the new version. Republican Senator Bacchus from Alabama calls the new plan a "rush to judgment," but Roy Blunt of Missouri predicts that it will pass this time.

The financial crisis forcing retail stores across the country to begin advertising holiday sales early. They are trying to attract customers after analysts say this could be the store's worst holiday season in 24 years.

And new developments in the Steve Fossett search. DNA testing will be performed on a small amount of remains that were found inside the wreckage of Fossett's plane. The millionaire adventurer disappeared more than a year ago. His plane was found earlier this week near Mammoth Lakes, California.

Now back to our top story now. Another big bank buyout announced this morning. Wells Fargo buying Wachovia for a whopping $15.1 billion. Christine Romans joins us now with the very latest and interesting twist in this story.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It is, the ground is shifting beneath us in the banking sector literally on an hour by hour basis. It was a just a few days ago that we were telling you that Citigroup with the help of the federal government was going to step in and buy the banking operations of Wachovia and then today, Wells Fargo announces that it and Wachovia have agreed on a merger.

Wells Fargo essentially acquiring Wachovia and a stock for stock deal that values it at $15 billion -- $7 a share for Wachovia, without the help of the federal government. John, you know that you're in completely new territory when the first line of a press release about a banking merger says, without the help of the government authorities.

I mean, these are very, very unusual times. If you are a Wachovia Bank - you know, you bank at Wachovia, a week ago maybe you thought that you were going to be banking at Citi. Now, it looks like it's going to be Wells Fargo. If you're a shareholder, this should be better news for you than some of the more recent developments. But keep in mind at $7 a share for Wachovia shareholders. A year ago, it was $51 a share for Wachovia. In just a year, the banking sector has been completely, completely changed. And we're seeing incredible -- this is not the end. We're going to see more changes in banking. We're going to see more banks lining up, combining -- I mean, it's all just beginning now.

JOHN ROBERTS, CNN ANCHOR: Oh boy, it's going to be a rough few months ahead of us.

ROMANS: Buckle your seat belts.

ROBERTS: All right, Christine, thanks.

KIRAN CHETRY, CNN ANCHOR: All right. Well, we are still dissecting last night's V.P. debate between Sarah Palin, the newcomer to Washington, and the 35-year Washington veteran, and that's of course Joe Biden. CNN's Candy Crowley takes a look at how Joe Biden and Sarah Palin did in their one and only debate.

Candy?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Kiran and John, it was probably the most anticipated vice presidential debate in history, and in the end, everyone survived.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): Sarah Palin did not deliver perfection.

GWEN IFILL, MODERATOR: As vice president, there is nothing that you had promised as a candidate that you wouldn't take off the table because of this financial crisis were in?

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: There is not? And how long have I been at this, like five weeks, so there hasn't been a whole lot that I have promised.

CROWLEY: But neither did she implode, repeatedly touching base with her regular gal persona. Here decrying Wall Street's meltdown.

PALIN: Let's commit ourselves, just everyday American people. Joe Six Pack, hockey moms across the nation, I think we need a band together and say "never again."

CROWLEY: She was the newbie, but she went toe-to-toe on climate change, economy, and Iraq with a 35-year Washington insider.

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: Barack Obama has offered a clear plan, shift responsibility to Iraqis over the next 16 months, draw down our combat troops. Ironically, the same plan that Maliki, the prime minister of Iraq and George Bush are now negotiating. The only odd man out here, only one left out is John McCain.

PALIN: Your plan is a white flag of surrender in Iraq. And that is not what our troops need to hear today, that's for sure.

CROWLEY: 84 percent of debate watchers said Palin did better than expected. That's according to a snap poll from CNN and Opinion Research Corporation. But 51 percent said Joe Biden won the night. Polite and even warm toward Palin, Biden mostly debated the top of the McCain-Palin ticket.

BIDEN: I haven't heard how his policies can be different on Iran than George Bush's. I haven't heard how his policy is going to be different with Israel than George Bush's. I haven't heard how his policy in Afghanistan is going to be different than George Bush's.

CROWLEY: She answered some questions but not others. It may not have won her the night, but she did take control.

PALIN: And I may not answer the questions the way that either the moderator or you want to hear, but I'm going to talk straight to the American people.

CROWLEY: If nothing else, Palin seems to have quieted conservative's growing concern she was not up to the job. The rest now is up to John McCain.

(END VIDEOTAPE)

CROWLEY: As one conservative leader put it, it got us back on track. That's all I wanted.

Kiran and John?

ROBERTS: All right. Candy Crowley for us this morning. It's coming up now on four minutes after the hour. We're back with Ed Rollins, Republican strategist and CNN contributor. And Democratic analyst Julie Menin.

Good morning to both of you.

JULIE MENIN, DEMOCRATIC ANALYST: Good morning.

ROBERTS: So, in "The New York Times" today, David Brooks, columnist writes that by the end of this debate last night, coming from a Republican perspective, "most Republicans would not have been crouching behind the couch, but I would suspect standing upon it." You know, the indication was that they were so scared last night, Ed, that she was going to screw things up, and then by the end of the night, they're sort of saying a big sigh of relief. Is that the way you saw it?

ED ROLLINS, CNN CONTRIBUTOR: Absolutely. And I think more important than all the rest of it, she regained her confidence. She was very confident woman out there last night. And the last two weeks, the stuff that we've seen, she didn't quite project that. So my sense is the base is happy. Obviously from here on, it's about McCain and Obama. But she can go out and energize that base, that big crowds, and help raise resources. ROBERTS: What did you think about last night? Because a lot of Democrats were hoping that she was going to fall flat on her face, and she didn't and she appeared to rise to the occasion.

MENIN: Well, that's right. I mean, the expectations were so low that it was hard not to really make that be a problem. I really thought that Biden though gave a fantastic performance. He was right on the substance. He was right on the issues. And when it came down to the issues, Sarah Palin didn't really have a lot to say.

ROBERTS: But does she connect in a way that Biden couldn't. Our poll found more people thought that she was likable.

MENIN: Well, that kind of folks --

(CROSSTALK)

ROBERTS: And don't you want to vote for somebody who you like?

MENIN: Well, we're not talking about head of the PTA. We're talking about someone who's going to be vice president, potentially even president of the country. And I think on that measure, when you evaluate her against that standard, she simply did not cut it. She could not talk in substance about the issues. And I particularly thought it was very interesting in talking about mortgages and bankruptcy, that she had to divert again back to energy. Really the only issue that just seem to feel comfortable expanding upon.

ROBERTS: Let's take a look at one of the highlights where she really was trying to connect with the audience last night.

(BEGIN VIDEO CLIP)

PALIN: I may not answer the questions the way that either the moderator or you want to hear, but I'm going to talk straight to the American people and let them know my track record.

(END VIDEO CLIP)

ROBERTS: So, Ed, there she is talking straight to the American people. But did she deliver? Was it straight talk? Was she talking about her record?

ROLLINS: She was not talking about her record. She was kind of talking about McCain in the future, which I think was very important. I think one of the great pivots of the night, every time Biden started talking about Bush, she basically said, that's the past, let's talk about the future. Now, that was very good bid and very important point.

ROBERTS: Right. But in terms of that, you know, Julie -- can voters out there, particularly independent voters who were very upset with the last eight years of the Bush administration look at that and say, OK, let's move on. Let's forget what happened in the last eight years. MENIN: Well, yes. You know, that's exactly right, because we've seen eight years of failed Bush-Cheney policies. Policies of deregulation that really caused this economic failure. And I found what she was saying to be rather disingenuous. I mean, she is trying to say, hey, we're the mavericks, we're the outsiders, but she's running with someone who's been in Washington for 26 years. It's very hard to get that message across when the person at the top of the ticket really is the ultimate Washington insider.

ROBERTS: Ed, you were part of our election -- our post-debate coverage last night. You were there with Paul Begala. Paul Begala said that he didn't think that she help John McCain, but she certainly help herself.

ROLLINS: She certainly did help herself, but I think that in turn helps John McCain. I think this campaign has had a rough couple of weeks and I think she gave a new energy once again. It's now up to him. The economy is the issue. He's got to basically define his economic plan more effectively to the American people.

ROBERTS: But did Joe Biden also help himself? Let's look at just a poll here. Favorability ratings before the debate, he was at 58 percent. He gained 11 points after, 69 percent. Is he qualified to be president? Before, 78 percent, afterwards 87 percent. A rise of nine points.

MENIN: Yes. And that's exactly right. I don't think there's anyone Republican independent or Democrat who saw that debate who doesn't say, hey, Joe Biden is not qualified to be either vice president or president of the United States. And that's what really came across. And that's why I think last night was a very big win for Biden. And he showed amazing discipline. He was on point. He was on message. He wasn't overly loquacious. And he didn't also rise to debate, and I thought that was really great.

ROBERTS: We're going to have to leave it there. Julie Menin, welcome to the program.

MENIN: Thank you so much for having me.

ROBERTS: We'll have you back a lot. Ed Rollins, always good to see you.

ROLLINS: Thank you, John.

ROBERTS: And of course, you'll be back, you know that. All right.

Kiran?

CHETRY: Night and day, day and night, he's always here.

Well, the race for the White House is getting buzz all over the world. CNN's Becky Anderson joins us live from London this morning.

How about the consensus there? We know from many of your reports that you're in Obama country, but what did they think of last night's V.P. debate?

BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: All right. Well, for those of us who actually stayed up until 2:00 in the morning to watch these debates are feeling a little groggy this morning. I've got to say, though, those who did stay up to watch the debates really rather enjoyed it this time, perhaps more so than the presidential debates last week -- the first one.

Anne McElvoy, who has written in the "Evening Standard," the first paper of course out today, because the debates were too late for the day. This is the afternoon paper. The "Evening Standard" in London. Now, this woman who is rising today can kill the toughest of us dead with a one liner. Let me say, this is an acerbic writer. And she quite enjoyed what she saw. "A wink, and Sarah is a winner."

She started with the greatest asset of them all, which is the gift of low expectations, of course. And after a week of what Anne McElvoy called premier crude, gaffes, and fluffs. And more Anne goes on to say is that, "Sarah Palin passed the, "what is she doing here test?" And I think that is ultimately how people felt here after all. They got through it. That was the first thing.

A lot of people in the U.K. and across the world were almost looking forward to the fact that these two guys were going to be caught short, as it were. And nobody really has come out of this. Neither of them have come out of it particularly badly as far as the rest of the world. Certainly those in the U.K. are concerned. I've been looking through the editorials of the European papers today, and it was really rather that. It was, they got through it, she passed the first test, no real gaffes there at the end of the day. We learned more about the vice presidential candidate than we've known before.

We only heard about Sarah Palin being that hockey mom before. We knew absolutely nothing really that's going to be said about Joe Biden. He came across particularly well as well. He's given his longest established tendency towards "The Times" today. He said "prolixity and logorrhea." Whatever that means, he came across fairly well as well. So I think there's a good sense that we've learned more about the vice presidential candidates today, more than we knew yesterday and we're looking forward to the next 32 days.

Guys?

CHETRY: Well, we certainly are too. All right. London reaction from Becky Anderson this morning to last night's V.P. debate. Thanks.

Well, Tuesday night is the next presidential debate, by the way. So, join the Best Political Team on Television for your front row seat. John McCain versus Barack Obama. It's all live at 9:00 p.m. Eastern right here on CNN.

CHETRY: Logorrhea.

ROBERTS: Logorrhea, it's a euphemism for verbal vomit. There you go. He's run for president four times and you may not know it, but that's including this year, so what does Ralph Nader think about the competition? He's going to tell us live just ahead. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: That was quite a debate that we had tonight, and I was so proud! They had told me that Senator Biden was a very skilled debater and now I know what they meant. He was tough, but --

(END VIDEO CLIP)

CHETRY: Well, Sarah Palin and Joe Biden, they're only debate now behind them. No major gaffes last night. In fact, most pundits say they both did a fairly good job. Jason Carroll joins us now with more.

You were watching as well?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: I was watching into the wee hours of the morning. You know, what everyone's saying going into this debate? There were concerns on both sides. Would Biden offend or talk too much? Would Palin, given the uneven interviews she has done in the past week, get caught off-guard? In the end, and let's say, both did exactly what they needed to.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Senator Biden had a very good night.

UNIDENTIFIED MALE: Sarah Palin did herself a lot of good. And I thought they both did a really terrific job.

CARROLL (voice-over): First up, the economy.

BIDEN: John McCain said at 9:00 in the morning that the fundamentals of the economy were strong. 11:00 that same day, two Mondays ago, John McCain said that we have an economic crisis.

PALIN: John McCain, in referring to the fundamental of our economy being strong, he was talking to and he was talking about the American workforce.

CARROLL: Governor Sarah Palin was short on some specifics, but analysts say she appealed to average Americans.

LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Sarah Palin came off as an everyday person.

CARROLL: Larry Persily has seen that person before. He moderated one of Palin's gubernatorial debates.

LARRY PERSILY, JOURNALIST & FMR. PALIN STAFFER: She went back to that folksy, warm, you betcha, say it ain't so, Joe, hockey mom, Joe six packs, Sarah Palin. Not great on the details of the answers, but good at being the smiling, folksy Sarah Palin.

CARROLL: Observers say Senator Joe Biden succeeded in keeping the focus on Senator John McCain, like when it came to Iraq.

BIDEN: You've got to have a time line to draw down the troops and shift responsibility to the Iraqis. We will end this war. For John McCain, there is no end in sight.

CARROLL: Both candidates tried to appeal to middle-class voters by drawing on personal experiences.

PALIN: And we know what other Americans are going through as they sit around the kitchen table and try to figure out how are they going to pay out of pocket for health care.

BIDEN: The notion that somehow, because I'm a man, I don't know what it's like to raise two kids alone. I don't know what it's like to have a child you're not sure it's going to make it. I understand. I understand as well as, with all due respect to the Governor or anybody else, what it's like for those people sitting around that kitchen table.

HILARY ROSEN, EDITOR-AT-LARGE, HUFFINGTONPOST.COM: Joe Biden was not going to let Sarah Palin out-Main Street him.

CARROLL: In the end, most insiders agree the much-hyped face-off probably wasn't a game changer.

PERSILY: It's like going to NASCAR race and not seeing crashes or going to a hockey game and not seeing any fights. So, I think people may have come away a little disappointed that nothing bad happened.

(END VIDEOTAPE)

CARROLL: And most analysts say Palin kept the Republican base, but it remains to be seen whether she or Biden did anything to attract those very important undecided voters. That job, like it traditionally is, is now left to the presidential candidates.

CHETRY: It's funny. He put it very well. People hoping to see a crash didn't see one.

CARROLL: Yes, it's an interesting way to put it, but yes.

CHETRY: Thanks, Jason.

CARROLL: All right.

ROBERTS: Bailout bargains. The upside of the credit crunch. Retailers offering big discounts to get you in the door. Gerry Willis shows you how to get a deal if you've got the cash. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: 20 minutes after the hour and welcome back to the "Most News in the Morning." It is issue number one on every American's mind. What is going to happen to their money now that the crisis seems to be in every community? Our personal finance editor Gerri Willis joins us now.

What's the impact of this credit crunch in the local level?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, it's a good news/bad news scenario, John. First off, the good news. If you're out there shopping, if you have money to shop, retailers are trying to prime the pump for Christmas. Restoration hardware is sending out e- mails to customers saying they'll give them $100 off any purchase of $400. And they even cite the bailout bill in the ad. Wal-Mart, of course, price cuts on toys. But there is a dark side to this. Scammers are getting involved, too, John.

In East Texas, people there have been getting e-mails from scammers. The Better Business Bureau reports that these scammers are offering to keep your money safe by moving it overseas. They cite the bailout bill and the money being spent on that. It's just really sad, John, that scammers are taking advantage really of the fear out there that people have, telling them that they can keep their money safe. And get this, they claim to be from Citigroup, which is not true. Citigroup has denied this, it's not them. And clearly, what they want is your money and your identity.

ROBERTS: Yes. You know, I remember that there was a scam not too long ago, send checks to Romania or something like that. You know, people have to be aware that there are these people who can make a very legitimate-looking e-mail, but if it's something that's crazy sounding, send your money overseas, you really got to watch out.

WILLIS: You got to watch out. And watch for misspellings, that's a red flag when you're looking at these things. When they're asking you for a lot of personal data, don't buy it, because at the end of the day, that means you're trying to get your identity, get information on you. Only give personal data that people that you contact, either by e-mail or by phone.

ROBERTS: All right. Gerri Willis for us. Gerri, thanks very much.

WILLIS: My pleasure.

ROBERTS: 21 minutes after the hour now.

CHETRY: Well, as a consumer activist, he's taken on big business and again this year as a presidential candidate, he's taken on some long odds. Ahead, we'll get Ralph Nader's thoughts on last night's vice presidential debate and what he thinks is missing from the conversation in Washington.

Face to face --

(BEGIN VIDEO CLIP)

PALIN: Your plan is a white flag of surrender.

(END VIDEO CLIP)

CHETRY: Rating Sarah Palin and Joe Biden's prime-time performance. Who came out on top? Our panel dissects the debate.

(BEGIN VIDEO CLIP)

BIDEN: How different is John McCain's policy going to be than George Bush's?

(END VIDEO CLIP)

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PALIN: It's so obvious that I'm a Washington outsider and someone just not used to the way you guys operate, because here, you voted for the war, and now you oppose the war.

BIDEN: Let's talk about the maverick John McCain. Again, I love him. He's been a maverick on some issues, but he has been no maverick on the things that matter to people's lives. He voted four to five times for George Bush's budget which put us a half a trillion dollars in debt this year and over $3 trillion in debt since he's got there.

(END VIDEO CLIP)

CHETRY: It's Joe Biden and Sarah Palin trying to show their independence from Washington politics last night. And one man who knows a lot about being a Washington outsider is independent presidential candidate Ralph Nader. He joins us this morning from our Washington Bureau. Thanks for being with us this morning.

RALPH NADER, INDEPENDENT PRESIDENTIAL CANDIDATE: Thank you, Kiran.

CHETRY: Did you buy Sarah Palin's claim that the McCain-Palin ticket is actually the ticket of change?

NADER: That debate is just a side show, Kiran. It's the clone of the major debates by McCain and Obama. The main event is right here in Washington, where Wall Street is trying to shake down Washington, D.C., namely, the U.S. taxpayer on this $700 billion bailout.

CHETRY: Yes. You are saying that you think that it's the wrong mistake, even with the new provisions that are in this?

NADER: There are a lot of freebies and goodies for all these commercial interests. It's gone from a four-page bill to over 400 pages. You know what that means. But look at the questions that aren't being answered for the American taxpayer? For example, who's going to pay for this $700 billion? I suggest a one-tenth of one percent on this securities derivative speculation that are going on. That's $500 billion they could raise. I suggest that the American taxpayer want to know, is this going to affect interest rates?

There's nothing in this bill to avert home foreclosures and defaults. There's no regulation in this bill. No law and order. No sheriff on the corporate speculation beat. No corporate crime and force provisions against the crooks in Wall Street who are jumping into golden life boats with huge pay packages.

This is a stampede bill, Kiran, and a stampede bill is going to have a lot of bad, unintended consequences. And those members of Congress, when they go back home after they crack the champagne here, they're going to face a torrent of outrage by taxpayers as the taxpayers realize more and more what's in the bill.

CHETRY: I do want to ask you about that because we seem to have seen a shift. When this was first discussed, the $700 billion bailout plan, people were saying a 101, they were getting calls against it. The constituents were calling their members of Congress. That seems to have since changed, where there's more people saying, I know we need something. We need to make sure that we do something. And I think there's a little bit of confusion as to what the answer is.

NADER: You're right. In fact, the politicians here are actually contributing to the panic, by saying chicken little, chicken little, pass this bill, pass this bill without adequate congressional hearings, I've never seen in 40 years, a bill of this magnitude without detailed congressional hearings where the best minds around the country. There's disagreement in Wall Street about, that this is the wrong package. What happens if it's the wrong package, which I think it is. Because at first bails out the speculators and the reckless institutions in Wall Street, instead of first providing a safety net for the prudent institutions and small savers throughout America.

If it's a train wreck of 400 pages, what's the next act? You have to have congressional hearings. Slow down Congress. If the House is stampeded today and votes for this bill, you're going to see all kinds of consequences, including not facing up to what should have been faced up to -- comprehensive regulation, power to the investors and shareholders to put a stop to what these bosses are doing in the companies that shareholder's own, criminal prosecution of the crooks to deter future speculation. And a speculation tax and higher margin requirements will reduce this speculation and pay for the bailout.

Just remember, this is the subject for the future. A one-tenth of one percent tax on security derivative speculation. Unlike a 7 percent sales tax on the necessities, just one-tenth of one percent of the $500 trillion in transactions, Kiran, will raise $500 billion. And it helps answer the question that everybody wants around the country is asking. Who's going to pay for this and who's going to get the benefits? The good news or the crooks and speculators? Votenader.org has a ten-point plan for the Nader-Gonzalez campaign throughout the country in order to bring some reason, and some calm, and some detail, and some deliberation in the next few weeks. But Congress is in a stampede mode. And it's heading for a cliff.

CHETRY: People can certainly check it out on your Web site. We thank you for joining us as always. Ralph Nader, thanks for being with us.

NADER: Thank you, Kiran.

ROBERTS: Coming up on the half hour. A quick check of this morning's top stories. Wachovia, the latest troubled bank to be sold, again. Wells Fargo is buying Wachovia for $15.1 billion in stock. The deal if approve will give the company retail banks on the East Coast.

Arnold Schwarzenegger says his state needs cash. The governor says California may need a $7 billion loan from the federal government just so it can pay its teachers and police officers and fund other services.

And harsh words from the Vatican. Former St. Louis archbishop Raymond Burke who now heads the Vatican's highest court says the Democratic Party risks becoming, quote, "the party of death." Burke specifically singled out Joe Biden and Nancy Pelosi for their stances on abortion.

Well, if you're just waking up this morning and didn't see the vice presidential debate, here are some of the best moments from both candidates.

(BEGIN VIDEO CLIP)

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: This is a fundamental difference between us. We will end this war, for John McCain, there is no end in sight to end this war. Fundamental difference. We will end this war.

GWEN IFILL, MODERATOR: Governor?

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Your plan is a white flag of surrender in Iraq and that is not what our troops need to hear today, that's for sure. And it's not what our nation needs to be able to count on.

BIDEN: The middle class under John McCain's tax proposals, 100 million families, middle class families, households, to be precise, they got not a single change - they got not a single break in taxes. No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised, whether it's their capital gains tax, their income tax, investment tax, any tax.

PALIN: I do take issue with some of the principle there with that redistribution of wealth principle that seems to be espoused by you. But when you talk about Barack's plan to tax increase affecting only those making $250,000 a year or more, you're forgetting the millions of small businesses that are going to fit into that category.

IFILL: What is true and what is false about what we have heard, read, discussed, debated about the causes of climate change?

PALIN: I'm not one to attribute every activity of man to the changes in the climate. There is something to be said also for man's activities, but also for the cyclical temperature changes on our planet.

BIDEN: I think it is man made. I think it's clearly man made. And look, this probably explains the biggest fundamental difference between John McCain and Barack Obama and Sarah Palin and Joe Biden -- Governor Palin and Joe Biden. If you don't understand what the cause is, it's virtually impossible to come up with a solution. We know what the cause is, the cause is man made.

(END VIDEO CLIP)

ROBERTS: Moments from last night's debate. Now, for what this all means going forward, let's talk about it. Joining us now from Washington, Patricia Murphy. She's the editor of citizenjanepolitics.com. And in New York, John Avalon, registered independent and contributor to politico.

So our last CNN poll of polls shows that there's eight percent of voters who are undecided, Barack Obama leading John McCain 48 percent to 43 percent. Patricia, how does last night change the race? Does it change the race at all?

PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: I don't know that last night changes the race in terms of moving anything forward for undecided voters. I do think that it would have had the potential of taking people off of the John McCain ticket if Sarah Palin has had some sort of just disastrous gaffe.

That would have been a game changer and I think a game ender in a lot of ways. She was kind of sinking into quicksand and managed to get herself back up on to solid ground. And now it's up to John McCain going forward to really start hitting notes on the economy that are resonating with people. He's not doing that right now. It's not Sarah Palin's fault but she's giving him a little bit of new life going forward.

ROBERTS: Do you agree with that, John, not much of a game changer, but could have gone the other way easily?

JOHN AVALON, POLITICO CONTRIBUTOR: I do. Sarah Palin benefited from low expectations. You know there's a fine line between folksy and hokey and I think she walked it well and really connected with a lot of folks at home. I don't know that she entirely cleared the commander in chief test, but she reassured those people who had had real doubts about her serving as VP net no difference.

ROBERTS: She was portraying herself last night as Joe Six Pack or at the very least the candidate of Joe Six Pack. And Patricia, over the course of your appearances this morning, we learned that you're a Joe or Josephine Six Pack. Her net worth is said to be somewhere around $1.2 million. Is that a Joe Six Pack?

MURPHY: Well, it's not the Joe Six Packs that I know. I will also say, there was a huge front page article in "The New York Times" yesterday that showed that Joe Biden's home is actually worth $3 million, which isn't kind of the Main Street regular guy Joe that we've been hearing about either.

But what was startling to me in this debate and the last debate is that neither of these candidates nor Obama nor John McCain is really getting serious about the financial crisis. They're not giving us many details about what they would change, what they would cut. This is a fundamental crisis with the American economy and neither campaign I think is really recognizing reality there.

ROBERTS: John, as you know, the Biden-Obama campaign - or the Obama- Biden campaign has been trying to float this idea of change versus more of the same with John McCain. Last night during the debate, Sarah Palin tried to turn the tables on them saying that they're living too much in the past, pointing too many fingers. Let's listen to how she put that.

(BEGIN VIDEO CLIP)

PALIN: Constantly looking backwards and pointing fingers and doing the blame game, there have been huge blunders in the war, there have been huge blunders throughout this administration, as there are with every administration. But for a ticket that wants to talk about change and looking into the future, there's just too much finger- pointing.

(END VIDEO CLIP)

ROBERTS: Now, John, voters don't like negativity, but can a Republican make the case to say, that was then, forget about it, move on, this is now?

AVALON: Don't look behind this curtain. I mean you know I think that's the problem with this. They're clearly trying to distance themselves from the Bush administration, because they have to, to gain credibility as a candidate of bipartisanship, of reform, they have to convince independent voters in particular that they don't represent more of the same when it comes to policies of the Bush administration.

So this is a new rhetorical technique to do that. Trying to make the case that Obama and Biden are stuck in the past. I'm not sure it will work because the baggage of the Bush administration is so big and there is a legitimate continuity in principles.

ROBERTS: All right. Looking forward to the next presidential debate coming up on October the 7th. Patricia Murphy, John Avalon, as always, thanks so much.

AVALON: Thank you.

MURPHY: Thank you. CHETRY: News just in. New jobless numbers for the month of September. Christine Romans joins us now with more on this. We thought it might be more jobless claims. What do we know now?

ROMANS: We know that the unemployment rate, Kiran, is 6.1 percent in September. That's the same as it was in August. But 159,000 more jobs were lost in this economy. In August, we saw revisions, so there were fewer jobs lost in August, but 159,000 more lost in September. We're up above 700,000 jobs lost over the past few months. This is the ninth month in a row for job losses.

Where were they lost? Manufacturing, no surprise there. We've seen that for months now. Construction and those sorts of jobs, lost again in the month. Department stores, auto parts, car dealers, anything that's really close to car buyers and people going out and shopping. You saw losses there. Where were there gains? Education, health services, schools, teachers, hospitals. Those are the kind of places that are hiring and the government added 9,000 jobs.

The economists will tell you again and again, when the government is adding jobs consistently, that is not the sign of a healthy economy. So again 6.1 percent is unemployment rate. We're going through sort of regionally and taking a look, but traditionally you've been seeing Texas as one of the strongest states for jobs and you've been seeing sort of the Rocky Mountain, parts of the Midwest have been good for jobs. And then you're seeing California, Rhode Island, Mississippi, Michigan those are the places that are having the highest unemployment rates. Kiran.

CHETRY: The AP's economic writer says it's a worrisome sign that the economy is hurdling towards a deep recession. Do you share that view?

ROMANS: Absolutely. That's what I've been hearing from all kinds of different economists who say they're expecting hundreds of thousands of jobs more to be lost, Kiran. They're saying when you look back at other recessions, we're not even close to where you've seen jobs lost at the beginning of the 2000 recession, back in '91, and the recession of the '80s. If we are headed for a recession, we can expect far more jobs lost.

Some people are trying to figure out if this bailout bill is going to just help us so that we have a plain vanilla recession. If we have just a plain vanilla recession, we're still looking for far more jobs lost than this. Kiran.

CHETRY: All right. Christine Romans for us, thank you.

ROMANS: You're welcome.

CHETRY: Checking the facts, still ahead. During the debate, Joe Biden claims that a top commander says an Iraq-like surge will not work in Afghanistan. Was Biden right? The truth squad is on the case. Also, after the showdown in Missouri, how did the candidates connect with viewers in that state? We're spinning the radio dial to find out. You're watching the most news in the morning.

(COMMERCIAL BREAK)

ROBERTS: 41 minutes after the hour. And time once again to check in with the truth squad. How was that?

ALINA CHO, CNN CORRESPONDENT: That was great.

ROBERTS: Alina Cho has been fact checking some of the things from last night's debate and she joins us this morning.

CHO: Nobody says it like you. Good morning, John. Good morning everybody. You know everybody has been talking about the economy these days, but many of the pundits believe that the most compelling exchanges last night came when Biden and Palin went back and forth on the wars in Iraq and Afghanistan. There were a couple of comments that made us sit up and listen. One in particular, something Joe Biden said about winning the war in Afghanistan, Here he is responding to a suggestion by Governor Palin that the troop surge in Iraq could be tried in Afghanistan too. Take a listen.

(BEGIN VIDEO CLIP)

BIDEN: The fact is that our commanding general in Afghanistan said today that a surge, the surge principles used in Iraq will not - let me say this again now. Our commanding general in Afghanistan said the surge principles in Iraq will not work in Afghanistan.

(END VIDEO CLIP)

CHO: Certainly, one of the more memorable exchange last night. The commanding general said the surge won't work in Afghanistan. Is that true when Biden says that? Well, the top commander that Biden was talking about is General David McKiernan. He did say this week there was an urgent need for more troops. But as "The Washington Post" reported, McKiernan qualified that by saying an Iraq-style surge would not end the conflict.

He said, "Afghanistan is not Iraq, and the word I don't use for Afghanistan is surge. General McKiernan said what really needs to happen, a sustained commitment that would hopefully lead to a political solution. So again the question when Biden cited a top general as saying the surge would not work in Afghanistan, was he write?

The verdict, the truth squad says, true. Biden was correct in saying the top commander in Afghanistan said a surge will not do there what it did in Iraq. But to be fair, that same general also said, John, that he believes more troops are needed on the ground. So many exchanges last night that were so compelling, so interesting. We wish we could truth squad all of them, but you know it's just a three-hour show.

ROBERTS: We got a lot of material this morning. I tell you what, when we see the word "truth squad," we got to have some sort of regal fanfare.

CHO: I think so. Maybe we'll some music where we're coming from. Will be back to you on Monday.

ROBERTS: Kiran.

CHETRY: Thanks guys. Well, Senator Joe Biden is back home in Delaware today. His son, Bo, who is also Delaware's attorney general, is being deployed to Iraq. He's going with the National Guard. The ceremony will take place before his unit moves to Texas for a few weeks of training.

Missouri, a bellwether state, having chosen every president since 1956. So how did voters there react to the debate in their own state? We're tuning in to hear what listeners are saying. You're watching the most news in the morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BIDEN: The notion that somehow because I'm a man I don't know what it's like to raise two kids alone, I don't know what it's like to have a child you're not sure is going to - is going to make it. I understand.

(END VIDEO CLIP)

CHETRY:: That was an emotional moment for Senator Joe Biden during last night's debate. So how did people who were in the audience think the vice presidential candidates did? Well, McGraw Milhaven is a radio host at 550 KTRS. It's in St. Louis, Missouri, and he was there for all of it. That was the moment that you said really, really resonated. What was the reaction like when he was explaining that? Because for people that don't know, he lost his first wife and infant daughter in a car crash and raised his two sons who were badly injured alone.

MCGRAW MILHAVEN, HOST "THE MCGRAW SHOW": Yes. You know, it was interesting, because we were told in the audience, we were not allowed to make any comments, but you could hear some gasps and some moans and some ohs throughout the audience when he said that. It was a very - I think it was one of his most personal moments of the night.

CHETRY: He was, some of the pundits say, he was trying not to sort of let Sarah Palin take away from him the every man, you know, the working class vote or aspect by making sure that he reminded people, hey, I'm an average Joe.

MILHAVEN: No question about it. Because I think about an hour into it, she really hit her stride and those folksy sayings and say it ain't so, Joe, I'm not just from Washington. Those are really hitting home so well in the audience that you can really hear, even though you know, it was speechless, you could really hear her supporters in the room really smiling. He had the awkward smile like, oh, you got me on that one, let me try to be folksy as well. But yes he tried. He did OK that way, but she clearly was the folksy winner of the night. CHETRY: Well, some say that where she was weak was the foreign policy. She did talk about the Iraq war. Let's listen to a bit of what she said.

(BEGIN VIDEO CLIP)

PALIN: Your plan is a white flag of surrender in Iraq. And that is not what our troops need to hear today, that's for sure. And it's not what our nation needs to be able to count on. You guys oppose the surge, the surge works, Barack Obama still can't admit the surge works.

(END VIDEO CLIP)

CHETRY: How did that go over?

MILHAVEN: You know what, it went over OK. I think people weren't expecting her to go toe to toe in policy debates with him. That's not her strong suit. I think she strung together complete sentences, understandable sentences, sentences people could understand what she was saying.

So in that sense, she hit a home run. And more importantly, she's now defendable. You can now defend Sarah Palin. Before this debate, you could not defend her. Even her supporters couldn't defend her. But she gave them now ammunition to go out and to defend her on the campaign trail.

CHETRY: And what were your listeners telling you, I'm just curious about how important the VP pick is going to be and how some of her past performances, shaky many say in some of these interviews, really matter to them?

MILHAVEN: I will tell you how important it is, as well as the economy. Two weeks ago in the state of Missouri, which you mentioned earlier, has gone with the winners every time except once since the beginning of the 19th century.

McCain had a ten-point lead in this state. Now it is dead even. So she really needed to stop the bleeding here in Missouri and I truly think she did. I think she recaptured that energy she got from the convention. I think now people will sort of forget that whole Katie Couric incident.

CHETRY: McGraw, I'm just wondering, do you think that the reason that we're dead even now is because of Sarah Palin or is it simply the economy and the financial crisis that they're dealing with on Capitol Hill?

MILHAVEN: I think it's both. I think John McCain, it didn't play well for John McCain and I think she was such a drag on the ticket, I think people understand he's 72 years old. I think they understand that the vice president is much more important today than it was, say, 20, 30 years ago. I think people are looking at that and she was incoherent. So she was so bad, I think she was really dragging the ticket. Now I think that has at least stabilized and probably has reversed. And I'm making a prediction, in the next couple of days, he is going to get a bounce here in the state of Missouri because of what happened in that room.

CHETRY: Very interesting. All right. We'll be watching. McGraw Milhaven, radio talk show host in St. Louis. Thanks for being with us.

MILHAVEN: Kiran, my pleasure. Thank you very much.

ROBERTS: And here's another exchange that caught a lot of attention at last night's debate. Check this one out.

(BEGIN VIDEO CLIP)

BIDEN: Do I support granting same-sex benefits? Absolutely, positively, look. In an Obama-Biden administration, there will be no difference between a constitutional standpoint or a legal standpoint between a same-sex and heterosexual couple. The fact of the matter is that under the constitution, we should be granted - same-sex couples should be able to have visitation rights in the hospital, joint ownership of property, life insurance policies, et cetera. That's only fair. It's what the constitution calls for.

GWEN IFILL, MODERATOR: Governor, would you support expanding that beyond Alaska to the rest of the nation?

PALIN: Not if it goes closer and closer towards redefining the traditional definition of marriage between one man and one woman. Unfortunately, that's sometimes where those steps lead.

No one would ever propose, not in a McCain-Palin administration, to do anything to prohibit, say, visitations in the hospital, or contracts being signed, negotiated between parties. But I will tell Americans straight up that I don't support defining marriage as anything but between one man and one woman.

(END VIDEO CLIP)

ROBERTS: Well, CNN NEWSROOM is just minutes away now. Heidi Collins at the CNN center with a look at what's ahead. Good morning, Heidi.

HEIDI COLLINS, CNN ANCHOR: Hey there, John. Here's a check of what we're working on coming up very shortly here in the news room. All eyes on the house today. Lawmakers take up the revised bailout bill, but will the add-ons add up to a green light?

And breaking down the debate. Did the vice presidential showdown change minds? That's the question this morning. We hear from our experts and from you.

Plus this - carrier comes home. A spruced up intrepid returns to its New York pier. We're going to talk with the curator of the museum ship when we get started at the top of the hour right here on CNN. John. ROBERTS: Looking forward to it, Heidi. We'll see you soon, just seven minutes from now.

(BEGIN VIDEOTAPE)

ROBERTS: Picking on Palin.

PALIN: Betcha. Darn right.

ROBERTS: What happened to all the gaffes? Jeanne Moos looks hard to find some unusual moments in the big debate.

PALIN: Doggone it.

ROBERTS: You're watching the most news in the morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

ROBERTS: Well, there was no train wreck in sight, no knockout blows, no big blunders. Who knew the Palin-Biden debate would turn out to be a gaffe-free affair. Certainly not our Jeanne Moos who was sweating the small stuff as a result.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: What happens when shoot from the lip meets a gaffe a minute? It's only human nature we would want to watch as two trains collide.

UNIDENTIFIED MALE: This debate is going to be a train wreck of astonishing magnitude.

MOOS: But what kind of train wreck starts out so friendly?

PALIN: Can I call you Joe?

MOOS: And stays so polite.

PALIN: With all due respect. I do respect.

BIDEN: And I give her credit for.

MOOS: Even when attacked, Joe Biden was all smiles.

PALIN: That's not patriotic.

MOOS: And all those gaffes that we were expecting, our gaffometer barely moved. OK, Sarah Palin accidentally called Joe Biden O'Biden at one point.

PALIN: Barack Obama and Senator O'Biden Senator -

MOOS: And she referred to a well known general, General David McKiernan as -

PALIN: McClellan.

MOOS: She insisted on pronouncing nuclear -

PALIN: Our nuclear weapon read -

MOOS: With that kind of small stuff, how we register with the gaffometer. What did register with viewers were her folksy expressions.

PALIN: I'll betcha. Darn right it was the predator lenders. Say it ain't so, Joe. Doggone it.

MOOS: Phrases like that drove a group of democrats watching in Pittsburgh nuts. They scoffed when Governor Palin made a soccer mom reference. And while the democrats hooted, Republican viewers in Virginia rooted. Booing when Joe Biden said global warming was caused by man.

BIDEN: Totally man made.

MOOS: And when Sarah Palin gave a shoutout -

PALIN: Here's a shout-out to all those third graders in Gladys Wood Elementary School, you get extra credit for watching this debate.

MOOS: The democrats shouted back. But a debate that some tuned in to, expecting to see a car wreck -

UNIDENTIFIED MALE: Oh, he just clipped somebody. He's going into a pole.

MOOS: And did without anybody losing control.

BIDEN: It really was a pleasure getting to meet you.

UNIDENTIFIED MALE: Governor Palin did not crash, did not burn.

UNIDENTIFIED FEMALE: There were no major gaffes.

MOOS: Instead of gaffes -

PALIN: My dad who's in the audience.

MOOS: We in the media had to settle for unsettling winks.

PALIN: How long have I been at this, like five weeks?

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

ROBERTS: John McCain and Barack Obama are up next. Joins us for your front row seat to the presidential debate, Tuesday night, 9:00 p.m. Eastern, right here on CNN. CHETRY: And we want to thank you so much for watching us this week. Hope to see you back here. Have a great weekend. See you Monday.

ROBERTS: Just a programming note, this is not a CNN programming note, but our Ali Velshi is on "Oprah" today, so we'll let you switch away for a couple of minutes.

CHETRY: That's right. We're going to have all the highlights for you on Monday as well.

ROBERTS: Just don't stay here. Be back right here on CNN. Right now, here's CNN NEWSROOM with Heidi Collins. We'll see you Monday.