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CNN NEWSROOM

Claims of Voter Registration Fraud Against ACORN; Gearing up For Final Presidential Debate; Reviewing Rescue Efforts to Strengthen U.S. Economy

Aired October 15, 2008 - 09:00   ET

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


HEIDI COLLINS, CNN ANCHOR: Their debate number three, your issue #1, the economy. The main talking point tonight. What points the candidates could make.
And snapshot of a rescue. How is the government's plan looking today? The latest on credit, stocks, and your wallet.

It's Wednesday, October 15th. I'm Heidi Collins. You are in the CNN NEWSROOM.

Live this hour at the White House. President Bush meets with his Cabinet on the nation's financial crisis. Today's focus, the government's plan to buy an ownership stake in troubled banks. President Bush is briefing Cabinet secretaries on the full details of the bailout.

Of course, we're going to bring you the very latest live directly from the White House.

And the economy expected to be front and center tonight at Hofstra University. It's the third and final debate between senators Barack Obama and John McCain.

So what can we expect to hear? Well, CNN correspondent Ed Henry is at the debate site this morning.

So that's the big question. What do we think we're going to hear, particularly, Ed, on the lines of attacks?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, good morning, Heidi.

I mean, obviously, Barack Obama, as the front-runner, it's not in his interests to throw any punches. He's going to try to get through unscathed. For John McCain, the stakes much higher. He's behind especially in the key battleground states that we have identified.

Only seven of them now from Ohio to Florida to Colorado out west. Those key states John McCain has been slipping behind or is in the toss-up with Obama. So, it's much more likely John McCain might start throwing some punches.

In fact, yesterday he indicated that he will bring up the name of William Ayres, the -- former 1960s radical that's been tied to Barack Obama. McCain shied away from an attack like that in the second debate. Might have backfired in a town hall format. But for this one, he's expected to bring it.

And then the big question will be, how will voters -- undecided voters react to that? How will Barack Obama react to it? And will he punch back, Heidi?

COLLINS: Talk a little bit, if you would, Ed, because obviously people are going to be watching for that. But some of the things that we don't see when the candidates are getting ready for debates like this -- I think I heard you talking a little bit earlier about some quirky little demands maybe here and there and maybe "demand" is too strong of a word.

HENRY: Well, I think you might be right. You've heard about the rock stars only want green M&Ms in the green room and...

COLLINS: Oh yes.

HENRY: You know take the red ones out. It's not quite like that per se, but we're told by organizers that, basically, both campaigns urged that there be a special vent for air-conditioning over where each of them will be sitting. They'll be sitting around a table.

Neither one wants to wind up like Richard Nixon in the 1960, little 5 o'clock shadow, maybe some sweat on the brow.

COLLINS: He hides, yes.

HENRY: A second one that's quite interesting. I actually have a prop for this. Second one is that both candidates demanded that they get a replica of the drinking glass beforehand. They'll probably get something that says Hofstra University, a souvenir.

It's probably unlikely that you'll be something you'd drink beer out of -- maybe that's more for campus. Maybe more a drinking glass like this.

Bottom line is that they wanted to get the thickness, the feel for it. Neither one wants to be on stage and have, you know, sort of a slippery glass falling out of their hands on international television.

COLLINS: Yes, that would be bad, too.

HENRY: The point is that both -- they don't want to leave anything to chance. This is pretty high stakes, Heidi.

COLLINS: Yes, no question about it. The question is also which one are you be going to taking home, Ed?

Thank you, Ed Henry.

HENRY: The water.

COLLINS: Obviously. No doubt about it.

Hey, Ed, your colleague Jessica Yellin is also standing by to talk a little bit more about tonight and the format.

Jessica, a lot of people, obviously, from the first two debates, kind of wondered why we couldn't just hear the candidates talk to each other. There was some more positive responses from sort of the town hall meeting style, if you like, because people sort of felt that was less formal.

But tonight there are certainly rules in place like every debate.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: That's right, Heidi. Tonight they'll get a chance to really go back and forth with one another. They're going to be seated, all three of them at the table, both candidates and Bob Schieffer, the moderator.

He'll put a question to the candidates. They'll each have time to give a two-minute answer and then there's another five minutes for them to discuss in sort of a group format with Bob Schieffer, sort of moderating they say, but really, they can go at each other directly.

Now the one thing that's a little different about this is because they're seated, we've seen this during the debates and the primary, you'll recall folks tend to be a little bit more restrained. It doesn't get as aggressive in the seated format.

COLLINS: Yes.

YELLIN: And as Ed has just reported, we expect more attacks tonight than ever before. So it should -- it could be a little bit awkward seeing them if they get very vicious with each other just seated in such close contact. It'll be an interesting sight to see.

COLLINS: Yes, no question about that. Now, what about from the Obama camp? What are they saying that they're going to really be concentrating on tonight?

YELLIN: Well, aside from talking about the mugs that Ed went into so much detail about -- Hofstra University can be very pleased with that -- they really are talking about Barack Obama's focusing on his economic message, and then punching back if McCain hits him.

COLLINS: Yes, a lot of people...

YELLIN: For Obama, this is all about -- go ahead.

COLLINS: Sorry, a lot of people really haven't seemed to understood(ph) or heard too much from Obama about his specific plan.

YELLIN: Well, he unveiled it on Monday. And he had gotten some coverage of that, but he had a down day yesterday, and so he'll repeat it today. And -- but for them, they're really focused on just sort of maintaining that level that they established in the first two debates where Obama kept an even keel, didn't vary too much in terms of his tone.

You didn't hear a lot of highs and lows. They want to sell him as this steady leadership guy compared to the guy McCain who they are calling erratic. So that's a little bit of the other dynamics you'll see tonight.

COLLINS: All right, well, we know that you both will be there and covering it very closely for us. We sure do appreciate it, Ed Henry and Jessica Yellin.

Thanks, guys.

Your front-row seat to tonight's debate is right here on CNN. You can join the best political team on television live from Hofstra University in New York. Again, that will be at 9:00 p.m. Eastern.

We want to quickly show you some tape that we are just now getting in here to CNN with the president regarding the economy. Let's listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I said yesterday, it's very important for the American people to know that the program is designed to preserve free enterprise, not replace free enterprise.

Decisions we took to enhance liquidity and make sure our financial instruments are strong is a temporary decision, that, for example, when the equity -- purchases into banks is designed so that these shares will eventually be sold back to the government.

Now, secondly, the program is limited. In other words, the government will buy only a certain number of shares in individual banks. These banks will be privately controlled. The liquidity measures being taken are structured such that the government will be a passive investor. In other words, there won't be government officials sitting on the boards of private companies.

These are extraordinary measures, no question about it. And it's well thought out. They are necessary. And I'm confident, in the long run, this economy will come back.

Secretary, I want to thank you and your team for working hard during these extraordinary times. We analyzed the situation very carefully. And the American people must understand that this carefully structured plan is aimed at helping you. If I had thought this situation would have been contained only to Wall Street, we'd have had a different response.

In our judgment had we not acted decisively at the time we did, the credit crunch, the inability for banks in your communities to loan to your businesses, would have affected the working people and the small businesses of America.

That's unacceptable to me. And it's unacceptable to this Cabinet. And so I am looking forward to going to Michigan today to talk to small business owners and community bankers and workers that have been affected by the economy.

I'm looking forward to hearing what they have to say. And I'm looking forward to sharing my thoughts about why the government has taken these temporary measures, designed to make sure that their lives are -- you know, have the best shot at dealing with this financial crisis.

Thank you very much.

(END VIDEO CLIP)

COLLINS: So there you see President Bush sitting beside Condoleezza Rice and Treasury Secretary Hank Paulson as well. This was a meeting with his Cabinet, obviously, talking about the latest in the government's plan.

And you heard him say several different specifics regarding buying out ownership stake in some of the troubled banks. That has certainly been the plan and a little bit more detail offered saying that these are extraordinary measures and this plan will be limited and temporary.

We will be following it all day long here and trying to make it make sense to you and how it affects you at home.

Your money is issue #1. Gas prices, down for the 28th straight day. AAA reports the national average has dropped to just over to $3.12 a gallon. That is a drop of nearly a drop from the July record.

Meanwhile, the world weighs on the -- financial crisis. Now international markets are mostly down after a two-day rally. One key reason, rising doubts international efforts can head off a global recession.

So where is Wall Street headed this morning? Well, the futures are pointing down. The opening bell, as you know, coming up at the bottom of the hour. We, of course, will go there live.

First, a dismal new measure of the economy. In fact, the word one economist group used -- hideous.

Let's get the latest now from CNN's Christine Romans in New York.

So Christine, these are new retail numbers.

CHRISTINE ROMANS, CNN CORRESPONDENT: Right.

COLLINS: Ouch. I mean, what is it, the worst in two years?

ROMANS: In a couple of years. Down 1.2 percent for retail sales. You saw people shunning furniture, apparel, they're -- you know, they're filling up their gas tanks and they're looking at what's happening in the economy around them and the jobs market, and in the credit crisis and they're saying, I'm going to stay out of the mall, I'm going to stay out of the car dealerships.

So retail sales in September plunged 1.2 percent, the biggest drop in a couple of years. Now, keep in mind, this is September. Heidi, the stock market didn't fall out of bed until October. So it's a little bit of a gut check about what's happening in America.

Back in September, people were already starting to feel this uncertainty. I made a map for you, too, and this map sort of shows the conditions across the country. And you can see green is good, red is bad, and white is kind of neutral.

But this is taking jobs, foreclosures, GDP, personal income, putting it all together and trying to figure out, you know, where are things a little better than average, where are things average...

COLLINS: Sure.

ROMANS: ... and where are things worse than average. And this is the kind of map that, I think, is going to be important for this presidential debate tonight, because this map kind of looks an awful lot like some of the electoral maps we've been watching as well. But...

COLLINS: Right.

ROMANS: ... 70,000 or 60,000 jobs lost so far this year. Unemployment 6.1 percent, 2.5 million American homeowners are going to enter foreclosure this year, according to -- Realty Track. About half of them are going to lose their jobs -- or lose their houses, rather.

This is -- this is big stuff. And -- the Federal Reserve president of San Francisco, that's a regional Fed bank, yesterday in a speech, she said that U.S. economy appears to be in recession.

Now, the Fed doesn't declare when there's a recession, of course. But this is a Fed official, and they're very careful with their words, saying what many economists and to many American people as already obvious, and that is that there are recessionary conditions for many parts of this country.

She says, you know, it's not really controversial. We know we're there and that the credit crisis has really affected every part of the economy. We won't know officially, Heidi, if there's a recession until after it's all said and done. There's a group of economists that dispassionately survey all of this, the National Economic Bureau of Research, and when it's done, they will issue a report saying, dispassionately, there was a recession.

But I'm telling you it's hard to be dispassionate about some of the numbers that we're seeing right now.

COLLINS: Yes. And quickly, though, we should probably talk about the credit freeze, if you will. A little bit of that ice block being chipped away just a tiny bit.

ROMANS: That's right. Boy, it's taken a lot of measures, right? But you're seeing and what we -- what we watched, the LIBOR, it is a measure of borrowing costs that set in London, actually.

But LIBOR is showing some signs of thawing a little bit. We'll continue to watch it. We've seen a couple of days now where you've seen cracks in that. So that's causing some -- some cause for happiness or relief, at least, in the credit market.

COLLINS: All right, well, we are watching all of that very closely. Thank you, Christine.

ROMANS: You're welcome.

COLLINS: Registering voters without leaving your kitchen? One city official says canvassers are so desperate for money they are copying names from the phone book.

(COMMERCIAL BREAK)

COLLINS: Hofstra University in the spotlight. It is hosting tonight's final match-up between John McCain and Barack Obama.

So joining me, the young man who helped bring the debate to Hofstra, student body president, Peter DiSilvio, and university president, Stuart Rabinowitz.

Thanks to the both of you for being here. What a big day for your university.

Peter, in fact, you were the one who wrote the letter that invited the presidential commission to actually come to Hofstra and hold debates -- the debate there tonight? What's your feeling on the day it's actually going to happen?

PETER DISILVIO, HOFSTRA UNIVERSITY STUDENT BODY PRESIDENT: It's a total jubilation. We're so excited. It was actually me and a few other students, Lisa Gunta, Cathleen Hunter, a few people who help write the letter and to see it all actually come to fruition is an amazing feeling.

COLLINS: Very nice shout-out that you did there. They will appreciate that a lot.

DISILVIO: I try. I figured they would. I knew they were watching.

COLLINS: Yes. And President Rabinowitz, nice to see you as well. In your eight years, I believe it is, since you've been the school's president, nearly 40 years serving on the campus, has there ever been anything like this? I know you guys have had many notable speakers come to the university. But now you've got two presidential candidates.

STUART RABINOWITZ, PRESIDENT, HOFSTRA UNIVERSITY: There's never been anything close. We've hosted four former presidents through the Calico Center on the -- American presidency, but nothing, none of those events, compared with something of this importance and of this world and national interest.

This is something special.

COLLINS: Has this event -- since your student body has learned that it would be happening there at Hofstra, has it really changed anything? I'd like the answer from both of you.

President, you first.

RABINOWITZ: I think it has. You know, we view our mission as not only to educate our students, but to inspire them to be active participants in the democratic process that we're so fortunate to enjoy. And that really was the major incentive for us to apply for this.

And we set up a pre-debate program running over a nine-month period called "Educate '08" which brought every scholar, expert, and pundit on the campus to discuss the issues. And 6800 of our students signed up for the seats allocated to us.

So, by any measure, they seem to be inspired.

COLLINS: Well, yes. That's terrific. And you know, just the other day, yesterday I believe it was, we had, Peter -- a gentleman who has written and done a documentary on the younger generation, particularly for this election cycle and some of the things that he has noticed.

Are you really finding that your fellow students are energized by this particular election?

DISILVIO: Oh, most definitely. Most definitely. I was fortunate enough to be here during the last election as well. And there was definitely a level of excitement, but nothing like this. You have over 90 events...

COLLINS: Why do you think that is?

DISILVIO: I think part of it is just the times we're in with the economy and, you know, Afghanistan, Iraq, all of those things. But also especially because of the "Educate '08" program, so many people are just so interested and so much energy because we knew that these two very important people were coming to campus and, you know, so much -- to the world was going to be watching us and it sort of put a new weight on things.

COLLINS: So what's interesting to us also is that there's going to be, I believe, 200 students that are actually going to be inside the debate hall.

How were they selected, Peter?

DISILVIO: There was a lottery. A totally random lottery. I didn't even get a ticket. So it was totally random. A lot of people put out for it. A lot of people are very excited, even more people are very upset, but it's totally worth it.

We are actually having four locations on campus where there's going to be, like, different events going on to celebrate the debate, watch the debate. So you can't be on campus and not be experiencing it some sort of special way. COLLINS: And President Rabinowitz, I imagine that you're very proud of your student body. And I wonder what will happen the day after. Are there any events that are planned to sort of debrief, if you will, after the debate?

RABINOWITZ: I may sleep in until 9:00 that day. But it's...

COLLINS: Until 9:00, because that's when our show starts, right?

RABINOWITZ: I am incredibly proud of our students.

COLLINS: I'm sorry, go ahead.

RABINOWITZ: OK. I'm -- I'm incredibly proud of our students. You know they are among the most civically engaged students of any college in America. And to see them -- you know, to go through all of this effort over all these months and incur all these costs and then see your students react the way you want them to, you know, that makes it all worthwhile.

So I couldn't be more pleased.

COLLINS: Do you think you have any future presidents there at Hofstra?

RABINOWITZ: Well, we definitely do. I mean we have a current governor...

COLLINS: Peter is laughing.

RABINOWITZ: ... as an alumni, David Patterson, and the current state controller of New York, Tom Danopli, our alumnus. There's no reason we can't have a president as well.

COLLINS: All right, well, good for you. We will certainly all be watching tonight, this third and final debate coming directly from Hofstra -- Hofstra University.

President Stuart Rabinowitz and Peter DiSilvio, thanks so much, you guys.

DISILVIO: Our pleasure.

RABINOWITZ: Thank you very much.

COLLINS: Well, you are becoming part owner of some very large banks. What is the government's plan to free up the clogged credit market and what it means to you, the taxpayer?

(COMMERCIAL BREAK)

COLLINS: A potential hijacking spoiled. It happened this morning aboard a Turkish airlines flight on the way to St. Petersburg, Russia. The Turkish aviation authority says a drunk man tried to take over the flight. Other officials say the man handed a note to a flight attendant claiming he had a bomb. They say he was overpowered by other passengers. No explosives were found.

Hurricane season, not over yet. A late-season category 1 storm is making its way across the eastern Caribbean now. Hurricane Omar, with maximum sustained winds of 75 miles per hour is moving toward Puerto Rico.

And in the western U.S., hot, dry, Santa Ana winds are dying down and firefighters are now gaining some ground on thousands of acres of wildfires in Southern California.

We were showing you some of these pictures yesterday, too.

CNN iReporter Reg Whatley captured this video of smoke coming up from a 4,000-acre fire at Camp Pendleton Marine Base. That's near San Diego. And that blaze is now 60 percent contained and evacuation orders have actually been lifted.

So some good news there. Rob Marciano was telling us about it yesterday.

So overnight, Rob, it sounds like that is exactly what happened as winds started dying down.

ROB MARCIANO, CNN METEOROLOGIST: They are. But there's still low levels of humidity today. Winds less, that's the good news. This picture taken yesterday or may even -- this may have been actually Monday. But it gives you an idea of the amount of smoke and ash in the air. And talking to another people on the ground in L.A., it's just -- it's been pretty nasty and still quite a bit of that debris to have to breathe in, it's just not a good deal.

(WEATHER REPORT)

COLLINS: Yes, very good. And the Red Sox are on the phone, they're saying, hey, don't give up on us yet, Rob Marciano.

MARCIANO: Oh I gave up a long time ago. No, best of luck to them.

COLLINS: OK.

MARCIANO: And the Rays and the Dodgers and the Phillies.

COLLINS: All right. Good for you. Rob, we'll check back later on.

In just a few minutes, as you well know, about that time of day, opening bell, seconds away. We'll have it for you in just a moment.

(COMMERCIAL BREAK)

COLLINS: On Wall Street, investors have a slew of information out to sift through today. Everything from corporate earnings to economic reports and new worries about that dreaded "R" word. Susan Lisovicz is at the New York Stock Exchange with a look at what it all means for the market.

Hi there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi.

What it means is we think it will be a rough open, Heidi, but it's been so volatile. What happens at the open certainly doesn't guarantee what happens at the close. There's always a lot of actions in between.

What we can tell you is markets overseas are falling. Stocks here in the U.S. set to follow suit. Fed chief Ben Bernanke set to speak today in New York. But right now a lot of the focus is on comments made last night by regional Fed president Janet Yellen.

She said what a lot of economists have been saying for some time now, that the U.S. economy appears to be in a recession. She says virtually every major sector of the economy has been hit by the financial crisis, and today we get a look at how just -- how bad the damage is.

For instance, retail sales which plunged 1.2 percent last month, a third straight monthly decline, the longest streak of declines in 15 years.

COLLINS: Yes.

LISOVICZ: Retail sales, as we all know, Heidi, always closely watched, because consumer spending accounts for more than two-thirds of the economic activity.

COLLINS: Right.

LISOVICZ: A big reason for the drop. Weak auto sales. Meanwhile wholesale prices once you strip out food and energy, rose more than expected last month. But we are not seeing stocks rise in the first few seconds of trading. We're also watching corporate profits. JPMorgan chase, a financial company, reported a more than 80 percent drop in quarterly earnings. The company's CEO expects reduce earnings over the next few quarters. But the banking giant actually managed to post a profit.

And to the tech sector, Intel reported a modest increase in quarterly earnings mostly because the company lowered its manufacturing costs. The Dow Industrials right now in the first 45 seconds of trading is down triple digits off 112 points. Yesterday was the first time, Heidi, in nine sessions that the Dow did not finish the day with a triple-digit move, even though it achieved both during the trading session.

The Dow was up 400 points at its high, down 300 at its low. The Nasdaq Composite meanwhile is down about -- more than one percent as well. These are volatile times. A lot of information coming to -- coming in to Wall Street and the market moves real quickly in all directions.

COLLINS: Yes. And I was just going to say that, boy, when you get the retail sales numbers like this right before the holiday season, I mean, I know plenty of people who are already thinking about holiday shopping.

LISOVICZ: And how they're going -- and what they are going to spend and what they're not going to spend.

(CROSSTALK)

COLLINS: Yes, absolutely. All right --

(CROSSTALK)

LISOVICZ: Well, you can expect retailers to respond. We've already seen Wal-Mart for instance fire an opening salvo by cutting prices of ten really popular toys.

COLLINS: Yes, yes. All right, well, we'll continue to watch that. Thank you, Susan Lisovicz.

LISOVICZ: You're welcome.

COLLINS: The latest wrinkle now of the rescue plan. $250 billion of your money funneled into the nation's troubled banks. The goal? Get them writing loans again. But how exactly will all of that work? CNN's Allan Chernoff is here now to explain.

And it's a tough one to explain. That's for sure, Allan.

ALLAN CHERNOFF, CNN SENIOR BUSINESS CORRESPONDENT: Good morning, Heidi. These are exceptional moves rarely ever taken by the U.S. government. This is historic without a doubt. As you said, $250 billion of taxpayer money being pumped into banks around the nation. Nine of the biggest banks have agreed to take half of that money. The Treasury basically forced to the bottom, whether or not they wanted the money, but they wanted to be sure there was absolutely no stigma to taking the U.S. government money. This is all about building confidence. And as you say, getting banks to spread that money around.

So, what's happening here is that taxpayers will become stockholders in these banks. And that stock will be preferred stock. It's special shares of stock and we'll be getting a 5 percent dividend on this. The Treasury Secretary said the intent here is for bankers to take the money and lend it.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: At a time when events naturally make even the most daring investors risk averse, the needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it.

(END VIDEO CLIP) CHERNOFF: And hopefully they will very quickly. The money will be with those banks within days according to the Treasury -- Heidi.

COLLINS: Yes. I think a lot of people, even those who are in favor of this type of move, say that it's still going to take a while for people to -- to realize that there has been some type of change or some type of resolution to it all. Washington doing several other things regarding this crisis, too.

CHERNOFF: Yes. This is just part of the new playbook and the Treasury really had to rework their playbook. The FDIC is now playing a key role as well. They want to make sure that banks get plenty of money, not only from the government but that they can raise money from investors. So, the government, the FDIC, is going to be guaranteeing new bonds that are issued by banks. This guarantee will be good through next summer, for any bonds issued. They can be up to three- year bonds.

And also, the FDIC is going to be insuring business deposits at banks. The idea here is to prevent business deposits from leaving small banks to the relative safety, the perceived safety, of larger banks. So, they're trying to protect the smaller banks by saying, hey, all of these deposits are guaranteed. It's all about insuring security, confidence in the banking system -- Heidi.

COLLINS: Yes, and then what about the original plan of buying back those troubled assets from the banks?

CHERNOFF: Yes, what about it? It hasn't happened just yet. You know, it was touted before Congress, to rescue. And it didn't instill any confidence at all. The markets plunged. That plan is still under way, but it's going to take still several more weeks to get it going. It simply was not a quick enough fix. That's why we have these other plans in place now.

COLLINS: All right, very good. Our senior business correspondent, Allan Chernoff. Thank you, Allan.

And a quick look at the big board you see down there. Now, Dow Jones Industrial Averages down about 163 points, about five minutes into the trading day. We're watching all of it for you very closely.

As well as this, the stage is set. Live pictures for you, Hofstra University. But what lines will the two players actually be saying? Live reports from both campaigns ahead for tonight's final debate.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Instead revive the market by attracting new investment. I will cut in half the capital gains tax on stocks purchased and held for more than a year.

(APPLAUSE) A rate of 15 percent to 7.5 percent. This vital measure will promote buying, raise asset values, help companies that shore up the pension plans for workers and retirees.

(END VIDEO CLIP)

COLLINS: Senator John McCain unveiling his new economic strategy yesterday in Pennsylvania. He also wants to eliminate taxes on unemployment benefits. Senator Barack Obama unveiled an economic plan of his own earlier in the week. He came out yesterday supporting the government's plan to invest in the nation's banks.

Pocketbook issues. The likely focus when the two candidates go at it one last time there at Hofstra University. CNN's Ed Henry is following Senator McCain and Jessica Yellin is with Senator Obama.

I want to begin with you, Ed. And it seems McCain has been coming out swinging lately. Is he going to do that again tonight?

HENRY: Absolutely. You can bet on it. There may be some personal attacks on issues like William Ayres, but you're right. The focus of this debate really on domestic issues, the economy, issue number one obviously.

John McCain, frankly, has struggled getting his economic message straight in recent weeks. Dealing with this financial crisis where his campaign thinks it will have some fertile ground tonight, is to really zero in on the issue of taxes. He's got a broad corporate tax cut that he wants to go from 35 percent to 25 percent. He also wants to extend the Bush tax cuts. Take a listen to how he framed the debate yesterday on the trail.

(BEGIN VIDEO CLIP)

MCCAIN: He's an eloquent speaker but even he can't turn a record of supporting a higher taxes into a credible promise that cut taxes. What he promises today is the opposite of what he has done his entire career. Perhaps never in history have the American people been asked to risk so much, based on so little.

(END VIDEO CLIP)

HENRY: He's trying to zero in there on the idea of the allegation that's been out there a long time that Barack Obama really is focused more on tax increases. Obviously Obama camp has vehemently denied that over and over saying they just want to go after a small number of people at the top end for tax increases. But you're going to hear this again and again tonight, Heidi.

COLLINS: Yes. He was asked about that, actually, on the campaign trail by a gentleman and his answer was something about he didn't want to do that, but he wanted to spread the wealth.

HENRY: Right. And that's why conservatives are pouncing on that remark from Barack Obama in Ohio. Suggesting like this is a Robin Hood situation. And that Barack Obama is just all about redistributing wealth. But obviously Jessica can speak more to what the Obama campaign is saying and explaining about that.

But you can bet that John McCain, he jumped on it yesterday as you said. You can bet he's going to jump on that point again tonight to say he's all about redistributing wealth, not actually getting more money into people's pocketbooks -- Heidi.

COLLINS: So, Jessica, obviously, the issue is certainly going to be the economy tonight because we're talking about domestic policy. How will Senator Barack Obama handle it?

YELLIN: Well, he has two goals tonight. One, Heidi, is to emphasize what his economic plan is. You know, we talked about what John McCain came out with yesterday.

Obama says that his plan is targeted much more to helping middle- income families and he'll go through the specifics and talk about how he wants to have a 90-day moratorium on foreclosures, and he wants for people who really can't pay their mortgages and how he does want to help small businesses create new jobs by giving them tax incentives to do so. But he's also going to be positioned to back some of these attacks he expects from John McCain including what Ed mentioned about tax cuts.

The Obama campaign has just put up on a tax calculator where you can go to a Web site and input what your income is and see how much your tax cut would be under Barack Obama versus John McCain. And the Obama campaign believes that will really help make Obama's argument that he really is committed to cutting taxes for 95 percent of Americans. As for John McCain's economic message, here's what he had to say about McCain's plan yesterday.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: There's some ideas that Senator McCain has put forward in the last couple of weeks that are very bad ideas. The idea, for example, of purchasing homes at full price from banks so that banks have no losses and taxpayers automatically have losses. That's a bad idea.

(END VIDEO CLIP)

YELLIN: And I bet we'll hear a lot more about each other's bad ideas a few hours from now this evening, Heidi.

COLLINS: All right, thanks to the both of you. Sure do appreciate that from Hofstra University where the whole thing is going to happen tonight. Jessica Yellin and Ed Henry.

A surge in new voter registrations could lead to a big change in one battleground state. We had there, coming up.

(COMMERCIAL BREAK)

COLLINS: Taking a look now at the live pictures coming in from the campus of Hofstra University. That, of course, is the scene of tonight's final presidential face-off. And your front-row seats to the debate is right here on CNN. You can join the Best Political Team on Television live from the debates, 9:00 p.m. Eastern.

The accusations keep coming. Claims of voter registration fraud against the Association of Community Organizations for Reform Now, better known as ACORN. CNN's Special Investigation's Unit Drew Griffin is following developments in Philadelphia.

So, Drew, what's going on here?

DREW GRIFFIN, CNN SPECIAL INVESTIGATION'S UNIT CORRESPONDENT: Heidi, every since the registration close for this election cycle, I feel like we've been on a national tour looking into voter registration fraud and today in Philadelphia officials are saying, look, it's the same here as it's everywhere else, and it's also the same group.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): The good news, there have been hundreds of thousands of new voter registrations processed in Philadelphia, including a vast majority of good, clean registrations from ACORN. The bad news, Philadelphia has already sent 1,500 obvious fraudulent registrations to the U.S. Attorney to be investigated. Every one of them from the same group, ACORN.

(on camera): Is ACORN a group that has been problematic in its organizing of these voter registration drives?

FRED VOIGT, DEPUTY CITY COMMISSIONER: Sure.

GRIFFIN: Have you tried to work with them to explain to them?

VOIGT: Absolutely.

GRIFFIN: Why is --

VOIGT: I don't have an answer for you, OK?

GRIFFIN: All right.

VOIGT: We originally -- this has been going on for a number of years. We have met with them. We've talked to them.

GRIFFIN (voice-over): According to city officials, close to 8,000 applications turned in by ACORN are problematic, including the 1,500 already sent to the U.S. Attorney, and officials expect the number to climb. Greg Voigt says so far his office is catching them, making sure no bad registrations lead to bad votes, but admits he has limited staff.

VOIGT: Are there going to be bad votes? Sure, there are going to be bad votes. There are always bad votes. Am I concerned this is a close election? Of course, I'm concerned it's a close election. But, you have to weigh everything in terms of your capacity to find things out.

GRIFFIN: Voigt says the problem is ACORN hires people desperate for money, including drug addicts, homeless, recovering alcoholics, even recent parolees who only get paid if they get signatures.

VOIGT: You just look at them and it was all in the same hand. You know, if you see some where they used a phone book, including the apostrophe. You know, some of the -

GRIFFIN (on camera): Went down in the phone book and just copied it verbatim right now.

VOIGT: Kitchen petition.

GRIFFIN: Kitchen? Sitting around the kitchen, fill out the petition.

VOIGT: Fill out the petition. That happens.

GRIFFIN (voice-over): We went to ACORN's Philadelphia headquarters where a rally was taking place, telling volunteers the recent news about voter fraud was just another attack by the right wing and the media on the poor.

UNIDENTIFIED ACORN SPEAKER: That is fraud! That is voter suppression. That is not news.

(APPLAUSE)

UNIDENTIFIED ACORN SPEAKER: Where is the news media when that is going on?

GRIFFIN: Junette Marcano is the local ACORN chairperson who acknowledges ACORN hires the less fortunate, but says there is nothing wrong with that.

(on camera): Why is the Deputy City Commissioner of Philadelphia telling me that ACORN is hiring recovering alcoholics, drug addicts, homeless people, who are so desperate to get money that they know that they don't make their quota, they just fill in any old name, that's what he's telling me?

JUNETTE MARCANO, LOCAL ACORN CHAIRPERSON: That is not the point.

GRIFFIN: That's not the point?

MARCANO: No, that is not the point.

GRIFFIN: What is the point?

MARCANO: They are not deliberately go out there and say -- you are homeless, you are a recovering alcoholic. You are --

GRIFFIN: But has it presented itself as a problem to ACORN? Wouldn't ACORN like to run a nice, clean, smooth voter registration drive?

MARCANO: We have -- we have done that. Because if we had been able to register 85,000, above 85,000, good registrants compared to 5,000 suspect cards, we have done a good job. (END VIDEOTAPE)

GRIFFIN: Election officials say they really won't know until after the election when they're done processing all these cards just how many voter registration cards were filled in fraudulently, but they say the number is closer to 10,000.

Heidi, back to you.

COLLINS: Wow. All right, Drew, thank you.

In Iraq now, concerns about Muslim violence against Christians. Earlier today, a Baghdad protesters drew attention to an exodus of Christians in northern Iraq. Authorities say more than 1,300 families have fled Mosul, reportedly terrified by a series of killings and threats by Muslim extremists. The choice? Convert to Islam or face possible death.

In the past two weeks, 14 Christians have been killed in the northern Iraqi City. In response, authorities have set up more checkpoints in several of Mosul's Christian neighborhoods.

Drinking and driving, of course, don't mix. Especially when the driver is driving a combine. See the damage that was left behind.

(COMMERCIAL BREAK)

COLLINS: With less than three weeks to go until Election Day, we are focusing on few key battleground states over the next few days. Our correspondents are taking a closer look at battles in Florida, Ohio, Virginia, Nevada and Colorado. Yes, in fact, we talked about Ohio. Today it's Colorado's turn. Remember Denver was the site of the Democratic convention. That may have been an important move for Democrats hoping to carry the state for the first time since 1992. As our Dan Simon reports, new voter registrations could be the difference.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): Katie Ulrich thinks of California as home, but the 20-year-old college student registered to vote in Boulder, Colorado, where she goes to college.

KATIE ULRICH, STUDENT, UNIVERSITY OF COLORADO: I realized that my vote was much more important here in Colorado, so that's why I registered here.

SIMON: What is helping to make this traditionally red state competitive is people like Katie, new voters to the Democratic roles. This year Colorado Democrats have added nearly 140,000 new voters, Republicans about 42,000. That's a more than 3 to 1 margin for the Democrats. It's not known yet how many are college age. But students at Boulder say they saw long lines at the registration booth.

Katie says it was a speech on campus from Michelle Obama...

MICHELLE OBAMA, SEN. BARACK OBAMA'S WIFE: Register right now --

SIMON: ...that motivated her and several of her friends to change where they were registered, from their home states to battleground Colorado.

ULRICH: You know, I didn't really know when I came here that it was such a battleground state. But I think that the student population has a good chance of swinging it to the Democratic vote.

SIMON: Freshman Zach Perkins also saw a chance to have an impact.

ZACH PERKINS, STUDENT, UNIVERSITY OF COLORADO: It's good to know that I have some kind of control actually in this election, whereas opposed to -- if I was in a state where my vote didn't necessarily make much of a difference.

SIMON: If Obama is actually able to turn this state blue, local observers say new voters could be a decisive factor.

KEN BICKERS, PROFESSOR, UNIVERSITY OF COLORADO: In a tight election, any group that really surges can put it over the top.

SIMON: Still political science professor Ken Bickers says McCain has 40 years of history on his side. For Republicans, the task is clear.

BICKERS: McCain is going to have to turn out the base in a big way, that is social conservatives and traditional Republicans. He's going to have to work the neighborhoods and get those people out to vote.

(END VIDEOTAPE)

COLLINS: Here is a little more now on Colorado. President Bush carried the state in 2004 by less than 100,000 votes. And if you take the 97,000 newly Democratic registrations Dan Simon just talked about, it's an even tighter race this time around.

And this note, too, we are expecting some important new CNN-Time Magazine Opinion Research Corporation Poll numbers on Colorado and other key battleground states. They will be coming out just about an hour or so from now. So, be sure to stay tuned for those.

Going home when there's no home to go to.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We were literally on top of the world. And now we're gone with the wind.

(END VIDEO CLIP)

COLLINS: California wildfire victims talk about what they've lost and something they've gained.

(COMMERCIAL BREAK)

COLLINS: Back on the market. Madonna back on the market. Will the British media is abuzz with reports that the material girl is splitting from her husband, director Guy Ritchie. The couple married nearly eight years ago, but trouble surfaced in recent months amid reports Madonna was carrying on with baseball superstar Alex Rodriguez, A. Rod. Madonna has denied those claims, but the couple is mum on the divorce reports.

The Atlantic City, you can booze, you can gamble, but you better not light up, at least not on the floor of the city's 11 casinos. For the first time in 30 years, gamblers will not be allowed to smoke at the tables or slots. They can, though, retreat to enclose smoking lounges. Casino official say the sour economy and plunging revenues make this a terrible time to offend customers.

A path of destruction in one Iowa neighborhood. All of the damage caused by an alleged drunken driver on a combine. You know one of those big huge pieces of farm equipment. It's also known as a thresher. The man allegedly stole the combine, took it on a slow- speed joy ride -- again, very slow -- through people's yards and into one home. He also smashed several vehicles.

(BEGIN VIDEO CLIP)

DEP. GREGG HALBACH, MITCHELL COUNTY SHERIFF'S DEPT.: It was all intentional. He took several rams at vehicles. He actually had to back the combine up and ram certain items.

(END VIDEO CLIP)

COLLINS: The people in the neighborhood grabbed the guy and held him until the police came. Police say the driver doesn't remember what happened.

Final face off, debate number three for John McCain and Barack Obama. The stakes are high for both candidates. Election Day just 20 days away.

And a regional fed chairman drops the "R" bomb. Are investors running for cover? We're watching Wall Street.

It's Wednesday, October 15th. I'm Heidi Collins. You are in the CNN NEWSROOM.

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