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McCain Stumps in Florida; New Poll Numbers in Battleground States; Growing Brush Fire in Los Angeles; Suicide Bomber Targets Iraqi Minister's Convoy in Baghdad

Aired October 23, 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: Twelve days left to make a case. Candidates hit battleground states and attack each other over economic plans.
And are you concerned about your vote counting? We're looking at potential pitfalls at the polls.

It is Thursday, October 23rd. I'm Heidi Collins. You are in the CNN NEWSROOM.

Presidential politics, 12 days until the election and candidates are hitting their last laps of the campaign trail.

Republican nominee John McCain begins the day in Florida. Then he'll travel to another battleground state, Colorado.

His running mate Sarah Palin is in the all-important state of Ohio, which you have heard a lot about. She will then travel on to Pennsylvania.

Democratic nominee Barack Obama also begins the day in the Midwest. He is in Indiana for a morning rally there and then he'll head to Hawaii -- all the way over there -- to be with his ailing grandmother that we have also been talking about here on CNN.

Obama's running mate Joe Biden is in North Carolina today for a bus tour of that state.

In just a moment, we're going to be checking in with our correspondent Ed Henry. He is following John McCain today. You can see the live event pictures right there for us, once again, Ormond Beach, so we will be joining him very shortly and get sort of a taste of what is expected to happen at that rally.

As we said, John McCain is in Florida today. We'll be getting to that in just a moment. But for now, we -- want to talk a little bit more about the attorney for Sarah Palin and her husband Todd.

They've been telling CNN the two will provide sworn depositions tomorrow. At issue now whether the Alaska governor unfairly fired the state's public safety director this summer.

Walter Monegan says Palin fired him after he resisted pressure to can state trooper Mike Wooten. You may remember, the trooper had gone through a bitter divorce and custody battle with Palin's sister. Earlier this month a state investigation found Palin abused her authority by pressing for the firing of her former brother-in-law. But it also found Palin was within her rights to fire the public safety director.

Want to get on over to Ed Henry now who is standing by for us at the rally for Senator John McCain.

Ed, how are things looking in Ormond Beach? There we see quite a crowd gathering.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: It's interesting, we're just outside Daytona Beach. The McCain camp billing this as a Joe the Plumber tour.

We're told we're not going to see Joe himself because he's now become -- according to McCain aide -- a metaphor. So instead we're going to hear from Tom, the lumberyard guy, who actually owns this building supply company right here -- building materials company, where there will be a rally in just a few moments.

The McCain camp, obviously, using this to try to connect with middle class voters. John McCain, frankly, has struggled with his financial message ever since this financial crisis really blew up.

They see Joe the Plumber mantra as a way to try and say, look, John McCain is standing up for the little guy. It's playing into John McCain's tax message where he charges that Barack Obama wants to raise taxes.

Here's what he said yesterday in Ohio.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: That's the problem with Senator Obama's approach on taxes. He's more concerned about creating a tax plan that is, quote, "fair" than creating a plan that creates jobs and grows our economy.

The Obama tax increase could come at the worst possible time for America and especially for small businesses.

(END VIDEO CLIP)

HENRY: Now Barack Obama has repeatedly pushed back against that attack by saying that, in fact, if Joe the Plumber or Tom, the lumberyard guy, makes less than $250,000 a year, they'll actually get a tax cut from Barack Obama.

And Barack Obama also tested out a new line yesterday basically saying he believes John McCain is really standing up for Joe the Hedge Fund Manager, not Joe the Plumber -- Heidi.

COLLINS: All right. A lot to be discussed. We, of course, are going to be bringing this event to everybody live when it begins.

Our Ed Henry there in Florida. Thanks so much, Ed.

Barack Obama is in Indianapolis this morning on what will likely be his last campaign stop for a couple of days. He is heading to the bedside of his grandmother who he reported as seriously ill.

CNN's Jessica Yellin is in Indianapolis for us this morning. Hi, Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Heidi, Barack Obama is heading from here in Indianapolis to see his grandmother, the woman who raised him from the age of 10, a woman who he says smashed the glass ceiling.

Barack Obama's grandmother was a bank secretary who rose to be one of the top executives there and a prime earner in his family. He missed his own mother's final days and so he said he didn't want to repeat that with his grandmother. That is why he'll be taking two days off the campaign trail.

But first he'll be hitting this stop here in Indianapolis. This is a red state. John McCain is favored to win here right now, but Barack Obama, stumping on this turf, forces John McCain to continue to spend money here and campaign here and spread John McCain's resources even thinner than McCain would no doubt like.

Barack Obama has also been taking on those charges from the McCain/Palin ticket that he's somehow promoting socialism. He says that basically John McCain's out of ideas.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: They don't have a very good argument on their side. So what they're trying to do is to fabricate an argument and to try to suggest that somehow what I'm proposing would hit the middle class or small businesses.

Actually it's just not correct. I mean Senator McCain is running a campaign against somebody else, not me, because he's not speaking to my plan.

(END VIDEO CLIP)

YELLIN: Now Obama makes the argument that he is trying to help middle class workers and basically taxes have always taxed the rich more than the middle class and more than the working folks. So John McCain's argument, he says, is -- doesn't hold water.

Now Obama will also probably mention national security. It's another issue he's addressed in recent days. But, again, talking to a very enthusiastic crowd, he's spent quite a few stops here in Indianapolis.

I think we have been here a total of more than a week at different Obama events over the past year. So he gets big crowds when he shows up, Heidi.

COLLINS: Jessica, we're also hearing that this new radio ad on air in Indiana with a local star from the area? Is that...

YELLIN: Yes. Yes, it's the rocker, John Mellencamp, who has often championed issues for farmers, rural folks and working folks. He'll be talking about Obama's economic message and maybe putting up "Jack and Diane" up against Joe the Plumber -- Heidi?

COLLINS: "Little Diddy, about Jack and Diane."

All right, Jessica, thank you.

And make sure you stay with us for all the latest from the campaign trail. Less than two hours from now we will be joining the Barack Obama live from Indianapolis. That will begin 11:00 Eastern hour.

Around the world under the stress. Stock markets overseas take a beating. In Asia, South Korea's market plunged more than 7 percent. Japan's Nikkei index closed down 2.5 percent.

Caution, also the watch word, in Europe, throughout the morning. England and Germany have seen their markets more than 4 percent off.

Part of the reason, yesterday's big drop on Wall Street. The Dow, and I'm sure you know, plunged 514 points before it was all over yesterday.

So how are things shaping up for the opening bell at the bottom of the hour? Quick look at the futures, well, we will get to all of that with Carrie Lee in today.

Your money, your vote, a close presidential election could be decided in the nation's battleground states. And people in many of those places are dealing with layoffs right now.

CNN's Christine Romans is in New York. And we've been talking about this concern for a long time, Christine, people losing their jobs.

CHRISTINE ROMANS, CNN CORRESPONDENT: And it's really kind of ramping up here even more. Today we got jobless claims that were 478,000 people lined up (INAUDIBLE) benefits the most recent week. That was more than people had expected.

And Heidi, when so many people in these battleground states go to the polls, they're going to the polls with some grim realities about their financial futures. So this is a real challenge for both of these candidates to try to appeal to these folks.

Let's first talk about layoffs. We know that Chrysler is closing a plant and cutting a shift. There's another one that was announced today. GM with more job cuts, job losses in September, mass layoffs, that's when a company lays off at least 50 people in one fell swoop.

Those were the highest in September since September 11th, 2001.

Let's talk about the battleground states and what kinds of layoffs they've seen in those battleground states. Not including all the pink slips we've heard from this week from the likes of GM, Yahoo, Merck and others.

Some of these -- Florida, Ohio, Nevada, Colorado -- those are how many job cuts just since Saturday -- Saturday -- since January, Missouri, North Carolina, as well. Now the other problem in some of these states, foreclosures. We know that in the most recent months, 2,710 homes were seized every day for foreclosure.

Those aren't the people falling into foreclosure filings, even more -- who are just falling into the falls of foreclosure filings. Those are the actual homes that were seized, 2700 a day. States like Florida, a battleground state seeing very high levels of foreclosures.

So you'll -- I think when people go and cast their votes, Heidi, we cannot overstate how important some of these issues are for them.

COLLINS: No question about that. And that's what we have been talking about. You know what will actually happen when they go into that voting booth and they start thinking about their own personal finances and their outlook in the jobs market.

ROMANS: One thing...

COLLINS: What are you mostly hearing about that from the circles that you're in?

ROMANS: Well, it's interesting because there's some disparate concerns. It's drug companies laying off workers, right? Yahoo, a technology company, laying off workers. Banks laying off a lot of workers. Goldman Sachs laying off a lot of workers.

And right now people don't -- maybe don't have a lot of sympathy for banking layoffs. But think of the kinds of jobs in banking.

COLLINS: Sure.

ROMANS: It's not just highly paid bankers.

COLLINS: No.

ROMANS: It's also all of those industries and business -- small businesses surrounded around banking -- car services and -- you know the guy who sells the bagels on the concern and all those kinds of jobs.

I mean a lot of people are faced with losing their jobs here in New York and then also a lot of other places, too.

Car -- you know, car salesmen, dealers, right down the line, are seeing a lot of different kinds of jobs where there are job cuts and some of those battleground states, we're seeing them very, very deeply. Interesting side note for you, though. Colorado is one of those battleground states.

COLLINS: Yes.

ROMANS: Colorado is not seeing as many job cuts as you're seeing elsewhere. And in fact, a lot of economists saying that the economy still is pretty healthy overall in Colorado. So that's an interesting side note.

COLLINS: That's because they're getting snow and they're all skiing right now. No, I'm kidding. I'm kidding.

All right, Christine, thanks so much.

Voter error or machine malfunction. A few early voters in West Virginia say machines were out of touch with their candidate choice.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KEVIN NEUGEBAUER, CNN IREPORTER: There is a lot of issues here that have people really turning out in record numbers which is really amazing, looking at the line behind me over here. I have never seen this before.

(END VIDEO CLIP)

COLLINS: That iReport from Katie, Texas. Lots of people in early voting states are sending us their iReports. And we do want to hear from you. You can log on at ireports.com and send us your early voting stories.

So 12 days to go until Election Day and this morning we are talking about problems at the polls, including reports from one early voting state where some voters are having trouble with touch screens.

CNN's Brian Todd is live in Washington for us this morning.

So, Brian, you found out about some voters' concerns in West Virginia. What's the problem?

BRIAN TODD, CNN CORRESPONDENT: Well, Heidi, the problem in Jackson and in Putnam Counties in West Virginia seemed, on the surface, to be due to fairly simple issues in the touch screen machines.

But they're causing a lot of worry in those counties so we went there and talked to local voters and local officials to try to get to the root of the problem.

(BEGIN VIDEOTAPE)

TODD (voice over): Calvin Thomas has voted in West Virginia since Truman beat Dewey. He's 81 years old now and his eyesight is deteriorating. But when he tried to vote early in his hometown of Ripley and brought his daughter Micki Clendenin into the booth to help him, Thomas's vision wasn't the problem.

CALVIN THOMAS, WEST VIRGINIA VOTER: I went in there and pushed the Democrat ticket and it jumped to the Republican ticket, on the president of the United States.

TODD: Micki helped her dad touch the screen a couple of times but his vote for Barack Obama still clicked on John McCain, then it happened to Micki. Each time, poll workers had them repeat the process.

MICKI CLENDENIN, WEST VIRGINIA VOTER: The lady came in and she just -- she very nicely, she just said, she said, it's just being doing that so I just hit it again. So we hit it again, and this time it did go to Obama.

TODD: Same thing happened to Bobbi Oates in neighboring Putnam County.

BOBBI OATES, WEST VIRGINIA VOTER: When I went to my U.S. senators, I touched J. Rockefeller and it put a check mark beside J. Wolf. And I'm saying no, I didn't do this.

TODD: At least five voters reported the same problem in two West Virginia counties. State and local officials tell us these were isolated cases that each time poll workers fixed the problem and the correct vote was cast.

The machines, manufactured by a company called ES&S, will be used by several states this year and were among those that had problems in Ohio in 2004. Company officials tell us they've inspected the machines in West Virginia and nobody has cast an inaccurate vote.

In Ripley, West Virginia, we weren't allowed to film the actual machines that had problems, but Jackson County clerk Jeff Waybright took us through the process with an identical machine and zeroed in on what he thinks happened.

JEFF WAYBRIGHT, JACKSON CO., WEST VIRGINIA CLERK: They touched on Barack Obama. They thought they were touching him, but their finger may possibly roll up. Now if I roll my finger down, you can see that it looks like my finger is definitely on Barack Obama's box.

TODD: We asked Waybright about insinuations in local news reports of political manipulation since he and the neighboring county clerk are Republican and in most cases Democratic votes clicked to a GOP candidate.

WAYBRIGHT: If I was going to, you know, try to manipulate the machine, I wouldn't know how to do it to begin with.

TODD: The West Virginia secretary of state's office told us it thinks the problem could have stemmed from the machines not being calibrated properly when they were being set up. That means, essentially, that the electronically boxes weren't aligned right. (END VIDEOTAPE)

TODD: Now Jeff Waybright disputes that saying that the boxes -- the machines in his county were all aligned and calibrated perfectly. He believes, in the end, this was a case of voter error.

Those voters in the piece that we talked to got back to us after he said that, said it wasn't their fault. So Heidi...

COLLINS: Yes.

TODD: ... it was an issue with these machines and they're going to have to watch these very closely.

COLLINS: Yes. And it really begs the question, and I'm sure we won't know until November 4th or after when everything is counted up, God forbid, but it seems like, you know, it's possible those people could have been voting three and four times.

Is there a reset button to make sure that you're starting from the beginning if a mistake has been made?

TODD: Absolutely, there is. There are a lot of safeguards in these machines. You can actually hit the box that clicked again and it will basically take everything out and clear the field and then you can hit something again and make sure that it registers, and then at the end of the whole process, it does have a field there where you can kind of check all of your votes, make sure that they're correct.

I mean there are a lot of those layers there in each of these machines that we saw, so, you know...

COLLINS: Sure.

TODD: ... you would think that there are plenty of safeguards in place, but, again, if people are hitting these boxes quickly and they want to get out of there and they don't check it and they leave...

COLLINS: A lot of them do.

TODD: That's right.

COLLINS: Yes.

TODD: That's when it doesn't get caught. Now the problems in West Virginia, about maybe eight people called in and said they had these problems, those are just the people who caught the errors.

COLLINS: Sure.

TODD: You know, who knows how many didn't.

COLLINS: Yes, a lot of people going to vote on their lunch break...

TODD: Right. COLLINS: ... come November 4th. So they're going to want to get in now fast.

All right, well, Brian Todd, we'll be watching that one, of course. Thank you.

TODD: Thank you.

COLLINS: We also want to hear from you if you run into problems at the polls. Call the CNN voter hotline. You can help us track the problems and then we will report the trouble in real time.

That number is on your screen. You see it down below. 1-877- 462-6608. We are keeping them all honest all the way through the election and beyond.

A growing brush fire closing down a major freeway through Los Angeles this morning. The fire now at 150 acres along the San Diego freeway. That's the 405 for those of you who know the area.

The fire also moving close to the famous Getty Center Museum. About 350 firefighters are battling the blaze now near Beverly Hills. Residents in the Brentwood area being told to get ready to evacuate.

We're going to have a live coming up in about 20 minutes or so on the situation there. In the meantime, Rob Marciano is standing by to give us the very latest.

I just saw above your head, Rob, critical fire conditions obviously.

ROB MARCIANO, CNN METEOROLOGIST: Today, yes, again, we'll see a little bit of an improvement tomorrow and then maybe to the weekend. But it's going to continue to be hot. We'll have this, what we consider to be a moderate Santa Ana event, meaning it's not quite as extreme as it was last year which pretty much cooked San Diego.

But it's obviously bad enough to create -- you get that spark, what we saw in the overnight hours near the Getty Museum and it doesn't take much.

So offshore winds today. It will be dry, these winds tend to cook as they come down and compress off the mountains. And -- so will be hot. Temperatures can easily get to 95 or better.

A live shot of Los Angeles where the sun is just about to come up. We have got choppers that are up there from KTLA. We've got tower cameras as well and that fire continues to burn so far, as you mentioned, over 150 acres have been scorched and that probably will be an ongoing battle as we go through tonight.

(WEATHER REPORT)

COLLINS: Winter hitting some places already, but just a tease. We'll see that later, right?

MARCIANO: Exactly.

COLLINS: I don't want to steal your thunder today.

(LAUGHTER)

COLLINS: All right, Rob, thanks. We'll see you a little later.

Battleground Ohio, a critical state in play for the election, leading to an ugly fight over voter fraud allegations.

(COMMERCIAL BREAK)

COLLINS: Quickly some information into us here in the CNN NEWSROOM regarding former Federal Reserve chairman, Allan Greenspan, and some comments that he's going to be making coming up in about 35 minutes or so.

Our senior financial correspondent Allan Chernoff is joining us now with more.

This testimony that we have received here, pretty lengthy, Allan. What does it all mean?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well, Heidi, Greenspan is actually pretty straightforward here. You know he's received some criticism here as the former chairman of the Federal Reserve for perhaps being a little too easy with interest rates, allowing the housing bubble to expand and expand.

And in these comments, he's saying, look, it wasn't -- that wasn't the real key problem, the key problem was the securitization of all those mortgages. That's basically bundling up the mortgages together and selling them off to investors and he's saying that those securities were mispriced.

And that is the root of our problems right now. He's saying right now we're facing a once-in-a-century credit tsunami and he's also saying that things are going to get much worse.

He anticipates an increase in layoffs. He's also saying that what we need right now is exactly what the government is doing, the government is backing of the banks, and he's saying that the $700 billion plan is adequate and that really should help the situation.

But we're not going to be through all of this, he says, until housing stabilizes, which is, certainly, he says, quite a distance away.

COLLINS: Yes.

CHERNOFF: Heidi?

COLLINS: So it's hard to know whether people will feel better or worse hearing those words because he's agreeing that the fix is a good one, but that this is going to last for a long, long time.

Wow, All right.

CHERNOFF: He has been talking about trouble in the economy for quite some time.

COLLINS: Yes.

CHERNOFF: But he says this is something he never imagined.

COLLINS: Wow. All right. Well, Allan, I know you'll be watching that closely coming up again in about 30 minutes or so.

Allan Chernoff for us out of New York this morning.

Meanwhile, as we were speaking with Allan, we watch the Straight Talk Express roll up. You see Senator John McCain, his wife behind him, Cindy McCain, and we are looking at Ormond Beach, Florida.

He'll -- will begin that rally shortly, I imagine. He may go straight to the podium now, or there may be a little bit more of an introduction. Looks like an introduction. So when that happens we will bring it to you live in a just a moment.

For now, though, we want to check in with Carrie Lee, our business correspondent, to take another look at what on earth may be happening on Wall Street today. It's not an easy question because, Carrie, as you well know, it's been all over the map for weeks now.

Yesterday, down, down, down on the Dow Jones Industrial Averages.

CARRIE LEE, CNN CORRESPONDENT: Exactly, Heidi. Yesterday we had that 513 point drop on the Dow losing $700 billion in market value.

Worries over the expanding global recession, really front and center, and that's weighing over everything else on Wall Street. So that certainly weighed on stocks yesterday.

And today we may have more of the same because futures are looking a bit weak, this is -- these minutes before the opening bell here.

Case in point, Amazon.com saw it's profits up nearly 50 percent in the third quarter, but the company, like so many other we've seen in the past couple of days, is giving a weak outlook, cutting its estimates for this year and so this stock is really expected to take a huge hit today.

In fact, Amazon shares were down 13 percent in after-hours trading last night.

Now some other sectors we're keeping an eye on, airlines, because four airline names are reporting results today and then we have drug makers Bristol-Myers and Ely Lily reporting also. Remember yesterday, Merck also announced those big layoffs.

So more news in the drug sector today. Other sectors we're going to be watching, bank shares. Sources confirming to CNN, that, yes, Goldman Sachs is going to be cutting 10 percent of its 32,000-person workforce. This is really shocking because Goldman has widely been regarded as the strongest investment bank on Wall Street.

It wasn't as hard hit as some of these other banks a few months ago so the fact that Goldman is taking this broad cut well rather shocking indeed. And so we'll be watching that stock.

And then in the auto sector, General Motors planning to begin involuntary layoff of some of its salaried workers. Other cost- cutting moves include things like suspending payments into a stock savings plan.

And then, finally, housing. We are far from out of the woods in housing. Picture not getting any better here. 80,000 more homes fell victim to foreclosure in September. So now, according to realty tracks, this brings the number of total homes that have been repossessed over the last year to more than 850,000.

OK. You can hear the opening right there, Heidi.

COLLINS: Yes.

LEE: We'll have the opening numbers for you in just a second. But futures are looking weak, so we'll see how the follow through goes.

COLLINS: Yes. And listening to those words that will be coming in about 30 minutes or so from the former Fed chairman, Allan Greenspan.

LEE: That's right.

COLLINS: Really interesting to hear what he is saying, talking about a once in a century credit crisis. Obviously, it would be great to be able to have a measure of that, but we don't. We just have a measure of the numbers with the trading. And eventually --

LEE: Right. But - but...

COLLINS: Go ahead.

LEE: But Greenspan on Capitol Hill -- yes, that's a rare thing and people are really listening to what he has to say. You know, he's talk about this, you know, the worst downturn we've seen in decades. So, we'll be following that today as well. Still keeping an eye on the opening numbers here to see where we're starting out.

COLLINS: That's all right, Carrie. We'll check back. We usually keep a real close eye on this.

LEE: OK.

COLLINS: It's part of our gizmo to kind of keep an eye throughout the day, so that we can have some sort of idea what is going to be happening with people's money.

(CROSSTALK)

LEE: OK, Heidi.

COLLINS: Nice to see you, Carrie Lee.

LEE: You as well.

COLLINS: From the floor of New York Stock Exchange. Thank you.

Also, watching this, as Senator John McCain, as we mentioned, is in Ormond Beach, Florida for a rally there, about to take to the podium. We'll bring it to you when it happens.

(COMMERCIAL BREAK)

COLLINS: Quickly, taking a look at the big board for you now. Dow Jones Industrial Averages to the positive by double digits there, about 73 points up. That's better than yesterday when everything was said and done. The market closed down about 514 points. So, we are watching very closely there.

With 12 days to go in the election, there is no rest for those running for the White House. GOP presidential nominee John McCain at a rally in Ormond Beach, Florida. You can see, he's just about to take to the podium there. We are watching that for you. Of course, we'll bring it to you live as soon as he begins speaking. His running mate Sarah Palin headed to Troy, Ohio for an early afternoon event there.

And on the Democratic side, Barack Obama in Indianapolis later this morning. It will be his last campaign event before he heads to Hawaii to visit his ailing grandmother.

His running mate Joe Biden gets on a bus this afternoon for a tour of another battleground state, North Carolina.

COLLINS: We will go live to the Obama rally in Indianapolis when it happens. It's set to begin around 11:00 a.m. Eastern. So, make sure you watch for that.

Battleground states in play. We have new poll numbers in key spots to tell you about. More from CNN's senior political analyst Bill Schneider, part of the Best Political Team on Television.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Virginia, North Carolina, West Virginia, Ohio, and Nevada, all Bush states in 2004. And now?

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Nevada, are you ready to make John McCain the next president of the United States?

SCHNEIDER: Maybe not, according to new CNN/"TIME" Opinion Research Corporation polls. Right now, Barack Obama leads John McCain by five points in Nevada. McCain is doing four points worse in Nevada than George W. Bush did in 2004. Obama is doing three points better than John Kerry. Ohio's a major battleground.

MCCAIN: We need to win Ohio.

OBAMA: We intend to win Ohio.

SCHNEIDER: The latest poll? Obama up by four. McCain is doing five points worse than Bush. Obama is doing one point better than Kerry. The new polls have a sampling error between three and four points.

We are seeing the biggest changes from 2004 in two southern states with large numbers of African-American voters. Two weeks ago, North Carolina was a dead heat.

MCCAIN: We have to win the state of North Carolina.

OBAMA: I promise you, we won't just win North Carolina. We'll win this general election.

SCHNEIDER: Now Obama has a four-point edge in North Carolina. McCain is doing nine points worse than Bush. Obama is doing seven points better than Kerry.

The big news last week was a ten-point lead for Obama in Virginia. So we polled Virginia again. Still Obama up by ten. McCain is doing ten worse than Bush. Obama's doing nine points better than Kerry. McCain is leading in one former Bush state.

KENNIE BASS, POLITICAL ANALYST: West Virginia voters are very, very interested in defense and family and moral values and the second amendment.

SCHNEIDER: McCain's leading Obama by nine points in West Virginia up from four last month. But that's still smaller than Bush's 13-point victory in West Virginia last time.

(on camera): In each of this five former Bush states, Republican losses since 2004 have been larger than Democratic gains, which suggests a loss of confidence in the Republicans but some voters still unsure about Barack Obama.

Bill Schneider, CNN, Covington, Kentucky.

(END VIDEOTAPE)

COLLINS: We want to take you back to Ormond Beach, Florida now. Senator John McCain addressing the crowd there at his rally. Let's listen.

(JOINED IN PROGRESS)

MCCAIN: My wife, Cindy, will be a great first lady of the United States. We just came back from Ohio with an event with Sarah Palin, where I introduced her.

(APPLAUSE)

And can I tell you how much I look forward to introducing Sarah Palin to Washington, D.C., where we're going to drain this slump and clean up the mess.

(APPLAUSE)

My friends, I am so proud of Sarah Palin and what she represents in reform and family and all of the things we value, I am very proud of her and I know you are too.

(APPLAUSE)

Now, my friends, I'm honored to be back in Florida where I spent part of my Navy career and loved every minute of it. And my friends, I got to give you some straight talk, we need to win on November 4.

(APPLAUSE)

With your help, we're going to win -- we're going to win Florida and bring real change to Washington, D.C.

(APPLAUSE)

We need your vote. There's 12 days, my friend. And you know we've heard a lot of words over the course of this election and after months of campaign trail eloquence, we finally learned what Senator Obama's economic goal is, as he told Joe the Plumber in Ohio, he wants to, quote, "spread the wealth around." That's what Senator Obama wants to do.

He believes in redistributing the wealth, not in policies that grow our economy and create jobs and opportunities for all Americans. Senator Obama is more interested in controlling who gets your piece of the pie than he is in growing the pie.

You know, whether it's Joe the Plumber in Ohio, or Joe over here, thank you, Joe -- Joe, thank you, there's Joes all over here. Small business owners I met with this morning here in Florida, we shouldn't be taxing our small businesses more as Senator Obama wants to do. We need to be helping them expand their businesses and create jobs.

(APPLAUSE)

These small business owners -- these small business owners, please raise your hand if you're in small business here. Thank you and God bless you for all you do. You have the same dream that Joe the Plumber has. They now own their own businesses and combined employ hundreds of workers because they have been successful. Obama wants to spread the wealth around. Senator Obama wants to spread it around. That means fewer jobs at their businesses and fewer jobs here in Florida.

You know, this week -- this week we learned that Senator Obama is concerned that his plan for wealth redistribution is seen as welfare. So he just added a work requirement. 12 days to go, 13 days to go in this election, he changed his tax plan because the American people have learned the truth about it and they didn't like it.

It's another example that he'll say anything to get elected. So now if you're unemployed, Senator Obama's plan won't help you at all. Even as his tax increases make fewer jobs available to you, so you can get back to work. And that's the problem with Senator Obama's approach on taxes. He's more concerned about using taxes to spread the wealth than creating a tax plan that creates jobs and grows our economy.

(APPLAUSE)

The Obama tax increase would increase -- would come at the worst possible time for America, and especially for small businesses like the one that Joe and you dream of owning. The small businesses Senator Obama would tax provides 16 million jobs in America and a sudden tax hike for those businesses will kill jobs when a time when we need to be creating jobs. I'm not going to let that happen, my friends. I won't let that happen.

(APPLAUSE)

The McCain-Palin tax cut is the real thing. We're going to double the child deduction for every family. We'll cut the capital gains tax. And we'll cut business taxes to help create jobs and keep American businesses in America.

(APPLAUSE)

You know, as Joe and small business owners across the country have now reminded us all, America didn't become the greatest nation on earth by giving our money to the government, to spread the wealth around. In this country, we believe in spreading opportunity for those who need jobs and those who create them.

(APPLAUSE)

And that's exactly what I intend to do as president of the United States. Now, the next president won't have time to get used to the office. We face many challenges here at home and many enemies abroad in this dangerous world. And I'll bring our troops home from Iraq in victory and honor, and not in defeat.

(APPLAUSE)

Senator Obama had cut his way, they would have come home in defeat, have no doubt about that. And incredibly, incredibly, incredibly, this weekend Senator Biden guaranteed -- he guaranteed that if Senator Obama is elected, we will have an international crisis to test America's new president. He predicted it. He said mark my words, my friend. We don't want a president who invites testing from the world at a time when our economy is in crisis. And Americans are already fighting in two wars. Yesterday, Senator Obama tried to explain away this by warning -- by saying that his running mate sometimes engages in rhetorical flourishes. Really?

(LAUGHTER)

Really? That's another way of saying that he accidentally delivered some straight talk to America.

(APPLAUSE)

My friends, Senator Biden referred to how Jack Kennedy was tested in the Cuban missile crisis. I had a little personal experience in that. I was a Navy pilot on board the USS Enterprise.

(APPLAUSE)

And I was ready to go into combat at any moment. And I know how close to a nuclear war we became, and I will not be a president that needs to be tested. I have been tested. Senator Obama has not been tested.

(APPLAUSE)

And it shows, it shows in Senator Obama's responses to our challenges abroad. What is more troubling is that Senator Obama told their campaign donors when that crisis hits they would have to stand with them because it wouldn't be apparent Senator Obama would have the right response. Forget apparent, my friends. We know Senator Obama won't have the right response.

(APPLAUSE)

How do we know? Because we've seen the wrong response from him over and over during this campaign. He opposed the surge strategy that's bringing us victory in Iraq and will bring us victory in Afghanistan.

(APPLAUSE)

He said he would sit down unconditionally with the world's worst dictators including the Castro brothers. When Russia invaded Georgia, Senator Obama said the invaded country should show restraint. The invaded country. He's been wrong on all of these. You know, it's amazing. Are you ready to trust America's national security to an untested leader in these times of war?

AUDIENCE: No!

MCCAIN: Two wars we're in. You know, we can't spend the next four years as we have spent much of the last eight hoping for our luck to change at home and abroad. We have to act. We need a new direction and we have to fight for it.

(APPLAUSE)

I have been fighting for this country since I was 17 years old and I have the scars to prove it.

(APPLAUSE)

COLLINS: Senator John McCain, a little bit of his rally taking place in Ormond Beach, Florida. We, of course, we'll be covering all of the candidates today for you.

The impact of race on the race. A focus of our political coverage tomorrow so make sure you stay with us as we get closer to Election Day.

(COMMERCIAL BREAK)

COLLINS: We are watching a growing brush fire in Los Angeles this morning. Boy, look at those flames. It closed down a major freeway. In fact, earlier this morning, just a few minutes ago, the highway patrol reopened the road just in time for rush hour.

CNN radio's Jim Roope is joining us now on the phone from the scene on that fire.

And boy, Jim, when you look at those flames, pretty unbelievable.

VOICE OF JIM ROOPE, CNN RADIO CORRESPONDENT: Yes, it was amazing. When I first arrived, and I had to come up -- when the head of the freeway closing, I came up (INAUDIBLE), the old road, and the entire hillside was just ablaze. And you can see the height of some of these flames. They were licking up across the trees. And within an hour, maybe two, everything had laid down to where -- and it was still dark. It was almost black. There was nothing on the freeway, nothing in the hillside. So they made very quick work of this fire with nine water-dropping helicopters, 350 firefighters.

You can see them as the helicopters were flying over and lighting up the hillside. The firefighters were sort of dotted along the hillsides there. And they really did a great job of containing this fire, controlling it as much as they can before these winds start to kick up, and that's happening right around now.

COLLINS: Yes. That's what we would imagine, I guess, as the sun comes up. What's the biggest concern, though, for the firefighters today? Are we talking about evacuations or anything?

ROOPE: Well, no mandatory evacuations. Although, they are telling people to keep alert, because as these winds come up -- and then, you have a couple of issues here. You have the weather that the fire itself, the ground temperature meets the air temperature, and the wind that develops from that, the fire itself has its own weather.

Then you have the winds that are coming up, you have the heat, the very low humidity and as odd as this may sound, because we're so close to the ocean, 12 percent humidity. So, you have this perfect storm, if you will, for fire conditions.

And when the winds come up, and that starts to blow these things and push all of these flames in through these very dry brush areas, that's the biggest concern. And those winds are expected at 15 miles per hour, 25-mile-per-hour gusts here through noon local time here. So, that's the big concern. Some of those with respiratory problems and those who are -- with mobility problems, the infirm, they have pretty much gotten out. And so, right now, it's folks aimed in getting out and just being ready to go if needed.

COLLINS: All right. Very good. CNN radio's Jim Roope for us there in California. Thank goodness they got the 405 back open before rush hour. That would really, really been a nightmare.

But, in fact, our Rob Marciano joining me now to talk a little bit more about this and the rest of the weather across the country.

And it brings up a great point that I don't think it can be overemphasize that fires really do create their own weather. It's so bizarre.

ROB MARCIANO, AMS METEOROLOGIST: It can. The larger scale of this is what's going on in the rocky mountains where there's cool air, and this time of the year, especially at night, that cool air sinks and settles, and need to forced down through the canyons, and over the mountains and down to the valleys. That heats it up. It's already coming from a dry place.

So, as long as these arrows, and the wind is going this way, the ocean has absolutely no effect on cooling them off or lifting that levels of humidity. So, this will go on for today again. We have red flag warning. We have a critical fire danger in effect for today and maybe extended through tomorrow.

Meanwhile, a huge storm affecting the central part of the country. Blizzard conditions yesterday across Nebraska and Kansas. Winds gusting over 50 miles an hour times. We'll have that to a lesser extent today. And then rain stretching all the way to New Orleans. This will be marching across the eastern third of the country. Everybody will be affected by this storm in the way mostly of heavy rain depending on where you are, starting from say, St. Louis all the way to Boston over the next several days.

COLLINS: Wow. All right. We'll keep our eye on that one, too. Thank you, Rob.

MARCIANO: You got it.

COLLINS: A government official targeted. He is safe, but others killed in the bombing. Suicide blast in Iraq.

(COMMERCIAL BREAK)

COLLINS: A suicide bomber targets an Iraqi minister's convoy in Baghdad. Eleven people are dead. The labor official was not in the convoy. 22 people wounded in the blast. It happened in a busy commercial area.

As a college student he stood in line ten hours to vote. Now he wants to be sure other students don't have problems with access to the polls.

(COMMERCIAL BREAK)

COLLINS: Watching the big board, waiting for word. Investors with a lot on their minds. New economic reports, and this hour predictions from the former fed chairman.

Plus, point, counterpoint. War of words in the battleground states. What the candidates are saying, today.

It's Thursday, October 23rd, I'm Heidi Collins. You are in the CNN NEWSROOM.