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Obama Campaign Buying Ads in Reliably Red States; McCain: Ohio Will Carry Us; Interview With Barack Obama

Aired October 31, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, Barack Obama, he's spelling out his presidential priorities in our brand-new, in-depth, one-on-one interview. Four days before America votes, the Democrat acknowledge John McCain is making him look scary, but he's offering an olive branch to his rival anyway. Stand by for the interview.
Plus, Al Gore stumps for Barack Obama on some painfully familiar turf, while Obama takes the ad war right into McCain's back yard.

And John McCain says he's closing the gap with Obama with help from his friends. Can Arnold Schwarzenegger pump up the Republican candidate in the crucial battleground state of Ohio?

We're going to bring you their joint appearance. That's coming up later. All of that live.

I'm Wolf Blitzer with the CNN Election Express in Des Moines, Iowa. You're in THE SITUATION ROOM.

Barack Obama's winding down his presidential campaign where it first took off, right here in Iowa. The Democrat told voters today to expect more slash-and-burn tactics from John McCain before Election Day, on Tuesday. But in our one-on-one interview just a short while ago here in Iowa, Senator Obama sounded more statesmanlike toward his Republican opponent. I asked him whether he'd even considered giving Senator McCain a job in his administration if, if he wins the White House.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I would certainly consider any position for John McCain where I thought he was going to be the best person for our country. He and I have had a tough fight, but I think that I certainly have respect for him. I've said that before.

He is a leader in his party, the leader of his party right now. I think that he has a history of wanting to work together on some things that I care about, like comprehensive immigration reform, and making sure that we are dealing with critical issues like global warming. And so I hope that we can forge a strong relationship.

(END VIDEO CLIP)

BLITZER: The full interview with Senator Obama, including your viewer questions for the candidate, that's coming up here in THE SITUATION ROOM. Stand by.

Right now, let's bring in Jessica Yellin. She's in Senator Obama's home base of Chicago. Jessica, you're seeing new signs, I take it, of confidence within the Obama campaign. Tell our viewers what you're seeing.

JESSICA YELLIN, CNN CORRESPONDENT: Wolf, the Obama campaign is doing something that's highly unusual this late in an election. They are buying ads in reliably red states -- North Dakota, Georgia, and here's a zinger, Arizona, John McCain's own back yard.

Now, in Arizona, they're staying with a positive ad. No attacks on John McCain there. But all of this is a clear show of force and of confidence.

In a conference call with reporters today, Obama's campaign manager said basically that they're enormously enthusiastic about what they're seeing in early voting. They see good signs that it is going their way, that new voters are getting to the polls. And he says, look, these ads are an opportunity to try to expand the map. But the bottom line is they're hoping for a blowout, and they have the money to try to get one, and so they're trying with these ads in these states.

Now, as you know, Georgia, it went for Bush by 17 points four years ago. Right now John McCain is up by only 6 there. In Arizona, he's up by only 4, both according to our Poll of Polls. So the Obama campaign gunning for those three new states.

Another state that's enormously important to them, Florida. And as you mentioned, they dispatched a man who knows a little bit something about losing by just a few votes -- Al Gore. They sent Gore and his wife, Tipper, there to turn out the early vote and energize the base. They were there today, and that's Florida.

Now, as you mentioned, Barack Obama is in red states today, Iowa. He heads to Indiana tonight. He saying, look, he expects the campaign to get much more -- he used the word "ferocious," they use the word "ferocious" -- in the next few days. But Obama is doing his share of attacks on McCain, too. A tough last few days.

The last thing, Wolf, Obama will be back here to see his girls in their Halloween costumes quickly tonight -- Wolf.

BLITZER: Yes. That's why he left Des Moines just a little while ago, to be in Chicago, not all that far away, to spend Halloween with his two sweet little girls. Jessica, thanks very much.

For a second day, John McCain is going all out in the battleground state of Ohio. The Republican says he's making headway in that make-or-break tossup state.

We're standing by for Senator McCain's live appearance in Columbus, Ohio, with the California governor, Arnold Schwarzenegger. We'll go there live once their speaking. I think you're going to want to hear what Governor Schwarzenegger has to say right now. But in the meantime, let's go to CNN's Ed Henry. He's already in Columbus, getting ready for this event. Ed, we just heard the Obama camp is sounding rather confident right now. What about the McCain camp?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the McCain camp knows they're down right now. But they insist they feel some momentum, and they're hoping Governor Schwarzenegger can pump up the vote even more in this critical state.

(BEGIN VIDEOTAPE)

HENRY (voice-over): In the last days, the crowds are finally getting larger for John McCain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Thank you, Ohio!

HENRY: And he's feeding off the energy.

MCCAIN: I want to tell you, the enthusiasm and the momentum that I feel here in Ohio is going to carry us to victory here in Ohio and throughout this country.

HENRY: McCain aides insist their private polls in battlegrounds like Ohio suggest they're narrowing the gap with a strong closing case against Barack Obama's tax plan. And McCain is getting a little help from his friends to launch a double-barreled assault. First warning the financial crisis will deepen if Democrats, poised for gains in the House and Senate, also get the White House.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Our opponents in the next four years, Pelosi, Reid, Obama, the tax trifecta from hell, don't let it happen!

HENRY: Secondly, charging that unlike Obama, McCain has the national security credentials that led him to make the right call on the surge in Iraq.

RUDY GIULIANI (R), FMR. PRESIDENTIAL CANDIDATE: John McCain was right, and I watched him because there was a point in this election cycle where I was an opponent of John McCain's.

HENRY: But the McCain camp knows this is still an uphill battle with the Republican brand so tarnished.

MCCAIN: There's corruption in Washington.

HENRY: But for the first time, the candidate brought up the case of Senator Ted Stevens on the stump.

MCCAIN: We just had a senior member of the United States Senate convicted. I will clean up this mess and make you proud again of people who serve you in Washington.

(END VIDEOTAPE) HENRY: Now, the McCain camp is also jumping on the fact that Democrat Bill Richardson said in a radio interview that if you make $125,000 or less, you'll get a tax cut under Senator Obama's plan. This follows Joe Biden saying $150,000 just a few days ago, when, in fact, the plan says $200,000 or less. The Obama camp says Bill Richardson misspoke, but you'll have to wonder this late in the game why the Obama camp can't keep their own tax plan straight -- Wolf.

BLITZER: Well, we talk a lot about that, the taxes, coming up in my interview with Senator Obama. I tried to get him to clarify a lot of this. Stand by, Ed, for that.

In the meantime, let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Former Secretary of State Lawrence Eagleburger, a Republican and supporter of John McCain, told National Public Radio yesterday that Alaska Governor Sarah Palin is not prepared to take over the job of president if she had to, and he said -- quoting now -- "I devoutly hope that she never would have to be tested." But the fact is, if some people in the Republican Party get their way, she could be tested one day.

Should John McCain lose the race for the White House, you can bet your last dollar that this moose-hunting, gun-toting, pro-life hockey mom is not going to just fade from the political spotlight. She is a huge hit with a group of social conservatives who embrace her values and see her as a fresh face for a divided party. To them, a 2012 Palin run for the White House may be on the horizon.

But a lot of people feel quite differently about Sarah Palin. She quickly became a national joke for her lack of experience, her failure to grasp the issues, and her inability to handle herself with the media, especially those absolutely horrible interviews she did with Katie Couric.

Recently, she's gone off script and off message, and the campaign is angry. Some of McCain's insiders, campaign advisers, are saying that she has turned into a liability in the last couple of weeks. She's been called everything from a diva to a whack job.

And yet through it all, Sarah Palin remains remarkably unfazed. In an interview this week on ABC's "20/20," Palin said, "I'm not doing this for naught." Yet another pithy utterance.

Here's the question: If John McCain loses, what's next for Sarah Palin?

Go to cnn.com/caffertyfile and post a comment on my blog -- Wolf.

BLITZER: Jack, thank you.

And to our viewers, stand by for my one-on-one interview with Senator Barack Obama.

(BEGIN VIDEO CLIP) OBAMA: Clearly, Senator McCain doesn't know how to capture bin Laden.

(END VIDEO CLIP)

BLITZER: Does Senator Obama have a plan to get bin Laden? And would he sign off for talks with the Taliban, perhaps a group that aided and abetted al Qaeda? We're going to talk about that and more.

Plus, a viewer question for Senator Obama on Senator McCain's charge that he wants to redistribute America's wealth. You're going to see how Senator Obama is trying to reassure voters he's not a socialist.

And CNN's electoral map is changing once again in some rather surprising places.

We're live with the CNN Election Express in Des Moines, Iowa, and you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: And this just coming in to THE SITUATION ROOM, new changes in CNN's electoral map.

North Dakota now switching from leaning McCain to a tossup state, based on the latest polling and a number of other factors in that state.

Louisiana moving from leaning McCain to safe for McCain. That's Louisiana.

And look at this. McCain's home state of Arizona moving from safe for McCain to leaning McCain. This coming as Senator Obama has launched a new ad campaign in Arizona.

CNN now estimates that Obama would win 291 electoral votes if the election were held today. That's 21 more than needed to win the White House. Senator McCain would win 160 electoral votes based on this latest CNN estimate.

Regardless of who wins the White House, U.S. history will change. Americans will either elect a president whose running mate would become the first female vice president in history, or put the first African-American in the White House.

As this race goes down to the wire, Barack Obama took some time out from his hectic schedule to sit down with me here in Iowa. It happened just a short while ago in Des Moines, and I asked him a wide range of questions, some of them questions you want answered, specifically your iReport questions. He even responded directly to questions from voters like you.

(BEGIN VIDEOTAPE)

BLITZER: Senator Obama, thanks very much for joining us. OBAMA: Thanks for having me, Wolf.

BLITZER: Pretty exciting to come back to Iowa, because a lot of people think this is where it all started for you.

OBAMA: Well, especially when it's 70 degrees outside in late October. I'm really happy to come back to Iowa.

BLITZER: It's warmer here than it is back in New York or Washington.

OBAMA: But no, it felt really good to see all these familiar faces. There were a bunch of people out here who signed up for our campaign when we had almost no money, very few endorsements, the polls weren't good for us, and a lot of these people took a chance. They came up and volunteered, put their names on my campaign.

BLITZER: Iowa showed that a black man can really get a lot of white people's support.

OBAMA: Well, I think that's part of what it showed. But what it also showed, I think you'll remember, because you were watching, a lot of people were skeptical about young people coming out, about people who traditionally haven't participated in caucuses getting involved. And here's where we, I think, proved that we can get people much more engaged in the political process than they have been before.

BLITZER: Let's go through a whole bunch of substantive economic issues, foreign policy issues. I'm going to give you quick questions. If you can give me quick answers, I think we'll get through a lot. We've got limited time, as you know. You want universal health care or something approaching universal health care. That's a top priority. Where is the money going to come from?

OBAMA: Well, we're going to have to cut back on some things that don't make sense right now. We're spending $15 billion a year, for example, under the Medicare problem to subsidize insurance companies.

We're going to have to cut programs that don't work in order to provide health care. And as I've said before, we're going to roll back the Bush tax cuts on the wealthiest Americans, people making over $250,000 a year, especially millionaires and billionaires who have been making much more than that.

BLITZER: So, in effect, that will pay for the health care?

OBAMA: That will pay for the health care.

BLITZER: What about the war in Iraq? You're going to want to stop that war as well, right?

OBAMA: The war in Iraq, we can achieve some significant savings. It's not going to come immediately. I've said I want a responsible drawdown. We're still going to have to reset our military. We're still going to have to deal with rising veterans' costs.

Post-Traumatic Stress Disorder, for example, I think has been under-diagnosed. We've got to make sure treatment...

(CROSSTALK)

BLITZER: So the $12 billion the United States is spending a month right now on Iraq, that's going to go on at least for, what, a year, a year and a half?

OBAMA: My hope is, is that we draw down that money over time, it's drastically reduced. But the point is that we're not going to be able to take that $12 billion and suddenly automatically apply it all to domestic stuff. We've got to take care of our troops, and we're still going to have expenditures in Afghanistan because we need to hunt down bin Laden and al Qaeda and put them finally out of business.

BLITZER: Senator McCain says if he's president, he will veto every piece of legislation that has pork barrel spending or earmarks. Will you make that promise?

OBAMA: You know, here's what I'll tell you -- we're going to have to fundamentally change how our appropriations process works. And I want to sit down with members of Congress, should I be elected, even before I'm sworn in, and explain to them that some of these projects may be worthy projects in their home state, home district, but right now we can only do those things that are absolutely necessary. And if we're going to have a project, I think it has to not just be a whim of a particular local community, it's got to be something that serves to help build the overall economy and move us in a better direction.

BLITZER: At a time of economic crisis, as it is right now, the worst since the Great Depression, people want to know who you'll be surrounded with on these important decisions.

Who do you think will be your secretary of the Treasury?

OBAMA: Well, I'm not going to make that kind of news because I have --

BLITZER: Give me an example of the folks that you're thinking about.

OBAMA: I haven't won yet. But I'll tell you who is already part of my senior economic advisory group, because you've seen him. Paul Volcker, former Federal Reserve Board chairman; Larry Summers, former secretary of the Treasury; Warren Buffett, who's been a great friend and a great adviser and talked to me a lot during this resent economic crisis.

Those are the kinds of people that I expect will surround me, will help me make decisions. But it's getting ahead of ourselves for me to identify particular cabinet posts.

BLITZER: Will you raise the capital gains tax, the tax where people sell stocks or mutual funds, their 401(k)s? Will you raise it from 15 percent, that capital gains tax? OBAMA: I have said early in this campaign that it makes sense for us to go from 15 percent to 20 percent. Now, frankly, people aren't experiencing a lot of capital gains right now. People are having a lot of capital losses.

But I've talked to people like Warren Buffett and asked him, you know, will that modest increase in the capital gains tax have an impact on the real economy, on investment, on business growth? And he assures me that's not going to be an impediment to capital formation and us being able to move forward on the economy.

BLITZER: Will the middle class family be exempted from that increase in capital gains tax?

OBAMA: Well, what I've said is small businesses are going to be exempted and anybody who's making less than $250,000 a year. I've said they're not going to get their capital tax gains increased.

BLITZER: So they will be exempted?

OBAMA: They will be exempted from that, as well as any income tax increase, any payroll tax increase. My attitude is, is that middle class families need a tax cut. And 95 percent of American families and workers are going to get reduced taxes. In fact, there was an article today in "The New York Times" that laid out in very stark terms the fact that I give much more tax relief to middle class families than John McCain does.

BLITZER: At a time of economic distress, is it wise to increase the corporate tax rate?

OBAMA: Well, we're not increasing the corporate tax rate.

BLITZER: I know, but there's some talk that you want to increase it. It's 35 percent right now. You talked about that in the past.

OBAMA: Where is that talk coming from?

BLITZER: I don't know, you tell me. You want to keep it at 35 percent?

OBAMA: I have no plans for increasing the corporate tax rate. And in fact, you can make an argument for lowering the corporate tax rate, but only if you, at the same time, close all the corporate loopholes.

The problem we have right now is, on paper we've got a high corporate tax rate. In actual terms, corporations aren't paying their fair share.

BLITZER: ExxonMobil will still pay 35 percent. Is that right?

OBAMA: ExxonMobil will still pay 35 percent, although I've talked about previously the idea that we should have a windfall profits tax similar to the one that Sarah Palin imposed on oil companies to benefit Alaska. (END VIDEOTAPE)

BLITZER: All right. We're just getting started. Stand by for much more of my interview with Senator Barack Obama. He's responding to a viewer also who fears his economic policy smacks of socialism.

(BEGIN VIDEO CLIP)

OBAMA: Well, you know, if she's taking the description John McCain is giving of my plans, then I'd be scared, too.

(END VIDEO CLIP)

BLITZER: Senator Obama spelling out his top priorities if he wins the White House. And the ranking -- it goes through 1 through 5 -- may surprise you.

Plus, two Republicans respond in our "Strategy Session." Stand by for that.

And democracy in action right now, the lines and the enthusiasm in states with early voting.

Stay with us. You're in THE SITUATION ROOM.

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, a real problem for Senator Barack Obama, or could it be just a myth? The so-called Bradley Effect which suggests whites may publicly say they'll vote for an African-American but privately vote against one, we're examining how real or imagined that is.

And are we seeing more high-profile Republican defections from John McCain? One Republican from the Reagan White House now hinting he may turn his back on Senator McCain, while another McCain supporter says Sarah Palin is simply not ready.

And is Palin a drag on the McCain campaign? Wait until you hear what voters like you are telling pollsters right now.

I'm Wolf Blitzer at the CNN Election Express in Des Moines, Iowa.

You're in THE SITUATION ROOM.

Just moments ago, you heard the first part of my interview with Senator Barack Obama. He talked about taxes, health care and other important issues. Now we discuss international affairs, including the hunt for Osama bin Laden.

(BEGIN VIDEOTAPE)

BLITZER: If you're elected president -- still a big "if" right now -- when would you shut down Gitmo, the Guantanamo naval base, the detention center for suspected terrorists is?

OBAMA: I want to close Gitmo as -- as quickly as we can do...

(CROSSTALK)

BLITZER: What does that mean? How quickly?

OBAMA: Well, as quickly as we can do prudently.

And I'm not going to give a time certain, because I think what we have to do is evaluate all those who are still being held at Gitmo. We have to put in place appropriate plans to make sure that they are tried, convicted, and punished to the full extent of the law. And that's going to require, I think, a review of the existing cases, which I have not had the opportunity to do.

BLITZER: Senator McCain says that, if he's elected president, Iran will not become a nuclear power. Can you make that same commitment?

OBAMA: Well, I have said I will do everything in my power to prevent Iran from obtaining nuclear weapons.

I think it would be a game-changer. It would not be acceptable. It would be a threat to our strongest ally in the region, Israel. But it would potentially trigger a nuclear arms race in the region. And we have to both apply much tougher diplomacy, but -- and sanctions, potentially, if they do not move in a better direction. We have to give them some inducements to walk away from their nuclear program. And we should never take a military option off the table.

BLITZER: If you're elected president, would you support direct talks with the Taliban in Afghanistan?

OBAMA: You know, I know that General Petraeus has discussed the possibility of trying to peel away more moderate factions within the Taliban.

And I think that, talking to our commanders on the ground, and based on sound intelligence, if we can peel off some support from the hard-core militants that are aligned with al Qaeda, that would be beneficial.

I don't think that we necessarily are the best intermediary in that kind of discussion. And I would want to see some proof, some evidence, that, in fact, there are aspects of the Taliban that are -- that are susceptible to reasonable dialogue. But I...

(CROSSTALK)

BLITZER: Because, as you know, this is the group that gave aid and comfort to al Qaeda.

OBAMA: Well, and that's exactly my point.

The -- if -- my general attitude is that we have to snuff out al Qaeda. We have to capture and/or kill bin Laden. And, in order for us to do that, we're going to have to have cooperation from Afghans and Pakistanis.

But, you know, it may get murky in terms of who are potential allies, who are enemies in that situation. I want to work with our commanders to do whatever, practically, we can do, in order to make sure that the overall goal of eliminated al Qaeda as a threat is accomplished.

BLITZER: The model that General Petraeus used in Iraq, to wean away --

OBAMA: The Sunni --

(CROSSTALK)

BLITZER: Iraqi Sunni insurgents.

OBAMA: Right.

BLITZER: From al Qaeda --

OBAMA: Right.

BLITZER: It seems to have worked in the Al Anbar Province --

OBAMA: Absolutely.

BLITZER: -- and elsewhere. Is that model applicable in weaning away Taliban elements from al Qaeda in Afghanistan?

OBAMA: I think it is important to understand that these countries are all different. That's one of the mistakes we made going into Iraq. We have to, I think, analyze, very specifically, what the situation is there, before we make any moves. And I will expect, if I'm the president-elect, to have some very rapid discussions with General Petraeus, who I think has done a very good job in Iraq. I want to get his assessment, and I want -- I would want to see some evidence that, in fact, the possibility of that model working existed in Afghanistan.

BLITZER: As you know, he was -- he took charge today, even as we're speaking --

OBAMA: That's right.

BLITZER: -- of the U.S. military Central Command, which oversees that entire region. You have confidence in him, and you want him to stay?

OBAMA: I do have confidence in him. I think he did an outstanding job in Iraq, as our military generally has done outstanding work.

What -- what they need is a commander in chief who is thinking more strategically about how we deploy our resources to make America more secure. And I look forward to working alongside our commanders and our troops on the ground, in order to make sure that we are going after al Qaeda, we're getting bin Laden, that we stabilize Iraq, that we create a situation in Afghanistan where this ongoing threat is not constantly coming back at us.

BLITZER: Senator McCain says he knows how to capture bin Laden, and he says, "I will get him," if he's elected president. Do you know how to capture bin Laden?

OBAMA: Well, you know, I -- I'm reminded of -- he said this during the debate. And I think, the next -- that night, maybe, I think, Jon Stewart, on Comedy Central, said, you know? Well, why have you been holding out on us for the last six years?

(LAUGHTER)

OBAMA: I mean, the fact is, is that, along with George Bush, John McCain championed a strategy that distracted us from capturing bin Laden, that focused on Iraq, that had nothing to do with 9/11.

And, so, clearly, Senator McCain doesn't know how to capture bin Laden, because he was supportive of a huge strategic blunder when it came to accomplishing the task.

I will focus on what Secretary Gates and others have indicated is our number-one security threat. And that is bin Laden and al Qaeda. We will go after him. We will kill him, or we will capture him, try him, apply the death penalty to him, where it is necessary.

But that is the threat that we should have stayed focused on. That's the threat that I will focus on when I'm president.

BLITZER: How worried are you about the stability of the Pakistani government? Because it looks like al Qaeda is going after the new leadership post-Musharraf in Islamabad.

OBAMA: Well, I'm concerned about it. This was one of the problems with our previous strategy. There was a lot of resentment that built up as a consequence of our support of President Musharraf there, who had squelched democracy.

And now you have got a fledging democratic government. We have to support their efforts to democratize. That means, by the way, not just providing military aid. It means, also, helping them to provide, you know, concrete solutions to the -- the poverty and lack of education that exists in Pakistan. So, I want to increase non- military aid to Pakistan.

But we also have to help make the case that the biggest threat to Pakistan right now is not India, which has been their historical enemy. It's actually militants within their own borders. And, if we can get them to refocus on that, then that's going to be critical to our success, not just in stabilizing Pakistan, but also in finishing the job in Afghanistan.

(END VIDEOTAPE) BLITZER: All right, we're going to have a lot more coming up of my interview with Senator Obama here in Des Moines, Iowa.

He runs down a list of five presidential priorities, should he win the White House, then offers this surprise.

(BEGIN VIDEO CLIP)

BLITZER: You tell me which one of these five would be your top priority after you're inaugurated, on January 25, you are inaugurated: health care reform, energy independence, a new tax code, including tax cuts for the middle class, education spending, or comprehensive immigration reform.

OBAMA: Well --

BLITZER: Top priorities.

OBAMA: Top priorities may not be any of those five.

(END VIDEO CLIP)

BLITZER: All right, so, what -- what would his top priority be, if he wins the White House? Stand by for his answer.

And also, in our "Strategy Session": You are now hearing what Senator Obama is saying about, Senator McCain doesn't know how to catch bin Laden. Does he know how to catch bin Laden?

Republican reaction. Ed Rollins and Alex Castellanos, they are standing by live.

And we're talking to undecided voters in Ohio right now about what will finally get them to make up their minds.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: So, how would Senator Obama prioritize the country's problems, should he win the election on Tuesday?

He starts to open up about that in our interview.

(BEGIN VIDEOTAPE)

BLITZER: If you're elected president, you have to make major decisions, and you have to make them right away.

OBAMA: Right.

BLITZER: Priorities are going to be critical.

I'm going to give you five issues. You tell me which one of these five would be your top priority after you're inaugurated, on January 25, you are inaugurated: health care reform, energy independence, a new tax code, including tax cuts for the middle class, education spending, or comprehensive immigration reform.

OBAMA: Well --

BLITZER: Top priorities.

OBAMA: Top priorities may not be any of those five. It may be continuing to stabilize the financial system. We don't know yet what's going to happen in January.

And none of this can be accomplished if we continue to see a potential meltdown in the banking system or the financial system. So, that's priority number one, making sure that the plumbing works in our capitalist system.

Priority number two of the list that you have listed -- have put forward, I think, has to be energy independence. We have to seize this moment, because it's not just an energy independence issue. It's also a national security issue, and it's a jobs issue. And we can create five million new green energy jobs with a serious program.

Priority number three would be health care reform. I think the time is right to do it. Priority number four is making sure that we have tax cuts for the middle class and part of a broader tax reform effort.

Priority number five, I think, would be -- would be making sure that we have an education system that works for all children.

One thing I want to make a point of, though, that the tax cut that I talked about may be part of my priority number one, because I think that's going to be part of stabilizing the economy as a whole. I think we are going to need a second stimulus.

One of my commitments is to make sure that that stimulus includes a tax cut for 95 percent of working Americans. That may be the first bill that I introduce.

BLITZER: We're almost out of time, Senator. We asked viewers in the United States and around the world to send some questions to you.

We got one from Martha Amadano (ph) of Union City, New Jersey. She says she's an undecided voter who votes -- votes mostly Republican, sometimes Democrat. She says she originally supported Hillary Clinton.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: As a Cuban American, your plan to redistribute the wealth or spread the wealth around that you have been saying scares me. It didn't work with Fidel Castro in my country of Cuba. What makes you think it's going to work in this country?

(END VIDEO CLIP)

OBAMA: Well, you know, if she's taking the description John McCain is giving of my plans, then I would be scared, too. Understand to Maria (sic) what I will -- I will repeat what I have said. If you make less than $250,000 a year, you will see no tax increase. You will probably see a tax cut under my plan.

If you make more than $250,000 a year, all we're talking about is going back to the tax rates that existed under Bill Clinton. If she was a strong supporter of Hillary Clinton's, then she should understand that all I'm talking about is going back to the tax rates that existed under Bill Clinton during the 1990s, when the economy grew.

By the way, that's the same position that Hillary Clinton took.

BLITZER: We have one more question from a viewer, Derek Noiner (ph) of Saint Louis.He says this:

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I know you have pledged to have a bipartisan administration. But I was wondering, does that include John McCain? After this very vicious campaign, can you consider him a friend, an ally in the Senate, or would you even consider him for a position in your administration?

(END VIDEO CLIP)

OBAMA: Well, I will tell you what. I would certainly consider any position for John McCain where I thought he was going to be the best person for our country.

He and I have had a tough fight, but I think that I certainly have respect for him. I have said that before. He is a leader in his party, the leader of his party right now. I think that he has a history of wanting to work together on some things that I care about, like comprehensive immigration reform, and making sure that we are dealing with critical issues, like global warming. And, so, I hope that we can forge a strong relationship to get some things done, get some things moving.

BLITZER: We're out -- we're out of time.

But all of us were moved last weekend when you went to see your grandmother in Hawaii. I know she watches CNN.

OBAMA: Yes.

BLITZER: Because she says she watches CNN.

OBAMA: She does.

BLITZER: If -- and she might be watching right now. And I know how proud she must be that you have reached this level and on the verge, potentially, of becoming president of the United States. How emotional is this for you and for her at this moment?

OBAMA: Well, you know, look, she's my grandma. And she helped raise me. And she -- she put off a lot of things in her own life to make sure that myself and my sister, that -- that we were taken care of.

So, a big chunk of whatever success I have achieved is because of her. I love her dearly, and she knows that.

And, if she is listening, I just want to make sure that she's getting her rest and -- and hopefully getting better.

BLITZER: And we wish her only the best and -- and a speedy, speedy recovery to your grandma.

OBAMA: Thank you so much, Wolf. Great to talk to you.

BLITZER: Senator, thanks very much.

OBAMA: Appreciate it.

(END VIDEO CLIP)

BLITZER: He clearly loves his grandmother very, very much. We spoke about that a little bit after the interview as well.

You heard Senator Obama scoff at John McCain's suggestion that he knows how to capture bin Laden. But what about Senator Obama's chances of catching the al Qaeda leader? Republicans Ed Rollins and Alex Castellanos, they are standing by live to respond.

We will also speak with a top official from the McCain campaign to get their live reaction.

Also in our "Strategy Session": Obama sounds like he's finding common ground with General David Petraeus, despite their disagreements on Iraq. What's going on?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In our "Strategy Session," joining us now, Republican reaction to my interview with Senator Barack Obama. I'm joined by Republican strategist and CNN contributor Ed Rollins, and Republican consultant, also a CNN contributor, Alex Castellanos.

First of all, Ed, what did you think about his specific ideas, if -- and it's still a big if -- if he becomes president?

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: Well, you know, first of all, so much of it is his presentation.

He's a very calm, very disciplined -- and there's nothing he says that's scary. You have to look beyond the words and the -- and the demeanor, you know, and I think, to a certain extent when he talks about, "You know, I'm going to go back to the Clinton tax cut," I mean, he forgets to add that, to those who are in the upper brackets, they're going to have to pay, for the -- the lower -- I mean, it's going to go to almost 50 percent, with the additional Social Security tax that's going to be up there. So, when you start taxing people at a 50 percent rate that are the most productive people in society, and you add state and local, you really basically affect the economy, which is what his first task is going to be.

BLITZER: No, I think what he says is, if you make more than $250,000 a year, you would go from 36 percent to 39 percent as the maximum tax rate...

ROLLINS: That's -- that's -- no, no.

BLITZER: ... which is what it was under the Clinton administration.

(CROSSTALK)

BLITZER: As far as Social Security withholding, he says he would maybe another 2 or 3 or 4 percent, half paid by the employees, half paid by the employer.

ROLLINS: That's not been defined yet. And, basically, if you spread it out, it's $104,000 today that people pay. And self-employed and small businesses, it's going to have a terrible effect. And I think the details are what he really has to lay out here, as we get very -- closer to this election.

BLITZER: It's a fair point.

All right, I tried to pin him on some of those details.

(LAUGHTER)

BLITZER: Alex, what did you think?

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Oh, he's -- he's a terrific political performer. There's no doubt, very reassuring. He's got a lead. And I think, in -- in opportunities like that, he's trying to reassure the American people that he's safe -- I think Ed's right -- that -- that the change he would bring is very safe.

But I -- to Ed's point, for example, one of the things we're not hearing is that he's got $400 billion in what he calls tax cuts for people who don't pay taxes, which is, of course, actually -- a transfer payment like that, we used to call that welfare. so, he's going to actually undo one of the significant accomplishments of the Clinton administration, which is eliminating just welfare and turning it into welfare to work.

It's -- but he's very good. He was very reassuring in that kind of an interview. And he does love his grandma.

BLITZER: Yes, he certainly does love his grandmother.

He points out in other interviews that, on that issue of welfare, he gets really agitated when he hears that charge from the McCain camp, because he says, these aren't people who aren't working. These are people who are working. They do have withholding taxes that they're -- that they're paying, and this is a tax credit, not unlike some of the tax credits that have been provided to others, including some of the -- the economic stimulus checks that went out to people, some of whom don't pay any taxes, any federal income taxes, either.

So, he gets really sensitive on that issue.

Ed, let's talk a little bit about bin Laden. He started to laugh when I pointed out to him that McCain keeps saying: "I know how to capture bin Laden. I will find him. I will chase him all the way to the gates of hell."

He said: "You know what? If he had that notion, why hasn't he shared it with the president of the United States?"

ROLLINS: Well, I think, in fairness -- in fairness to President Bush -- and, obviously, lots of people are very critical of President Bush these days -- if we had any way of getting bin Laden, we would have got him seven years ago or six years ago.

I think the key thing is, we -- we have bottled up a lot of their activities. And that's the critical thing. As costly as this war has been, there's been at least 30 situations where they have tried to do activities here in America that have been stopped.

So, I think getting bin Laden is very symbolic. And, to a certain extent, we all admire that goal. But, at the end of the day, how do we defend our country is the most important thing and keep events from happening. He's never been specific on what he's going to do on that front. And I think that's -- that's a big question mark.

BLITZER: Yes.

CASTELLANOS: Well, he's --

BLITZER: It's true. They haven't been specific.

He -- he was specific, though, Alex, in expressing his complete confidence in General Petraeus, who is now the commander of that entire region, not just in Iraq, but the entire Middle East, South Asia, as the -- as the leader of the Central Command.

CASTELLANOS: You know, it's interesting, in his -- in his quest to demonstrate stability and continuity, how much like the Bush administration Obama is becoming, while, at the same time, attacking John McCain for being, you know, the second coming of George Bush.

But he's talked about keeping, of course, General Petraeus, maybe keeping Gates. He is now supporting the Bush policy of -- of preemption, if necessary, in Iran, so -- looking at oil drilling -- so, there's a lot there that we're seeing actually Barack Obama move to the right to comfort people.

And it's not going to be that radical a change, is the message we have been hearing. And I think, the way he's handling General Petraeus, talking about General Petraeus as part of that. BLITZER: Yes. And you remember he also said that he wouldn't be able to eliminate that $12-billion-a-month expenditure in Iraq anytime soon. It could take a year, year-and-a-half, because the U.S. is going to have to have that -- that troop presence there for the time being. He was pretty precise --

CASTELLANOS: Wolf --

BLITZER: -- on that, as well, even though he constantly laments the fact that the U.S. has to shell out $12 billion a month for that.

CASTELLANOS: Wolf, when you asked him that question --

BLITZER: All right, guys, unfortunately --

CASTELLANOS: -- I thought it was really interesting.

BLITZER: Yes, go ahead.

CASTELLANOS: He was -- he was trying to make change safe there. He was really trying to --

BLITZER: Yes.

CASTELLANOS: -- make change safe, let you know, no radical change. Diminished expectations, I think, is what we're already seeing.

BLITZER: Yes, I heard that myself. I -- I heard exactly -- I heard what you heard, Alex. That was -- that -- my ears perked up as well.

All right, guys, stand by. We're going to continue this conversation.

Joe Biden hopes to be a winner, no matter what happens on Election Day. Surely, he wants to become vice president of the United States, but he's also running in another race.

And are more high-profile Republicans turning their backs on John McCain? One man hints at it, while the other is a McCain supporter who says Sarah Palin is simply not ready.

Much more coming up -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker": Joe Biden is running for something other than vice president of the United States. The Delaware Democrat is expected to win reelection to the U.S. Senate. He will have to give up that seat if the Democrats win the White House.

Biden's GOP challenger, Christine O'Donnell, accusing Biden of blowing off the people of Delaware because he hasn't debated her or done much campaigning to keep his day job. Let's go back to Jack Cafferty. He's got "The Cafferty File" -- Jack.

CAFFERTY: The question this hour is: If John McCain loses, what's next for Sarah Palin?

Anne in Seattle, Washington: "With that pushy personality, we will unfortunately see more of her. I won't be watching, though. And, if the Republicans see her as part of their future, I see the U.S. as a one-party system. My wish is that she would spend her life gazing at Russia, quietly, very quietly."

Sherry in Pennsylvania: "She will go back to Alaska, a state we in the lower 48 ought to stop casting such a dim view on. She will continue to govern the energy-rich state. She will be herself, and a mom. There is no job in the world more important than being a good parent. I wish everybody would give her a break and stop demonizing her."

Dennis in Cleveland writes, "Hopefully, obscurity."

James in Tennessee weighs in with this: "Her name will become synonymous with the anti-intellectual, intolerant, theocratic base of the former Republican Party. She will be the candidate of choice for those who don't read, those who still look under their beds at night for communists, those who wish to limit the freedoms that most of America wants. She will hopefully be required to repay the state of Alaska for flying her family around as if they were royalty."

Roy in Chicago: "With her comedic delivery, she is well-suited to situation comedies. How about 'Third Rock from Russia'? Political mother of pregnant teenager with snowmobiling husband deals with the trials and tribulations of Alaskan life in the midst of a hilarious impeachment."

Jeff writes: "What's next for Princess Palin? Nothing."

And Toni says this: "She and Joe the plumber could hook up, get a reality TV show on MTV."

If you didn't see your e-mail here, you can go to my blog, CNN.com/caffertyfile. Look for yours there, among hundreds of others -- Wolf.

BLITZER: Thanks, Jack.

And to our viewers, you're in THE SITUATION ROOM.

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