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THE SITUATION ROOM

New Presidential Poll Numbers; Hurricane Season Forecast; Inside a Life of Hate; Obama Wraps Up Colorado Campaign Swing; Romney Versus Obama Super PAC; Most Voters Expect Obama To Win; Gunmen Fire On Sinai Police Station; Report: 100 Million People Get Welfare; NOAA: July In U.S. Hottest On Record

Aired August 9, 2012 - 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: We're releasing the results of our brand-new polling in the presidential race. You're going to want to see this. The candidates are moving in opposite directions, and the numbers indicate a big reason why.

Also, inside a life of hate -- a former skinhead gives us a chilling look at the lifestyle and the mind-set of people like the gunman in the Wisconsin temple shooting.

And an updated and ominous forecast for the rest of the Atlantic hurricane season. We have new information.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

We begin this hour with a very important change in the presidential race. According to our brand-new CNN/ORC poll, a majority of the nation's voters now say they want to reelect President Obama. Take a look at this. The president has 52 percent. He's seven points ahead of Mitt Romney, who's at 45 percent.

Just a month ago, the president in our poll was ahead 49 percent to 46 percent. Significantly, the president now according to our latest poll is above 50 percent. Our polls also show what voters think of Mitt Romney's potential vice presidential picks.

Let's bring in our national political correspondent, Jim Acosta. He's taking a closer look at all of these numbers.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: That's right.

BLITZER: At least on the surface, should bring a smile to the Obama campaign.

ACOSTA: And perhaps a warning to Mitt Romney and his campaign to go big in the vice presidential search. Wolf, with Mitt Romney heading out on what is becoming a potential rollout for his running mate, the results from our CNN/ORC poll on the veepstakes are even more fascinating.

The two men that seem to be the safe bets in Washington are not the top choices in their own party.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With perhaps just days to go before Mitt Romney makes his vice presidential pick, the conventional wisdom in Washington has narrowed it down to the two P's, Tim Pawlenty and Rob Portman.

TIM PAWLENTY (R), FORMER MINNESOTA GOVERNOR: It's an honor to be considered. It certainly would be an honor for anybody to be considered.

ACOSTA: Widely considered the safest choices of the bunch, the two P's are saying all the right things.

SEN. ROB PORTMAN (R), OHIO: I'm in the Senate. I just got elected two years ago. I think I'm probably going to end up staying.

But as new CNN/ORC poll, Republicans want a flashier pick like the GOP's rising star Marco Rubio, the bombastic Chris Christie or conservative heartthrob Paul Ryan, all at the head of the pack. Why? Likability.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: In the end, nobody votes for vice president.

ACOSTA: Among all Americans the New Jersey governor has the highest favorability numbers of the seven men in the poll, followed closely the Florida senator. Name recognition is also a factor. The public still doesn't know much about Pawlenty and even less about Portman.

UNIDENTIFIED MALE: Governor Mitt Romney!

ACOSTA: It could be a warning sign for Romney, who's about to embark on a bus tour that his campaign has hinted could be a running mate debut.

The unofficial GOP nominee could use some pizzazz, with our poll finding him seven points behind Obama's. What's more, the president's favorability numbers are holding steady and better than Romney's numbers.

NARRATOR: President Obama used his health care plan to declare war on religion.

ACOSTA: Romney is trying to change that with a new ad accusing the president of waging war on churches and faith-based groups by requiring religious employers to cover contraception under the health care law. The Obama campaign notes those rules have since been relaxed.

But according to our new poll, the vast majority of Americans want Romney to release more of his tax returns. And on the driving force of Romney's campaign, the economy, slightly more Americans believe things will get better under the president.

As Chris Christie put it earlier this week, it's the candidate at the top of the ticket that matters.

CHRISTIE: I mean, you really think people in the United States I'm not sure about this Obama guy, but, boy, I love Biden, I'm voting for him for that reason? No, people don't do that. They just don't do it.

(END VIDEO CLIP)

ACOSTA: Our new poll also finds that despite a close race, two- thirds of Americans believe the president will win reelection. And as for all of the nasty ads in recent days, the poll is split over whether the candidates have been attacking each other unfairly.

And, Wolf, just getting back to that factor of unknowability, if that's a word I could use, about Rob Portman and Tim Pawlenty, very interesting in these poll numbers -- 72 percent in the polls said they were unsure about Rob Portman, 58 percent about Tim Pawlenty. There's a lot of people out there who just don't know who either of these guys really is. And they might be on that running mate slot.

BLITZER: On that specific issue, who the vice presidential running mate should be, there's only one person, maybe two -- that would be Mitt Romney and Ann Romney -- who will make that final decision and he has to really feel comfortable with his running mate, because if he's elected president, that person's going to be vice president. They're going to be working very, very closely.

So while the American public might not know a lot about Rob Portman, for example, the senator from Ohio, I think he knows a lot about him and he has spent a lot of quality time with them as well.

ACOSTA: And everything about the Romney campaign and everything about Mitt Romney is data-driven and risk-averse. They try to avoid risk at all costs.

That's why everybody keeps going back to Rob Portman and Tim Pawlenty. They don't want another Sarah Palin situation. But our polling finds that if they want to spice things up out there, there are certainly other picks out there that the party, their own party, would like to see on that ticket.

BLITZER: Originally, there was a push to get this announcement before the start of this bus tour. But that could be delayed, right?

ACOSTA: Well, we were thinking that it could happen any time during this bus tour. It doesn't make much sense to do it while the Olympics are going on because the Olympics are taking up so much of the public's attention right now.

That's why folks are focusing on the last two legs of this bus tour, Florida and Ohio on Monday and Tuesday going through Marco Rubio's territory, then Rob Portman's territory. But, Wolf, as you know, anything can happen after that. There's still plenty of time between the end of that bus tour and the convention.

BLITZER: We will see. We will see what happens. Good work. Thanks very much, Jim Acosta.

Let's dig a bit deeper now. Let's bring in CNN senior political analyst Ron Brownstein. He's also editorial director of "The National Journal."

Let me put these numbers up and get your thoughts, Ron, because you're an expert on this subject. Registered voters' choice for president of the United States, a month ago Obama was at 49 percent, and now he's up to 52 percent. A month ago Romney was at 46 percent, and now he's down to 45 percent.

How much should we read into what has happened over the past month in our own poll?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, I think there are two really important things in this poll. Your 52 is a little at the high end for Obama now. But, Wolf, it's now the fifth national poll since mid-July that's put the president at 49 or above.

And also in the last two weeks, Quinnipiac University with CBS and "The New York Times" have polled six of the key swing states. In five of them, Obama is at 49 or above. Clearly, the polls are converging that the president is moving right to or even above that magic 50 percent marker now.

The second really important thing in this poll I think is if you look in the internals, the formula for victory for President Obama is what you could call the 80/40 solution. Four years ago in 2008, he won a combined 80 percent of all minority voters. If he holds that vote in 2012, he only needs 40 percent of whites, an incredible number really, to get to a national majority.

You look at your new poll today, 81 percent of non-whites, 41 percent of whites, and 52 percent overall, that is the formula for President Obama if he's going to win a second term.

BLITZER: Let me put some more numbers up on the screen, Ron. Favorability, a favorable opinion of President Obama, 56 percent say they have a favorable opinion of the incumbent president; 47 percent have a favorable opinion of Mitt Romney.

What do those numbers say to you?

BROWNSTEIN: This is really striking because in your poll President Obama's approval rating reaches 50 percent. In most polls he's just under 50, which means that to win reelection he has to convince some people who think he hasn't done a good job that they would prefer Mitt Romney even less.

And what these numbers suggest is they are having success at that, that Mitt Romney has an unfavorable image net on balance in most polls with the public, certainly in many of the swing states we have seen come out in the last few weeks, where they have seen the advertising. And it does make you wonder.

The focus of the Romney campaign by and large has been raising questions in their advertising about President Obama. They really have not put a big push into defining Mitt Romney. And what this suggests is that that has created a vacuum that has allowed President Obama's team to make some ground at doing that themselves first.

BLITZER: And as you and all our viewers know, the economy is certainly issue number one, creation of jobs. We asked the question, the economy will get better with the president or if Romney wins? Look at this. In May, 47 percent thought the economy would get better with the president. That has stayed the same, 47 percent right now.

In May, 50 percent thought economy would get better if Romney wins, but that's gone down now to 45 percent. What happened?

BROWNSTEIN: Well, look, I think you probably have to look first of all at the effect of the advertising, I think, in the swing states. In other polling, a similar question, who is more concerned about the problems of people like you? Mitt Romney has lost ground on that as well.

This is the core argument, of course, for the Romney campaign, not surprisingly, in a period of the longest economic downturn since the Great Depression, that he can do a better job than the president at bringing us out of this.

What this shows again is that he's not made as much progress as needs to in making the positive case. There are certainly a lot of voters out there who are uncertain whether they want to give President Obama a second term, but what Obama I think has successfully done and his team so far is make the case to them, those uncertain voters, that Romney is not the answer.

As the ad said, he's more part of the problem than the solution. And that I think is clearly the challenge for Mitt Romney heading into his convention and beyond.

BLITZER: Ron Brownstein, thanks very much.

We're going to be releasing more numbers later this hour. We will have more analysis of our poll numbers in our next hour as well, including a closer look at what voters think of some of Mitt Romney's potential running mates. Stand by for that.

Let's go to Jack Cafferty though right now. He's got "The Cafferty File." Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, more than 100 million people in the United States of America get welfare from the federal government, 100 million.

According to "The Weekly Standard," Senate Republicans say the federal government administers nearly 80 different overlapping federal means-tested welfare programs. This figure of 100 million doesn't include those who only get Social Security or Medicare. The most popular welfare programs are food stamps and Medicaid.

The number of recipients in both these programs has skyrocketed in the last decade. Food stamp use has gone from 17 million Americans in 2000 to 45 million in 2011. And these 100 million people on welfare include citizens and non-citizens.

In fact, a new report by the Center for Immigration Studies finds that 36 percent of immigrant-headed households get at least one form of welfare. That's compared to 23 percent of native-born American households. Immigrants from some countries rely on welfare more than others.

More than half of those coming from Mexico, Guatemala and the Dominican Republic get welfare. Meanwhile, Mitt Romney's accusing President Obama of loosening welfare requirements. A new ad charges the president with gutting the 1996 welfare reform law that requires recipients to work in order to collect benefits.

But President Obama's campaign, the White House and former President Clinton, who signed the welfare reform bill into law, are all pushing back against the Romney ad, calling it false and misleading.

Our question is this: Where is this country headed if more than 100 million people get welfare?

Go to CNN.com/caffertyfile. Post a comment on my blog. Or go to our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: That's a huge number. I had not heard that number before, Jack.

CAFFERTY: Staggering.

BLITZER: It's pretty startling when you think about it.

What, do we have 350 million people in the country and 100 million get some form of welfare from the federal -- this is federal government, not state, right?

CAFFERTY: Yes, no, federal government -- 80 different federal means-tested welfare programs and 100 million Americans are getting money from those programs.

BLITZER: Wow. OK, Jack. Good question. Thanks very much.

We're about to meet a man who says he can identify with the gunman who killed six people at a Sikh temple in Wisconsin. You're going to want to hear how he turned his life around and about this country's deeply disturbing subculture of hate.

Also, a new offensive against violent extremists and the tunnels they use to carry out their attacks.

And later, spreading drought. It's continuing, the heat especially, and now an updated forecast for the rest of this hurricane season, information you need to know.

(COMMERCIAL BREAK) BLITZER: The FBI's now ended its on scene investigation of Sunday's deadly attack on a Sikh temple in suburban Milwaukee. There it is right there. Members of the temple have been allowed to return. And doctors say two of the three hospitalized victims of the shooting are getting better while a third remains in critical condition.

A white supremacist, Wade Michael Page, killed six people at the temple before he killed himself. CNN's Brian Todd is in Wisconsin where he's been all week. He met with a man who used to believe many of the things that page believed in.

What are you finding out, Brian?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, while law enforcement officials try to ascertain some kind of specific motive for the shootings, we are getting some idea of the possible mindset, the lifestyle of the shooter, from a man who says he's been in those shoes.

(BEGIN VIDEOTAPE)

TODD (voice-over): Arno Michaelis never met Wade Michael Page but says he can identify with him.

ARNO MICHAELIS, FORMER SKINHEAD: I can identify with him because I was there. If it wasn't for things that very fortunate things that happened to me along the way and help I got from other people, many of whom I claimed to hate, I could have very easily ended up where Wade Page ended up on Sunday.

TODD (on camera): You could have done those killings?

MICHAELIS: Well, it's important to understand that Wade Page was living in this reality of terror that he had created.

TODD (voice-over): A similar reality Michaelis says that he has created for himself for seven years as a white supremacist skinhead -- remnants of ha life inked on his arm.

MICHAELIS: The ruins below here are North Ruins, and it says (INAUDIBLE), which sort of a contraction of racial holy war.

TODD: Like Page, Michaelis fronted a supremacist band, his was called Centurion. There wasn't a single episode that drove into that life, Michaelis says. He says his parents were not racist but that there was alcoholism and verbal abuse in his family which made him want to lash out.

By age 16, he was moving in skinhead circles in Milwaukee. He estimates he violently attacked people of other races or religions about once a week for four or five years.

(on camera): What's the worst thing you did?

MICHAELIS: I've beaten people and left them for dead.

TODD (voice-over): Michaelis believes that if Wade Michael Page was anything like how he was, Page was suffering in his final days.

MICHAELIS: His day-to-day life was nothing but terror. Everywhere he looked around him -- going to work, at work, getting home from work -- everything threatened him. When you are in that environment, there is no room for happiness. There's no room for joy.

TODD: Michaelis says he attempted suicide twice.

(on camera): But in what only be described as a twist in life, a seed was planted in Arno Michaelis to change. It came in a place he wouldn't have figured from someone he never could have imagined.

(voice-over): He'd started going to McDonald's on paydays. He says he came upon an older, kindly African-American woman working behind the counter who greeted him warmly as she took his order.

MICHAELIS: I was really kind of disconcerted. It was hard when black people were very kind to me when I was trying to hate them.

TODD: Once after getting a swastika tattooed on his middle finger, Michaelis went back into that McDonald's and found himself trying to hide that from the lady, but she saw it.

MICHAELIS: She looked me right in the eye and she said, I know you're a better person than that. That's not who you are.

And I was like, could I please have my Big Mac? And I got my food, and I went and ate it and I never went back to that McDonald's.

TODD (on camera): You never saw her again?

MICHAELIS: Never saw her again. But 20 years later, I haven't forgotten that moment.

TODD (voice-over): It led him to eventually move away from those groups and to start his own. An organization called Life After Hate dedicated to helping people transition out of that existence.

I asked Michaelis what he'd say if a supremacist was sitting across from him now, contemplating a similar horrific act.

MICHAELIS: I would challenge them to think about what happens after that, and to think about someone in their life who they love.

(END VIDEOTAPE)

TODD: Michaelis says his real slap in the face moment came after a friend of his was murdered in a street fight. He says he believes Sunday's shootings were a slap in the face moment for someone in a hate group somewhere and he is desperate to help them. He wants them to go to his Web site. It's called lifeafterhate.org, so they can start to climb out of that hole -- Wolf.

BLITZER: A powerful story indeed. Thanks for bringing it to us, Brian Todd, on the scene for us in Wisconsin.

And in the wake of the mass shootings in Wisconsin and earlier in Colorado, our latest CNN/ORC poll shows no change, repeat, no change in American's general attitudes towards gun control. Fifty percent say they want minor restrictions or no restrictions at all, 48 percent want major restrictions or a complete ban. These numbers by the way are almost exactly the same as they were last year. This is the first poll done immediately after both of these most cent killing incidents.

Shrinking usership, big losses and missed payments. America's mail service reports new fiscal hurdles and a deeper struggle out of the hole.

And he's the fastest texter in the country. We're going to show you the teen with abnormally speedy thumbs.

(COMMERCIAL BREAK)

BLITZER: U.S. mail is swimming in red ink.

Lisa Sylvester's monitoring that and some of the other stories in THE SITUATION ROOM right now.

LISA SYLVESTER, CNN CORRESPONDENT: Hi, Wolf.

Well, that red ink keeps flowing at the U.S. Postal Service, which is reporting a $5.2 billion loss for the second quarter of the year. Officials blame declining volume in everyday mail for much of the loss, coupled with a congressional mandate to prefund health care benefits for retirees. The agency defaulted on a $5.5 billion payment to that fund that was due August 1st.

And corn prices soar today to new record highs. They spiked to $8.28 per bushel on the Chicago board of trade before following back. Prices for corn are up -- get this -- more than 60 percent over the last seven weeks. The U.S. drought is credited with driving up prices worldwide due to a shortfall in production against high demand for corn and other crops.

And the dramatic evacuation from a research facility in one of the world's harshest places, the Australian team landed on an ice runway at McMurdo station on dark, winter bound Antarctica to pick up a person in need of medical distress. The distress actually went out last Wednesday, but the team had to wait in New Zealand until today for enough light to land and take off. The patient is not identified but believed to be an American.

And a teenager from Wisconsin has been named the fastest texter in America, for the second year running. Seventeen-year-old Austin Wierschke defended his title at the sixth annual LG national texting competition in New York's Times Square.

Eleven competitors texted forward, back ward and blindfolded.

Austin credits abnormally fast thumbs for his victory. He says he's going to use his $50,000 prize to help pay for college.

So, impressive stuff. He's got the thumbs quick in motion. I'm not that fast of a texter myself, Wolf. What about you?

BLITZER: I'm pretty good at it. But I'm sure I can't beat him. He sounds very, very impressive. I wouldn't want to go into a thumb war with him either.

SYLVESTER: Yes, that's a talent to be able to do it blindfold. I have heard of people being able to do that. But for the life of me, Wolf, I don't know how they can do it.

BLITZER: No. I can't do it. All right.

Well, congratulations to him.

The gloves are coming off in the presidential ad game. Accusations are flying from one camp to the other. But do they stand up? Could they backfire? Our strategy session is coming up next.

And new predictions about this hurricane season. Information you need to know. And guess what? We could be in a lot more storms than expected.

(COMMERCIAL BREAK)

BLITZER: We've been watching as President Obama wraps up a two- day campaign swing through Colorado. He won the state in 2008, but the latest polling there shows him trailing Mitt Romney by five points.

Our White House correspondent Brianna Keilar is traveling with the president. Brianna's joining us right now. He's courting a specific group of voters, today, Brianna, tell us all about that.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. It was very obvious he was courting women voters yesterday. It's not quite as tailored to the Hispanic voter audience today, but make no mistake, this is very important for President Obama.

He started off the day in Pueblo, Colorado. Started at a Tex-Mex restaurant where he had enchiladas for breakfast and the you can just sort of see from the visuals, a traditional Mexican dance group entertaining the crowd.

He talked a little bit about immigration, and Ken Zalazar, a very prominent member, a Hispanic member of his staff, the secretary of the interior and former senator here from Colorado appearing at both of his events today.

Yes, he's trailing according to the latest poll, but he has a 40-point lead with Hispanics. And between Hispanics and women, he's hoping, Wolf, to build a winning coalition that can deliver him Colorado's nine electoral votes.

BLITZER: Brianna, yesterday you and I spoke about the controversial Obama "Super PAC" ad, which gives the impression that Mitt Romney is responsible actually at least indirectly for a woman's death. Today the Obama campaign is speaking out about it. What are they saying now?

KEILAR: Yesterday what we heard from the Obama campaign is as they tried to sort of distance themselves from this ad, we heard from spokeswoman Jen Psaki that the campaign was not aware of this man's, Joe Soptic's personal story.

Then it came to light, Wolf, that actually he'd been featured in a campaign conference call where he very much told the exact same story that he told in this ad by this "Super PAC."

So you can see the Obama campaign today getting a little kind of caught up in those words, Psaki dropped that sentence today saying they had no awareness of his personal story. Instead, they're emphasizing that the ad has not even run. Wolf, I e-mailed Bill Burton, the founder of that "Super PAC" and he said the plan is for it still to run even though it hasn't in battleground states.

Even though in a way it has because it's gotten so much publicity, but I also think that seeing is going to be believing because the campaign is facing -- the campaign and "Super PAC" is facing so much pressure and so much criticism over this ad that it really does seem to draw this connection between the steel worker's wife's death and Mitt Romney.

BLITZER: Brianna Keilar out on the campaign trail for us covering the president in Colorado. Thank you.

Let's get to our "Strategy Session" right now. We'll dig a little deeper. Joining us are two CNN political contributors, the Democratic strategist Donna Brazile and the Republican strategist Alex Castellanos. Guys, thanks very much for coming in.

I want to play a little bit of both of these ads that have caused so much commotion. Both of them are at least misleading if not false. A Romney campaign ad and an Obama "Super PAC" campaign ad. And then we'll discuss.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: President Obama quietly announced a plan to gut welfare reform by dropping work requirements. Under Obama's plan you wouldn't have to work and wouldn't have to train for a job. They just send you your welfare check. And welfare to work goes back to plain old welfare.

UNIDENTIFIED MALE: When Mitt Romney and Bain closed the plant, I lost my health care. And my family lost their health care. And a short time after that my wife became ill. I don't know how long she was sick and I think maybe she didn't say anything because she knew that we couldn't afford the insurance.

(END VIDEO CLIP)

BLITZER: We've done our own CNN fact check. Both of these ads are both totally wrong. They're both misleading at best false is probably a more accurate description.

But here's the question for two people who have worked in campaigns, know how to raise money, energize the base. Does it make any difference? Do these ads do for the respective campaigns the job they need to do, energize the right or the left?

ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Wolf, I think they energized the Obama campaign because their campaign is about getting out their base. The Republican campaign actually has to persuade the voters in the middle. So they need a very different strategy.

So ads that overreach I think frankly would hurt Romney more than Obama. But you know, I've looked at that Romney ad. There's a section in that welfare reform ad that says you can't take out work requirements. And President Obama for the first time actually does that specifically. So I disagree that that ad is off base.

BLITZER: He mandates that every state that wants a waiver including two Republican governors who sought that waiver, they must show the federal government there's a 20 percent increase in people going from welfare to work if they want to remain eligible for that.

CASTELLANOS: If they want to remain, but then he pulls out the work requirement. This is a very confusing thing that President Obama has done. Why did he do something that specifically the law says they can't do?

BLITZER: Because the governors asked the federal government hand over these responsibilities to the states.

CASTELLANOS: But no governor asked him to pull the work requirements.

BLITZER: But he's not pulling the work requirements.

DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: And as Governor Mitt Romney requested also to basically modify the welfare requirements in terms of the work requirement. But look, Wolf, I think we need to lay it on the table.

The truth is, is this is about the narrative. I mean, the Republicans have a way of trying to paint every Democrat including those who are moderate or pragmatic somehow this liberal trying to send a check to people who are not working.

We know that there are misleading ads out there. The point is, Wolf, these ads are misleading at this point because they're trying to paint or distort the picture so these "Super PACs," whether they're on our side, their side or we don't know what side they're on because there's a lot of anonymous misleading information out there.

BLITZER: Is this pro-Obama "Super PAC" ad, which effectively accuses Mitt Romney at least indirectly of seeing this woman die and it's an outrageous ad, is that going to be counterproductive to the Obama campaign? Or will it help the Obama campaign by raising more money from the hard core left, shall we say?

BRAZILE: I'm sure because I'm not involved in any campaign, but I'm sure the Obama campaign is not coordinating with their "Super PAC."

BLITZER: They're not coordinating, but is it going to help or hurt? I know that Bill Burton, Paul Begala and the "Priorities USA Action," they want to help the president. I'm asking, will this help the campaign or hurt?

BRAZILE: Well, Wolf, I haven't seen all of the ads. I mean, what I read today about the ad is that this is part of a story that we're going to see more and more of.

We have all these workers in these plants that Mitt Romney while during his tenure at Bain whether he bankrupted the company or whether he sold the company or whether the company basically went belly up.

BLITZER: That's all fair. But it's not fair to suggest that the woman died because of Mitt Romney.

CASTELLANOS: And that's the big difference here, I think, Donna, between these two ads. One of them we're interpreting the law. These two campaigns are interpreting the law in very different ways.

That may be a debate on the facts, but now O.J. Simpson can stop looking for the real killer, according to Team Obama because it turns out it was Mitt Romney all along. That's going over the line.

BRAZILE: Maybe the ads that you produce for Mitt Romney four years ago were accurate and intelligent. The ads that I've seen from their "Super PACs," they've been nasty, destructive, misleading. And there have been so many "Politifact" and fact checkers. I haven't seen the ad --

CASTELLANOS: Answer my question though.

BRAZILE: I'm sure he was not responsible for -- I'm sure he was not. That's not the kind of question I believe I'm --

CASTELLANOS: Then we both agree that we can do better than that.

BRAZILE: But do you think President Obama is telling people they don't get a check regardless whether or not they work? That Democrats helped to pass? No.

CASTELLANOS: I think he's weakening welfare reform to the point that that comes back on the table. I really do.

BRAZILE: Alex, this is a president that's done more --

BLITZER: Quick question.

BRAZILE: -- this so-called liberal slant will not work on President Obama.

BLITZER: Quick answer from both of you. We asked the question, who do you think -- these are registered voters out there, who do you think, Democrats, Republicans, independents, who do you think will win the election in November, Obama gets 63 percent, Romney 33 percent.

That's a pretty hefty margin to think the president is going to be re-elected. Somebody's done a lot of work in politics, what does that number say to you less than three months from election?

CASTELLANOS: It's a scary moment for Republicans. No doubt about it. I think a lot of others look at that and see the electoral map is tilted Obama's way. He doesn't have to win as many states as Romney has to do.

And also it tells you that Team Romney has not made its case yet as to why he's the better alternative. People may be tired of Obama, but they don't know that Mitt Romney is the better choice yet.

BLITZER: What does that number say to you?

BRAZILE: It says that President Obama people trust him. They believe that he understands the issues facing this country and give him credit for stabilizing the economy at a time when the Republicans decided not to do anything but watch and scream.

CASTELLANOS: It's hard to beat the heavyweight champ. That's Obama right now.

BLITZER: We're going to show you that ad. You'll see it, study it, get the impression that most people get when they see that impression, which is a false impression.

BRAZILE: I've been on cable blackout all day dealing with some other issues.

BLITZER: It's been out for a couple days. We're going to show it to you.

Coming up, by the way, in our next hour, an eye opening look at what Republicans think of Mitt Romney's potential running mates. The safest choices aren't necessarily the most popular.

And tunnels, that's right, tunnels, they may be the key to cutting down on the violence in a part of the world that's growing more and more dangerous by the day.

(COMMERCIAL BREAK)

BLITZER: In Egypt, violence has ticked up another notch in Northern Sinai where gunmen fired on a police station today. The attacks come on the heels of coordinated attacks yesterday and a fierce assault on Sunday that left 16 Egyptian soldiers dead.

Ian Lee is joining us on the phone from Sinai. Ian, the Egyptians have begun sealing some of those tunnels that separate Egypt from Gaza. Tell us what's going on.

IAN LEE, CNN CORRESPONDENT (via telephone): That's exactly right, Wolf. They're trying to seal off a connection between Gaza and Egypt. And this is where people believe that the militants were able to come through these tunnels, infiltrate Egypt and attack the soldiers last Sunday.

Right now, I'm standing at the security headquarters in Northern Sinai and the minister interior is meeting with roughly 100 tribal leaders. He's going to need their help if he hopes to control these tunnels to shut down these tunnels.

Because ultimately the tunnels are -- the veterans run the tunnels and they know where all the tunnels are. So he's going to need their full cooperation if he hopes to shut down these tunnels and sever the link between Egypt and Gaza -- Wolf.

BLITZER: Who are these militants? That's the word you used. Who are these militants that are causing the turmoil in Sinai right now?

LEE: Wolf, we went out and talked to one of the tribal leaders today and put that question to him. He told us it's a group called Jubza and this is a very extreme group, a very conservative group.

He said they have hundreds of members and they span the Egypt/Gaza border, and they have an extreme ideology. He says these are the ones that are in charge. These are the ones attacking not only the military, but they are also attacking police here. So he said these are the ones that we need to watch out for.

BLITZER: The Israelis as you know are watching all of this very carefully. I was in Jerusalem last week and interviewed the Israeli Defense Minister Ahud Barack and he suggested there was an al Qaeda presence causing some of these tensions, some of these problems in Sinai right now. What are you seeing there?

LEE: Well, that al Qaeda has been thrown around quite a bit. If you talk to some of the security officials here, they will tell you that al Qaeda is present in Sinai.

But you go around and talk to the tribal leaders, they deny this. They say the groups are not really al Qaeda, but they're al Qaeda-inspired. They aspire to be like al Qaeda, but they don't have the organization. They don't have the backing of actual al Qaeda itself.

BLITZER: Let's not forget there are about 700 U.S. Army troops in Sinai right now. They've been there for more than 30 years watching what's going on. Presumably they are in trouble potentially at least. We're going to stay on top of that part of the story as well. Thanks very much for that report, Ian Lee, our man on the scene in Sinai.

You've probably noticed the weather in the United States has been extraordinary this summer. Now NOAA says we're in for more Atlantic storms in this hurricane season. We'll update you on what's going on.

And later here in THE SITUATION ROOM, the view from the cockpit of a plane as it's going down. We have the dramatic video.

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BLITZER: Let's get back to Jack for "The Cafferty File" -- Jack.

CAFFERTY: Wolf, the question this hour is where's the United States headed if more than 100 million Americans get welfare?

David in Missouri writes, "We're headed for the nanny state and we're going to run out of money. And then there will be no more free stuff. This is a huge social mistake that we'll regret."

Sean writes from Thousand Oaks, California, "Another sign the American dream as we knew it was shipped off to China and gutted by the vampire CEOs who want to suck up every dime they can get. We're transforming into a two-class society. The middle class being stomped upon by a Patton leather dress shoe and will soon disappear."

Don writes, "This country's probably going to hit an all-new low. It's a hard one to call, but in relation to the big picture, our debt is just going to get bigger and bigger because right now the government just can't afford it all."

Ken in Connecticut writes, "Many of those on welfare don't realize they are caught in a web. The state of the union is far worse than we're led to believe. If 100 million people are getting welfare, we are a socialized country already."

Ron in North Carolina writes, "If the Democrats get another four years, we'll all be on welfare." And David says, "It starts to suggest that pretty soon we will come up on the road sign that reads "last exit before Greece."

If you want to read more on the subject, go to the blog cnn.com/caffertyfile or through our post on THE SITUATION ROOM's Facebook page -- Wolf.

BLITZER: All right, Jack, thank you.

Here in the United States the first seven months of this year are now the warmest on record. But get this, the old record for the country's hottest year was set way back in 1936. Stay with us.

We're going to ask our meteorologist Chad Myers what's going on with our wild weather.

And in our next hour, CNN's Ben Wedeman reports from a city that's under siege right now.

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BLITZER: Let's take a look at this hour's "Hot Shots." In the Philippines, look at this, flood victims wait in line to receive relief items. In India, children sip cold drinks during a religious celebration.

In Germany, an amusement ride spins people at a fair and in France, workers harvest ripe grapes in a vineyard. "Hot Shots," pictures coming in from around the world.

It's official, that hot July in the continental United States was not your imagination. In fact, the National Oceanic and Atmospheric Association or NOAA as it was called says it was the hottest July ever, ever, since the recordkeeping began in the United States in 1895.

Our meteorologist Chad Myers is joining us now from the CNN Weather Center. It was pretty hot out there. What is going on, Chad?

CHAD MYERS, AMS METEOROLOGIST: Well, it was hot and it was dry and so we broke a record that we set back in 1936. What happened in the '30s? Dust bowl, it was all dry. So it was kind of a dry heat.

Think about it, if we don't have clouds that will make rain, therefore we have a drought. We don't have clouds that block out the sun and block out the heat. So it gets hotter at the surface with no clouds.

And then you don't have water on the ground to evaporate to make more clouds and it just one thing after another and it just rolls so altogether 77.6 the all-time record high for July.

Actually, Virginia the only state that actually broke the record for it, but there were 32 other states that were in the top ten of hot temperatures of all-time. And that was enough to get it over the top, 32 states there, the hottest on record also for the past 12 months as well.

What did that do to the corn crop? Literally, this is happening in the bread basket of America. Right now, 50 percent, 5-0 percent of the corn crop is poor to very poor. I know you're not a farmer probably out there.

I know there are some farmers watching. That means we're losing yield. That means some crops may not produce anything. Other crops that are poor even to fair only get a 50 percent yield, which means what we thought we were going to grow in America to sell to other countries may in fact not be there. Only 23 percent of the corn crop right now is good to excellent. That's a very low number on any year -- Wolf.

BLITZER: I can't tell you how many people have tweeted to me or sent me e-mails or asked questions saying July is the hottest month ever in the continental United States, the lower 48, going back to when records were started back in 1895. But the second hottest July ever was way back in 1936. So what does that say, if anything, about global warming?

MYERS: It tells us that this really happened because there was a drought. And there was obviously a big drought in 1936. There had been other droughts since, but when you get the lack of rainfall and you get the lack of cloud cover, you're going to get very hot temperatures.

And that's what we have now. It means that we have now broken a record from a record we have never seen before even though we were close in the '30s, we're above that now.

And the past 12 months, add it all together are the hottest 12 months in a row ever as well so not just July. This has been a very hot year. And that tells us that global warming is pretty real.

BLITZER: Chad, thanks very, very much.

MYERS: You're welcome.