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Managing Debate Expectations; Americans Facing $3,500 Tax Hike on Average; Presidential Debate; D.C. Sniper is Talking; 72-Year-Old Leaps to Flee Fire; Arnold Schwarzenegger's Sins

Aired October 1, 2012 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: You are in THE SITUATION ROOM. Happening now the Obama and Romney campaigns managing expectations, trying at least with just two days to go before the first presidential debate.

Ahead, taking a closer look at some of the greatest moments in debate history and thousand they can help make or break a presidential race.

Also, he calls himself a monster, a ghoul and a thief, the rare and chilling interview from the D.C. sniper himself on the lives he took 10 years ago.

And Arnold Schwarzenegger takes us inside the shocking moment he first admitted to his wife he father a child with a family maid.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in the SITUATION ROOM.

(BEGIN VIDEO CLIP)

(END VIDEO CLIP)

BLITZER: President Obama and Mitt Romney are about to take the national stage for the first presidential debate. And with only two days left to prepare, both candidates are hunkering down right now while the political expectations game goes into overdrive. Mitt Romney is heading to Colorado today. Our national political correspondent, Jim Acosta, is traveling with him -- Jim.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Wolf, it's a pre- debate tradition. Advisers with both campaigns are managing expectations just in case their candidate has an off night Wednesday, and both sides have another thing in common. They think the media might be pulling for the other guy.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Governor, are you ready?

UNIDENTIFIED FEMALE: Ready for the debate?

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: Yes. I'm there.

ACOSTA (voice-over): After a weekend of debate preparations, Mitt Romney was careful to avoid questions about his first match-up with President Obama, but on a conference call with reporters, a top adviser revealed there's one subject Romney is ready for.

ROMNEY: And so my account (ph) is not to worry --

ACOSTA: Those comments that were caught on tape on the 47 percent of voters he said were dependent on government.

VOICE OF ED GILLESPIE, ROMNEY SR. ADVISER: We wouldn't be surprised, obviously, if that came up at the debate, and the governor's prepared obviously to respond to that.

ACOSTA: After lowering expectations for days, the Romney campaign sent New Jersey governor, Chris Christie, out on the Sunday talk show circuit where he made a surprising prediction. The GOP nominee will pull off a game changer.

GOV. CHRIS CHRISTIE, (R) NEW JERSEY: He's going to contrast what his view is and what the president's record is, and the president's view for the future. And this whole race is going to be turned upside down come Thursday morning.

ACOSTA: Contrast that with Romney's running mate, Paul Ryan, who was on another show at almost the same time giving the president the edge.

REP. PAUL RYAN, (R) VICE PRESIDENTIAL CANDIDATE: He's an experienced debater. He's done these kinds of debates before. This is Mitt's first time on this kind of a stage.

ACOSTA: A new "Washington Post"/ABC poll finds most voters expect the president to win the first face-off. Meanwhile, there's already spin on how the media will cover the results. Top Obama strategist, David Plouffe, said it will be pro-Romney.

DAVID PLOUFFE, OBAMA SENIOR ADVISER: We know the news media is anxious to write that Romney recovery in come back store.

ACOSTA: Ryan told Fox News bias is already baked in.

RYAN: I think it kind of goes without saying that there's definitely a media bias. I'm used to media bias. We expect that media bias going into this.

ROMNEY: Wow!

ACOSTA: Some in the Romney campaign are even questioning a slew of recent polls that show the president leading in crucial swing states like Ohio. Romney's Ohio state director issued a memo saying that it's amazing what happens when you stop over-sampling Democrats. You find a race in Ohio that says tight as a tick.

Ryan told one fundraiser he prefers interviews with local news stations and town hall events to go around national media outlets. President's ads he said on one conservative talk show are another battle.

RYAN: And we're making it crystal clear to people that all these falsehoods that are coming out of the Obama campaign about our tax policy, about our Medicare reform, and everything else are just that.

(END VIDEOTAPE)

ACOSTA (on-camera): Romney will be working in some pre-debate campaigning just as he arrives in Denver. He will be off to a rally known poll well. With three debates and four weeks, every day counts -- Wolf.

BLITZER: Jim Acosta, thank s very much.

President Obama is spending the next couple of days in Henderson, Nevada, gearing up for Wednesday's debate. Our White House correspondent, Dan Lothian, is over at the White House. He's getting some new information. What's the latest on his debate preparation, Dan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, a campaign official telling me that the president began those practices last night after arriving in Nevada and then continued these rehearsals this morning there in Nevada as well, taking only a break this afternoon. One of the things that they're really working on is trying to get the president to be more concise in his answers.

And you know, Wolf, sometimes, the president can be long winded. The campaign has even admitted this, and it's not the most effective way to deliver your message. So, they're trying to get the president to answer these questions with very few words. He has a small team of advisers around him, including David Axelrod, former White House communications director, Anita Dunn, and also Brian Deese, who's one of the president's economic advisers.

They're not talking about some of the specifics, what's going on behind the scenes, but one thing they are saying publicly is they're trying to lower expectations, talking about how the president has not had a lot of time to practice, because he's been very busy with his day job, talking about how Mitt Romney had spent a lot of time practicing, how he had all the practice during the Republican primaries, and even the president last night during a grassroots event in Las Vegas, was playing the expectations game.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know folks in the media are speculating already on who's going to have the best zingers.

UNIDENTIFIED FEMALE: You are.

OBAMA: I don't know about that. You know, who's going to put the most points on the board.

(CHANTING) You are!

OBAMA: No, no. Governor Romney, he's a good debater. I'm just OK.

(END VIDEO CLIP) LOTHIAN: Senator John Kerry will be playing the role of Mitt Romney as in those practice debates with the president. That's important for two reasons. First of all, he knows Mitt Romney well because he is from the state of Massachusetts, but also, he has a lot of experience debating.

As you heard the president talking about Mitt Romney there saying that he has these zingers, well, the campaign saying don't expect the president to deliver any of these zingers. President will be having a conversation with the American people talking about his vision for the next four years, Wolf.

BLITZER: Yes. They're both very good debaters and we'll see what happens Wednesday night. Dan Lothian, thanks. Much more on the story coming up later this hour.

While the political spotlight may be focused on the upcoming debates and election right now, the clock here in Washington has not stopped ticking toward that looming fiscal cliff. And if Congress fails to act by the end of this year, it could cost taxpayers a lot of money big time.

Look at this. According to a new analysis from a tax policy center, the 2013 fiscal cliff could meet tax hikes of anywhere from $400 to $14,000 depending on your income range. Let's talk about what's going on with the chief economist of Moody's Analytics, Mark Zandi, who's joining us right now.

Mark, if nothing happens between now and the end of the year, and all those tax cuts that were imposed in the years since President Bush, for example, took office 2001, 2003, the tax cuts in the Obama stimulus plan, all those tax cuts go away. How quickly would that hit people's pocketbooks?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Quickly, withholding schedules would change. And so, when you got your next paycheck at the turn of the year, you'd see a lower amount because more would be deducted for paying taxes. And as you point out, Wolf, it's quite significant, and it would be a big hit to the economy relatively quickly.

BLITZER: Well, talk about that. How big of a hit to the overall economy would it be? Some have suggested it could bring us back into recession. Is that realistic?

ZANDI: Yes, that's likely. So, if you add it all up, expiration of the Bush era tax cuts, the expiration of the payroll tax holiday, there's a so-called patch the alternative minimum tax, all slew of things are going on. If all those things expired and all these taxes would increase, it amounts to about $500 billion in extra tax payments next year.

That's three percent of GDP. That's the valuable of things that we produce. And as you know, Wolf, we're only growing right now at best two percent. So, you know, you do a little bit arithmetic and that says recession. So, policymakers need to change this. They can't allow the tax -- all these tax rates to go up on January 1st.

BLITZER: Because the other argument I've heard is that these were basically bring these - if the taxes went up, it would basically bring the tax rates in the United States where they were during the Bill Clinton administration in the 1990s when the economy was doing just fine. What's wrong with that argument?

ZANDI: Nothing, but you do need to do -- if you're going go down that path, you have to do that over time. You can't do that cold turkey. I mean, that's just too much of a hit to our after-tax income, particularly, in the context of what is still a very weak economy. So, if you wanted to go down that path, again, I don't think we need to. We don't need to see tax rates rise that much.

But if you want to go down that path, only way to make logical sense out of that is to phase that in over time so that people could digest that and it wouldn't push us back into a recession. But again, I don't really think we need go down that path. We need tax revenue.

We need to see additional tax revenues generated, but we don't need to see that much tax revenue generated. That would be, I think, counter- produce.

BLITZER: And what if they just let the taxes lapse for the wealthiest Americans, which is what President Obama wants those families making more than $250,000 a year, individuals making more than $200,000 a year, what would the impact of that be?

ZANDI: Well, you know, that would hurt, but that's something the economy could digest because the total hit would be much smaller. And of course, you're hitting higher income households who have other saving, other financial resources. They wouldn't pull back on their spending to the same degree.

So, you know, if all else is being equal, it would be a negative to the economy in the very near term, but it's something the economy could digest. And, ultimately in the longer run, we need to address our fiscal situation. That is, we need government spending cuts and we need additional tax revenue, both of those things to address our fiscal problems.

So, one way or the other, we're going to need additional tax revenue and most likely place to get the additional tax revenue is from higher income households.

BLITZER: Yes. With a $1.3 trillion annual deficit, you definitely need something to bring that deficit down, bring the national debt down at some point down the road once there's a balanced budget, but who knows when that would be. Most people assume nothing is going to happen as far as the fiscal cliff is concerned between now and November 6th.

But afterwards, in that lame duck session between November 6th and December 31, something will happen. Are you among those who will agree -- who agree that the fiscal cliff will be avoided? ZANDI: Yes. I think it will be avoided. I mean, you know, depends on the election. You know, I think, if Governor Romney wins then, it's likely we'd kick the can into next year. Leave everything the same for a few months, let the new president come into office, and get it together, probably in the spring. If President Obama wins the election, then right after the election, the lame duck, the clock will start ticking and he'll be under a lot of pressure to do something.

Let me say one other thing, though, Wolf. You know, I think the most likely scenario is that we're actually going to have to go into next year, see tax rates rise for everybody, because it's then that we see enough economic pain that it generates political will necessary to do the kinds of things that we need to get done.

And that means addressing our long-term fiscal problems which means cutting spending and raising tax revenue to address our long-term fiscal issues.

BLITZER: Mark Zandi, thanks very much for coming in.

ZANDI: Thank you.

BLITZER: So, what is it mean for Mitt Romney if he's less popular than George W. Bush? That's coming up next.

Also, what caused this deadly school bus crash outside a high school? We have details. That's just ahead, as well.

(COMMERCIAL BREAK)

BLITZER: He said he was a monster. That's just one of the many new chilling statements from the D.C. area sniper, Lee Boyd Malvo. Coming up, you're going to hear his voice as he details some of the vicious murders ten years ago.

(COMMERCIAL BREAK)

BLITZER: A rough comparison for Mitt Romney. Jack Cafferty is following that in the "Cafferty File." He's joining us now -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Wolf, something here that ought to give camp Romney a little heartburn to say the least. There's a poll out that finds the Republican candidate for president, Mitt Romney, is less popular than George W. Bush. "Bloomberg News" did this survey. It shows the former president with a favorability rating of 46 percent compared to 43 percent for Romney.

Bush gets an unfavorable rating of 49 percent, Romney gets 50%. Bush's favorables are also higher than Joe Biden, Paul Ryan, and the Republican Party, in general. It's well known Romney's favorability numbers are lower than the president's. Many believe Romney, the mega-rich businessman, who once tied the family dog to the roof of his car, doesn't seem able to connect with a lot of ordinary voters out there.

But less popular than George W. Bush, that's cold. For starters, Romney and his campaign have done everything in their power to make American forget about George W. Bush in his eight years as president. Romney avoids mentioning the former president's name. Bush was nowhere to be seen at the Republican convention in Tampa.

That's because for a lot of Americans, Bush's presidency brings back bad memories of the war in Iraq, Afghanistan, the dismal response to the federal government to hurricane Katrina, the conditions that allowed the financial crisis of 2008 to happen, on and on. It's a long list.

A few months ago, a CNN/ORC poll found Bush is the least popular living ex-president. But somehow, he still gets better favorable ratings than the Republican who wants to be our next president.

Here's the question, what does it mean for Mitt Romney if he's less popular than George W. Bush? That can't be good. Go to CNN.com/CaffertyFile and post a comment on my blog or you can go to our post on the SITUATION ROOM's Facebook page -- Wolf.

BLITZER: Can't be good, indeed. Thanks very much for that, Jack.

Lisa Sylvester is monitoring some of the other top stories in the SITUATION ROOM right now, including some very ominous signs coming in from Iraq. What's the latest?

LISA SYLVESTER, CNN CORRESPONDENT: Yes, that's right, Wolf. Last month was the deadliest in Iraq in two years. The interior ministry says 365 people lost their lives to the violence that still plagues the country. Half of the victims were civilians, the other half soldiers and police.

Baghdad's (INAUDIBLE) government blames the blood shed on Sunni insurgents with ties to al Qaeda.

And investigators in Texas hope to find out what caused a fatal school bus crash outside a high school. The driver of one bus was killed while several passengers suffered minor injuries. a witness said one bus appears to -- appeared to lose control, jumping a curb before colliding with the other bus.

And encouraging numbers on manufacturing were enough to spark a modest rally on Wall Street. The Dow finished up almost 78 points. Reports show the manufacturing industry was expanding for the first time in four months. Investors are now eagerly awaiting Friday's monthly jobs report from the labor department.

And Florida wildlife officials, they say, it's legal for a business to rent out alligators, yes, alligators for pool parties. The unorthodox idea for a pool party is the brainchild of a business called alligator attractions. And for a price, it will bring gators to your home.

After a safety course party guests can swim and pose for pictures with the animals, the owners say, you know, their business is in line with the law. But I cannot imagine a parent saying sure, honey, just go on in the pool with the alligator. Just can't see it. Can't see it. Those are dangerous animals. BLITZER: You got two little -- sweet little kids. Would you let your kids --

SYLVESTER: Absolutely not.

BLITZER: No way.

SYLVESTER: I have a two-year-old and a four-year-old. No way, no how will I let them swim with alligators. I can tell you that, Wolf.

BLITZER: You're a good mother. Thanks very much for that.

Presidential candidates can't necessarily win the election with a good debate performance but a bad one can all but destroy their prospects. Anderson Cooper has the good, the bad, and the ugly from a half century worth of debates. That's coming up right here in the SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: All right. We're counting down to the first presidential debate only two days away. And while many debates may not necessarily always change the course of presidential elections, they certainly could be powerful moments revealing the true character of the politicians running for president of the United States.

CNN's Anderson Cooper takes a closer look now at some of the most memorable debates.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN CORRESPONDENT (voice-over): September 26, 1960, the first televised presidential debate signaling a new era where appearances matter more than ever and gaffes however small are magnified.

UNIDENTIFIED MALE: Those are the same for all Americans.

COOPER: John F. Kennedy, a young senator from Massachusetts, facing off against Vice President Richard Nixon who's known to be a fierce debater. But on screen, Kennedy looks cool and calm, while Nixon looks uncomfortable, sweating profusely under the hot studio lights.

UNIDENTIFIED MALE: Think I better shave.

COOPER: Nixon flounders under the glare of television for all four debates. Kennedy goes on to win the election. In 1976, President Gerald Ford makes this blunder in his debate with Georgia governor, Jimmy Carter.

UNIDENTIFIED MALE: There is no Soviet domination of Eastern Europe and there never will be under a Ford administration.

UNIDENTIFIED MALE: I'm sorry. Could I just --

COOPER: The remark becomes a central theme in Carter's campaign and is blamed by many for costing Ford the election. In 1980, Ronald Reagan has repeatedly attacked by President Carter for his stance on health care.

UNIDENTIFIED MALE: Governor Reagan, as a matter of fact, began his political career campaigning around this nation against Medicare.

COOPER: But Reagan wins fans and the election by staying cool.

UNIDENTIFIED MALE: There you go again.

COOPER: Four years later, President Reagan again used his humor to handle attacks on his age during his debate with Walter Mondale.

UNIDENTIFIED MALE: I want to you know that also I will not make age an issue of this campaign. I am not going to exploit for political purposes my opponent's youth and inexperience.

COOPER: And the next election, Democratic candidate, Michael Dukakis is asked this controversial question in his debate with Vice President George Bush.

UNIDENTIFIED MALE: If Kity Dukakis (ph) were raped and murdered, would you favor an irrevocable death penalty for the killer?

UNIDENTIFIED MALE: No, I don't, Bernard. And I think you know that I've opposed the death penalty during all of my life.

COOPER: The public sees his answer as cold and dispassionate, and that very night, his poll numbers dropped. During the 1988 vice presidential debate, Republican senator Dan Quails comparison to John F. Kennedy elicit this blistering response from his opponent.

UNIDENTIFIED MALE: Senator, you are no Jack Kennedy.

COOPER: Body language played a part in the presidential debate in 1992. George H.W. Bush deliberately looks at his watch and he pays for it when the audience and voters see it as disrespectful.

UNIDENTIFIED MALE: There's differences --

COOPER: Body language makes a difference in a debate between Al Gore and George W. Bush as well. Gore sighs over and over again. And bush, the underdog, surprises by winning the debate and, of course, the election.

Both President Obama and Governor Romney are seasoned debaters, and experts say neither are prone to making major gaffes. But if there is one thing that history has taught us when it comes to presidential debates, expect the unexpected.

Anderson Cooper, CNN.

(END VIDEOTAPE)

BLITZER: Until this week, it's been a rough presidential election to be sure. Now, the candidates can't stop complimenting each other's debating skills, but while they try to lower expectations, one of Mitt Romney's supporters is predicting a big night for the Republican.

(COMMERCIAL BREAK)

BLITZER: Let's get right to our" Strategy Session." Joining us now is CNN contributor, the Democratic strategist, Paul Begala. He's senior strategist for the Democratic fundraising groups, Priorities USA, Priorities USA Action. Those are the Super PACs that (ph) we should say. Also, Republican strategist John Feehery is here. He's the president of Quinn Gillespie Communications here in Washington.

You know we've heard a lot of the expectations Romney suggesting that Obama is the greatest debater, Obama is saying Romney is the greatest debater. But then Chris Christie, the governor of New Jersey says this yesterday. I will play the clip.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: We have a candidate who is going do extraordinarily well on Wednesday night. He's going to lay out his vision for America. He's going to contrast what his view is and what the president's record is and the president's view for the future. And this whole race is going to be turned upside down come Thursday morning.

(END VIDEO CLIP)

BLITZER: Wow. What a bold prediction that is by the Republican governor of New Jersey. What do you think?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: Well God bless him. You know, everybody has to spin this -- as spin doctors, you know we lie for a living, so but we really ramp up the lies the week of the debate. And you pretend -- oh Barack Obama is not very smart, he's not a very good debater. Is that baloney. I like actually the fact that the governor, he is stating the obvious which is true. That it is a narrow race but there is a solid but narrow lead for the president. It means this is at least one, maybe one of the last, very big moments that Mitt Romney can change that, so I don't know that the prediction is right. But the strategic comparative is correct and I think at least the governor ought to get credit for not lying.

BLITZER: And he doesn't (ph) deserve credit for being blunt. That's his stand Mark, he can't -- his trademark -- he just can't go out there --

The thing I like about Chris Christie is he doesn't get into all that inside the Beltway crap.

UNIDENTIFIED MALE: Yes.

JOHN FEEHERY, REPUBLICAN STRATEGIST: (INAUDIBLE) I think he's right. I think that -- I think Romney has been well trained. He had a lot of primary debates. He has been on his game. He knows how to do this. And I think Obama has been out of the game for so long and I'm not playing this expectations game (ph) right now. I'm just giving you my prediction. I do think that Obama is going to be will be a little -- having someone say hey, Mr. President, your stuff -- you are not that big guy anymore. That's going to will hurt him and it's going to put him on his heels. I think it's going to happen.

BLITZER: Take us behind the scenes, Paul because you played -- you helped Al Gore in the 2000 debate --

BEGALA: I played Bush, yes --

BLITZER: You played George W. Bush in that debate. Was he sighing in the rehearsals like he was on stage? Was he breathing like that because that got on the nerves of a lot of folks?

BEGALA: I did not notice any irregular breathing patterns of the vice president. And I do think it was kind of cheap that that was analyzed and overanalyzed so much.

BLITZER: It got him a lot of negative publicity --

(CROSSTALK)

BLITZER: -- in the days that followed.

BEGALA: It did and what you could see in the press is that he was honestly appalled to be standing on stage with George W. Bush. He thought Bush was completely unworthy and had no business running for president and you could tell. And he would roll his eyes, so you could see that and I was playing Bush. You could pick that up. This is a worry for President Obama. He debated John McCain who is an American hero. And Senator Obama served with Senator McCain and even though he didn't agree I think Barack Obama, Senator Obama had a very high degree of respect for John McCain looking across that stage. I fear as an Obama supporter that he lacks that looking at Romney. Not only might he, as Bush might say, misunderestimate Governor Romney but he might show -- this is a huge risk for him -- he might show some of that contempt that I think Gore showed for Bush --

(CROSSTALK)

BEGALA: -- and that's a huge risk for the president.

UNIDENTIFIED MALE: (INAUDIBLE)

BEGALA: The president tends to stick his chin up and look down his nose at you if he thinks --

UNIDENTIFIED MALE: Yes.

BEGALA: -- like you know like you are beneath him and that's -- if you see that body language --

(CROSSTALK)

FEEHERY: I think that's a real danger. I think that there is not a lot of love lost between these two. I don't think that Obama likes Romney at all. I think that's why he has gotten so competitive in this election and I think if you have that disdain coming out in this debate it can really hurt Obama because people think that Obama is a likable guy.

BEGALA: Right.

FEEHERY: He's a nicer guy and they don't think that Romney is a nice guy. If somehow Romney can equalize that likeability gap, I think that that's going to really help --

BLITZER: But if Romney does to the president what he did effectively with Newt Gingrich during the Republican debates get under his skin how -- the president has got to be prepared to react shall we say in a presidential way.

BEGALA: Let me take this opportunity on CNN to thank the Romney team for telegraphing the strategy. This is so dumb. The president of the United States reads "The New York Times". He watches CNN and they told -- the Romney team told "The New York Times" we're going to try to get under his skin and annoy him. That did more to prepare the president than any prep session with Senator John Kerry who is playing Romney because now he knows. And this president, he is a literate man. He reads "The New York Times" and he is a smart man. Now I think there's absolutely no chance that he participates in their strategy --

(CROSSTALK)

BEGALA: They should have just shut up and done it.

FEEHERY: And I think that -- I think that for Romney it's actually more important for him to look presidential. I think the biggest problem in this campaign he hasn't looked presidential. He looked petty at times especially after the Libya thing. If he looks presidential he will come off (INAUDIBLE) decrease and it will look much better, he'll look much more electable, which I think is important.

BLITZER: Yes, I think in those Republican debates and there were what 20 of them and leading up to him getting the -- his getting the nomination I thought it -- he certainly seemed presidential in those debates. I moderated three of them. He seemed pretty presidential.

FEEHERY: Well I think that once you are on the stage with the president, if you look presidential then, that really -- people are starting to pay attention for the first time especially the general voters, the people that are independent voters, the undeciders that were profiled on "Saturday Night Live", those guys are starting to tune in and they see that Mitt Romney looks pretty credible --

UNIDENTIFIED MALE: That's right.

FEEHERY: -- I think that's --

BLITZER: Let me play a clip -- this is Representative Paul Ryan, the Republican vice presidential nominee. I want to play this clip and then we will talk.

(BEGIN VIDEO CLIP) REP. PAUL RYAN (R-WI), VICE PRESIDENTIAL CANDIDATE: When you're outspent massively on TV with absolutely false and misleading ads by your political adversaries who are suggesting that this somehow raises people's taxes, it clutters and confuses. We are entering the debate phase of this campaign. We are entering the choice phase of this campaign. And we are making it crystal clear to people that all these falsehoods that are coming out of the Obama campaign about our tax policy, about our Medicare reform and everything else, are just that.

(END VIDEO CLIP)

BLITZER: I assume that's going to be one of their strategies in this debate as well.

BEGALA: Yes. But this is one of the surprises of this election cycle is how poorly Paul Ryan has performed. It was the conventional wisdom in (INAUDIBLE) that he's a serious man. That he's a truth teller and a talented man. I have seen none of that. He's actually even for a politician astonishingly dishonest. He gave -- at convention we give you a lot of play, OK, but he really told a lot of falsehoods in his convention speech and then he went out and said he ran a marathon in two hours and 50 minutes and now he's on there whining he actually -- and he told "FOX NEWS" Sunday yesterday -- I wrote this down because I didn't want to be unfair to him. He was asked to say the math in their economic plan and their tax plan and he said I don't have the -- it would take me too long go through all the math and today he said I didn't want to go through all the math because everyone would start changing the channel. Well, people want specifics. He wasn't hired because he can run a marathon in two hours and 50 minutes which he can't. He was hired because he was supposed to be the specifics guy and when you go on national television, on "FOX NEWS" and tell your base, well, I won't give you the specifics because you are too stupid to understand it, may be true but it is an unwise statement.

BLITZER: He was talking about which deductions, which loopholes for rich folks out there, for corporations he would seek to eliminate in order to pay for some of the other cuts in taxes and he doesn't have those specifics, at least not yet.

FEEHERY: I would say that Ryan is right. That the ad campaign has been very, very successful and if the Romney campaign --

(CROSSTALK)

BLITZER: The Obama ad campaign.

FEEHERY: The Obama campaign --

(CROSSTALK)

FEEHERY: They have been false and they need to kind of set the record straight. If they don't set the record straight they are going to be in big trouble in this election and I think they have got to get the message out that simplifying the tax code can create jobs. It can create economic growth. The sooner they get that message out the better. BLITZER: John, thanks very much for coming in.

(CROSSTALK)

BLITZER: Paul, thanks very much -- both of you guys are good. Thank you.

President Obama and Governor Romney face-to-face as American voters weigh their choice, the first presidential debate starts in about 48 hours from now Wednesday night. You can see it live. Our coverage will begin 7:00 p.m. Eastern right here on CNN and on CNN.com.

Lee Boyd Malvo was part of a pair that terrorized Washington, D.C., the greater area one decade ago. Now he's openly talking about the shooting spree that made him in his own words "a monster". We have the tape.

(COMMERCIAL BREAK)

BLITZER: It's been 10 years since a deadly week's long shooting spree crippled the Washington, D.C., area. Now in a rare and chilling prison interview the D.C. sniper, Lee Boyd Malvo is speaking out about those horrifying days on the run and apologizing for the lives he took. Brian Todd is here with the details.

BRIAN TODD, CNN CORRESPONDENT: That's right.

BLITZER: All of us remember 10 years ago what was going on in this area.

TODD: It is surreal, Wolf. For those of us who covered it, you covered it, I covered it, surreal for us to hear all of this. We spoke to victims, to the FBI agent who questioned Malvo and to others, but it is Lee Boyd Malvo himself who spoke with "The Washington Post" who is so compelling. You hear him speaking intelligently and showing what seems to be genuine compassion for his victims.

(BEGIN VIDEOTAPE)

TODD (voice-over): He says he is a different person now. Not the same young man who terrorized the entire Washington region for nearly a month.

LEE BOYD MALVO: "I mean I was monster. If you look up the definition, I mean that's what a monster is. I was a ghoul. I was a thief. I stole people's lives."

TODD: Lee Boyd Malvo convicted in the D.C. area sniper case says he is truly sorry for what happened. His exclusive interview with "The Washington Post" comes on the 10-year anniversary of the shooting spree that left 10 people in the Washington region dead over the course of about three weeks. Speaking from Red Onion State Prison (ph) in Virginia where he is serving a life sentence, Malvo, who is now 27, tells "The Post" Josh White (ph) what it was like to be under the control of his older partner in the killings, John Allen Mohammed (ph). MALVO: "He told me the old person has to die. Lee Malvo has to die."

TODD: And he gives jarring descriptions of how they deliberately but randomly went about shooting their victims.

(on camera): It's the detail in Malvo's account that is often so haunting, like his description of what happened here in the parking lot of this Home Depot when Malvo was the spotter and John Allen Mohammed (ph) shot Linda Franklin (ph) who just happened to be in her car.

(voice-over): Malvo describes how he gave the signal to shoot, how Mohammed on a hill nearby fired the kill shot and how the image of Franklin's husband is the one that stands out for him.

MALVO: "The first one is Mr. Franklin's eyes and what makes that -- they're penetrating. But -- it's the worst sort of pain I've ever seen in my life. His eyes. It's the worst -- words do not possess the depth in which to fully convey that emotion and what I felt when I saw it."

TODD: Retired FBI agent Brad Garrett who questioned Malvo after his capture says he's not surprised that Malvo is willing to pin much of the terror on Mohammed when he wasn't before.

BRAD GARRETT, ABC NEWS ANALYST: The spell is gone. The whole idea that Mohammed was a good person or actually helped him in life has dissolved. And so now what he is doing is stepping forward. He's taking responsibility but he's clearly putting Mohammed in the picture.

TODD: Mohammed was executed in 2009. Josh White, "The Post" reporter, couldn't get new pictures of Malvo. The prison allowed no cameras, writing utensils or paper. White interviewed Malvo through Plexiglas.

(on camera): Can you tell us what he looks like now?

JOSH WHITE, WASHINGTON POST REPORTER: You know he looks similar to what he looked like before, though about 10 years older. He is kind of a slight guy. He's not particularly tall. He's not particularly heavy. His hair was very closely cut.

TODD (voice-over): Paul Laruffa, one of the first people shot during the spree, says he forgives Malvo.

PAUL LARUFFA, SNIPER VICTIM: If I held the same hate today or that I felt in 2002 when he tried to kill me, I would have wasted or just damaged the last -- I would have let him damage the last 10 years of my life and he hasn't.

(END VIDEOTAPE)

TODD: One particularly chilling account for Malvo in "The Post" interview he said during the shooting spree he sometimes went to the news conferences held by law enforcement officials. Malvo said he went to those events for, quote, "intelligence collection". Wolf, when those officials were speaking and telling us where they thought the killers may be, he was sometimes in the audience.

BLITZER: I was sometimes at those news conferences myself. That is pretty chilling. But he does speak about one particular incident where he supposedly, Malvo, defied Mohammed. What happened?

TODD: That's right. Malvo says that at one point John Mohammed (ph) told him he would have to kill a pregnant woman. Malvo says when the time came he simply just didn't do it and he later told Mohammed that the circumstances just weren't right for him to pull the trigger. That's the one time he drew the line. He couldn't kill a pregnant woman.

BLITZER: Malvo is serving life in prison without the possibility of parole.

TODD: Without the possibility of parole --

BLITZER: He will spend the rest of his life there.

TODD: Yes he will.

BLITZER: All right. Thanks very much. Brings back a lot of memories. A 72-year-old had no choice but to trust his neighbors and several strangers when faced with the danger in his apartment.

(COMMERCIAL BREAK)

BLITZER: New Yorkers may not always trust each other but a 72-year- old man found himself with little choice when his apartment caught on fire. News 12, the Bronx's reporter Laura Terrain (ph) has the story of his incredible rescue. Watch this.

(BEGIN VIDEOTAPE)

UNIDENTIFIED REPORTER (voice-over): A leap of faith from a burning building into the arms of friends and neighbors.

UNIDENTIFIED MALE: I'm glad I'm healthy. (INAUDIBLE) I didn't get no broken bones.

UNIDENTIFIED REPORTER: Seventy-two-year-old Ronnie Poe says he miraculously suffered only a bruised heel. He fell three stories from this (INAUDIBLE) Avenue apartment after his kitchen caught fire Thursday afternoon.

RONNIE POE, JUMPED FROM BURNING APARTMENT: I couldn't breathe so I ran back to my room, closed the door. I closed the door. Smoke was coming in my room.

UNIDENTIFIED REPORTER: He tells me he first yelled out this window for someone to call 911 then began climbing out to escape the smoke, eventually hanging by just one arm on to the window's ledge. Vanessa, a good friend of Ronnie's, was on the street below. She said she started yelling for a crowd to come help catch him. VANESSA MCMILLON, HELPED CATCH VICTIM: Anybody (INAUDIBLE) gather around and let him jump.

POE: I leaned out the window, held my arm right here and waited and waited. I couldn't hold on no more.

UNIDENTIFIED REPORTER: Falling feet first into the group assembled below.

UNIDENTIFIED FEMALE: They held him, you know held him like you're all right? You're OK. He was like, yes, I'm good.

UNIDENTIFIED REPORTER (on camera): Ronnie tells me he served in the U.S. Army for several years and was trained as a paratrooper to safely jump from planes.

POE: I knew what to do when I jumped out the window. How to jump, how to land and (INAUDIBLE) over. But people caught me when I jumped out the window.

UNIDENTIFIED REPORTER (voice-over): Fire officials tell us the flames were contained to Ronnie's apartment and no one was seriously injured in the fire or during this heroic catch.

(END VIDEOTAPE)

BLITZER: Happy Ronnie Poe is OK, happy everyone who caught him is OK, as well. I want to thank Laura Terrain (ph), News 12, the Bronx reporter for that report.

Let's go back to Jack. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Kind of a heartwarming little item there, wasn't it?

BLITZER: Yes.

CAFFERTY: The question this hour is what does it mean for Mitt Romney if he's less popular than George W. Bush? "Bloomberg News" did a survey and this is what they came up with.

Bob in Iowa writes "totally nothing. Those who are going to vote for him don't care what he stands for or anything else. No Obama is their only vote."

Robert writes "it means the media have deemed it so by spending more time covering Romney's dog on the car than the cover-up of Benghazi or fast and furious, the media are ensuring four more years of the same."

Paul in North Carolina "it means be careful what you wish for. Before the convention, Romney said he wanted people to get to know him better. Apparently they have."

Rick writes "simple, he has little charisma. On the other hand, charisma is not required to be a good leader."

Sylvia in San Diego writes "who cares? Anyone voting based on popularity instead of policy should not have the right to vote."

Dee says "is that even possible? George W. Bush didn't win by popularity in 2000 and he was more popular than he is now. If Mr. Romney wants to improve his popularity, he should concede right now. The 47 percent he doesn't worry about would appreciate that."

Bob in New York says "it means he won't be able to include president of the United States on his resume."

And Bob in Ohio writes "all it means is we have forgotten how incompetent 'Dubya' was. We're just proving that the attention span of the average American can be measured in days."

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

BLITZER: Jack, thank you.

Arnold Schwarzenegger certainly has lived his life in the public spotlight. What he did in the shadows, though, shamed the former governor -- the former governor of California to no end. Now he's confessing his sins and explaining them as best as he can.

(COMMERCIAL BREAK)

BLITZER: Shocking admissions from the former California governor, Arnold Schwarzenegger, revealing for the first time in his brand new book the moment he confessed to his wife Maria Shriver that he fathered a child with the family's housekeeper in an affair. He spoke about it in a dramatic interview with "60 Minutes". Here's CNN's Zoraida Sambolin.

(BEGIN VIDEOTAPE)

ARNOLD SCHWARZENEGGER (R), FORMER CALIFORNIA GOVERNOR: I think it was the stupidest thing I have done in the whole relationship.

ZORAIDA SAMBOLIN, CNN CORRESPONDENT (voice-over): It was a secret he kept from his wife, Maria Shriver, and the public for years.

SCHWARZENEGGER: It was terrible. I inflicted tremendous pain on Maria and unbelievable pain on the kids.

SAMBOLIN: The most painful chapter from Arnold Schwarzenegger's new memoir "Total Recall", the moment when he admitted to Shriver that he had fathered a child behind her back with the family's housekeeper, Mildred Baena (ph).

SCHWARZENEGGER: She then said, hey, I think that Josef (ph) is your kid and am I off here on this or not and I said you're absolutely correct.

SAMBOLIN: Shriver confronted her husband about the affair at a counseling session the day after he left office in 2011. Schwarzenegger admits she raised suspicions before, but he hadn't been truthful.

UNIDENTIFIED REPORTER (on camera): So you lied to her?

SCHWARZENEGGER: You can say that.

SAMBOLIN: Baena (ph) remained the couple's housekeeper working for the woman she had betrayed.

UNIDENTIFIED REPORTER (on camera): Even after you realized it.

SCHWARZENEGGER: Uh-huh.

UNIDENTIFIED REPORTER: Was that strange?

SCHWARZENEGGER: Very difficult, strange. I mean, bizarre. I mean, everything else. Whatever you want to call it, but it's the best way I could handle it.

SAMBOLIN: Schwarzenegger also writes of a, quote, "hot affair with actress Brigitte Nielsen (ph), his costar in the 1985 film "Red Sonja" (ph). He was already living with Shriver at the time.

UNIDENTIFIED REPORTER (on camera): She knew?

SCHWARZENEGGER: Yes.

UNIDENTIFIED REPORTER: So it's a recurring issue with you.

SCHWARZENEGGER: I'm not perfect.

(CHEERING)

SAMBOLIN: Affairs weren't the only secrets. Schwarzenegger also admits he tried to hide open heart surgery from Shriver and says he didn't tell her about his run for governor until days before he announced it.

SCHWARZENEGGER: She started shaking and she had tears in her eyes and I realized that I was stepping into something that was much deeper than just me running and her being a supportive wife.

SAMBOLIN: She ultimately gave up her journalism career to campaign with her husband. Now years later, his time in office over, Schwarzenegger says he'll always live with the regret of what he did to his family.

SCHWARZENEGGER: That is something that I will always look back and say, how could you have done that?

(END VIDEOTAPE)

BLITZER: Arnold Schwarzenegger will join our Piers Morgan for an interview tomorrow evening, 9:00 p.m. Eastern right here on CNN.

Happening now, countdown to debate night. Governor Romney versus President Obama. How the candidates are preparing. Allegations of registration fraud in a crucial swing state.

Plus, unexpected twists that up end presidential campaigns. Will this contest see an October surprise?

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