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Anderson Cooper 360 Degrees
Congress Approves Wall Street Rescue Plan
Aired October 03, 2008 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Tonight, the deal is done. The bailout package goes through 263-171. And now the bill comes due. Two weeks after the stock market began collapsing and the credit market seized up, Congress approves a rescue plan.
Stocks, however, went down. New job data is the worst in five years. And California, the nation's richest state, warns it may need a federal bailout, too.
We have all the angles on the bailout tonight, the secret pork projects they have hidden in it and don't want you to know about, and all the presidential politics and the debating politics.
But we begin with the late details on how this deal was done.
Jessica Yellin has the "Raw Politics" -- Jessica.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Anderson.
Well, there was real uncertainty in the House this morning. Even as leader scheduled a vote, their aides were privately telling us they were not positive this bill would pass. By the time the bill came to the floor, and leaders thought they had the votes, health care anxiety was still high. They worried that they could see a surprise defeat of the bill, just as they did earlier this week.
(BEGIN VIDEOTAPE)
YELLIN (voice-over): For Democratic leaders, an agonizing week ended with a laugh.
REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Good morning. Do you want to come see it?
(LAUGHTER)
YELLIN: Just days ago, members were shocked when the first bill fell 12 votes short and sent the stock market tumbling. There was high anxiety today, as they feared a repeat, and relief when the updated version passed with 33 new Democrats and 26 additional Republicans voting yes. But those who switched their votes may have put their political futures in jeopardy, just four weeks before an election.
REP. HOWARD COBLE (R), NORTH CAROLINA: I'm voting aye today, and it may be politically damaging. And the sky may fall tomorrow, but it will fall upon my head. It won't fall upon anyone else. YELLIN: The pressure was enormous from constituents.
REP. DONNA EDWARDS (D), MARYLAND: I talked to workers who are worried about losing their jobs.
REP. ELIJAH CUMMINGS (D), MARYLAND: What they are saying to me, is, Congressman, every day I go to my portfolio, I'm see that, from a pension or whatever, I am seeing that my money is leaving.
YELLIN: From business leaders.
REP. JOE KNOLLENBERG (R), MICHIGAN: That was coming from CEOs. It was coming from bank presidents. I think I talked to more bank presidents in 10 days than I have talked to in 16 years.
YELLIN: And from intense lobbying by President Bush and Senator McCain targeting Republicans and Senator Obama dialing Democrats all week.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: There were a number of members of Congress who had voted no that I talked to.
REP. BRUCE BRALEY (D), IOWA: He called me at my home on Tuesday night.
YELLIN: They insisted the bill isn't a Wall Street bailout, but a Main Street rescue. Still, many are unconvinced, and accuse both Democratic and Republican leaders of fear-mongering.
REP. BRAD SHERMAN (D), CALIFORNIA: Wall Street wants the $700 billion so bad, they can taste it. To get it, they need two things. First, you create panic. Then you block alternatives. And then you herd the stampeding cattle toward passing a bad bill.
REP. PETER DEFAZIO (D), OREGON: Henry Paulson set this up, I mean, really, coming over on a Thursday night and saying the world is going to collapse and then going out to the public and saying if Congress doesn't pass this in three days, the world economy crashes. Congress is really easy to stampede when they're up for election.
YELLIN: And few, if any, who voted for the bill actually like it.
REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: When this bill passes today, remember those words, in God we trust, because we're going to need help.
(END VIDEOTAPE)
COOPER: Jessica, have any of these folks in Congress, Senate or the House, Republicans or Democrats, have any of them taken any personal responsibility? Have any of them said, you know what, raised their hand, and said, you know what, I played a role in this, I played in a role in the shoddy oversight that we have had for decades now? Has anyone done that? I asked Barney Frank if he takes any personal responsibility. And he said, no, that it was all the Republicans' fault. Does anybody take any personal responsibility?
YELLIN: I haven't heard it, Anderson.
You will hear from Democrats who run the Banking Committee or Finance Committee, they say it was the Republicans who were in charge before them. The Republicans now say, well, look, the Democrats are in charge now, so their fault.
The simple answer is no.
COOPER: It's mind-boggling that no one -- I mean, I think people would accept it, if people just came forward and said, you know what, I should have done better. I think the American people would be forgiving of that and would probably appreciate the honesty.
But we're going to try next week to just every night even looking at who's to blame for this, because there's a lot of people who had their hands out for -- for -- for money from Fannie and Freddie, Republicans and Democrats. This is not a partisan issue.
Jessica, appreciate the reporting tonight. Thank you.
The bill got porkier to pass. We know that. We're "Keeping Them Honest" on those details in a moment. You're -- you're not going to believe some of the money that was in this bill for things like rum. The question now is, is it meaty enough and timely enough, this bill, work? It's your money, it's your vote, and that's why it matters.
CNN's Ali Velshi spent his day on the market floor in Chicago, joins us now with some answers.
Ali, I think people expected the Dow to go up today, after this bill was signed. Instead, it fell 157 points. Why?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: The rum was for the traders, who couldn't understand what was going on.
(LAUGHTER)
VELSHI: It was a very peculiar day.
As that bill was going on, the House -- the Dow was up about 300 points. And then it was all over the map. All over the map generally signifies, Anderson, the confusion, not knowing exactly where we go next.
And the confusion here is that, all right, the bill has passed. It's kind of one of those buy on the rumor, sell on the news, and, then, all of a sudden, we realize we have got a really lousy economy to contend with that this bill is actually not going to address.
This bill was about the financial freeze, the credit freeze we were in. Now, one of the reasons I was at the Chicago Board of Trade is, that's where treasuries are traded. And if you talk to the traders and you follow some intricacies of the trading, we could see, from the moment the bill was passed, a slight thaw in this credit freeze, very slight, most traders told me, not even enough to call it a trend, but it was in the right direction.
Short-term money started to become cheaper. But the concern, the overwhelming concern today, and the reason markets probably ended lower, was that job numbers we got this morning. On most days, this is typical of the last few weeks, the job numbers would have been the biggest story in the news, bar none.
We lost 159,000 jobs in September. That's a big drop from even what we have seen all year. Look at that chart. Since January, we have seen those numbers drop. Collectively, 760,000 jobs have been lost in America this year. And, Anderson, that's 760,000 people without an income, without credit, who are not contributing to our economy, who are not paying taxes, and could be on -- on the side, where we are paying their benefits. That's bad for the economy.
COOPER: All right. Ali Velshi, thanks.
We're going to continue to follow this all through next week. This story is not going away any time soon.
Up next, there is more than just bailout money in this bill. Fill up the trough, because there's a whole lot of pork in this as well. Your tax dollars, we're talking about, for rum, for wooden arrows, for stock car racetracks. What does any of that have to do with bailing out the economy? Joe Johns tonight "Keeping Them Honest."
What McCain and Obama had to say about the bailout today, we will tell you that, and what McCain plans to do now to recapture the momentum. Can he? Is his campaign about to go all-out negative?
Also, 70 million of you watched Biden and Palin debating last night. We will show you the most important exchanges and how they were rated by undecided voters.
And Sarah Palin is speaking out again today, explaining why she couldn't tell Katie Couric what newspapers and magazines she reads. Her answers -- well, see for yourself.
As always, I'm blogging throughout the hour. Join the conversation at AC360.com. And you can check out Erica Hill's live show during the break -- more 360 in a minute.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: The action Congress took today is a tourniquet. It's not a permanent solution.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: If we can stop the bleeding that this package implemented effectively and then move forward to deal with the broader problems on Main Street, then hopefully we can start getting our economy back on track.
(END VIDEO CLIP)
COOPER: Senators Obama and McCain saying the bailout is necessary, a bitter medicine to try to save the economy.
It took a lot of sweetening, though, to turn that bill into law today. More than $100 billion went to pork barrel projects. And the spending included a fortune on rum and wooden arrows for kids. Rum and arrows. It seems the bailout came with a lot of bacon.
If you want to see, Joe Johns is "Keeping Them Honest."
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): If ever the Congress could be accused of ponying up taxpayer money to support the slings and arrows of outrageous fortune, well, this might be it.
The Wall Street rescue bill is stuffed with about $110 billion in old tax breaks getting a new lease on life that, frankly, don't have much, if anything, to do with Wall Street.
Think $2 million for producers of wooden arrows designed for use by children, a fast 100 million bucks for, well, driving fast, a tax break for owners of automobile speedway traps. And you might think they're drunk on more than power in Washington. They just gave away $192 million to slash taxes on rum from the Virgin Islands and Puerto Rico.
UNIDENTIFIED MALE: You know, so, you could actually say, you know, this is really brought to you by Robin Hood, Captain Morgan and Speed Racer that are lobbying for this piece of legislation.
JOHNS: Then there's the whopping $3.3 billion, so people who don't pay income tax can deduct from their sales taxes from their federal returns: $10 million for bicycle commuters, and -- full disclosure -- there's even something for people in the media business, $478 million to keep more film and television production in the United States.
(on camera): Joe Johns at CNN. How you doing?
(voice-over): When we went to the Hill today to ask lawmakers what's going on, we found a lot of people on the right and left who had a big problem with the overall price tag.
REP. PETER DEFAZIO (D), OREGON: We're borrowing, ultimately, $810 billion. What happens when the next crisis hits in the not-too- distant future? When Wall Street wakes up from its celebration, and it sobers up, and they look and see, we did nothing for the fundamentals in this country, then the stock market will go down again, after it goes up today.
JOHNS: So, how does something like this pass? Congressman John Lewis said he didn't like the add-ons, but was worried about the economy, and voted yes.
REP. JOHN LEWIS (D), GEORGIA: Some members on the Senate side, they have some of their pet projects. And I wanted a -- more or less, a clean bill, a bill that is -- that is -- everything is paid for. I don't like the idea of passing on a tremendous amount of debt to our children and their children.
JOHNS: The truth is, the House got rolled. They were over a barrel. After their previous vote, the stock market tanked. And they were worried about wasting time.
REP. KENDRICK MEEK (D), FLORIDA: It's a very unfortunate thing, but it's a part of the legislative process.
JOHNS: OK. So, if everyone is scratching their heads, who stuck all that extra stuff into the bill in the first place?
That would be Senator Majority Leader Harry Reid, no slight of hand. He takes credit for it. He says it will help stimulate the economy. And then there's the politics of it. A lot of times, when the kitchen sink gets thrown in, it's to get someone's vote. But, on a measure this important, some say the so-called sweeteners were little less than tasteless.
(END VIDEOTAPE)
COOPER: Joe, it certainly feels like wasting taxpayer dollars on this kind of stuff. I get the impression a lot of fiscal conservatives aren't too upset about it, though.
JOHNS: No, we're pretty much talking about tax cuts here, Anderson. Fiscal conservatives, as you know, support tax cuts. A lot of them I talked to said they did, and said they supported that part of the bill.
But it's liberals and conservatives who are most upset about it. Some feel like they were steamrolled, certainly over on the House side.
COOPER: All right, Joe Johns, thanks.
Straight ahead, the political fallout, how McCain and Obama are both spinning this bailout. And what happens now in the campaign? With momentum going for Obama, will the race suddenly take a far more negative turn? We will talk to our panel about that also.
Later, Sarah Palin -- we will examine the most important moments from last night's debate. And, today, she was speaking out again, trying to explain her shaky appearances with Katie Couric, in particular why she didn't answer the questions about what newspapers and magazines she reads. We have actually discovered what she reads. And we will tell you -- tonight on 360.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) OBAMA: even if this rescue package works exactly as it should, it's only the beginning, it's not the end, because we still have 150,000 new people who've lost their jobs this month; 750,000 since the beginning of this year.
MCCAIN: We can go backward with job-killing tax hikes, the same old broken partisanship and out-of-control spending, as Senator Obama would have us do, or we can bring real reform to Washington.
(END VIDEO CLIP)
COOPER: John McCain, Barack Obama in Colorado and Pennsylvania today, both, of course, battleground states.
McCain is scaling back his political operation in another battleground state, or what was a battleground state, Michigan, where the unemployment rate is 8.9 percent right now. As we said at the top, grim news nationwide on the jobless front, the sharpest losses in five years, the economy issue one all year, the bailout issue one today on the campaign trail -- both candidates, however, treading kind of carefully.
On the trail tonight, Ed Henry.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): After taking a beating when the bailout stalled, John McCain might be expected to enjoy a victory lap. But campaigning in Colorado just minutes after the rescue plan passed, he avoided any celebration.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: This is a tourniquet. It's not a cure. It's not a cure, it's a tourniquet. It will stop the bleeding, but now we've got to reform the way we do business in Washington. And it's got to be reformed now.
(CHEERING AND APPLAUSE)
HENRY: The same metaphor used by Barack Obama after buying his wife a dozen roses in Pennsylvania.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: So, if we can stop the bleeding that this package implement it effectively, and then move forward to deal with the broader problems on Main Street, then hopefully we can start getting our economy back on track.
HENRY: Both men supported the rescue. But they were careful not to cheerlead a bill that many voters are outraged about. It's seen as a bailout of fat cats, a sensitive point, since it was signed into law the same day the government revealed another 159,000 jobs were lost.
MCCAIN: There was a jobs report that came out today that's terrible news for America. I have to give you straight talk, my friends. So, I can't give you rosy scenarios.
HENRY: With a tourniquet on the economy, McCain now needs to stop the bleeding in his campaign. Obama is edging ahead in key battlegrounds, as he links McCain to the economic policies of an unpopular president.
OBAMA: This failed philosophy is what John McCain has embraced for the last 26 years in Washington. He hasn't been getting tough on Wall Street. So, suddenly, a crisis comes, and the polls change, and suddenly, he's -- he's out there talking like Jesse Jackson.
(LAUGHTER)
HENRY (on camera): Here in Colorado, a state that Republicans have had a lock on, Obama has inched ahead by four points in the latest CNN/"TIME"/Opinion Research poll. So, McCain has decided to go on offense with a tough new ad on taxes.
(BEGIN VIDEO CLIP, MCCAIN CAMPAIGN AD)
NARRATOR: Senator Obama voted 94 times for higher taxes. Ninety-four times. He's not truthful on taxes.
(END VIDEO CLIP)
HENRY (voice-over): CNN has done a fact-check of McCain's charge, and found it to be misleading. Many of the 94 votes were budget votes that would not have directly raised tax. Nevertheless, McCain is vowing to hit the issue hard in next week's second presidential debate.
MCCAIN: You're going to learn a lot about who's the liberal and who's the conservative and who wants to raise your taxes and who wants to lower them.
(CHEERING AND APPLAUSE)
HENRY: That face-off will be one of McCain's final chances to shake up the dynamics of a race that is tilting against him.
Ed Henry, CNN, Denver.
(END VIDEOTAPE)
COOPER: Let's dig deeper now with CNN senior political analyst David Gergen, Jennifer Donahue, political director of the New Hampshire Institute of Politics, and CNN's Candy Crowley.
So, David, in spite of this rescue packages, the focus is still going to be on the economy for weeks to come. Can McCain gain any -- any lost ground on this issue?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: He can, Anderson. It's going to be very, very hard. He's pushing up a big, great big boulder up a mountain for him now.
He did get good -- good news last night with Sarah Palin's debate performance. That has bolstered him, especially among Republicans. But the economy is caught in this grip and it's not going to go away with this bailout plan passage.
The loss of 157,000 jobs, after all that has -- what's already happened, there -- the people on Wall Street believe that another 100,000 jobs are going to be lost in the financial community alone just over this meltdown. There are more job losses coming. The economy seems to be going deeper into recession.
So, it's not -- there's just no way, between now and election, when, suddenly, the economy is going to go away as an issue, magically disappear. So -- and -- and John McCain, right now, on the economy is behind Barack Obama. So, Tuesday night has become even more critical for him.
It's a good format for him. It's a much more town hall-ish kind of format, where he is -- where he excels. But to make the arguments, he has got to hammer away at Obama in ways he was unable to do successfully in the first debate. After all, he did go after him on the economy in the first -- in the first debate.
COOPER: Well, Candy...
GERGEN: And he didn't lose -- didn't win.
COOPER: Candy, I guess that gets to my next question. Is this thing about to go incredibly negative? There's some 30-odd days left to go. Do they just like pull out all the stops now?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Yes, I don't see any reason it's going to be any different from any other campaign, which happens -- and it always happens in the last 30 days.
Now, there will be -- if it goes according to previous campaigns about five, six, seven days before the final vote, both of them will come up with positive ads, sort of to leave voters with a better taste. But, absolutely, I think that McCain, in particular, will be more negative, although he has a lot of negative ads up, as does Barack Obama. But Obama has the freedom not to have them all be negative.
COOPER: Jennifer, the McCain campaign is announcing it's pulling out of Michigan, obviously a big blow -- blow to them. We have a recent poll of polls which shows Obama commanding an eight-point lead there in Michigan.
And McCain is hoping to turn New Hampshire red, where you are. How does he stand there?
JENNIFER DONAHUE, SENIOR ADVISER FOR POLITICAL AFFAIRS, NEW HAMPSHIRE INSTITUTE OF POLITICS AT SAINT ANSELM COLLEGE: Well, we did a poll at Saint Anselm College that the results were revealed yesterday, and Obama is 12 points ahead.
He's had significant movement among independents, who are McCain's base. So, it's a real uphill battle for McCain in New Hampshire. While it's only four electoral votes, I suspect that, if they had known what our poll said, they wouldn't have pulled out of Michigan. They would have pulled out of New Hampshire.
It's going to be hard to stop the hemorrhaging when Main Street -- you can drive down the street here and see that mom and pop stores and small businesses, the -- the backbone of the economy here, just like in the heartland, the doors are closed. They're -- they're -- they're gone.
COOPER: Well, we're going to have a lot more with our panel ahead.
Stay with us, David and Candy.
Jennifer Donahue, thanks so much.
Next on 360: debating the debate. Seventy of you watched the -- these moments.
(BEGIN VIDEO CLIP)
BIDEN: But the notion that somehow, because I'm a man, I don't know what it's like to raise two kids alone, I don't know what it's like to have a child you're not sure is going to -- is going to make it -- I understand.
I understand, as well as, with all due respect, the governor or anybody else, what it's like for those people sitting around that kitchen table.
(END VIDEO CLIP)
COOPER: One of the few emotional moments from the debate last night. The question is, who won? Just ahead, real voters who were undecided when the debate began weighing in, you can see their opinion there in real time at the bottom of the screen. We will show you what happened.
And, later, to tell the truth -- Palin and Biden said a lot last night. What's the facts and what are the fictions that they said. We're "Keeping Them Honest," both of them -- coming up.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: ... entrenched in our work force. That's a positive. That's encouragement. And that's what John McCain meant.
At least we can agree to disagree on that one, and I am going to keep pushing him on ANWR, though.
... full of school teachers. My grandma was. My dad, who is in the audience today, he's a schoolteacher.
(END VIDEO CLIP) COOPER: A record number of people watched last night's vice presidential debates, 70 million viewers, in fact. In a moment, how those folksy phrases, one-liners, and winks played with undecided voters.
First, Erica Hill joins us with a 360 news and business bulletin -- Erica.
ERICA HILL, CNN CORRESPONDENT: At least I think I know where she learned the wink, A.C.
(LAUGHTER)
HILL: All right, onto the news now.
The O.J. Simpson jury still deliberating at this hour, after having -- asking to have dinner delivered. They're trying to decide if Simpson and his co-defendant are guilty of robbing two sports memorabilia dealers at gunpoint in a Las Vegas hotel room. Both defendants have pleaded not guilty.
California Governor Arnold Schwarzenegger predicting a difficult path ahead in the financial markets, despite that newly approved bailout package.
Yesterday, the governor warned, his state might need $7 billion in emergency federal aid because it was having trouble borrowing on the credit market.
A takeover fight brewing at Wachovia -- Wells Fargo agreeing to buy the ailing bank for about $16 billion, a merger deal, actually, there. That happened just days after Citigroup, though, said it would acquire Wachovia's banking assets for $2.2 billion. Well, Citi is now demanding Wells Fargo drop its offer. Stay tuned on that one.
And meet a man who suffered a major shock at the gas pump. Check this out, nothing to do with the gas prices there. It was captured on surveillance video. He's filling up his truck in Upstate New York when he gets struck by lightning. You can kind of see if you look out the doors. Look at that...
COOPER: Wow.
HILL: ... that flash of the lightning. Remarkably, this guy walks away with barely a scratch.
COOPER: Yikes.
HILL: Insane.
COOPER: That's incredible.
HILL: Mm-hmm.
COOPER: All right, Erica. Win lose or draw, the campaigns got instant feedback on their veeps in waiting during last night's debate. Those squiggly lines at the bottom of the screen are part of a real-time dial-testing which -- seen only on CNN.
One headline that we learned from this: Quit the personal attacks, at least according to these focus groups. We will show you more of how undecided voters rated both of these candidates.
Also, Sarah Palin explaining why, the last time she was asked, she wasn't able to name a single newspaper or magazine she read. She has got an answer now -- ahead on 360.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN, (R) VICE PRESIDENTIAL NOMINEE: Can I call you Joe?
Darned right it was the creditor lenders.
Joe Six-pack, hockey moms across the nation, I think we need to band together.
Darned right we need tax relief.
The chant is drill baby drill.
Say it ain't so, Joe, there you go again pointing backwards again.
(END VIDEO CLIP)
ANDERSON COOPER, CNN ANCHOR: Folksy phrases from Governor Palin. A lot of folks talking about this on our blog, 360.com, join in. A lot of people were watching last night's debate, no doubt about that.
The early numbers indicate some 70 million viewers tuned into the one and only vice-presidential debate. Palin and Biden didn't score any knock-out punches but a CNN poll found one candidate performed better than the other. We'll give you the results in a moment.
First, real time reaction from a group of undecided voters in Columbus, Ohio; it's called dial testing. You all probably know about it by now. And while they were watching the debate, we were watching them watching the debate.
"360's" Randi Kaye reports.
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT: She sold herself as a folksy Washington outsider. He sold himself as a seasoned and steady leader. Did voters like what they heard? Those orange and green lines told us what voters thought of responses from Governor Sarah Palin and Senator Joe Biden. Green is men; orange, women. Our survey included 32 undecided voters, Democrats, Republicans and Independents.
When they liked something, their lines climbed. Watch.
SEN. JOE BIDEN, (D) VICE PRESIDENTIAL NOMINEE: No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised.
KAYE: When Biden spelled out the Democrats' tax plan, women and men liked it. Both lines shot up. Same thing happened when Palin talked energy independence.
PALIN: Energy independence is the key to this nation's future.
KAYE: On foreign policy, Biden scored much higher. When Palin tried to tackle the topic, both lines dipped nearly every time.
Political analyst, Larry Sabato explains why.
LARRY SABATO, POLITICAL ANALYST: It reminded them how inexperienced she is and how she's come across unprepared for the vice-presidency.
KAYE: Voters liked Biden's talk of troop withdrawal for Iraq. But when Palin said this --
PALIN: Your plan is a white flag of surrender in Iraq.
KAYE: Both lines dipped down and stayed down. Voters didn't like that.
SABATO: A lot of water has gone under the bridge since 2004 about Iraq. Close to two-thirds of Americans believe it was an unnecessary war.
KAYE: Palin did well when criticizing corporate greed. She spiked highest on education and raising teacher's salaries. Biden peaked when he choked up about raising two sons alone after his wife and daughter died in a car crash.
BIDEN: The notion that somehow because I'm a man I don't know what it's like to raise two kids alone, I know what it's like to have a child you're not sure is going to make it --
KAYE: What didn't work well for either candidate were attacks.
What about Palin's folksiness, her "you bet yahs" and winks at the camera? If lines are to be believed, it all fell flat, so did her appeal to hockey moms and Joe Six-pack. Biden's mention of the infamous "bridge to nowhere" a dig at Palin's record on earmarks also flunked.
Biden did better with women in our group than Palin did. And on oil drilling?
PALIN: The chant is drill, baby drill.
KAYE: Women were turned off but the men liked it. Women loved when Biden tied McCain to Bush and when Biden called Dick Cheney the most dangerous vice president in American history. That made all our undecided voters happy.
SABATO: It was the appropriate moment to use the Cheney factor. Biden did it and he scored with it.
KAYE: In the end, our group called it a win-win. They liked both candidates better. They gave Biden high marks for sophistication, sincerity and honesty. Palin scored with honesty, too, and they had more faith she could do the job. Our undecided voters, though, are still undecided.
Randi Kaye, CNN, New York.
(END VIDEOTAPE)
COOPER: Who came out ahead in your opinion? CNN Opinion Research Corporation poll gave Biden the edge; 51 percent said he did the best job in the debate. Palin got 36 percent of the vote.
Both candidates exceeded expectations, as Randi said; 64 percent said Biden did a better job than they expected, 84 percent said the same for Sarah Palin.
It was an exciting debate no matter who you liked. The question is did the candidates answer the questions and were their answers actually accurate. We're "Keeping Them Honest."
Also, there was only kind of verbal sparring but there were personal shots mixed in. We'll show more of the debate.
And also what we heard from Sarah Palin today. She had a hard time answering Katie Couric in some of Katie Couric's questions today. In a new interview she explained why she didn't give answers and she actually tells what magazines and newspapers she does read, coming up.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DAVID AXELROD, OBAMA CAMPAIGN MANAGER: Senator Biden however, spoke with a passionate commitment and a real sense of how to advocate for and change the circumstances that we find ourself -- for middle class people and change the circumstances we find ourselves in today.
SEN. LINDSEY GRAHAM, MCCAIN SUPPORTER: What I hope for happened, she's no longer judged for 15 second sound bites. Over a 90-minute period you saw somebody genuineness, you saw smart, you saw tough, you saw somebody understood John McCain and where he wants to take the world.
(END VIDEO CLIP)
COOPER: Surrogates talking in the spin. I don't know why we even interview anyone in the spin room because it's just pure spin, they even named the room "spin". Why even go in there?
We're taking a look at the facts tonight; what the candidates said at last night's debate. Governor Palin and Senator Biden rolled off a lot of numbers. They also unleashed their barrage of accusations like whether she cut taxes in Alaska or if Obama believes the surge in Iraq isn't working.
Who's telling the truth? We're "Keeping Them Honest." Here's Tom Foreman.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT: Anderson, both vice-presidential candidates took liberties with the truth on a lot of subjects. Let's get started.
The success of the surge in Iraq is something Senator McCain is proud of. Since Senator Obama was against it, Governor Palin said this.
PALIN: Barack Obama still can't admit the surge works.
FOREMAN: But that's false. Obama still wants our troops out of Iraq, however, he now says the surge succeeded beyond our wildest dreams. Obama has been criticized for his views on foreign policy. So Biden went after McCain on that same front.
BIDEN: John McCain said as recently as a couple weeks ago, he wouldn't even sit down with the government of Spain.
FOREMAN: Problem is, that's false. America has had strained relations with its old NATO ally, Spain. But when McCain was interviewed about it recently, he did not commit one way or the other to future talks.
On the economy, Biden says this is McCain's plan for health care reform.
BIDEN: Deregulate it and let the free market move like he did for the banking industry.
FOREMAN: That's misleading. McCain wants some deregulation but nothing like the extensive lack of oversight being blamed for many banking problems.
On taxes, Palin says Biden said this.
PALIN: Higher taxes or asking for higher tax or paying higher taxes is patriotic.
FOREMAN: That's misleading, too. Biden says making more than a quarter million a year should pay more to help out middle class Americans and helping the economy recover is what he calls patriotic.
There are plenty of other examples.
Palin said Obama voted 94 times to increase taxes or not reduce them. That's misleading. More than half those votes came in budget resolutions, which on their own, could not raise taxes.
(END VIDEOTAPE)
The list of half-truths, outright fibs and misleading statements from both sides goes on and on and no doubt that is what it will continue doing right up until the election -- Anderson.
COOPER: No doubt. Tom Foreman, thanks.
Let's dig deeper now with more post debate analysis. Joining us David Gergen, Jennifer Donahue and Candy Crowley once again.
David, Republicans celebrated Palin's debate performance last night saying it exceed expectations. What kind of an impact do you think she had on independents and on women?
DAVID GERGEN, CNN SENIOR POLITICAL ANALSYT: Not much that we can see so far, Anderson. We'll have to wait and see the polls. The debate itself will fade. But she's going to have boisterous crowds in the coming days and she's also promised to do far more media. We may be back on a Katie Couric moment before it's over.
But the other part of this is, Anderson, she's feisty herself. Today, she was questioning, she said she publicly disagreed with John McCain's decision to pull out of Michigan, said she sent an e-mail to the campaign, come on, guys, let's not do this. She wants to go back in there. I've never heard of a vice-presidential candidate --
COOPER: Why do you think she's doing that?
GERGEN: I think, you know, she's got -- it's the maverick in her, Anderson. I don't know. I've never seen anything like that before.
She's going to be a little unpredictable and she'll probably get a lot of media from that state but I really think it will switch back to John McCain in the economy and McCain versus Obama. And there's going to be a lot of attention on Obama. After all, he's not a potted plant in all this; he's on his own offensive.
COOPER: Candy, how does Obama now handle things? Does he basically just kind of try to run out the clock, keep hammering away the way he's been hammering linking McCain to Bush but not try to come up with something new on the economy? Does he just kind of play it safe?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, it is not in his interests at this point to come up with any specifics beyond what he's already done. The more specific you get the bigger target you are in terms of plans. Listen, he has got the wind at his back. He has ever since any Democrat had ever since the beginning of this year, in fact January in '07.
The economy didn't change because they passed this bill. People are still paying horrendous gasoline prices. Those people who were being foreclosed upon yesterday are still being foreclosed upon tomorrow.
The elements favor Democrats. The Democrat is Barack Obama, playing for time is, you know, I think they would argue with that. It is pretty close to that at this point. The movement is in his direction because economic hard times, a, favors the party out of power, b, favors the Democrats because they tend to be more interventionist in a post-Katrina era. The country is ready for a little intervention here from the government and c, George Bush is really unpopular.
Obama doesn't have to do that much new.
COOPER: Jennifer, the idea Sarah Palin is now going to be doing more media, do you believe she will do more media of all stripes or do you see her doing more conservative talk radio, conservative TV?
JENNIFER DONAHUE, NEW HAMPSHIRE INSTITUTE OF POLITICS: Well, I think she'll do more of the conservative stuff and the heartland stuff because women do like her but the women who like her tend to be conservative. And so she helps solidify some women quickly going to Obama, independents and women moving quickly towards Obama. They're trying to stop the hemorrhaging by having Palin out there, keep some of the conservative women and some of those homemakers.
But the key here is this. The Palin-Biden debate is over, she held her own, she's a smart lady, great, move on. The next debate is Tuesday. That's the one that matters.
The only thing McCain could have done to put a tourniquet on his candidacy would have been to vote against the bailout bill, say this bill is pork. It's pork for Wall Street, it's pork for Washington, I'll vote against it, I'll show leadership, this is why I'm here.
Without having done that, without having had that stroke, I don't see how he differentiates himself from the Democrats and I don't see how he turns this around for himself.
COOPER: David, you're kind of shaking your head. It is so hard for him to differentiate himself from Obama on the economy.
GERGEN: It is. But I think if he had opposed this Bill and persuaded Republicans to defeat the bill, he could have brought the pillars not only of Wall Street down but he could have brought the whole pillars of his campaign down around his head.
DONAHUE: But David --
GERGEN: He would be blamed -- I understand it's a way to differentiate, but he would be blamed for every single drop in the stock market and the deepening credit crisis and in California basically going bankrupt.
If he had come out against it, the Republicans would have defeated the bill.
DONAHUE: Right. I see what you're saying, except that they didn't hold one minute of hearings on this bill. Here's a Congress with committees that are meant to hold hearings on this bill. Not a minute on this bill.
GERGEN: I'm not trying to argue the bill was wonderful. I am trying to argue there was a very deep sense in the financial community if this bill had not passed this thing would have collapsed.
DONAHUE: But the problem is that the voters don't like it. The voters say you know what, you're rewarding Wall Street at my expense.
GERGEN: Well, you know, sometimes you have to do what's right. If he had done what's wrong, I'm telling it would have killed his campaign.
DONAHUE: I'm not sure it's what's wrong now. I think they should have had more compromise; a solution that would have pleased both parties is all I'm saying.
COOPER: We'll continue this after the break. We got more of our panel ahead.
And also some new comments from Sarah Palin today about those questions from Katie Couric that caused her so much trouble. She kind of explains what's going on in her mind at least and explains why she didn't say what newspapers she reads and we find out what newspapers and magazines she says she does read.
Also, ever wonder what all the best political team members are watching on their laptop. Well, last night one particular member was so busted -- we'll tell you who he is and what he was really watching when we all were talking about important things.
Here's a hint though. He's very smart but not smart enough to close his laptop.
We'll be right back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PALIN: I may not answer the questions the way that either the moderator or you want to hear but I'm going to talk straight to the American people and let them know my track record.
BIDEN: Let's talk about the maverick, John McCain. Again, I love him. He has been a maverick on some issues but he has been no maverick on the things that matter to people's lives. He'd voted four to five times with George Bush's budget which put us $1.5 trillion in debt this year and over $3 trillion in debt since he got there.
(END VIDEO CLIP)
COOPER: That's talk from both vice presidential candidates last night. There's no doubt Sarah Palin reassured a lot of Republicans last night. And since being named to the ticket she has certainly energized the base.
Last night apparently, for at least one writer, she also stimulated the base. Rich Lowery the editor of the "National Review" magazine wrote and I quote, "I'm sure I'm not the only male in America when Palin dropped her first wink sat up a little straighter on the couch and said, hey, I think she just winked at me. Her smile, by the end, when she clearly knew she was doing well, it was so sparkling it was almost mesmerizing. It sent starbursts through the screen and ricocheting around the living rooms of America. That's quality that can't be learned; it's either something you have or you don't, man, she's got it."
Once again David Gergen, Jennifer Donahue and Candy Crowley.
So Candy, Palin was asked about striking differences between her performance in this debate and recent interviews. She was asked this in an interview on Fox. Let's listen today.
(BEGIN VIDEO CLIP)
PALIN: The Sarah Palin in those interviews was a little bit annoyed. Because it's like Man, no matter what you say, you're going to get clobbered. If you choose to answer a question you're going to get clobbered on the answer. If you choose to try to pivot and go on to another subject that you believe that Americans want to hear about, you get clobbered for that, too.
But in those Katie Couric interviews, I did feel there were a lot of things that she was missing in terms of an opportunity to ask what a VP candidate stands for, what the values are represented in our ticket.
(END VIDEO CLIP)
COOPER: She went on to say that she reads the "New York Times," "Wall Street Journal" and "The Economist."
What do you think explains though the differences that we saw Palin in that interview and also on the stage last night and in those Katie Couric interviews?
CROWLEY: You know, confidence.
When I watched her in the Couric interviews, I didn't get the sense there wasn't an answer there. I just think they got into her head too much.
It reminded me and David I think will remember this, that there was one Ronald Reagan presidential debate, where he was so full of facts and figure, you couldn't follow him. It was all, Ronald Reagan doesn't know specifics and he's a generalist. They sent him all this information and it was striking because he didn't connect at all.
There were so many dos and don't when she went in there. It struck me she was more brain-locked than she was not having an answer. How difficult is it to say what you read?
COOPER: It has got to be hard, David, when you're preparing a candidate and all candidates. It's easy to say Sarah Palin was coached last night; they're all coached and they've been coached for days and many of them have been coached for years. But it's got to be a fine line between giving a person a lot of information and also kind of dialing that back and not giving them too much information.
GERGEN: That's generally right. There was in 1984, Ronald Reagan's first debate with Walter Mondale went so badly that Reagan was way ahead in the campaign, but suddenly people had questions about whether he was senile or not. He had a great comeback; you remember in that second debate and knocked Mondale out of the park.
That's when he said, when he was asked about are you going senile essentially. He said I will never make my opponent's age an issue in this campaign.
I think there was -- I think the brain lock is exactly the right word to describe what we seemed to see with Sarah Palin. I think taking her out to Sedona and going out there in the trees and especially reuniting her with her family seems to have done wonders.
I've seen that happen with candidates. I once worked with Al Gore as he was coming to do that famous debate with Ross Perot and Larry King. He got a little locked up at one point. It was really, when Tipper came and spent some time with him he relaxed and found himself again and was a much, much better candidate. He found himself, his own voice.
COOPER: Jennifer, I want to play just one other thing Palin that said today on the whole reading material issue. Take a look.
(BEGIN VIDEO CLIP)
PALIN: I read the same things that other people across the country read including the "New York Times" and the "Wall Street Journal" and "The Economist" and some of these publications we've recently been interviewed to up there in Alaska because of everything that we're doing with oil and gas. (END VIDEO CLIP)
COOPER: How do you feel -- we talked about this a little bit before, Jennifer. How do you see her being used on out, energizing the base, talking to true believers?
DONAHUE: Yes, that but also if she can show this side of herself that reads the "New York Times" and "The Economist," that's really credible. When you watched the debate last night, when she was looking either at Biden or not addressing the camera, here, Rich Lowery, does that help?
When she wasn't winking and being cute, when she was being smart and being herself, she was terrific and beat expectations by an overwhelming margin. It's when she's trying to be cute and go to this sort of, aren't I a cute governor from Alaska, she needs to be smart and put one foot in front of the other and hold the baby at the same time and be herself. If she can do that, she's a better debater than Joe Biden.
COOPER: I'm out of time but David just very briefly, what?
GERGEN: She beat expectations, let's not go too far. She was not a foreign policy expert out there. Joe Biden won the debate, you know. He really brought the sophistication to the debate that you look for, that most Americans look for.
COOPER: Right. And the polls on Fox and CNN and CBS all said the same thing, Biden won.
We're going to leave it there. Candy Crowley, thank you so much. Jennifer Donahue, David Gergen as well. Have a great weekend.
Coming up, all those laptops, all those analysts staring intently at their screens last night. Hard at work, right? Maybe, find out what one of our pundits was caught watching during last night's debate coverage. Was David Gergen? Could it be? I don't think so. I'll give you a hind; it's not David Gergen.
Later, we break down the bailout vote. What made it into a final bill? How long is it going to take before any of us see relief? Will we see relief? That's ahead on "360."
(COMMERCIAL BREAK)
COOPER: Time now for "The Shot" on this Friday evening. Do you ever wonder what our pundits are doing on their laptops when they're on the set? Most are checking e-mail, blogging, talking to sources.
But last night thanks to our friends at Gizmodo, we caught senior analyst Jeffrey Toobin watching a playoff game last night. Look at the screen, look closely at his screen.
While I was leading a very important discussion at the time, Mr. Legal Eagle was filling out his fantasy league roster.
ERICA HILL, CNN CORRESPONDENT: Yes. Multitasking there. So sorry to keep you away from your important business, Toobin.
COOPER: I know. It just so happens we have Jeffrey Toobin on the phone right now. He's off somewhere, probably at a baseball game.
Jeff, are you there?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Excuse me, Anderson, you're interrupting, the Red Sox are leading the Angels 5-1 in the fourth. COOPER: You're a legal analyst, you're political analyst and now you're a senior baseball analyst, apparently.
TOOBIN: That's true. You know what? It's all about multitasking. Your discussion are always fascinating, but, you know --
HILL: When you're listening.
TOOBIN: You have to keep track of what's happening in the playoffs.
COOPER: I see.
HILL: That's good. It's the politics or the legal stuff doesn't work out, you could always go work in sports.
TOOBIN: Right.
COOPER: Is this the first time you've done this?
TOOBIN: I really -- ESPN is my ultimate goal.
HILL: He's avoiding your question, Anderson.
COOPER: Is this the first time you've done this, Jeff?
TOOBIN: Is it the first time I've done this?
COOPER: Wait a minute. You just did it.
HILL: Oh, the hesitation.
TOOBIN: I don't remember.
COOPER: You did something that was -- like you repeated the question, which is a clear buying for time. Is this the first time I did it? That was the question, is this the first time I did it? Let me tell you, if this is the first time I did it. Jeff, you should know better, you're a lawyer --
TOOBIN: I'm lawyer and that's why I know how to avoid giving a direct answer. I don't remember whether I've done this before.
COOPER: Oh, you don't remember.
HILL: Even better.
COOPER: Yes. All right, Jeff Toobin, thanks very much. Have a good weekend.
Have a good weekend, guys. Listen to the roar of the crowd.
You can see all the most recent shots on our Website, ac360.com. You can check out what Jeff was reading there. That's about it for that. Coming up at the top of the hour, the bottom line on the bailout. The inside story, how it got passed, what it's costing you pork and a chance of it actually helping any of us.
All the angles next on "360."
(COMMERCIAL BREAK)
