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White House Daily Briefing; Presidential Debate Developments

Aired September 26, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: OK. And the balls are up in the air once again. Where do we go from here?
As you just saw, Democrats scrambling this hour to rescue the financial rescue plan. Ironically, it is one that's been advocated by a Republican president.

What looked like a done deal clearly has been thrown overboard. Perhaps it happened during that extraordinary White House meeting yesterday.

We'll get some more clarity on that. Obviously more chaos this morning.

We have a team of reporters on these breaking developments. We're talking about Suzanne Malveaux in Oxford, Mississippi; Christine Romans in New York.

And let's begin with our Kate Bolduan on Capitol Hill, where bailout negotiators are scheduled to get back to work shortly.

But Kate, I mean, who is going to be doing the work here? Are we talking about the senators themselves or staff members? It sounds as though we've reached something of an impasse here?

KATE BOLDUAN, CNN CORRESPONDENT: I would definitely classify it as an impasse. I mean, since last night, it was clear that the negotiations between the lawmakers, specifically House -- Senate Democrats and some Senate Republicans and House Republicans, were clearly stalled. They did definitely reach an impasse. But what we're hearing now is they're trying to get these negotiations up and running again.

You just heard from Senate Majority Leader Harry Reid. He said the vehicle came off the tracks. The train came off the tracks and we're trying to get it back on right now. And that sums it up pretty well.

We are told that there is going to be a negotiating meeting. It's going to be a staff level meeting, though, as Harry Reid says. That should be happening shortly.

The majority leader also says that they hope to have a members meeting later today. But as you can tell from this roller-coaster ride that we've been on in the past day, that things change from minute to minute, hour to hour. And what we've seen from yesterday to today, there was a clear growing opposition among house Republicans to this plan the Treasury secretary, Henry Paulson, proposed, brought over here and Democrats said they were working with.

House Republicans are opposed to the fundamental principle of this plan, which the plan would use taxpayer dollars to buy up these bad mortgages. And House Republicans say they're not going to go along with that. They want something closer to what would be a government-backed insurance plan requiring that private money fund this bailout. And that's created, as we can get, a lot of back and forth.

Listen here.

(BEGIN VIDEO CLIP)

REP. JUDY BIGGERT (R), ILLINOIS: Unlike the Paulson plan, our plan makes Wall Street pay for Wall Street's mistakes. Unlike the Paulson plan, it calls for a workout, not a bailout. By requiring owners of mortgage-backed securities to purchase insurance, we put the ball squarely where it belongs, with those who were responsible, not the innocent, hard-working taxpayers.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK: Average people get hurt when our financial arteries are clogged even though they are blameless. That is the difficulty of our world. It is not fair. It is not right. But it is how it is.

(END VIDEO CLIP)

BOLDUAN: It is how it is. You hear it right there from Democratic Senator Chuck Schumer. It is how it is, is what he's trying to say, is this is not going to be an easy deal, as many lawmakers have said, for anyone.

It's going to be difficult. But what Chuck Schumer is saying right there, it has to be done because what affects Wall Street is going to affect Main Street when we're in this financial crisis -- Tony.

HARRIS: OK, Kate. A couple of things here.

We just heard from Representative Biggert. But I'm curious -- we also heard just moments ago at the top of the hour, the Senate majority leader, Harry Reid, casting the impasse as being at the feet of House Republicans.

So I'm wondering, who specifically are the fingers being pointed at right now? Are we talking about Representative Biggert? Are we talking about the ranking member of the House Committee Financial Services? Are we talking Richard Shelby?

BOLDUAN: It seems to have changed, to be quite honest, Tony. There's really no one clear answer. And that's one of the problems that they're dealing with, is they don't really know. "They" being the lawmakers that are trying to get the deal going, they don't really know who is negotiating. That was one of the problems that came out of the meeting yesterday.

HARRIS: So there's no clear negotiating team on this?

BOLDUAN: They seem to be trying to figure that out. We do know clearly that the Senate Banking Committee chairman -- that would be Chris Dodd, Democratic senator -- as well as Barney Frank, Democratic chairman of the House Financial Services Committee, they're -- on the Democratic side, they've been taking the lead.

On the Republican side, that has change. We did at first have Senator Shelby.

HARRIS: Yes.

BOLDUAN: But as we know, he has brought -- taken himself out of the negotiations because he says he does not stand for that proposal that they're working on. In his place we had Senator Bennett come in, another Republican, and now we also have Senator Judd Gregg, also a Republican senator, that have come in to kind of take the place for the Republican senators who are trying to reach this deal.

It's been confusing. And I know I'm probably not clearing it up, but...

HARRIS: No, no, no. I'm not quite understanding how Representative Shelby can take himself out of the mix. Whatever plan comes out of the House, it seems to me, would have to have his seal, his stamp of approval on this. So I'm still hopeful that he's a part of the negotiating team.

BOLDUAN: I think everyone is trying to find some kind of consensus. And right now, what we've heard from Majority Leader Harry Reid and we've heard from other senators and Republicans, Democrat and Republican -- I'm very sorry -- is that they say the problem that they're all facing right now is that your general consensus to work together between Senate Democrats, Senate Republicans and House Democrats. But what they're missing is, what they're saying, is that they're missing house Republicans. That they're not even come together the negotiating table to really negotiate, so how can they reach any kind of conclusion or agreement?

HARRIS: Well, can you find out for us, Kate, if there's a back channel negotiation going on here?

BOLDUAN: I'm working on it.

HARRIS: I can't imagine that this is being left to the staff members. I can't...

OK. Kate Bolduan.

BOLDUAN: I know. This -- I know. That's how it feels. I promise I'm working on it.

HARRIS: Well, I'm listening to the president say to us we've got to get a deal done and we've got to get it done now.

Kate Bolduan working the story on Capitol Hill for us.

We want to get you the latest developments unfolding really right now regarding the presidential debates.

Suzanne Malveaux is live at the debate site in Oxford, Mississippi with the latest.

And Suzanne, maybe a slightly clearer picture is beginning to emerge?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I think so. Probably clearer than what's happening on the Hill. Obviously a lot of complexity there.

But I've been in constant contact with university officials who have been in direct talks with the Debate Commission, the members. They have almost had hourly updates. Within the last hour, I spoke with the chancellor, Robert Khayat, and I want to be precise about what he says here, because he got an update just within the last hour or so.

He says that they fully expected both of these candidates will show up here this afternoon for the evening debate, that Obama has already filed his flight plan. He says, "We fully expect McCain to come. We are simply waiting for McCain to file his flight plan." He says he is getting very positive signs from the Debate Commission that this thing is going to go on without a hitch, and that he's going to be getting an update about 2:00 Eastern Time.

I also spoke with the vice chancellor, that being Gloria Kellum. She has also been in contact with the representatives of the Debate Commission.

This is a quote from her. She says that, "Front people from the campaigns who are in these meetings are telling the commission that they are coming." So these are very positive signs that these folks simply are going to show up.

And what they're doing is they're kind of trying to calculate back time, if you will, what time John McCain would have to leave Washington to get here in time, to walk the stage. There's a lot that's going on behind me, as you can probably tell, a lot of sound checks, video checks.

Barack Obama is going to do that this afternoon when he arrives. McCain is also scheduled to do that. Whether or not he will be able to do it on time is another matter.

But the chancellor told me kind of in a little bit of a joking way, if you will, off the cuff, what he said, as long as he gets here at 8:02, that being local time, the time the debate starts, then they've got something that's going ahead, and it's going to take place.

But very clear signs from these officials who are in direct talks that this thing is going to happen this evening -- Tony.

HARRIS: Unbelievable what's going on right now. So we have some indication, just to sort of recap this for just a moment, we have some indications from the Barack Obama campaign of a flight plan. And Suzanne, we're still waiting for that kind of information to come from the McCain campaign.

MALVEAUX: Absolutely. And as you know, we have our own correspondents who are traveling with both of these candidates. So I imagine that we'll be getting some information from them as well, if there is any kind of information coming from these campaigns that yes, this a go, this is the time we're leaving.

We already know about Barack Obama's travel, that he'll be here shortly, later in the day. And it's just simply a matter -- I mean, this is what the officials are calculating, how much time does it take to get here, to actually go through, walk the set, walk the stage, figure these things out, and be on time to stand behind that podium and participate this evening?

HARRIS: Unbelievable what's going on.

Suzanne Malveaux for us from Oxford, Mississippi.

Suzanne, thank you.

A couple of questions for you. Will the bailout happen? Will the debate happen? Oh, yeah, and the markets reacting to today's news.

We're back in a moment.

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: This bailout deal is going to go through.

Now, we have been following John McCain around here all morning. He's actually now at his campaign headquarters, he's not here on Capitol Hill.

But all morning he was going between meetings with House Republican leaders, with the Senate Republican leader. And we reported in the last hour some of the ideas that he was talking about and some is of his fellow Republicans were talking about as a way to potential broker the very deep divide, philosophical divide, really, on how to deal with this bailout. But what we are told from McCain advisors is that, based on those conversations, although we still don't know if there really is going to be any fruition, if you will, from these talks, from anybody here on Capitol Hill, what McCain has decided and what he has concluded is he feels enough progress has been made that he's going to go to this debate.

HARRIS: Well, Dana, I have to ask you -- boy, a couple of questions immediately spring to mind. Did the senator hear the comments from the Senate leader, Harry Reid? Did he hear the comments from Chris Dodd, who chairs the Senate Finance Committee? Did he hear that? He seems to be suggesting that sufficient progress has been made.

BASH: I'm not sure if he heard the comments this morning in terms of what you're referring to. I mean, I know obviously he has been hearing the accusations that he sort of parachuted in here. And if anything, he made the negotiations -- hindered them rather than helped them.

HARRIS: Yes.

BASH: And they're pushing back on that big time, as you can imagine. And what they say inside the McCain camp is that they believe that the Democrats have played politics. That they tried to rush through yesterday a negotiation and what they called a deal that really wasn't necessarily there in order to try to prevent McCain from getting credit for it.

So there is a lot of politicking going on both sides. Everybody has a reason to say -- to blame the other for scuttling negotiations.

HARRIS: Yes.

BASH: But the headline here is quite interesting in that what John McCain said a couple of days ago is that things are bad enough, that he felt that he needed to come back here and potentially not go to the debate. Yesterday, he did a lot of listening, but not a lot -- in fact, no negotiating. Today, it seems as though he and his advisors and really his associates here on Capitol Hill were trying, after they listened yesterday, to come up with kind of a framework for a compromise.

HARRIS: Yes.

BASH: We don't know -- and this is really important. We don't know if this framework they came up with, which I can tell you about in terms of substance in a minute, we don't know if that's going to sell here at all. The House Republicans haven't met yet, the House leader hasn't presented it yet to the House Republicans leadership.

HARRIS: That's right.

BASH: The Senate Republican leadership certainly hasn't talked about it. Never mind the Democrats, who are actually in charge here or the administration.

We know that McCain did talk to Henry Paulson this morning. He did talk to a key Senate Republican, in addition to the Senate Republican leader who is sort of involved in the negotiations on the Banking Committee, Judd Gregg, who told our producer, Evan Glass (ph), just a minute ago that he was OK with this framework.

But the important thing to know is that McCain says he feels comfortable. But we don't know how it's going to play here on Capitol Hill. But McCain, politically, they really feel they need to go to this debate, and that's what he's going to do.

HARRIS: Yes, absolutely. Yes, I think everyone would agree with that.

But let me just sort of try to drill down a little bit more on this. I'm trying to follow the evolution of John McCain's position on all of this.

Was there a point in time -- I seem to remember a point in time when John McCain was saying that until a deal is done on this, I'm suspending the campaign and I'm calling for a postponement of tonight's debate. Was that -- do I remember that correctly?

BASH: That is the gist of what he said. You know, his advisors are saying that he felt that he needed to come back here and felt that he needed to feel -- to see that there was sufficient progress. That's the term that they're using now. I have to go back and look at his exact words, but certainly that was the impression that McCain left a couple of days ago when he said in New York he was coming back to Washington to work out a deal.

I can just tell you just a little bit quickly on the substance of this, of what is being talked about here, because that's obviously important.

You just heard Kate Bolduan describing some of the differences between the House Republicans and their philosophy and some of what has already been discussed with regard to whether or not it is the government's role to actually buy bad debt. So what they're talking about, according to three McCain sources that I spoke to who have been in these meetings all morning with Republicans on the House and Senate side, is the following: splitting it up so that, in part, the government would be able to buy bad debt, but in part, the government would back insurance policies. And then the third, the government would back some loans.

So the idea there would be to sort of give a little bit to all sides here who have problems with the Republicans -- the conservatives who have problems with the idea of buying bad debt, and the others who think that's probably the way to go. And this whole idea of backing an insurance policy, that's going to do nothing to bring back the tailspin that the economy is going in right now

HARRIS: Got you.

BASH: So that's what they're talking about. Again, we're going to have to wait and see.

We're going to see what our reporting brings us in terms of whether or not that's going to really sell here, whether that's going to really become any kind of solution. But what they do know inside the McCain campaign, Tony, is that they understand that John McCain's presence here is political dynamite basically.

In fact, one McCain senior adviser I spoke to just a few minutes ago said, "We understand what we need to do is get McCain out of here, get him out of town." Because the minute that McCain is somebody who is seen as maybe brokering this, the Democrats are going to kill it. Whether or not that's true, it just speaks to the political poison, frankly, that's going on right now, and the political posturing that's going on on all sides.

HARRIS: Yes. Yes. Well, Dana, I've got to let you go. You've got to go. You've got a plane to catch.

Dana Bash on Capitol Hill.

Appreciate it.

BASH: OK.

HARRIS: Thanks for all that information, Dana, and the breaking news as well.

BASH: Thank you.

HARRIS: So, what have we learned? The debate will go on. And as we told you as breaking news just moments ago, John McCain will take part in the presidential match up. Thanks again to Dana Bash for breaking that story.

With us from Washington, to talk about the debate, CNN special correspondent and former Washington Bureau Chief, Frank Sesno.

Frank, great to see you.

FRANK SESNO, CNN SPECIAL CORRESPONDENT: Good to see you, Tony.

HARRIS: Any doubt in your mind this was going to happen? That we would ultimately get here, that both candidates would debate tonight?

SESNO: Oh, yes. I mean, I think this has been a great suspense novel or a comedy or a tragedy. I'm not quite sure what it is anymore.

HARRIS: I agree with you on that. Yes.

SESNO: You know, I thought the story was the broken financial system. I'm seeing a broken political and campaign system, here. And John McCain risks looking like a political pinball. He's in New York, he's in Washington, he's at the White House, he's at the Capitol, he's at Crystal City. He's got to go down to the debate and now his advisors are saying get him out of town. This has not played well for him. And he better get his balance back before tonight.

HARRIS: Was there any indication that there was anything really substantial -- not just John McCain, but Barack Obama, as well. Anything substantial that either man could do in helping to put this deal together? Neither man, should be noted, is on the Senate committee that has oversight in this area.

SESNO: They haven't been on the Senate committees that have oversight. They haven't been participating in the debates. They haven't been negotiating with the administration. This isn't their area of expertise.

HARRIS: Frank, so what was this all about? What was this all about? What was this announcement on Wednesday, all about?

SESNO: Positioning. It's all about positioning.

HARRIS: No. You're not going to tell me it was about pure politics, are you?

SESNO: Far be it for me. I've been in Washington, too long. No, but see? Even the positioning is complicated because they want to position themselves, or at least McCain apparently, has wanted to position himself close enough to influence it and be the fixer.

But, this is a very, very unpopular package in the country. Whoever gets elected is also going to need some distance from it. Because they may have to -- if it doesn't work, they don't want to get saddled with it. So, this is the process of painting yourself into a corner with paint that may never dry.

HARRIS: What do you think about the expectations for this debate tonight? Boy, the expectations for Barack Obama are extraordinary high. And I'm wondering what that is based on. Because as I think back on the primary season, the general consensus on the analysis post debates was that Barack Obama didn't perform that well.

Is it the sense that he gives such a great speech, that he should also be a great debater?

SESNO: I have to say, I think the expectations on both sides are high, higher and highest now, because of what's been playing out over the last week.

This is very, very serious business. And this affects every person in this country who works or saves or buys or borrows and every business. So, people are going to be looking at these candidates for yes, sure, for the oh, there you go again. You know, maybe the one- liner. But much more for the answers. For a sense of assurance that that they get it, they understand it, that they're capable of dealing with it and they've got some ideas.

So, I think for Barack Obama he's going to have to show that he's serious. And one of the words that a lot of people have been using is that he's safe, that he can manage this stuff and not melt down. John McCain's going to have to show the same thing. He's demonstrated very erratic behavior. That's been the chat all over the airwaves, a lot of radio talk show hosts and others. So, they've both got a big, big job tonight.

HARRIS: I'm going to try to sneak one more in. And Eddie just give me a heads up if we need to get to the White House for the daily briefing with White House press secretary Dana Perino.

But Frank, do you anticipate -- how much times -- it seems to me the minute Jim Lehrer opens up the debate and asks the first question about the bailout, it may not long be a foreign policy debate. It may be strictly a domestic bailout economic debate.

SESNO: And what kind of leader you're going to be. Yes.

Look, so you call it, it's International affairs, foreign policy, whatever you want. Well, what's foreign policy? The dollar, trade, finances, our economy, jobs.

HARRIS: Energy policy.

SESNO: Energy, name it. Go on and on and on.

So, what's happening in Washington right now is all about the position that America is going to play in the world. It's all about how strong the country's going to be. It's all about what kind of leadership it's going to protect around the world. So, this debate at this moment is going to give Americans one heck of a look at these two candidates.

HARRIS: OK. Frank Sesno for us. Our special correspondent. Former Washington Bureau Chief.

Let's get you now to the White House's daily briefing. There you see Dana Perino.

Let's have a listen.

(JOINED IN PROGRESS)

DANA PERINO, WHITE HOUSE PRESS SECRETARY: -- via teleconference with PRT leaders, proventional reconstructed team leaders, in Afghanistan. And President Karzai will join him for that. PRTs are helping to improve the lives of Afghan citizens is and they'll have a chance to hear about their progress.

Following that, the president will meet with President Karzai in the Oval Office. He looks forward to discussing with him the state of the international community's on-going efforts to help improve security there and reconstruction in Afghanistan, as well as the governance of Afghanistan. And it will give them a chance to talk about the expansion of the Afghan national army, the continued training of that army and the strategic partnership talks. Just for your -- just as a reminder. The two leaders last met in Egypt, in May, during the president's visit to the Middle East.

Also, at 4:20 today, as I told you yesterday, the president will meet with the prime minister of the United Kingdom, Gordon Brown. That will be in the Oval Office. And they will discuss the global economy. Certainly Iran, Iraq, Afghanistan, Georgia and other issues of shared concern.

At 7:00 this evening, the president and Mrs. Bush will attend the 2008 National Book Festival gala performance and dinner. Both events are being held at the Library of Congress, Jefferson building here in Washington. There are approximately 400 guests and we can provide you more information or the First Lady's office could, too, if you're going to have anything on that. Also, we welcome the Senate's ratification yesterday evening of Albania's and Croatia's ascension to NATO. This step recognizes the tremendous progress made by these countries in recent years. Their membership in NATP, once ratification by other allies is completed, will be a great asset to the alliance. Both countries are already active participants in military operations along with U.S. forces and those of our allies. The Senate vote underscores how these new democracies have helped to close a dark chapter in the history of the Balkans. And are making strides in ensuring the entire region is peaceful, Democratic and on the path toward full Euro-Atlantic integration.

We also hope to welcome Macedonia as a member of NATO, as soon as the issue of its name is resolved. And to continue NATO's enlargement process to include other allies in the future.

Now, you heard from the president already this morning about the economy. I know you've been following the developments on Capitol Hill. Let me just give you a little bit of what is going on here at the White House, to help bring this to a conclusion.

The president has been talking with senior advisors, Josh Bolton, Joel Kaplan, Ed Gillespie, Dan Meyer, Keith Hennessey, Eddie Lizear and others. The president spoke to the Republican leaders this morning. Mitch McConnell and John Baner. He will be on the phone with others members today, I would expect and I'll provide you updates as possible, throughout the day.

Josh Bolton and Joel Kaplan have been on the phone regularly with members of Congress as well. The president instructed his legislative affairs team and his economic policy advisors here at the White House and at Treasury, to keep working with Congress. Keith Hennessy, the Director of the National Economic Council is on the Hill right now, meeting with members. He's also been on the phone with members to discuss the policy options and the concerns in trying to find a way that we can resolve them.

Dan Meyer, who's the assistant to the president for Legislative Affairs was in the meeting last night on Capitol Hill. He was up there again this morning. And his staff, John Embling (ph) and Chris Freck (ph) are also up there working with members to address their concerns.

Secretary Paulson is also on the Hill. And he's calling in providing updates to Joel Kaplan and Josh Bolton and to the president, as well. He was also meeting with members and then working the phones last night. So, we have a lot of work to do. But I think things are continuing to head in the right direction.

One thing we know is that everyone understands the urgency with which we need to get something done.

QUESTION: What you said, that they're working -- people from the White House are working with Congress. Are they working to push the administration plan, the Paulson plan? Or are they exploring avenues of compromise? PERINO: As the president wanted them to do yesterday, is to listen to the concern and see if there were areas that we could find compromise that would still allow the plan to work.

So, I don't have the nitty-gritty details on what they are. But, the president has said, let's listen to their concerns. We've already come their way on a few things on both the Republicans and the Democrat's side. For example, when we put out the legislation last Saturday, which was an outline, we asked for their feedback. One of the things that understandably people wanted to have was more transparency and oversight.

So, we were willing to work with them on that. I think there's still some modifications that some of the members would like to see in that regard. We're willing to look at them. In addition to that, there's the issue of executive compensation and should there will limits for companies whose CEOs participate in this program. And Hank Paulson is trying to work with his team on the details as to what that would look like.

QUESTION: When you're talking about modifications of the administration plan, what about the sort of separate idea that House Republicans have broached? Is the White House pushing back against that, are you asking him not to go there?

PERINO: I think that's the way I can describe it.

There are alternatives and variations to what we have proposed that have come forward. What the president said he would do is at the end of the day, when this legislation is crafted, that he would look to his secretary of the Treasury and Ben Bernanke, the Fed chairman, and he would ask them one question. Does this legislation do what needs to be done in order to help save the economy?

And if the answer is yes, then we'll all have done our duty on behalf of the American people. So, that's the -- that is the spirit with which we have gone forward with these negotiations and we're trying to reach a conclusion that would also solve the problem.

QUESTION: Do you understand what happened yesterday when there seemed to be a deal and then it appeared to all fall apart at the White House meeting? What happened in that meeting?

PERINO: Well, I would disagree that it fell apart at the White House.

The president invited the leaders and both presidential candidates to come to the White House yesterday, gave them an opportunity to each have the floor, to express any concerns. I would say the meeting was very constructive for the large majority of it.

There's obviously concerns -- we've asked Congress to do something huge. We've asked them to bite off a lot and to pass a massive package in a very short amount of time. And they've worked very hard. They had hearings quickly, they've educated their members. And the president thanked all of them. The members thanked the president for the speech that he gave Wednesday night, which they thought helped.

Now, there are alternatives and variations that some House Republican members have wanted to put forward. And Speaker Pelosi is has been very clear that she wants to see a certain number of Republican votes. And John Baner is working very hard to figure out a way, how can my members' consideration and concerns be included in this package in a way that will still solve the problem. So, that's what they're working towards.

Yesterday afternoon was something I think was -- it was a good moment for everyone to vent their frustrations as well, if they had them. But, I think what you see today from the reaction of members of Congress who left here, went back to Capitol Hill and worked until late into the evening, they brought their staffs back in early this morning and they're going to have further negotiations today. They all understand that they can get it done. And I appreciate that Senator Reid said that he doesn't see any reason why we couldn't get this done before opening bell on Monday.

QUESTION: And how important is it to get it done by opening bell on Monday?

PERINO: I'm just going to say, it's important we get it done as quickly as possible. Secretary Paulson has talked about the concerns across the board with the economy. But certainly with the credit markets that have shown troubling signs of tightening up even more in the past several days.

And what that means is that it hurts everybody down the food chain. It hurts people who are trying to get loans for their homes or their businesses. You can't grow your business. Everything that freezes up. And if no one in the financial community trusts each other to lend money, then we're going to have a complete and total financial collapse.

And that's what we're trying to prevent. So, I would say it's critical we get it done quickly. And I appreciate that Senator Reid said that they think they can get it done before opening bell on Monday.

QUESTION: Whatever Congress comes up with as a final package, if they pass it, will the president basically sign it?

PERINO: I tell you once again. This is what the president's going to do. He's going to continue to work with the members of Congress. He has the staff working with them very closely. And once it's finished and once there's a deal, the president will turn to Secretary Paulson and say, does this solve the problem?

But I don't think there's any member of Congress that doesn't want the package ultimately to solve the problem which is why they're all working so hard today.

QUESTION: And what happens if it doesn't get done by Monday?

PERINO: We are going to keep working at it. We don't have any reason to believe we can't get it done by Monday.

QUESTION: Dana, Secretary Paulson has said publicly that the approach the House Republicans want, mortgage insurance, won't work. Is the president --

PERINO: I don't think that there's --

QUESTION: -- consider something the Secretary --

PERINO: I think that I'd be careful. We don't know all the details and all the discussions on-going because we are not negotiating in the press.

So I don't know exactly how Republicans are framing this and putting forward their considerations. I know Minority Leader Baner has just sent a letter to Speaker Pelosi that outlines some of their concerns and asks for consideration. We will be considering those issues, too. And that's what we're doing up there right now.

QUESTION: Considering an approach that is Treasury secretary's rejected?

PERINO: I don't know that anybody up there on the Hill thinks the insurance suggestion would take over the whole program. So, I think we just need to let the negotiators continue to work it out.

QUESTION: Dana -- (INAUDIBLE) and heading to the debate (INAUDIBLE). First of all, what's the White House reaction to that? And then secondly, should that be interpreted as a sign that things are well enough in hand, in terms of the negotiation, that his presence in Washington is no longer needed?

PERINO: You're going to be very dissatisfied with my answer. That I'm let Senator McCain and political pundents you know, decide what it means.

But I think, what I would point you to are the public comments from Senators Reid, Senator Gregg, and the fact that the president has his whole team with all hands on deck to make sure that we get this solved.

QUESTION: (INAUDIBLE)

QUESTION: (INAUDIBLE) president yesterday, in order to help drive things to a conclusion. That's what we've (INAUDIBLE) --

PERINO: What we said is that if the two presidential candidates, since we're trying to pass this massive package in the middle of a presidential election. That if their participation in the meetings could help finalize things, that that would be for the better.

I'll let other decide and analyze. And once it's all finished, everybody can take a look back and see if it was helpful or not. I do think it was actually very useful for everyone to be able to meet yesterday with the president of the United States, talk about the discussions they've had over the past several days and where they needed to go draw this to a conclusion. And the president was very clear. That there's going to be one test for this legislation. Does Secretary Paulson and does Ben Bernanke believe that this will solve the problem? So, that's the framework everyone is driving towards.

QUESTION: What do you think -- what progress do you think happened between yesterday and just now for John McCain to say he's going to resume his campaign and go to the debate?

PERINO: I don't know. I couldn't tell you what his --

QUESTION: You said there's been progress since yesterday's meet.

PERINO: Senator Reid said the same thing. So did Senator Gregg. I'm going to let the negotiators continue.

As I said, we feel like we've been close, but we're not quite there yet. There are many members of Congress, especially on the House Republican side who have a lot of concerns. And I have those concerns. We get it. This president did not want to have to take this route either.

But it was after being briefed repeatedly by his secretary of the Treasury and his Fed chairman, that if we did not do something drastic, that we would be facing financial calamity. The president of the United States said we can't sit by and let that happen. If we have a way that could fix it and to stabilize and strengthen the financial markets, we have an obligation to do that.

QUESTION: Do you think the debate adds to or detracts from the work that will be done on the hill?

PERINO: I just don't know. But I think it will be fun to watch.

QUESTION: Senator Obama said that it was unhelpful to inject presidential politics into the delicate negotiations. What's your take on it?

PERINO: I don't have a take on that. We're focused on trying to get the legislation done. And I'll let political reporters like yourself, or pundits decide --

QUESTION: Well, I understand it's a bad idea to have the meeting yesterday.

PERINO: What I just said is that I think that it was useful to have everybody at the table yesterday, so that we knew where we stood and we could go forward and try to get a deal.

QUESTION: Whose idea was it to have the presidential candidates there? Was that John McCain's suggestion?

PERINO: Yes, yes. That's what we said before.

QUESTION: You mentioned in your opening remark that the president called the leaders Baner and McConnell, this morning. Has the president reached out personally to any of the rank and file House Republicans, either by phone or in person, to try to personally persuade them?

PERINO: I'll have to get back to you. Because I don't know who all he might have seen over the past week. But those -- he's trying to work with their leadership, as they try to manage their caucuses.

QUESTION: And is he at all disappointed that you know, members of his own party, these are people, obviously (INAUDIBLE), Republican Party are not going along with his exhortation?

PERINO: The president understands that a lot of them have reservations. Even about the concept, about the government intervening in the free market. He had the same instincts.

But he believes that with the education that he got and then the ones we have provided to members of Congress, that they understand that we should -- we cannot stand by and just let this happen if we have a way to try to fix it.

You'll recall that this president has been -- has shown bold leadership on many different issues. And there have been a couple of them that come to mind where not all the House Republicans were with the presidents. Not all the Senate Republicans were with the president on issues. But he has led on important issues like Social Security, immigration and now this one, where we try to help drive it to a conclusion. The president believed in the urgency of Social Security and immigration. But they pale in comparison to the urgency of this package.

QUESTION: What does the president think about Gordon Brown's call for tighter global regulations to prevent this thing from spreading or reoccurring on a global level?

PERINO: Well, here in our own country we know that we need to improve our regulatory system. We're dealing in the 21th century, with something that was designed ad-hoc in the 1930s. And not in a systemic way.

So, we need a systemic solution to the immediate problem and then we need to look at the regulations. As we've said, President Bush and even going back to president Clinton, they tried to deal with the Fannie Mae and Freddie Mac issue in a way that was not receptive by members of Congress, both led by Republicans and led by Democrats.

We finally got legislation when we were in the middle of a major crisis, just this past August. There's going to be a time and a place for us to go forward with regulations. I would submit to you that Secretary Paulson has a very good blueprint that he recommended last spring. Unfortunately it fell on deaf ears. But I think now people have woken up and will start having hearings on that as soon as he can.

QUESTION: But he's talking about regulations at a national level. Is the president open to getting international --

PERINO: Let's let them have the meeting today and find out. I think that the G-7 ministers have had good conversations. They've been very supportive of the action that we have been trying to take over the past week. So, let's have the meet together day and then we'll see if there's anymore we can add.

QUESTION: You said he'd made some calls to McConnell and some of the others. Has he made them to people like Kantor, who are --

PERINO: I think I just told Mike. He's been working through the leadership. But I'll check and see there's been any other contact.

Let me just point out, the -- I'm sure secretary of the Treasury has, Josh Bolton or Joel Kaplan could have talked to them as well. But, I just don't know.

QUESTION: Dana, I think a couple of things everybody agrees on is that the root of this problem, the downward spiral will continue until you have the housing market stabilized. And another factor is (INAUDIBLE) that also could cause it to worsen. If you try to, as you said, put a massive package though in a very short period of time and you're sending a message that if you don't do this, the economy's going to collapse, then --

PERINO: Your questions is --

QUESTION: -- crisis of confidence and aren't you --

PERINO: These are the very problems that we're trying to solve. And I think if you look at the reaction we have from the vast majority of people who have looked at this problem, who understand it, think we have a package that could help stabilize the markets. That's what we're trying to do.

QUESTION: This is uncharted territory and you're saying that you're not going forward until you're sure that you have a plan that would fix it. How can you say that?

PERINO: Well, why would we go forward with plan that we didn't think would fix it?

QUESTION: This is uncharted territory. How do you know for sure that it will work?

PERINO: I trust that Secretary Paulson and Ben Bernanke and all the experts they're work with and the members on Capitol Hill, and their very experienced staff are all working towards trying to make sure we get the right package.

QUESTION: (INAUDIBLE) subject, Iran. Is that -- word from the -- from the U.N., that there is agreement with Russia on more sanctions?

HARRIS: OK. There you have White House Press Secretary Dana Perino, giving us an update on what the president is doing to get the rescue plan as he calls it, passed. It sounds like we'll get an update from the White House later today, or at the very least when the deal is done. The other major development of this day is that the first presidential debate in Oxford, Mississippi, will move forward as scheduled. CNN's Dana Bash broke the news a short time ago, that John McCain will participate in tonight's debate. When we come back we will update that story, the debate story, with Bill Schneider and our Suzanne Malveaux.

(COMMERCIAL BREAK)

HARRIS: Two big headlines today. Late word the presidential debate will go forward. But, will there be a bailout deal? We're staying on top of that for you. And speaking of the debate, you can watch it right here on CNN, beginning at 9:00 Eastern. Barack Obama in Washington all morning, heading to Oxford, Mississippi, for the presidential debate this evening.

Let's get to our Bill Schneider, who is there in Oxford, Mississippi. And Bill, I'm just sort of curious. Any reaction to the news there on campus that the debate will, in fact, happen?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Relief. I think that would be the word. There was a lot of concern, a lot of apprehension. Will this debate go forward? Would they have to change the format? Would there only one candidate? A lot of consternation over what Senator McCain was going to do. Would the bailout deal making enough progress so that he'd feel that he could come back to the debate.

And the answer is, yes, yes, yes. He will be here. He's on his way now. The debate will take place with both candidates as planned. The only question is, how much of it will deal with national security and foreign policy? And how much of the debate will deal with financial and economic problems, which, of course, are closely related to foreign policy because the U.S. economic crisis is really a crisis that faces and threatens the entire world.

HARRIS: Well Bill, I have to ask you. I can't imagine that we will be long into this debate before the subject turns to the economy, to this bailout plan. And it seems to me at that point, it becomes more of a debate about the economy than about foreign affairs or foreign policy.

SCHNEIDER: I think can you expect that. Certainly can you expect it to begin with questions about the financial issues and the crisis facing the country.

HARRIS: Sure.

SCHNEIDER: I think the moderator may try to turn it to the subject that was scheduled, which is national security and foreign policy. I think the McCain people are eager for that to happen. And the reason is that he is given much higher ratings than Obama, on foreign policy and security issues. Obama is rated higher on economic and domestic issues. So that I think the debate organizers and moderator will want to keep this balanced and pay some attention to both of these subjects. HARRIS: OK. Bill Schneider for us in Oxford, Mississippi. We want to -- do we have, just a question for the folks in the control room. Do we have pictures of John McCain? We don't have them yet? OK, just information.

All right. John McCain, we understand is now en route to it airport in D.C. And that he is, in fact there. We understand that he is traveling with his wife at the moment. But that they will take separate charters to Mississippi.

We want to get to Suzanne Malveaux. She is in Oxford, Mississippi, and she joins us live with the latest on the Obama team and preparations there for the debate. And Suzanne, it's going to happen.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, Tony, it is going to happen. There's a great sense of relief on the campus. I want to bring in the chancellor of the University, Robert Khayat. You and I have been talking constantly since we've been getting so much updates. Obviously, this is good news for the university.

What has the debate commission told you?

ROBERT KHAYAT, CHANCELLOR, UNIV. OF MISSISSIPPI: We've talked to the campaigns. So, the campaigns of both adviser that both candidates will be here. We know Senator Obama's on his way and we suspect that Senator McCain is about to leave Washington.

MALVEAUX: You've been through a lot in the last 24 hours. I mean, I know there are millions of dollars that on the line, hundreds of people involved. Is there any sense of resentment that what happened here and what McCain did?

KHAYAT: No resentment. None of us can appreciate the kind of pressure they're under. I mean, I can't. And so we're just thankful they're coming. It's going to about great event for America, and for Ole Miss and we love it and we're thankful.

MALVEAUX: Tell us what's going to happen next, later on. I understand that Barack Obama is going to be doing a stage check, as well as John McCain.

Can you give us a sense of what time and what we can expect on stage?

KHAYAT: I can't. I'm supposed to meet Senator Obama at 1:00, and welcome him to Ole Miss. When he does his walk-through and sound check, I guess. And then at 3:00, we have Senator McCain for the same process. And then I'm assuming that they're going to go away and be preparing for the night.

MALVEAUX: And there's one question a lot of people have in mind, is whether or not the debate is actually going to change. The focus is on national security but obviously, everyone is talking about the bailout and the economic crisis. Have they given you any indication that that might actually be a part of the discussion?

KHAYAT: They haven't. But, let me quote an authority. Tom Brokaw spoke last night and that question was asked. And he said, you cannot avoid the discussion of the economy. And that it is as international as any of the other issue that we deal with. So, I would defer to Tom Brokaw.

MALVEAUX: Well, I'm sure Jim Lehrer, who's the moderator, will probably include that question.

KHAYAT: I would think.

MALVEAUX: Thank you so much. I know it's been quite a trying time the last 24 hours. But thank you for keeping up so close updated on the (INAUDIBLE).

KHAYAT: Thank you very much.

MALVEAUX: So, there you heard it, Tony. A sense of relief, if you will.

A lot of people we've talked to were very frustrated about what was happening, the last 24 hours. The Republicans and McCain supporters who obviously wanted him to come here, a sense of relief that this debate is in fact, going to take place this evening.

HARRIS: And nice to see some smiles from the chancellor there. Just bears repeating that that university has done a lot of hard work to get ready for this debate. And the great news is, is that it's going to happen. Not only for the university, but for the country.

Suzanne Malveaux for us in Oxford, Mississippi. Suzanne, thank you.