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McCain, Obama Prepare For First Debate

Aired September 26, 2008 - 15:00   ET

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

(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN ANCHOR (voice-over): Coming at you now, down to the wire, bailout, deal or no deal?

And who blew this up? What did Obama say to the president? Did McCain really not read the three-page proposal?

What did Sarah Palin tell Katie Couric about Russia? You will see it for yourself.

And our show coverage going viral. Did you see this?

(on camera): Fifteen thousand, 16,000, almost 15,000 people who are with Twittering with us.

(voice-over): What a week. How will it end? You are talking to us while we report on Twitter and more now.

(END VIDEOTAPE)

SANCHEZ: And hello again, everybody. I'm Rick Sanchez.

Here we go again. This is going to be one hot hour. What you are looking at, at the right is the Capitol Building. The reason we are showing you that is that, right now, this very minute, there is a very important meeting taking place between congressional legislators. They are going to be trying to come up with some kind of prompt compromise on this $700 billion bailout.

Then, on the other side of the screen, you see that right there? The debate will take place tonight.

But here is the question, a very important question. Are they going to talk about foreign policy, as they had originally planned to do, or should they really now be talking about the economy instead? That's a question that we have posed to you. And, man, it is red hot. We have gotten a lot of answers from those of you who have been watching.

A couple of things to show you real quick. First of all, we are going to checking in with Jessica Yellin. She is following these congressional hearings for us. In fact, we have got Jessica Yellin following the congressional hearings. And we're also going to have Bill Schneider, who is going to be telling us what is going on now with the polling in terms of what Americans want.

There is Bill Schneider. We will be checking in with him in just a little bit.

But before we do anything else, let's try and get you a sense of where the Republicans are and where the Democrats are on this issue, because they really are two contrasting points of view. Remember, yesterday, about this time, we were saying they had some kind of compromise.

Today, as we come to here at 3:00 p.m. on the East Coast, it appears that they are far away from reaching a compromise once again.

First, John Boehner, his comments just a while ago. Here we go.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: There was nothing that was put on the table yesterday that Speaker Pelosi didn't already know about, nor the treasury secretary or the president. Those conversations had been going on at this level.

And I don't know what games were being played at the White House yesterday, ganging up on Boehner. But, if they thought they were rolling me, they were kidding themselves.

(END VIDEO CLIP)

SANCHEZ: All right. Now Christopher Dodd, we heard from him a little while ago. He is frustrated as well, but for a very different reason. He seems to think that this thing has been politicized to the point where it has now endangered the process.

More importantly, the Democrats seem to have some things they say they have to have in this provision, and they are different from what the Republicans want. Here it is.

(BEGIN VIDEO CLIP)

SEN. CHRISTOPHER DODD (D), CONNECTICUT: Let me just say briefly that there are two or three areas which are non-negotiable, the language of them are negotiable, but nonnegotiable. Executive compensation, none of us are going to -- I am certainly not going to support a plan that would allow in any way an executive to take bonuses or excessive compensation at taxpayer expense. That will not happen. That's in this discussion draft.

Secondly, taxpayers are going to be covered. They're going to have an opportunity to benefit from this plan if they are going to finance it, and we're going to insist that that be part of the plan.

(END VIDEO CLIP)

SANCHEZ: Let's go to Jessica Yellin now. She is following this for us, as she has been throughout the day.

She is in transit. So, we're going to have to do a phoner with her. In other words, we're going to have to talk to her by phone rather than seeing her by live. What is the difference, right? Jessica Yellin, give us a sense of what is going on in terms of progress with this thing.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Rick, I am standing right outside the meeting room, where the high-level negotiators are going to sit down within minutes and start hashing this out.

This will be the very first time that the new representative for those disenchanted House Republicans will sit down with everyone else and say what it will take to make a deal. Now, that means that Roy Blunt, who is now going to represent them, wants some give, and he says he is willing to walk away without a deal unless there is compromise.

He wants some of those points you have made, including not entirely financing this with taxpayer money, putting some private money into the bailout and some other provisions. But I will tell you, I spoke to a top Democrat just before this meeting began, and they said they don't really know what the House Republicans are going to demand in this meeting. They just don't know if it is something that they can accept or will accept, but everybody says they would like to get something done by Monday.

SANCHEZ: Is there no question that this thing was politicized yesterday, and that that, to a certain extent, kind of was a fly in the ointment?

YELLIN: Well, I will tell you that is certainly the view of everybody, except the House Republicans. I mean, the House Democrats, the Senate Democrats and many members of the Senate Republican conference agree that they feel this got ahead of itself because of presidential politics.

But the House Republicans really are adamant that they all along didn't like this deal, at least a good number of them didn't, and I will tell you, those folks really found their voice yesterday and really spoke up. Maybe they wouldn't have been as outspoken had events not transpired the way they did yesterday, but there was always a disenchanted component of the House Republican group, and they have just, you know, made their demands known in a loud voice now.

SANCHEZ: Yes. And what the House Republicans have been saying throughout the day is, look, it's going to be hard for us to go back and try to sell this to our constituents. So, we have to come up with a way where we can do that.

Boehner used the word roll over a little while ago. It doesn't look like there's going to be any rollovers on either side.

So, Jessica Yellin, we are going to get back to you on this. Obviously, you have got your finger on the pulse of this thing. Any reaction, let us know. We will get right back to you.

Meanwhile, Bill Schneider is following things for us in Mississippi. Why? Because now, in case you haven't heard, it does appear that this thing will take place. There will be a debate tonight, but there is a lot of questions going on with this thing, and there is also a question of who will do better on the debate?

In fact, that is a poll that Bill Schneider is going to introduce you to now.

Bill, what did you find out in this poll?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, we asked people, who do you expect to do a better job in the debate? And the answer was kind of clear, Obama by 25 percent. Higher expectations for him.

Is that an advantage? Not entirely, because each candidate is not just competing with his opponent, but also with expected. Each candidate has to do better than expected. For Obama, that will be tough, because he is expected to do very well. He is considered a polished speaker and an accomplished debater.

John McCain, well, the expectations for him are lower, so the bar that he has to hop over in this debate tonight is going to be a little bit easier for him.

SANCHEZ: There is another part to this, and that is the question, of course, of what is the most important issue to you going on right now in America, and it is interesting, because I asked folks at home.

Johnny be good, give me a shot of this thing, if you possibly can. We will share this with Bill. The question is, what should be debated tonight? Should they stick to foreign policy or should they be talking about something else, for example, the bailout?

Look at this. Yes, debate the economy is one of the responses.

"Debate the economy. I think the debate should include some discussion of the economy, but remain focused on the scheduled topics."

Basically, we are told that at least as far as Twitter and Facebook and MySpace is concerned that people want to have this debated for them. They want to get a sense of it. And you have a poll as well that seems to reflect the same thing, do you not, Bill?

SCHNEIDER: Exactly.

We asked people what is the most important issue that will matter (AUDIO GAP) vote for president -- 56 percent, by far the top issue is the economy. All other issues much lower in importance.

Now, this is a 90-minute debate. There's no reason why they can't debate more than one topic. I imagine the economy is going to come up probably close to the top of the debate. It is topic A. It is a national crisis. In fact, it's an international crisis, with some clear foreign policy overtones, so it does fit into the agenda of tonight's debate. So, before they shift to issues of national security and foreign policy, I believe we can all expect the economy and the bailout to come up in the debate.

SANCHEZ: All right, Bill Schneider, as usual, doing a good job out there following this thing for us. And now that the debate is going on, he is going to be a busy man.

Thanks so much, Bill. We appreciate it.

I mentioned to you just a little while ago that the Republicans are saying, look, I am going to have a tough time selling this to my constituents.

Here is what is interesting about this point. We have got a report that we're going to be showing you in just a little bit that actually crystallizes this. We talked to those people, those constituents, but not just as a name, per person. You will hear why they are telling their congress people, their congress men and women, look, we don't want you to vote for this thing. Their words. All right, it is a John King report I am going to show you.

Something else that we're going to be doing in the next couple of hours, we are going to be talking to some of the folks at home on Twitter, on Facebook, and on MySpace, a lot of response coming in between the last couple of days, thousands. And then we have got two guests, one from the left, one from the right. One is a McCain delegate. The other is an Obama delegate. They are going to be seated on both sides of me when we come back.

One more thing, look at this cartoon as we go to break. We put this together for you, because we wanted you to get a sense of what is really going on right now, on the left, Main Street, on the right, Wall Street.

No bailout for you, says Main Street, but then look what happens. Next page, and with that, we go to break.

(COMMERCIAL BREAK)

SANCHEZ: On Twitter and on MySpace and on Facebook, you are all talking to us. Welcome back. I'm Rick Sanchez here in the world headquarters of CNN. What a busy day this is.

As we speak, Rog, give them a shot of the Capitol, if we possibly can. Here is what is going on. Four congressional leaders are trying to hatch out some kind of deal. They started talking about 12 minutes ago. It is 12 minutes after the hour right now. We are keeping an eye on this. Obviously, our correspondents are watching this.

If there is any kind of movement, we will take you there right away.

Now let's take you to Mississippi, Barack Obama arriving in Mississippi just a while ago as well. This is him getting off the plane, preparing for the big debate that everyone seems to be looking forward to now perhaps even more than they were before this financial crisis suddenly hit the markets and the American people.

Speaking of this financial crisis, we want to bring in two people now. Yesterday, we told you that there are two kinds of people right now that look at this situation from an economic standpoint. There are those economists who are saying flat out this is a mistake, we should not do it. And there are those who are saying, if we don't do this, it is almost going to be like Armageddon. Who do you believe?

Let's do this. Let's bring in two people. One is saying that in fact this could be a catastrophe if we don't do it. And the other one is saying, nope, should not do it. Don't need to do it.

Jeffrey Miron is a Harvard economist from the Department of Economics there. And I'm sorry. I mispronounced your name. It is Miron. I apologize. And in fact you have signed a petition to make sure this doesn't get done. And then of course, Jordan Goodman, America's money answers man, who was good enough to join us yesterday and did a fine job by the way.

But let's go ahead and start with professor Miron, since he's bringing a topic that we didn't get a chance to discuss yesterday.

You say we should not do this. My question is, why would you say that given all these warnings that we have been hearing from people who say, if we don't do this, the market will collapse and so will our economy?

JEFFREY MIRON, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Well, basically, I think the warnings are highly exaggerated. There's no question it is a serious situation and that, without a bailout, there will be more bankruptcies, there will be more defaults, and there will be some disruption in the financial markets, but I don't think there is any evidence to suggest that there will be anything close to Armageddon.

And this bailout is an enormously dangerous policy. It's a huge intervention. We're not taking time to think it through. There's zillions of ways that there will strategic reactions by the people participating. There will be overpayment by the government and an enormous transfer from people who engaged responsibly, the taxpayer, to a bunch of people who took nutty risks on Wall Street and should be held accountable for that.

SANCHEZ: Jordan, you disagree with him, but I got tell you, most people agree with him in the American public today.

JORDAN GOODMAN, AUTHOR, "EVERYONE'S MONEY BOOK": Well, I am not happy about it. But I'm saying, what do we do to save the economy?

He kind of sounds like Herbert Hoover after the crash in 1929. Well, the market will take care of itself. It didn't take care of itself. You had to have the government have a massive intervention in the economy that turned things around. And even that, it took a while to get out of the Depression.

(CROSSTALK) SANCHEZ: Well, Jordan, tell us what you think will happen to our economy if this doesn't happen. I want the professor to hear that.

GOODMAN: It is happening right now. The markets are seizing up as we speak. The credit crunch is hitting right now.

So far this week, the Fed has injected $262 billion in cash into the banks, into the money market funds to keep -- create some liquidity right now. It's happening right now. And if this bailout does not happen, the Fed just can't keep doing that forever. I am not happy about spending $700 billion, but what is happening right now is preventing the...

(CROSSTALK)

SANCHEZ: Let's go ahead and give the professor a chance to answer that, though.

Professor, go ahead.

MIRON: So, two things. First of all, in the Great Depression, the Herbert Hoover issue that was referred to, the government made an enormous number of mistakes in the period from 1929 on that contributed greatly to the Depression, and most historians would blame the government in a significant way for that, not the private markets.

Secondly, markets are seizing up in part because of all of the uncertainty. They want the government to pick a lane. And of course, they would prefer the lane in which the government gives them a lot of money, but they will stop seizing up in part when government gets in one lane or the other and all this uncertainty is resolved.

SANCHEZ: All right, go ahead.

GOODMAN: I don't know what the other lane is. There is no other lane.

Basically, people are saying you need liquidity in the markets and the only place it's going to come from is the government, both Uncle Sam and the Federal Reserve. Tell me, what is the other lane that we're talking about here?

MIRON: The other lane is, let the bankruptcies occur. Let there be new development of relationships between borrowers and lenders.

Of course, these companies that are bankrupt are going to continue to exist. They're just going to be owned by the bond holders, instead of being owned by their shareholders. So they are going to continue to provide loans and liquidity as long as the uncertainty gets resolved and as long as the decisions are clear.

SANCHEZ: Intelligent debate. We have to leave it there, though.

Gentlemen, thanks so much for joining us, two very distinct perspectives on this and one that I'm sure many Americans are taking notes on. We thank you. By the way, there's a lot of questions as to what really started this. Was it the Bush administration with its policies or did this really begin with the Clinton administration?

When we come back, I am going to show you some research that we have dug up that goes back to a time that may surprise you as to where the origins of this problem may actually be. We will have that for you, as well as your comments on Twitter.com, Facebook, MySpace. There are a lot of them coming in right now.

And we're going to joined as well by two different people, one from the McCain campaign, the other from the Barack Obama campaign. There they are, two delegates on our air.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

SANCHEZ: A couple of things that I want to show you right now.

First of all, there's been a big debate about what put us in this situation today and a lot of people have pointed a finger at the Bush administration with its deregulation.

We have done some research, because we wanted to see what the origin of this might actually be. Watch this. This is a "New York Times" article that we found from 1999.

"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton administration to expand mortgage loans among low- and moderate-income people and felt pressure from stockholders to maintain its phenomenal growth in profits."

Again, that is an article in "The New York Times" back in 1999. There is another page to this. Let's go ahead to read that as well. It is really illustrative when you consider what is going on.

"These borrowers whose income, credit ratings and savings are not good enough to qualify for conventional loans can only get loans from finance companies that charge much higher insurance rates, anywhere from 3 to 4 percentage points higher than conventional loans."

Some will make the argument that it was the Clinton administration that lit the match. Some will make the argument that it was the Bush administration that threw gasoline on the problem.

We will continue with that discussion.

But, meanwhile, there is another one. John McCain, did he actually prepare for this proposal that was being set forth in Washington? Here is John McCain. I want you to listen to two sound bites, first, John McCain saying why he is going to be suspending his campaign, and what he wanted to do, and then John McCain afterward.

Let's take the first one first. Roger, here it is. (BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: Senator Obama has declined to put forth a plan of his own. In a time of crisis, when leadership is needed, Senator Obama has simply not provided it.

And the truth is that we don't have time to wait for Senator Obama's input for our nation to act. I think it is clear that Congress must act and act quickly. And I laid out my plan and my priorities last Friday. I spoke to Secretary Paulson about it over the weekend. And I have been looking at the plan that the administration has put forth.

(END VIDEO CLIP)

SANCHEZ: All right. Here is another one now. This is McCain. You heard him right there saying he has been looking at the proposal that is being put forth.

Now I want you to hear what he says to an Ohio television statement when asked if he has read the proposal. Here it is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The $700 billion staggering figure bailout bill now in front of Congress, would you vote for as it's presently constructed. Why or why not?

MCCAIN: I have not had a chance to see it in writing, so I have to examine that.

(END VIDEO CLIP)

SANCHEZ: A lot of people are making a lot of hay out of the fact that he is now saying that he never had a chance to read it.

It is only two-and-a-half-page proposal, by the way.

But this from the McCain camp, to be fair. His aides also question whether that question was really relevant, because the final text was likely to be different than the original proposal. So, he may have been waiting for final text to be set forth, in fairness to the McCain camp.

I am being joined now by two people, one who represents the McCain campaign as a delegate, the other one Barack Obama, Jade Morey and Maru Gonzalez.

Thank you for both of you for being here.

MARU GONZALEZ, OBAMA SUPPORTER: Thank you, Rick.

SANCHEZ: Let's start.

Did you hear what was just said a little while ago? And I want to pose this question of you as a Barack Obama supporter. A lot of Democrats these day are kind of pumping themselves pretty highly. Look what the Bush administration did. It looks, from reading that "New York Times" excerpt, that this thing may have started before the Bush administration.

GONZALEZ: Right.

Well, I think the issue now is where John McCain stands and where Barack Obama stands. And, in 1999, Phil Gramm actually spearheaded that effort and John McCain voted for that piece of legislation. John McCain for the past 26 years, while he's been in the Senate, he has been a crusader for deregulation. And Barack Obama has supported regulation.

SANCHEZ: Let me go to the other side.

And, Jade, you saw those quotes. It does not appear that John McCain was well versed on this proposal when he set forth to leave the campaign and go and try and tackle this in Washington. You say what?

JADE MOREY, MCCAIN SUPPORTER: I think it is pretty outrageous to say that he is not concerned with the issue at hand, OK? You may have a clip of him saying that he didn't see the two-page report.

SANCHEZ: Should he have read it? Should he have read it before he canceled his campaign and headed to Washington?

MOREY: Was being just honest about that particular document with that particular plan on it. OK. He went to Washington. They were there discussing it. OK? They are discussing it in person, so I think it is pretty outrageous for you to sit here and try to portray him as not being well versed and not really knowing what is going on and acting like it is just some political ploy.

SANCHEZ: The point is, should he have read the document?

But let me go on to something else. Interesting point. And I want to ask both of you this. Was this process politicized to the point where it actually obstructed the process?

Jade, I begin with you. It is a charge that has been made by some in Washington.

MOREY: I think one of the biggest problems we have in Washington is that everybody just plays the game. It is the blame game, each side throwing it back and forth, trying to get the biggest political gain out of it.

SANCHEZ: Ten seconds to you, same question. By canceling his campaign, going to Washington, some congressmen are saying, he, John McCain, and eventually Barack Obama, got in the way. Your comment on that?

GONZALEZ: Right. I absolutely agree. I agree with Harry Reid, who said that this is not a time for presidential politics to be interjected in delicate negotiations. I think John McCain saw that his poll numbers were slipping. He was desperate. And he thought that this would make him seem like he was above politics. And I think it backfired.

SANCHEZ: Two perspectives. Hold on. We're going to have more of this in just a little bit.

What we want to do now is let you know that we are going back to Mississippi, more developments on the big debate tonight, which I am sure both of you are looking forward to. We will have that for you on the other side.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

SANCHEZ: And we welcome you back. Johnny be good, do me a favor. Give me a shot of the big Twitter board over here. I want to see what people are talking about. And this is it.

"People want to watch this debate tonight and what they want to do is listen to a discussion about the economy. At least the consensus is that."

Frank Roche says: "They have to debate the economy tonight. McCain said this was the only thing he could focus on. He should show it."

Here is another one: "Absolutely they should do" -- the question, of course, was, should they debate the economy? "Absolutely. The topic set should be dispensed with and focus on economy tonight, for foreign policy can go later."

On that subject, we have now Mark Preston. He is standing by in Mississippi to pick up on this topic.

Mark, you have been following this. Is there any sense? You know, it would almost seem untimely, almost foolhardy for them to have a discussion tonight about foreign policy and not to talk about the economic situation. What do you know?

MARK PRESTON, CNN POLITICAL EDITOR: Well, Rick, no question, there is going to be a discussion about the economy tonight. There has to be a discussion about the economy. That is issue number one on Americans' minds. It has been issue number one on Americans' minds now for a year.

But, look, with this crisis that we are in right now, it's going to be a topic. I will tell you, I have been told by a very good source that even earlier this week before we reached this standoff between Barack Obama and John McCain, that the producer of tonight's debate had talked to the campaigns and said that, look, we have to talk about the economy tonight.

So, even before we had the standoff between McCain and Obama, they knew the economy was going to be on the table.

SANCHEZ: By the way, I want to show you something now, Barack Obama arriving for this debate. He arrived -- Mark, help me out with this.

I know I was listening to our political unit make the announcement when it happened. He arrived, and then McCain arrived shortly afterward, right?

PRESTON: He did. And they're doing their walk throughs. What they are doing, Rick, is they need to go in, kind of get a feel for the stage, get a feel for the audience before they go in to get under those spotlights, as you know. And really have an air of comfortability.

We know that Barack Obama has already been through for the walk through. John McCain will be as well. And then in just a couple of hours they are going to be on that stage. And look, even thought it will be about the economy tonight, Rick. It is going to be about foreign policy and for Barack Obama, he has some work to do. If you talk about Iraq, if you talk about terrorism, John McCain has double- digit leads when the Americans are asked that question who will do the better job. So that will be Barack Obama's job tonight.

SANCHEZ: That is a good point that you make. Mark Preston on Preston on Politics, joining us tonight, from Mississippi, the site of the debate. We thank you, Mark.

Let's do this now. Our little newscast, this thing we do everyday, from 3:00 to 4:00, has gone viral on the Internet. This is about us covering this particular story, about the economy. And at least as it is being viewed by now thousands of tens of thousands on the Internet. They did this and we want you to see it as well.

(BEGIN VIDEOTAPE)

SANCHEZ: I'm Rick Sanchez.

The market is tanking. Financial crisis. And I'm looking over, and oh, boy.

Oh, boy! We're having a -- a.

Who in the hell?! Where in the world?! What in the heck!?

(SPEAKING SPANISH)

GLENDA UMANA, CNN ESPANOL: Hola, Rick. (SPEAKING SPANISH)

SANCHEZ: It is terrible!

Let's go ahead, Robert.

Michael in the control room, if we can. Michael, in the control room.

I think you can go down, Michael to our Twitter board. Let's go over to Twitter now. See if we can put the Twitter board back up

If you happen to have an Internet close by, it is different, it is interactive. I've got a lot of tweets as well. We will check on some of the tweets. There's 15,000 -- 16,000, almost 15,000 people who are twittering with us. My Twitter board is about to explode, here.

In fact, let's go to my Facebook page. MySpace, Facebook.

The Lehman fall out.

The Lehman story. Lehman, the next domino to fall.

AIG. AIG, who is AIG? AIG -- watch this. AIG. AIG, AIG.

AIG, says 123Rawgirl.

AIG. AIG, AIG, AIG. AIG, AIG, AIG

UNIDENTIFIED MALE: AIG.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: AIG.

SANCHEZ: Speaking of AIG.

UNIDENTIFIED MALE: AIG.

SANCHEZ: Why is AIG so important?

Right now we're looking at the Dow. That little square there, right? Oops! Right there.

No, right there. See it? Right about there.

A little while ago I looked down, just right there where Susan Lisovicz's -- uh, chest area is.

It's up 28. Just went back to 286. Will it go under 400?

The market just topped 400.

What is it at right now? Tell me in my ear. It's at 350, right now. Thanks, Michael. That is a problem. That might be a problem.That's not good.

And I have read a lot of Ronald Reagan's theories --

Very important announcement.

From the Fed, really in just about any moment,

We are waiting. And we are going to take a quick break now.

Let's try and sneak in a break in here.

If we are in break, we will come out of it.

Stand by!

All right, here we go. Here we go. We just received the decision to not lower interest rates. Not, ixnay, nixay, no.

Where is this heading in?

I don't know where to begin.

What does that mean? What do you mean by that? What's -- what's -- what is going on? What's going on? What are the markets doing? Who are you talking about?

Whoa! Whoa! Whoa! Wait, wait, wait. Ba-ba-ba! OK, I am totally confused by what you are saying.

We will be back.

(END VIDEOTAPE)

SANCHEZ: What a wild ride and what a couple of weeks it has been. Our thanks to the folks at 236.com. They put that together. Since they put it out, it has been going everywhere. I know just about everyone who works here at CNN has gotten a copy and they have also sent it to me. Thank you very much.

Kevin O'Locka (ph), was the guy who put that together. The editor who did that fine work, I suppose. We thank you for paying attention, for watching.

A couple of other things we are watching. Johnny B. Goode, let's go over to the Twitter board. All right, here we go. Listen to this": "It was rambling, full of nervous ticks, and bordered on incoherence." This is what some people are saying about a Sarah Palin interview with Katie Couric. We have that interview. You are going to see it, for yourself, when we come back.

(COMMERCIAL BREAK)

SANCHEZ: We welcome you back to our shop. I'm Rick Sanchez.

So much to talk about. As a matter of fact, I told you a while ago, what may have been the genesis of this problem, going back to 1999 and the Clinton administration. We dug up in the archives a "New York Times" article that seem to say that.

Look at this, that we just got. This is a response that came in just a little while ago. This is on Facebook.

John Gallow (ph) writes to us, right there: "Reagan and Bush Senior set the logs. Clinton accidentally lit the match. And G.W. Bush poured 151 rum on it, and danced around it like a drunken fool."

Comments coming in from those of you today as Jay commented moments ago though, that is a high school student. What does he know about 151 rum, right?

Well, let's do this now. There is something coming up that we want you to know about, because what happens in the country is that many of the people are saying to their congressmen and congresswomen, we don't want you to vote for this particular proposal. Who are these people? These constituents as we refer to you, people with names and faces, and they live in some cases in Montana.

We are going to bring you that as we continue to follow it. And we will also have that John King report for you in a little bit.

What do you want me to do? Where are we going? This is what we want to show you right now, it is the interview that we did with that, that - Katie Couric did with Sarah Palin. Lots of responses coming in on this. Here it is.

(BEGIN VIDEO CLIP)

KATIE COURIC, NEWS ANCHOR, ABC NEWS: You have cited Alaska's proximity to Russia as part of your foreign experience. What did you mean by that?

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: That Alaska has a very narrow maritime border between a foreign country, Russia. And on our other side the land boundary that we have with Canada. It is funny that a comment like that was kind of made to -- I don't know, you know. Reporters.

COURIC: Mocked.

PALIN: Yes, mocked, I guess that is the word. Yes.

COURIC: Well, explain to me why that enhances your foreign policy credentials.

PALIN: Well, it certainly does, because our next door neighbors are foreign countries. They are in the state that I am the executive of. And there in Russia --

COURIC: Have you ever been involved with any negotiations for example with the Russians?

PALIN: We have trade missions, back and forth. It is very important when you consider even national security issues with Russia. As Putin rears his head and comes into the air space of the United States of America, where do they go? It is Alaska. It is just right over the border. It is from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia, because they are right there. They are right next to our state.

(END VIDEO CLIP)

SANCHEZ: The consensus is from most of you who have been writing to us that she looks somewhat befuddled, maybe confused. But then we got this Twitter.

Let's go to the Twitter board real quick. This is rrcowden: "Do you ask a question and then interrupt strongly with a more direct question and making the interviewee change thought process in the middle of a sentence?" Critical of Katie Couric interviewing. OK, we have heard what you have to say. Most of you saying, not a good performance. Well, we will join these two ladies in just a little bit.

They are going to give us their take on that Sarah Palin interview. We'll have that for you.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

We welcome you back. I am being flanked here by a delegate for Barack Obama and one for John McCain.

Let me start with you, Maru, you watched that interview that Katie Couric did with Sarah Palin. What did you think?

GONZALEZ: I did. I actually, you know, it is nice to have some comic relief in politics during these tough economic times. I took Steven Colbert's bid for presidency a little more seriously. I think it is no wonder the McCain campaign is keeping her sequestered. And I think that they have actually done her a disservice, because she lacks confidence. And that was clear.

SANCHEZ: That is what came out of that?

GONZALEZ: Yes.

SANCHEZ: Jade, to you?

MOREY: I think it is pretty unfair what they are doing to her. I wish the media would spend as much time on Senator Biden's outrageous comments that he makes on a nearly daily basis, as they do with her. You had "SNL" coming out making fun of her, as always making fun of the Republicans much more than the Democrats. It is business as usual. I think it is unfair. I'm looking forward to the debate between the VP in October.

SANCHEZ: My thanks to both of you. Good responses. We'll be right back with that piece we promised moments ago, by John King that really gets to the heart of who are the constituents who are arguing against this proposal. Cattle country, when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice over): Angela Stokes was never an overweight child, but as she grew an underactive thyroid gland changed all of that.

ANGELA STOKES, LOST 160 POUNDS ON VEGAN RAW DIET: Six and a half year ago years ago I was like 300 pounds and very unwell, very miserable. I really, I tried to give this impression all of the time that I felt fine about everything and that everything was good. But inside, I was really in a lot of pain a lot of the time.

GUPTA: But one day, while working in a greenhouse in Iceland, of all places, Angela says she had an epiphany.

STOKES: It was like kind of light bulb moment. Like, this is what I have been waiting for to just, you know, reclaim my health.

GUPTA: That day she started a raw food diet.

STOKES: The mainstay of it is not seeds, vegetables and fruits in an unheated, unprocessed condition. I often get asked, you know, does that mean sushi? Questions like that. For me, now, it doesn't mean sushi, but I pretty much a raw vegan.

GUPTA: And after just two years, she had lost 160 pounds and Angela has not looked back once.

STOKES: I went cold turkey into being raw, or cold cucumber, as we sometimes say. To me raw food isn't -the raw food, it's a lifestyle, it's an amazing lifestyle choice to make for ourselves.

GUPTA: So what tips does she have if you want to try the lifestyle for yourself? First of all, start slow.

STOKES: I recommend that people start out being at least 50 percent raw, and just take it from there.

GUPTA: She also recommends getting plenty of variety; starting out with foods that you are familiar with; and getting plenty of support.

STOKES: I think that emotionally and socially, it can be very challenging for a lot of people to live this way. Connect with other people who are into the world food movement. It is very great to get support.

My name is Angela Stokes and I lost 160 pounds with a raw food lifestyle.

GUPTA: Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

SANCHEZ: Who are Americans who believed in George Bush, but are now saying with this proposal you may be going to the well one too many times?

Here's this report by John King.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice over): Roundup day on the Rieder Ranch. Moving the cows to the coral is a sign of the changing season. A couple hundred head, many to be sold off soon, so Dave Rieder can pay the bank.

DAVE RIEDER, MONTANA RANCHER: Every legitimate rancher has to borrow 50 to 80 to maybe a quarter of a million just to pay your bills.

KING: And 8 percent interest sting especially when you add in the soaring cost of diesel and fertilizer, but what stings more are warnings from Washington that credit here, and across Main Street America could dry up if Congress does not quickly pass the $700 billion Wall Street bailout.

RIEDER: We are responsible for our debts out here. We pay our debts. I believe that George Bush, himself, said they got drunk on Wall Street. Well, they ought to suffer the hangover like we have to everyday out here.

KING: Rieder is hardly alone in saying he was not swayed by the president's nationally televised address.

UNIDENTIFIED FEMALE: So, I figure you're against this?

KING: At Republican Congressman's Denny Rehberg's Helena office the morning after tally was 55 calls against, one for.

Much the same across town. Democratic Senator Max Baucus, by mail and by telephone, hearing skepticism and most outright opposition.

UNIDENTIFIED FEMALE: We are waiting to see how it all comes out with the amendments attached.

KING: This 3,000 acre ranch has been in the family for 66 years, since Dave Rieder was four.

RIEDER: I was born during the days of FDR. FDR said that we have nothing to fear but fear. Well, this is exactly the opposite. They're praying on our fears. If we don't bail them out, the rest of you are going to go down the tubes and we'll have another depression. And I don't like the idea of this fear tactics. Who knows what it's going to do to us? We don't know. It doesn't seem to be solving the problems.

KING: That uncertainty is unsettling, all the more so because Rieder, and many others out here, listen to dire warnings from their president and just don't believe him.

RIEDER: Well, it's the same thing that the president did in Iraq. If we don't watch out, that will come in the form of a mushroom- shaped cloud, and there was no threat like that whatsoever. For my part, I don't believe anything that's coming out of Washington, particularly from the Oval Office.

KING: The mistrust of Mr. Bush and the Congress leaves Rieder feeling powerless and worried it will cost him even more when the cattle head back to the hills next spring and he needs another loan to keep the family ranch up and running.

John King, CNN, Boulder, Montana.

(END VIDEOTAPE)

SANCHEZ: Some stories you can only tell by going directly to the people, like that one.

Your comments when we come back and I wrap-up of what happened this week. The stories we weren't able to tell you. Why? Because of this other story in the news. We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: You know what we do in this newscast is we talk to you, while you are talking to us. It's you talking to us that's actually more important. Let's do that right now. Let's go to the board if we possibly can.

This is MySpace. This is from Manie (ph). He says, "You know, Sarah Palin sounds like one of those old school robots that hasn't gotten the brand-new technology of Intel yet. The more she talks, the smarter the Democrats look."

This one also came in right after we showed the Sarah Palin interview with Katie Couric. It says, "McCain likes to gamble. I think he lost this one with Sarah Palin. She's a strong woman, but I don't want her as my VP."

Let's move over to Twitter now if we possibly can. Here we go. This is another one I want to share with you. Obviously a lot of you guys are digging what we're doing. This is 39kirk, he says, "Rick, your show is not on long enough. You need to be on three hours so we can cover tons of stuff."

About our two guests today, Doug in Pennsylvania says, "What's funny is those two young ladies are more informed and brave enough to answer your questions, unlike Sarah Palin."

Your comments, we will continue to bring them to you. When we come back, we'll be checking in with the master in Washington. Wolf Blitzer will be telling us what's going on and a week look at all the stuff we weren't able to bring you this week that was really important. We'll have that after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SANCHEZ (voice over): Here's how it went. Politics, the economy, the economy, politics. Did you keep it on CNN this week? You're not going to believe me, but other news worthy events did happen around the world. We just didn't have enough minutes in our hour to bring it all to you. Like the people of Texas who got the first look at their material lives since Hurricane Ike. They were just, this week, allowed to return to their homes -- or in too many cases - the foundations and piles of rubble where their homes used to stand.

South Africa, the long-serving president suddenly resigned. A new man is sworn in. We didn't introduce him. And I'm still working on trying to pronounce his name.

We didn't tell you about Troy Davis, alive on death row. He had a date and time to be executed for killing a Savannah, Georgia, policeman. Two hours before lethal injection, the Supreme Court intervened. The justices will consider his appeal Monday.

Remember when we were all ga-ga over the Knute, that cutest little polar cub ever? That guy with the beard was almost as famous. The baby bear's hand-feeding handler. Knute's buddy, Thomas Doerflein was found dead a couple of days ago. This bear's life sad to happy to sad again.

(END VIDEO CLIP)

SANCHEZ: Now to the question of how the markets have fathered today and how they're going to close. For that, let's go over to Susan Lisovicz.

Susan, what you got?

LISOVICZ: Well, it's been another tough day on Wall Street, Rick. And a very tough day for anybody who owns shares of Washington Mutual.

Basically, they are worthless right now trading at 16 cents a share. Different story though for the short-lived CEO. If you're Alan Fishman, you could get a golden parachute. Our folks at CNNMoney.com crunched the numbers. Up to $18 million in salary, bonuses and severance for less than three weeks on the job. He was just hired earlier this month. We don't know if he will even have a job, but he had a base salary of $1 million, plus a target annual bonuses. And other bonuses.

And on the day we're talking about modest gains for the three major averages but a tough week on Wall Street. We're still waiting on Washington.

Now let's go to "THE SITUATION ROOM" and Wolf Blitzer.