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CNN Late Edition with Wolf Blitzer

Interview With Presidential Candidates

Aired January 20, 2008 - 11:00   ET


WOLF BLITZER, HOST: It's 11 a.m. here in New York, 8 a.m. in Las Vegas, 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition."
Nevada was a tough one for former Democratic Senator John Edwards. He placed a distant third in the caucuses there. After placing second in Iowa and third in New Hampshire, how much depends on winning next Saturday's Democratic primary in South Carolina?

We spoke about that and much more just a short while ago when he joined me from Greenville, South Carolina.


BLITZER: Senator Edwards, thanks very much for joining us. Welcome back to "Late Edition."

EDWARDS: Thank you, Wolf, for having me again.

BLITZER: South Carolina, next Saturday, it's proving to be critical for you. I'm looking at these ad numbers, how much the various candidates have spent only in the last couple of weeks in South Carolina. Between January 1st and January 16th, according to our numbers, you've spent more than $2 million, Obama spent just under $1 million, Hillary Clinton about $825,000.

How critical is South Carolina, the state where you were born? How critical is that state for you next Saturday?

EDWARDS: Well, it's important, Wolf. But it's part of the long process. I mean, this fight for the middle class and for people who don't have a voice is what my campaign is about. It's the cause of my life. But I'm now bringing it to South Carolina, the place, as you point out, where I was born.

A place that I understand very well what's happening with the economy in the rural areas of South Carolina, the issues with schools here, loss of jobs. I mean, this is a place that I know very, very well, and I'm going to campaign hard here.

BLITZER: You won that state four years ago. Will you win again on Saturday?

EDWARDS: I have no idea. What I'm going to do is stay here, make sure that people know what I stand for and what I want to do as president of the United States, what I want to do to stand up to entrenched moneyed interests in Washington and keep my fingers crossed. We will see how it goes.

BLITZER: What happened in Nevada yesterday, because you came in a disappointing, distant third. And I'm sure you were hoping to do better.

EDWARDS: I got my butt kicked.


EDWARDS: That is what happened in Nevada. And the job for me now is -- I have learned this from my whole life experience, is when you get knocked down, you have got to get up. You've got to get up and start fighting again. And I'm up and fighting again already in South Carolina for these causes that are the cause of my life.

I mean, we mentioned that I was born here. I grew up in a family that worked in the mills here, and fighting for people who worked like my own family and the people I grew up with, this is what it's about for me. It hasn't gone away, it is still there.

I do like -- I would kind of like to go back to the old Las Vegas saying, though. You know, what happens in Vegas stays in Vegas? I hope that turns out to be true in this case.

BLITZER: Because a lot of us thought you would do better given the heavy union membership. And you've really gone after union support. You didn't get the Culinary Workers Union, but you have got some other major union endorsement. And certainly they didn't show up in big numbers for you yesterday.

EDWARDS: Yeah. I think that what happened there, though, without making too much of it, I think that, number one, Senator Clinton and Senator Obama spent enormous amounts of money there. We didn't buy a single radio ad or television ad. They invested a lot of time, money and resources in Nevada that we didn't.

And I think it had consequences. I think the caucus system made our numbers look smaller than they were. I think our vote was significantly higher.

But the bottom line is, as I said just a minute ago, I got my butt kicked there. And it's time for me to get up and fight on, and fight on for these causes that are the reason I'm running for president.

BLITZER: You are making a major appeal on bread and butter issues, jobs, the economy, helping the middle class, and given the fears of recession right now, you would seem to have an opening. Tell our viewers -- tell voters, more importantly out there, why you think you could do a better job specifically in dealing with a potential recession than either Barack Obama or Hillary Clinton?

EDWARDS: Very simple reasons. Number one, I think to do the things that we need to do for this country, for the middle class, to strengthen the economy, we have to be willing to stand up against entrenched moneyed interests: drug companies, oil companies, insurance companies, lobbyists.

I'm the only candidate among the three of us who've never taken those people's money, never taken the lobbyists' money, never taken special-interest PAC money. Second, this fight is not academic for me. It is very personal.

I mean, because of the way I grew up, because I've been able to take advantage of the promise of America myself, I -- this is a battle that I take very, very personally. And so, I will never stop fighting. I will never stop when the fight is tough.

And all of the ideas that I've laid out, the substantive policy ideas, Wolf, from universal health care to creating a million new jobs as we green the economy, raising the minimum wage, strengthening the right of unions to organize, having a national predatory-lending law, making it easier for kids to go to college, all of those things are wrapped around the same single idea, which is making sure that we give our kids a real chance to have a better life.

BLITZER: Let me get your response to a specific proposal that Senator Clinton has put forward to deal with the problems of mortgages and housing foreclosures. She wants a 90-day moratorium on any foreclosures right now, and basically a five-year freeze on interest rates for people who are having trouble if their interest rates on their mortgages go up. Is that a good idea, what she is proposing?

EDWARDS: I think those are perfectly good ideas. I'd be more aggressive than that, though. I think we ought to go to the step, because we have so many people who have spent their lives investing in the biggest asset they have, their home. And they are in danger of losing it.

I'd go to the next step, which is to allow the bankruptcy courts to actually restructure these loans. You'd have to change the law to do that. But I would do that.

And I would create a national home rescue fund so that we can actually provide transitional help to these families that are at-risk. I think those are more aggressive measures in addition to what you just talked about.

BLITZER: She also says she's uniquely qualified, given her background, to be the next president of the United States, more than her rivals. I will play this little clip for you.


SEN. HILLARY RODHAM CLINTON, D-N.Y.: I do think that being president is the executive officer. And I respect what Barack said about setting the vision, setting the tone, bringing people together. But I think you have to be able to manage and run the bureaucracy.


BLITZER: Why do you think you could do it better? EDWARDS: Because I don't think this is about managing a bureaucracy. This is not what the president of the United States does. The president of the United States doesn't sit around and shuffle paper and decide what goes where. The president of the United States makes big, visionary judgments about what America needs to do.

And the president also has to have what it takes inside to fight against those obstacles. And I've talked about them repeatedly already today, those obstacles that stand between America and the change that we need.

That is what ultimately matters. There are going to be very tough fights for the next president of the United States. These things are not going to happen easily. They are not going to happen just by giving a speech. And they're not going to happen by moving paper around.

They are very difficult, tough fights for the next president. And I'm ready for that.

BLITZER: Barack Obama made some -- what some call controversial remarks involving Ronald Reagan and Bill Clinton. I'm going to play this clip and get your reaction. Listen to this.


SEN. BARACK OBAMA, D-ILL.: I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not.


BLITZER: Is he right, factually?

EDWARDS: I can't imagine why I or Barack Obama would be using Ronald Reagan as an example of change. I think the change that Ronald Reagan brought to the country was not good for America.

I mean, he helped destroy the -- or did great damage, at least -- to the organized labor movement, created a tax structure that favored the wealthiest Americans and big corporations. He did incredible damage to the environment by deregulating some of the regulation that was taking place.

So I would never use him as an example of change. I can tell you that.

BLITZER: A conservative columnist in The Washington Times wrote this about you the other day, on Thursday, and I'll read it to you. His name is Donald Lambro.

BLITZER: "John Edwards' angry campaign against greedy corporations has failed to move him above third place in the race for the Democratic presidential nomination, despite a worsening economy that has become the top issue in this year's election. Some Democrats say the former North Carolina senator's angry tone and his vast wealth as a successful liability trial lawyer who has sued major corporations may be part of his problem. Business lobbyists and Republicans dismiss his campaign as old-style class warfare that they say turns off most voters."

What do you say to that kind of criticism, which I know you've heard from others as well?

EDWARDS: It's just -- that's right-wing rhetoric. There is nothing angry about what I'm talking about, Wolf. You know, what I want to do is make the promise of America available to everybody. And I do think there are huge obstacles to making that happen.

Just take health care as an example. I mean, we have 47 million people without health care coverage. We've got lots more than that who are terrified about losing their coverage. And I do believe that the drug company and insurance companies lobbies stand as an obstacle to being able to do what we need to do.

That doesn't mean all corporations are bad. That's ridiculous. Of course there are great corporate citizens in this country. I could name several right now.

But that, however, misses the point. The point is that these entrenched moneyed interests, that have been in Washington for a very long time and have lobbied for a very long time, have a reason, an incentive to keep the system exactly the way it is. And unless we're able to get through that, America can't get what it needs.

That's what this election is about.

BLITZER: Senator Edwards, thanks for joining us. Good luck.

EDWARDS: Thank you, Wolf, so much.


BLITZER: And don't forget, John Edwards, Hillary Clinton, Barack Obama -- they will all face some serious questions in Myrtle Beach, South Carolina tomorrow night. I'll be joined by Suzanne Malveaux and Joe Johns, as CNN and the Congressional Black Caucus Institute sponsor a Democratic presidential debate on Martin Luther King, Jr. Day, tomorrow night, 8 p.m. Eastern, right here on CNN.

And coming up next, Mitt Romney enjoyed a victory in the Nevada Republican caucuses but didn't fare so well in South Carolina. I'll ask the former governor how he expects to hold on to his momentum.

Much more coming up, right after this.


BLITZER: New York City, on this Sunday. Welcome back to "Late Edition." I'm Wolf Blitzer, reporting today from New York.

My conversation with GOP candidate Rudy Giuliani is coming up here on "Late Edition," in the next hour, but right now, Mitt Romney racked up another gold in Nevada yesterday, but he also finished fourth in the important South Carolina primary.

I asked him about that contest, which every Republican nominee has won since 1980.


ROMNEY: South Carolina has terrific people there. I recognize, of course, it's been, sort of, McCain/Huckabee country. And you know, I have to make sure that I win a lot of states. And so far, I've got three golds, as you say, and that's feeling pretty darn good.

BLITZER: For a Republican to win a presidential contest, you really need to carry the South. The South has been the base for the Republican presidential candidates in most of the recent elections.

What is your sense right now? How do you stand in the south?

We saw you do well in Michigan, out in the West, in Wyoming and Nevada, but what about the South?

ROMNEY: I'll do real well in the South. We're going to have a primary right here in Florida. Right now, four people are all tied for first place in Florida. Our nominee's going to do real well in the South.

The key, of course, is how our nominee going to do in Michigan and how is our nominee going to do in Nevada?

Those are the swing states. And if we can win in Michigan and win in Nevada in November '08, we'd win in the White House. And I, frankly, think that the message that's going to win is the message of change in Washington, and a message of strengthening or economy.

And someone like myself, who has spent his entire life in the private sector, is going to be able to connect with people who are concerned about the future of our economy. BLITZER: Tell us why voters in Florida -- that's going to be the next big contest -- for Republicans, January 29th, why voters in Florida should support you, as opposed to Rudy Giuliani, let's say, who's invested so much of his political prospects in that state right now.

ROMNEY: Well, Mayor Giuliani is a wonderful fellow. He really hasn't been able to generate a lot of support in the six states, from what we can tell so far. And he'll be competing here in Florida.

The difference between us, of course, is that he's spent his life working in the public sector, in the governmental sector. I spent my life, 25 years, working in the private sector.

And I think, when it comes to trying to help Florida see jobs come back, see the housing market come back, see our economy stronger, they're going to want somebody who really understands how the economy works, and someone who, like Rudy Giuliani, has run something and someone who can, well, from the outside, finally get inside Washington and turn the place inside out.

BLITZER: What's the biggest difference, in Florida, for Florida voters, between you and John McCain?

ROMNEY: Well, Senator McCain is a fine man and an honorable and courageous individual. But he has been in Washington all of his career. And I don't think you're going to see change in Washington by somebody who's been such a part of it all of these years.

I think people recognize that, particularly with the challenges we face in our economy, it's essential to have somebody who's had a job in the economy, who knows how the economy works and can fight to bring good jobs for middle-income Americans.

There are other differences, of course. He opposed the Bush tax cuts. Even now, with the stimulus being proposed, he apparently is not in favor of that.

I proposed a very bold stimulus program to get our economic working again. You know, having a strong economy is key to great jobs and key to a lot of good things that happen in this country.

BLITZER: One final question, Governor, before I let you go. Mike Huckabee -- he's not been in Washington a lot. He spent 10 years as a governor in Arkansas. You spent four years as a governor in Massachusetts.

Same question: What's the difference between you and Mike Huckabee?

Because Mike Huckabee is certainly not a creature of the Beltway.

ROMNEY: No, that's right, and his experience was in government and in other not-for-profits.

Again, my experience was in working in the economy. I've seen how jobs come, how they go. I've been in various countries around the world, negotiating and managing and learning about businesses.

And I understand how jobs are affected by what we do in Washington. If it comes time to sit down with a trade agreement with another country, I know how that will affect jobs right here.

And that's something which I don't think anyone else on the Republican side has any experience doing. And I think that's absolutely critical, at this time in our nation's history, given the kind of international competition we face.

And of course, the desire to have a strong military flows from having a strong economy.

BLITZER: The winner of the Nevada caucuses, today, the former governor of Massachusetts, Mitt Romney, already in Florida, getting ready for that important primary on January 29.

Governor, once again, congratulations, thanks very much for joining us.

ROMNEY: Thanks, Wolf. Good to be with you. BLITZER: And up next, here on "Late Edition," we'll get the inside story on next weekend's South Carolina Democratic presidential showdown from two top campaign advisers: Virginia governor Tim Kaine -- he's supporting Barack Obama -- and Senator Evan Bayh of Indiana.

BLITZER: He's a co-chairman of Hillary Clinton's campaign. He's coming up next, right here on "Late Edition."


BLITZER: She seemed to be in trouble after her loss in the Iowa caucuses, but after another win yesterday in Nevada, Senator Hillary Clinton seems to be the front-runner once again. we'll see how long that lasts.

Can she keep up the momentum? To help us answer that question, I'm joined now by Senator Evan Bayh of Indiana. He's in our Washington bureau. Senator Bayh's a national co-chairman of the Clinton campaign. Senator, thanks for coming in.

BAYH: Good to be with us, Wolf.

BLITZER: Here's what John Edwards said earlier today in suggesting that he would be more qualified, a better president than the woman you're supporting, Hillary Clinton. Listen to this.


EDWARDS: Senator Clinton I think is more the old-style, the Washington working the way it does, that it's okay to take the money from the lobbyists and the special-interest PACs, which I've never done and I'm proud of.


BLITZER: All right, so, you want to respond to that? Because we keep hearing that criticism from him. He's not on the take of Washington lobbyists, and she is.

BAYH: Well, that's just not accurate, Wolf. And I think what yesterday's results show is that the underlying narrative in this campaign is now becoming clear. This is a substantive election. The American people are concerned about the direction of our country.

They're concerned about the challenges they face in their own lives, and they want someone who will not only raise our hopes, but can fulfill our hopes, can actually make the progress that will enable them to meet those challenges, things like health-care costs, good job creation, heating expenses.

Senator Clinton has the seasoning and the experience to actually make that happen, to move the country forward in the right direction. And I think the results yesterday reflect that.

BLITZER: But when he says she's old-style and takes money from lobbyists, from Washington lobbyists, she does accept money from Washington lobbyists, and Edwards says he does not.

BAYH: But there's no evidence at all, Wolf, that that reflects her views about job creation, about health-care costs, getting those things done. She fought the big special interests on that one.

So, the real question here is, among good people, and they're all good people, who really can move us in the right direction, who can translate our hopes into reality and enable the American people to have more progress in their daily lives? And Senator Clinton has that experience and seasoning necessary to actually make that happen.

BLITZER: But he points out that if she wants to negotiate health-care and drug premiums and help the middle class, at the same time she would be accepting money from the big pharmaceuticals, from the big pharmaceutical lobbyists. And that would undermined her ability in effect to go ahead and negotiate on behalf of average Americans.

BAYH: I'm glad you raised that point. If there's anyone who's fought the health-care battles and really put it on the line for more affordable health care, taking on the large special interests, it's Senator Clinton.

You know, Barack Obama's a good person, John Edwards is a good person, but Senator Clinton's been a leader on health-care reform, getting costs down for the American people for many, many years. And that proves that her heart is in the right place..

BLITZER: Among African-Americans yesterday in Nevada, she won the caucuses, but look at this. Obama got 79 percent based on the entrance polls that we did, to Senator Clinton's 16 percent. Edwards only 3 percent. Why did she do -- fare so poorly among African- American in Nevada?

BAYH: Well, you'll have to ask some of the voters that, Wolf. She did very, very well among many other demographics, and, look, at the end of the day, the affinity for Senator Obama among the African- American community is only natural and to be expected. He's a good person.

But I think African-Americans are going to want what all Americans want at the end of the day. And that's more progress. That's real results. That's helping to meet the challenges that they face and that we all face in our daily lives. And that Senator Clinton has the ability to actually make that happen.

BLITZER: Does that bode badly for her next Saturday in the South Carolina Democratic presidential primary? It's expected perhaps 50 percent of the Democrats who vote next Saturday are African-American.

BAYH: Well, I think yesterday's results bode very well for her in the long run. This is the first time one of the candidates has gotten more than 50 percent of the popular vote. She's ahead in the delegates.

Of course Senator Obama has a strong base of support in South Carolina, and that's to his credit. But I think Senator Clinton shows she can have strong support within the African-American community as well, and among all communities. And at the end of the day, that's what we're going to need, not only to win this election, but to move this country forward.

BLITZER: Before New Hampshire, the former president, Bill Clinton, had an issue. He got angry involving Barack Obama, and then before the Nevada caucuses, he had a little exchange, a testy exchange with a reporter. Let me play a couple clips for you. Listen to this.


BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Give me a break. This whole thing is the biggest fairy tale I've ever seen.



B. CLINTON: If you want to take that position, get on the television and take it. Don't be accusatory with me. I had nothing to do with this lawsuit.


BLITZER: Is the former president, Bill Clinton, helping or hurting his wife's campaign?

BAYH: Well, there's no question, Wolf, that he helps. I mean, look, he's her husband. He loves her. His own legacy has been questioned in some regards.

So, it's absolutely to be expected that he engages and gets a little emotional from time to time. You'd be asking me if he wasn't campaigning for his wife just as much.

So, look, he was a very successful president in terms of creating tens of millions of new jobs, turning deficits to surpluses, getting people from welfare into jobs. All those kind of substantive improvements that people are yearning for, he actually helped to bring about, and so I think can speak with some authority about what it takes to make that happen. And that bodes very well for Senator Clinton's campaign.

BLITZER: There's a lot of speculation, Senator, that you, as a former governor of Indiana, might be a potential vice presidential running mate for Senator Clinton. Give us the latest on any talks, any discussions you've had with her about that.

BAYH: Well, you shouldn't scare your viewers like that, Wolf, although I'm flattered that you would ask. Look, there have been no discussions about anything like that whatsoever. That would be wildly premature. We need to focus on who is the right leader to move this country forward, to help make the progress that people need to meet the challenges that they face in their daily lives. My strong view is, that's Senator Clinton. We need to focus on that first, and then all those other things will take care of themselves.

BLITZER: If she gets the nomination, though, would you like to be on the ticket?

BAYH: Well, that's entirely up to her, Wolf. So, we'll see what she decides.

BLITZER: I'll take that as a yes.


BLITZER: Senator, thanks very much for coming in.

BAYH: Good to be with you.

BLITZER: And straight ahead, I'll speak with Virginia Governor Tim Kaine. We'll talk about how the Barack Obama campaign is planning to recover from the loss in Nevada.

"Late Edition" continues right after this.


BLITZER: Barack Obama lost by a very slim margin to Hillary Clinton in the Nevada caucuses, but actually pulled very strong numbers among African-American voters.

How will this play, as the Democrats swing into next Saturday's primary in South Carolina?

To help us better understand this, I'm joined by a top adviser to the Obama campaign, Virginia governor Tim Kaine. He's at the state capital in Richmond.

Governor, thanks very much for coming in.

KAINE: Good morning, Wolf. Great to be with you.

BLITZER: Why did you decide, very quickly, to endorse Barack Obama, as opposed to Hillary Clinton or John Edwards, or anybody else?

KAINE: Absolutely. Well, I endorsed, a year ago, for a whole series of reasons -- I think there are great candidates. The Democrats love their field.

But I feel like Barack can change the game for our country and for our party. And I think he's the candidate who is the most likely to win in November.

And I think the Nevada results, in a little way, showed that. He came in a close second in popular vote. It looks like he'll win the delegates, by one delegate, in Nevada.

But if you look at the map, in Nevada, Wolf, I thought it was interesting. He did well among African-American voters, but he also did well all throughout rural Nevada. She had great pockets of support in the larger cities and did well there, but the reason that he's likely going to get an extra delegate is through rural Nevada, parts of the state that are traditionally are Republican, Barack won handily.

And I think that's what I saw his likely effect would be in Virginia and other swing states, that he would have the ability to get folks to come and pull a lever for a Democratic candidate that, maybe, in past years, weren't been willing to do so. BLITZER: She really did well with the Latino voters. This was the first Hispanic -- serious Hispanic test, out there, among the Democrats. He did very well with African-Americans.

I want to put up, on the screen, the corrected numbers from the entrance polls that we had in Nevada. Obama had 79 percent of the African-American vote in Nevada to Hillary's only 16 percent; John Edwards, 3 percent.

The Congressional Black Caucus -- I want you to look at this, because it's significant, I think. If you take a look at members in the House whom they support, 17 members of the Congressional Black Caucus support Obama; 16 support Hillary Clinton; 2 support Edwards; seven are still undecided.

What was interesting to me -- and I want your thoughts. Two thirds -- about two-thirds of the members of the Congressional Black Caucus do not -- are not necessarily on board with Barack Obama right now. Why do you think that?

KAINE: Well, you know, I think that's -- I don't think it's a bad thing. I don't think anybody should necessarily, you know, count on somebody's support because their skin color is the same.

I think that, you know, Barack Obama wants to make a case to every voter to support him.

Obviously, Senator Clinton has got long-standing relationships with many of the members of the caucus.

You know, Barack Obama has a tremendous number of supporters who are white.

And so that's a good thing. We wouldn't want to see everybody just breaking and deciding along racial lines.

The thing that I'm excited about Barack's candidacy -- I see it here in Virginia and I see it elsewhere -- is he has a great capacity to pull in voters of all kinds, all ages, people who are rock-solid regular participants, people who are brand new, people who are hard- core Democrats, people who are independents and disillusioned Republicans.

And I think, again, you know, the big game, here, is November 2008. We all have to, you know, remember that that's the big game. And I think that the Obama campaign is setting up to do very well next week and in the primary season and then really carry momentum forward to be our most electable candidate.

BLITZER: Sheila Jackson Lee, one of the African-American congresswomen, a member of the Congressional Black Caucus, said this -- she's endorsed Hillary Clinton.

"Senator Clinton has a strong record of diversity, whether it is with the Hispanic community, Asian community and African-American community. She will go to South Carolina and she will build on her long and strong relationships with a very diverse community, and we will speak to issues that are relevant to improving the lives of Americans."

As you take a look at the basic criticism of Barack Obama that's come from her supporters, it's that he simply doesn't have the experience that's needed to start, on day one, in the Oval Office.

And I wonder if you want to respond to that?

KAINE: Sure. I mean, I considered very carefully before I endorsed Senator Obama, did he have the experience to be president?

And I believe deeply that he does. And a number of us who have gotten on board with the campaign believe that. It's experience that matters. Look, we've got economic challenges, right now, affecting communities all across this commonwealth and nation.

Senator Obama started his career working with hard-hit steel workers who had lost their jobs. He knows the pain of that, but he also knows that what they need is not just a sympathetic ear but an advocate and somebody who can talk about building new hope, building new opportunities.

That's what he did in that capacity. That's what he did as a state senator in Illinois, and that's what he's doing as a U.S. senator, and always with the same kind of motive in mind -- you know, organize people well, bring people together, get past the old divisions and gridlock to, you know, get people working together for common solutions.

That's just what this nation needs. And I think the nation will respond to that kind of hopeful message.

BLITZER: He seemed to make some controversial remarks, the other day, when he was talking about Bill Clinton and Ronald Reagan. I'll play this little clip for you, Governor, and we'll talk about it.


OBAMA: I think Ronald Reagan changed the trajectory in America, in a ways that, you know, Richard Nixon did not, and in a way that Bill Clinton did not.


BLITZER: You just heard John Edwards, here on "Late Edition," say he doesn't understand why Barack Obama or any Democrat should offer any praise to Ronald Reagan, given his records on labor unions and economic issues and tax cuts for the wealthy.

What was he thinking, Barack Obama, when he said that?

KAINE: Well, you know, I'm not going to try to interpret exactly what he was thinking, but let me tell you what I think when I hear those words. I think Democrats, you know, we didn't like an awful lot of what Ronald Reagan did, but we do understand, most of us, that one thing he was good at was communicating to the American people a message of hope and uplift at a time where we were in a period of, kind of, gridlock and malaise.

We're in that kind of time right now, a time when we can't really count on Washington to produce solutions that matter, when it doesn't seem like Washington can competently manage either an overseas war or an at-home response to a hurricane.

And so what we seem to need, I think, is somebody who is going to have transformative effect of really being about hope and uplift and optimism and counting on the best of the American spirit. And so...

BLITZER: And let me interrupt for a second, Governor. Bill Clinton didn't have that; is that what you're saying?

KAINE: No, I think Bill Clinton did. I think Bill Clinton was transformative in that way, got us out of a malaise.

And we all -- you know, everybody called Reagan "the great communicator," whether they were Rs or Ds. Again, whether you didn't like what he did, that was one thing, but he had a way of capturing that spirit of optimism and pride in America.

And we want to feel good again. I think, after the last few years, we want to feel good again.

BLITZER: Let me wrap up by asking the same question I asked Evan Bayh, just a few moments ago.

If Barack Obama gets the nomination, would you like to be his running mate?

KAINE: I sure don't expect that to happen. And I'm going to -- I think I can help him in other ways.

And don't mention that, because I've got three teenagers at home who will feel even more of a need to pop my bubble.

BLITZER: But you can't turn him down, if that happens, right?

KAINE: You know, why think about things that aren't going to happen?

I'm helping him, as I can, for the last year, because I really believe that he's going to be the next president of the United States. It started a year ago as the improbable against the inevitable. And we've got a very, very close raise going into South Carolina and February 5. And that's very exciting. BLITZER: Governor, he's lucky to have a good friend and supporter like you. Thanks for coming in.

KAINE: Thanks, Wolf. BLITZER: And coming up here on "Late Edition," we'll talk to one Republican presidential candidate who's waiting until next week's Florida primary to make his big move. That would be Rudy Giuliani. That's coming up in the next hour.

And what's the right way to try to jump-start this sluggish U.S. economy?

I'll speak, live, with two top economic advisers. "Late Edition" continues, right after this.


BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer reporting today from New York. We received a record number of responses when I asked for questions you wanted asked at tomorrow night's Democratic presidential debate. Here are just a few.

Ken asks, "Has America abandoned the bright, shiny future we envisioned when Neil Armstrong first set foot on the moon nearly 40 years ago, or will we reclaim this future under your administration?" Louis (ph) would like to know, "How do the candidates plan to strengthen the economy? The dollar is being outperformed by other currencies, including the Euro. As the Fed cuts interest rates, it is devaluating the dollar. Do they have any idea as to what they might be able to do to spur economic growth and put America on a path to a stronger economy?"

Remember, you can read more questions on our political ticker at And don't forget, the Democratic presidential debate in Myrtle Beach, South Carolina, co-sponsored by CNN and the Congressional Black Caucus Institute tomorrow night. I'll be there along with Suzanne Malveaux and Joe Johns. They'll be helping in the questions.

That's Monday, tomorrow, Martin Luther King Jr. Day here in the United States, at 8 p.m. Eastern right here on CNN. Please join us for that.

We'll take a quick break. when we calm back, we'll talk about the U.S. economy. In this Great Depression, FDR said the only thing we have to fear is fear itself. We'll talk about that. We'll get some very different views when we come back.


BLITZER: Welcome back. As the stock market dropped and one grim economic statistic followed another, most in Washington agreed that something needs to be done and done quickly. But can the president find common ground with the Democratic majorities in the house and Senate?

To help us explore the options are two political veterans who have been through a couple of economic downturns before. Gene Sperling was economic adviser to the Clinton White House for eight years. He now advises the Hillary Clinton campaign. Former Minnesota Congressman Vin Weber is advising the campaign of Republican presidential candidate Mitt Romney.

Thanks to both of you for coming in. Gene, I'll start with you, and I'll play for you what the president said on Friday, explaining his desire to move quickly on the economic front. Listen to this.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are also times when swift and temporary actions can help ensure that inevitable market adjustments do not undermine the health of the broader economy. This is such a moment. By passing an effective growth package quickly, we can provide a shot in the arm to keep a fundamentally strong economy healthy.


BLITZER: All right, Gene, is the president right?

SPERLING: He is right. And he's been late in coming, but better late than never. You know, Senator Clinton called on December 5th for the president to start getting ready such a plan, and was the first candidate to put out a major detailed proposal.

And I think what's been similar is that -- and we're happy about, is that the president is calling for a temporary plan, which is a big change from last time, where it was used as a pretext for long-term deficit increases. But I think the focus needs to be, as Senator Clinton has stressed, on things that are quick, fast-acting, but also have the double benefit of being best for jump-starting the economy and for dealing with the areas of key economic distress -- housing, energy, jobs.

BLITZER: Vin Weber, you agree?

WEBER: I think that the president has approached this exactly right. I mean, he understands that in order to do something to be effective, it has to happen very, very quickly. And that means you have to put aside all sorts of different partisan considerations.

I saw Senator Schumer on another network earlier this morning. I thought he was just excellent in both the tone and the substance of the way he was approaching this, and I'm confident that they will be able to pass something in time to do some good.

BLITZER: Well, it sounds like there's nice bipartisan support, at least on this economic issue, right now. Ben Bernanke, the chairman of the Federal Reserve, Gene, he spoke out as well. And he was, for a Federal Reserve chairman, as you know, he was blunt. listen to this.

(BEGIN VIDEO CLIP) BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: The financial situation remains fragile, and many funding markets remain impaired. Adverse economic or financial news thus has the potential to increase financial strains and to lead to further constraints in the supply of credit to households and businesses.


BLITZER: Do you believe, Gene Sperling, that the country already is in a recession, even if the technical definition of a recession, two successive quarters of negative economic growth, have not been met?

SPERLING: Very possibly. We actually had a loss of private- sector jobs in the last report. We've seen an actual downturn in manufacturing. But I think what's very important is not only keeping it temporary and quick, as Chairman Bernanke said, but making sure you actually are addressing the key issues.

SPERLING: One of the things Senator Clinton has done is have a comprehensive plan on housing foreclosures. Part of her plan is a $30 million emergency fund. And this is really an area where being pro- growth and being fair go together.

And that's why the one thing Senator Clinton has said in encouraging this bipartisanship is, let's not leave out 50 million families who work, who pay taxes, and exclude them from benefiting in this stimulus. Because not only will they spend the money quickest, will be best for the economy, but it's just wrong to have a $23,000 waitress working hard, get nothing in an economic stimulus while the people she's serving food to get $1,600. And that's something we need to build on.

BLITZER: Hold on, let me get Vin Weber involved. She's also saying there should be a 90-day moratorium on any foreclosures because people can't pay their mortgages. She's also suggesting, Vin Weber, that there be a five-year freeze on interest rates for those mortgages where people might be in trouble to avoid them getting kicked out of their homes. Is she on to something?

WEBER: Well, I don't think so. And I certainly sympathize with anybody that's got a problem paying their mortgage. I think a five- year freeze like that could have long-term negative implications for the lending market. And on balance, our housing market has been pretty strong in this country.

We've got a very serious problem with deflation taking place in the housing market. But I don't think that you want to do anything that will, over the long term, impair the functioning of that market. And that's what I would be afraid of if you had a five-year freeze.

BLITZER: Do you feel comfortable with the five-year freeze, Gene Sperling, given the nature of this free market that we have in this country?

SPERLING: Let's understand, we are in a lot of economic danger we are because we are in a housing crisis. Many of the economic stimulus things we're doing will unlikely be effective unless you're doing this type of thing. Governor Schwarzenegger has called for something similar.

And remember, a family has to be working. A family has to be able to meet their mortgage payment. This is not a bailout. This is saying that if you can meet a reasonable 30-year fixed-rate mortgage, working hard each and every month, if we can keep some of those people in their homes, we can help stop this downturn. And it's going to help their neighbors because foreclosures lower property prices around them, and that continues the economic downturn.

Senator Clinton is recognizing you need a comprehensive plan if we're really serious about keeping ourselves out of a serious recession.

BLITZER: There was criticism of all of this on the editorial pages, op-ed page of The Wall Street Journal on Friday. Bill Thomas, a chairman of the House Committee on Ways and Means from 2001 to 2007, and Alex Brill, a senior adviser to the committee, wrote this: "The amplified rhetoric of economic doom from leaders and hopeful leaders in Washington may become a self-fulfilling prophecy as consumers curtail their spending in response to the predictions of recession by their favorite candidates. If history is a guide, economically sound help from Washington will arrive late at best and likely not at all."

Vin Weber, the point is that if people think there's a recession, even if there isn't a recession, they're going to start behaving as if there is a recession. They're not going to be spending the money they presumably would normally be spending, and it becomes a self- fulfilling prophecy. What do you think about that?

WEBER: I think it's true, but only around the margins. I think on balance, people react to changes in the real economy, in the real world. Yeah, I agree, the more coverage there is, where it's from politicians or anybody else about bad economic news, you do on the margins cause people to draw back a little bit.

But if we weren't addressing a real underlying economic problem, nobody would be talking about these things. That's what you need to address, and that's what we are addressing and we're going to address, I hope.

BLITZER: Last Sunday, Mitt Romney was on "Late Edition," Gene Sperling, and I asked him, if he were president, what he would do immediately to deal with this potential of a recession, the fears of a recession. Listen to what he told me.


MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: Immediately I'd go to try and get a reduction on taxes on middle-income Americans. Specifically, I proposed having people who earn under $200,000 a year be allowed to save their money tax-free. It means no tax on interest, dividends or capital gains.


BLITZER: All right. What do you think?

SPERLING: You know, I'm extremely disappointed in what Governor Romney's proposing. In fact, I have to say this is a place where this time around, President Bush focusing on temporary plans is doing much better. Look at what Governor Romney's proposing. He wants to lower the corporate tax rate. The Congressional Budget Office just in January said this is probably the lowest, least most effective thing you can do to stimulate the economy. His zero capital gains, the Tax Policy Center, independent Tax Policy Center has said that would help the average family under $50,000 by about 11 bucks. The average family between $50,000 and $100,000 by about 70 bucks.

And the one thing that we agree on is that doing something for middle-class families, which Senator Clinton agrees on, Governor Romney, like President Bush's proposal he's floated, would leave out 50 million of the hardest-working, most hard-pressed families.

BLITZER: Go ahead, Vin Weber.

WEBER: I'm surprised that Gene takes him on on the corporate tax rate, because that's one of the few areas of across-the-board tax reductions where we've actually seen some indications of interest from Democrats on Capitol Hill. Our problem is the corporate tax rate is rendering American industry non-competitive worldwide, whereas on other taxes we have brought rates down pretty much over the last 20- some years.

Our corporate tax rate remains one of the highest in the world, and is making us less competitive. And most economics studies, I'm sure Gene would agree, show that the workers end up paying the corporate tax, so it ends up having a depressing effect on wages. That's one of the best things, actually, that Governor Romney has talked about is reducing the corporate tax rate.

BLITZER: But that's a long-term...

WEBER: Right.

BLITZER: That would have a long-term effect as opposed to any immediate effect in terms of a recession.

WEBER: Well, no, no, it -- first of all, we do disagree on one thing. I understand that we're going to do short-term measures, because that's the easiest thing to do politically, and because we have a short-term demand-side problem. But I don't think that means that long-term measures are bad.

I think this is a good long-term structural change. And if you pass that tax-rate change immediately, making it effect on the date that the president signs it into law, it can have an immediate effect, along with the other things Governor Romney is talking about, which would reduce income tax rates on middle-income people and provide incentives for business investment as well. BLITZER: Vin Weber and Gene Sperling, we've got to leave it right there. a good discussion from both of you. Thanks, guys very much for coming in.

And we have much more coming up here on "Late Edition." We'll ask Republican presidential candidate Rudy Giuliani if his stance on social issues has actually hurt him in the first few contests.

But up next, we'll preview CNN's Democratic presidential debate tomorrow night in Myrtle Beach, South Carolina. We have two influential members of the Congressional Black Caucus standing by live. We're back right at the top of the hour.


BLITZER: This is "Late Edition," the last word in Sunday talk.


BLITZER (voice over): Playing the waiting game.

GIULIANI: I'm an optimist. We're going to win Florida, and I believe that will push us right to the top, in terms of getting the nomination.

BLITZER: With all the attention focused on the early contests, Rudy Giuliani has been concentrating on the January 29th Florida primary. Can he afford to stay above the fray. We'll ask him.

Race and politics.


CLINTON: We see so much injustice in today's economy. It is simply not working for so many of our families, especially for our African-American families.

SEN. BARACK OBAMA, D-Ill.: We can start healing some our racial wounds in this country.

BLITZER: Why has race emerged in this presidential contest?

We'll get insight from two influential members of the Congressional Black Caucus, James Clyburn and Eleanor Holmes Norton, just ahead of CNN's presidential Democratic debate in South Carolina.

SEN. JOHN MCCAIN, R-ARIZ.: Thank you, South Carolina, for bringing us across the finish line first.


BLITZER: And the stakes are higher than ever, as voters cast their ballots in key states. Three members of CNN's award-winning political team. Fareed Zakaria, Dana Bash, and Jeffrey Toobin are here to give us the lay of the land.

"Late Edition's" second hour begins right now.

(END VIDEOTAPE) ANNOUNCER: Live from CNN in New York, this is "Late Edition" with Wolf Blitzer.

BLITZER: And welcome back to the second hour of "Late Edition."

Democratic presidential candidates Hillary Clinton and Barack Obama worked to quiet an uncomfortable rift over race relations this past week.

Can they put this issue behind them or will race become a defining issue in the election?

Joining us now are two key members of the Congressional Black Caucus.

In his home state of South Carolina, the majority whip James Clyburn. He's the highest-ranking African-American in the U.S. Congress.

And joining us in Washington, the District of Columbia delegate in Congress, Eleanor Holmes Norton.

Thanks to both of you, very much, for coming in.

Let me start with Congressman Clyburn. You and Eleanor Holmes Norton are both undecided right now. Why is that?

Why have you not been able to select a preference over these Democratic candidates?

CLYBURN: Well, I made the promise, Wolf, way back at the beginning of this process, that if the Democratic National Committee were to allow South Carolina to go into the pre-primary window, I would stay out of the race. I was asked to do that, and I made that promise.

And the local Democrats, the state Democratic party, thought that, in order for us to have a real good creditable contest here in South Carolina, those of us in the local level should not take sides.

And that's why I have stayed out of it, simply because I want us to have a real good debate. I wanted us to have a real good primary contest. And to do that, you have to have all of your candidates participating in the process. So I've stayed out of it.

BLITZER: And the debate is tomorrow night, the Democratic presidential debate, in myrtle beach, South Carolina, where you are. The primary is next Saturday, for the Democrats, in South Carolina.

How come you haven't made up your mind, Eleanor Holmes Norton?

NORTON: Well, generally, Wolf, I don't see any value added for me to endorse. That's a general matter, in the Democratic primary, because the District of Columbia has a unique relationship to the president. I don't think I would be punished for endorsing one person or another. But, particularly this year, I've got two good friends running. And look at me. Look at me, Wolf. I'm a black woman. It's pretty hard to make some early decision when everything that you have fought for all of your life comes true, all in one election.

BLITZER: So am I correct to say that, like so many other black women around the United States right now, you seem to be torn between wanting the first African-American to become president as opposed to the first woman to become president?

NORTON: Absolutely, wolf. I mean, we have wanted this for two centuries. Now we have it in one election. And here we've got to sort it out.

But I see no reason for the lone representative for the people of the District of Columbia to be out in front sorting it out, particularly when both Hillary and Barack are such good personal friends.

BLITZER: The Politico, the Web site, Congressman Clyburn, did some checking among members of the Congressional Black Caucus and they found that 17 members have endorsed Obama; 16 have endorsed Clinton; two have endorsed Edwards. Seven remain undecided.

Are you surprised by that split?

You're one of those undecided.

CLYBURN: No, I'm not surprised at all. Take a look at our caucus. And I think Eleanor just hit the nail on the head. We have a lot of women in our caucus who are very proud of Hillary.

All in our caucus are African-American. And we're very, very proud of Obama.

And, so, when you have that kind of contest converge, and all in one race, it's tough. And so, I'm not surprised that we have that kind of a split in our caucus.

BLITZER: Are you surprised, Congresswoman?

NORTON: No, I think it reflects our community, our African- American community.

Remember, the community went first to the powerful Clinton brand. They did not know Barack as much.

And now there seems to be some disposition, at least in some areas, to exercise the presumption in favor of a black candidate. And that's simply because of our history in this country, where we've been excluded from the process, and here you have an attractive black candidate.

And, yes, the Clinton brand remains powerful among blacks. And she knows she should not be written in the black community. You know, the notion that Clinton was the first black president goes a bit far. It's a metaphor that goes a bit far, but it has stuck in the black community.

BLITZER: In fact, Andy Young, the former mayor of Atlanta, the former United Nations ambassador, caused a little stir, last month, when he said this. And I'm going to play this clip, Congressman, for you, and I want you to respond.


FMR. ATLANTA MAYOR ANDREW YOUNG: Barack Obama does not have the support network, yet, to get to be president. The Clintons have. He's smart. He's brilliant. But you cannot be president alone. Hillary Clinton, first of all, has Bill behind her, and bill is every bit as black as Barack.


BLITZER: All right, you heard that. Bill Clinton is every bit as black as Barack Obama. What do you make of that?

Because there is this widespread notion in the African-American community that Bill Clinton effectively was the first black American president?

NORTON: I wouldn't go there, if I were...

CLYBURN: Wolf...

NORTON: Go ahead.

BLITZER: Well, let me let Congressman Clyburn respond.

CLYBURN: Well, I think that we have to be very, very careful how we speak, especially in a contest like this. I know Andy Young very, very well. We worked alongside each other back in the days of SNCC and SCLC. And I know what his references were, but I believe I would have expressed myself much differently than he did.

BLITZER: And Congresswoman, you wanted to make a point, too. Go ahead.

NORTON: Yes, I want to say, hey, we don't want to engage in a lose/lose here. Hillary needs men and Barack needs whites, yes, and Hispanics.

And to the extent that we convert into a race/gender battle, both of them lose and Democrats lose.

So I can understand -- and the surrogates, by the way, have done more harm than the candidates themselves. I think the candidates have been much more careful.

I think everybody better be careful, because, if the rest of America thinks this election is not about them but about women and about blacks or, for that matter, about Hispanics, maybe the Republicans benefit from that. BLITZER: Because, on that point, Congresswoman, there was an issue of race and politics that came up between the Democratic candidates over the past few days, although they eventually decided they wanted a truce. They wanted to back away from this because it was getting ugly out there.

Have they pushed this issue away? Have they managed, including their surrogates, to stop talking about some of these sensitive issues?

NORTON: Oh, I think they've done it. And, look, everybody else ought to, and they ought to send e-mails to all of their major supporters, particularly with tomorrow Martin Luther King's birthday.

They declared the truce. Both of them have a long history of coalitions, particularly the black female, feminist coalition. Not all of their surrogates have heard it. Use Martin Luther King's birthday to send a message. That's exactly the message that King would have sent on his own birthday.

BLITZER: All right. What do you think, Congressman?

CLYBURN: Oh, I agree with that. We worked very hard to get this debate. And when we were dealing with the dates of the primary, we tried to work in the symbolism that it would have to all of the world, for that matter, to have this debate on Martin Luther King, Jr.'s birthday celebration.

We know the birthday is the 15th.

CLYBURN: But we celebrate it the third Monday in every January. And to have this debate on that day of celebration, I think it's the kind of symbolism that we in the Democratic Party, we in these United States of America will likely be putting forth.

And so, if we are going to have any discussion of race and gender, it ought to be done within the context of how we further the bounties of our society for these two groups of people that have politically been left out of the process.

BLITZER: I just want to tell our viewers they are seeing live pictures coming in from the Ebenezer Baptist Church in Atlanta right now. Barack Obama is participating in services there on this Sunday.

We'll show you these pictures, continue this conversation. Congresswoman, what is the most important one issue, the most important thing you want to hear from the Democratic presidential candidates at the debate in Myrtle Beach tomorrow night? And be brief.

NORTON: The one thing I want these candidates to raise, they themselves should raise it, if they're not questioning about it, because they didn't raise it in D.C. when they were here. There is a majority African-American community in the District of Columbia, which has a pending bill in the Senate, short only of three votes, to give the District only a House vote. It seems to me that on Martin Luther King's birthday, before an audience which would particularly appreciate this issue, they need to send the message to the entire country, let D.C. vote the way the rest of the country does on the House floor.

BLITZER: All right. And Congressman Clyburn, what's the single issue you want to hear most? And please be brief because we're almost out of time.

CLYBURN: I want us to get this economy moving again. I want us to bring back credibility to this great nation of ours around the world. These two things, I think, are very, very important, their vision for how we will get that done.

BLITZER: And we'll see you tomorrow in Myrtle Beach, South Carolina, 8 p.m. Eastern here on CNN.

CLYBURN: Thank you. BLITZER: The Democratic presidential debate, co-sponsored with the Congressional Black Caucus Institute. Thanks to both of you, James Clyburn, and Eleanor Holmes Norton, for coming in.

CLYBURN: Thank you so much.

BLITZER: And just ahead here on "Late Edition," Rudy Giuliani is promising the biggest tax cuts in U.S. history if -- if -- he becomes president. I'll ask him how much money that would put back in your pocketbook. That and a lot more coming up when we come back.


BLITZER: Welcome back to "Late Edition." We're reporting today from New York. One candidate notably missing from the action in South Carolina was the former New York City mayor, Rudy Giuliani. His political strategy has him holding back until the Florida Republican primary later this month.

But can he afford to wait that long? That was just one of my questions when we spoke late yesterday.


BLITZER: The former mayor of New York, Rudy Giuliani, is joining us. Mr. Mayor, thanks very much for coming in.

GIULIANI: Thank you, wolf. Thanks for having me.

BLITZER: All right, what's going on? Because there were such high expectations for you. We've had several contests right now. You're not doing well. I know you're gearing up for Florida, which is on January 29th. But what's happened in Michigan, New Hampshire, Nevada? Why aren't you doing better?

GIULIANI: Because we decided given all of our strengths, weaknesses, our resources, the best thing for to us do was concentrate on Florida, where we think we can make a very, very strong showing. And I think our strategy has kind of worked out. Because this is a wide-open field.

They all have to come down here, and we think we have sort of set the agenda here by putting out the boldest tax plan, the biggest tax cut in American history, a one-page form. We've gotten that all around Florida over the last week.

We've talked about the national catastrophic fund. Got to see where the other Republicans are on that. We've talked about what's needed for homeland security. We've talked about a lot of the concerns of Florida and have conducted I think a very strong campaign here.

And now the others can come here. And we want to contrast with them over tax cutting, which I've done a lot of, you know, and John voted against the Bush tax cuts. Mitt Romney didn't support them. I did. And I did tax cuts myself. BLITZER: Some have suggested that your problem in some of these other states at least, I'm not sure about Florida, where you're pinning a lot of your hopes, you're the only Republican presidential candidate right now who supports abortion rights, really supports gay rights, supports gun control. Are those the issues that are hurting you in some of these Republican contests?

GIULIANI: Wolf, we've been over that so many times even in the debates. I support the second amendment. That has been very, very clear. I would like to see abortions reduced and adoptions increased and support the ban on partial-birth abortion. Support parental notification.

I think that there's -- sure, there are some differences, but that kind of exaggerates the difference way beyond where it actually is. It's true. No one of us Republican candidates meets the full test. And that -- I think that's been part of the reason why there's been such back-and-forth and why the race is so open.

And I think Republicans have to sit back and say, you know, with Ronald Reagan, my 80 percent friend is not my 20 percent enemy. Who would be the most effective leader. Who's going to reduce taxes the most? Who's going to actually bring down government spending? And who's going to be strongest in dealing with Islamic terrorism?

BLITZER: Let's talk about the key issue emerging right now. That would be the economy. That would be jobs. You say you're going to propose the biggest tax cut in the history of the United States if you become president of the United States.

Let's talk about what that would mean specifically. For a family earning $500,000 a year, how much would that family save as opposed to a family earning $50,000 a year, how much would that family save?

GIULIANI: Well, we've computed it for a family that earns about $80,000 a year. A family of four would save about $3,000 or $4,000. The rest of the tax cuts -- and that's off the single form, because we're proposing a single form.

That in and of itself would result in tax savings for every American in all different brackets. Then it depends on the ones that get enacted. Like if we index the alternative minimum tax to inflation, it would help middle-class Americans tremendously.

Some of the tax cuts are not personal tax cuts. They are the corporate tax. We were the first to propose a major reduction in the corporate tax from 35 to 25 percent. That would not help any particular individual, but it would sure help a lot of people because it would create a lot of jobs.

The way I do tax cuts and the way I did it as the mayor of New York City is, I put out a lot of tax cuts. I fight for all of them. I never gotten all of them, but I get enough of them so we can really stimulate the economy.

BLITZER: How much would a family making $500,000 a year wind up saving potentially?

GIULIANI: I haven't calculated it. I haven't calculated it because I have no idea which ones of the tax cuts are going to happen, which ones aren't. The one we calculated was for the people who opt for the single form, which I happen to have in my pocket.

It's a single form on which you can fill out your taxes. That would bring you somewhere between 25 to 30 percent tax reductions, and it would depend to some extent on the number of other deductions that you had.

BLITZER: At a time of big budget deficits and the national debt going up and up and up...

GIULIANI: Good question.

BLITZER: ... and huge expenditures, $2 billion a week, for example, to pay for the war in Iraq...


BLITZER: And you're going to cut taxes, so where is the money going to come from?

That's the big criticism of your tax cut plan.

GIULIANI: Well, it would be a criticism of anyone's tax cut plan. That was the criticism of the Bush tax cut plan or the Reagan or the Kennedy tax cut plan.

I would cut taxes strategically. For example, I cut the income tax rate in New York City by 24 percent. We were getting 48 percent more revenues.

So I would cut taxes that would bring us more revenues. And also, during the week we'll also talk about cutting spending.

You're absolutely right. You just can't cut taxes. We wouldn't rehire half the federal civilian employees who come up for retirement. We could save money that way. Forty-two percent are coming up for retirement. We would impose 10 percent spending cuts on all of the civilian agencies. What you would see is fiscal discipline restored. And I have the best record of any of these candidates for fiscal discipline for reining in spending.

BLITZER: Do you support the president's immediate principles for this economic stimulus package that he's putting forward?

GIULIANI: I haven't seen the details of it. I prefer permanent tax reductions to one-shot rebates or one-shot deals...

BLITZER: But that would take a long time, to see the ramifications, the impact of that, and there's a crisis, apparently, right now.

GIULIANI: That would be good, but I'd like to see a package put together where you get one for the other.

Again, the way I look at tax cuts is, I put out 64 tax cuts when I was mayor of New York City; I got 23 of them. Some of them, I had to trade one for the other.

So I'm not opposed, at all, to the president trading some of these, but I'd like to see him get permanent ones as part of it. If he's got to trade with the Democrats in order to give them some of the things they want, that's OK, as long as he gets some of this permanent relief as well.

BLITZER: Let's wind up, because I know your time is short, with where we start in Florida.

You're really putting all your eggs in that Florida basket on January 29th. You want to interrupt -- is that what you're trying to do?

GIULIANI: No, no. I think you're right.

BLITZER: If you don't win Florida -- and you might win Florida; you might not win Florida, but you've really put a lot of your eggs in that basket right now -- not all of your eggs in that basket.

Give us your lay of the land right now. You've spent a lot of time in Florida.


What's going to happen?

GIULIANI: We're doing very well. We're very competitive. We're doing very well. We believe that Florida is Rudy country. We think we've helped to make it that way. We've had Florida to ourselves for about 10 days, now, and we've campaigned considerably, here, about a national catastrophic fund, tax cuts, spending reductions.

I was in the Everglades today to talk about making sure that we speed up the restoration of the Everglades. We've talked about what's needed in order to close that gap so that we have -- we have access to our space shuttle.

So, we've been -- we've got a heck of an organization in Florida. And, of course, we're looking forward to winning. You never -- you don't go into one of these things saying, oh, gee, you know, what happens if -- I'm an optimist. We're going to win Florida and I believe that will push us right to the top, in terms of getting the nomination.

BLITZER: Well, we see all of the signs behind you, Mr. Mayor...


... "Florida is Rudy Country." We'll soon find out if, in fact, it is.

GIULIANI: We will.


BLITZER: Good luck to you. Thanks very much for joining us.

GIULIANI: Thanks, Wolf. Nice to talk to you.

BLITZER: The struggling economy was the talk on all the Sunday morning talk shows. We're going to bring you what they had to say in our very popular "In Case You Missed It" segment.

But straight ahead, we'll go, live, to our team on the campaign trail for the latest of what's happening today and what's coming up next. Stay with us. "Late Edition" continues right after this.


BLITZER: In the battle for the nomination, moving on to Florida, right now, for the Republicans in South Carolina, for the Democrats.

In New Port Richey, Florida, our chief national correspondent John King has been getting ready for the GOP race. John, give us a little bit of the lay of the land. What's going on?

KING: And, Wolf, standing by here for a Rudy Giuliani event -- just a short time from now, the former New York City mayor will be here to continue his courtship in Florida.

You spoke to him just a few moments ago. This is what you get if you come to this Rudy event: "Florida is Rudy country."

Well, as you said to the mayor, that will soon be tested. The Florida primary is the next stop for the Republican race. And Giuliani has been here almost exclusively, while the others slugged it out in Michigan and slugged out in South Carolina. And yet he has been dropping in the polls here in Florida.

He decided on this risky strategy of wait; pick a big state, Florida, and start late, while the others were campaigning in all those early states. John McCain is on his way to Florida. He is now in, pretty much, a tie or maybe slightly ahead of Rudy Giuliani here, hoping that he can build on his South Carolina win with a victory here. And it's quite interesting to watch, Giuliani already going after McCain, questioning his credentials as a fiscal conservative.

McCain wants to come in here and, of course, and undercut Giuliani on his central message.

Giuliani campaigns as the candidate of national security, someone who would be a tough leader, based on his 9/11 experience. McCain, of course, wants that niche in the race.

And, Wolf, Governor Huckabee is coming here, trying to find out if he can find fertile territory in Florida. Governor Romney came here, straight from Nevada, yesterday.

So the big question, in the Republican race: Can somebody put two or three wins in a row and build momentum and secure the front- runner spot, or will we have happen here in Florida, the biggest state to vote so far, what has happened in the past, one candidate wins Iowa; the next one wins New Hampshire; somebody else wins Michigan; McCain back in play in South Carolina.

So it has been a jumbled Republican race. The question, now, as they fight more and more over taxes and the economy: Can somebody put together a few wins in a row, which means the onus is on senator John McCain, as he comes here to Florida, and on Rudy Giuliani, Wolf, to prove, after spending millions and millions of dollars with no wins so far, that his strategy of coming to Florida and making Florida first in his efforts will work. We'll find out, Wolf.

BLITZER: Not a traditional strategy...

KING: Not at all.

BLITZER: ... a high-risk strategy for Rudy Giuliani. Either he'll be brilliant or not so brilliant. And we'll soon find out, January 29th, in Florida. John, thanks very much.

KING: Thank you.

BLITZER: Suzanne Malveaux has been spending a lot of time looking into the role that race has been playing in politics, here in the United States.

She's joining us, now, from Charleston, South Carolina, getting a little bit more -- the Democrats getting ready for their big primary, next Saturday in South Carolina.

Suzanne, give us the play of the land there.

MALVEAUX: Well, Wolf, you know, we talked to a lot of people this week, and the one thing that became very, very clear is that this is a very personal decision for many people, particularly those in the African-American community. It is a real struggle. It's competing loyalties between going for Barack Obama, obviously a very capable African-American candidate, and Hillary Clinton, whose husband, the former president Bill Clinton, very much involved in a policy and an administration that was very good for African-Americans; Hillary Clinton herself involved in the civil rights movement.

There were a couple assumptions that we came with, here, that basically were turned on their head: first of all, that there was a sense that all the young folks were trying to go toward Barack Obama, the older towards Hillary Clinton out of a sense of loyalty.

Well, that was not necessarily the case. One young man, Joseph, I met -- he was 17 years old, had a 3.3 grade point average, was a little disappointed in himself that he hadn't done better.

He looked at Barack Obama and he said, here's a real chance for someone to show that we can do it, that the white community would perceive blacks differently, and that even African-Americans would perceive themselves differently as well, that anything was possible.

MALVEAUX: But then there were also the church elders who were saying, look, you know, we've struggled through segregation, we feel that perhaps Barack Obama is a chance, is that light and that hope. One councilman who I spoke with grew up in segregation. Beaten, went to segregated schools. He said this has become larger than Barack Obama. So that's just a sampling of some of the people that we talked to and really the sense of how personal this decision is for them, Wolf.

BLITZER: Suzanne Malveaux and Joe Johns and I will be -- all of us will be in Myrtle Beach, South Carolina, tomorrow night for the Democratic presidential debate. See you tomorrow, Suzanne. Thank you very much.

Up next here on "Late Edition," the voters have spoken now in several states, but we don't seem to be any closer yet to clear front- runners in either party. The best political team on television, standing by with some answers, or at least some interesting opinions.

We'll be right back.


BLITZER: Voters in key states made their decisions known this past week, but the campaign seem, if anything, still very confused about what's going on. Let's get some perspective from three of the best political team on television. With me here in New York our senior analyst, Jeff Toobin, Fareed Zakaria -- he's editor in chief of Newsweek International and a CNN contributor, getting ready for his new show that will debut soon here on CNN -- and in Myrtle Beach, South Carolina, our Congressional correspondent, Dana Bash.

You're there on the scene, Dana. Set the scene for us a little bit. We're all getting ready for this Democratic presidential primary next Saturday in South Carolina. Give us a little flavor. BASH: You know, this is going to be what we talked about yesterday, the caucus for the Democrats in Nevada being a potential tiebreaker between Hillary Clinton and Barack Obama. But, really, everything is going to matter here in the state of South Carolina.

For a whole host of reasons, but primarily when you look at how the African-American vote is going to break down, and it's really key here in the state of South Carolina. And you have seen kind of, in terms of the polls, the African-American vote for Democrats shifting between Hillary Clinton and Barack Obama. Barack Obama obviously has campaigned hard here, but so has Hillary Clinton, and, you know, it is going to be fascinating when you just look at that key demographic, how it's going to shake out in the primary next Saturday, Wolf.

BLITZER: What do you see unfolding? Give us a little sense what's going through your mind, Jeff.

TOOBIN: Well, I think one thing you have to say is that the Democratic National Committee's plan to move up Nevada, move up South Carolina has worked. They wanted to give Latinos a voice. And we saw Latinos backed Hillary Clinton, and that's why she won yesterday.

BLITZER: In Nevada.

TOOBIN: In Nevada. That's why they moved up South Carolina, because they wanted African-Americans. And here you have the two leading candidates courting African-American voters. You're going to do your debate tomorrow for the Congressional Black Caucus.

I think in that respect, you know, these important constituencies clearly have a voice in the outcome. As for predictions, you know, I'm stumped. I really -- I just don't know.

BLITZER: And South Carolina is unique in many respects because 50 percent of the expected Democratic voters are African-Americans.

ZAKARIA: I think you also have to look at outside of race, and, you know, the Latino vote is probably going to be as important going forward as the African-American. You have you have to look at class.

It's the unspoken part of American politics, but what's clearly happening is that Hillary is winning the waitress mom and Obama is winning the soccer mom. And it appears certainly in the Democratic primary that there are actually more waitress moms. So as long as Hillary is able to get the kind of working-person vote, the fact that college-educated people are going with Obama is not enough to put him over the edge.

BLITZER: And right after South Carolina, it won't be long until February 5th, Dana, and the Super Tuesday, when there are contests in 25 states including New York and California and New Jersey, major states with a lot of delegates to the Democratic convention and the Republican convention.

Let's look to the Democrats right now. In our national poll, and the national poll among registered Democrats is significant, because on Super Tuesday it could be a national primary in effect, Clinton is still ahead with 42 percent, Obama 33 percent, Edwards 17 percent. Kucinich is down at only 3 percent.

The national poll doesn't really mean a whole lot when you're looking at a state like Iowa or New Hampshire or even South Carolina. But for Super Tuesday, it does mean a lot.

BASH: It does, absolutely. Because it's pretty hard for these candidates to be campaigning in all of these states. But, you know, it speaks to why this state of South Carolina is going to be so crucial. Because it could really change the dynamic.

You know, just like the Republican side. I've been recovering the Republicans for the most part, but it's very similar on the Democratic side. Because both of the front-runners, Hillary Clinton and Barack Obama, have momentum, it means neither of them has momentum. So that is why I think this particular contest in South Carolina should be so incredibly crucial to really kind of changing the dynamic of giving one of those candidates that momentum, going into that Super-duper Tuesday because it is going to be basically a free-for-all otherwise.

TOOBIN: The pressure, though, I think really is on Obama to win in South Carolina. Because he did win in Iowa, but then Hillary Clinton has won in New Hampshire, won in Nevada, and now, you know, she could be going for three in a row.

And unlike the Republicans, the Democrats have nothing after South Carolina before Super Tuesday. It's the last one. The Republicans have Florida. The Democrats are not contesting that state.

So, you know, I think, you know, we don't have a front-runner, but Hillary Clinton has won more primaries. She is ahead of Obama in the national polls. So I think he's really got to win there.

BLITZER: And, you know, Fareed, we're also seeing Hillary Clinton open up more, speaking more personally, not just being, you know, sort of robotic, if you will. And she's going on these talk shows.

Tyra Banks, she's got a talk show, and she was asked about Monica Lewinsky and her affair with Bill Clinton. Listen to what Hillary Clinton said.


CLINTON: Because I had tremendous faith, number one, I really had to dig down deep and think hard about what was right for me, what was right for my family. And I never doubted Bill's love for me, ever.


ZAKARIA: You know, I think this could actually prove to be one of her strengths. People have often seen it as a weakness, you know, that why didn't she leave him, things like that? Look, if you believe in marriage and you think too many Americans get divorced, how do marriages stay together?

They stay together because you work through very difficult issues and hard times, and you don't abandon the marriage, you know, the minute things go badly. And I think if she can get that point across by talking about faith, by talking about, you know, her family, I think she actually will be able to turn that into an advantage. BLITZER: I think, Dana, on this point, I want you to weigh in, and then Jeff. It does seem to help Hillary Clinton when she that, you know, passionate moment or that moment just before New Hampshire when she seemed to be almost near tears.

BLITZER: I thought that was a sympathetic moment, and people responded.

BASH: There's no question that that was her "I found my voice" moment. That's the way she described it at the New Hampshire victory party.

But, look, if you talk to anybody who is close to Hillary Clinton and really throughout the years, you know this, Wolf, they will say, the person that you see in public is just so different from the person that we see in private. But, you know, she has said recently in interviews that part of her problem is that she came up as a woman who kind of tried to break through the ceiling at Wellesley University -- College, I should say, she tried to break through the ceiling in law school.

So, she is among a generation of women who couldn't really emote in public because that was not how you got ahead in a man's world. So, she is basically having to recalculate the way she approaches the world in an Oprah, Tyra Banks kind of atmosphere that we're in right now. And it's clearly not easy for her, but as she's been able to do that more and more and kind of let herself go, it is so obvious that it's really helped her.

TOOBIN: This month is the tenth anniversary of the Monica Lewinsky scandal breaking, when Matt Drudge made his famous post, and it started the whole thing. Ten years the United States has been having a conversation about the Clintons' marriage and -- you know, a lot of people are sick of that, though. A lot of people don't want to hear about it, don't want to think about it, don't want that back on the national stage.

So, I do think it's a mixed blessing for her to start talking about it again.

BLITZER: All right, guys, we're done talking about that right now. We're going to take a quick break. We've got a lot more to talk about. We're going to cover the Republican race for the White House as well. Our political panel standing by. Straight ahead as well, the economy was a subject of debate on the other Sunday morning talk shows here in the United States.

That's coming up next in our "in case you missed it" segment. Lots more coming up here on "Late Edition."

(COMMERCIAL BREAK) BLITZER: In our weekly roundup of Sunday morning talk shows, fears of a recession dominated the discussion. Republican presidential candidates Mitt Romney and Rudy Giuliani outlined their plans to try to jump-start the economy.


MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, my system is primarily based on trying to create jobs, not handing out cash to individuals. I do lower the lowest income tax bracket from 10 to 7.5 percent, and that helps, of course, people at the low economic level. But also for individuals 65 and older, the fact that they're not going to be paying any Social Security or Medicare taxes anymore, no more payroll taxes, means that going to be a break for them.



GIULIANI: I would err on the side of permanent tax cuts. Some of the short-term ones are necessary, some of them can help, but you also have to couple them with long-term tax cuts. For example, if somebody is planning right now to put a business in the United States and is worried that a Democrat is going to get elected, you're looking at a 30 percent increase in taxes. That is going to keep that money away from the United States.


BLITZER: Trying to soften the blow from a disappointing finish in the Nevada caucuses yesterday, the former Democratic senator, John Edwards, pointed out that anything can happen in an unpredictable race.


EDWARDS: This is a long process. As much as the media likes to think that all of America is obsessed with what happened in Nevada or in Iowa or New Hampshire, we've had three states vote so far out of 50. We've got 47 left to vote. And if you take this in a long view, which I do -- you know, I'm seasoned at this. I've been through it before -- you know that there are lots of ups and downs in these campaigns.


BLITZER: Highlights from the other Sunday morning talk shows here on "Late Edition," the last word in Sunday talk.

Up next, our political panel takes on the wide-open race for the Republican presidential nomination. "Late Edition" continues after this.

(COMMERCIAL BREAK) BLITZER: We're back. We're talking politics with the best political team on television. Dana Bash is in Charleston, South Carolina. Fareed Zakaria and Jeff Toobin, they're here in New York with me. Just to recap last night, the South Carolina primary results, McCain won with 33 percent, Huckabee came in second 30 percent, Fred Thompson 16 percent, Mitt Romney 15 percent. Ron Paul, 4 percent, Rudy Giuliani only 2 percent.

Dana, you had a chance to speak with John McCain today. And you asked him about the criticisms -- the criticism that he's getting from Rudy Giuliani right now on his decision, McCain's decision, not to support the Bush tax cuts back in 2001 and 2003. I want to play a little clip of your interview with McCain.


MCCAIN: I appreciate his attention back some months ago. When we weren't doing so well, we were the closest friends.



... look, I'm running on my record. I'm a fiscal conservative. Everybody knows that. Everybody knows I was part of the Reagan revolution, where we had tax cuts, when -- when, frankly, Mayor Giuliani was supporting a Democrat for governor of the state of New York.

So I'm proud of my fiscal record. I'm proud of the efforts to cut spending.


BLITZER: You know, when he walked out on that stage to deliver that victory speech last night, he seemed so happy, so excited, so relaxed. I don't think I've seen him that happy in a long time.


But you're there. You saw him this morning. Tell us what it's like.

BASH: Well, you know, there's something to the idea of feeling this sense of vindication that John McCain certainly feels, winning South Carolina after losing so brutally eight years ago.

So you definitely get that vibe from him, right off the bat. There's no question about it.

But it's interesting, Wolf. You also get this -- a little bit of trepidation, in the fact that he knows he's been here before. He's been in a place where he has been riding high and it has fallen apart. And his comfort zone is as an insurgent candidate.

Now, I asked him about that. He refused to use the front-runner word. He refused to call himself that. But he also said, look, the reality is, as winner of a big primary like South Carolina, he's hoping that the money will roll in. He needs that desperately. He is hoping that the endorsements will come in.

But what was fascinating about that little quip about Rudy Giuliani is that the two men are really good friends, or at least had been. And now, in Florida, in the next contest state, they are going to be vying essentially for the same kind of voters, the voters who want somebody who is strong on national security and those who want somebody who is fiscally conserve.

So this intense back-and-forth, already, about the Bush tax cuts is certainly a taste of what we're going to see between these two men.

TOOBIN: I think, in some respects, we may be burying the lead about the South Carolina primary. Because, sure, it's very important that McCain won.

But in 2000, that famous primary that Dana was talking about, 527,000 people voted. Yesterday, 437,000 people voted. Turn-out is down. The Republican Party is still a reeling party. Turn-out was down in New Hampshire. It was down in Michigan. It was somewhat up in Iowa.

But I think that is very significant. And, remember, this is a candidate, John McCain, whom Rush Limbaugh, a very important person in the Republican Party, calls unacceptable. So, he's got problems.

ZAKARIA: And the key issue, I think, is not going to be the economy. It's not going to be the differences between them on fiscal issues. It is going to be immigration.

And let us not forget, this was the issue for the last two or three years that Republican primary voters, not the country at large but Republican primary voters have shown the greatest intensity on.

McCain's big problem is he is the co-sponsor of the amnesty bill, or call it what you will, a bill that is regarded by many Republican primary voters as an amnesty bill.

If McCain is able to move forward, it will only be because somehow the immigration issue has deflated.

BLITZER: Jeff, put on your hat...

BASH: And you know, Wolf...

BLITZER: Hold on, Dana. I just want Jeff to weigh in on this, as our senior legal analyst, on Mike Huckabee wanting to pass two constitutional amendments to coincide with the Bible. Listen to what he said.


FMR. GOV. MIKE HUCKABEE, R-ARK.: But I believe it's a lot easier to change the Constitution than it would be to change the word of the living God, and that's what we need to do, is to amend the Constitution so it's in God's standards, rather than try to change God's standards so it lines up with some contemporary view of how we treat each other and how we treat the family.


BLITZER: He wants constitutional amendments, just to be precise, that would ban abortion and same-sex marriage.

TOOBIN: Well, yes. And that is not a particularly out-of-the- mainstream view. I mean, there are a lot of Republicans who want to amend the Constitution in that way, though, there is not a great deal of support outside the right wing of the Republican Party on that.

But the way Huckabee expressed himself is really in conflict with about 225 years, that is all of American constitutional history.

The Constitution is a document that is supposed to allow all religions to flourish, or people who don't believe in religion to flourish. And, you know, he later backed off that expression. But I mean, it's just an indication. He's a very conservative candidate.

ZAKARIA: It frankly made him sound more like Ahmadinejad of Iran. I mean, the way in which he was describing, you know, implementing God's law -- I mean, isn't that where we get scared off, when we hear it from Iranians and Saudis?

BLITZER: Dana, go ahead.

BASH: Well, what I was going to say is, just in terms of the Republican vote, that was just brought up, which is a really fascinating and important note, obviously Mike Huckabee got a good chunk of the evangelical vote -- no surprise there -- but it wasn't enough to propel his victory.

But, back on John McCain, you know, one of the things I asked him about, and he really wouldn't go there, even though I tried, is about the fact that, in South Carolina, just like New Hampshire, he didn't get a huge majority of the Republican vote. He got a lot of help from independents.

That's not going to happen in the state of Florida, where it's just a Republican primary.

And it speaks to, kind of, what Jeff was talking about, about the fact that John McCain is somebody who is a Republican but still has problems with his Republican base seeing him as somebody who is the standard-bearer of the party.

BLITZER: We've got to leave it there. Dana, thanks very much.

Jeff and Fareed, thanks to both of you as well.

If to this were any other Sunday, Fran Lewine would be at her desk at the CNN news room or out at stakeouts in Washington, throwing tough questions at senators and statesmen. But this Sunday, very sadly, Fran isn't writing the news. She is the news. Last night, at her Washington home, she passed away from an apparent stroke. She was 86 years old. (BEGIN VIDEOTAPE)

BLITZER (voice over): Today U.S. troops are fighting in Iraq. But when Fran started in the news business, G.I.s were battling the Nazis in North Africa.

She was hired by the Associated Press in 1942 and covered every president from Dwight Eisenhower to Jimmy Carter.

It made her furious that she was relegated to covering social events and first ladies, while her male colleagues covered the president.

But Fran didn't just get mad; she got even. The women who now have equal access to jobs in the news media owe much to her leadership and relentless pressure on this issue.

According to Fran, she showed up at CNN the day that President Reagan was shot in 1981 and simply asked to help out. She never left.

FRAN LEWINE: There's going to be a great stakeout.

BLITZER: Continuing to work as a producer and assignment editor at CNN for almost as long as we've been in business, she was recognized for a lifetime of achievement, just months ago, when she was awarded the Medal for Distinguished Service in Journalism at the Missouri School of Journalism.

We will miss her smile, her eagerness to join an office pool, her high standards, and her freely given advice to those just starting off in the profession she loved so much.

Working alongside Fran was a privilege and a joy. We will miss her.